2015 Final Results March 2016

Transcription

1 2015 Final Results March 2016

2 The acquisition of Landmark Doubles the size of Signature Extends market leadership Good barriers to entry Expands industry leading customer proposition Creates exciting opportunities for further value creation Synergies Operational excellence DOJ required disposals as anticipated and on track Integration commenced No initial surprises Further opportunities identified Enlarged Group % of operating profit 1 Aftermarket Services 17% Enlarged Group revenue by key markets 1 Commercial 18% Military 4% Flight Support 83% B&GA 78% Note 1: indicative pro forma FY2015 transforms and enhances the Group s growth prospects 1

3 Builds on a year of underlying growth Flight Support Signature: continued outperformance, strong drop through and further expansion ASIG: competitive markets, issues addressed, good operational improvement in H2 Weak Aftermarket Legacy: solid delivery ERO: a challenging year, cost and complexity reduction extended A year of growth, dividend increase already well positioned for

4 Modest growth in US B&GA flying continues US B&GA Market Segments Flight Hours TTM Y-on-Y Months of Growth Large Cabin Jets +3% 67 months Midsize Cabin Jets - Aircraft >10yrs old - Aircraft <10yrs old - 5% + 3% 49 months 68 months Small Cabin Jets +1% 31 months Other Markets European B&GA movements (3)% Commercial aviation movements flat in NA and up 3% in Europe Military market stable TOTAL +1% 68 months impressive Signature performance 3

5 Performance Review Mike Powell Group Finance Director 4

6 Satisfactory overall performance Organic revenue up 2% $48.8m revenue acquisition contribution Further EBITDA and OP progress Positive margin development in Signature offset by ERO EPS up 1% Dividend increased by 5% driven by Flight Support 5

7 Flight Support: excellent profit progression Signature >95% of Flight Support OP Revenue Bridge ($m) Revenue up 3% (adjusted for fuel and FX) Signature further market outperformance Offsetting ASIG net contract losses 1, , ,347 Operating profit growth 19% Operating margin improved to 11.8% Signature: good operating leverage ASIG: underlying operational progress 2014 FX Fuel cost 2014 Like For Like Operating Profit Bridge ($m) Acq's Organic 2015 Divisional ROIC 11.5% (2014: 9.9%) FX 2014 Like For Like Acq's Organic Hong Kong / Panama driven by Signature s robust operational delivery

8 Aftermarket Services: weaker than anticipated performance Revenue increased by 4% Supported by ERO engine trading Legacy steady as anticipated Revenue Bridge ($m) Operating profit decrease 33% Operating margin 7.6% (2014: 11.9%) ERO competitive markets and throughput inefficiencies Legacy satisfactory performance Divisional ROIC 6.7% (2014: 10.4%) 2014 FX Disposal 2014 Like For Like Operating Profit Bridge ($m) Acqs Organic FX 2014 Like For Like Acqs Organic 2015 with additional actions being taken in ERO 7

9 Delivering further progress $m Change Revenue 2, ,289.8 (7)% Revenue (fuel adjusted 1 ) 2, , % Operating profit Margin % 2 9.5% 8.8% 70bps Margin % 2 (fuel adjusted 1 ) 9.5% 9.7% (20)bps Net interest 2 (32.0) (28.8) 11% Profit before tax (1)% Profit after tax EPS % Dividend % ROIC 9.1% 9.4% (30)bps (1) Constant fuel price (2) Pre exceptional items (3) Historical measures adjusted to remove the impact of the rights issue on the capital base 8

10 Continued strong cash generation Strong cash generative ability 2014 working capital outperformance reversed, as anticipated 2015 gross capex ~1.3x associated depreciation and amortisation Legacy licence acquisitions for future growth Dividend growth and share repurchases Leverage of 2.3x $m Historical Underlying EBITDA Working capital movement (17.2) (12.0) Capex (90.7) (116.4) Net interest and tax paid (33.1) (49.9) Exceptional items (14.0) (31.5) All other movements (9.3) (6.2) Free cash flow Dividends (76.6) (74.2) Share repurchases (22.0) (76.6) Acquisitions, licences + other (31.2) (166.4) Disposals Change in net debt (21.0) (140.7) Net debt (640.2) (619.2) Net debt to EBITDA 2.3x 2.3x $m Share issue + other transaction costs 1, Net debt (619.2) supporting investment for future growth 9

11 Other financial matters Main exceptional items (before tax) Restructuring expenses ASIG Singapore $6.8m ERO footprint rationalisation $8.3m Amortisation of acquired intangibles $11.7m M&A costs $38.4m Pensions Valuation net deficit $40.1m (2014: $62.2m) 3.0m annual deficit contributions for next 5 years 2016 guidance FY16 capex c1.3x, plus $19m synergy capex Tax rate 17-18%, cash tax lower Exceptionals: amortisation, footprint reorganisation, synergy costs 10

12 Summary and Outlook Simon Pryce Group Chief Executive 11

13 US GDP ($bn) Business Jet Flight Hours (000s) Increased exposure to B&GA flying B&GA flying will drive ~80% of Group revenues GDP plus growth through-cycle US B&GA Flight Hours and GDP Positive medium-term indicators Long-term structural drivers Business Jet Flight Hours (Thousands) GDP (Billions in 2009 Dollars) Source: GAMA and US Bureau of Economic Analysis Note: 2004 the GAMA survey coverage expanded for turbine airplanes and rotorcraft, accounting for part of the increase in hours flown longer-term growth 12

