2007 - cobham plc · 12 interim results 2007 acquisition update board has confidence that...
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Interim Results 20071
Interim Results 2007
Interim Results 20072
Highlights
Solid order intake, order book of £1.7bn
Strong organic revenue growth of 7.8% across the technology divisions
Success with several significant R&D projects; PV up to 6.2%
Strong underlying EPS growth of 10.3% (15.3% at constant translation exchange)
Acquisitions remain a key element of the growth strategy
Interim Results 20073
Summary Profit and Loss Account
0.3pts6.2%5.9%PV Spend %**
9.1%86.178.9Profit before Taxation**
0.9pts16.9%16.0%Margin
1.0%83.482.6Trading profit**
(4.5)%493.8517.2Revenue
(33.5)%575.3865.5Orders Received*
Growth
Unaudited Half Year to
30/06/07£m
Unaudited Half Year to
30/06/06£m
AuditedYear to
31/12/06£m
1,390.5
1,015.7
186.3
18.3%
6.0%
182.9
* H1 2006 includes £326m of Sentinel orders** Note: See Appendix for definitions, including underlying, used throughout this presentation
Interim Results 20074
Shareholder Returns
28.0%29.4%Underlying Tax Rate
52.6%4.12p2.70 pFree Cash Flow Per Share
10%1.22p1.11 pDividend Per Share
4.40p6.80 pFully Diluted
4.43p6.87 pBasic
10.3%5.48p4.97 pUnderlying
Earnings Per Share
Growth
UnauditedHalf Year to
30/06/07£m
Unaudited Half Year to
30/06/06£m
Audited Year to
31/12/06£m
28.7%
11.66 p
13.13 p
13.00 p
3.75 p
9.20 p
Interim Results 20075
Earnings Per Share Growth
5.9
5.7
5.5
5.3
5.1
4.9
4.7
4.5
4.3
(5.0)% (1.0)% 16.3% 10.3%
4.97
0.250.05
0.81 5.48
pen
ce
2006 Half Year FX Translation FX Transaction Growth 2007 Half Year
15.3% OrganicGrowth
Interim Results 20076
Cash Flow
57.783.4Change in Net Borrowings/Cash
53.6%46.730.4Free Cash Flow from Business
4.0pts75.1%71.1%Operating Cash Flow/Trading Profit
6.6%61.357.5Operating Cash Flow
0.9%81.680.9Trading Profit (ex. JV)
Growth
UnauditedHalf Year to
30/06/07£m
Unaudited Half Year to
30/06/06£m
Audited Year to
31/12/06£m
181.6
153.0
84.3%
103.8
169.2
Net cash £58.6m
Interim Results 20077
Revenue and Profit
1.0%83.482.6(4.5)%493.8517.2Cobham Group16.9%16.0%Margin
(5.2)%9.19.6(2.0)%94.596.4Flight Operations & Services (CFOS)
9.6%10.0%Margin
5.5%77.273.2(2.8)%396.3407.7Technology Divisions
19.5%18.0%Margin
(1.4)(1.5)
1.6(1.8)
3.0-
13.1-
Other businesses*FSTA Bid Costs
4.2%86.382.8(2.6)%490.8504.1Operating Divisions
GrowthUnaudited H1 2007
UnauditedH1 2006Growth
Unaudited H1 2007
UnauditedH1 2006£m
Trading ProfitRevenue
* ERA Technology, Slingsby Aviation, Atlas Composites, Applied Composites, Property and Head Office, Countermeasures companies (discontinued operations)
Interim Results 20078
Technology Divisions Revenue Growth
Impact of using spot rate to account for hedged revenues
420
400
390
380
370
360
350
340
330
410(6.5)% (4.6)% 0.5% 7.9%
407.7
26.4
32.4 396.3
£m
H1 2006 FX Translation FX Transaction Growth H1 2007
7.8% OrganicGrowth
18.8
2.0
0.6
Disposals Acquisitions
(0.1)%
Interim Results 20079
Technology Divisions Revenue Growth
10.3%77.273.27.8%396.3407.7Technology Divisions
19.5%18.0%
12.412.761.973.0Life Support20.0%17.4%Margin
21.823.394.0100.7Defence Electronic Systems
23.2%23.1%Margin
20.813.4119.5100.8Avionics & Surveillance
17.4%13.3%Margin
18.420.080.892.0Antennas22.8%21.7%Margin
3.83.840.141.2Air Refuelling & AME9.5%9.2%Margin
OrganicGrowth
Unaudited H1 2007
UnauditedH1 2006
OrganicGrowth
Unaudited H1 2007
UnauditedH1 2006£m
Trading ProfitRevenue
10.3%77.273.27.8%396.3407.7Technology Divisions
19.5%18.0%
12.412.761.973.0Life Support20.0%17.4%Margin
21.823.394.0100.7Defence Electronic Systems
23.2%23.1%Margin
20.813.4119.5100.8Avionics & Surveillance
17.4%13.3%Margin
18.420.080.892.0Antennas22.8%21.7%Margin
3.83.840.141.2Air Refuelling & AME9.5%9.2%Margin
