BBA Aviation plc Interim Financial Report. Results for the half year ended 30 June 2017

BBA Aviation plc 2017 Interim Financial Report Results for the half year ended 30 June 2017 For further information please contact: David Crook, Group Finance Director (020) 7514 3999 Matt Denham, Investor Relations BBA AVIATION PLC David Allchurch/Michelle Clarke (020) 7353 4200 TULCHAN COMMUNICATIONS A video with Wayne Edmunds, Interim Group Chief Executive, and David Crook, Group Finance Director, is now available on www.bbaaviation.com A live audio webcast of the analyst presentation will be available from 09:00 today on www.bbaaviation.com 1

INTERIM FINANCIAL REPORT FOR PERIOD ENDED 30 JUNE 2017 GROUP Underlying results 1 Statutory results H1 H1 2 2 % Change 3 2 2 % Change 3 Revenue 1,145.5 1,183.7 1,020.6 1,229.4 12.2% 1,145.5 1,183.7 1,020.6 1,229.4 12.2% EBITDA 218.0 217.8 178.6 195.3 22.1% 212.7 212.5 156.3 173.0 36.1% Operating profit 174.9 174.7 135.6 149.6 29.0% 122.9 122.7 62.1 75.4 97.9% Profit/(loss) before tax 143.5 143.3 105.5 119.4 36.0% 91.5 84.7 (153.3) (269.0) Profit/(loss) after tax 117.3 117.1 88.0 100.3 33.3% 84.6 52.5 (129.7) (247.0) Basic adjusted earnings /(loss) per share 4 11.4 11.4 8.6 9.8 32.6% 8.2 5.1 (12.7) (24.1) Return on invested capital 5 10.7% 10.1% 60bps Free cash flow 56.6 91.7 (38.3)% Net debt 5 (1,256.3) (1,335.3) (5.9)% Dividend per share 3.81 3.63 5.0% 1. Adjusted performance measures are defined in note 17 2. includes discontinued 3. % change based on continuing for operating performance 4. Statutory measure is basic earnings per share 5. return on invested capital and net debt are for the full year Highlights underlying operating profit up 29% to $174.9 million; enlarged Signature network performing well Divisional summary: o Flight Support (86% of continuing Group underlying OP) Organic revenue up 3.2% and operating profit up 13.6%, with strong drop through US B&GA market up 3% in H1 Network contract negotiations with Signature s largest customers successfully concluded Short-term negative impact on fuel volumes relative to market o Aftermarket Services (14% of continuing Group underlying OP) Operating profit growth of 134% to $26.0m, driven by Ontic Ontic GE avionics delivering as expected, good contribution from licence acquisitions ERO improved operating performance H1 2017 vs H1, stable vs H2 Sale of ASIG for $202m completed 31 January 2017 Statutory continuing operating profit increased by 97.9% in H1 2017 compared to H1 Free cash flow of $56.6 million, de-levered to 2.9x net debt/ebitda as anticipated (FY : 3.1x on covenant basis) Group ROIC increased by 0.6% points to 10.7% Basic adjusted EPS increased by 32.6% to 11.4 Interim dividend increased by 5% to 3.81 cents reflecting continued confidence in the Group s future growth prospects Wayne Edmunds, BBA Aviation Interim Group Chief Executive, commented: We are pleased with BBA Aviation s performance overall in the first half of 2017. Against the background of a US B&GA market that grew 3%, we are making encouraging progress in delivering the benefits of Signature s unique global network of FBOs. We successfully concluded during the first half of the year negotiations with our largest customers regarding the delivery of our services across the enlarged, market-leading network and believe that the outcome demonstrates Signature s unrivalled ability to satisfy the needs of its customer base. Although we experienced a short-term negative impact on volumes relative to market during the period, Signature s strong drop through continues to demonstrate our ability to grow underlying operating profit ahead of market growth. In Aftermarket Services, Ontic had a good first half and we are pleased with the contribution of the portfolio of legacy avionics products acquired from GE Aviation at the end of. Ontic continues to have a strong pipeline of growth opportunities. Although ERO continues to be impacted by reduced legacy mid-cabin fixed wing flying, the slight improvement in operating performance seen in the second half of was maintained in to the first half of this year. In summary, the Board s confidence of good growth in 2017 remains unchanged. 2

