CSE Global : Annual Report 2023

CSE GLOBAL LIMITED

CONTENT

01 Corporate Profile

1. Message To Stakeholders

1. Board Of Directors

1. Key Management

1. Our Solutions

1. Group Structure
2. Corporate Information
3. Global Presence

1. Financial Highlights

1. Operations And Financial Overview

1. Report On Corporate Governance

1. Risk Governance And Internal Control

1. Sustainability Report

1. Financial Statements

1. Statistics Of Shareholdings

1. Notice Of Annual General Meeting

217 Additional Information On Re-Appointment Of Directors Proxy Form

Leveraging our strong foundation to capture opportunities in key and prospective markets.

ANNUAL REPORT 2023 1

CORPORATE PROFILE

CSE Global Limited (CSE) is a global technologies company listed on the Singapore Stock Exchange, with an international presence spanning the Americas, Asia Pacific, Europe, Middle East and Africa regions.

United

States

Mexico

United	India
Kingdom	China

Taiwan

Malaysia

Singapore	Indonesia
	Australia

New Zealand

58

Offices

close to

2,000

Employees

CSE Global is a leading systems integrator providing electrification, communications and automation solutions across various industries globally.

At CSE Global, we pride ourselves as a trusted, lifelong partner to our customers who always has their interests at heart. Leveraging our engineering experience, technology and diverse skill sets across our global network, we design and build customised, integrated systems for our clients that solve their problems.

Our integrated systems - from electrification to communications or automation systems - sit at the heart of every infrastructure and are mission-critical in nature. With highly attuned engineering capabilities

at our core, we have successfully delivered complex, largescale projects amidst the most challenging conditions. Our technologies are designed to reduce waste, allow for greener, smarter processes and are built to last.

Listed on the Singapore Exchange since 1999 and with our presence across 16 countries, 58 offices, and close to 2,000 employees across the globe, we enjoy long-standing relationships with a sizeable customer base comprising large government organisations and renowned brands across the Energy, Infrastructure, and Mining & Minerals sectors.

Over the years, we have built a workplace culture and management style that is people-centric, supportive and collaborative with employee well-being and people improvement as our key focus. Our passion for our work has resulted in a consistent profit track record for the past three decades, as we continue to pursue operational excellence

to achieve sustainable growth and enhanced shareholder returns.

CSE Global - Customer Satisfaction Everytime.

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CSE Global reported order wins of approximately S$1 billion - a record since our inception.

The Group's FY2023 revenue surged 30% to S$725.1 million from S$557.7 million in FY2022.

ANNUAL REPORT 2023 3

DECADES OF GROWTH

Despite the ongoing uncertainties in the macroeconomic environment, CSE Global achieved a strong performance in this financial year.

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MESSAGE TO STAKEHOLDERS

The Group has delivered a strong set of results

for our stakeholders, on the back of record order wins and strong revenue growth led by our Electrification and Communications business segments.

LIM BOON KHENG

Group Managing Director /

Chief Executive Officer

REVENUE

S$725.1 million

FY2022: S$557.7 million

NET PROFIT

S$22.5 million

FY2022: S$4.8 million

LIM MING SEONG

Chairman

ANNUAL REPORT 2023 5

Dear Stakeholders,

2023 continued to present operational challenges as the global economy faced volatility brought about by geopolitical tensions and grapple with inflationary pressures accompanied by interest rate hikes and recessionary concerns, Global supply chains was impacted by transportation bottlenecks and geopolitical tensions.

Despite the ongoing uncertainties in the macro-economic environment, CSE Global's diversification strategy to invest in and acquire electrification and communications businesses has expanded our capabilities and contributed to a strong financial and operational performance in FY2023, achieved record order intake and revenue in the year.

RECORD NEW ORDER

WINS OF S$1 BILLION

The Group reported order wins of approximately S$1 billion - a record since our inception. We are encouraged by the strong growth in the Electrification business segment in the Americas region and the Communications business segment contributed by recent new acquisitions. We continued to make good headway with order wins from the provision of Electrification

and Communications solutions to the Infrastructure sector which exceeded 60% of total order intake for the Group.

We are heartened to have achieved these milestone achievements during the year under review as 2023 marks CSE Global's 36th year since the start of our operations and 25th year as a listed company on the Main Board of the Singapore Exchange.

We have stayed focused on leveraging our engineering capabilities to deliver sustainable growth to all our stakeholders. Our strong commitment to excellence, continuous innovation, and meeting customers' needs and expectations have enhanced CSE Global's resiliency and competitiveness in the global arena.

MESSAGE TO STAKEHOLDERS

We have transformed CSE Global to be a leading global systems integrator providing electrification, communications and automation solutions.

ROBUST FINANCIAL PERFORMANCE

The Group's FY2023 revenue surged 30% from S$557.7 million in FY2022 to S$725.1 million - its strongest topline performance since inception. This was mainly attributable to strong growth in the Electrification and Communications business segments.

