Avingtrans Plc · LSE:AVG
Avingtrans — H1 FY2018 Earnings Presentation
39 slides from Avingtrans's earnings presentation, February 2018
Slide 1: Results: 6 months ended November 2017
RESULTS: 6 months ended November 2017 Steve McQuillan – Chief Executive Officer Stephen King – Chief Financial Officer 1
Slide 2: Financial Highlights
Financial Highlights HTG integration proceeding to plan Revenue increased to £26.9m (2017 H1: £9.6m) Excluding HTG, organic revenue increased by 14.9% Adjusted Group EBITDA advanced to £1.1m (2017 H1: £0.0m) Adjusted loss before tax £0.1m (2017 H1: loss £0.2m) Adjusted diluted EPS 0.4p (20
Slide 3: Operational Highlights
Operational Highlights Transformative acquisition of Hayward Tyler Group plc (HTG) – good progress to date Scientific Magnetics and Whiteley Read acquisitions also being fully integrated Two new divisions being created within Energy sector; Medical separation underway Improving orders and po
Slide 4: HTG Integration
HTG Integration Progress so far Opening balance sheet clean-up complete Banking facilities operating normally, within covenants in the UK and USA Duplicate board and advisory costs all removed Creditors position now stable – routine trading terms Debt levels as expected at this stage – cas
Slide 5: Proposed New Divisional Structure
Proposed New Divisional Structure ENERGY MEDICAL ENGINEERED PUMPS PROCESS SOLUTIONS MEDICAL & INDUSTRIAL & MOTORS & ROTATING EQUIPMENT IMAGING President/Divisional MD President/Divisional MD Acting Divisional MD Mike Turmelle Austen Adams Austen Adams 5
Slide 6: Energy
Energy Designs and manufactures safety critical equipment for the energy sectors, including oil & gas extraction, fossil fuels and nuclear process plant, pressure and vacuum vessels and components. Engineered Pumps and Motors Aftermarket organisation strengthened, New Chinese factory in Kunshan
Slide 7: Medical
Medical Designs and manufactures safety critical equipment for the medical, biomedical, science and industrial sectors. Medical and Industrial Imaging Revenue and adjusted EBIT show slight improvement Core MRI business at Metalcraft is steady China – new contract ramp up has been slow to build
Slide 8: Financials
(Avingtrans plc ) Financials
Slide 9: Profit and Loss Account
Profit and Loss Account H1 FY18 H1 FY17 £m £m Revenue 26.9 9.6 Gross Profit 6.1 1.4 Gross Profit margin 22.6% 14.6% Adjusted EBITDA 1.1 0.0 Adjusted EBITDA margin 4.1% - Adjusted loss before tax (0.1) (0.2) Loss after tax (4.3) (0.5) EPS – Continuing Adj. Fully Dil.1 0.4p (0.4)p Basic (19.6)p (1.9)p
Slide 10: Adjusted Divisional EBITDA
Adjusted Divisional EBITDA Energy(H) Energy(A) Medical Central H1 FY18 Energy(A) Medical Central H1 FY17 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Operating profit/(loss) (2,928) 333 75 (2,070) (4,590) (103) 54 (677) (726) Share-based payments - 10 6 16 32 1 1 5 7 Restructuring costs 1,2
Slide 11: Dividend Growth
Dividend Growth 4.0 3.5 3.0 2.5 2.2 Pence 2.1 2.0 2.0 1.8 1.5 1.5 1.0 1.2 1.3 0.5 1.0 1.1 0.9 0.7 0.0 FY13 FY14 FY15 FY16 FY17 FY18 Interim Final 18 11
Slide 12: HTG - Net Assets Bridge (March to August 2017)
HTG - Net Assets Bridge (31 March 17 to 31 August 17) 25 20 (5.7) (1.1) 15 (1.2) £m (3.7) 22.4 10 5 (10.3) 0.4 0 March 2017 Asset Pension & FX Tax losses Acquisition Trading August 2017 impairment derivatives derecognised costs losses 12 12
Slide 13: Balance Sheet
Balance Sheet 30 Nov 2017 31 May 2017 30 Nov 2016 £m £m £m Fixed Assets 27.8 4.9 4.6 Goodwill 20.6 5.2 4.6 Other Intangible 20.2 1.4 1.0 Deferred Tax Asset/Pension Obligation 1.6 - - Working Capital 19.5 7.4 7.0 Provisions (6.4) - - Tax 1.4 0.1 - Net (Debt)/Cash (8.2) 26.4 27.8 Creditors >1 year (3.