INTERIM FINANCIAL REPORT 2017 Overview BBA Aviation performed well in the first half of 2017 and made further progress with the implementation of its strategy. Flight Support ( Signature ) delivered good operating profit growth of 13.6% against US B&GA movements that grew 3% during the first six months of the year. With the Landmark Aviation acquisition successfully integrated in, Signature is making encouraging headway in realising the benefits of its unique and high quality global network of FBOs and in enhancing its network performance. Ontic continues to perform well, with the legacy avionics business acquired from GE Aviation at the end of contributing as expected. While trading conditions in Engine Repair & Overhaul (ERO) remain challenging, the actions being taken to reduce the cost and complexity of this business supported a stable operating performance following the slight improvement during the second half of. Group revenue increased by 12.2% to $1,145.5 million (H1 : $1,020.6 million) including a $74m contribution from acquisitions. Signature revenue increased 18.0%, reflecting organic growth of 3.2%, a $52.8m contribution from acquisitions - principally an additional month of contribution from the Landmark Aviation acquisition (completed February ) - and the net positive impact of higher fuel prices and adverse foreign exchange movements, which increased revenue by $45.9 million. Aftermarket Services revenue increased by 0.8% reflecting the contribution from the acquisitions in Ontic, largely offset by an organic revenue decrease in ERO. Group underlying operating profit was $174.9 million (H1 : $135.6 million). There was a good operating performance in Signature, with strong drop through and a $3.6 million net contribution from acquisitions less the impact of disposals completed in H1. Underlying operating profit at Aftermarket Services more than doubled, including an $8.4 million contribution from acquisitions, and now accounts for 13.9% of the continuing Group. Ontic delivered as anticipated, and the slight improvements seen in ERO s operating performance in the second half of were maintained in to the first half of 2017. Group underlying operating profit margin increased to 15.3% (H1 constant fuel price: 12.6%) with positive margin development in Signature and Aftermarket Services. Net interest increased by $1.3 million to $31.4 million (H1 : $30.1 million), mostly due to higher interest rates and other interest costs offset partly by lower debt. Net debt decreased to $1,256.3 million (FY : $1,335.3 million). Net debt to EBITDA reduced to 2.9x on a covenant basis (FY : 3.1x) and 2.9x on a reported basis (FY : 3.2x). Interest cover increased to 6.7x for the 12 months to 30 June 2017 (FY : 6.5x). underlying profit before tax increased to $143.5 million (H1 : $105.5 million). The Group s underlying tax rate for continuing was 18.3% (H1 : 16.6%). Adjusted earnings per share for continuing was up 32.6% to 11.4 (H1 : 8.6 ). Exceptional and other items after tax, for continuing and discontinued, totalled $64.6 million. Key components of this for continuing are the non cash amortisation of acquired intangibles ($46.7 million), restructuring expenses ($5.3 million) and a tax credit of $19.3 million. Discontinued includes the disposal of ASIG ($6.6 million) and an associated tax charge on the disposal ($25.3 million). statutory profit before tax was $91.5 million versus a $153.3 million statutory loss for the first half of. The improvement arises principally from the lower level of exceptional and other items charged during the first six months of 2017, with the first six months of including impairment charges in relation to the assets of ERO and ASIG. Free cash inflow was $35.1 million lower at $56.6 million (H1 : $91.7 million). There was a $65.1 million outflow of working capital in the first half of 2017 (H1 : $9.3 million inflow, FY : $36.1 million inflow) principally due to the expected reversal of the year end working capital outperformance for continuing and a working capital outflow of $24.8 million on ASIG discontinued prior to its disposal on 31 January 2017. It is expected that approximately $15 million of the further outflow on continuing will reverse in the second half. Gross capital expenditure amounted to $38.2 million (H1 : $49.6 million), including the construction of a new FBO terminal at Boeing Field, Seattle, which completed in June 2017. Cash flows on exceptional and other items are largely as a result of restructuring expenses. The Group made $2.1 million of pension scheme payments (H1 : $2.6 million). The Group s tax payments during the period were $18.8 million (H1 : $7.0 million) and interest payments were $28.8 million (H1 : $29.5 million). The dividend payment was $91.5 million (H1 : $87.2 million). spend on acquisitions and licences completed during the period was $61.3 million (H1 : $2,092.0 million), which included $59.3 million for the GE Aviation avionics acquisition in Ontic. The first half of included the acquisition of Landmark Aviation for $2,086.9 million. Proceeds from disposals of $180.4 million (H1 : $186.5 million) relate to the disposal of ASIG, net of costs. 3

Return on Invested Capital (ROIC) increased to 10.7% (FY : 10.1%). Business Review Operations Flight Support (86.1% of continuing underlying operating profit) The Flight Support division ( Signature ) provides specialist on-airport services including refuelling and ground handling to the business & general aviation (B&GA) market. H1 % Change Revenue 802.8 680.5 18.0% Underlying operating profit 160.8 141.6 13.6% Underlying operating margin 20.0% 18.3% 1 1.7% pts Statutory operating profit 119.7 77.4 54.7% Operating cash flow 154.0 145.8 5.6% Divisional return on invested capital 11.4% 11.2%* 0.2% pts 1 H1 operating margin adjusted for constant fuel prices and disposals (unadjusted H1 operating margin: 20.8%) *Return on invested capital for full year Revenue at Signature increased by 18.0% to $802.8 million (H1 : $680.5 million). This included a $52.8 million contribution from acquisitions - principally an additional month of contribution from the Landmark Aviation acquisition (completed February ) - and the net positive impact of higher fuel prices and adverse foreign exchange movements, which increased revenue by $45.9 million. Signature s organic revenue, excluding the contribution from acquisitions, increased by 3.2%. This was against the background of US B&GA movements up 3% and European B&GA movements up 6%. Following the successful integration of Landmark Aviation in, Signature has focused on optimising its unique and high quality global network and on enhancing network performance. This has included Signature engaging during the first half of the year in negotiations with its customers regarding the provision of its services across the enlarged network, focusing initially on Signature s heaviest users. During the first half, a range of important contract negotiations were successfully concluded, including with many of Signature s largest customers, and the Group is confident that the outcome demonstrates the ability of Signature s unrivalled network to deliver value and satisfy the needs of its customers. Signature is continuing to work with its broader customer base to deliver value across the network. As previously guided, Signature is focused on delivering underlying operating profit growth ahead of the growth in its market. Although there was a negative impact on fuel volumes in the first half of 2017 while negotiations with Signature s customers were underway, drop through to profit was strong. Underlying operating profit at Signature increased by 13.6% to $160.8 million (H1 : $141.6 million) and on an organic basis, adjusting for the net impact of acquisitions and disposals ($3.6 million) and FX ($(0.9) million), increased by 12.4%. The Group remains confident in Signature s ability to continue to deliver significant value creation across the enlarged network. Underlying operating margin was slightly lower at 20.0% (H1 : 20.8%) due primarily to the increase in fuel prices and disposals in. After adjusting for constant fuel prices and disposals, Signature s underlying operating margin increased by 1.7% points compared to the prior period. Statutory operating profit of $119.7 million has increased by 54.7% (H1 : $77.4 million). This increase is a result of organic growth, the impact of acquisitions, net of disposals and lower charges for exceptional and other items. Operating cash flow for continuing Signature improved to $154.0 million (H1 : $145.8 million), principally due to increased EBITDA from organic growth and the acquisition of Landmark Aviation, which completed in February. Return on invested capital increased to 11.4% (FY : 11.2%). During the period, Signature continued to invest in its existing network, with the opening of its newly constructed facility at Boeing Field, Seattle. It also secured a new strategic lease at Washington Dulles International Airport, Virginia. The number of locations in the Group s affiliate FBO programme, Signature Select TM, remains at 18. The Group continues to see opportunities to expand the Signature Select TM network. There are now 202 locations in Signature s global network. 4

