Investor Seminar 11 November 2010 BBA Aviation BBA Aviation - PDF document

Investor Seminar 11 November 2010 BBA Aviation BBA Aviation

Agenda Agenda Time Topic Speaker 09.30 Introduction Simon Pryce – BBA Aviation, CEO Michael Scheeringa – President, Signature 10 00 10.00 Flight Support Flight Support Keith Ryan – President, ASIG 10.45 Break Hugh McElroy – President, ERO 11.00 Aftermarket Services & Systems Peg Billson – President, Legacy Support Mike Askew – Managing Director, APPH 12.00 Financial dynamics Mark Hoad – BBA Aviation, FD 12.15 Conclusions & Q&A 13.00 Lunch 2

BBA Aviation today BBA Aviation today… A focused aviation services and aftermarket business  Service based with cyclical balance  Market leading businesses, good barriers to entry Actively managed y g  Defined, common, group-wide focus  Empowered, experienced, motivated management  D i i Driving for value creation f l ti Delivering a strong relative performance Significant growth opportunities  Cyclical recovery  Structural growth  Consolidation …a unique business with an exciting future 3

Service based with balance… Service based with balance BBA Aviation plc Flight Support (Signature and ASIG) focused on refuelling and ground handling of business and commercial aviation f Business Aviation 63% aircraft Commerical Aviation 30% Aftermarket Services & Systems (Engine Repair & Overhaul, Legacy Support and APPH) focused on the Military y 7% repair and overhaul of jet engines and the design, manufacture and service of aerospace sub-systems and Flight Support components Business Aviation 63% Two thirds of revenues derived from business and general Two thirds of revenues derived from business and general Commerical Aviation 32% aviation Aftermarket Services & Systems Aftermarket Services & Systems >70% of revenues generated in North America 70% f t d i N th A i Business Aviation 56% Commerical Aviation 26% BBA Aviation is the only listed exposure to business and y p general aviation services Military 18% …and limited exposure to more volatile B&GA OE markets 4

Market leading businesses… Market leading businesses Flight Support Aftermarket Services & Systems Signature Engine Repair ASIG Legacy Support APPH Group Flight Support g t Suppo t & O e & Overhaul au ~45% Group EBIT ~10% Group EBIT ~25% Group EBIT ~10% Group EBIT ~10% Group EBIT Largest FBO Leading independent Leading independent Leading global Niche and full service network with over service provider to authorised engine provider of legacy landing gear and 100 locations the commercial repair service parts and repair and hydraulic globally aviation industry provider to B&GA overhaul services sub-systems supplier 2009 revenue: £435m 2009 revenue: £209m 2009 revenue: £334m 2009 revenue: £53m 2009 revenue: £50m  Only international network  Only international network  Network position  Network position  Portfolio authorisations  Portfolio authorisations  Business model  Business model  IPR  IPR  Brand strength  Brand strength  Brand strength  Technical strength  Core OE relationships  Consistent service  Breadth of service  Excellence in service and  Product focus and  Product life spans of 40+ standards, safety record product support portfolio years  Location specific critical  Unique network locations mass  Broad technical expertise  IPR  Integrated logistics on long leases (16-year on long leases (16 year support support  Industry leading training Industry leading training residual) and safety standards …with good barriers to entry 5

A defined common group-wide focus A defined, common, group-wide focus… To grow exceptional, long-term, sustainable value for all our stakeholders g p , g , Exceeding Continuously Working Being an Always customer improving, together for employer of behaving with expectations t ti market k t the greater th t choice in a h i i i t integrity and it d leading and gain safe and and respect competitor innovative sustainable offerings businesses environment …with clear, cascaded short and long-term goals 6

