Slide 1: 2022 Interim Results
2022 INTERIM RESULTS Strong Performance, Outlook Maintained Interim Results 2022
Slide 2: Agenda
AGENDA Introduction David Squires CEO 2022 Interim Results Bindi Foyle FD Markets, Strategy & Outlook David Squires CEO Cautionary Statement This document has been prepared solely to provide additional information to enable shareholders to assess the Group’s strategy and business objectives and the
Slide 3: H1 2022 Highlights
H1 2022 HIGHLIGHTS Strong trading performance in line with expectations Demand continues to strengthen across our core markets Increased order intake with a book-to-bill of 1.34 Strong free cash inflow; healthy balance sheet, significantly de-levered Supply chain constraints and increasing
Slide 4: 2022 Interim Results
2022 INTERIM RESULTS Interim Results 2022
Slide 5: Financial Headlines
FINANCIAL HEADLINES H1 2022 H1 2021 Change Constant currency Book to bill ratio 1.34 1.18 Revenue £402.2m £332.8m +21% +16% Adjusted Operating Profit £12.6m £5.2m +142% +117% Adjusted Operating Margin 3.1% 1.6% +150bps +140bps Adjusted Profit before Tax £8.8m £0.9m +878% +577% Adjusted Earnings per
Slide 6: H1 2022 at a Glance
H1 2022 AT A GLANCE £m 450 Revenue Bridge 46.1 402.2 400 $1.29 (H1 21: $1.39) 8.1 350 15.2 332.8 300 250 H1 2021 Exchange Price Volume H1 2022 Adjusted Operating Profit (1) Bridge £m 16 8.1 (9.4) 9.1 (0.1) (0.9) 14 12.6 12 10 8 5.2 0.6 6 4 2 - H1 2021 Exchange Price Cost Inflation Volume Share of JV
Slide 7: H1 2022 Revenue Bridge
H1 2022 REVENUE BRIDGE £m 450 23.3 0.1 402.2 400 30.8 $1.29 (H1 21: $1.39) 15.2 350 332.8 300 250 H1 2021 Exchange Aerospace Flexonics Eliminations H1 2022 Revenue Reconciliation £m Revenue Reconciliation £m Aerospace (1) H1 2021 revenue 233.7 Flexonics (1) H1 2021 revenue 114.6 Civil aerospace 40.4
Slide 8: H1 2022 Adjusted Operating Profit Bridge
H1 2022 ADJUSTED OPERATING PROFIT(2) BRIDGE £m 16 3.5 (0.1) (0.9) 14 12.6 12 4.3 10 $1.29 (H1 21: $1.39) 8 0.6 6 5.2 4 2 - H1 2021 Exchange Aerospace Flexonics Share of JV Central Costs H1 2022 H1 2022 H1 2021 Change H1 2022 H1 2021 Change Aerospace (1) Flexonics (1) £m £m £m £m Revenue 264.5 233.7
Slide 9: Adjusted and Reported Profit
ADJUSTED AND REPORTED PROFIT HY 22 HY 21 £m £m Adjusted operating profit 12.6 5.2 Net finance costs – borrowings, cash (3.2) (3.2) – lease liabilities (IFRS 16) (1.2) (1.3) – retirement benefits 0.6 0.2 Adjusted profit before tax 8.8 0.9 Tax (0.8) (0.5) Adjusted profit for the period 8.0 0.4 Net res
Slide 10: Strong Cash Flow Generation
STRONG CASH FLOW GENERATION Change in Net Debt: £m Net cash inflow 17.5 £m Exchange variations (11.0) 2.2 (1.2) Lease liabilities – additions, 40 (11.4) (2.8) 24.5 modifications and disposals Net debt - opening (153.1) Net debt – closing (149.4) 30 Net debt to EBITDA (5) 1.3x (1.6) 25.1 (4.1) (1.7)
Slide 11: Balance Sheet Strength
BALANCE SHEET STRENGTH Credit facilities and headroom Profile of committed credit facilities £350m £350m Fixed rate £300m £300m Floating rate £250m £250m Net debt (excluding leases) £200m Headroom Headroom £200m June 2022 - £72.9m £208.0m £228.0m £150m £150m Reduction in £100m borrowing £100m £50m N
Slide 12: Financial Summary
FINANCIAL SUMMARY Strong H1 performance with improved profitability Successfully mitigating inflationary pressures Strong cash performance with £19.3m free cash inflow Healthy balance sheet, significantly de-levered with strong liquidity Dividend reinstated On track to delivering minimum o
Slide 13: Markets
MARKETS Interim Results 2022
Slide 14: Attractive End Market Exposure
