Senior plc · LSE:SNR
Senior — H1 2004 Earnings Presentation
34 slides from Senior's earnings presentation, Aug 21, 2004
Slide 1: Interim Results 2004
INTERIM RESULTS - 2004 Interim Results 2004
Slide 2: Index
INDEX Appendices Introduction 1 Headline numbers 2 Divisional performance - reported 3 Half-yearly comparison 18 - constant currency 4 Exchange rates 19 Key operating profit movements 5 Gross capital expenditure 20 Geographical performance - reported 6 Net debt history 21 - constant currency 7 Usage
Slide 3: Introduction
INTRODUCTION This is a presentation on the first half of 2004 in which: 1. Trading conditions were stable. 2. Raw material prices and currencies were volatile. 3. At constant currency, sales and OP were the same as in 2003. 4. Net debt and interest costs continued to fall. 5. Underlying earnings per
Slide 4: Headline Numbers
HEADLINE NUMBERS June June Change 2004 2003 Turnover £173.7m £186.9m - 7.1% Operating profit £5.6m £6.4m -12.5% Profit before tax £4.1m £3.7m Basic earnings per share 1.01p 0.88p Underlying earnings per share 1.85p 1.77p +4.5% Dividend per share 0.65p 0.65p no change Free cash flow £7.1m £10.8m -34.
Slide 5: Divisional Performance - as reported
DIVISIONAL PERFORMANCE - as reported £m Turnover Operating Profits (1) Margin on Sales 2004 2003 Currency 2004 2003 Currency 2004 2003 Impact(2) Impact(2) Aerospace 70.0 76.3 (6.5) 4.0 4.1 (0.4) 5.7% 5.4% Automotive 64.9 69.5 (3.8) 4.0 3.8 (0.4) 6.2% 5.5% Industrial 39.1 41.2 (1.9) 0.2 1.2 (0.1) 0.5
Slide 6: Divisional Performance - constant exchange rates
DIVISIONAL PERFORMANCE - constant exchange rates (2) £m Turnover Operating Profits (1) Margin on Sales 2004 2003 Change 2004 2003 Change 2004 2003 Aerospace 70.0 69.8 +0.3% 4.0 3.7 +8.1% 5.7% 5.3% Automotive 64.9 65.7 -1.2% 4.0 3.4 +17.6% 6.2% 5.2% Industrial 39.1 39.3 -0.5% 0.2 1.1 -81.8% 0.5% 2.8%
Slide 7: Operating Profit Movements
OPERATING PROFIT MOVEMENTS Aerospace Automotive Industrial Total £m £m £m £m 2003 Operating Profit 4.1 3.8 1.2 9.1 Exchange movements - translation (0.4) (0.4) (0.1) (0.9) A380 & JSF costs - 2003 1.2 - - 1.2 - 2004 (0.7) - - (0.7) Reorg & redundancy - 2003 0.3 0.2 0.1 0.6 - 2004 (0.5) (0.3) (0.3) (1
Slide 8: Geographical Performance - as reported
GEOGRAPHICAL PERFORMANCE - as reported £m Turnover by Origin Operating Profits (1) Margin on Sales 2004 2003 Currency 2004 2003 Currency 2004 2003 Impact (2) Impact(2) North America 90.8 105.9 (11.9) 3.7 6.9 (0.9) 4.1% 6.5% United Kingdom 34.0 34.9 - 1.7 1.2 - 5.0% 3.4% Rest of Europe 41.2 39.3 (0.6
Slide 9: Geographical Performance - constant exchange rates
GEOGRAPHICAL PERFORMANCE - constant exchange rates (2) £m Turnover by Origin Operating Profits (1) Margin on Sales 2004 2003 Change 2004 2003 Change 2004 2003 North America 90.8 94.0 -3.4% 3.7 6.0 -38.3% 4.1% 6.4% United Kingdom 34.0 34.9 -2.6% 1.7 1.2 +41.7% 5.0% 3.4% Rest of Europe 41.2 38.7 +6.5%
Slide 10: Underlying Earnings Per Share
UNDERLYING EARNINGS PER SHARE June June 2004 2003 £m £m Change Operating profit before goodwill amortisation 8.2 9.1 -9.9% Interest payable (1.5) (2.7) Underlying pre-tax profit (1) 6.7 6.4 +4.7% Tax (2004: 14.9%; 2003: 15.6%) (1.0) (1.0) Underlying profit after tax 5.7 5.4 Average no. of shares 306
Slide 11: Retained Profits
