5493002HQHWN5JQHKQ512023-01-012023-12-31iso4217:GBP5493002HQHWN5JQHKQ512022-01-012022-12-31iso4217:GBPxbrli:shares5493002HQHWN5JQHKQ512023-12-315493002HQHWN5JQHKQ512022-12-315493002HQHWN5JQHKQ512021-12-31ifrs-full:IssuedCapitalMember5493002HQHWN5JQHKQ512021-12-31ifrs-full:SharePremiumMember5493002HQHWN5JQHKQ512021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember5493002HQHWN5JQHKQ512021-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493002HQHWN5JQHKQ512021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493002HQHWN5JQHKQ512021-12-31ifrs-full:RetainedEarningsMember5493002HQHWN5JQHKQ512021-12-31ifrs-full:TreasurySharesMember5493002HQHWN5JQHKQ512021-12-315493002HQHWN5JQHKQ512022-01-012022-12-31ifrs-full:IssuedCapitalMember5493002HQHWN5JQHKQ512022-01-012022-12-31ifrs-full:SharePremiumMember5493002HQHWN5JQHKQ512022-01-012022-12-31ifrs-full:ReserveOfSharebasedPaymentsMember5493002HQHWN5JQHKQ512022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493002HQHWN5JQHKQ512022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493002HQHWN5JQHKQ512022-01-012022-12-31ifrs-full:RetainedEarningsMember5493002HQHWN5JQHKQ512022-01-012022-12-31ifrs-full:TreasurySharesMember5493002HQHWN5JQHKQ512022-12-31ifrs-full:IssuedCapitalMember5493002HQHWN5JQHKQ512022-12-31ifrs-full:SharePremiumMember5493002HQHWN5JQHKQ512022-12-31ifrs-full:ReserveOfSharebasedPaymentsMember5493002HQHWN5JQHKQ512022-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493002HQHWN5JQHKQ512022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493002HQHWN5JQHKQ512022-12-31ifrs-full:RetainedEarningsMember5493002HQHWN5JQHKQ512022-12-31ifrs-full:TreasurySharesMember5493002HQHWN5JQHKQ512023-01-012023-12-31ifrs-full:IssuedCapitalMember5493002HQHWN5JQHKQ512023-01-012023-12-31ifrs-full:SharePremiumMember5493002HQHWN5JQHKQ512023-01-012023-12-31ifrs-full:ReserveOfSharebasedPaymentsMember5493002HQHWN5JQHKQ512023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493002HQHWN5JQHKQ512023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493002HQHWN5JQHKQ512023-01-012023-12-31ifrs-full:RetainedEarningsMember5493002HQHWN5JQHKQ512023-01-012023-12-31ifrs-full:TreasurySharesMember5493002HQHWN5JQHKQ512023-12-31ifrs-full:IssuedCapitalMember5493002HQHWN5JQHKQ512023-12-31ifrs-full:SharePremiumMember5493002HQHWN5JQHKQ512023-12-31ifrs-full:ReserveOfSharebasedPaymentsMember5493002HQHWN5JQHKQ512023-12-31ifrs-full:ReserveOfCashFlowHedgesMember5493002HQHWN5JQHKQ512023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5493002HQHWN5JQHKQ512023-12-31ifrs-full:RetainedEarningsMember5493002HQHWN5JQHKQ512023-12-31ifrs-full:TreasurySharesMember
Annual Report & Accounts 2023
Innovating today...
...enabling our tomorrow
We are
Senior
We are an international, market-leading, engineering
solutions provider with 26 operating businesses in
12 countries.
Senior's expertise in fluid conveyance and thermal
management provides safe and innovative products
for demanding applications in some of the most
challenging environments.
Strategic Report
1 Financial and Non-Financial Highlights
4 Our Purpose
6 Our Business Model
8 Group at a Glance
10 Chair’s Statement
12 Group Chief Executive Officer’s
Statement
13 Market Overview
15 Strategy and Outlook
16 Sustainability
20 Our Technology and Product
Development on the Path to Net Zero
22 Environment
25 TCFD
32 Social
37 Governance
38 Investment Case
40 Our strategic priorities
42 Technology
44 Our Technology Themes
46 Our Enabling Technology
48 Stakeholder Engagement
54 Section 172 Statement
56 Key Performance Indicators
58 Risks and Uncertainties
70 Divisional Review – Aerospace
72 Divisional Review – Flexonics
74 Financial Review
78 Viability Statement
79 Non-Financial and Sustainability
Information Statement
Governance
82 Chair’s Governance Letter
83 Board at a Glance
84 Board of Directors
87 Executive Committee
88 Board Leadership and Company Purpose
92 Division of Responsibilities
94 Composition, Succession and
Evaluation
95 Nominations Committee Report
98 Report of the Directors
100 Audit Committee Report
106 Remuneration Committee Report
106 Chair’s Annual Statement
110 2023 Remuneration Report at a Glance
111 Remuneration Report: Policy
118 Annual Report on Remuneration
128 Statement of Directors’ Responsibilities
129 Independent Auditor’s Report to the
Members of Senior plc
Financial Statements
138 Consolidated Income Statement
139 Consolidated Statement of
Comprehensive Income
140 Consolidated Balance Sheet
141 Consolidated Statement of Changes in
Equity
142 Consolidated Cash Flow Statement
143 Notes to the Consolidated Financial
Statements
184 Company Balance Sheet
185 Company Statement of Changes in Equity
186 Notes to the Company Financial
Statements
192 Five-year Summary
Additional Information
193 Group Undertakings
195 Additional Shareholder Information
196 Officers and Advisers
Fluid conveyance
Industrial
& Land Vehicle
Read more on page 2
Aerospace
& Defence
Read more on page 16
Industrial
& Land Vehicle
Read more on page 42
Aerospace
& Defence
Read more on page 80
Enabling technologies
Read more on page 136
Thermal management
1SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 1
STRATEGIC REPORT / FINANCIAL AND NON-FINANCIAL HIGHLIGHTS
Financial highlights
Revenue
+14%
£963.5m
2022 – £848.4m
Adjusted operating margin
(1)
+140bps
4.8%
2022 – 3.4%
Adjusted profit before tax
(2)
+91%
£38.3m
2022 – £20.1m
Profit before tax
+2%
£22.8m
2022 – £22.4m
Adjusted earnings per share
(3)
+136%
10.28p
2022 – 4.36p
Basic earnings per share
+55%
7.52p
2022 – 4.86p
Return on capital employed
(4)
+240 bps
7.1%
2022 – 4.7%
Dividend per share
+77%
2.30p
2022 – 1.30p
Free cash flow
(5)
-44%
£15.5m
2022 – £27.7m
Net debt
(5)
£25m increase
£203.8m
2022 – £178.9m
Non-financial highlights
CDP
(climate disclosure project)
A
2022 – A
Leadership rating “Implementing best practices”
Total Scope 1 and 2 Carbon Dioxide
Emissions
(tonnes CO
2
equivalent emitted)
40,491 tonnes
2022 – 44,878 tonnes
(Scope 1, Scope 2 – market based)
Lost time injury rate
(per 100 employees)
0.32
2022 – 0.38
Waste recycled
95.1%
2022 – 94.8%
Ethics
(percentage of employees who completed Annual
Code of Conduct Training)
95%
2022 – 94%
Women in leadership –
Board of Directors
57%
2022 – 55%
Women in leadership –
Executive Committee
38%
2022 – 29%
Adjusted operating profit and adjusted profit before tax are
stated before £2.2m amortisation of intangible assets from
acquisitions (2022 – £0.2m), £5.6m net restructuring costs
(2022 – £4.2m net income) and £0.1m site relocation cost
(2022 – £nil). Adjusted profit before tax is also stated before
costs associated with corporate undertakings of £7.6m
(2022 – £1.7m). A reconciliation of adjusted operating profit
to operating profit is shown in Note 9. Adjusted earnings
per share includes benefit of 2.54 pence from the release
of the provision for uncertain tax positions in the second
half of 2023, that will not repeat in 2024 (see Note 10 for
further details).
EBITDA is adjusted profit before tax and before interest,
depreciation, amortisation and profit or loss on sale of
property, plant and equipment. It also excludes EBITDA
from businesses which have been disposed and includes
12 months EBITDA for businesses acquired and it 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.
(2) A reconciliation of adjusted profit before tax to profit
before tax is shown in Note 9.
(3) A reconciliation of adjusted earnings per share to basic
earnings per share is shown in Note 12.
(4) See page 57 for the derivation of return on capital
employed.
(5) See Notes 32b 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 2023 was $1.24 (2022 – $1.24). The US Dollar
exchange rate applied to the balance sheet at 31December
2023 was $1.27 (31 December 2022 – $1.21).
Cautionary statement
The Annual Report & Accounts 2023 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.
2 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 20232
STRATEGIC REPORT /
Strategic
Report
EGR Cooler
Aids in reducing combustion temperatures, thereby
reducing NOx (which creates smog) and improving fuel
economy (which results in lower CO
2
). In order to meet
tightening emissions standards, EGR Coolers will be
required for diesel, natural gas and synthetic fuel internal
combustion engines.
Electronic thermal management
Thermal management of critical electronic components
is required for all new land vehicles. Newer, more
efficient vehicles require more electronic systems for
engine management and therefore need advanced
thermal management forelectronic durability.
Battery cooling plates for electric buses
Senior has designed and manufactured customised
cooling plates for the battery pack used on battery
electric powertrains, meeting stringent performance
requirements.
Developing products for
our customers today...
Thermal management: Industrial & Land Vehicle
3SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 3
STRATEGIC REPORT /
IN THIS SECTION
4 Our Purpose
6 Our Business Model
8 Group at a Glance
10 Chair’s Statement
12 Group Chief Executive
Officer’s Statement
13 Market Overview
15 Strategy and Outlook
16 Sustainability
20 Our Technology & Product
Development
on the Path to Net Zero
22 Environment
25 TCFD
32 Social
37 Governance
38 Investment Case
40 Our strategic priorities
42 Technology
44 Our Technology Themes
46 Our Enabling Technology
48 Stakeholder Engagement
54 Section 172 Statement
56 Key Performance Indicators
58 Risks and Uncertainties
70 Divisional Review – Aerospace
72 Divisional Review – Flexonics
74 Financial Review
78 Viability Statement
79 Non-Financial and
Sustainability Information
Statement
...making trucks
of tomorrow
more efficient
4 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 20234
STRATEGIC REPORT / OUR PURPOSE
Our Purpose
We help engineer the transition to a sustainable
world for the benefit of all our stakeholders.
We do this by:
Technology expertise
Using our technology expertise in fluid
conveyance and thermal management to
provide safe and innovative products for
demanding applications in some of the
most hostile environments.
Customer transition
Enabling our customers, who operate in some of
the hardest-to-decarbonise sectors, to transition
to low-carbon and clean energy solutions.
5SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 5
STRATEGIC REPORT / OUR PURPOSE
David Squires | Group Chief Executive Officer
“Our Purpose resonates
across our various
stakeholder groups.”
Climate action
Staying at the forefront of climate disclosure and
action by ensuring our own operations achieve
our Net Zero commitments.
Our Vision
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 core Values
‘The Senior Way’
Safety We operate safely, protecting people
andtheenvironment.
Integrity We operate with integrity and in an
ethicalmanner.
Customer focus We put the customer at the heart of
everything we do.
Respect and trust We work together with mutual respect
andtrust.
Accountability We do what we say.
Excellence We continually strive to do better inevery
aspect of our business.
6 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 20236
How we do it
Our strengths/differentiators
Read more about our people on page 34 and about our technology on pages 42 to 47
Organisation
• A culture of autonomous
collaboration.
• Active sharing of best
practices.
• Complementary
capabilities.
• Leverage common
customer and supplier
relationships.
• Strong Divisions provide
additional focus on growth,
performance and
governance.
Financial
• Financial strength supporting
investment and innovation for
customer benefit.
Global footprint
• 26 operating businesses in
12 countries serving a
number of markets.
• An integrated global
footprint providing
customers with market
proximity and cost
competitiveness.
People and culture
• Integrity and high ethical
standards.
• Maintaining a safe and
healthy workplace
• Empowerment of local
management, within a
well-defined control
framework.
• Ongoing investment in
personal and professional
development at all levels
throughout the business.
Innovation
• Focusing on technology
product and process
innovation to better serve our
customers and enhance our
Business Model.
Our strategic priorities
Read more about our strategic priorities on pages 40 and 41
Autonomous
and collaborative
Business Model
Senior’s Business Model
is one of empowering and
holding accountable our
businesses, operating within
a clearly defined divisional
structure, to develop and
deliver business plans in line
with overall Group strategy.
Focus on growth
We seek to outgrow our
end markets, which have
structural long-term growth
drivers, both organically and
through acquisition.
Considered and effective
capital deployment
Senior understands the
importance of considered and
effective capital deployment
in the interest of maximising
shareholder value.
High performance
operating system
Senior has implemented a
high-performance operating
system, drawing on the many
excellent practices from
across the Group, through the
Senior Operating System and
a comprehensive business
review process.
Competitive cost country
strategy
Senior has a global footprint
to ensure we stay competitive
at a capability and cost level.
In addition to our North
American and European
footprint, we have facilities in
Thailand, Malaysia, China, India,
Mexico, South Africa and the
Czech Republic which help to
ensure we meet our
customers’ cost and price
challenges whilst enhancing
returns on investment.
Sustainability
Sustainability is a fundamental
component of our strategic
approach and underpins our
Purpose. Our ongoing
commitment is to provide
products in a way that is not
only environmentally
sustainable but also contributes
to economic growth, fostering
long-term value for
shareholders through
sustainable practices.
