Slide 1: Full Year Results 2017
FULL YEAR RESULTS 2017 Full Year Results 2017
Slide 2: Agenda
AGENDA Introduction David Squires CEO 2017 Full Year Results Bindi Foyle FD Markets & Outlook David Squires CEO Full Year Results 2017
Slide 3: Cautionary Statement
2017 FULL YEAR RESULTS Cautionary Statement This document contains certain forward-looking statements. Such statements have been made in good faith based on information available at the time of announcing the results for the year ended 31 December 2017. These statements should therefore be treated w
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS Constant 2017 2016 Change Currency Revenue £1,023.4m £917.0m +12% +6% Adjusted Operating Profit £82.6m £85.6m -4% -9% Adjusted Operating Margin 8.1% 9.3% -1.2ppts -1.3ppts Adjusted Profit before Tax £73.1m £75.3m -3% -9% Adjusted Earnings per Share 14.39p 14.37p nil Total Divide
Slide 5: 2017 at a Glance
2017 AT A GLANCE £m 1,050 Revenue • Large Commercial £29.9m 1,030 31.6 (0.4) 1,023.4 • Regional & Business Jets £0.2m 1,010 • Military £(8.5)m 29.7 • Other £8.1m 990 970 45.5 • Truck & Off-highway £19.8m 950 • Passenger Vehicles £1.6m • Oil and Gas £13.6m 930 917.0 • Other industrial
Slide 6: Aerospace Results – constant exchange rates
AEROSPACE RESULTS – constant exchange rates(2) £m 745 Revenue Growth 2016 to 2017 725.3 725 0.2 £m 2017 2016 Change 705 (8.5) 8.1 695.6 Revenue 725.3 695.6 +4.3% 685 29.9 Adj OP(1) 76.6 78.4 -2.3% Margin 10.6% 11.3% -0.7ppts 665 645 625 2016 Large Regional & Biz Military Other 2017 Commercial Jets
Slide 7: Flexonics Results – constant exchange rates
FLEXONICS RESULTS – constant exchange rates(2) £m 310 Revenue Growth 2016 to 2017 300 8.7 1.5 298.8 £m 2017 2016 Change 290 19.8 1.6 Revenue 298.8 267.2 +11.8% 280 Adj OP(1) 20.0 22.2 -9.9% 267.2 Margin 6.7% 8.3% -1.6ppts 270 260 250 2016 Truck & Off- Passenger Industrial Other 2017 Highway Vehicles
Slide 8: Adjusted and Reported Profit
ADJUSTED AND REPORTED PROFIT 2017 2016 Change £m £m Adjusted operating profit 82.6 85.6 -4% (-9% on constant currency basis) Net interest payable – borrowings and cash (9.3) (10.1) – retirement benefits (0.2) (0.2) Adjusted profit before tax 73.1 75.3 -3% (-9% on constant currency basis) Tax (2017:
Slide 9: Cash Flow and Use of Funds
CASH FLOW AND USE OF FUNDS £m Gross capex £(54.8)m 150 Disposal proceeds £1.8m 140 12.4 (53.0) Gross capex of £54.8m includes: 130 £23.5m – USA, for 737 MAX, A320neo, A330neo capacity 40.5 expansion, equipment replacement and tooling 120 £8.5m – Thailand, for 737MAX, 787, A320, A330 and A350 110 £5.
