Avingtrans Plc · LSE:AVG
Avingtrans — FY2017 Earnings Presentation
35 slides from Avingtrans's earnings presentation, May 2017
Slide 1: Results: 12 months ended May 2017
RESULTS: 12 months ended May 2017 Steve McQuillan – Chief Executive Officer Stephen King – Chief Financial Officer Copyright Avingtrans PLC 1
Slide 2: Financial Highlights
Financial Highlights Transitional year navigated successfully ü Revenue from continuing operations increased by 7% to £22.7m (2016: £21.2m) ü Adjusted Group EBITDA advanced by 104% to £0.7m (2016: £0.4m) ü Adjusted profit before tax saw modest improvement to £0.3m (2016: £0.1m) ü Adjusted diluted EP
Slide 3: Operational Highlights
Operational Highlights ü Improving sales in continuing businesses, driven by the Energy division ü First Sellafield 3M3 (three metre cubed) box prototype delivered and approved ü Chatteris facilities redevelopment for Sellafield is on time and on budget ü Order book strengthened: ü £11m, 3-year cont
Slide 4: HTG Integration
HTG Integration Progressing to plan so far… ü Balance sheet stabilised ü High cost debt – e.g. loan notes – repaid ü Banking facilities renewed in the UK and USA ü Duplicate board and advisory costs removed ü Creditor overhang eliminated ü Strategy refresh underway ü Product portfolio being reshaped
Slide 5: Energy
Energy Energy Division: designs and manufactures safety critical equipment for the energy sectors, including oil and gas extraction and nuclear process plant, pressure and vacuum vessels and components. ü Strong sales growth and improving margins ü Chatteris refurbished for Sellafield decommissionin
Slide 6: Medical
Medical Medical Division: designs and manufactures safety critical equipment for the medical, biomedical and science sectors. ü Overall sales flat, but margins improving ü Core MRI business steady ü China seeing continued improvement in prospects • £9m, 10 year contract in Wuhan, China for NMR cryos
Slide 7: Financials
Financials 7 7
Slide 8: 5 year history: revenue and EBITDA (ex. Sigma)
5 year history: revenue and EBITDA (ex. Sigma) 25 0.8 0.72 0.6 20 0.4 0.35 0.3 0.2 15 0 23.7 22.6 22.7 10 21.2 -0.2 17.5 -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 Copyright Avingtrans PLC 8
Slide 9: Dividend Growth
Dividend Growth Pence 1.1 18 Copyright Avingtrans PLC 9
Slide 10: Value creation record
Value creation record 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; Purchas
Slide 11: Profit and Loss Account
Profit and Loss Account FY17 FY16 £m £m Revenue 22.7 21.2 Gross Profit 4.1 3.1 Gross Profit margin 18% 15% Adjusted EBITDA 0.7 0.4 Adjusted EBITDA margin 3.2% 1.7% Adjusted profit before tax 0.3 0.1 (Loss)/profit after tax (0.3) 0.4 EPS – Continuing Adj. Fully Dil.1 1.1p 1.0p Basic (1.3)p 1.5p 1 – f
Slide 12: Balance Sheet
Balance Sheet 31 May 2017 31 May 2016 £m £m Fixed Assets (including assets held for sale) 4.9 4.7 Goodwill 5.2 4.6 Other Intangible 1.4 0.9 Working Capital 7.4 3.7 Provisions - - Tax 0.1 - Net Cash 26.4 51.0 Contingent consideration (0.3) - Deferred Tax (0.2) (0.1) Net Assets 44.9 64.8 Net Cash to E
Slide 13: Cash Flow
Cash Flow FY17 FY16 £m £m Total EBITDA 0.4 6.6 Net Working cap (3.4) 2.5 Interest, Tax and Other - (0.8) Dividend (0.9) (0.8) Issue of new shares 0.6 - Disposal/(acquisition) (0.6) 50.2 Purchase of shares – Tender buyback (19.4) - Capex (1.1) (0.5) Net Cash Flow (24.4) 57.2 Opening Net Cash/ (Debt)
Slide 14: Divisional Overview: Energy
Divisional Overview: Energy 14 14
Slide 15: Our markets (Energy)
Our markets (Energy) 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 Copyright Avingtrans PLC 15
Slide 16: Energy Division
ENERGY Division Performance-critical solutions for energy systems We design, engineer, manufacture and service performance-critical power, pump, process and storage solutions for the global energy sector. Our product portfolio of specialist motors, pumps, turbines, compressors pressure vessels and c
