Porvair plc

Interim results presentation

June 2009

>Specialist filtration and environmental technology

>Operating in selected m

arket niches where:

�S

ale

s a

re w

on t

hro

ugh d

esig

n o

r applic

ations e

ngin

eering

–M

ostly

bespoke filt

ers

or

instr

um

ents

desig

ned for

specific

applic

ations

–P

roduct perf

orm

ance is o

ften m

ore

critical th

an p

rice

�D

em

and is d

riven b

y legis

lation, re

gula

tion o

r qualit

y a

ccre

ditation

requirem

ents

�C

om

petitive p

ositio

n is b

ols

tere

d b

y q

ualif

ication p

rocesses, desig

n r

ights

or

inte

llectu

al pro

pert

y

�P

roducts

are

consum

able

, or

have

a c

onsum

able

com

ponen

t

–sin

gle

use o

r re

pla

ced/m

ain

tain

ed a

s p

art

of a

main

tenance c

ycle

�P

roducts

have long life c

ycle

s: 25 y

ears

+ n

ot unusual

Porvair –who we are and what we do

>Q

ualit

y accre

ditation o

r assura

nce

�E

xam

ple

: alu

min

ium

cast house f

ilters

im

pro

ve m

eta

l qualit

y

>F

AA

/CA

A r

egula

tion

�E

xam

ple

: avia

tion fuel ta

nk inert

ing

sys

tem

filt

ers

>H

ealth a

nd s

afe

ty r

eq

uirem

en

ts

�E

xam

ple

: cry

pto

sporidiu

m filt

ers

fo

r w

ate

r

>E

mis

sio

ns c

ontr

ol

�E

xam

ple

: N

ucle

ar

cle

an-u

p f

ilters

>W

ate

r pollu

tion

contr

ol

�E

xam

ple

: S

eaw

ate

r qualit

y a

naly

sis

sys

tem

s

>P

rocess r

elia

bili

ty

�E

xam

ple

: gasific

ation filt

ers

fo

r bio

mass a

nd c

lean c

oal

>P

rocess e

ffic

iency

�E

xam

ple

: la

bora

tory

96 w

ell

filter

pla

tes

Markets served have

attractive long term

demand drivers

Ae

rosp

ace

Env

iro

lab

eq

uip

me

ntE

nvir

o la

b c

onsu

ma

ble

sP

ha

rma

lab

co

nsum

ab

les

Ge

ne

ral l

ab

co

nsu

ma

ble

sL

ab

wa

ter

filte

rsG

asific

atio

nN

ucl

ea

rN

at g

as

Ind

ust

ria

l pro

ce

ssP

oly

me

rG

ene

ral e

ngin

ee

ring

Pa

cka

gin

g (

alu

min

ium

)G

ene

ral a

lum

iniu

mB

uild

ing

& c

onst

ructio

nIn

vestm

ent

ca

stin

gR

efr

acto

ryA

uto

mo

tive

Co

mm

erc

ial v

ehi

cle

sB

atte

rie

sT

urb

ine

sA

via

tio

n -

alu

min

ium

Common filtration principles, niche

market positions

Based on 2008 revenues:

Metals Filtration: key m

arkets

served

Specialist metal and super-alloy filtration

�R

ailw

ay

wheels

, cru

cib

les, tu

rbin

e b

lades

Iron foundry filtration

�A

uto

, lig

ht tr

uck &

machin

ery

mark

ets

�M

ostly

NA

FT

A

Aluminium cast house filtration

�E

ngin

eering, packagin

g, constr

uction, tr

ansport

, an

d a

viation

�W

orldw

ide s

ale

s

�A

ssocia

ted r

efr

acto

ries

Metals Filtration

The physical properties of reticulated foam m

ake excellent filters for molten m

etals

Metals Filtration -locations

>Selee–Hendersonville, North Carolina

�A

lum

iniu

m c

ast house filt

ers

–50

%+

ma

rke

t sha

re

–S

upp

ly a

ll m

ajo

r a

lum

iniu

m p

rodu

cers

. S

upp

ly A

lco

a

10

0%

�C

era

mic

foam

iro

n foundry

filt

ers

–N

o.1

in

NA

FT

A

–N

o2

to

Fo

seco

wo

rld

wid

e

�S

uper-

allo

ys–

95

% m

ark

et

sha

re in

US

tu

rbin

e b

lade

s

>Engineered Ceramics –

Gilberts, Illinois

�R

efr

acto

ries, cru

cib

les, tu

ndis

hes

>Porvair SeleeChina –

Wuhan

�S

tart

-up 2

009

–In

itia

lly iro

n fo

und

ry m

an

ufa

ctu

re

–E

xce

llen

t te

chn

ica

l re

pu

tatio

n

–C

om

pe

titio

n:

Dra

che

(Ge

rman

y);

Pyr

ote

ch

(US

, S

witze

rlan

d,

Ch

ina

)

–K

ey

cu

sto

me

rs:

GM

, F

ord

, D

ee

re,

Nem

ak

Microfiltration: key m

arkets

served

Aviation

�C

om

me

rcia

l, r

egio

nal/executive, m

ilita

ry/r

ota

ry.

