BBA Aviation enabling flight; expanding horizons March 2017 BBA - - PowerPoint PPT Presentation

BBA Aviation ‐ enabling flight; expanding horizons

March 2017

BBA Aviation

2016 – a transformational year

Major expansion of Signature ‒ Acquired Landmark ‒ Unique global network of >200 FBOs Focused the Group ‒ Value added, IP protected, strong ROIC / cash flow ‒ Merged aircraft management and charter business ‒ Grown Ontic ‒ ASIG disposal Successfully integrated Landmark Aviation ‒ Cost synergies quicker and greater than anticipated ‒ Extended opportunity for outperformance

…enhanced underlying quality, growth and opportunity for value creation

106 112 115 118 125 138 203

2010 2011 2012 2013 2014 2015 Now

Signature global network expansion Historical1 Today2

Total operating profit

$181.5m

Total operating profit

$302.6m

01 Note 1: Based on 2015 financial information Note 2: Based on 2016 financial information Enabling flight; expanding horizons

Aftermarket Services 28% Flight Support 72% Aftermarket Services 12% Flight Support 88%

BBA Aviation Military 5% B&GA 88%

Attractive financial characteristics

‒ Low asset intensity and flexible cost base ‒ Strong, resilient through‐cycle cash flow

Enhanced growth prospects

‒ Increased exposure to growing B&GA market ‒ Extended opportunity for outperformance

BBA Aviation today - a focused B&GA service provider

…with accelerated value creation potential

Enabling flight; expanding horizons Aftermarket Services 33%

High quality businesses

‒ Market leadership ‒ Unmatched customer relevance ‒ Strengthened barriers to entry

Flight Support 67% RoW 14% North America 86% Commercial 7%

2016 Revenue Splits

02

BBA Aviation

Market leadership

…driving sustainable value through a common vision, mission and values

Enabling flight; expanding horizons 03

68 % 38 % 19 % 9 % 6 % 5 % 5 % 1 %

Signature Flight Support Atlantic Jet Aviation Million Air TAC Air Ross Sheltair Cutter

Signature's enhanced leadership position

Network Enlarged Signature Atlantic Aviation Million Air Jet Aviation

Total locations 203 65 29 23 North America 139 65 27 9 Sole source locations 63 24 14 1 Top 50 US airports 39‡ 29 6 7

Locations comprise licenses, JVs and fully owned entities and correct as at time of announcement ‡ Adjusted for overlap locations within the top 50 of the respective category shown (i.e. where two FBOs on one airport, we count as one location)

Signature Flight Support

>85%

Group EBIT The world’s largest fixed base operation (FBO) and line maintenance network for Business & General Aviation (B&GA) users

Engine Repair & Overhaul

<2%

Group EBIT A leading independent authorised engine service provider, with market‐leading positions in small thrust capacity engine and rotorcraft overhaul programmes

Ontic

>13%

Group EBIT Leading provider of high‐quality equipment and cost‐effective solutions for maturing and legacy aerospace platforms with a unique portfolio of IP‐protected components and systems

Addressable market as measured by fuel burn, source: ARG/US Top 200 locations according to FAA departures

Network relevance: addressable market at top 200 U.S. airports

BBA Aviation

Unmatched customer relevance

Unique network

‒ 39 Signature locations in top 50 US airports ‒ At 14 of top 20 home bases for business aircraft in USA ‒ Signature presence on 49 of top 50 routes ‒ Key European and ROW B&GA destinations ‒ Global support for customers’ aftermarket needs

Market leading customer proposition

‒ Industry leading service and safety standards ‒ Full service support for B&GA – FBOs, MRO, charter, aircraft management, hangarage ‒ Network pricing optimises customer cost of flying and secures customer loyalty ‒ Strong, extensive customer relationships and knowledge

Technical capability

‒ IP‐protected product knowledge ‒ Efficient and flexible aftermarket processes in state‐of‐the‐art facilities

…Signature US touches 63% of business jet and turboprop fleet each year

Enabling flight; expanding horizons 04

Signature locations serve both ends of 34 of the 50 most heavily‐trafficked city pairs in the USA

KLAS KOAK KSNA KSDL KSFO KDAL KHOU KFTW KSAT KSJC KAUS KSAV KPDK KPBIKOPF KMIA KVNY KLAX KTEB KMMU KBOS KBED KHPN KMDW KCMH KPWK KIAD

Type Competed Sole Source

Source: FAA ARG/US April 2016

BBA Aviation

Barriers to entry

Scale

‒ Over 220 locations on 5 continents ‒ 9.2m sq ft of hangar, terminal and office space in the USA ‒ Handle >1.4m aircraft movements p.a. ‒ >2,200 turbine engines processed annually ‒ >150 licences for >6,000 parts

Unique network locations on long leases One of the world’s largest aircraft management and charter businesses Licence, adoption process and authorisation IP Highly recognised and valued brands Cross‐business opportunities

…underpinned by unique real estate and licence portfolio

Enabling flight; expanding horizons 05

17 17 18 18 18 19 2012 2013 2014 2015 2016 2017

US FBO Long Leases

Average remaining lease term

Trusted brands

BBA Aviation

Increased exposure to B&GA market

Indicator Details

Short Term Aircraft utilisation ‒ B&GA flying hours continued growth Corporate confidence ‒ B&GA flying closely correlated to corporate confidence ‒ SME confidence measures continue to improve Medium Term Fleet growth ‒ Global B&GA fleet continues to expand ‒ Forecast fleet growth of 3‐4% CAGR through 2025 ‒ % of second hand fleet for sale and pricing stable Fleet dynamics ‒ Larger aircraft are an increasing proportion of the fleet, up from 22% to 28% (2005‐2016) ‒ Higher average age of fleet Long Term GDP ‒ Through‐cycle growth in excess of GDP ‒ External forecasts of 2.5% flight hours growth p.a.

