Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — H1 2017 Earnings Presentation
24 slides from Avon Technologies's earnings presentation, 2017
Slide 1: Avon Rubber p.l.c. Interim Results 2017
AVON RUBBER P.L.C. INTERIM RESULTS 2017 DELIVERING AND BUILDING GROWTH 1
Slide 2: Agenda
AGENDA Chief Executive Overview Paul McDonald Financial Review Paul Rayner Outlook Paul McDonald DELIVERING AND BUILDING GROWTH 2
Slide 3: Chief Executive Overview
PAUL MCDONALD Chief Executive Overview DELIVERING AND BUILDING GROWTH 3
Slide 4: Group Key Messages
GROUP KEY MESSAGES CORPORATE FINANCIAL HIGHLIGHTS MILITARY New management team A number of military installed and making opportunities exist that progress provide long-term growth potential The first half of the year was positive and we M53A1 and XM69 continue to grow our programme readiness
Slide 5: Financial Review
PAUL RAYNER Financial Review DELIVERING AND BUILDING GROWTH 5
Slide 6: Group Highlights
GROUP HIGHLIGHTS 2017 2016 Increase CC 2016 HIGHLIGHTS Interim Interim reported * Full Year Orders received £90.7m £73.4m 24% 9% £133.0m Strong orders, revenue and operating profit growth at reported currency Revenue £81.1m £66.3m 22% 7% £142.9m Revenue up 22% and operating EBITDA** £16.5m £13.2
Slide 7: Analysis of Revenue and Operating Profit
ANALYSIS OF REVENUE AND OPERATING PROFIT 2017 2016 2016 COMMENTS Interim Interim Full year Strong first half: Revenue Protection revenue up 22%, constant currency 6% Protection & Dairy revenue up 22%, constant £55.9m £45.7m £100.9m Defence currency 7% Protection operating margins consistent
Slide 8: Group Revenue Bridge
GROUP REVENUE BRIDGE FIRE MR|ITP LE OEM DOD FX Organic As Organic growth expected growth As expected Significant tailwind H1 2016 H1 2017 Protection revenue £10.2m higher Dairy revenue £4.6m higher FX £9.7m of which £6.9m is Protection and £2.8m is Dairy DELIVERING AND BUILDING GROWTH 8
Slide 9: Group Operating Profit Bridge
GROUP OPERATING PROFIT BRIDGE Dairy P&D Corporate costs FX Growth Despite offset by absorbing higher £0.6m depreciation Tailwind - additional and some expect amortisation overhead $1.30 H2 growth H1 2016 H1 2017 FX £1.3m of which £0.8m is Protection and £0.5m is Dairy DELIVERING AND BUILDING GROWTH
Slide 10: Military & Protection
MILITARY & PROTECTION FINANCIALS REVENUE SPLIT BY MARKET 2017 2016 Increase 2016 5% 4% 11% 15% Interim Interim Reported CC Full Year 38% Revenue £55.9m £45.7m 22% 6% £100.9m 47% 2016 – H1 2017 – H1 EBITDA £12.1m £9.7m 25% 9% £22.4m 28% Operating profit £8.0m £6.6m 21% 6% £16.0m 31% EBITDA margin 22%
Slide 11: Dairy
DAIRY FINANCIALS REVENUE SPLIT BY MARKET 2017 2016 Increase 2016 15% 12% 20% 22% Interim Interim Reported CC Full Year Revenue £25.2m £20.6m 22% 7% £42.0m 2016 – H1 2017 – H1 EBITDA £5.5m £4.5m 22% 9% £9.8m Operating profit £4.0m £3.4m 18% 6% £7.2m EBITDA margin 22% 22% - - 23% 65% 66% Operating pro
Slide 12: Other Items
OTHER ITEMS IMPACT OF US$ TRANSLATION Average rate for H1 was $1.24 (2016: $1.42) £9.7m additional revenue and £1.3m additional operating profit due to FX tailwind Sensitivity analysis shows 5¢ movement will result in £2.6m in revenue and £0.3m operating profit on half year numbers Our H2 ex
Slide 13: Summary Balance Sheet and Cash Flow
SUMMARY BALANCE SHEET AND CASH FLOW BALANCE SHEET 2017 2016 2016 Interim Interim Full year Development costs: Goodwill and acquired intangible assets £23.7m £23.3m £26.0m £0.9m capitalised H1 (H1 2016: Development expenditure and £1.7m) computer software £21.7m £22.2m £21.3m £2.0m amortised H1
Slide 14: Outlook
PAUL MCDONALD OUTLOOK DELIVERING AND BUILDING GROWTH 14
Slide 15: 2017 Focus - Military
2017 FOCUS - MILITARY NORTH AMERICA Strengthen our military contracting bid capture team Identify new customers and expand geographic footprint Progress JSGPM contract and post-contract sustainment position XM69 and M53A1 contract wins in place for FY18 Ongoing M61 filter awards from DOD
Slide 16: 2017 Focus - Protection
2017 FOCUS - PROTECTION LAW ENFORCEMENT Continue the growth in North America LE channels Leverage wider hoods opportunity for civilian protection Further focus into oil and gas hoods opportunities Launch powered air combination systems into LE channels Focus on niche tactical opportunities
Slide 17: 2017 Focus - Dairy
2017 FOCUS - DAIRY Continue sales Maximise the expansion in benefit of the emerging markets milk price such as China and recovery South America Deliver sales synergies through Expanded Farm the conversion of Services offering to Milkrite and include Pulsator and InterPuls Tag Exchange dealer
Slide 18: Further Opportunities
FURTHER OPPORTUNITIES We have successfully acquired and integrated 3 core businesses within the last 3 years We have no need or desire to go beyond our core markets Our balance sheet supports further opportunities when available We believe further opportunities will be available for the futu
Slide 19: Outlook Statement
OUTLOOK STATEMENT The first half has been positive and we continue to grow our order pipeline. With a continued strong US dollar against sterling we anticipate a foreign exchange tailwind in 2017 compared to the last fiscal year. Against the backdrop of anticipated increases in US defence spending a
Slide 20: 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 statements are so
Slide 21: Appendices
APPENDICES APPENDICES DELIVERING AND BUILDING GROWTH 21
Slide 22: Military
MILITARY US DOD sole-source contract for 50 series respirator Experts in our field for respiratory protection Leverage our mask of choice pedigree with other militaries around the world Leading APR range provides the opportunity to cross-sell other products New product development projects
Slide 23: Protection: Law Enforcement and Fire
PROTECTION LAW ENFORCEMENT Growing threat levels for law enforcement and first responders Expanded complementary product range to create hybrid modular combination systems Escape products provide growing opportunity for wider civilian protection FIRE Market leading Thermal Imaging Cameras (T
Slide 24: Dairy
DAIRY INTERFACE PRECISION, CONTROL & FARM SERVICES INTELLIGENCE Products that interface with the Products around vacuum, Monthly rental business model animal milking and herd management with warranty & service included Improving animal health & farm Increase farm efficiency and efficiency