28 slides from Chesterfield Special Cylinders's earnings presentation, Dec 12, 2017
Slide 1: 2017 Investor Presentation
2017 Investor Presentation Pressure Technologies plc
Slide 2: Our Group Structure
Pressure Technologies plc Investor presentation 2017 Our Group Structure Manufacturing Divisions AE Division 2
Slide 3: How We Run our Business
Pressure Technologies plc Investor presentation 2017 How We Run our Business Defence Oil and Gas Renewable Energy Our Cylinder Division is the world leader in naval and aviation Our Manufacturing Divisions design and manufacture Greenlane Biogas has installed the largest population of defence market
Slide 4: Our investment case
Pressure Technologies plc Investor presentation 2017 Potential Entrepreneurship Heritage Our investment case Leadership Trusted Skilled 4
Slide 5: Financial highlights
Pressure Technologies plc Investor presentation 2017 Financial highlights Revenue up 7.3% to Operating Profit* Operating cash inflow*** £38.4m £1.1m £1.0m (2016: £35.8m) (2016: loss £(0.4)m) (2016: £5.1m) Acquisition of Martract Ltd Revenue per employee up 27% to Return on Revenue £3.6m £161k** 2.9%
Slide 6: Operational highlights
Pressure Technologies plc Investor presentation 2017 Operational highlights Oil and gas market improvement Cylinders profitability Restructuring PMC order intake more Underpinned by defence Alternative Energy consistent with strong market and industrial gases restructured and broke even second-half
Slide 7: PMC, CSC and AE continue to achieve strong returns for the Group
Pressure Technologies plc Investor presentation 2017 PMC, including the recent acquisition, and CSC continue to achieve strong returns for the Group. AE has progressed significantly in the year breaking even for the first time since the acquisition of Greenlane • The sustained impact of the O&G mark
Slide 8: Oil and Gas sector revenue improving throughout 2017
Pressure Technologies plc Investor presentation 2017 Oil and Gas sector revenue improving throughout 2017 from H216 low point across the Manufacturing divisions • As reported in the Interim statement H216 was the low point for the Group’s O&G revenue • OPEC production cuts and consequent oil price i
Slide 9: The AE division has delivered on the £14m order book
Pressure Technologies plc Investor presentation 2017 The AE division has delivered on the £14 m order book that was brought forward into 2017 • The AE division has delivered on the £14 m order book that was brought forward into 2017 • Closing order book going into 2018 was £5 million • Since year en
Slide 10: Summary results
Pressure Technologies plc Investor presentation 2017 Summary results 2017 2016 • Exceptional items below adjusted operating profit relate to: Revenue 38.4 35.8 £0.2m - M&A costs Adjusted operating profit 1.1 (0.4) £0.7m - restructuring £2.4m - amortisation of Operating profit (1.6) (0.1) intangible
Slide 11: Manufacturing Divisions
AL Pressure & Technologies Manufacturing Divisions
Slide 12: Manufacturing financial highlights
Pressure Technologies plc Investor presentation 2017 Manufacturing financial highlights Revenue down 5.6% to Gross Profit margin up 4.4ppt to Operating Profit* up 12.5% to £22.6m 35% £2.4m (2016: £24.4m) (2016: 31%) (2016: £2.2m) Return on Revenue Revenue per employee up 13.1% to Operating cash infl
Slide 13: Manufacturing Divisions saw a bottoming out of O&G volumes
Pressure Technologies plc Investor presentation 2017 The Manufacturing Divisions saw a bottoming out of O&G sector volumes in the second half of 2016. Over 2017 volume, margin and mix continued to improve • As highlighted in the interim results H216 was the low point for the Group’s O&G revenue whic
Slide 14: PMC Division continues to achieve strong results
Pressure Technologies plc Investor presentation 2017 PMC Division continues to achieve strong results. Margin improvement continued in the second half as volume and mix resulted in LFL 12.5% increase in Operating Profit ● Increasing revenue and profit since the second-half of the 2016 financial year