Slide 17: Energy brands
Energy brands Energy systems solutions Market leader in the design, manufacture and servicing Specialist turbines and compressors of performance-critical motors and pumps for power generation, marine, sugar, petrochemical and for the harshest of environments. processing, waste-to-energy power plants
Slide 18: Product suite
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 Heat Exc
Slide 19: Service, Maintenance & Repair
Service, Maintenance & Repair 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 machinery
Slide 20: Strategic Alliances
STRATEGIC ALLIANCES § Global market leader in § Number 1 nuclear pump § Leading Japanese manufacturer subsea systems manufacturer in China of pumps for energy, oil and gas, § HT and Apollo will co-develop pumps and general industry sectors § HT is manufacturing permanent magnet motors for use in FMC
Slide 21: Strategic Alliances & PSAs
Strategic Alliances & PSAs Strategic alliances enhance: • Product portfolio • Customer relevance • Global reach Preferred Supplier Agreements: • Give a long-term view of the business opportunities • Allow collaborative planning to grow in a specific market Preferred Supplier Agreements include: Eure
Slide 22: Divisional Overview: Medical
Divisional Overview: Medical 22 22
Slide 23: Medical Overview
Medical Overview Medical imaging and diagnostics markets showing strong growth potential, due to demographics of growing and aging world population Metalcraft - cryogenic vacuum vessels •Pedigree spanning 40 years •Niche market leadership in: • magnetic resonance imaging (MRI) • nuclear magnetic res
Slide 24: Scientific Magnetics
Scientific Magnetics • Superconducting magnets and cryogenics • Acquired for £0.35m in February 2017 • Turnover £2.0m; PBT£41k (June 2016) • Based in Abingdon, Oxfordshire • 15 employees, 1000m2 facility • Products used for: • MRI/NMR systems • Solid state physics instruments • Magnetic separation s
Slide 25: Composite Products
Composite Products • Composite structures for industrial & medical products • Based in Buckingham • 10 employees, 1000m2 facility • Manufacturing composite parts and assemblies for: • X-ray systems • MRI systems • Defence applications • Customers include: • Rapiscan; Siemens; Thales 25 Copyright Avi
Slide 26: Summary
Summary 26 26
Slide 27: Summary
Summary ü Successful navigation of tricky transitional year, post aerospace disposal ü Strong order book growth from existing businesses – Energy and Medical ü Sellafield 3M3 project on plan: technically, operationally and commercially ü Good potential for Medical from recently won contracts ü Stron
Slide 28: Pinpoint-Invest-Exit Strategy, niche leadership, shareholder returns
ü Compelling Pinpoint-Invest-Exit Strategy ü Niche market leadership positions ü Consistent shareholder returns 28
Slide 29: Appendix
Appendix 29 29
Slide 30: 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 31: 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 32: Adjusted EBITDA
Adjusted EBITDA FY17 FY16 £'000 £'000 (Loss)/profit before tax (285) 245 Share based payment expense/Amortisation of business combinations 34 21 Acquisition Costs 101 - Restructuring costs 182 271 Tender share buyback costs 226 - Profit on disposal of property - (446) Adjusted profit before tax 258
Slide 33: Long Term Investors
Long Term Investors % of issued share capital Shareholder owned Nigel Wray 9.8 Funds Managed by Unicorn Asset Management Ltd 6.3 Harwood Capital 6.2 R S McDowell’s Pension Fund 4.6 Funds Managed by RBC Trustees Limited 4.5 P McDowell’s Pension Fund 4.0 Other Board Members 3.9 Funds Managed by LGT Ba
Slide 34: Blue chip key accounts
Blue chip key accounts 34 Copyright Avingtrans PLC 34
Slide 35: Our locations
Our locations 603 Employees 102 Employees 54 Employees 11 Employees Low cost sourcing strategy appealing to OEM customers Copyright Avingtrans PLC 35