LON:SNR Senior H2 2024 Earnings Report GBX 132 +4.40 (+3.45%) As of 04/25/2025 11:57 AM Eastern Earnings HistoryForecast Senior EPS ResultsActual EPSGBX 7.17Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ASenior Revenue ResultsActual RevenueN/AExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/ASenior Announcement DetailsQuarterH2 2024Date3/3/2025TimeBefore Market OpensConference Call DateMonday, March 3, 2025Conference Call Time4:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportAnnual ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Senior H2 2024 Earnings Call TranscriptProvided by QuartrMarch 3, 2025 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Good morning. Welcome to Senior PLC's twenty twenty four full year results presentation. And thank you for making the effort to get here. Operator00:00:10And our thanks also go to Deutscher Nummies for hosting us here at their auditorium. And a warm welcome too for those of you joining remotely. Before I continue, I just wanted to mention that this is actually going to be Bindi Foyle's last set of results because Bindi is retiring on May year. So hopefully, we got in a high, Bindi. But I also want to introduce Alpna AMR. Operator00:00:35Alpna, if you could raise your hand maybe, if that's alright. Alpna is our new incoming CFO joining us in April. So, and Bindi and Alpna are already working on a smooth handover. We've also got Sylvia. Where's Sylvia? Operator00:00:48Sylvia is our new group HR directors who's joining us today, succeeding Jane, who's retiring in a few weeks' time. So welcome to you both. In terms of our itinerary today, we have a different format compared to our usual results day. We'll start by running through our 2024 results, focusing on the financials and outlook for 2025, followed by Q and A on that. We will then take a fifteen minute coffee break and come back at 10AM to run through an investor event, which focuses on Senior as the market leading pure play fluid conveyance and thermal management business. Operator00:01:27We will allow plenty of time for Q and A after that as well. So let me first comment on progress with our strategic review of our Aerostructures business. Senior is committed to a sale of our Aerostructures business and we are making good progress. There is good buyer interest. We're now at an advanced stage of a sale process with a small number of parties and negotiations are progressing positively. Operator00:01:56We're focused on completing the sale process and maximizing value for shareholders and we will update the market in due course. And this is in line with our strategy to position Senior as the market leading pure play fluid conveyance and thermal management business focused on custom design products and systems with rich IP content. You will hear much more about this at the investor event starting at 10AM this morning. For 2024, trading was in line with our revised expectations and we had strong free cash flow. Group sales and profits were up and Binny will describe that later. Operator00:02:38Order intake was once again strong with a book to bill of 1.12 which underpins confidence in future growth. We had notable contract wins in both Aerospace and Flexonics divisions. In the two years since acquisition, sales for Spencer Aerospace have grown by 135%. We are delighted with how Spencer's performance continues to improve and there is much more to come. I'll talk more about our standard parts strategy in our next session after the break. Operator00:03:13Reflecting the Group's performance and the Board's confidence in its future prospects, the Board has approved a final dividend of 1.65p per share, bringing full year dividend to 2.4p per share, an increase of 4% compared to 2024. For the year ahead, the Board anticipates good growth for the group in line with its expectations. I'll say more about the different elements of that when I cover outlook at the end of this presentation. Sustainability is a central theme of our purpose, our strategy, and indeed our technology roadmap. Importantly, therefore, we are making great progress as an organization in terms of our own sustainability actions. Operator00:04:01With regard to our actions on climate change, in 2024, we achieved our near term scope one and two greenhouse gas emission reduction targets a year ahead of schedule, delivering a 33% reduction against a 2018 baseline, and we remain on track for our Scope three near term commitment. Our focus is now progressing against our long term net zero targets, which were approved and verified by SBTI in 2023. For the third year running, we were delighted to have recently been informed that we are one of a small number of companies to be awarded the prestigious A rating from CDP for our climate disclosure and actions. Our focus on the social and governance aspects of ESG is unwavering with continued high performance and progress on aspects such as safety, diversity, and inclusivity. In particular, our strong performance on safety saw our lost time injury rate reducing to zero point one nine. Operator00:05:04This is truly world class performance, though we're never complacent and work hard to continuously improve our behavioral safety program. So before I talk about the detailed outlook for 2025, I will hand over to Bindi to take us through the financial results. David. Speaker 100:05:26Good morning. Senior delivered 2024 trading in line with revised expectations, which we set out in October as a consequence of the Boeing strike and an Airbus tier one supplier temporarily reducing build schedules in q four of twenty four and q one of twenty five. Free cash flow performed stronger than expected. On a constant currency basis, revenue grew 4%, adjusted operating increased 5%, and margins expanded in both divisions. Adjusted profit before tax was £33,000,000, and adjusted earnings per share was 7.17p, both lower than last year. Speaker 100:06:11The prior year benefited from interest and tax provision releases that did not repeat in 2024. The 2023 EPS benefit from this was 2.54p. The group recorded free cash inflow of £17,300,000, an improvement over last year. Net debt, excluding capitalized leases, was a hundred and £53,000,000. The strong performance at Spencer meant we paid the first earn out in 2024. Speaker 100:06:43That, together with payments for dividends and share purchases to hedge our share award commitments, led to a year on year increase in net debt. And net debt to EBITDA was 1.8 times. Return on capital employed decreased by 30 basis points to 6.8% with higher inventory and investment in growth not yet fully offset by growth in profit, which was impacted by the near term temporary customer led headwinds. Group revenue increased by £13,600,000 to 977,000,000 despite adverse exchange rate translation of 25 and a half million pounds. Looking at divisional performance on a constant currency basis, aerospace revenue increased by 10%, a notable achievement given seven three seven MAX volumes were subdued following the Alaska Airlines incident in January 2024 and the Boeing employee strike in September 2024. Speaker 100:07:51Civil aerospace sales were up 11.6%, reflecting increased deliveries to Airbus programs, activity levels increasing in our Thailand business as a key supplier recovers from a fire in 2023, as well as continued strong growth in revenue from Spencer. Revenue from the defense sector grew 1.4% as our sales to the f 35 program increased and legacy programs remained stable. A number of our aerospace businesses supply product to adjacent industrial markets. Revenue from these markets increased by 15.4%, largely due to the rebound in demand from semiconductor equipment market. In flexonics, revenue was down 6%. Speaker 100:08:44Strong revenue growth from downstream oil and gas and nuclear was offset by lower oil and upstream oil and gas business and the anticipated softness in land vehicle markets. Revenue from land vehicle markets decreased 3.7%. This was a resilient performance as a launch and ramp up of new programs wins helped partly mitigate the softer market conditions. Our sales to the North American truck market decreased 2%, benefiting from higher service demand and therefore slightly outperforming the end market, which was down 2.3%. Seniors North American off highway sales decreased 13 and a half percent, reflecting softer market conditions. Speaker 100:09:33Sales to other truck and off highway regions, primarily Europe and India, were flat as growth from India and higher sales from the launch and ramp up of new program wins, as well as a one off