Slide 1: Full Year Results 2023
2023 FULL YEAR RESULTS Strong results with adjusted operating profit 61% up on prior year Full Year Results 2023
Slide 2: Agenda
AGENDA Introduction David Squires CEO 2023 Full Year Results Bindi Foyle FD Markets, Strategy & Outlook David Squires CEO Cautionary Statement This document has been prepared solely to provide additional information to enable shareholders to assess the Group’s strategy and business objectives and th
Slide 3: 2023 Highlights
2023 HIGHLIGHTS Strong trading performance across the Group compared to 2022 Adjusted EPS of 10.28p includes benefit of 2.54p from release of provisions for uncertain tax provisions Continued ROCE improvement, increasing by 240 bps Robust core market demand, with a healthy book-to-bill of 1.
Slide 4: Full Year Results
2023 FULL YEAR RESULTS Full Year Results 2023
Slide 5: Financial Headlines
FINANCIAL HEADLINES 2023 2022 Change Constant currency Book to bill ratio 1.14 1.24 Revenue £963.5m £848.4m +14% +14% Adjusted Operating Profit £45.8m £28.5m +61% +61% Adjusted Operating Margin 4.8% 3.4% +140bps +140bps Adjusted Profit before Tax £38.3m £20.1m +91% +92% Adjusted Earnings per Share(1
Slide 6: 2023 Revenue Bridge
2023 REVENUE BRIDGE £m 1,000 53.1 (0.2) 963.5 950 63.5 900 $1.24 (FY 22: $1.24) 848.4 (1.3) 850 800 FY 2022 Exchange Aerospace Flexonics Eliminations FY 2023 Revenue Reconciliation £m Revenue Reconciliation £m Aerospace (1) Flexonics (1) FY 2022 revenue 553.0 FY 2022 revenue 294.9 Civil aerospace 72
Slide 7: 2023 Adjusted Operating Profit Bridge
2023 ADJUSTED OPERATING PROFIT(2) BRIDGE £m 50 12.2 0.6 (2.1) 45.8 45 40 $1.24 (FY 22: $1.24) 6.7 35 28.5 (0.1) 30 25 20 15 10 5 - 2022 Exchange Aerospace Flexonics Share of JV Central Costs 2023 Aerospace (1) 2023 2022 Change Flexonics (1) 2023 2022 Change £m £m £m £m Revenue 616.5 553.0 +11.5% Rev
Slide 8: Adjusted and Reported Profit
ADJUSTED AND REPORTED PROFIT 2023 2022 £m £m Adjusted operating profit 45.8 28.5 Net finance costs – borrowings, cash (10.2) (7.1) – interest unwind on uncertain tax positions 3.5 - – lease liabilities (IFRS 16) (2.9) (2.5) – retirement benefits 2.1 1.2 Adjusted profit before tax 38.3 20.1 Tax – Tax
Slide 9: Cash Flow Generation
CASH FLOW GENERATION £m 110 Inventory £(23.7)m Change in Net Debt: £m 49.5 2.9 (27.6) Receivables £(20.4)m 100 Net cash outflow (25.5) Payables & other £16.5m 90 Exchange variations 8.5 80 Lease liabilities – additions and (35.2) (7.9) modifications 70 Net debt – opening (178.9) 60 50 45.8 Net debt
Slide 10: Balance Sheet Strength
BALANCE SHEET STRENGTH Credit facilities and headroom Profile of committed credit facilities £350m £350m Fixed rate £300m £300m Floating rate £250m £250m Net debt (excluding leases) Dec 2023 - £132.0m Headroom Headroom £200m £200m £179.4m £142.4m £150m £150m £100m £100m Net Debt £50m Net Debt £132.0
Slide 11: On Track to Achieve Minimum ROCE Target
ON TRACK TO ACHIEVE MINIMUM ROCE TARGET Min ROCE target Confident in delivering good returns on capital and ≥ 13.5% enhanced shareholder value 11.1% Portfolio optimisation strategy to maximise value creation Ongoing end-market growth across the Group Strategic focus on IP-rich fluid with volume rela
Slide 12: Markets
MARKETS Full Year Results 2023
Slide 13: Attractive End Market Exposure
ATTRACTIVE END MARKET EXPOSURE 36% Flexonics Division Aerospace Division 64% (35%) (65%) Power & Energy Civil Aerospace 15% (16%) 42% 78% 22% Land Vehicle (40%) 21% Single aisle, regional and business jets Wide body (19%) 8% 14% Defence (11%) (14%) Other Aerospace (Adjacent Markets)* End markets com
Slide 14: Land Vehicle Markets Growing Through the Cycle
