5 ANNUAL REPORT 2023 MESSAGE TO STAKEHOLDERS 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. 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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