SENIOR PLC

ANNUAL REPORT

& ACCOUNTS 2021

CONTENTS

STRATEGIC REPORT

IFC Financial Highlights

1 Our purpose

2 Group at a Glance

4 Chair’s Statement

6 Group Chief Executive Officer’s Statement

12 Sustainability

14 Environment

18 TCFD

24 Social

28 Governance

30 Our Business Model

32 Investment Case

34 Strategic Priorities

36 Our Technology Themes

38 Our Technology & Product Development

40 Stakeholder Engagement

44 Section 172 Statement

46 Key Performance Indicators

48 Risks and Uncertainties

56 Divisional Review – Aerospace

58 Divisional Review – Flexonics

60 Financial Review

64 Viability Statement

GOVERNANCE

65 Chairman’s Governance Letter

68 Board of Directors

72 Executive and HSE Committee

73 Governance and Report of the Directors

76 Nominations Committee Report

80 Audit Committee Report

87 Remuneration Report: Annual Statement

90 2021 Remuneration Report at a Glance

92 Remuneration Report: Policy

98 Annual Report on Remuneration

108 Statement of Directors’ Responsibility

109 Independent Auditor’s Report to the

Members of Senior plc

FINANCIAL STATEMENTS

116 Consolidated Income Statement

117 Consolidated Statement of Comprehensive Income

118 Consolidated Balance Sheet

119 Consolidated Statement of Changes in Equity

120 Consolidated Cash Flow Statement

121 Notes to the Consolidated Financial Statements

156 Company Balance Sheet

157 Company Statement of Changes in Equity

158 Notes to the Company Financial Statements

163 Five-year Summary

ADDITIONAL INFORMATION

164 Group Undertakings

166 Additional Shareholder Information

167 Officers and Advisers

FINANCIAL HIGHLIGHTS

Revenue

-10%

£658.7m

2020 – £733.6m

Adjusted operating margin

(1)

+40 bps

0.9%

2020 – 0.5%

Adjusted loss before tax

(2)

£(1.9)m

2020 – £(6.2)m

Proﬁt/(Loss) before tax

£23.7m

2020 – £(191.8)m

Adjusted earnings/(loss)

per share

(3)

0.17p

2020 – (0.84)p

Basic earnings/(loss)

per share

5.82p

2020 – (38.20)p

Return on capital employed

(4)

+50 bps

1.0%

2020 – 0.5%

Dividend per share

nil %

nil p

2020 – nil p

Free cash ﬂow

(5)

£14.0m

2020 – £46.5m

Net debt

(5)

£53m reduction

£153.1m

2020 – £205.9m

CDP

(climate disclosure project)

A-

Leadership rating

“Implementing best practices”

Total Carbon Dioxide Emissions

(tonnes CO

equivalent emitted)

46,540 tonnes

2020 – 46,747 tonnes

(Scope 1, Scope 2 -market based and Scope 3)

Lost time injury rate

(per 100 employees)

0.32 incidents

2020 – 0.32 incidents

Waste recylced

93%

2020 – 93%

Women in leadership

Board of Directors

50%

2020 – 43%

Executive Committee

38%

2020 – 38%

Engagement survey

(percentage of employees

completing the survey)

81%

2020 – 64% (Global Covid employee survey)

Ethics

(percentage of employees who completed

Annual Code of Conduct Training)

94%

2020 – 94%

NON FINANCIAL HIGHLIGHTS

Adjusted operating proﬁt and adjusted loss before tax are stated before £nil amortisation

of intangible assets from acquisitions (2020 – £7.7m), £4.4m net restructuring income

(2020 – £39.0m net restructuring cost) and £nil goodwill impairment and write-o

(2020 – £134.3m). Adjusted loss before tax is stated before income associated with

corporate undertakings of £21.2m (2020 – £4.6m cost). Adjusted earnings/loss per share

is stated before exceptional non-cash tax credit of £0.6m (2020 – £nil).

EBITDA is deﬁned as adjusted loss before tax, and before interest, depreciation,

amortisation, and proﬁt or loss on sale of property, plant and equipment. It also excludes

EBITDA from disposed businesses and is based on frozen GAAP (pre-IFRS 16).