LAND VEHICLE MARKETS GROWING THROUGH THE CYCLE (21% of Group) Global growth in GDP and tighter Global commercial vehicle market is Senior is supporting the transition to a low emissions regulations increase expecting to grow at low single-digit carbon economy; providing thermal management demand for
Slide 15: Power & Energy Markets Growing
POWER & ENERGY MARKETS GROWING (15% of Group) Global demand for oil to grow Electricity generation from Nuclear based generation important 1% in 2024 then <1% p.a. renewable sources will make up role to play in achieving Net Zero untill 2028, when it peaks. over one-third of mix by 2025 targets Worl
Slide 16: Diversified Aerospace & Defence Platforms
DIVERSIFIED AEROSPACE & DEFENCE PLATFORMS A320 16% (19%) Other 38% (39%) 737 MAX 10% (10%) A220 7% (5%) G5000/6000 1% (2%) F-35 5% (6%) G7500 2% (1%) A350 5% 767 2% (5%) (2%) C-130 4% 777 2% (4%) (1%) E2 2% A330 3% (2%) 787 3% (2%) (2%) Based on 2023 Aerospace revenue. % in brackets are 2022 compara
Slide 17: B737-MAX (6% of Group)
B737-MAX (6% of Group) MAX revenue represents 6% of Group in 2023 FAA imposed limit on 737 production rate of 38 per Boeing’s Renton production facility month following Alaskan Air incident Boeing has indicated that it will maintain its master schedule for the supply chain This may currently
Slide 18: Civil Aerospace Market Growth
CIVIL AEROSPACE MARKET GROWTH (42% of Group) Large commercial aircraft Strong structural growth in air Single aisle OEM order Resurgent long-haul travel deliveries increased by travel; driven by growing books at record levels supporting widebody growth 11% in 2023, now 2% demand in Asia; supported b
Slide 19: Defence Markets Growing
DEFENCE MARKETS GROWING (14% of Group) Senior’s sales to the Defence Mature programmes such as the Senior is well placed with good sector are primarily focused on C-130J transport aircraft continue in content on key growth programmes the US-defence market series production such as F-35 and T-7A Red
Slide 20: Other Adjacent Markets
OTHER ADJACENT MARKETS (8% of Group) Senior’s aerospace businesses supply to other markets e.g., space, semiconductor equipment and medical Low earth orbit satellite market Semi-conductor equipment market Our diversification into other attractive end-markets Growth of active satellites (1957 - 202
Slide 21: Strategy & Outlook
STRATEGY & OUTLOOK Full Year Results 2023
Slide 22: Our Purpose
OUR PURPOSE We help engineer the transition to a sustainable world for the benefit of all our stakeholders. We do this by: Technology Customer Climate expertise transition action Using our technology expertise in fluid Enabling our customers, who operate in Staying at the forefront of climate convey
Slide 23: Continued Progress Made on Sustainability
CONTINUED PROGRESS MADE ON SUSTAINABILITY E S G Awarded the top ‘A’ score by CDP in its global Following our 2022 Global Employee Opinion The Board approved the Group’s Human Rights annual ranking for transparency on climate Survey our operating businesses continue to Policy, demonstrating com
Slide 24: Active Portfolio Optimisation
ACTIVE PORTFOLIO OPTIMISATION We actively review our overall portfolio of operating businesses and evaluate them in terms of their strategic fit within the Group in order to maximise Group operating efficiency and optimal value to shareholders. We continue to explore strategic options for our Aerost
Slide 25: Group Outlook
GROUP OUTLOOK • Overall, in line with the Board’s expectations, further good growth is anticipated for the Group in 2024. • Momentum is building in our Aerospace Division: • A diversified position across key civil and defence aircraft platforms. • Benefiting from increasing aircraft build rates whic
Slide 26: Any Questions?
