Slide 1: Interim Results 2018
INTERIM RESULTS 2018 Interim Results 2018
Slide 2: Agenda
AGENDA Introduction David Squires CEO 2018 Interim Results Bindi Foyle FD Markets & Outlook David Squires CEO Interim Results 2018
Slide 3: Cautionary Statement
2018 INTERIM RESULTS Cautionary Statement This document contains certain forward-looking statements. Such statements have been made in good faith based on information available at the time of announcing the results for the six months ended 30 June 2018. These statements should therefore be treated w
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS constant H1 2018 H1 2017 Change currency Revenue £523.3m £510.0m +3% +7% Adjusted Operating Profit £43.4m £37.5m +16% +21% Adjusted Operating Margin 8.3% 7.4% +90bps +100bps Adjusted Profit before Tax £39.0m £32.6m +20% +24% Adjusted Earnings per Share 7.36p 6.23p +18% Interim D
Slide 5: H1 2018 at a Glance
H1 2018 AT A GLANCE £m Revenue 530 18.0 (0.3) 523.3 520 Aerospace 510.0 (22.4) 18.0 H1 2018 H1 2017 Change 510 £m £m 500 Revenue 363.5 345.5 +5.2% Adj OP(1) 38.0 33.0 +15.2% 490 Margin 10.5% 9.6% +90bps $1.38 (H1 17: 1.27) 480 €1.14 (H1 17: 1.17) • Large Commercial £13.1m • Regional & Business Jet
Slide 6: Adjusted and Reported Profit
ADJUSTED AND REPORTED PROFIT H1 H1 Change 2018 2017 £m £m Adjusted operating profit 43.4 37.5 +16% (21% on constant currency basis) Net interest payable – borrowings and cash (4.5) (4.8) – retirement benefits 0.1 (0.1) Adjusted profit before tax 39.0 32.6 +20% (24% on constant currency basis) Tax (H
Slide 7: Cash Flow and Use of Funds
CASH FLOW AND USE OF FUNDS £m Gross capex £(22.0)m 100 Disposal proceeds £0.3m Gross capex of £22.0m includes: 90 £10.8m – USA, for 737 MAX capacity expansion, equipment replacement and tooling 80 £3.7m – Malaysia, for A320neo family and new facility £2.5m – Thailand, for 787, A320neo, A330neo and A
Slide 8: Balance Sheet
BALANCE SHEET June Dec June 2018 2017 2017 £m £m £m Goodwill and other intangible assets 340.8 344.0 360.6 FX Impact from Dec 2017 Investment in JV 2.7 2.4 2.0 £m Property, plant and equipment 265.0 256.1 248.3 Non current assets 11.9 Other long-term assets 3.2 2.4 6.9 Working capital 1.1 Non curren
Slide 9: Working Capital
WORKING CAPITAL Working capital as a % of revenue 16.0% 14.0% 13.4% 0.1% (1.4)% 0.4% 13.2% 0.7% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Dec-17 Receivables Payables Inventories FX /Other Jun-18 Interim Results 2018 Page 9
Slide 10: H1 2018 Financial Summary
H1 2018 FINANCIAL SUMMARY Trading slightly ahead of expectations Another strong period of order intake • Book-to-bill 1.2x Margin progression in both Divisions • Aerospace 90 bps and Flexonics 130 bps in constant currency Adjusted profit before tax of £39.0m, 20% Strong free cash flo
