Avingtrans Plc · LSE:AVG
Avingtrans — H1 FY2020 Earnings Presentation
29 slides from Avingtrans's earnings presentation, February 2020
Slide 1: Results for 6 months ended 30 November 2019
Pinpoint-Invest-Exit Results for 6 months ended 30 November 2019 Steve McQuillan, CEO Stephen King, CFO 10 September, 2018
Slide 2: Financial highlights – H1 FY2020
Financial highlights – H1 FY2020 Group Revenue Gross Profit Margin Adjusted EBITDA £54.8m 25.8% £4.6m +15.0% 2019 H1: 25.7% +26.0% Adjusted Diluted EPS Interim Dividend Net Debt* 5.1p 1.5p £8.3m 2019 H1 4.5p 2019 H1: 1.4p 31 May 2019: £2.0m Net debt* - old accounting basis (pre-IFRS 16) 2
Slide 3: Our divisions
Our divisions Energy: Engineered Energy: Process Solutions Medical and Industrial Pumps and Motors (EPM) and Rotating Equipment Imaging (MII) (PSRE) HT Inc, USA Metalcraft, UK (Energy) Metalcraft, UK (Medical) HT Luton (HT) Fluid Handling Metalcraft, China HT China Peter Brotherhood Scientific Magne
Slide 4: Compelling Pinpoint-Invest-Exit strategy
✓ Compelling Pinpoint-Invest-Exit strategy ✓ Niche market leadership positions ✓ Consistent shareholder returns 4
Slide 5: Our strategy in action - Pinpoint
Our strategy in action - Pinpoint Strengthening the portfolio Blast doors - Avingtrans successfully acquires Booth Nuclear Life Extension - Avingtrans successfully assets for £1.8m on 11 June 2019. acquires Energy Steel for $0.6m on 24 June 2019. 5
Slide 6: Our strategy in action - Invest
Our strategy in action - Invest Establishing world class capability Energy Medical • Booth site rationalisation will complete in 2020 • Work progressing on new MRI and NMR systems • Construction of new Bolton site extension underway and components • New wing will eliminate surplus leased building •
Slide 7: Our strategy in action - Exit
Our strategy in action - Exit Building and returning shareholder value Avingtrans is engaged with the Invest phase of • Avingtrans is committed to profitable growth and to its two energy divisions and its medical division. business exits at advantageous valuations. This follows the Exit of Sigma Com
Slide 8: Booth integration ahead of expectations
Booth integration ahead of expectations ✓ Banking facilities re-established ✓ Restructuring exercise completed ✓ Unneeded leased buildings eliminated ✓ New site extension underway ✓ Working capital requirement funded Booth produces doors and walls that are: ✓ Strategic plan developed Blast/explosi
Slide 9: Energy Steel integration on track
Energy Steel integration on track Good progress so far ✓ Strategic ES/HT collaborative plan executed ✓ Working capital requirement funded ✓ Strong order book and prospect pipeline ✓ Supply chain synergies defined Energy Steel is a custom fabricator exclusively ✓ HT/ES cross-selling and training unde
Slide 10: Divisional priorities - EPM
Divisional priorities - EPM Hayward Tyler and Energy Steel • Markets • Nuclear – on-going life extension focus • Contract wins in USA and China • Next Generation nuclear and renewables • ITER and solar power contract wins • Hydrocarbons – limited recovery continues • First OE products now well estab
Slide 11: Divisional priorities - PSRE
Divisional priorities - PSRE PB, Metalcraft, Fluid Handling, Ormandy, Crown, Booth • Markets • Nuclear decommissioning (Metalcraft, Fluid Handling) • Sellafield 3M3 boxes steady progress • £1m Fluid Handling contract win for remote valves • Hydrocarbons (PB) – on-going signs of recovery. Focus on af
Slide 12: Divisional priorities - MII
Divisional priorities - MII Sci Mag, Tecmag, Metalcraft Medical, Composite Products • Markets • NMR – business case for further investment developed • MRI – prototype producing images. Business case for further investment developed • Imaging – steady progress with Rapiscan (baggage scanning) • Scien
Slide 13: Financial Highlights
Ds. Avingtrans Financial Highlights 13
Slide 14: IFRS 16 Leases
