Presentation Year ended 30 November 2015 Ben Stocks Chief - - PDF document

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Presentation

Year ended 30 November 2015 Ben Stocks Chief Executive Chris Tyler Finance Director

Specialist filtration & environmental technology

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Niche positions

in growing, regulated markets

New product development

and intellectual property

9% CAGR

in revenue

£57m

cash from

• perations

49%

return on operating capital employed

7%

Underlying revenue growth

8% EPS

growth to 15.5p

£10.7m

Net cash

Summary

Consistent strategy delivering results

£22m

invested

£20m

£9.7m net debt to £10.7m net cash

Consistent strategy 2010-2015 In the year ended 30 November 2015

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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

1 2 3 4

A focus on regulated markets with long-term growth prospects

Four key markets

Concerted new product development

Now core to revenue growth

Geographic expansion to support key markets Generate cash to invest in:

Organic growth Acquisitions Dividends

Good prospects for future growth

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A focus on regulated markets

With long-term growth prospects

1 2 3 4

Growth in pax revenue miles 2014 - 2034

(Source: Boeing 2015)

FAA, CAA, EASA and other specific accreditations 5.0%

p.a.

Growth in gasification 2011 - 2016

(Source: US DOE 2010)

International nuclear standards: NQA1, ASME, etc

11.5%

p.a.

Growth in water analysis consumables 2011 - 2016

(Source: SDI Research 2012)

Approved methods: EPA, SEPA, EU water directives 5.6%

p.a.

Growth in primary aluminium usage 2016

(Source: Alcoa 2016)

ISO and customer accreditations; extensive qualification requirements

6.0%

p.a. Aviation Energy and industrial process Environmental laboratory supplies Molten metals

Regulation Market Growth Markets

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Main markets

And operating companies

1 2 3 4

Porvair Filtration Group Seal Analytical Porvair Sciences

Aviation Energy and industrial process Environmental laboratory supplies

15% 35% 20%

SELEE Corp

Molten metals

30%

Microfiltration Metals Filtration

Main operating companies Business division Principal markets Approx share

• f Group sales

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Niche positions

Fuel systems Coolant systems Hydraulics

Growth drivers

Aircraft build rates Maintenance schedules New programmes Retrofit: inerting

Competitive advantage

Qualified, installed base Design engineering skills Range of media Design protection

Recent new products

Boeing, Airbus & other fuel tank inerting filters A380 & 787 coolant filters A350 Airbus NEO

Strong market positions

And concerted new product development

Aviation

1 2 3 4

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Strong market positions

And concerted new product development

Energy and industrial process

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

Competitive advantage

Installed base Range of media Design engineering: pulse jet systems Design protection

Recent new products

E-gas™: Posco E-gas™: Reliance E-gas™: SG Solutions E-gas™: CNOOC UK Government remediation 1 2 3 4

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Niche positions

Analysis of inorganic chemicals in water Associated consumables Porous plastics

Growth drivers

Regulated water testing Higher environmental standards Developing markets Bioscience growth

Competitive advantage

Installed base Instrument design protection Porous plastics IP and related patents

Recent new products

Upgraded instruments: 2012 2013 2014 Reengineered new instruments: 2015 2016

Strong market positions

And concerted new product development

Environmental laboratory supplies

1 2 3 4

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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

Competitive advantage

Patent protection Metallurgical expertise US / China manufacturing

Recent new products

Selee CSX™ Selee IC™ Selee SA™ Range extensions

Strong market positions

And concerted new product development

Molten Metals

1 2 3 4

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Geographic expansion to key markets:

Recent developments and 2015 revenue by destination

Microfiltration plants Metals Filtration plants Americas

47%

UK

16%

Europe

14%

Asia

22%

US Caribou, ME, plant extended New premises in Ashland undergoing fit out Fiber Ceramics acquired and moved to Hendersonville NC UK and Europe New plant in New Milton

• pened in 2015

Asia First phase Xiaogan, China, plant completed in 2013 Second Xiaogan plant

• pened in 2015

1 2 3 4

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Consistent strategy:

Five years of growth and cash generation

9% revenue CAGR since 2010 (2014 exceptional) EPS growth continuing More than £20m net cash generated Revenue growth coming from US and Asia

