28 slides from Chesterfield Special Cylinders's earnings presentation, Jun 12, 2018
Slide 1: 2018 Interim Investor Presentation
2018 Interim Investor Presentation Pressure Technologies plc
Slide 2: Our Group Structure
Pressure Technologies plc Interim Investor presentation 2018 Our Group Structure Manufacturing Divisions AE Division 2
Slide 3: Key messages and highlights
Pressure Technologies plc Interim Investor presentation 2018 Key messages and highlights Manufacturing Divisions PMC benefited from the recovery in O&G strengthened considerably market - like for like revenue 10% up on 2017 due to more favourable but GM% down 1ppt due to mix. Closing order market co
Slide 4: Summary Group results
Pressure Technologies plc Interim Investor presentation 2018 Summary Group results 2018 H1 2017 H1 Revenue down Revenue (£m) 13.6 17.7 -23.2% Gross profit (£m) 4.2 4.2 to £13.6m (2017: £17.7m) Adjusted operating loss (£m) (1.3) (0.8) Gross margin up 7.1 ppt to Exceptional items (£m) (3.5) (1.7) +30.
Slide 5: PMC continues to achieve strong returns for the Group
Pressure Technologies plc Interim Investor presentation 2018 PMC continues to achieve strong returns for the Group with phasing of large contract orders and revenue in both CSC and AE leading to volatility in reported group results • PMC continues to contribute most Operating Profit and, although or
Slide 6: Summary Group balance sheet
Pressure Technologies plc Interim Investor presentation 2018 Summary Group balance sheet 2018 H1 2017 H16 £m £m Closing Net Debt up Goodwill & Intangible assets 27.0 30.0 £0.7m to £9.3m (2017: £8.6m) Tangible Assets 12.2 13.2 Inventories 6.0 5.2 Measured leverage covenant ratio Trade & other receiva
Slide 7: Summary Group cash flow
Pressure Technologies plc Interim Investor presentation 2018 Summary Group cash flow - 6 months to March 2018 Operating cash (outflow)/inflow* £(2.1)m (2017: £2.2m inflow) Net investment in working capital* £1.5m (2017: reduction £2.2m) Net fundraising in 2018 £4.8m (2017: nil) Repayment of RCF faci
Slide 8: Manufacturing financial highlights
Pressure Technologies plc Interim Investor presentation 2018 Manufacturing financial highlights Revenue up 11.3% to Gross Profit margin up 6.2ppt to Operating Profit* £10.8m 33.3% £0.5m (2017: £9.7m) (2017: 27.1%) (2017: £0.0m) Return on Revenue Net investment in working capital Operating cash outfl
Slide 9: PMC Division highlights
Pressure Technologies plc Interim Investor presentation 2018 PMC Division highlights ● Division predominantly focused on the global oil and gas market which is Increase in Revenue starting to show signs of recovery following an unprecedented three year downturn 10.0% LFL* in 2018 to £5.1 million ● H
Slide 10: Cylinders Division highlights (1 of 2)
Pressure Technologies plc Interim Investor presentation 2018 Cylinders Division highlights (1 of 2) ● Transitioned from reliance on the oil and gas market to a defence market Revenue up focused business ○ Principal project for 2018 and 2019 is supply of cylinders to the first of 24% To £3.9m (2017:
Slide 11: Cylinders Division highlights (2 of 2)
Pressure Technologies plc Interim Investor presentation 2018 Cylinders Division highlights (2 of 2) ● Investment in large capital assets in the subsea, deepwater oil and gas market Revenue up contracts remain at low levels with market forecasters not anticipating significant growth before 2020 24% T
Slide 12: Alternative Energy financial highlights
Pressure Technologies plc Interim Investor presentation 2018 Alternative Energy financial highlights Revenue Gross Profit margin Operating Loss* £2.8m 21.7% £(0.8)m (2017: £8.0m) (2017: 18.1%) (2017: profit £0.1m) Return on Revenue Revenue per employee down 23% to Operating cash outflow*** -31.8% £2
Slide 13: Alternative Energy Division highlights
Pressure Technologies plc Interim Investor presentation 2018 Alternative Energy Division highlights ● First stage of reorganisation completed with hiring of new Divisional President based Revenue down -65% to in Vancouver ● Strengthening of commercial teams and establishment of global partnerships w
Slide 14: Outlook
& Pressure “JF Technologies Specialist engineering allence - organic growth « Futur olutions - Integrity management eader ° 120 years of engineerii ’ skilled craftsmen «+ Creativity Close collaboration with cust of PMC brand + Collaboraticn 9eople = InvestmentinIT*Investii bstantial potential * New
Slide 15: PMC outlook