…continued outperformance

Enabling flight; expanding horizons 06

Source: GAMA and US Bureau of Economic Analysis Note: 2004 the GAMA survey coverage expanded for turbine airplanes and rotorcraft, accounting for part

• f the increase in hours flown

1000 2000 3000 4000 5000 10000 15000 20000 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Business Jet Flight Hours (000s) US GDP ($bn) Business Jet Flight Hours (Thousands) GDP (Billions in 2009 Dollars)

US B&GA Flight Hours and GDP

‐25.0% ‐20.0% ‐15.0% ‐10.0% ‐5.0% 0.0% 5.0% 10.0% 15.0% Jan‐08 Jun‐08 Nov‐08 Apr‐09 Sep‐09 Feb‐10 Jul‐10 Dec‐10 May‐11 Oct‐11 Mar‐12 Aug‐12 Jan‐13 Jun‐13 Nov‐13 Apr‐14 Sep‐14 Feb‐15 Jul‐15 Dec‐15 May‐16 Oct‐16

US B&GA Aircraft Movements and US Small Business Confidence

YOY 12 month rolling change in B&GA aircraft movements % YOY change in Small Business Confidence

Source: FAA and Bloomberg

BBA Aviation

With longer-term structural growth drivers

… B&GA a key efficiency and productivity tool

Enabling flight; expanding horizons 07

Business aviation: principally a North American market, created by:

‒ Large distances ‒ Dispersed population centres ‒ Lack of intermodal alternatives ‒ Retrenchment from point‐to‐point routes by commercial airlines

An established market

‒ c4500 airports and 2700 FBOs (of which 2100 can sell fuel)

RoW market characteristics are different

‒ Europe: compact centres; fast intermodal alternatives ‒ South America & Asia Pacific : longer‐term opportunities; markets relatively immature

A worked example Business Commercial Check‐in Pittsburgh 0800hrs 0800hrs Depart Pittsburgh 0815hrs 0930hrs Connect in Atlanta 1115hrs Depart Atlanta 1200hrs Arrive Milwaukee 1000hrs 1430hrs Total time 2 hours 6.5 hours

Large US distances vs compact European centres

KVNY KTEB 2,450 miles KMIA 1,098 miles KHOU KSFO 1, 635 miles KPWK 723 miles MUC LHR 645 miles LBG 218 miles

BBA Aviation

Extended opportunity for outperformance

Proven track record of outperforming market

‒ Historic market outperformance of 200bps at 25% drop through

Bigger and better network positioned to capture volume and EBITDA growth Application of operational excellence Broader range of value‐added services Cost and scale synergies Growing portfolio of IP protected licences and authorisations Unique and broad technical skill set and knowledge

…underpinned by experience, expertise, data and track record

Enabling flight; expanding horizons 08

BBA Aviation

Attractive financial characteristics

Low asset intensity and flexible cost base

‒ Fixed costs c25% / Variable costs c75% ‒ Fuel costs passed through ‒ Flexible labour ‒ Lease costs <10% Signature cost base

Strong cash generation

‒ 75‐105% cash conversion normal range

Positive margin drop through Capital structure reflecting proven through‐cycle resilience Opportunity for enhanced capital returns

‒ Progressive dividend policy

Through‐cycle ROIC target >12%

…years of disciplined investment; focusing on yield optimisation

Enabling flight; expanding horizons 09

25% 75%

Flexible Cost Base

Fixed costs ‐ Leases & other Variable costs ‐ Fuel & labour 0% 50% 100% 150% 200% 100 200 300 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

A cash generative business model

Free Cash Flow ($m, Historical Rates) Cash Conversion (%)

BBA Aviation

Appendix

Enabling flight; expanding horizons 10

BBA Aviation

BBA Aviation – a shared vision

We drive sustainable value through a common vision, mission and values We instate actions throughout organisation to deliver against specific short and long terms goals

‒ Market leadership and outperformance ‒ Service quality, customer satisfaction and innovation ‒ Realising cross business opportunities ‒ Employee development, health and safety and sustainability performance

Focus on improved capital efficiency and cash generation Investment discipline tied to generating risk adjusted returns exceeding cost of capital

Enabling flight; expanding horizons 11

Executive Management Executive Directors Executive Management Committee

Simon Pryce Group CEO Mike Powell Group FD (until June 2017) David Blizzard Company Secretary Kevin Erickson Group HR Director Gareth Hall President and MD, Ontic Mark Johnstone President and MD, Global Engine Services Erik Keller Chief Information Officer Tony Lefebvre President and MD, MRO and AMC Maria Sastre President and COO, Signature Flight Support David Crook Group FD (from June 2017)