Senior plc · LSE:SNR
Senior — H1 2008 Earnings Presentation
47 slides from Senior's earnings presentation, Dec 3, 2008
Slide 1: Interim Results 2008
INTERIM RESULTS 2008 Interim Results 2008
Slide 2: Index
INDEX Presentation Appendices Highlights 1 Exchange rates 20 Division results - constant currency 2 Division results - as reported 21 Geographic results - constant currency 3 - half yearly 22 Adjusted earnings per share 4 Geographic results - as reported 23 Reported profit and dividends 5 Capo acqui
Slide 3: Highlights
HIGHLIGHTS An excellent set of results H1 2008 H1 2007 Revenue £279.9m £237.8m +18% ● New Group CEO and FD Operating Profit £31.3m £20.0m +57% Adj Operating Profit £33.4m £21.4m +56% ● Aerospace - strong demand and order intake - acquired Capo (Jan 08) Adj Operating Margin 11.9% 9.0% - - now managed
Slide 4: Division Results – constant exchange rates
DIVISION RESULTS – constant exchange rates (2) £m Turnover Trading Profit (1) Margin on Sales 2008 2007 Change 2008 2007 Change 2008 2007 Aerospace 152.2 125.2 +21.6% 22.2 16.2 +37.0% 14.6% 12.9% Flexonics 128.1 119.8 +6.9% 14.2 8.4 +69.0% 11.1% 7.0% Inter-Segment sales (0.4) (0.2) - - - - - - Centr
Slide 5: Geographic Results – constant exchange rates
GEOGRAPHIC RESULTS – constant exchange rates (2) £m Turnover by Origin Trading Profit (1) Margin on Sales 2008 2007 Change 2008 2007 Change 2008 2007 North America 176.8 146.3 +20.8% 25.7 16.7 +53.9% 14.5% 11.4% Rest of Europe 54.3 53.7 +1.1% 3.0 2.2 +36.4% 5.5% 4.1% United Kingdom 31.0 29.4 +5.4% 3
Slide 6: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE June June 2008 2007 Change £m £m Operating profit 31.3 20.0 +57% Loss on disposal of fixed assets - 0.2 Release of provision set up on acquisition - (0.5) Amortisation of intangible assets on acquisitions 2.1 1.7 Trading profit (1) 33.4 21.4 +56% Net interest payable - bo
Slide 7: Reported Profit and Dividends
REPORTED PROFIT AND DIVIDENDS June June Reported Profit 2008 2007 Change £m £m Adjusted profit for the period 21.6 13.6 +59% Loss on disposal of fixed assets - (0.2) Amortisation of intangible assets (2.1) (1.7) Release of provision set up on acquisition - 0.5 Related tax on above items 0.8 0.6 Repo
Slide 8: Balance Sheet
BALANCE SHEET June June Dec 2008 2007 2007 £m £m £m Goodwill 143.9 109.4 114.3 Other intangible assets 14.9 13.1 11.9 Property, plant and equipment 105.5 86.3 93.6 Other long-term assets 3.5 3.5 3.6 Non current assets 267.8 212.3 223.4 Inventories 77.5 73.2 79.4 Receivables and construction contract
Slide 9: Free Cash Flow
FREE CASH FLOW June June Dec 2008 2007 2007 £m £m £m Operating profit 31.3 20.0 41.5 Depreciation 8.4 7.2 14.1 Amortisation of intangible assets 2.4 1.9 3.8 Loss on disposal of fixed assets - 0.2 0.7 Release of provision set up on acquisition - (0.5) (0.5) Charge for share options 0.7 0.6 1.5 Pensio
Slide 10: Change in Net Debt
CHANGE IN NET DEBT June June Dec 2008 2007 2007 £m £m £m Free cash flow 24.6 6.8 18.5 Dividends (6.7) (5.4) (8.1) Disposals - - 0.1 Acquisitions (mainly Capo – page 24/3) (43.7) (1.2) (8.2) Share issues 1.1 - 0.2 Net cash (outflow)/inflow (24.7) 0.2 2.5 Exchange variations (2.2) 3.7 (0.8) Net debt -
