2011 Interim Results. 5 August 2011

Transcription

1 2011 Interim Results 5 August 2011

2 A successful H1 Steady growth in major markets Continued improvement in flight hours Strong business performance Market share gains Sustained operational improvement Continued recovery in ROIC Long-term capital structure in place Supporting continued execution of strategy Good strategic progress Dividend increase 5 acquisitions, $60m annualised revenues Organic investments Strong pipeline of further opportunities Maintained through the downturn, further increased 2

3 Financial Review Mark Hoad Group Finance Director

4 Financial highlights Continued growth Organic revenue growth 6% Enhanced profitability Underlying operating profit up 17% Adjusted EPS increased 11% to 9.0p ROIC improvement Group ROIC up 60bps to 10.1% Successful refinancing Diversified funding sources at attractive rates Supports execution of growth strategy 4

5 Income statement m H H as reported Change Change constant t FX Revenue % 17% Revenue (fuel adjusted) % 9% Operating Profit (1) % 17% Margin % (1) 9.1% 9.1 % - - Margin % (1) (fuel adjusted, ex pensions gain) - 8.0% +110bps - Net Interest (7.4) (8.5) 13% 9% Profit Before Tax (1) % 21% EPS (1) 9.0p 8.4p 7% 11% Dividend 2.52p 2.4p 5% Return on Invested Capital (2)(3) 10.1% 95% 9.5% +60bps (1) Pre exceptional items (2) 12-month constant currency average (3) H month constant currency average, 2010 Full Year 5

6 Flight Support Revenue Bridge ( m) (15) FX Fuel 2010 like-for-like Operating Profit Bridge ( m) 35 (1) Acqs Organic (2) Organic revenue increase of 6% Underlying operating profit up 21% at constant exchange rates Margin of 9.5% up 100 basis points on like-forlike basis (2010: 8.5%) Cash conversion 73% (2010: 103%) Divisional i i ROIC 10.7% (2010 full year: 9.7%) 2010 FX 2010 like-for-like Acqs Organic Cost increase

7 Aftermarket Services & Systems Revenue Bridge ( m) 217 (8) FX 2010 Acquisitions Organic Transaction like-for-like FX Operating Profit Bridge ( m) 24 (1) (3) (1) (2) FX Pensions 2010 Acquisitions Organic Cost 2011 gain like-for-like increases 25 Organic revenue increase of 8% Underlying operating profit up 8% Pi Prior year includes net pensions gain ( 3.0m OP) Like-for-like operating margins up 120 basis points to 10.8% (2010: 9.6%) Cash conversion 12% (2010: 95%) Divisional ROIC 9.4% (2010: 9.1%) 7

8 H cash flow Free cash flow 3.6m (2010: 35.2m) Working capital outflow 48.1m (2010: 8.7m) Reduced net capex of 4.4m (2010: 13.7m) 6m payment of fees on bank facility renewal and US PP issue No cash restructuring costs; commencement of pension deficit contributions Working capital outflow mainly timingi Reversal of 13m timing benefit from 2010 Some consumption associated with revenue growth WIP due to parts supply constraints and timing of customer receipts Focus on capital discipline remains Average invested capital to 30 June 2011 broadly flat to

9 2011 cash flow % of Cash flow item Comment operating profit Operating profit Driven by market growth and active cost management 100% Capex depreciation Capex c. 0.7x-1.2x 12 depreciation -10% to +10% Working capital Flight Support neutral, Aftermarket modest consumption, still some structural opportunity -10% to 0% Pensions c. 5-6m per annum over next 3-4 years -5% Other No other major items expected 0% Operating cash conversion 75% - 105% Capex growing to 1.0x depreciation as markets improve One-off working capital benefits from 2010 reverse in 2011, short-term timing issues unwind in H2 Pensions and other items as per previous guidance In line with strategy, $100m of cross-currency swaps closed out in m cash cost below free cash flow line 9

10 Long-term and diversified funding Bank facility replaced - $750m RCF 3/5 years Initial margin 175/200 bps over US LIBOR US private placement - $300m 7/10/12 years Initial offering of $150m more than 4 times oversubscribed Fixed coupons of 5.22%-5.91% 5 based on historically low US Treasury yields 1, Facilities ($m) - pre refinancing <1yr 1-2 yr 2-3 yr 3-4 yr 4-5 yr 5-10 yr >10 yr Financial impact Facilities ($m) - post refinancing <1yr 1-2 yr 2-3 yr 3-4 yr 4-5 yr 5-10 yr >10 yr Replaces very low cost RCF full year interest charge c. 18m Equity placing 86m net proceeds to fund continuing growth More than 70% of proceeds now deployed 10

