Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — FY2015 Earnings Presentation
38 slides from Avon Technologies's earnings presentation, December 2015
Slide 1: Avon Rubber plc Preliminary Results 2015
AVO N R U B B E R P LC P R E L I M I N A R Y R E S U LT S 2 0 1 5 INTEGRATING TECHNOLOGY 1
Slide 2: Avon Rubber p.l.c. Team
AVON RUBBER P.L.C. TEAM DAVID EVANS ANDREW LEWIS SARAH MATTHEWS-DEMERS Chairman Interim Group Chief Executive Associate Group Finance Director INTEGRATING TECHNOLOGY 2
Slide 3: 2015 Group Key Messages
2015 GROUP KEY MESSAGES Our strategy continues to deliver strong organic growth as the long term investments we have made start to deliver. The outlook for the future remains positive Two acquisitions completed in 2015 (InterPuls and Hudstar) and one completed since year end (Argus) The technology w
Slide 4: Group 2015 Highlights
GROUP 2015 HIGHLIGHTS Revenue £’m FINANCIAL HIGHLIGHTS 150 100 H2 • Operating profit growth of 19% 50 H1 • Diluted earnings per share increased 29% • Revenue up 8% 0 2011 2012 2013 2014 2015 • Return on sales (EBITDA divided by revenue) improved 1.9% from 18.4% to 20.3% 25 • 119% conversion of opera
Slide 5: Sarah Matthews-Demers, Associate Group Finance Director
S A R A H M AT T H E W S - D E M E R S Associate Group Finance Director INTEGRATING TECHNOLOGY 5
Slide 6: Group Income Statement
GROUP INCOME STATEMENT 2015 2014 £’m £’m Revenue 8% 134.3 124.8 EBITDA 19% 27.3 22.9 Depreciation and amortisation (7.1) (5.9) Operating profit before amortisation of acquired intangibles, exceptional items 19% 20.2 17.0 and defined benefit pension costs Amortisation of acquired intangibles, excepti
Slide 7: Protection & Defence
PROTECTION & DEFENCE FINANCIALS PERFORMANCE DRIVERS 2015 2014 £’m £’m Growth in DOD sales as bias moved from non-DOD to DOD, in contrast to the prior year Good performance at AEF and in the Fire and Revenue 7% 98.8 92.8 Industrial markets Good performance from the underlying portfolio of Adjus
Slide 8: Protection & Defence Markets
PROTECTION & DEFENCE MARKETS DOD masks / filters DOD spares EMEA / NA LE Fire AEF 8% 10% 8% 8% 38% 2014 2015 45% £92.8m £98.8m 34% 28% 12% 9% Mix DOD biased as a result of flexibility in production scheduling Good performance from underlying portfolio of law enforcement and non-US military in th
Slide 9: DOD Contract Summary
DOD CONTRACT SUMMARY MASK SYSTEMS Delivered Sole Source Contract Vehicle 3000 Orders Mask systems (thousands) 2500 2000 Total Service Requirement 1500 1000 500 Filter pairs (thousands) 0 1000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 800 600 400 200 0 2008 2009 2010 2011 2012 2013
Slide 10: Dairy
DAIRY FINANCIALS PERFORMANCE DRIVERS 2015 2014 Excellent organic growth in all markets £’m £’m Impulse Air liner reached 25% market share in US and 3.5% in Europe Revenue 11% 35.5 32.0 Cluster Exchange programme grew strongly in Europe and the US with 1,262 farms now signed up Adjusted EBITDA
Slide 11: Dairy Market
DAIRY MARKET OUR REVENUE SPLIT - GEOGRAPHY OUR REVENUE SPLIT - BRAND 6% 1% OEM Milkrite and InterPuls Total 20,000 EU 15,000 31% 62% 25% £'000 10,000 NA 5,000 71% 0 FY11 H1 FY11 H2 FY12 H1 FY12 H2 FY13 H1 FY13 H2 FY14 H1 FY14 H2 FY15 H1 FY15 H2 US EU China South America LINER MARKET SHARE CLUSTER EX
