Ben Stocks - Chief Executive Chris Tyler - Finance Director 1
Summary Consistent strategy Consistent strategy delivering results Niche positions New product development in growing, regulated markets and intellectual property 2011-2016 10% £63m £28m £19m CAGR cash from invested cash operations improved in revenue In the year ended 30 November 2016 14% 10% EPS £13.6m 48% return on revenue growth to cash operating capital growth 17.1p employed 2
Specialist filters are used to protect costly or complex downstream systems Attractive business characteristics Niche positions: Robust demand Barriers to entry: drivers: Long life cycles Secular trends Specialist design skills Bespoke Regulation/legislation Engineering skills Consumable products Maintenance schedules Patent protection Specialist filtration Quality accreditation and environmental technology 3
Consistent strategic A focus on regulated markets with and operational objectives 1 long-term growth prospects Four key markets Long-term growth from developing specialist filtration and environmental Concerted new product technology businesses 2 development both organically and Now core to revenue growth by acquisition Geographic expansion 3 to support key markets Strategy continues to Generate cash to invest in: Organic growth generate 4 Acquisitions opportunities Dividends 4
A focus on regulated markets with long-term growth prospects 1 Markets Regulation Market growth 4.8% Growth in pax revenue FAA, CAA, EASA 2 Aviation miles 2015 - 2035 and other specific accreditations p.a. (Source: Boeing 2016) Long term growth in Energy and 3-4% International nuclear standards: nuclear power industrial NQA1, ASME, etc generation capacity p.a. process 3 (Source: IAEA) 5% Laboratory Approved methods: Growth in water EPA, SEPA, EU water directives analysis consumables supplies p.a. (Source: company estimate) 4 ISO and customer Growth in primary 5% Molten metals accreditations; extensive aluminium usage to p.a. qualification requirements 2020 (Source: CRU 2016) 5
Main operating Approx. share companies of Group sales Business division Principal markets 1 15% Aviation Porvair Filtration Group Energy and Microfiltration 35% industrial 2 process Seal Analytical Laboratory 20% Porvair Sciences supplies 3 Metals 30% SELEE Corp Molten metals Filtration 4 Main markets and operating companies 6
Strong market positions and new product development 1 Aviation 2 Niche positions Growth drivers Recent new Competitive products advantage Fuel systems New build Inerting filters Installed base Coolant systems Maintenance A350 Design engineering 3 Hydraulics New airframes and Airbus NEO Range of media engines Bombardier C Series Design protection Retrofit programmes Mitsubishi MRJ 4 7
Strong market positions and new product development 1 Energy and industrial process 2 Niche positions Growth drivers Recent new Competitive products advantage Hot gas and gasification Gasification build rates E-gas™ Installed base Pulse jet systems Maintenance schedules Spares and service Range of media 3 Nuclear remediation Nuclear clean-up High strength HEPA Design engineering Polymer production Energy efficiency and GasPro™ Design protection security 4 8
Strong market positions and new product development 1 Laboratory supplies 2 Niche positions Growth drivers Recent new Competitive products advantage Analysis of inorganic Regulated water testing 4 new water analysis Installed base chemicals in water platforms Higher environmental Instrument design 3 3 product upgrades protection Associated consumables standards Chromatography Developing markets 6 Chromatrap range Porous plastics IP and extensions consumables related patents Bioscience growth 4 9
Strong market positions and new product development 1 Molten Metals 2 Niche positions Growth drivers Recent new Competitive products advantage Aluminium cast house Aluminium consumption Selee CSX™ / CSW™ Patent protection filtration US auto and light truck Selee IC™ Metallurgical expertise 3 Gray and ductile iron production Selee SA™ US / China filtration Increased use of high manufacturing Range extensions Super alloys grade and exotic alloys Chinese expansion 4 10