This measure is used for the purpose of assessing covenant compliance and is reported

to the Group Executive Committee.

(1) Adjusted operating margin is the ratio of adjusted operating proﬁt to revenue.

Areconciliation of adjusted operating proﬁt to operating proﬁt/loss is shown in Note 9.

(2) A reconciliation of adjusted loss before tax to proﬁt/loss before tax is shown in

Note9.

(3) A reconciliation of adjusted earnings/loss per share to basic earnings/loss per

shareisshown in Note 12.

(4) See page 47 for the derivation of return on capital employed.

(5) See Notes 47 and 32c for the derivation of free cash ﬂow and of net debt

respectively.

The US Dollar exchange rate applied in the translation of revenue, proﬁt and cash

ﬂowitems at average rates for 2021 was $1.38 (2020 – $1.29). The US Dollar

exchangerate applied to the balance sheet at 31 December 2021 was $1.35

(31December 2020 – $1.37).

Cautionary statement

The Annual Report & Accounts 2021 contains certain forward-looking statements.

Suchstatements are made by the Directors in good faith based on the information

available to them at the date of this Report and they should be treated with caution

dueto the inherent uncertainties underlying any such forward-looking statements.

Our purpose is to provide

safe and innovative

products for demanding

thermal management

and ﬂuid conveyance

applications

about how we

are performing

in Aerospace

Page 56

about how we

are performing

in Flexonics

Page 58

about our

investment case

Page 32

about our

people and

culture on

Pages 12, 24,

31, 35 & 41

about the

progress we

are making on

our purpose on

Pages 4, 12,

34, 36 & 38

about our

strategic priorities

Page 34

1SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021

STRATEGIC REPORT

GROUP AT A GLANCE

Our vision is to be a trusted and collaborative high value-added

engineering and manufacturing company delivering sustainable

growth in operating proﬁt, cash ﬂow and shareholder value.

Our purpose is to provide safe and innovative products for

demanding thermal management and ﬂuid conveyance applications.

The Group aims to create long-term sustainable growth in shareholder value through a culture that

empowers operations to work autonomously and collaboratively within an eective control framework.

OUR BUSINESS DIVISIONS

66%

(2020 – 70

(1)

Civil Aircraft 37%

Military/defence

aerospace 18%

Other aerospace

division 11%

34%

(2020 – 30

(1)

Land vehicles 18%

Power and energy 16%

Aerospace

Providing high technology products and

systems for demanding applications in civil

aerospace & defence and adjacent markets.

The Aerospace portfolio spans a wide

range of ﬂuid conveyance and thermal

management components and sub-

systems, as well as complex structural

parts and assemblies, for ﬁxed-wing and

rotary aircraft, aero-engines, spacecraft

and a variety of other industrial applications.

Read more on pages 36 to 39

(1) This number excludes Senior Aerospace Connecticut

2 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021

OUR PEOPLE WORLDWIDE

North America

43%

UK and Europe

34%

Asia

20%

Rest of the world

Read more about our people and culture on page 24

Worldwide operating

businesses

Countries

Our Values set out the

principles and standards

ofbehaviour that drive

ourculture.”

David Squires

Group Chief Executive Ocer

3SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021

STRATEGIC REPORT

• we held a Capital Markets Day (“CMD”)

presented by key business and technical

leadership from across the Group to

showcase our strategies and capabilities.

It was rewarding to see the support and

engagement fromour shareholders at

the session;

• our sector-leading sustainability credentials

and actions of the Group have always been

strong and Executive driven. Progress and

drive have been sustained by the Executive

throughout thisperiod; and

• how we execute our business and the

nature of our business strategies are

interlinked and synergistic.

The Board has a very strong understanding of

the business model and its intrinsic cash ﬂows.

In the ﬁrst half of 2021, Senior encountered

corporate action in the form of a conditional

proposal from LSF XI Investments, LLC,

acompany advised by Lone Star Global

Acquisitions, Ltd. The Board, fully aware of

its ﬁduciary responsibilities, and together with

its advisers, assessed the fundamental value

of theCompany in relation to the proposals.

