Senior Plc · LSE:SNR
Senior — H1 2005 Earnings Presentation
39 slides from Senior's earnings presentation, 2005
Slide 1: Interim Results 2005
INTERIM RESULTS - 2005 Interim Results 2005
Slide 2: Index
INDEX Appendices Introduction 1 Exchange rates 14 Headline numbers 2 Key operating profit movements 15 Divisional performance Divisional performance - as reported 16 - constant currency 3 - half yearly 17 Geographical performance Geographical performance - as reported 18 - constant currency 4 Intern
Slide 3: Introduction
INTRODUCTION This is a presentation on the first half of 2005 which saw: 1. A significant recovery for the Industrial Division 2. Continued recovery in the Aerospace Division 3. The bottom of the cycle for the Automotive Division 4. Significant capital expenditure in the Automotive Division 5. Group
Slide 4: Headline Numbers
HEADLINE NUMBERS June June Change 2005 2004 Continuing operations - Revenue £166.9m £157.1m +6.2% - Operating profit £9.5m £8.3m +14.5% - Profit before tax £7.2m £6.2m +16.1% - Basic eps 1.92p 1.73p +11.0% Total operations - Adjusted profit after tax £6.1m £5.7m Adjusted earnings per share (1) 1.99p
Slide 5: Divisional Performance - constant exchange rates
DIVISIONAL PERFORMANCE - constant exchange rates (2) £m Turnover Operating Profits (1) Margin on Sales 2005 2004 Change 2005 2004 Change 2005 2004 Aerospace 74.5 68.9 +8.1% 6.3 5.1 +23.5% 8.5% 7.4% Automotive 68.1 65.5 +4.0% 3.7 5.1 -27.5% 5.4% 7.8% Industrial 24.9 22.4 +11.2% 1.8 0.2 +800% 7.2% 0.9
Slide 6: Geographical Performance - constant exchange rates
GEOGRAPHICAL PERFORMANCE - constant exchange rates (2) £m Turnover by Origin Operating Profits (1) Margin on Sales 2005 2004 Change 2005 2004 Change 2005 2004 North America 89.0 84.1 +5.8% 6.7 5.0 +34.0% 7.5% 5.9% United Kingdom 28.5 27.7 +2.9% 1.5 2.1 -28.6% 5.3% 7.6% Rest of Europe 38.6 35.4 +9.0%
Slide 7: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE June June Change 2005 2004 £m £m Continuing operations Operating profit (1) 9.7 8.3 +16.9% Net interest payable - borrowings and cash (1.8) (1.5) - retirement benefits (0.5) (0.6) Profit before tax (1) 7.4 6.2 +19.4% Tax (2005: 17.6%; 2004: 14.5%) (1.3) (0.9) Profit after
Slide 8: Reported Profit and Dividends
REPORTED PROFIT AND DIVIDENDS June June 2005 2004 £m £m Adjusted profit for the period 6.1 5.7 Loss on sale of fixed assets (0.2) - Reported profit for period 5.9 5.7 Proposed interim dividend - £m 2.0 2.0 - per share 0.65p 0.65p Interim Results 2005 Page 6
Slide 9: Balance Sheet
BALANCE SHEET June June Dec 2005 2004 2004 £m £m £m Property, plant and equipment 72.7 73.4 68.8 Goodwill 76.1 75.8 73.1 Intangible assets 1.1 1.4 1.2 Other long-term assets 4.0 1.0 3.9 Non current assets 153.9 151.6 147.0 Inventories 44.9 41.8 38.4 Receivables and construction contracts 67.1 66.1 5
Slide 10: Free Cash Flow
