Air Partner plc Preliminary Results for the year ended to 31 January - - PowerPoint PPT Presentation

Air Partner plc Preliminary Results for the year ended to 31 January 2016

Mark Briffa, CEO Neil Morris, CFO Justin Scarborough, CD&IR

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Introducing Air Partner

Air Partner is a global aviation services group that provides high added value aviation solutions in the areas of aircraft charter and remarketing, specialist travel management, aviation safety & security and crisis & emergency planning From our Headquarters in London Gatwick UK we operate 24/7 year- round and have 20 offices globally, employing 260 people across four continents, serving the needs of industry, commerce, governments, and private individuals

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Our leading aviation brands

Divisional overview

COMMERCIAL JETS

• Charters airliners from 20 to 500 people
• Used for product launches, sport teams

and conferences

• Typical clients include: Automotive,

entertainment, pharmaceutical

• Cabot Aviation, a leading Aircraft

Remarketing company, purchased in May 2015 for up to £0.8m PRIVATE JETS

• Flies fewer than 20 people
• Offers a bespoke service or a JetCard
• Typical clients include: Finance houses,

film and entertainment and high net worth individuals

• Ad hoc charter and;
• JetCard, a private jet card programme

with >200 cardholders FREIGHT

• Charters aircraft from Learjets to the

giant Antonov 225

• Time critical door to door delivery

service

• Typical clients include: Goverments,

automotive, engineering and energy 3 BAINES SIMMONS

• A world-leading Aviation Safety

consultant

• Specialising in aviation regulation,

compliance and safety management

• Purchased in August 2015 for up to a

net cash consideration of £5.3m SUPPORT DIVISIONS 24/7 Operations, Travel Management, Emergency Planning

• Underlying operating profit and PBT increasing by 67% & 64% respectively
• Underlying EPS 29.7p, up 7%, underlying adjusted 33.0p, up 20%
• Final dividend increased by 10% to 16.9p
• Underlying net debt £0.5m, equivalent to 0.1x EBITDA
• Total cash balances of £19.8m (£18.8m), including JetCard cash of £16.8m (£14.1m)
• A strong UK performance, flat in Europe but a decline in the US
• 209 JetCards, utilisation up by an impressive 33%
• Customer First launched and implemented across Broking
• Acquisitions of Cabot Aviation and Baines Simmons enhancing and extending our capabilities and services
• Dividend policy to target cover between 1.5 and 2.0 times
• A positive and encouraging start to the new financial year

Full year summary

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Financial highlights

Underlying relates to continuing operations and excludes non-trading items and non-cash acquisition related costs

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January 2016 January 2015 Change (%) Gross Transaction Value (£m) 210.8 192.1 10 Gross Profit (£m) 27.3 22.0 24 Gross margin (%) 12.9 11.5 +150bps Underlying operating profit (£m) 4.4 2.6 67 Underlying operating margin (%) 2.1 1.4 +70bps Underlying PBT (£m) 4.3 2.6 64 Underlying EPS (p) 29.7 27.7 7 Underlying EPS tax credit adjusted (p) 33.0 27.7 19 Final Dividend (p) 16.9 15.4 10 Total cash (£m) 19.8 18.8 +£1.0m Total cash excluding JetCard (£m) 3.0 4.7

• £1.7m

Operating profit bridge

6 4,386 2,632 259 1,596 399 (99) (401) FY15 Commercial Jets Private Jets Freight Baines Simmons Corporate Costs FY16

Cash Flow bridge

7 3,015 4,701 2,320 745 (5,902) 3,471 (250) (271) 691 (2,331) (159) Jan-15 NOPAT D&A Acquisitions Net bank loans Working capital Capex Tax, interest & other Dividends FX Jan-16

Gross profit by Product

Commercial Jets Private Jets Freight Baines Simmons

• Strong performances across all Products
• First time contribution from Baines Simmons
• Similar gross profit mix by region FY16 vs FY15
• Baines Simmons 8% of gross profit

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12.5 8.0 1.5 0.0 14.0 9.4 1.9 2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0

+12% +17% +21%

57% 51% 36% 34% 7% 7% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY15 FY16

