2012 Preliminary Results March 2013 Good underlying progress - - PowerPoint PPT Presentation

2012 Preliminary Results

March 2013

Growth  Revenue increase despite challenges  Flight Support down 4% Aftermarket Services up 6% Performance  Structural cost reduction, operational improvement continues  Benefit disguised by weak de-icing Cash generation  Strong cash conversion, dividend increase and investment capacity Value creative investment  Positive progress in Flight Support and Aftermarket Services

Good underlying progress despite subdued markets...

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…good momentum into 2013..

Financial Review

Mark Hoad Group Finance Director

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2012 Financial Highlights

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 1% revenue growth ex fuel price increases despite soft markets  Underlying OP of $195.4m impacted by de-icing  Adjusted EPS unchanged with sustainable reduction in effective tax rate  Good cash conversion with free cash flow of $121.2m  Net debt to EBITDA 1.6x  ROIC of 10.0% reflects fall in OP  Full year dividend increased by 5%

2012 Income Statement

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 Continued revenue growth  Reduction in underlying OP resulting in 20 basis point reduction in margin  Net interest increase reflects cost of the long-term financing structure  Effective tax rate 14.9%  Adjusted EPS unchanged  Full year dividend increased by 5% to 14.65¢

$m 2012 2011 Change Revenue 2,178.9 2,136.7 2% Revenue (fuel adjusted1) 2,178.9 2,152.0 1% Operating profit2 195.4 198.9 (2)% Margin %2 9.0% 9.3% (30bps) Margin %2 (fuel adjusted1) 9.0% 9.2% (20bps) Net interest (32.4) (28.7) (13)% Profit before tax2 163.0 170.2 (4)% EPS2 29.0¢ 29.0¢

• Dividend

14.65¢ 13.94¢ 5%

(1)

Constant fuel price

(2)

Pre exceptional items

Flight Support

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Organic revenue decline of 4%  1% related to de-icing  2% due to exit from Miami & Tampa  Remaining reduction of 1% versus market declines of 1-4% Underlying operating profit $112.5m  Lack of high margin de-icing  Exit from Miami and Tampa  Benefit of operational improvement and $2m from finance synergy project Margin of 8.5% down 80bps on like-for-like basis (2011: 9.3%) Cash conversion 104% (2011: 152%) Divisional ROIC 9.4% (2011: 10.6%) Revenue Bridge ($m) Operating Profit Bridge ($m)

1,330 1,340 1,322 15 33 (5) (51)

2011 FX Fuel 2011 Restated Acqs/ Disposals Organic 2012

125 124 113 3 (1) (12) (2)

2011 FX 2011 Restated Acqs/ Disposals Organic Cost Increase 2012

Aftermarket Services

Revenue increase of 6%  Organic increase of 3%  Full year contribution from fuel measurement business Underlying operating profit $100.5m  Improved mix-related drop-through in H2 as anticipated Margin up 40bps to 11.7% (2011: 11.3%) Cash conversion 93% (2011: 98%) Divisional ROIC 11.2% (2011: 10.7%)

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Revenue Bridge ($m) Operating Profit Bridge ($m)

807 805 857 24 28 (2 )

2011 FX 2011 Like-for-Like Acqs Organic 2012

91 91 100

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9 (3)

2011 FX 2011 Like for Like Acqs Organic Cost Increase 2012

Structural cost improvement projects  Finance synergy project largely complete ─ $2m benefit in 2012 ─ Incremental $2m benefit in 2013  Basingstoke footprint rationalisation complete ─ $4m capex avoided ─ $1m annualised savings Acquisition costs  Four acquisitions completed in 2012  Substantial activity in relation to opportunities which did not meet value creation criteria Amortisation of acquired intangibles Restructuring & other exceptionals

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$m P&L Cash Structural projects 13.4 10.5 Acquisition costs 6.6 6.6 Amortisation of acquired intangibles 7.6

• Restructuring & other

5.1 3.6 Total 32.7 20.7

Exceptional Items

 Free cash flow $121.2m  Capital expenditure investment in growth projects and lease extensions (2011 capex net of $14.6m of disposals)  Net interest and tax paid in 2011 benefitted from $35m refund  91% cash conversion in middle of target range as expected  Leverage marginally below lower end of target range

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$m 2012 2011 Underlying EBITDA 255.9 260.5 Working capital movement (12.8) (12.2) Net capital expenditure (55.4) (29.3) Net interest and tax paid (36.3) (13.0) Exceptional items (20.7) (4.5) All other movements (9.5) (15.7) Free Cash Flow 121.2 185.8 Dividends (67.9) (63.7) Equity issue 1.8 141.9 Acquisitions and disposals (35.5) (125.8) Other (32.4) (49.0) Net cash flow (12.8) 89.2 Net Debt 416.4 403.6 Net Debt to EBITDA 1.6x 1.5x

Cash Flow / Debt

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Other Financial Matters

Exceptional items  Amortisation of acquired intangibles $8m  2013 restructuring costs $5m ─ Completion of finance synergy project ─ Slough site closure ─ Divisional re-organisation Cross currency swaps  €50m and $75m settled in 2012 at cash cost of $10.9m  $125m swaps with a mark-to-market loss of $21.8m due to mature in H1 2013 Tax  P&L effective rate in mid to high teens  On-going cash tax c80% of P&L charge Pensions  New accounting standard (IAS19) effective 1 January 2013  On comparable basis, 2012 underlying operating profit reduced by $2.7m, adjusted EPS by 1.1 cents  2012 triennial valuation due for completion in H1

Performance and strategy update

Simon Pryce Group Chief Executive

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Signature Flight Support ASIG  Outperformance, unique and enhanced network  Lease extensions at 10 key locations  Commercial initiatives delivering  Strong performance across a range of key

• perational metrics

 Significant headwinds  Good renewal and new business conversion rates, technical service extension  Satisfactory underlying operational performance  PLH/Dryden acquisition exceeding expectations

…reduced headwinds into 2013..