short term order offset reduced customer demand in Europe. Sales to passenger vehicle markets decreased by 1.7%. Group revenue from power and energy markets decreased by nine and a half percent. Sales to oil and gas customers decreased by £17,400,000 with robust demand in our downstream business, partially offsetting a reduction in sales from our upstream stream business due to a lower share of this very competitive work. Sales to other power and energy markets increased by £4,800,000, reflecting growth in power generation, nuclear, and renewables. Speaker 100:10:34The increase in the adjust group's adjusted operating profit was driven by aerospace more than offsetting the expected volume related reduction in profit in flexonics. In aerospace, adjusted operating profit increased by 14.3% to £30,400,000, and the adjusted operating margin increased by 20 basis points to 4.6%. The division continued to make steady progress operationally, responding dynamically to the temporary headwinds that were experienced in the year. Boeing faced challenges in 2024 suppressing production volumes, and our operating businesses most exposed to this customer, both directly and through tier one suppliers, took mitigating actions to control and reduce costs to align with the lower volumes required. Although OEMs continue to face challenges with the supply of certain product categories, seniors' own supply chain became more stable as a consequence of specific actions taken by us and our suppliers. Speaker 100:11:43A few hotspots remain, and we are continuing to work with our customers and suppliers to resolve these. In Flexonics, with the expected reduction in revenue, adjusted operating profit decreased by 3% to £35,100,000. Nevertheless, operational efficiencies, lower costs, and favorable product mix helped increase the division's adjusted operating margin by 30 basis points to 11%. The increase in central costs was largely due to naught £400,000 higher UK pension plan running costs and higher health and life assurance costs. This slide shows the reconciliation of adjusted operating profit to the statutory reported profit for the period. Speaker 100:12:34It also highlights our interest and tax charges. Net borrowing costs increased by £1,900,000 to 12,100,000.0 due to higher interest rates on higher variable rate debt and higher levels of indebtedness compared to last year. We expect these costs to increase in 2025, reflecting higher indebtedness and higher weighted average interest on our loan notes as we refinance lower interest notes that have matured. IFRS 16 interest charge on lease liabilities increased to £3,400,000 due to higher interest rates. And net finance income from pension plans decreased slightly to GBP 2,000,000. Speaker 100:13:20A reminder on the comparative, in 2023, we simplified our America's legal entity ownership structure. And having reassessed provisions for estimated uncertain tax positions, provisions of £7,000,000 and associated interest of 3 and a half million pounds were released in 2023. This benefit, therefore, did not repeat in 2024. A tax charge of £3,300,000 was recognized on the group's adjusted profit before tax, an effective rate of 10%. This was lower than expected as we benefited from the recognition of a deferred tax asset in respect of historical tax losses. Speaker 100:14:04Looking ahead to 2025, we currently expect the group's effective tax rate on adjusted profit before tax to return to a more normal level of around 22%. In terms of reconciling adjusted profit to statutory reported profit, we recognize site relocation costs of 3 and a half million pounds. This relates £3,000,000 of this relates to the transfer of some aerospace manufacturing from California to Mexico, and half a million pounds relates to the transfer of our flexonics crumbling business to a nearby high-tech facility. The £1,100,000 charge associated with US class action relates to the settlement of wage and hour class action claims. Corporate undertakings include £1,200,000 of costs primarily associated with potential divestment activities. Speaker 100:15:02The rest of the items excluded from adjusted profit measures relate primarily to the acquisition of Spencer, namely £1,600,000 for amortization of intangible assets from the acquisition and £2,200,000 of income under corporate undertakings for change in fair value of contingent consideration. At the October trading update, I guided for free cash inflow to be low single digit. So as positive to have delivered free cash inflow of £17,300,000 Operating cash flow was £39,300,000, a cash conversion of 85% of adjusted operating profit. Working capital cash outflows were £17,000,000 with 26,600,000 of outflow related to increase in inventory, partly offset by inflows from receivables and payables. Inventory was higher in aerospace with planned investment to enable us to meet the increase in demand from our customers and because of the impact of the Boeing strike and certain customer schedule changes in in quarter four. Speaker 100:16:20Working capital was 18.3% of sales. We are likely to see an increase in absolute working capital over the year to cut support growth in aerospace. But overall, we expect working capital as a percentage of sales to come down to 17 to 18%. Capital expenditure of £43,000,000 was 1.1 times depreciation. And for 2025, CapEx is expected to be above pre IFRS 16 depreciation. Speaker 100:16:53The majority of this investment is in support of growth projects, particularly in flexonics, where contracts have already been secured. Net payments for interest and tax total £22,000,000. And below free cash flow, after payment of dividends and acquisition of shares by the employee benefit trust, we were cash neutral. Overall, the group's net cash outflow from of £9,800,000 in 2024 was therefore for the payment of this first Spencer Aerospace earn out following its strong sales growth performance. Based on Spencer's twenty twenty four performance, we expect to spay the second earnout amount of 13 and a half million pounds in 2025. Speaker 100:17:44The group's net debt to EBITDA was 1.8 times in December, and we had liquidity headroom of a hundred and 58 and a half million pounds under our committed borrowing facilities. During the year, we issued new $50,000,000 private placement notes carrying interest at 6.26, maturing in February 2030, and we extended the maturity of the $50,000,000 US RCF out to June 26. In February 2025, we issued new $40,000,000 private placement notes carrying interest at 5.46% maturing in February 2029. This replaced the £27,000,000 facility that matured in January 25. These actions mean the current weighted average maturity of the group's facilities is two and a half years. Speaker 100:18:38So for my final results, senior has liquidity, healthy liquidity with stable finance arrangements and to support growth from its higher order book. Thank you. I'll now hand back to David to cover outlook. Operator00:18:59Thank you, Bindi. So let me finish this section by summarizing 2024 and going through the outlook for 2025. Last year, there was no doubt that the situation at Boeing significantly affected sales, volumes and profitability. Despite that, revenue, profits and margins increased. Outside of Boeing, we did see other civil aircraft production rates increasing. Operator00:19:27Defence also grew and sales from our aerospace businesses to adjacent markets, especially semiconductor equipment, also increased. In Flexonics, we have worked hard over recent years to reach double digit margins in the division and that continued in 2024. That was helped by robust demand in our downstream oil and gas and nuclear business and with the new programs we've won in our land vehicle operating businesses. So let me finish by going through the outlook. For the year ahead, the Board anticipates good growth for the group in line with its expectations. Operator00:20:04We are closely monitoring the impact on global trade from potential tariff changes. Increasing aircraft build rates, operational efficiency benefits, and improved contract pricing are expected to drive good growth in aerospace in 2025 with H2 expected to be higher than H1. For the full year, Aerostructures is expected to improve from a loss making position in 2024 to an operating profit range of million to million in 2025 with the large majority of that being earned in H2. We expect Flexonics' performance in 2025 to be broadly similar to 2024. In Land Vehicles, the ramp up of programs recently won means we expect our 2025 performance to be broadly similar to 2024 despite