Gross profit by Region

UK Europe US

• Strong performance in the UK with gross profit

up by 54% or by 15% excluding Baines Simmons

• Europe flat year-on-year
• US down by 17%
• UK accounted for 61% of gross profit
• Europe and US mix reduced

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10.9 7.3 3.8 16.7 7.4 3.2 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

+54% 0%

• 17%

49% 61% 33% 27% 17% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY15 FY16

Operating profit by Product

Commercial Jets Private Jets Freight Baines Simmons

• CJ +10% but up 23% provision adjusted
• Outstanding PJ performance, particularly the UK
• Strong rise in Freight
• Small loss at Baines Simmons
• CJ remains our largest division
• PJ increased to 40% of operating profit

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2.7 0.8 0.4 3.0 2.4 0.8

• 0.1
• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

+10% +59% +202% +109%

70% 49% 21% 40% 10% 13%

• 20%

0% 20% 40% 60% 80% 100% FY15 FY16

JetCard goes from strength to strength

• JetCard cash balances year-on-year have risen

by £2.7m (19%) to £16.8m

• The number of JetCards has risen year-on-year

by 12 to 209

• Utilisation up by an impressive 33%
• The UK has 128 JetCards, a net decline of 10

year-on-year

• The USA had a successful period with a net

increase of 10 JetCards, making a total of 52

• Europe ended the period with 29 JetCards, a

net increase of 12 or 71%

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50 100 150 200 250 FY14 FY15 FY16 Europe US UK £5.6m £7.6m £8.8m £14.1m £16.8m

• 4

8 12 16 20

• 50

100 150 200 250 FY11 FY12 FY14 FY15 FY16 JetCard Cash JetCard Numbers JetCard cash JetCard numbers

• Gross profit increased by 12% to £14.0m
• Operating profit increased by 10% to £3.0m or by 23% excluding a

£0.4m provision in Tour Ops

• Strong UK performance, Europe flat
• US declined significantly
• Cabot forms within the CJ division, the integration has gone well
• Cabot private jet remarketing launched
• Consolidation of wet and dry lease operations

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OIL & GAS

The oil and gas industries are used to functioning in remote, challenging locations, with precise operating demands and very exacting time

• considerations. We have unparalleled

experience of dealing with extreme weather, remote inhospitable locations, political issues, civil unrest, and even war

AUTOMOTIVE

Whether it’s flying 9,000 dealers and journalists to the exclusive launch of your new marque, getting a critical part delivered swiftly to your production line, or shuttle flights to get your engineers to work, Air Partner understands your needs from drawing board to showroom floor

SPORTS

It’s all about preparation, performance and results. That’s why so many of the world’s top teams, athletes and sports professionals choose Air Partner as their support crew

REMARKETING

Whether your needs are for commercial, business or private jets, Cabot provides sale or leasing

• expertise. We also advise clients on

aircraft acquisition, fleet management and we provide both dry and wet leasing

2.5 2.6 2.7 2.8 2.9 3.0 11.5 12.0 12.5 13.0 13.5 14.0 14.5 FY15 FY16 Gross profit Operating profit

• Gross profit increase by 17% to £9.4m
• Operating profit increased threefold to £2.4m
• A very strong performance in the UK
• Europe experience a decline in gross profit, the US was flat
• The operating profit impact in Europe and the US was mitigated

by cost management

• JetCard success - utilisation up by 33%

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ON-DEMAND CHARTER

Whether you need to fly for business

• r leisure, our on-demand charter

lets you fly on your own terms, with the aircraft of your choice, and from the airport most convenient to you

JETCARD

Fly whenever you want, to wherever you need at very short notice with no peak hour restrictions. JetCard is designed for busy individuals whose time is precious yet relish the

• pportunity to enjoy life's pleasures

CORPORATE CARD

Enabling key personnel of an

• rganisation to plan their day

around work instead of planning work around their travel

0.0 0.5 1.0 1.5 2.0 2.5 3.0 7.0 7.5 8.0 8.5 9.0 9.5 FY15 FY16 Gross profit Operating profit