ANY QUESTIONS? Full Year Results 2023
Slide 27: Appendices
APPENDICES Full Year Results 2023
Slide 28: Investment Case: Positioned for Growth
INVESTMENT CASE: POSITIONED FOR GROWTH Our Purpose: We help engineer the transition to a sustainable world for the benefit of all of our stakeholders Clear strategy to maximise shareholder value Focus on IP-rich Aerospace fluid conveyance & Leading thermal Focused Long-term Flexonics Differentiated
Slide 29: Our Business Model
OUR BUSINESS MODEL Our vision is to be a trusted and collaborative high value-added engineering and manufacturing company delivering sustainable growth in operating profit, cash flow and shareholder value Our purpose: We help engineer the transition to a sustainable world for the benefit of all our
Slide 30: Strategic Priorities
STRATEGIC PRIORITIES Considered and Autonomous and Competitive Cost High Performance Focus on Growth Effective Capital Talent Development Collaborative Sustainability Country Strategy Operating System Deployment Business Model Outgrow our end The executive team Skilled workforce and Empowerment En
Slide 31: Focus on IP-Rich Technology and Manufacturing
FOCUS ON IP-RICH TECHNOLOGY AND MANUFACTURING 70% Fluid Conveyance and Fluid Conveyance and Thermal Management Thermal Management Product and System Design & Manufacturing IP UK North America Asia & Africa Europe Cape Town India GmbH FY 2023 revenue Mexico Structures Complex Machining and Manufactur
Slide 32: Highly Engineered Products in Attractive End-Markets
HIGHLY ENGINEERED PRODUCTS IN ATTRACTIVE END-MARKETS Fluid conveyance and thermal management technology embedded in our IP-rich products Semiconductor Medical Power & Energy Land vehicle Defence Aerospace Equipment Fuel cell energy Composite ducting Solar Additive manufacturing Petrochemical Hybrid
Slide 33: Future Proofing Business as We Transition to Low Carbon World
FUTURE PROOFING BUSINESS AS WE TRANSITION TO LOW CARBON WORLD 2010s 2020s 2030s 2040s Launch of more efficient Urban Air Mobility (UAM) More widespread use of EIS and production of Aerospace aero engines services to start from 2024 SAFs in commercial aircraft* hydrogen-powered aircraft We are workin
Slide 34: Product Development Strategy Compatible with Our Focus on ESG
PRODUCT DEVELOPMENT STRATEGY COMPATIBLE WITH OUR FOCUS ON ESG End-market evolution to achieve Net Zero Aerospace - Airbus envisions using multiple pathways including use of hydrogen and sustainable aviation fuels to reduce emissions Land vehicle - More efficient diesel engines and accelerating hydro
Slide 35: Fluid Conveyance & Thermal Management Capability Highlights
FLUID CONVEYANCE & THERMAL MANAGEMENT CAPABILITY HIGHLIGHTS 1 2 3 4 5 World class fluid Industry leading Component & system Thin-wall metal Additive conveyance & edge-welded and level simulation & manufacturing manufacturing thermal management formed bellows analysis expertise expertise system desig
Slide 36: Strategic Progress: IP, Technology & Manufacturing
STRATEGIC PROGRESS: IP, TECHNOLOGY & MANUFACTURING IP Technology Manufacturing Maintained focus on IP-rich technology and Developing novel solutions for low and Capabilities supported by a strong body of manufacturing zero carbon applications design and manufacturing process intellectual property an
Slide 37: Acquisition Framework
