Senior plc · LSE:SNR
Senior — H1 2006 Earnings Presentation
37 slides from Senior's earnings presentation, Oct 19, 2006
Slide 1: Interim Results 2006
INTERIM RESULTS - 2006 Interim Results 2006
Slide 2: Index
INDEX Appendices Highlights 1 Exchange rates 16 Headline numbers 2 Division results - as reported 17 Division results - constant currency 3 - half yearly 18 Geographic results - constant currency 4 - old format 19 Adjusted earnings per share 5 Geographic results - as reported 20 Reported profit and
Slide 3: Highlights
HIGHLIGHTS 2006 First Half Highlights: Sales up 17.2% Adjusted PBT up 23.0%, adjusted EPS up 17.1% Margin increased to 6.1% (H1 2005 5.8%) Strong demand across aerospace operations Acquired Sterling Machine (end Jan 2006) Heavy investment in new diesel products Strong energy markets Solid advance in
Slide 4: Headline Numbers
HEADLINE NUMBERS June June Change 2006 2005 Continuing operations - Revenue £195.6m £166.9m +17.2% - Operating profit £11.6m £9.5m +22.1% - Profit before tax £8.7m £7.2m - Basic eps 2.24p 1.92p Total operations - Adjusted profit before tax (1) £9.1m £7.4m +23.0% Adjusted earnings per share (1) 2.33p
Slide 5: Division Results - constant exchange rates
DIVISION RESULTS - constant exchange rates (2) £m Turnover Trading Profit (1) Margin on Sales 2006 2005 Change 2006 2005 Change 2006 2005 Aerospace 95.3 77.1 +23.6% 8.1 6.5 +24.6% 8.5% 8.4% Flexonics 100.6 95.7 +5.1% 6.1 5.7 +7.0% 6.1% 6.0% Inter-Segment sales (0.3) (0.3) - - - - - - Central costs -
Slide 6: Geographic Results - constant exchange rates
GEOGRAPHIC RESULTS - constant exchange rates (2) £m Turnover by Origin Trading Profit (1) Margin on Sales 2006 2005 Change 2006 2005 Change 2006 2005 North America 113.8 93.7 +21.5% 8.4 7.1 +18.3% 7.4% 7.6% Rest of Europe 41.6 38.9 +6.9% 1.8 1.2 +50.0% 4.3% 3.1% United Kingdom 28.6 28.5 +0.4% 1.3 1.
Slide 7: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE June June Change 2006 2005 £m £m Operating profit 11.6 9.5 +22.1% Loss on disposal of fixed assets - 0.2 Amortisation of intangible assets on acquisitions 0.4 - Trading profit (1) 12.0 9.7 +23.7% Net interest payable - borrowings and cash (2.5) (1.8) - retirement benefits
Slide 8: Reported Profit and Dividends
REPORTED PROFIT AND DIVIDENDS June June 2006 2005 £m £m Adjusted profit for the period 7.5 6.1 Loss on disposal of fixed assets - (0.2) Amortisation of intangible assets (0.4) - Tax benefit of intangible amortisation 0.1 - Reported profit for period 7.2 5.9 Proposed interim dividend - cost £2.1m £2.
Slide 9: Balance Sheet
BALANCE SHEET June June Dec 2006 2005 2005 £m £m £m Property, plant and equipment 80.1 72.7 76.1 Goodwill 85.6 76.1 77.1 Intangible assets 3.1 1.1 1.1 Other long-term assets 3.5 4.0 3.9 Non current assets 172.3 153.9 158.2 Inventories 53.9 44.9 47.7 Receivables and construction contracts 70.0 68.0 6
Slide 10: Free Cash Flow
FREE CASH FLOW June June Dec 2006 2005 2005 £m £m £m Operating profit 11.6 9.5 19.6 Depreciation and amortisation 6.7 6.0 12.0 Loss on disposal of fixed assets - 0.2 0.2 Charge for share options 0.2 0.2 0.2 Pension payments above service cost (1.4) (1.2) (2.8) Working capital (page 22) (4.5) (3.5) (
Slide 11: Change in Net Debt
CHANGE IN NET DEBT June June Dec 2006 2005 2005 £m £m £m Free cash flow (2.4) 1.4 2.2 Dividends (4.4) (4.1) (6.1) Acquisitions (21.4) (0.1) (0.1) Share issues 8.9 0.1 0.5 Net cash (outflow) / inflow (19.3) (2.7) (3.5) Exchange variations 6.0 (5.1) (7.8) Net debt - opening (62.4) (50.6) (50.6) - non
Slide 12: Aerospace – Sterling Machine Acquisition
AEROSPACE – STERLING MACHINE ACQUISITION Acquired end January 2006 Sikorsky, representing 95% of sales, went on strike Not ideal start but remained healthily profitable 5 month sales £5.2m; trading profit £0.6m; margin 11% Strong and growing demand from Sikorsky Factory expansion approved New manufa
Slide 13: Aerospace - Markets