Havingcarefully considered the oers, the

Board unanimously rejected them on the basis

they fundamentally undervalued Senior and

its futureprospects.

The Board was able to make a unanimous

decision as we are conﬁdent that we have

astrategy that will maximise value for

shareholders and deliver its target return on

capital employed of a minimum of 13.5%

(postIFRS 16) over the medium term.

Continued recovery in the Group’s end markets,

combined with our strong operating leverage

and augmented by the beneﬁts from the

restructuring programme, are foundations of

ourconﬁdence about our prospects. Our end

markets positions, capabilities, technologies and

trusted relationships forged with our customers

enable us to help them meet today’s challenges

and deliver solutions for future low carbon

requirements. The balance sheet remains robust

and was further strengthened by the divestiture

of Senior Aerospace Connecticut. We remain a

well-capitalised Group, with intrinsically strong

cash ﬂows and businesses that have capacity

tobeneﬁt from end market recoveries.

STAKEHOLDER ENGAGEMENTS

The long-term success of the Group is

enabled by mature and progressive

engagement with all of our stakeholders.

Akey priority for the Group is ensuring

thattheir viewpoints are fully considered

when assessing the impact of our

decisions and strategies.

Pages 40 to 43 explains more on this

SUSTAINABILITY PROGRAMME

A commitment to sustainability underpins

our purpose, and is a key objective of the

Executive and the Board. Our programme

is well deﬁned and being delivered.

Our progress is measured by metrics,

targets and an annual scorecard.

Read more on pages 12 to 29 on the scorecard

and progress achieved to date.

2021 has been a challenging year,

given the external global environment

we have had to address

There are a number of aspects of the year

Iwould like to draw out:

• the performance and behaviours of the

teamhas been exemplary during this

unprecedented challenging period. Our

people and their personal safety have been

paramount in all we do;

• the restructuring, announced in 2019,

has been completed and was thoughtful,

comprehensive and incisive. No stone was

left unturned but we were careful to preserve

organisational capability for the recovery

to come. We can already see the beneﬁts

of the action on the ﬂow through margins

of the business as volumes increase;

• we tested our end markets and strategies

forthe group against reasonable assumptions.

We determined that our capabilities, market

positions and technology are applicable

tothenet zero world we are increasingly

operating within;

The Company’s strategy continues to provide

asolid foundation to support our future growth

aspirations. When looking forward across the

portfolio, our businesses manufacture highly

engineered products and systems with

applications aligned to the low carbon economy.

These are pivotal technologies for emissions

reduction and environmental eciency.

We have identiﬁed signiﬁcant current and

future opportunities for the Group in ﬂuid

conveyance, thermal management and structural

components. These capabilities continue to be

highly relevant as the world transitions towards

a low carbon economy. Our products and

capabilities are relevant today and for the

longer term.

The Board has and will continue to evaluate

andreview the portfolio within the Group. The

Defence document issued on 22 June 2021

continues to best express the Boards position.

Our performance

In 2021, the Board and the Executive team

continued to be ﬂexible and adaptive to the

dynamics the Company was facing. As in 2020,

they illustrated that they could function well

during the challenging times of the pandemic.

The decisive actions taken to manage costs

hasdelivered savings of £50m realised in 2021.

These actions have meant that we are now an

even leaner and more ecient business and

we expect to see healthy near-term operating

leverage across the Group’s operating business

as sales recover.

The Group generated a free cash inﬂow of

£14.0m. The Group balance sheet remains

robust, with adequate headroom to our

committed facilities. We have well-structured

ﬁnancing arrangements in place and supportive

lenders, who agreed appropriate covenant

relaxations to December 2021, though our

strong cash performance in 2021 meant that

wedid not need to utilise those facilities.

While Group performance in 2021 has improved

compared to 2020, it was still impacted by the

pandemic, and as such, the Board believes it is

not appropriate to pay a ﬁnal dividend for the

year. The Board are optimistic that the recovery

currently underway in our core markets will

continue and therefore we currently expect to

resume dividend payments in 2022. We will

continue to follow a progressive dividend policy

reﬂecting earnings per share, free cash ﬂow

generation, market conditions and dividend

cover over the medium term.