Slide 14: Cash Flow
Cash Flow H1 FY18 H1 FY17 £m £m Total EBITDA (2.0) (0.3) Net Working cap (8.7) (3.1) Interest, Tax and Other 0.1 0.1 Dividend (0.2) (0.3) Issue of new shares - 0.3 Acquisition - - Purchase of shares – Tender buyback - (19.4) Capex (1.1) (0.2) Net Cash Flow (11.9) (22.9) Opening Net Cash/ (Debt) 26.4
Slide 15: AVG – Net Debt Bridge H1 FY17
AVG – Net Debt Bridge H1 FY17 30 (1.1) (1.4) 26.4 (1.5) (3.0) 25 (3.7) 20 (2.0) (1.1) (0.2) (22.4) 15 £m 10 5 0 -5 (0.4) (8.2) -10 June 2017 EBITDA Restructing AVG acqn HTG HTG Net WCap Cap Ex Dividend HTG net FX & other November costs costs creditor disposal change Acqn debt 2017 o'hang costs 15 15
Slide 16: Summary
(Avingtrans plc ) Summary
Slide 17: Summary
Summary Successful initial integration of Hayward Tyler and Peter Brotherhood Strong order book growth in Energy; Medical primed for growth in coming year Nuclear life extension wins in the UK, USA, Sweden and S. Korea Sellafield 3M3 project on plan: technically, operationally and commercial
Slide 18: Compelling Pinpoint-Invest-Exit Strategy
Compelling Pinpoint-Invest-Exit Strategy Niche market leadership positions Consistent shareholder returns 18
Slide 19: Energy Overview
(Avingtrans ple ) engineering tec hnology group Energy Overview
Slide 20: Energy - Markets
Energy - Markets Oil & Gas / Downstream Oil & Gas / Upstream Chemical & Processing Defence Power Gen / Power Gen / Power Gen / De-centralised Energy Fossil Nuclear + Decommissioning Clean + Renewables Production + Storage Specialist Original Equipment and Comprehensive Through Life Support across al
Slide 21: Energy - Offering
Energy - Offering Performance-critical solutions for energy systems We design, engineer, manufacture and provide comprehensive through life support for performance-critical power, pump, process and storage solutions for the global energy sector. Our product portfolio of specialist motors, pumps, tur
Slide 22: Energy - Brands
Energy - Brands Energy systems solutions Specialist Original Equipment and Comprehensive Through Life Support Market leader in the design, manufacture Specialist turbines and compressors and through life support of performance- for power generation, marine, sugar, petrochemical and critical motors a
Slide 23: Energy - Product Suite
Energy - Product Suite Integrated energy systems - design, engineer, manufacture and service. POWER Steam Turbines Subsea motors Submersible motors CHP & Gas-to-Power Permanent magnet generators PUMP Canned Motor Pump / ASME S3 Reciprocating Boiler circulating pumps Gear Pumps Canned Motor Retrofits
Slide 24: Energy - Through Life Support / Aftermarket
Energy - Through Life Support / Aftermarket ~90% of total life cycle cost is after equipment is purchased and installed Continued safe and efficient operation of facilities across the energy markets is fundamental in todays socioeconomic environment Older facilities are being operated beyond their o
Slide 25: Energy – 5D Through Life Support Model
Energy – 5D Through Life Support Model The Five Dimensional (5D) through-life support model – developed around customer needs Designed to be simple, but comprehensive and covers all aspects of support for customers that might be needed during the lifecycle of owning, operating and maintaining their
Slide 26: Energy – Strategic Alliances