Slide 11: Senior's Markets
SENIOR’S MARKETS 2000 H1 2008 Aerospace 36% Other Industrial 6% Energy, power and Flexonics ventilation 15% 64% Commercial Aerospace 33% H1 2008 Automobiles 18% Military Aerospace Flexonics 12% 46% 7% 54% Heavy Trucks 9% Aerospace Other Aerospace Division Interim Results 2008 Page 9
Slide 12: Aerospace – End Markets and Customers
AEROSPACE – END MARKETS AND CUSTOMERS End Markets Direct Customers (page 32) Other 15% 13% Boeing Large Commercial UTC 11% 40% Military/ Defence 47% Other 7% GE/ 23% Smiths 6% Airbus & EADS 6% Goodrich 11% 11% 5% Business Jets 5% Regional Jets Bombardier Rolls Royce Interim Results 2008 Page 10
Slide 13: Aerospace – Orders and Deliveries
AEROSPACE – ORDERS AND DELIVERIES Large Commercial Aircraft - Historic Deliveries Net Orders Order Book H1 H1 June Dec Dec Dec 2008 2007 2006 2005 2008 2007 2006 2005 2008 2007 2006 2005 Boeing 241 441 398 290 475 1,413 1,044 1,002 3,661 3,427 2,455 1,809 Airbus 245 453 434 378 482 1,341 790 1,055 3
Slide 14: Aerospace – Wide-Bodied Markets
AEROSPACE – WIDE-BODIED MARKETS Orders Order Orders Order & BOEING Book & AIRBUS Book Deliveries Deliveries 2000 4,000 2000 4,000 1800 1800 3,500 3,500 1600 1600 3,000 3,000 1400 1400 2,500 2,500 1200 1200 1000 2,000 1000 2,000 800 800 1,500 1,500 600 600 1,000 1,000 400 400 500 500 200 200 0 0 0 0
Slide 15: Aerospace – Wide-Bodied Backlog
AEROSPACE – WIDE-BODIED BACKLOG Boeing backlog by region: H1 08 Airbus backlog by region: H1 08 US 15% US 10% Africa Africa 2% US Major US Major 8% 6% 2% 16% Asia ex-India, 15% Asia ex-India, US LCC 4% US LCC 5% China China Unknown area 2% US Freighter 2% 2% Australasia 4% Australasia Middle East 11
Slide 16: Aerospace – Summary
AEROSPACE – SUMMARY 54% of Group Revenue. 61% of Group Trading Profit At constant exchange rates: Sales up 21.6%; Trading profit up 37.0% Margin up to 14.6% (H1 2007: 12.9%) Airbus/Boeing order books up 7% in H1 = 7½ years backlog Strong demand across all operations and markets Capo Industries acqui
Slide 17: Flexonics – End Markets and Customers
FLEXONICS – END MARKETS AND CUSTOMERS End Markets End Customers (page 35) Other Industrial 11% 11% PSA (2%)1 Petrochemical 22% Automobile Flex 8% 10% Ford (12%)1 Heating, Ventilation 44% and Solar 10% Industrial 7% GM (22%)1 18% 7% Other Automobile Cummins (0%)1 Power and Energy 15% 4% Renault Nissa
Slide 18: Flexonics – Vehicle Markets
FLEXONICS – VEHICLE MARKETS North America / Europe Production Brazil / India Production 25 4 20 3 Cars / Light Trucks million vehicles million vehicles 15 2 Cars / Light Trucks 10 Cars only 1 5 0 0 2004 2005 2006 2007 2008F 2009F 2010F 2004 2005 2006 2007 2008F 2009F 2010F Europe North America North
Slide 19: Flexonics – Energy Markets
FLEXONICS – ENERGY MARKETS World Primary Energy Demand World Renewable Energy Demand 18 2.5 16 billion tonnes of oil equivalent billion tonnes of oil equivalent 2 14 12 1.5 10 8 1 6 4 0.5 2 0 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2
