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    Porvair Porvair Document Transcript

    • Presentation Year ended 30 November 2013 Chief Executive Finance Director 1
    • Summary Consistent strategy delivering results Consistent strategy Niche positions in growing, regulated markets Long-term focus on new product development and intellectual property 2007- 2013 11% CAGR in revenue £48m (£8m p.a. avg) 39% operating return on cash from operations capital employed In the year ended 30 November 2013 10% revenue growth to £84.3m 26% EPS growth to 12.7p 115% reduction in net debt. Net cash of £0.6m 2
    • Specialist filtration and environmental technology Specialist filters are used to protect costly or complex downstream systems Attractive business characteristics Annuity demand: Robust demand drivers: Barriers to entry: •  Consumables: 80%+ •  Secular trends •  Patent protection •  Long life cycles •  Regulation/legislation •  Quality accreditation •  Bespoke •  Process reliability •  Design rights 3
    • Consistent strategic and operational objectives Long-term growth from developing specialist filtration and environmental technology businesses both organically and by acquisition 1 A focus on regulated markets with long-term growth prospects •  Four key markets 2 Concerted new product development •  Now core to revenue growth 3 Geographic expansion to support key markets 4 Generate cash to invest in: •  Organic growth •  Acquisitions •  Dividends 11% revenue CAGR since 2007 Plenty of opportunity ahead 4
    • 1 2 3 4 A focus on regulated markets with long-term growth prospects Markets Regulation Market Growth Aviation FAA, CAA, EASA and other specific accreditations 5.0% Growth in pax revenue miles 2012 - 2032 Energy and industrial process International nuclear standards: NQA1, ASME, etc 11.5% Growth in gasification 2011 - 2016 Environmental laboratory supplies Approved methods: EPA, SEPA, EU water directives 5.6% Molten metals ISO and customer accreditations; extensive qualification requirements p.a. p.a. p.a. 6.5% p.a. (Source: Boeing 2013) (Source: US DOE 2010) Growth in water analysis consumables 2011 - 2016 (Source: SDI Research 2012) Growth in primary aluminium usage 2010 to 2020 (source: Alcoa 2013) 5
    • 1 2 3 4 Main markets and operating companies Microfiltration Approx share of Group sales Aviation Main operating companies Principal markets 15% Energy and industrial process Business division 30% Environmental laboratory supplies 20% Molten metals 35% Porvair Filtration Group Seal Analytical Porvair Sciences Metals Filtration SELEE Corp 6
    • 1 2 3 4 Strong market positions and concerted new product development Aviation Niche positions Growth drivers Recent new products Competitive advantage •  Fuel tank inerting •  Aircraft build rates •  •  Installed base •  Coolant systems •  •  •  Hydraulics •  Fuel lines •  Maintenance schedules New programmes Design engineering skills and track record •  Retrofit: inerting Boeing, Airbus and other fuel tank inerting filters A380 and 787 coolant filters •  A350 underway •  Range of media •  Airbus NEO qualification •  Design protection •  7
    • 1 2 3 4 Strong market positions and concerted new product development Energy and industrial process Niche positions Growth drivers Recent new products Competitive advantage •  Pulse jet systems •  •  E-gas™: Posco •  Installed base •  •  Maintenance schedules •  E-gas™: Reliance •  Range of media •  Hot gas and gasification Nuclear remediation Gasification build rates •  •  Polymer production Nuclear clean-up Design engineering: pulse jet systems •  •  E-gas™: SG Solutions •  Energy efficiency and security •  UK Government remediation •  Design protection •  Bechtel nuclear 8
    • 1 2 3 4 Strong market positions and concerted new product development Environmental laboratory supplies Niche positions Growth drivers Recent new products Competitive advantage •  Analysis of inorganic chemicals in water •  Regulated water testing •  Quaatro 39 •  Installed base •  Associated consumables •  Higher environmental standards •  •  •  Porous plastics •  Developing markets •  AA1 method development AQ2 upgrade •  Bioscience growth •  Bioscience filters Instrument design protection Porous plastics IP and related patents •  Chromatrap™ •  9
    • 1 2 3 4 Strong market positions and concerted new product development Molten metals Niche positions Growth drivers Recent new products Competitive advantage •  Aluminium cast house filtration •  Aluminium consumption •  Selee CSX™ •  Patent protection •  Gray and ductile iron filtration •  US auto and light truck production •  Selee IC™ •  •  Selee SA™ •  Super alloys •  Increased use of high grade and exotic alloys •  Range extensions Metallurgical expertise US manufacture (for the Americas) •  10
