INTERIM RESULTS 2010 Interim Results 2010 AGENDA Introduction - PowerPoint PPT Presentation

INTERIM RESULTS 2010 Interim Results 2010

AGENDA Introduction Martin Clark Chairman “Senior has delivered an excellent set of results for the first half of 2010. The benefits of increased volumes, combined with the effects of the cost reduction measures implemented last year and an improved product mix, have enabled the Group to deliver an impressive 38% increase in adjusted pre-tax profit and to remain strongly cash generative. The first half performance and healthy near- term outlook now lead the Board to expect 2010 adjusted profit before tax to be comfortably ahead of market expectations. The Board is pleased to announce an increase of 11% in the interim dividend, reflecting its confidence in the future prospects for the business.” Interim Results Simon Nicholls FD Markets & Outlook Mark Rollins CEO Interim Results 2010

2010 INTERIM RESULTS Interim Results 2010

FINANCIAL HIGHLIGHTS H1 2010 H1 2009 Change Revenue £287.7m £275.9m +4% Adjusted Operating Profit £28.9m £37.7m +30% Adjusted Operating Margin 13.1% 10.5% - Adjusted Profit before Tax £32.5m £23.5m +38% Adjusted Earnings per Share 5.94p 4.27p +39% Interim Dividend 1.00p 0.90p +11% Net Borrowings £87.4m £127.4m £40m better Interim Results 2010 Page 1

AEROSPACE RESULTS – constant exchange rates (2) Adj Operating Profit (1) £m Margin on Sales Turnover £m 2010 2009 Change 2010 2009 Change 2010 2009 169.9 165.2 +2.8% 25.3 21.4 +18.2% 14.9% 13.0% � Increasing build rates on principal military programmes, plus market share gains � Turnover in large commercial aircraft segment unchanged overall, although mix improved � Reduced activity in regional and business jet markets, as expected � Increased sales in semi-conductor industry (other Aerospace) � Record adjusted operating profit margin of 14.9% achieved from: � increased volumes on selective programmes � return to normal activity levels following impact of Boeing strike in 2009 � further improvement in operational efficiencies on reduced cost base � favourable foreign exchange for European operations selling in US$ (1) Before amortisation of intangible assets arising on acquisitions of £2.3m (2009: £2.4m). (2) All at June 2010 YTD exchange rates – translation effect only. Interim Results 2010 Page 2

FLEXONICS RESULTS – constant exchange rates (2) Adj Operating Profit (1) £m Margin on Sales Turnover £m 2010 2009 Change 2010 2009 Change 2010 2009 118.0 107.9 +9.4% 15.2 10.3 +47.6% 12.9% 9.5% � Increase in passenger car production in North America, Europe, Brazil and India � Increased sales of heavy duty diesel engine components in North America � Positive impact from new truck programmes in Germany � Improved turnover from renewables sector � Market led decline in large industrial expansion joints; other industrial markets mixed � Significant profit and OP margin improvement from: � increased volumes in key land vehicle markets � positive operational leverage on lower cost base (France & Czech Rep. return to profit) (1) Before amortisation of intangible assets arising on acquisitions of £nil (2009: £nil). (2) All at June 2010 YTD exchange rates – translation effect only. Interim Results 2010 Page 3

DIVISION RESULTS – constant exchange rates (2) Adj Operating Profit (1) £m Turnover Margin on Sales 2010 2009 Change 2010 2009 Change 2010 2009 169.9 165.2 +2.8% 25.3 21.4 +18.2% 14.9% 13.0% Aerospace 118.0 107.9 +9.4% 15.2 10.3 +47.6% 12.9% 9.5% Flexonics (0.2) (0.3) - - - - - - Inter-Segment sales Central costs - - - (2.8) (2.7) +3.7% - - Continuing Ops 287.7 272.8 +5.5% 37.7 29.0 +30.0% 13.1% 10.6% Exchange effect - 3.1 - - (0.1) - - - As reported 287.7 275.9 +4.3% 37.7 28.9 +30.4% 13.1% 10.5% (1) Before amortisation of intangible assets arising on acquisitions of £2.3m (2009: £2.4m). (2) All at June 2010 YTD exchange rates – translation effect only. Interim Results 2010 Page 4

GEOGRAPHIC RESULTS – constant exchange rates (2) Turnover by Origin Adj Operating Profit (1) Margin on Sales £m 2010 2009 Change 2010 2009 Change 2010 2009 North America 186.5 181.7 +2.6% 27.8 24.9 +11.6% 14.9% 13.7% Rest of Europe 51.8 43.5 +19.1% 1.3 (0.5) - 2.5% -1.1% United Kingdom 29.4 31.8 -7.5% 5.6 2.7 +107.4% 19.0% 8.5% Rest of World 22.4 18.5 +21.1% 5.8 4.6 +26.1% 25.9% 24.9% (2.4) (2.7) - - - - - - Inter-Segment sales Central costs - - - (2.8) (2.7) +3.7% - - Continuing Ops 287.7 272.8 +5.5% 37.7 29.0 +30.0% 13.1% 10.6% Exchange effect - 3.1 - - (0.1) - - - As reported 287.7 275.9 +4.3% 37.7 28.9 +30.4% 13.1% 10.5% (1) Before amortisation of intangible assets arising on acquisitions of £2.3m (2009: £2.4m). (2) All at June 2010 YTD exchange rates – translation effect only. Interim Results 2010 Page 5