IFRS 16 Leases • Interim financial statements have been prepared on an IFRS 16 basis using the modified retrospective method: Old New Performance IFRS 16 • Leases all valued on the date of implementation (1 accounting accounting (£’m) impact June 2019) basis basis • Prior year reporting periods have
Slide 15: Income Statement
Income Statement H1 FY20 H1 FY19 As Energy IFRS 16 Group As reported Steel Booth impact LFL reported £’m £’m £’m £’m £’m £’m Revenue 54.8 2.8 4.2 - 47.8 47.7 Gross Profit 14.1 0.6 1.1 - 12.5 12.3 Gross Profit % 25.8% 20.1% 26.2% - 26.1% 25.7% Adjusted EBITDA 4.6 (0.6) (0.2) 0.8 4.6 3.6 Adjusted EBIT
Slide 16: Summary Divisional Results
Summary Divisional Results Energy: Energy: 1H Energy: Energy: 1H EPM PSRE Medical Central FY20 EPM PSRE Medical Central FY19 £’m £’m £’m £’m £’m £’m £’m £’m £’m £’m Revenue: OE 4.6 19.4 5.6 - 29.6 7.6 12.0 6.1 - 25.7 AM 17.7 7.5 - - 25.2 15.2 6.7 0.1 - 22.0 Total Revenue 22.3 26.9 5.6 - 54.8 22.8 18
Slide 17: Balance Sheet
Balance Sheet H1 FY20 FY19 H1 FY19 £’m £’m £’m Tangible fixed assets* 35.6 26.6 27.0 Goodwill 23.6 23.4 23.4 Other intangible 15.5 14.5 15.1 Deferred tax asset & pension surplus 2.5 2.7 3.0 Working capital 18.8 14.5 17.5 Provisions (6.0) (5.3) (5.9) Tax asset 0.2 0.1 0.3 Net debt* (17.7) (2.0) (7.1)
Slide 18: Movement in Net Debt (£'m)
Movement in Net Debt (£’m) 0.0 (2.0) Movement due to businesses which were Movement due to new acquisitions (2.0) part of the Group at 31 May 2019 (4.0) (8.3) (6.0) (9.7) (8.0) (2.9) 5.4 (10.0) (2.2) (12.0) (0.8) (0.8) (9.4) (14.0) (2.6) (16.0) (0.3) (1.7) (18.0) Net debt at 1 Adj. EBITDA Working Ca
Slide 19: Ninth year of dividend growth
Ninth year of dividend growth 4 3.5 3 2.5 2.4 2.3 2.2 2.1 2 2.0 1.8 1.5 1.5 1 1.3 1.4 1.5 0.5 1.1 1.2 1.0 0.9 1.0 0.7 0.4 0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Interim Final 19
Slide 20: Summary
Ds. Avingtrans Summary 20
Slide 21: Summary
Summary ✓ H1 FY20 - on target to deliver full year expectations ✓ Revitalisation of Hayward Tyler and Peter Brotherhood remains on plan ✓ Order book: strong pipeline in Energy; Medical working on new products in MRI/NMR ✓ Significant contract wins in the UK, USA and China ✓ Good potential for Medica
Slide 22: Appendix
Ds. Avingtrans Appendix 22
Slide 23: Pinpoint-Invest-Exit (PIE)
Pinpoint-Invest-Exit (PIE) • Strong balance sheet • Seasoned board and management • Creating significant shareholder value 23
Slide 24: Our locations and employees
Our locations and employees UK 659 China USA 148 India 64 11 24
Slide 25: Blue chip partnerships
Blue chip partnerships /. Avingtrans @® Sellafield Ltd VATTENFALL @ BIEYEXS <‘seprenercy Ty «=6XEASTMAN EUREKA —falltech] a ed Shi nhoo Gs fH PUMPS & MOTOR LAING O'ROURKE = Dominion le Rapiscan — Energy” Qone An O51 Stems Company wills 25
Slide 26: Our values
h Avingtrans v Integrity We mean what we say and will do, with re: t for all * Quality Right first time, on time. Our produc and Agility adapt rapidly and e to chang: t effectively in the enviror in ent
Slide 27: Market capitalisation progression
Market capitalisation progression Purchased Moss & Placing £3.5m 2009 8 Purchased Sigma* 2010 9 2011 15 2012 17 Sold JenaTec; Purchased Aerotech & PFW 2013 32 Purchased Maloney 2014 45 Oil Price Shock Purchased RMDG 2015 31 Purchased Rolls Royce pipes; Sold Sigma 2016 50 Returned £19m to shareholder
Slide 28: M&A – successful exits
M&A – successful exits Brand Acquisitions Bought for £m1 Sold for £m1 JRT Ltd JenaTec Inc 4.0 14.5 JGWT GMBH Boneham & Turner (FY02 - FY09) (FY13) Moss Group Sigma Components B&D Patterns C&H Composites Eng Group 22.0 65.0 Aerotech Tubes PFW Farnborough (FY07 - FY16) (FY16) RMDG Rolls Royce Nuneaton
Slide 29: Largest investors
Largest investors Number of % of total shares shares (000s) Nigel Wray 3,239 10.2% Funds managed by RBC Trustees Limited 2,208 7.0% Funds managed by BlackRock 2,124 6.7% Funds managed by Unicorn Asset Management Limited 1,946 6.1% Harwood Capital 1,550 4.9% R S McDowell’s Pension Fund 1,406 4.4% P M