Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — H1 2012 Earnings Presentation
32 slides from Avon Technologies's earnings presentation, 2012
Slide 1: Interim Results 2012: Focused on Opportunities
INTERIM RESULTS 2012 FOCUSED ON OPPORTUNITIES
Slide 2: Interim Results 2012 - Peter Slabbert, Chief Executive
INTERIM RESULTS 2012 PETER SLABBERT CHIEF EXECUTIVE
Slide 3: Highlights
HIGHLIGHTS Revenue £’m FINANCIAL HIGHLIGHTS Profit before tax up 6% Earnings per share up 5% Interim dividend of 1.2p per share up 20% Net debt reduced to £9.8m from £11.8m at 30 September 2011 Lower interest costs and effective tax rate Operating profit £’m 126% conversion of operating
Slide 4: Globally Focused
GLOBALLY FOCUSED FOCUSED ON OPPORTUNITIES
Slide 5: Interim Results 2012 - Andrew Lewis, Group Finance Director
INTERIM RESULTS 2012 ANDREW LEWIS GROUP FINANCE DIRECTOR
Slide 6: Group Income Statement
GROUP INCOME STATEMENT 2012 2011 2011 Interim Interim Year £’m £’m £’m Revenue 49.6 48.0 107.6 EBITDA 7.2 7.1 15.7 Depreciation and amortisation (2.2) (2.3) (4.6) Body copy to go in here where it Operating profit is required. Body copy to go in here where it is required. 3% 5.0 4.8 11.1 Body copy to
Slide 7: Protection & Defence Financials
PROTECTION & DEFENCE FINANCIALS REVENUE £m 2012 2011 2011 Interim Interim Year £’m £’m £’m Revenue 33.2 32.7 77.4 EBITDA 5.0 5.3 11.6 Operating profit 3.0 3.2 7.5 OPERATING PROFIT £m PERFORMANCE DRIVERS DoD respirator sales up 30% on 2011 Shipment of filter spares affected by delays in US Govern
Slide 8: Protection & Defence Revenue
PROTECTION & DEFENCE REVENUE 2011 £77.4m 2012 H1 £33.2m 8% 4% DoD 8% 8% 9% NA DHS/EMEA Fire 56% 20% 24% AEF & Other 63% UK MoD Growth in DoD M50 mask sales, slight reduction in filter spares US DoD M50 masks and M61 filters still dominate Protection & Defence revenue Lower level of ‘impact’ sa
Slide 9: Analysis of DoD Contract
ANALYSIS OF DoD CONTRACT Mask systems (thousands) Sole Source Contract Vehicle 3000 2500 Total Service Requirement 2000 1500 1000 500 0 2008 2009 2010 2011 H1 2012 2013 2014 2015 2016 2017 9 FOCUSED ON OPPORTUNITIES
Slide 10: Dairy Financials
DAIRY FINANCIALS REVENUE £m 2012 2011 2011 Interim Interim Year £’m £’m £’m Revenue 16.4 15.4 30.2 EBITDA 3.2 2.7 5.9 Operating profit 2.9 2.5 5.5 OPERATING PROFIT £m PERFORMANCE DRIVERS Sales and distribution facility established in China Dairy management team strengthened These investments a
Slide 11: US$ Translation Has Not Had a Material Impact This Period
US$ TRANSLATION HAS NOT HAD A MATERIAL IMPACT THIS PERIOD GROUP PROTECTION & DEFENCE 2011 2011 2012 restated at 2011 2012 restated at 2011 H1 2012 rates H1 H1 2012 rates H1 £’m £’m £’m £’m £’m £’m Revenue 49.6 48.4 48.0 Revenue 33.2 32.9 32.7 EBITDA 7.2 7.2 7.1 EBITDA 5.0 5.4 5.3 Operating Profit 5.
Slide 12: Cashflow
CASHFLOW 2012 2011 2011 Interim Interim Year £’m £’m £’m Net cashflow from operations ¾ Continuing 6.2 1.6 12.0 ¾ Discontinued ‐ (0.3) (1.6) Cash generated from operations 6.2 1.3 10.4 Tax Body copy to go in here where it 0.2 (0.2) (1.5) is required. Body copy to go in here where it is required. Int
Slide 13: Increasing Investment to Underpin Growth
INCREASING INVESTMENT TO UNDERPIN GROWTH R&D cash £2.8m (2011: £2.6m) Customer funded Customer funded 1.7m £0.6m Avon funded £2.2m Body copy to go in here where it is required. Body copy to go in here where it is required. Body copy to go in here where it is required. Body copy to go R&D capitalised
Slide 14: Summary Balance Sheet
SUMMARY BALANCE SHEET 2012 2011 2011 Interim Interim Year £’m £’m £’m Intangible assets 11.1 9.1 10.5 Property, plant and equipment 16.8 16.4 16.7 Current assets 29.0 32.0 29.1 Current liabilities Body copy to go in here where it (18.9) (20.9) (18.0) is required. Body copy to go in here where it is
Slide 15: UK Retirement Benefit Scheme
UK RETIREMENT BENEFIT SCHEME IAS19 31 March 2012 Surplus increased from £0.3m at 30 September 2011 to £2.0m at 31 March 2012 Strong asset performance as investment strategy performed well in difficult markets Offset by higher liabilities caused by a lower discount rate due to fall in corporate
Slide 16: Interim Results 2012 - Peter Slabbert, Chief Executive
INTERIM RESULTS 2012 PETER SLABBERT CHIEF EXECUTIVE
Slide 17: Dairy Strategy
DAIRY STRATEGY DAIRY is a market leading brand of innovative high technology consumable products supplying the growing Dairy industry around the globe Further development of the brand. Investment in product development and Body research into copy to go in here where it milking process. is required.
