Slide 1: Full Year Results 2018
FULL YEAR RESULTS 2018 Full Year Results 2018
Slide 2: Agenda
AGENDA Introduction David Squires CEO 2018 Full Year Results Bindi Foyle FD Markets & Outlook David Squires CEO Full Year Results 2018
Slide 3: Cautionary Statement
2018 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 2018. These statements should therefore be treated w
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS constant 2018 2017 Change currency Revenue £1,082.1m £1,023.4m +6% +8% Adjusted Operating Profit £91.6m £82.6m +11% +13% Adjusted Operating Margin 8.5% 8.1% +40bps +40bps Adjusted Profit before Tax £83.0m £73.1m +14% +15% Adjusted Earnings per Share 16.08p 14.39p +12% Total Divi
Slide 5: 2018 at a Glance
2018 AT A GLANCE £m Revenue 1,100 29.6 (0.5) 1,082.1 Aerospace 1,080 2018 2017 Change 1,060 49.4 £m £m 1,040 Revenue 760.4 711.0 +6.9% 1,023.4 (19.8) Adj OP(1) 80.4 75.2 +6.9% 1,020 Margin 10.6% 10.6% - 1,000 $1.34 (17: 1.29) • Large Commercial £31.4m 980 €1.13 (17: 1.15) • Regional & Business £
Slide 6: Adjusted and Reported Profit
ADJUSTED AND REPORTED PROFIT 2018 2017 Change £m £m Adjusted operating profit 91.6 82.6 +11% (13% on constant currency basis) Net interest payable – borrowings and cash (8.8) (9.3) – retirement benefits 0.2 (0.2) Adjusted profit before tax 83.0 73.1 +14% (15% on constant currency basis) Tax (2018: 1
Slide 7: Cash Flow and Use of Funds
CASH FLOW AND USE OF FUNDS £m Gross capex £(56.3)m Disposal proceeds £0.5m 150 140 4.3 (11.1) Gross capex of £56.3m includes: 41.5 £28.6m – USA, for 737 MAX capacity expansion, equipment replacement, 130 (55.8) tooling, facility expansion and Advanced Additive Manufacturing Centre £9.3m – Malaysia,
Slide 8: Balance Sheet
BALANCE SHEET Dec Dec 2018 2017 £m £m Goodwill and other intangible assets 339.6 344.0 FX Impact from Dec 2017 Investment in JV 3.0 2.4 £m Property, plant and equipment 285.6 256.1 Non current assets 23.1 Other long-term assets 2.9 2.4 Working capital 4.8 Non current assets (before pension) 631.1 60
Slide 9: Maturity Profile of Credit Facilities
MATURITY PROFILE OF CREDIT FACILITIES In February 2019 the Group refinanced its main UK RCF of £80m by increasing the committed facilities to £120m and extending the maturity to February 2024, presented below in light blue. The previous £80m was due to mature as follows: £20m in March 2019 and £60
Slide 10: Working Capital
WORKING CAPITAL Working capital as a % of revenue remains under 15% 16.0% 0.8% 14.4% 14.0% 13.4% 0.4% (0.4%) 0.2% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Dec-17 Receivables Payables Inventories FX /Other Dec-18 Full Year Results 2018 Page 10
Slide 11: IFRS 16 Leases – From 1 January 2019
IFRS 16 LEASES – FROM 1 JANUARY 2019 Opening Balance Sheet Adjustments: Right of Use Assets £96.7m Lease Liabilities/ Net Debt £96.3m Net Balance Sheet Impact Nil Working Capital and Other £0.4m Estimated Annual P&L Impact(1) : Depreciation Charge £10.2m Lease Rental Costs £11.3m
Slide 12: 2018 Financial Summary
2018 FINANCIAL SUMMARY Senior delivered profitable growth in 2018 Sales increased to £1,082.1m, 6% Group adjusted operating margin improvement of 40 bps, to 8.5% Adjusted profit before tax of £83.0m, 14% Healthy free cash flow of £45.3m after investing £56.3m in capital expenditure for
