Slide 1: 2021 Full Year Results
2021 FULL YEAR RESULTS Robust results; recovery underway Full Year Results 2021
Slide 2: Agenda
AGENDA Introduction David Squires CEO 2021 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: 2021 Highlights
2021 HIGHLIGHTS Robust financial performance in challenging circumstances • Improved profitability, strengthened balance sheet • Restructuring delivering ahead of plan Recent contract wins demonstrate Senior’s appeal to customers • New Boeing contracts for 737 & 777, 767 • Flexonics land vehicle
Slide 4: Extending our sustainability leadership in 2021
EXTENDING OUR SUSTAINABILITY LEADERSHIP IN 2021 E S G Scope 1, 2 and 3 emissions targets are Achieved 81% response rate on global Updated Group’s Code of Conduct with now verified SBTi “Near Term Net-Zero” employee engagement survey training provided to all employees Targets Reduced lost tim
Slide 5: Future proofing our growth for a low carbon world
FUTURE PROOFING OUR GROWTH FOR A LOW CARBON WORLD Using our Thermal Management & Fluid Conveyance expertise across multiple technological applications Power Vehicles Aerospace The Challenge The Challenge The Challenge Countries need to use a mix of energy sources to A COP26 declaration calls for all
Slide 6: 2021 Full Year Results
2021 FULL YEAR RESULTS Full Year Results 2021
Slide 7: Financial Headlines
FINANCIAL HEADLINES 2021 2020 Change constant currency Book to bill ratio 1.16 0.64 Revenue £658.7m £733.6m -10.2% -5.5% Adjusted Operating Profit £6.1m £3.7m +64.9% +110.3% Adjusted Operating Margin 0.9% 0.5% +40bps +50bps Adjusted Loss before Tax (£1.9m) (£6.2m) +69.4% +70.8% Adjusted Earnings/ (L
Slide 8: 2021 Revenue Bridge
2021 REVENUE BRIDGE £m 800 733.6 (36.4) 750 (58.7) 700 19.9 658.7 0.3 650 $1.38 (FY 20: 1.29) 600 550 500 450 400 350 300 250 2020 Exchange Aerospace Flexonics Interdivisional 2021 Revenue Reconciliation £m Revenue Reconciliation £m Aerospace (1) 2020 revenue 498.0 Flexonics (1) 2020 revenue 200.0 C
Slide 9: 2021 Adjusted Operating Profit Bridge
2021 ADJUSTED OPERATING PROFIT(2) BRIDGE £m 10 8 2.4 (1.6) 6.1 6 2.4 3.7 (0.8) 4 2 $1.38 (FY 20: 1.29) - 2020 Exchange Aerospace Flexonics Central Costs 2021 2021 2020 Change 2021 2020 Change Aerospace (1) Flexonics (1) £m £m £m £m Revenue 439.3 498.0 -11.8% Revenue 219.9 200.0 +9.9% Adj OP(2) 7.9 5
Slide 10: Restructuring
RESTRUCTURING Net income/cost Cash Cost Savings benefits Net restructuring income of £4.4m £39.0m Savings of £50m delivered in 2021 Cumulative cost £46.7m £0.9m £15.2m £12.1m Cumulative net cash outflow Savings of £36m £2.9m £19.0m delivered in 2020 2019 2020 2021 Since 2019 2020 2021 Since Dec 2019
Slide 11: Adjusted and Reported Profit
ADJUSTED AND REPORTED PROFIT 2021 2020 £m £m Adjusted operating profit 6.1 3.7 Net finance costs – borrowings, cash (5.8) (7.8) – lease liabilities (IFRS 16) (2.6) (3.0) – retirement benefits 0.4 0.9 Adjusted loss before tax (1.9) (6.2) Tax 2.6 2.7 Adjusted profit/(loss) for the period 0.7 (3.5) Amo
Slide 12: Robust Cash Flow Generation
ROBUST CASH FLOW GENERATION £m 70 46.9 (3.2) 60 57.7 2.2 (2.6) 47.8 (21.1) 50 40 (5.1) 30 27.3 (8.0) 20 ( 5.3 ) 14.0 10 6.1 - FY 2021 Depreciation and Other items Change in Net Capital Pensions in FY 2021 Net Interest Paid Tax Paid FY 2021 Free Corporate Restructuring FY 2021 Net Adjusted Amortisati
Slide 13: Balance Sheet Strength
BALANCE SHEET STRENGTH Credit facilities and headroom Profile of committed credit facilities £300m £350m Fixed rate £300m £250m Floating rate Headroom £250m £200m £157.1m Headroom £208.0m £200m Reduction in £150m Net debt (excluding leases) borrowing £150m December 2021 - £79.9m £100m £100m Net Debt
Slide 14: Financial Summary
FINANCIAL SUMMARY Robust cash performance with £14.0m free cash inflow Restructuring programme has delivered the expected benefits early and at a lower cost Improved profitability in both Divisions (Aerospace and Flexonics) Strengthened balance sheet; £208m liquidity headroom; Net debt/EBITD
