Avon Technologies Plc · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — FY2014 Earnings Presentation
28 slides from Avon Technologies's earnings presentation, 2014
Slide 1: Preliminary Results 2014
PRELIMINARY RESULTS 2014 aven Avon Rubber p.l.c
Slide 2: Presenters
A V O N R U B B E R P. L . C . PETER SLABBERT ANDREW LEWIS Chief Executive Group Finance Director DAVID EVANS SARAH MATTHEWS-DEMERS Chairman Group Financial Controller 2
Slide 3: Highlights
HIGHLIGHTS 140 Revenue £’m FINANCIAL HIGHLIGHTS 120 100 • Operating profit growth of 20% (26% at cc) and profit before tax 80 H2 increased 21% (28% at cc) 60 H1 • Return on sales (EBITDA divided by revenue) improved 2% from 16% to 40 20 18% 0 • Diluted earnings per share increased 30% (37% at cc) 20
Slide 4: Delivering Our Strategy
D E L I V E R I N G O U R 2 0 1 3 S T R AT E G Y Fusion PROTECTION & DEFENCE JSAM Fire Commercial activities Cluster Exchange continued rollout DAIRY Milkrite sales expansion in EU including ImpulseAir penetration BRIC market development 4
Slide 5: Avon Rubber p.l.c
Avon Rubber p.l.c
Slide 6: Group Income Statement
G R O U P I N C O M E S TAT E M E N T 2014 2013 £’m £’m Revenue 124.8 124.9 EBITDA 14% 22.9 20.0 Depreciation and amortisation (5.9) (5.8) Operating profit before amortisation of acquired intangibles, exceptional items and defined benefit pension costs 20% 17.0 14.2 Amortisation of acquired intangib
Slide 7: Impact of US$ Translation – Significant Headwind
I M PA C T O F U S $ T R A N S L AT I O N – S I G N I F I C A N T H E A D W I N D GROUP 2013 Average rate for the US $/£ translation restated moved from $1.56 to $1.65 Constant at 2014 currency 2014 rates 2013 growth £’m £’m £’m Revenue 5% 124.8 119.1 124.9 9 cent headwind impacted 2014 operating Ad
Slide 8: Protection & Defence Financials
PROTECTION & DEFENCE FINANCIALS IMPACT OF US $ TRANSLATION 2014 2013 Constant 2013 restated at £’m £’m currency 2014 2014 rates 2013 growth £’m £’m £’m Revenue 92.8 93.2 Revenue 5% 92.8 88.7 93.2 Adjusted EBITDA 18.5 16.1 Adjusted EBITDA 20% 18.5 15.4 16.1 Adjusted Adjusted operating profit 13.6 11.
Slide 9: Protection & Defence Market
PROTECTION & DEFENCE MARKET DOD masks / filters DOD spares EMEA / NA LE Fire AEF 10% 8% 6% 8% 2013 49% 2014 38% £93.2m £92.8m 28% 34% 12% 7% DOD lower as operational flexibility used to produce more non-DOD DOD spares grow as installed base grows Positive market reaction to new fire product, D
Slide 10: DOD Contract Summary
DOD CONTRACT SUMMARY MASK SYSTEMS (THOUSANDS) FILTER SPARES (PAIRS) Sole Source Contract Vehicle 3000 1,200,000 2500 1,000,000 Total Service Requirement 2000 800,000 1500 600,000 1000 400,000 Delivered Orders 500 200,000 0 - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010
Slide 11: Dairy Financials
DAIRY FINANCIALS IMPACT OF US $ TRANSLATION 2013 Constant restated at 2014 2013 currency 2014 2014 rates 2013 £’m £’m growth £’m £’m £’m Revenue 32.0 31.7 Revenue 5% 32.0 30.4 31.7 EBITDA 6.6 5.8 EBITDA 19% 6.6 5.5 5.8 Operating Profit 5.7 5.2 Operating profit 17% 5.7 4.9 5.2 OPERATING PROFIT £’M PE
Slide 12: Cashflow
CASHFLOW 2014 2013 £’m £’m Cash generated from operations before effect of exceptional items 26.5 15.5 Cash effect of exceptional items (1.0) (0.2) Cash generated from operations 25.5 15.3 Tax (2.9) (2.2) Interest (0.3) (0.4) 156% Payments to pension scheme O P E R AT I N G (0.5) (0.6) Capital expen
Slide 13: Summary Balance Sheet
SUMMARY BALANCE SHEET 2014 2013 £’m £’m Intangible assets 17.2 16.6 Property, plant and equipment 19.6 20.4 £7m INVESTMENT Current assets IN NEW 32.1 34.3 PRODUCTS Current liabilities (26.5) (23.4) Non-current liabilities (4.3) (5.0) 38.1 42.9 Net cash / (debt) 2.9 (10.9) 41.0 32.0 Retirement benefi
Slide 14: UK Retirement Benefit Scheme
UK RETIREMENT BENEFIT SCHEME IAS 19R 2014 Accounting deficit moved from £11.3m at 30 Sept 2013 to £16.0m at 30 September 2014 due to lower AA corporate bond yields reducing the discount rate used in the accounting valuation. The AA corporate bond driven discount rate has not moved in line with the l