Slide 20: Flexonics – Summary
FLEXONICS – SUMMARY 46% of Group Revenue. 39% of Group Trading Profit At constant exchange rates: Sales up 6.9%; Trading profit up 69.0% Margin up to 11.1% (H1 2007: 7.0%) Heavy duty diesel products – much improved contribution N America auto demand weak. Elsewhere OK or even good Benefiting from ma
Slide 21: Group Outlook
GROUP OUTLOOK Negative impact of higher fuel prices and credit crunch Positive impact of higher fuel prices Material price changes largely pass through. Low energy user (1% of sales) Growth from increased build rates of existing aircraft Growth from launch of B787 (896 orders) and A380 Growth from n
Slide 22: Appendices
APPENDICES Interim Results 2008
Slide 23: Exchange Rates
EXCHANGE RATES Profit and Loss Account Balance Sheet Average Rates Period End Rates June June Dec June June Dec 2008 2007 Change 2007 2008 2007 Change 2007 £ : US Dollar 1.98 1.97 -0.5% 2.00 1.99 2.01 +1.0% 1.99 £ : Euro 1.30 1.48 +13.8% 1.46 1.26 1.49 +18.3% 1.36 £ : Rand 15.08 14.08 -6.6% 14.06 15
Slide 24: Division Results – As Reported
DIVISION RESULTS – AS REPORTED £m Turnover Trading Profit (1) Margin on Sales 2008 2007 Currency 2008 2007 Currency 2008 2007 Impact(2) Impact(2) Aerospace 152.2 123.6 1.6 22.2 16.1 0.1 14.6% 13.0% Flexonics 128.1 114.4 5.4 14.2 8.1 0.3 11.1% 7.1% Inter-Segment sales (0.4) (0.2) - - - - - - Central
Slide 25: Division Results – Half Yearly
DIVISION RESULTS – HALF YEARLY Turnover Trading Profit H1 2008 H2 2007 H1 2007 H2 2006 H1 2008 H2 2007 H1 2007 H2 2006 Aerospace 152.2 122.6 123.6 101.7 22.2 17.3 16.1 11.1 Flexonics 128.1 110.6 114.4 90.9 14.2 9.3 8.1 5.7 Intersegment sales (0.4) (0.3) (0.2) (0.3) - - - - Central costs - - - (3.0)
Slide 26: Geographic Results – As Reported
GEOGRAPHIC RESULTS – AS REPORTED £m Turnover by Origin Trading Profit (1) Margin on Sales 2008 2007 Currency 2008 2007 Currency 2008 2007 Impact (2) Impact(2) North America 176.8 146.6 (0.3) 25.7 16.7 - 14.5% 11.4% Rest of Europe 54.3 46.7 7.0 3.0 1.8 0.4 5.5% 3.9% United Kingdom 31.0 29.4 - 3.6 2.6
Slide 27: Aerospace – Capo Acquisition
AEROSPACE – CAPO ACQUISITION Capo specialises in the 5-axis machining of high performance products, in titanium and steel alloys, for auxilliary power units for large civil airliners and propulsion engines for business jets. ENGINE MOUNT ASSEMBLY FALCON 2000 EX FRONT FRAME ASSEMBLY HTF 7000 TURBINE
Slide 28: Aerospace – Capo Acquisition continued
AEROSPACE – CAPO ACQUISITION continued Acquired end January 2008 5 month sales £9.1m; underlying trading profit £1.4m; margin 15% Main customers: Honeywell, Hamilton Sundstrand, Barnes Aerospace, Exotic Metals Markets: Business jet 50%; wide-bodied 20%, military 15%, regional 10%, other 5% Propulsio
Slide 29: Capo Financials
CAPO FINANCIALS Acquisition (acquired 25 January 2008) Provisional £1: $1.98 Pre-Acq Fair Value £m £m Intangible assets - 5.1 Intangible assets arising on acquisition Property, plant and equipment 5.4 6.2 Inventory 3.8 4.0 Receivables 1.9 1.9 Payables (2.2) (2.2) Net assets acquired 8.9 15.0 Goodwil