ADJUSTED AND REPORTED PROFIT June June 2010 2009 Change £m £m Adjusted operating profit (1) 37.7 28.9 +30% (2) (2) Net interest payable - borrowings and cash (4.1) (3.2) - retirement benefits (1.1) (2.2) Adjusted profit before tax (1) 32.5 23.5 +38% Tax (2010: 27.1%; 2009: 27.7%) (8.8) (6.5) Adjusted profit for the period (1) 23.7 17.0 +39% Amortisation of intangible assets (2.3) (2.4) Related tax on above items 0.9 1.0 Reported profit for period 22.3 15.6 +43% (1) Before amortisation of intangible assets arising on acquisitions of £2.3m (2009: £2.4m). (2) Includes benefit from asset hedges of £nil (2009: £0.9m). Interim Results 2010 Page 6

EARNINGS PER SHARE AND DIVIDENDS 2010 2009 Change Average number of shares Basic 399.0m 398.1m +0.9m Fully diluted 412.5m 403.3m +9.2m Adjusted earnings per share (1) Basic 5.94p 4.27p +39% Fully diluted 5.75p 4.22p +36% Dividends (pence per share) Interim 1.00p 0.90p +11% (35%) Final 1.70p (65%) Total 2.60p (1) Before amortisation of intangible assets arising on acquisitions of £2.3m (2009: £2.4m). Interim Results 2010 Page 7

FREE CASH FLOW BRIDGE £m Adj OP (1) Free Cash 50 Flow 9.9 (5.2) Flexonics 45 (3.9) 1.2 Discretionary (3.7) 10.9 £(2.5)m (6.5) Aerospace 40 (7.3) 37.7 35 (5.5) Flexonics 30 Aerospace 27.6 25 20 15 10 5 - Adjusted Depreciation Pensions in Inventory Receivables Payables Other Non Net Interest Tax paid Net Capital Free Cash Operating & Excess of Cash Items paid Expenditure Flow (1) (1) Profit Amortisation Service Cost (1) Before amortisation of intangible assets arising on acquisitions of £2.3m (2009 - £2.4m). Interim Results 2010 Page 8

CHANGE IN NET DEBT June Dec June 2010 2009 2009 £m £m £m Free cash flow 27.6 28.9 60.1 Dividends (6.8) (6.8) (10.4) Deferred consideration received - - 0.5 Share issues 0.1 0.1 0.1 Net cash inflow 20.9 22.2 50.3 Exchange variations (page 29) (6.0) 24.9 21.9 Net debt - opening (102.3) (174.5) (174.5) Net debt - closing (87.4) (127.4) (102.3) Net debt to EBITDA (page 32) 1.0x (1) 1.6x (1) 1.3x (1) Based on rolling 12 month EBITDA Interim Results 2010 Page 9

BALANCE SHEET June June Dec 2010 2009 2009 £m £m £m Goodwill and other intangible assets 185.9 179.0 180.3 Property, plant and equipment 116.2 117.6 118.0 Other long-term assets 0.8 3.5 0.8 Non current assets 302.9 300.1 299.1 Inventories 70.8 72.0 65.0 Receivables and construction contracts 87.9 82.4 79.6 Payables (109.7) (91.6) (95.6) Working capital (page 11) 49.0 62.8 49.0 Current tax liabilities (4.3) (7.6) (4.6 ) Net current assets 44.7 55.2 44.4 Retirement benefit obligations (page 33/1) (50.1) (65.6) (48.1) Net borrowings (87.4) (127.4) (102.3) Other long-term liabilities (7.7) (7.6) (8.3) Net assets 202.4 154.7 184.8 Interim Results 2010 Page 10

WORKING CAPITAL Balance Sheet Cash Flow Receivables Working Inventories Payables (and construction Capital contracts) £m £m £m £m 31 December 2009 (page 10) 65.0 79.6 (95.6) Movements in period: Aerospace 0.9 5.8 (4.3) (2.4) Flexonics 2.8 1.5 (6.8) 2.5 Holding companies - - 0.2 (0.2) Cash flow 3.7 7.3 (10.9) (0.1) Foreign exchange effect 2.1 1.7 (2.0) Other non-cash movements - (0.7) (1.2) 30 June 2010 (page 10) 70.8 87.9 (109.7) (0.1) (page 27) % Working capital as % of 12 month rolling revenue 17% 15.8% 16% 15.0% 15% 14% 13.5% 13% 13.4% 12% 11.2% 11% 10% 9% 9.1% 8.9% 8% 7% Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Interim Results 2010 Page 11

MARKETS Interim Results 2010

SENIOR’S MARKETS – H1 2010 41% Flexonics Division Aerospace Division 59% Other Industrial 4% (39%) (61%) (4% ) Petrochemical 4% (4%) Power & Energy 5% (8%) 23% Large Commercial Aircraft (25%) Heating, Ventilation & Solar 6% (5%) Truck 6% (6%) Passenger Vehicles 16% 17% Military/Defence Aerospace (12%) (16%) Products – see page 25 9% Regional & Business Jets Customers – see page 26 Other Aerospace Division 8% (12%) (7%) 2% Space & Non Military Helicopter (%) H1 2009 (1%) Interim Results 2010 Page 12