Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — H1 2013 Earnings Presentation
29 slides from Avon Technologies's earnings presentation, 2013
Slide 1: Investing in innovation
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Slide 2: Peter Slabbert, Chief Executive
Peter Slabbert Chief Executive investing in innovation 2
Slide 3: Highlights
HIGHLIGHTS 140 Revenue £’m 120 FINANCIAL HIGHLIGHTS 100 80 60 H2 Operating profit growth of 17% and profit after tax up 26% H1 40 Diluted earnings per share up 24% 20 0 132% conversion of operating profit to operating cash inflow 15 2008 2009 2010 2011 2012 2013 Interim dividend of 1.44p per
Slide 4: Global Investment
GLOBAL INVESTMENT Avon Dairy Solutions/Milkrite locations Avon Protection locations Avon Protection Systems is a customer Milkrite is a market leading brand of driven world leader of advanced innovative high technology consumable CBRN/respiratory protection systems products supplying the growing dai
Slide 5: Andrew Lewis, Group Finance Director
Andrew Lewis Group Finance Director investing in innovation 5
Slide 6: Group Income Statement
GROUP INCOME STATEMENT 2013 Interim 2012 Interim 2012 Full Year (Unaudited) (Unaudited) (Audited) £’m £’m £’m Revenue 20% 59.6 49.6 106.6 EBITDA 16% 8.4 7.2 16.4 Depreciation and amortisation (2.6) (2.2) (4.8) Operating profit 17% 5.8 5.0 11.6 Interest expense (0.2) (0.2) (0.2) Other finance income
Slide 7: Protection & Defence
PROTECTION & DEFENCE FINANCIALS REVENUE £’m 2013 2012 2012 Interim Interim Full Year 100 £’m £’m £’m 80 Revenue 43.5 33.2 74.6 60 H2 40 EBITDA 6.6 5.0 11.6 20 H1 0 Operating profit 4.3 3.0 7.5 2009 2010 2011 2012 2013 OPERATING PROFIT £’m PERFORMANCE DRIVERS 8 Growth in sales of DoD mask systems (
Slide 8: Protection & Defence Market
PROTECTION & DEFENCE MARKET 2012 H1 £33.2m 2012 FY £74.8m 2013 H1 £43.5m 13% DoD 9% 12% 10% 8% 8% EMEA/ NA LE 17% 53% 57% Fire 64% 23% 26% AEF/DoD spares/Other DoD sales have grown in absolute terms but are a smaller percentage of the larger absolute revenue in H1 2013 Strong non DoD sales and o
Slide 9: Analysis of DoD Contract
ANALYSIS OF DoD CONTRACT Actual Orders Mask systems (thousands) Sole Source Contract Vehicle 3000 2500 Actual Filter spares (pairs) Total Service Requirement Orders 2000 (thousands) 1,200 1,000 1500 800 1000 600 400 500 200 0 - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 20
Slide 10: Dairy
DAIRY FINANCIALS REVENUE £’m 2013 2012 2012 40 Interim Interim Full Year £’m £’m £’m 30 20 H2 Revenue 16.1 16.4 32.1 10 H1 EBITDA 2.9 3.2 6.5 0 Operating profit 2.6 2.9 6.0 2009 2010 2011 2012 2013 OPERATING PROFIT £’m PERFORMANCE DRIVERS 8 Impulse Air liner reached 18% market share in North 6 Ame
Slide 11: US$ Translation Has Had No Impact This Period
US$ TRANSLATION HAS HAD NO IMPACT THIS PERIOD GROUP PROTECTION & DEFENCE 2012 Full 2012 Full Year Year 2013 restated at 2012 2013 restated at 2012 Interim 2013 rates Interim Interim 2013 rates Interim £’m £’m £’m £’m £’m £’m Revenue 59.6 49.8 49.6 Revenue 43.5 33.3 33.2 EBITDA 8.4 7.2 7.2 EBITDA 6.6
Slide 12: Cashflow
CASHFLOW 2013 Interim 2012 Interim 2012 Year £’m £’m £’m Cash generated from operations 7.7 6.2 14.7 Tax (0.9) 0.2 (0.3) Interest (0.1) (0.2) (0.3) Payments to pension scheme (0.3) (0.2) (0.6) Capital expenditure (4.5) (3.6) (9.5) Purchase of own shares (1.8) - (0.3) Dividends to shareholders (0.7)
Slide 13: Investing in Innovation
INVESTING IN INNOVATION R&D cash £3.7m (2012: £2.8m) 32% Avon funded £2.9m Customer funded £0.8m + Protection and Defence 7% of sales Dairy 2% of sales £2.6m £0.3m Development costs capitalised £2.2m R&D expensed £0.7m Balance Sheet Income Statement Development costs amortised £0.6m Capitalised P&L
Slide 14: Summary Balance Sheet
SUMMARY BALANCE SHEET 2013 Interim 2012 Interim 2012 Year £’m £’m £’m Intangible assets 15.6 11.1 13.3 Property, plant and equipment 19.6 16.8 17.8 Current assets 36.0 29.0 30.2 Current liabilities (27.1) (18.9) (21.5) Non-current liabilities (5.0) (5.4) (5.0) 39.1 32.6 34.8 Net debt (9.9) (9.8) (8.
