Slide 1: 2022 Full Year Results
2022 FULL YEAR RESULTS Strong results as recovery continues Full Year Results 2022
Slide 2: Agenda and Cautionary Statement
AGENDA Introduction David Squires CEO 2022 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: 2022 Highlights
2022 HIGHLIGHTS Strong trading performance compared to prior year • Significantly improved profitability • Excellent free cash flow, double prior year • Healthy balance sheet, net debt / EBITDA of 1.47x Acquired Spencer Aerospace with initial cash outlay of $30m Extended our sector leading sus
Slide 4: 2022 Full Year Results
2022 FULL YEAR RESULTS Full Year Results 2022
Slide 5: Financial Headlines
FINANCIAL HEADLINES 2022 2021 Change Constant currency Book to bill ratio 1.24 1.16 Revenue £848.4m £658.7m +29% +20% Adjusted Operating Profit £28.5m £6.1m +367% +285% Adjusted Operating Margin 3.4% 0.9% +250bps +240bps Adjusted Profit/(Loss) before Tax £20.1m (£1.9m) +1,158% +1,775% Adjusted Earni
Slide 6: FY 2022 at a Glance
FY 2022 AT A GLANCE 900 Revenue Bridge £m 114.8 848.4 850 800 $1.24 (FY 21: $1.38) 750 28.6 46.3 700 658.7 650 600 FY 2021 Exchange Price Volume FY 2022 Adjusted Operating Profit (1) Bridge £m 40 28.6 ( 26.0 ) 35 20.8 0.2 ( 2.5 ) 30 28.5 25 20 $1.24 (FY 21: 15 $1.38) 10 6.1 1.3 5 0 FY 2021 Exchange
Slide 7: 2022 Revenue Bridge
2022 REVENUE BRIDGE £m 900 ( 0.2 ) 61.0 848.4 850 800 82.6 $1.24 (21: $1.38) 750 46.3 700 658.7 650 600 550 500 450 400 350 300 FY 2021 Exchange Aerospace Flexonics Eliminations FY 2022 Revenue Reconciliation £m Revenue Reconciliation £m Aerospace (1) 2021 revenue 471.0 Flexonics (1) 2021 revenue 23
Slide 8: 2022 Adjusted Operating Profit Bridge
2022 ADJUSTED OPERATING PROFIT(2) BRIDGE £m 35 11.5 0.2 ( 2.5 ) 30 28.5 25 11.9 20 15 $1.24 (21: $1.38) 10 1.3 6.1 5 0 FY 2021 Exchange Aerospace Flexonics Share of JV Central Costs FY 2022 2022 2021 Change 2022 2021 Change Aerospace (1) Flexonics (1) £m £m £m £m Revenue 553.6 471.0 +17.5% Revenue 2
Slide 9: Adjusted and Reported Profit
ADJUSTED AND REPORTED PROFIT 2022 2021 £m £m Adjusted operating profit 28.5 6.1 Net finance costs – borrowings, cash (7.1) (5.8) – lease liabilities (IFRS 16) (2.5) (2.6) – retirement benefits 1.2 0.4 Adjusted profit / (loss) before tax 20.1 (1.9) Tax (2.0) 2.6 Adjusted profit for the period 18.1 0.
