Investor Presentation Morgan Stanley 11th Asia Pacific Summit 7 – 8 November 2012 Forward Looking Statements This presentation may contain forward-looking statements regarding, among other things, the Company's outlook, business and strategy which are current as of the date they are made. These forward-looking statements are based largely on the current assumptions, expectations and projections of the directors and management of SATS about our business, and the industry and markets in which we operate. These statements are not guarantees of SATS’ future performance and are subject to a number of risks and uncertainties, some of which are beyond the Company's control and are difficult to predict. Future developments and actual results could differ materially from those expressed in the forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward- looking information will prove to be accurate. SATS does not undertake to update these forward-looking statements to reflect events or circumstances which arise after publication. 2 Agenda • SATS Overview • Investment Highlights • Strategic Directions & Outlook • Appendix 3 SATS Overview 4 Our Business Food Solutions Gateway Services Passenger Services Airline Catering and Lounge Management Institutional Ramp and Catering Baggage Handling Airfreight Handling Food Distribution and Logistics and Logistics Aviation Security Airline Linen Laundry Cruise Handling and Terminal Management 5 At a Glance As at 31 March 2012 Revenue S$1.69bn PATMI S$170.9m Total Assets S$2.12bn Cash and Cash Equivalents S$470.1m Debt-to-Equity 0.1x ROE 11.3% Market Capitalisation S$3.09bn (02 November 2012) Headcount ~14,000 6 2Q12/13 Highlights Revenue • Higher revenue driven by steady growth momentum in gateway (+7.9%) and food (+9.3%) businesses. $461.5m +8.8% • Continued recovery from March 11 disasters saw TFK revenue hit $90.1m (+13.1%). Operating Profit • Focus on cost and productivity improvements yielding some results as operating profit ex-TFK rose 7.9% despite higher $52.1m +15.0% operating expenditure. Share of results of • Associates/JVs in North Asia were key contributors to higher Associates/JVs, net of tax share of results of associates/JVs. $10.4m +3.0% PATMI • Growth in PATMI attributed to improved operating performance and Daniels’ loss in 2Q11/12. Excluding this loss and one-offs, $50.3m +25.4% underlying net profit grew 9.3% to $50.7m. Debt-to-equity • Debt to equity ratio remained healthy. • Cash balance as at 30 September 2012 was $323.5m. 0.12 times +0.02 ppt 7 Our Road Map – expanding beyond aviation and Singapore By Business By Industry By Geography Corp 0.3% Gateway Services Aviation Singapore 35.3% 100.0% 100.0% FY1999 Food Solutions 64.4% Corp Corp Others 0.3% 0.3% 4.4% Gateway Non- Services Aviation Aviation Japan Singapore 35.3% 17.5% 82.2% 19.3% 76.2% 1H FY2013 Food Solutions 64.4% 8 Investment Highlights 9 Investment Highlights 1. 2. 3. Unique Strong Positive Business Model Market Position Prospects 4. 5. Sound Operating Resilient Fundamentals Cash Flows 10 1. Unique Business Model • Twin engines of growth in gateway services and food solutions • Largest aviation services network in Asia 10 Countries 36 Airports Jilin Shenyang Beijing (1) Tokyo (Narita & Haneda) Flights Tianjin 340,266 Riyadh Hong Kong Taipei Batam Manado Medan Macau (1) Jeddah India Manila Balikpapan Passengers Ho Chi Minh Timika Male City Jakarta Surabaya Ujung 63.0m Pandang Singapore Yogyakarta Denpasar Indonesia (1) Meals Amritsar 79.3m Delhi Rockhampton Kolkata Hervey Bay Mumbai Brisbane Airfreight(1) Hyderabad 3.9m tons Goa Chennai Mangalore Bangalore Gateway Services Trivandrum Food Solutions Gateway Services and Food Solutions (1) Based on FY11/12 aviation statistics for Singapore and overseas operations 11 2. Strong Market Position • Singapore aviation: first-choice service provider for close to 60 scheduled airlines at Changi Airport Gateway Services(1) Aviation Food Solutions(1) Ground & Cargo Handling Airline Catering DNATA 26% DNATA 14% SATS 74% SATS 86% ASIG 0% • Singapore non-aviation: leading institutional caterer with the largest capacity • Regional aviation: majority of subsidiaries and JVs are either No. 1 or 2 operator in the airports where they operate (1) Source: Changi Airport Group; market share based on number of scheduled flights. 