Slide 13: Markets & Outlook
MARKETS & OUTLOOK Full Year Results 2018
Slide 14: Senior's Markets – 2018
SENIOR’S MARKETS – 2018 30% Flexonics Division Aerospace Division 70% (29%) 5% Other (71%) Power Generation 3% (5%) (3%) Oil and Gas 6% (6%) 45% Large Commercial Aircraft Passenger Vehicles 5% (45%) (5%) Truck & Off-Highway 11% (10%) 52% Civil Aircraft (52%) Other Aerospace Division 5% (5%) Space &
Slide 15: Senior's Customers – 2018
SENIOR’S CUSTOMERS – 2018 30% Flexonics Division Aerospace Division 70% (29%) (71%) Other 12% 11% Boeing (12%) (10%) Schlumberger 2% all 1% of (2%) Group or less 10% Spirit (10%) Other Land Vehicle 9% (8%) all 1% of Group or less Caterpillar 3% (3%) 10% Rolls Royce (11%) Cummins 4% (4%) all 1% of Gr
Slide 16: Land Vehicles (16% of Group)
LAND VEHICLES (16% of Group) North American Truck and Off-Highway (8% of Group) EU & ROW Truck and Off-Highway (3% of Group) North American Class 8 Truck Production Forecast (Thousands) 400 (1) 350 9% 27% 3% Group EU sales 22% over 2017 21% 23% 300 (1) 250 -29% 12% -28% 6% Group ROW sales 11% ov
Slide 17: Power & Energy (14% of Group)
POWER & ENERGY (14% of Group) Units Oil Price and Rig Count $ 4000 90 3500 80 Group 2018 sales compared to 2017(1) 3000 70 2500 60 Oil & Gas (6% of Group): 2000 50 Sales 11% (£6.9m) - Upstream benefitted from increased drilling 40 1500 30 1000 20 activity in North America 500 10 - Downstream stabl
Slide 18: Military and Defence (11% of Group)
MILITARY AND DEFENCE (11% of Group) Shipset Value ($k) Avg.(1) Airframe (1) Deliveries x Avg. Shipset Value ($m ) Var. in avg. shipset 2018 shipset value value deliveries 0 5 10 15 20 25 30 0 200 400 600 800 1000 1200 12/17 to 12/18 ($k) (number) ($k) C-130J 1,026 25 +7 C-130J F-35 (JSF) 275 91 -(3)
Slide 19: Civil Aircraft (52% of Group)
CIVIL AIRCRAFT (52% of Group) Aircraft Deliveries/Production (number) 2,200 Group sales 8%(1) compared to 2017 2,000 1,800 2018 was the cross-over year for new and mature aircraft platforms 1,600 2019 will be the peak transition year 1,400 Many thousands of new parts introduced for these new
Slide 20: Delivering Profitable Growth
DELIVERING PROFITABLE GROWTH NPI and industrialisation Typical Aerospace Programme Profile Moving through the learning curve INCREASES PRODUCTIVITY & EFFICIENCY, DRIVES DOWN Length of contract COST Volume ROCE Capital expenditure investments Focus on: Delivering profitable growth Driving shareho
Slide 21: Civil Aircraft (52% of Group)
CIVIL AIRCRAFT (52% of Group) Avg.(1) Airframe Var. in avg.(1) Shipset Value ($k) shipset 2018 Order Deliveries x Avg.(1) Shipset Value ($m) shipset value value 12/17 to 12/18 deliveries book 0 200 400 600 800 1000 1200 0 10 20 30 40 50 60 70 80 90 100 ($k) (number) ($k) A320neo 235 386 5,891 A320ne
Slide 22: Group Outlook
GROUP OUTLOOK 2019 trading has started in line with expectations Visibility in the Aerospace Division remains good and our future prospects remain strong • Continuing to balance ongoing cost reduction and learning curve improvements on newer programmes, with the cost of further new product introduct
Slide 23: Any Questions?
