Avon Technologies PLC · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — FY2010 Earnings Presentation
33 slides from Avon Technologies's earnings presentation, 2010
Slide 1: Preliminary results 2010: focus on the future
preliminary results 2010 focus on the future
Slide 2: Peter Slabbert, Chief Executive
preliminary results 2010 Peter Slabbert Chief Executive
Slide 3: Highlights
HIGHLIGHTS Revenue £'m • Revenue growth of 17% 70 • Operating profit growth of 68% to £9.3m in 60 2010 50 40 • Reduction in interest payable of 36% from 30 £1.5m to £1.0m 20 10 • No income statement exceptional items in 0 2010 H1 08 H2 08 H1 09 H2 09 H1 10 H2 10 • Cash generated from continuing oper
Slide 4: Global Focus
GLOBAL FOCUS Atlanta, Georgia 4 4
Slide 5: Protection & Defence
PROTECTION & DEFENCE Hampton Park HAMPTON PARKWest WEST CADILLAC Manufacture of S10 and FM12 for MoD Manufacture of M50 for the US DoD and NATO forces C50 production capability established in Two filter lines making M61 – the UK 2m filter pair capacity Manufacture of non DoD 50 series Manufacture of
Slide 6: Protection & Defence
PROTECTION & DEFENCE MARKETING & DEVELOPMENT, BELCAMP, SALES & MARKETING, HPW UK, MALAYSIA, MARYLAND EUROPE New Advanced Facility focusing Target UK, Europe, Development and Marketing Middle East and Far New Products into Defence and Eastern markets Commercial Markets Solely and in collaboration for
Slide 7: Dairy
DAIRY JOHNSON CREEK UK / CZECH REPUBLIC Manufacturing centre for US Manufacturing, design European style dairy and distribution facility liners Dairy products within the European, Middle-East United States, Canada, South and Asia markets America and Australasia MODESTO MILK-RITE BRAND Expanded custo
Slide 8: Andrew Lewis, Group Finance Director
preliminary results 2010 Andrew Lewis Group Finance Director
Slide 9: Group Income Statement
GROUP INCOME STATEMENT 2010 2009 £’m £’m Revenue 17% 117.6 100.9 EBITDAE 41% 13.6 9.7 Depreciation and amortisation (4.3) (4.2) Operating profit before exceptional items 68% 9.3 5.5 Exceptional items - (2.5) Operating profit 9.3 3.0 Interest expense 36% (1.0) (1.5) Other finance (expense)/income (1.
Slide 10: Segmental Analysis Revenue
SEGMENTAL ANALYSIS REVENUE FINANCIALS PROTECTION & DEFENCE 2010 2009 • Order intake in Protection & Defence of £’m £’m £61.7m (2009: £54.5m) P&D £14.1m 90.2 76.1 • DoD mask deliveries stable and Dairy £2.6m 27.4 24.8 spares/filters growing £16.7m 117.6 100.9 • Non C50 DoD sales at a record level REV
Slide 11: Operating Profit by Segment
OPERATING PROFIT BY SEGMENT FINANCIALS PROTECTION & DEFENCE 2010 2009 £’m £’m • Benefits of operational gearing apparent P&D £2.0m 6.5 4.5 • Increasing influence of non-DoD/MoD Dairy £1.6m 4.6 3.0* • Continued investment in sales Corporate costs (1.8) (2.0) and marketing ahead of the revenue curve •
Slide 12: US$ has not had a significant impact in 2010
US$ HAS NOT HAD A SIGNIFICANT IMPACT IN 2010 FINANCIALS PROTECTION & DEFENCE 2010 2009 2009 2010 2009 2009 £’m restated at £’m £’m restated at £’m 2010 rates 2010 rates £’m £’m Revenue 117.6 100.3 100.9 Revenue 90.2 75.6 76.1 EBITDA 13.6 9.6 9.7 EBITDA 10.4 7.8 7.9 Operating profit 9.3 5.5 5.5 Opera
Slide 13: Cashflow
CASHFLOW 2010 2009 £’m £’m Net cashflow from operations Continuing excluding exceptional items 13.1 7.4 Exceptional items (1.2) (1.7) Continuing total 11.9 5.7 Discontinued (2.0) (2.6) Cash generated from operations 9.9 3.1 Tax (1.8) (0.3) Interest (0.8) (1.6) Net capital expenditure (4.4) 1.3 (Acqu
Slide 14: Bank Facilities
BANK FACILITIES £'m £ $Denominated Denominated $£Denominated Denominated • Barclays committed to 30 March 2014 and Comerica to 30 September 2013 at a £5.0m lower cost X £19.3m • Majority of facilities are US$ denominated X • Headroom of £11.7m on a total facility of £24.3m at 30 September 2010 £'m U
Slide 15: Summary Balance Sheet
SUMMARY BALANCE SHEET 2010 2009 £’m £’m Intangible assets 8.8 9.9 Property, plant and equipment 17.0 15.3 Current assets 26.2 27.0 Current liabilities (18.2) (21.3) Non-current liabilities (5.3) (5.9) 28.5 25.0 Net borrowings (12.6) (13.6) 15.9 11.4 Retirement benefit obligations (7.1) (9.1) Net ass
Slide 16: UK Retirement Benefit Scheme
UK RETIREMENT BENEFIT SCHEME IAS 19 30 SEPTEMBER 2010 31 MARCH 2009 TRIENNIAL VALUATION • Deficit reduced from £8.4m to £6.3m • Agreement between Company and Trustees • Scheme 91.4% funded • Strong asset performance in the 12 months • 10 year Deficit Recovery Plan (‘DRP’) • Offset by more prudent di
Slide 17: Peter Slabbert, Chief Executive
preliminary results 2010 Peter Slabbert Chief Executive
Slide 18: Protection & Defence Strategy Overview