ATTRACTIVE END MARKET EXPOSURE 34% Flexonics Division Aerospace Division 66% (34%) (66%) Power & Energy Civil Aerospace 15% (16%) 40% 79% 21% Land Vehicles 19% (36%) Single aisle, regional Wide body and business jets (18%) 11% Defence (11%) 15% (19%) Other Aerospace* End markets composition based on
Slide 15: Diversified Aerospace & Defence Platforms
DIVERSIFIED AEROSPACE & DEFENCE PLATFORMS A320 18% Other 42% 737 MAX 9% F-35 6% A220 5% Global 5000/6000 A350 5% 2% C-130 4% 777 2% 767 2% E2 3% A330 2% 787 2% Based on H1 2022 Aerospace revenue. Interim Results 2022 Page 15
Slide 16: Civil Aerospace Market Growth
CIVIL AEROSPACE MARKET GROWTH (40% of Group) Air travel demand resilient, Strong structural growth in IATA forecasts world particularly for domestic and air travel; driven by growing passenger flows will return to short haul routes. International demand in Asia; supported 2019 levels by end of 2024
Slide 17: Civil Aerospace Single Aisle Growth
CIVIL AEROSPACE SINGLE AISLE GROWTH A320 Family target to Production volumes 737 MAX production rate reach a monthly ramping up increased to 31 per month production rate of 65 in during Q2 2022 early 2024, ramping up towards rate 75 in 2025 737 MAX monthly production rates A320 monthly production ra
Slide 18: Defence Market Growing
DEFENCE MARKET GROWING (15% of Group) Approved budget for US Defence in 2022 is $778bn Bipartisan request for 2023 spending of $857bn has been made US defence spend continues to grow* The US spends almost as much on defence as rest of top 10 Global defence spending 2021 ($2.08 trillion) 1000 United
Slide 19: Defence Platforms
DEFENCE PLATFORMS Senior’s sales to the Defence Mature programmes such as the C- Senior is well placed with good sector are primarily focused on 130 transport aircraft continue in content on key growth programmes the US defence market series production such as F-35 and T-7A Red Hawk Senior benefits
Slide 20: Other Attractive Markets
OTHER ATTRACTIVE MARKETS (11% of Group) Senior’s aerospace businesses supply to other industrial markets e.g. space, semi-conductor equipment and medical – Good growth in space, semi-conductor equipment market and medical Semi-conductor market is forecast to grow 5% y-o-y in 2023 Our diversification
Slide 21: Land Vehicle Markets Growing
LAND VEHICLE MARKETS GROWING (19% of Group) Growth in GDP and tighter emissions Commercial vehicles grow at 4% Senior is supporting the transition to a low regulations increase demand for p.a. and passenger vehicles grow at carbon economy; providing thermal Senior’s land vehicle products 3% p.a. thr
Slide 22: Power & Energy Markets Improving
POWER & ENERGY MARKETS IMPROVING (15% of Group) Continuing recovery in upstream Demand for world oil Growing renewables to Nuclear-based generation oil & gas, improved levels of expected to surpass pre- almost match moderate is expected to grow by 1% maintenance and overhaul pandemic levels in 2023
Slide 23: Strategy & Outlook
STRATEGY & OUTLOOK Interim Results 2022
Slide 24: Focus on IP-Rich Technology and Manufacturing
FOCUS ON IP-RICH TECHNOLOGY AND MANUFACTURING 66% Fluid Conveyance and Thermal Management Fluid Conveyance and Thermal Management Product and System Design & Manufacturing IP UK North America Asia & Africa Europe Cape Town India GmbH H1 2022 revenue Mexico Structures Complex Machining and Manufactur
Slide 25: Fluid Conveyance Acquisition – Spencer Aerospace
FLUID CONVEYANCE ACQUISITION – SPENCER AEROSPACE Spencer Aerospace designs and manufactures highly engineered high-pressure hydraulic fluid fittings for use in commercial and military aerospace applications. • Owner managed business founded in 2013, located in Valencia, CA, USA with approx. 50 emplo
