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BBA Aviation

BBA Aviation2017 Final Results

BBA Aviation

2017 – Strong execution in favourable market conditions

01

2017 Final Results

2017

Total operating profit1

$360.6m

Aftermarket Services

17%

Total operating profit1

$302.6m

Flight Support

88%

Flight Support

83%

2016 Aftermarket Services

12%

Signature

‒ Significant progress on the commercial renegotiations

‒ Unique global network of 198 FBOs

Investing for future growth

‒ Signature leases, hangar space and new non-fuel services

‒ Ontic has recently acquired five licences and continues to see a strong pipeline

Capital structure

‒ Increased target debt range to 2.5-3.0x based on Group’s strong

cash flow generation

Progress

‒ Ongoing cost discipline

‒ Improved financial performance at Ontic

‒ New CEO, Group Finance Director and two new NEDs

Strategic review of ERO.

Note 1: Underlying operating profit (pre exceptional and other items)

BBA Aviation

Outperforming a strong market

Signature outperformance

‒ Good second half progress through commercial renegotiations

‒ Network benefits starting to show through:

• Improved loyalty and customer satisfaction

• Improved fuel volumes

• Improved fuel margins

• Extended non-fuel services contribution

Aftermarket Services progress

‒ Ontic strong performance, with a good contribution from 2016 licences

‒ Further second half Ontic licence portfolio growth

‒ Improving ERO performance in continuing weak markets

Opportunities for capital investment at attractive ROIC.

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2017 Final Results

BBA Aviation

Performance ReviewDavid CrookGroup Finance Director

2017 Final Results

3

BBA Aviation

Strong operating profit growth for 2017

4

Flight Support (83% of continuing OP1):

‒ Signature continued outperformance with strong drop-through

‒ Improved second half performance as new commercial agreements contribute

Aftermarket Services (17% of continuing OP1):

‒ Ontic strong performance

‒ ERO much improved H2 performance

Basic adjusted EPS (continuing)

‒ up 24% to 24.0c

Dividend increased 5.1% to 13.4c per share

Continued strong cash flow

‒ Free cash flow $220.6 million

‒ Further deleveraging to 2.6x

‒ New target leverage range of 2.5x-3.0x.

2017 Final Results

Operating profit1 ($m) 2017 2016 Change

Flight Support 329.4 294.0 12.1%

Aftermarket Services 65.3 42.0 55.5%

Central costs (34.1) (33.4) 2.1%

Group continuing 360.6 302.6 19.2%

Discontinued (0.2) 27.5

Basic adjusted EPS

(continuing)24.0c 19.4c 23.7%

Dividend per share 13.40c 12.75c 5.1%


Free cashflow ($m) 220.6 224.1 (3.5)

Net debt ($m) (1,167.1) (1,335.3) (168.2)

Net debt to EBITDA,

covenant 2.6x 3.1x (0.5)x

Net debt to EBITDA,

reported 2.6x 3.2x (0.6)x

BBA Aviation

Flight Support: up 12%83% of continuing OP1

Strong revenue growth of 7% (constant fuel prices)

‒ Signature good organic growth of 3.8%; (H1 : 3.2%, H2 : 4.4%)

‒ Landmark contribution for January shown under acquisitions

Organic operating profit growth of 11%

‒ Building off a strong underlying US market at 3.7%

‒ Strong drop through

‒ Operating margins up 140bps to 20.0% at constant fuel prices excluding disposals

Network

‒ New strategic lease at Dulles International, Washington

‒ Lease extension at Santa Barbara

Investment returns

‒ Divisional ROIC 12.2% (FY 2016: 11.2%).