PROTECTION & DEFENCE STRATEGY OVERVIEW “As a Protection and Defence company, we will establish our position as the world leader in IPE; grow by maximising the potential of the JSGPM contract in the near term, leverage our relationship with the DoD and by capitalising on the resulting products and te
Slide 19: Protection & Defence Revenues
PROTECTION & DEFENCE REVENUES 2009 £76m 2010 £90m DoD MoD Other DoD MoD Other 24% 24% 4% 5% 72% 71% • US DoD and UK MoD still dominate Protection & Defence revenues • North American homeland security growing • EMEA success in Saudi Arabia, Italy and Canada 19 19
Slide 20: Analysis of DoD Contract
ANALYSIS OF DoD CONTRACT Sole Source Contract Vehicle 3000 Number of mask systems (thousands) 2500 Total Service Requirement 2000 1500 1000 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Filter spares (pairs) 800,000 600,000 400,000 200,000 - 2008 2009 2010 Filter spares (pairs) 20 20
Slide 21: Current Products: Defence Market
MARKET SECTOR DEFENCE MARKET • US DoD (M50) – 2.3M mask systems FUTURE PRODUCTS MARKET POTENTIAL • M61 Filter - 20M pairs over 10-20 years • M53 Aircrew Mask contract • EMEA Military (e.g. Saudi Arabia) • US Navy re-breather $100m (400K units) • UIPE (Future Soldier) development 100 92% CURRENT PROD
Slide 22: Current Products: Homeland Security Market
MARKET SECTOR HOMELAND SECURITY MARKET FUTURE PRODUCTS MARKET POTENTIAL • NA LE/First Responder (C50) >1m installed base • Combined suit & mask offering • Correctional market – >250K installedbase • NIJ Sponsored Tactical officers mask 400 335% CURRENT PRODUCTS REVENUE GROWTH % 300 200 2009 2010 67%
Slide 23: Current Products: Fire Market
MARKET SECTOR FIRE MARKET FUTURE PRODUCTS MARKET POTENTIAL • Market share gains - current less than 5% • Z7 Extreme – Product upgrade • 2012-13 NFPA Standard changes • Upgraded thermal imaging cameras • Modular systems for varied use 19% 20 CURRENT PRODUCTS 15 REVENUE GROWTH % 10 2009 5 2010 0 -5 -8
Slide 24: Current Products: Industrial Market
MARKET SECTOR INDUSTRIAL MARKET FUTURE PRODUCTS MARKET POTENTIAL • Mining respiratory protection • Niche respiratory application • Gas escape hoods for oil refineries, mines & industrials • Expanded distribution network 17% 20 CURRENT PRODUCTS 10 REVENUE GROWTH % 0 -10 2009 -20 2010 -30 -40 -42% -50
Slide 25: Healthcare Market: Future Products Market Potential
Market Sectors HEALTHCARE MARKET • Leverages investment in powered air MARKET POTENTIAL FUTURE PRODUCTS technology • $1B assigned to domestic preparedness against H1N1/SARS • Niche medical applications – • Worldwide market for well design healthcare protective device 25
Slide 26: Dairy Strategy
DAIRY STRATEGY “Continued development of the brand to expand the current product range and markets to achieve long term growth, serviced by a globally competitive and sustainable cost base” Dairy “Technical Solutions” provider Further development of the brand Investment in product development capabi
Slide 27: Dairy Liners
DAIRY LINERS LINERS Manufacturing approx. 60% of worldwide requirement No 1 leading brand of liners sold and NA = 70% distributed across 55 different countries EU = 55% RoW = 30% 27
Slide 28: Focus on the future - opportunities and outlook
preliminary results 2010 focus on the future - opportunities and outlook
Slide 29: Market: Protection & Defence and Dairy
MARKET PROTECTION & DEFENCE • DoD – spend on PPE and JSGPM program maintained • MoD – 2011 last year of contract so spending cuts have no effect • EMEA – Middle East positive; budget restraint in Europe • DHS and Fire USA- tough but 9/11 replacement spend impact soon? • Industrial NA – some signs of
Slide 30: Opportunities
OPPORTUNITIES PROTECTION & DEFENCE • Maximise performance through the benefits of operational gearing • DoD mask systems volumes maintained • Commercial order wins to improve margins • Increased consumable filter volumes from increased capacity ahead of competition • Annualised effect of ISI’s H2 re
Slide 31: Outlook Statement
OUTLOOK STATEMENT We expect the progress made in 2010 to continue and for operating margins to improve further. Lower interest costs should also have a positive effect on earnings. The Dairy business will benefit from a full year’s impact of the European outsourcing completed during 2010 and relativ
Slide 32: Wrap Up
WRAP UP • World leading position and brand in dairy and respiratory protection • Deliver further operational improvements • Maximise opportunities with existing best in class product ranges • Introduce new technologies and products to drive further growth
Slide 33: Preliminary results 2010: focus on the future
preliminary results 2010 focus on the future