Slide 1: 2020 Full Year Results
2020 FULL YEAR RESULTS Resilient through the pandemic and positioned for recovery Full Year Results 2020
Slide 2: Agenda and Cautionary Statement
AGENDA Introduction David Squires CEO 2020 Full Year 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 th
Slide 3: 2020 Summary
2020 SUMMARY • Results significantly impacted by Coronavirus (COVID-19) and 737 MAX • Strong free cashflow generation of £46.5m • Restructuring on track and delivering target savings • Net debt/EBITDA of 2.8x: liquidity headroom of £157.1m: appropriate covenant relaxations in place through 31 Decemb
Slide 4: Our Response to Coronavirus (COVID-19) Pandemic
OUR RESPONSE TO CORONAVIRUS (COVID-19) PANDEMIC • Health, welfare and safety of employees our highest priority • All of our businesses following best practice guidelines and national and local government instructions • Vulnerable employees given special protection • Coronavirus Oversight Committee,
Slide 5: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE E S G First worldwide in our sector to Lost Time Injury Illness Rate at 0.32, a Launched 2020 Code of Conduct training have greenhouse gas reduction of 69% from 2015 (2020 target: <0.5) incorporating new modules on cyber security reduction targets approved by the S
Slide 6: How Senior is Contributing to a Low Carbon Economy
HOW SENIOR IS CONTRIBUTING TO A LOW CARBON ECONOMY Using our proprietary technology and intellectual property to How Senior is contributing to develop a range of products to help lower GHG emissions Aerospace building a low carbon economy • Developing a product portfolio that supports More efficient
Slide 7: 2020 Full Year Results
2020 FULL YEAR RESULTS Full Year Results 2020
Slide 8: Coronavirus (COVID-19) Update – Disruption & Recovery
CORONAVIRUS (COVID-19) UPDATE – DISRUPTION & RECOVERY World Passengers Flows Long-run Outlook World Vehicles Production Forecast CAGR 2005-40 105 ~4% 100 ~4% 95 Million units 90 85 ~3% 80 75 70 65 60 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Light Vehicles Medium/Heavy Commercial Vehicles So
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS 2020 2019 Change constant currency Revenue £733.6m £1,110.7m -34% -33% Adjusted Operating Profit £3.7m £89.4m -96% -96% Adjusted Operating Margin 0.5% 8.0% -750bps -760bps Adjusted (Loss) / Profit before Tax (£6.2m) £78.5m Adjusted (Loss) / Earnings per Share (0.84p) 16.17p Tota
Slide 10: 2020 at a Glance
2020 AT A GLANCE £m Aerospace(1) 1,300 Revenue 2020 2019 Change 1,200 £m £m 1,110.7 (8.6) (304.1) Revenue 526.2 830.3 -36.6% 1,100 Adj OP(2) 5.9 75.9 -92.2% 1,000 $1.29 (19: 1.28) Margin 1.1% 9.1% -800bps • Y-o-Y: Q1 22%; Q2 40%; Q3 45%; Q4 39% 900 • Civil £309.8m ( 50.5%) (64.0) 800 • De
Slide 11: Adjusted and Reported Profit
ADJUSTED AND REPORTED PROFIT 2020 2019 £m £m Change Adjusted operating profit 3.7 89.4 -96% Net finance costs – borrowings, cash (7.8) (8.1) – IFRS 16 (3.0) (3.5) – retirement benefits 0.9 0.7 Adjusted (loss) / profit before tax (6.2) 78.5 Tax (2020: 43.5%; 2019: 14.5%) 2.7 (11.4) Adjusted (loss) /
Slide 12: Restructuring
RESTRUCTURING Restructuring adjusted charge and cash cost Savings benefits Headcount reduction since June 2019 Annualised run 2021 - £2.0m rate saving of £50m from 2022 Savings of £36m Cumulative 27% 2020 - delivered to date savings of £39.0m 31% 2021 - £45m by end 17% £11.0m of 2021 2020 - 20
Slide 13: Cash Flow and Use of Funds
CASH FLOW AND USE OF FUNDS £m 32.3 (26.3) 90 80 70 (5.0) 2.0 60.6 (10.6) 60 53.9 (3.5) 50 46.5 (23.3) 40 30 23.2 20 10 3.7 - 2020 Adjusted Depreciation and Other items (2) Change in Net Capital Pensions in 2020 Operating Net Interest Paid Tax Paid 2020 Free Cash Restructuring and 2020 Net Cash Opera
Slide 14: Balance Sheet
BALANCE SHEET £m Dec 2020 Dec 2019 Goodwill and other intangible assets 169.8 310.0 FX Impact from Dec 2019 Investment in JV 3.6 3.3 £m Property, plant and equipment 330.5 369.3 Non current assets (3.2) Other long-term assets 4.8 2.2 Working capital (1.1) Net debt 2.4 Non current assets, before reti
Slide 15: Maturity Profile of Credit Facilities
MATURITY PROFILE OF CREDIT FACILITIES In July 2020, the $50m US RCF agreement was further extended to 30 June 2022 $20m (£14.6m) private placement note was repaid on maturity in October 2020 Recognising the market conditions and scenarios we have tested, we have agreed appropriate covenants wi
Slide 16: Financial Summary