14 A focused B&GA value added service provider Extended market leadership Strengthened network Leading customer proposition Customer reach Legacy growth Enhanced Signature leadership position Signature (post acquisition) Atlantic Million Air Jet Aviation Total locations 195 * North America Sole source locations 62** Top 50 US airports Locations are inclusive of licenses, JVs and fully owned entities * 149 of 195 locations are wholly owned Excludes the 6 FBOs for disposal ** 57 of the 62 are wholly owned locations Adjusted for overlap locations within the top 50 of the respective category shown Proportion of total US departures 48% 22% 7% 6% 4% 3% 1% Signature Atlantic Jet Aviation Million Air Tac Air Sheltair Cutter enhanced underlying quality, growth and value creation prospects 13

15 Positioned for a year of good growth in 2016 Industry leading businesses Above market delivery Performance Application of operational excellence Management actions Value creation and growth Realisation of Signature/Landmark combination Portfolio options Longer-term positioning Increased exposure to B&GA Market leadership Growth investments contributing Enhanced cash generation an exciting time for BBA Aviation 14

16 Q&A 15

17 Appendix 16

18 Revenue split and organic growth Flight Support 63% Organic - Aftermarket Services 37% Organic 6% ASIG 32% Organic (7)% Signature 68% Organic 4% ERO 79% Organic 8% Legacy Support 21% Organic (2)% Signature RoW 14% Organic (1)% Signature N. America 86% Organic 5% Revenue ($m) N. America RoW Total Signature Flight Support ASIG Engine Repair & Overhaul Legacy Support , ,

19 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Signature s market outperformance 30% 20% 10% 0% -10% -20% -30% -40% USA Market vs USA Market vs. Prior Year SFS USA Gallons vs. Prior Year Source: FAA 18

20 Flight Support: H1 and H2 bridges H1 Revenue Bridge ($m) 776 H2 Revenue Bridge ($m) H1 FX Fuel 2014 H1 Acqusitions Organic Singapore 2015 H1 Like for Like 2014 H2 FX Fuel cost 2014 Like For Like Acq's Organic Singapore 2015 H2 H1 Operating Profit Bridge ($m) H2 Operating Profit Bridge ($m) H1 FX 2014 H1 Like for Like Acqs Organic Singapore Hong-Kong 2015 H H2 FX 2014 Like For Like Acq's Organic Singapore Panama 2015 H2 19

21 Aftermarket Services: H1 and H2 bridges H1 Revenue Bridge ($m) H2 Revenue Bridge ($m) H1 FX Disposals 2014 H1 like-for-like Acq's Organic 2015 H H2 FX 2014 Like For Like Acq's Organic 2015 H2 H1 Operating Profit Bridge ($m) H2 Operating Profit Bridge ($m) H1 FX 2014 H1 like-for-like Acq's Organic 2015 H H2 FX 2014 Like For Like - Acq's Organic 2015 H2 20

22 Cash flow statement reconciling slide 9 to the statutory accounts $m Historical 2015 Rights issue and fee adjustments Reported 2015 Reported 2014 Underlying EBITDA Working capital movement (17.2) (4.5) (21.7) (12.0) Capex less disposal proceeds (90.7) - (90.7) (116.4) Net interest and tax paid (33.1) (1.3) (34.4) (49.9) Exceptional items (14.0) (14.6) (28.6) (31.5) All other movements (9.3) - (9.3) (6.3) Free cash flow (20.4) Dividends (76.6) - (76.6) (74.2) Share repurchases (22.0) - (22.0) (76.6) Acquisitions, licences + other (31.2) - (31.2) (166.4) Disposals Right s issue net of fees - 1, , Change in net debt (21.0) 1, ,075.7 (140.7) Net debt (640.2) (619.2) Net debt to EBITDA 2.3x 2.3x $m Historical 2015 Reported 2014 Share issue + other transaction costs 1, Net debt (619.2) 21

23 Reported vs Historical Measures Basic EPS Change Reported Basic EPS Historical Basic EPS % See Note 5 to Consolidated Financial Statements DPS Historical 1 Restated 2 (Historical x bonus factor) Reported (2015 = Historical interim + restated final) Interim Final Total Interim Final Total Interim Final Total Net Debt Reported Net Debt (619.2) Historical Net Debt 1 (640.2) (619.2) (1) Historical measures have adjusted 2015 reported financials to remove the impact of the rights issue on the capital base and in relation to net debt the cash costs related to the acquisition of Landmark Aviation. This makes Historical measures comparable through both periods. (2) Restated measures have adjusted 2014 reported financials for the impact of the rights issue on the capital base. This makes restated comparable through both periods. 22

24 Landmark Aviation: transaction costs The Group completed the acquisition of Landmark Aviation on 5 February 2016 Total net fees for the acquisition of Landmark Aviation were $73.7 million during 2015 Equity fees of $26.0 million Debt arrangement and ticking fees of $9.7 million ($5.8 million capitalised) Other transaction fees of $38.4 million These fees were partially offset by $0.4m of interest received on money market deposits relating to the proceeds of the rights issue Please refer to Note 26 to the Consolidated Financial Statements for further detail 23

25 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. 24