Talent development
Senior has a skilled
workforce and highly
experienced
entrepreneurial business
leaders. We invest
continuously in technical
skills, and professional and
leadership development.
Our core Values Our culture
‘The Senior Way’
Our Values set out the
principles and standards
of behaviour that drive
our culture.
The safety and wellbeing of
our employees is a priority
in everything that we do.
In our autonomous and
collaborative Business Model,
our operational business
leaders are empowered and
accountable, and set the tone
for their operations.
The principles of openness
and transparency are
strongly encouraged and
are evident across all our
businesses.
Safety: We operate safely,
protecting people
andtheenvironment.
Integrity: We operate
with integrity and in an
ethicalmanner.
Customer focus: We put
the customer at the heart of
everything we do.
Respect and trust: We work
together with mutual respect
andtrust.
Accountability:
We do what we say.
Excellence: We continually
strive to do better inevery
aspect of our business.
STRATEGIC REPORT / OUR BUSINESS MODEL
Our Business Model
What we do
Senior designs and manufactures highly
engineered, technology-rich components
and systems for principal original
equipment manufacturers in the
worldwide aerospace and defence, land
vehicle and power & energy markets.
For the majority of original equipment
applications, revenue is recognised on
sale to customer on incoterms (with no
long-term contract accounting).
The Group has a global
footprint with
26
operating businesses located in
12
countries servicing blue-chip
customers.
Aerospace
Flexonics
Read more on pages 72 to 77
We aim to create value for all our stakeholders
through our Business Model.
Purpose
We help engineer the transition to a sustainable
world for the benefit of all our stakeholders.
Read more about how we do this on pages 4 and 5
Vision
Our Vision is to be a trusted and collaborative high
value-added engineering, manufacturing and
technology company delivering sustainable growth
in operating profit, cash flow and shareholder value.
7SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 7
How we do it
Our strengths/differentiators
Read more about our people on page 34 and about our technology on pages 42 to 47
Organisation
• A culture of autonomous
collaboration.
• Active sharing of best
practices.
• Complementary
capabilities.
• Leverage common
customer and supplier
relationships.
• Strong Divisions provide
additional focus on growth,
performance and
governance.
Financial
• Financial strength supporting
investment and innovation for
customer benefit.
Global footprint
• 26 operating businesses in
12 countries serving a
number of markets.
• An integrated global
footprint providing
customers with market
proximity and cost
competitiveness.
People and culture
• Integrity and high ethical
standards.
• Maintaining a safe and
healthy workplace
• Empowerment of local
management, within a
well-defined control
framework.
• Ongoing investment in
personal and professional
development at all levels
throughout the business.
Innovation
• Focusing on technology
product and process
innovation to better serve our
customers and enhance our
Business Model.
Our strategic priorities
Read more about our strategic priorities on pages 40 and 41
Autonomous
and collaborative
Business Model
Senior’s Business Model
is one of empowering and
holding accountable our
businesses, operating within
a clearly defined divisional
structure, to develop and
deliver business plans in line
with overall Group strategy.
Focus on growth
We seek to outgrow our
end markets, which have
structural long-term growth
drivers, both organically and
through acquisition.
Considered and effective
capital deployment
Senior understands the
importance of considered and
effective capital deployment
in the interest of maximising
shareholder value.
High performance
operating system
Senior has implemented a
high-performance operating
system, drawing on the many
excellent practices from
across the Group, through the
Senior Operating System and
a comprehensive business
review process.
Competitive cost country
strategy
Senior has a global footprint
to ensure we stay competitive
at a capability and cost level.
In addition to our North
American and European
footprint, we have facilities in
Thailand, Malaysia, China, India,
Mexico, South Africa and the
Czech Republic which help to
ensure we meet our
customers’ cost and price
challenges whilst enhancing
returns on investment.
Sustainability
Sustainability is a fundamental
component of our strategic
approach and underpins our
Purpose. Our ongoing
commitment is to provide
products in a way that is not
only environmentally
sustainable but also contributes
to economic growth, fostering
long-term value for
shareholders through
sustainable practices.
Talent development
Senior has a skilled
workforce and highly
experienced
entrepreneurial business
leaders. We invest
continuously in technical
skills, and professional and
leadership development.
Our core Values Our culture
‘The Senior Way’
Our Values set out the
principles and standards
of behaviour that drive
our culture.
The safety and wellbeing of
our employees is a priority
in everything that we do.
In our autonomous and
collaborative Business Model,
our operational business
leaders are empowered and
accountable, and set the tone
for their operations.
The principles of openness
and transparency are
strongly encouraged and
are evident across all our
businesses.
Safety: We operate safely,
protecting people
andtheenvironment.
Integrity: We operate
with integrity and in an
ethicalmanner.
Customer focus: We put
the customer at the heart of
everything we do.
Respect and trust: We work
together with mutual respect
andtrust.
Accountability:
We do what we say.
Excellence: We continually
strive to do better inevery
aspect of our business.
STRATEGIC REPORT / OUR BUSINESS MODEL
Creating value for
our stakeholders
Our employees
Ensuring Senior is a a great
place to work with inspiring
operational leadership and
a highly motivated
workforce.
Our customers
Continuously delivering
competitive products and
solutions to customers
with outstanding quality
and delivery performance.
Our suppliers
Developing reliable, ethical
and sustainable supply
chains ensuring we can
meet our customers’
requirements.
Our shareholders
Generating shareholder
value through sustainable
growth in operating profit
and cash flow.
Our communities
Actively participating and
helping to improve the
quality of life in our local
communities. Minimising
our environmental impact
through peer-leading
sustainability programmes.
Our environment
Caring for our planet by
reducing greenhouse gas
emissions, using less
water and recycling our
waste.
8 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 20238
STRATEGIC REPORT / GROUP AT A GLANCE
Group at a glance
David Squires | Group Chief Executive Officer
“Our core Values underpin our culture with
Safety and Integrity first amongst equals.”
Read more about our Values on page 6
Our people worldwide
North
America
43%
UK and
Europe
35%
Asia
19%
Africa
3%
Worldwide
operating
businesses
26
Countries
12
Read more about our people and culture on page 35
9SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 9
STRATEGIC REPORT / GROUP AT A GLANCE
Aerospace
Senior Aerospace provides high technology
products and systems for demanding applications
in aerospace & defence and adjacent markets.
Our product 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.
With a global footprint, Senior Aerospace
manufactures proprietary designed and build-to-
print products for customers around the world that
meet today’s challenges and is actively engaged in
developing products and capabilities for a low-
carbon sustainable future.
Read more about Aerospace on page 70
Fluid conveyance systems
Design and manufacture:
• High-pressure and low-pressure ducting systems (metal and
composite)
• Control bellows, sensors and assemblies
Structures
• Precision-machined airframe components and assemblies
Gas turbine engines
• Precision-machined and fabricated engine components
(rotating and structural)
• Fluid systems, ducting and control products
Read more on pages 42 to 47
64%
(2022 – 65%)
Civil Aerospace 42%
Defence 14%
Other Aerospace (Adjacent Markets) 8%
Flexonics
Senior Flexonics provides high technology
products and systems for demanding applications
in land vehicle, power & energy and adjacent
markets.
Our product portfolio spans a wide range
of fluid conveyance and thermal management
components / sub-systems, as well as complex
precision-machined parts, for conventional and
advanced land vehicle propulsion systems,
petrochemical, renewable energy and a variety of
other industrial applications.
With a global footprint, Senior Flexonics
manufactures proprietary designed and build-to-
print products for customers around the world that
meet today’s challenges and is actively engaged in
developing and supplying products and capabilities
for a low-carbon sustainable future.
Read more about Flexonics on page 72
Land vehicle emission control
• Exhaust gas recirculation coolers
• Fuel mixing and distribution systems
• Flexible couplings
Industrial process control
Design and manufacture:
• Engineered expansion joints, dampers anddiverters
• Flexible hose assemblies and controlbellows
• Fuel cells and heat exchangers
• Precision-machined components
Read more on pages 42 to 47
36%
(2022 – 35%)
Land vehicle 21%
Power & energy 15%
10 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202310
STRATEGIC REPORT / CHAIR’S STATEMENT
Chair’s statement
Ian King | Chair
“We continue to deliver what we say we will. We remain confident in
maximising value for shareholders over the medium-term.”
Stakeholder engagement
The success of the Group is enabled by mature
and progressive engagement with all 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 48 to 53 for further details
Sustainability Report
A commitment to sustainability underpins Our
Purpose and is a key objective of the Executive team
and the Board. Our programme is well defined and
being delivered. Our progress is measured by metrics,
targets and an annual scorecard.
For more information on progress and external
validation of our sustainability programme read
pages 16 to 37.
Good operational and strategic progress in the year
Overview
The geopolitical and business environment
currently is challenging for all of us but we have
a robust strategy and operate in long-term,
attractive and resilient core markets. Our
diversity of technology and product offerings
remain attractive and relevant.
As markets recover and supply chains normalise,
we will continue to see improving profitability,
whilst managing inflationary impacts through
our focus on cost and pricing management.
The operating businesses, under David and
Bindi’s leadership, have risen to the challenge
and delivered significant growth and improved
profitability during the period. Growing core
markets, evidenced by increased production
volumes in both Aerospace and Flexonics,
underpinned a Group revenue growth of 14%
and a healthy order intake. The metric of new
orders placed divided by revenue (book-to-bill)
is healthy at 1.14.
The Group’s strategy continues to be compelling
and along with our well-capitalised businesses
provides a solid foundation to support our future
growth aspirations. The integration of Spencer
Aerospace is progressing well and growth in
revenue of high-pressure hydraulic fluid fittings
has been strong in its North American home
market, over 50% year on year, with promising
progress in Europe in collaboration with their
Senior Aerospace France colleagues. The
Spencer business continues to develop under
the Senior umbrella.
What Senior offers is pivotal technologies
for emissions reduction and environmental
efficiency; capabilities that continue to be highly
relevant as the world transitions towards a
low-carbon economy. R&D investment in the
right technologies and leveraging our
engineering capabilities will ensure that we
provide solutions both today and in the future.
In October, the Company hosted a Technology
“Teach In” for investors to highlight how
working with our customers on new
technologies in fluid conveyance and thermal
management will shape our business as core
markets decarbonise in the coming decades.
This evolution is further ahead in Flexonics’
businesses given their market’s dynamics and
there are mechanisms in place to share these
innovations with our Aerospace businesses in
order to enable technological advancements
and solutions for our Aerospace customers.
We are a well-capitalised and intrinsically cash
generative Group with operating businesses
that have capacity to benefit from attractive end
markets. The Group maintains a strong financial
position and the balance sheet remains robust,
further enhanced by the recent debt raising of
$50m (in the US Private Placement market) in
February 2024.
The Board continues to actively review the
portfolio within the Group, understanding the
importance of considered and effective capital
deployment to maximise shareholder value
creation. Growing 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.
The Board is confident in our strategy and that it
will deliver enhanced value for all stakeholders.
11SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 11
STRATEGIC REPORT / CHAIR’S STATEMENT
Our performance and dividend
In 2023, the Board and the Executive team
continued to make good strategic, operational,
and financial progress. We grew strongly across
both divisions and further improved profitability
as well as growing the order book.
Group revenue increased 14% to £963.5m, with
growth in both divisions. Our adjusted operating
profit increased to £45.8m which resulted in the
Group’s adjusted operating margin increasing by
140 basis points, to 4.8%. We have made good
financial progress in the year with growth in
ROCE and earnings per share.
The Group’s financial position remains robust,
with a healthy balance sheet and period-end net
debt to EBITDA of 1.6x, after taking into account
the second tranche of consideration of $30m for
the acquisition of Spencer Aerospace.
In line with the Board’s decision in 2022 to
reinstate dividends, and reflecting confidence in
the Group’s performance, financial position and
future prospects, the Board is proposing a final
dividend of 1.70 pence per share (2022 – 1.00
pence per share). This would bring total
dividends, paid and proposed for 2023 to 2.30
pence per share. The Board 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.
Our sector leading
sustainabilitycredentials
The Board recognises the importance of
adopting a bold and comprehensive sustainability
programme. We firmly believe our Company
Purpose and our leadership in this area provide
a distinct commercial competitive advantage as
the world transitions to a low-carbon economy.
Sustainability remains an integral part of our
strategy, firmly embedded within the behaviours
of our people and the culture of our organisation.
In 2023, our Long-Term Net Zero science-based
emission reduction targets were validated by the
Science Based Targets initiative. The targets, to
be achieved by 2040, are aligned to keep global
warming to 1.5ºC, the most ambitious goal of
the Paris Agreement. We have been awarded
the top “A” score by Carbon Disclosure Project
(“CDP”), consecutively, in its global annual
ranking for transparency on climate change,
based on our disclosure in 2023.
The Sustainability Report on pages 16 to 37
explains how Senior has achieved significant
improvement against our non-financial targets
and outlines our Long-Term Net Zero targets in
more detail.
Our Board
We have a cohesive, diverse and high
performing Board working with and challenging
the Executive Leadership team to implement
the Company’s strategy. The non-executive
Directors (NEDs) continued to bring very strong,
broad, professional and complementary qualities
to the Board in 2023 and I look forward to
continue working with the Board in 2024 to
deliver long-term sustainable growth.
I am delighted that Joe Vorih has agreed to
join the Board as a NED with effect from
1January 2024. Joe’s leadership and
engineering background in complementary
industrial markets will enhance the current
Board. Joe is committed to a personal
integration plan in 2024.