AEROSPACE - MARKETS Commercial Aircraft Market Deliveries Net Orders Order Book H1 H1 2006 2005 2004 2003 2006 2005 2004 2003 Jun 06 Dec 05 Dec 04 Dec 03 Boeing 195 290 285 281 480 1,002 273 238 2,094 1,809 1,097 1,109 Airbus 219 378 320 305 97 1,055 366 254 2,055 2,177 1,500 1,454 Total 414 668 605
Slide 14: Aerospace - Summary
AEROSPACE - SUMMARY End Market 2006 2005 At constant exchange rates: Large Commercial 34% 31% Sales up 23.6% Military / Defence 27% 28% Trading profit up 24.6% Regional Jets 13% 15% Margin up to 8.5% (2005: 8.4%) Business Jets 9% 7% Space 1% 3% Sterling Machine acquired Non Aerospace 16% 16% 100% 10
Slide 15: Flexonics – Diesel Development
FLEXONICS – DIESEL DEVELOPMENT USA Production Projects – start late 2006 Further Opportunities Product Vehicle Capital 2008 Sales $m $m New customers EGR Cooler Heavy truck 8.6 17.6 Next generation (2010) Common Rail Heavy truck 3.2 3.7 Truck exhaust flexes Common Rail Light truck 2.3 3.0 Diesel SUV
Slide 16: Flexonics - Summary
FLEXONICS - SUMMARY Product Analysis % At constant exchange rates: 2006 2005 Sales up 5.1% Auto - Exhaust Flex 32% 30% Trading profit up 7.0% Auto - Fuel Distribution 13% 14% Margin up to 6.1% (2005: 6.0%) Auto - Other Pipework 13% 14% Heating and Ventilation 9% 13% Steady automotive demand Petroche
Slide 17: Group Outlook
GROUP OUTLOOK Growth from strong aerospace commercial market Growth from Sterling Machine acquisition Growth from new heavy duty diesel products Growth from further tightening of emission laws Growth from global energy markets A solid backdrop for improved future earnings Interim Results 2006 Page 1
Slide 18: Appendices
APPENDICES Interim Results 2006
Slide 19: Exchange Rates
EXCHANGE RATES Profit and Loss Account Balance Sheet Average Rates Period End Rates June June Dec June June Dec 2006 2005 Change 2005 2006 2005 Change 2005 £ : US Dollar 1.78 1.87 +5.1% 1.82 1.85 1.77 -4.3% 1.72 £ : Euro 1.45 1.45 - 1.46 1.45 1.48 +2.1% 1.46 £ : Rand 11.37 11.50 +1.1% 11.46 13.19 12
Slide 20: Division Results – As Reported
DIVISION RESULTS – AS REPORTED £m Turnover Trading Profit (1) Margin on Sales 2006 2005 Currency 2006 2005 Currency 2006 2005 Impact(2) Impact(2) Aerospace 95.3 74.5 2.6 8.1 6.3 0.2 8.5% 8.5% Flexonics 100.6 92.7 3.0 6.1 5.5 0.2 6.1% 5.9% Inter-Segment sales (0.3) (0.3) - - - - - - Central costs - -
Slide 21: Division Results - Half Yearly
DIVISION RESULTS - HALF YEARLY Turnover Trading Profit H1 2006 H2 2005 H1 2005 H2 2004 H1 2006 H2 2005 H1 2005 H2 2004 Aerospace 95.3 81.7 74.5 69.6 8.1 6.7 6.3 5.9 Flexonics 100.6 90.3 92.7 80.4 6.1 5.6 5.5 3.7 Intersegment sales (0.3) (0.3) (0.3) (0.3) - - - - Central costs - - - (2.2) (2.2) (2.1)
Slide 22: Division Results – Old Format
DIVISION RESULTS – OLD FORMAT £m Turnover Trading Profit (1) Margin on Sales 2006 2005 Currency 2006 2005 Currency 2006 2005 Impact(2) Impact(2) Aerospace 95.3 74.5 2.6 8.1 6.3 0.2 8.5% 8.5% Automotive 75.0 68.1 2.0 4.2 3.7 0.1 5.6% 5.4% Industrial 25.6 24.9 1.0 1.9 1.8 0.1 7.4% 7.2% Inter-Segment s
Slide 23: Geographic Results – As Reported
GEOGRAPHIC RESULTS – AS REPORTED £m Turnover by Origin Trading Profit (1) Margin on Sales 2006 2005 Currency 2006 2005 Currency 2006 2005 Impact (2) Impact(2) North America 113.8 89.0 4.7 8.4 6.7 0.4 7.4% 7.5% Rest of Europe 41.6 38.6 0.3 1.8 1.2 - 4.3% 3.1% United Kingdom 28.6 28.5 - 1.3 1.5 - 4.5%
Slide 24: Sterling Machine Financials
STERLING MACHINE FINANCIALS Acquisition (acquired 27 January 2006) Provisional Pre-Acq Fair Value £m £m Intangible assets - 2.7 Intangible assets arising on acquisition Property, plant and equipment 2.1 2.1 Inventory 3.8 3.4 Accounting policy adjustment Receivables 2.4 2.1 Accounting policy adjustme
Slide 25: Working Capital
WORKING CAPITAL Balance Sheet Cash Flow Receivables and Working Stocks Payables construction Capital contracts £m £m £m £m 31 December 2005 (page 7) 47.7 68.1 (66.9) - Movements in period: Acquisition 3.4 2.1 (0.5) - Aerospace 4.9 2.5 (2.0) (4.7) excl (0.7) non-cash Flexonics 0.8 1.5 (4.4) - excl 2.