Slide 10: Balance Sheet
BALANCE SHEET Dec Dec 2017 2016 £m £m Goodwill and other intangible assets 344.0 379.3 FX Impact from Dec 2016 Investment in JV 2.4 1.7 £m Property, plant and equipment 256.1 254.2 Non current assets (27.0) Working capital (6.2) Other long-term assets 2.4 7.8 Net borrowings 11.0 Non current assets (
Slide 11: Working Capital
WORKING CAPITAL Working capital as a % of revenue 16.0% 15.1% (0.6)% 15.0% (0.7)% 14.0% (0.2)% (0.2)% 13.4% 13.0% 12.0% 11.0% 10.0% Dec-16 Receivables Payables Inventories FX /Other Dec-17 Full Year Results 2017 Page 11
Slide 12: 2017 Financial Summary
2017 FINANCIAL SUMMARY Delivered a solid performance with margin improvement in H2 Adjusted profit before tax of £73.1m, adjusted earnings per share of 14.39p Healthy free cash flow of £58.3m after investing £54.8m in capital expenditure for further organic growth Working capital as % of sal
Slide 13: Markets & Outlook
MARKETS & OUTLOOK Full Year Results 2017
Slide 14: Senior's Markets – 2017
SENIOR’S MARKETS – 2017 29% Flexonics Division Aerospace Division 71% (27%) Heating, Ventilation & Solar 1% 4% Other (73%) (1%) (3%) Power & Energy 3% (4%) Oil and Gas 6% (5%) 45% Large Commercial Aircraft Passenger Vehicles 5% (45%) (5%) Truck & Off-Highway 10% (9%) Other Aerospace Division 5% (5%)
Slide 15: Senior's Customers – 2017
SENIOR’S CUSTOMERS – 2017 29% Flexonics Division Aerospace Division 71% (27%) (73%) Other Industrial & Aerospace 12% 11% Rolls-Royce (12%) (10%) Schlumberger 2% (1%) all 1% of Group or less 10% Boeing Other Land Vehicle 8% (12%) (8%) all 1% of Group or less Caterpillar 3% (2%) 10% Spirit Cummins 4%
Slide 16: Large Commercial Aircraft (45% of Group)
LARGE COMMERCIAL AIRCRAFT (45% of Group) Avg.(1) Airframe (1) Var. in avg. Shipset Value ($k) Deliveries x Avg. Shipset Value ($m ) shipset value shipset 2017 Order value deliveries book 12/16 to 12/17 0 200 400 600 800 1000 1200 0 10 20 30 40 50 60 70 80 90 100 110 ($k) (number) ($k) 737 229 455 43
Slide 17: Regional and Business Jets (7% of Group)
REGIONAL AND BUSINESS JETS (7% of Group) Shipset Value ($k) Deliveries x Avg.(1) Shipset Value ($m ) Var. in avg. Airframe shipset value 0 100 200 300 400 500 600 Shipset 2017 Order 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 12/16 to 12/17 value ($k) deliveries book ($k) GL GL 5000/6000 GL5000/6000 5000/600
Slide 18: Military and Defence (12% of Group)
MILITARY AND DEFENCE (12% of Group) (1) Shipset Value ($k) Avg.(1) Deliveries x Avg. Shipset Value ($m ) Var. in avg. Airframe shipset shipset value 2017 0 200 400 600 800 1000 1200 value 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 12/16 to 12/17 deliveries ($k) ($k) (number) C-130J +67 C-130J 1,020 26
Slide 19: Land Vehicles (15% of Group)
LAND VEHICLES (15% of GROUP) North American Truck and Off-Highway (7% of Group) EU & ROW Truck and Off-Highway (3% of Group) North American Class 8 Truck Production Forecast (Thousands) 400 350 Group EU sales 13%(1) over 2016 300 (1) 250 12% 16% 0% -4% Group ROW sales 72% over 2016 200 150 The G
Slide 20: Industrial (13% of Group)
INDUSTRIAL (13% of Group) Units Oil Price and Rig Count $ 4000 70 Group 2017 sales compared to 2016(1) 3500 60 3000 50 Oil & Gas (6% of Group): 2500 40 Sales 28% (£13.6m) 2000 Upstream oil and gas benefitted from increased 30 1500 drilling activity in North America. 20 1000 Key customer – Schlumbe
Slide 21: Strategic Priorities
STRATEGIC PRIORITIES Autonomous Autonomous and and High Performance Operating Focus Focus on on Growth Growth Talent Development Collaborative Collaborative Business Business Model Model System Empowerment and Outgrow our end markets by: A strong focus on improving accountability organisational ca
Slide 22: Strategic Priorities
STRATEGIC PRIORITIES Competitive Cost Country Autonomous and Considered and Effective High Performance Operating Focus on Growth Strategy Collaborative Business Model Capital Deployment System Enhance global footprint to The executive team Implementing a high performance ensure businesses stay conti
Slide 23: Group Outlook
GROUP OUTLOOK 2018 trading started in line with expectations Order book strong across most businesses • Aerospace revenue growth driven by 737 MAX, A320neo, A350 and C Series ramp up, and E2 Jet and GL 7000/8000 entry into service • Flexonics revenue growth driven by improvement in North American he
Slide 24: Any Questions?