Slide 10: Cash Flow Generation
CASH FLOW GENERATION £m Change in Net Debt: £m 95 Net cash outflow (2.6) 85 5.6 ( 12.1 ) Exchange variations (14.2) 49.6 Lease liabilities – additions, 75 ( 30.0 ) (9.0) modifications and acquisitions 65 Net debt – opening (153.1) Net debt – closing (178.9) 55 Net debt to EBITDA (6) 1.47x 45 ( 1.4 )
Slide 11: Balance Sheet Strength
BALANCE SHEET STRENGTH Credit facilities and headroom Profile of committed credit facilities £350m £300m Fixed rate £300m £250m Floating rate £250m £200m Net debt (excluding leases) Dec 2022 - £100.5m £200m Headroom Headroom £208.0m £179.4m £150m £150m £100m £100m £50m Net Debt (1) Net Debt (1) £50m
Slide 12: On Track to Deliver Medium Term Minimum ROCE Target
ON TRACK TO DELIVER MEDIUM TERM MINIMUM ROCE TARGET Medium term min ROCE target ≥ 13.5% Confident in delivering Portfolio optimisation strategy to 11.1% good returns on capital maximise value creation and enhanced shareholder value Strategic focus on IP-rich fluid conveyance and thermal management O
Slide 13: Markets
MARKETS Full Year Results 2022
Slide 14: Attractive End Market Exposure
ATTRACTIVE END MARKET EXPOSURE 35% Flexonics Division Aerospace Division 65% (34%) (66%) Power & Energy Civil Aerospace 16% (16%) 79% 21% Land Vehicles 19% 40% Single aisle, regional and business jets Wide body (37%) (18%) Defence 11% 14% (11%) (18%) Other Aerospace* End markets composition based on
Slide 15: Diversified Aerospace & Defence Platforms
DIVERSIFIED AEROSPACE & DEFENCE PLATFORMS A320 19% (17%) Other 40% (45%) 737 MAX 10% (5%) F-35 6% (7%) 777 1% A220 5% (5%) (1%) Global 5000/6000 2% A350 5% (5%) (1%) 787 2% C-130 4% (3%) 767 2% A330 2% (6%) (2%) (1%) E2 2% (2%) Based on 2022 Aerospace revenue. % in brackets are 2021 comparatives and
Slide 16: Civil Aerospace Market Growth
CIVIL AEROSPACE MARKET GROWTH (40% of Group) ICAO/IATA forecasts world Global air travel demand Structural growth in air passenger flows will return to resilient, with both domestic and travel; driven by growing 2019 levels in 2023/2024 international traffic recovering demand in Asia; supported stro
Slide 17: Civil Aerospace: Large Commercial Growth
CIVIL AEROSPACE: LARGE COMMERCIAL GROWTH Large commercial aircraft Single aisle OEM order Resurgent long-haul travel deliveries increased by books at record levels supporting widebody growth 21% in 2022, now 31% supporting strong growth rates below prior peak of 2018 Boeing monthly production rates
Slide 18: Defence Market Growing
DEFENCE MARKET GROWING (14% of Group) Approved budget for US Defence in 2023 is $858bn 2023 budget is 10% higher than the budget in 2022 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 States of
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 programmes such as the US defence market series production F-35 and T-7A Red Hawk Senior benefits from po
Slide 20: Other Markets
OTHER MARKETS (11% of Group) Senior’s aerospace businesses supply to other markets e.g. space, semi-conductor equipment and medical – Good growth in space, slowdown in semi-conductor equipment market; medical stable Low earth orbit satellite market Our diversification into other attractive end-mar
Slide 21: Land Vehicle Markets Growing
LAND VEHICLE MARKETS GROWING (19% of Group) Global growth in GDP and tighter Commercial vehicles grow at 4% Senior is supporting the transition to a low emissions regulations increase p.a. and passenger vehicles grow at carbon economy; providing thermal management demand for Senior’s land vehicle 3%
Slide 22: Power & Energy Markets Improving
POWER & ENERGY MARKETS IMPROVING (15% of Group) Higher activity levels in Demand for world oil Electricity generation from Nuclear based generation potential upstream oil & gas, nuclear expected to surpass pre- renewable sources to rise to play a significant role to secure and renewables pandemic le
Slide 23: Strategy & Outlook
STRATEGY & OUTLOOK Full Year Results 2022
Slide 24: Our Renewed Purpose