Slide 26: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE H1 2006 H1 2005 Capex Depn (1) Capex Depn (1) £m £m £m £m Aerospace 3.2 2.8 1.7 2.6 Flexonics 8.0 3.4 7.4 3.3 Holding Companies 0.2 0.1 - 0.1 Total 11.4 6.3 9.1 6.0 (1) Excludes amortisation of intangible assets arising on acquisitions of £0.4m (2005: £nil) Interim Results
Slide 27: Usage of Banking Facilities - June 2006
USAGE OF BANKING FACILITIES - June 2006 Usage by Currency Facility Usage £ $ € Other £m £m Private placements US $ 75.0m (Oct 2008) 40.5 40.5 - 40.5 - - US $ 25.0m (Jun 2007) 13.5 13.5 - 13.5 - - 54.0 54.0 - 54.0 - - Revolving credit facility (Oct 2007) 46.0 25.3 6.5 16.2 2.6 - Bank of America (May
Slide 28: Pensions – June 2006
PENSIONS – JUNE 2006 6 months 2006 2005 UK USA Total Total Funded Funded Unfunded £m £m £m £m £m IAS19 Scheme deficit at 31 Dec 2005 (31.3) (4.9) (3.7) (39.9) (41.4) Foreign exchange impact - 0.3 - 0.3 (0.4) Service cost (0.7) (0.2) (0.1) (1.0) (1.8) Interest cost of liabilities (4.1) (0.6) (0.1) (4
Slide 29: Pensions – December 2005
PENSIONS – DECEMBER 2005 Actuarial Valuations UK Plan USA Plans Last valuation 6 April 2004 31 December 2005 Scheme assets/(liabilities) at valuation £112.7m / (£131.2m) £18.3m / (£23.2m) Funding level 86% 79% IAS 19 Valuations Dec 2005 Dec 2004 Dec 2005 Dec 2004 £m Return £m Return £m Return £m Ret
Slide 30: Aerospace - Operations
AEROSPACE - OPERATIONS Operation Location Senior Aerospace SSP Los Angeles, USA Senior Aerospace Ketema San Diego, USA and Saltillo, Mexico Senior Aerospace Metal Bellows Boston, USA Senior Aerospace Jet Products San Diego, USA Senior Aerospace BWT Macclesfield, UK Senior Aerospace Bird Bellows Cong
Slide 31: Aerospace - Products
AEROSPACE - PRODUCTS 31% of Senior Aerospace sales are in 27% of Senior Aerospace sales are in engine structures and mounting systems metallic ducting systems Trent 1000 intermediate Environmental conditioning case system feed duct Engine mounting ring Bleed duct gimbal Jet engine impingement Auxili
Slide 32: Aerospace - Products
AEROSPACE - PRODUCTS 14% of Senior Aerospace sales are in 6% of Senior Aerospace sales are in fluid composite ducting systems control systems Air distribution ducting Hydraulic distribution system Fuselage ducting and Active clearance control Insulation system Auxilary power unit air Hydraulic syste
Slide 33: Aerospace - Products
AEROSPACE - PRODUCTS 6% of Senior Aerospace sales are in 16% of Senior Aerospace sales are to non- helicopter machined parts aerospace markets Medical Titanium spindle Control bellows for medical pitch control shaft drug dispenser implant Power Generation Titanium carrier – Exhaust collector for lan
Slide 34: Flexonics - Operations
FLEXONICS - OPERATIONS Operation Location Senior Automotive Bartlett Chicago, USA Senior Automotive Blois France Senior Flexonics Pathway San Antonio, USA Senior Automotive Kassel Germany Senior Automotive Cape Town South Africa Senior Hargreaves Bury, UK Senior Automotive Crumlin South Wales Senior
Slide 35: Flexonics - Products
FLEXONICS - PRODUCTS 32% of Senior Flexonics sales are of 13% of Senior Flexonics sales are of fuel flexible mechanisms for exhaust systems system distribution pipework and subsystems Flexible exhaust connector High-pressure diesel tube set Picture 16 High-pressure diesel Flexible exhaust connector
Slide 36: Flexonics - Products
FLEXONICS - PRODUCTS 13% of Senior Flexonics sales are of cooling 9% of Senior Flexonics sales are HVAC system, emission control and other ducting and expansion joints for the automotive pipework construction industry Exhaust gas recirculation cooler Nuclear (Sizewell B) Wembley Staduim Turbocharger
Slide 37: Flexonics - Products
FLEXONICS - PRODUCTS 9% of Senior Flexonics sales are expansion joints, control bellows and hoses for the oil and gas and chemical processing industries and 24% for other industrial markets Metal expansion joints Fabric expansion joints On-site services Connectors and flexible metal hose Cryogenic m