The Board has completed a questionnaire-
based, externally conducted Board Performance
Review during 2023. The review concluded that
the Board had exercised strong governance and
was operating effectively. NED succession
continues to be a priority for 2024 with Susan
Brennan’s nine-years tenure at the end of the
calendar year. To find more details on the
outcome of the review and actions, please
refer to page 97 in the Governance section.
The Governance section on pages 80 to 127
explains how the Board takes the lead on
governance matters and sets the tone. We
continue to ensure the health, wellbeing and
safety of our employees is a priority and
everyone who works for Senior conducts
themselves with integrity and in an ethical,
sustainable and socially responsible manner.
Stakeholder Engagement
The Board continues to focus on our
responsibility to all of Senior’s stakeholder
groups – our shareholders, employees,
customers, suppliers and the communities
we operate in. We believe that engaging with
our stakeholders is key to the long-term
success of the Group.
In 2023, the Executive team, Group Chair, and
Chair of the Remuneration Committee (Barbara
Jeremiah), continued the Group’s engagements
with shareholders through a diverse and tailored
range of channels. This included a consultation
with shareholders on a new remuneration policy.
Please refer to page 109 in the Remuneration
Report. The impacts on employees from
inflation and cost of living increases were a
major focus in the year and the Board is
committed to treating all our people fairly.
This year we have been following up on the
actions from the 2022 Global Employee Opinion
Survey and the Group will be conducting its third
global survey in 2024. Mary Waldner, together
with our Group HR Director, Jane Johnston,
participated in 20 employee engagement focus
groups with two of our US operating businesses
and three of our UK businesses. Feedback
from the meetings was provided to local
management, the Executive Leadership team
and the Company’s Board of Directors, who
were given the opportunity to ask questions
on the findings.
The Group reviewed and discussed the
recommendations of the Parker Review during
2023 to assess equal opportunity for senior
management (executive and their direct reports).
Senior aims to achieve ethnic diversity in 30%
of managers versus the current level of 23%.
Looking forward
Our strategy and positioning in attractive
and structurally resilient core markets, combined
with our sector-leading sustainability credentials
and highly-relevant technical capabilities,
underpins our commitment to continuing
to deliver a strong performance across our
Aerospace and Flexonics Divisions, which in turn
will deliver enhanced value for our stakeholders.
We have made good strategic, operational,
and financial progress in the year and remain
confident of continuing to do so in 2024. We
are on track to drive the Group ROCE to a
minimum of 13.5% in line with our previously
stated ambition.
On behalf of the Board, I would like to thank our
employees and all other stakeholders for their
continued support.
Ian King
Chair
12 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202312
STRATEGIC REPORT / GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT
Group Chief Executive
Officer’s statement
Overview of 2023 results
Trading performance was strong with revenue
growing 14% and adjusted operating profit
growing 61% over 2022.
In 2023, Group revenue increased by 14% on a
constant currency basis to £963.5m with strong
double-digit growth across both divisions. This
year-on-year increase reflected the strength in
our core markets and our positioning on key
growth platforms across both Aerospace and
Flexonics. The Group benefited from growth in
land vehicle and power & energy markets, the
increases in civil aircraft production rates and
higher defence spending.
In Flexonics, revenue grew 18% compared to
prior year, on a constant currency basis. This
performance was driven by strong customer
demand and market share gains in land vehicle
as well as good momentum in power & energy
markets. In Aerospace, revenue increased
11.5% year-on-year on a constant currency
basis. The increase reflected ramp up in civil
aircraft production rates and growth in the
defence market more than offsetting the
reduction in sales to semiconductor equipment
customers, which is included in “Other
Aerospace” (Adjacent Markets).
For the third year running, the Group
recorded good order intake reflecting the
broad, diversified and high-quality nature of
our business. The 2023 book-to-bill ratio of 1.14
underpins our confidence in further growth in
2024 and beyond.
We measure Group performance on an adjusted
basis, which excludes items that do not directly
reflect the underlying trading performance in the
period (see Note 7). References below therefore
focus on these adjusted measures.
The Group generated an adjusted operating
profit of £45.8m (2022 – £28.5m). Adjusted
operating margin increased by 140 basis points,
to 4.8% for the year. Price increases secured
during the period helped to more than offset the
impact of continued inflationary cost increases,
including raw materials. The improved
profitability also reflected volume related
operating leverage, particularly across our
Flexonics operating businesses. In Aerospace,
trading performance has been in line with
expectations whilst absorbing the significant
impact of the Thailand supplier fire and other
supply chain issues in 2023.
As anticipated, the Aerospace supply chain
has started to improve and we expect further
progress throughout 2024. The volume of parts
shortages and specific supply chain challenges
has reduced considerably, however, there are
still some challenges on certain material and
component categories that are affecting some
of our operating businesses in common with
the whole industry.
One of the most significant supply chain
challenges in 2023 that we have previously
highlighted was the fire at one of our key
suppliers in Thailand. Our team in Thailand
proactively managed the consequences of
the fire to help customers, and the supplier
in question, to the very best of their ability.
Nonetheless the fire had a significant effect on
planned growth and performance in our Thailand
business and it was to the credit of our other
Aerospace businesses that they stepped up to
ensure we met our expectations for the Division
as a whole. Progress with the factory rebuild at
our supplier is continuing apace and should be
near completion by the end of Q1 although, as
previously advised, it will be well into the second
half of 2024 before requalification of their parts
from the new factory will allow return to normal
operations. Thereafter we are confident that
Thailand will see rapid growth as they have a
compelling value proposition that our customers
are keen to take advantage of.
The Group’s adjusted profit before tax increased
by 91% in 2023 to £38.3m (2022 – £20.1m).
This includes £3.5m benefit (2022 – £nil) from
interest unwind following a simplification of our
Americas legal entity ownership structure, that
will therefore not repeat in 2024 (see Note 10).
The adjusted tax credit for 2023 was £4.2m
(2022 – a charge of £2.0m) and includes £7.0m
benefit (2022 – £nil) from a release of provision
for uncertain tax positions, following the legal
entity simplification described above. Adjusted
earnings per share increased by 136% to 10.28
pence (2022 – 4.36 pence) and includes benefit
of 2.54 pence from the above noted release of
interest and tax provisions following the legal
entity simplification, that will not repeat in 2024.
Reported operating profit was £37.9m (2022 –
£32.5m) and profit before tax was £22.8m
(2022 – £22.4m). Basic earnings per share
increased to 7.52 pence (2022 – 4.86 pence).
The Group generated free cash inflow of
£15.5m (2022 – £27.7m) in 2023; higher
year-on-year profits were offset by increased
investment in working capital reflecting
production growth. Cash outflows from working
capital of £27.6m (2022 – £12.1m) reflected
higher receivables as a result of revenue growth
and planned investment in inventory to enable
us to meet the strong increase in demand from
our customers, as well as to mitigate ongoing
supply chain issues in Aerospace. Gross capital
expenditure was £35.9m (2022 – £30.5m)
which was 0.9x depreciation (excluding the
impact of IFRS 16). Cash interest paid, net of
interest received, was £12.9m (2022 – £9.0m)
reflecting the effect of higher borrowing costs
on variable rate debt. The Group experienced a
net cash outflow of £25.5m (2022 – £2.6m)
in 2023, due to free cash inflow of £15.5m
(2022 – £27.7m), offset by £25.8m cash
outflows related to corporate undertakings;
£6.6m dividends paid; £5.6m purchase of
shares held by the employee benefit trust; and
£3.0m net outflows related to restructuring and
the US pension settlement.
The Group’s balance sheet remains healthy with
a period-end net debt to EBITDA of 1.6x. The
headroom on our committed borrowing facilities
at 31 December 2023 was £142.4m. Net debt
at the end of December 2023 was £203.8m
(including capitalised leases of £71.8m), an
increase of £24.9m from December 2022,
after taking into account favourable currency
movements of £8.5m and a £7.9m increase
for lease movements.
ROCE increased by 240 basis points to 7.1%
(2022 – 4.7%). The continued increase in ROCE
reflects the 61% increase in adjusted operating
profit in 2023. This improvement keeps the
Group on track to deliver our stated ROCE
target of at least 13.5%.
The Board has confidence in the Group’s
performance, financial position and future
prospects, and has approved a final dividend of
1.70 pence per share (2022 – 1.00 pence). This
will be paid on 31 May 2024 to shareholders on
the register at close of business on 3 May 2024.
This brings the total dividends, paid and
proposed for 2023, to 2.30 pence per share
(2022 – 1.30 pence). We will continue to follow
a progressive dividend policy reflecting earnings
per share, free cash flow generation, market
conditions and dividend cover.
David Squires | Group Chief Executive Officer
Senior made good
operational and strategic
progress in 2023
13SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 13
STRATEGIC REPORT / GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT
Market Overview
Our core Flexonics and Aerospace markets
were strong during 2023.
Land Vehicle
Land vehicle markets experienced good
momentum in 2023 with strong growth in
Europe and India and record heavy-duty truck
production in North America.
According to Americas Commercial
Transportation (“ACT”) research, the North
American heavy-duty truck market grew by 8%
in 2023 compared to 2022 which was ahead of
their earlier expectations. ACT expects this
market to decline by 16% in 2024 reflecting a
return to more normal levels of production
before returning to growth in 2025. As stated by
S&P, European truck and bus market production
grew by 14% in 2023 and is forecast to decline
by 11% in 2024, with growth resuming in 2025.
The global commercial vehicle market is
expected to grow at low single-digit compound
annual growth rate through the cycle.
Passenger vehicle production in 2023 continued
to benefit from improving supply chains and
pent-up demand. According to S&P, European
passenger vehicle production grew by 12% in
2023 and it is forecast to decline by 3% in 2024.
Production of electric vehicles (EVs) grew by
32% during 2023, representing 12% of all new
passenger vehicles.
Power & Energy
In 2023, power & energy markets grew with
higher levels of activity in upstream oil & gas
continuing and good levels of maintenance and
overhaul. In upstream markets oil producers
sought to enhance both their existing and
future production capabilities. Investment in
exploration, appraisal and production was
high in multiple geographies.
Global oil-refining capacity grew by an estimated
2% in 2023, according to the International
Energy Agency (IEA), with most of this growth
in Africa, China and India. Capacity growth in
North America was flat.
Looking ahead demand for oil in 2024 is
anticipated by the IEA to increase by 1%, in line
with the growth in supply. Refining capacity is
anticipated to increase by 1% per annum over
the next five years. Wood McKenzie forecast
that oil consumption will peak in 2028 as
improvements in the efficiency of the global-
vehicle fleet and the adoption of EVs lead to
lower demand, while renewables and nuclear
represent a greater share of energy supply.
Civil Aerospace
Air-passenger traffic volumes continued to
recover strongly during 2023. Revenue
Passenger-Kilometres (RPKs) increased by 37%
and have now reached 94% of 2019 (pre-
pandemic) levels. Domestic passenger traffic
surpassed 2019 RPKs during the year, reaching
104% of 2019 levels, while international
passenger traffic has reached 89% of pre-
pandemic levels. Air traffic will continue to grow
driven in particular by demand in Asia-Pacific.
Both single-aisle and wide-body aircraft build
rates increased in 2023. Airbus has confirmed
that production of the A320-family of aircraft,
which represented 10% of Group sales in 2023,
are planned to move progressively to 75 per
month in 2026. On other important Airbus
platforms production of the A220 remains on
track to reach 14 per month in 2026, for the
A330 rates of 4 per month in 2024 and the
A350 a build rate of 10 per month in 2026.
Boeing has confirmed that production of the
B737-MAX, which represented 6% of Group
sales in 2023, increased from 31 aircraft a
month in H1 2023 to 38 aircraft per month by
the end of 2023. Rates will not increase beyond
this level until approved to do so by the Federal
Aviation Administration (FAA). Boeing has
previously said that they plan to increase B737
production to 50 per month over the 2025/2026
timeframe. During the pause in the expansion of
B737-MAX production, Boeing has said that
they will maintain the current master schedule,
which for some suppliers may be above rate 38
per month, to avoid disruptions to the supply
chain and support future production increases
once authorised by the FAA.
Production of the B787, currently at 5 per
month, is planned to move steadily to 10 per
month by 2025/2026, while production of the
B777X has resumed and the programme’s
timeline of reaching a build rate of 4 per month
by 2025 remains unchanged.
Defence
Senior’s sales to the defence sector are focused
primarily on the US-military aircraft market.
The Group is well placed with good content
on the F-35 Joint Strike Fighter, mature
programmes such as the C-130J and A400M
transport aircraft, Eurofighter and the newer
T-7A Red Hawk trainer programme.
Lockheed Martin has stated that they expect to
produce F-35 at a rate of 156 aircraft per annum
over the next five years.
The first T-7A advanced trainer aircraft from
the production line was delivered to the US
Air Force (USAF) in November 2023 for flight
testing. The USAF have awarded Boeing a
contract for 351 of the aircraft, with entry into
service expected in 2027.
Other Aerospace (Adjacent Markets)
Sales from our Aerospace operating businesses
into end markets outside of the civil aerospace
and defence markets are classified under “Other
Aerospace” (Adjacent Markets) and include
sales into the semiconductor equipment,
medical device and space markets.
Using our world class bellows technology,
we manufacture highly engineered proprietary
products to provide unique solutions for
semiconductor manufacturing equipment and
low-earth orbit satellites. Demand in the
semiconductor equipment market is anticipated
to remain flat during H1 2024 before beginning
to recover in the second half.
The low-earth-orbit satellite market is expected
to grow at a compound annual growth rate of
15% between 2023 and 2030 driven by
demand for high-speed and low-cost
broadband, growing advancements in satellite
network and potential uses for laser-based
space optical communications.
