Avon Technologies Plc · LSE:AVON
Avon Technologies — Investor Presentation (January 2025)
26 slides from Avon Technologies's investor presentation, Jan 31, 2025
Slide 1: Investor Presentation
INVESTOR PRESENTATION 31 JANUARY 2025
Slide 2: A High Performing Business in Growing Markets
A HIGH PERFORMING BUSINESS IN GROWING MARKETS
Slide 3: Our aim is for heroes to survive and thrive
Our aim is for heroes to survive and thrive . . . WHO WE ARE Our purpose is Protecting Lives. It’s something everyone in this business cares passionately about. WHAT WE DO Our mission is to provide unparalleled protection for those who protect us, giving them the confidence to tackle challenging sit
Slide 4: A best-in-class product portfolio underpinned by strong recurring revenue streams
A best-in-class product portfolio... 1 Best in class product range 2 Long-term, sole-source, multi-year contracts Sustainable Broadening user-base revenue growth 3 driven by changing threat landscape Strengthened 4 Expanding product financial & operational portfolio discipline High-growth Underwater
Slide 5: Leading commercial and international opportunity
Leading commercial and international opportunity … Multi-year 1 contracts secured 2 Strong DOD order book Large commercial & Strong order 3 International market opportunity book with focus on execution 4 Leading technology Improved margin delivery Expanding product 5 portfolio . . . with considerabl
Slide 6: A focused NATO defence and first responder business
A focused NATO defence and first responder business . . . Revenue by division and customer 53% 47% 6% Military US 18% 27% Military Europe 22% Military Rest of World 29% Commercial US 7% 65% 23% Commercial Europe & Rest of World 3% 24 . . . with a broad customer base
Slide 7: Growing US and NATO demand for military helmets and respirators
Growing US and NATO demand for military helmets and respirators . . . $m Annual ballistic helmet demand – military1 $m Annual respirator demand – military1 250 180 160 200 140 120 150 100 80 100 60 50 40 20 0 0 Ø19-23 2024 2028 Ø19-23 2024 2028 US Other NATO US Other NATO • Aggregate 2024-2028 CAGR
Slide 8: Law enforcement markets growing 3-4% compound
Law enforcement markets growing 3-4% compound . . . Annual ballistic helmet demand - law Annual respirator demand - law enforcement enforcement 60 90 80 50 70 40 60 $m $m 50 30 40 30 20 20 10 10 0 0 Ø19-23 2024 2028 Ø19-23 2024 2028 US Other NATO US Other NATO • Law enforcement officer threat exposu
Slide 9: Strategy to deliver over medium and long term
Strategy to deliver over medium and long term . . . • SAFER, HAPPIER, MORE CAPABLE PEOPLE IMPROVE • GENERATE CASH MARGINS & • WEALTH THROUGH CREATE CAPACITY PRODUCTIVITY TO INVEST IN GROWTH • GROWTH LEVERAGE ORGANICALLY GROW INNOVATION TO THE CORE AND SCALE DRIVE LONG UP EMERGING TERM GROWTH OPPORTU
Slide 10: Strengthen Through Continuous Improvement
STRENGTHEN THROUGH CONTINUOUS IMPROVEMENT
Slide 11: What is Continuous Improvement?
What is Continuous Improvement? Culture & Developing our people, empowering them to Leadership take action to change things for the better Just In Time Reduce waste, improve inventory turns and deliver on time No defects Detect and stop defects 29
Slide 12: Why did we choose Continuous Improvement?
Why did we choose Continuous Improvement? Proven to work 30 . . .because it’s proven to work
Slide 13: The Strengthen Avon System (SAS)
The Strengthen Avon System (SAS)... 31 …our approach to Continuous Improvement
Slide 14: What are we trying to achieve with our processes?
What are we trying to achieve with our processes? One Piece Flow Pull System Work to Takt Time Standard Work everywhere Quality built in Stop when problem Level load Set clear goals 32
Slide 15: And we're making progress against these
And we’re making progress against these. . . Group Direct Labour Group Scrap (% of revenue)2 Group Inventory Turns3 Productivity1 +30% +37% $600k (vs. H123) (vs. H123) 5.0% 3.50 4.5% $500k 3.00 4.0% 2.50 $400k 3.5% $300k 3.0% -48% 2.00 2.5% (vs. H123) 1.50 2.0% $200k 1.00 1.5% $100k 1.0% 0.50 0.5% -
Slide 16: Kaizen is our number one tool for improvement
Kaizen is our number one tool for improvement 34
Slide 17: Site Transformation project in Salem
Site Transformation project in Salem CURRENT STATE: FUTURE STATE: • Push based model • Poor material & information flow • Reduced travel time from 474 • Over production • Large scale plant transformation with only to 89 seconds • Longer lead times 3 pieces of equipment not being moved • Reduced WIP
Slide 18: Improving productivity on face blank bonding line
Improving productivity on face blank bonding line CURRENT STATE: FUTURE STATE: TIME TO PRODUCE EACH PIECE VS TIME TO PRODUCE EACH PIECE VS CUSTOMER DEMAND CUSTOMER DEMAND 60 50 Optimised level 60 50 40 loading to achieve 40 Time (sec) Time (sec) 30 customer demand 30 20 20 10 level and improved 10 0
Slide 19: Order Book & Pipeline Expanding
ORDER BOOK & PIPELINE EXPANDING 37
Slide 20: Biggest ever order book
Biggest ever order book . . . Australian Military Thales renewal UK MOD US DOD FM54 order Rebreathers US DRSKO Up to £10m, 6 year First orders under the M50 order & First order under new Germany and Self-Contained contract new 4 year GSR contract accessories deployment contract New Zealand Breathing
Slide 21: Revolutionising our product base
Revolutionising our product base.. 39 …two new solutions launched this month
Slide 22: Confident of Delivering Improved Returns
CONFIDENT OF DELIVERING IMPROVED RETURNS
Slide 23: Supportive markets and leading positions drive growth
Supportive markets and leading positions drive growth . . . Group revenue ($) • Contracted and non-contracted growth Non-contracted growth will drive incremental recurring revenue over time Contracted growth • Market growth and new product development underpins confidence • Cost base anchored off re
Slide 24: A lot done on our Transformation
A lot done on our Transformation. . . “Unity” programme on track: • New “3P” plant improvement • Built IHPS and ACH finishing lines in process applied at three sites Cleveland • Value Stream Model in place at • IHPS moulding to move from Irvine all sites to Salem start of 2025 • Completion of plant
Slide 25: On track to deliver our medium-term goals
On track to deliver our medium-term goals . . . Revenue Cash Margin ROIC conversion Leverage growth FY23 1.94x net (7.5)% 8.7% 8.7% 7% debt/EBITDA FY24 12.2% 11.5% 13.7% 157.8% 0.91x net debt/EBITDA Medium At least 1-2x net term 5% 14-16% > 17% 80-100% debt/EBITDA . . . potential to reach target mar
Slide 26: Pace accelerating
Pace accelerating . . . Financial goals • Recipe for success leading to growth, 1 Superb margin, cash and ROIC execution • Transformation programme on track • Growing markets in an increasingly 2 Growing dangerous world at 2-4% CAGR markets • Record order book 3 Stable base and well • Valuable recur
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