12 3. Positive Prospects - Singapore & the Region • Located in Asia – a bright spot in the world economy 2012 GDP forecasts(1) China – 7.8% and India – 4.9% Asia-Pacific airlines remain the biggest contributor to global aviation industry profit(2) YTD Passenger traffic (RPK) on Asia Pacific airlines grew 6.2% against global average of 5.7%(3) • Well established international hub Changi Airport is Asia’s leading air hub for key global carriers Passenger traffic up 10.7% to 46.5m in 2011; projected to exceed 50m by 2014 (4) Addition of the new Marina Bay Cruise Centre Singapore • Transforming tourism and hospitality landscape Integrated Resorts, F1, Gardens by the Bay, Sports Hub, medical tourism Visitor arrivals up 13% to13.2m in 2011; targeted to reach 17m by 2015 (5) (1) Source: World Economic Outlook Update October 2012 (2) Source: IATA Financial Forecast September 2012 (3) Source: IATA September 2012 Air Transport Market Analysis (4) Source: Changi Airport Group (5) Source: Singapore Tourism Board 13 4. Sound Operating Fundamentals • Strong customer focus and consistently high service standards • Economies of scale • Focused on sustainable cost levels Operating Margins – SATS vs global peers (1) 10.0% 9.2% 6.8% 5.4% 5.0% 4.4% 2.8% SATS BBA Compass Sodexo Autogrill gategroup John Menzies Airport Service Providers Aviation Food Solutions Food Solutions Source: FactSet, company information as of latest financial year (1) Calendarized to March-year end 14 5. Resilient Cash Flows & Healthy Balance Sheet • Highly cash generative businesses Dividend Payout Ratio(2) with short cash cycle 168.8% • Contract based revenues with limited 98.4% downside risks 77.5% 73.5% 78.6% • Low capex spend ~ S$70m p.a. 63.7% 71.3% • Healthy cash reserves of S$323.5m FY07/08 FY08/09 FY09/10 FY10/11 FY11/12 (1) (29 cents per share) Ordinary dividend Special divdend • Low debt-to-equity ratio of 0.12x(1) FCF & Dividends Paid(2) • Undrawn S$500m MTN programme 288* Excellent financial flexibility to seek 190 188* 151 156 strategic opportunities S$ m 140 142 132 108 104 (1) As at 30 September 2012 (2) Includes special dividends 2008 2009 2010 2011 2012 * Includes special dividends of S$0.06 per share and S$0.15 per share for FY11 and FY12 respectively Free Cash Flow Dividends paid 15 Strategic Directions & Outlook 16 Our Strategy Growth • Serve key customers at strategic locations • Seek strategic Customer Intimacy partnerships and • Anticipate customers’ acquisitions business challenges and find solutions collaboratively Innovation • Increase share of • Explore creative ways their spending to delight our customers with game-changing innovations Operational Excellence • Sustain and improve • Continually improve product and service productivity and offerings performance 17 Execution Focused execution of strategy Acquired 100% Formed 50:50 ground Bought 40% stake in Commenced cruise Singapore Food handling JV with Adel Abuljadayel Flight handling and terminal Industries Air India – AISATS Catering in Saudi Arabia management MBCCS Launched LCC Awarded technical ramp Formed a 51:49 JV with Formed a 30%-owned unit, Asia-Pacific Star handling licence at OCS Ventures to provide assoc company in Saudi Changi Airport remote catering services Arabia to offer pilgrimage catering services Change in major Formed JV to set up an Disposed UK non- Divested 51% equity shareholder from SIA integrated pig farm in aviation food business – stake in Country Foods to Temasek Jilin Food Zone, China Daniels Group Macau Purchased 50.7% stake Won tender to operate in Japanese inflight and manage the new caterer, TFK Corporation Marina Bay Cruise Centre S’pore (MBCCS) 18 Recent Contracts Singapore • Ground and cargo handling for China Eastern Airlines, EVA Airways, FedEx and Turkish Cargo • Inflight catering and ancillary services for Tiger Airways • Inflight catering and laundry services for Air Mauritius • Catering services for Home Team Academy • Ship supplies to two local companies • Logistics and catering services for Singapore Armed Forces 19 Recent Contracts Overseas • TFK: inflight catering services for Aeroflot Russian Airlines, AirAsia Japan, Finnair, Lufthansa and Swiss International Air Lines. • SATS HK: ground handling services for Air Astana, BB Airways, City Airways, Ethiopian Airlines, Singapore Airlines Cargo and Turkish Airlines. 20 Accolades • SATS received Best Reliability (Caterer) Award for mid-year 2012 from United Airlines • All Nippon Airways named PT JAS as one of the Best Three Improved Stations in 1H 2012 • Singapore Airlines conferred Manila Station – MacroAsia Catering Services – the “Winner of Excellence (Catering)” Award 2011 21 Outlook Uncertainty in global air travel demand persists amid the trying global economic environment and the slowdown in Europe. Airfreight demand remains weak on the back of lower consumption in advanced economies. Changi Airport’s fundamentals continue to be supported by regional traffic growth and network enhancement by some airlines. However, decline in air cargo throughput is likely to continue in the coming months. We expect the growth momentum in our food business to continue, underpinned