Slide 15: Markets
MARKETS Full Year Results 2021
Slide 16: Attractive End Market Exposure
ATTRACTIVE END MARKET EXPOSURE 34% Flexonics Division Aerospace Division 66% (30%) Power & Energy 16% (70%) (17%) 37% Civil Aerospace (44%) 24% Wide body Land Vehicles 18% (13%) 76% Single aisle, regional and business jets Other Aerospace* 11% (8%) Defence 18% (18%) End markets composition based on
Slide 17: Our Diversified Aerospace & Defence Platforms
OUR DIVERSIFIED AEROSPACE & DEFENCE PLATFORMS A320 17% F-35 7% Other 46% A350 6% C-130 5% 737 MAX 5% A220 5% 777 2% 787 3% A330 2% E2 2% Based on 2021 Aerospace revenue, pro forma for sale of Senior Aerospace Connecticut. Full Year Results 2021 Page 17
Slide 18: Civil Aerospace Shape of Market Recovery
CIVIL AEROSPACE SHAPE OF MARKET RECOVERY (37% of Group) Global air traffic recovery in 2021 showed overall progress as the COVID-19 vaccine delivery gathered pace and travel restrictions eased globally IATA forecasts world passenger flows will return to 2019 levels by end of 2023; – Domestic tra
Slide 19: Civil Aerospace Single Aisle Growth
CIVIL AEROSPACE SINGLE AISLE GROWTH The lower operating cost and better sustainability of new aircraft will continue to be a necessity for the airline industry Airbus and Boeing have confirmed plans to ramp up single aisle production 737 MAX monthly production rates A320 monthly production rates
Slide 20: Defence (18% of Group)
DEFENCE (18% of Group) Senior focuses on the US as the largest defence market in the world Following bipartisan US Senate support, the National Defence budget is likely to be in the region of $770 billion for fiscal year 2022 US defence spend continues to grow The US spends almost as much on def
Slide 21: Defence Platforms
DEFENCE PLATFORMS Senior is well placed with good content on key growth programmes such as F-35 and T-7A Red Hawk Mature programmes such as the C-130 transport aircraft continue in series production Senior benefits from positions on important defence programmes F-35 annual production rates incre
Slide 22: Other Markets (11% of Group)
OTHER MARKETS (11% of Group) Senior’s aerospace businesses supply to other markets e.g. space, semi-conductor equipment and medical – Good growth in space and semi-conductor equipment market; medical stable Global semi-conductor market growth Our diversification into other attractive end-markets 6
Slide 23: Land Vehicles (18% of Group)
LAND VEHICLES (18% of Group) Truck & Off-Highway (14%) Passenger Vehicles (4%) North American Class 8 Heavy Duty Truck EU and UK Commercial Vehicle Production Forecast EU & UK and India Passenger Cars Production Forecast Production Forecast 400 800 30 India 6% 21% 350 9% 1% 0% Europe 13% 18% 700 -7%
Slide 24: Power & Energy (16% of Group)
POWER & ENERGY (16% of Group) Recovery in the upstream oil & gas sector is underway Longer term, share of renewables in power generation expected to increase Senior’s product portfolio supports solutions for solar, wind, nuclear and oil & gas World Liquid Fuels Production and Consumption Balan
Slide 25: Strategy & Outlook
STRATEGY & OUTLOOK Full Year Results 2021
Slide 26: Focus on IP-Rich Technology and Manufacturing
FOCUS ON IP-RICH TECHNOLOGY AND MANUFACTURING 67% Fluid Conveyance and Thermal Management Fluid Conveyance and Thermal Management Product and System Design & Manufacturing IP ✓ This remains the key strategic focus 2021 ✓ Significant current and future opportunities identified within this revenue* te
Slide 27: Aerostructures: Momentum Building
AEROSTRUCTURES: MOMENTUM BUILDING Civil Aerospace – Awarded new multi-year contracts from Boeing • Major floor beam structural assemblies on the Boeing 767 o Deliveries started January 2022 Attractive end-market • Quadrant Assemblies for flight control systems on the Boeing 737 and Boeing 777 platfo