Energy – Strategic Alliances Leading Japanese manufacturer Global market leader in Number 1 nuclear pump of pumps for energy, oil & gas, subsea systems manufacturer in China and general industry sectors HT is manufacturing permanent HT and Apollo will co-develop HT will supply BCPs and o
Slide 27: Medical Overview
(Avingtrans pic) Medical Overview
Slide 28: Medical - Markets
Medical - Markets Magnetic Resonance Imaging MRI Proton Therapy Nuclear Magnetic Resonance NMR Security screening Specialist Original Equipment and Solid State Physics Through Life Support for NMR systems 28
Slide 29: Medical - Brands
Medical - Brands Medical systems solutions Specialist Original Equipment and Through Life Support for NMR Systems Superconducting magnets • Expertise in MRI and NMR magnet technology • Partnership with MR Resources for NMR services Cryogenic vacuum vessels Niche market leadership in: • magnetic reso
Slide 30: Medical - Through Life Support / Aftermarket
Medical - Through Life Support / Aftermarket New partnership launched in January 2018, to provide independent NMR service in Europe Multiple service contract enquiries already received for a variety of systems Currently installing a Varian NMR system in our factory for demo/resale A second V
Slide 31: Appendix
(Avingtrans pic) engine technology grour Appendix
Slide 32: Proposed New Divisional Structure
Proposed New Divisional Structure Engineered Pumps and Process Solutions and Medical and Industrial Motors Rotating Equipment Imaging HT Inc Metalcraft UK (Energy) Metalcraft UK (Medical) HT Luton Peter Brotherhood Metalcraft China HT China Maloney Scientific Magnetics HT India (HT) Fluid Handling C
Slide 33: Our Locations
Our Locations 560 Employees 104 Employees 54 Employees 11 Employees Low cost sourcing strategy appealing to OEM customers 33
Slide 34: Blue Chip Key Accounts
(Avingtrans plc) Blue Chip Key Accounts asinine sections ove ® Sellafield Ltd | SIEMENS | ‘F TechnioFmc Jalltech] Medical Systems € © De@DFENERGY Rapiscan systems OY BRUKER Cir) ch BL ERR Zhongke-Niujin
Slide 35: Market Capitalisation History
Market Capitalisation History Purchased Moss & Placing £3.5m 2009 8 Purchased Sigma1 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 £19.4m to shareholders;
Slide 36: 5 Year History: Revenue and EBITDA
5 Year History: Revenue and EBITDA (excl. Sigma/Aerospace) 25 0.72 0.8 23.7 22.6 22.7 0.6 20 21.2 0.4 17.5 0.35 0.3 0.2 15 0 10 -0.2 -0.4 5 -0.45 -0.55 -0.6 0 -0.8 FY13 FY14 FY15 FY16 FY17 Revenue (£M LHS) EBITDA (£M RHS) adjusted to continuing operations (excluding Sigma) 16 36
Slide 37: M&A Strategy (PIE)
M&A Strategy (PIE) • Defendable markets • Bought Scientific Magnetics • Unconsolidated engineering niches • Enabling acquisition for Medical div. PINPOINT • Good businesses, or subscale entities • Bought Hayward Tyler • Acquisitions at competitive prices • Transforming acquisition for Energy div. •
Slide 38: M&A Strategy – Brand Building
M&A Strategy – Brand Building Brand Acquisitions Bought for £m1 Sold for £m1 JRT Ltd JenaTec Inc 4.0 14.5 JGWT GMBH (FY02 - FY09) (FY13) Boneham & Turner Moss Group Sigma Components B&D Patterns C&H Composites Eng Group 22.0 65.0 Aerotech Tubes (FY07 - FY16) (FY16) PFW Farnborough RMDG Rolls Royce N
Slide 39: Long Term Investors
Long Term Investors % of issued share Shareholder capital owned Nigel Wray 9.7 Funds Managed by Unicorn Asset Management Ltd 6.3 Harwood Capital 6.1 Funds Managed by RBC Trustees Limited 5.5 R S McDowell’s Pension Fund 4.5 P McDowell’s Pension Fund 3.9 Funds Managed by LGT Bank 3.3 Other Board Membe