OrganicGrowth
Unaudited H1 2007
UnauditedH1 2006
OrganicGrowth
Unaudited H1 2007
UnauditedH1 2006£m
Trading ProfitRevenue
8a
Interim Results 200710
Technology Divisions Trading Profit Growth
78
74
72
70
68
66
64
76
(5.1)% (0.4)% 0.7% 11.1%
73.2
3.7
8.1 77.2£
m
2006 H1 FX Translation FX Transaction Growth 2007 H1
10.3% OrganicGrowth
0.3
0.5
0.6
Disposals Acquisitions
(0.8)%
9
Interim Results 200711
US$ Transaction Exposure & Hedging
Chelton Ltd
CDC
Total 2007
2007
2009 to 2014
FRL$13m
$155m
2007 and 2008 Exposures:
Hedging in place:
$151m
$114m
Historic averageeffective rate
2003 $1.48 : £12004 $1.59 : £12005 $1.70 : £12006 $1.77 : £1
97% hedged for 2007
Dollar/Euro exposure predominantly hedged with $29m at 1.29 for 2007 and $15m at 1.36 for the first 6m of 2008
Avionics and Surveillance
FRA
$60m
2008
-$3m
$14m
$33m
$32m
$10m
$6m$102m
$70m
-$5m
$117m 97% hedged for 2008Total 2008
Avg hedge rate $1.92: £1
Avg hedge rate $1.67: £1
Avg hedge rate $1.82: £1
10
Interim Results 200712
Acquisition Update
Board has confidence that acquisitions will drive significant growth
$2.6bnEstimated Acquisition Cost$2.1bnEstimated Acquisition Cost
B- Avionics
L,M- Defence ElectronicsPrime Divestment
B- Defence Electronics
M- Life Support
M- AntennasPrivate Equity
B- Defence Electronics
M,B,B- Antennas
M- AR&AMEB- Defence Electronics
B- Life SupportPrivate Companies
M, B- Antennas
M- Antennas
M- Defence Electronics
L- Antennas
Public Companies
L- Defence Electronics
SIZEACTIVE PIPELINEOWNERSHIPSIZEMISSED/PASSED
Patriot Antennas acquisition completed - $45m
L >$500M M $100-$500M B(Bolt on/Bolt In) < $100M11
Interim Results 200713
Exceptional Profits from Portfolio Restructuring
£14.6mAvailable to invest on further exceptional restructuring
£(5.5m)
£(2.5)m£(1.0)m£(0.9)m£(0.5)m£(0.6)m
Restructuring costs, H1 2007Wimborne Site RestructuringLife Support IntegrationClosure of Falcon Special Air ServicesRacal Antennas IntegrationOther
£20.1m
£5.6m£14.5m
Exceptional Profits on Disposals20052006
12
Interim Results 200714
2007 H1 Financial Highlights
7.8% organic revenue growth across technology divisions; 4 divisions operating well above pro-forma growth
Technology divisions trading margin increased by 3.5 points since H1 2005 to 19.5%
Strong underlying EPS growth of 10.3% (15.3% at constant translation exchange)
Strong operating cash conversion; up 4.0 points to 75.1%
Dividend CAGR of 14% over the 27 years since 1980
Acquisitions remain a key element of the growth strategy
13
Interim Results 200715
Group Revenue Analysis
Geography
Domain
Civil 40%(2006: 39%)
Other 5%(2006: 7%)
Military Aerospace 31%(2006: 33%)
Military Land 24%(2006: 21%)
MainlandEurope17%(2006: 16%)
Australia12%(2006: 12%)
UK 13% (2006: 16%)
USA 47%(2006: 45%)
RoW 11%(2006: 11%)
Civil = non military aviation & marine
14
Interim Results 200716
Military Aerospace Overview
Market Update
US DoD budgeting in 2008 – 104 helicopters, 44 fixed wingUSAF CAGR 2008 – 2013 is ~3% Continued focus on capability upgradesNegotiations with Saudi on Typhoon progressingUK DIS V2 will confirm aerospace as a critical capabilityIndia MMRCA requirement for 126 fighters
Business Highlights
Defence Electronic successes on F-22; F-18 and F-16 radar and EWSDB launcher, V-22 refuelling probe and F-22 fuel tanks move to full rate productionFollow on order for C-17 On Board Inert Gas Generation SystemFSTA moves to financial competition – contract close “as quickly as possible”
31% Group Revenue
15
Interim Results 200717
Military Aerospace –Selected Programme Positions
Antennas, Air Refuelling Pods, Avionics
Up to £1bn2009- 2019KC-X Tanker
Opportunity
Antennas, Avionics Equipment$50-$100m2008- 2013TH-57/67 Trainer Helicopter
