The most important thing we build is trust ADVANCED ELECTRONIC SOLUTIONS AVIATION SERVICES COMMUNICATIONS AND CONNECTIVITY MISSION SYSTEMS Capital Markets Day – Cobham Aviation Services RAF Shawbury, 1 October 2014 Introduction Bob Murphy, Cobham Chief Executive Officer Page 1 of 75
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The most important thing we build is trust
ADVANCED ELECTRONIC SOLUTIONS AVIATION SERVICES COMMUNICATIONS AND CONNECTIVITY MISSION SYSTEMS
Capital Markets Day – Cobham Aviation Services RAF Shawbury, 1 October 2014 Introduction Bob Murphy, Cobham Chief Executive Officer
Page 1 of 75
Cobham plc Cobham plc Capital Markets Day – CEO introduction
• Aviation Services has a robust business model:
- Long term contracts and customer relationships, with good revenue visibility and significant order book
- Attractive end markets
- Differentiated capabilities and know-how
- Consistently good financial performance
- Excellent management team
• No update today on Group trading – Q3 IMS on 6 November
Welcome to RAF Shawbury Capital Markets Day
Page 2 of 75
Cobham plc Cobham plc
Timeline Provision of services has long been part of Cobham’s operating model
1948 to
1949
Cobham Supports
Berlin Airlift
1954
Flight Refuelling
Becomes a Public
Limited Company
1985
Contract win to provide Electronic
Warfare (EW) training to Royal
Navy
1934
Flight Refuelling Ltd formed 1996
FBH JV formed – wins UK Defence Helicopter Flying School Contract
2003
Acquisition of Trans Australian Air for AU$25m 2011
2013
Acquisition of outstanding 50% of FBH JV for £74m
AU$500m expanded Qantas-
Link contract, further expanded in 2013
2008
AU$1bn Sentinel Contract renewed
to 2021
2013
£200m extension of UK Operational
Readiness Training to 2019
1996
£52m
2000
£143m
2003
£180m
2008
£222m
2013
£365m
2011
£308m
2000
Acquisition of National Jet Systems in Australia for
AU$64m
Revenue growth over an extended timeframe ...
Capital Markets Day – CEO introduction
A growing business … largely built through organic investment
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Cobham plc Cobham plc Capital Markets Day – CEO introduction
Cobham Aviation Services Revenue
Cobham Group Revenue FY2013
c£1.8bn
Cobham Group Proforma Revenue
c£2.2bn
Cobham Mission Systems
Cobham Aviation Services
Cobham Advanced Electronic Solutions
* FY 2013 Revenue according to realigned Sectors, excludes non-core businesses. Proforma includes full year Aeroflex actual revenue from y/e 30 June 2013 at 2013 average FX rate and estimated full year FBH revenue annualised from H1 2014
Cobham Mission Systems
Cobham Aviation Services
Cobham Advanced Electronic Solutions
Cobham Communications & Connectivity
Cobham Communications & Connectivity
A significant proportion of the Group
Cobham Aviation Services revenue remains c20% of Group post Aeroflex
Page 4 of 75
Cobham plc Cobham plc Capital Markets Day – CEO introduction
SSA Board
Chief Executive Officer
Bob Murphy
Chief Financial Officer
Simon Nicholls
Chief Operating Officer
Global Technology Sectors
David Squires
Advanced Electronic Solutions Sector
Jill Kale
Aviation Services Sector
Peter Nottage
Communications and Connectivity Sector
Pete Raby
Mission Systems Sector
Mark Barclay
Cobham Senior Business & Finance Team
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The most important thing we build is trust
ADVANCED ELECTRONIC SOLUTIONS AVIATION SERVICES COMMUNICATIONS AND CONNECTIVITY MISSION SYSTEMS
Capital Markets Day, RAF Shawbury – 1 October 2014 Aviation Services Sector Overview Peter Nottage, Sector President
Safety is our first priority, our staff and customers are central to all we do
May I extend my personal thanks to you and your team for your flexibility and determination. With very short notice in which to generate the aircraft and aircrew, please extend my thanks to your team who worked seamlessly with my Air Department to ensure your Company was represented in the finest traditions of flying. Royal Navy [August 2014]
Replacing our turboprop services with jet services represents great value for money and will increase efficiencies as it enables us to consolidate our FIFO schedule and still travel direct to our sites with gravel runways, while increasing passenger comfort. Gold Fields Australia [June 2014]
The job of relocating a flight overseas is an enormous undertaking, a military process that can take anything from 12-18 months of very hard work. The fact that it took just 4 months from the time Commander Land Forces directed me to send 25 Flt AAC to Kenya, to the time the flight was established has been nothing short of remarkable. Joint Helicopter Command [April 2013]
Customer feedback
2013 Managing Safe Work & Fatality Prevention
OUTSTANDING CONTRACTOR AWARD
2012 Director’s Award for Environment, Health and Safety
Performance
Recognised for safety
2013 Gorgon Project
Quarantine Facilities Management Award
Capital Markets Day - Sector Overview
Snapshot of customer representation on Aviation Services’ SPIRIT Reward & Recognition Programme (2006-2014)
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Cobham plc Cobham plc
Aviation Services Goal 3 – Global reach with presence in select geographies
Presence in 10 countries with 2,500 employees
Capital Markets Day - Sector Overview Page 10 of 75
Cobham plc Cobham plc