11 US dollar reporting Starting with FY 2011 results Revenues, profits, cash flows primarily generated in USD Increasing transparency Final 2011 dividend to be declared in USD and paid in GBP or USD Restated figures to be released in H2 11

12 Strategic & Operational Progress Simon Pryce Group Chief Executive

13 Growing markets with attractive fundamentals 30% 20% 10% 0% -10% -20% -30% -40% Source: FAA Signature volumes vs B&GA market activity based on aircraft movements Jan Jun +4% Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 US year-on-year Signature US year-on-year Europe year-on-year B&GA Steady growth on tougher comparators Medium/long-term indicators slowly improving No change to long-term structural growth US 22% off peak Commercial Low growth despite headwinds ds Military No impact from existing or anticipated budget cuts 13

14 Flight Support Signature Continued market outperformance Strong operational improvement Selective organic investment Flight Support revenue and organic growth Strengthened global and % market-leading network 0-15% H1 07 H1 08 H1 09 H1 10 H locations Revenue ( m, fuel adjusted. & constant currency) Organic growth (%) 10% 5% 0% -5% ASIG Strong growth Good labour flex Positive renewal rates, service extensions Managed expansion in to high growth, emerging markets Flight Support operating profit and margin Peak annual margin = 11.5% H1 07 H1 08 H1 09 H1 10 H1 11 OP ( m, constant currency) Margin (%, fuel adjusted) 15% 10% 5% 0% 14

15 Aftermarket Services & Systems Engine Repair & Overhaul Aftermarket Services & Systems revenue and organic growth Benefiting from full impact of % growth in flying hours 10% 200 Closer cooperation with Signature 0% 150 Parts supply constraints, expected -10% to ease % H1 07 H1 08 H1 09 H1 10 H1 11 Extension of field service offering Revenue ( m, fuel adjusted. & constant currency) Emerging g market expansion Organic growth (%) Legacy Support Continued ramp up on major licenses, active selling Aftermarket Services & Systems operating profit and margin Peak annual margin = 12.5% 17% order book increase 20 APPH Markets stabilised * Operational challenges being addressed H1 07 H1 08 H1 09 H1 10 H1 11 OP ( m, constant currency) Margin (%, fuel adjusted) * Excludes 3m pensions gain 15% 13% 11% 9% 7% 5% 15

16 Executing consolidation elements of growth strategy Long-term capital structure to support continued investment and consolidation Flight Support 4 FBO acquisitions: Bozeman ($10.5m), Boca Raton ($21m), San Juan ($3m), Edinburgh ($2.6m) Aftermarket Services & Systems GE Aviation Fuel Measurement business ($69.5m) Integration on plan Significant further investment capacity Strong pipeline of consolidation opportunities 16

17 Entering the second half Some economic uncertainty Market-leading businesses out-performing Strong Aftermarket order book, good visibility Further opportunities from continued cross-business cooperation Contribution from acquisitions Further positive underlying progress 17

18 Progress against long-term expectations Strategic consistency Maintained aviation services and aftermarket focus Organic growth Continued market recovery Structural growth Enhanced service offering New authorisations, licences and outsourcing opportunities Strong underlying performance Continued operational improvement Cross-business synergies Consolidation opportunities Fragmented markets Expanding product/technical expertise Superior long-term returns Sustained through-cycle growth well in excess of GDP Pre-tax through-cycle return on invested capital >12% Progressive dividend policy 18

19 Appendix

20 Revenue split and organic growth Flight Support (65%) Organic +6% Aftermarket Services & Systems (35%) Organic 8% APPH (8%) Organic -12% Signature (71%) Organic +6% ASIG (29%) Organic +5% Legacy (14%) Organic +19% ERO (78%) Organic +9% Signature US (83%) Organic +6% Signature RoW (17%) Organic +6% Revenue ( m) US RoW Total Business Commercial ERO Legacy APPH

21 Cash flow / debt m H H Underlying EBITDA Working capital movement (48.1) (8.7) Net capital expenditure (4.4) (13.7) Net interest and tax paid (15.2) (10.0) Exceptional items (1.0) (4.2) All other movements (6.5) (1.2) Free Cash Flow Dividends (27.2) (11.6) Equity Issue Acquisitions and disposals (incl. licences) (47.3) (3.6) Other (13.5) (4.6) Net cash flow H yr end 2010 Net Debt Net Debt to EBITDA 1.9x 2.1x 21

22 Exchange rates H H FY 2010 $ $ $ Average Period end

23 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 plans and efficiencies. 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. 23