Avingtrans Plc · LSE:AVG
Avingtrans — H1 FY2021 Earnings Presentation
32 slides from Avingtrans's earnings presentation, February 2021
Slide 1: Results for 6 months ended 30 November 2020
Pinpoint-Invest-Exit Results for 6 months ended 30 November 2020 Steve McQuillan, CEO Stephen King, CFO 10 September, 2018
Slide 2: Financial highlights – H1 FY2021
Financial highlights – H1 FY2021 Group Revenue Gross Profit Margin Adjusted EBITDA £54.1m 30.9% £6.3m (0.4)% 2020 H1: 25.6% +36.6% Adjusted Diluted EPS Dividend Net Debt* 10.5p Intention to reinstate £7.8m 2020 H1 5.4p full year dividend 31 May 2020: £7.4m Net debt* - old accounting basis (pre-IFRS
Slide 3: Our divisions
Our divisions Energy: Engineered Pumps Energy: Process Solutions Medical and Industrial 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: Covid-19 update
Covid-19 update We have dealt well with a number of Covid-19 hurdles • People – flexible working arrangements and shift patterns; targeted restructuring completed • Markets • Energy • Nuclear – resilient throughout CV19 - some on-going order delays • Renewables – increasing prospects - eg in concent
Slide 6: Our strategy in action - Pinpoint
Our strategy in action - Pinpoint Strengthening the portfolio Compact MRI systems - Avingtrans acquired an initial 58.1% stake in Magnetica, in a merger with SciMag and Tecmag, completed on 29 January 2021. 6
Slide 7: Our strategy in action - Invest
Our strategy in action - Invest Establishing world class capability • Booth site rationalisation will now complete in 2021 • Construction of new Bolton site extension underway • New wing eliminates surplus leased building • Booth has a record orderbook and strong prospects • Market research highligh
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: 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 • Next Generation nuclear – TerraPower completed • Hydrocarbons – progress hampered by CV-19 Concentrated Solar Power plant • Modest recovery now unde
Slide 10: Divisional priorities - PSRE
Divisional priorities - PSRE PB, Metalcraft, Fluid Handling, Ormandy, Booth • Markets • Nuclear decommissioning (Metalcraft, Fluid Handling) • Sellafield - 3M3 box production continues • £2.5m Fluid Handling contract win for remote valves Booth doors manufacture • Hydrocarbons (PB) – aftermarket foc
Slide 11: Divisional priorities - MII
Divisional priorities - MII Magnetica, Metalcraft Medical, Composite Products • Medical • MRI systems (post period end update) • Transformational merger with Magnetica • SciMag and Tecmag to rebrand • Orthopaedic and veterinary niches as focus • Initial addressable market estimate c£400m MRI orthopa
Slide 12: Financial Highlights
MD. Avingtrans Financial Highlights 12
Slide 13: Income Statement
Income Statement H1 FY21 H1 FY20 FY20 £’m £’m £’m Revenue 54.1 54.3 113.9 Gross Profit 16.7 13.9 31.6 Gross Profit % 30.9% 25.6% 27.8% Adjusted EBITDA 6.3 4.6 11.8 Adjusted EBITDA % 11.7% 8.5% 10.3% Adjusted Profit before tax 3.5 1.8 6.0 Adjusted Profit after tax 3.4 1.7 5.4 Adj. Diluted EPS (pence)
Slide 14: Summary Divisional Results
Summary Divisional Results Energy: Energy: 1H Energy: Energy: 1H EPM PSRE Medical Central FY21 EPM PSRE Medical Central FY20 £’m £’m £’m £’m £’m £’m £’m £’m £’m £’m Revenue: OE 7.5 15.8 6.0 - 29.3 4.6 18.9 5.6 - 29.1 AM 18.5 6.3 0.0 - 24.8 17.7 7.5 - - 25.2 Total Revenue 26.0 22.1 6.0 - 54.1 22.3 26
Slide 15: Balance Sheet
Balance Sheet H1 FY21 FY20 H1 FY20 £’m £’m £’m Tangible fixed assets 32.3 34.4 35.6 Goodwill 23.5 23.5 23.6 Other intangible 13.2 13.8 15.5 Deferred tax asset & pension surplus 3.0 2.9 2.5 Working capital 23.2 20.0 18.8 Provisions (5.3) (5.5) (6.0) Tax asset 0.5 1.2 0.2 Net debt (15.9) (16.3) (17.7)
Slide 16: Movement in Net Debt (£'m)
Movement in Net Debt (£’m) 0.0 (2.0) (4.0) (7.4) (7.8) (6.0) (8.0) (10.0) (1.3) (12.0) (9.0) (8.1) (6.3) (3.8) (14.0) (0.6) (0.2) (16.0) (18.0) 1 June 2020 Adjusted EBITDA Restructuring Net working capital Capital Interest, tax and 30 November expenditure other 2020 Impact of IFRS 16 Leases 16