Further progress in Flight Support given short term challenges

A strong Aftermarket Services performance...

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 Expanded authorisations/ service capabilities  Strengthened relationships with B&GA platform OEMs  Continued focus on

• perational effectiveness

 Enhanced repair portfolio

Engine Repair & Overhaul

 Cheltenham capacity being filled  Dedicated electronics facility completed  Additional licences and new licensors  Good order pipeline and high quote conversion rate

Legacy Support

 Strong H2  Order book growth and new contracts  Reduced APPH footprint  Continued focus on

• perational improvement

APPH

…well positioned into 2013..

Good strategic growth investments

Acquisitions  $35m invested ─ PLH/Dryden ($27m) ─ Omaha FBO ($3m) ─ Sun Aircraft Services ($3m) ─ Consolidated Turbine Support ($2m) Good progress on organic growth projects  Dedicated NetJets facility at Palm Beach  New FBO at Chicago O’Hare New growth projects  Newark FBO  Luton development San Jose  Signature success in RFP

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...solid pipeline of further opportunity..

Markets, Potential and Outlook

Simon Pryce Group Chief Executive

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500 1,000 1,500 2,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Turboprop Jet

2,000 2,500 3,000 3,500 4,000 4,500 5,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Update on BBA Aviation’s major markets

B&GA  Flat over the last three years  No structural change  Improved medium-term indicators  Planning for relatively flat market in 2013  Potential impact of sequestration unclear  Significant medium/long-term potential Commercial  Commercial GDP+ growth  Outsourcing Legacy/ military  Demands of aging fleet outweighs any reduction in defence spend

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Source: 2005-2012 GAMA 2013-2020 Teal Group Forecast

7.3% CAGR per FAA 4.0% CAGR to return to peak

...planning for broadly stable markets in 2013..

Annual turbo jet hours flown B&GA historic and forecast deliveries

Flying hours Back to peak flying hours

Performance  Sustainable management actions, improved operational gearing  Further improvement opportunities  Organisation evolution Cash generation  $800m in free cash flow in last 5 years  Cash conversion supporting progressive dividend and significant investment capacity Value creative investment  Organic  Acquisitions Growth  Recovery and through cycle structural growth

211 195 195 17 71 (7) (9) (88)

2007 Fx De-icing Normalised 2007 Market decline* Acqs / Disposals inc MIA** Mgmt actions 2012

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Operating Profit 2007-2012 ($m)

... driving superior long term returns..

The continuing BBA Aviation opportunity…

* B&GA and Commercial market decline 2007-2012 at standard 25% drop through ** First year contribution from acquisitions

Outlook for 2013…

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…underlying momentum, good progress..

Performance  Additional benefit from 2012 improvement actions and structural cost reduction  Further opportunities supported by

• rganisational evolution

Cash generation  Strong cash conversion  Progressive dividend  Investment capacity Value creative investment  Solid 2012 progress  Solid pipeline into 2013 Growth  Reduced headwinds  Anticipating broadly flat markets

Q&A

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Appendix

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Artist rendering - Luton

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Artist rendering - Luton

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Artist rendering – San Jose

Pensions – Impact of Revised IAS19

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 Underlying operating profit reduction of $2.7m from reclassification of administration costs  IAS 19 finance charge reduced due to reclassification of administration costs

• ffset by interest on assets at lower rate

 Earnings per share lower by 1.1¢  No impact on funding basis

As reported Impact of Revised IAS 19 Restated $m 2012 Admin costs Discount rate 2012 Change Operating profit1 195.4 (2.7)

• 192.7

(2.7) Net interest (32.4) 2.6 (5.1) (34.9) (2.5) Profit before tax1 163.0 (0.1) (5.1) 157.8 (5.2) EPS1 29.0¢ 27.9¢ (1.1)¢

(1)

Pre exceptional items

Revenue split and organic growth

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Flight Support 61% Organic (4%) Signature 72% Organic (3%) ASIG 28% Organic (6%) Signature US 83% Organic (2)% Signature RoW 17% Organic (5)% Aftermarket Services & Systems 39% Organic 3% Legacy 17% Organic 2% ERO 75% Organic 3% APPH 8% Organic 9% Revenue ($m)

• N. America

RoW Total Business 788.9 164.0 952.9 Commercial 284.0 84.9 368.9 ERO 541.2 100.0 641.2 Legacy 93.9 53.4 147.3 APPH 12.6 56.0 68.6 1,720.6 458.3 2,178.9

Disclaimer

This presentation contains forward-looking statements including, without limitation, statements relating to: future demand and markets of the Group’s products and services; research and development relating to new products and services; liquidity and capital; and implementation of restructuring plans and efficiencies. These forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Accordingly, actual results may differ materially from those set out in the forward-looking statements as a result of a variety of factors including, without limitation: changes in interest and exchange rates, commodity prices and other economic conditions; negotiations with customers relating to renewal of contracts and future volumes and prices; events affecting international security, including global health issues and terrorism; changes in regulatory environment; and the

• utcome of litigation. The Company undertakes no
• bligation to publicly update or revise any forward-looking

statement, whether as a result of new information, future events or otherwise.

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