Sector President Peter Nottage
Vice President Human Resources Steve Barrett
Vice President/ General Manager Special Mission Darren Moncrieff
Vice President/ General Manager Regional Services Ryan Both
Special Mission Commercial Aviation Rotary Wing
Vice President Finance & Enterprise Risk Matt Lang
Vice President Safety, Risk & Environment Chris McKie
Vice President Operations Ben Gower
Vice President Commercial Contracts Paul Armstrong
Vice President Sales and Business Development Jeff McCulloch
Source: Deloite Access Economics, Modelling employment demand and supply in the resources sector 2013
China
Less developed regions, excluding China
Continued urbanisation in emerging markets drives demand for energy and resources
250,000
260,000
270,000
280,000
290,000
300,000
310,000
320,000
2013 2014 2015 2016 2017 2018
Mining, Oil & Gas operations
F F F F
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Regional Services Customer value proposition
Unmatched gravel kit jet capability
Only jet freighter within curfew hours
Exceptional safety standard Bespoke service (e.g. quarantine)
Capital Markets Day - Regional Services
Innovation
Track record of high performance
Page 18 of 75
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Regional Services Capable of operating within airport night-time curfew hours
• Only jet aircraft type authorised to operate into Sydney Airport during curfew hours, protected under Sydney Airport Curfew Act 1995
• 24 hour / 7 day operations and maintenance control
• Dedicated team focused on night freight operations
Capital Markets Day - Regional Services Page 19 of 75
Cobham plc Cobham plc
Perth
Granny Smith
Regional Services Gravel-kit jets drive productivity and savings
35% faster
45% cheaper per seat
Capital Markets Day - Regional Services
“The flexibility introduced by the gravel-kitted jets removed substantial costs while increasing productivity. They delivered on their promise.” Xstrata Nickel
“Replacing our turboprop services with jet services represents great value for money and will increase efficiencies as it enables us to consolidate our FIFO schedule and still travel direct to our sites with gravel runways, while increasing passenger comfort.”
Gold Fields Australia
Page 20 of 75
Cobham plc
Regional Services Embraer 190 innovation will streamline logistics and drive savings
Capital Markets Day - Regional Services
Fuel delivered to fuel depot
in Port Headland
Decanted into airport fuel tankers
To Karratha Airport by road tanker
To Dampier Port facility by fuel truck
Loaded onto barge
Transferred into ISO-Tainers.
Barge from Dampier to Barrow Island
ISO-Tainers unloaded from barge
Trucked to Barrow Island Airport
Fuel transferred into the 200,000 lts fuel tank,
from which the airport fuel truck is filled
Fuel received at Perth facility
Fuel transferred to airport
Cobham E190 flight to Barrow Island
No fuel uplift required from Barrow Island for Cobham’s
primary aircraft services
Cobham RJ100 flight to Barrow Island & return
Cobham return flight to Perth
Current Fuel Delivery Process Future Process
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Cobham plc
• Customer-centric - Business that is relentlessly focused on customer needs
• Differentiated - Set of capabilities that are unique and deliver sustainable differentiation
• Performance - A market leading position delivering top-quartile margins
Capital Markets Day - Regional Services
Regional Services Summary
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Cobham plc 1 October 2014 Page 25 of 75
The most important thing we build is trust
ADVANCED ELECTRONIC SOLUTIONS AVIATION SERVICES COMMUNICATIONS AND CONNECTIVITY MISSION SYSTEMS
Capital Markets Day, RAF Shawbury – 1 October 2014 Cobham Aviation Services – Commercial Aviation, Airline Services
Russell Dyer, General Manager
Page 26 of 75
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Airline Services A track record of organic growth
B717 Fleet Growth
Organic growth: Five Boeing 717s delivered on time, on budget in 2013/14
Capital Markets Day - Airline Services
0
2
4
6
8
10
12
14
16
18
20
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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Airline Services Customer value proposition
Track record of high performance
Exceptional safety standard Customer service Responsiveness/Flexibility
Speed to market
Capital Markets Day - Airline Services
Cost effective
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Cobham plc Capital Markets Day - Airline Services
• Cobham offers a strong value proposition built on safety, cost effectiveness, high quality performance and flexibility
• A proven track record of delivering large project growth, highly agile market expansion, and on time performance
• A trusted partnership with Qantas for more than 20 years, the only third party trusted with the Qantas brand
Airline Services Summary
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The most important thing we build is trust
ADVANCED ELECTRONIC SOLUTIONS AVIATION SERVICES COMMUNICATIONS AND CONNECTIVITY MISSION SYSTEMS
Capital Markets Day, RAF Shawbury – 1 October 2014 Cobham Aviation Services – Special Mission Darren Moncrieff, Vice President/General Manager
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Cobham plc
Special Mission What is surveillance?
