Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — H1 2020 Earnings Presentation
36 slides from Avon Technologies's earnings presentation, 2020
Slide 1: Half Year Results 2020
HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 2: 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 3: Agenda
Agenda Delivering Highlights Financial sustainable review growth 3 HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 4: Highlights
Section Highlights heading here Paul McDonald SUBHEADING HERE Chief Executive Officer 4 HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 5: Strategy delivering sustainable growth
Strategy delivering sustainable growth 28.7% revenue growth and 330 bps EBITDA improvement 9.5% organic constant currency revenue growth driven by strong contributions from both Avon Protection and milkrite | InterPuls Completed milestone acquisition of 3M’s ballistic protection business - going for
Slide 6: Further progress against our investor proposition
Further progress against our investor proposition +9.5% HELMETS & 21.8% 20.1% +30% AT ORGANIC ARMOR +330 BPS ORGANIC CASH INCREASE OVER CONSTANT ACQUISITION AT ORGANIC CONVERSION PRIOR YEAR CURRENCY COMPLETED CONSTANT 102.9% CURRENCY EXCLUDING ONE-OFFS 6 HALF YEAR RESULTS 2020 Delivering Sustainable
Slide 7: Financial Review
Financial Review Nick Keveth Chief Financial Officer 7 HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 8: Continued strong financial momentum
Continued strong financial momentum FINANCIALS REVENUE SPLIT BY BUSINESS H1 2020 % Change % Organic Constant Currency Orders received £117.9m 24.2% (4.7%) Avon Protection £94.7m Closing order book £115.5m 95.4% (15.6%) (2019: £73.6m) milkrite | InterPuls Revenue £94.7m 28.7% 9.5% Adjusted EBITDA £20
Slide 9: 9.5% organic revenue growth
9.5% organic revenue growth £13.8m (£2.5m) £94.7m £80.9m Avon Protection milkrite | InterPuls £73.6m 10.0% 8.5% 2019 2020 9 HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 10: Net debt reflects H&A acquisition and IFRS16 adoption
Net debt reflects H&A acquisition and IFRS16 adoption (£15.6m) (£4.1m) 20.1% (£3.8m) ORGANIC CASH (£4.2m) (£0.1m) (£84.3m) CONVERSION 102.9% EXCLUDING ONE-OFFS (£70.8m)1 (£8.8m)2 (£4.7m)3 (£6.2m) (£6.2m) 1 Initial consideration of Helmets & Armor 2 Acquired Lease liabilities 3 Acquisition completion
Slide 11: Avon Protection
Avon Protection FINANCIALS REVENUE SPLIT BY MARKET H1 2020 % Change % Organic Constant Currency Military Orders received £90.5m 30.6% (9.2%) £68.4m First Responder Closing order book £110.6m 99.6% (18.8%) (2019: £49.3m) Helmets & Armor Revenue £68.4m 38.7% 10.0% Adjusted EBITDA £16.1m 67.7% 34.3% Ad
Slide 12: milkrite | InterPuls
$/kg milkrite | InterPuls 2.5% 50.0 2.0% 40.0 1.5% 30.0 FINANCIALS H1 2020 % Change % Organic 1.0% 20.0 Constant 0.5% 10.0 Currency 0.0% 0.0 Orders received £27.4m 7.0% 7.5% Mar-19 Sep-19 Apr-20 Mar-20 Closing order book £4.9m 32.4% 33.1% IFCN Combined World Milk Price Indicator Revenue £26.3m 8.2%
Slide 13: Impact of COVID-19
Employees Operations • The wellbeing of our employees and • Both Avon Protection and customers is our top priority milkrite | InterPuls have continued to operate with only minor disruption, playing a crucial role in • We have implemented measures to ensure our supporting our customers ongoing requir
Slide 14: Excellent opening order book visibility for H2
Excellent opening order book visibility for H2 FIRST HELMETS & MILITARY RESPONDER ARMOR £36.5m £9.3m £64.8m The receipt of the follow-on M69 Increased demand for masks, Strong order book visibility delivery order, strong RoW filters and accessories under existing helmet and demand and significant sp
Slide 15: Confident in full year expectations
Confident in full year expectations Opening order book provides strong visibility going into the second half Full year of delivery against new M69 aircrew mask and M53A1 mask and powered air system contracts Discussions with the DOD for the M50 mask system sustainment contract are in advanced stages
Slide 16: Delivering Sustainable Growth
Delivering Section Sustainable heading here Growth SUBHEADING HERE Paul McDonald Chief Executive Officer 16 HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 17: Focus on our strategy delivering sustainable growth
Focus on our strategy delivering sustainable growth Growing Selected Value the core product enhancing development acquisitions 17 HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 18: System supplier for life critical protection portfolio
System supplier for life critical protection portfolio Powered Respirators Air Supplied Air • Suppl Broad portfolio to meet the needs of ied our growing Military and First Air Responder customer base Helmets Body Armour 18 HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 19: Military outlook underpinned
Military outlook underpinned Current contract period Potential medium-term In service order intake per annum M50 Mask System* £25-35m Sole-source / Own IP / Commercial pricing M53A1 Mask and Powered Air System £20-25m Sole-source / Own IP / Commercial pricing H1 2020 organic military revenue: M69 Ai
Slide 20: Helmets & Armor outlook underpinned
Helmets & Armor outlook underpinned Current contract period In service Potential medium-term order intake per annum IHPS Helmet £35-45m Single-source / Own IP VTP Body Armor £20-35m Multi-source / Own IP H1 2020 revenue: Legacy ESAPI Body Armor £30-45m £13.8m Multi-source / Own IP DOD: £13.0m Other:
Slide 21: Strategic focus on First Responder market
Strategic focus on First Responder market We are seeing the benefits of focusing our resources on our strong customer relationships within the core First Responder market We are focused on taking our leading personal protection product portfolio to our commercial customers at enhanced margins Our mo
Slide 22: Selected product development update
Selected product development update We have continued our investment in research and development projects, particularly in Avon Protection as we focus on both next generation products and enhancing the capability of our existing range The most significant expenditure has been on the next generation
Slide 23: Helmets & Armor acquisition update
Helmets & Armor acquisition update We have enhanced the growth prospects for Avon Protection with the completion of the Helmets & Armor acquisition on 2 January The acquired business is high quality, with a strong incumbent management team, backed by leading proprietary technology, established contr
Slide 24: Confident in the medium-term outlook
Confident in the medium-term outlook We continue to focus on delivering against our three strategic priorities of growing the core, selective product development and value enhancing acquisitions Existing contracts underpin our medium-term outlook with significant growth opportunities in all our mark
Slide 25: Questions
Section heading here Questions SUBHEADING HERE 25 HALF YEAR RESULTS 2020 Delivering Sustainable Growth
Slide 26: Group income statement
Group income statement 2020 2019 £m £m (Restated) Revenue 94.7 73.6 Adjusted EBITDA 20.6 13.6 Depreciation and amortisation (5.0) (4.6) Operating profit before amortisation of acquired intangibles, exceptional items and defined 15.6 9.0 benefit pension costs Amortisation of acquired intangibles, exc
Slide 27: Reported to adjusted reconciliation
Reported to adjusted reconciliation 2020 2019 £m £m (Restated) Operating profit 3.0 4.1 Amortisation of acquired intangible assets 3.6 1.8 Defined benefit pension administration costs 0.4 0.2 Defined benefit scheme past service costs - 2.9 Acquisition costs and accounting adjustments 8.6 - Adjusted
Slide 28: Revenue by line of business
Revenue by line of business 2020 2019 £m £m Military 37.2 30.9 First Responder1 17.4 18.4 Helmets & Armor 13.8 - Avon Protection 68.4 49.3 Interface 18.7 17.4 Precision, Control & Intelligence 4.5 4.3 Farm Services 3.1 2.6 milkrite | InterPuls 26.3 24.3 Group total 94.7 73.6 1 Following the exit fro
Slide 29: Balance sheet
Balance sheet 2020 2019 £m £m (Restated) Intangible assets 84.1 39.2 Property, plant and equipment 42.7 22.3 Current assets 94.8 43.9 Current liabilities (46.7) (35.1) Non-current assets 22.1 11.1 197.0 81.4 Net (debt) / cash (66.9) 34.9 130.1 116.3 Retirement benefit scheme (49.7) (46.5) Net assets
Slide 30: Cash flow
Cash flow 2019 2020 £m £m (Restated) Cash flows before exceptionals (0.9) 12.6 Cash impact of exceptionals (4.7) (0.2) Cash flows from operations (5.6) 12.4 Interest paid/received (1.4) (0.8) Payments to pension scheme (1.0) (0.8) Tax paid (1.4) (1.9) Purchase of property, plant and equipment (1.8)
Slide 31: Foreign exchange and sensitivities
Foreign exchange and sensitivities Average rate Closing rate Average rate Closing rate 2020 2020 2019 2019 U.S. Dollar 1.283 1.223 1.294 1.309 Euro 1.162 1.114 1.135 1.165 1$ cent 1€ cent movement movement £m £m Revenue 1.1 0.2 Operating profit 0.2 - Net assets 0.3 0.2 31 HALF YEAR RESULTS 2020 Deli
Slide 32: IFRS 16 Leases Impact
IFRS 16 Leases Impact Organic Helmets & Total Armor Adjusted EBITDA 1.0 0.3 1.3 Adjusted operating profit 0.3 - 0.3 Adjusted earnings - (0.1) (0.1) Organic Helmets & Total Armor Right of use asset 8.9 8.5 17.4 Lease liability (12.6) (8.5) (21.1) Accruals 1.2 - 1.2 Deferred tax asset 0.5 - 0.5 Net as
Slide 33: Glossary of financial terms
Glossary of financial terms Term Explanation Adjusted basic earnings per Adjusted profit for the period divided by the weighted average number of shares in issue share Adjusted EBITDA Adjusted EBITDA is defined as operating profit before depreciation, amortisation, exceptional items and defined bene
Slide 34: Glossary of financial terms (continued)
Glossary of financial terms (continued) Term Explanation Dividend per share Dividends paid / proposed, divided by the weighted average number of shares in issue EBITDA The Group’s earnings before charging interest, tax, depreciation and amortisation Intellectual Property Intangible property created
Slide 35: Abbreviations
Abbreviations Term Explanation 50 Series A range of masks based on the proven technology of the M50 mask system BPS Basis points CBRN Chemical, Biological, Radiological, Nuclear CE CE markings indicate conformity to health and safety standards sold within the European Economic area CES Cluster Excha
Slide 36: Abbreviations (continued)
Abbreviations (continued) Term Explanation IFCN International Farm Comparison Network IHPS Integrated Head Protection System MOD Ministry of Defence PAPR Powered air breathing apparatus PCI Precision, Control and Intelligence PES Pulsator Exchange Service RoW Rest of world SCBA Self-contained breath