Aftermarket Services (13.9% of continuing underlying operating profit) The Aftermarket Services division is focused on the support of maturing aerospace platforms through Ontic, the Group s Legacy Support business, and the repair and overhaul of engines through the Group s Engine Repair and Overhaul (ERO) businesses. H1 % Change Revenue 342.7 340.1 0.8% Underlying operating profit 26.0 11.1 134.2% Underlying operating margin 7.6% 3.3% 430bps Statutory operating profit 16.7 1.8 827.8% Operating cash flow (14.7) (6.8) (116.2)% Divisional ROIC 10.2% 6.9%* 3.3% pts *Return on invested capital for full year In Aftermarket Services, revenue increased by 0.8% to $342.7 million (H1 : $340.1 million). On an organic basis, adjusting for FX ($(6.3) million) and acquisitions ($21.2 million), revenue decreased by 3.7%. This decrease was driven by ERO. Underlying operating profit of $26.0 million increased by 134% (H1 : $11.1 million). Both Ontic and ERO contributed to the uplift in profitability. Growth at Ontic was driven by the acquisition of a portfolio of avionics products from GE Aviation at the end of last year and the licence acquisitions. In ERO, the improved operating performance seen in the second half of was maintained in to the first half of 2017. On an organic basis, operating profit increased 72.5%. Operating margins improved to 7.6% (H1 : 3.3%). Statutory operating profit of $16.7 million has increased by $14.9 million (H1 : $1.8 million), principally as a result of the improvement in underlying operating profit as outlined above. There was an operating cash outflow for the division of $14.7 million (H1 : $6.8 million outflow) reflecting the expected reversal of working capital outperformance from the year end offset by improved EBITDA, including the benefit of acquisitions. Return on invested capital increased to 10.2% (FY : 6.9%). Ontic, the Group s legacy support business, continues to perform well, with revenue increasing 34.2% to $94.2 million (H1 : $70.2 million). On an organic basis, revenue was up 8.6%. The first half performance included a significant contribution from the portfolio of legacy avionics products acquired from GE Aviation in December. The acquired portfolio of products is delivering as expected and the transfer of the business into Ontic s existing UK facility in Cheltenham is underway, with completion expected in the second half of 2017. Ontic also benefited from the licences added in with Ultra Electronics, for the Q400 PEC, and with Safran Nacelles, to support the Saab 2000 nacelles and AWACS CFM56 thrust reverser, together with the expansion last year of its licensor relationship with Pratt & Whitney Canada Corp, increasing its portfolio of JT15D products. Furthermore, Ontic benefited in the first six months of 2017 from initiatives being undertaken to achieve a more balanced annual performance profile. As such, a more even split is expected in Ontic s performance between the first and second half of 2017 than in previous years. Ontic continues to assess a strong pipeline of opportunities in relation to new products and licence adoptions. Engine Repair and Overhaul s revenue declined by $21.4 million to $248.5 million (H1 : $269.9 million). While market conditions remain challenging, ERO s operating performance was stable in the first half of 2017 following the slight improvement in the second half of. Volumes in legacy mid-cabin engines and rotorcraft engine overhauls remained depressed through the period, with reduced workscopes and competitive pricing. Nevertheless, while the small thrust engine repair and overhaul market remains competitive and volatile month-to-month, ERO did see improvements in demand for overhauls in certain Pratt & Whitney and Tay markets, as well as market share gains for the TFE731 over the course of the first half. ERO s footprint rationalisation programme is nearing completion. The new overhaul facility at Dallas Forth Worth (DFW) is successfully delivering the overhaul formerly undertaken at the Neosho and Forest Park facilities. The sale of the Forest Park site continues to be expected this year. It continues to be anticipated that ongoing operational improvements and cost reduction will help to improve flexibility, customer service and financial performance. Central costs Underlying central costs have decreased during the first half of 2017 by $5.2 million to $11.9 million (H1 : $17.1 million). This primarily reflects the costs of supporting ASIG being absorbed under the transitional service agreement with John Menzies as part of the ASIG disposal. 5

Discontinued Operations Discontinued for all periods presented include the results of the Group s ASIG business. The disposal of ASIG, which completed on 31 January 2017, generated proceeds of $180.4 million, net of costs during the period. ASIG s results are included up to the date of its disposal. Other Financial Information Net debt reduced by $79.0 million to $1,256.3 million (FY : $1,335.3 million). At 30 June 2017 the Group had total borrowings of $1,416.1 million (FY $1,547.7 million), obligations under finance leases of $1.5 million (FY $1.7 million) and cash and cash equivalents of $152.6 million for continuing (FY : $182.5 million) and cash and cash equivalents for discontinued of $nil (FY $22.8 million). Net debt to EBITDA reduced to 2.9x on a covenant basis (FY : 3.1x) and 2.9x on a reported basis (FY : 3.2x). Interest cover increased to 6.7x for the 12 months to 30 June 2017 (FY : 6.5x). Pensions The Group s net defined benefit pension and other post-retirement benefits liabilities reduced by $2.7 million during the first half of 2017 from $82.8 million at 31 December to $80.1 million at 30 June 2017, reflecting the favourable impact of better than expected returns on plan assets and employer contributions, more than offsetting the unfavourable impact of foreign exchange movements, net interest costs and administration expenses. Dividend The Board is declaring an increased interim dividend of 3.81 (H1 : 3.63 ) up 5% on an underlying basis reflecting the Board s progressive dividend policy and its continued confidence in the Group s future growth prospects. Board Changes As previously announced, Simon Pryce stood down as Group Chief Executive and from the Board with effect from 30 June 2017. Wayne Edmunds has been appointed Interim Group Chief Executive until the process of finding a permanent successor is complete. David Crook succeeded Mike Powell as Group Finance Director on 1 June 2017. Outlook We are pleased with BBA Aviation s performance overall in the first half of 2017. Against the background of a US B&GA market that grew 3%, we are making encouraging progress in delivering the benefits of Signature s unique global network of FBOs. We successfully concluded during the first half of the year negotiations with our largest customers regarding the delivery of our services across the enlarged, market-leading network and believe that the outcome demonstrates Signature s unrivalled ability to satisfy the needs of its customer base. Although we experienced a short-term negative impact on volumes relative to market during the period, Signature s strong drop through continues to demonstrate our ability to grow underlying operating profit ahead of market growth. In Aftermarket Services, Ontic had a good first half and we are pleased with the contribution of the portfolio of legacy avionics products acquired from GE Aviation at the end of. Ontic continues to have a strong pipeline of growth opportunities. Although ERO continues to be impacted by reduced legacy mid-cabin fixed wing flying, the slight improvement in operating performance seen in the second half of was maintained in to the first half of this year. In summary, the Board s confidence of good growth in 2017 remains unchanged. 6

