Proprietary Information of SAM 1
SAM Engineering & Equipment (M) BerhadBusiness Update
2nd September 2020
1Proprietary information of SAM, all rights reserved
Proprietary Information of SAM
The information contained in this presentation reflect the views and opinions of the management of SAM Engineering &Equipment (M) Berhad (“SAMEE”) with regard to the sources referenced and is part of the group business update.
All sources of information are believed to be factual and current as at 31 August 2020. SAMEE does not make any representationor warranty or guarantee regarding the accuracy, applicability, fitness or completeness of the information referenced or theanalysis of subject discussed, or the content produced. All expressions and opinions in this video are subject to change dependentupon updated research and public information received.
No content herein should be construed as an offer to buy or sell, or a solicitation of an offer to buy or sell any of SAMEE securities.You are advised to always seek professional advice and conduct your own due diligence prior to committing to any actionregarding your investment.
Under no circumstances shall SAMEE or any of its personnel be held responsible or liable in any way for any content herein,including but not limited to, any errors or omissions in the content, or for any loss or damage of any kind incurred as a result ofany content communicated hererin. In no event shall SAMEE or any of its personnel be liable for any special, indirect orconsequential damages or any damages whatsoever resulting from the loss of use, data or profits arising out of or in connectionwith the availability, use or performance of any information communicated hererin. Any action that is taken in reliance of theinformation contained herein shall be at your own risk.
SAMEE reserves the right to edit, delete or modify any material within this presentation as it deems necessary.
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Disclaimer
Proprietary Information of SAM
FY2020 Revenue ( Business Segment )
48%52% RM939mil
Our Business
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Proprietary Information of SAM
Highlights of FY2020 Financials
Equity attributable to owners of the Company : RM 610 milNet Debt to Equity ratio : 0.1
5-year CAGR : 10.9% 5-year CAGR : 6.1%
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Proprietary Information of SAM
Highlights of 1Q FY2021 Financials
Revenue & Profit Before TaxRM’ mil
§ Performance affected by COVID-19
§ Reduction in demand for Aerospace products
§ Equipment segment affected by Malaysia MCO
§ Order backlog is RM 2.4 Billion
§ Net Debt to Equity Ratio is 0.1
5
39.5
131.5
171
-5.216.9 11.7
-200
20406080
100120140160180
Aerospace Equipment Total
FY2021 1st Quarter Results
Revenue Profit before tax
Proprietary Information of SAM
Key Industries for Equipment Business
Semiconductor
Storage Devices• Solid State Drive• Hard Disk Drive
• Front End• Back End
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48%52%AerospaceEquipment
FY2020 Revenue ( Business Segment )
Proprietary Information of SAM
SEMI (July 2020) projected:• Global revenue of Semiconductor equipment to increase 6% ($63.2 billion) in 2020 • Record high revenue of ~$70 billion in 2021
Equipment Outlook
6%11%$63.2B
$69.6B$59.6B
$64.5B
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Equipment Outlook
SAMEE continues its expansion to support existing and new projects
Cleanroom expansion
New manufacturing equipment
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Proprietary Information of SAM
Aerospace Products and Programs
777C919
Aerostructure (Small to Large Size)
> 2 meter
Aero-Engine
• A220• A320neo• A350• B787
• A320ceo/neo• B737NG/max• B777• B787
• C919• Global 7500/8000
A220
A320neo
Single Aisle Twin Aisle Business Jet
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Proprietary Information of SAM
Boeing 737Max Status
Boeing 737Max contributed <10% of FY2020 Revenue
FY 2020
Revenue RM 938.7 mil
• Mar 2019 B737 Max grounded by Federal Aviation Administration (FAA)
• Apr 2019 Boeing announced production rate cut to 42 aircraft monthly (-20%)
• Dec 2020 Boeing announced production halt in January 2020
• May 2020 Boeing restarted 737 Max production at low rate
• Jul 2020 FAA completed test flights on 737 Max. Currently evaluating the test results. Boeing plans to ramp up 737 Max production to 31 Aircraft per month by 2022.
• Aug 2020 FAA published preliminary summary of the FAA’s Review of the B737 Max.
B737 Max crashes (Lion Air JT610 and Ethiopian Airlines ET 302) resulted in planes grounding by FAA
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Proprietary Information of SAM 11
__________Teal Group, an US based aerospace anddefence market analysis firm. It providescompetitive intelligence to industry andgovernment worldwide.
Source: Teal Group (COVID-19 & Civil Aviation Markets Report, August 2020 edition)
Aerospace Outlook
Single AislesA220/ A320neo/ B737Max
Twin AislesA350/ B777/B787
Proprietary Information of SAM 12
Projection of Commercial aircraft deliveries
0
10
20
30
40
50
60
70
80
90
20182019
20202021
20222023
20242025
20262027
20282029
Single Aisles Twin Aisles
Deliv
erie
s in
2020
$Bi
llion
s
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Deliveries dip 40 - 50% in 2020 1
Recovery from 2021, led by Single Aisles (A320neo, B737max)
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2
4 Overall deliveries expected to recover to normal by 2024/25
Source: Teal Group - COVID-19 & Civil Aviation Markets Report, August 2020
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3 Recovery of Twin Aisles will take a longer time
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Pre-COVID
19
Proprietary Information of SAM
Actual flights made by Global Airlines
Source: ICAO, August report13
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Actual flights in Europe
Source: ICAO, August report14
Proprietary Information of SAM
Domestic air travel in China
Source: ICAO, August report15
Proprietary Information of SAM
Domestic air travel in US
Source: ICAO, August report16
Proprietary Information of SAM
Managing the crisis – Key Priorities
Conserve Cash
Reduce Operating Costs
• Implemented management pay cuts (5-10%)• Freeze Hiring, wage freeze, no over-time• 4-day work week for Aerospace division• Redeploy Aerospace manpower to support Equipment’s growth
• Push out raw materials where possible• Only committed and necessary CAPEX are spent• Financial support from governments
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Proprietary Information of SAM 18
Thank You