Empowered experienced motivated management Empowered, experienced, motivated management… Simon Pryce: Chief Executive Officer Appointed June 2007 Mark Hoad: Group Finance Director Appointed April 2010  Joined BBA Aviation as Group Financial Controller in May  GKN plc, latterly Chief Executive of GKN’s $1.6bn global 2005. Previously various finance roles at RMC Group plc automotive based Diversified Businesses Group)  Qualified Chartered Accountant  Qualified Chartered Accountant Flight Support Aftermarket Services & Systems ASIG ERO Legacy Legacy Signature President: President: President: President: President: Michael Scheeringa Michael Scheeringa Keith Ryan Keith Ryan Hugh McElroy Hugh McElroy Peg Billson Peg Billson Mike Askew Mike Askew Appointed: 2009 Appointed: 2001 Appointed: 2005 Appointed: 2009 Appointed: 2010 Background: Background: Background: Background: Background:  34+ years industry  23+ years industry  25+ years industry  25+ years industry  23+ years industry experience p experience. p experience p experience p experience p  President, Airwork Corp  CEO, Flight Options  VP Operations at  COO, Eclipse Aviation  Divisional MD, Signature Doncasters plc  US Airways  Honeywell  Westland Group …focused on execution 7

Driving for value creation Driving for value creation…  Rigorous drive for continuous operational improvement  Defined actions to deliver against specific short and long term goals – Market leadership and outperformance – Service quality, customer satisfaction and innovation Service quality customer satisfaction and innovation – Realising identified cross business opportunities – Employee development, health and safety and sustainability performance  Maintained focus on improved capital efficiency and cash generation  Investment discipline tied to generating risk adjusted returns exceeding cost of capital of capital …and measured accordingly 8

Delivering strong relative performance Delivering strong relative performance…  Market outperformance through the Health & safety focus… downturn 8 -6% -22% 6 -15%  Significant, pre-emptive cost reductions 4 -23% -10% 2  Accelerated de leveraging  Accelerated de-leveraging 0 0 2006 2007 2008 2009  Sound balance sheet suited to business RIR (Recordable Incident Rate) LWCR (Lost Workday Case Rate 2007-2009) characteristics  Dividend maintained …driving continuous improvement 250  Positive strategic developments and 200 trends in non-financial measures trends in non-financial measures 150 150 100 50 54% 47% 43% 26% 0 54% 2006 2007 47% 2008 2009 43% Locations with zero RIR Total locations 28% …across a broad range of key performance indicators 9

Experiencing cyclical recovery Experiencing cyclical recovery…  B&GA flight activity is cyclical US turbojet hours flown through-cycle vs corporate profits 1 2006 vs 2009: -31% – Correlated to GDP 1989 vs 1991: -30% – Peak to trough 1989-91 cycle of 30% recovered to prior peak within 5 years – 2001-03 cycle masked by external factors – Peak to trough 2007-09 cycle of over 30% , slow steady recovery commenced  Growth in B&GA flight hours is up 11% YTD B&GA market activity based on aircraft movements but still 17% below peak 20% 0% – Utilisation improving -20% 20% – Late model used inventory trending lower -40% Jun-08 Jun-09 Jun-10 Oct-07 Dec-07 Feb-08 Apr-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Aug-10 – Services recover quicker than OE and R&O USA USA vs 07 07 USA USA year-on-year Europe vs 07 Europe year-on-year …with slow improvement in lead indicators (1) Source : GAMA, company estimate, BEA 10

Structural growth Structural growth…  B&GA flight activity set to continue GDP+ Growing business aviation market th through cycle growth h l th – Geographical distances 2010 - 2020 – Limited efficient intermodal alternatives FAA forecast wn CAGR 8 8% CAGR 8.8% – Money value of time M l f ti bojet hours flow – Increasing cost competitiveness 1991- 2009  CAGR 5.5% Increasing fleet size and new product (trough to trough) categories more than offset increased fuel categories more than offset increased fuel US turb efficiency – OEM’s reporting cycle recovery 2012/13, ca10,000 new jets to 2020, 60% in North America A i – External forecasters predicting buoyant recovery – 4-6% per annum through cycle seems – 4-6% per annum through cycle seems Source : GAMA and FAA forecast reasonable *1991-2006 CAGR 9.3% Source FAA Aerospace …set to continue *1991-2006 CAGR 9.3% 11