Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — FY2012 Earnings Presentation
26 slides from Avon Technologies's earnings presentation, December 2012
Slide 1: Preliminary Results: investing in innovation
PRELIMINARY RESULTS investing in innovation
Slide 2: Peter Slabbert, Chief Executive
PRELIMINARY RESULTS Peter Slabbert Chief Executive
Slide 3: Highlights
HIGHLIGHTS 140 Revenue £’m FINANCIAL HIGHLIGHTS 120 100 H2 Operating profit up 4% 80 60 H1 Diluted earnings per share up 9% 40 Dividend increase of 20% to 3.6p per share 20 Lower interest costs and effective tax rate 0 2008 2009 2010 2011 2012 127% conversion of operating profit to operati
Slide 4: Global Investment
GLOBAL INVESTMENT Avon Dairy Solutions/Milkrite locations Avon Protection locations Milkrite is a market leading brand of Avon Protection Systems is a customer driven innovative high technology consumable world leader of advanced CBRN/respiratory products supplying the growing dairy protection syste
Slide 5: Andrew Lewis, Group Finance Director
PRELIMINARY RESULTS Andrew Lewis Group Finance Director
Slide 6: Group Income Statement
GROUP INCOME STATEMENT 2012 2011 £’m £’m Revenue 0.9% 106.6 107.6 EBITDA 4% 16.4 15.7 Depreciation and amortisation (4.8) (4.6) Operating profit 4% 11.6 11.1 Interest expense 51% (0.2) (0.5) Other finance expense 16% (0.4) (0.4) Profit before taxation 8% 11.0 10.2 Taxation (3.2) (3.1) Profit for the
Slide 7: Protection & Defence
PROTECTION & DEFENCE FINANCIALS REVENUE £’m 2012 2011 £’m £’m Revenue 74.6 77.4 EBITDA 11.6 11.6 Operating profit 7.5 7.5 OPERATING PROFIT £’m PERFORMANCE DRIVERS DoD respirator sales up 36% on 2011 Shipment of filter spares affected by timing of US Government placing orders Growth in orders f
Slide 8: Analysis of DoD Contract
ANALYSIS OF DoD CONTRACT Actual Orders Mask systems (thousands) 3000 Sole Source Contract Vehicle 2500 Total Service Requirement Actual Filter spares (pairs) 2000 Orders (thousands) 1,200 1500 1,000 800 1000 600 500 400 200 0 - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 20
Slide 9: Dairy
DAIRY FINANCIALS REVENUE £’m 2012 2011 £’m £’m Revenue 32.1 30.2 EBITDA 6.5 5.9 Operating profit 6.0 5.5 OPERATING PROFIT £’m PERFORMANCE DRIVERS Sales and distribution facility established in China Dairy management team strengthened ImpulseAir liner reached 16% market share in North America
Slide 10: US$ Translation Has Not Had a Material Impact This Year
US$ TRANSLATION HAS NOT HAD A MATERIAL IMPACT THIS YEAR GROUP PROTECTION & DEFENCE 2011 2011 restated at restated at 2012 2012 rates 2011 2012 2012 rates 2011 £’m £’m £’m £’m £’m £’m Revenue 106.6 109.0 107.6 Revenue 74.6 78.5 77.4 EBITDA 16.4 16.0 15.7 EBITDA 11.6 11.8 11.6 Operating profit 11.6 11
Slide 11: Cashflow
CASHFLOW 2012 2011 £’m £’m Net cashflow from operations Continuing 14.7 12.0 Discontinued - (1.6) Cash generated from operations 14.7 10.4 Tax (0.3) (1.5) Interest (0.3) (0.5) Payments to pension scheme (0.6) (0.9) Net capital expenditure (9.5) (5.7) Exchange and other - (0.3) Dividends to share
Slide 12: Investing in Innovation
INVESTING IN INNOVATION R&D cash £6.6m (2011: £6.6m) Customer funded £1.4m Avon funded £5.2m Protection & Defence – 7% Dairy – 1% of of sales sales Development costs £4.8m £0.4m R&D expensed £1.0m capitalised £4.2m Balance sheet Income statement Development costs amortised £1.3m Capitalised P&L Char
Slide 13: Summary Balance Sheet