Going concern The Directors have carried out a review of the Group s trading outlook and borrowing facilities, with due regard to the risks and uncertainties to which the Group is exposed, the uncertain economic climate and the impact that this could have on trading performance. Based on this review, the Directors believe that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis. Directors responsibilities The Directors confirm that to the best of their knowledge: a) the condensed consolidated set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting ; b) the interim financial report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and, c) the interim financial report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties transactions and changes therein). Signed on behalf of the Board, Wayne Edmunds Interim Group Chief Executive David Crook Group Finance Director 31 July 2017 31 July 2017 This interim financial report 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. This interim financial report has been drawn up and presented in accordance with and in reliance on applicable English company law and the liabilities of the directors in connection with this report shall be subject to the limitations and restrictions provided by such law. This report is available in electronic format from the Company s website www.bbaaviation.com 7

Unaudited condensed consolidated income statement ended 30 June 2017 ended 30 June Year ended 31 December Exceptional and other Exceptional and other Exceptional and other Underlying 1 Items Underlying 1 Items Underlying 1 Items Note Revenue 2 1,145.5-1,145.5 1,020.6-1,020.6 2,149.1-2,149.1 Cost of sales (876.8) - (876.8) (792.5) - (792.5) (1,654.7) - Gross profit 268.7-268.7 228.1-228.1 494.4-494.4 Distribution costs (18.3) - (18.3) (16.9) - (16.9) (37.6) - (37.6) Administrative expenses Other operating income Share of profit of associates and joint ventures Other operating expenses (1,654. 7) 3 (79.5) (46.7) (126.2) (88.9) (51.2) (140.1) (172.3) (98.6) (270.9) 2.8-2.8 2.8-2.8 5.7-5.7 1.7-1.7 11.0-11.0 13.4-13.4 3 (0.5) - (0.5) (0.5) (16.1) (16.6) (1.0) (28.0) (29.0) Restructuring costs 3 - (5.3) (5.3) - (6.2) (6.2) - (9.9) (9.9) Operating profit/(loss) 2, 3 174.9 (52.0) 122.9 135.6 (73.5) 62.1 302.6 (136.5) 166.1 Impairment of assets 3 - - - - (185.3) (185.3) - (184.4) (184.4) Investment income 1.0-1.0 1.7-1.7 3.7-3.7 Finance costs (32.4) - (32.4) (31.8) - (31.8) (67.6) - (67.6) Profit/(loss) before tax 143.5 (52.0) 91.5 105.5 (258.8) (153.3) 238.7 (320.9) (82.2) Tax (expense)/credit 3, 4 (26.2) 19.3 (6.9) (17.5) 41.1 23.6 (39.5) 102.4 62.9 Profit/(loss) from continuing Discontinued operation Profit/(loss) from discontinued operation, net of tax Profit/(loss) for the period 117.3 (32.7) 84.6 88.0 (217.7) (129.7) 199.2 (218.5) (19.3) 3, 14 (0.2) (31.9) (32.1) 12.3 (129.6) (117.3) 17.9 (97.5) (79.6) 117.1 (64.6) 52.5 100.3 (347.3) (247.0) 217.1 (316.0) (98.9) Attributable to: Equity holders of BBA Aviation plc Non-controlling interests Profit/(loss) for the period 117.0 (64.6) 52.4 100.1 (347.3) (247.2) 217.1 (316.0) (98.9) 0.1-0.1 0.2-0.2 - - - 117.1 (64.6) 52.5 100.3 (347.3) (247.0) 217.1 (316.0) (98.9) Earnings/(loss) per share group ended 30 June 2017 ended 30 June Year ended 31 December Note Adjusted 1 Adjusted Unadjusted 1 Unadjusted Adjusted 1 Unadjusted (Restated) (Restated) Basic 5 11.4 5.1 9.8 (24.1) 21.1 (9.6) Diluted 5 11.3 5.0 9.7 (24.1) 20.9 (9.6) Basic 5 11.4 8.2 8.6 (12.7) 19.4 (1.9) Diluted 5 11.3 8.1 8.5 (12.7) 19.2 (1.9) Discontinued Basic 14 - (3.1) 1.2 (11.4) 1.7 (7.7) Diluted 14 - (3.1) 1.2 (11.4) 1.7 (7.7) 1 Underlying results and adjusted earnings per share are stated before exceptional and other items. Exceptional and other items are disclosed in note 3. All alternative performance measures are reconciled to IFRS measures and explained in note 17. 8