Slide 28: 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 vehicles Defence Aerospace Equipment Fuel cell energy Composite ducting Solar Additive manufacturing Petrochemical Hybrid
Slide 29: Our Technology Roadmaps Reflect Market Trends
OUR TECHNOLOGY ROADMAPS REFLECT MARKET TRENDS 2010s 2020s 2030s 2040s Launch of more efficient aero Application of more advanced More widespread use of SAFs Production ramp-up of Aerospace engines production methods in commercial aircraft* hydrogen-powered aircraft New additive Our existing fluid Ou
Slide 30: Active Portfolio Optimisation
ACTIVE PORTFOLIO OPTIMISATION We continue our prune to grow strategy: divesting, closing or combining non-core or performance-challenged assets We remain confident that Aerostructures core market will recover, driving performance improvement and providing the Group with strategic optionality E
Slide 31: Acquisition Framework
ACQUISITION FRAMEWORK More Likely Less Likely Aerospace & Defence Semi-conductor Equipment Market Power & Energy (clean energy) Volume Automotive Land Vehicles (electrification) Medical Fluid Conveyance Products Structures / Machining Product Thermal Management Products Own design / IP products Comm
Slide 32: 2022 Priorities
2022 PRIORITIES Return to growth • Ramp up production to meet customer needs Diligent management of supply chain constraints and inflationary pressures Active portfolio management Currently expect to resume dividend payments in 2022 Maintain sector leading sustainability performance Full Y
Slide 33: Group Outlook
GROUP OUTLOOK Recovery underway in our core markets including civil aerospace and anticipate that continuing in 2022 and beyond. The Board anticipates good progress in 2022, in line with previous expectations, as we continue the multi-year recovery back to pre-COVID levels of performance. Over
Slide 34: Any Questions?
ANY QUESTIONS? Full Year Results 2021
Slide 35: Appendices
APPENDICES Full Year Results 2021
Slide 36: Investment Case: Positioned for Growth
INVESTMENT CASE: POSITIONED FOR GROWTH Our purpose to provide safe and innovative products for demanding thermal management and fluid conveyance applications Clear strategy to maximise shareholder value Focus on IP-rich Aerospace fluid conveyance & Leading thermal Long-term Flexonics A differentiate
Slide 37: Medium Term Minimum ROCE Target
MEDIUM TERM MINIMUM ROCE TARGET Medium term min ROCE target ≥ 13.5% Portfolio optimisation strategy to Confident in delivering maximise value creation 11.1% good returns on capital and enhanced shareholder value Strategic focus on IP-rich fluid conveyance and thermal management Ongoing End-Market In
Slide 38: 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 is to provide safe and innovative products for demanding thermal management and flu
Slide 39: Strategic Priorities
STRATEGIC PRIORITIES Autonomous and Considered and High Performance Competitive Cost Collaborative Business Focus on Growth Effective Capital Talent Development Operating System Country Strategy Model Deployment Empowerment and Outgrow our end Key elements include: Enhance global footprint The exe
Slide 40: 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 vehicles - More efficient diesel engines and accelerating hydr
Slide 41: Our Locations
OUR LOCATIONS UK Rickmansworth H.O 2021 split Sales Employees Massachusetts Metal Bellows Crumlin N. America 60% 2,431 Lymington Canada BWT UK 15% 1,126 SF Canada Bird Bellows Rest of Europe 13% 808 Thermal Wisconsin Weston EU Rest of World 12% 1,299 GA Germany Washington SF GmbH AMT & Damar Czech R
Slide 42: Our Customers
OUR CUSTOMERS 34% Flexonics Division Other Power & Energy 14% Rolls Royce 7% Aerospace Division 66% (9%) (30%) (14%) (70%) Boeing 7% (9%) Schlumberger 2% all 1% of (3%) Group or less Other Land Vehicle 7% Spirit 6% (5%) (6%) all 1% of Group or less Airbus 5% Daimler 2% (5%) (1%) Caterpillar 4% Rayth
