SATS Ltd.

Good morning, everyone. Welcome to SATS first quarter results briefing for financial year 2027. This is David Bowie, Group Head of Strategic Comps at SATS . With me today are Terry Mock, SATS President and CEO, and Timothy Tang, CFO. Before we begin, I turn your attention to the forward-looking statement now on screen. Quick safety reminder, whether you're joining us from the office, at home, or the outdoors, do be aware of your surroundings at all times. Please make safety your priority before joining this call, a recording of which will be available on our website in due course. I'll now hand over to Terry to take you through the business update. Terry, please.

Thank you, David, and good morning, everybody. Thank you for joining us again in this Q1 FY27 results review. Let me just go straight to the deck. I think a couple of things I just want to highlight. One is this quarter has really been fantastic in terms of revenue growth. At the end of March, we were all thinking about the Middle East situation. But I'm glad to say that the network that we have has allowed us to actually capture quite a lot of the rerouting flow that resulted in actually our cargo tonnage being a record quarter again. And this is actually something that we are very, very positive and happy about. Revenue grown 11.3. Food as well has also done very well with some new additional wins that help us with our capacity in our overseas kitchen. Unfortunately, Vida only grew about 6%, but I think when you balance against some of the challenges that we're faced with, in particular, you know, when you have rerouting, you will have manpower that is probably excess in one location. And then the other location where the rerouting is being routed to, we would have put in more resources to capture those additional volume. And of course, as we have mentioned last quarter, we're expecting to see input cost increases to start to funnel through our P&L. PANV grew 4.3 to now 75.1 million. That's also benefited from some low taxes as well. But when you look at the segment performances, both from cargo, flight handle, aviation meals and non-aviation meals, you can see it's all showing in a positive growth segment. I'll move on to the next slide. Some key wins. We continue to secure more wins and largely also because of good performances from the guys on the ground that gave the customer confidence to continue to work with us. Qatar Airways, this is actually a win that we've won last year. This is actually the implementation of the Qatar win. So you'll start to see volumes going through Europe through the Qatar implementation. In fact, next quarter or Q2, you'll see another Qatar implementation, which is actually in Amsterdam. We've renewed our contracts also with China Airlines across our North American station market. Growing our market share there because, again, China Airlines is important for Asian export into America. So these are all important customers of ours in America. On the M&A side, we have completed an additional 40% stake. So we now hold 90% of Nanjing Weizhou Airline Food Corporation, which is actually the largest frozen meal manufacturer for domestic China flights. And this is really, you know, we can see the trend of Chinese carriers all shifting towards frozen meals as their main product as opposed to in the past it was just more of a just in case and filler product. So this we believe is a major trend and a trend that we believe puts us in a good position to continue to capture those volumes as they grow in China. On the food side, we began catering operation also in Noida. As you know, Noida is the airport that's just out of Delhi. We also have our cargo operations there as well through AI SETS. And food has also done well. We knew several key customers of ours with British Airways, Air France and KLM in Singapore. We've also started a work with Massey Life Science Laboratory to really look at how we can utilize some of their technology, well, produce through unique sustainable food farming technologies We're seeing how we can actually advance that and increase our food security and also sustainable product offering to our customer. And then the last one on T-Coin Award, we continue to win a lot of recognition from the industry. One that I want to highlight is actually the Red Dot Design Award. Both our Global Nation Hub and our Marina Bay Cruise Center teams have won awards for design concepts and innovation. Something that we're very proud of because I think it really separates us from the rest of our competitor where we are very focused around innovation, design thinking, and we're glad to see that the team actually given the award for recognition of what done. Global Air Cargo Handling Agent of the Year from Air World Air Cargo Awards, Best Air Cargo Terminal Operator. And also, I think, well, I think this is actually very pleasing as well. ANA gave us International Caterer Award for medium haul. Next slide. Again, these are just some of the key drivers you can see against all business drivers. You can see it's all growth. Cargo, as I mentioned, 2.59 million tons. That's 8.6% year-on-year growth. Flight standards have grown as well. Primarily, it's driven by the wind that we had in Brazil. And that's obviously mitigated against some of the flight cancellation that we saw, particularly with a lot of the low-cost carriers. Milsurf has all gone out well. From an associate standpoint, it's reflected with some of the flight cancellation, which is why you can see a bit of a downtrend from the associate side. Again, this is the Milsurf for non-aviation. You can see a huge jump, 20% jump. That's really reflecting the additional wins that we have both in China and India. On the headcount side, it's more or less balanced. It's really because of the acquisition we made in Brussels for Avia Partners, so that's being integrated right now in Brussels. Next slide. This is the cargo performance. You can see we continue to outgrow higher numbers, and this is something that we obviously track a lot in Brussels. Again, I think our presence and our network allowed us to continue to reap those benefits coupled with new wins that we have been also implementing across the region.