FINANCIAL SUMMARY Strong cash performance in the face of significant disruption to our end markets from the pandemic Both Divisions (Aerospace and Flexonics) were profitable Generated £46.5m free cash inflow £157.1m headroom on our committed borrowing facilities Agreed appropriate covenant
Slide 17: Markets, Strategy & Outlook
MARKETS, STRATEGY & OUTLOOK Full Year Results 2020
Slide 18: Our Markets
OUR MARKETS 28% Flexonics Division Aerospace Division 72% (25%) Power & Energy 16% (75%) (14%) Land Vehicles 12% (11%) 42% Civil Aerospace (56%) Other Aerospace 8% (6%) Defence 22% (13%) End markets composition based on 2020 revenue % in brackets are 2019 comparatives Full Year Results 2020 Page 18
Slide 19: Our Customers
OUR CUSTOMERS 28% Flexonics Division Other Power & Energy 14% Aerospace Division 72% 9% Rolls Royce (25%) (12%) (9%) (75%) all 1% of Schlumberger 2% (2%) Group or less 8% Boeing (11%) Other Land Vehicle 6% (6%) all 1% of Group or less 7% Lockheed Martin (4%) Caterpillar 3% (2%) Cummins 3% 5% Spirit
Slide 20: Civil Aerospace Shape of Market Recovery
CIVIL AEROSPACE SHAPE OF MARKET RECOVERY (42% of Group) Group civil aerospace sales 50%(1) World passengers flows long-run outlook compared to 2019 CAGR Reflected the significant cuts in programme production 2005-40 rates by the civil aircraft and engine OEMs ~4% Further disruption caused by t
Slide 21: 737 MAX Recertified and Returned to Service
737 MAX 737 MAX recertified and returned to service Boeing resumed production at a low rate in May 2020 and deliveries to airline customers have resumed in December 2020 Boeing expects production to gradually increase from a low rate currently to 31 per month in early 2022, with further gradua
Slide 22: Defence (22% of Group)
DEFENCE (22% of Group) US defence spend continues to grow The United States spends more on defence than the next 10 countries combined Source: US DoD FY21 "Green Book", Roland Berger, July 2020. OCO = Overseas Contingency Operations. RDT&E = Research Development Test & Evaluation. O&M =Operation and
Slide 23: Land Vehicles (12% of Group)
LAND VEHICLES (12% of Group) North American Truck and Off-Highway (7% of Group) Tightening of global environment legislation North American Class 8 Truck Production Forecast will increase future demand for 400 (Thousands) electric/hybrid engines Market – N. Am. Class 8 truck production 38% 27% 6%
Slide 24: Power & Energy (16% of Group)
POWER & ENERGY (16% of Group) Units Oil Price and Rig Count $ 4000 90 (1) 3500 80 Group 2020 sales compared to 2019 3000 70 2500 60 Oil & Gas (6% of Group): Sales 32% (£20.5m) 2000 50 Upstream – some North America capacity mothballed 1500 40 Downstream – some maintenance projects deferred 30 1000
Slide 25: Strategic Focus Remains Through Pandemic Crisis
STRATEGIC FOCUS REMAINS THROUGH PANDEMIC CRISIS • Fluid Conveyance and Thermal Management – Highly engineered products and sub-systems for a range of attractive end markets – Rich in existing IP and investing in products and technologies for growing and emerging markets – e.g. A&D, Electrification,
Slide 26: Fluid Conveyance & Thermal Management Technology
FLUID CONVEYANCE & THERMAL MANAGEMENT TECHNOLOGY Highly engineered products serving a range of attractive end markets Aerospace Semiconductor equipment Defence Medical Fluid conveyance and thermal management technology embedded in our IP rich products Land Vehicles Power & Energy Full Year Results 2
Slide 27: Technology Developments
TECHNOLOGY DEVELOPMENTS Ways to reduce carbon How Senior has responded • Production of 70kW battery cooler commenced in 2020 Hybrid/ electric • Development projects with various land vehicle OEMs and battery manufacturers vehicles • Global team established to develop hydrogen market solutions • Desi
Slide 28: Portfolio Optimisation
PORTFOLIO OPTIMISATION • Divestiture of Senior Aerospace • Senior Aerospace Connecticut is the only operating business in Senior whose primary Connecticut focus is build-to-print parts for the rotary sector • Divestiture consistent with Senior’s strategy to • Closure of our Senior Aerospace review t
Slide 29: Outlook
OUTLOOK • Senior has undertaken mitigating actions and extended its restructuring programme. • For 2021 our current market assumptions are: - Production volumes for civil aerospace will be lower in 2021 than 2020; varying levels of inventory in different tiers of the supply chain. - Defence markets
Slide 30: Any Questions?
