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