ANY QUESTIONS? Full Year Results 2017
Slide 25: Appendices
APPENDICES Full Year Results 2017
Slide 26: Group Evolution
GROUP EVOLUTION Revenue (£m) Adjusted Operating Profit (£m) Adjusted Operating Margin (%) 1200 120 18 Total after central costs 16 1000 100 Total after central costs 14 800 80 12 10 600 60 8 400 40 6 4 200 20 2 0 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Aerospac
Slide 27: EU and North America
EU and North America Senior is an international 2017 split Sales Adj. OP Employees manufacturing Group with 33 N. America 59% 63% 3,202 operations in 14 countries UK 16% 4% 1,457 Within Europe, Senior has 12 Rest of Europe 12% 11% 1,190 operations across 5 countries, Rest of World 13% 22% 1,847
Slide 28: Changes in Accounting Standards IFRS 15 / 16
CHANGES IN ACCOUNTING STANDARDS IFRS 15 / 16 IFRS 15 Revenue IFRS 16 Leases Requires the recognition of revenue in a Requires lessees to recognise assets and manner that depicts the transfer of goods or liabilities for all leases, unless the lease term is 12 services to customers months or less
Slide 29: Currency Effect
CURRENCY EFFECT Translation FULL YEAR Impact on FY 2016(1) (£m) Avg. Avg. FY FY Adj. 2016 Rates to GBP 2017 Revenue PBT(2) 1.36 US $ 1.29 30.4 3.0 47.81 Thai Baht 43.93 3.5 0.5 33.24 Czech Rep. Koruna 30.18 1.4 0.5 1.23 Euro € 1.15 6.4 0.4 19.89 South African Rand 17.13 1.5 0.3 1.80 Canadian $ 1.68
Slide 30: Division and Geographic Results – As Reported
DIVISION AND GEOGRAPHIC RESULTS – AS REPORTED Revenue £m Adj Operating Profit(1) £m Margin(1) 2017 2016 Currency 2017 2016 Currency 2017 2016 Impact(2) Impact(2) By Division Aerospace 725.3 665.2 30.4 76.6 74.8 3.6 10.6% 11.2% Flexonics 298.8 252.1 15.1 20.0 20.7 1.5 6.7% 8.2% Share of JV - - - 0.7
Slide 31: Earnings per Share and Dividends
EARNINGS PER SHARE AND DIVIDENDS 2017 2016 Change Average number of shares Basic 418.9m 418.8m +0.1m Fully diluted 421.8m 419.3m +2.5m Adjusted earnings per share (1) Basic 14.39p 14.37p +0.1% Fully diluted 14.30p 14.36p -0.4% 2017 2016 Dividends (pence per share) (2) Interim 2.05p 1.95p +5.1% Final
Slide 32: Free Cash Flow
FREE CASH FLOW 2017 2016 £m £m Operating profit 65.5 65.8 Share of JV (0.7) (0.7) Depreciation 38.8 32.5 Amortisation of intangible assets from acquisitions 17.1 19.8 Amortisation of other intangible assets 2.0 1.7 Profit on sale of fixed assets (0.2) - Costs on disposal (0.8) (0.3) Share-based paym
Slide 33: Change in Net Debt
CHANGE IN NET DEBT 2017 2016 £m £m Free cash flow (page 32) 58.3 48.5 Dividends (27.9) (26.4) Proceeds on disposal 0.4 1.3 Repayment of JV loan 0.3 0.5 Purchase of shares by employee benefit trust (0.1) (1.1) Net cash inflow 31.0 22.8 Exchange variations 11.0 (26.3) Non-cash items 0.8 - Net debt – o
Slide 34: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE 2017 2016 Capex Depn (1) Capex Depn (1) £m £m £m £m Aerospace 41.0 27.7 40.1 23.5 Flexonics 13.4 12.9 12.2 10.5 Holding Companies 0.4 0.2 0.5 0.2 Total 54.8 40.8 52.8 34.2 (1) Depreciation of £38.8m (2016: £32.5m) and amortisation of computer software of £2.0m (2016: £1.7m)
Slide 35: Usage of Credit Facilities – December 2017
USAGE OF CREDIT FACILITIES – December 2017 Usage by Currency Interest Facility Usage £ $ € Other % £m £m US Private placements: €28.0m (Feb 2027) 1.51% 24.8 24.8 - - 24.8 - $60.0m (Oct 2025) 3.75% 44.3 44.3 - 44.3 - - £27.0m (Jan 2025) 2.35% 27.0 - - - - - $20.0m (Oct 2022) 3.42% 14.8 14.8 - 14.8 -
Slide 36: Maturity Profile of Credit Facilities