ANY QUESTIONS? Full Year Results 2020
Slide 31: Appendices
APPENDICES Full Year Results 2020
Slide 32: Group Evolution
GROUP EVOLUTION Revenue (£m) Adjusted Operating Profit (£m) Adjusted Operating Margin (%) 1200 100 12 Total after central costs 90 Total after central costs 1000 80 10 70 800 8 60 600 50 6 40 400 30 4 20 200 2 10 0 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Aerosp
Slide 33: Currency Effect
CURRENCY EFFECT Translation Impact on FULL YEAR- FY 2019(1) (£m) Avg. FY Avg. FY Adj. 2019 Exchange Rates to GBP 2020 Revenue PBT(2) 1.28 US $ 1.29 (5.4) (0.4) 1.14 Euro € 1.13 0.8 0.1 18.53 South African Rand 20.97 (0.9) (0.1) 39.76 Thai Baht 40.24 (0.8) (0.1) 5.06 Brazilian Real 6.60 (0.8) 0.1 1.7
Slide 34: Earnings Per Share and Dividends
EARNINGS PER SHARE AND DIVIDENDS 2020 2019 Average number of shares Basic 414.9m 415.0m Fully diluted 414.9m 416.8m Adjusted (loss)/earnings per share (1) Basic (0.84)p 16.17p Fully diluted (0.84)p 16.10p Dividends (pence per share) Interim - 2.28p Final - - Total - 2.28p Dividend cost (£m) Interim
Slide 35: Change in Net Debt
CHANGE IN NET DEBT 2020 2019 £m £m Free cash flow (page 13) 46.5 58.3 Dividends - (31.2) Proceeds on disposal of businesses, net of costs and cash disposed (4.2) (8.2) Restructuring cash outflows (15.2) (2.9) US class action lawsuits (3.9) - Purchase of shares by employee benefit trust - (6.3) Net c
Slide 36: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE 2020 2019 Capex Depn (1) Capex Depn (1) £m £m £m £m Aerospace 19.4 39.6 51.2 39.5 Flexonics 7.3 13.7 13.5 14.5 Holding companies 0.1 0.6 0.1 0.6 Total 26.8 53.9 64.8 54.6 (1) Depreciation of £41.9m (2019: £42.3m), IFRS 16 depreciation £10.2m (2019: £10.2m) and amortisation
Slide 37: Usage of Credit Facilities – December 2020
USAGE OF CREDIT FACILITIES – December 2020 Usage by Currency Interest Facility Usage £ $ € Other % £m £m US Private placements: $30.0m (Sep 2028) 4.18% 21.9 21.9 - 21.9 - - €28.0m (Feb 2027) 1.51% 25.0 25.0 - - 25.0 - $60.0m (Oct 2025) 3.75% 43.8 43.8 - 43.8 - - £27.0m (Jan 2025) 2.35% 27.0 27.0 27.
Slide 38: Covenants at Frozen GAAP
COVENANTS at FROZEN GAAP (1) Covenant reconciliation* (as defined in Group debt agreements): Dec 2020 £m Adjusted Operating Profit (Note 9) 3.7 Net debt - restated at average exchange rates (2) £134.8m Add: Depreciation of property, plant & equipment (Note 32a) 52.1 Net interest payable £7.8m Amorti
Slide 39: Pensions
PENSIONS 2020 2019 UK USA Various IAS 19 Retirement Benefit Funded Funded Unfunded Total Total £m £m £m £m £m Scheme assets 334.7 52.6 1.1 388.4 357.7 Scheme liabilities (285.8) (54.6) (6.9) (347.3) (339.2) Scheme asset/(deficit) at opening 48.9 (2.0) (5.8) 41.1 18.5 Current and past service cost (0
Slide 40: ESG Achievement Highlights
ESG ACHIEVEMENT HIGHLIGHTS ESG remains a very high priority for Senior. Some of the achievement highlights since 2015 include: • Reduced our Lost Time Injury Rate (“LTIR”) by 69% by December 2020 • Reduced our Total Recordable Injury Rate (“TRIR”) by 63% by December 2020 • Reduced total Scope 1 and
Slide 41: 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 42: Strategic Priorities
STRATEGIC PRIORITIES Autonomous and Autonomous and Considered and High Performance Competitive Cost High Performance Collaborative Business Focus on Growth Collaborative Business Focus on Capital Effective Growth Talent Development Operating System Country Strategy Operating System Model Model Deplo
Slide 43: 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 44: Senior's Locations
SENIOR’S LOCATIONS UK Rickmansworth H.O 2020 split Sales Employees Massachusetts Crumlin Metal Bellows N. America 65% 2,525 Lymington Canada BWT UK 14% 1,016 SF Canada Bird Bellows Thermal Rest of Europe 11% 879 Wisconsin Weston EU Rest of World 10% 1,460 GA Germany Washington SF GmbH AMT Czech Repu