ANY QUESTIONS? Full Year Results 2018
Slide 24: Appendices
APPENDICES Full Year Results 2018
Slide 25: Group Evolution
GROUP EVOLUTION Revenue (£m) Adjusted Operating Profit (£m) Adjusted Operating Margin (%) 1200 120 18 Total after central costs 16 1000 100 14 Total after central costs 800 80 12 10 600 60 8 400 40 6 4 200 20 2 0 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Aerospac
Slide 26: Trade Considerations
TRADE CONSIDERATIONS Senior is an international manufacturing 2018 split Sales Adj. OP Employees Group with 33(1) operating businesses in 14 N. America 59% 66% 3,528 countries UK 16% 3% 1,504 Within Europe, Senior has 12(1) operations Rest of Europe 12% 12% 1,157 across 5 countries, including th
Slide 27: Currency Effect
CURRENCY EFFECT Translation FULL YEAR Impact on FY 2017(1) (£m) Avg. Avg. FY Exchange Rates FY Adj. 2017 to GBP 2018(1) Revenue PBT(2) 1.29 US $ 1.34 (22.3) (1.5) 1.15 Euro € 1.13 1.8 0.1 17.13 South African Rand 17.50 (0.3) (0.1) 43.93 Thai Baht 43.21 1.0 0.1 4.15 Brazilian Real 4.85 (1.1) 0.1 1.68
Slide 28: Earnings per Share and Dividends
EARNINGS PER SHARE AND DIVIDENDS 2018 2017 Change Average number of shares Basic 417.8m 418.9m -1.1m Fully diluted 423.5m 421.8m +1.7m Adjusted earnings per share (1) Basic 16.08p 14.39p +11.7% Fully diluted 15.87p 14.30p +11.0% 2018 2017 Dividends (pence per share) (2) Interim 2.19p 2.05p +6.8% Fin
Slide 29: Change in Net Debt
CHANGE IN NET DEBT 2018 2017 £m £m Free cash flow (page 7) 45.3 58.3 Dividends (29.6) (27.9) Proceeds on disposal of business - 0.4 Loan repayment by JV 0.5 0.3 Purchase of shares by employee benefit trust (7.2) (0.1) Net cash inflow 9.0 31.0 Exchange variations (6.7) 11.0 Non-cash items - 0.8 Net d
Slide 30: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE 2018 2017 Capex Depn (1) Capex Depn (1) £m £m £m £m Aerospace 43.3 29.0 41.0 27.7 Flexonics 12.8 12.3 13.4 12.9 Holding Companies 0.2 0.2 0.4 0.2 Total 56.3 41.5 54.8 40.8 (1) Depreciation of £39.5m (2017: £38.8m) and amortisation of software of £2.0m (2017: £2.0m). Full Ye
Slide 31: Usage of Credit Facilities – December 2018
USAGE OF CREDIT FACILITIES – December 2018 Usage by Currency Interest Facility Usage £ $ € Other % £m £m US Private placements: $30.0m (Sep 2028) 4.18% 23.4 23.4 - 23.4 - - €28.0m (Feb 2027) 1.51% 25.2 25.2 - - 25.2 - $60.0m (Oct 2025) 3.75% 47.0 47.0 - 47.0 - - £27.0m (Jan 2025) 2.35% 27.0 27.0 27.
Slide 32: Covenants
COVENANTS Dec 2018 Jun 2018 Dec 2017 Jun 2017 Net debt £153.0m £148.8m £155.3m £181.6m Net interest - rolling 12 months £8.8m £9.0m £9.3m £10.1m EBITDA - rolling 12 months £133.7m £127.6m(1) £123.9m(1) £114.0m Interest cover (to exceed 3.5 times) 15.2 x 14.2 x 13.3 x 11.3 x Net debt to EBITDA (not t
Slide 33: Pensions
PENSIONS 12 Months 2018 2017 UK USA Various IAS 19 Retirement Benefit Funded Funded Unfunded Total Total £m £m £m £m £m Scheme assets 321.2 47.1 0.4 368.7 348.5 Scheme liabilities (301.8) (54.3) (7.9) (364.0) (358.9) Scheme asset/(deficit) at opening 19.4 (7.2) (7.5) 4.7 (10.4) Current service cost
Slide 34: 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 35: 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 Key elements include: ensure businesses stay continually rev
Slide 36: 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 37: Senior's Locations
SENIOR’S LOCATIONS UK Rickmansworth H.O 2018 split Sales Adj. OP Massachusetts Crumlin Metal Bellows Lymington N. America 59% 66% Canada BWT UK 16% 3% SF Canada Bird Bellows Thermal Rest of Europe 12% 12% Wisconsin Weston EU Rest of World 13% 19% GA Germany Washington SF GmbH AMT Czech Republic Abso
Slide 38: Senior's Products – 2018
SENIOR’S PRODUCTS – 2018 30% Flexonics Division Aerospace Division 70% (29%) Other machined parts 5% (71%) (5%) Industrial flexible parts 9% (9%) 19% Airframe structural parts (20%) Off-highway hydraulics (LV) 3% (3%) Exhaust flexes (LV) 3% (3%) Fuel distribution (LV) 3% (3%) Emission control (LV) 7
Slide 39: Aerospace Division