FREE CASH FLOW June June Dec 2005 2004 2004 £m £m £m Operating profit - continuing operations 9.5 8.3 16.8 - discontinued operations - 0.5 0.5 Depreciation and amortisation 6.0 7.2 13.3 Loss / (profit) on disposal of fixed assets 0.2 - (0.5) Charge for share options 0.2 - - Pension payments above se
Slide 11: Change in Net Debt
CHANGE IN NET DEBT June June Dec 2005 2004 2004 £m £m £m Free cash flow 1.4 7.1 10.5 Dividends (4.1) (4.1) (6.1) Acquisitions - deferred consideration (0.1) (0.1) (0.2) Disposals - proceeds - - 4.7 Share issues 0.1 - - Net cash (outflow) / inflow (2.7) 2.9 8.9 Exchange variations (5.1) 3.4 4.7 Net d
Slide 12: Aerospace
AEROSPACE Commercial Aircraft Market Net Orders Deliveries Book to Bill Order Book First Half First Half First Half June Dec 2005 2004 2005 2004 2005 2004 2005 2004 Boeing 417 78 155 151 2.69 0.52 1,359 1,097 Airbus 268 100 189 161 1.42 0.62 1,579 1,500 Total 685 178 344 312 1.99 0.57 2,938 2,597 Bo
Slide 13: Aerospace continued
AEROSPACE continued 1. Sales up 8.1% - market recovery End Market 2005 2004 - A380, JSF start to contribute Large Commercial 31% 25% 2. Profit up 23.5% - better sales Military / Defence 28% 27% - cost reductions Regional / Business 22% 26% Space 3% 4% - operational efficiencies Non Aerospace 16% 18%
Slide 14: Automotive
AUTOMOTIVE 6 month sales (vehicles – million) 1. Sales up 4.0%, profit down 27.5% 2005 2004 2. Comparison of last three halves: North America GM 2.32 2.27 +2% Ford 1.61 1.69 -5% DC 1.29 1.24 +4% £m Sales Profit Margin Toyota 1.11 1.00 +11% To June 04 64.9 5.0 7.7% Other Asia 1.85 1.80 +3% Other Euro
Slide 15: Automotive - Secured New Business
AUTOMOTIVE - SECURED NEW BUSINESS Country Product Vehicle Capital Start of 2007 Sales £m Production £m USA Common Rail Heavy Trucks 1.4 Late 05 2.0 India Exhaust Flex Cars 0.3 End 05 1.1 UK (1) EGR Cooler Cars 0.5 End 05 0.9 USA Common Rail Heavy Trucks 1.3 Mid 06 1.6 Europe Common Rail Cars 1.4 Lat
Slide 16: Automotive continued: Diesel Engines
AUTOMOTIVE continued Diesel Engines Existing – Heavy Duty • North American new product introduction on plan • Capital expenditure to be high in 2005 and 2006 • Benefit of additional sales expected to start in late 2006 Potential - Passenger vehicles • New medium diesel engine market now expected in
Slide 17: Industrial
INDUSTRIAL 1. Sales up 11.2%, profits up 800% to 7.2% ROS 2. Hargreaves - working through Wembley Stadium difficulties - signed option to sell surplus property for £2.75m (purchaser’s option) 3. Canada - continuing excellent profit performance 4. Pathway - major recovery due to: (a) benefit of ratio
Slide 18: Summary
SUMMARY 1. Expect Automotive to strengthen in future 2. Expect capital expenditure to be high in 2005 and 2006 3. Expect to maintain Industrial performance 4. Expect continued improvement in Aerospace 5. Overall prospects for the Group are encouraging Interim Results 2005 Page 13
