Senior plc · LSE:SNR
Senior — FY2005 Earnings Presentation
42 slides from Senior's earnings presentation, March 2006
Slide 1: Full Year Results 2005
FULL YEAR RESULTS - 2005 Full Year Results 2005
Slide 2: Index
INDEX Appendices Introduction 1 Exchange rates 14 Headline numbers 2 Key trading profit movements 15 Divisional performance Divisional performance - as reported 16 - constant currency 3 - half yearly 17 Geographical performance Geographical performance - as reported 18 - constant currency 4 Internat
Slide 3: Introduction: 2005 Highlights
INTRODUCTION 2005 Highlights Turnover up 10.4% to £338.6m. Operating profit up 18.1% to £19.6m. Adjusted earnings per share up 11.7% to 4.01p. Aerospace commercial market buoyant. Record orders for Airbus and Boeing. Heavy duty diesel engine product introduction on track. Wembley contract poor but I
Slide 4: Headline Numbers
HEADLINE NUMBERS 2005 2004 Change Continuing operations - Revenue £338.6m £306.8m +10.4% - Operating profit £19.6m £16.6m +18.1% - Profit before tax £16.6m £12.5m - Basic eps 4.59p 3.56p Total operations - Adjusted profit before tax(1) £14.8m £12.5m +18.4% Adjusted earnings per share (1) 4.01p 3.59p
Slide 5: Divisional Performance - constant exchange rates
DIVISIONAL PERFORMANCE - constant exchange rates (2) £m Turnover Trading Profit (1) Margin on Sales 2005 2004 Change 2005 2004 Change 2005 2004 Aerospace 156.2 140.3 +11.3% 13.0 11.2 +16.1% 8.3% 8.0% Automotive 135.9 125.1 +8.6% 8.9 8.1 +9.9% 6.5% 6.5% Industrial 47.8 45.4 +5.3% 2.2 0.9 +144% 4.6% 2
Slide 6: Geographical Performance - constant exchange rates
GEOGRAPHICAL PERFORMANCE - constant exchange rates (2) £m Turnover by Origin Trading Profit (1) Margin on Sales 2005 2004 Change 2005 2004 Change 2005 2004 North America 187.3 169.7 +10.4% 14.6 12.8 +14.1% 7.8% 7.5% United Kingdom 55.9 53.8 +3.9% 2.0 3.4 -41.2% 3.6% 6.3% Rest of Europe 73.7 68.0 +8.
Slide 7: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE 2005 2004 Change £m £m Continuing operations Operating profit 19.6 16.6 +18.1% Loss/(profit) on sale of fixed assets 0.2 (0.5) Trading profit 19.8 16.1 +23.0% Net interest payable - borrowings and cash (3.9) (2.9) - retirement benefits (1.1) (1.2) Profit before tax (1) 14
Slide 8: Reported Profit and Dividends
REPORTED PROFIT AND DIVIDENDS 2005 2004 £m £m Adjusted profit for the period 12.3 11.0 Disposal of fixed assets - (loss)/profit (0.2) 0.5 - tax - (0.2) Exchange gain on long-term inter-company loans 2.0 - Loss on disposal of discontinued businesses - (4.8) Reported profit for period 14.1 6.5 pence p
Slide 9: Balance Sheet
BALANCE SHEET 2005 2004 £m £m Property, plant and equipment 76.1 68.8 Goodwill 77.1 73.1 Intangible assets 1.1 1.2 Other long-term assets 3.9 3.9 Non current assets 158.2 147.0 Inventories 47.7 38.4 Receivables and construction contracts 68.3 60.0 Payables (67.1) (58.9) Tax liabilities (10.0) (9.5)
Slide 10: Free Cash Flow
FREE CASH FLOW 2005 2004 £m £m Operating profit - continuing operations 19.6 16.6 - discontinued operations - 0.5 Depreciation and amortisation 12.0 13.3 Loss / (profit) on disposal of fixed assets 0.2 (0.5) Charge for share options 0.2 0.1 Pension payments above service cost (2.8) (4.0) Working cap
Slide 11: Change in Net Debt