RETAINED PROFITS June June 2004 2003 £m £m Underlying profit after tax 5.7 5.4 Goodwill amortisation (2.6) (2.7) Profit for period 3.1 2.7 Dividends (2.0) (2.0) Retained profit 1.1 0.7 Interim Results 2004 Page 9
Slide 12: Balance Sheet
BALANCE SHEET June June Dec 2004 2003 2003 £m £m £m Goodwill 73.2 82.6 76.7 Tangible assets 74.8 85.4 79.1 Fixed Assets 148.0 168.0 155.8 Stocks 41.8 43.5 40.1 Debtors & prepayments 68.5 70.9 64.8 Creditors - current tax payable (net) (6.1) (2.9) (4.7) - dividend payable (2.0) (2.0) (4.1) - other &
Slide 13: Free Cash Flow
FREE CASH FLOW June June Dec 2004 2003 2003 £m £m £m Operating profit 5.6 6.4 12.1 Depreciation 7.2 8.6 16.1 Goodwill 2.6 2.7 5.4 Working capital (2.9) 0.3 (0.7) Operating cash flow 12.5 18.0 32.9 Interest paid (net) (1.2) (2.6) (5.0) Tax received / (paid) 0.7 (1.3) (0.8) Capital expenditure - cash
Slide 14: Change in Net Debt
CHANGE IN NET DEBT June June Dec 2004 2003 2003 £m £m £m Free cash flow 7.1 10.8 20.2 Dividends (4.1) (4.1) (6.1) Deferred consideration (0.1) (0.2) (0.3) Disposals - deferred proceeds - 0.6 0.7 Cash inflow 2.9 7.1 14.5 Exchange variations 3.4 1.2 8.7 Net debt - opening (64.2) (87.4) (87.4) Net debt
Slide 15: Pensions
PENSIONS SSAP 24 2002 – full year 2003 – full year 2004 (estimate) P&L Cash P&L Cash P&L Cash UK Scheme - normal 2.0 1.6 2.0 1.6 2.1 1.6 - voluntary - - - 0.9 - 2.0 USA Schemes 0.7 0.2 1.0 0.7 0.9 3.9(1) Total 2.7 1.8 3.0 3.2 3.0 7.5 (1) The large cash contribution to the USA scheme planned for 2004
Slide 16: Aerospace
AEROSPACE Divisional Sales 2004 2003 1. At constant exchange rates Military 27% 31% - Sales up 0.3% Regional + Business Jets 26% 23% - OP up 8.1% Large Commercial 25% 28% - Margin up from 5.3% to 5.7% Space 4% 3% Non Aerospace 18% 15% 2. Demand more stable, better visibility 100% 100% 3. Slow but su
Slide 17: Automotive
AUTOMOTIVE 1. At constant exchange rates 6 month sales (vehicles – million) - Sales down 1.2% 2004 2003 - OP up 17.6% North America - Margin up from 5.2% to 6.2% GM 2.27 2.26 +0.4% Ford 1.66 1.73 -3.9% DC 1.14 1.11 +2.8% 2. Market demand stable but raw material Toyota 1.00 0.90 +11.2% pricing a majo
Slide 18: Industrial
INDUSTRIAL 1. At constant currency - Sales down 0.5% - OP down by £0.9m - Margin down from 2.8% to 0.5% 2. Weak demand at Pathway and Hargreaves 3. Closure of Pathway’s Oakridge factory on track 4. £0.3m of rationalisation and reorganisation costs incurred 5. Five industrial hose businesses - perfor
Slide 19: Summary
SUMMARY 1. Expect to deliver hose disposal soon. 2. Expect industrial recovery in 2005. 3. Expect automotive growth to start 2006. 4. Expect capex to be high in 2005 and 2006. 5. Expect aerospace recovery to continue. Interim Results 2004 Page 17
Slide 20: Appendices
APPENDICES Interim Results 2004
Slide 21: Half Yearly Comparison
HALF YEARLY COMPARISON Turnover Operating Profits H1 2004 H2 2003 H1 2003 H2 2002 H1 2004 H2 2003 H1 2003 H2 2002 Aerospace (2) 70.0 67.5 76.3 82.2 4.0 3.1 4.1 4.6 Automotive 64.9 60.1 69.5 68.9 4.0 3.6 3.8 4.7 Industrial 39.1 40.8 41.2 43.5 0.2 1.7 1.2 1.6 Intersegment sales (0.3) (0.4) (0.1) (0.2)
Slide 22: Exchange Rates
EXCHANGE RATES Profit and Loss Account Balance Sheet Average Rates Period End Rates June June Dec June June Dec 2004 2003 Change 2003 2004 2003 Change 2003 £ : US Dollar 1.82 1.61 -11.5% 1.64 1.83 1.65 -9.8% 1.79 £ : Euro 1.48 1.46 -1.4% 1.45 1.49 1.44 -3.4% 1.42 £ : Rand 12.06 12.96 +7.5% 12.37 11.