Antennas, Avionics Equipment$200m-$400mto 2017Global Hawk
Communications & Life Support Equipment, External Fuel Tanks
$170m-$190mto 2017F-22
Antennas, Avionics, Fuel Tanks, Wing Pods
$50m-$65mto 2012F-18E/F&G
Refuelling Probe, Life Support Equipment, Avionics
$1.9bn-$2.2bnto 2017F-35
Antennas, Life Support Equipment£30m-£40m2008- 2012C27-J Transport
Antennas, Air Refuelling Pods, Avionics
£50m - £160mto 2017A400M
Antennas, Avionics, Aux Mission Equipment
£75m-£95mto 2014Gripen
Antennas, Radomes, Life Support Equipment Aux Mission Equipment
£200m-£300mto 2013Eurofighter Typhoon
ProductsEstimated Cobham Value
TimingProgramme
Value of selected programmes £1.7bn to £3bn
16
Interim Results 200718
Military Land Overview
Market Trends
US DoD shows strong Army growth over next 2-3 yearsInvestment account (Procurement and RD&T) core growth >10%SASC have added $4bn for MRAPs; $2.7bn for unfunded army requirementsStrong demand in RoW markets for LUV and MRAPs
Business Highlights
US Marine Corps - $30m antenna contract for communication mastsCDC wins Queen’s Award for Enterprise – 300% growth in 5 yearsNew communication systems orders received from UK MoD, Egypt and NZMicroclimate cooling systems for US Army Stryker – 5000 now fieldedCOM-231 antenna IDIQ received – output increased to 400/month
24% Group Revenue
17
Interim Results 200719
Military Land – Selected ProgrammePositions
Value of selected programmes £310m to £660m
Communication EquipmentUp to $3bn2009- 2019Vehicle Intercom
Opportunity
Antennas$150m-$300mto 2012COM-201/231 Antenna
Communications Equipment$100m-$130mto 2017Integrated Digital Soldier System
Life Support Equipment, mINCAN
$6m-$75mto 2012Stryker
Vehicle Intercom, Antennas, Life Support Equipment,
$300m-$600mto 2014HMMWV
Vehicle Intercom, Life Support Equipment
$70m-$210mto 2010MRAP
ProductsEstimated Cobham value
TimingProgramme
19
Interim Results 200720
Civil Aviation & Marine Overview
Market Trends
Commercial aerospace CAGR 2008 – 2013 is >6% Boeing 787 first flight scheduled for December 2007A380 enters service with Singapore airlines on 25 OctoberTrend for satellite communications strong in Civil and Marine applications
Business Highlights
HGA7001 satellite communications system selected for B787, B777 and B747-8Increased demand for audio management systems Airbus A380 & single aisle productsSelected to supply Eclipse Very Light Jet antenna suiteEFIS now system of choice with Bell, AgustaWestlandFive year A$300m award for Qantas B717 fleetStrong demand for marine SATCOM systems world-wideFive Dash 8 aircraft delivered for Australian Coastguard – ahead of schedule
40% Group Revenue
19
Interim Results 200721
Civil Aviation & Marine –Selected Opportunities
Value of selected programmes £790m to £1.9bn
Opportunity
Antennas$500m-$1bnto 2017Marine SOTM
AvionicsNot disclosedto 2017Robinson
Antennas, Avionics$100m-$200mto 2017Agusta/ AgustaWestland
Antennas, Avionics$70m-$110mEurocopter (Civil)
Antennas, Avionics$40m-$150mto 2017Eclipse VLJ
Antennas, Life Support Equipment, Avionics
$38m-$350mto 2027Airbus A380
Antennas, Life Support Equipment
$40m-$150mto 2027Boeing 787
ProductsEstimated Cobham value
TimingProgramme
20
Interim Results 200722
Strategy Progress Update
Sold 9 companies since ’05 ~ £246m
Acquired 12 companies ~ £230m
HR, Strategy, M&A
Finance, BD, supply chain
Technology, procurement, IT,
3.5 % point increase intechnology division margin
PV increased to 6.2%
Technology division organic growth 7.8%
Focus
Capabilities
Performance
21
Interim Results 200723
Core PV activities
• Next generation Radars• High capacity comms links• Electronic Counter Measures
1: MMICs • JSF, F-22, F-18 retrofit, SPEAR• UAVs, JSTARS, P-8A• RIVET JOINT, classified programs
Land SeaAir
!!!! ! !
