2012 Interim Results August 2012

Transcription

1 2012 Interim Results August 2012

2 Further progress despite short-term challenges... *ex de-icing and FBO exits Growth Flight Support down 2%*, Aftermarket up 11% Growth despite short-term challenges Operational improvement De-icing impacting margins Underlying efficiencies continue Strong cash generation Significant improvement in free cash flow Value creative investment C$27m ASIG acquisition, good contribution from 2011 investments Strong pipeline of opportunities reflected in increased interim dividend 1

3 Key markets impacted by macro environment... B&GA market activity based on movements Commercial market activity based on movements 8% 6% Q1 Q2 Q3* 4% 2% 0% -2% -4% -6% -2.7% -2.0% -2.4% -2.3% -2.3% -1.8% -8% Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 USA year-on-year Europe year-on-year US YOY Europe YOY Source: FAA and Eurocontrol Source: OAG, *forecast medium-term indicators remain positive...[insert text] 2

4 Financial Review Mark Hoad Group Finance Director 3

5 Financial Highlights Revenue growth up 2% ex fuel price increases despite weaker market backdrop Underlying OP of $90.2m principally impacted by de-icing Free cash flow increased to $21.8m Leverage 1.7x Continued focus on invested capital. ROIC 9.9% Interim dividend increased by 5% 4

6 Income Statement Continuing to drive revenue growth $m H H Change Margin reduction principally related to de-icing Interest higher due to new debt and PP facilities plus cost acceleration into H1 Tax rate maintained at 20.1% EPS impacted by OP and interest Revenue 1, , % Revenue (fuel adjusted 1 ) - 1, % Operating profit (7)% Margin % 2 8.2% 9.1% - Margin % 2 (fuel adjusted 1 ) 8.2% 9.0% (80bps) Net interest (18.5) (11.9) (55)% Profit before tax (15)% EPS (17)% Dividend % (1) Constant fuel price (2) Pre exceptional items 5

7 Flight Support Organic revenue decline of 7% 2% related to de-icing i 3% due to exit from Miami & Tampa Remaining reduction of 2% versus market declines of 1-4% Underlying operating profit $54.7m Lack of high-margin de-icing Exit from Miami and Tampa Margin of 8.2% down 110bps on like-for-like basis (2011: 9.3%) Revenue Bridge ($m) (4) 703 (50 ) 2011 FX Fuel 2011 Restated Operating Profit Bridge ($m) Acqs/ Disposals 668 Organic 2012 Cash conversion 65% (2011: 73%) Divisional ROIC 9.6% (FY 2011: 10.6%) (12) (1) FX 2011 Restated Acqs/ Disposals Organic Cost Increase

8 Aftermarket Services & Systems Organic revenue increase of 11% Underlying operating profit $45.1m Good contribution from Legacy fuel measurement business Drop-through on organic impacted by short-term mix changes in APPH Margins broadly maintained at 10.6% (2011: 10.8%) Cash conversion 69% (2011: 12%) Divisional ROIC 10.9% (2011: 10.7%) Revenue Bridge ($m) 369 (2 ) FX 2011 Like-for-Like 16 Operating Profit Bridge ($m) Acqs Organic (3) FX 2011 Like for Like Acqs Organic Cost Increase

9 Cash Flow / Debt H1 free cash flow returned to a more normal level Working capital driven by H1 seasonality, Aftermarket growth and establishment of Cheltenham h Increase in capex driven by spend at Cheltenham and relocation of Chicago O Hare FBO Prior year capex net of $6.8m of disposals Full year cash conversion still expected to be in middle of % range Leverage up from year-end due to cash flow seasonality $m H H Underlying EBITDA Working capital movement (33.9) (77.4) Net capital expenditure (28.4) (7.1) Net interest and tax paid (22.4) (24.6) Exceptional items (8.5) (1.5) All other movements (5.6) (10.5) Free Cash Flow Dividends (47.7) (44.5) Equity issue Acquisitions and disposals (5.6) (76.2) Other (11.7) (21.7) Net cash flow (41.9) 4.8 $m H YE 2011 Net Debt Net Debt to EBITDA 1.7x 1.5x 8

10 Other Financial Matters Exceptional items Cross-business synergy project progressing well (H1 expense: $2m) Footprint rationalisation at Basingstoke largely complete (H1 expense: $6m) M&A activity with 3 acquisitions to date (H1 expense: $1m) Amortisation of acquired intangibles (H1 expense: $4m) Cross currency swaps 50m settled in H1 at cash cost of $4.4m $75m with mark-to-market loss of $8.4m maturing in H2 Tax Effective rate of c.20.1% expected for full year 9

11 Performance Update Simon Pryce Group Chief Executive 10

12 Further underlying progress in Flight Support... Signature Flight Support Outperformance Commercial initiatives delivering Network enhanced Further improvement in key operational metrics ASIG Good renewals Strong new business conversion Service extension Effective response to softer market...despite first half headwinds 11

13 Attractive ASIG bolt-on PLH Aviation Services & Dryden Air Services Inc. C$27m Complementary services Geographic expansion New customer relationships Consolidation benefits EPS accretive and achieves Group ROIC target in the first full year 12

14 A strong Aftermarket Services & Systems performance... Engine Repair & Overhaul Robust growth Solid order book Expanded service capability Successful geographic expansion Legacy Support Successful integration of fuel measurement business Additional licences Expanded electronics capability Record order book APPH Further Hawk orders Operational improvements delivering Basingstoke closure on plan...with good visibility 13

15 Summary and Outlook Simon Pryce Group Chief Executive 14

16 Despite continued macro uncertainty... Growth Continuation of H1 trends into H2 Medium term indicators positive Operational improvement Good momentum Major projects contribute in 2013 Strong cash generation Good conversion Significant investment capacity Value creative investment Acquisitions delivering, contribution from PLH/Dryden Pipeline strengthened...anticipating further progress 15

17 Q&A 16

18 Appendix 17

19 Revenue split and organic growth Flight Support 61% Organic -7% Aftermarket Services & Systems 39% Organic 11% ASIG 27% Organic (10%) Signature 73% Organic (6%) ERO 77% Organic 13% Legacy 16% Organic 9% APPH 7% Organic (4%) Signature RoW 16% Organic (6)% Signature US 84% Organic (6)% Revenue ($m) US RoW Total Business Commercial ERO Legacy APPH

20 Disclaimer This presentation contains forward-looking statements including, without limitation, statements relating to: future demand and markets of the Group s products and services; research and development relating to new products and services; liquidity and capital; and implementation of restructuring t plans and efficiencies. i i These forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Accordingly, actual results may differ materially from those set out in the forward-looking statements as a result of a variety of factors including, without limitation: changes in interest and exchange rates, commodity prices and other economic conditions; negotiations with customers relating to renewal of contracts and future volumes and prices; events affecting international security, including global health issues and terrorism; changes in regulatory environment; and the outcome of litigation. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. 19