2017 Final Results

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Operating Profit1 ($m)

Revenue Bridge ($m)


294.0

(0.6) -

(7.8)

285.6 11.6

32.2 329.4

2016 FX Fuel Disp-osals

2016 Like-for-like

Acqui-sitions

Organic 2017

1,443.2

(2.6)

90.7 1,531.3

53.0

58.7 1,643.0

2016 FX Fuel 2016 Like-for-like

Acqui-sitions

Organic 2017

BBA Aviation

Aftermarket Services: up 55%17% of continuing OP1

Revenue up 3%

‒ Ontic delivered 27% revenue growth (5% organic growth)

‒ ERO organic revenues declined 7% in H1 and 0.5% in H2

Operating profit1 up 55%

‒ Ontic strong operational performance – c.85% of division

‒ Strong contribution from new Ontic licences

‒ Contribution from B52 parts and C130 radar units in Ontic not

expected to repeat in 2018

‒ Much improved ERO performance in H2

Investment returns

‒ Divisional ROIC 11.3% (2016: 6.9%).

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Operating Profit1 ($m)

Revenue Bridge ($m)


2017 Final Results

705.9

(5.8)

700.1 39.7

(12.2)

727.6

2016 FX 2016 Like-for-like

Acq's Organic 2017

42.0

(1.3)

40.7

11.5

13.1 65.3

2016 FX 2016 Like-for-like

Acq's Organic 2017

BBA Aviation

Underlying Group Income Statement

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Continuing operations ($m) 2017 2016 Change

Revenue 2370.6 2149.1 10.3%

Revenue (fuel adjusted) 2370.6 2239.8 5.8%

Operating profit¹ 360.6 302.6 19.2%

Margin % 15.2% 14.1% 110bps

Margin % (fuel & disposal adjusted) 15.2% 13.2% 200bps

Net interest (62.1) (63.9) (2.8)%

Profit before tax 298.5 238.7 25.1%

Profit after tax 246.3 199.2 23.6%

Continuing, adjusted EPS 24.0c 19.4c 23.7%

Continuing operations by segment

($m)2017 2016 Change

Flight Support 329.4 294.0 12.1%

Aftermarket Services 65.3 42.0 55.5%

Central costs (34.1) (33.4) 2.1%

Operating profit¹ 360.6 302.6 19.2%

Total Group2017 2016 Change

ROIC 11.0% 10.1% 90bps

Adjusted EPS (cents) 24.0 21.1 13.7%

Adjusted EPS (continuing in

cents)24.0 19.4 23.7%

Dividend (cents) 13.40 12.75 5.1%

2017 Final Results


BBA Aviation

Exceptional and other items

Exceptional and other items

Continuing (before tax)

‒ Amortisation of acquired intangibles: $93.8m (non-cash)

‒ Restructuring expenses of $28.0m (ERO and Corporate)

Continuing (tax)

‒ One off non-cash charge $17.5m in respect of US tax reform

‒ One time repatriation charge $3.0m, payable over 8 years

Discontinued (after tax)

‒ Disposal of ASIG ($22.5m) in January 2017.

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2017 Final Results

BBA Aviation

Continuing strong cash generation

Continuing businesses

‒ Strong cash generative business driven by earnings growth

‒ Working capital outflow reflects the anticipated $20m reversal from 2016 outperformance

‒ Capex investments at FBOs in Boeing Field, Palm Beach and Nashville

‒ Cash tax rate remains substantially lower than underlying effective tax rate

‒ Exceptional cash costs relate to restructuring costs

‒ Acquisitions of $80.7m, primarily in Ontic

‒ Leverage 2.6x

Discontinued business

‒ Working capital outflow for ASIG in January prior to its disposal

‒ Tax payable on gain related to ASIG disposal.

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2017 Final Results


Note 2: Underlying operating profit before depreciation and amortisation

$m Continuing Discontinued 2017 2016

Underlying operating profit 1

Depreciation & amortisation

360.6

87.3

(0.2)

0.2

360.4

87.5

330.1

84.6

Underlying EBITDA2 447.9 - 447.9 414.7

Working capital movement (20.6) (25.7) (46.3) 51.5

Capex (80.3) - (80.3) (102.4)

Net Interest paid (57.3) - (57.3) (61.9)

Tax paid (33.4) (8.4) (41.8) (15.8)

Exceptional and other items (12.7) - (12.7) (63.5)

