FY 2025 Full-Year Financial Results Webcast Briefing

Good morning. Welcome to SD Engineering's full year 2025 results briefing. We will begin with a presentation by our group CFO Cedric Fu. Our group president and CEO Vinh Sun Chong will then give his remarks. After that, we will end today's session with a Q&A for the analysts. Without further ado, may I invite Cedric to give his presentation, please. Yeah, thank you. First of all, welcome to the SD Engineering's full year 2025 results briefing. Good morning to all participants, whether you're in person here or by the webcast.

Slide two. Before I begin, I would like to bring our attention to slide number two, which states amongst others that the group's actual performance outcomes and results in the future may differ materially from those expressed in forward-looking statements herein. Slide three. This is our agenda for today. I'm very pleased to present our 25 full year results covering the following topics. Group highlights, business segment discussions, portfolio management, productivity, contract wins and order book, debt, dividends and outlook. Group highlights. Slide number five. In the second half of 2025, we continue to streamline our portfolio with four significant investments. We also recorded non-cash impairments relating to our second business. These actions,

with their one-off effects, affected our reported financial statements and distorted the group's underlying base operating performance. To enable our stakeholders to better assess the financial performance underlying our continuing businesses, we will be using the term BOP or base operating performance throughout this presentation. Some of you call it by other names like clean, underlying, but it means the same thing, or non-gap. On a BOP basis, we delivered an excellent set of results for 2025. Here are some highlights. Revenue reached $12.3 billion.

BOP net profits surged to $851 million. This translates to year-on-year growth rates of 9% and 21% respectively. We also achieved contract wins of $18.7 billion, which is 49% higher year-on-year, lifting our order book $33.2 billion or 16% higher. During the year, we recognised one of non-cash impairment of $689 million, partially offset by divestment gains of $301 million. These figures were reflected in the reported PL&R statements. Importantly, the group generated strong cash flow, $1.7 billion from operations and about $700 million from divestments. These cash resources enabled us to firstly return value to shareholders via the special dividend as recommended by the board.

Secondly, pay down debt to $4.8 billion. And thirdly, reinvest in our growth.

Informatively, our return on equity for 2025 is 28% plus. Slide six. This slide shows the reported PL&R, and I will not dwell too much because of the distortions from one of us. At the revenue level, unchanged from base operating performance, with second half 25 revenue up 12% on the left and full year 25 up 9% on your right. Reported EBITDA, EBIT, PBT and net profit are lower year-on-year, primarily due to one of items recorded during the year, such as impairment losses and divestment gains. And these impairment losses do hit many lines of the PL&R except revenue. Nevertheless, we are pleased to report a positive second half 25 net profit after taking in all the one-off effects of two half 25 as we have guided.

Slide seven. Now, this slide shows base operating performance or BOP.

On a BOP basis, 2025 was a very strong year, which reflected the strength and resilience of our underlying businesses. For the second half of 2025, which is on the other left, the group achieved very strong growth. 12% growth in revenue, 9% growth in EBITDA, 16% growth in EBIT, 21% growth in PBT and 22% growth in net profit.

For second half 2025 growth over first half, which is not shown here, which is a half on half, second half 25 versus first half 25, net profit was 448 million or 11% higher than first half 25 of 4 or 3 million. This represents good trajectory going into 2026. In other words, the second half have higher and better numbers than first half. For the full year 2025, the group also performed very well. 9% growth in revenue, which crossed the 12 billion mark for the first time, 10% growth in EBITDA, 16% growth in EBIT, 20% growth in PBT and 21% growth in net profit. As the year on year revenue growth rate for second half 2025 was 12%, as you can see in the slide, and higher than the 9% growth for the full year 2025, as you can see on your right,

the operating momentum is indeed very strong.

Slide number eight, revenue by segment. On the left, the pie chart shows the revenue breakdown by segment for 2025. 40% was contributed by commercial aerospace, CA in short. 43% was contributed by defence and public security, DPS in short, and 16% was contributed by Urban Solutions and SECCOM or USS. DPS as a segment includes both local and international customers. It also covers commercial domains, including public security, safety, critical infrastructure, and others. Hence DPS as a segment has a revenue of 5.3 billion in 2025. On the left, it's different from the revenue derived from defence, products and solutions. In the middle of the chart, it's 3.8 billion. So in other words, the 3.8 is a subset of the 5.3.

Revenue by type in the centre shows revenue for the past two years. Commercial revenue increased from 7.8 billion to 8.6 billion. Defence revenue increased from 3.5 billion to 3.8 billion. On the right-hand side, revenue by customer location. The table shows revenue by customer location. Asia contributed 55%. It went up. US down 19%, partly because of Liboy, MAE and lower PTF in the US. Europe 20% and others 6%. Slide number nine. This slide shows the year-on-year increase in group revenue by segment. In 2025, our revenue grew from 11.3 to 12.3 billion. Increase in 9% contributed by all segments. If not for the weaker US dollar, average rate in 2025 versus 2024, group revenue would have grown more than 9%.

It would have grown by 10% year-on-year. Now, from another perspective, on a rebase basis, if we exclude Liboy revenue, which was invested in September last year, from both the 2025 Liboy revenue and 2024 Liboy revenue, we just rebased everything. Our underlying continuing businesses would have grown by 11% in sit-on-9%.

Slide number 10. This slide shows BOP EBIT. EBIT grew 16% year-on-year on a BOP basis, driven by effective execution, business growth, and cost savings across the group. After accounting for one of items during the year, reported EBIT is lower. This EBIT, this item relates portfolio actions taken into 2025. On a rebased BOP basis, if we exclude EBIT of Liboy and our share of Citicam, both these companies were divested. For both years, 25 and 24, the underlying businesses grew 18% year-on-year. Slide 11. Net profit. On a BOP basis, net profit grew 21% year-on-year to $851 million. On a rebased BOP basis, again excluding the net profit from Liboy and share of Citicam,

the underlying businesses grew 24% year-on-year, almost a quarter.

Next, we move on to discuss business segments. Slide 13. Slide 13. For CA, revenue grew 14% to $5 billion. Jeff is very proud of hitting that five. Very close, but really almost there. This growth was contributed by strongest years from Engines, MRO, and Nacelles. In terms of contract wins, CA secured $5.8 billion, and this is on your right, of new contracts in 2025, of which $1.7 billion was secured in the fourth quarter alone. You will notice that the contract wins exceed the revenue drawdown from the order book, which is a good sign.

Slide 14. Commercial aerospace EBIT. On a BOP basis, EBIT for CA grew 22%. Very strong. The $487 million outpacing the revenue growth, we talked about, of 14%. So revenue grew 14%, but BOP EBIT 22%. So clearly this is driven by higher margins. On a reported basis, EBIT for CA was $542 million. This is the last bar on the chart, and that includes the divestment gain on Starco of $56 million.