Slide 43: Our Products
OUR PRODUCTS 34% Flexonics Division Other machined parts 4% Aerospace Division 66% (30%) (5%) (70%) Industrial flexible parts 12% (12%) High pressure ducting 18% Fuel distribution (LV) 1% (21%) (1%) Off-highway hydraulics (LV) 2% (2%) Exhaust flexes (LV) 4% (3%) Engine structures Emission control (L
Slide 44: Group Evolution
GROUP EVOLUTION Revenue (£m) Adjusted Operating Profit (£m) Adjusted Operating Margin (%) 100 12 1200 90 Total after central costs 80 Total 10 1000 after 70 central 8 800 60 costs 50 6 600 40 30 4 400 20 200 2 10 0 0 0 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Aerosp
Slide 45: Earnings per Share
EARNINGS PER SHARE 2021 2020 Average number of shares Basic 415.7m 414.9m Fully diluted 422.5m 414.9m Adjusted earnings per share (1) Basic 0.17p (0.84)p Fully diluted 0.17p (0.84)p (1) Based on adjusted profit for the period as defined on page 11. Full Year Results 2021 Page 45
Slide 46: Balance Sheet
BALANCE SHEET £m Dec 2021 Dec 2020 FX Impact from Dec 2020 Goodwill and other intangible assets 154.4 169.8 £m Investment in JV 3.9 3.6 Non current assets (3.7) Property, plant and equipment 294.6 330.5 Working capital (1.1) Other long-term assets 5.8 4.8 Net debt 0.7 Non current assets, before reti
Slide 47: Change in Net Debt
CHANGE IN NET DEBT 2021 2020 £m £m Free cash flow (page 12) 14.0 46.5 Net cash inflow/(outflow) from corporate undertakings 46.9 (4.2) Net restructuring cash outflows (0.9) (15.2) US class action lawsuits (2.3) (3.9) Net cash inflow 57.7 23.2 Exchange variations 0.7 2.4 Lease liabilities – additions
Slide 48: Maturity Profile of Committed Credit Facilities
MATURITY PROFILE OF COMMITTED CREDIT FACILITIES £m 340 320 300 280 Oct- £14.8m 260 Jun - £35.9m Net debt (excluding leases) 240 Dec 2021 - £79.9m 220 200 £208m 180 Feb - £120m headroom 160 140 120 Jan - £27m 100 80 Oct - £44.5m 60 40 Feb - £23.5m Sep - £22.2m 20 0 Dec 2021 Dec 2022 Dec 2023 Dec 2024
Slide 49: Usage of Credit Facilities – December 2021
USAGE OF CREDIT FACILITIES – December 2021 Usage by Currency Interest Facility Usage £ $ € Other % £m £m US Private placements: $30.0m (Sep 2028) 4.18% 22.2 22.2 - 22.2 - - €28.0m (Feb 2027) 1.51% 23.5 23.5 - - 23.5 - $60.0m (Oct 2025) 3.75% 44.5 44.5 - 44.5 - - £27.0m (Jan 2025) 2.35% 27.0 27.0 27.
Slide 50: Covenants at Frozen GAAP
COVENANTS at FROZEN GAAP(1) Covenant reconciliation (as defined in Group debt agreements, EBITDA and Net interest based on last twelve month figures): Dec 2021 £m Adjusted Operating Profit (last 12 months) 6.1 Add: Net debt - restated at average exchange rates (2) £78.9m Depreciation of property, pl
Slide 51: Aerospace Division
AEROSPACE DIVISION Full Year Results 2021
Slide 52: Aerospace Division: A Summary
AEROSPACE DIVISION: A SUMMARY 2021 2020(1) Change 14(3) Operations Revenue £439.3m £498.0m -11.8% NAFTA 6 Europe 2 Adjusted Operating Profit (2) £7.9m £5.5m +43.6% UK 4 Adjusted Operating Margin(2) 1.8% 1.1% +70bps ROW 2 Markets (4) Customers (4) Other 17% Rolls-Royce 11% Boeing 10% Civil Aerospace
Slide 53: Flexonics Division
FLEXONICS DIVISION Full Year Results 2021
Slide 54: Flexonics Division: A Summary
FLEXONICS DIVISION: A SUMMARY 2021 2020(1) Change 11(3) Operations & JV NAFTA 4 Revenue £219.9m £200.0m +9.9% Europe 2 Adjusted Operating Profit(2) £12.9m £10.5m +22.9% UK 2 ROW 3 Adjusted Operating Margin (2) 5.9% 5.3% +60bps China JV 1 Markets Customers Other markets 18% Cummins 16% Truck & Off Hi
Slide 55: Index
INDEX Presentation Appendices 2021 highlights 3 Investment case: Positioned for growth 36 Extending our sustainability leadership in 2021 4 Medium term minimum ROCE target 37 Future proofing our growth for a low carbon world 5 Our business model 38 Financial headlines 7 Strategic priorities 39 2021