OUR RENEWED PURPOSE We help engineer the transition to a sustainable world for the benefit of all our stakeholders. We do this by: Technology Customer Climate expertise transition action Using our technology expertise in fluid Enabling our customers, who operate in Staying at the forefront of climat
Slide 25: Great Progress Made on Sustainability
GREAT PROGRESS MADE ON SUSTAINABILITY E S G Achieved the highest CDP rating of A for Achieved 81% response rate on Global Employees received refresher training on our climate change disclosure Employee Opinion Survey with increased Senior’s Code of Conduct Applied to SBTi to validate our 204
Slide 26: Focus on IP-Rich Technology and Manufacturing
FOCUS ON IP-RICH TECHNOLOGY AND MANUFACTURING 68% Fluid Conveyance and Fluid Conveyance and Thermal Management Thermal Management Product and System Design & Manufacturing IP UK North America Asia & Africa Europe Cape Town India GmbH 2022 revenue Mexico Structures Complex Machining and Manufacturing
Slide 27: 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 28: NASA X-59 Programme: Capabilities in Action
NASA X-59 PROGRAMME : CAPABILITIES IN ACTION • Quiet supersonic technology demonstrator testing low sonic- boom technologies. First flight scheduled this year • Senior Aerospace SSP designed and manufactured X- ’s entire bleed air duct system • Innovative design provides performance benefits • Adher
Slide 29: Technology Roadmaps Reflect Market Trends
TECHNOLOGY ROADMAPS REFLECT MARKET TRENDS 2010s 2020s 2030s 2040s Launch of more efficient Application of more advanced More widespread use of EIS and production of Aerospace aero engines production methods SAFs in commercial aircraft* hydrogen-powered aircraft New additive Our existing fluid Our th
Slide 30: Active Portfolio Optimisation
ACTIVE PORTFOLIO OPTIMISATION Actively review overall portfolio of operating businesses and evaluate their strategic fit within the Group We are considering the best time to relaunch the divestment process for Aerostructures to ensure we optimise value for shareholders, taking into account financing
Slide 31: Fluid Conveyance Acquisition – Spencer Aerospace
FLUID CONVEYANCE ACQUISITION – SPENCER AEROSPACE Spencer Aerospace supplies highly engineered high-pressure hydraulic fluid fittings for use in commercial and military aerospace applications: • Founded in 2013, located in Valencia, CA, • Acquired 28 November 2022 • Integration progressing well • Tra
Slide 32: 2023 Priorities
2023 PRIORITIES Fully support customers as build rates increase Further improve profitability and ROCE Diligent management of supply chain constraints and inflationary pressures Continue to actively manage portfolio Achieve key milestones for technology development projects Maintain sector leading s
Slide 33: Group Outlook
GROUP OUTLOOK • Order book is healthy, reflecting favourable market dynamics, with commercial aerospace recovery in full swing and other important markets remaining buoyant • Demand currently holding up well, though we remain mindful of the potential impact of the ongoing supply chain pressures in a
Slide 34: Any Questions?
ANY QUESTIONS? Full Year Results 2022
Slide 35: Appendices
APPENDICES Full Year Results 2022
Slide 36: Investment Case: Positioned for Growth
INVESTMENT CASE: POSITIONED FOR GROWTH Our purpose: We help engineer the transition to a sustainable world for the benefit of all of our stakeholders Clear strategy to maximise shareholder value Focus on IP-rich Aerospace fluid conveyance & Leading thermal Focused Long-term Flexonics Differentiated
Slide 37: Fluid Conveyance & Thermal Management Capability Highlights
FLUID CONVEYANCE & THERMAL MANAGEMENT CAPABILITY HIGHLIGHTS 1 2 3 4 5 World class fluid Industry leading Component & system Thin-wall metal Additive conveyance & edge-welded and level simulation & manufacturing manufacturing thermal management formed bellows analysis expertise expertise system desig