    • 1 2 3 4 Geographic expansion to key markets: Recent developments Seal US expansion and Thomas Cain acquisition Metals Filtration principal plant Acquired Chand Eisenmann Metallurgical PFG US capacity expansion Microfiltration principal plants -  Aerospace capacity expansion -  bioscience dedicated facility Seal production facility Strengthened European sales force Xiaogan facility opened Opened Russian and Middle Eastern tech support office Seal Shanghai tech centre recruitment Microfiltration Metals Filtration 11
    • 1 2 3 4 Geographic expansion to key markets: 2013 revenue by destination UK 21% Americas 46% Europe 13% Asia 18% Microfiltration Metals Filtration 12
    • 1 2 3 4 Consistent strategy: revenue growth and margin improvement 11% revenue CAGR since 2007 14 12 Half year 10 Final £ millions Pence per share EPS growth trend established 8 6 4 2 0 2009 2010 2011 2012 2013 £ millions Revenue growth coming from US and Asia 90 80 70 60 50 40 30 20 10 0 Asia Americas Europe United Kingdom 2013 Final 2008 2009 2010 2011 2012 2013 Net debt eliminated Others 2007 Half year 2007 £ millions 2008 90 80 70 60 50 40 30 20 10 0 16 14 12 10 8 6 4 2 0 -2 Half year Final 2009 2010 2011 2012 2013 13
    • Record performance for the year ended 30 November 2013 Revenue up 10% to £84.3m PBT up 25% to £7.8m Revenue up 15% in Microfiltration EPS up 26% to 12.7p Revenue up 2% in Metals Filtration Net debt down 115% net cash of £0.6m 14
    • Income statement year ended 30 November 2013 2013 £000 Revenue 2012 £000 84,267 76,455 Operating profit 8,641 7,205 Interest (793) (906) Profit before tax 7,848 6,299 (2,367) (2,017) Profit after tax 5,481 4,282 EPS (basic) 12.7p 10.1p Tax 15
    • Cash flow year ended 30 November 2013 2013 £000 2012 £000 11,149 1,116 9,446 (283) (417) (518) Tax (2,104) (1,238) Capital expenditure (net of disposals) (1,543) (1,928) 8,201 5,479 Acquisitions (3,324) (3,329) Proceeds from issue of shares Dividends paid Exchange movements 659 (1,175) 88 Net debt at 1 December (3,870) 41 (1,023) 53 (5,091) 579 (3,870) Operating cash flow before working capital movements Working capital movement Interest Net cash from operations Net cash / (debt) at 30 November 16
    • Metals Filtration results and progress – year ended 30 November 2013 2013 £000 Revenue Operating profit 2012 £000 28.5 28.0 2.4 2.4 Revenue 2% higher, operating margins maintained •  Stronger second half •  Margin and market share gains from patented products •  Xiaogan plant opened New product development •  Promising development pipeline •  New high grade lithium aluminium alloy filter in trials •  Entirely new design of filter in development 2014 outlook •  Positive start to 2014 •  Capacity investments in US and China 17
    • Microfiltration results and progress – year ended 30 November 2013 2013 £000 Revenue Operating profit 2012 £000 55.8 48.5 8.6 6.7 Revenue up 15%, operating profit up 29% •  Record revenue and profits •  Seal Analytical up 13% •  Two US based acquisitions completed Strategic progress •  Large contracts progressing well •  Good progress in aviation, nuclear •  Bioscience: licencing agreement 2014 outlook •  Healthy order books going into 2014 •  Investment to add capacity: •  UK •  USA 18
    • 2014 – 2016 opportunities market growth, market share gains and margin growth Aviation Energy and industrial process Laboratory supplies Market growth Regulated markets with long term growth prospects – long product lifecycles Market share gains •  Inerting still growing Molten metals •  Large contracts in place •  Thomas Cain crossselling & integration •  Steady market share gains from IP protected ranges •  Pipeline promising •  Bioscience licensing growth with Thermo •  Chand Eisenmann capacity increase & cross-selling •  Product range extensions •  Bioscience filtration development •  Initial orders for next generation of new products •  US expansion •  US sales and manufacturing •  Improved analyser range designs •  New China plant built •  UK capacity increases •  Longer life hot gas filters •  US manufacture of two product ranges •  Incremental product and process improvements •  Airbus A380 and Boeing 787 coolant underway •  A350 underway •  Airbus NEO in qualification Margin growth 19
    • Summary and outlook Results Investment 10% 2014 year of revenue growth to £84.3m investment 26% in UK and US planned EPS growth to 12.7p Net debt eliminated New plants Other capacity upgrades in Large contracts One-off revenue boost in 2014 Profits spread over four years Outlook new product pipeline Promising Positive start to 2014 UK, US and China The underlying business should continue to grow 20
    • Presentation Year ended 30 November 2013 Chief Executive Finance Director 21