MATURITY PROFILE OF CREDIT FACILITIES $30m private placement repaid in January 2017 by drawing of a new €28m 10 year private placement with an interest rate of 1.51% In May 2017 the committed Harris facility was rolled-forward to June 2019 with a 0.15 ppts reduction in margin A new £27m 7 year
Slide 37: Covenants
COVENANTS Dec 2017 Jun 2017 Dec 2016 Jun 2016 Net Debt £155.3m £181.6m £198.1m £207.3m Net interest - rolling 12 months £9.3m £10.1m £10.1m £9.0m(1) EBITDA - rolling 12 months £123.9m(1) £114.0m £119.6m £130.0m(1) Interest cover (to exceed 3.5 times) 13.3 x 11.3 x 11.8 x 14.4 x Net Debt to EBITDA (n
Slide 38: Pensions
PENSIONS 12 Months 2017 2016 UK USA Various IAS 19 Retirement Benefit Funded Funded Unfunded Total Total £m £m £m £m £m Scheme assets 301.4 47.1 - 348.5 297.4 Scheme liabilities (297.4) (54.5) (7.0) (358.9) (310.0) Scheme asset/(deficit) at 31 Dec 2016 4.0 (7.4) (7.0) (10.4) (12.6) Current service c
Slide 39: Acquisition Framework
ACQUISITION FRAMEWORK More Likely Less Likely Fluid Systems Structures New Markets Division Flexonics Large Commercial Rotorcraft Reg Jet Biz Jet VLJ Market Defence Energy Truck/ Off Highway Automotive Renewables General Industrial Medical Semi-conductor Equipment Aero Ducting Control Bellows Precis
Slide 40: Senior's Locations
SENIOR’S LOCATIONS UK Rickmansworth H.O 2017 split Sales Adj. OP Massachusetts Crumlin Metal Bellows N. America 59% 63% Lymington Canada BWT UK 16% 4% SF Canada Bird Bellows Thermal Rest of Europe 12% 11% Wisconsin Weston EU Rest of World 13% 22% GA Germany Washington SF GmbH AMT Czech Republic Abso
Slide 41: Senior's Products – 2017
SENIOR’S PRODUCTS – 2017 29% Flexonics Division Aerospace Division 71% (27%) Other machined parts 5% (73%) (4%) Industrial flexible parts 9% (9%) 20% Airframe structural parts (22%) Off-highway hydraulics (LV) 3% (1%) Exhaust flexes (LV) 3% (3%) Fuel distribution (LV) 3% (4%) Emission control (LV) 6
Slide 42: Aerospace Division
AEROSPACE DIVISION Full Year Results 2017
Slide 43: Aerospace – Orders and Deliveries
AEROSPACE – ORDERS AND DELIVERIES Deliveries Net Orders Order Book Large Commercial Dec Dec Dec Dec Aircraft 2017 2016 2015 2014 2017 2016 2015 2014 2017 2016 2015 2014 Boeing 763 748 762 723 912 668 768 1,432 5,864 5,715 5,795 5,789 Airbus 718 688 635 629 1,109 731 1,080 1,456 7,265 6,874 6,831 6,3
Slide 44: Aerospace – Large Commercial Aircraft Backlog
AEROSPACE – LARGE COMMERCIAL AIRCRAFT BACKLOG Boeing backlog by region: Dec 2017 Airbus backlog by region: Dec 2017 Australasia Australasia 1% 2% 13% Asia ex-India, Undisclosed 18% China Asia ex-India, Exec. & Private Jets 17% China 5% China & Undisclosed 28% 2% China 4% India 7% India 12% Middle Ea
Slide 45: Aerospace Division: A Summary
AEROSPACE DIVISION: A SUMMARY 2017 2016(2) Change 19 Operations Revenue £725.3m £695.6m +4.3% NAFTA 10 Europe 3 Adjusted Operating Profit (1) £76.6m £78.4m -2.3% UK 4 Adjusted Operating Margin(1) 10.6% 11.3% -0.7ppts ROW 2 Markets Customers Space & Non Military 7% Other Helicopter 2% 16% Rolls-Royce
Slide 46: Progression – Large Commercial Aircraft
(1) SHIPSET VALUE PROGRESSION – Large Commercial Aircraft $k % CAGR 1000 Share of T1000 +26% 900 adjusted to 50% 800 +11% 700 600 -2% 500 +93% 400 +8% 300 +6% 200 100 0 737 MAX 777X 787 A320neo A330neo A350 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 (1) Avera
Slide 47: Progression – Regional, Business and Military
