SATS : SGX Gateway Services Food Solutions 30 Jun 2021 Annual Report 2020-21

Renewed

Vigour

SATS LTD. Annual Report 2020-21

Contents

Renewed Vigour	01
Megatrends	02
SATS Story	04
Key Business Metrics	06
Reinforce Capabilities	08
Feed Communities
Redefine Productivity	10
Connect Communities
Nurture People	12
Upskill Workers
Chairman & PCEO Statement	14
Geographical Presence	20
Board of Directors	22
Operational Review:	28
Food Solutions
Operational Review:	32
Gateway Services
Five-Year Group Financial	36
and Operational Summary
Financial Review	38
Financial Calendar	43
Group Management Board	44
Corporate Governance Report	50
Building a Sustainable Future	98
Financial Statements	103
Additional Information	215
SATS Acronyms	217
Information on Shareholdings	219
Notice of Annual General Meeting	221
Additional Information on Directors	230

Seeking Re-election

Proxy Form

Corporate Information

SATS marked a watershed year in FY2020-21 where we accelerated our transformation in the face of challenges precipitated by the COVID-19 crisis.

It was a season of change that saw the expansion of new pathways for

business growth,

Harnessing food technologies and resilient supply chains, SATS continuously germinates fresh ways of creating tasty, quality food and makes it accessible to more people. We serve communities and customers in and beyond aviation with heartfelt service and advanced technology, connecting people and businesses seamlessly through our comprehensive gateway services.

Driven by a passion to delight our customers

Online Version

For more information, please visit sats.com.sg/AGM2021

All values in the tables, graphs and charts are expressed in Singapore currency unless otherwise stated. Any discrepancies in the tables, graphs and charts included in this report between the listed amounts and total thereof are due to mathematical rounding. Where applicable, measurements in square metres ("sq m") are converted to square feet ("sq ft") and vice versa based on the conversion rate of 1 sq m = 10.7639 sq ft.

Venue courtesy of Gardens By The Bay, Singapore

buttressing of our core business and capabilities, and our people branching out to feed and connect communities.

through innovation, we continue our transformation with renewed vigour.

SATS Ltd. Annual Report 2020-2101.

Thesemegatrends have paved the way for SATS to leverage its capabilities to help its customers and stakeholders in these industries to meet demand and grow sustainably.

01. Plant-based proteins

02. eCommerce

The demand for eCommerce has surged during the COVID-19 pandemic, as consumers shifted their disposable spending from services to products, driving the online share of global retail up to 17% in 2020 from 14% in 20192. SATS is tapping on the advantageous airside locations of its digitalised cargo terminal operations (CTO) network across 10 countries in Asia Pacific and the Middle East to bring added value to its customers. From enhancing its CTO facilities to enable more automated track

& trace piece-level handling to obtaining IATA CEIV certifications, SATS is scaling efficiency to keep supply chains running smoothly.

2 How COVID-19 Triggered the Digital

and eCommerce Turning Point,

UNCTAD, 15 March 2021

03.

Travel

In anticipation of air travel's rebound,

SATS is proactively working with

1 The New Protein Diet, Business Times, 30 April 2021

One of the biggest food trends today is plant-based proteins, which are projected to grow in market size from US$10.3 billion in 2020 to US$14.5 billion by 20251. SATS is well-positioned to capture a share of the market by acquiring distribution rights for plant-based brands such as Growthwell, Tyson First Pride, and Impossible Foods through its subsidiary, Country Foods.

its airline customers to explore innovative solutions to create a safe and improved travel experience for passengers. These prolific efforts range from enhancing demand planning and reducing waste, to promoting sustainable food packaging and boosting sanitisation, as well as harnessing data insights from digital menus to help airlines better predict customer demand and refresh buy-onboard offerings more often to feature the latest F&B trends.

02. Renewed Vigour

SATS Ltd. Annual Report 2020-2103.

SATS Story

Who We Are

Our Purpose

Feedand Connect

Communities.

For more details on	See "Purpose and Brand"
our refreshed purpose	page 90

SATSis Asia's leading provider of food solutions and gateway services with 13,000* employees delighting customers in over 55 locations and 13 countries across the Asia Pacific, UK, and the Middle East.

* This refers to the Group's average headcount for FY2020-21.

Our Stakeholders Include

Our

Vision

To be the market leader by delighting customers with innovative food solutions and seamless connections.

