BBA Aviation enabling flight; expanding horizons. March 2017

Transcription

1 enabling flight; expanding horizons March 2017

2 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 Historical 1 Today 2 Aftermarket Services 28% 106 Total operating profit $181.5m 112 Flight Support 72% Signature global network expansion Aftermarket Services 12% Now 125 Total operating profit $302.6m 138 Flight Support 88% 203 enhanced underlying quality, growth and opportunity for value creation Note 1: Based on 2015 financial information Note 2: Based on 2016 financial information 01

3 BBA Aviation today - a focused B&GA service provider High quality businesses Market leadership Unmatched customer relevance Strengthened barriers to entry 2016 Revenue Splits Aftermarket Services 33% Flight Support 67% Enhanced growth prospects Increased exposure to growing B&GA market Extended opportunity for outperformance RoW 14% North America 86% Attractive financial characteristics Low asset intensity and flexible cost base Strong, resilient through cycle cash flow with accelerated value creation potential Commercial 7% Military 5% B&GA 88% 02

4 Market leadership 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 Signature's enhanced leadership position Network relevance: addressable market at top 200 U.S. airports 68 % 38 % 19 % 9 % 6 % 5 % 5 % 1 % Ontic >13% Group EBIT Engine Repair & Overhaul <2% 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 A leading independent authorised engine service provider, with market leading positions in small thrust capacity engine and rotorcraft overhaul programmes Signature Flight Support Network Atlantic Jet Aviation Addressable market as measured by fuel burn, source: ARG/US Top 200 locations according to FAA departures Million Air TAC Air Ross Sheltair Cutter Enlarged Signature Atlantic Aviation Million Air Jet Aviation Total locations North America Sole source locations Top 50 US airports 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) driving sustainable value through a common vision, mission and values 03

5 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 locations serve both ends of 34 of the 50 most heavily trafficked city pairs in the USA KSFO KOAK KSJC KVNY KLAX KSNA KLAS KSDL Source: FAA ARG/US April 2016 Type KFTW KSAT KAUS Competed Sole Source KDAL KHOU KPWK KMDW KCMH KPDK KIAD KSAV KPBI KOPF KMIA KBED KBOS KHPN KTEB KMMU Signature US touches 63% of business jet and turboprop fleet each year 04

6 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 US FBO Long Leases Average remaining lease term Trusted brands underpinned by unique real estate and licence portfolio 05

7 Increased exposure to B&GA market Short Term Indicator Aircraft utilisation Corporate confidence Details B&GA flying hours continued growth B&GA flying closely correlated to corporate confidence SME confidence measures continue to improve US B&GA Flight Hours and GDP US GDP ($bn) Business Jet Flight Hours (000s) 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 Business Jet Flight Hours (Thousands) GDP (Billions in 2009 Dollars) Source: GAMA and US Bureau of Economic Analysis Note: 2004 the GAMA survey coverage expanded for turbine airplanes and rotorcraft, accounting for part of the increase in hours flown Long Term Fleet dynamics Larger aircraft are an increasing proportion of the fleet, up from 22% to 28% ( ) Higher average age of fleet GDP Through cycle growth in excess of GDP External forecasts of 2.5% flight hours growth p.a. continued outperformance US B&GA Aircraft Movements and US Small Business Confidence 15.0% 10.0% 5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 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 Source: FAA and Bloomberg YOY 12 month rolling change in B&GA aircraft movements % YOY change in Small Business Confidence 06

8 With longer-term structural growth drivers Large US distances vs compact European centres Business aviation: principally a North American market, created by: Large distances KSFO 1, 635 miles 2,450 miles KPWK 723 miles KTEB Dispersed population centres Lack of intermodal alternatives Retrenchment from point to point routes by commercial airlines KVNY KHOU 1,098 miles KMIA LHR 218 miles LBG 645 miles MUC An established market c4500 airports and 2700 FBOs (of which 2100 can sell fuel) RoW market characteristics are different 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 Europe: compact centres; fast intermodal alternatives South America & Asia Pacific : longer term opportunities; markets relatively immature B&GA a key efficiency and productivity tool 07

9 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 08

10 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 % 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% Flexible Cost Base 75% A cash generative business model % Fixed costs Leases & other Variable costs Fuel & labour % 150% 100% 50% 0% Free Cash Flow ($m, Historical Rates) Cash Conversion (%) years of disciplined investment; focusing on yield optimisation 09

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12 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 Executive Management Executive Directors Simon Pryce Group CEO Executive Management Committee David Blizzard Company Secretary Mike Powell Group FD (until June 2017) Kevin Erickson Group HR Director David Crook Group FD (from June 2017) 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 11