some softness in North America and Germany. Operator00:21:11In Power and Energy, activity levels are also expected to be similar to 2024. Our strategy of positioning Senior as a pure play fluid conveyance and thermal management business in attractive and structurally resilient core markets with active portfolio management combined with our highly relevant technical capabilities and sector leading sustainability credentials provides confidence of continued performance improvements for the Group. So that finishes this part of the section on the results. All the usual market materials are in the back of the pack, but of course, we'll be talking much more about strategy and markets in the second half of this morning's presentations at the Investor event. And that starts at 10:00. Operator00:21:58But in the meantime, Bindi and I would be delighted to take any questions you might have on the results. Speaker 200:22:12Good morning, both. It's Andrew Douglas from Jefferies. I'll keep my strategy questions for later. But just on results, I've got four quick ones, please. Can you just explain to us the semicon recovery? Speaker 200:22:22We've seen lots of other companies with semicon exposure struggling recovery deferred to the right. So I'm just trying to figure out what's going on with you guys that other people maybe aren't having. On the Boeing challenges, clearly, that's now behind us. Can you just talk about the pace of the ramp? Is that getting back to where we thought at the pace that you thought? Speaker 200:22:41Or are there any log jams there? You You've had another cracking year of market share gains in 2024, well done. What's the outlook for 2025 market share gains and kind of new contracts? And then last but by no means least, Spencer, another hell of a year from the top line. Can you just give us an update on what's going on at the bottom line in terms of margin? Operator00:23:03Okay. Speaker 200:23:04I'll leave my 12 questions later. Operator00:23:07Thank you, Andy. I'll do a bit of a double act on this one. So firstly, on semiconductor, I know the bulk of our semiconductor business is with Lam Research out of our Metabellows business in Massachusetts. And I think that had fallen greatly from the previous highs over the last couple of years. So it was really in trough. Operator00:23:26Now we are absolutely seeing the sign of that picking up. And for us, it's not making chips that's important. It's the ordering of the equipment. So if you like, that's maybe a leading indicator. So we are seeing the start of some good pickup in semiconductor equipment related orders coming in for the stuff we make from there, which is like pin lift actuators that go into the place of wafers very carefully into the equipment. Operator00:23:53So that's good to see. I think on the pace of ramp at Boeing, so where are we? Coming out of the strike, they got going again around the March 13 in terms of manufacturing, fairly soft start in December, but then rapidly picking up the pace. I'm privileged to be involved in a regular CEO call with the Head of Supply Chain in Boeing, and they're quite open with us on how things are going. So their first objective is to get up to over $8.30, and I think we'll get there quite quickly. Operator00:24:25The cap is still rate 38, and obviously, therefore, the second aspiration is to get to that cap. And thereafter, it's I think we would hope by the end of the year to be beyond the cap. That depends on the FAA giving them approval to increase production. And I asked a specific question on that call, what are the factors that you'll need to happen to allow that? And I think they've been quite open about it. Operator00:24:49So they have a set of KPIs with the FAA, and it's really built around empirical data, from certain key performance indicators that are under statistical process control. And once they have addressed those, then they'll have a constructive dialogue on increasing the cap. And they're very close, I can tell you. You can really see things stabilizing within the production system at Boeing, which is very good to see. And therefore, I'm optimistic that we won't have another year like last year and that we will actually get through that. Operator00:25:22New CEO is doing a good job and seems to be really driving the necessary improvements. For us specifically, you might remember I said that last year, we'd agreed to a level loading with Boeing so that we continue to deliver at the same pace. So that paused during the strike, but it's picked up again now. So we're back at that rate now and that will continue for the bulk of this year. And that's at a level to help them drive down their inventory, but once they get over a certain production, then we'll start to see our rates improving from there. Operator00:25:57So long answer to the question, I think the summary is the rates are picking up at Boeing and I'm optimistic that they will get the cap lifted later in this year because they're optimistic. But I'll come out to Spencer and I'll come out back and do the market share gains, Ben. Yeah. Speaker 100:26:14So Spencer, as David said, since we acquired it, the sales have gone up 135% over the two year period. And last year, they grew 54%. Their margins did get to a run rate of double digit in the second half of twenty twenty four, and we're expecting them to then continue to climb into the teens into 2025. But there is more margin expansion and more sales growth to come beyond that as well. Operator00:26:42Yes. So very pleased with Spencer. It's going to be a great driver. And I think I'll talk more about it in the next event because it's not just a one off acquisition itself. It was the launch pad to help us grow organically with our standard parts expansion and we'll come back to that after 10:00. Operator00:27:01And then market share gains, yes. So we've had some great wins in the land vehicle side and part of the reason for that is that, you know, some suppliers rushed to get out of internal combustion engine sales and into all electric. You've heard us talk about one foot in today, one foot in tomorrow, and making sure that we can provide parts to whatever our customers need. I firmly believe for some time, the people that manage that transition the best will be the winner. So we appear to be doing a pretty good job there. Operator00:27:31So we've actually picked up quite a lot of work for the more efficient petrol engines on the passenger vehicle side, as well as some really cracking and very cool new products on the electric side. And then on the truck side as well, we continue to work with all the key players Cummins and Daimler being the two biggest. And on the off highway side, CAT, JCB are our two largest customers there. So we seem well positioned with all of those customers to continue growing. And then the aerospace side, I will talk about some new wins on the fluid conveyance side after the break. Operator00:28:12Again, on the standard part side with the organic investments we've been making to introduce flanges, the humble flange as one of our products. And I'll describe more about that. So that was a real landmark award that we've just received. And there's still more opportunities. We won the Dutch aircraft complete EBU and bleed air system ducting contract last year. Operator00:28:40That will slowly come into production. We're in the middle of development now. So there are opportunities on the fluid systems side equally with some really good wins on the aerostructure side. So, obviously, that helps as we're selling the business for prospective buyers to see the confidence we have in the growth that's coming with that business. Speaker 200:28:58Thank you. Speaker 300:29:04Morning. It's Richard Page from Deutsche News. Operator00:29:06Good morning, Rich. Speaker 300:29:07Morning. Three, if I may, please. First off, just could you confirm, looking back at the FY twenty four performance, it looks like it was aero structures that caused the sort of a lot of the just to confirm how the core fluid conveyance business performed in the latter part of the year, please? And then on the Airbus Tier one issue, just to confirm what the run rate on that side, please, for this year. You've got obviously some very interesting pricing agreements coming through this year. Speaker 300:29:39Could you just remind us the sort of timing of those as well, please? And then just finally, you've mentioned H2 waiting. Could you give a bit more around the visional aspects of that, please? Operator00:29:52Sure. Right. Sorry, the first one was, it looked like Aerostructures