In line with higher revenue, Group gross profit for the year rose S$53.7 million or 36.7% year-on-year to S$199.9 million, with gross margins increasing to 27.6% in FY2023 from 26.2% in FY2022. Group EBITDA improved by 90.5% to S$63.6 million compared to FY2022 of S$33.4 million, mainly attributed to higher gross profits offset by a more moderate increase in operating costs. Net profit rose 372.4% year-on-year to S$22.5 million despite higher interest costs.

For FY2023, the Group generated a strong cash inflow from operations of S$72.0 million as compared to FY2022 of S$9.1 million, due to the achievement of several large project billing milestones and stronger collections.

The Group's net debt position was S$76.0 million as at end of December 2023, as compared to S$72.2 million as at end of December 2022. Net gearing ratio as at 31 December 2023 was 0.35x.

We are also delighted to report that the Group has recorded a record order intake totalling nearly S$1 billion (S$990.2 million), increasing 20.9% from the previous year's order intake of S$818.7 million. This was driven by strong growth in the Electrification and Communications business segments, fueled by increasing requirements in power management solutions and products, and stronger demand in critical communications services.

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MESSAGE TO STAKEHOLDERS

The Electrification segment recorded a 41.9% increase in new orders to S$561.1 million, attributed mainly to a number of major electrification projects which included the design and manufacturing of power distribution centres and integration of electrical and control systems and equipment in the United States of America ("USA").

The Communications segment demonstrated the strongest growth in new order intake, with an increase of 58.7% to S$247.7 million, boosted by new orders from recent acquisitions to expand its geographic footprint and market coverage as well as a contract for the supply, installation, integration and maintenance of communication and security systems by the Singapore Government.

Order intake for the Automation business segment totalled S$181.5 million, compared to S$267.2 million in FY2022 which included a one-off major contract relating to a multi-year system maintenance contract from the Singapore Government and maintenance of integrated control systems for an offshore facility.

As at 31 December 2023, the Group's outstanding order book remained robust at S$730.6 million, supported by our existing and new customers. Many customers continued to support and award us with

a stable stream of flow orders, some of whom have been with us for decades.

PROGRESSING IN OUR SUSTAINABILITY & CORPORATE GOVERNANCE EFFORTS

As the business continues its growth trajectory, the importance of sustainability and corporate governance remains instilled within the Group. Aligned with the Singapore Green Plan positioning Singapore to achieve its 2050 net zero emissions goal, we are committed to contributing to Singapore's national agenda on sustainable development.

At CSE, we employ two main sources of energy consumption for our operations. Whilst our fleet of vehicles predominantly function on diesel and petrol, our office premises, warehouses, and integration

centres primarily utilise electricity. We drive to reduce our energy consumption across all operational processes to ultimately mitigate our carbon footprint whilst striving to negate detrimental environmental impacts. We remain cognisant of curbing energy consumption for a sustainable future, which will result in cost savings and overall improvements in economic performance.

We are dedicated to reducing energy consumption and mitigating our carbon footprint. In a bid to transition to cleaner and renewable energy sources while promoting energy efficiency throughout our operations, CSE started to implement energy-saving practices, such as motion sensor lights, energy-efficient bulbs, and regular efficiency checks, while promoting employee awareness of energy conservation. Additionally, our commitment to reduce our carbon footprint includes transitioning to a greener fleet through the adoption of electric vehicles.

With our customers, our participation in renewable energy projects and powering our solutions with renewable sources has contributed to the greening of their operations.

In FY2023, CSE Global successfully obtained a sustainability-linked loan facility with one of our bankers. This loan facility will provide CSE Global with funding terms similar to a typical revolving credit facility, but with favourable terms for reductions in emissions intensity. At CSE Global, we see this as a first step in linking financial incentives to our sustainability performance. In the future, we foresee greater use of sustainability-linked loans and other innovative financing mechanisms to help incentivise and steer us toward achieving our emissions targets.

ANNUAL REPORT 2023 7

Moreover, good corporate governance establishes and maintains a legal and ethical environment within the Group, which complements the Group's sustainability efforts. As a testament to our commitment towards excellent corporate governance, CSE Global was awarded the Silver Award for Best Risk Management and Best Annual Report under the listed companies with market capitalisation of less than S$300 million category, at the Singapore Corporate Awards 2023. Our Group Managing Director / Chief Executive Officer of CSE Global, Mr Lim Boon Kheng, was also selected as a Winner of the Investors' Choice Outstanding CEO Award at the Securities Investors Association (Singapore) Investors' Choice Awards 2023.

CSE Global is committed to upholding corporate governance standards, which we believe will create more value to our shareholders. We will continue to strengthen our corporate governance practices, supported by our capable team and the Board.

SUPPORTING COMMUNITIES,

IMPACTING LIVES

Corporate citizenry is part of our DNA across the regions where we operate. We firmly believe in giving back to our communities while pursuing our business objectives, with particular emphasis on community engagement and contributions through meaningful initiatives. CSE continued to support our Corporate Social Responsibility ("CSR") program demonstrating our commitment to local charitable and social causes in the community where we live and operate.