Slide 15: Avon Rubber p.l.c
Avon Rubber p.l.c
Slide 16: The Protection & Defence of Today
T H E P R O T E C T I O N & D E F E N C E O F T O D AY Manufacturing Brand Technology Excellence DOD EMEA/NA LE Fire & Industrial • JSGPM mask system to DOD • Global leader in military • 2% - 3% market share in (initial contract to 2018) land based Respiratory North America fire market • Strong posi
Slide 17: The Protection & Defence of Tomorrow
Protection T H E P R O T& E CDefence TION & DofE Ftomorrow ENCE OF TOMORROW Manufacturing Brand Technology Excellence DOD EMEA / NA LE Fire & Industrial • Sustainment of DOD • Fusion complete – reinforce • Deltair market share JSGPM contract post 2018 dominance in LE / First increase in the North •
Slide 18: Protection & Defence Innovation: Project Fusion
P R O T E C T I O N & D E F E N C E I N N O V AT I O N : P R O J E C T F U S I O N MODULAR PPE SYSTEM | MULTIPLE FUNCTIONALITY |TOTAL MARKET COVERAGE In 2014 we delivered Stage 1 of our AvonAir Powered Air Purifying Respirator System (PAPRs), an extended range of NIOSH and CE-approved filters, Delta
Slide 19: Protection & Defence Opportunities
PROTECTION & DEFENCE OPPORTUNITIES MARKET ENVIRONMENT GROWTH DRIVERS • Budgets stabilised • Personal protection remains a priority • JSGPM filters DOD • Funding line for JSGPM project still intact • JSAM new programme start ($70m opportunity) • EEBD ($140m opportunity) • Navy rebreather programme ($
Slide 20: The Avon Dairy Solutions of Today
T H E A V O N D A I R Y S O L U T I O N S O F T O D AY Manufacturing Brand Technology Excellence US EU RoW • brand leader • brand growing • China distribution • Major OE supplier • Major OE supplier centre • Strong ImpulseAir • Cluster Exchange • Low level of exports to position launched other marke
Slide 21: The Avon Dairy Solutions of Tomorrow
THE AVON DA I RY S OLUTI ON S OF TOMORROW Manufacturing Brand Technology Excellence US EU RoW • Lead market with liner • Double • Major growth in China technology (ImpulseAir market share • SA distribution centre & successor) • Major OE supplier • India distribution centre • Further • Increased pres
Slide 22: Dairy Innovation
D A I R Y I N N O V AT I O N LINERS | TUBING |SHELL | CLAWS | CLUSTER EXCHANGE SERVICE | PULSATORS 200 Monthly Revenue £000 150 100 50 - Oct-12 Oct-13 Oct-14 21% market share in US 887 farms 2.5% in Europe 256,000 cows FULL CLUSTER OFFERING 2015 22
Slide 23: Dairy Market Share and Potential
DAIRY MARKET SHARE AND POTENTIAL THE EMERGENCE OF 3 BILLION MIDDLE-CLASS CONSUMERS Billions of people EU 25% 3.9 2.2 Source: OECD / 0.8 Rest of the World McKinsey. 2011 1 1 1 datapoint based on UN US and Europe statistics 2011 2020 2030 Millions of cows EU US NA China Brazil Russia India market shar
Slide 24: Dairy Opportunities
DAIRY OPPORTUNITIES MARKET ENVIRONMENT GROWTH DRIVERS • Farm profitability improving with • Cluster Exchange higher milk price and lower input costs • ImpulseAir US • Farm consolidations (Mega farms) • Full cluster offering • Farm consolidations • Milkrite market share • Quota/subsidy reductions • I
Slide 25: Outlook Statement
O U T L O O K S TAT E M E N T Our strategy has significantly improved the shape of the Group, reduced the risk profile and improved margins. This is providing continued growth and the outlook for the future remains positive. In our global Protection & Defence business we have good visibility of DOD
Slide 26: Our 2015 Focus
OUR 2015 FOCUS Growth of non DOD business in foreign PROTECTION & DEFENCE military, homeland security and industrial Further DOD business with EEBD & JSAM Improve our fire market share in NA through success with Deltair Expand product range ImpulseAir growth in US & EU Cluster Exchange growth in US
Slide 27: Safe Harbour Statement
S A F E H A R B O U R S TAT E M E N T 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 stateme
Slide 28: WWW.avonel
WWW.avonel