CHANGE IN NET DEBT 2005 2004 £m £m Free cash flow 2.2 10.5 Dividends (6.1) (6.1) Acquisitions - deferred consideration (0.1) (0.2) Disposals - proceeds - 4.7 Share issues 0.5 - Net cash (outflow) / inflow (3.5) 8.9 Exchange variations (7.8) 4.7 Net debt - opening (50.6) (64.2) - new under IAS (0.5)
Slide 12: Aerospace - Sterling Acquisition
AEROSPACE - STERLING ACQUISITION Full Year Results 2005 Page 10/1
Slide 13: Aerospace - Sterling Acquisition continued
AEROSPACE - STERLING ACQUISITION continued BLACKHAWK Magnesium Housing / Liner Titanium Carrier - Titanium Spindle Assy - Input - Intermediate Planetary Assy Pitch Control Shaft Gearbox Main Gearbox SIKORSKY S-92 Horn Assy Guide Swashplate Cam Assembly – Blade Rotary Wing Head Main Gearbox Positione
Slide 14: Aerospace - Sterling Acquisition continued
AEROSPACE - STERLING ACQUISITION continued 2005 sales $18.8m, EBIT $4.2m. Makes transmission and rotor-head components for helicopters. 95% sales to Sikorsky. Sikorsky delivered 100 helicopters in 2005. Plan to double their build rate. All essentially military – Blackhawk and Super Stallion. Modern
Slide 15: Aerospace: Commercial Aircraft Market
AEROSPACE Commercial Aircraft Market Deliveries Net Orders Book to Bill Order Book 2005 2004 2003 2005 2004 2003 2005 2004 2003 Dec 05 Dec 04 Dec 03 Boeing 290 285 281 1,002 273 238 3.46 0.96 0.85 1,809 1,097 1,109 Airbus 378 320 305 1,055 366 254 2.79 1.14 0.83 2,177 1,500 1,454 Total 668 605 586 2
Slide 16: Aerospace continued
AEROSPACE continued Sales up 11.3% - primarily market recovery End Market 2005 2004 Profits up 16.1% - higher build rates Large Commercial 31% 26% - better execution Military / Defence 28% 29% Capex at 60% of depreciation but upward trend Regional / Business 23% 24% Space 2% 3% Margin up from 8.0% t
Slide 17: Automotive
AUTOMOTIVE Production (vehicles – million) Sales up 8.6% - new programmes 2005 2004 North America Profits up 9.9% GM 4.57 4.99 -8% Ford 3.39 3.61 -6% - higher sales DC 2.80 2.67 +5% Toyota 1.62 1.51 +7% - France back in profit Honda 1.35 1.22 +11% Nissan 1.19 1.06 +12% - recovery of US engineering c
Slide 18: Automotive continued: Diesel Engines
AUTOMOTIVE continued Diesel Engines £10m Capex in 2005, expect £15m in 2006. Expect incremental annual sales of £30m starting late 2006. Fuel products - common rail and high pressure fuel lines. Exhaust gas recycling cooler has significant opportunities - heavy duty, North America and Europe - passe
Slide 19: Industrial
INDUSTRIAL Sales up 5.3% to £47.8m. Profits up from £0.9m to £2.2m. Loss making Wembley Stadium ducting contract coming to an end. Canada improved performance. Pathway major improvement - cost down in 2004 - oil and gas market booming. Full Year Results 2005 Page 12
Slide 20: Summary
SUMMARY Organic growth in Automotive coming to fruition. Industrial prospects encouraging. Aerospace market growing. Sterling Machine - first acquisition in recent years - earnings enhancing Expect to make further progress in 2006. Full Year Results 2005 Page 13
Slide 21: Appendices
APPENDICES Full Year Results 2005
Slide 22: Exchange Rates
EXCHANGE RATES Profit and Loss Account Balance Sheet Average Rates Period End Rates P+L Dec Dec B Sheet 2005 2004 Change 2005 2004 Change £ : US Dollar 1.82 1.83 +0.5% 1.72 1.92 +11.6% £ : Euro 1.46 1.47 +0.7% 1.46 1.41 -3.4% £ : Rand 11.46 11.75 +2.5% 10.89 10.82 -0.6% Euro : Rand 7.85 7.99 +1.8% 7