Slide 38: 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: We help engineer the transition to a sustainable world for the benefit of all our
Slide 39: Strategic Priorities
STRATEGIC PRIORITIES Considered and Autonomous and Competitive Cost High Performance Focus on Growth Effective Capital Talent Development Collaborative Sustainability Country Strategy Operating System Deployment Business Model Outgrow our end The executive team Skilled workforce and Empowerment En
Slide 40: Strategic Progress: IP, Technology & Manufacturing
STRATEGIC PROGRESS: IP, TECHNOLOGY & MANUFACTURING IP Technology Manufacturing Maintained focus on IP-rich technology and Developing novel solutions for low and Capabilities supported by a strong body of manufacturing zero carbon applications design and manufacturing process intellectual property an
Slide 41: 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 42: 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 43: Fluid Conveyance Acquisition – Spencer Aerospace
FLUID CONVEYANCE ACQUISITION – SPENCER AEROSPACE Spencer Aerospace supplies 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 employees • Use of th
Slide 44: Our Locations
OUR LOCATIONS UK Rickmansworth H.O FY 2022 split Sales Employees Massachusetts Metal Bellows Crumlin N. America 59% 2,681 Lymington Canada BWT UK 17% 1,316 SF Canada Bird Bellows Rest of Europe 12% 880 Thermal Wisconsin Weston EU Rest of World 12% 1,484 GA Germany Washington SF GmbH AMT & Damar Czec
Slide 45: Our Customers
OUR CUSTOMERS 35% Flexonics Division Other Power & Energy 14% Boeing 7% Aerospace Division 65% (7%) (34%) (14%) (66%) Spirit 7% (6%) Schlumberger 2% all 1% of (2%) Group or less Other Land Vehicle 7% Rolls Royce 7% (7%) (7%) all 1% of Group or less Airbus 5% Daimler 2% (5%) (2%) Caterpillar 4% (4%)
Slide 46: Our Products
OUR PRODUCTS 35% Flexonics Division Other machined parts 5% Aerospace Division 65% (34%) (4%) (66%) Industrial flexible parts 11% (12%) High pressure ducting 15% Fuel distribution (LV) 1% (18%) (1%) Off-highway hydraulics (LV) 2% (2%) Exhaust flexes (LV) 4% (4%) Airframe structural parts 15% (12%) E
Slide 47: 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 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Aerosp
Slide 48: Balance Sheet
BALANCE SHEET £m Dec 2022 Dec 2021 Goodwill and other intangible assets 235.9 154.4 FX Impact from Dec 2022 Investment in JV 4.4 3.9 £m Property, plant and equipment 307.2 294.6 Non current assets 32.0 Other long-term assets 11.3 5.8 Working capital 9.3 Non current assets, before retirement benefits
Slide 49: Maturity Profile of Committed Credit Facilities
MATURITY PROFILE OF COMMITTED CREDIT FACILITIES £m 300 280 Jun - £38.7m 260 (floating maturity) 240 Net debt (excluding leases) 220 Jan - £27m + Oct - £49.6m Dec 2022 - £100.5m 200 (fixed maturities) 180 £179.4m 160 headroom 140 Nov - £115m 120 (floating maturity) 100 80 60 Feb - £24.8m 40 (fixed Se
Slide 50: Usage of Credit Facilities – December 2022
USAGE OF CREDIT FACILITIES – DECEMBER 2022 Usage by Currency Interest Facility Usage £ $ € Other % £m £m US Private placements: $30.0m (Sep 2028) 4.18% 24.8 24.8 - 24.8 - - €2 .0m ( eb 2027) 1.51% 24.8 24.8 - - 24.8 - $60.0m (Oct 2025) 3.75% 49.6 49.6 - 49.6 - - £27.0m (Jan 2025) 2.35% 27.0 27.0 27.
Slide 51: Aerospace Division: A Summary
AEROSPACE DIVISION: A SUMMARY 2022 2021 Change 14 Operations Revenue £553.6m £471.0m +17.5% NAFTA 6 Europe 2 Adjusted Operating Profit (2) £20.3m £8.4m +141.7% UK 4 Adjusted Operating Margin(2) 3.7% 1.8% +190bps ROW 2 Markets Customers Boeing 11% Other 17% Spirit 11% Civil Aerospace 61% Other 35% Ro
Slide 52: Flexonics Division: A Summary
FLEXONICS DIVISION: A SUMMARY 2022 2021(1) Change 11 Operations & JV NAFTA 4 Revenue £295.6m £234.6m +26.0% EU 2 Adjusted Operating Profit(2) £25.4m £13.9m +82.7% UK 2 ROW 3 Adjusted Operating Margin (2) 8.6% 5.9% +270bps China JV 1 Markets Customers Other markets 16% Cummins 17% Truck & Off Other 3