Geographic expansion in key markets: £28 million invested in the last five years 1 Americas UK and Europe Asia 6 sites 4 sites 2 sites 2016 update: 2016 update: 2016 update: 2 New equipment for Caribou, ME Bioscience expansion New line in Xiaogan fully commissioned New premises in Ashland, VA opened Aviation expansion Joint venture in India TEM acquired New plant for Seal In Mequon, WI opened 3 Revenue Revenue Revenue 15% 14% 46% 24% UK Europe 4 11
Record performance for the year ended 30 November 2016 1 Revenue Revenue Revenue 14 % 15 % 12 % 2 to £109.4m Microfiltration Metal Filtration 3 PBT EPS Net Cash 10 % 10 % £ 13.6 m to £10.1m to 17.1p 4 12
Income statement for the year ended 30 November 2016 1 2016 2015 £000 £000 Revenue 109,363 95,828 2 Operating profit 10,669 9,801 Interest (586) (604) Profit before tax 10,083 9,197 3 Tax (2,347) (2,241) Profit after tax 7,736 6,956 4 EPS (basic) 17.1p 15.5p 13
Cash flow for the year ended 30 November 2016 1 2016 2015 £000 £000 Operating cash flow before working capital movements 13,709 12,517 Working capital movement (345) 777 2 Interest (161) (143) Tax (2,090) (1,836) Capital expenditure (net of disposals) (4,510) (3,337) Net cash from operations 6,603 7,978 3 Acquisitions (2,930) (1,087) Proceeds from issue of shares 164 34 Purchase of Employee Benefit Trust shares (77) - Dividends paid (1,625) (1,479) Exchange movements 760 28 4 Net cash at 1 December 10,738 5,264 Net cash at 30 November 13,633 10,738 14
1 2016 2015 £000 £000 Revenue 34.7 31.0 Operating profit 2.2 2.4 2 Revenue up 12% to £34.7m 2017 outlook Up 1% at constant currency: Sales of proprietary filters to - better second half Chinese market underway 3 Record aluminium revenue Investments in: - productivity 89% growth in Chinese revenues - Chinese foundry - additive manufacture 12% operating profit fall: - Chinese start up costs Metals Filtration 4 Results and progress – year ended 30 November 2016 15
Microfiltration Results and progress – year ended 30 November 2016 1 2016 2015 £000 £000 2 Revenue 74.6 64.8 Operating profit 11.8 9.7 15% revenue growth to a record 2017 Outlook Aviation up 21% New inerting filter 3 US Industrial up 11% New high strength nuclear HEPA filter Seal Analytical up 6% Investment in bioscience capacity Large projects commissioning Further expansion to accommodate demand 4 Microelectronics: good start 16
Investment and development opportunities: 2017 – 2020 £28m invested in capex and acquisitions over five years; £7.4m in 2016; further investment in 2017 Energy and Laboratory Molten Aviation industrial supplies metals process New programmes: Further gasification bids New platforms for water Chinese production - 787 - 777X analysis - Aluminium underway Gasification services - A350 - NEO - Foundry in 2017 - JV in India Upgraded capability for - Bombardier - Mitsubishi bioscience filter Patented formulations Nuclear: high strength UK production expansion manufacture differentiated Organic HEPA - IP in form and function growth US sales and manufacture CSX TM share gains expansion Range extensions for - 2016 record sales Chromatrap TM New products: inerting Al-Li range extension Selee metal services Microelectronics Licensing: Fiber ceramics integrated Acquired - Gas Pro TM - Thermo order book growth - New products to roll out increasing 17
Summary and outlook Results Investment Revenue Outlook 14% growth Invested in £7.4m the year HEALTHY ORDER BOOKS EPS growth for 2017 10% to 17.1p 8 New or STRONG upgraded PLANTS Balance sheet £13.6m Net cash Full NEW PRODUCT CAPACITY DEVELOPMENT pipeline For growth EXPANSION POSITIVE START to 2017 18
Ben Stocks - Chief Executive Chris Tyler - Finance Director 19
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