Slide 11: Markets & Outlook
MARKETS & OUTLOOK Interim Results 2018
Slide 12: Senior's Markets – H1 2018
SENIOR’S MARKETS – H1 2018 31% Flexonics Division Aerospace Division 69% (29%) Heating, Ventilation & Solar 1% 4% Other (71%) (1%) (4%) Power & Energy 4% (3%) Oil and Gas 6% (6%) 45% Large Commercial Aircraft (45%) Passenger Vehicles 5% (5%) Truck & Off-Highway 11% (10%) Other Aerospace Division 6%
Slide 13: Senior's Customers – H1 2018
SENIOR’S CUSTOMERS – H1 2018 31% Flexonics Division Aerospace Division 69% (29%) (71%) Other Industrial & Aerospace 12% 11% Boeing (12%) (10%) Schlumberger 3% all 1% of (2%) Group or less 10% Rolls Royce (11%) Other Land Vehicle 9% (8%) all 1% of Group or less Caterpillar 3% (3%) 10% Spirit (9%) Cum
Slide 14: Large Commercial Aircraft (45% of Group)
LARGE COMMERCIAL AIRCRAFT (45% of Group) Avg.(1) Airframe (1) Var. in avg. Shipset Value ($k) Deliveries x Avg. Shipset Value ($m ) shipset value shipset H1 2018 Order 12/17 to 6/18 0 200 400 600 800 1000 1200 value deliveries book 0 10 20 30 40 50 ($k) (number) ($k) 737 221 181 231 -8 737 787 484 7
Slide 15: Regional and Business Jets (6% of Group)
REGIONAL AND BUSINESS JETS (6% of Group) Shipset Value ($k) Deliveries x Avg.(1) Shipset Value ($m ) Var. in avg. Airframe shipset value 0 100 200 300 400 500 600 Shipset H1 2018 Order 0 1 2 3 4 5 6 12/17 to 6/18 value ($k) deliveries book ($k) GL 5000/6000 Bombardier 281 20 (1) ? +2 GL 5000/6000 A2
Slide 16: Military and Defence (11% of Group)
MILITARY AND DEFENCE (11% of Group) Shipset Value ($k) Avg.(1) Airframe (1) Deliveries x Avg. Shipset Value ($m ) Var. in avg. shipset H1 2018 shipset value value deliveries 0 2 4 6 8 10 12 0 200 400 600 800 1000 1200 12/17 to 6/18 ($k) (number) ($k) F-35 (JSF) 288 39 LRIP +13(4) F-35 (JSF) C-130J 1
Slide 17: Land Vehicles (16% of Group)
LAND VEHICLES (16% of Group) North American Truck and Off-Highway (8% of Group) EU & ROW Truck and Off-Highway (3% of Group) North American Class 8 Truck Production Forecast (Thousands) 400 (1) 350 Group EU sales 44% over H1 2017 300 (1) 250 17% 0% -3% Group ROW sales 18% over H1 2017 200 150 Th
Slide 18: Industrial (14% of Group)
INDUSTRIAL (14% of Group) Units Oil Price and Rig Count $ 4000 90 3500 80 Group H1 2018 sales compared to H1 2017(1) 3000 70 60 2500 2000 50 Oil & Gas (6% of Group): 40 1500 30 Sales 18% (£5.2m) 1000 20 - Upstream benefitted from increased drilling 500 10 activity in North America 0 0 - Downstream
Slide 19: Group Outlook
GROUP OUTLOOK H1 2018 trading slightly ahead of expectations Order book is strong (H1 2018 book-to-bill 1.2x) • Commercial aerospace and improving flexonics markets primary drivers of growth Anticipate year on year margin progression in the Group as we continue our focus on cost management and effic
Slide 20: Any Questions?