Unaudited condensed consolidated statement of comprehensive income ended 30 June 2017 ended 30 June Year ended 31 December Profit/(loss) for the period 52.5 (247.0) (98.9) Other comprehensive income/(loss) Items that will not be reclassified subsequently to profit or loss Actuarial gains/(losses) on defined benefit pension schemes 4.5 (11.5) (52.3) Tax (charge)/credit relating to components of other comprehensive income/(loss) that will not be reclassified subsequently to profit or loss (0.9) 2.5 9.8 3.6 (9.0) (42.5) Items that may be reclassified subsequently to profit or loss Exchange difference on translation of foreign (98.5) 158.6 309.0 Recycling of translational exchange differences accumulated in equity upon disposal of subsidiary 6.4 - - Gains/(losses) on net investment hedges 87.0 (158.1) (308.0) Fair value movements in available for sale investments - - (2.0) Fair value movements in foreign exchange cash flow hedges 7.0 (1.5) 1.3 Transfer to profit or loss from other comprehensive income on foreign exchange cash flow hedges (1.9) (2.3) (4.5) Fair value movement in interest rate cash flow hedges (1.9) (21.4) (5.4) Transfer to profit or loss from other comprehensive income on interest rate cash flow hedges Tax relating to components of other comprehensive income that may be subsequently reclassified to profit or loss 2.3 3.8 7.3 (1.1) 5.7 2.8 (0.7) (15.2) 0.5 Other comprehensive income/(loss) for the period 2.9 (24.2) (42.0) comprehensive income/(loss) for the period 55.4 (271.2) (140.9) Attributable to: Equity holders of BBA Aviation plc 55.3 (271.2) (141.1) Non-controlling interests 0.1-0.2 55.4 (271.2) (140.9) 9

Unaudited condensed consolidated balance sheet As at 30 June 2017 As at 30 June As at 31 December Note Non-current assets Goodwill 1,118.3 1,117.8 1,113.9 Other intangible assets 1,339.8 1,373.8 1,378.3 Property, plant and equipment 867.1 870.2 875.6 Interests in associates and joint ventures 40.4 47.1 40.1 Trade and other receivables 19.9 36.0 19.2 Deferred tax asset 0.7 14.8 0.4 3,386.2 3,459.7 3,427.5 Current assets Inventories 243.3 237.0 235.8 Trade and other receivables 289.4 270.3 296.8 Cash and cash equivalents 7 152.6 164.8 182.5 Tax recoverable 1.1 0.7 1.4 Assets held for sale - 255.6 267.7 686.4 928.4 984.2 assets 2 4,072.6 4,388.1 4,411.7 Current liabilities Trade and other payables (451.8) (433.2) (543.2) Tax liabilities (63.1) (44.1) (36.8) Obligations under finance leases (0.2) (0.4) (0.2) Borrowings 7 (124.4) (0.2) (1.0) Provisions (26.1) (40.0) (27.6) Liabilities held for sale - (85.3) (89.3) (665.6) (603.2) (698.1) Net current assets 20.8 325.2 286.1 Non-current liabilities Borrowings 7 (1,291.7) (1,652.8) (1,546.7) Trade and other payables due after one year (3.1) (19.3) (4.0) Pensions and other post-retirement benefits 13 (80.1) (49.4) (82.8) Deferred tax liabilities (108.2) (211.7) (120.5) Obligations under finance leases (1.3) (1.6) (1.5) Provisions (38.0) (30.8) (39.5) (1,522.4) (1,965.6) (1,795.0) liabilities 2 (2,188.0) (2,568.8) (2,493.1) Net assets 1,884.6 1,819.3 1,918.6 Equity Share capital 15 508.8 508.6 508.7 Share premium account 1,594.5 1,594.4 1,594.5 Other reserve 0.3 1.0 (1.0) Treasury reserve (91.7) (89.9) (91.0) Capital reserve 47.1 40.1 45.1 Hedging and translation reserves (87.9) (109.4) (87.1) Retained earnings (88.2) (127.1) (52.2) Equity attributable to equity holders of BBA Aviation plc 1,882.9 1,817.7 1,917.0 Non-controlling interest 1.7 1.6 1.6 equity 1,884.6 1,819.3 1,918.6 10

Unaudited condensed consolidated cash flow statement ended 30 June 2017 ended 30 June Year ended 31 December Operating activities Note Net cash flow from operating activities 9 121.4 160.0 374.9 Investing activities Interest received 0.5 1.7 2.7 Dividends received from associates 1.9 3.2 2.4 Purchase of property, plant and equipment (35.9) (48.1) (101.6) Purchase of intangible assets (2.3) (8.3) (11.4) Proceeds from disposal of property, plant and equipment 0.3 7.6 11.1 Acquisition of businesses, net of cash/(debt) acquired 10 (61.3) (2,085.2) (2,098.2) Investment in joint ventures and associates (0.5) - - Proceeds from disposal of subsidiaries and associates, net of cash/(debt) disposed 11 180.4 186.5 186.6 Net cash inflow/(outflow) from investing activities 83.1 (1,942.6) (2,008.4) Financing activities Interest paid (29.2) (31.1) (64.5) Interest element of finance leases paid (0.1) (0.1) (0.1) Dividends paid 6 (91.5) (87.2) (124.3) (Losses) / gains from realised foreign exchange contracts (5.0) 10.5 42.7 Proceeds from issue of ordinary shares net of issue costs 0.1-0.3 Purchase of own shares (2.1) (0.4) (1.3) (Decrease)/increase in loans (134.0) 1,125.7 1,035.3 (Decrease)/increase in finance leases (0.2) 2.0 1.7 Increase/(decrease) in overdrafts 2.5 (11.8) (11.0) Net cash (outflow)/inflow from financing activities (259.5) 1,007.6 878.8 Decrease in cash and cash equivalents (55.0) (775.0) (754.7) Cash and cash equivalents at beginning of the period 205.3 966.4 966.4 Exchange adjustments 2.3 (1.7) (6.4) Cash and cash equivalents at end of the period 152.6 189.7 205.3 Comprised of: Cash and cash equivalents at end of the period 152.6 164.8 182.5 Cash included in Assets held for sale at end of the period - 24.9 22.8 Net debt at beginning of the period (1,335.3) 456.5 456.5 Decrease in cash and cash equivalents (55.0) (775.0) (754.7) Decrease/(increase) in loans 134.0 (1,125.7) (1,035.3) Decrease/(increase) in finance leases 0.2 (2.0) (1.7) (Increase)/decrease in overdrafts (2.5) 11.8 11.0 Exchange adjustments 2.3 (2.6) (11.1) Net debt at end of the period (1,256.3) (1,437.0) (1,335.3) Purchase of intangible assets includes $nil million (30 June : $6.8 million; 31 December : $10.6 million) paid in relation to Ontic licences. Purchase of own shares includes shares purchased for the Employee Benefit Trust and shares purchased from employees to settle their tax liabilities as part of the share scheme. Within the Group s definition of net debt the US private placement is included at its face value of $500 million (30 June : $500 million; 31 December : $500 million) reflecting the fact that the liabilities will be in place until maturity. This is $8.7 million (30 June : $28.3 million; 31 December : $8.8 million) lower than its carrying value. 11