Land Vehicle
21% of
Group
Power & Energy
15% of
Group
Civil Aerospace
42% of
Group
Defence
14% of
Group
Other Aerospace
(Adjacent
Markets)
8% of
Group
David Squires | Group Chief Executive Officer
“Senior has delivered a year
of strong trading performance
and profit growth with
significant momentum across
our two divisions and good
growth anticipated for the
Group in 2024, in line with
our expectations.”
Revenue
£963.5m
(2022 – £848.4m)
Adjusted profit before tax
£38.3m
(2022– £20.1m)
Adjusted earnings per share
10.28p
(2022 – 4.36p)
14 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202314
STRATEGIC REPORT / GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Sustainability
Our dedication to sustainability is ingrained
in our core Values, forming the foundation of
our Purpose.
Our Environmental, Social, and Governance
(ESG) programmes are dynamic and
continually advancing. Notably, we have
earned a distinguished “A” rating from
CDP for our work during 2023 on climate
disclosure and action. In addition, we also
attained the highest leadership rating for our
2022 Supplier Engagement programme.
These achievements underscore our ongoing
commitment to sustainability, reflecting our
proactive stance in addressing environmental
challenges and fostering positive social and
governance practices.
In 2023, our ambitious Net Zero science-
based emission reduction targets received
verification from the Science Based Targets
initiative (“SBTi”).
Senior’s verified SBTi targets, using 2018 as
a base year are:
• commitment to reach Net Zero
greenhouse gas emissions across the
value chain by 2040;
• near-term, commitment to reduce absolute
Scope 1 and 2 greenhouse gas emissions
30% by 2025, and that 82% of suppliers
by spend covering purchased goods and
services and capital goods will have
science-based targets by 2025;
• commitment to reduce absolute Scope 1,
2 and 3 greenhouse gas emissions 90%
by 2040.
• SBTi’s Target Validation Team assessed
Senior’s Scope 1 and 2 Near-Term and
Long-Term Target ambitions and Scope 3
long-term ambition and has determined
that they are in line with the Paris
Agreement targets to limit global
warming to a 1.5°C trajectory.
In addition, SBTi commended Senior on the
ambition of their overall target, which is the
highest designation available through the
SBTi process.
In 2023, we have again made good
progress with our key sustainability
metrics and activities:
Environment.
• We remain on track to achieve our Scope
1, 2 and 3 Science Based Target initiative
(“SBTi”) verified Near-Term Targets.
• Verification of our Long-Term Net Zero
carbon reduction targets.
• 48% of our electricity was sourced from
renewable energy, an increase from 41%
in 2022.
• Recycled 95.1% of waste produced,
compared to 94.8% in 2022.
Social
• Following our 2022 Global Employee
Opinion Survey our operating businesses
continue to work on implementing their
action plans and communicate progress to
employees. We will run the next survey in
May 2024.
• Our Lost Time Injury Illness Rate reduced
to 0.32 in 2023, an improvement from
0.38 at the end of 2022. Our Total
Recordable Injury Illness Rate improved
from 0.93 in 2022 to 0.63 in 2023.
• Currently, 57% of the Board Directors are
female, including the Chair of the Audit
Committee, the Senior Independent
Director, who is also Chair of the
Remuneration Committee, and the Group
Finance Director. The Chair of the Audit
Committee is also the non-executive
Director with Board responsibility for
employee engagement. Two of the
Directors (29%) are from ethnic
minority backgrounds.
Governance
• The Board approved the Group’s Human
Rights Policy, demonstrating commitment
to do business in a responsible way and
respecting the human rights of our
workers and everyone we engage with.
• Introduction for 2024 of two new non-
financial performance measures (carbon
reduction and employee engagement) to
the Company’s annual bonus targets.
Further information on Senior’s sustainability
activities can be found on pages 16 to 37.
OUR SUSTAINABILITY PERFORMANCE
Environment
29.5%
Reduction in Scope 1 (Direct) and Scope 2 (Indirect)
emissions (market based) from 2018 base year
(2022 – 22%)
Waste
95.1%
Recycling rate
(2022– 94.8 %)
Diversity
57%
Percentage of women on Senior plc Board
(2022 – 55%)
15SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 15
STRATEGIC REPORT / GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Delivery of Group Strategy
Senior has a compelling strategy to maximise
value for shareholders. Our Purpose is “we help
engineer the transition to a sustainable world for
the benefit of all our stakeholders”, further
explained on pages 4 and 5.
To achieve our strategy, we will continue to:
• strengthen our strategic focus on
IP-rich fluid-conveyance and thermal-
management products;
• maintain a strong focus on lean manufacturing
and operational efficiency through our Senior
Operating System;
• execute on our portfolio optimisation strategy
to maximise value creation;
• maintain our sector leading sustainability
performance; and
• drive intrinsic strong cash generation
and deliver our stated target of at least
13.5% ROCE.
Our strategic focus and expertise in fluid
conveyance and thermal management
technology and capabilities is supported by
extensive design and manufacturing process
intellectual property and know-how. We develop
and supply proprietary products, sub-systems
and systems for our customers’ demanding
applications across a range of diverse and
attractive end markets. Our products are key
enablers of pivotal technologies which are
delivering emission reductions and
environmental efficiency and are highly relevant
as the world transitions towards a low-carbon
economy. Senior has developed novel solutions
for low and zero carbon applications. We 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 on pages 42
and 47.
As well as our businesses being actively
focused on new product offerings for the
transition to a low-carbon world, we continue
to be actively involved in making conventional
technology cleaner as part of our ‘one foot in
today, one foot in tomorrow’ approach. In
addition, Senior’s end-markets are evolving
to reflect the global effort 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
see pages 16 and 37. This strategy, along with
our well-capitalised businesses, provides a
solid foundation to support our future
growth aspirations.
Spencer Aerospace
Acquired in November 2022, the integration
of Spencer Aerospace is progressing well.
Sales grew over 50% versus prior year and
order intake underpins further strong growth
expected in 2024. In addition, Spencer
Aerospace is working collaboratively with our
French Aerospace business, Ermeto, which
has qualified hydraulic fittings for European
Aerospace customers.
Considered and effective
capitaldeployment
We understand the importance of considered
and effective capital deployment towards
maximising shareholder value creation. The
Group has a financial objective to maintain an
overall ROCE in excess of its cost of capital and
to target a minimum pre-tax return on capital
employed of 13.5% on a post IFRS 16 basis.
Our strategy of expanding Senior’s high-quality
fluid conveyance and thermal management
businesses remains a priority. All significant
investments are supported by a business case
and are assessed using a rigorous investment
appraisal process.
To maximise the Group’s operating efficiency,
overall effectiveness and returns, we actively
review our overall portfolio of operating
businesses and evaluate them in terms of
their strategic fit within the Group in order to
maximise Group operating efficiency and
optimal value to shareholders.
We continue to explore strategic options for our
Aerostructures business which includes the
potential divestment of the business.
Outlook
Overall, the Board anticipates good
growth for the Group in 2024 in line with
its expectations.
Momentum is building in our Aerospace
Division. We have achieved a diversified
position across key civil and defence aircraft
platforms and are benefiting from
increasing aircraft build rates which we
expect will lead to higher sales in 2024
and beyond. Supply chain issues are
improving as anticipated and we expect
further improvement as 2024 progresses.
Beyond this, we can expect Aerospace
performance to continue to improve in
2025 as production rates increase, supply
chain continues to improve, and additional
contractually agreed price rises take effect.
Our Flexonics Division performed well in
2023 with double-digit margins and strong
growth in both land vehicle and power &
energy. In 2024 we expect to maintain
good performance with land vehicle market
demand normalising to more typical levels
and continuing robust demand in our
downstream oil & gas business.
Looking further ahead, we remain on track
to achieve our stated Group ROCE target
of at least 13.5%. Our strategy and
positioning in attractive and structurally
resilient core markets, active portfolio
management, combined with our sector
leading sustainability credentials and highly
relevant technical capabilities, provides
confidence of continuing performance
improvements across our Aerospace and
Flexonics Divisions, enhancing value for
our stakeholders.
David Squires
Group Chief Executive Officer
16 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202316
Electronics cooling
Each new generation of aircraft utilises more and more
sophisticated electronic systems. Such aircraft utilise
high voltages and currents, and require extensive
thermal management of the various power electronics
modules to assure component life and reliability. Senior
has used our extensive experience of thermal
management systems to develop high efficiency
heatsinks and bespoke cooling plates for a variety
of aerospace electronics applications.
Heat exchangers
Heat exchangers are a core component of several aircraft
and aero-engine subsystems – ranging from maintaining
lubricating oil temperature to cooling pressurised air in
between compressor stages. Senior is developing the
capability to design and manufacture heat exchangers,
both with conventional fin-type designs as well as
new high-efficiency designs made via additive
manufacturing methods.
Battery compartment thermal management
Senior has leveraged its significant experience in the
development of thermal management systems for
land-vehicle applications into new-generation aircraft
propulsion systems. As an example, Senior has worked
with a leading e-VTOL manufacturer to develop venting
systems to mitigate thermal runaway in large-capacity
battery compartments on a development UAM.
STRATEGIC REPORT / SUSTAINABILITY
Sustainability
Developing innovative
technology today...
Thermal management: Aerospace
17SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 17
STRATEGIC REPORT / SUSTAINABILITY
IN THIS SECTION
20 Our Technology and Product
Development on the Path to
Net Zero
22 Environment
25 TCFD
32 Social
37 Governance
...to help customers
save weight and
become more fuel
efficient tomorrow
18 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202318
STRATEGIC REPORT / SUSTAINABILITY CONTINUED
Sustainability
Mark Roden | Group Director of HSE &
Sustainability
“ Our sustainability programmes
continued to develop in 2023.
Highlights included the
verification of our Net Zero 2040
carbon reduction targets by SBTi
and our “A” rating for climate
disclosure from CDP.”
Environment
29.5%
Reduction in Scope 1 (Direct) and Scope 2 (Indirect)
emissions (market based) from 2018 base year
(2022 – 22%)
Waste
95.1%
Recycling rate
(2022 – 94.8%)
Diversity
57%
Percentage of women on Senior plc Board
(2022 – 55%)
Our sustainability framework
Environment Social Governance
Our sustainability
framework reflects our
core Values including
safety, the highest ethical
standards and care for the
environment.
We believe this framework
and the high standards we
set, helps us to attract,
develop and retain the
right people, and thatthis
is fundamental to our
long-term success.
We have talented, committed
people with the right skills
and experience across our
businesses, and we continue
tosupport the personal and
professional development
of our staff.
SUSTAINABLE
PRODUCTS
Support our customers in
developing products that
help reduce the impact
on the environment.
ENVIRONMENTAL
FOOTPRINT
Carbon
Overall Net Zero Target
• Senior Plc commits to
reach Net Zero GHG
emissions across the
value chain by 2040 from
a 2018 base year.
Near-Term Target
Read more on page 21
Long-Term Target
Read more on page 21
Waste
• Achieve 95% recycling
rate by 2025.
Water
• Limit the environmental
impact of our production
processes through the
efficient use of water.
HEALTH & SAFETY
Reduce Lost Time Injury
Rate to 0.3 by 2025
DIVERSITY &
INCLUSION
Develop greater
diversity and inclusion
within the Group
PEOPLE & CULTURE
Create a working
environment that enables
our employees to achieve
their full potential
EMPLOYEE WELLBEING
Support physical and mental
health of employees. Create
the environment that leads to
ahighly engaged workforce
COMMUNITY
INITIATIVES
Bring positive change to
the communities in which
weoperate
UPHOLD HIGH
STANDARDS OF
ETHICALINTEGRITY
Bribery & Corruption
Ensure our policies and
practices deliver the highest
standards of integrity,
avoiding the possibility of
bribery andcorruption
Human Rights
Uphold international
standards on human rights
Modern Slavery
Prevent slavery and human
trafficking in the Group’s
activities and its supply
chain
Responsible Sourcing
Promote the use of
responsible practices with a
supply chain
Responsible Taxation
Fully comply with the tax
laws, regulations and
disclosure requirements in
the countries we operate in
Whistle-blowing
Encourage the reporting
of wrongdoing in the
organisation
CYBERSECURITY &
DATA PROTECTION
Reduce the risk
of cyber attacks and
ensure protection of
all confidential data
PRODUCT SAFETY
Ensure that Senior products
are certified to the required
International Standards
19SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 19
STRATEGIC REPORT / SUSTAINABILITY CONTINUED
Senior achieves SBTi
Net Zero 2040 approval
Our ambitious Net Zero (2040)
science-based emission reduction
targets have been validated by the
Science Based Targets initiative
(“SBTi”).
The validation highlights Senior’s
leading position in climate disclosure
and action.
Our validated targets;
• Overall Net Zero Target; Senior
commits to reach Net Zero GHG
emissions across the value chain
by 2040 from a 2018 base year.
• Near-Term Targets; Senior
commits to reduce absolute Scope 1
and 2 GHG emissions 30% by 2025
from a 2018 base year. Senior also
commits that 82% of its suppliers by
spend covering purchased goods
and services and capital goods will
have science-based targets by 2025.
• Long-Term Targets; Senior
commits to reduce absolute Scope
1, 2 and 3 GHG emissions 90% by
2040 from a 2018 base year.
*SBTi is a global body enabling businesses
to set ambitious emissions reductions
targets in line with the latest climate
science.
Senior achieves climate
CDP “A” rating in 2023
Based on data reported through CDP’s
2023 Climate Change questionnaire,
Senior is one of a small number of
companies that achieved an “A” out
of over 21,000 companies rated.
