Slide 1: Avon Rubber plc Preliminary Results 2016
AVON RUBBER PLC PRELIMINARY RESULTS 2016 DELIVERING AND BUILDING GROWTH 1
Slide 2: Rob Rennie, Chief Executive Officer
ROB RENNIE Chief Executive Officer DELIVERING AND BUILDING GROWTH 2
Slide 3: 2016 Group Key Messages
2016 GROUP KEY MESSAGES We met market expectations in a challenging trading environment CORPORATE We have shown the resilience of the organisation to be able to achieve this without P&D impact orders We continued to invest in sales/marketing and product development to position ourselves well f
Slide 4: Andrew Lewis, Group Finance Director
ANDREW LEWIS Group Finance Director DELIVERING AND BUILDING GROWTH 4
Slide 5: Group 2016 Highlights
GROUP 2016 HIGHLIGHTS Revenue £’m FINANCIAL HIGHLIGHTS 200 150 Operating profit growth of 8% H2 EBITDA growth of 13% 100 50 H1 Tax credit of £0.9m Diluted earnings per share increased 33% 0 2012 2013 2014 2015 2016 Return on sales (EBITDA divided by revenue) improved 1.3% from 20.3% to 21.
Slide 6: Group Income Statement
GROUP INCOME STATEMENT 2016 2015 £’m £’m Revenue 6% 142.9 134.3 EBITDA 13% 30.8 27.3 Depreciation and amortisation (9.0) (7.1) Operating profit before amortisation of acquired intangibles, exceptional 8% 21.8 20.2 items and defined benefit pension costs Amortisation of acquired intangibles, exceptio
Slide 7: Protection & Defence
PROTECTION & DEFENCE FINANCIALS PERFORMANCE DRIVERS 2016 2015 Argus acquisition adding to our fire market offering £’m £’m Normal level of DOD sales under our long-term sole- source contract at improved pricing Revenue 2% 100.9 98.8 Growth in underlying portfolio of NA law enforcement NH15 C
Slide 8: Protection & Defence Markets
PROTECTION & DEFENCE MARKETS 2015 2016 10% 5% 11% 8% 40% 45% £98.8m £100.9m 28% 31% 9% 13% DOD DOD SPARES EMEA/NA FIRE AEF DOD masks and filters in line with expectations, spares revenue accelerating as installed base of mask grows Underlying non-DOD portfolio growing Fire benefiting from the
Slide 9: DOD Contract Summary
DOD CONTRACT SUMMARY MASK SYSTEMS FILTER PAIRS Sole-Source Contract Vehicle 3000 Mask systems (thousands) 2500 1000 Filter pairs (thousands) Total Service Requirement 2000 750 1500 500 1000 250 500 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 10: Dairy
DAIRY FINANCIALS PERFORMANCE DRIVERS 2016 2015 Proportion of own brand business growing in soft £’m £’m overall dairy market caused by low milk prices InterPuls integration progressed well and delivered Revenue 18% 42.0 35.5 first sales synergies in Q4 Impulse Air market share growth in US and
Slide 11: Dairy Market
DAIRY MARKET REVENUE SPLIT - GEOGRAPHY US REVENUE SPLIT - BRAND EU 3% ASIA 50 SOUTH AMERICA Revenue (£m) 40 10% EU 30 25% 20 51% 36% NA 10 71% 0 2011 2012 2013 2014 2015 2016 OEM Milkrite | InterPuls Total LINER MARKET SHARE Milkrite Impulse Air CLUSTER EXCHANGE SERVICE GROWTH Milkrite non-Impulse A
Slide 12: Impact of US$ Translation
IMPACT OF US$ TRANSLATION GROUP PROTECTION 2015 & DEFENCE 2015 Constant restated at Constant restated at currency 2016 2016 rates 2015 currency 2016 2016 rates 2015 growth £’m £’m £’m growth £’m £’m £’m Revenue 1% 142.9 143.7 134.3 Revenue 5% 100.9 105.9 98.8 Adjusted EBITDA 6% 30.8 29.2 27.3 Adjust
Slide 13: Cashflow
CASHFLOW 2016 2015 £’m £’m Cash generated from continuing operations before effect of exceptional items 33.1 24.1 Cash effect of exceptional items/discontinued operations (0.7) (2.8) Cash generated from operations 32.4 21.3 Tax (1.0) (3.3) Interest (0.3) (0.1) Payments to pension scheme 152% (0.7) (
Slide 14: Summary Balance Sheet
SUMMARY BALANCE SHEET 2016 2015 £’m £’m Intangible assets 47.4 41.3 Property, plant and equipment 30.1 28.2 DEBT FACILITIES Current assets 40.6 34.1 OF £33M Current liabilities (34.1) (24.8) Non-current liabilities (4.0) (6.8) 80.0 72.0 Net cash/(debt) 2.0 (13.2) 82.0 58.8 Retirement benefit scheme
Slide 15: UK Retirement Benefit Scheme
UK RETIREMENT BENEFIT SCHEME ACTUARIAL VALUATION ACCOUNTING VALUATION The triennial actuarial valuation Accounting deficit moved from at 31 March 2013 showed that £16.6m at 30 September 2015 to the scheme was 98% funded. The £40.0m at 30 September 2016. results of the 31 March 2016 The increase in l
Slide 16: Paul McDonald, Managing Director - Dairy
PAUL MCDONALD Managing Director - Dairy DELIVERING AND BUILDING GROWTH 16
Slide 17: Dairy Strategy
DAIRY STRATEGY Products around Monthly rental Products to Vacuum, Milking & business model Interface with the Herd Management with warranty & animal service included Improving animal Increase farm Locks in customers health & farm efficiency and with our Exchange efficiency profitability
