Presentation Year ended 30 November 2013 Chief Executive Finance - - PDF document

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Chief Executive Finance Director Year ended 30 November 2013

Presentation

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Summary

Consistent strategy delivering results

Consistent strategy

Niche positions

in growing, regulated markets Long-term focus on

new product development

and intellectual property

£48m (£8m p.a. avg)

cash from operations

2007- 2013

39%

return on operating capital employed

11% CAGR

in revenue

26% EPS

growth to 12.7p

In the year ended 30 November 2013

115% reduction

in net debt. Net cash of £0.6m

10%

revenue growth to £84.3m

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Specialist filtration

and environmental technology

Specialist filters are used to protect costly or complex downstream systems Attractive business characteristics Annuity demand:

• Consumables: 80%+
• Long life cycles
• Bespoke

Robust demand drivers:

• Secular trends
• Regulation/legislation
• Process reliability

Barriers to entry:

• Patent protection
• Quality accreditation
• Design rights

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

Long-term growth from developing specialist filtration and environmental technology businesses both organically and by acquisition

Consistent strategic

and operational objectives

1 2 3 4

Plenty of opportunity ahead 11% revenue CAGR since 2007

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Growth in pax revenue miles 2012 - 2032

(Source: Boeing 2013)

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 2010 to 2020

(source: Alcoa 2013)

ISO and customer accreditations; extensive qualification requirements

6.5%

p.a.

A focus on regulated markets

with long-term growth prospects

1 2 3 4

Aviation Energy and industrial process Environmental laboratory supplies Molten metals

Regulation Market Growth Markets

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Main markets

and operating companies

Porvair Filtration Group Seal Analytical Porvair Sciences Aviation Energy and industrial process Environmental laboratory supplies

15% 30% 20%

SELEE Corp Molten metals

35%

Microfiltration Metals Filtration

Business division Main operating companies Principal markets Approx share

• f Group sales

1 2 3 4

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Strong market positions

and concerted new product development

Aviation

Niche positions

• Fuel tank inerting
• Coolant systems
• Hydraulics
• Fuel lines

Growth drivers

• Aircraft build rates
• Maintenance

schedules

• New programmes
• Retrofit: inerting

Recent new products

• Boeing, Airbus

and other fuel tank inerting filters

• A380 and 787

coolant filters

• A350 underway
• Airbus NEO

qualification Competitive advantage

• Installed base
• Design engineering

skills and track record

• Range of media
• Design protection

1 2 3 4

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Strong market positions

and concerted new product development

Energy and industrial process

Niche positions

• Pulse jet systems
• Hot gas and

gasification

• Nuclear remediation
• Polymer production

Growth drivers

• Gasification build

rates

• Maintenance

schedules

• Nuclear clean-up
• Energy efficiency

and security Recent new products

• E-gas™: Posco
• E-gas™: Reliance
• E-gas™: SG

Solutions

• UK Government

remediation

• Bechtel nuclear

Competitive advantage

• Installed base
• Range of media
• Design engineering:

pulse jet systems

• Design protection

1 2 3 4

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Strong market positions

and concerted new product development

Environmental laboratory supplies

Niche positions

• Analysis of inorganic

chemicals in water

• Associated

consumables

• Porous plastics

Growth drivers

• Regulated water

testing

• Higher environmental

standards

• Developing markets
• Bioscience growth

Recent new products

• Quaatro 39
• AA1 method

development

• AQ2 upgrade
• Bioscience filters
• Chromatrap™

Competitive advantage

• Installed base
• Instrument design

protection

• Porous plastics IP

and related patents

1 2 3 4

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Strong market positions

and concerted new product development

Molten metals

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 Recent new products

• Selee CSX™
• Selee IC™
• Selee SA™
• Range extensions

Competitive advantage

• Patent protection
• Metallurgical

expertise

• US manufacture (for

the Americas)

1 2 3 4

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Geographic expansion to key markets:

Recent developments

Microfiltration

1 2 3 4

PFG US capacity expansion Microfiltration principal plants

• Aerospace

capacity expansion

• bioscience

dedicated facility Seal production facility Seal Shanghai tech centre recruitment Seal US expansion and Thomas Cain acquisition Metals Filtration principal plant Strengthened European sales force Opened Russian and Middle Eastern tech support

