Keppel : Presentation slides for Extraordinary General Meeting 2021 Download

Extraordinary General Meeting: Proposed acquisition of SPH through scheme of arrangement

9 December 2021

Disclaimer

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS PRESENTATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL, SUBSCRIBE FOR OR BUY SECURITIES IN ANY JURISDICTION, INCLUDING IN THE UNITED STATES.

This presentation should be read in conjunction with the joint announcements released by Singapore Press Holdings Limited ("SPH") and Keppel Pegasus Pte. Ltd. ("Offeror") on 2 August 2021 and 9 November 2021 in relation to the proposed acquisition by the Offeror of all of the issued and paid-up ordinary shares (excluding the treasury shares) in SPH by way of a scheme of arrangement (the "Joint Announcements" and such acquisition, the "Proposed Transaction") and the Circular despatched by Keppel Corporation ("Keppel") to its shareholders on 24 November 2021 (the "Circular"). Copies of the Joint Announcements and the Circular are available on the website of the SGX-ST at http://www.sgx.com.

This presentation is for information purposes only and does not have regard to your specific investment objectives, financial situation or your particular needs. Any information in this presentation is not to be construed as investment or financial advice and does not constitute an invitation, offer or solicitation of any offer to acquire, purchase or subscribe for shares in Keppel (the "Shares"). The past performance of Keppel is not indicative of the future performance of Keppel.

Certain statements in this presentation may constitute "forward-looking statements", including forward-looking financial information. Such forward-looking statements and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Keppel or industry results, to be materially different from any future results, performance or achievements, expressed or implied by such forward-looking statements and financial information. Such forward-looking statements and financial information are based on numerous assumptions regarding Keppel's present and future business strategies and the environment in which Keppel will operate in the future. Actual future performance, outcomes and results may differ materially from these forward-looking statements and financial information. As these statements and financial information reflect management's current views concerning future events, these statements and financial information necessarily involve risks, uncertainties and assumptions. These forward-looking statements speak only as at the date of this presentation. No assurance can be given that future events will occur, that projections will be achieved, or that assumptions are correct.

Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management regarding future events. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither Keppel nor any of its affiliates or representatives or the advisers of the Offeror (including J.P. Morgan) shall have any liability whatsoever for any loss howsoever arising, whether directly or indirectly, from any use of, reliance on or distribution of this presentation or its contents or otherwise arising in connection with this presentation. None of Keppel nor its affiliates or representatives or the advisers of the Offeror (including J.P. Morgan) undertakes any obligation to update publicly or revise any forward-looking statements.

The information and opinions contained in this presentation are subject to change without notice.

The directors of Keppel (including those who may have delegated detailed supervision of this presentation) have taken all reasonable care to ensure that the facts stated and opinions expressed in this presentation which relate to Keppel (excluding information relating to SPH, SPH REIT, Keppel REIT or Cuscaden Peak (save for Keppel's unitholding interest in Keppel REIT)) are fair and accurate and that there are no other material facts not contained in this presentation, the omission of which would make any statement in this presentation misleading. The directors of Keppel jointly and severally accept responsibility accordingly.

Where any information has been extracted or reproduced from published or otherwise publicly available sources or obtained from SPH, the sole responsibility of the directors of Keppel has been to ensure through reasonable enquiries that such information is accurately extracted from such sources or, as the case may be, reflected or reproduced in this presentation. The directors of Keppel do not accept any responsibility for any information relating to SPH, SPH REIT, Keppel REIT or Cuscaden Peak (save for Keppel's unitholding interest in Keppel REIT).

The presentation is qualified in its entirety by, and should be read in conjunction with, the full text of the Joint Announcements and the Circular. In the event of any inconsistency or conflict between the Joint Announcements and the Circular on one hand and the information contained in this presentation on the other, the Joint Announcements and the Circular shall prevail. All capitalised terms not defined in this presentation shall have the meanings ascribed to them in the Joint Announcements and the Circular.

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Rare opportunity to acquire synergistic platform aligned to Vision 2030

• Financially attractive, enhances returns and earnings profile

1	Pro-forma EPS accretion	2	Pro-forma recurring income	3	Maintain net gearing4 headroom
contribution1,3

Earnings accretive			+18%	56%		<1.0x	term through asset
on pro-forma basis1,2							Deleveraging in the near
		Growth in	Recurring PATMI 3		Net gearing	monetisation programme5
				recurring PATMI 3
 Increased scale in focus areas
1 Potential Increased AUM6	2	Growth sectors	3	Established REIT platform
c.S$47b		+c.27%			Purpose Built Student	Senior Living
			Accommodation
			("PBSA")

• Natural fit with existing businesses and Vision 2030 with many opportunities to harness synergies

Attractive portfolio aligned with Keppel's asset-light business model and supports recurring income growth