ACQUISITION FRAMEWORK More Likely Less Likely Aerospace & Defence Semiconductor Equipment Market Power & Energy (clean energy) Volume Automotive Land Vehicle (electrification) Medical Fluid Conveyance Products Structures / Machining Product Thermal Management Products Own design / IP products Commod
Slide 38: Our Locations
OUR LOCATIONS UK Rickmansworth H.O. FY 2023 split Sales Employees Massachusetts Metal Bellows Crumlin N. America 59% 2,839 Lymington Canada BWT UK 17% 1,416 SF Canada Maine (part of Pathway) Bird Bellows Rest of Europe 13% 918 Thermal Wisconsin Weston EU Rest of World 11% 1,506 GA Germany Washington
Slide 39: Our Customers
OUR CUSTOMERS 36% Flexonics Division Other Industrial 12% Boeing 9% Aerospace Division 64% (35%) (14%) (7%) (65%) Spirit 7% (7%) SLB 3% (2%) Other LV 8% Airbus 6% (7%) (5%) Daimler Rolls-Royce 6% 3% (7%) (2%) Caterpillar 4% RTX 3% (3%) (4%) Cummins 6% Safran 3% (3%) (6%) Bombardier 2% (2%) Lockheed
Slide 40: Our Products
OUR PRODUCTS 36% Flexonics Division Other machined parts 5% (5%) Aerospace Division 64% (35%) (65%) Industrial flexible parts 10% High Pressure ducting 16% (11%) (15%) Fuel distribution (LV) 1% (1%) Off-highway hydraulics (LV) 3% (2%) Exhaust flexes (LV) 4% (4%) Airframe structural parts 14% (15%) E
Slide 41: Group Evolution
GROUP EVOLUTION Revenue (£m) Adjusted Operating Profit (£m) Adjusted Operating Margin (%) 100 12 1200 90 80 10 1000 70 Total 8 800 60 after Total after central costs 50 central costs 6 600 40 400 30 4 20 200 2 10 0 0 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Aerosp
Slide 42: Balance Sheet
BALANCE SHEET £m Dec 2023 Dec 2022 FX Impact from Dec 2023 Goodwill and other intangible assets 226.4 235.9 £m Investment in JV 5.1 4.4 Non current assets (22.1) Property, plant and equipment 284.7 307.2 Working capital (6.6) Other long-term assets 21.5 11.3 Net debt 8.5 Non current assets, before r
Slide 43: Maturity Profile of Committed Credit Facilities
MATURITY PROFILE OF COMMITTED CREDIT FACILITIES £m 340 320 Feb - £39.7m Jun - 300 (fixed £37.2m + maturity) (1) (floating 280 maturity) Net debt (excluding leases) 260 Dec 2023 - £132.0m Jan - 240 £27.0m + Oct £47.3m £142.4m 220 (fixed headroom maturity) 200 180 160 Nov - £115m 140 (floating maturit
Slide 44: Usage of Credit Facilities – December 2023
USAGE OF CREDIT FACILITIES – DECEMBER 2023 Usage by Currency Interest Facility Usage £ $ € Other % £m £m US Private placements(1): $30.0m (Sep 2028) 4.18% 23.6 23.6 - 23.6 - - €28.0m (Feb 2027) 1.51% 24.3 24.3 - - 24.3 - $60.0m (Oct 2025) 3.75% 47.3 47.3 - 47.3 - - £27.0m (Jan 2025) 2.35% 27.0 27.0
Slide 45: Aerospace Division
AEROSPACE DIVISION Full Year Results 2023
Slide 46: Aerospace Division: A Summary
AEROSPACE DIVISION: A SUMMARY FY 2023 FY 2022(1) Change 14 Operations Revenue £616.5m £553.0m +11.5% NAFTA 6 France 2 Adjusted Operating Profit (2) £27.0m £20.3m +33.0% UK 4 Adjusted Operating Margin(2) 4.4% 3.7% +70bps ROW 2 Markets Customers Boeing 14% Other 12% Other 32% Spirit 11% Defence 21% IR
Slide 47: Flexonics Division
FLEXONICS DIVISION Full Year Results 2023
Slide 48: Flexonics Division: A Summary
FLEXONICS DIVISION: A SUMMARY FY 2023 FY 2022(1) Change 11 Operations & JV NAFTA 4 Revenue £348.0m £294.9m +18.0% EU 2 Adjusted Operating Profit(2) £37.5m £25.3m +48.2% UK 2 ROW 3 Adjusted Operating Margin (2) 10.8% 8.6% +220bps China JV 1 Other Markets Markets Customers Cummins 15% 15% Other 28% Ca