All other movements 10.4 0.7 11.1 1.5

Free cash flow 254.0 (33.4) 220.6 224.1

Dividends (130.7) - (130.7) (124.3)

Issue of shares 0.3 - 0.3 0.3

Acquisitions & licences (80.7) - (80.7) (2,108.8)

Disposals 137.1 33.4 170.5 186.6

Other + FX (11.8) - (11.8) 30.3

Change in net debt 168.2 - 168.2 (1,791.8)

Net debt (1,167.1) (1,167.1) (1,335.3)

Net debt to EBITDA, covenant 2.6x 2.6x 3.1x

Net debt to EBITDA, reported 2.6x 2.6x 3.2x

BBA Aviation

Other financial matters and guidance FY18

Central costs

‒ ~$25m Group central costs in FY18

Capital expenditure

‒ FY18 capex $100-110m

‒ Ontic licence investment in FY18 of c.$30m

Tax

‒ Underlying effective tax rate c20%, cash tax rate c10%

Interest

‒ Update to follow refinancing

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Pensions

‒ Total pensions valuation net deficit $71.7m (2016: $82.8m)

due to better than expected returns on plan assets

‒ UK payment schedule as agreed with trustees:

£3m for next 3 years, £2.7m thereafter until 2034

‒ Next UK actuarial review March 2018.

2017 Final Results

BBA Aviation

Robust and flexible cash flows

2017 Final Results

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25%

75%

Flexible Cost Base

Fixed costs- Leases & other

Variable costs- Fuel & labour

17 1

8

18 1

9

18

18

2012 2013 2014 2015 2016 2017

US FBO long leases Capital Expenditure and licences

2.7x2.9x 2.8x

2.1x

1.5x 1.6x

1.8x 2.2x

2.3x¹3.1x

2.6x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Net debt to EBITDA

-

50.0

100.0

150.0

200.0

2017 2016

Licenses

FBO/Hangar dvpmt

FBO Maintenance

Ontic

ERO

ASIG

Other

$136.8m

…delivered through long-term lease and IP protected portfolio Note 1: 2015 historically adjusted for the results of the equity raise

$160.1m

BBA Aviation

Strategy translated into our capital allocation policy

2017 Final Results

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Ongoing organic growth and

market outperformance

Enlarged network proposition

Signature Elite®

Signature Select ®

Expanded non-fuel service offering

Expanded line maintenance services

Hangar development

Technology

Market leading service quality

Capital expenditure

Ontic licences

M&A opportunities

Core dividend – sustainable growth

Return to shareholders

BBA Aviation

Financing

2017 Final Results

13

– $650m RCF to be refinanced in H1 2018

– Facility B acquisition debt to be refinanced in 2018

– Facility C acquisition debt to be refinanced by 2019

– US PP $500m ($120m maturing May 2018) will be retained and reviewed periodically as we refinance.

Debt facilities aligned both to the target leverage range and with tenure that

better reflects the long-term nature of the Group’s lease and IP portfolio

BBA Aviation

BBA AviationWayne EdmundsInterim Group Chief Executive

2017 Final Results

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BBA Aviation

BBA Aviation – What’s next ?

o BBA has evolved from Aviation Services conglomerate to the global leader in FBOs

o BBA has a durable and defensible market position from which to launch new growth

‒ Core assets

‒ 198 FBOs

‒ average US lease term of 18 years

‒ 150 long term Ontic licences

‒ demonstrable success in buying and integrating new FBO and licences

‒ Cost advantage from scale in IT, purchasing etc

‒ 12%+ ROIC at manageable risk levels over the long term

o Recent sources of EBITDA outperformance include:

‒ Organic fuel and non-fuel services growth

‒ Additional investments in FBOs, Ontic licences and non-fuel services

‒ Synergies.

