Annual Report 2010 in PDF - BBA Aviation

Chairman’s
Statement
6 — Directors’ Report
BBA Aviation delivered a good set of results in 2010. With both Flight Support and Aftermarket Services
and Systems returning to growth, revenue and profitability increased. Our maintained capital discipline
also resulted in continued strong cash generation and an improved return on invested capital. We also
made further good strategic progress.
Our 2010 performance reflects the underlying strengths of our business, our organic growth prospects,
consolidation opportunities and the focus of our strong management team on implementing
continued operational improvement.
Results
Following an unprecedented downturn in our major markets in 2008 and 2009 it is very encouraging to be
able to report that the principal driver of our revenues, business and general aviation fying hours in North
America, grew in 2010 and both of our divisions returned to growth as expected.
Revenue increased by 4% on an organic basis and underlying operating profts increased by 10% to
£110.6 million (2009: £100.5 million) as a result of the increased activity across both divisions and other
factors including further operational improvement.
Adjusted earnings per share increased by 21% to 17.6p (2009: 14.6p).
We continued to deliver strong cash fow from the business with free cash fow in the year of £115.2 million
(2009: £137.5 million). We have now delivered in excess of £325 million of free cash fow in the last three
years. Net debt was reduced to £313.9 million at the end of 2010 (2009: £391.6 million), despite a foreign
exchange loss of £12.0 million, and the Group’s leverage ratio (net debt to EBITDA) was improved
substantially to 2.1 times (2009: 2.8 times).
At the same time as delivering operationally, we have continued to make strategic progress with the
addition of two new FBOs at Montreal and Fresno, the international expansion of ASIG into Panama and the
award to ERO by Honeywell of an independent engine authorisation for Asia Pacifc which will allow us to
expand our presence in this region during 2011.
This strategic progress has continued in the frst quarter of 2011 with Signature’s agreement to acquire the
Yellowstone Jetcenter FBO in Bozeman, Montana and Legacy Support’s agreement to acquire GE Aviation
Systems’ fuel measurement business which increases its exposure to the commercial aviation market and
its non-US product portfolio, as well as adding third generation electronics expertise.
Dividend
A fnal dividend 5.7p has been recommended by the Board (2009: 5.3p) taking the dividend for the full year
to 8.1p (2009: 7.6p), an increase of 7%. This increase refects the Board’s continued confdence in the
Group’s prospects whilst at the same time progressively re-building cover.