Our approach to climate transition planning
SENIOR
APPROACH
TO TRANSITION
PLANNING
Decarbonising
Senior
Climate-
related
risks &
opportunities
Economy
wide
transition
Economy wide transition
Our fluid conveyance and
thermal management
technology allows us to
support our customers with
high-value solutions in the
medium and long-term as
they transition to sustainable
technologies
Decarbonising Senior
Senior commits to reach Net
Zero GHG emissions across
the value chain by 2040 from
a 2018 base year.
Climate-related risks
& opportunities
Climate change has been
reported as one of the
Group’s principal risks since
2019. In 2023, we performed
our annual assessment of
climate-related risks and
opportunities taking into
consideration legislative
frameworks on climate
change, expectations from
regulators and market
stakeholders, changes in
weather patterns as well as
the latest technological trends
related to climate change.
20 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202320
STRATEGIC REPORT / SUSTAINABILITY CONTINUED
Our technology and
product development
on the path to Net Zero
Aerospace
Observation
The latest generation aero-engine
technology can deliver up to 15%
fuel-efficiency improvements.
Urban Air Mobility (UAM)
operators planning to start
operations from 2024, but
widespread acceptance
unlikely before2030.
Our response
We have, and continue to win,
significant content on systems
critical to fuel efficiency on
current best-in-class engines.
We are working with
multiple UAM providers on
prototype solutions for thermal
management solutions.
Observation
The US aims to supply ≥3 bn
gallons of sustainable aviation
fuels (“SAFs”) per year by 2030.
The EU’s policy objective is for
SAF to be >5% of aviation fuels by
2030 while planning to end free
CO
2
credits (aviation allowances)
for airlines by 2027.
Our response
Our current fluid conveyance and
structural components solutions
are fully compatible with SAFs.
We are collaborating with
multiple customers on various
components and systems for
more-electric aircraft, whether
with conventional or zero-
emission propulsion systems.
Observation
Alternative-powered aircraft will
increase demand for ourbattery
thermal management, fuel cell
andcryogenic expertise.
AirbusZEROe H2 aircraft
planned for service in 2035.
Our response
Our Aerospace and Flexonics
divisions are working together
to develop various demonstrator
hydrogen powertrain components
forOEM customers.
Bleed air duct Inverter heat sink
Double-wall
liquid-hydrogen
ducting
Land vehicle
Observation
The California Air Resources
Board requires 82.5% NOx
reductions by 2027. EURO VII
standards to be introduced
in 2025.
Semiconductor content in cars
is increasing, especially in EVs.
The US passed the CHIPS act
to secure supply, EU/India are
implementing similar plans.
Our response
Our emissions controls products
help vehicle manufacturers meet
increasingly stringent regulations,
such as the radial-fin EGR cooler
for EURO-VII compliant diesel
engines.
We are a key supplier to
semiconductor equipment
manufacturers.
Observation
The US EPA will tighten emissions
rules countrywide from 2027.
Major car markets are
implementing a COP26
agreement to ban new
fossilfuel cars by 2035.
Our response
We have patented solutions for
electric vehicle (EV) inverter heat
sinks (power electronics cooling),
as well as battery thermal
management systems.
We are developing fuel (H2)
and exhaust water ducting
solutions for hydrogen fuel-
cell truck applications.
Observation
27 countries have committed to
100% zero-emission new truck
and bus sales by 2040.
Our response
We are developing very high
pressure hoses capable of
1000bar (40% higher than
current capacity) for high
speed H2 refuelling.
We are in series production
of battery coolers, and have
won multiple contracts for fluid
conveyance applications on BEVs.
Radial-fin EGR
cooler design
Fuel inlet piping for
H2 fuel-cell truck
application
Battery-cooling
plate for heavy-duty
on-road vehicles
Power & energy
Observation
Nuclear is increasingly seen
as vital for a low-carbon future.
The European Parliament
voted to classifynuclear
as agreeninvestment.
World leaders have agreed
to transition away from fossil
fuels at COP28.
Our response
We are providing engineering
design and bid support for
expansion joints to OEMs of Small
Modular Reactors (“SMR”).
Our flue gas diversion products
are mitigating climate impact of
conventionalenergy.
Observation
The EU increased its renewables
target to ≥45% ofenergy mix
by 2030.
The US eyes 100% carbon
pollution-free electricity by2035.
Our response
Energy storage applications will
grow in importance as renewable
energy sources grow to be the
dominant mode of generation.
Senior is already working with
energy storage companies to
develop thermal management
solutions for this sector.
Carbon capture is another area
where we are working with
OEMs to develop solutions.
Observation
The IEA forecasts that under its
Announced Pledges Scenario
solar and wind power generation
will grow by >3x from 2021 to
2050 (~4% CAGR)
Ensuring stable power supply for
critical infrastructure such as data
centres will be important.
Our response
We continue to support our
customers in their sustainability
journey by providing solutions for
wind and solar power generation.
We have extensive experience in
land-based solid oxide fuel cell
(“SOFC”) components used in
backup power units for data
centres. We are also applying core
thermal management and fluid
systems expertise to electrolysers
for hydrogen generation.
Large expansion
joint for power
generation
application
Atmospheric Carbon
Capture system
Electrolyser system
(Source: Cummins)
20302020
Delivering sustainable solutions
As the world transitions to a low-carbon
economy, Senior continues to work with our
customers developing efficient and effective
products that are more sustainable and have
lower environmental impact during the
manufacture process and in use.
Our success is built on developing
long-term partnerships with our customers,
which enable us to help them meet today’s
challenges and deliver solutions for future low
21SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 21
STRATEGIC REPORT / SUSTAINABILITY CONTINUED
2040 2050
carbon requirements. An example of this is
our work to provide customers with more
energy efficient solutions on existing internal
combustion technologies while simultaneously
helping these same customers bring to market
efficient and viable electric and hydrogen
power trains.
We have continued to reduce our carbon
emissions (market based Scope 2) using
more renewable energy and more sustainable
production methods and materials wherever
possible. Reducing waste and the consumption
of electricity and water during the manufacturing
of the products remains a key focus. In 2023 we
achieved a waste recycling rate of 95.1%. With
operations in 12 countries, we are also able to
be geographically close to major customers
which helps to minimise the carbon footprint
of our products.
Aerospace
Observation
The latest generation aero-engine
technology can deliver up to 15%
fuel-efficiency improvements.
Urban Air Mobility (UAM)
operators planning to start
operations from 2024, but
widespread acceptance
unlikely before2030.
Our response
We have, and continue to win,
significant content on systems
critical to fuel efficiency on
current best-in-class engines.
We are working with
multiple UAM providers on
prototype solutions for thermal
management solutions.
Observation
The US aims to supply ≥3 bn
gallons of sustainable aviation
fuels (“SAFs”) per year by 2030.
The EU’s policy objective is for
SAF to be >5% of aviation fuels by
2030 while planning to end free
CO
2
credits (aviation allowances)
for airlines by 2027.
Our response
Our current fluid conveyance and
structural components solutions
are fully compatible with SAFs.
We are collaborating with
multiple customers on various
components and systems for
more-electric aircraft, whether
with conventional or zero-
emission propulsion systems.
Observation
Alternative-powered aircraft will
increase demand for ourbattery
thermal management, fuel cell
andcryogenic expertise.
AirbusZEROe H2 aircraft
planned for service in 2035.
Our response
Our Aerospace and Flexonics
divisions are working together
to develop various demonstrator
hydrogen powertrain components
forOEM customers.
Bleed air duct Inverter heat sink
Double-wall
liquid-hydrogen
ducting
Land vehicle
Observation
The California Air Resources
Board requires 82.5% NOx
reductions by 2027. EURO VII
standards to be introduced
in 2025.
Semiconductor content in cars
is increasing, especially in EVs.
The US passed the CHIPS act
to secure supply, EU/India are
implementing similar plans.
Our response
Our emissions controls products
help vehicle manufacturers meet
increasingly stringent regulations,
such as the radial-fin EGR cooler
for EURO-VII compliant diesel
engines.
We are a key supplier to
semiconductor equipment
manufacturers.
Observation
The US EPA will tighten emissions
rules countrywide from 2027.
Major car markets are
implementing a COP26
agreement to ban new
fossilfuel cars by 2035.
Our response
We have patented solutions for
electric vehicle (EV) inverter heat
sinks (power electronics cooling),
as well as battery thermal
management systems.
We are developing fuel (H2)
and exhaust water ducting
solutions for hydrogen fuel-
cell truck applications.
Observation
27 countries have committed to
100% zero-emission new truck
and bus sales by 2040.
Our response
We are developing very high
pressure hoses capable of
1000bar (40% higher than
current capacity) for high
speed H2 refuelling.
We are in series production
of battery coolers, and have
won multiple contracts for fluid
conveyance applications on BEVs.
Radial-fin EGR
cooler design
Fuel inlet piping for
H2 fuel-cell truck
application
Battery-cooling
plate for heavy-duty
on-road vehicles
Power & energy
Observation
Nuclear is increasingly seen
as vital for a low-carbon future.
The European Parliament
voted to classifynuclear
as agreeninvestment.
World leaders have agreed
to transition away from fossil
fuels at COP28.
Our response
We are providing engineering
design and bid support for
expansion joints to OEMs of Small
Modular Reactors (“SMR”).
Our flue gas diversion products
are mitigating climate impact of
conventionalenergy.
Observation
The EU increased its renewables
target to ≥45% ofenergy mix
by 2030.
The US eyes 100% carbon
pollution-free electricity by2035.
Our response
Energy storage applications will
grow in importance as renewable
energy sources grow to be the
dominant mode of generation.
Senior is already working with
energy storage companies to
develop thermal management
solutions for this sector.
Carbon capture is another area
where we are working with
OEMs to develop solutions.
Observation
The IEA forecasts that under its
Announced Pledges Scenario
solar and wind power generation
will grow by >3x from 2021 to
2050 (~4% CAGR)
Ensuring stable power supply for
critical infrastructure such as data
centres will be important.
Our response
We continue to support our
customers in their sustainability
journey by providing solutions for
wind and solar power generation.
We have extensive experience in
land-based solid oxide fuel cell
(“SOFC”) components used in
backup power units for data
centres. We are also applying core
thermal management and fluid
systems expertise to electrolysers
for hydrogen generation.
Large expansion
joint for power
generation
application
Atmospheric Carbon
Capture system
Electrolyser system
(Source: Cummins)
Net Zero
22 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 20232222
STRATEGIC REPORT / SUSTAINABILITY / ENVIRONMENT
Progress towards our certified Science
Based Targets
Scope 1 and 2 carbon emissions
Scope 1 emissions are greenhouse gas
emissions released directly from a business ,
this includes natural gas combustion, owned
transport and refrigerant use.
Scope 2 emissions are indirect GHG emissions
released from energy purchased by an
organisation, principally electricity.
We continue with our carbon reduction
programme, increasing energy efficiency, on
site renewable generation and the sourcing of
low-carbon electricity where available.
In 2022 we introduced our energy hierarchy;
the aim was to focus on energy efficiency as
well as reducing our overall carbon emissions.
Our businesses have focused on improving
energy management and monitoring as well
as upgrading plant and equipment with more
energy efficient alternatives.
As a result of this in 2023:
• gas usage decreased by 11.9%
• electricity usage decreased by 3.1%
• total energy usage decreased by 5.4%
• we increased our sourcing of low-carbon/
renewable electricity.
• extended our on-site solar generation
with a facility in the Czech Republic (Thailand,
Malaysia and our India operating businesses
have existing solar photovoltaics (PV)).
We remain ahead of our 2025 Near-Term
Science Based Target
• 10% reduction in total Scope 1 and 2
emissions (market based) in 2023
compared to 2022.
• 29.5% reduction in Scope 1 and 2 emissions
compared to our 2018 baseline. 15% reduction
in Scope 2 emissions in 2023 (market based)
compared to 2022.
• 48% of our electricity sourced from
renewable supply (41% in 2022).
Scope 3 emissions
Scope 3 emissions are the result of activities
from assets not owned or controlled by Senior,
emissions of carbon outside of Scope 1 and 2
which Senior indirectly affects in the value chain.
In order to reduce Scope 3 emissions, we know
that it is vital to engage with our supply chain as
purchased goods and capital goods are our
major sources of Scope 3 emissions.
Since 2021, in partnership with CDP, we have
been working constructively with our suppliers,
following best practices, to achieve our Scope 3
(supplier engagement) SBTi target.
Environment
2010
First submission to the Carbon
Disclosure Project
2015
Launch of “20/20 Vision for
Sustainability” including adopting
climate targets for carbon intensity,
waste recycling and water usage
2020
“20/20 Vision for Sustainability”
climate targets achieved
2020
July
Scope 1, 2 and 3 targets approved by
the SBTi
2020
Dec
Gap analysis undertaken to assess the
Company’s alignment to TCFD
recommendations and to identify
areas for improvement
2021
July
Re-assessment of climate-related
risks andopportunities
2021
Sept
Scenario analysis undertaken
2021
Dec
Senior’s 2021 CDP score
A-“Implementing current best
practice” Senior achieves “Supplier
Engagement Leadership Status”
fromCDP
2022
Develop our Long-Term Net Zero
Targets
2022
July
Submit application to SBTi for
verification of our Long-Term Net Zero
Targets
2022
Dec
Senior achieves “A” rating for Climate
Disclosure
2023
Net Zero 2040 Targets approved by
the SBTi
2024
Jan
Senior achieves “A” rating for
Climate Disclosure
The route to Net Zero
Senior has verified targets to achieve
Net-Zero by 2040
In 2023
48%
of our electricity was sourced from renewable
energy, an increase from 41% in 2022
Senior energy hierarchy
TRANSITION FROM
GAS TO RENEWABLE
RENEWABLE/LOW
CARBON ENERGY
PROCUREMENT
ON-SITE RENEWABLE
ENERGY
REDUCE ENERGY
CONSUMPTION
Supplier engagement
In 2023, we were awarded
“A” for our efforts in the CDP
supplier programme, the
highest rating awarded to
only the most committed
companies who are
dynamically working across the supply
chain to reduce greenhouse gas emissions.