Slide 19: Appendices
APPENDICES Interim Results 2005
Slide 20: Exchange Rates
EXCHANGE RATES Profit and Loss Account Balance Sheet Average Rates Period End Rates June June Dec June June Dec 2005 2004 Change 2004 2005 2004 Change 2004 £ : US Dollar 1.87 1.82 -2.7% 1.83 1.77 1.83 +3.4% 1.92 £ : Euro 1.45 1.48 +2.1% 1.47 1.48 1.49 +0.7% 1.41 £ : Rand 11.50 12.06 +4.9% 11.75 12.0
Slide 21: Key Operating Profit Movements
KEY OPERATING PROFIT MOVEMENTS Aerospace Automotive Industrial Central costs Total £m £m £m £m £m 2004 Operating Profit (1) 5.2 5.0 0.2 (2.1) 8.3 Exchange movements - translation (0.1) 0.1 - - - Reorg & redundancy - 2004 0.5 0.3 0.3 - 1.1 - 2005 (0.1) (0.2) - - (0.3) Underlying Trading 0.8 (1.5) 1.3
Slide 22: Divisional Performance - as reported
DIVISIONAL PERFORMANCE - as reported £m Turnover Operating Profits (1) Margin on Sales 2005 2004 Currency 2005 2004 Currency 2005 2004 Impact(2) Impact(2) Aerospace 74.5 70.0 (1.1) 6.3 5.2 (0.1) 8.5% 7.4% Automotive 68.1 64.9 0.6 3.7 5.0 0.1 5.4% 7.7% Industrial 24.9 22.5 (0.1) 1.8 0.2 - 7.2% 0.9% I
Slide 23: Half Yearly Comparison
HALF YEARLY COMPARISON Turnover Operating Profits H1 2005 H2 2004 H1 2004 H1 2005 H2 2004 H1 2004 Aerospace 74.5 69.6 70.0 6.3 5.9 5.2 Automotive 68.1 58.0 64.9 3.7 3.0 5.0 Industrial 24.9 22.4 22.5 1.8 0.8 0.2 Intersegment sales (0.6) (0.3) (0.3) - - - Central costs - - - (2.1) (1.7) (2.1) Continui
Slide 24: Geographical Performance - as reported
GEOGRAPHICAL PERFORMANCE - as reported £m Turnover by Origin Operating Profits (1) Margin on Sales 2005 2004 Currency 2005 2004 Currency 2005 2004 Impact (2) Impact(2) North America 89.0 86.2 (2.1) 6.7 5.1 (0.1) 7.5% 5.9% United Kingdom 28.5 27.7 - 1.5 2.1 - 5.3% 7.6% Rest of Europe 38.6 34.4 1.0 1.
Slide 25: International Accounting Standards
INTERNATIONAL ACCOUNTING STANDARDS International accounting standards adopted from 1 January 2005: • Prior period comparatives restated to IAS • Effects minor. Most significant monetary effects related to non-amortisation of goodwill, non-accrual for period end dividends and change in treatment of p
Slide 26: International Accounting Standards
INTERNATIONAL ACCOUNTING STANDARDS Segmental analysis amended to show central costs separately: As reported under UK GAAP As reported under IFRS 2004 2003 2004 2003 Half Full Full Half Full Full year (1) Year Year year Year year £m £m £m £m £m £m Aerospace 4.3 9.3 7.7 5.2 11.1 9.3 Automotive 4.2 6.6
Slide 27: Working Capital
WORKING CAPITAL Balance Sheet Cash Flow Receivables and Working Stocks Payables construction Capital contracts £m £m £m £m 31 December 2004 (page 7) 38.4 58.3 (58.6) - Movements in period: Aerospace 3.6 3.5 (4.3) (2.8) Automotive 1.2 6.6 (6.8) (1.0) Industrial - (1.4) 0.4 1.0 Holding companies - (0.