Slide 45: Senior's Products – 2020
SENIOR’S PRODUCTS – 2020 28% Flexonics Division Other machined parts 5% Aerospace Division 72% (25%) (5%) (75%) Industrial flexible parts 11% (9%) 20% High pressure ducting Fuel distribution (LV) 1% (18%) (1%) Off-highway hydraulics (LV) 2% (1%) Exhaust flexes (LV) 2% (3%) Emission control (LV) 7% (
Slide 46: Technology Theme One: Fluid Conveyance
TECHNOLOGY THEME ONE: FLUID CONVEYANCE Aircraft Low Pressure Ducting High Pressure Ducting Aerospace Control Products Non-Aerospace Control Products Gas Turbine Engines Complex Ducts, Tubes & Pipes Bellows Seals & Controls Aerospace Controlling the flow of fluids within systems Extending the technol
Slide 47: Technology Theme Two: Structures
TECHNOLOGY THEME TWO: STRUCTURES Airframe Structures & Assemblies Airframe Structures Airframe Assemblies Hard & Soft Metal Machined Parts Engine Structures & Mountings Nacelle Rings Engine Casings Aerospace Aerofoils Precision Machined Components and Assemblies Power & Energy Oil & Gas Directional
Slide 48: Aerospace Division
AEROSPACE DIVISION Full Year Results 2020
Slide 49: Aerospace Division: A Summary
AEROSPACE DIVISION: A SUMMARY (3) 2020 2019(1) Change 18 Operations Revenue £526.2m £830.3m -36.6% NAFTA 9 Europe 3 Adjusted Operating Profit (2) £5.9m £75.9m -92.2% UK 4 Adjusted Operating Margin(2) 1.1% 9.1% -800bps ROW 2 Markets Customers Other 12% Rolls-Royce 12% Civil Aerospace 58% Other 30% Bo
Slide 50: Civil Aerospace (42% of Group)
CIVIL AEROSPACE (42% of Group) Boeing, Airbus and independent forecasters predicting air traffic will continue to grow over the long term Long-term drivers for traffic demand remain with emerging markets still likely to want more air services, according to IATA The lower operating cost and bet
Slide 51: Defence (22% of Group)
DEFENCE (22% of Group) Global defence spending expected to grow at 3% CAGR 2019-2023 and to exceed $2 trillion in 2023(1) The US continues to spend more on defence than the next ten countries combined Senior is well placed with good content on F-35 and T-7A Red Hawk (formerly T-X Trainer) (1)
Slide 52: Our Aerospace Platforms
OUR AEROSPACE PLATFORMS A320neo 14% Other 44% F-35 (JSF) 7% 787 6% A350 6% C-130 6% A330 2% 737 MAX 4% E2 2% Black Hawk 4% 777 2% A220 3% Note: Based on 2020 Aerospace revenue. Full Year Results 2020 Page 52
Slide 53: Flexonics Division
FLEXONICS DIVISION Full Year Results 2020
Slide 54: Flexonics Division: A Summary
FLEXONICS DIVISION: A SUMMARY (3) 2020 2019(1) Change 11 Operations & JV NAFTA 4 Revenue £208.3m £272.3m -23.5% Europe 2 Adjusted Operating Profit(2) £11.0m £26.0m -57.7% UK 2 ROW 3 Adjusted Operating Margin (2) 5.3% 9.5% -420bps China JV 1 Markets Customers Cummins 12% Other markets 19% Truck & Off
Slide 55: Land Vehicles (12% of Group)
LAND VEHICLES (12% of Group) Recovery in GDP growth, government stimulus programmes and tighter emissions regulations create demand for Senior’s land vehicle products Senior is addressing the changing landscape with innovative products across different powertrains Global EV stock and sales by sc
Slide 56: Power & Energy (16% of Group)
POWER & ENERGY (16% of Group) Projected increases in global energy usage, tightening emission control regulations and emerging changes in power generation will drive increased demand for Senior’s power & energy products Senior’s product portfolio supports solutions for solar, wind, nuclear and o
Slide 57: Index
INDEX Presentation Appendices 2020 summary 3 Group evolution 32 Our response to Coronavirus (COVID-19) pandemic 4 Currency effect 33 Environmental, social & governance 5 to 6 Earnings per share and dividends 34 Coronavirus (COVID-19) update – disruption & recovery 8 Change in net debt 35 Financial h