Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — H1 2011 Earnings Presentation
29 slides from Avon Technologies's earnings presentation, 2011
Slide 1: Interim results 2011: focus on the future
interim results 2011 focus on the future
Slide 2: Peter Slabbert, Chief Executive
interim results 2011 Peter Slabbert Chief Executive
Slide 3: Highlights
HIGHLIGHTS Revenue £'m 140 120 FINANCIAL HIGHLIGHTS 100 • Operating profit up 18% 80 • Profit before taxation up 49% 60 H2 • Earnings per share up 77% 40 H1 • Lower interest costs and effective tax rate • Improved margins reflecting sales mix and 20 improved operational efficiencies 0 • Resumption o
Slide 4: Global focus
GLOBAL FOCUS Atlanta, Georgia 36% 64% 4 4
Slide 5: Protection & Defence
PROTECTION & DEFENCE Hampton Park HAMPTON PARKWest WEST CADILLAC Manufacture of S10 and FM12 for Manufacture of M50 for the US DoD MoD and NATO forces C50 production capability established Two filter lines making M61 – in the UK 2m filter pair capacity Manufacture of escape hoods for Manufacture of
Slide 6: Protection & Defence
PROTECTION & DEFENCE MARKETING & DEVELOPMENT, BELCAMP, SALES & MARKETING, HPW UK, MALAYSIA & MARYLAND EUROPE Target UK, Europe, New Advanced Facility focusing Development and Marketing Middle East and Far New Products into Defence and Eastern markets Commercial Markets Solely and in collaboration fo
Slide 7: Dairy
DAIRY JOHNSON CREEK & MODESTO UK / CZECH REPUBLIC US Manufacturing, design Outsourced manufacturing and distribution facility centre for European style dairy liners Dairy products within the United States, Canada, South European, Middle-East and Asia markets America and Australasia 7
Slide 8: Andrew Lewis, Group Finance Director
interim results 2011 Andrew Lewis Group Finance Director
Slide 9: Group Income Statement
GROUP INCOME STATEMENT 2011 2010 2010 Interim Interim Year £’m £’m £’m Revenue 48.0 56.5 117.6 EBITDA 16% 7.1 6.2 13.6 Depreciation and amortisation (2.3) (2.1) (4.3) Operating profit 18% 4.8 4.1 9.3 Interest expense (0.2) (0.6) (1.0) Other finance expense (0.2) (0.6) (1.2) Profit before taxation 49
Slide 10: Segmental Analysis Revenue
SEGMENTAL ANALYSIS REVENUE FINANCIALS PROTECTION & DEFENCE 2011 2010 2010 • Non DoD military and police respiratory growth Interim Interim Year • Spare filters in inventory at period end due to £’m £’m £’m customer administrative and testing issues, order P&D 32.7 43.3 90.2 in hand to ship in H2 (£5
Slide 11: Operating Profit by Segment
OPERATING PROFIT BY SEGMENT FINANCIALS PROTECTION & DEFENCE 2011 2010 2010 • Return on sales improved as non DoD revenue Interim Interim Year grew and lower margin AEF revenue reduced £’m £’m £’m • DoD contract for mask systems unaffected by P&D 3.2 3.0 6.5 budget delay in US Dairy 2.5 2.0 4.6 • Adm
Slide 12: US$ has not had a significant impact in H1 2011
US$ HAS NOT HAD A SIGNIFICANT IMPACT IN H1 2011 FINANCIALS PROTECTION & DEFENCE 2011 2010 2010 2011 2010 2010 Interim restated at Interim Interim restated at Interim £’m 2011 rates £’m £’m 2011 rates £’m £’m £’m Revenue 48.0 56.2 56.5 Revenue 32.7 43.1 43.3 EBITDA 7.1 6.1 6.2 EBITDA 5.3 4.8 4.9 Oper
Slide 13: Cashflow
CASHFLOW 2011 2010 2010 Interim Interim Year £’m £’m £’m Net cashflow from operations Continuing excluding exceptional items 1.4 4.9 13.1 Exceptional items - (0.8) (1.2) Continuing total 1.4 4.1 11.9 Discontinued (0.3) (0.9) (2.0) Cash generated from operations 1.1 3.2 9.9 Tax (0.2) - (1.8)
Slide 14: Summary Balance Sheet
