Avingtrans Plc · LSE:AVG
Avingtrans — FY2020 Earnings Presentation
31 slides from Avingtrans's earnings presentation, Sep 10, 2020
Slide 1: Results for year ended 31 May 2020
Pinpoint-Invest-Exit Results for year ended 31 May 2020 Steve McQuillan, CEO Stephen King, CFO 10 September, 2018
Slide 2: Financial highlights
Financial highlights Guidance Reinstated Group Revenue Gross Profit Margin Adjusted EBITDA £113.9m 27.8% £11.8m +9.5% 2019: 26.6% +25.7% Adjusted Diluted EPS Total Dividend Net Debt** 16.9p 0.0p* £7.4m 2019: 14.6p 2019: 3.8p 2019: £2.0m * Suspended due to Covid-19 ** Excluding IFRS16 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: Pinpoint-Invest-Exit strategy, niche leadership, shareholder returns
✓ Compelling Pinpoint-Invest-Exit strategy ✓ Niche market leadership positions ✓ Consistent shareholder returns 4
Slide 5: Adapting to Covid-19
Adapting to covid-19 We have adapted well to deal with a number of Covid-19 hurdles • People – flexible working arrangements and shift patterns; targeted restructuring implemented • Markets • Energy • Nuclear – resilient throughout CV19, despite some order delays • Renewables – increasing prospects
Slide 6: 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. 6
Slide 7: Our strategy in action - Invest
Our strategy in action - Invest Establishing world class capability Energy Medical • Booth site rationalisation close to completion • Work progressing on new MRI and NMR systems • Construction of new Bolton site extension underway and components • New wing will eliminate surplus leased building • Pr
Slide 8: 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 9: Energy Steel integration well on track
Energy Steel integration well 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 ✓ HT/ES cross-selling and training underway Energy Steel is a custom fabricator ex
Slide 10: Booth integration ahead of expectations
Booth integration ahead of expectations ✓ Banking facilities re-established and stable ✓ Restructuring exercise completed ✓ New site extension underway ✓ Working capital funded – now stable ✓ Strategic plan developed Booth produces doors and walls that are: ✓ Strong order book and prospect pipeline
Slide 11: Booth wins £36m HS2 safety doors contract
Booth wins £36m HS2 safety doors contract ✓ The £36m contract will see more than 300 units manufactured ✓ High-pressure safety doors linking HS2’s tunnel passages. ✓ Safety doors will play a crucial role in the operation of the railway, with trains running at up to 360km/h. ✓ The doors must withstan
Slide 12: Divisional priorities - EPM
Divisional priorities - EPM Hayward Tyler and Energy Steel • Markets • Nuclear – on-going life extension focus • Contract wins in USA and South Korea ($5m + $3m) • Next Generation nuclear and renewables • ITER and solar power contract wins Concentrated Solar Power plant • Hydrocarbons – progress ham
Slide 13: Divisional priorities - PSRE
Divisional priorities - PSRE PB, Metalcraft, Fluid Handling, Ormandy, Crown, Booth • Markets • Nuclear decommissioning (Metalcraft, Fluid Handling) • Sellafield - 3M3 box production now stable • £2.5m Fluid Handling contract win for remote valves Crossrail doors installation • Hydrocarbons (PB) – fl
Slide 14: Divisional priorities - MII
Divisional priorities - MII Sci Mag, Tecmag, Metalcraft Medical, Composite Products • Markets • MRI – new products under development • Notably for the veterinary market • Board approved revised strategic plan, to target relevant niches, over next 18-24 months • NMR – service business building steadi