• Gross profit rose by 21% to £1.9m
• Operating profit doubled to £0.8m
• Ongoing assistance to government and aid agencies
• Strong gross profit progression in the UK and Europe, most

notably Germany

• Gross profit in the US declined

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HUMANITARIAN AID

Air Partner’s unrivalled experience, advanced technical support and vast global reach make us the first choice for numerous governments and aid

• rganisations for air charter flights to

delver disaster relief and humanitarian aid worldwide

TIME CRITICAL

Time is money. It’s also reputation –

• urs and yours. That’s why we provide

secure, time critical door-to-door delivery of your cargo to destinations worldwide 24/7

OIL & GAS AIRCRAFT PARTS AUTOMOTIVE PARTS DANGEROUS GOODS HIGH VALUE CARGO

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 FY15 FY16 Gross profit Operating profit

• First time gross profit contribution of £2.0m
• Small operating loss of £0.1m
• New and streamlined leadership and management team
• Integration progress across finance, HR & IT
• 2015 was a busy year – Practice restructuring, SMARRT MAP

launched, 4th European Aviation Safety Symposium

• Recently awarded a 10-year contract for IoMAR
• Started the roll out of Customer First

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SMARRT MAP

The SMARRT MAP model illustrates the nine essential components needed for the effective ‘Management of Safety’ and represents our approach to achieving Organisational Safety Performance.

IoMAR

The fastest growing private aircraft registry in the world, with over 850

• registrations. Since launch

in May 2007, Baines Simmons has carried out almost 2,800 aircraft surveys

TRAINING DIRECTORY

Over 100 practically focused training courses and consulting services which highlight the breadth and depth of our technical and professional support on offer

Baines Simmons

• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 FY16 Gross profit Operating profit

Strategic direction

• Building a world class aviation services group through:

‒ Optimise: Our existing customer portfolio and building new customer relationships ‒ Enhance: Our customer proposition by identifying complementary capabilities and services ‒ Extend: Our product and service proposition, leveraging our infrastructure and operating model

• Customer First: Optimise our current assets and capital

‒ Changing the way we operate ‒ Drive organic growth across our business ‒ Differentiate through the delivery of an exceptional and unrivalled customer experience ‒ Strengthen our brand and extend our market position

• Cabot: Enhance our customer proposition

‒ A highly complementary service capability ‒ Leveraging off existing customer relationships ‒ Benefiting from being part of a listed plc

• Baines Simmons: Extending our proposition

‒ Identify areas of strategic attractiveness within aviation ‒ Standalone entities with growth characteristics ‒ Products and services which we can overlay on our existing operating model

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Customer First central to our strategy

• Changing how we think about our customers and how we operate
• Listening to our customer needs
• Greater customer insights with enhanced data
• Enhanced process capabilities
• Providing the right tools for our people
• Strength our brand and differentiate its identity
• Drive self improvement and enhance profitability
• Customer First Phase 1 rolled out across broking
• Trials began in September 2015 within CJ UK
• Trials extended to all country and products
• Live roll out was completed by March 2016
• Customer First into Cabot and Baines Simmons
• Cabot journey has begun
• Baines Simmons at foundation work stage

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Dividend policy

• Full year dividend of 24.3p is equivalent to 1.4x cover on adjusted underlying EPS
• Net debt at year end £0.5m, equivalent to 0.1x EBITDA
• £44m in dividends paid out over the past 20 years
• Over the period our market cap has risen from £9m to £43m
• Our operating profit has increased over the period at a compound rate of 9%
• Future target dividend cover of between 1.5 and 2.0 times underlying EPS
• Future uses of balance sheet include:
• Reinvest back into the business
• M&A investment opportunities
• Return of capital to shareholders
• The policy provides clarity, flexibility and is aligned with shareholder interests

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• A strong financial performance
• The roll out of Customer First across broking
• Two acquisitions completed
• A streamlined Operating Board
• Updated dividend policy
• A positive start to the new financial year
• We have a strong platform
• Organic investment opportunities remain
• We will take advantage of opportunities that improve our customer experience
• We will create value by putting our customers first

Summary

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