(1) SHIPSET VALUE PROGRESSION – Regional, Business and Military $k % CAGR 600 +5% 500 400 +6% +63% 300 +29% 200 +11% 100 0 CSeries ERJ 190/195- E2 G7000/8000 JSF (F-35) CH-53K Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 (1) Average based on programme share and
Slide 48: Fluid Conveyance
FLUID CONVEYANCE Low Pressure Ducting High Pressure Ducting Engineered Welded Duct Silencer Duct Assemblies Assembly Low Typical Wing Duct Products Pressure Ducting Assemblies HP Bleed Air Duct Low Pressure Ducting Cabin Assembly Typical Regional Jet Bombardier CSeries High Ducting Layout Pressure D
Slide 49: Fluid Conveyance
FLUID CONVEYANCE Aerospace Control Products Non-Aerospace Control Products Welded Bellows Maintenance Free Accumulators Pin Lift Actuators (Semi-Conductor) Control Actuators Drug Pump Implants Hydraulic System Couplings (Medical) Main Operations: Metal Bellows, Calorstat, Bird Bellows, Ermeto Main C
Slide 50: Gas Turbine Engines
GAS TURBINE ENGINES Fluid Conveyance Systems Engine Components Engine Casing (B787 Trent 1000 ) Aerofoil for gas Active Clearance turbine engines Control System Engine Bleed Ducts, Gimbals, Vibreakers, Ball Joints Static Seals Hydraulic/Fuel Feed Bent tubes Manifolds Bellows Face Seals Main Operatio
Slide 51: Structures
STRUCTURES Airframe Assemblies 737 Air Inlet 737 Main Landing Gear 737 Wing to (2ea) Ram Air Wheel Well Body Frame (Birdcage) Premium Seat 737 Boeing Wing Chassis Ribs Main Operations: AMT, Absolute, Damar, Mexico, AMT, Weston, S A Thailand Weston, S A Thailand, S A Upeca Main Customers: Boeing, Spi
Slide 52: Structures
STRUCTURES Nacelles Helicopter Transmissions B777 Engine Nacelle Housing 777 Load Sikorsky UH60 Blackhawk Share Ring Blackhawk Gear Housing Assy. Blackhawk Spindle CF34-10 Torque Box Ring, (Embraer 190) Main Operations: Jet, Ketema, Thermal Engineering S A Connecticut Main Customers: Boeing, Goodric
Slide 53: Flexonics Division
FLEXONICS DIVISION Full Year Results 2017
Slide 54: Flexonics Division: A Summary
FLEXONICS DIVISION: A SUMMARY 2017 2016(2) Change 14 Operations Incl JV NAFTA 4 Revenue £298.8m £267.2m +11.8% Europe 3 Adjusted Operating Profit(1) £20.0m £22.2m -9.9% UK 2 ROW 4 Adjusted Operating Margin (1) 6.7% 8.3% -1.6ppts China JV 1 Markets Customers Other Industrial 10% 2% Aerospace 14% Cumm
Slide 55: Land Vehicle Emission Control
LAND VEHICLE EMISSION CONTROL Common Rails Tubes Turbo-oil feed and drain High Pressure Fuel Lines Exhaust Bellows EGR Coolers/Heat Exchangers Diesel fuel injector components Main Operations: Bartlett, GA, Germany, Blois, Cape Town, Sao Paulo, New Delhi Main Customers: Cummins, Perkins, CAT, MAN, Sc
Slide 56: Industrial Process Control (1)
INDUSTRIAL PROCESS CONTROL (1) Metal Expansion Joints Fabric Expansion Joints Petrochemical, Refineries, & Steel Mills Power Generation Dampers/Diverters Oilfield Services Flow Control Valve Oil & Gas Directional Drilling Equipment Packers Bodies Main Operations: Pathway, S F Upeca, LPE Main Custome
Slide 57: Industrial Process Control (2)
INDUSTRIAL PROCESS CONTROL (2) Vacuum Seal Bellows Flexible Tubes & Hoses CSP - Solar Troughs RotationFlex ® Instrument Control Medical Heat Fuel Cell Bellows Exchangers Components Main Operations: Bartlett, Canada, Germany, Crumlin Main Customers: Medtronics, Valliant, Rioglass, Bloom Energy Full Y
Slide 58: Index
INDEX Presentation Appendices Financial highlights 4 Group evolution 26 2017 at a glance 5 EU and North America 27 Aerospace results - constant exchange rates 6 IFRS 15 and 16 28 Flexonics results - constant exchange rates 7 Currency effect 29 Adjusted and reported profit 8 Division and geographic r