20 40 60 80 100 120 2010 2015 £millions

Others Asia Americas Europe United Kingdom

2 4 6 8 10 12 14 16 18 2010 2011 2012 2013 2014 2015

Half year Final

Pence per share 20 40 60 80 100 120 2010 2011 2012 2013 2014 2015

Half year Final

£ millions

• 19
• 14
• 9
• 4

1 6 11 16 2010 2011 2012 2013 2014 2015

Half year Final

£ millions

1 2 3 4

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Record performance

For the year ended 30 November 2015

Revenue down

(8)%

to £95.8m Underlying revenue up

9%

in Microfiltration Revenue up

3%

in Metals Filtration PBT up

9%

to £9.2m EPS up

8%

to 15.5p Net cash up to

£10.7m

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Income statement

For the year ended 30 November 2015

2014 £000 2015 £000

Revenue 95,828 104,004 Operating profit 9,801 9,205 Interest (604) (785) Profit before tax 9,197 8,420 Tax (2,241) (2,087) Profit after tax 6,956 6,333 EPS (basic) 15.5p 14.4p

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Cash flow

For the year ended 30 November 2015

2014 £000 2015 £000 11,968 Operating cash flow before working capital movements 12,517 2,188 Working capital movement 777 (328) Interest (143) (2,205) Tax (1,836) (5,096) Capital expenditure (net of disposals) (3,337) 6,527 Net cash from operations 7,978 (707) Acquisitions (1,087) 199 Proceeds from issue of shares 34 (9) Exchange movements 28 579 Net cash at 1 December 5,264 5,264 Net cash at 30 November 10,738 (1,325) Dividends paid (1,479)

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Results and progress – year ended 30 November 2015

2014 £000 2015 £000 Revenue 31.0 30.1 Operating profit 2.4 2.6

4% lower at constant currency: Agriculture and prior year one-off Break even in China with start up Good performance despite strong dollar: Steady market share gains from patented products Fiber Ceramics acquired and moved to Hendersonville Second Chinese plant built and commissioned Positive start to 2016 Good early results from Chinese customer trials

Revenue to £31.0m record – 3% growth Recent developments 2016 outlook

Metals Filtration

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Microfiltration

Results and progress – year ended 30 November 2015

Large projects building and commissioning going well: £14.0m lower revenue in 2015 Gasification spares, US industrial and bioscience strong Quieter year in aerospace and nuclear Operating margins improved to 15% New UK plant opened to expand capacity US plant extended Record year for Seal; more product releases planned Healthy order books Return to growth for aerospace and nuclear

9% underlying growth Recent developments 2016 outlook

2013 £000 2015 £000 2014 £000 Revenue 64.8 73.9 55.8 Operating profit 9.7 8.7 8.6

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Microfiltration

Acquisition of TEM Filter Company

Well designed product range Market knowledge Distribution

TEM brings:

Idaho, US based Niche market Highly regulated Exacting technical specifications Integration underway

Microelectronics filtration Porvair adds:

Wider range of media International sales reach Funds for investment

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2016 – 2018 opportunities

Market growth, market share gains and margin growth

Aviation Energy and industrial process Laboratory supplies Molten metals

Market growth Market share gains Margin growth

Inerting developments US expansion A350 and NEO UK capacity increases Airbus A380 and Boeing 787 US sales and manufacturing Large contract pipeline, spares and service Caribou growth and TEM integration Differentiated hot gas filters Improved analyser range designs Bioscience licensing growth with Thermo Chromatrap range development US manufacture of two product ranges Regulated markets with long term growth prospects – long product lifecycles China plant expansion Selee Metallurgical Services Incremental process improvements Steady market share gains from IP protected ranges Product range extensions Growing installed base and product portfolio

• Two new platforms

Sub-contract filter manufacture New formula for Chinese market

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Summary

and outlook The Board looks forward with confidence

£3.8m

invested in the year

New plants in

UK, US and China

Fiber Ceramics and TEM acquired Healthy order books for 2016 Large projects

progressing well

Positive start

to 2016 Further

investments

planned

7%

underlying revenue growth

8%

EPS growth to 15.5p Net cash of

£10.7m

Results Outlook Investment

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Presentation

Year ended 30 November 2015 Ben Stocks Chief Executive Chris Tyler Finance Director

Specialist filtration & environmental technology