Capital Markets Day - Special Mission
Canberra
Suspected illegal entry vessel
The safe and secure transfer of information using highly-modified aerial platforms
3
1 2
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Special Mission Cobham conducts surveillance operations in two key geographies
Capital Markets Day - Special Mission
10 x Dash 8
2 x F406
1 x Dash 8 (LADS Navy)
Surveillance Fleet
2 x Dornier 228
1 x Islander
Exclusive Economic Zone
Oil Spill Response Zone
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Special Mission What is Operational Readiness Training (ORT)?
Capital Markets Day - Special Mission
Royal Navy
Electronic jamming
Royal Air Force
An advanced training solution for armed forces using leading-edge technology
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Special Mission Cobham conducts ORT in various regions throughout the world
Capital Markets Day - Special Mission
15 x Falcon 20
1 x DA42
Operational Readiness Training Fleet
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Cobham plc
Special Mission Flight inspection services & Air Traffic Control systems
Capital Markets Day - Special Mission
Airport sensors
Airport Traffic Control
The calibration and certification of flight navigation aids at airports
3 x Beechcraft King Air
1 x DA42
Flight Inspection Fleet
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Special Mission Market Trends & Opportunities
Capital Markets Day - Special Mission
Opportunity to become integrated aviation service provider in the Special Mission sector through fixed wing and rotary wing capability
Opportunity for further growth beyond western countries into other nations, including the Middle East
Opportunity to further evolve services with existing clients to introduce and support next generation technology
Continued trend to performance-based outsource contracts with monthly and hourly charges
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Cobham plc
Special Mission Customer value proposition
Capital Markets Day - Special Mission
Track record of high performance
Blend of military capabilities with commercial approach
Domain know-how
Outcome-oriented services
Cost effective
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Cobham plc
Special Mission A track record of innovation in mission platforms for surveillance
Capital Markets Day - Special Mission
Australian Defence
Force (ADF) border
surveillance started
ADF outsources
border surveillance
ADF Navy
Tracker aircraft retired
Seascan aircraft
introduced
Sentinel surveillance
contract submission
process begins
Sentinel surveillance
contract commences
Cobham introduces Surveillance Information Management (SIM) system
Evolution of operational readiness training technology
Type 23 Frigates
Upgraded with new
Radar
Cobham wins contract to
provide Electronic
Warfare (EW) training to RN
RN & RAF EW contracts merged
& 020 contract awarded 10Y, major EW pod
upgrade
Development of new
complex threat
simulator pods for RN
Development of new advanced
Digital Radio Frequency Memory
(ADRFM) pods for RN
Introduction of new CTS
pods & frequency extended
ADRFM pods for RAF
Planned introduction of
new EW capabilities with
synthetic training enhancements
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Special Mission Summary
Capital Markets Day - Special Mission
• Our objective is to retain our market-leading position and grow our footprint internationally
• We deliver outcome-orientated services at a fraction of the cost than what has traditionally been provided by government bodies
• We continue to look ahead and evolve our offerings to meet emerging technology driven requirements
• The outsourcing trend is extending to governments and militaries beyond western nations, we are focused and delivering on these opportunities
• We now have an opportunity to become an integrated aviation service provider to customers that have a requirement for both fixed and rotary wing capability
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The most important thing we build is trust
ADVANCED ELECTRONIC SOLUTIONS AVIATION SERVICES COMMUNICATIONS AND CONNECTIVITY MISSION SYSTEMS
Capital Markets Day, RAF Shawbury – 1 October 2014 Highlights Peter Nottage, Sector President
Page 41 of 75
Cobham plc Cobham plc