CHAIR’S STATEMENT

Resilient in a challenging year

4 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021

There are short- and long-term incentive

schemes that ensure the team at all levels

oftheGroup are focused on delivery of the

strategy for the beneﬁt of our stakeholders.

Short-term incentive schemes deliver the

foundation for longer-term recovery. It is

fundamentally important, given the

decentralised structure ofthe Group, that

we have an integrated and consistent set of

targets applying to all members of the schemes.

Our incentive targets are stretching, and the

longer term targets reﬂect the Board’s view

of the medium-term prospects for the Group.

Our purpose

Our purpose is to provide safe and innovative

products for demanding ﬂuid conveyance

and thermal management applications.

Our commitment to sustainability is rooted in

our core Values: it is highly complementary

to, and underpins, our purpose. As an

international, high value-added engineering and

manufacturing company, the Board recognises

the importance of adopting a market-leading

sustainability programme. We ﬁrmly believe

that our leadership in this area provides a

distinct commercial competitive advantage as

the worldtransitions to a low carbon economy.

Sustainability is an integral part of our strategy,

embedded within the behaviours of our people

and the culture of our organisation.

We provide products that operate in hard-to-

decarbonise sectors – such as aerospace,

transport and power. As an engineering

company with a strong heritage in relevant

domains created over almost 90 years,

innovation is in our DNA. We apply our

expertiseand technology across many

dierent applications, working in close

partnership withour customers, to develop

solutions thatsupportboth their commercial

and sustainability objectives.

It is this relevant engineering expertise that

hasgiven us an important role in helping

to tackle the climate change and clean air

challenge, as the world transitions to a lower

carbon economy.

In 2020 we became the ﬁrst, and remain the

only, company in our sector to have its scope 1,

2 and 3 greenhouse emissions reduction targets

approved and veriﬁed by the Science Based

Target Initiative (“SBTi”).

Amongst other sustainability successes,

in 2021, we maintained our CDP leadership

rating of A- for our climate disclosure, which

is deﬁned by CDP as “implementing current

best practices” and at the same time Senior is

described by CDP as “a trailblazer driving the

transition towards a sustainable net-zero future”.

Our Board

We have a cohesive, diverse and high

performing Board. Last year’s Board

Eectiveness review, given Celia Baxter’s

and Giles Kerr’s tenure, highlighted the need

to properly handle transition to maintain the

Board’s quality and standards. The Board felt,

recognising this, we should advance succession

planning and make sure there was more than

enough time to integrate the new Board. I am

delighted to say we are on plan with Mary and

Barbara, having joined the Board, and both

nowembracing their personal integration plans

in 2022. Celia and Giles remain fully committed

as highly valued members of the Board.

We willrecognise their contributions at the

appropriate time.

The Board has completed a comprehensive

Board evaluation during 2021. The main

recommendation centred around Board

succession, ensuring strategy form part of every

Board meeting agenda and that Directors have

good access to the Executive teams. Actions

are well underway to focus on these areas. To

ﬁnd more detail on these improvements, please

refer to page 77 in the Governance section.

The Board and I continue to focus on our

responsibility to all of Senior’s stakeholder

groups – our employees, customers, suppliers,

communities and shareholders. We believe

that engaging with our stakeholders is key to

the long-term success of the Group. Over the

course of the year, in light of the corporate

activity, our communication and engagement

with shareholders increased. This year we

invited all employees to participate in our

global employee engagement survey. We had

excellent participation and engagement, and

feedback was very positive, valuable, and

constructive. Celia Baxter, together with our

Director of HR, Jane Johnston, participated in

employee engagement focused groups with our

UK operating businesses. This engagement has

given the Board valuable insight and feedback

which will help it implement speciﬁc continuous

improvement plans across the business.

Our intention is to run this global survey

every 18months.

The Corporate Governance Report (pages 65

to108) examines how the Board sets the tone

from the top of the organisation. We continue

toensure the health, well-being and safety

of our employees is a priority and that our

operations conduct themselves with integrity

and in an ethical, sustainable and socially

responsible manner. The Group is focused on

aset of non-ﬁnancial metrics which range from

diversity, to greenhouse gas emissions, to water

consumed and how much waste is recycled

inthe businesses. The Sustainability Report

onpages 12 to 29 looks at how Senior has

achievedsigniﬁcant improvement against

our non-ﬁnancial targets in 2021.