Slide 26: Highly Engineered Products in Attractive End-Markets
HIGHLY ENGINEERED PRODUCTS IN ATTRACTIVE END-MARKETS Fluid conveyance and thermal management technology embedded in our IP-rich products Semiconductor Medical Power & Energy Land vehicles Defence Aerospace Equipment Fuel cell energy Composite ducting Solar Additive manufacturing Petrochemical Hybrid
Slide 27: Our Technology Roadmaps Reflect Market Trends
OUR TECHNOLOGY ROADMAPS REFLECT MARKET TRENDS 2010s 2020s 2030s 2040s Launch of more efficient Application of more advanced More widespread use of Production ramp-up of Aerospace aero engines production methods SAFs in commercial aircraft* hydrogen-powered aircraft New additive Our existing fluid Ou
Slide 28: Extending Our Sustainability Leadership
EXTENDING OUR SUSTAINABILITY LEADERSHIP E S G On track to deliver Scope 1, 2 and 3 In September 2022 we are undertaking The 2022 Code of Conduct annual SBTi verified “Near Term Net-Zero” our next global employee survey training programme has been launched Targets and is due to be completed in
Slide 29: Group Outlook
GROUP OUTLOOK Our core markets are showing good growth as activity levels pick up. Global supply chain constraints and increasing inflationary pressures, caused by external events, remain evident and we continue to manage the impact of those diligently to ensure we satisfy our customers and othe
Slide 30: Any Questions?
ANY QUESTIONS? Interim Results 2022
Slide 31: Appendices
APPENDICES Interim Results 2022
Slide 32: Investment Case: Positioned for Growth
INVESTMENT CASE: POSITIONED FOR GROWTH Our purpose to provide safe and innovative products for demanding thermal management and fluid conveyance applications Clear strategy to maximise shareholder value Focus on IP-rich Aerospace fluid conveyance & Leading thermal Long-term Flexonics A differentiate
Slide 33: Medium Term Minimum ROCE Target
MEDIUM TERM MINIMUM ROCE TARGET Medium term min ROCE target ≥ 13.5% Portfolio optimisation strategy to Confident in delivering maximise value creation 11.1% good returns on capital and enhanced shareholder value Strategic focus on IP-rich fluid conveyance and thermal management Ongoing End-Market In
Slide 34: Our Business Model
OUR BUSINESS MODEL Our vision is to be a trusted and collaborative high value-added engineering and manufacturing company delivering sustainable growth in operating profit, cash flow and shareholder value Our purpose is to provide safe and innovative products for demanding thermal management and flu
Slide 35: Strategic Priorities
STRATEGIC PRIORITIES Autonomous and Considered and High Performance Competitive Cost Collaborative Business Focus on Growth Effective Capital Talent Development Operating System Country Strategy Model Deployment Empowerment and Outgrow our end Key elements include: Enhance global footprint The exe
Slide 36: Product Development Strategy Compatible with Our Focus on ESG
PRODUCT DEVELOPMENT STRATEGY COMPATIBLE WITH OUR FOCUS ON ESG End-market evolution to achieve net zero Aerospace - Airbus envisions using multiple pathways including use of hydrogen and sustainable aviation fuels to reduce emissions Land vehicles - More efficient diesel engines and accelerating hydr
Slide 37: Acquisition Framework
ACQUISITION FRAMEWORK More Likely Less Likely Aerospace & Defence Semi-conductor Equipment Market Power & Energy (clean energy) Volume Automotive Land Vehicles (electrification) Medical Fluid Conveyance Products Structures / Machining Product Thermal Management Products Own design / IP products Comm
Slide 38: Our Locations