Slide 18: Existing Markets – North America & Europe
EXISTING MARKETS – NORTH AMERICA & EUROPE MARKET SHARE ROUTES TO MARKET • 800 Milk‐Rite dealers • Most global OEM’s • Avon distribution from Wisconsin (East Coast, USA), California (West Coast, USA) and Rudnik, (Cz Republic) FUTURE POTENTIAL USP’s • Farm consolidation drives technology • Expertise i
Slide 19: Developing Markets
DEVELOPING MARKETS PROGRESS TO DATE 2012 DEVELOPMENTS • UK based salesman covering EMEA market • Opened Avon • Eastern European resource added in 2010 sales & distribution • Middle East representative added in 2011 centre in China • Brazilian dealer added in 2011 • In‐country Avon resource added in
Slide 20: Protection & Defence
PROTECTION & DEFENCE We are a customer driven World Leader of Advanced “Customer driven World Leader of Advanced CBRN/Respiratory Protection systems delivering Quality, CBRN/Respiratory Protection Delivering Quality, Reliability, Reliability, Performance and Value to Military and First Performance a
Slide 21: US Military JSGPM M50 Masks and M61 Filters
US MILITARY JSGPM M50 MASKS JSGPM M61 FILTERS Sales Filter spares (pairs) (thousands) 80,000 Orders Sales 70,000 1200 Orders 60,000 1000 50,000 40,000 800 30,000 600 20,000 10,000 400 0 200 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 0 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12
Slide 22: EMEA Foreign Military/First Responders
EMEA FOREIGN MILITARY/FIRST RESPONDERS MARKET SIZE SUCCESSES Europe, Mid 2009 2010 2011 2012 2013 2014 2015 Existing Avon customers New Avon customers East, Asia* • UK MoD Sales $m • UK Police • Saudi 3,250 3,472 3,596 3,821 4,189 4,422 4,796 • Finland • Kuwait AGR % • Singapore • Germany ‐ 5.5 5.5
Slide 23: North American DHS/First Responder
NORTH AMERICAN DHS/FIRST RESPONDER MARKET SIZE SUCCESSES NA 2009 2010 2011 2012 2013 2014 2015 Sales $m 3,700 3,774 3,849 3,965 4,124 4,289 4,503 • Product of choice with C50/FM53/ST53 due to AGR % ‐ 2 2 3 4 4 5 military pedigree CAGR % • Coast to Coast Sales and Marketing team ‐ 3.6 * Frost and Sul
Slide 24: Product Development
PRODUCT DEVELOPMENT • Board approved program to enhance product range • Unique modular approach to respiratory protection • Multi‐community interaction through common Avon products • Total market coverage for all Fire, Military and First Responder community • Program delivers first products in 2013
Slide 25: Fusion – Increasing Sales Value Through Modularity
FUSION – INCREASING SALES VALUE THOUGH MODULARITY THE FUTURE TODAY Mask $500 Mask $500 Filter $50 Filter $50 TOTAL $550 PAPR $650 CDV Hose $750 • Fusion modules deliver add on options and unique performance SCBA $2500 • Opportunity to increase sales value by a factor of 8 ‘Only Avon can provide this
Slide 26: Re-Breather Technology
RE‐BREATHER TECHNOLOGY PROGRESS TO DATE 2012 DEVELOPMENTS • Identified opportunity with • Production tooled product submitted to NIOSH US Navy for certification against existing standard. Expect • Acquired technology from certification July 2012 government funded business • New standard released in
Slide 27: Air Crew Mask Technology
AIR CREW MASK TECHNOLOGY PROGRESS TO DATE 2012 DEVELOPMENTS • Program initiated by USAF in 2007 to use a • Avon funded £125k for demonstrating capability modified Avon M53 mask system in lieu of the • Requirements met with early prototypes Gentex mask system • Continued administrative delays of RFP
Slide 28: Other Technology/Opportunities
OTHER TECHNOLOGY/OPPORTUNITIES Respiratory and PPE markets Full Body Communication Helmet integration Filtration Respiratory Collective Individual CBRN Detection Decontamination markets Protection Protection 28 FOCUSED ON OPPORTUNITIES
Slide 29: Outlook Statement
OUTLOOK OUTLOOKSTATEMENT STATEMENT The Protection & Defence business will continue to benefit from the security of the long term DoD contract and increased market share in the US homeland security and foreign military markets. In the short term, however, visibility and timing of filter orders from t
Slide 30: Wrap Up
WRAP WRAPUP UP DoD contract security Non‐DoD 2013 & 2014 order book being established Project Fusion on target BRIC expansion in Dairy IP‐MV market share continues to grow Progress expected to continue 30 01 FOCUSED ON FOCUSED ON OPPORTUNITIES OPPORTUNITIES
Slide 31: Interim Results 2012
INTERIM RESULTS 2012 FOCUSED ON OPPORTUNITIES
Slide 32: Safe Harbour Statement
SAFE HARBOUR STATEMENT 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 sometim