ANY QUESTIONS? Interim Results 2018
Slide 21: Appendices
APPENDICES Interim Results 2018
Slide 22: Group Evolution
GROUP EVOLUTION Revenue (£m) Adjusted Operating Profit (£m) Adjusted Operating Margin (%) 1200 120 18 Total after central costs 16 1000 100 14 Total after central costs 800 80 12 10 600 60 8 400 40 6 4 200 20 2 0 0 0 2013 2014 2015 2016 2017 H1 2018 2013 2014 2015 2016 2017 H1 2018 2013 2014 2015 20
Slide 23: EU and North America
EU AND NORTH AMERICA Senior is an international H1 2018 split Sales Adj. OP Employees manufacturing Group with 33 N. America 58% 64% 3,378 operations in 14 countries UK 16% 5% 1,479 Within Europe, Senior has 12 Rest of Europe 13% 13% 1,263 operations across 5 countries, Rest of World 13% 18% 1,9
Slide 24: Changes in Accounting Standards IFRS 15 / 9 / 16
CHANGES IN ACCOUNTING STANDARDS IFRS 15 / 9 / 16 IFRS 15 Revenue and IFRS 9 Financial IFRS 16 Leases Instruments IFRS 15 - Requires the recognition of Requires lessees to recognise assets and revenue in a manner that depicts the liabilities for all leases, unless the lease term is 12 transfer of
Slide 25: Currency Effect
CURRENCY EFFECT Translation HALF YEAR Impact on H1 2017(1) (£m) Avg. Avg. H1 Exchange Rates H1 Adj. 2017 to GBP 2018 Revenue PBT(2) Translation FULL YEAR Impact on 1.27 US $ 1.38 (23.9) (1.6) FY 2017(3) (£m) 1.17 Euro € 1.14 1.4 0.1 Avg. Avg. FY Exchange Rates FYF Adj. 16.67 South African Rand 16.94
Slide 26: Earnings per Share and Dividends
EARNINGS PER SHARE AND DIVIDENDS H1 2018 H1 2017 Change Average number of shares Basic 418.6m 418.9m -0.3m Fully diluted 424.1m 421.0m +3.1m Adjusted earnings per share (1) Basic 7.36p 6.23p +18.1% Fully diluted 7.26p 6.20p +17.1% H1 2018 2017 Dividends (pence per share) Interim 2.19p 2.05p +6.8% Fi
Slide 27: Change in Net Debt
CHANGE IN NET DEBT H1 H1 FY 2018 2017 2017 £m £m £m Free cash flow (page 7) 32.2 29.6 58.3 Dividends (20.5) (19.4) (27.9) Proceeds on disposal of business - - 0.4 Loan repayment by JV 0.2 0.3 0.3 Purchase of shares by employee benefit trust (3.5) (0.1) (0.1) Net cash inflow 8.4 10.4 31.0 Exchange va
Slide 28: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE H1 2018 H1 2017 Capex Depn (1) Capex Depn (1) £m £m £m £m Aerospace 16.0 14.2 15.3 13.7 Flexonics 5.9 6.0 5.0 6.2 Holding Companies 0.1 0.1 0.3 0.1 Total 22.0 20.3 20.6 20.0 (1) Depreciation of £19.3m (H1 2017: £19.1m) and amortisation of software of £1.0m (H1 2017: £0.9m).
Slide 29: Usage of Credit Facilities – June 2018
USAGE OF CREDIT FACILITIES – June 2018 Usage by Currency Interest Facility Usage £ $ € Other % £m £m US Private placements: $30.0m (Sep 2028) 4.18% 22.7 - - - - - €28.0m (Feb 2027) 1.51% 24.8 24.8 - - 24.8 - $60.0m (Oct 2025) 3.75% 45.4 45.4 - 45.4 - - £27.0m (Jan 2025) 2.35% 27.0 27.0 27.0 - - - $2
Slide 30: Maturity Profile of Credit Facilities
MATURITY PROFILE OF CREDIT FACILITIES In June 2018 the committed US RCF was rolled-forward to June 2021 A new $30.0m 10 year private placement agreement was committed in June 2018 with an interest rate of 4.18% Net debt:EBITDA = 1.2x £m 340 320 300 Oct- £57m 280 260 Mar - £20m £174m headroom 2
Slide 31: Covenants
COVENANTS Jun 2018 Dec 2017 Jun 2017 Dec 2016 Net debt £148.8m £155.3m £181.6m £198.1m Net interest - rolling 12 months £9.0m £9.3m £10.1m £10.1m EBITDA - rolling 12 months £127.6m(1) £123.9m(1) £114.0m £119.6m Interest cover (to exceed 3.5 times) 14.2 x 13.3 x 11.3 x 11.8 x Net debt to EBITDA (not
Slide 32: Pensions