Slide 23: Key Trading Profit Movements
KEY TRADING PROFIT MOVEMENTS Aerospace Automotive Industrial Central costs Total £m £m £m £m £m 2004 Trading Profit (1) 11.1 7.9 0.9 (3.8) 16.1 Exchange movements - translation 0.1 0.2 - - 0.3 Reorg & redundancy - 2004 0.7 0.3 0.7 - 1.7 - 2005 (0.2) (0.3) (0.3) - (0.8) Underlying Trading 1.3 0.8 0.9
Slide 24: Divisional Performance - as reported
DIVISIONAL PERFORMANCE - as reported £m Turnover Trading Profit (1) Margin on Sales 2005 2004 Currency 2005 2004 Currency 2005 2004 Impact(2) Impact(2) Aerospace 156.2 139.6 0.7 13.0 11.1 0.1 8.3% 8.0% Automotive 135.9 122.9 2.2 8.9 7.9 0.2 6.5% 6.4% Industrial 47.8 44.9 0.5 2.2 0.9 - 4.6% 2.0% Inte
Slide 25: Half Yearly Comparison
HALF YEARLY COMPARISON Turnover Trading Profit H2 2005 H1 2005 H2 2004 H1 2004 H2 2005 H1 2005 H2 2004 H1 2004 Aerospace 81.7 74.5 69.6 70.0 6.7 6.3 5.9 5.2 Automotive 67.8 68.1 58.0 64.9 5.2 3.7 2.9 5.0 Industrial 22.9 24.9 22.4 22.5 0.4 1.8 0.8 0.1 Inter-segment sales (0.7) (0.6) (0.3) (0.3) - - -
Slide 26: Geographical Performance - reported rates
GEOGRAPHICAL PERFORMANCE – reported rates £m Turnover by Origin Trading Profit (1) Margin on Sales 2005 2004 Currency 2005 2004 Currency 2005 2004 Impact (2) Impact(2) North America 187.3 168.4 1.3 14.6 12.7 0.1 7.8% 7.5% United Kingdom 55.9 53.8 - 2.0 3.4 - 3.6% 6.3% Rest of Europe 73.7 67.1 0.9 2.
Slide 27: International Accounting Standards
INTERNATIONAL ACCOUNTING STANDARDS International accounting standards adopted from 1 January 2005: • Prior period comparatives restated to IAS. • Effects minor. Most significant monetary effects related to non-amortisation of goodwill, non-accrual for period end dividends and change in treatment of
Slide 28: International Accounting Standards
INTERNATIONAL ACCOUNTING STANDARDS Continuing Operations 2004 Central IFRS 2004 UK GAAP Costs Adj IFRS £m £m £m £m Aerospace 9.3 1.8 - 11.1 Automotive 6.6 1.4 (0.1) (2) 7.9 Industrial 0.5 0.4 - 0.9 Central costs - (3.6) (0.2) (3) (3.8) Trading profit (1) 16.4 - (0.3) 16.1 (1) Before profit on dispos
Slide 29: Working Capital
WORKING CAPITAL Balance Sheet Cash Flow Receivables and Working Stocks Payables construction Capital contracts £m £m £m £m 31 December 2004 (page 7) 38.4 60.0 (58.9) - Movements in period: Aerospace 3.6 3.0 (3.8) (2.8) Automotive 2.2 5.2 (1.0) (6.4) Industrial 0.6 (2.4) (0.1) 1.9 Holding companies/o
Slide 30: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE 2005 2004 Capex (1) Depn (1) Capex (1) Depn (1) £m £m £m £m Aerospace 3.1 5.2 4.1 (2) 5.5 Automotive 13.2 6.1 4.4 6.5 Industrial - continuing 0.3 0.6 1.5 0.6 - discontinued - - 0.3 0.6 Holding Companies - 0.1 0.1 0.1 Total 16.6 12.0 10.4 (2) 13.3 (1) Includes acquisition an
Slide 31: Usage of Banking Facilities - December 2005
USAGE OF BANKING FACILITIES - December 2005 Usage by Currency Facility Usage £ $ € Other £m £m Private placements US $ 75.0m (Oct 2008) 43.6 43.6 - 43.6 - - US $ 25.0m (Jun 2007) 14.5 14.5 - 14.5 - - 58.1 58.1 - 58.1 - - Revolving credit facility (Oct 2007) 46.0 7.2 - 2.9 4.3 Bank of America (May 20
Slide 32: Pensions - Deficit Movement
