Senior plc · LSE:SNR
Senior — FY2004 Earnings Presentation
40 slides from Senior's earnings presentation, 2005
Slide 1: Full Year Results 2004
FULL YEAR RESULTS - 2004 Full Year Results 2004
Slide 2: Index
INDEX Introduction 1 Appendices Headline numbers 2 Exchange rates 19 Headline to underlying reconciliation 3 Half-yearly comparison 20 Divisional performance - reported 4 FRS 17 / UITF 38 implementation 21 - constant currency 5 Pensions 22 Key operating profit movements 6 Taxation 23 Geographical pe
Slide 3: Introduction: 2004 Highlights
INTRODUCTION 2004 Highlights 1. Continued recovery in the aerospace industry and Aerospace Division. 2. Dealt with weak dollar and escalating raw material prices. 3. Won significant new business in the Automotive Division. 4. Completed sale of the five Industrial Hose businesses. 5. Completed ration
Slide 4: Headline Numbers
HEADLINE NUMBERS 2004 2003(1) Change Turnover £325.9m £354.9m - 8.2% Operating profit £11.7m £13.1m -10.7% (Loss)/profit before tax (£5.2m) £6.4m Basic (loss)/earnings per share (2.25p) 1.50p Underlying profit before tax £12.7m £11.4m +11.4% Underlying earnings per share 3.65p 3.13p +16.6% Dividend
Slide 5: Headline to Underlying Reconciliation
HEADLINE TO UNDERLYING RECONCILIATION Turnover Operating Profit (1) 2004 2003 2004 2003 £m £m £m £m Headline numbers 325.9 354.9 11.7 13.1 Discontinued operations (page 27) (19.1) (32.0) (0.4) (1.1) Goodwill amortisation - continuing - - 5.1 5.3 - discontinued - - - 0.1 Underlying performance 306.8
Slide 6: Divisional Performance - as reported
DIVISIONAL PERFORMANCE - as reported £m Turnover Operating Profits (1)(2) Margin on Sales 2004 2003 Currency 2004 2003 Currency 2004 2003 Impact(3) Impact(3) Aerospace 139.6 143.8 (11.1) 9.3 7.7 (0.7) 6.7% 5.4% Automotive 122.9 129.6 (6.3) 6.6 7.7 (0.6) 5.4% 5.9% Industrial 44.9 50.0 (2.4) 0.5 2.0 (
Slide 7: Divisional Performance - constant exchange rates
DIVISIONAL PERFORMANCE - constant exchange rates (2) £m Turnover Operating Profits (1) Margin on Sales 2004 2003 Change 2004 2003 Change 2004 2003 Aerospace 139.6 132.7 +5.2% 9.3 7.0 +32.9% 6.7% 5.3% Automotive 122.9 123.3 -0.3% 6.6 7.1 -7.0% 5.4% 5.8% Industrial 44.9 47.6 -5.7% 0.5 1.8 -72.2% 1.1%
Slide 8: Operating Profit Movements
OPERATING PROFIT MOVEMENTS Aerospace Automotive Industrial Total £m £m £m £m 2003 Operating Profit 7.7 7.7 2.0 17.4 Exchange movements - translation (0.7) (0.6) (0.2) (1.5) A380 & JSF costs - 2003 1.7 - - 1.7 - 2004 (1.0) - - (1.0) Reorg & redundancy - 2003 0.7 0.5 0.1 1.3 - 2004 (0.7) (0.3) (0.7) (
Slide 9: Geographical Performance - as reported
GEOGRAPHICAL PERFORMANCE - as reported £m Turnover by Origin Operating Profits (1) Margin on Sales 2004 2003 Currency 2004 2003 Currency 2004 2003 Impact (2) Impact(2) North America 168.4 190.2 (19.3) 10.4 13.7 (1.5) 6.2% 7.2% United Kingdom 53.8 54.9 - 2.9 2.0 - 5.4% 3.6% Rest of Europe 67.1 63.1 (
Slide 10: Geographical Performance - constant exchange rates
GEOGRAPHICAL PERFORMANCE - constant exchange rates (2) £m Turnover by Origin Operating Profits (1) Margin on Sales 2004 2003 Change 2004 2003 Change 2004 2003 North America 168.4 170.9 -1.5% 10.4 12.2 -14.8% 6.2% 7.1% United Kingdom 53.8 54.9 -2.0% 2.9 2.0 +45.0% 5.4% 3.6% Rest of Europe 67.1 62.2 +