Scope 3 Emissions Progress
Our continued work on the supplier base
continues to be succesful with an increase
of 14% in our supplier participation rate:
• in 2021, 94 of our suppliers provided data
to us;
• in 2022, we had a response rate of
160 suppliers; and
• in 2023 we have been successful
inincreasing our response to
182suppliers.
This has been achieved through increased
contact and support with our supply base.
We hosted a number of Webex meetings,
some alongside our partners in CDP as well
as assisting with carbon calculations with
some smaller suppliers.
We continue our focus on improving our
engagement with suppliers; many of them
are new to climate-related disclosures and
targets. We are working with CDP to fully
assess the targets reported by our suppliers
to effectively measure their alignment with
the core principles of SBTi. We will use this
data to disclose progress in meeting our
approved Supplier Engagement target
infuture.
14%
Increase in supplier responses in 2023 compared
to 2022
23SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 2323
STRATEGIC REPORT / SUSTAINABILITY / ENVIRONMENT
Scope 1 and 2 market based emissions
Carbon emissions
(measured as tonnes ofCO
2
e)
Scope 1
Scope 2
Electricity +
District Heating
(market based) Total
2018 10,414 47,0 0 4 57,418
2019 10,378 46,614 56,992
2020 8,731 38,016 46,747
2021 8,445 38,095 46,540
2022 8,629 36,249 44,878
2023 9,701 30,790 40,491
Note: The Scope 1 and 2 emissions
Location Based andMarket Based (FY22)
are independently verified in accordance
with the International Standard on Assurance
Engagements ISAE3410 (limited assurance).
Carbon emissions
In Compliance with Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 –
Streamlined Energy and Carbon Reporting (“SECR”)
1 Jan 2023 to 31 Dec 2023 1 Jan 2022 to 31 Dec 2022
UK and
Offshore
Global
excluding UK
and Offshore Total
UK and
Offshore
Global
excluding UK
and Offshore Total
Scope 1: Combustion of fuel and operation of facilities 1,122 8,579 9,701 1,224 7,405 8,629
Scope 2: (location based) Electricity, heat and steam
purchased for own use 2,264 39,473 41,737 2,15 9 39,550 41,709
Scope 2: (market based) Electricity + District Heating 0 30,790 30,790 1,085 35,107 36,249
Total gross Scope 1 and 2 (location based) emissions/
tCO
2
e 3,387 48,051 51,438 3,383 46,955 50,338
Energy consumed in MWh to calculate above emissions 16,309 130,610 146,919 17,19 8 138,029 155,227
Scope 3: Business travel, waste, water 238 2,226 2,464 103 1,995 2,098
Total Gross emissions/tCO
2
e (Scope 1, Scope 2 location
based, Scope 3 ; Business travel, waste, water) 3,625 50,278 53,902 3,486 48,950 52,436
Intensity measure tonnes CO
2
emitted per £m of revenue 21 64 56 25 69 62
Water usage (in megalitres) 32 228 260 32 235 266
Percentage of waste recycled or recovered 100% 94.5% 9 5.1% 100% 94% 94.8%
Methodology
The Group’s approach to calculating and reporting
our GHG emissions follows the GHG Protocol on
how to measure and monitor GHG emissions. Three
data sources are used to calculate GHG emissions:
1. UK Government GHG Conversion factors for
company reporting (DEFRA full set for advanced
users 2023).
2. US EPA (eGRID) Emission factors for greenhouse
gas inventories for US electricity generation
(2023 Version).
3. IEA (International Energy Agency) Emission
factors year 2023 Edition. Reporting has
incorporated Scope 2 greenhouse gas emissions
(associated with electricity consumption)
calculated using both the Location and
Market-based methods. Data for the market
based, utility emission rates has been collated
during the period December 2023 – January
2024, as best available information to represent
the emissions during the year. It should be noted
that these vary and are periodically updated, so
are representative of our best endeavour to
determine market-based emissions at the
time of collating data for this report.
Each Senior business reports its environmental
performance monthly using the Group’s financial
reporting process.
The Scope 1 and 2 emissions Location Based
and Market Based (FY23) are independently
assured in accordance with the International
Standard on Assurance Engagements ISAE 3410
(limited assurance).
In calculating GHG emissions, the Group has
used the control approach and more specifically the
financial control approach under which a company
accounts for 100% of the GHG emissions from
operations over which it has control. This covers
all wholly owned operations and subsidiaries of
the Group for financial reporting purposes.
Limited Scope 3 emissions are reported in the table
above, they are not externally verified at the time of
publication of this Annual Report and Accounts. A
full disclosure of the 2023 Scope 3 emissions,
externally verified, will be made publicly available
within our CDP Climate Change later in 2024.
Total waste includes the reported production
and non-production-related hazardous and
non-hazardous solid, sludge and liquid materials
(including wastewater since 2019) that is sent off
site for disposal, treatment, reprocessing, recycling
or reuse by others. Waste materials do not include
by-products or scrap from a Senior business
process which are re-used in a production process.
Similarly, waste that arises from construction and
other maintenance/remediation work performed by
third party contractors are not included in the scope
of reporting where the contractor is responsible for
the disposal of the waste. DEFRA conversion
factors are used worldwide for waste data as
means to determine a reasonable carbon
conversion factor.
Water volumes are obtained from meter
readings and from supplier invoices. All water
consumption is converted to megalitres, carbon is
derived using recognised and appropriate DEFRA
conversion factors.
For vehicle and air mileage, Senior uses the most
applicable DEFRA conversion factors to calculate
the carbon based on distance travelled.
29.5%
reduction in total Scope 1 and 2 emissions from our
2018 baseline
We remain on track to achieve our
30%
SBTi reduction target by 2025
24 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202324
STRATEGIC REPORT / SUSTAINABILITY / ENVIRONMENT CONTINUED
Energy efficiency actions
In the reporting year we have
implemented energy efficiency projects
across our global operating businesses.
In total, Senior’s environmental
improvements have the potential to
reduce annual GHG emissions by 340
tonnes of CO
2
e.
These environmental improvements include
improving the energy efficiency in buildings,
including insulation, heating, ventilation and
air conditioning improvements, as well as
further installation of LED lighting. Senior
has also looked carefully at energy efficiency
in production processes, including machine/
equipment replacement and compressed
air efficiency and heat recovery.
Several Senior operating businesses have
implemented energy monitoring software
systems to give granular insights into energy
consumption trends within the plant. This
enables plants to drill down into energy
consumption by service usage categories
(gas, electricity and water) and check against
baseline comparisons and cost impact using
a dashboard. Plants can also detect energy
anomalies and investigate when identified.
Senior has set out its year 2025 plan and is on
target to reduce Scope 1 and 2 emissions by
30%. Key to achieving this year 2025 target is
the further purchase of renewable electricity
supply/contracts.
All of Senior’s UK operating businesses and
our corporate office have now contracted into
the supply of 100% renewable electricity,
avoiding over 2,200 tonnes of GHG
emissions annually.
One of our USAs operating businesses
continues to purchase 100% renewable
electricity and a further business in the
US has increased their renewable energy
contract from 25% to a 50% renewable tariff.
Other Senior operating businesses continue
to make progress to achieving renewable
energy contracts.
We continue to invest in solar PV – one
European business has installed a solar PV
system late in 2023 with the ability to reduce
GHG emissions by 50 tonnes. With this latest
addition, the total number of our businesses
equipped with on-site solar photovoltaic (PV)
systems now stands at four.
Water Waste Certification
Objective: our primary goal is to
minimise the environmental impact of
our production processes by optimising
water usage, especially in regions facing
high water scarcity.
Recognising the escalating strain on
freshwater reserves, we are proactively
exploring regions experiencing water
scarcity and evaluating strategies to reduce
freshwater consumption in these areas.
Leveraging tools such as the World Wide
Fund for Nature (“WWF”) water filter, we
identify businesses situated in water-scarce
regions to target our efforts effectively.
For information on water, please see
www.seniorplc.com/sustainability
Objective: 95% recycling rate by 2025.
To increase the amount of waste that is
recycled on site and provide efficient ways
to recycle the waste that is produced.
With continued progression with business
level actions to increase our overall recycling
rate, we have achieved a recycling rate of
95.1% in 2023, an increase from 94.8%
in 2022.
For information on hazardous waste, please see
www.seniorplc.com/sustainability
All Senior legacy businesses have
accreditation to ISO14001, while our
latest acquisition, Spencer Aerospace,
will be working to achieve accreditation
in 2024.
In Senior, the Environmental Management
System (“EMS”) ISO 14001 serves as a
collaborative endeavour that fosters
teamwork and a shared commitment
to a common goal. Through internal
communication of achievements and
progress, staff members are motivated and
engaged, leading to a more cohesive and
productive work environment.
Water usage in 2023
260 megalitres
In 2023, Senior was
successfulinrecycling
95.1%
of waste produced
Reduction in usage of
82 megalitres
compared to 2019 (342 ML), the last full year before
COVID-19 related impact to operations
In 2023, 75% of our businesses
achieved a recycling rate of
90%
or higher
25SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 25
STRATEGIC REPORT / SUSTAINABILITY / TCFD
Task Force on Climate-Related
FinancialDisclosures (“TCFD”)
This section summarises the
Group’s climate-related financial
disclosures consistent with the
TCFD framework recommending
11 disclosure topics across four
pillars – governance, strategy,
risk management and metrics
and targets.
TCFD compliance statement
Senior’s climate-related disclosures
for the year ending 31 December
2023 are consistent with the TCFD
recommendations and recommended
disclosures (set out in Section C of
the 2021 TCFD Annex “Guidance for
All Sectors”), and comply with the
requirements of the Listing Rule
9.8.6 R(8).
Governance
Oversight of climate-related risks
and opportunities
The Company’s Board of Directors has oversight
over climate-related matters. It is important that
the Board of Directors has a clear understanding
of the climate-related risks and opportunities,
and that this knowledge is subsequently
integrated into the decision-making process.
The Group Chief Executive Officer is ultimately
responsible for climate-related risks and
opportunities. Reporting to the Group Chief
Executive Officer, the Group Director of HSE
& Sustainability is responsible for Senior’s
sustainability and climate-related strategies.
During 2023, the Board was informed on
climate-related matters as outlined below:
• Regular reporting: Over the last few years,
we have established a routine reporting of
climate-related matters to the Board through
a dedicated sustainability section in the Group
Chief Executive Officer’s report to the Board,
which is presented at every scheduled Board
meeting. This section of the report updates
the Board about the Group’s performance on
a wide range of sustainability matters,
including climate-related issues. The items
that were brought to the Board’s attention in
2023 included: the results of the Group’s
2022 supplier engagement programme and
actions planned to increase supplier response
rates in 2023; the results of the 2022 carbon
emissions calculations for Scope 1 and 2
market based emissions; and the activities
planned for 2023 in respect of increasing
the sourcing of low-carbon and renewable
electricity to mitigate the potential increase
of the Group’s Scope 2 emissions.
Throughout the year, the Board was regularly
updated on the progress of the Group’s Net
Zero application to the SBTi. During its
September meeting, the Board was notified
that the SBTi had approved the following
Group’s Net Zero targets:
– Overall Net Zero Target:
Senior plc commits to reach net-zero GHG
emissions across the value chain by 2040
from a 2018 base year.
– Long-Term Targets:
Senior plc commits to reduce absolute
Scope 1, 2 and 3 GHG emissions 90% by
2040 from a 2018 base year.
In the near-term, Senior plc remains committed
to reducing its absolute Scope 1 and 2 GHG
emissions 30% by 2025 from a 2018 base year.
In 2023, we revised our supplier engagement
target – Senior commits that 82% of Senior’s
suppliers by spend, covering purchased goods
and services and capital goods, will have
science-based targets by 2025.
The Board recognises that a robust
governance framework is critical to
ensure accountability for Senior’s Net
Zero commitments. Therefore, the Board
will continue its oversight activities in
2024 around reviewing, challenging and
approving the actions and initiatives to be
taken by the Group to achieve its Long-
Term Net Zero Targets.
• Engagement with the Group’s
Sustainability team: the Group Director
of HSE & Sustainability attended two Board
meetings in 2023, during which the Board
was presented with the Group’s Scope 1 and
2 Market Based Emission Tracker, illustrating
the Group’s progress in meeting Senior’s
Near-Term Scope 1 and 2 targets as well as
the initiatives taken by the sustainability team
to engage with suppliers in respect of their
Scope 3 emissions. In 2022, we developed
Senior’s Energy Hierarchy – a framework of
priorities in managing and reducing emissions
and energy consumption. As part of the
presentation to the Board, the Group Director
of HSE & Sustainability reported on the
progress made by the operating businesses
in moving to low-carbon electricity contracts
as well as actions taken as part of Senior’s
Energy Hierarchy, such as installation of
energy monitoring systems, on-site
generation of energy, and formulating plans
to transition to renewable energy. Over the
years, there has been an increase in customer
requests for CDP and other ESG disclosures
from Senior, and the Board was briefed on
the engagement between the Group’s
sustainability team with a number of
customers in this regard.
• Board Committees: the Audit Committee
is responsible for reviewing the TCFD
disclosures in the Company’s Annual Report
& Accounts. The Board is cognisant of the
fact that it may need to adapt its current
oversight mechanism over the Group’s
sustainability matters as various sustainability-
related reporting regulations evolve.