• ffice

Xiaogan facility

• pened

Metals Filtration

Acquired Chand Eisenmann Metallurgical

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Geographic expansion to key markets:

2013 revenue by destination

Americas

46%

UK

21%

Europe

13%

Asia

18%

Microfiltration Metals Filtration

1 2 3 4

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11% revenue CAGR since 2007 EPS growth trend established

Consistent strategy:

revenue growth and margin improvement

Net debt eliminated Revenue growth coming from US and Asia

10 20 30 40 50 60 70 80 90 2007 2013 £ millions

Others Asia Americas Europe United Kingdom

2 4 6 8 10 12 14 2008 2009 2010 2011 2012 2013

Half year Final

Pence per share 10 20 30 40 50 60 70 80 90 2007 2008 2009 2010 2011 2012 2013

Half year Final

£ millions

• 2

2 4 6 8 10 12 14 16 2009 2010 2011 2012 2013

Half year Final

£ millions

1 2 3 4

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Revenue up

Record performance

for the year ended 30 November 2013

10%

to £84.3m Revenue up

15%

in Microfiltration Revenue up

2%

in Metals Filtration PBT up

25%

to £7.8m EPS up

26%

to 12.7p Net debt down

115%

net cash of £0.6m

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2012 £000

Income statement

year ended 30 November 2013

2013 £000

Revenue 84,267 76,455 Operating profit 8,641 7,205 Interest (793) (906) Profit before tax 7,848 6,299 Tax (2,367) (2,017) Profit after tax 5,481 4,282 EPS (basic) 12.7p 10.1p

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2012 £000

Cash flow

year ended 30 November 2013

2013 £000

9,446 (283) Working capital movement 1,116 (518) Interest (417) (1,238) Tax (2,104) (1,928) Capital expenditure (net of disposals) (1,543) 5,479 Net cash from operations 8,201 (3,329) Acquisitions (3,324) 41 Proceeds from issue of shares 659 53 Exchange movements 88 (5,091) Net debt at 1 December (3,870) (3,870) Net cash / (debt) at 30 November 579 (1,023) Dividends paid (1,175) Operating cash flow before working capital movements 11,149

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Metals Filtration

results and progress – year ended 30 November 2013

2012 £000 2013 £000 Revenue 28.5 28.0 Operating profit 2.4 2.4

Revenue 2% higher, operating margins maintained

• Stronger second half
• Margin and market share gains from patented products
• Xiaogan plant opened

New product development

• Promising development pipeline
• New high grade lithium aluminium alloy filter in trials
• Entirely new design of filter in development

2014 outlook

• Positive start to 2014
• Capacity investments in US and China

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Microfiltration

results and progress – year ended 30 November 2013

2012 £000 2013 £000 Revenue 55.8 48.5 Operating profit 8.6 6.7

Revenue up 15%, operating profit up 29% Strategic progress

• Large contracts progressing well
• Good progress in aviation, nuclear
• Bioscience: licencing agreement

2014 outlook

• Healthy order books going into 2014
• Investment to add capacity:
• UK
• USA
• Record revenue and profits
• Seal Analytical up 13%
• Two US based acquisitions completed

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2014 – 2016 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 still growing
• US expansion
• A350 underway
• UK capacity

increases

• Airbus NEO in

qualification

• Airbus A380 and

Boeing 787 coolant underway

• US sales and

manufacturing

• Large contracts in

place

• Pipeline promising
• Chand Eisenmann

capacity increase & cross-selling

• Longer life hot

gas filters

• Improved analyser

range designs

• Bioscience licensing

growth with Thermo

• Bioscience filtration

development

• US manufacture of

two product ranges Regulated markets with long term growth prospects – long product lifecycles

• New China plant built
• Steady market share

gains from IP protected ranges

• Product range

extensions

• Initial orders for next

generation of new products

• Incremental product

and process improvements

• Thomas Cain cross-

selling & integration

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Summary

and outlook

2014 year of

investment New plants

in UK and US planned Other capacity

upgrades in

UK, US and China Promising new

product pipeline Positive start

to 2014

10%

revenue growth to £84.3m

26%

EPS growth to 12.7p Net debt

eliminated

The underlying business should continue to grow

Results Outlook Investment

One-off

revenue boost in 2014 Profits spread

• ver four years

Large contracts

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Chief Executive Finance Director Year ended 30 November 2013

Presentation