was there. Did you see Yes. Speaker 300:29:58In terms of the 24 performance at the end of last year, how that weighted Operator00:30:04across Aerostructures versus the underlying? Speaker 300:30:04Yes. Yes. The bulk of the structures versus the underlying. Operator00:30:07Yes, indeed. Yes, no, the bulk of the reason why we had to issue the revised prediction in October was because of aerostructures because they were the most affected by Boeing. So specifically, our Pacific Northwest business, which is EMT and Dimar, for those who have been following us for a long time, it's all Boeing. They have it's largely Boeing. They have some SpaceX work as well, but most of that's Boeing, some of it directly, some of it into people like Spirit. Operator00:30:36So really across for the September through October, November and even up to the December, they were only doing some seven eighty seven work and some SpaceX work. All the other models, particularly seven thirty seven MAX, seven seventy seven was all on hold, Boeing put all its suppliers on hold at that time. So we had 95% of the workforce on furlough, 50% full time, 45 part time throughout that period. So yes, that was a huge impact on us in the final quarter. And that's why we had to issue that trading update, unfortunately, in October. Operator00:31:10So yes, it really was concentrated primarily in structures. Now we have some business with Boeing as well in the fluid systems side, but those businesses have greater opportunities to make up for changes during the year because of a more diverse customer base. I think on the Airbus Tier one side, let me cover that next. So, yes, we announced in October that there seemed to be an imbalance between wing delivery and other deliveries, particularly around engines and interiors, which Guillaume Faury, the CEO at Airbus, has been very open about. So he joked about if you want some gliders, we can get them provided you don't want to sit down in them. Operator00:31:50And I think they are making progress. He gave a bit more upbeat talk about that at the earnings presentation, was that last week? And signs of that stabilizing. So what that meant was they really had slowed down a bit on the other parts of the aircraft that weren't late. And as an on time supplier, unfortunately, we fell foul of that. Operator00:32:11So, yes, that Tier one supplier took schedule. They didn't take them out. They postponed them until later because the demand hasn't gone away. So through quarter four and into quarter one and given their credit, that's exactly what's happening. So we've had a soft start. Operator00:32:28This is mainly in Newpeka in Malaysia with the soft start in January, slightly higher volume in February, it will be slightly higher volume again in March and then full bore from April and all the orders are coming through in that. So the temporary sort of reduction in schedules is just that temporary. Ben, do you want to cover the waiting and then I'll come back and talk about the other ones? Speaker 100:32:52Yes. So in terms of waiting from a aerostructures point of view, we said we expect most of the profits to come in the second half of the year. So you know, small small amount or breakeven break basically in half one and then the rest of it in half two. On the fluid systems side, at the moment, we're looking at, it will it will be around the edges, but around forty, sixty half one to half two. And some of that is because we are having price increases kick in from July 2025 in fluid systems. Speaker 100:33:27On Flexonics, it at the moment, it looks like a sort of close to a forty, sixty split half one to half two. And that's because with the end market dynamics, first half of this year, particularly in land vehicles, is expected to be softer and then picking up again in the second half of the year. But, you know, we have had a good start to to the year in Flexonics, so it it may be slightly more balanced by the time we get to the half year. Operator00:33:58So I think, Benny covered the price agreements as well. We've got we've got one sizable contract kicks in April, May, and then the rest of second half of the year. Yes. And then just remind me, I've written down fluid conveyance for the second question. What was the context? Speaker 300:34:12On the second, I think you've covered it all. Operator00:34:13Did I say it? So it Speaker 300:34:14was just on the pricing. Pricing. And the timing of the pricing and then what you've got beyond. Operator00:34:18Yes. Yes. That's right. Speaker 400:34:28Thanks. Hi. Andrew Humphrey from Hi, Andrew. How are you? Just a couple, if I may. Speaker 400:34:35On structures, that's clearly a kind of the expectation for 2025 is clearly strong in terms of profitability. I wanted to ask, given that business is doing sort of half of the FY 'nineteen peak on revenue more or less, what is the incremental drop through on that as we kind of get through into a point where volumes can be growing again? And secondly, just any further restructuring costs expected in FY '20 '20 '5? Operator00:35:04Are you going to ask us to keep structures now? Look, we've said consistently these are good businesses. I'll cover more about this in the next presentation. But this is not some kind of fire sale of toxic assets, far from it. They've had some lean years because there's a high fixed cost base in those structures business. Operator00:35:25If it goes around in the factories, you'll see big heavy duty equipment that costs a lot of money. So if you're not manufacturing the right volumes, then you've got an under absorbed fixed overhead that you can't get rid of. Great to see improving. We'll put some specific comments about what happened between 'twenty three to 'twenty four in our next presentation. And we're going to split out structures from fluid systems and show you the relative performance. Operator00:35:52So it will be a lot more detail after this. But yes, once you get over that certain point, the drop through is pretty good in our structures businesses and that's one of the attractions for the prospective buyers. In the years ahead, you can see the volumes are coming through. So this is going to be a good business for whoever buys it. In the meantime, it's very much under our control and will be until until the sale happens. Operator00:36:15So we continue to manage them very responsibly and we'll be driving very hard for the best possible result from that. Speaker 100:36:21Yeah. And in terms of restructuring, I mean, in 2024, we did do some restructuring to align our headcount to the volumes we were seeing. This was on the Aerostructure side because of what happened with the Alaska Airlines incident, and we we took headcount out. And then in the second half of the year also realigning when when the strike impact hit, although the furloughs that we did helped helped as well. And then on in flexonics, as land vehicle volumes were softer, we anticipated that and took headcount out to align to to the new volumes. Speaker 100:36:55All of that restructuring was taken above the line in 2024, so we haven't taken it below the line. In 2025, there's most of the headcount has now been aligned. There there's a little bit more, perhaps, in the upstream oil and gas business in flexonics, where their revenues are expected to come down a little bit as well. So just realigning that. But again, all of that's being taken above the line. Speaker 400:37:23Thanks. Operator00:37:30Any more questions on the results? I think we're itching to get on to the meaty stuff in the next presentation. So, okay. So, we are going to break now and we're going going to start at 10AM. And there is a webcast, so it will be sharp at 10AM. Operator00:37:46So please take twenty minutes and we look forward to seeing you soon. Thank you.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallSenior H2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim reportAnnual report Senior Earnings HeadlinesChris Eubank Sr's three-word message to his son after dramatic victory over Conor BennApril 27 at 4:35 AM | mirror.co.ukWhy will Chris Eubank Sr not be at son's fight with Conor Benn? Family fall-out explainedApril 26 at 8:32 AM | msn.com$2 Trillion Disappears Because of Fed's Secretive New Move$2 trillion has disappeared from the US government's books. The reason why is a new, secretive move being carried out by the Fed that has nothing to do with lowering or raising interest rates... but could soon have an enormous impact on your wealth.April 27, 2025 | Stansberry Research (Ad)UK's Senior says direct impact of US tariffs "limited and manageable"April 24 at 2:34 AM | reuters.com1 FTSE 250 stock analysts think could climb 50%April 20, 2025 | msn.comSenior plc Announces Managerial Share TransactionApril 10, 2025 | tipranks.comSee More Senior Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Senior? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Senior and other key companies, straight to your email. Email Address About SeniorSenior (LON:SNR) is an international, market-leading, engineering solutions provider with 30 operating businesses in 13 countries*. Senior designs, manufactures and markets high-technology components and systems for the principal original equipment producers in the worldwide aerospace, defence, land vehicle and power & energy markets. The Group aims to create long-term sustainable growth in shareholder value through a culture of empowerment of autonomous and collaborative operations working within an effective control framework. Our vision is to be a trusted and collaborative high value-added engineering and manufacturing company producing sustainable growth in operating profit, cash flow and shareholder value. Our purpose is to provide safe and innovative products for demanding thermal management and fluid conveyance applications. *As of 31 December 2020, the decision was taken to close Senior Aerospace Bosman, Netherlands and Senior Flexonics Upeca, Malaysia. 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There are 5 speakers on the call. Operator00:00:00Good morning. Welcome to Senior PLC's twenty twenty four full year results presentation. And thank you for making the effort to get here. Operator00:00:10And our thanks also go to Deutscher Nummies for hosting us here at their auditorium. And a warm welcome too for those of you joining remotely. Before I continue, I just wanted to mention that this is actually going to be Bindi Foyle's last set of results because Bindi is retiring on May year. So hopefully, we got in a high, Bindi. But I also want to introduce Alpna AMR. Operator00:00:35Alpna, if you could raise your hand maybe, if that's alright. Alpna is our new incoming CFO joining us in April. So, and Bindi and Alpna are already working on a smooth handover. We've also got Sylvia. Where's Sylvia? Operator00:00:48Sylvia is our new group HR directors who's joining us today, succeeding Jane, who's retiring in a few weeks' time. So welcome to you both. In terms of our itinerary today, we have a different format compared to our usual results day. We'll start by running through our 2024 results, focusing on the financials and outlook for 2025, followed by Q and A on that. We will then take a fifteen minute coffee break and come back at 10AM to run through an investor event, which focuses on Senior as the market leading pure play fluid conveyance and thermal management business. Operator00:01:27We will allow plenty of time for Q and A after that as well. So let me first comment on progress with our strategic review of our Aerostructures business. Senior is committed to a sale of our Aerostructures business and we are making good progress. There is good buyer interest. We're now at an advanced stage of a sale process with a small number of parties and negotiations are progressing positively. Operator00:01:56We're focused on completing the sale process and maximizing value for shareholders and we will update the market in due course. And this is in line with our strategy to position Senior as the market leading pure play fluid conveyance and thermal management business focused on custom design products and systems with rich IP content. You will hear much more about this at the investor event starting at 10AM this morning. For 2024, trading was in line with our revised expectations and we had strong free cash flow. Group sales and profits were up and Binny will describe that later. Operator00:02:38Order intake was once again strong with a book to bill of 1.12 which underpins confidence in future growth. We had notable contract wins in both Aerospace and Flexonics divisions. In the two years since acquisition, sales for Spencer Aerospace have grown by 135%. We are delighted with how Spencer's performance continues to improve and there is much more to come. I'll talk more about our standard parts strategy in our next session after the break. Operator00:03:13Reflecting the Group's performance and the Board's confidence in its future prospects, the Board has approved a final dividend of 1.65p per share, bringing full year dividend to 2.4p per share, an increase of 4% compared to 2024. For the year ahead, the Board anticipates good growth for the group in line with its expectations. I'll say more about the different elements of that when I cover outlook at the end of this presentation. Sustainability is a central theme of our purpose, our strategy, and indeed our technology roadmap. Importantly, therefore, we are making great progress as an organization in terms of our own sustainability actions. Operator00:04:01With regard to our actions on climate change, in 2024, we achieved our near term scope one and two greenhouse gas emission reduction targets a year ahead of schedule, delivering a 33% reduction against a 2018 baseline, and we remain on track for our Scope three near term commitment. Our focus is now progressing against our long term net zero targets, which were approved and verified by SBTI in 2023. For the third year running, we were delighted to have recently been informed that we are one of a small number of companies to be awarded the prestigious A rating from CDP for our climate disclosure and actions. Our focus on the social and governance aspects of ESG is unwavering with continued high performance and progress on aspects such as safety, diversity, and inclusivity. In particular, our strong performance on safety saw our lost time injury rate reducing to zero point one nine. Operator00:05:04This is truly world class performance, though we're never complacent and work hard to continuously improve our behavioral safety program. So before I talk about the detailed outlook for 2025, I will hand over to Bindi to take us through the financial results. David. Speaker 100:05:26Good morning. Senior delivered 2024 trading in line with revised expectations, which we set out in October as a consequence of the Boeing strike and an Airbus tier one supplier temporarily reducing build schedules in q four of twenty four and q one of twenty five. Free cash flow performed stronger than expected. On a constant currency basis, revenue grew 4%, adjusted operating increased 5%, and margins expanded in both divisions. Adjusted profit before tax was £33,000,000, and adjusted earnings per share was 7.17p, both lower than last year. Speaker 100:06:11The prior year benefited from interest and tax provision releases that did not repeat in 2024. The 2023 EPS benefit from this was 2.54p. The group recorded free cash inflow of £17,300,000, an improvement over last year. Net debt, excluding capitalized leases, was a hundred and £53,000,000. The strong performance at Spencer meant we paid the first earn out in 2024. Speaker 100:06:43That, together with payments for dividends and share purchases to hedge our share award commitments, led to a year on year increase in net debt. And net debt to EBITDA was 1.8 times. Return on capital employed decreased by 30 basis points to 6.8% with higher inventory and investment in growth not yet fully offset by growth in profit, which was impacted by the near term temporary customer led headwinds. Group revenue increased by £13,600,000 to 977,000,000 despite adverse exchange rate translation of 25 and a half million pounds. Looking at divisional performance on a constant currency basis, aerospace revenue increased by 10%, a notable achievement given seven three seven MAX volumes were subdued following the Alaska Airlines incident in January 2024 and the Boeing employee strike in September 2024. Speaker 100:07:51Civil aerospace sales were up 11.6%, reflecting increased deliveries to Airbus programs, activity levels increasing in our Thailand business as a key supplier recovers from a fire in 2023, as well as continued strong growth in revenue from Spencer. Revenue from the defense sector grew 1.4% as our sales to the f 35 program increased and legacy programs remained stable. A number of our aerospace businesses supply product to adjacent industrial markets. Revenue from these markets increased by 15.4%, largely due to the rebound in demand from semiconductor equipment market. In flexonics, revenue was down 6%. Speaker 100:08:44Strong revenue growth from downstream oil and gas and