Slide 23: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE H1 2004 H1 2003 Capex Depn Capex Depn £m £m £m £m Aerospace 2.0 2.7 1.1 3.0 Automotive 1.9 3.6 1.7 4.5 Industrial 1.0 0.8 0.6 1.0 Holding Companies 0.1 0.1 0.1 0.1 Total 5.0 7.2 3.5 8.6 Interim Results 2004 Page 20
Slide 24: Net Debt History
NET DEBT HISTORY £m 1.67 1.66 1.58 1.61 1.51 1.49 1.41 1.46 1.52 1.61 1.65 1.79 1.83 $:£ 180 Appointment of current 160 management and implementation of revised strategy 140 120 100 80 60 40 20 0 Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- 97 98 98 99 99 00 00 01 01 02 02 0
Slide 25: Usage of Facilities - June 2004
USAGE OF FACILITIES - June 2004 Usage by Currency Facility Usage £ $ Other £m £m Private placements US $ 75.0m (Oct 2008) 40.9 40.9 - 40.9 - - US $ 25.0m (Jun 2007) 13.7 13.7 - 13.7 - - 54.6 54.6 - 54.6 - - Revolving credit facility (Oct 2006) 46.0 10.7 5.0 - 3.4 2.3 Bank of America (May 2007) 13.7
Slide 26: Defined Benefit Pension Schemes
DEFINED BENEFIT PENSION SCHEMES Actuarial Valuations UK Plan USA Plans Last valuation Ongoing – previously 6 April 2001 31 December 2003 Scheme Assets at valuation £115.0m £13.6m Funding level 100% 72% FRS 17 Valuations Dec 2003 Dec 2002 Dec 2003 Dec 2002 £m Return £m Return £m Return £m Return Sche
Slide 27: 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 BWT Macclesfield, UK Senior Aerospace Ermeto Blois, France
Slide 28: Aerospace - Products
AEROSPACE - PRODUCTS 37% of Senior Aerospace sales are in 7% of Senior Aerospace sales are in fluid engine structures and mounting systems control systems Jet engine exhaust frame Hydraulic distribution system Engine mounting ring Active clearance control system Jet engine impingement Hydraulic syst
Slide 29: Aerospace - Products
AEROSPACE - PRODUCTS 25% of Senior Aerospace sales are in 13% of Senior Aerospace sales are in metallic ducting systems composite ducting systems Environmental conditioning Air distribution ducting system feed duct Bleed duct gimbal Fuselage ducting and Insulation Auxiliary power unit Auxilary power
Slide 30: Automotive - Operations
AUTOMOTIVE - OPERATIONS Operation Location Senior Automotive Bartlett Chicago, USA Senior Automotive Blois France Senior Automotive Kassel Germany Senior Automotive Cape Town South Africa Senior Automotive Crumlin South Wales Senior Automotive Olomouc Czech Republic Senior Automotive New Delhi India
Slide 31: Automotive - Products
AUTOMOTIVE - PRODUCTS 42% of Senior Automotive sales are of 8% of Senior Automotive sales are of engine flexible mechanisms for exhaust systems emission control pipework and subsystems Flexible exhaust connector Secondary air tube Picture 16 Exhaust gas recirculation Flexible exhaust connector (cut
Slide 32: Automotive - Products
AUTOMOTIVE - PRODUCTS 17% of Senior Automotive sales are of 13% of Senior Automotive sales are of fuel system distribution pipework and airconditioner, turbocharger and cooling subsystems systems pipework High-pressure diesel Turbocharger oil drain tube tube set High-pressure diesel Exhaust gas reci
Slide 33: Industrial
INDUSTRIAL Operation Location Senior Hargreaves Bury, UK Pathway Texas & Tennessee, USA Canada Toronto, Canada United Flexible Merthyr Tydfil, Wales USA Hose Division Chicago, USA Habia Knivsta, Sweden Holland Rotterdam, Holland Calorstat Hose Dourdan, France Interim Results 2004 Page 30
Slide 34: International Accounting Standards
INTERNATIONAL ACCOUNTING STANDARDS Work continues to ensure the Group is fully prepared for the implementation of International Accounting Standards with effect from 1 January 2005. A very preliminary view of the effect their adoption might have on the Group’s balance sheet at the end of 2003 is: £m