Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — H1 2016 Earnings Presentation
37 slides from Avon Technologies's earnings presentation, 2016
Slide 1: Avon Rubber plc Interim Results 2016
AVO N R U B B E R P LC I N T E R I M R E S U LT S 2 0 1 6 INTEGRATING TECHNOLOGY 1
Slide 2: Avon Rubber p.l.c. Team
AVON RUBBER P.L.C. TEAM DAVID EVANS ROB RENNIE ANDREW LEWIS SARAH MATTHEWS- Chairman Chief Executive Group Finance DEMERS Officer Director Associate Group Finance Director INTEGRATING TECHNOLOGY 2
Slide 3: 2016 Group Interim Key Messages
2016 GROUP INTERIM KEY MESSAGES DOD contract provides stable volume of business MARKET • P&D • Export opportunities are growing, but timing difficult to predict • NA law enforcement HY on HY growth • Manufacturing moved to our UK site ARGUS • New camera product approved (NFPA/CE) late H1 • Sales tea
Slide 4: Group 2016 Interim Highlights
GROUP 2016 INTERIM HIGHLIGHTS Revenue £’m FINANCIAL HIGHLIGHTS 150 • Operating profit growth of 6% 100 H2 • Diluted earnings per share increased 29% 50 H1 • Return on sales (EBITDA divided by revenue) improved 0.5% from 19.4% to 19.9% 0 2012 2013 2014 2015 2016 • Continuing healthy conversion of ope
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 Interim Income Statement
GROUP INTERIM INCOME STATEMENT 2016 2015 2015 Full Interim £’m Interim £’m Year £’m Revenue 5% 66.3 62.8 134.3 EBITDA 9% 13.2 12.2 27.3 Depreciation and amortisation (4.2) (3.7) (7.1) Operating profit before amortisation of acquired intangibles, 6% 9.0 8.5 20.2 exceptional items and defined benefit
Slide 7: Protection & Defence
PROTECTION & DEFENCE FINANCIALS PERFORMANCE DRIVERS 2016 2015 2015 • Stable DOD sales under our long-term sole source Interim Interim Full Year £’m £’m £’m contract • Argus acquisition adding to our fire market offering Revenue 1% 45.7 45.3 98.8 • Growth in the underlying portfolio of NA law enforce
Slide 8: Protection & Defence Market
Protection PROTECTION & Defence & DEFENCE Market MARKETS 2016 H1 2015 H1 2015 FY 5% 12% 10% 11% 8% 11% 43% 45% 47% £45.3m £98.8m £45.7m 28% 28% 27% 9% 7% 9% DOD DOD SPARES EMEA/NA FIRE AEF • Strong DOD order intake and deliveries in line with prior period • No individual ‘impact’ order, but underlyi
Slide 9: DOD Contract Summary
DOD CONTRACT SUMMARY MASK SYSTEMS FILTER PAIRS Sole Source Contract Vehicle 3000 2500 Mask systems (thousands) 1000 Filter pairs (thousands) Total Service Requirement 2000 750 1500 500 1000 250 500 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 201
Slide 10: Dairy
DAIRY FINANCIALS PERFORMANCE PERFORMANCE DRIVERS DRIVERS • Proportion of own brand business growing in soft overall 2016 2015 2015 dairy market caused by low milk prices Interim Interim Full Year £’m £’m £’m • Impulse Air market share growth in US and EU • Cluster Exchange revenues continue to grow,
Slide 11: Dairy Market
DAIRY MARKET OUR REVENUE SPLIT - GEOGRAPHY OUR REVENUE SPLIT - BRAND 2% OEM Milkrite | InterPuls Total Revenue 10% EU £'000 25% 36% 52% NA 71% FY11 H1 FY11 H2 FY12 H1 FY12 H2 FY13 H1 FY13 H2 FY14 H1 FY14 H2 FY15 H1 FY15 H2 FY16 H1 US EU Asia South America LINER MARKET SHARE CLUSTER EXCHANGE GROWTH C
Slide 12: Impact of US$ Translation
IMPACT OF US$ TRANSLATION GROUP PROTECTION & DEFENCE 2015 2015 Constant 2016 restated at 2015 Constant 2016 restated at 2015 currency Interim 2016 rates Interim currency Interim 2016 rates Interim growth £’m £’m £’m growth £’m £’m £’m 1% 66.3 65.8 62.8 Revenue 4% 45.7 47.7 45.3 Revenue Adjusted EBIT
Slide 13: Cashflow
CASHFLOW 2016 Interim £’m 2015 Interim £’m 2015 Full Year £’m Cash generated from continuing operations before effect of exceptional items 14.7 11.8 24.1 Cash effect of exceptional items/discontinued operations (0.3) (0.7) (2.8) Cash generated from operations 14.4 11.1 21.3 Tax 1.7 (1.2) (3.3) Inter
Slide 14: Summary Balance Sheet
SUMMARY BALANCE SHEET 2016 Interim 2015 Interim 2015 Full Year £’m £’m £’m Intangible assets 45.5 19.0 41.3 Property, plant and equipment 29.1 20.3 28.2 NET DEBT Current assets REPRESENTS 35.9 32.3 34.1 30% OF EBITDA Current liabilities (28.5) (26.6) (24.8) Non-current liabilities (7.0) (4.0) (6.8)
