Annual Report 2010 in PDF - BBA Aviation

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Our Strengths BBA Aviation is a focused aviation support and aftermarket services business, ideally placed to exploit opportunities in these cyclical but attractive markets. There are fve critical factors which will contribute to the continued success of BBA Aviation in the future: 16 — Directors’ Report Market leadership – We are market leaders in the markets in which we operate with strong, recognised brands – Signature is the world’s leading FBO network with 83 wholly owned worldwide locations and 20 additional locations in which we have minority interests – ASIG is the largest independent refueller in the world – Our ERO business has market leading positions in the programmes in which it participates Barriers to entry – The requirement for a lease from an airport authority to operate an FBO; the average unexpired lease term of our FBO network in the USA is 17 years – The need for an authorisation to provide commercial aviation services at individual airports and the required technical capability around into-plane refuelling – The need for a licence from an OEM to service its engines; we are authorised by the OEMs for engine overhauls on 80% of B&GA engines now in service – Intellectual property on aviation component systems and sub-systems which we develop ourselves or which we license from OEMs Service orientation – Our businesses have a service focus with low asset intensity, a naturally fexible cost base and are highly cash generative which makes them inherently well suited to deal with market cyclicality as demonstrated through this cycle. Growth – There are signifcant growth opportunities across all of our businesses resulting from cyclical recovery, structural growth and the scope for consolidation in fragmented markets. Common focus – The business is actively managed by an empowered, experienced and motivated management team with a defned common Group-wide focus as expressed in our vision, mission and values.
Principal Risks and Risk Potential Impact Mitigation Uncertainties General economic downturn – Reduction in revenues and profts as a – Strong fnancial controls to monitor result of reduced B&GA and commercial fnancial performance and provide a fying and military expenditure basis for corrective action when required – Low fxed costs allow cost base to be fexed to meet demand – Mixture of early and later cycle businesses Catastrophic global event – Reduction in revenues and profts as – Strong fnancial controls to monitor (terrorism, weather) with a a result of reduced B&GA and fnancial performance and provide a material impact on global commercial fying basis for corrective action when required air travel – Low fxed costs allow cost base to be fexed to meet demand Legislative changes causing – Reduction in revenues and profts as a – Active participation in all relevant material increase to cost of result of reduction in B&GA fying hours industry bodies B&GA fight relative to – Low fxed costs allow cost base alternatives to be fexed to meet demand Ability to attract and retain – Loss of key personnel – Remuneration structure designed to high-quality and capable – Lack of internal successors to key reward superior performance and people management roles promote retention – Short to medium term disruption – Succession planning process embedded to the business with review at Executive Management Committee and Board level annually – Proactive employee development Potential liabilities from – Reputational impact with associated – Standard operating procedures with defects in services and deterioration in customer relationships routine route cause analysis of products – Loss of earnings from liability claims all incidents – Liability insurance Intentional or inadvertent – Reputational impact – Clear corporate policies and education non-compliance with – Exposure to potential litigation in all major risk areas legislation or criminal proceedings – Semi-annual compliance certifcation by all senior management – Robust internal control environment and regular review by internal and external audit Foreign exchange rate – Volatility in sterling earnings, balance – Dollar borrowings provide partial hedge f u c t u a t i o n s sheet position and fnancial covenants of operating proft volatility through the interest line – Bank covenants contain ability to test at average rates – Revenue and cash fow streams predominantly in US dollars, matching the US dollar assets and liabilities Environmental exposures – Loss of earnings from cost to remediate – Strong procedural controls and physical or potential litigation containment when working with fuel or – Potential for loss of licence to operate other hazardous chemicals – Greater than expected liabilities – Active management of known associated with historical operations environmental matters to minimise costs to resolve Directors’ Report — 17
Page 1 and 2: Annual Report 2010
Page 3 and 4: Directors’ Report 2 Overview 2 Gr
Page 5 and 6: Group Structure Revenue by business
Page 7 and 8: Revenue Revenue increased by 4% on
Page 9 and 10: Corporate Governance The Board beli
Page 11 and 12: Michael Harper (66) Chairman Simon
Page 13 and 14: Worldwide Business Jet and Turbopro
Page 15 and 16: Commercial Aviation Our commercial
Page 17: Each of the fve businesses has a cl
Page 21 and 22: Return on Invested Capital (ROIC) M
Page 23 and 24: Proft before tax increased by 42% t
Page 25 and 26: Financial Summary 2010 2009 Inc/(de
Page 27 and 28: ASIG United States of America, Cari
Page 29 and 30: Directors’ Report — 27
Page 31 and 32: Revenue 2010 2009 Inc/(dec) 20091 I
Page 34 and 35: ASIG Focused on growth 32 — Direc
Page 36 and 37: Key Facts ASIG is a world leading i
Page 38: London Heathrow: the A380 is a doub
Page 41 and 42: Financial Summary 2010 2009 Inc/(de
Page 43 and 44: Legacy Support United States of Ame
Page 45 and 46: Directors’ Report — 43
Page 47 and 48: Revenue 2010 2009 Inc/(dec) 20091 I
Page 50 and 51: Legacy Support Flexible resources m
Page 52 and 53: Key Facts Legacy Support is a leadi
Page 54 and 55: Houston, Texas: a Legacy Support st
Page 56 and 57: APPH Delivering continuous improvem
Page 58 and 59: Key Facts APPH has a niche focus an
Page 60: Runcorn, UK: a Jas39 Gripen nose la
Page 63 and 64: CSR leadership Group-wide Providing
Page 65 and 66: The Group also launched its new par
Page 67 and 68: A signifcant proportion of our debt
Page 69 and 70:
Suppliers Payment Policy Substantia
Page 71 and 72:
The Board has a formal schedule of
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a. Remuneration Committee Compositi
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Guidance on Audit Committees. The A
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Directors’ Remuneration Report I
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The following chart shows the balan
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d. Longer-term performance incentiv
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Annualised total shareholder return
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e. Pension: policy and implementati
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Independent Auditor’s Report to t
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Consolidated Statement of Comprehen
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Consolidated Cash Flow Statement Op
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Accounting Policies Basis of Accoun
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Property, Plant and Equipment Prope
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Notes to the Consolidated Financial
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2. Proft for the year Proft for the
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5. Dividends On 21 May 2010, the 20
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8. Intangible assets - continued Th
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10. Investments in associates Cost
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13. Trade and other payables Amount
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16. Bank overdraft and loans - cont
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17. Derivative fnancial instruments
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Page 115 and 116:
Page 117 and 118:
19. Pensions and other post-retirem
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19. Pensions and other post-retirem
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21. Share capital and reserves Allo
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21. Share capital and reserves - co
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23. Cash fow from operating activit
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26. Related party transactions Tran
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Company Balance Sheet 2010 2009 Not
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Leases Where assets are f nanced by
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6. Creditors: amounts falling due w
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10. Capital and reserves Details of
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Five Year Summary 2010 2009 2008 20
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This Annual Report is addressed sol
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Annual Report 2010 in PDF - BBA Aviation

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