Customs and Border Protection Qantas Hydrographic Survey
Surveillance Operational Readiness Training
Search & Rescue Resource sector support
Oil Spill Response
Defence Helicopter Flying School
Aviation Services Long term trusted relationships, technology and know-how enabled services
Capital Markets Day - Highlights Page 42 of 75
Cobham plc Cobham plc
Commercial / Government / Military / Multiple Geographies
Aviation Services Very broad capabilities, a full service or any part thereof
REPAIR
DESIGN
INTEGRATION
CERTIFICATION MISSION
OPERATORS
AIRFIELD
MANAGEMENT
HEAVY
MAINTENANCE
LINE MAINTENANCE
REGULATORY
APPROVALS
TERMINAL
PASSENGERS
AIRCREW
OPERATIONS REPAIR
DESIGN
INTEGRATION
CERTIFICATION
OPERATIONS REAR CREW
REGULATORY APPROVALS
MISSION
OPERATORS
HEAVY
MAINTENANCE
LINE MAINTENANCE
AIRCREW
Capital Markets Day - Highlights Page 43 of 75
Cobham plc Cobham plc
Kenya in 4 months
Customer-centric
mindset
Jets into gravel runways B717 In-flight entertainment Electronic warfare pods
Catering stowage units
Dash 8 - search and
rescue capability
Mission information systems
Leveraging military UAS technology
Aviation Services A focus on innovation, a high performance customer-centric culture
Continuous improvement
Capital Markets Day - Highlights Page 44 of 75
Cobham plc Cobham plc
Aviation Services Questions
Page 45 of 75
The most important thing we build is trust
ADVANCED ELECTRONIC SOLUTIONS AVIATION SERVICES COMMUNICATIONS AND CONNECTIVITY MISSION SYSTEMS
Commercial in Confidence
Capital Markets Day, RAF Shawbury – 1 October 2014 Cobham Aviation Services – Helicopter Services Peter Richardson, Executive Director
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Cobham plc
Maintenance & modification
Training • 700 employees
• 8 countries of operation
• 40,000 flying hours per annum
• 64 aircraft owned
• Key locations: − Basingstoke, UK
− RAF Shawbury, UK
− Doha, Qatar
Critical emergency response
Capital Markets Day – Helicopter Services
Helicopter Services Snapshot
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Cobham plc
Curacao
Cyprus
United Kingdom
Brunei Trinidad
Bahrain
Kenya
Qatar
Helicopter Services Operating in select geographies worldwide
Capital Markets Day – Helicopter Services Page 48 of 75
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Helicopter Services Defence Helicopter Flying School
• Tri-service rotary wing training provision at RAF Shawbury, RAF Valley and the Army Aviation Centre Middle Wallop
• Base support services at RAF Shawbury and Army Aviation Centre Middle Wallop
Capital Markets Day – Helicopter Services Page 49 of 75
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Helicopter Services Defence Helicopter Flying School
Capital Markets Day – Helicopter Services
• Pilot/crew basic to advanced flying training
• Day/night tactical flying
• Simulator/cockpit procedures trainers
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Cobham plc
At SARTU, based at RAF Valley, we provide:
• Basic and advanced Search & Rescue training for pilots, winchmen and winch operators
• Dry and wet winching (over land and sea)
• Pilots and rear-crew supporting SARTU operations
Capital Markets Day – Helicopter Services
Helicopter Services Search and Rescue Training Unit (SARTU)
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Cobham plc Capital Markets Day – Helicopter Services
Helicopter Services AMSU and CATCS
Aircraft Maintenance and Storage Unit (AMSU)
• Over 100 aircraft in storage
• Major servicing of RAF Aerobatic Team Hawks
Central Air Traffic Control School (CATCS)
• Training of all military Air Traffic Controllers
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• Responsible for maintenance support to the British Army Lynx Training Helicopters at Middle Wallop
Capital Markets Day – Helicopter Services
Helicopter Services Base Support Services at RAF Shawbury & AAC Middle Wallop
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• 3 specially modified helicopters, with full engineering support incl. facilities
• British Army 25 Flight
• Support to Battlefield Training, including range clearance and medical/casualty evacuation
• Pilot training undertaken at Middle Wallop for Kenya and Brunei pilots
Capital Markets Day – Helicopter Services
Helicopter Services Kenya – MEDEVAC & SH Operations, Maintenance