• ‘Office in the sky’• Covert military vehicle fit• Train installations
2: Low-profileSATCOMantenna
• Airbus, Boeing, Regional Jets• US Army programs• UK, India, Europe
!!!! !
• Tactical UGV, UAV• Border Surveillance• Video Flashlight
3: COFDM • Talon, CUTLASS, Skylite B• SBINet, Eastern Europe• First Responder orders
!!!! !!
• Wireless intercom• Naval boarding parties• Hazardous environments
4: MeshedNetworkedradio
• Selected by Middle-East Army• Ordered by RNZN • Emergency responders
!!!! !
Technology Applications Programmes/Platforms
Continued investment in market driven innovation
!!!! = initial route to market ! = subsequent market
22
Interim Results 200724
Operational Improvements Progressduring 2007
Reducing labour costs, cycle times and improving working capital
A combination of site consolidation, reorganisation, integration and business lean activities
Examples includeMore than 20% space improvement on air refuelling probes in Wimborne
50% reduction in labour costs following site integration at Life Support Florida
Military antenna lead times reduced by 40% in CDES
SATCOM system lead times reduced by a factor of 3 and WIP reduced by 65%
Improvements have enabled increased investment in technology, innovation and technology division margins
3.5pts to 19.5% since the first half of 2005
23
Interim Results 200725
Outlook and Summary
A great set of results
Our strategy is on track
Very strong prospects for organic and acquisitive growth
24
Interim Results 200726
Appendices
IR Calendar
US Defence Budget Outlook
Cash Flow
US$ Exchange Rates
Cobham Involvement in FSTA
Air Refuelling & Auxiliary Mission Equipment Programmes
Ship set values
Definitions
Glossary
Cautionary statement
25
Interim Results 200727
IR Calendar
Site Tours/Investor Days
Farnborough
20082007
DecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSep
DSEi, London
Major Shows
30
CDC, Blackburn, UK (TBC)
22REMEC, San Diego, USA
Investor Day, London(TBC)
57 7611
Announcements/AGM
14-20
InterimsAGM &Interim
ManagementStatement
InterimManagementStatement
11-14
PrelimsTradingUpdate
Interims
tbctbc
7tbc
26
Interim Results 200728
US Defence Budget Outlook
Investment Account SpendingBudget Authority, Current $m
FY
Base growth* 1.9% 4.5% 13.1% 6.2% 2.2% (0.8%) 2.2% (0.6%)
Total growth 5.2% 17.2% 10.3% 2.8% (0.4%) (3.0%) (0.6%) (3.1%)
164.9173.5
203.3
224.2 230.5 229.6 222.6 222.2214.4
ProcurementRDT&ESupplemental
CAGR 07 - 09 : 6.5%CAGR 05 - 07 : 11.0%
CAGR 07 - 13 : 0.9%
Source: Bank of America Securities*Core DoD Procurement & RDT&E budget
2005 2006 2007 2008 2009 2010 2011 2012 2013
27
Interim Results 200729
Technology Divisions Revenue and Profit
10.3%77.273.27.8%396.3407.7Technology Divisions
19.5%18.0%
12.412.761.973.0Life Support20.0%17.4%Margin
21.823.394.0100.7Defence Electronic Systems
23.2%23.1%Margin
20.813.4119.5100.8Avionics & Surveillance
17.4%13.3%Margin
18.420.080.892.0Antennas22.8%21.7%Margin
3.83.840.141.2Air Refuelling & AME9.5%9.2%Margin
OrganicGrowth
Unaudited H1 2007
UnauditedH1 2006
OrganicGrowth
Unaudited H1 2007
UnauditedH1 2006£m
Trading ProfitRevenue
28
Interim Results 200730
Cash Flow
Net cash £58.6m at 30/06/07
Audited Year to 31/12/06
UnauditedHalf Year to
30/06/06
UnauditedHalf Year to
30/06/07£m £m £m
181.6 Trading Profit (ex. JV) 80.9 81.6
(7.4) Movements in working capital (20.2) (19.3)
(16.8) Movements in provisions (4.6) (1.3)
35.0 Depreciation and other non-cash adjustments 17.6 16.2
(39.4) Capital expenditure (16.2) (15.9)
153.0 Operating cash flow 57.5 61.3
84.3% Operating cash flow/Trading Profit 71.1% 75.1%
(7.3) Net Interest (4.7) 0.4
4.3 Dividends received from JVs 3.0 1.6
(46.2) Tax (25.4) (13.9)
Restructuring Costs (2.7)
103.8 Free cash flow 30.4 46.7
(39.7) Dividends paid - -
64.1 Net cash flow from business 30.4 46.7
61.1 Net acquistion costs (2006 - net disposals) 22.9 (0.1)
6.9 Proceeds from issue of shares 5.1 3.5
37.1 FX 25.0 7.6
169.2 Decrease/(increase) in net borrowings 83.4 57.7
29
Interim Results 200731
Cobham Group Revenue Growth
530
500
490
480
450
440
430
520 517.2
27.1
31.5 493.8
£m
H1 2006 FX Translation FX Transaction Growth H1 2007
6.0% OrganicGrowth
29.4
2.2
Disposals Acquisitions
510
470
4600.6
Impact of using spot rate to account for hedged revenues
30
Interim Results 200732
Cobham Group Trading Profit Growth
84
78
76
74
72
82
£m
H1 2006 FX Translation FX Transaction Growth H1 2007
6.8% OrganicGrowth
Disposals Acquisitions
80
82.6
3.8
6.2 83.4
1.5
0.5
0.6
31
Interim Results 200733