Slide 12: Impact of US$ Translation
IMPACT OF US$ TRANSLATION GROUP PROTECTION & DEFENCE 2014 2014 Constant restated at Constant restated at currency 2015 2015 rates 2014 currency 2015 2015 rates 2014 growth £’m £’m £’m growth £’m £’m £’m Revenue 2% 134.3 132.0 124.8 Revenue 0.3% 98.8 98.5 92.8 Adjusted EBITDA 12% 27.3 24.3 22.9 Adjus
Slide 13: Cashflow
CASHFLOW 2015 2014 £’m £’m Cash generated from continuing operations before effect of exceptional items 24.1 26.5 Cash effect of exceptional items/discontinued operations (2.8) (1.0) Cash generated from operations 21.3 25.5 Tax (3.3) (2.9) Interest (0.1) (0.3) Payments to pension scheme 119% (0.8) (
Slide 14: Summary Balance Sheet
SUMMARY BALANCE SHEET 2015 2014 £’m £’m Intangible assets 41.3 17.2 Property, plant and equipment 28.2 19.6 Current assets £21m INVESTMENT 34.1 32.1 IN ACQUISITIONS Current liabilities (24.8) (26.5) Non-current liabilities (6.8) (4.3) 72.0 38.1 Net (debt)/cash (13.2) 2.9 58.8 41.0 Retirement benefit
Slide 15: UK Retirement Benefit Scheme
UK RETIREMENT BENEFIT SCHEME The triennial actuarial valuation at 31 March ACTUARIAL 2013 showed that the scheme was 98% VALUATION funded. The next valuation is due at 31 March 2016 Accounting deficit moved from £16.0m at 30 September 2014 to £16.6m at 30 September 2015 as the increase in liabilitie
Slide 16: Andrew Lewis, Interim Group Chief Executive
ANDREW LEWIS Interim Group Chief Executive INTEGRATING TECHNOLOGY 16
Slide 17: Integrating Our Protection & Defence Technology
INTEGRATING OUR PROTECTION & DEFENCE TECHNOLOGY Land – military, law enforcement, fire, LAND LAND industrial AIR & SEA AIR & SEA Air Air & Sea & Sea – military, – military, commercial commercial shipping shipping TECHNOLOGY TECHNOLOGY Integrate technology – helmets, INTEGRATED INTEGRATED Integrated
Slide 18: Integrating Our Protection & Defence Technology
INTEGRATING OUR PROTECTION & DEFENCE TECHNOLOGY Organic Product Acquisitions Development 18 18 INTEGRATING TECHNOLOGY
Slide 19: Protection & Defence Opportunities
PROTECTION & DEFENCE OPPORTUNITIES MARKET ENVIRONMENT GROWTH DRIVERS ‐ Budgets stabilised ‐ Funding line for JSGPM project secure ‐ Air crew (JSAM) development programme DOD progressing well ‐ Budget pressures ‐ NA market share gain from existing installed user ‐ Increasing recognition of base (>600
Slide 20: Integrating Our Milking Technology
INTEGRATING OUR MILKING TECHNOLOGY Strategy InterPuls acquisition rationale • Complementary market leading technology • Opportunity to sell Milkrite products through InterPuls distribution network • Opportunity to sell InterPuls products through Milkrite distribution network • Strong product develop
Slide 21: Integrating Our Milking Technology
INTEGRATING OUR MILKING TECHNOLOGY Organic Product Acquisition Development 21 INTEGRATING TECHNOLOGY 21
Slide 22: Dairy Opportunities
DAIRY OPPORTUNITIES MARKET ENVIRONMENT GROWTH DRIVERS ‐ Farm profitability at acceptable ‐ Cluster Exchange levels ‐ Impulse Air ‐ Farm consolidations (mega ‐ Full cluster offering US farms) ‐ InterPuls product range ‐ Farm consolidations ‐ Milkrite market share ‐ Quota/subsidy reductions ‐ Impulse
Slide 23: Outlook Statement