Slide 17: Dividend growth
Dividend growth 4 3.5 Final year dividend to reinstate 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 FY21 Interim Final 17
Slide 18: Summary
MD. Avingtrans Summary 18
Slide 19: Summary
Summary H1 FY21 - on target to deliver full year expectations - despite covid-19 Hayward Tyler and Peter Brotherhood continue to progress well overall Order book: strong pipeline in Energy; Medical pivot to new MRI products now completed Significant contract wins in the UK, USA, China and S
Slide 20: Appendix
MD. Avingtrans Appendix 20
Slide 21: Pinpoint-Invest-Exit (PIE)
Pinpoint-Invest-Exit (PIE) • Strong balance sheet • Seasoned board and management • Creating significant shareholder value 21
Slide 22: Our locations and employees (30 November 2020)
Our locations and employees (30 November 2020) UK 591 China USA 154 India 67 10 Australia 10* * Australia from 29th January 2021 22
Slide 23: Our values
/ Avingtrans Our values A High Performance Business Integrity Quality Agility We mean what we say and do what we say we Right first time, on time. Our products and We adapt rapidly and cost effectively - in will do, with respect for all concerned services have enduring value to our customers respons
Slide 24: Market capitalisation progression (£m)
Market capitalisation progression (£m) Purchased Moss & Placing £3.5m 2009 8 Purchased Sigma* 2010 9 2011 15 2012 17 Exited JenaTec; Purchased Aerotech & PFW 2013 32 Oil Price Purchased Maloney 2014 45 Shock Purchased RMDG 2015 31 Purchased Rolls Royce pipes; Exited Sigma 2016 50 Returned £19m to sh
Slide 25: Blue chip partnerships
Blue chip partnerships /o. Avingtrans KeIS2 = vattenrac. @ BEES <'ceprenercy Keppel BR aniccinc EUREKA — Jalltech] y wt] Shinhoo Nuclear Operating Company ey | | = PUMPS & MOTOR LAING O'ROURKE = Dominion - Rapiscan — Energy* Qone seen tis aati Bb— 25
Slide 26: 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 27: Largest investors
Largest investors Ordinary shares of 5p each Number of shares % of total (000s) shares Harwood Capital 4,137 13.0% Funds managed by Business Growth Fund 2,363 7.4% Funds managed by RBC Trustees Limited 2,208 6.9% Funds managed by Unicorn Asset Management Ltd 1,946 6.1% R S McDowell’s Pension Fund 1,
Slide 28: MRI and the diagnostic imaging market
MRI and the diagnostic imaging market • Total market size over £20 billion p.a. in 2017 • CAGR projected to be 4% from 2020-2027 • MRI is 18% of the total market • MRI is the most expensive imaging technique • However, it provides the best images • Especially of soft tissues… • and there is no radia
Slide 29: Current product types and limitations
Current product types and limitations MRI is still the “gold standard” for medical imaging, but there are limitations Current whole body systems (the market is dominated by Siemens, GE and Philips): • Using these for certain scans seems inefficient and can be uncomfortable for patients • Neonatal sc
Slide 30: Large potential for compact, high field MRI
Large potential for compact, high field MRI • Reduce the cost of high field MRI systems by shrinking their size and footprint • Eliminate infrastructure costs by using helium-free technology • Dramatically expand potential locations for MRI systems, by virtue of the above • Unlock precious capacity
Slide 31: Advantages and Benefits
Advantages and Benefits Compact, cryofree high field systems with cloud/AI diagnosis: • Free-up capacity of existing installed whole body systems (at least 20%) • Widen capability to critical new applications – eg neonatal scans in the NICU • Require minimal infrastructure and can be sited easily –
Slide 32: Next phase plan for orthopaedic MRI system
Next phase plan for orthopaedic MRI system EXT Demo System Magnet - SciMag Spectrometer - Tecmag GC, RFC, PHS, RF Subsystem - Magnetica Software - Magnetica Supporting Subsystems - COTS Integration & Test Capability validated 3 x systems for clinical testing Q1 Q2 Q3 Q4 Q1 Q2 2021 2022 32