nuclear was offset by lower oil and upstream oil and gas business and the anticipated softness in land vehicle markets. Revenue from land vehicle markets decreased 3.7%. This was a resilient performance as a launch and ramp up of new programs wins helped partly mitigate the softer market conditions. Our sales to the North American truck market decreased 2%, benefiting from higher service demand and therefore slightly outperforming the end market, which was down 2.3%. Seniors North American off highway sales decreased 13 and a half percent, reflecting softer market conditions. Speaker 100:09:33Sales to other truck and off highway regions, primarily Europe and India, were flat as growth from India and higher sales from the launch and ramp up of new program wins, as well as a one off short term order offset reduced customer demand in Europe. Sales to passenger vehicle markets decreased by 1.7%. Group revenue from power and energy markets decreased by nine and a half percent. Sales to oil and gas customers decreased by £17,400,000 with robust demand in our downstream business, partially offsetting a reduction in sales from our upstream stream business due to a lower share of this very competitive work. Sales to other power and energy markets increased by £4,800,000, reflecting growth in power generation, nuclear, and renewables. Speaker 100:10:34The increase in the adjust group's adjusted operating profit was driven by aerospace more than offsetting the expected volume related reduction in profit in flexonics. In aerospace, adjusted operating profit increased by 14.3% to £30,400,000, and the adjusted operating margin increased by 20 basis points to 4.6%. The division continued to make steady progress operationally, responding dynamically to the temporary headwinds that were experienced in the year. Boeing faced challenges in 2024 suppressing production volumes, and our operating businesses most exposed to this customer, both directly and through tier one suppliers, took mitigating actions to control and reduce costs to align with the lower volumes required. Although OEMs continue to face challenges with the supply of certain product categories, seniors' own supply chain became more stable as a consequence of specific actions taken by us and our suppliers. Speaker 100:11:43A few hotspots remain, and we are continuing to work with our customers and suppliers to resolve these. In Flexonics, with the expected reduction in revenue, adjusted operating profit decreased by 3% to £35,100,000. Nevertheless, operational efficiencies, lower costs, and favorable product mix helped increase the division's adjusted operating margin by 30 basis points to 11%. The increase in central costs was largely due to naught £400,000 higher UK pension plan running costs and higher health and life assurance costs. This slide shows the reconciliation of adjusted operating profit to the statutory reported profit for the period. Speaker 100:12:34It also highlights our interest and tax charges. Net borrowing costs increased by £1,900,000 to 12,100,000.0 due to higher interest rates on higher variable rate debt and higher levels of indebtedness compared to last year. We expect these costs to increase in 2025, reflecting higher indebtedness and higher weighted average interest on our loan notes as we refinance lower interest notes that have matured. IFRS 16 interest charge on lease liabilities increased to £3,400,000 due to higher interest rates. And net finance income from pension plans decreased slightly to GBP 2,000,000. Speaker 100:13:20A reminder on the comparative, in 2023, we simplified our America's legal entity ownership structure. And having reassessed provisions for estimated uncertain tax positions, provisions of £7,000,000 and associated interest of 3 and a half million pounds were released in 2023. This benefit, therefore, did not repeat in 2024. A tax charge of £3,300,000 was recognized on the group's adjusted profit before tax, an effective rate of 10%. This was lower than expected as we benefited from the recognition of a deferred tax asset in respect of historical tax losses. Speaker 100:14:04Looking ahead to 2025, we currently expect the group's effective tax rate on adjusted profit before tax to return to a more normal level of around 22%. In terms of reconciling adjusted profit to statutory reported profit, we recognize site relocation costs of 3 and a half million pounds. This relates £3,000,000 of this relates to the transfer of some aerospace manufacturing from California to Mexico, and half a million pounds relates to the transfer of our flexonics crumbling business to a nearby high-tech facility. The £1,100,000 charge associated with US class action relates to the settlement of wage and hour class action claims. Corporate undertakings include £1,200,000 of costs primarily associated with potential divestment activities. Speaker 100:15:02The rest of the items excluded from adjusted profit measures relate primarily to the acquisition of Spencer, namely £1,600,000 for amortization of intangible assets from the acquisition and £2,200,000 of income under corporate undertakings for change in fair value of contingent consideration. At the October trading update, I guided for free cash inflow to be low single digit. So as positive to have delivered free cash inflow of £17,300,000 Operating cash flow was £39,300,000, a cash conversion of 85% of adjusted operating profit. Working capital cash outflows were £17,000,000 with 26,600,000 of outflow related to increase in inventory, partly offset by inflows from receivables and payables. Inventory was higher in aerospace with planned investment to enable us to meet the increase in demand from our customers and because of the impact of the Boeing strike and certain customer schedule changes in in quarter four. Speaker 100:16:20Working capital was 18.3% of sales. We are likely to see an increase in absolute working capital over the year to cut support growth in aerospace. But overall, we expect working capital as a percentage of sales to come down to 17 to 18%. Capital expenditure of £43,000,000 was 1.1 times depreciation. And for 2025, CapEx is expected to be above pre IFRS 16 depreciation. Speaker 100:16:53The majority of this investment is in support of growth projects, particularly in flexonics, where contracts have already been secured. Net payments for interest and tax total £22,000,000. And below free cash flow, after payment of dividends and acquisition of shares by the employee benefit trust, we were cash neutral. Overall, the group's net cash outflow from of £9,800,000 in 2024 was therefore for the payment of this first Spencer Aerospace earn out following its strong sales growth performance. Based on Spencer's twenty twenty four performance, we expect to spay the second earnout amount of 13 and a half million pounds in 2025. Speaker 100:17:44The group's net debt to EBITDA was 1.8 times in December, and we had liquidity headroom of a hundred and 58 and a half million pounds under our committed borrowing facilities. During the year, we issued new $50,000,000 private placement notes carrying interest at 6.26, maturing in February 2030, and we extended the maturity of the $50,000,000 US RCF out to June 26. In February 2025, we issued new $40,000,000 private placement notes carrying interest at 5.46% maturing in February 2029. This replaced the £27,000,000 facility that matured in January 25. These actions mean the current weighted average maturity of the group's facilities is two and a half years. Speaker 100:18:38So for my final results, senior has liquidity, healthy liquidity with stable finance arrangements and to support growth from its higher order book. Thank you. I'll now hand back to David to cover outlook. Operator00:18:59Thank you, Bindi. So let me finish this section by summarizing 2024 and going through the outlook for 2025. Last year, there was no doubt that the situation at Boeing significantly affected sales, volumes and profitability. Despite that, revenue, profits and margins increased. Outside of Boeing, we did see other civil aircraft production rates increasing. Operator00:19:27Defence also grew and sales from our aerospace businesses to adjacent markets, especially semiconductor equipment, also increased. In Flexonics, we have worked hard over recent years to reach double digit margins in the division and that continued in 2024. That was helped by robust demand in our downstream oil and gas and nuclear business and with the new programs we've won in our land vehicle operating businesses. So let me finish by going through the outlook. For