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. 2016 Accounting deficit moved from £16.6m £16.0m at 30 September 20152014 to £18.7m £16.6m at 30 31 March 2016 as the
Slide 16: Andrew Lewis, Group Finance Director
ANDREW LEWIS Group Finance Director INTEGRATING TECHNOLOGY 16
Slide 17: Integrating Our Protection & Defence Technology
INTEGRATING OUR PROTECTION & DEFENCE TECHNOLOGY Land – world leading respiratory LAND LAND protection for military, law enforcement and industrial users AIR & SEA Air Air & Sea – military, – developing the JSAMcommercial mask for the AIR shipping US Air Force fixed-wing requirement TECHNOLOGY SeaInt
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 DOD ‐ Air crew (JSAM) development programme 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 INTEGRATION PROGRESS • Opportunities to sell Milkrite products through InterPuls distribution network identified and defined • Opportunities to sell InterPuls products through Milkrite distribution network identified and prioritised • Sales teams
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 under ‐ Cluster Exchange pressure from lower milk prices ‐ Impulse Air market share ‐ Farm consolidations (mega ‐ Full cluster offering US farms) ‐ InterPuls product range ‐ Milk price falling in H1 2016 but ‐ Other product l
Slide 23: Rob Rennie, Chief Executive Officer
Rob Rennie Chief Executive Officer INTEGRATING TECHNOLOGY 23
Slide 24: Outlook Statement
OUTLOOK STATEMENT LOOKING The Board remains confident that the Group will continue to make progress FORWARD as the year develops and maintain our record of strong cash generation. Trading is normally second-half weighted in our Protection & Defence business and we believe this will again be the case
Slide 25: Our H2 2016 Focus
OUR H2 2016 FOCUS Protection & Defence •• Growth Growth of of non non-DOD DOD business business in inforeign foreign military, military and homeland homeland security security and markets industrial markets •• Successful Market penetration launch of with our expanded our expanded product product ran
Slide 26: Integrating Technology
INTEGRATING TECHNOLOGY 26
Slide 27: Forward-Looking Information
FORWARD-LOOKING INFORMATION 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 FORWARD-LOOKING I
Slide 28: Appendices
APPENDICES INTEGRATING TECHNOLOGY 28
Slide 29: Group Worldwide Locations
GROUP GROUP WORLDWIDE WORLDWIDE LOCATIONS LOCATIONS INTEGRATING TECHNOLOGY 29
Slide 30: 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 30 30 INTEGRATING TECHNOLOGY
Slide 31: Protection & Defence - Other Products
PROTECTION & DEFENCE – OTHER PRODUCTS NH15 hood AEF skirt MDC150 dive Other products AEF tank computer MCM100 Thermal rebreather imaging camera 31 31 INTEGRATING TECHNOLOGY
Slide 32: Dairy - Integrating Milking Technology
DAIRY – INTEGRATING MILKING TECHNOLOGY 32 INTEGRATING TECHNOLOGY 32
Slide 33: Dairy - Interface
DAIRY - INTERFACE Cluster Impulse Air liner Italia bucket Round liner Interface milker CombiFast Claw milking system 33 INTEGRATING TECHNOLOGY 33
Slide 34: Dairy - Precision & Control
DAIRY – PRECISION & CONTROL Pulsator Milk meter Vacuum Precision Automatic stability & Control cluster remover Vacuum pump Wash controller 34 INTEGRATING TECHNOLOGY 34
Slide 35: Dairy - Intelligence & Integration
DAIRY – INTELLIGENCE & INTEGRATION Herd Management Software Pedometer Herd Management Dairy Intelligence Cluster Exchange Necktag & Integration Service Dealer iMilk parlour support 35 INTEGRATING TECHNOLOGY 35
Slide 36: Dairy Market: 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 Avon market share
Slide 37: Glossary
GLOSSARY Term Explanation AEF Avon Engineered Fabrications AUS Avon Underwater Systems BRIC Brazil, Russia, India, China CBRN Chemical, Biological, Radiological, Nuclear CE Conformité Européene EEBD Emergency Escape Rebreather Device HUD Heads-up display JSAM Joint Service Aircrew Mask JSGPM Joint S