With that, I'll hand over to Tim to run through the financial summary. Thank you, Kerry. Good morning to everyone. And once again, thank you for joining us in our quarter one update in FY27. So what I'll try to do now, starting from slide 7, I'll give you as much additional colour as I can. Excuse me, translating the overall results into our numbers. So starting with the group results, I think as Kerry's already noted, we are extremely pleased with the way that the business has been very resilient, managing our global network. The obvious translation of the higher growth, in particular in cargo volume, which is in particular very resilient given the geopolitical volatility, is we've got 11% year-on-year growth on our revenue. As we've mentioned, there's no doubt that the margins are impacted due to the inefficiencies of both operations. So the operations that Kerry noted too is the diversion of the labour, Beyond that, the input costs also impacted our Q1 results, albeit that we think As we previously guided, the overall impact has not fully felt in Q1. We do see some lag in the contractual arrangements of the food pricing, and we see that pressure really continue. We see that so far continue in Q2, and it's still likely to go on, depending on the outcome of the conflict in the Middle East. If you look beneath operations, we continue to invest in our infrastructure and IT, and there's additional cost in addressing some of our M&A activity as well, along with some AI investments of which we've noted. All of that does contribute towards the overall EBIT year-on-year growth being lower than last year, but primarily it is the inefficiency coming out from the operations that's driving that number. The SOJV that we've alluded to that being lower than last year really is a reflection of the Middle East conflict as well. One of the factors that if you look into the airline impact, low-cost carriers are in particular impacted given the higher impact cost in Airview. And the cancellations have certainly been more pronounced on the low-cost carrier side. which is impacting their operations. The direct translation of that into our business is that, yes, it is also in the core business, but it is also heavier weighted into the SOA GAV results as well. So barring that, the results still held up considering that we continue to have growth in a number of areas. The Delta versus last year then is really us taking some provisions around the performance of some of our JVs who has been impacted by, in particular, the low-cost carriers' performances onto their portfolio. Excluding that one-off impact, SOE JV would have been very close to flat effectively on a year-on-year basis. And so therefore, if you look at that as a normalisation now onto our overall earnings, we would have been closer to the $80 million patently at that standpoint. If you dig into the Gateway and the Food P&L at the bottom of the slide there, ultimately the Gateway is a function of really the cargo. We actually had positive growth on the ground handling side of things as well. But ultimately, if you look at the rewind the three months we're into Q1, most of you will remember that we did have some upside that came through early in the quarter due to rerouting. But a lot of that rerouting has continued to normalize throughout the quarter, where towards the end of the Q1, we were starting to see some of that reshape back to what it was pre the conflict. We're very pleased on the food results. Obviously, the margins and the growth within the portfolio. Overall margin improvement is really a function of a few factors. Number one, we do have the continuation of scaling up our facilities, and particularly Intingent in India that Kerry mentioned. Ultimately, it is a scale business, and the increase in activity in those facilities have improved our overall results, and we expected that. The utilisation continues to be very, very positive. Last year we were ending the quarter at sort of this low to mid digit of utilization and we're up about 30% now in Tianjin and north of 20% in our China facility. So it's a significant year-on-year increase and we see that path continue as we see the pipeline of our business development. There's no doubt that rerouting benefited the mix and the overall results too in the food side, not to mention that ultimately the cost that we expected to rise has not been fully baked in. So there's a combination of factors that really did drive our overall food performance to perhaps a little bit of an outperformance given the factors that we're seeing in the marketplace. Over on the slide 8 then, if you look at the business in a different way by the business lines, you can see that the translation of the volume really into the core parts of our business. Targo revenue then, it's been very consistent. The appendix, I think you can refer to the appendix, we saw operating volume really at this 9% to 10% range across the world. And that's, in particular, very, very positive, obviously, in our U.S. market, which we know that had been softer prior to the Middle East conflict, post-Liberation Day and the tariff impact and de minimis impact from last financial year. There was a one-off from the charters that we've mentioned previously that went from U.S. into the Middle East market that propped up volume. But having said that, it is the reflection of the global network that allows us to do that. And once again, that goes back towards our competitive advantage in the way we serve our customers, number one, but also obviously leveraging our global network on the cargo side of things as we continue to serve our customers better. Beyond that, the ground and the non-aviation really drove what I've already spoken about. And ultimately, you can see that the broad-based growth by regions in the bottom corner that speaks to the overall resilience of the network. We've been pleasantly surprised in Singapore, of course, always our home market, and it does allow us to continue to invest into innovation and technology within Singapore, given the Very positive results here. Chengyi had a very, very good quarter in serving its customers, both on the ground and the cargo side. Some of the highest growth we've seen for some time above the normal cadence due mainly to rerouting, and it's been slowing to the Singapore market, given its status as a hub around the world. Onto the next slide, number nine then, the translation of that into the financial metrics. So nothing surprising then, given what I've already highlighted. You can see that, yes, the SOEJB obviously looked down at the translation to pat me Cash flow, I'll cover in the next slide, but if you look across the ratios, it is as you would expect it in that we do have slightly softer margin due to the indecency of the business. But beyond that, we are, if you look within the underlying structural structure of the business, Outside of the inefficiencies driven by Middle East, we are obviously very pleased with the structural integrity of the business and we do continue to see that as things normalise, our scale and our breadth of the business will continue to drive our margins towards our FY29 targets. Lastly, on slide 10 on cash flow, it is Q1. So at this stage, from a year-on-year standpoint and then from a cash flow-facing standpoint, it's really impacted by timing. Our receivables grew significantly above our payables growth on a quarter-by-quarter change standpoint. Sorry. So the timing itself is driven the cash flow, the negative cash flow on Q1. It is very similar to the timing, some of the timings issue we experienced in first Q in 2026. So we expect that to normalize over the year, given our normal cadence of cash flow that we produce on a quarter-by-quarter basis, given our business loan rate. With that, I'll hand it back over to Perry just to talk about a little bit of the FY29 targets on our board.