SUMMARY BALANCE SHEET 2011 2010 2010 Interim Interim Year £’m £’m £’m Intangible assets 9.1 9.5 8.8 Property, plant and equipment 16.4 17.8 17.0 Current assets 31.9 33.0 26.2 Current liabilities (20.9) (24.4) (18.2) Non-current liabilities (5.3) (7.3) (5.3) 31.2 28.6 28.5 Net borrowings (13.9) (14.4
Slide 15: UK Retirement Benefit Scheme
UK RETIREMENT BENEFIT SCHEME IAS 19 31 MARCH 2011 31 MARCH 2009 TRIENNIAL VALUATION • Deficit at 30 September 2010 of £6.3m has become • Agreement between Company and Trustees a surplus of £0.9m at 31 March 2011 • Benefit of move from RPI to CPI for deferred valuation • Scheme 91.4% funded of £9m •
Slide 16: Peter Slabbert, Chief Executive
interim results 2011 Peter Slabbert Chief Executive
Slide 17: Growth Opportunities
GROWTH OPPORTUNITIES “As a Protection and Defence company, we will establish our position as the world leader in IPE; grow by maximising the potential of the JSGPM contract in the near term, leverage our relationship • DoD with the DoD and by capitalising on the resulting products and technologies i
Slide 18: Protection & Defence Revenues
PROTECTION & DEFENCE REVENUES FY 2010 £90.2m H1 2011 £32.7m DoD masks & filters DoD other (AEF & spares) MoD Non DoD masks DoD masks & filters DoD other (AEF & spares) MoD Non DoD masks 24% 39% 5% 42% 45% 29% 11% 5% • DoD masks and filters remain consistent • Lower margin AEF substituted by higher m
Slide 19: DoD Opportunities
DoD OPPORTUNITIES Sole Source Contract Vehicle 3000 • 10 year mask systems • Filter spares Number of mask systems (thousands) 2500 • Air crew program Total Service Requirement 2000 • Navy EEBD opportunity • Development funding 1500 1000 Filter spares (pairs) 700,000 500 600,000 0 2008 2009 2010 2011
Slide 20: Sales & Marketing Infrastructure
SALES & MARKETING INFRASTRUCTURE 60 50 40 30 Headcount 20 10 0 2007/08 2008/09 2009/10 2010/11 P&D Dairy 20
Slide 21: Distributors
DISTRIBUTORS 2011 EMEA NA TOTAL 60 196 256 286 499 785 2008 EMEA NA TOTAL 40 108 148 206 480 686 21
Slide 22: Research & Development
RESEARCH & DEVELOPMENT 1.6 1.4 1.2 R&D Spend £m 1 0.8 0.6 0.4 0.2 0 2009 2010 HY 2011 Avon Customer 22
Slide 23: Dairy
DAIRY NUMBER OF COWS MARKET • Brazil 19% 25% Developed Nations • Russia BRICA • India 56% Other • China • Australasia BRAND PRODUCTS • Liners • Dairy tubing • Filter socks • Claws • Pulsators • Accessories 23
Slide 24: Acquisitions
ACQUISITIONS PROTECTION & DEFENCE • DoD opportunity • Technology fill in • Respiratory and or CBRN protection • Leverage DoD relationship DAIRY • Technical products • Milk-Rite brand leverage • Milk-Rite distribution leverage 24
Slide 25: Focus on the future - outlook
interim results 2011 focus on the future - outlook
Slide 26: Market and Opportunities
MARKET AND OPPORTUNITIES PROTECTION & DEFENCE • US defence budget approved • Catch up in delayed deliveries • Operational improvements • Commercial order wins DAIRY DAR DAIRY Y • Stabilise input costs • Milk price increase in NA • Benefit from higher selling price recovering higher inputs 26 26
Slide 27: Outlook Statement
OUTLOOK STATEMENT The Board remains confident that the Group can maintain the underlying profit momentum seen in the first half of the year and expects stronger revenues in the second half, particularly now the US defence budget has been approved. The Protection & Defence business will benefit from
Slide 28: Wrap Up
WRAP UP • Margins substantially improved • EPS growth with finance cost & tax management • Order coverage positive for H2 • Investment in product development and sales & marketing continues • Targeted acquisitions
Slide 29: Focus on the future
interim results 2011 focus on the future