AEROSPACE DIVISION Full Year Results 2018
Slide 40: Aerospace – Large Commercial Aircraft Backlog
AEROSPACE – LARGE COMMERCIAL AIRCRAFT BACKLOG Boeing backlog by region: Dec 2018 Airbus backlog by region: Dec 2018 Australasia Asia ex-India, Australasia 1% 9% China 2% 2% China Asia ex-India, Undisclosed 21% 16% Exec. & Private Jets China 5% India & Undisclosed 30% 6% China 12% Middle East 2% Indi
Slide 41: Aerospace Division: A Summary
AEROSPACE DIVISION: A SUMMARY 2018 2017(1) Change 19 Operations Revenue £760.4m £711.0m +6.9% NAFTA 10 Europe 3 Adjusted Operating Profit(2) £80.4m £75.2m +6.9% UK 4 Adjusted Operating Margin(2) 10.6% 10.6% - ROW 2 Markets Customers Space & Non Military 7% Other Helicopter 2% 15% Boeing Other 30% Mi
Slide 42: Shipset Value Progression – Large Commercial Aircraft
SHIPSET VALUE(1) PROGRESSION – Large Commercial Aircraft $k % CAGR 1000 Share of T1000 +20% 900 reduced Share of T7000 800 reduced +72% 700 600 -4% 500 -6% 400 +6% 300 +5% 200 100 0 737 MAX 777X 787 A320neo A330neo A350 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 (1)
Slide 43: Shipset Value Progression – Regional, Business and Military
SHIPSET VALUE(1) PROGRESSION – Regional, Business and Military $k % CAGR 800 +71% 700 600 +5% +38% 500 400 -5% 300 +10% 200 100 0 A220 ERJ 190/195- E2 GL7500 JSF (F-35) CH-53K Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 (1) Average based on programme share and estima
Slide 44: Large Commercial Aircraft (45% of Group)
LARGE COMMERCIAL AIRCRAFT (45% of Group) Avg.(1) Airframe (1) Var. in avg. Shipset Value ($k) Deliveries x Avg. Shipset Value ($m ) shipset value shipset 2018 Order 12/17 to 12/18 0 200 400 600 800 1000 1200 value deliveries book 0 10 20 30 40 50 60 70 80 90 100 ($k) (number) ($k) A3 2 0 ne o 235 38
Slide 45: Regional and Business Jets (7% of Group)
REGIONAL AND BUSINESS JETS (7% of Group) Shipset Value ($k) Deliveries x Avg. Shipset Value ($m ) Var. in avg. Airframe shipset value 0 100 200 300 400 500 600 Shipset 2018 Order 0 2 4 6 8 10 12 14 16 18 20 12/17 to 12/18 value ($k) deliveries book ($k) A220 Airbus 521 33 480 +41 A220 GL 5000/6000 B
Slide 46: 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 Airbus A220 High Pressure Ducting Layout Ducting
Slide 47: 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 48: 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 49: Structures
STRUCTURES Airframe Assemblies 737 Wing to Body Frame (Birdcage) 777X Folding Wing Tip 737 Main Landing Gear Wheel Well 737 Air Inlet (2ea) Ram Air 737 Boeing Wing Ribs Main Operations: AMT, Absolute, Damar, Mexico, AMT, Weston, S A Thailand Weston, S A Thailand, S A Upeca Main Customers: Boeing, Sp
Slide 50: 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 51: Flexonics Division
FLEXONICS DIVISION Full Year Results 2018
Slide 52: Flexonics Division: A Summary
FLEXONICS DIVISION: A SUMMARY 2018 2017(1) Change 14(3) Operations Incl JV NAFTA 4 Revenue £322.9m £293.3m +10.1% Europe 3(3) Adjusted Operating Profit(2) £26.1m £19.7m +32.5% UK 2 ROW 4 Adjusted Operating Margin (2) 8.1% 6.7% +140bps China JV 1 Markets Customers Other Industrial 10% 2% Aerospace 15
Slide 53: Land Vehicle Emission Control
LAND VEHICLE EMISSION CONTROL Common Rails Tubes Turbo-oil feed and EV Battery drain Cooling Exhaust Bellows EGR Coolers/Heat Exchangers Diesel fuel injector components Main Operations: Bartlett, GA, Germany, Cape Town, Sao Paulo, New Delhi, Wuhan JV, Crumlin Main Customers: Cummins, CAT, MAN, Scani
Slide 54: 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 55: 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: Medtronic, Valliant, Rioglass, Bloom Energy Full Ye
Slide 56: Index
INDEX Presentation Appendices Financial highlights 4 Group evolution 25 2018 at a glance 5 Trade considerations 26 Adjusted and reported profit 6 Currency effect 27 Cash flow and use of funds 7 Earnings per share and dividends 28 Balance sheet 8 Change in net debt 29 Maturing profile of credit facil