OUR LOCATIONS UK Rickmansworth H.O H1 2022 split Sales Employees Massachusetts Metal Bellows Crumlin N. America 58% 2,505 Lymington Canada BWT UK 17% 1,262 SF Canada Bird Bellows Rest of Europe 12% 852 Thermal Wisconsin Weston EU Rest of World 13% 1,467 GA Germany Washington SF GmbH AMT & Damar Czec
Slide 39: Our Customers
OUR CUSTOMERS 34% Flexonics Division Aerospace Division 66% Other Industrial Rolls Royce 7% (34%) 13% (7%) (66%) (14%) Boeing 7% Schlumberger (6%) 2% (2%) Other LV Spirit 7% 7% (6%) (7%) Daimler 2% Airbus 5% (2%) (5%) Caterpillar 4% (4%) Collins 3% (<2%) Cummins Safran 3% (2%) 6% (5%) MTU Aero 2% (2
Slide 40: Our Products
OUR PRODUCTS 34% Flexonics Division Other machined parts 4% Aerospace Division 66% (34%) (4%) (66%) Industrial flexible parts 11% (12%) High pressure ducting 15% Fuel distribution (LV) 1% (19%) (1%) Off-highway hydraulics (LV) 2% (2%) Exhaust flexes (LV) 4% (4%) Engine structures Emission control (L
Slide 41: Group Evolution
GROUP EVOLUTION Revenue (£m) Adjusted Operating Profit (£m) Adjusted Operating Margin (%) 100 12 1200 90 Total after central costs 80 10 1000 Total 70 after central 8 800 60 costs 50 6 600 40 400 30 4 20 200 2 10 0 0 0 2018 2019 2020 2021 HY 2022 2018 2019 2020 2021 HY 2022 2018 2019 2020 2021 HY 20
Slide 42: Balance Sheet
BALANCE SHEET £m H1 2022 FY 2021 H1 2021 FX Impact from Dec 2021 Goodwill and other intangible assets 161.4 154.4 152.9 £m Investment in JV 4.2 3.9 3.8 Non current assets 28.6 Property, plant and equipment 304.1 294.6 303.0 Working capital 7.5 Other long-term assets 8.8 5.8 4.6 Net debt (11.0) Non c
Slide 43: Maturity Profile of Committed Credit Facilities
MATURITY PROFILE OF COMMITTED CREDIT FACILITIES £m 340 320 300 Oct- £16.4m (fixed maturity) 280 260 Net debt (excluding leases) 240 Jun 2022 - £72.9m Feb - £120m 220 (floating 200 maturity) £228m 180 headroom 160 Jun - £39.6m 140 (floating maturity) 120 100 Jan - £27m + Oct - £49.2m (fixed 80 maturi
Slide 44: Usage of Credit Facilities – June 2022
USAGE OF CREDIT FACILITIES – JUNE 2022 Usage by Currency Interest Facility Usage £ $ € Other % £m £m US Private placements: $30.0m (Sep 2028) 4.18% 24.6 24.6 - 24.6 - - €28.0m (Feb 2027) 1.51% 24.1 24.1 - - 24.1 - $60.0m (Oct 2025) 3.75% 49.2 49.2 - 49.2 - - £27.0m (Jan 2025) 2.35% 27.0 27.0 27.0 -
Slide 45: Covenants at Frozen GAAP
COVENANTS at FROZEN GAAP(1) Covenant reconciliation (as defined in Group debt agreements, EBITDA and Net interest based on last twelve month figures): Jun 2022 £m Adjusted Operating Profit (last 12 months) 13.5 Add: Net debt - restated at average exchange rates (2) £68.0m Depreciation of property, p
Slide 46: Aerospace Division
AEROSPACE DIVISION Interim Results 2022
Slide 47: Aerospace Division: A Summary
AEROSPACE DIVISION: A SUMMARY H1 2022 H1 2021(1) Change 14 Operations Revenue £264.5m £233.7m +13.2% NAFTA 6 Europe 2 Adjusted Operating Profit(2) £9.8m £5.5m +78.2% UK 4 Adjusted Operating Margin(2) 3.7% 2.4% +130bps ROW 2 Markets Customers Rolls Royce 10% Other 16% Boeing 10% Other 34% Spirit 10%
Slide 48: Flexonics Division
FLEXONICS DIVISION Interim Results 2022
Slide 49: Flexonics Division: A Summary
FLEXONICS DIVISION: A SUMMARY H1 2022 H1 2021(1) Change 12 Operations & JV NAFTA 4 Revenue £137.9m £114.6m +20.3% EU 2 Adjusted Operating Profit(2) £11.3m £7.8m +44.9% UK 2 ROW 3 Adjusted Operating Margin (2) 8.2% 6.8% +140bps China JV 1 Other Markets Markets Customers 15% Cummins 17% Other 34% Cate
Slide 50: Index
INDEX Presentation Appendices H1 2022 highlights 3 Investment case: Positioned for growth 32 Financial headlines 5 Medium term minimum ROCE target 33 H1 2022 at a glance 6 Our business model 34 H1 2022 revenue bridge 7 Strategic priorities 35 H1 2022 adjusted operating profit bridge 8 Product develo