	Using innovative food technologies and
	resilient supply chains, we create tasty,
	quality food in sustainable ways for
	airlines, foodservice chains, retailers and
	institutions. With heartfelt service and
	advanced technology, we connect people,
	businesses and communities seamlessly
Our	through our comprehensive gateway
services for customers such as airlines,
cruise lines, freight forwarders, postal
services and eCommerce companies.

Mission

Customers Employees Partners Investors Regulators

For more detailed	See "Corporate Governance Report"	See "Building a Sustainable Future"
discussions around our
pages 50-97	pages 98-102
context and stakeholders

Our

Core

Values

Passion	Innovation
to delight	Trust
Safety
Teamwork

SATS' core values, Corporate Governance principles, Code of Conduct, and Ethics and Compliance Framework help to guide everyone at SATS to act in line with these values and comply with relevant laws and regulations.

For more details on how our core values are embedded within the company

See "Corporate

Governance Report"

pages 50-97

04. Renewed Vigour

SATS Ltd. Annual Report 2020-2105.

Key Business

Metrics

Revenue	FY2019-20	EBITDA#	FY2019-20	Share of results	FY2019-20	(Loss)/profit	FY2019-20
	S$ 1,941.2M		S$ 355.6M	of associates/joint	S$ 11.8M	attributable to	S$ 168.4M
				ventures, net of tax		owners of the
						company
	S$ 970M	S$ 72.3M	S$ (48)M	S$ (78.9)M

For more detailed information, please refer to page 36

Staff costs & revenue per employee

S$ 125,882	S$ 131,182	S$ 127,780	S$ 113,157	S$ 74,749
Revenue
per Employee
Staff Costs
per Employee

Return on equity

(5)%

FY2020-21

FY2016-17	FY2017-18	FY2018-19	FY2019-20
16.7%	16.2%	15.1%	10.3%

We measure our success by tracking key performance indicators that reflect our operational and financial performance.

S$ 54,102		S$ 53,803
		S$ 52,304
			S$ 44,279	S$ 27,307
FY2016-17		FY2017-18		FY2018-19		FY2019-20	FY2020-21

Average number of employees

Operating statistics*

* Operating statistics cover SATS and its subsidiaries, but does not include associates and joint ventures.

Cargo/Mail	Passengers	Gross Meals	Flights	Ship Calls
Processed	Handled	Produced	Handled	Handled

1.2M	4.1M	43.7M	55.1K	96
(tonnes)
FY2019-201.8M	FY2019-2084.6M	FY2019-2082.5M	FY2019-20351.4K	FY2019-20258

Resizing of manpower

to manage lower

aviation volumes

12,977

contributed to the

decrease in average

13,738

13,147

14,306

17,155

number of employees

FY2016-17

FY2017-18

FY2018-19

FY2019-20

FY2020-21

Earnings per share (Basic)

Dividends per share

Net asset value per share

(7.1)¢

NIL

138.1¢

FY2016-17FY2017-18FY2018-19FY2019-20

FY2016-17

FY2017-18FY2018-19FY2019-20

FY2016-17FY2017-18FY2018-19FY2019-20

23.2¢

23.4¢

22.3¢

15.1¢

17¢

18¢

19¢

6¢

143.9¢

146.4¢

148¢

144.7¢

Combined revenue*
	FY2018-19	FY2019-20	FY2020-21
Combined	S$ 2,587.3M	S$ 2,621.7M
Revenue
Consolidated
Revenue
			S$ 1,263.6M
	S$ 1,828M	S$ 1,941.2M	S$ 970M

• Combined revenue is the sum of the consolidated revenue of the Group and its proportionate share of revenue from its associates/joint ventures (Aggregated Revenue - Non-SFRS(I))

• EBITDA refers to earnings (including share of results of associates/joint ventures) before interest, tax, depreciation and amortisation; and excluding one-off items.

Free cash flow

				S$ 56.2M
FY2020-21						S$ 168.3M
FY2019-20
						S$ 208M
FY2018-19
						S$ 146.3M
FY2017-18
						S$ 220.8M
FY2016-17

Debt-equity ratio

0.56 times

FY2019-20	FY2018-19
0.39		0.06
FY2017-18	FY2016-17
0.07		0.07

Increase in debt to strengthen the Group's liquidity position. Excluding the impact of adopting SFRS (I) 16, debt-equity ratio will be 0.44 times (FY2019-20: 0.26 times)

06. Renewed Vigour

SATS Ltd. Annual Report 2020-2107.