Slide 30: Working Capital
WORKING CAPITAL Balance Sheet Cash Flow Receivables and Working Inventories Payables construction Capital contracts £m £m £m £m 31 December 2007 (page 6) 79.4 81.1 (89.8) Movements in period: Acquisitions – Capo Industries 4.0 1.9 (2.2) – Sterling Machine - (0.4) - Aerospace (1.1) 7.2 (6.5) 0.4 Flex
Slide 31: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE H1 2008 H1 2007 Capex Depn (1) Capex Depn (1) £m £m £m £m Aerospace 9.4 4.2 5.3 3.5 Flexonics 3.5 4.5 4.3 3.9 Holding Companies - - - - Total 12.9 8.7 9.6 7.4 (1) Depreciation excludes amortisation of intangible assets arising on acquisitions of £2.1m (2007: £1.7m) but incl
Slide 32: Usage of Credit Facilities – June 2008
USAGE OF CREDIT FACILITIES – June 2008 Usage by Currency Facility Usage £ $ € Other £m £m Private placements: US $ 75.0m (Oct 2008) 37.7 37.7 - 37.7 - - US $ 30.0m (Jan 2017) 15.1 15.1 - 15.1 - - US $ 35.0m (Oct 2014) 17.6 17.6 - 17.6 - - Bank facilities: Revolving credit facility (July 2012) 80.0 6
Slide 33: Covenants
COVENANTS June June Dec 2008 2007 2007 CNW (to exceed £175m) £264.8m £237.3m £253.8m Net Debt £121.7m £92.8m £94.8m Net Debt to CNW (to be below 100%) 46% 39% 37% Net Interest (1) £3.2m £3.3m £6.5m EBITDA (1) £41.4m £28.4m £60.3m Interest cover (to exceed 3.5 times) 12.9x 8.6x 9.3x Net Debt to EBITD
Slide 34: Pensions – Deficit Movement
PENSIONS – DEFICIT MOVEMENT 6 Months 2008 2007 UK USA Various Total Total Funded Funded Unfunded £m £m £m £m £m IAS19 Scheme deficit at 31 Dec 2007 (30.5) (2.0) (3.8) (36.3) (37.5) Service cost (0.6) (0.2) - (0.8) (2.2) Total employer cash contributions 3.0 - 0.1 3.1 5.2 Interest cost of liabilities
Slide 35: Pensions – UK Plan Funding
PENSIONS – UK PLAN FUNDING Actuarial Valuations Last valuation 6 April 2007 Scheme assets/(liabilities) at valuation £143.0m / (£178.9m) Funding level 80% IAS 19 Valuations June 2008 Dec 2007 Dec 2006 £m £m £m Scheme Assets Equities 60.3 69.3 72.5 Active currency 6.3 6.4 7.4 Bonds 16.0 13.7 11.2 Gil
Slide 36: Aerospace – Operations
AEROSPACE – OPERATIONS Operation Location Senior Aerospace AMT Seattle, USA Senior Aerospace Ketema San Diego & Mexico Senior Aerospace SSP Los Angeles, USA Senior Aerospace Metal Bellows Boston, USA Senior Aerospace Jet Products San Diego, USA Senior Aerospace BWT Macclesfield, UK Senior Aerospace
Slide 37: Aerospace – Products
AEROSPACE – PRODUCTS 29% of Senior Aerospace sales are in 17% of Senior Aerospace sales are in engine structures and mounting systems metallic ducting systems Trent 1000 intermediate Environmental conditioning case system feed duct Engine mounting ring Bleed duct gimbal Jet engine impingement Auxili
Slide 38: Aerospace – Products
AEROSPACE – PRODUCTS 17% of Senior Aerospace sales 9% of Senior Aerospace sales are in are airframe and other structural composite ducting systems parts Air distribution ducting 737 Wing ribs 737 Wheel well kits Fuselage ducting and Insulation 777 & 787 Stow bins Auxilary power unit air intake duct