Pressure Technologies plc Interim Investor presentation 2018 PMC outlook ● Oil and gas market starting to recover but market dynamics changing ○ High quality, low cost and fast delivery required ○ Requirement similar to automotive industry and we have staff with considerable experience in this secto
Slide 16: Cylinders outlook
Pressure Technologies plc Interim Investor presentation 2018 Cylinders outlook ● Defence will remain the mainstay of the Division for the foreseeable future ○ Submarine build programmes largely unaffected by any cuts in defence spending ○ Clear pipeline of potential projects through to at least 2030
Slide 17: Alternative Energy outlook
Pressure Technologies plc Interim Investor presentation 2018 Alternative Energy outlook ● Renewable Natural Gas market set for rapid growth driven by ambitious environmental targets, for example ○ France target 30% of gas grid to be RNG by 2030 and 100% by 2050 ○ Canada target 5% of gas grid to be R
Slide 18: Group outlook
Pressure Technologies plc Interim Investor presentation 2018 Group outlook ● Group core competency is in low volume, high added value, safety critical, difficult to manufacture engineering component markets where cost of a component is orders of magnitude smaller than opportunity cost of failure ● S
Slide 19: Supporting information
AL Pressure & Technologies Supporting information
Slide 20: Oil and Gas sector revenue improving from H216 low point
Pressure Technologies plc Interim Investor presentation 2018 Oil and Gas sector revenue improving from H216 low point across the Manufacturing divisions • As reported in the full year statement H216 was the low point for the Group’s O&G revenue • OPEC production cuts and consequent oil price increas
Slide 21: PMC Division operating profit bridge
Pressure Technologies plc Interim Investor presentation 2018 PMC Division operating profit bridge Increase in Revenue 10.0% LFL* in 2018 to £5.1 million Decrease in Gross Margin 1ppt LFL* in 2018 to 33% Return on Revenue 12.9% -4.9ppt from 2017 Revenue per employee £122k +12.9% from 2017 Closing ord
Slide 22: CSC Division operating profit bridge
Pressure Technologies plc Interim Investor presentation 2018 CSC Division operating profit bridge Revenue up 24% To £3.9m (2017: £3.1m) Increase in Gross Margin +19ppt in 2018 to 35% driven predominantly by the mix of work towards defence Return on Revenue 0.3% +20.5ppt from 2017 Services revenue £1
Slide 23: EP Division operating profit bridge
Pressure Technologies plc Interim Investor presentation 2018 EP Division operating profit bridge Revenue down 1.9% From 2017 Increase in Gross Margin 6ppt in 2018 to 31% as a result of continued focus on LEAN operations Return on Revenue -8.8% Up 7.6ppt from 2017 On 7 June 2018, the Group completed
Slide 24: The AE division has delivered on the £5m order book
Pressure Technologies plc Interim Investor presentation 2018 The AE division has delivered on the £5m order book that was brought forward into 2018 • The AE division has delivered on the £5m upgrader project order book that was brought forward into 2018 • Since the start of the year, three contracts
Slide 25: AE Division operating profit bridge
Pressure Technologies plc Interim Investor presentation 2018 AE Division operating profit bridge Revenue down -65% to £2.8m Due to slippage of timing of new order wins Increase in Gross Margin % 3.6ppt Through improved project management Return on Revenue -32.9ppt From 2017 Revenue per employee £270
Slide 26: The Group's £15m RCF facility was £12.3m drawn
Pressure Technologies plc Interim Investor presentation 2018 The Group’s £15m RCF facility* was £12.3m drawn at the half year date. Leverage has continued to fluctuate with volatility in the AE performance and net investment in working capital as expected in the first half of the financial year. FY1
Slide 27: Keep up to date with our news
Pressure Technologies plc Interim Investor presentation 2018 Keep up to date with our news Please join us on LinkedIn https://www.linkedin.com/company/17971399/ And keep up to date with news from around the Group http://www.pressuretechnologies.com/news 27
Slide 28: Disclaimer
Pressure Technologies plc Interim Investor presentation 2018 Disclaimer This presentation has been prepared by Pressure Technologies plc (the “Company“ or “Pressure Technologies”) solely in connection with providing information on the Company and to certain institutional and professional investors i