New

build

and s

pare

s

Lab equipment/consumables

�In

clu

des S

eal A

naly

tical

Energy

�G

asific

ation, nucle

ar,

natu

ral gas

Industrial process, polymer

Diverse product range; niche m

arkets

served

Nitro

gen g

enera

tion s

yste

m f

ilters

Gasific

ation a

nd n

ucle

ar

filters

Labora

tory

consum

able

s

Seal A

naly

tical:

wate

r qualit

y analy

sis

and c

onsum

able

s

Microfiltration-locations

>Porvair Filtration Group, UK

�M

icro

filtre

x-

Fa

reham

–A

viation, nucle

ar,

gasific

ation

�F

ilters

for

industr

y -

Ne

w M

ilton

–P

rocess filt

ration &

instr

um

enta

tion

�P

orv

air T

echnolo

gy

-W

rexham

–S

inte

red p

lastics,

meta

ls

–C

lean r

oom

facili

ties for Porvair Sciences

manufa

ctu

re

�M

F&

T -

Poole

–N

atu

ral gas s

kid

s

>Seal Analytical

�W

ate

r analy

sis

instr

um

en

ts, se

rvic

ing a

nd c

onsum

able

s

�H

am

burg

& M

ilwaukee W

I; U

K o

ffic

e in F

are

ham

, m

anufa

ctu

ring in N

ew

Milt

on

�M

ark

et

leaders

hip

in d

iscre

te a

nd c

ontinuous flo

w a

naly

sis

�In

dustr

y s

tandard

equip

ment fo

r seaw

ate

r analy

sis

>Porvair Filtration Inc. –Ashland, Virginia

�U

S m

anufa

ctu

re

�P

rocess filt

ration

Porvair plc

2009 Interim results

2009 results summary

>Results in line with recent expectations

�R

eve

nues u

p 5

% to £

27.0

m (

2008: £25.6

m)

�B

reak-e

ven a

t pro

fit befo

re tax

befo

re e

xceptional item

s (

2008: pro

fitof £1.9

m)

–R

estr

uctu

ring c

osts

of £0.6

m

�C

ash g

enera

ted fro

m o

pera

tions £

2.0

m

–N

et debt re

duced b

y £0.7

m to £

16.0

m

>Results dominated by US trading volatility

�M

eta

ls F

iltra

tion r

evenues d

ow

n 3

5%

.

–S

om

e s

egm

ents

dow

n 5

0%

–R

obust m

itig

ating a

ctions c

om

ple

te

>Resilience in energy, life sciences, water and other segments

�S

eal A

naly

tical in

tegra

ted a

nd tra

din

g w

ell

>Accelerating progress with new products

Income statement

Six m

onths ended 31 May 2009

Revenue

Opera

ting p

rofit/(loss)

Inte

rest

Pro

fit/(loss)

befo

re tax

Tax

Pro

fit/(loss)

after

tax

EP

S (

basic

and d

ilute

d)

2008

£000

25,6

03

2,1

50

(224)

1,9

26

(611)

1,3

15

3.2

p

2009

£000

26,9

95

(114)

(485)

(599)

190

(409)

(1.0

)p

Exceptionals

£000 -

(637)

-

(637)

202

(435)

(1.1

)p

Before

exceptionals

£000

26,9

95

523

(485)

38

(12)

26

0.1

p

Cash flow

Six m

onths ended 31 May 2009

Cash inflo

w f

rom

opera

tio

ns

Inte

rest

Tax

Capita

l e

xpe

nd

iture

Continuing operations

Acquis

itio

ns

Div

idends

Fore

ign e

xcha

nge

Net

incre

ase in

borr

ow

ings

Movement in net debt

Openin

g n

et

debt

Closing net debt

2008

£000

1,1

07

(226)

(152)

(1,5

09)

(780)

(796)

(488)

(380)

(447)

(2,891)

(6,9

71)

(9,862)

2009

£000

2,0

23

(514)

(169)

(960)

380 - -

334 -

714

(16,7

30)

(16,016)

Note: Increase in debt in second half 2008 arising from acquisition of Seal and retranslation of US dollar

borrowings.

Balance sheet and dividend

>Group facilities with Barclays satisfactorily renegotiated.

�R

econfirm

ation o

f all

exis

ting facili

ties a

vaila

ble

until July

2011

�C

ovenants

am

ended to p

rovid

e fle

xib

ility

fo

r fu

ture

develo

pm

ent

�M

arg

ins r

evis

ed t

o b

etw

een 2

.75%

and

3.2

5%

ab

ove L

IBO

R

�N

o fees

>Dividend held as in prior years

�1.0

p inte

rim

div

idend to b

e p

aid

in S

epte

mber

2009

Metals Filtrationresults

Sale

sO

pe

rating p

rofit

(pre

except.