Slide 18: Dairy: Delivering and Building Growth
OUR 2017 DELIVERING AND Improving Return to BUILDING GROWTH milk price traditional & farm buying profitability behaviour OUR 2016 Challenging Structured to market due deliver future to low milk growth price MARKET Farm scale CONDITIONS Positive Milk/feed increasing outlook due ratio macro changing t
Slide 19: 2017 Focus
2017 FOCUS Maximise the benefit of the milk Upgrade customers to Cluster price recovery Exchange in US & EU Deliver sales synergies through Continue sales expansion into the conversion of Milkrite and emerging markets such as China InterPuls dealer/distribution and South America networks Expanded Fa
Slide 20: Rob Rennie, Chief Executive Officer
ROB RENNIE Chief Executive Officer DELIVERING AND BUILDING GROWTH 20
Slide 21: Protection & Defence Strategy
PROTECTION & DEFENCE STRATEGY US DOD contract Leverage military pedigree Thermal Imaging Leverage with other Cameras (TICs) militaries Law enforcement and first responders Self Contained Experts in our field Breathing Apparatus Complementary (SCBA) Cross-sell other products from fu
Slide 22: Protection & Defence: Delivering and Building Growth
DELIVERING AND OUR 2017 JSAM mask BUILDING GROWTH CBRN/CO hood Argus TIC Non-DOD military contracts OUR 2016 DOD on schedule 2016 highlights: Argus TIC JSAM & diving CBRN/CO hood rebreather NPD MARKET DOD reference Market-leading CONDITIONS Growing threat customer TIC levels Market deman
Slide 23: 2017 Focus
2017 FOCUS Military – DOD Military – Rest of World JSGPM contract and post- Deeper relationships with contract sustainment more countries JSAM (XM69) Impact orders Soldier of the future Funded development Law Enforcement Fire NH15 CO Escape Hood Success with Argus New Fusion produc
Slide 24: Delivering and Building Growth
DELIVERING AND BUILDING GROWTH 24
Slide 25: Outlook Statement
OUTLOOK STATEMENT Our strategy of integrating new technologies from product development and acquisitions with our existing strong brands and routes to market has created a business that is resilient to adverse LOOKING market conditions with strong foundations for growth in both divisions. FORWARD In
Slide 26: Delivering and Building Growth
DELIVERING AND BUILDING GROWTH 26
Slide 27: Forward-Looking Information
FORWARD-LOOKING INFORMATION Avon Rubber p.l.c. (the ‘Group’) is providing the following cautionary statement: This document contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of the Group. These statements are so
Slide 28: Appendices
APPENDICES DELIVERING AND BUILDING GROWTH 28
Slide 29: Group Worldwide Locations
GROUP WORLDWIDE LOCATIONS DELIVERING AND BUILDING GROWTH 29
Slide 30: Protection & Defence – Masks & Mask Systems
PROTECTION & DEFENCE – MASKS & MASK SYSTEMS 1. MP-PAPR 2. FM53A Air Crew Mask 3. FM50 4. EZAir 8 5. CS-PAPR 6. HMK150 7. NH15 8. Deltair 5 6 7 1 2 3 4 DELIVERING AND BUILDING GROWTH 30
Slide 31: Protection & Defence – Other Products
PROTECTION & DEFENCE – OTHER PRODUCTS 1. Thermal Imaging Camera 2. AEF Tank 3. MCM100 Re-breather 4. AEF Skirt 5. MDC150 Dive Computer 6 6. AvonAir Shield2 4 5 1 2 3 DELIVERING AND BUILDING GROWTH 31
Slide 32: Dairy – Interface
DAIRY – INTERFACE 1. CombiFast Milking System 2. Italia Bucket Milker 3. Impulse Air Liner 4. Impulse Claw 300 5. Round Liner 6 6. Cluster 4 5 1 2 3 32 DELIVERING AND BUILDING GROWTH 32
Slide 33: Dairy – Precision, Control & Intelligence
DAIRY – PRECISION, CONTROL & INTELLIGENCE 1. iMilkNET 2. Farm Controller 3. Pulsator 4. Vacuum Stability 5. Vacuum Pump 6. Milk Meter 9 10 7. Automatic Cluster Remover 8. Dealer Support 9. Wash Controller 10. Software 6 7 8 1 2 3 4 5 33 DELIVERING AND BUILDING GROWTH 33
Slide 34: Dairy – Farm Services
DAIRY – FARM SERVICES 1. Herd Management Pedometer 2. Herd Management Necktag 3. Cluster Exchange Service 3 1 2 34 DELIVERING AND BUILDING GROWTH 34
Slide 35: Dairy Market: Emergence of Billion Middle-Class Consumers
DAIRY MARKET THE EMERGENCE OF 3 BILLION MIDDLE-CLASS CONSUMERS Global middle-class 3.9 billions of people EU 2.2 25% Source: OECD / McKinsey. NA 71% 1.0 0.8 1.0 1.0 2011 data point based on UN statistics 2011 2020 2030 North America and Europe Rest of the World MARKET OPPORTUNITIES 35 DELIVERING AND
Slide 36: Glossary
GLOSSARY Term Explanation AEF Avon Engineered Fabrications AUS Avon Underwater Systems BRIC Brazil, Russia, India, China CBRN Chemical, Biological, Radiological, Nuclear CE Conformité Européene CO Carbon Monoxide EEBD Emergency Escape Rebreather Device HUD Heads-up display JSAM Joint Service Aircrew