PENSIONS – DEFICIT MOVEMENT 2005 2004 UK USA Other Total Total £m £m £m £m £m IAS19 Scheme deficit at start of year (33.7) (4.2) (3.5) (41.4) (44.2) Service cost (1.2) (0.5) (0.1) (1.8) (2.0) Interest cost of liabilities (8.1) (1.2) (0.2) (9.5) (9.3) Expected return on assets 7.1 1.3 - 8.4 8.1 Emplo
Slide 33: Pensions - Funding
PENSIONS – FUNDING Actuarial Valuations UK Plan USA Plans Last valuation 6 April 2004 31 December 2005 Scheme assets/(liabilities) at valuation £112.7m / (£131.2m) £18.3m / (£23.2m) Funding level 86% 79% IAS 19 Valuations Dec 2005 Dec 2004 Dec 2005 Dec 2004 £m Return £m Return £m Return £m Return Sc
Slide 34: Aerospace - Operations
AEROSPACE - OPERATIONS Operation Location Senior Aerospace Ketema San Diego, USA Saltillo, Mexico Senior Aerospace SSP Los Angeles, USA Senior Aerospace Metal Bellows Boston, USA Senior Aerospace Jet Products San Diego, USA Senior Aerospace Sterling Machine Enfield, USA Senior Aerospace BWT Macclesf
Slide 35: Aerospace - Products
AEROSPACE - PRODUCTS 34% of Senior Aerospace sales are in 29% of Senior Aerospace sales are in engine structures and mounting systems metallic ducting systems Jet engine exhaust frame Environmental conditioning system feed duct Engine mounting ring Bleed duct gimbal Jet engine impingement Auxiliary
Slide 36: Aerospace - Products
AEROSPACE - PRODUCTS 14% of Senior Aerospace sales are in 7% of Senior Aerospace sales are in fluid composite ducting systems control systems Air distribution ducting Hydraulic distribution system Fuselage ducting and Active clearance control Insulation system Auxilary power unit air Hydraulic syste
Slide 37: Automotive - Operations
AUTOMOTIVE - OPERATIONS Operation Location Senior Automotive Bartlett Chicago, USA Senior Automotive Blois France Senior Automotive Cape Town South Africa Senior Automotive Kassel Germany Senior Automotive Crumlin South Wales Senior Automotive Olomouc Czech Republic Senior Automotive Sao Paulo Brazi
Slide 38: Automotive - Products
AUTOMOTIVE - PRODUCTS 42% of Senior Automotive sales are of 18% of Senior Automotive sales are of flexible mechanisms for exhaust systems fuel system distribution pipework and subsystems Flexible exhaust connector High-pressure diesel tube set Picture 16 High-pressure diesel Flexible exhaust connect
Slide 39: Automotive - Products
AUTOMOTIVE - PRODUCTS 12% of Senior Automotive sales are of 6% of Senior Automotive sales are engine airconditioner, turbocharger and cooling emission control pipework and subsystems systems pipework Turbocharger oil drain tube Secondary air tube Exhaust gas recirculation cooler Exhaust gas recircul
Slide 40: Automotive - New Products
AUTOMOTIVE - NEW PRODUCTS Diesel Exhaust Gas Recycling (EGR) Cooler (US Trucks) Diesel Exhaust Gas Recycling (EGR) Cooler (European Cars) Diesel Common Rail Diesel Fuel Lines Full Year Results 2005 Page 28/3
Slide 41: Automotive - New Products continued
AUTOMOTIVE - NEW PRODUCTS continued Country Product Vehicle Capital Start of 2007 Sales £m Production £m USA Common Rail Heavy Duty 1.4 Late 05 2.0 India Exhaust Flex Cars 0.3 End 05 1.1 USA Common Rail Heavy Duty 1.3 Mid 06 1.6 Europe Common Rail Cars 1.4 Late 06 2.9 USA EGR Cooler Heavy Duty 4.6 E
Slide 42: Industrial - Operations
INDUSTRIAL Operation Location Pathway Texas, USA Senior Hargreaves Bury, UK Canada Toronto, Canada Full Year Results 2005 Page 29