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2017 Final Results

BBA Aviation

BBA Aviation – What’s next ?

o Consensus Free Cash Flow – $250-300m over next few years

‒ Includes $100m capital expenditure (1x depreciation)

‒ This funding supports organic growth from fuel and non-fuel services

o Additional investment of $100-$150m per year will be made to extend the Signature services and Ontic

licences

‒ We have demonstrable success in buying and integrating in our ‘sweet spot’ of new FBOs and Ontic licences

‒ 12%+ ROIC at manageable risk levels over the long term

‒ Yield management – more fuel volume and more services over a comparatively fixed cost base increases all

key financial KPIs.

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2017 Final Results

Landmark integration complete, major portfolio work underway and Group de-levered

BBA Aviation2017 Final Results

17

MarketGrowth

– Organic B&GA growth at 2-3%

– FBO additions

NetworkAgreements

– Fractionals

– Charter

– Other

Expansion of non-fuel services

– Hangaring

– Baggage handling

– De-icing

– Customer and pilot services

New services and asset utilisation

– Franchise - Select®

– Aircraft management & charter (GASAM)

– Line maintenance -TECHNICAir™

– Travel services and Elite®

– Data analytics for targeted promotions and revenue management

– Technology.

What’s next for the Signature network?

BBA Aviation

Key services

Ontic profile

2017 Final Results

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Financial profile

What sets us apart

• IP rights for wide portfolio

• Partnerships with more than 25 OEMs

• Balanced portfolio of licences between commercial & military

aviation

• Flexible manufacturing and product support capabilities with

cross-trained workforce

• Depth of knowledge on multiple aircraft systems

• 150+ licences for more than 6,500 parts

• $200m+ revenues

• 15% ROIC

• $30m average annual licence investment

• Provision of equipment, components and spare parts for

maturing and legacy platforms

• Transition of non-core products from OEMs

• Maintenance, repair and overhaul.

Aftermarket services for

25+ major OEMs

BBA Aviation

What’s next for Aftermarket Services?

Expanded investment to leverage unique position

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2017 Final Results

M&A to expand on more

platforms and add technology

Licence acquisition expanded

Data analytics for pricing and

end-of-life management

ERO strategic review

BBA Aviation

Strategy translated into our capital allocation policy

2017 Final Results

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Ongoing organic growth and

market outperformance

Enlarged network proposition

Signature Elite®

Signature Select ®

Expanded non-fuel service offering

Expanded line maintenance services

Hangar development

Technology

Market leading service quality

Capital expenditure

Ontic licences

M&A opportunities

Return to shareholders

Core dividend – sustainable growth

BBA Aviation

Self-fund expansion of core assets to support long-term growth

2017 Final Results

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High quality business

‒ Market leadership, barriers to entry

‒ Strong brands, durable business model

‒ Ontic acquisitions contributing; ERO cost efficient

Good growth prospects

‒ Network strength brings market outperformance opportunity

‒ Expansion of non-fuel services

‒ Ontic pipeline potential

‒ Data analytic approach

‒ Portfolio optimisation

Attractive financial characteristics

‒ Strong cash generation

‒ Effective capital structure appropriate for the Group going forwards and allows for return to shareholders

‒ Expand ROIC.

BBA Aviation

Outlook

2017 Final Results

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– Solid B&GA market growth expected

– Investments in our Signature network focused on delivering continued market outperformance

– A growing portfolio of IP protected licences at Ontic offers significant opportunities despite some non-recurring 2017 contributions

– Strategic review at ERO

– Strong balance sheet with appropriate capital structure allowing flexibility for both organic and inorganic growth opportunities

– Expectations for 2018 performance remain unchanged.