Slide 28: Gross Capital Expenditure
GROSS CAPITAL EXPENDITURE H1 2005 H1 2004 Capex Depn (1) Capex Depn (1) £m £m £m £m Aerospace 1.7 2.6 2.0 2.7 Automotive 7.3 3.0 1.9 3.6 Industrial - continuing 0.1 0.3 0.8 0.3 - discontinued - - 0.2 0.5 Holding Companies - 0.1 0.1 0.1 Total 9.1 6.0 5.0 7.2 (1) Includes amortisation of intangible as
Slide 29: Usage of Banking Facilities - June 2005
USAGE OF BANKING FACILITIES - June 2005 Usage by Currency Facility Usage £ $ € Other £m £m Private placements US $ 75.0m (Oct 2008) 42.4 42.4 - 42.4 - - US $ 25.0m (Jun 2007) 14.1 14.1 - 14.1 - - 56.5 56.5 - 56.5 - - Revolving credit facility (Oct 2006) 46.0 4.6 - 2.6 2.0 - Bank of America (May 2007
Slide 30: Pensions - June 2005
PENSIONS – JUNE 2005 6 months 2005 2004 UK USA Other Total Total £m £m £m £m £m FRS17 Scheme deficit at 31 Dec 2004 (33.5) (4.2) (3.5) (41.2) (44.0) Dec 2003 Adjustment for IAS19 (0.2) - - (0.2) n/a IAS19 Scheme deficit at 31 Dec 2004 (33.7) (4.2) (3.5) (41.4) (44.0) Foreign exchange impact - (0.4)
Slide 31: Pensions - December 2004
PENSIONS – DECEMBER 2004 Actuarial Valuations UK Plan USA Plans Last valuation 6 April 2004 31 December 2004 Scheme assets/(liabilities) at valuation £112.7m / (£131.2m) £15.6m / (£19.8m) Funding level 86% 79% FRS 17 Valuations Dec 2004 Dec 2003 Dec 2004 Dec 2003 £m Return £m Return £m Return £m Ret
Slide 32: Aerospace - Operations
AEROSPACE - OPERATIONS Operation Location Senior Aerospace Ketema San Diego, USA Saltillo, Mexico Senior Aerospace SSP Los Angeles, USA Senior Aerospace Metal Bellows Boston, USA Senior Aerospace Jet Products San Diego, USA Senior Aerospace BWT Macclesfield, UK Senior Aerospace Bird Bellows Congleto
Slide 33: Aerospace - Products
AEROSPACE - PRODUCTS 34% of Senior Aerospace sales are in 29% of Senior Aerospace sales are in engine structures and mounting systems metallic ducting systems Jet engine exhaust frame Environmental conditioning system feed duct Engine mounting ring Bleed duct gimbal Jet engine impingement Auxiliary
Slide 34: Aerospace - Products
AEROSPACE - PRODUCTS 13% of Senior Aerospace sales are in 8% of Senior Aerospace sales are in fluid composite ducting systems control systems Air distribution ducting Hydraulic distribution system Fuselage ducting and Active clearance control Insulation system Auxilary power unit air Hydraulic syste
Slide 35: Automotive - Operations
AUTOMOTIVE - OPERATIONS Operation Location Senior Automotive Bartlett Chicago, USA Senior Automotive Blois France Senior Automotive Cape Town South Africa Senior Automotive Kassel Germany Senior Automotive Crumlin South Wales Senior Automotive Olomouc Czech Republic Senior Automotive New Delhi India
Slide 36: Automotive - Products
AUTOMOTIVE - PRODUCTS 41% of Senior Automotive sales are of 19% of Senior Automotive sales are of flexible mechanisms for exhaust systems fuel system distribution pipework and subsystems Flexible exhaust connector High-pressure diesel tube set Picture 16 High-pressure diesel Flexible exhaust connect
Slide 37: Automotive - Products
AUTOMOTIVE - PRODUCTS 13% of Senior Automotive sales are of 6% of Senior Automotive sales are engine airconditioner, turbocharger and cooling emission control pipework and subsystems systems pipework Turbocharger oil drain tube Secondary air tube Exhaust gas recirculation cooler Exhaust gas recircul
Slide 38: Automotive - New Products
AUTOMOTIVE - NEW PRODUCTS Diesel Exhaust Gas Recycling (EGR) Cooler (US Trucks) Diesel Exhaust Gas Recycling (EGR) Cooler (European Cars) Diesel Common Rail Diesel Fuel Lines Interim Results 2005 Page 28/3
Slide 39: Industrial - Operations
INDUSTRIAL Operation Location Pathway Texas, USA Senior Hargreaves Bury, UK Canada Toronto, Canada Interim Results 2005 Page 29