BBA Aviation plc 2011 Final Results Results for the year ended 31 December 2011 For further information please contact: Simon Pryce, Group Chief Executive (020) 7514 3990 Mark Hoad, Group Finance Director (020) 7514 3950 BBA AVIATION PLC David Allchurch / Christian Cowley / Martha Kelly (020) 7353 4200 TULCHAN COMMUNICATIONS A video interview with Chief Executive Officer Simon Pryce is now available on www.bbaaviation.com and www.cantos.com. An audio webcast of the analyst presentation will also be available from 09:00 today on www.bbaaviation.com and www.cantos.com.
FINAL RESULTS FOR PERIOD ENDED 31 DECEMBER 2011 Results in brief ($m) Underlying results 1 Statutory results 2011 2010 % Change 2011 2010 % Change Revenue 2,136.7 1,833.7 17% 2,136.7 1,833.7 17% EBITDA 260.5 231.1 13% 250.1 221.0 13% Operating Profit 198.9 171.4 16% 180.6 155.6 16% Profit before tax 170.2 147.8 15% 163.6 132.0 24% Earnings per share 2 29.0c 27.3c 6% 32.5c 23.6c 38% Return On Invested Capital³ 10.6% 9.5% Free Cash Flow 4 185.8 178.6 4% 403.6 492.8 Net Debt Net Debt to EBITDA 1.5x 2.1x Dividend per share 13.94c 13.09c 6.5% (1) Before exceptional items (as defined in note 2 to the financial statements). (2) Basic earnings per share. (3) Underlying operating profit return on average invested capital including goodwill and intangibles amortised or written off to reserves. (4) Cash generated by operations, plus dividends from associates, less tax, net interest and net capital expenditure (excluding Legacy Support licence acquisitions). These definitions as outlined above are consistently applied throughout this results announcement. Financial highlights Continued market outperformance, Group organic revenue growth of 5% Underlying operating profit up 16% to $198.9m, Aftermarket Services & Systems up 23%; Flight Support up 10% Underlying profit before tax up 15%, adjusted earnings per share of 29.0c up 6% Free cash flow increased by 4% with continued strong cash conversion of 102% Further improvement in Group return on invested capital up 110bps to 10.6% Full year dividend increased by 6.5% to 13.94c Operational highlights Flight Support (57% of Group EBIT) Signature: continued market outperformance; strong operating profit conversion; integration of the 7 FBOs acquired proceeding well; network expanded to 112 locations ASIG: good growth; SGS acquisition exceeding expectations; commencement of operations in Latin America Aftermarket Services and Systems (43% of Group EBIT) ERO: strong overhaul demand; expanded field service offering and footprint in South America and Asia Legacy: buoyant demand; further operational improvement. Integration of GE Aviation Systems’ legacy fuel measurement business progressing well, performance exceeding initial expectations APPH: revenues stabilising; further opportunities for operational improvement and cost efficiencies Strategic highlights Implemented a stable, long-term and diversified funding structure, that together with the equity placing and the Group’s strong cash generation supports continued execution of growth strategy $129m invested in 2011 on 7 acquisitions in Signature and Legacy Support with annualised revenues of $75m, $37m committed to organic expansion and lease extensions Strong pipeline of opportunities with significant investment capacity Simon Pryce, BBA Aviation Chief Executive Officer, commented: “BBA Aviation delivered another strong set of results in 2011 despite slower than anticipated market growth. The Group continued to outperform, with good operating profit conversion, strong cash generation and further progress in improving returns on invested capital. We completed seven acquisitions during the year which are integrating well and made further organic investments to extend key lease terms and support future growth. We will continue to deliver operational improvement, to flex costs and to deploy our available capital to a strong pipeline of attractive investment and consolidation opportunities. Whilst the macro-economic climate remains uncertain, we anticipate making further progress during the year. Over the medium-term, the strengths and track record of our business together with the structural drivers of our markets give us continued confidence in the attractive growth prospects for BBA Aviation and our ability to deliver superior through-cycle returns.” 2
BBA Aviation plc – Final Results, 2 March 2012 FINAL RESULTS 2011 Overview BBA Aviation produced another strong set of results in 2011 with good profit conversion and strong cash generation, despite the relatively low growth environment. Our businesses made good operational progress throughout the year and we continued the effective execution of our growth strategy. We made seven acquisitions in Signature and Legacy Support during the year, for a combined consideration of $129m, and committed a further $37m to extend lease terms and for organic expansion. We implemented a stable, long-term and diversified financing structure that, together with the equity placing and the Group’s strong cash generation, positions the Group well for further investment and consolidation to complement our organic growth and continued operational improvement. As previously announced the Group’s presentation currency has changed to allow for greater transparency of the underlying performance of the Group, and these are the first set of results to be presented in US dollars. Group revenue increased by 17% to $2,136.7 million (2010: $1,833.7 million). Excluding the impact of higher fuel prices, which increased revenue by $130.7 million, revenue grew by 9%, of which 5% was organic (excluding the impact of exchange rates, fuel prices, acquisitions and disposals). Acquisitions and disposals contributed $56.5 million of additional net revenue. Underlying operating profit increased by 16% to $198.9 million (2010: $171.4 million) due principally to increased activity across both divisions, the contribution from acquisitions and despite the inclusion in the prior year of a one-off $4.8 million pension curtailment gain. Reported operating margins were unchanged at 9.3% (2010: 9.3%) but improved by 80 basis points on a like-for-like basis after adjusting for the impact of the higher fuel prices and the pension curtailment gain. The underlying net interest charge amounted to $28.7 million (2010: $23.6 million) with the increase due to the higher costs associated with the new bank facility and US private placement from the second quarter, partially offset by the impact of lower average net debt. Underlying profit before tax increased by 15% to $170.2 million (2010: $147.8 million). The underlying effective tax rate was slightly lower at 20.3% (2010: 21.2%). Adjusted earnings per share improved by 6% to 29.0 cents (2010: 27.3 cents) with the growth rate lower than underlying profit before tax as a result of the increased number of shares in issue compared to the prior year. Profit before tax increased by 24% to $163.6 million (2010: $132.0 million) resulting from the improvement in underlying profit before tax as outlined above, together with a reduction in pre tax exceptional items to $6.6 million (2010: $15.8 million). In addition there was an exceptional tax credit of $23.0 million (2010:$0.2 million) largely relating to the settlement of an old outstanding tax claim in Germany. Unadjusted earnings per share increased by 38% to 32.5 cents (2010: 23.6 cents). Free cash flow of $185.8 million showed a 4% improvement over the prior year (2010: $178.6 million) with the working capital outflow experienced in the first half reversing as expected and cash conversion returning to normal levels. Cash interest payments decreased to $21.5 million (2010: $22.8 million), with the impact of the fees associated with the new bank facility and US private placement notes offset by the interest element of the German tax refund. As a result of the tax refund outlined above there was a net tax inflow of $8.5 million (2010: outflow $4.0 million). The cash dividend payment in the year amounted to $63.7 million (2010: $25.9 million) with the increase a result of the withdrawal of the scrip dividend alternative together with the increased number of shares following the equity share placing in March 2011. The share placing raised $140.4 million in net proceeds and the new shares were largely allocated to existing shareholders. In the first half of the year we also implemented a new diversified and long-term financing structure. Total spend on acquisitions in the year amounted to $129.1 million. In addition, we have spent or committed a further $37 million in capital expenditure to extend key lease terms and deliver additional 3
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