Slide 15: UK Retirement Benefit Scheme
UK RETIREMENT BENEFIT SCHEME IAS19 31 March 2013 Moved from a deficit of £2.2m at 30 September 2012 to a surplus of £1.8m at 31 March 2013 Strong asset performance as investment strategy performed well. This offset the higher liabilities caused by a lower discount rate and higher inflation assum
Slide 16: Peter Slabbert, Chief Executive
Peter Slabbert Chief Executive investing in innovation 16
Slide 17: Protection & Defence Roadmap
PROTECTION & DEFENCE ROADMAP Investment in Sales 10 Year DoD sole Research and and Distribution source contract Development Investment Capability Global Customer Base JSAM EEBD / VR Technology investing in innovation 17
Slide 18: Product Innovation
PRODUCT INNOVATION Product Strategy Delivers: Unique modular approach to respiratory protection Multi-community interaction through common Avon products Total market coverage for all Fire, Military and First responder community Filter Products FM54 & Law Enforcement SCBA MilCF50 available Developmen
Slide 19: Protection & Defence Outlook
PROTECTION & DEFENCE OUTLOOK MARKET ENVIRONMENT GROWTH DRIVERS • US Budgets under pressure • Personal protection a priority post sequestration • Established success of sole • New programmes at risk source JSGPM programme • Reducing Homeland Security • Superior and growing funding in North America te
Slide 20: Dairy Roadmap
DAIRY ROADMAP Innovation and Investment in Sales & OEM supplier Further Product Product Management Investment Resource OEM Liner Milkrite Liner Triangular Technology Impulse Air Liner Cluster Exchange Claw Technology and margin Own brand Milkrite Expansion into Full Cluster and enhancements in growt
Slide 21: Dairy Market
DAIRY MARKET OUR GEOGRAPHICAL REVENUE SPLIT MARKET SHARE v POPULATION OF COWS 40 China 35 4% 30 25 Millions EU 20 25% 15 10 NA 5 71% 0 EU NA China Brazil Russia India market share no. of cows opportunity MARKET SHARE 18,000 Revenue by product 16,000 NA EU 14,000 12,000 Milkrite non-Impulse Air OEM 1
Slide 22: Dairy Outlook
DAIRY OUTLOOK MARKET ENVIRONMENT GROWTH DRIVERS • Lower milk prices • Impulse Air • Higher feed costs are putting farm • Cluster exchange programme profits under pressure • BRIC and Australasian markets • Farm consolidations • Global dairy demand • Technology growth • China direct distribution • Pop
Slide 23: Protection – Other Technology / Opportunities
PROTECTION – OTHER TECHNOLOGY / OPPORTUNITIES Respiratory and PPE markets Full Body Protection Training and through-life maintenance Communication Helmet integration Filtration Respiratory Collective Individual Detection Decontamination Protection Protection investing in innovation 23
Slide 24: Protection - Current Developments
PROTECTION - CURRENT DEVELOPMENTS Underwater Technology Currently responding to IDIQ tender with an estimated initial value of over $30m for an emergency escape device for the US Navy using rebreather technology Acquired VR Technology which has market leading underwater ‘rebreather’ systems Ex
Slide 25: Dairy - Other Technology/Opportunities
DAIRY- OTHER TECHNOLOGY/OPPORTUNITIES Sensor Technology and Telemetry Vacuum Pumps Pulsators Cluster Exchange Service Claws Shell Tubing Liners Brazil China EU + NA Russia India investing in innovation 25
Slide 26: Outlook Statement
OUTLOOK STATEMENT We are delivering our strategy. We have achieved strong growth in the first half of the year and the Board is confident of making further progress as the year evolves, despite the challenges of the uncertain global economic and political environment and the temporary slowdown seen
Slide 27: Wrap Up
WRAP UP Strong growth in revenue and earnings in the first half Identifying and generating more opportunities H2 focus Protection & Defence JSAM Fire – Deltair Integrating VR Technology Commercial activities Fusion delivery Dairy Cluster Exchange BRIC expansion investing in i
Slide 28: Safe Harbour Statement
SAFE HARBOUR STATEMENT 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 sometim
Slide 29: Investing in innovation
investing in in tion investing in innovation 29