Unaudited condensed consolidated statement of changes in equity Share capital Share premium Retained earnings Other reserves Noncontrolling interests equity Balance at 1 January 2017 508.7 1,594.5 (52.2) (134.0) 1,917.0 1.6 1,918.6 Profit for the period - - 52.4-52.4 0.1 52.5 Other comprehensive income for the period - - 2.4 0.5 2.9-2.9 comprehensive income for the period - - 54.8 0.5 55.3 0.1 55.4 Dividends - - (91.5) - (91.5) - (91.5) Issue of share capital 0.1 - - - 0.1-0.1 Movement on treasury reserve - - - (2.1) (2.1) - (2.1) Credit to equity for equity-settled sharebased payments - - - 3.9 3.9-3.9 Tax on share-based payment transactions - - 0.2-0.2-0.2 Transfer to retained earnings - - 0.5 (0.5) - - - Balance at 30 June 2017 508.8 1,594.5 (88.2) (132.2) 1,882.9 1.7 1,884.6 Balance at 1 January 508.5 1,594.4 208.2 (137.9) 2,173.2 (4.8) 2,168.4 (Loss)/profit for the period - - (247.2) - (247.2) 0.2 (247.0) Other comprehensive loss for the period - - (3.3) (20.9) (24.2) - (24.2) comprehensive (loss)/income for the period - - (250.5) (20.9) (271.4) 0.2 (271.2) Dividends - - (87.2) - (87.2) - (87.2) Issue of share capital 0.1 - - - 0.1-0.1 Movement on treasury reserve - - - (0.4) (0.4) - (0.4) Credit to equity for equity-settled sharebased payments - - - 3.4 3.4-3.4 Changes in non-controlling interest - - - - - 6.2 6.2 Transfer to retained earnings - - 2.4 (2.4) - - - Balance at 30 June 508.6 1,594.4 (127.1) (158.2) 1,817.7 1.6 1,819.3 Balance at 1 January 508.5 1,594.4 208.2 (137.9) 2,173.2 (4.8) 2,168.4 Loss for the period - - (98.9) - (98.9) - (98.9) Other comprehensive loss for the period - - (39.7) (2.1) (41.8) (0.2) (42.0) comprehensive loss for the period - - (138.6) (2.1) (140.7) (0.2) (140.9) Dividends - - (124.3) - (124.3) - (124.3) Issue of share capital 0.2 0.1 - - 0.3-0.3 Movement on treasury reserve - - - (1.3) (1.3) - (1.3) Credit to equity for equity-settled sharebased payments - - - 9.1 9.1-9.1 Changes in non-controlling interest - - - - - 6.6 6.6 Tax on share-based payment transactions - - 0.7-0.7-0.7 Transfer to retained earnings - - 1.8 (1.8) - - - Balance at 31 December 508.7 1,594.5 (52.2) (134.0) 1,917.0 1.6 1,918.6 12

Notes to the condensed consolidated half yearly financial statements 1 Basis of preparation The unaudited condensed consolidated financial statements of BBA Aviation plc (the Group ), for the six months ended 30 June 2017 have been prepared in accordance with the Disclosure and Transparency Rules of the UK s Financial Conduct Authority and International Accounting Standard IAS 34: Interim Financial Reporting (IAS 34) which permits the presentation of the financial information on a condensed basis. These condensed consolidated half yearly financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006, and therefore should be read in conjunction with the Group s Annual Report for the year ended 31 December. The Group s annual financial statements for the year ended 31 December have been reported upon by the Group s auditor and delivered to the Registrar of Companies. The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. These condensed consolidated half yearly financial statements have been prepared in accordance with the accounting policies, presentation and methods of calculation as set out in the Group s consolidated financial statements for the year ended 31 December, which were prepared in accordance with International Financial Reporting Standards (IFRS) endorsed for use in the European Union and the Companies Act 2006, and comply with Article 4 of the EU IAS Regulation. Going concern The directors are satisfied that, at the time of approving the condensed consolidated financial statements, it is appropriate to continue to adopt the going concern basis of accounting. Further information is given on page 7 of the interim statement. New financial reporting requirements A number of EU-endorsed amendments to existing standards and interpretations are effective for annual periods beginning on or after 1 January 2017 and have been applied in preparing the Condensed Consolidated Financial Statements of the Group. There is no impact on the Condensed Consolidated Financial Statements of the Group from applying these standards. Financial reporting standards applicable for future financial periods A number of EU-endorsed standards and amendments to existing standards and interpretations, which are described below, are effective for annual periods beginning on or after 1 January 2018 and have not been applied in preparing the Consolidated Financial Statements of the Group. The most significant changes to the IFRS framework in these forthcoming standards and amendments to standards are IFRS 9: Financial Instruments (IFRS 9), IFRS 15: Revenue from contracts with customers (IFRS 15) and IFRS 16: Leases. IFRS 9 addresses the classification, measurement and recognition of financial assets and financial liabilities, impairment and hedge accounting. IFRS 15 addresses recognition of revenue from customer contracts and impacts on the amounts and timing of the recognition of such revenue. In both standards were endorsed by the EU and will become effective on 1 January 2018. The assessment of the impact of IFRS 9 and IFRS 15 on the Group s Consolidated Financial Statements is substantially complete and management s expectations remain that the impact will not be material. The IASB released IFRS 16: Leases on 13 January. The standard has not yet been adopted into EU-IFRS. Management have not yet completed their assessment of the impact of the final standard on the Group s financial statements. However, the Group has substantial operating lease commitments and the standard is expected to have a material impact on the Group. 2 Segmental analysis IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker (for the Group, this is the Chief Executive) to allocate resources to the segments and to assess their performance. Based on the above, the reportable segments of the Group are Flight Support and Aftermarket Services. The businesses within the Flight Support segment provide re-fuelling, ground handling and other services to the business, general and commercial aviation markets. The businesses within the Aftermarket Services segment maintain and support engines and aerospace components, sub-systems and systems. Sales between segments are immaterial. There has been no change to the Group's reportable segments since the last annual report. 13