Flight Operations & Services Revenue Growth
97
94.5
94
93.5
93
95.5
£m
H1 2006 FX Translation Loss of Pass Through
H1 2007Acquisitions
95
96.4
0.8
1.3
94.5
0.2
96
96.5
32
Interim Results 200734
US$/£ Translation Exchange Rates
2.00641.95721.84961.7168Balance Sheet(closing rate)
1.96931.84231.7891n/aIncome Statement(average rate)
H1Full YearH1Opening
20072006
£400k PBT translation impact for every 1 cent movement
33
Interim Results 200735
Cobham Involvement in FSTA
Establishment Phase Operational Phase
FRL manufacture and deliver pods
FRA convert aircraft No. 3-’n’
FC ITS FSD CE
FC = Financial CloseITS = FC + 43 months Introduction to serviceFSD = FC + 102 months Full service dateCE = FC + 324 months Concession end
FRL through Life Support contract for Pods
34
Interim Results 200736
Air Refuelling & Auxiliary Mission Equipment Programmes
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼25-50 p.a.Aftermarket
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼25-50F35 - probe
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼>100JF17
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼75-100Small Diameter Bomb
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼>100Eurofighter
Decision late 07 early 08n/aKC30
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼>135HC130 Recapitalisation
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼75-100FSTA
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼<25RAAF A330 MRTT
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼75-100A400M
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼50-75V22
➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼➼Su-30
›2012
201220112010200920082007Est. Total Programme Value (£m)
Programme/Platform
AR & AME Revenue
Net cash of £58.6m at 30/06/07Good programme and earnings visibility
Refu
ellin
gA
ME
35
Interim Results 200737
Ship Set Values
Programme / Platform
AR & AME Antennas
Avionics &
Surveillance
Defence
Electronic
Systems Life Support
Flight
Operations &
Services
20
06
20
08
20
10
20
12
Sh
ip S
et
Valu
es
US
$
F15 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $600k
F16 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $700k
F/A 18 E/F/G ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $800k
F22 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $950k
F35 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $700k
Eurofighter Typhoon ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $1,050k
Hawk ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $275k
T50 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $190k
Gripen ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $760k
C17 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $600k
C130 / KC130 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $3,300k
KC135 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $2,960k
C-160 ➼➼➼➼ ➼➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $420k
ASTOR Sentinel R ➼➼➼➼ ➼➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $520k
B2 ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $1,360k
P3/EP-3E ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ $1,150k
Predator ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ $300k
Global Hawk ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ $2,030k
EH101 / VH71 ➼➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ $1,200k
UH60 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ $1,000k
NH90 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $170k
MD902 ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $200k
EC120 ➼➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $190k
EC135 ➼➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $250k
EC155 ➼➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $375k
TH 57 ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $330k
ALH ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $360k
Lynx ➼➼➼➼ ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $180k
Apache ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $180k
V22 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $540k
A380 ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $220k
B787 ➼➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $150k
Type 45 Destroyer ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $300k
Aegis DPYIDV ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $2,200k
Light Vehicle ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $10k
Amoured Fighting Vehicle ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $20k