Slide 11: Underlying Earnings per Share
UNDERLYING EARNINGS PER SHARE 2004 2003 Change £m £m Operating profit before goodwill amortisation 16.4 17.4 -5.7% Discontinued operating result (page 27) 0.4 1.1 Interest payable - net underlying (3.7) (4.9) - Ketema recovery 0.8 - FRS 17 finance cost (1.2) (2.2) Underlying pre-tax profit (1) 12.7
Slide 12: Retained Profits
RETAINED PROFITS 2004 2003 £m £m Underlying profit after tax 11.2 9.6 (Loss) on disposal of businesses (page 27) (13.3) - Disposal of fixed assets - profit 0.5 0.4 - tax (0.2) - Goodwill amortisation - continuing (5.1) (5.3) - discontinued - (0.1) (Loss)/profit for period (6.9) 4.6 Dividends (6.1) (
Slide 13: Balance Sheet
BALANCE SHEET 2004 2003 £m £m Goodwill 68.0 76.7 Tangible assets 70.0 79.1 Fixed Assets 138.0 155.8 Stocks 38.4 40.1 Debtors & prepayments 58.8 62.3 Creditors - corporate tax (8.3) (4.7) - dividend payable (4.1) (4.1) - other & accruals (58.9) (61.5) Working Capital 25.9 32.1 Debtors over one year 3
Slide 14: Free Cash Flow
FREE CASH FLOW 2004 2003 £m £m Operating profit 11.7 13.1 Depreciation 13.3 16.1 Goodwill 5.1 5.4 Supplementary pension payments (4.0) (1.3) Working capital (page 24) (5.7) (0.4) Operating cash flow 20.4 32.9 Interest paid (net) (2.9) (5.0) Tax recovered / (paid) 2.7 (0.8) Capital expenditure (page
Slide 15: Change in Net Debt
CHANGE IN NET DEBT 2004 2003 £m £m Free cash flow 10.5 20.2 Dividends (6.1) (6.1) Deferred consideration (0.2) (0.3) Disposals (page 27) 4.7 0.7 Cash inflow 8.9 14.5 Exchange variations 4.7 8.7 Net debt - opening (64.2) (87.4) Net debt - closing (50.6) (64.2) Full Year Results 2004 Page 13
Slide 16: Aerospace
AEROSPACE 1. At constant exchange rates - Sales + 5.2% - OP + 32.9% Divisional Sales 2004 2003 - Margin 6.7% Military 29% 31% 2. Civil industry recovery started. Large Commercial 26% 28% Regional + Business Jets 24% 23% 3. Regionals weaker, Business Jets stronger. Space 3% 3% Non Aerospace 18% 15% 4
Slide 17: Automotive
AUTOMOTIVE 1. At constant exchange rates - Sales down 0.3% - OP down 7.0% Production (vehicles – million) - Margin 5.4% 2004 2003 N America GM 4.99 5.30 -5.8% 2. Vehicle production flat. Ford 3.48 3.72 -6.5% DC 2.67 2.57 +3.9% 3. Huge pressure on raw material prices. Honda 1.22 1.26 -3.2% Toyota 1.1
Slide 18: Automotive - New Products
AUTOMOTIVE - NEW PRODUCTS Diesel Exhaust Gas Recycling (EGR) Cooler (US Trucks) Diesel Exhaust Gas Recycling (EGR) Cooler (European Cars) Diesel Common Rail Diesel Fuel Lines Full Year Results 2004 Page 16 /1
Slide 19: Automotive - Secured New Business
AUTOMOTIVE - SECURED NEW BUSINESS Country Product Vehicle Capital Start of 2007 Sales £m Production £m USA Common Rail Heavy Trucks 1.4 Late 05 2.0 India Exhaust Flex Cars 0.3 End 05 1.1 UK EGR Cooler Cars 0.5 End 05 0.9 USA Common Rail Heavy Trucks 1.3 Mid 06 1.6 Europe Common Rail Cars 1.4 Late 06
Slide 20: Automotive - Potential New Business
AUTOMOTIVE - POTENTIAL NEW BUSINESS Ongoing Discussions Customer A B C D E F G H I Product Exhaust Flex EGR Coolers Common Rails Fuel Lines Customers include GM, PSA, Ford, Fiat, Hyundai, Siemens, Cummins, Caterpillar and Mitsubishi Heavy. Full Year Results 2004 Page 16 / 3
Slide 21: Industrial