2 Segmental analysis - continued As at, and for the six months ended 30 June 2017 Business segments External revenue External revenue from continuing and discontinued Less external revenue from discontinued External revenue from continuing Note Flight Support 1 Aftermarket Services Unallocated Corporate 2 841.0 342.7 1,183.7-1,183.7 14 (38.2) - (38.2) - (38.2) 802.8 342.7 1,145.5-1,145.5 Underlying operating profit Underlying operating profit/(loss) from continuing and discontinued Less underlying operating loss from discontinued Adjusted for intergroup charges for discontinued Underlying operating profit/(loss) from continuing Underlying operating margin from continuing Exceptional and other items Exceptional and other items from continuing and discontinued Less exceptional and other items from discontinued Exceptional and other items from continuing 160.6 26.0 186.6 (11.9) 174.7 14 0.2-0.2-0.2 14 - - - - - 160.8 26.0 186.8 (11.9) 174.9 20.0% 7.6% 16.3% - 15.3% (41.1) (9.3) (50.4) (1.6) (52.0) 14 - - - - - 3 (41.1) (9.3) (50.4) (1.6) (52.0) Operating profit/(loss) from continuing Impairment of fixed assets Net finance costs Profit before tax from continuing 119.7 16.7 136.4 (13.5) 122.9 - (31.4) 91.5 Other information Capital additions cash flows 32.0 6.2 38.2-38.2 Depreciation and amortisation Balance sheet 75.4 14.2 89.6 0.2 89.8 assets 3,203.7 773.2 3,976.9 95.7 4,072.6 liabilities (297.9) (141.2) (439.1) (1,748.9) (2,188.0) Net assets/(liabilities) 2,905.8 632.0 3,537.8 (1,653.2) 1,884.6 1 Flight Support s segment result includes $1.7 million (30 June : $11.0 million; 31 December : $13.4 million) relating to profits of associates and joint ventures. 2 Unallocated corporate balances include debt, tax, provisions, pensions, insurance captives and trading balances from central activities. 14

2 Segmental analysis - continued As at, and for the six months ended 30 June Business segments External revenue External revenue from continuing and discontinued Less external revenue from discontinued External revenue from continuing Note Flight Support Aftermarket Services Unallocated Corporate 889.3 340.1 1,229.4-1,229.4 14 (208.8) - (208.8) - (208.8) 680.5 340.1 1,020.6-1,020.6 Underlying operating profit Underlying operating profit/(loss) from continuing and discontinued Less underlying operating profit from discontinued Adjusted for intergroup charges for discontinued Underlying operating profit/(loss) from continuing Underlying operating margin from continuing Exceptional and other items Exceptional and other items from continuing and discontinued Less exceptional and other items from discontinued Exceptional and other items from continuing 146.3 11.1 157.4 (7.8) 149.6 14 (4.7) - (4.7) - (4.7) 14 - - - (9.3) (9.3) 141.6 11.1 152.7 (17.1) 135.6 20.8% 3.3% 15.0% - 13.3% (64.9) (9.3) (74.2) - (74.2) 14 0.7-0.7-0.7 3 (64.2) (9.3) (73.5) - (73.5) Operating profit/(loss) from continuing 77.4 1.8 79.2 (17.1) 62.1 Impairment of fixed assets (185.3) Net finance costs (30.1) Loss before tax from continuing (153.3) Other information Capital additions cash flows 38.5 17.8 56.3 0.1 56.4 Depreciation and amortisation Balance sheet 83.6 13.7 97.3 0.3 97.6 assets 3,507.7 673.0 4,180.7 207.4 4,388.1 liabilities (347.0) (170.5) (517.5) (2,051.3) (2,568.8) Net assets/(liabilities) 3,160.7 502.5 3,663.2 (1,843.9) 1,819.3 15

2 Segmental analysis - continued As at, and for the year ended 31 December Business segments External revenue External revenue from continuing and discontinued Less external revenue from discontinued External revenue from continuing Note Flight Support Aftermarket Services Unallocated Corporate 1,860.0 705.9 2,565.9-2,565.9 14 (416.8) - (416.8) - (416.8) 1,443.2 705.9 2,149.1-2,149.1 Underlying operating profit Underlying operating profit/(loss) from continuing and discontinued Less underlying operating profit from discontinued Adjusted for intergroup charges for discontinued Underlying operating profit/(loss) from continuing Underlying operating margin from continuing Exceptional and other items Exceptional and other items from continuing and discontinued Less exceptional and other items from discontinued Exceptional and other items from continuing 303.9 42.0 345.9 (15.8) 330.1 14 (9.9) - (9.9) 1.0 (8.9) 14 - - - (18.6) (18.6) 294.0 42.0 336.0 (33.4) 302.6 20.4% 5.9% 15.6% - 14.1% (117.4) (19.8) (137.2) - (137.2) 14 0.7-0.7-0.7 3 (116.7) (19.8) (136.5) - (136.5) Operating profit/(loss) from continuing Impairment of tangible and intangible fixed assets 177.3 22.2 199.5 (33.4) 166.1 (184.4) Net finance costs (63.9) Loss before tax from continuing Other information Capital additions cash flows 74.2 38.7 112.9 0.1 113.0 Depreciation and amortisation Balance sheet (82.2) 158.7 24.8 183.5 0.4 183.9 assets 3,515.7 747.5 4,263.2 148.5 4,411.7 liabilities (397.6) (233.2) (630.8) (1,862.3) (2,493.1) Net assets/(liabilities) 3,118.1 514.3 3,632.4 (1,713.8) 1,918.6 16

