Avingtrans Plc · LSE:AVG
Avingtrans — FY2021 Earnings Presentation
34 slides from Avingtrans's earnings presentation, September 2021
Slide 1: Results for year ended 31 May 2021
Pinpoint-Invest-Exit Results for year ended 31 May 2021 Steve McQuillan, CEO Stephen King, CFO Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) ("MAR") prior to its release as part of this announceme
Slide 2: Financial highlights (continuing operations)
Financial highlights (continuing operations) Group Revenue Gross Profit Margin Adjusted EBITDA £98.5m 30.4% £12.5m +7.1% 2020: 26.8% +78.5% Adjusted Diluted EPS Total Dividend Net Cash** 22.4p 4.0p £23.3m +180.8% 2020: 0.0p* 2020: £7.4m net debt * Suspended due to Covid-19 ** Excluding IFRS16 2
Slide 3: Our divisions
Our divisions Revenue Energy: Engineered Energy: Process Medical and Pumps and Motors Solutions and Rotating Industrial Imaging Medical (EPM) Equipment (PSRE) (MII) £11.5m USA UK/China UK EPM PRSE £51.4m UK (HT) Fluid Handling, UK USA £37.6m China UK AUS India UK Adj. EBITDA USA UK Medical £0.6m Key
Slide 4: Compelling Pinpoint-Invest-Exit strategy
Compelling Pinpoint-Invest-Exit strategy Niche market leadership positions Consistent shareholder returns 4
Slide 5: Our proven strategy in action - Pinpoint
Our proven strategy in action - Pinpoint Strengthening the portfolio • Magnetica - compact helium-free MRI systems • Avingtrans acquired an initial 58.1% stake in Magnetica, in a merger with SciMag and Tecmag • Completed on 29 January 2021 • Initial markets are orthopaedic and veterinary. • Estimate
Slide 6: Our proven strategy in action - Invest
Our proven strategy in action - Invest Establishing world class capability • Booth site rationalisation will now complete this FY • Construction of new Bolton site extension advanced • New wing eliminates surplus leased building • Booth has a record orderbook and strong prospects • Market research h
Slide 7: Our proven strategy in action - Exit
Our proven strategy in action - Exit Building and returning shareholder value PB acquired for c£9m as part of HTG in 2017 • Avingtrans is committed to profitable growth and to business Exit of PB for enterprise value of £35m in March 2021 exits at advantageous valuations. Gross return on original ca
Slide 8: Divisional priorities - EPM
Divisional priorities - EPM Hayward Tyler and Energy Steel • Markets • Nuclear – on-going life extension focus • Contract wins in USA and South Korea • Next Generation nuclear – TerraPower completed • Hydrocarbons – progress hampered by CV-19 Concentrated Solar Power plant • Recovery now underway •
Slide 9: Divisional priorities - PSRE
Divisional priorities - PSRE Metalcraft, Fluid Handling, Ormandy, Booth, Composite Products • Markets • Nuclear decommissioning (Metalcraft, Fluid Handling) • Sellafield - 3M3 box contact (£70m) now in 2nd phase Booth doors manufacture • £4.4m Fluid Handling contract win for remote valves • Defence
Slide 10: Divisional priorities - MII
Divisional priorities - MII Magnetica, Scientific Magnetics. Tecmag • Medical • MRI systems • Transformational merger with Magnetica • SciMag and Tecmag to rebrand • Orthopaedic and veterinary niches as focus MRI - orthopaedic scanner • Initial addressable market estimate c£400m • Potentially bigger
Slide 11: Financial Highlights
1/3 Avingtrans Financial Highlights
Slide 12: Income Statement – continuing operations
Income Statement – continuing operations FY21 FY202 £’m £’m Revenue 98.5 92.0 Gross Profit 29.9 24.6 Gross Profit % 30.4% 26.8% Adjusted1 EBITDA 12.5 7.0 Adjusted1 EBITDA % 12.7% 7.6% Adjusted1 Profit before tax 7.7 2.6 Adjusted1 Profit after tax 7.3 2.6 Adjusted1 Diluted EPS (pence) 22.4 8.0 Adjust
Slide 13: Discontinued operations
Discontinued operations FY21 FY202 £’m £’m Revenue 8.4 22.7 Adjusted1 EBITDA 0.1 4.4 Adjusted1 Profit before tax (0.9) 3.0 Net Cashflow from Operations (2.3) 2.6 Net gain on sale of PB 23.4 - Total Discontinued Profit after tax 22.1 1.5 Adjusted1 Diluted EPS (pence) to shareholders 73.9 0.2 1 Adjust
Slide 14: Divisional results – continuing operations
Divisional results – continuing operations Energy: Energy: Energy: Energy: EPM PRSE Medical Central FY21 EPM PRSE* Medical Central FY20 £’m £’m £’m £’m £’m £’m £’m £’m £’m £’m Revenue: OE 15.4 33.0 9.3 - 57.7 12.8 28.0 11.9 - 52.7 AM 36.0 4.6 0.2 - 40.8 36.5 2.8 - - 39.3 Total Revenue 51.4 37.6 9.5
Slide 15: Balance Sheet
Balance Sheet FY21 FY20 £m £m Tangible fixed assets 25.3 34.4 Goodwill 21.2 23.5 Other intangible 14.5 13.8 Deferred Tax Asset/Pension Surplus 3.1 2.9 Working capital 21.3 20.0 Tax - 1.2 Net Cash/(Debt) (incl £3.0m IFRS16) 20.3 (16.3) Provisions (1.7) (5.6) Derivative (0.1) - Creditors > 1 year (1.3
Slide 16: FY21 Movement in net cash/(debt)
FY21 Movement in net cash/(debt) (£m) Continuing operations Discontinued operations 25.0 3.1 20.0 5.5 15.0 23.3 10.0 20.3 5.0 26.6 0.0 (7.4) (1.1) (5.0) (2.9) (10.0) 12.5 (3.2) 0.6 (1.5) (9.0) (15.0) (20.0) Opening net Adjusted Exceptional Working Capital Interest, tax Operating Proceeds Leases on C