PENSIONS 6 Months 2018 2017 UK USA Various IAS 19 Retirement Benefit Funded Funded Unfunded Total Total £m £m £m £m £m Scheme assets 321.2 47.1 0.4 368.7 348.5 Scheme liabilities (301.8) (54.3) (7.9) (364.0) (358.9) Scheme asset/(deficit) at opening 19.4 (7.2) (7.5) 4.7 (10.4) Current service cost -
Slide 33: Strategic Priorities
STRATEGIC PRIORITIES Autonomous Autonomous and and High Performance Operating Focus Focus on on Growth Growth Talent Development Collaborative Collaborative Business Business Model Model System Empowerment and Outgrow our end markets by: A strong focus on improving accountability organisational ca
Slide 34: Strategic Priorities
STRATEGIC PRIORITIES Competitive Cost Country Autonomous and Considered and Effective High Performance Operating Focus on Growth Strategy Collaborative Business Model Capital Deployment System Enhance global footprint to The executive team Implementing a high performance ensure businesses stay conti
Slide 35: Acquisition Framework
ACQUISITION FRAMEWORK More Likely Less Likely Fluid Systems Structures New Markets Division Flexonics Large Commercial Rotorcraft Reg Jet Biz Jet VLJ Market Defence Energy Truck/ Off Highway Automotive Renewables General Industrial Medical Semi-conductor Equipment Aero Ducting Control Bellows Precis
Slide 36: Senior's Locations
SENIOR’S LOCATIONS UK Rickmansworth H.O H1 2018 split Sales Adj. OP Massachusetts Crumlin Metal Bellows Lymington N. America 58% 64% Canada BWT UK 16% 5% SF Canada Bird Bellows Thermal Rest of Europe 13% 13% Wisconsin Weston EU Rest of World 13% 18% GA Germany Washington SF GmbH AMT Czech Republic A
Slide 37: Senior's Products – H1 2018
SENIOR’S PRODUCTS – H1 2018 31% Flexonics Division Aerospace Division 69% (29%) Other machined parts 6% (71%) (5%) Industrial flexible parts 9% (9%) 19% Airframe structural parts (21%) Off-highway hydraulics (LV) 3% (3%) Exhaust flexes (LV) 3% (3%) Fuel distribution (LV) 3% (3%) Emission control (LV
Slide 38: Aerospace Division
AEROSPACE DIVISION Interim Results 2018
Slide 39: Aerospace – Orders and Deliveries
AEROSPACE – ORDERS AND DELIVERIES Deliveries Net Orders Order Book Large Commercial H1 H1 June Dec Dec Dec Aircraft 2018 2017 2016 2015 2018 2017 2016 2015 2018 2017 2016 2015 Boeing 378 763 748 762 460 912 668 768 5,946 5,864 5,715 5,795 Airbus 303 718 688 635 206 1,109 731 1,080 7,168 7,265 6,874
Slide 40: Aerospace – Large Commercial Aircraft Backlog
AEROSPACE – LARGE COMMERCIAL AIRCRAFT BACKLOG Boeing backlog by region: June 2018 Airbus backlog by region: June 2018 Australasia Australasia 1% Asia ex-India, 2% 14% China Undisclosed 20% 16% Asia ex-India, Exec. & Private Jets China 3% China & Undisclosed 29% 2% China 3% India 7% India 11% Middle
Slide 41: Aerospace Division: A Summary
AEROSPACE DIVISION: A SUMMARY H1 2018 H1 2017(1) Change 19 Operations Revenue £363.5m £345.5m +5.2% NAFTA 10 Europe 3 Adjusted Operating Profit(2) £38.0m £33.0m +15.2% UK 4 Adjusted Operating Margin(2) 10.5% 9.6% +90bps ROW 2 Markets Customers Space & Non Military 8% Other Helicopter 2% 16% Boeing R
Slide 42: Shipset Value Progression – Large Commercial Aircraft
SHIPSET VALUE(1) PROGRESSION – Large Commercial Aircraft $k % CAGR 1000 Share of T1000 +22% 900 adjusted to 50% 800 +9% 700 600 +66% -2% 500 400 +8% 300 +6% 200 100 0 737 MAX 777X 787 A320neo A330neo A350 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 (1) Average
Slide 43: Shipset Value Progression – Regional, Business and Military