Looking forward

Despite the ongoing challenges in 2021 and

notwithstanding near-term uncertainties in the

global economy, Senior is well placed to beneﬁt

from the recovery underway in our end markets.

The Group also has multiple opportunities to

leverage its capabilities and technology as the

world transitions to a low carbon economy

On behalf of the Board, I would like to thank all

of our people for their substantial contribution

toSenior over the last year. I would also like to

extend this to all of our stakeholders for their

continued support.

As we enter 2022, we will continue to focus

ondelivering our strategy. We remain well

positioned to deliver improved returns for

our shareholders over the medium term.

Thank you all for your support.

Ian King

Chair

The long-term success of the Group is enabled by mature

and progressive engagement with all of our stakeholders.”

Ian King

Chair

5SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021

STRATEGIC REPORT

GROUP CHIEF EXECUTIVE

OFFICER’S STATEMENT

It is heartening to see recovery

underway in our core markets including

civil aerospace and we anticipate

that continuing in 2022 and beyond.”

David Squires

Group Chief Executive Ocer

Overview of 2021 results

In 2021, Senior maintained a strong focus on

operational performance and delivered improved

proﬁtability, robust free cash ﬂow generation

and further strengthened the balance sheet.

This was despite the continued impact of the

coronavirus (COVID-19) pandemic on our

markets and customers.

With markets starting to recover, we saw order

intake increasing with a healthy book to bill ratio

of 1.16 for the Group, which underpins our

conﬁdence in a return to growth in 2022, 2023

and beyond. We announced notable contract

extensions and new contract wins including

new orders with Boeing and Honda which

help to demonstrate Senior’s reputation as a

reliable and innovative supplier to our blue-chip

customer base: attributes which are highly

valued during the uncertain times through which

we and our customers have been navigating.

In our Post-close Trading Update on 14 January

2022, we reported that, for the full year, both

Group revenue and adjusted loss before tax

were in line with management’s expectations.

Group revenue was 6% lower than the prior

year on a constant currency basis, part of

which was pre-COVID-19 and included Senior

Aerospace Connecticut (which was divested

on 22 April 2021) for the full year.

In Aerospace, revenue declined 12% year-on-

year on a constant currency basis, reﬂecting that

part of 2020 was pre-COVID and 2020 included

a full year contribution from Senior Aerospace

Connecticut. Excluding Senior Aerospace

Connecticut, revenue for the full year on an

organic, constant currency basis declined by

7%. The year-on-year decline reﬂected the

reduction in civil aircraft production rates,

partly oset by growth from semi-conductor

equipment, defence and space markets.

HIGHLIGHTS

Revenue

£658.7m

(2020 – £733.6m)

Adjusted loss before tax

£(1.9)m

(2020 – £(6.2)m)

Adjusted earnings/(loss) per share

0.17p

(2020 – (0.84)p)

In Flexonics, revenue grew 10% compared

toprior year, on a constant currency basis.

Theperformance in 2021 beneﬁted from the

recovery in heavy-duty truck and o-highway

and passenger vehicle markets, partially oset

by a decline in oil & gas and the closure of the

Senior Flexonics business in Malaysia.

We measure Group performance on an

adjusted basis, which excludes items that do

not directly reﬂect the underlying in-year trading

performance (see Note 9). References below

therefore focus on these adjusted measures.

The decisive actions taken by the Group on

managing costs in 2021 have delivered

signiﬁcant beneﬁts and improved proﬁtability.

This has helped us to generate an adjusted

operating proﬁt of £6.1m (2020 – £3.7m),

despite the reduction in Group revenue.

Savings of £50m were realised in 2021. The

Group’s adjusted operating margin increased

by 40 basis points, to 0.9% for the year.

Adjusted loss before tax reduced to £1.9m

(2020 – £6.2m loss). The adjusted tax credit was

£2.6m (2020 – £2.7m). Adjusted earnings per

share increased to 0.17 pence (2020 – adjusted

loss per share of 0.84 pence).