Slide 15: EP volume increase in fourth quarter of 2017
Pressure Technologies plc Investor presentation 2017 EP has seen volume increase in fourth quarter of 2017 but this, and product mix, continues to be unpredictable in a competitive and cost sensitive market ● Revenue for the year 7% lower than 2016 due to continuing reduced capital expenditure and S
Slide 16: CSC had a significant second half as defence work gathered pace
Pressure Technologies plc Investor presentation 2017 As expected CSC had a significant second half as the defence work gathered pace. First order in 3 years received for O&G drillship project for delivery in 2018/9 ● Second half revenue up ○ 70% ○ From the first half due to phasing of defence work ○
Slide 17: Alternative Energy Division
Alternative Energy Division 17
Slide 18: Alternative Energy financial highlights
Pressure Technologies plc Investor presentation 2017 Alternative Energy financial highlights Revenue Gross Profit margin Operating Profit* £15.8m 17.3% £0.0m (2016: £11.3m) (2016: 17.4%) (2016: loss £(1.1)m) Return on Revenue Revenue per employee up 40% to Operating cash outflow*** 0.0% £353k** £(0.
Slide 19: AE delivered the opening order book but margin impacted by cost overruns
Pressure Technologies plc Investor presentation 2017 AE has delivered the opening order book but margin has been adversely impacted by cost overruns on projects and the full benefits of the restructuring at the start of H217 have yet to be seen Revenue £15.8m Due to slipping on timing of new order w
Slide 20: AE restructuring and break-even achieved
Pressure Technologies plc Investor presentation 2017 AE has delivered the opening order book but margin has been adversely impacted by cost overruns on some projects and the full benefits of the restructuring at the start of H217 have yet to be seen ● Break-even achieved for first time since Greenla
Slide 21: Balance sheet and cash flow
Balance sheet and cash flow 21
Slide 22: Summary balance sheet
Pressure Technologies plc Investor presentation 2017 Summary balance sheet 2017 2016 • Increase in goodwill and intangibles in respect of the Martract acquisition £m £m (£4.8m), product development in CSC and AE (£0.6m) and investment in IT Goodwill & Intangible assets 29.7 26.3 systems & software (
Slide 23: Operational cash generation offset by working capital and Martract acquisition
Pressure Technologies plc Investor presentation 2017 Strong operational cash generation in Manufacturing offset by investment in working capital and the acquisition of Martract resulting in closing net debt of £11.1m • Operating cash inflow before movements in working capital and reorganisation and
Slide 24: £15m RCF facility fully drawn at year-end; leverage improving
Pressure Technologies plc Investor presentation 2017 £15m RCF facility* was fully drawn at the year-end date. Leverage has continued to improve as EBITDA increases. Volatility in the AE working capital in particular can however lead to pressure on the headroom depending on number and stage of comple
Slide 25: Outlook
& Pressure “JF Technologies Specialist engineerinc xcellence ¢ Organic growth * Fu tion of Martract * Unique solut 1gement services * World leade neering heritage « Highly skille sity and ingenuity * Close collal omers ° Creation of PMC braric! = ‘stment in peoples Investment in ystems ° Substantial
Slide 26: Recent share issue improves ability to support organic growth
Pressure Technologies plc Investor presentation 2017 The recent share issue improves the Group’s ability to support large-scale organic growth, and with no immediate major capital expenditure required the Group is in good shape ● Increasing confidence in the oil and gas market is driving growth in P
Slide 27: Keep up to date with our news
Pressure Technologies plc Investor presentation 2017 Keep up to date with our news Please join us on LinkedIn https://www.linkedin.com/company/17971399/ And keep up to date with news from around the Group http://www.pressuretechnologies.com/news 27
Slide 28: Disclaimer
Pressure Technologies plc Investor presentation 2017 Disclaimer 28