Annual Report 2010 in PDF - BBA Aviation

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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.
Corporate Governance The Board believes that good corporate governance also contributes to the growth of sustainable value for BBA Aviation’s stakeholders. In our Corporate Governance Statement on pages 68 to 74 you can read in greater detail about the ways in which the principles relating to the Board’s role and efectiveness set out in the UK’s Combined Code on Corporate Governance have been applied in practice over the past year. One aspect of this is our programme of briefngs, presentations and site visits, at which Board members meet senior executives and employees in individual operations. Employees I would like to record the Board’s sincere gratitude to all of BBA Aviation’s employees who have worked so hard through a very difcult period. I am very proud of the contribution they have made during the downturn and am very pleased that they too are now able to see the fruits of their eforts as we return to growth. Our employees remain committed to our overarching objective to grow exceptional, long-term sustainable value for all our stakeholders by focusing on BBA Aviation’s vision, mission and values, set out in more detail on page 14. Sustainability and CSR are a fundamental part of BBA Aviation’s vision and mission and I am pleased to report that we have continued to make good progress in this area as reported in the CSR section on pages 60-63. Outlook As our major markets continue their gradual recovery we expect to make further progress in 2011. The underlying strengths of our business and our organic growth and consolidation opportunities, together with a continued focus on operational improvement, mean that we expect to deliver a strong performance and generate superior returns over the longer term. Michael Harper Chairman Directors’ Report — 7
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: Revenue Revenue increased by 4% on
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 and 18: Each of the fve businesses has a cl
Page 19 and 20: Principal Risks and Risk Potential
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
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Key Facts APPH has a niche focus an
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Runcorn, UK: a Jas39 Gripen nose la
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CSR leadership Group-wide Providing
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The Group also launched its new par
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A signifcant proportion of our debt
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Suppliers Payment Policy Substantia
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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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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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