Note: 1 This statement on growth in earnings per share ("EPS") and recurring income contribution is not intended as a profit forecast and should not be construed as such. This statement should not be interpreted to mean that its value in any future financial period will necessarily be greater than
those for the relevant preceding financial period. In computing the financial impact of the Proposed Transaction on pro forma EPS, financial statements for different financial year ends and different financial years were used (being the financial year ended 31 Dec 2020 for the Group and the
financial year ended 31 Aug 2021 for the SPH Group). In computing the financial impact of the Proposed Transaction on pro forma recurring income contribution, financial statements with different half year ends were used (being 30 Jun 2021 for the Group and 28 Feb 2021 for the SPH Group); 2
Based on (a) Keppel's audited consolidated results for the financial year ended 31 Dec 2020, (b) the SPH FY2021 Results (for the financial year ended 31 Aug 2021) and (c) pro-forma financial effects of the DIS on selected financial measures of SPH set out in Appendix B to the Circular, yielding a
decrease in loss per share of 3.9 Singapore cents excluding one-off effects due to gains arising from the change in interest in Keppel REIT held by Keppel and excluding restructuring adjustments which include the effect of the assumption of certain liabilities, costs and expenses arising from the	2
Media Business Restructuring; 3 Profit after tax and non-controlling interests ("PATMI"), recurring income excludes gain arising from the change in interest in Keppel REIT held by the Group and finance costs to be incurred due to cash consideration used to fund the transaction; 4 Net debt over

equity; 5 Keppel has earmarked a pool of assets with total carrying value of c.$17.5b (as at 30 Jun 2020) that can be monetised in its Vision 2030 strategy; 6 Potential Increased AUM includes addition of portfolio valuation of SPH REIT and PBSA, carrying value of Orange Valley, investment property value of Japan aged care assets, investment property value of Seletar Mall, GDV of Woodleigh Mall and Genting Lane Data Centre as at 31 Aug 2020, based on SPH 1H FY21 financial results presentation and SPH REIT FY20 annual report, as well as addition of 70% portfolio valuation (as at 6 Aug 2020, based on Prime US REIT 1H FY20 financial results presentation) of Prime US REIT as manager interest increased from 30% to 50% post transaction, resulting in a controlling stake in manager

A win-win proposition for Keppel and SPH shareholders

Final Consideration1

	Firm Offer with			S$2.351

	MAE condition	0.782 SPH REIT	S$0.798
	waived
		units2
		0.596 KREIT
		S$0.685
			units3
			Cash
			S$0.868

Attractive premiums			Additional upside
+12%4 from		Receive KREIT units at
Initial Consideration5		10% discount
+9% premium to		to NAV8
SPH's 9 Nov
closing price6
+57% premium to
SPH unaffected price7

SPH shareholders will receive additional cash consideration of S$0.200/share

Note: 1 Based on KREIT closing price of S$1.150/unit and SPH REIT closing price of S$1.020/unit as of 9 Nov 2021; 2 Consideration of 0.782 SPH REIT units per SPH share; 3 Consideration of 0.596 KREIT units per SPH share; 4 Cash portion of Final Consideration increased by S$0.200 cents

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per SPH share with no change in the number of KREIT and SPH REIT units being offered. However the cumulative value of KREIT and SPH REIT units has gone up by S$0.052/SPH share due to changes in unit prices of KREIT and SPH REIT. Overall, the 12% increase is a combination of cash portion increase (c.10%) and increased value of KREIT and SPH REIT consideration (c.2%); 5 Based on KREIT closing price of S$1.200/unit and SPH REIT closing price of S$0.915/unit as of 30 Jul 2021; 6 S$2.160/SPH share as of 9 Nov 2021; 7 S$1.500/SPH share as of 30 Mar 2021;

8 As of 30 Sep 2021.

Compelling acquisition for Keppel

Proposed acquisition remains attractive to Keppel even at Final Consideration

• Increase in cash consideration of S$0.200/share underpinned by strengthening global economic conditions, recent improvement in SPH performance and growing synergies identified
• Continue to see significant value in SPH portfolio
• Keppel will remain disciplined and increased consideration is final and would not be further increased
• Offer structure remains part scrip - part cash, in line with Keppel's initial plans, but with additional cash
• Proposed acquisition remains earnings accretive on a pro forma basis1
• Higher cash consideration expected to increase Keppel's pro forma net gearing post-transaction by only
  0.03x2, with pro forma net gearing expected to remain <1x, leaving adequate capacity to pursue other Vision 2030 growth opportunities and reward shareholders

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Note: 1 Based on (a) Keppel's audited consolidated results for the financial year ended 31 Dec 2020, (b) the SPH FY2021 Results (for the financial year ended 31 Aug 2021) and (c) pro-forma financial effects of the DIS on selected financial measures of SPH set out in Appendix B to the Circular, yielding a decrease in loss per share of 3.9 Singapore cents excluding one-off effects due to gains arising from the change in interest in Keppel REIT held by Keppel and excluding restructuring adjustments which include the effect of the assumption of certain liabilities, costs and expenses arising from the Media Business Restructuring; 2 In projecting the pro forma net gearing of the Company post-transaction, the net gearing of the Company as at 30 June 2021 was used, assuming that the Proposed Transaction had been effected on 30 June 2021