Tanks ➼➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼ ➼➼➼ ➼➼➼➼ ➼ ➼➼➼ $50k
Naval
Land
Rotary
UAV
Military Fast
Jets /
Trainers
Medium /
Large Military
Commercial
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Interim Results 200738
Definitions
Free cash flow is cash generated by the business before dividends, movements in funding and FX, acquisitions and disposals and dividends to shareholders
Free Cash Flow
Defined as free cash flow/average number of shares in issue
Operating cash flow is defined as cash generated from operations, including the deduction of capital expenditure, but excluding cash flows from acquisitions and disposals.
Operating cash conversion is defined as operating cash flow as a percentage of trading profit, excluding profit from joint ventures.
Organic growth represents the growth of the business for the period that it was within the Group’s control, translated at constant exchange rate. Results related to the period where the business was not owned in the prior period are shown as ‘acquisition’ contributions.
Free Cash Flow per share
Operating Cash Flow
OperatingCash conversion
Organic growth
To assist with the understanding of earnings trends, trading profit (formerly underlying operating profit) and underlying earnings have been defined to exclude the impact of the amortisation of intangible assets recognised upon acquisition and the impact of the marking to market of foreign exchange derivatives not realised in the period.
All underlying measures also include the revenue and operational results of both continuing and discontinued businesses until the point of sale, but exclude exceptional profits or losses arising from portfolio restructuring and integration activities undertaken in the period and exceptional costs directly associated with terminated acquisitions. Any impairments of goodwill and mark to market of inventory upon acquisition would also be excluded from underlying measures but none exist in the current or comparative period.
Underlying
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Interim Results 200739
Glossary
AME Auxiliary Mission EquipmentCOFDM Coded Orthogonal Frequency Division MultiplexingDIS Defence Industrial StrategyEFIS Electronic Flight Instrument SystemFIST Future Inventory Soldier TechnologyFSTA Future Strategic Tanker AircraftHMMWV High-Mobility Multipurpose Wheeled Vehicle IDIQ Indefinite Delivery Indefinite Quantity awardJSTARS Joint Surveillance Target Attack Radar System LUV Light Utility VehiclemINCAN Miniature Interference Cancellation SystemMMA Multi-mission Maritime Aircraft MMIC Monolithic Microwave Integrated CircuitMRAP Mine Resistant Ambush Protected vehicleSASC Senate Armed Service Committee SATCOM Satellite CommunicationSBINet Secure Border Initiative componentSDB Small Diameter BombSOTM Satellite Communications On The MoveSPEAR Scaleable Panel for Efficient Affordable RadarsUAV/UGV Uninhabited Aerial Vehicle/Uninhabited Ground VehicleVIS Vehicle Intercom SystemVLJ Very Light Jet
38
Interim Results 200740
For the purposes of the following disclaimers, references to this “document” shall be deemed to include references to the presenters’ speeches, the question and answer session and any other related verbal or written communications.
This document contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of Cobham plc (Cobham) and to certain of Cobham’s plans and objectives with respect to these items. Forward-looking statements are sometimes but not always identified by their use of a date in the future or such words as “anticipates”, “aims”, “due”, “could”, “may”, “should”, “expects”, “believes”, “intends”, “plans”, “targets”, “goal”, or “estimates”. By their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or will occur in the future. There are various factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies, political situations and markets in which the Group operates; changes in government priorities due to programme reviews or revisions to strategic objectives; changes in the regulatory and competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; changes to or delays in programmes in which the Group is involved; the completion of any acquisitions and divestitures and changes in exchange rates. All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Cobham or any other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Cobham does not intend to update these forward-looking statements
Cautionary statement
39