Reported proﬁt before tax was £23.7m

(2020 – £191.8m loss). Basic earnings per share

was 5.82 pence (2020 – basic loss per share

of 38.20pence).

Maintaining a strong focus on cash generation

throughout 2021, the Group delivered free cash

ﬂow of £14.0m (2020 – £46.5m). Our diligent

management of working capital and capital

expenditure have beneﬁted this year’s free cash

ﬂow and net debt position. Gross investment in

capital expenditure was £21.3m (2020 –

£26.8m) and the Group incurred £2.6m cash

outﬂows (2020 – £32.3m inﬂows) from working

capital. Reﬂecting the actions taken, the Group

generated net cash ﬂow of £57.7m (2020 –

£23.2m) in the year, due to free cash ﬂow of

£14.0m (2020 – £46.5m) and £43.7m cash

inﬂows (2020 – £23.3m outﬂows) primarily

related to corporate undertakings and

restructuring activity.

(1) Adjusted loss before tax is before amortisation of

intangible assets from acquisitions, goodwill

impairment and write-o, net restructuring income/

costs and corporate undertakings.

6 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021

The Group’s ﬁnancial position remains resilient,

with £208.0m of headroom on our committed

borrowing facilities at 31 December 2021.

Netdebt at the end of December 2021

was £153.1m (including capitalised leases

of £73.2m), a reduction of £52.8m from

December2020, after taking into account

favourable currency movements of £0.7m

and£5.6m increase for lease movements.

Considered and eective capital deployment is

astrategic priority for the Group and, in line with

our strategy to review the overall portfolio of our

businesses and evaluate their strategic ﬁt within

the Group, on 22 April 2021 we completed the

divestiture of our Senior Aerospace Connecticut,

USA, operating business. The net proceeds for

this divestiture were £49.7m. As previously

announced, in 2021, we closed our small oil

&gas operating business in Malaysia, Senior

Flexonics Upeca, and also our Senior Aerospace

Bosman operating business in the Netherlands

following the seamless transfer of production

from Rotterdam to our French Aerospace sites.

While Group performance in 2021 has improved

compared to 2020, it was still impacted by the

pandemic, and as such, the Board believes it is

not appropriate to pay a ﬁnal dividend for the

2021 ﬁnancial year. We are optimistic that the

recovery currently underway in our core markets

will continue and therefore, we currently expect

to resume dividend payments in 2022. We will

continue to follow a progressive dividend policy

reﬂecting earnings per share, free cash ﬂow

generation, market conditions and dividend

cover over the medium term.

Delivery of Group Strategy

Senior has a focused and compelling strategy

tomaximise value for shareholders, and is

conﬁdent of delivering its target return on

capitalemployed of a minimum of 13.5%

(postIFRS 16) over the medium term through

the following:

• a strategic focus on intellectual property

(“IP”) rich ﬂuid conveyance and thermal

management;

• organically growing our Aerostructures

business fully utilising our world class

globalfootprint;

• maintaining strong focus on eciencies

through our Senior Operating System

as endmarkets continue to recover;

• executing on its portfolio optimisation

strategy to maximise value creation; and

• driving intrinsic strong cash generation.

Senior has maintained its focus on IP-rich

technology and manufacturing, by developing

expertise in ﬂuid conveyance and thermal

management technology and capabilities.

These capabilities are supported by a strong

body of design and manufacturing process

intellectual property and know-how. Using these

technologies and capabilities, Senior is able

to develop and supply proprietary products,

sub-systems and systems for our customers’

demanding applications across a range of

diverse and attractive end markets.

Across the portfolio, our businesses

manufacture highly engineered products and

systems with applications that incorporate

pivotal technologies for emissions reduction

andenvironmental eciency. We have identiﬁed

signiﬁcant current and future opportunities

forthe Group in ﬂuid conveyance and thermal

management applications and these capabilities

continue to be highly relevant as the world

transitions towards a low carbon economy.