the year ahead, the Board anticipates good growth for the group in line with its expectations. Operator00:20:04We are closely monitoring the impact on global trade from potential tariff changes. Increasing aircraft build rates, operational efficiency benefits, and improved contract pricing are expected to drive good growth in aerospace in 2025 with H2 expected to be higher than H1. For the full year, Aerostructures is expected to improve from a loss making position in 2024 to an operating profit range of million to million in 2025 with the large majority of that being earned in H2. We expect Flexonics' performance in 2025 to be broadly similar to 2024. In Land Vehicles, the ramp up of programs recently won means we expect our 2025 performance to be broadly similar to 2024 despite some softness in North America and Germany. Operator00:21:11In Power and Energy, activity levels are also expected to be similar to 2024. Our strategy of positioning Senior as a pure play fluid conveyance and thermal management business in attractive and structurally resilient core markets with active portfolio management combined with our highly relevant technical capabilities and sector leading sustainability credentials provides confidence of continued performance improvements for the Group. So that finishes this part of the section on the results. All the usual market materials are in the back of the pack, but of course, we'll be talking much more about strategy and markets in the second half of this morning's presentations at the Investor event. And that starts at 10:00. Operator00:21:58But in the meantime, Bindi and I would be delighted to take any questions you might have on the results. Speaker 200:22:12Good morning, both. It's Andrew Douglas from Jefferies. I'll keep my strategy questions for later. But just on results, I've got four quick ones, please. Can you just explain to us the semicon recovery? Speaker 200:22:22We've seen lots of other companies with semicon exposure struggling recovery deferred to the right. So I'm just trying to figure out what's going on with you guys that other people maybe aren't having. On the Boeing challenges, clearly, that's now behind us. Can you just talk about the pace of the ramp? Is that getting back to where we thought at the pace that you thought? Speaker 200:22:41Or are there any log jams there? You You've had another cracking year of market share gains in 2024, well done. What's the outlook for 2025 market share gains and kind of new contracts? And then last but by no means least, Spencer, another hell of a year from the top line. Can you just give us an update on what's going on at the bottom line in terms of margin? Operator00:23:03Okay. Speaker 200:23:04I'll leave my 12 questions later. Operator00:23:07Thank you, Andy. I'll do a bit of a double act on this one. So firstly, on semiconductor, I know the bulk of our semiconductor business is with Lam Research out of our Metabellows business in Massachusetts. And I think that had fallen greatly from the previous highs over the last couple of years. So it was really in trough. Operator00:23:26Now we are absolutely seeing the sign of that picking up. And for us, it's not making chips that's important. It's the ordering of the equipment. So if you like, that's maybe a leading indicator. So we are seeing the start of some good pickup in semiconductor equipment related orders coming in for the stuff we make from there, which is like pin lift actuators that go into the place of wafers very carefully into the equipment. Operator00:23:53So that's good to see. I think on the pace of ramp at Boeing, so where are we? Coming out of the strike, they got going again around the March 13 in terms of manufacturing, fairly soft start in December, but then rapidly picking up the pace. I'm privileged to be involved in a regular CEO call with the Head of Supply Chain in Boeing, and they're quite open with us on how things are going. So their first objective is to get up to over $8.30, and I think we'll get there quite quickly. Operator00:24:25The cap is still rate 38, and obviously, therefore, the second aspiration is to get to that cap. And thereafter, it's I think we would hope by the end of the year to be beyond the cap. That depends on the FAA giving them approval to increase production. And I asked a specific question on that call, what are the factors that you'll need to happen to allow that? And I think they've been quite open about it. Operator00:24:49So they have a set of KPIs with the FAA, and it's really built around empirical data, from certain key performance indicators that are under statistical process control. And once they have addressed those, then they'll have a constructive dialogue on increasing the cap. And they're very close, I can tell you. You can really see things stabilizing within the production system at Boeing, which is very good to see. And therefore, I'm optimistic that we won't have another year like last year and that we will actually get through that. Operator00:25:22New CEO is doing a good job and seems to be really driving the necessary improvements. For us specifically, you might remember I said that last year, we'd agreed to a level loading with Boeing so that we continue to deliver at the same pace. So that paused during the strike, but it's picked up again now. So we're back at that rate now and that will continue for the bulk of this year. And that's at a level to help them drive down their inventory, but once they get over a certain production, then we'll start to see our rates improving from there. Operator00:25:57So long answer to the question, I think the summary is the rates are picking up at Boeing and I'm optimistic that they will get the cap lifted later in this year because they're optimistic. But I'll come out to Spencer and I'll come out back and do the market share gains, Ben. Yeah. Speaker 100:26:14So Spencer, as David said, since we acquired it, the sales have gone up 135% over the two year period. And last year, they grew 54%. Their margins did get to a run rate of double digit in the second half of twenty twenty four, and we're expecting them to then continue to climb into the teens into 2025. But there is more margin expansion and more sales growth to come beyond that as well. Operator00:26:42Yes. So very pleased with Spencer. It's going to be a great driver. And I think I'll talk more about it in the next event because it's not just a one off acquisition itself. It was the launch pad to help us grow organically with our standard parts expansion and we'll come back to that after 10:00. Operator00:27:01And then market share gains, yes. So we've had some great wins in the land vehicle side and part of the reason for that is that, you know, some suppliers rushed to get out of internal combustion engine sales and into all electric. You've heard us talk about one foot in today, one foot in tomorrow, and making sure that we can provide parts to whatever our customers need. I firmly believe for some time, the people that manage that transition the best will be the winner. So we appear to be doing a pretty good job there. Operator00:27:31So we've actually picked up quite a lot of work for the more efficient petrol engines on the passenger vehicle side, as well as some really cracking and very cool new products on the electric side. And then on the truck side as well, we continue to work with all the key players Cummins and Daimler being the two biggest. And on the off highway side, CAT, JCB are our two largest customers there. So we seem well positioned with all of those customers to continue growing. And then the aerospace side, I will talk about some new wins on the fluid conveyance side after the break. Operator00:28:12Again, on the standard part side with the organic investments we've been making to introduce flanges, the humble flange as one of our products. And I'll describe more about that. So that was a real landmark award that we've just received. And there's still more opportunities. We won the Dutch aircraft complete EBU and bleed air system ducting contract last year. Operator00:28:40That will slowly come into production. We're in the middle of development now. So there are opportunities on the fluid systems side equally with some really good wins on the aerostructure side. So, obviously, that helps as we're selling the business for prospective buyers to see the confidence we have in the growth that's coming with that business. Speaker 200:28:58Thank you. Speaker 300:29:04Morning. It's Richard Page from Deutsche News. Operator00:29:06Good morning, Rich. Speaker 