INDUSTRIAL 1. At constant exchange rates - Sales down 5.7%. OP down 72.2% Margin 1.1% 2. Sale of five Hose businesses - disposal programme completed. 3. Canada improved in good economy. 4. Pathway rationalised to save $2m annually in poor market year. 5. Hargreaves downsized, re-strategised and prop
Slide 22: Summary
SUMMARY 1. Expect continued Aerospace performance improvement. 2. Expect Automotive growth to start in mid 2006. 3. Expect Capex to be high in 2005 and 2006. 4. Expect healthy Industrial business profit recovery. 5. 2005 has started satisfactorily. Full Year Results 2004 Page 18
Slide 23: Appendices
APPENDICES Full Year Results 2004
Slide 24: Exchange Rates
EXCHANGE RATES Profit and Loss Account Balance Sheet Average Rates Period End Rates Dec Dec 2004 2003 Change 2004 2003 Change £ : US Dollar 1.83 1.64 -10.4% 1.92 1.79 -6.8% £ : Euro 1.47 1.45 -1.4% 1.41 1.42 +0.7% £ : Rand 11.75 12.37 +5.3% 10.82 11.95 +10.4% Euro : Rand 7.99 8.53 +6.8% n/a n/a n/a
Slide 25: Half Yearly Comparison
HALF YEARLY COMPARISON Turnover Operating Profits H2 2004 H1 2004 H2 2003 H1 2003 H2 2004 H1 2004 H2 2003 H1 2003 Aerospace 69.6 70.0 67.5 76.3 5.0 4.3 3.5 4.2 Automotive 58.0 64.9 60.1 69.5 2.4 4.2 3.7 4.0 Industrial 22.4 22.5 24.6 25.4 0.6 (0.1) 1.0 1.0 Intersegment sales (0.3) (0.3) (0.4) (0.1) -
Slide 26: FRS 17 / UITF 38 Implementation
FRS 17 / UITF 38 IMPLEMENTATION Profit and Loss Account £m £m Balance Sheet £m £m 2003 profit - previously reported 5.8 2003 net assets – previously reported 122.1 FRS 17 - reverse SSAP24 cost 3.0 SSAP 24 reverse: - add FRS17 service cost (2.0) - prepayment (1.5) UITF 38 - reverse 2003 credit (0.1)
Slide 27: Pensions
PENSIONS Actuarial Valuations UK Plan USA Plans Last valuation 6 April 2004 31 December 2004 Scheme assets/(liabilities) at valuation £112.7m / (£131.2m) £15.6m / (£19.8m) Funding level 86% 79% FRS 17 Valuations Dec 2004 Dec 2003 Dec 2004 Dec 2003 £m Return £m Return £m Return £m Return Scheme Asset
Slide 28: Taxation
TAXATION PBT Tax Effective £m £m Rate Tax at UK corporation tax rate 12.7 3.8 30.0% Benefit of overseas tax rates (1.4) Underlying tax 2.4 18.9% USA Federal - Ketema related recovery (0.6) - prior year adjustment 0.1 USA State - partly Ketema related (0.5) France - prior year adjustment 0.1 Total ta
Slide 29: Working Capital
WORKING CAPITAL Balance Sheet Cash Flow Debtors and Creditors Working Stocks Prepayments and Accruals Capital £m £m £m £m 31 December 2003 (page 11) 40.1 62.3 (61.5) - Hose disposal (page 27) (6.1) (6.8) 5.6 - Movements in period: Aerospace 3.0 0.9 (2.3) (1.6) Automotive 1.5 2.0 (2.4) (1.1) Industri
Slide 30: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE 2004 2003 Capex Depn Capex Depn £m £m £m £m Aerospace 4.1 (1) 5.5 2.8 5.9 Automotive 4.4 6.5 3.8 8.2 Industrial - continuing 1.5 0.6 0.5 0.8 - discontinued(2) 0.3 0.6 0.8 1.1 Holding Companies 0.1 0.1 0.1 0.1 Total 10.4 (1) 13.3 8.0 16.1 (1) 2004 Aerospace capital expenditu
Slide 31: Usage of Facilities - December 2004
USAGE OF FACILITIES - December 2004 Usage by Currency Facility(1) Usage £ $ € Other £m £m Private placements US $ 75.0m (Oct 2008) 39.1 39.1 - 39.1 - - US $ 25.0m (Jun 2007) 13.0 13.0 - 13.0 - - 52.1 52.1 - 52.1 - - Revolving credit facility (Oct 2006) 46.0 0.0 - - - - Bank of America (May 2007) 13.