Slide 17: Dividend growth
Dividend growth pence 4.0p 4 Final year dividend reinstated 3.5 Suspended due to Covid-19 3 2.5 2.4 2.3 2.2 2.1 2 2.0 1.8 1.5 1.5 1 1.2 1.3 1.4 0.5 1.0 0.9 1.0 1.1 0.7 0.4 0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Interim Final 17
Slide 18: Tax highlights – future profits protected
Tax highlights – future profits protected • Effective tax rate 7.0% • Tax refund received in the US kept the charge lower than expected. • Tax losses of £22.6m available for future use with £6.1m of these recognised as a deferred tax asset – Future upside. • As per the UK March 2021 budget, the tax
Slide 19: Summary
1/3 Avingtrans Summary
Slide 20: Summary
Summary Record year for profits Revitalisation of Hayward Tyler, Energy Steel and Booth remains on plan Order book: robust despite some delays and disruption Significant Nuclear sector contract wins in the UK, USA, and South Korea Sellafield 3M3 box project now worth £70m and moves to volu
Slide 21: Appendix
1/3 Avingtrans Appendix
Slide 22: Our values
h. Avingtrans Our values A High Performance Business Integrity Quality Agility We mean what we say and do what we say we Right first time, on time. Our products and We adapt rapidly and cost effectively - in will do, with respect for all concerned services have enduring value to our customers respon
Slide 23: Our locations and employees (31 August 2021)
Our locations and employees (31 August 2021) UK 450 China USA 141 India 71 10 Australia 14* * Australia from 29th January 2021 23
Slide 24: Environment, Social and Governance (ESG)
Environment, Social and Governance (ESG) • Our goal is to ensure sustainability is embedded into our pinpoint-invest-exit business strategy. In 2021, we have reassessed our approach to sustainability, aligning ourselves with the UN’s Sustainable Development Goals (SDGs). We consider the following to
Slide 25: Market capitalisation progression (£m)
Market capitalisation progression (£m) Purchased Moss & Placing £3.5m 2009 8 Purchased Sigma* 2010 9 2011 15 2012 17 Exited JenaTec; Purchased Aerotech & PFW 2013 32 Purchased Maloney 2014 45 Oil Price Shock Purchased RMDG 2015 31 Purchased Rolls Royce pipes; Exited Sigma 2016 50 Returned £19m to sh
Slide 26: Blue chip partnerships
Blue chip partnerships /». Avingtrans HS2 VATTENFALL @ <> eDFENERGY & sellafield Ltd EUREKA Shinhoo ON NY = -e Bimm Pangea 26
Slide 27: M&A – successful exits
M&A – successful exits Brand Acquisitions Bought for £m1 Sold for £m1 JRT Ltd JenaTec Inc 4.0 14.5 JGWT GMBH Boneham & Turner (FY02 - FY09) (FY13) Moss Group Sigma Components B&D Patterns C&H Composites Eng Group 22.0 65.0 Aerotech Tubes PFW Farnborough (FY07 - FY16) (FY16) RMDG Rolls Royce Nuneaton
Slide 28: Largest investors
Largest investors Ordinary shares of 5p each Number of shares % of total (000s) shares Harwood Capital 4,034 12.6% Funds managed by Business Growth Fund 2,363 7.4% Funds managed by Unicorn Asset Management Ltd 1,946 6.1% Funds managed by RBC Trustees Limited 1,867 5.8% RS McDowell’s Pension Fund 1,4
Slide 29: The MRI Market
1/3 Avingtrans The MRI Market
Slide 30: MRI and the diagnostic imaging market
MRI and the diagnostic imaging market • Total market size over £20 billion p.a. in 2017 • CAGR projected to be 4% from 2020-2027 • MRI is 18% of the total market • MRI is the most expensive imaging technique • However, it provides the best images • Especially of soft tissues… • and there is no radia
Slide 31: Current product types and limitations
Current product types and limitations MRI is still the “gold standard” for medical imaging, but there are limitations Current whole body systems (the market is dominated by Siemens, GE and Philips): • Using these for certain scans seems inefficient and can be uncomfortable for patients • Neonatal sc
Slide 32: Large potential for compact, high field MRI
Large potential for compact, high field MRI • Reduce the cost of high field MRI systems by shrinking their size and footprint • Eliminate infrastructure costs by using helium-free technology • Dramatically expand potential locations for MRI systems, by virtue of the above • Unlock precious capacity
Slide 33: Advantages and Benefits
Advantages and Benefits Compact, cryofree high field systems with cloud/AI diagnosis: • Free-up capacity of existing installed whole body systems (at least 20%) • Widen capability to critical new applications – eg neonatal scans in the NICU • Require minimal infrastructure and can be sited easily –
Slide 34: Next phase plan for orthopaedic MRI system
Next phase plan for orthopaedic MRI system EXT Demo System Magnet - SciMag Spectrometer - Tecmag GC, RFC, PHS, RF Subsystem - Magnetica Software - Magnetica Supporting Subsystems - COTS Integration & Test Capability validated 3 x systems for clinical testing Q1 Q2 Q3 Q4 Q1 Q2 2021 2022 34