300:29:07Morning. Three, if I may, please. First off, just could you confirm, looking back at the FY twenty four performance, it looks like it was aero structures that caused the sort of a lot of the just to confirm how the core fluid conveyance business performed in the latter part of the year, please? And then on the Airbus Tier one issue, just to confirm what the run rate on that side, please, for this year. You've got obviously some very interesting pricing agreements coming through this year. Speaker 300:29:39Could you just remind us the sort of timing of those as well, please? And then just finally, you've mentioned H2 waiting. Could you give a bit more around the visional aspects of that, please? Operator00:29:52Sure. Right. Sorry, the first one was, it looked like Aerostructures was there. Did you see Yes. Speaker 300:29:58In terms of the 24 performance at the end of last year, how that weighted Operator00:30:04across Aerostructures versus the underlying? Speaker 300:30:04Yes. Yes. The bulk of the structures versus the underlying. Operator00:30:07Yes, indeed. Yes, no, the bulk of the reason why we had to issue the revised prediction in October was because of aerostructures because they were the most affected by Boeing. So specifically, our Pacific Northwest business, which is EMT and Dimar, for those who have been following us for a long time, it's all Boeing. They have it's largely Boeing. They have some SpaceX work as well, but most of that's Boeing, some of it directly, some of it into people like Spirit. Operator00:30:36So really across for the September through October, November and even up to the December, they were only doing some seven eighty seven work and some SpaceX work. All the other models, particularly seven thirty seven MAX, seven seventy seven was all on hold, Boeing put all its suppliers on hold at that time. So we had 95% of the workforce on furlough, 50% full time, 45 part time throughout that period. So yes, that was a huge impact on us in the final quarter. And that's why we had to issue that trading update, unfortunately, in October. Operator00:31:10So yes, it really was concentrated primarily in structures. Now we have some business with Boeing as well in the fluid systems side, but those businesses have greater opportunities to make up for changes during the year because of a more diverse customer base. I think on the Airbus Tier one side, let me cover that next. So, yes, we announced in October that there seemed to be an imbalance between wing delivery and other deliveries, particularly around engines and interiors, which Guillaume Faury, the CEO at Airbus, has been very open about. So he joked about if you want some gliders, we can get them provided you don't want to sit down in them. Operator00:31:50And I think they are making progress. He gave a bit more upbeat talk about that at the earnings presentation, was that last week? And signs of that stabilizing. So what that meant was they really had slowed down a bit on the other parts of the aircraft that weren't late. And as an on time supplier, unfortunately, we fell foul of that. Operator00:32:11So, yes, that Tier one supplier took schedule. They didn't take them out. They postponed them until later because the demand hasn't gone away. So through quarter four and into quarter one and given their credit, that's exactly what's happening. So we've had a soft start. Operator00:32:28This is mainly in Newpeka in Malaysia with the soft start in January, slightly higher volume in February, it will be slightly higher volume again in March and then full bore from April and all the orders are coming through in that. So the temporary sort of reduction in schedules is just that temporary. Ben, do you want to cover the waiting and then I'll come back and talk about the other ones? Speaker 100:32:52Yes. So in terms of waiting from a aerostructures point of view, we said we expect most of the profits to come in the second half of the year. So you know, small small amount or breakeven break basically in half one and then the rest of it in half two. On the fluid systems side, at the moment, we're looking at, it will it will be around the edges, but around forty, sixty half one to half two. And some of that is because we are having price increases kick in from July 2025 in fluid systems. Speaker 100:33:27On Flexonics, it at the moment, it looks like a sort of close to a forty, sixty split half one to half two. And that's because with the end market dynamics, first half of this year, particularly in land vehicles, is expected to be softer and then picking up again in the second half of the year. But, you know, we have had a good start to to the year in Flexonics, so it it may be slightly more balanced by the time we get to the half year. Operator00:33:58So I think, Benny covered the price agreements as well. We've got we've got one sizable contract kicks in April, May, and then the rest of second half of the year. Yes. And then just remind me, I've written down fluid conveyance for the second question. What was the context? Speaker 300:34:12On the second, I think you've covered it all. Operator00:34:13Did I say it? So it Speaker 300:34:14was just on the pricing. Pricing. And the timing of the pricing and then what you've got beyond. Operator00:34:18Yes. Yes. That's right. Speaker 400:34:28Thanks. Hi. Andrew Humphrey from Hi, Andrew. How are you? Just a couple, if I may. Speaker 400:34:35On structures, that's clearly a kind of the expectation for 2025 is clearly strong in terms of profitability. I wanted to ask, given that business is doing sort of half of the FY 'nineteen peak on revenue more or less, what is the incremental drop through on that as we kind of get through into a point where volumes can be growing again? And secondly, just any further restructuring costs expected in FY '20 '20 '5? Operator00:35:04Are you going to ask us to keep structures now? Look, we've said consistently these are good businesses. I'll cover more about this in the next presentation. But this is not some kind of fire sale of toxic assets, far from it. They've had some lean years because there's a high fixed cost base in those structures business. Operator00:35:25If it goes around in the factories, you'll see big heavy duty equipment that costs a lot of money. So if you're not manufacturing the right volumes, then you've got an under absorbed fixed overhead that you can't get rid of. Great to see improving. We'll put some specific comments about what happened between 'twenty three to 'twenty four in our next presentation. And we're going to split out structures from fluid systems and show you the relative performance. Operator00:35:52So it will be a lot more detail after this. But yes, once you get over that certain point, the drop through is pretty good in our structures businesses and that's one of the attractions for the prospective buyers. In the years ahead, you can see the volumes are coming through. So this is going to be a good business for whoever buys it. In the meantime, it's very much under our control and will be until until the sale happens. Operator00:36:15So we continue to manage them very responsibly and we'll be driving very hard for the best possible result from that. Speaker 100:36:21Yeah. And in terms of restructuring, I mean, in 2024, we did do some restructuring to align our headcount to the volumes we were seeing. This was on the Aerostructure side because of what happened with the Alaska Airlines incident, and we we took headcount out. And then in the second half of the year also realigning when when the strike impact hit, although the furloughs that we did helped helped as well. And then on in flexonics, as land vehicle volumes were softer, we anticipated that and took headcount out to align to to the new volumes. Speaker 100:36:55All of that restructuring was taken above the line in 2024, so we haven't taken it below the line. In 2025, there's most of the headcount has now been aligned. There there's a little bit more, perhaps, in the upstream oil and gas business in flexonics, where their revenues are expected to come down a little bit as well. So just realigning that. But again, all of that's being taken above the line. Speaker 400:37:23Thanks. Operator00:37:30Any more questions on the results? I think we're itching to get on to the meaty stuff in the next presentation. So, okay. So, we are going to break now and we're going going to start at 10AM. And there is a webcast, so it will be sharp at 10AM. Operator00:37:46So please take twenty minutes and we look forward to seeing you soon. Thank you.Read morePowered by