SHIPSET VALUE(1) PROGRESSION – Regional, Business and Military $k % CAGR 800 +85% 700 600 +5% 500 400 +6% +26% 300 +12% 200 100 0 A220 ERJ 190/195- E2 GL7500 JSF (F-35) CH-53K Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 (1) Average based on programme share and
Slide 44: Fluid Conveyance
FLUID CONVEYANCE Low Pressure Ducting High Pressure Ducting Engineered Welded Duct Silencer Duct Assemblies Assembly Low Typical Wing Duct Products Pressure Ducting Assemblies HP Bleed Air Duct Low Pressure Ducting Cabin Assembly Typical Regional Jet Airbus A220 High Pressure Ducting Layout Ducting
Slide 45: Fluid Conveyance
FLUID CONVEYANCE Aerospace Control Products Non-Aerospace Control Products Welded Bellows Maintenance Free Accumulators Pin Lift Actuators (Semi-Conductor) Control Actuators Drug Pump Implants Hydraulic System Couplings (Medical) Main Operations: Metal Bellows, Calorstat, Bird Bellows, Ermeto Main C
Slide 46: Gas Turbine Engines
GAS TURBINE ENGINES Fluid Conveyance Systems Engine Components Engine Casing (B787 Trent 1000 ) Aerofoil for gas Active Clearance turbine engines Control System Engine Bleed Ducts, Gimbals, Vibreakers, Ball Joints Static Seals Hydraulic/Fuel Feed Bent tubes Manifolds Bellows Face Seals Main Operatio
Slide 47: Structures
STRUCTURES Airframe Assemblies 737 Air Inlet 737 Main Landing Gear 737 Wing to (2ea) Ram Air Wheel Well Body Frame (Birdcage) Premium Seat 737 Boeing Wing Chassis Ribs Main Operations: AMT, Absolute, Damar, Mexico, AMT, Weston, S A Thailand Weston, S A Thailand, S A Upeca Main Customers: Boeing, Spi
Slide 48: Structures
STRUCTURES Nacelles Helicopter Transmissions B777 Engine Nacelle Housing 777 Load Sikorsky UH60 Blackhawk Share Ring Blackhawk Gear Housing Assy. Blackhawk Spindle CF34-10 Torque Box Ring, (Embraer 190) Main Operations: Jet, Ketema, Thermal Engineering S A Connecticut Main Customers: Boeing, Goodric
Slide 49: Flexonics Division
FLEXONICS DIVISION Interim Results 2018
Slide 50: Flexonics Division: A Summary
FLEXONICS DIVISION: A SUMMARY H1 2018 H1 2017(1) Change 14 Operations Incl JV NAFTA 4 Revenue £160.6m £142.6m +12.6% Europe 3 Adjusted Operating Profit(2) £12.8m £9.6m +33.3% UK 2 ROW 4 Adjusted Operating Margin (2) 8.0% 6.7% +130bps China JV 1 Markets Customers Other Industrial 9% 3% Aerospace 13%
Slide 51: Land Vehicle Emission Control
LAND VEHICLE EMISSION CONTROL Common Rails Tubes Turbo-oil feed and drain High Pressure Fuel Lines Exhaust Bellows EGR Coolers/Heat Exchangers Diesel fuel injector components Main Operations: Bartlett, GA, Germany, Blois, Cape Town, Sao Paulo, New Delhi Main Customers: Cummins, Perkins, CAT, MAN, Sc
Slide 52: Industrial Process Control (1)
INDUSTRIAL PROCESS CONTROL (1) Metal Expansion Joints Fabric Expansion Joints Petrochemical, Refineries, & Steel Mills Power Generation Dampers/Diverters Oilfield Services Flow Control Valve Oil & Gas Directional Drilling Equipment Packers Bodies Main Operations: Pathway, S F Upeca, LPE Main Custome
Slide 53: Industrial Process Control (2)
INDUSTRIAL PROCESS CONTROL (2) Vacuum Seal Bellows Flexible Tubes & Hoses CSP - Solar Troughs RotationFlex ® Instrument Control Medical Heat Fuel Cell Bellows Exchangers Components Main Operations: Bartlett, Canada, Germany, Crumlin Main Customers: Medtronics, Valliant, Rioglass, Bloom Energy Interi
Slide 54: Index
INDEX Presentation Appendices Financial highlights 4 Group evolution 22 H1 2018 at a glance 5 EU and North America 23 Adjusted and reported profit 6 IFRS 15, 9 and 16 24 Cash flow and use of funds 7 Currency effect 25 Balance sheet 8 Earnings per share and dividends 26 Working capital 9 Change in ne