Slide 15: Financial Highlights
Ds. Avingtrans Financial Highlights
Slide 16: Divisional results – continuing operations
Divisional results – continuing operations Energy: Energy: Energy: Energy: EPM PRSE Medical Central FY20 EPM PRSE Medical Central FY19 £’M £’M £’M £’M £’M £’M £’M £’M £’M £’M Revenue: OE 12.8 38.3 11.9 - 63.0 13.9 30.0 12.0 - 55.9 AM 36.5 14.4 - - 50.9 35.1 12.9 0.1 - 48.1 Total Revenue 49.3 52.7 11
Slide 17: Income Statement – continuing operations
Income Statement – continuing operations FY20 FY19 As Energy IFRS 16 Group As reported Steel Booth impact LFL reported £’m £’m £’m £’m £’m £’m Revenue 113.9 7.9 9.6 - 96.4 104.0 Gross Profit 31.6 2.1 3.5 - 26.1 27.7 Gross Profit % 27.8% 25.9% 36.2% - 27.1% 26.6% Adjusted EBITDA 11.8 0.2 0.1 1.5 10.0
Slide 18: Balance Sheet
Balance Sheet FY20 FY19 £m £m Tangible fixed assets 34.4 26.6 Goodwill 23.5 23.4 Other intangible 13.8 14.5 Deferred Tax Asset/Pension Surplus 2.9 2.7 Working capital 20.0 14.5 Provisions (5.5) (5.3) Tax 1.2 0.1 Net Debt (16.3) (2.0) Creditors > 1 year (1.5) (3.1) Deferred Tax Liability (2.5) (2.1)
Slide 19: Movement in Net Debt (£m)
Movement in Net Debt (£m) 0.0 (0.3) (2.0) (2.0) (3.2) (7.4) (4.0) (2.6) (6.0) 11.8 (9.7) Movement due to new acquisitions (8.0) (3.9) (10.0) 0.3 (0.4) (3.2) (9.0) (12.0) (14.0) (2.1) Movement due to businesses which were 0.3 (16.0) part of the Group at 1 June 2019 (1.2) (18.0) 1 June 19 Adjusted Exc
Slide 20: Dividend growth – suspended due to COVID-19
Dividend growth 4 3.5 Suspended due to COVID-19 3 2.5 2.4 2.3 2.2 2.1 2 2.0 1.8 1.5 1.5 1 1.2 1.3 1.4 0.5 1.0 0.9 1.0 1.1 0.7 0.4 0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Interim Final 20
Slide 21: Tax highlights
Tax highlights • Effective tax rate 20.9% • Tax refund due in the US kept the charge lower than expected. • Charge arising from the reversal in the recognised rate on UK deferred tax from 17 to 19% increased the effective tax rate by 2.2%. • Tax losses of £32.6m available for future use with £6.5m o
Slide 22: Summary
Ds. Avingtrans Summary
Slide 23: Summary
Summary ✓ Record year for revenue and profits ✓ Revitalisation of Hayward Tyler businesses remains on plan ✓ Order book: some delays and disruption due to Covid-19, but still robust ✓ Significant Nuclear sector contract wins in the UK, USA, and South Korea ✓ Sellafield 3M3 box project output now ste
Slide 24: Appendix
Ds. Avingtrans Appendix
Slide 25: Our locations and employees
Our locations and employees (at 31 Aug 2020) UK 598 China USA 158 India 63 10 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 Exited JenaTec; Purchased Aerotech & PFW 2013 32 Purchased Maloney 2014 45 Oil Price Shock Purchased RMDG 2015 31 Purchased Rolls Royce pipes; Exited Sigma 2016 50 Returned £19m to shareho
Slide 28: Blue chip partnerships
Blue chip partnerships /. Avingtrans @® Sellafield Ltd VATTENFALL @ BEEN <‘seprenercy Ty] «=6XxEASTMAN EUREKA —falltech] a ed Shi nhoo Gs fH PUMPS & MOTOR LAING O'ROURKE = Dominion le Rapiscan — Energy” Qone An O51 Stems Company wills 28
Slide 29: 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 30: Largest investors
Largest investors Number of % of total shares shares (000s) Nigel Wray 3,273 10.3% Funds managed by BlackRock 2,825 8.9% Funds managed by RBC Trustees Limited 2,208 7.0% Funds managed by Unicorn Asset Management Limited 1,946 6.1% Harwood Capital 1,759 5.5% R S McDowell’s Pension Fund 1,406 4.4% P M
Slide 31: IFRS 16 Leases
IFRS 16 Leases • FY21 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 no