We have already developed novel solutions

forlow and zero carbon applications and are

involved in a range of research and development

projects that support the drive for electriﬁcation

and hydrogen propulsion systems on land and

inthe air. This is discussed further in the

“Technology and product design and

development” section below.

As well as our businesses being actively

focused on product oerings for the transition

toa low carbon world we continue to be actively

involved in making conventional technology

cleaner to bridge the gap between both worlds.

In addition, Senior’s end-markets are evolving

toreﬂect the global eort to achieve net zero

carbon emissions. Senior’s technology and

product roadmap is aligned to these trends

witha product development strategy that is

compatible with our focus on sustainability.

In addition to our ﬂuid conveyance and thermal

management capabilities, we also have excellent

build-to-print precision machining and structural

assembly capabilities. These businesses focus

on a wide range of both complex airframe and

aeroengine applications. Examples include

compressor fan blades for multiple engine types,

wing ribs for narrow-body aircraft, complex

structures assemblies for wing and fuselage,

highly engineered engine casings and complex

machined products for satellites. Our Structures

businesses are well capitalised with state-of-the-

art equipment and operate across North

America, the UK and South-East Asia.

Our strategy for our Structures businesses

aswe emerge from the pandemic is to focus

anddrive:

• ﬁlling our existing capacity;

• pursuing some further diversiﬁcation

intoSpace and Defence; and

• growing market share proﬁtably

inCivilAerospace.

We remain conﬁdent that our Aerostructures

core market will recover, driving performance

improvement and providing the Group with

strategic optionality.

7SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021

STRATEGIC REPORT

Power & Energy

• We continue to develop an established wide

range of ﬂuid conveyance products, bellows

and expansion joints for harsh environments

in carbon-free energy generation, including

solar farms, wind power plants, hydroelectric,

geothermal, fuel cell and nuclear power

applications.

• Our extensive experience of providing

ﬂuid conveyance products for demanding

environments, and, speciﬁcally, hydrogen

fuel cell cooling and conveyance, opens up

opportunities in hydrogen production and

infrastructure applications.

Portfolio optimisation

The Group actively reviews its overall portfolio

of operating businesses and evaluates them

in terms of their strategic ﬁt within the Group.

Senior has continued its “Prune to Grow”

strategy of portfolio optimisation by divesting,

closing, or combining non-core or performance-

challenged assets. Most recently in 2021 we:

• successfully raised £49.7m from the strategic

divestment of the Senior Aerospace

Connecticut helicopter structures business;

• realised value from the sale of the property

following the closure of our oil and gas

machining Senior Flexonics Malaysia facility,

which oset some of the closure costs; and

• completed the transfer of production from

the Netherlands to France and closed the

Senior Aerospace Bosman facility.

Senior understands the importance of

considered and eective capital deployment

to maximise shareholder value creation.

Expanding Senior’s high quality ﬂuid conveyance

and thermal management businesses remains

an ongoing priority. Investments are supported

by a business case and are assessed using

a rigorous investment appraisal process.

Technology and product design and

development

We continue to invest in new technology

and product development in the areas of

ﬂuid conveyance, thermal management and

Additive Manufacturing in support of our key

markets in Aerospace, Land Vehicles and

Power & Energy, as they transition towards

a low carbon economy.

Aerospace

• Our traditional ﬂuid conveyance products are

entirely compatible with sustainable aviation

fuels, the increasing use of which will be the

fastest route to lowering aviation emissions.

• Our Additive Manufacturing capabilities

are enabling advances in complex product

design for improved performance and weight

reduction for the beneﬁt of our customers.

• Our world-class capability in thermal

management and ﬂuid conveyance provides

opportunities to support the development

ofelectric/hybrid air vehicle applications.

• We are leveraging and building upon our

long experience of providing hydrogen

ﬂuid handling and distribution products for

industrial markets to support development

ofboth on-aircraft and o-aircraft hydrogen

technologies as this alternative propulsion

system evolves.

Land Vehicles

• Our current exhaust gas recirculation and

waste heat recovery products continue to

support evolving Land Vehicle propulsion

systems as they become more ecient

andlower their environmental impact.