OUTLOOK STATEMENT Our strategy of integrating new technologies from product development and Strategy acquisitions has provided strong results in 2015 and increased our future opportunities In our global Protection & Defence business we have good visibility of DOD Protection revenues for 2016 and a s
Slide 24: Our 2016 Focus
OUR 2016 FOCUS Protection & Defence • Growth of non DOD business in foreign military, • Growth of non DOD business in foreign military, homeland security and industrial markets homeland security and industrial markets • Successful launch of our expanded product range – • Successful launch of our exp
Slide 25: David Evans, Chairman
DAVID EVANS Chairman INTEGRATING TECHNOLOGY 25
Slide 26: Introducing Rob Rennie, CEO
INTRODUCING ROB RENNIE, CEO AVON RUBBER PLC, 1 DECEMBER 2015 • Rob joins Avon from the global engineering company Invensys p.l.c. • As President, Equipment Business, and member of the Global Executive Team, Rob was responsible for the company’s Measurement & Instrumentation business • Rob is experie
Slide 27: Integrating Technology
INTEGRATING TECHNOLOGY 27
Slide 28: Safe Harbour Statement
SAFE HARBOUR STATEMENT Avon Rubber p.l.c. (the ‘Group’) is providing the following cautionary statement: This document contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of the Group. These statements are sometim
Slide 29: Appendices
APPENDICES INTEGRATING TECHNOLOGY 29
Slide 30: Group Worldwide Locations
GROUP GROUP WORLDWIDE WORLDWIDE LOCATIONS LOCATIONS INTEGRATING TECHNOLOGY 30
Slide 31: Protection & Defence - Masks and Mask Systems
PROTECTION & DEFENCE - MASKS AND MASK SYSTEMS M50 FM53A Air Crew Mask Deltair Masks and EZAIR+ mask systems CSPAPR MPPAPR 31 31 INTEGRATING TECHNOLOGY
Slide 32: Protection & Defence - Other Products
PROTECTION & DEFENCE – OTHER PRODUCTS NH15 hood AEF skirt MDC150 dive Other products AEF tank computer MCM100 Thermal rebreather imaging camera 32 32 INTEGRATING TECHNOLOGY
Slide 33: Dairy - Integrating Milking Technology
DAIRY – INTEGRATING MILKING TECHNOLOGY 33 INTEGRATING TECHNOLOGY 33
Slide 34: Dairy - Interface
DAIRY - INTERFACE Cluster Impulse Air liner Italia bucket Round liner Interface milker CombiFast Claw milking system 34 INTEGRATING TECHNOLOGY 34
Slide 35: Dairy - Precision & Control
DAIRY – PRECISION & CONTROL Pulsator Milk meter Vacuum Precision Automatic stability & Control cluster remover Vacuum pump Wash controller 35 INTEGRATING TECHNOLOGY 35
Slide 36: Dairy - Intelligence & Integration
DAIRY – INTELLIGENCE & INTEGRATION Herd Management Software Pedometer Herd Management Dairy Intelligence Cluster Exchange Necktag & Integration Service Dealer iMilk parlour support 36 INTEGRATING TECHNOLOGY 36
Slide 37: The Emergence of Billion Middle-Class Consumers
DAIRY MARKET THE EMERGENCE OF 3 BILLION MIDDLE-CLASS CONSUMERS Global middle-class 3.9 billions of people EU 2.2 25% Source: OECD / McKinsey. NA 71% 1.0 1.0 1.0 2011 data point based 0.8 on UN statistics 2011 2020 2030 North America and Europe Rest of the World MARKET OPPORTUNITIES 37 INTEGRATING TE
Slide 38: Glossary
GLOSSARY Term Explanation AEF Avon Engineered Fabrications AUS Avon Underwater Systems BRIC Brazil, Russia, India, China CBRN Chemical, Biological, Radiological, Nuclear EEBD Emergency Escape Rebreather Device HUD Heads-up display JSAM Joint Service Aircrew Mask JSGPM Joint Service General Purpose M