2 Segmental analysis - continued Geographical segments As at, and for the six months ended 30 June 2017 Revenue by destination Revenue by origin Capital additions cash flows Non-current assets 1 United Kingdom 39.8 137.0 2.2 236.9 Mainland Europe 103.2 26.5 0.3 48.8 North America 993.7 1,010.1 35.2 3,066.2 Rest of world 47.0 10.1 0.5 20.0 from continuing and discontinued 1,183.7 1,183.7 38.2 3,371.9 Less discontinued (38.2) (38.2) - - from continuing 1,145.5 1,145.5 38.2 3,371.9 As at, and for the six months ended 30 June United Kingdom 63.6 155.5 8.6 166.5 Mainland Europe 96.5 24.3 0.1 50.4 North America 1,002.1 1,028.6 45.8 3,175.3 Rest of world 67.2 21.0 1.9 21.3 from continuing and discontinued 1,229.4 1,229.4 56.4 3,413.5 Less discontinued (208.8) (208.8) (10.8) - from continuing 1,020.6 1,020.6 45.6 3,413.5 As at, and for the year ended 31 December United Kingdom 128.0 320.8 14.7 226.7 Mainland Europe 200.9 54.5 0.2 46.1 North America 2,098.5 2,148.0 92.1 3,117.2 Rest of world 138.5 42.6 6.0 23.5 from continuing and discontinued 2,565.9 2,565.9 113.0 3,413.5 Less discontinued (416.8) (416.8) (10.3) - from continuing 2,149.1 2,149.1 102.7 3,413.5 1 The disclosure of non-current assets by geographical segment has been amended to exclude balances related to deferred tax and financial instruments in all periods, as required under IFRS 8. 17

3 Exceptional and other items Underlying profit is shown before exceptional and other items on the face of the income statement because the directors consider that this gives a useful indication of underlying performance and better visibility of key performance indicators. Exceptional and other items on discontinued are presented in note 14. Exceptional and other items on continuing are as follows: Administrative expenses Other operating expenses ended 30 June 2017 ended 30 June Year ended 31 December Restructuring costs Restructuring expenses ERO footprint rationalisation - - 3.7 3.7 6.2 9.9 Central costs rationalisation - - 1.6 1.6 - - Acquisition related Amortisation of intangibles assets arising on acquisition and valued in 46.7 - - 46.7 51.2 98.6 accordance with IFRS 3 Landmark integration costs - - - - 16.1 24.9 Transaction costs 1 - - - - - 1.5 Other - - - - - 1.6 Operating loss on continuing 46.7-5.3 52.0 73.5 136.5 Impairment loss - 185.3 184.4 Net finance costs - - - Loss before tax on continuing 52.0 258.8 320.9 Tax impact of exceptional and other items (19.3) (41.1) (102.4) Loss for the year on continuing 32.7 217.7 218.5 Loss from discontinued operation, net of tax, see note 14 31.9 129.6 97.5 exceptional and other items 64.6 347.3 316.0 1 All transaction costs presented in exceptional and other items related to the acquisition of Landmark Aviation. 4 Income tax ended ended 30 Year ended 31 30 June 2017 June December Recognised in the income statement Current tax (credit)/expense (3.8) 10.6 16.0 Adjustments in respect of prior periods current tax (1.2) - (1.6) Current tax (5.0) 10.6 14.4 Deferred tax expense/(credit) 11.9 (34.2) (78.7) Adjustments in respect of prior periods deferred tax - - 1.4 Deferred tax 11.9 (34.2) (77.3) Income tax expense/(credit) for the period from continuing 6.9 (23.6) (62.9) Tax expense/(credit) relating to discontinued 25.3 1.6 (2.8) income tax expense/(credit) 32.2 (22.0) (65.7) Corporation tax on continuing for the interim period is charged at an effective rate of 18.3% (30 June : 16.6%; 31 December : 16.5%) on underlying profit before tax, representing the best estimate of the weighted average annual corporation tax expected for the full financial year. The total income tax expense for the six months ended 30 June 2017 includes a tax credit of $19.3 million (30 June : $41.1 million; 31 December : $102.4 million) relating to exceptional and other items (see note 3). 18

4 Income tax - continued Tax credited to other comprehensive income and equity is as follows: ended ended Year ended 31 30 June 2017 30 June December Recognised in other comprehensive income and equity Recognised in other comprehensive income Tax on items that will not be reclassified subsequently to profit or loss Current tax credit on pension deficit payments - - 0.5 Deferred tax (expense)/credit on actuarial gains/(losses) (0.9) 2.5 9.3 Tax on items that may be reclassified subsequently to profit or loss (0.9) 2.5 9.8 Current tax credit on foreign exchange movements - 5.7 0.7 Deferred tax (expense)/credit on derivative instruments (1.1) - 2.1 (1.1) 5.7 2.8 tax (expense)/credit within other comprehensive income (2.0) 8.2 12.6 Recognised in equity Current tax credit on share-based payments movements 0.1-0.1 Deferred tax credit on share-based payments movements 0.1-0.6 tax credit within equity 0.2-0.7 tax (expense)/credit within other comprehensive income and equity (1.8) 8.2 13.3 5 Earnings/(loss) per share The calculation of the basic and diluted earnings/(loss) per share is based on the following data: ended 30 June 2017 ended 30 June Year ended 31 December ended 30 June 2017 ended 30 June Year ended 31 December Basic and diluted: Earnings: Profit/(loss) for the period 84.6 (129.7) (19.3) 52.5 (247.0) (98.9) Non-controlling interests (0.1) (0.1) (0.4) (0.1) (0.2) - Basic earnings/(loss) attributable to ordinary shareholders 84.5 (129.8) (19.7) 52.4 (247.2) (98.9) Exceptional and other items net of tax 32.7 217.7 218.5 64.6 347.3 316.0 Adjusted earnings for adjusted earnings per share 117.2 87.9 198.8 117.0 100.1 217.1 Underlying deferred tax 29.6 9.3 27.7 29.6 10.3 35.6 Adjusted earnings for cash earnings per share 146.8 97.2 226.5 146.6 110.4 252.7 19