• We focus on product oerings for the

transition to a low carbon economy and

engage with our customers’ new product

development programmes by providing

design and engineering support for cooling

and ﬂuid handling solutions for batteries

and electronics on the growing number

of electric/ hybrid vehicles.

• We are supporting the development of

commercial vehicle hydrogen fuel cell

cooling and conveyance by capitalising

on our experience of producing hydrogen

fuel cell products in the energy sector.

Restructuring

The decisive actions the Group took on

restructuring and cost management since 2019

have delivered the expected beneﬁts, with

savings of £50m realised in 2021. In 2021, net

restructuring income of £4.4m was recognised

as our operating businesses maximised

opportunities to realise income from assets

that had no alternative use.

Since its inception in 2019:

• the cumulative cost of the programme has

been £46.7m, (£6m lower than initially

expected);

• cumulative cash outﬂow has been £19.0m,

(£10m lower than expected); and

• savings delivered of £4m in 2019, £36m

in 2020 and £50m in 2021 (a year earlier

than initially expected).

These decisive actions, taken to insulate the

Group through the pandemic in 2020 and 2021

mean that we are now an even leaner and more

ecient business.

We continued to make good

progress on our

sustainability goals,

maintaining our sector

leading position.”

David Squires

Group Chief Executive Ocer

GROUP CHIEF EXECUTIVE

OFFICER’S STATEMENT

CONTINUED

8 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021

SUSTAINABILITY

Senior is a values driven organisation: we

believe with conviction that how you do

business is every bit as important as what

you do. We always put safety and ethics

ﬁrst and we strongly encourage and

promote diversity and inclusivity across our

international operations. For many years,

therefore, we have had a strong focus on

Environmental, Socialand Governance

(“ESG”). As sustainability themes and issues

become ever more important to our

stakeholder groups, our strong track record

means that we are well positioned to meet

and exceed their ESG expectations.

Our industry leading ESG disclosures and

ratings are evidence of Senior’s longstanding

approach to sustainability.

In 2021, we have again made good progress

with our key sustainability metrics

andactivities:

• Environment

– In 2020, Senior became the ﬁrst,

andremains the only, company in the

GlobalAerospace and Defence sector

tohave its Scope 1, 2 and 3 greenhouse

gas emissions targets approved and

veriﬁed through the Science-Based

Targets Initiative (“SBTi”) and in 2021,

these are now veriﬁed “Near Term

Net-Zero Targets” in line with the

updatedclassiﬁcationsystem.

– Maintained our CDP leadership rating of

A- for our climate disclosure, which is

deﬁned by CDP as “implementing current

best practices”.

– Achieved the highest CDP leadership

rating for the work with our supply chain.

Recently, Sonya Bhonsle, Global Head of

Value Chains & Regional Director

Corporations, CDP stated, “As a Supplier

Engagement Leader, Senior plc is a

trailblazer driving the transition towards

asustainable net-zero future”.

– Reduced our SBTi Scope 1 and 2 (market

based) carbon emissions by 18.9%

compared to our 2018 base year.

– 36% of our electricity was sourced from

renewable energy, an increase from 25%

in 2020.

– Recycled 93% of waste produced.

• Social

– Achieved an 81% response rate on our

global employee engagement survey in

May 2021. This response rate exceeded

the benchmark for manufacturing

companies.

– Reduced the number of lost time injuries

from 21 in 2020 to 18 in 2021. We remain

on track to meet our 2025 reduction target.

– The percentage of women on the Board

increased to 50% in 2021 from 43%

in2020.

– Donated £200,000 to UNICEF to support

its Covid-19 Vaccines appeal. Our donation

was the equivalent of providing

vaccinations for every Senior employee

and their families.

• Governance

– Updated the Group’s Code of Conduct

with a booklet issued to all employees

and provided training on it.

– Information security was a key area of

focus to safeguard the Group’s assets,

particularly as during the pandemic many

ofthe Group’s employees worked from

home. During the year, all sta received

training and regular reminders about the

risks related to information security and the

importance of awareness of matters such

as fraud, scammers and ransomware,

proper use of the internet and smart

downloading.

– Training on Anti-Money Laundering and

the Corporate Criminal Oence Act was

also rolled out to all relevant sta.

9SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2021