SUMMARY BALANCE SHEET 2012 2011 £’m £’m Intangible assets 13.3 10.5 Property, plant and equipment 17.8 16.7 Current assets 30.2 29.1 Current liabilities (21.5) (18.0) Non-current liabilities (5.0) (5.6) 34.8 32.7 Net debt (8.7) (11.8) 26.1 20.9 Retirement benefit scheme (deficit)/surplus (2.2) 0.3 N
Slide 14: UK Retirement Benefit Scheme
UK RETIREMENT BENEFIT SCHEME IAS19 30 September 2012 Moved from a surplus of £0.3m at 30 Sept 11 to a deficit of £2.2m at 30 Sept 12 Strong asset performance as investment strategy performed well in difficult markets Offset by higher liabilities caused by a lower discount rate due to fall in c
Slide 15: Peter Slabbert, Chief Executive
PRELIMINARY RESULTS Peter Slabbert Chief Executive
Slide 16: Dairy Market
DAIRY MARKET DAIRY OUR GEOGRAPHICAL REVENUE SPLIT MARKET SHARE v POPULATION OF COWS 40 35 30 25 Millions 20 15 10 5 0 EU NA China Brazil Russia India market share no. of cows opportunity MARKET SHARE 18 16 investing in innovation
Slide 17: Product Innovation
PRODUCT INNOVATION REVENUE £m Medium term new product development Shell • Bespoke design to ImpulseAir to maximise performance of liner PERFORMANCE DRIVERS Claw OEM liner Milkrite liner ImpulseAir liner Cluster exchange • Increased • Largely • Triangular • Introduced 2010 • Locks in milkflow unchang
Slide 18: Dairy Outlook
DAIRY OUTLOOK MARKET ENVIRONMENT GROWTH DRIVERS • Milk price remains above • ImpulseAir average • BRIC and Australasian markets • Farm consolidations • Milk price • Technology growth • Global dairy demand • Material input price volatility • China direct distribution reducing • EU distribution capabi
Slide 19: Protection & Defence Market
PROTECTION & DEFENCE MARKET 2011 £77.4m 2012 £74.8m 4% 12% 8% DoD 8% NA DHS/EMEA 8% Fire 56% 57% 24% AEF & Other 23% UK MoD Growth in DoD M50 mask sales, reduction in M61 filter spares US DoD M50 masks and M61 filters still dominate Protection & Defence revenue Fewer ‘impact’ sales due to timi
Slide 20: Product Innovation
PRODUCT INNOVATION • Programme to enhance product range • Unique modular approach to respiratory protection • Multi-community interaction through common Avon products • Total market coverage for all Fire, Military and First Responder community • Programme delivers first products in 2013 “TOTAL SOLUT
Slide 21: Protection & Defence Outlook
PROTECTION & DEFENCE OUTLOOK MARKET ENVIRONMENT GROWTH DRIVERS • US Budgets under • Personal protection a priority pressure • Established success of sole • New programmes at risk source JSGPM programme • MoD budgets no longer • Superior and growing relevant technology platform • Middle East, South •
Slide 22: Other Technology/Opportunities
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 22 investing in innovation
Slide 23: Outlook Statement
OUTLOOK STATEMENT We have a clear strategic direction and expect to make further progress despite an uncertain outlook for global defence spending. In our Protection & Defence business, being the technology leader, operating in global markets, investing in people and products and having an appropria
Slide 24: Wrap Up
WRAP UP Stronger more capable business Identifying and generating more revenue opportunities 2013 focus Protection & Defence Win more DoD business Commercial activities Fusion launch Dairy BRIC expansion New products ImpulseAir 24 investing in innovation
Slide 25: 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 26: Preliminary Results: investing in innovation
PRELIMINARY RESULTS investing in in tion