BBA Aviation

Questions

2017 Final Results

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BBA Aviation

Appendix

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2017 Final Results

BBA Aviation

Flight Support – H1 and H2 bridges

2017 Final Results

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H2 Revenue ($m)

H2 Operating Profit1 ($m)H1 Operating Profit1 ($m)

H1 Revenue ($m)


141.6

(0.9)-

(8.0)

132.7

11.6

16.5 160.8

2016 H1 FX Fuel Disp-osals

2016 H1Like-for-like

Acqui-sitions

Organic 2017 H1

152.4 0.3 0.2 152.9

15.7 168.6

2016 H2 FX Disposals 2016 H2 Like-for-like

Organic 2017 H2

680.5

(6.3)

52.2 726.452.8

23.6 802.8

2016 H1 FX Fuel 2016 H1 Like-for-like

Acqui-sitions

Organic 2017 H1

762.7 3.7

38.5 804.9

0.2

35.1 840.2

2016 H2 FX Fuel 2016 H2Like-for-Like

Acqui-sitions

Organic 2017 H2

BBA Aviation

Aftermarket Services – H1 and H2 bridges

2017 Final Results

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H2 Revenue ($m)

H2 Operating Profit1 ($m)H1 Operating Profit1 ($m)

H1 Revenue ($m)


340.1

(6.3)

333.8

21.2

(12.3)

342.7

2016 H1 FX 2016 H1 Like-for-like

Acq's Organic 2017 H1

11.1

(0.9)

10.2

8.4

7.4 26.0



365.8 0.5 366.3

18.5 0.1 384.9



30.9 (0.4)

30.5

3.1

5.7 39.3



BBA Aviation

Depreciation and Amortisation 2017

2017 Final Results

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TotalUnderlying Exceptional Statutory

OP 360.4 (123.0) 237.4

Depreciation 71.4 - 71.4

Amortisation 16.1 93.8 109.9

EBITDA 447.9 (29.2) 418.7

DiscontinuedUnderlying Exceptional Statutory

OP (0.2) - (0.2)


Amortisation - - -

EBITDA - - -

ContinuingUnderlying Exceptional Statutory

OP 360.6 (123.0) 237.6


Amortisation 16.1 93.8 109.9

EBITDA 447.9 (29.2) 418.7

Extract from cash flow2017

Operating profit 237.6

Operating profit from discontinued operations (0.2)

Share of profit from associates and joint ventures (3.4)

Profit from operations 234.0

Depreciation of property, plant and equipment 71.4

Amortisation of intangible assets 109.9

BBA Aviation

Revenue split1and organic growth

2

28

Flight Support 69%

Organic 4%

Flight SupportN. America 89%

Organic 4%

Flight Support RoW

11%

Organic 7%

AftermarketServices 31%

Organic (2)%

Ontic 29%

Organic 5%

ERO 71%

Organic (4)%

Revenue2 ($m) N. America RoW Total

Signature Flight Support 1,463.0 180.0 1,643.0

Engine Repair & Overhaul 437.1 81.7 518.8

Ontic 122.7 86.1 208.8

2,022. 8 347.8 2,370.6

Note 1: Revenue for continuing operations only Note 2: Organic growth representing continuing operations only

2017 Final Results

BBA Aviation

Adjusted earnings per share

2017 Final Results

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Discontinued Continuing Total

2017 2016 2017 2016 2017 2016

Adjusted earnings A - 18.3 246.4 198.8 246.4 217.1

Underlying DT - 7.9 47.7 27.7 47.7 35.6

Adjusted earnings on current tax B - 26.2 294.1 226.5 294.1 252.7

IFRS weighted average number of shares C - 1,026.6 1,028.2 1,026.6 1,028.2 1,026.6

Underlying EPS A/C - 1.7c 24.0c 19.4c 24.0c 21.1c

Growth - 23.7% 13.7%

Cash EPS B/C - 2.5c 28.6c 22.1c 28.6c 24.6c

Growth - 29.4% 16.2%

BBA Aviation

Disclaimer

This presentation contains forward-looking statements including, without limitation, statements relating to: future demand and markets of the Group’s products and services; research and development relating to new products and services; liquidity and capital; and implementation of restructuring plans and efficiencies. These forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Accordingly, actual results may differ materially from those set out in the forward-looking statements as a result of a variety of factors including, without limitation: changes in interest and exchange rates, commodity prices and other economic conditions; negotiations with customers relating to renewal of contracts and future volumes and prices; events affecting international security, including global health issues and terrorism; changes in regulatory environment; and the outcome of litigation. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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2017 Final Results

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