• Risk Management: following the Group’s
annual identification and assessment of
climate-related risks and opportunities, the
Executive Committee and the Board received
and reviewed the summary of findings during
their meetings in December 2023.
• Integration with Strategy: in 2022, we
updated the Company’s Purpose – “We help
engineer the transition to a sustainable world
for the benefit of all our stakeholders” – to
reflect its commitment to sustainability. The
focus of the 2023 Board Strategy meeting
was, among other matters, how Senior’s
technology expertise could be applied to
capitalise on the opportunities presented by
transitions to a low-carbon future. In particular,
26 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202326
discussions evolved around opportunities
associated with the application of hydrogen
in a variety of products for land vehicles,
aerospace, power and energy markets.
Electrification, or the transitioning from
fossil-based energy sources to electricity, and
sustainable aviation fuel were among other
themes that received significant prominence
in strategic discussions this year.
• Board expertise: the Board of Directors
needs to continually develop its expertise
in climate matters and stay abreast of the
evolving regulatory landscape related to
climate change, both in the UK and
internationally. In 2023, all Board Directors
completed the TCFD training. Regular
secretarial reports to the Board highlight
sustainability and climate-related regulations
being developed by countries and
international bodies to address the impact
of climate change. In October 2023, we held
the “Investor Technology Teach-In” event.
The event, attended by Board Directors,
investors and some Group employees, was
delivered by the Group Director of Business
Development & Strategy and other
representatives of the Group’s operating
businesses with the support of the Group
Chief Executive Officer in the format of
an interactive online educational session
focused on the five main technology themes
specific to Senior. The aim of this session
was to inform and educate the audience
about current and future potential
applications of thermal management and
fluid conveyance products, as well as to
build good understanding of Senior’s
enabling technologies, such as additive
manufacturing and digitisation.
Assessing and managing climate-related
risks and opportunities
Senior’s management is responsible for
assessing and managing climate-related risks
and opportunities.
The Group Director of HSE & Sustainability
has direct oversight over Senior’s operations
on the matters of climate change, ensuring
that data, such as Scope 1, 2 and 3 emissions,
waste recycling and water consumption, is
collated, monitored, presented and reported
to the Executive Committee and the Board
on a regular basis. Responsibility for carbon
emission management and the development
of the Energy Efficiency programme also
resides with this position.
Chief Executives of the Aerospace and the
Flexonics Divisions have direct responsibility for
ensuring that their Divisions meet the Group’s
carbon reduction targets and supplier
engagement responsibilities. They constantly
monitor customer demands and are best placed
to ensure that these requirements are reflected
in future programmes as customers transition to
low-carbon products.
The Executive Committee, led by the Group
Chief Executive Officer, ensures that material
climate-related risks form part of the Group’s
overall risk management framework, and that
climate-related opportunities are incorporated
into the Group’s strategic and financial planning.
The HSE Committee, chaired by the Group
Chief Executive Officer, monitors the Group’s
progress on its environmental targets, including
Scope 1, 2 and 3 emissions.
The assessment of the Group’s climate-related
risks and opportunities is performed on an
annual basis, and the outcomes of the 2023
assessment can be found on page 27.
Senior’s climate-related governance framework
Group Chief Executive Officer
Ultimate responsibility for management of
climate-related risks and opportunities
HSE Committee
Monitoring progress
onGHGemissions
Executive Committee
Leading the Group’s efforts
onclimatechange
Board of Directors
Oversight of climate-related matters
Case study
Innovation Competition
“Innovation on the Road
to Net Zero”
In Senior, we foster a culture that
encourages and celebrates innovation.
In 2023, we launched our first
Group-wide innovation competition
which was sponsored by the
Technology Council and aimed at
inspiring innovation, encouraging
collaboration and participation with our
wider Technology Council activities.
The theme of the competition was
“Innovation on the Road to Net Zero”.
A total of ten entries were submitted
from 10 operating businesses from
both Aerospace and Flexonics
Divisions, with projects covering
process technology improvements,
new product developments or
sustainability improvements.
Senior Aerospace Thailand was one of
the two operating businesses winning
the Gold Award for their projects.
Background
Senior Aerospace Thailand is located
in Chonburi – a province of Thailand
with a tropical climate. Chonburi has
hot, humid weather and the average
temperature inside the factory can be
as high as 32ºC, with the humidity
jumping to 82% during the rainy
season. Consequently, the operating
business had installed an air
conditioning system which has a sizable
cooling tower and runs continuously.
Project
The team at Senior Aerospace Thailand
have designed a customised wind
turbine system that is driven by the
exhaust airflow from the air
conditioning systems to generate clean
and cost-effective electricity sufficient
to power two manufacturing cells and
also to provide battery charging for a
small electric vehicle. It is estimated
that the implementation of the system
in 2024 will reduce Scope 1 GHG
emissions by 100 tonnes per annum.
STRATEGIC REPORT / SUSTAINABILITY / TCFD CONTINUED
27SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 27
STRATEGIC REPORT / SUSTAINABILITY / TCFD CONTINUED
Climate-related risks and opportunities
identified over the short, medium and
long-term
Senior assessed climate-related risks and
opportunities using the below time horizons,
because they align with the Group’s internal risk
management and planning time frames:
Rating Range
S
Short-term 2023 – 2026
M
Medium-term 2026 – 2028
L
Long-term 2028 – 2043
In 2023, we carried out an annual Group-level
assessment of climate-related risks and
opportunities; we believe such a proactive
approach ensures that the Group is better
prepared to address existing and future
challenges posed by climate change and to take
advantage of potential opportunities.
Consideration was given to the existing and
forthcoming legislative and regulatory
sustainability reporting requirements likely to
affect the Group’s operations, expectations of
the Group’s customers, suppliers, employees,
investors, regulators and other stakeholders,
changes in weather patterns and the latest
technological trends. The assessment also
considered the various geographical locations
of the Group’s operations together with
challenges and opportunities arising in
industry sectors where Senior operates. The
risks and opportunities, shown in the table
below, are relevant to all of the Group’s
market sectors.
The results of the assessment indicate that
the Group’s material risks remain relatively
unchanged from the 2022 assessment. The
risk of “Increased pricing of GHG emissions/
cost of carbon offset” has moved from
medium-term into long-term horizon,
reflecting the complexities of carbon pricing
mechanisms in individual countries and
considering the Group’s current time
horizons. The assessment identified a new
opportunity “Employee retention and/or
recruitment”. Increasingly, candidates prefer
to work for companies taking a proactive
approach on climate change and sustainability
matters. We believe that leveraging the
opportunity of attracting talented and
forward-thinking candidates could offer a
strategic advantage to Senior. The opportunity
“Shift in Consumer Preferences” has moved
from the short-term to the medium-term
horizon, recognising that any benefit from
changing consumer preferences was likely to
occur beyond the three-year timeframe.
The WWF Water Risk Filter analysis conducted
in 2022, indicated that nine of our operating
businesses were in areas of potential water
scarcity. These are our businesses in India,
South Africa, California (Senior Aerospace SSP,
Senior Aerospace Jet Products, Senior
Aerospace Ketema, Senior Aerospace Steico
Industries and Senior Aerospace Spencer), as
well as our Flexonics and Aerospace businesses
in Mexico. To date, Senior has not been subject
to conditions where water scarcity had led to
interruptions in operations, although we are
aware that severe localised water shortages
can lead to potential operational interruption
and interrupted supply of products to our
customers. We are analysing the opportunities
to reduce overall water consumption in each
of these businesses.
Strategy
Category
Sub
category Risk/Opportunity description
Indicative
time
frame
Link to Senior's
Principal Risks
Opportunities Products
and
Services
Development of new products
Development or expansion of low-emission products may raise demand for Senior’s products.
S
Shift in Consumer preferences
Changing customer/consumer behaviour or preferences increases demand for Senior’s products
which support the transition to a low-carbon economy.
M
Resilience Resource substitutes/diversification
Shift to sustainable low-carbon energy sources may raise cost-effectiveness of the Group’s
operations, reduce GHG emissions, strengthen energy security and resilience to climate shocks.
M
Employee retention and/or recruitment
Commitment to environmental sustainability may enhance employee retention and attract talent.
S
Transition
Risks
Market Changing customer/consumer behaviour or preferences
Customers’ shift to low-emission products may reduce demand for some of Senior’s products.
M
Climate change
Influence of ESG on debt-rating agencies/assessment of credit risk
Changes in investor expectation can change market valuations in a negative way (such as
attracting negative screening).
M
Implementation
ofstrategy
Financing and
liquidity
Technology Substitution of existing products and services with lower emissions options
Disregarding evolving low-emission technologies and product demand may reduce market share.
M
Innovation and
technological change
Costs to transition to lower emissions technology
Decarbonising processes/products as per SBTi targets may require additional capital investment.
M
Unsuccessful investment in new technologies
Delaying investment in low-emission technology may commit Senior to fossil-fuel dependent
assets long-term, incurring extra costs to transition from such assets before their useful life ends.
M
Policy &
legal
Increased pricing of GHG emissions/cost of carbon offset
Future GHG emission pricing may raise the costs for products both bought and sold by Senior.
L
Inflation
Exposure to litigation
Failure to manage climate-related issues may result in prosecution (fines and reputational damage).
L
Corporate
governance breach
Reputation Increased stakeholder concern or negative stakeholder feedback
Failure to align climate change commitments with corresponding actions may result in discontent
among customers and other stakeholders, attract negative press and lead to reputational damage.
M
Implementation
ofstrategy
Stigmatisation of sector
Activism and protests against aviation, land vehicles and oil and gas market sectors might become
a threat to the reputation of Senior.
M
Physical
Risks
Acute Increased severity of extreme weather events such as cyclones and floods
Extreme weather events may damage infrastructure and disrupt operations.
S
Climate change
Chronic Changes in precipitation patterns and extreme variability in weather patterns
Global temperature rise and changing weather patterns may intensify droughts, impacting water
supply to Senior’s manufacturing sites and disrupting operations.
S
28 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202328
Impact of climate-related risks and opportunities on the organisation’s businesses,
strategy and financial planning
Products and Services
In terms of climate change, our strategy is being influenced in several key areas.
Climate change regulation and understanding is driving changes in consumer attitudes and increasing demand for energy efficient
transportation. This will mean the increased use of hybrid, fully electric and hydrogen powered vehicles. Senior is currently active in this
area with new products, including innovative thermal management solutions for large battery packs (initially for public transport vehicles).
The opportunity here is for Senior to become a leader in this technology, as we have the expertise to design products with class-leading
technical performance which will help to increase sales in this growing market sector. Examples of these include battery cooling,
electronics cooling, electric vehicle fluid handling and flex for vehicle range extenders, fluid conveyance hoses and tubes for hydrogen
fuel cells. The time horizon for this is short to medium-term with prototypes currently under test for some products.
We have a dedicated team based in the Flexonics businesses specifically working on exhaust gas recirculation (“EGR”) systems with
customers. Requirements are driven by performance (lower carbon emissions) and changing legislation. Legislation drives lower NOx
allowances for heavy-duty diesel engines.
We have invested in specialised additive manufacture equipment in some of our Aerospace businesses. The purpose of this is two-fold:
to develop and manufacture metallic components which are much lighter, reducing weight and, ultimately, saving fuel and reducing
carbon emissions during flight. At the same time, lighter components will reduce waste during the production process, therefore
decreasing the amount of material required (reducing our Scope 3 emissions) and the associated material cost.
Read more on pages 20 to 21 and 44 to 47
Operations and supply chain
To be effective, it is vital that climate change considerations are applied at individual operating business sites where Senior’s approach
has focused on energy efficiency and cost reduction, particularly in respect of the Scope 1 and 2 emissions. Numerous energy
conservation projects have been implemented in production sites across the world, such as improving building insulation, upgrading
energy efficient lighting, installation of heat recovery systems and upgrading HVAC systems.
The strategic focus has been on the Group’s Scope 3 emissions, particularly how our products and services help customers and society
at large reduce emissions. This has been supported by our ongoing engagement initiatives with over 300 of the Group’s suppliers
through the Carbon Disclosure Project, asking them to align with Senior’s environmental goals and set emissions reduction targets
by 2025.
An important decision in relation to our operating businesses was to have our carbon reduction targets approved by the SBTi. Following
high-level discussions on our carbon reduction strategy and the need to ensure our approach followed science-based evidence and was
aligned to the Paris Agreement, we applied to the SBTi. Following the approval of our targets to reduce Scope 1 and 2 emissions 30% by
2025 by the SBTi, we started exploring low-carbon energy supply opportunities, while supporting existing energy efficiency initiatives.
Within the framework of Senior’s Energy Hierarchy, operating businesses needed to investigate and cost on-site generation of low-
carbon energy, as well as switching to low-carbon electricity by 2025. As part of the roll-out of our Energy Strategy, the Group-wide
energy comsumption reduced by 5.4% in 2023 (compared to 2022).
Each site within the Group has a scenario-based Business Continuity Plan which is tested on an annual basis; this enables us to ensure
that mitigation and adaptation activities associated with the physical risks from climate change are addressed. Further information on
how we manage the risk of climate change can be found on page 63.
Read more on pages 22 to 24
Investment in research and development
Climate change is a fundamental element of the Group’s business strategy. As a consequence, when considering R&D spend and
expansion, we assess sustainability aspects of our products in terms of supporting our customers’ aims to reduce energy consumption
and carbon. A recent example is the development of specialised thermal management products to maintain the optimum working
temperature of vehicle battery packs (battery cooling packs, initially for large public service vehicles), as described above.