)

2009

$m

14

.1(1

.6)

2008

$m

21

.80

.7

Metals Filtration

>35% sales decline reflecting US auto, global

aluminium production declines

�S

ale

s a

t le

vels

not seen s

ince 1

993

�sig

ns o

f sta

bili

ty fro

m A

pril

>40% staff reductions and salary sacrifice

�£0.4

m in r

estr

uctu

ring c

harg

es

>Good working capital management and cash

generation

>New products -acceleration

�N

ew

alu

min

ium

filt

er

40%

conve

rted. A

CS

aw

ard

.

�N

ew

NiC

ofilter

100%

conve

rted

�F

irst pro

duction r

uns o

f adva

nced b

attery

com

ponent

�N

ew

foundry

filt

er

tria

lling w

ell

LM

E c

ash

price

pe

r to

nn

e (

$)

Da

ys c

on

sum

ption

in r

ep

ort

ed

sto

ck

Source: Alcoa, IAI, Bloomberg

Aluminium price and stocks

Sig

nific

an

t m

ove

men

t fr

om

Q4

2008

Microfiltrationresults

Sale

sO

pe

rating p

rofit

(pre

except.

)

2009

£m

17

.5

2

.1

2008

£m

14

.72

.4

Microfiltration

>Reported sales up 19%; Like-for-like sales down 13%

�P

rincip

ally

tim

ing o

f ord

ers

, som

e m

ark

et w

eakness in U

S a

nd g

enera

l in

dustr

ial

>Order book £2.0m higher than prior year

�S

trong e

nerg

y and p

rocess o

rders

for

H2

–P

roje

cts

carr

y re

peat ord

er

opport

unitie

s

�A

viation s

ale

s a

head o

f th

e p

rior

period b

ut ord

er

schedule

s h

ave

weakened for

the s

econd h

alf

>Seal fully integrated and trading well

�S

trong s

ale

s a

nd o

rder

book p

art

icula

rly

from

Asia

�U

K f

acili

ties c

losed a

nd tra

nsfe

rred to o

ther

Mic

rofiltra

tion

sites

�O

pera

ting e

ffic

iencie

s in U

S a

nd G

erm

any

Proven new products/capabilities now

ready in all key m

arket areas

Ne

w f

orm

ula

tion to low

er

cost

and

incre

ase f

iltra

tion e

ffic

iency

‘Latt

ice filt

er’

–sig

nific

antly

better

filter

‘CS

X’f

ilter

intr

oduced 2

008.

Better

eff

icie

ncy

and

environm

enta

l perf

orm

ance

Battery

com

ponent fo

r adva

nced

lead a

cid

technolo

gy

Gasific

ation &

nucle

ar

filte

rs

usin

g long life m

edia

Pro

ducts

: seve

ral –

NG

S a

good

exa

mple

Capab

ility

–upg

raded facili

ties,

Toolturn

acq

uis

itio

n

Product/Capability

2009 � ���

2015

2010 $

5m

2011 $

8m

2012 $

12m

First pro

duct

ship

ped in 2

009

Note

ris

k: m

ark

et accepta

nce,

technic

al f

ailu

re –

this

pro

duct not

yet

launched c

om

merc

ially

Energy

2005 � ���

2012

Up t

o £

10m

Very

act

ive a

rea. G

asific

ation a

nd

nucle

ar

pro

ject

s w

on f

or

2009

and 2

010

Energy

2008� ���

2012

£2m

+ (

NG

S

alo

ne)

£8m

capacity

NG

S launched. M

ore

to c

om

e

Abili

ty t

o q

uote

for

make-t

o-p

rint

no

w w

inn

ing

ord

ers

Aviation

2009 � ���

2012

$5m

in

cre

menta

lE

xtensiv

e c

usto

mer

tria

ls

underw

ay

Iron foundry

$5m

$3m

in

cre

menta

l

($15m

tota

l)

Revenue

potential p.a.

When?

Start � ���

Full

scale

Progress report

Market

2009

Launched

Super-alloy

2008 -

2009

40%

mark

et conve

rsio

n s

o far

Aluminium

Outlook

>Metals Filtration

�S

igns o

f sta

bili

ty in d

em

and, still

at lo

w levels

�Low

er

cost base f

ollo

win

g r

estr

uctu

ring

�A

ccele

ration o

f n

ew

pro

ducts

im

pro

ves m

arg

ins

>Microfiltration

�P

rovin

g to b

e a

resili

ent busin

ess o

vera

ll

�G

ood

ord

er

book fo

r re

main

der

of

2009 b

ala

nces s

om

e r

ecessio

nary

weakness

�S

eal A

naly

tical is

tra

din

g w

ell

>Board: Porvair should prosper when conditions improve

Porvair plc

Interim results presentation

June 2009