Slide 39: Aerospace – Products
AEROSPACE – PRODUCTS 7% of Senior Aerospace sales are in 5% of Senior Aerospace sales are in fluid helicopter machined parts control systems Titanium spindle Hydraulic distribution pitch control shaft system Titanium carrier – Active clearance control planetary assembly system main gearbox Hydraulic
Slide 40: Aerospace – Products
AEROSPACE – PRODUCTS 16% of Senior Aerospace sales are to non- aerospace markets Medical Control bellows for medical drug dispenser implant Power Generation Exhaust collector for land turbine Semi-conductor PRIME MOVER actuators for semi-conductor wafer production Interim Results 2008 Page 31/4
Slide 41: Aerospace – Customers
AEROSPACE – CUSTOMERS Sales as % of total Customer June 2008 June 2007 Boeing 13 14 UTC 11 9 GE / Snecma / Smiths 7 8 Airbus + EADS 6 7 Goodrich 6 6 Rolls-Royce 5 6 Bombardier 5 6 Honeywell 3 1 Onex (Spirit) 2 2 Textron (Cessna) 2 2 General Dynamics (Gulfstream) 2 2 Embraer 2 2 Finmeccanica 2 1 Cate
Slide 42: Flexonics – Operations
FLEXONICS – OPERATIONS Operation Location Senior Automotive Bartlett Chicago, USA Senior Flexonics Pathway San Antonio, USA Senior Automotive Blois France Senior Automotive Kassel Germany Senior Automotive Cape Town South Africa Senior Hargreaves Bury, UK Senior Automotive Sao Paulo Brazil Senior Au
Slide 43: Flexonics – Products
FLEXONICS – PRODUCTS 28% of Senior Flexonics sales are of 13% of Senior Flexonics sales are of flexible mechanisms for exhaust systems cooling system, emission control and other automotive pipework Flexible exhaust connector Exhaust gas recirculation cooler Picture 16 Flexible exhaust connector Turb
Slide 44: Flexonics – Products
FLEXONICS – PRODUCTS 15% of Senior Flexonics sales are of fuel 10% of Senior Flexonics sales are HVAC system distribution pipework and ducting and expansion joints for the subsystems construction industry and solar applications High-pressure diesel Nuclear (Sizewell B) tube set High-pressure diesel
Slide 45: Flexonics – Products
FLEXONICS – PRODUCTS 15% of Senior Flexonics sales are expansion joints, control bellows and hoses for the power and boiler market, 8% for the oil and gas and chemical processing industries and 11% for other industrial markets Metal expansion joints Fabric expansion joints On-site services Connector
Slide 46: Flexonics – Customers
FLEXONICS – CUSTOMERS Sales as % of total End Customer June 2008 June 2007 PSA 11 11 Ford 10 11 General Motors 7 12 Cummins (Heavy duty diesel) 7 5 Renault Nissan 4 4 Fiat 3 2 Reliance (Industrial) 3 - Chrysler 2 2 Freightliner (Daimler) (Heavy duty diesel) 2 1 Caterpillar (Heavy duty diesel) 2 1 TV
Slide 47: Group Evolution
GROUP EVOLUTION Revenue (£m) Trading Profit (£m) 600 65 550 60 500 55 450 50 400 45 40 350 Total after central costs 35 300 30 250 25 200 20 150 15 100 10 50 5 0 0 2003 2004 2005 2006 2007 H1 2008 2003 2004 2005 2006 2007 H1 2008 Aerospace Flexonics Group ABN Forecast (pre results) Aerospace Flexoni