Slide 32: Discontinued Operations
DISCONTINUED OPERATIONS In August 2004 the five industrial hose businesses (UK, France, Holland, Sweden and the USA) were sold in a single transaction. Turnover Operating Profit pre goodwill 2004 2003 2004 2003 £m £m £m £m Discontinued Operations 19.1 32.0 0.4 1.1 Net Assets sold £m Consideration £m
Slide 33: International Accounting Standards
INTERNATIONAL ACCOUNTING STANDARDS Standards potentially having most significant impact on Senior. Accounting Standard Estimate of Financial Key Aspects Senior Background Impact Number Description Options issued after 7 Share-based Only 12 March 2003 options. Valued PBT - reduction of less IFRS 2 No
Slide 34: Aerospace - Operations
AEROSPACE - OPERATIONS Operation Location Senior Aerospace Ketema San Diego, USA Saltillo, Mexico Senior Aerospace SSP Los Angeles, USA Senior Aerospace Metal Bellows Boston, USA Senior Aerospace BWT Macclesfield, UK Senior Aerospace Jet Products San Diego, USA Senior Aerospace Ermeto Blois, France
Slide 35: Aerospace - Products
AEROSPACE - PRODUCTS 36% of Senior Aerospace sales are in 26% of Senior Aerospace sales are in engine structures and mounting systems metallic ducting systems Jet engine exhaust frame Environmental conditioning system feed duct Engine mounting ring Bleed duct gimbal Jet engine impingement Auxiliary
Slide 36: Aerospace - Products
AEROSPACE - PRODUCTS 13% of Senior Aerospace sales are in 7% of Senior Aerospace sales are in fluid composite ducting systems control systems Air distribution ducting Hydraulic distribution system Fuselage ducting and Active clearance control Insulation system Auxilary power unit air Hydraulic syste
Slide 37: Automotive - Operations
AUTOMOTIVE - OPERATIONS Operation Location Senior Automotive Bartlett Chicago, USA Senior Automotive Blois France Senior Automotive Cape Town South Africa Senior Automotive Kassel Germany Senior Automotive Crumlin South Wales Senior Automotive Olomouc Czech Republic Senior Automotive New Delhi India
Slide 38: Automotive - Products
AUTOMOTIVE - PRODUCTS 41% of Senior Automotive sales are of 18% of Senior Automotive sales are of flexible mechanisms for exhaust systems fuel system distribution pipework and subsystems Flexible exhaust connector High-pressure diesel tube set Picture 16 High-pressure diesel Flexible exhaust connect
Slide 39: Automotive - Products
AUTOMOTIVE - PRODUCTS 12% of Senior Automotive sales are of 8% of Senior Automotive sales are of engine airconditioner, turbocharger and cooling emission control pipework and subsystems systems pipework Turbocharger oil drain tube Secondary air tube Exhaust gas recirculation Exhaust gas recirculatio
Slide 40: Industrial - Continuing Operations
INDUSTRIAL - CONTINUING OPERATIONS Operation Location Senior Hargreaves Bury, UK Pathway Texas, USA Canada Toronto, Canada Full Year Results 2004 Page 33