In the Americas, CSE participated in over 38 different community activities, fundraisers, and events supporting many local non-profit organisations and making positive impact on the lives of others. CSE Americas continued its support to the United Way of Greater Houston and Southwest Louisiana for the third consecutive year in a row. In 2023, CSE Americas participated in several fundraising events for charitable causes such as: 36th annual TechnipFMC's

MESSAGE TO STAKEHOLDERS

United Way golf tournament, 3rd Annual Technip FMC United Way Sporting Clays tournament and ExxonMobil United Way Golf tournament, helping United Way, where CSE Americas contributed over US$5,500 in funds and 32 community work man-hours at the events. CSE Americas was also proud to serve as a "Cook Sponsor" at several local charitable events, where we served over 1,200 meals and more than 100+ community work hours at these events.

Other charitable donations for the year include the BEAR Be A Resource, Grace Ashley Scasny Foundation, the St. Jude Children's Research Hospital, the Ronald McDonald House of Houston, the Houston Texans Foundation, the Houston Food Bank (Randy Sauceda Memorial Fund), the Pontchartrain Conservancy and the Susan G. Komen New Orleans, National Fire Protection Agency.

In addition, CSE Americas contributed over US$4,000 to local scholarship foundations such as the Houston Electrical League Foundation and the Pipeliners Association of Houston. CSE Americas' VetNet (Veterans Network) was honoured for its continuous support of local non-profit veterans' organizations in the Houston area. During the year, CSE Americas' employees also participated in different sporting events and as cook sponsors at many local fundraising and networking events that focused on non-profit and community support causes.

In 2023, CSE Australia has proudly donated and contributed to community sponsorship in excess of A$25,000 to various charities and not-for-profit organisations. The major beneficiaries include the Multiple Sclerosis Society of Western Australia which supports care and research into neurological conditions, The Movember Foundation to fund ongoing research, awareness and services for men's health, and the Lions Festival for Disadvantaged Children (WA) Inc. and Rotary Foundations supporting disadvantaged children. CSE Australia has also supported community sport events such as Mackay Marina Run as well as Surf Life Saving.

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MESSAGE TO STAKEHOLDERS

In Singapore, we have granted a total of 25 bursaries to local education institutions and supported our staff for their families' education expenses. In 2023, we donated S$70,000 to various groups in the communities after identifying deserving beneficiaries. In addition,

we have rendered our support again to Yellow Ribbon Singapore as part of our commitment to help inmates and ex- offenders rebuild their lives and lower the recidivism rate through skills and long-term career development. We also continue to empower women and children patients, visually handicapped, blood disorder as well as life-limiting patients. We will continue to champion good corporate social responsibility and seek to empower underprivileged groups as well as enrich our communities through our staff volunteerism opportunities.

RIDING ON MEGA TRENDS

While mapping growth strategies for resilient and sustainable growth, we identified three key secular mega trends: urbanisation, electrification and decarbonisation, which serve as CSE Global's growth drivers as we align and expand our engineering capabilities and technology solutions to tap opportunities arising and better serve our customers.

With urbanisation, the World Bank expects the number of people living in cities to more than double to a point where nearly seven in ten people will live in cities by 20501. The emphasis on sustainability while catering to the needs of growing populations living in cities has made electrification and decarbonisation key priorities. The global electrification market is forecasted to reach US$172.9 billion by 20322, growing at a CAGR of almost 9% between 2023 and 2032. Decarbonisation is expected to drive the demand for a fundamentally different energy system, such as alternative energy sources based on green electricity and green molecules.

Diversification into new markets brought about by emerging trends ensures our relevancy in the marketplace. During the year, we saw rising demand for power management solutions in data centres, wind and solar farms, battery energy storage and electric vehicle charging infrastructure, which is in-line with the increasing focus on sustainability and renewable energy. Having delivered solutions in the renewables space since 2000s, we are adept at meeting our customers' needs by developing technologies to reduce waste and adapt "greener", smarter ways to deliver efficient and effective solutions.

This diversification into new opportunities is made possible through the adaptability of CSE Global's skillsets, coupled with strategic acquisitions that have expanded CSE Global's suite of electrification, communications, and automation solutions. Our positioning in the critical communications and electrification market allow us to take on more projects in the Infrastructure sector including transportation and public utilities.

These three mega trends translate to immense growth opportunities in multiple industries such as clean energy, public infrastructure such as utilities and energy, transport, data centres and communications, amongst others which are at the cusp of multi-year upcycles as demand is projected to grow strongly in the mid-to-long term.

1. The World Bank (2023, April 3). Urban developmenthttps://www.worldbank.org/en/topic/urbandevelopment/overview#:~:text=Today%2C%20some%2056%25%20of%20the,people%20will%20live%20 in%20cities.
2. Precedence Research (2023, March). Electrification market.https://www.precedenceresearch.com/electrification-market