Read more on page 40
STRATEGIC REPORT / SUSTAINABILITY / TCFD CONTINUED
29SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 29
Access to capital
Investors and lenders consider Senior plc’s ESG policies, strategy and performance when making decisions in allocating capital. Whilst
we have not yet identified any significant correlation related to climate change and access to capital, it is an area that remains under our
review. We expect capital to become harder to source for industrial companies that do not manage their climate risks and opportunities
progressively. The Group has successfully extended its main UK Revolving Credit facility (“RCF”) by an additional year to November
2027 which involved the extension of our sustainability KPIs in agreement with our lenders.
Acquisitions or divestments
Portfolio optimisation is a central pillar of our strategy. Climate change is considered in the overall view of acquiring new businesses, in
terms of potential of the sustainability of the product portfolio as well as in future planned divestures. The future markets of the goods
produced will be assessed in line with expected changes in consumer spending as climate change dictates the use of alternative energy
and reduced carbon solutions.
Financial planning process
One of the short-term (one to three years) influences of climate change on Senior’s business strategy is that of cost and internal
efficiencies, particularly in respect of the Group’s Scope 1 and 2 emissions. In support of the 2025 SBTi targets, our operating
businesses initiated energy conservation projects as detailed on page 24. In 2023, Senior Flexonics Czech commissioned the
installation of the solar PV system; further details can be found in the case study below.
We are seeing some limited negative effects from the decreasing market trend for diesel passenger vehicles in Europe and a
consequent reduction in demand for some products. Although some of Senior’s operating businesses are experiencing reduced
demand, the effect is not significant overall with other product lines filling demand. This means we are tailoring our financial planning
to reflect these market changes. At the same time, opportunities in new technologies that may require investment are also considered
as part of the financial planning.
We consider climate change when assessing liabilities in the Group’s operating businesses. The need to insure fixed assets and
the adoption of safety measures to protect staff in areas subject to severe weather are current examples.
STRATEGIC REPORT / SUSTAINABILITY / TCFD CONTINUED
Case study
INSTALLATION OF PHOTOVOLTAIC SYSTEM AT SENIOR FLEXONICS CZECH
Senior Flexonics Czech located in
Olomouc, the Czech Republic, produces and
distributes components and tube systems
from stainless steel, low-carbon steel and
aluminium. Their products are mainly made for
oil, air conditioning, roof, cooling and air
systems for prominent brands of world
automotive factories.
In 2023, Senior Flexonics Czech commissioned
the installation of the solar PV system with an
investment of approximately £300,000.
Project Rationale
1. Reduce energy costs by generating
own electricity from solar energy.
2. Reduce carbon footprint of Senior Flexonics
Czech in support of the Group’s
sustainability commitments.
3. Reduce reliance on non-renewable
energy sources.
This case study demonstrates how the
installation of photovoltaic system has fulfilled
both financial and environmental objectives for
the business.
Results
Produced energy 383,770 kWh/year
Consumption of
produced energy
280,950 kWh/year
Consumption of
produced energy in %
73%
Energy supplied to
the grid
102,820 kWh/year
Savings CO
2
154,5 tons/year
Plant consumption 1,4 87,14 0 kWh/ year
Share of solar panel
generated electricity on
plant consumption
19%
30 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202330
Resilience statement
Senior recognises that its strategy may
be affected by climate-related risks and
opportunities. We believe that our Purpose acts
as a solid cornerstone for business decisions that
shape and future-proof the Group’s strategy.
The output of forward-looking scenario
analysis indicated that transition risks could
have more significant impacts in scenarios 1
and 2. The approval of Long-Term Net Zero
Targets, aligned to 1.5ºC for all scopes, by SBTi
and the initiatives the Group plans to take to
achieve these targets will make the Group more
resilient to the effects of climate change in a
number of ways. As governments across the
world start imposing stricter regulation of
carbon emissions, Senior will be better placed
to avoid potential risks associated with penalties
or liabilities. We recognise that transitioning to
Net Zero will require our operating businesses
to improve their operating efficiencies, and we
have already started a number of initiatives in
this regard as part of Senior’s Energy Hierarchy.
Operational efficiencies can result in cost
savings in the longer term. By working actively
with our suppliers and encouraging them to
decarbonise, we are enhancing the resilience
of our supply chain against potential disruption
by climate change. The Group’s focus on
innovation and strong relationships with
customers means we are well positioned to
maximise opportunities offered by smooth
and disruptive transition scenarios. We are
proactively assessing the way climate change
affects market demand for our products as part
of our annual strategic meetings.
Under scenario 3, the physical impacts of
climate change could be more significant.
The Group’s robust business continuity plans,
tailored to the specific risks and vulnerabilities
of a given area, help us become more resilient
against the potential physical impacts of climate
change. We recognise that scenario analysis will
be developed over time, and we shall continue
to integrate the findings into Senior’s risk
management framework.
Resilience of the organisation’s strategy
with reference to three climate-related
scenarios, including a 2ºC or lower scenario
In 2021, we carried out scenario analysis to
understand the potential impact of climate
change on the Group’s operations. We selected
the three climate scenarios produced by the
Bank of England because:
• they meet TCFD recommendation to assess
business resilience at different climate-related
scenarios, including a 2ºC or lower scenario;
• these scenarios are used by the Bank of
England to explore resilience of the UK
financial system to climate change;
• the scenarios are modelled to a 30-year
timespan, out to 2050 to align to the Paris
Agreement and other Net Zero 2050 targets;
• they consider the macroeconomic impacts
with more granularity and within a more
applicable business context than climate
scenarios based on temperature increases; and
• multiple high transition scenarios provide
diversity in stress test.
Further information on the assumptions and
parameters used in the scenarios can be found
on the Company’s website.
Scenario 1 (<2ºc) Scenario 2 (<2ºc) Scenario 3 (>3ºc)
Early policy action:
smooth transition
Late policy action:
disruptive transition
No policy action:
business as usual
• Decisive carbon action to reduce global
emissions starts in 2021;
• Carbon taxes and other policies intensify
gradually over the scenario horizon;
• Global warming is limited to 1.8ºC by
2050 compared to pre-industrial levels;
• Limited physical risks.
• Delay in implementing the policy required
to reduce global emissions by 10 years;
• Starting in 2031, significant and rapid
policy action causing drastic bending of
emissions trajectory globally;
• Global warming is limited to 1.8ºC by
2050 compared to pre-industrial levels;
• Limited physical risks.
• Governments fail to introduce further
policies to address climate change
beyond those already implemented;
• Increase in global temperatures reach
3.3ºC by 2050 compared to pre-industrial
levels;
• High physical risks.
Potential impact
Policy changes start to accelerate, and
consumer and investor preferences evolve
rapidly to facilitate decarbonisation.
In the short and medium-term, Senior
needs to ensure that its investment
decisions are consistent with its Science
Based Targets and deliver expected results.
In the long-term, it is important to keep
pace with changing market demand for
low-emission products and remain
consistent between Senior’s public
commitments and market expectations.
Potential impact
A sudden increase in the intensity of
climate policy in 2031, following an initial
period which is characterised by insufficient
or ineffective emission reducing policies.
Senior needs to ensure that it takes action
over this time period to avoid disruption in
the long-term as mature economies make
rapid strides to cut emissions.
Potential impact
Absence of transition policies result in a
growing concentration of greenhouse gas
emissions in the atmosphere.
Increased exposure to heatwaves, tropical
cyclones and droughts may increasingly
provide challenge for some of Senior’s sites
and supply chains.
With less policy action and investment
driving forward technology development,
the costs of transitioning to the new
technologies may be higher, the likelihood
of successful implementation and the
relative rewards for the investment may be
lower.
Opportunities
The ability to maximise returns on new
investments in the long-term, once
transition has occurred and markets have
stabilised.
Opportunities
Early investment can set the Group up to be
ready for the swift changes to the disrupted
economy after 2030.
Opportunities may materialise over the
long-term, due to the late policy action and
the abrupt transition to low-carbon
economy.
Opportunities
The Group’s continued investments and its
ability to diversify business activities can
help Senior be more resilient to changes in
the markets and adapt to the impacts of
climate change.
STRATEGIC REPORT / SUSTAINABILITY / TCFD CONTINUED
31SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 31
Metrics used to assess climate-related
risks and opportunities
Targets used to manage climate-related
risks and opportunities and performance
against targets
The below table illustrates the metrics we have
selected to measure our climate-related risks
and opportunities. We selected these metrics
because we consider that they are relevant to
the climate-related risks and opportunities facing
Senior, as well as regulatory and stakeholder
expectations; in addition, these metrics are
measurable, transparent, comparable and
actionable. Our Near-Term Scope 1, 2 and 3
targets were verified by SBTi in 2021. In 2023,
the SBTi approved our Long-Term Net Zero
climate Targets for Scope 1, 2 and 3 emissions.
The targets, to be achieved by 2040, and aligned
to 1.5ºC for all scopes, are included in the table
below. We started developing a high-level plan
to reduce our emissions in line with the 2040
targets against the 2018 base year. In 2024, we
shall undertake further work to produce a more
granular transition plan in line with the Transition
Plan Taskforce (“TPT”) guidance.
In 2023, the Remuneration Committee
proposed that 10% of the 2024 bonus potential
will be determined by a target related to
absolute reductions in Scope 1 and 2 emissions
over the one year performance period. The set
target is consistent with the Group’s SBTi-
validated target of a 30% reduction in these
emissions by 2025 (from a 2018 baseline).
Climate-related target
Target
year
Base
year Progress in 2023 Metric Link to material climate risk
Reduce absolute
Scope 1and 2 GHG emissions by 30%
2025 2018 29.5% decrease
(2022 – 22% decrease)
Tonnes CO
2
e
Increased pricing of GHG emissions/cost of carbon
offset
Increased stakeholder concern or negative
stakeholder feedback/Stigmatisation of sector
For Scope 3 GHG emissions, 82% of suppliers
by spend to have climate Science Based Targets
2025 2018 182
(2022 – 160)
Supplier
Engagement
(response rate)
Reduce absolute Scope 1, 2 and 3 emissions by 90% 2040 2018 reporting to start in
2026
Tonnes CO
2
e
Achieve a recycling rateof 95% 2025 95.1%
(2022 – 94.8%)
% of waste
recycled
Increased stakeholder concern or negative
stakeholder feedback/Stigmatisation of sector
Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (“GHG”) emissions
The details of our Scope 1, 2 and 3 emissions, in compliance with SECR, can be found on page 23.
Risk management
Metrics and targets
The organisation’s processes for
identifying, assessing and managing
climate-related risks
Climate risks are identified, assessed and
managed using Senior’s risk management
process as shown on page 60 on an annual
basis. The Committee of Sponsoring
Organizations of the Treadway Commission
(“COSO”) enterprise risk management
integrated framework serves as the foundation
of the Group’s risk management process,
tailored to reflect Senior’s culture and Values.
The process includes identification of relevant
risks, risk scoring, development and assignment
of response actions, monitoring the
effectiveness of key mitigating controls and
reporting of the risk and assurance environment
to the Executive Committee, the Audit
Committee and the Board.
During 2023, the multi-disciplinary team
including the Group Director of Risk and
Assurance, the Group Director of HSE &
Sustainability, the Divisional CFOs, the
Director of Investor Relations and Corporate
Communications, the Director of Business
Development & Strategy, the Head of Treasury
and the members of the Secretarial team,
re-assessed the climate-related risks at a Group
level, taking into account the evolving landscape
associated with climate change in the areas of
existing and expected legislation, supplier and
consumer preferences, government policies and
commitments, as well as changes in weather
patterns. The results of the assessment
were reviewed by the Executive Committee
and the Board.
We recognise that there is benefit in assessing
climate-related opportunities at the operational
level, in addition to a broader Group level. Such
an assessment can provide a more granular
understanding of risks that are specific to any
particular geographic location. At the same time,
operational-level risk assessment can
help identify operating businesses that are
best placed to take advantage of opportunities
offered by the transition to a low-carbon
economy; for example, through energy
efficiency initiatives or renewable energy
sources. We were aware that those individuals
responsible for assessing climate-related risks
and opportunities at the operational level,
required adequate training. To address this, in
2023 we rolled out the TCFD training
programme to a large target audience which,
in addition to the Board of Directors, included a
wide range of functions such as divisional and
operational CEOs, CFOs, EHS managers and
others. In 2023, Senior Flexonics Bartlett was
selected as one of the operating businesses
to pilot an assessment of climate-related risks
and opportunities.
Climate-related risks and opportunities are
identified using a wide range of data sources,
such as climate change specific publications and
data, CDP disclosures from peers, relevant
sector literature and guidance from TCFD for
Senior’s sector. Materiality of climate-related
risks is assessed by considering such factors
as likelihood, magnitude of impact and the
strategic importance to the business. For our
2023 assessment, risks were assessed as
residual, having considered existing controls
and mitigations.
Mitigating action plans are developed for all
climate-related risks where the risk scoring
exceeds the Group’s tolerance level for that risk.
The action plans include a detailed description of
the response actions (assigned to the members
of the Executive Committee and other senior
members of staff) as well as time horizons for
completion of the mitigating action plans. Action
plan progress is tracked to ensure timely
implementation. The overall effectiveness of the
risk control environment is closely monitored
through assurance and audit activities to assess
if critical risks are being mitigated within the
Group’s risk tolerance.
Integration of processes for identifying,
assessing, and managing climate-related
risks into the organisation’s overall risk
management framework
Climate-related risks form part of the Group’s
risk register and will be subject to an annual
review by the Executive Committee and the
Board. Climate change has been reported as
one of the Group’s principal risks since 2019.
STRATEGIC REPORT / SUSTAINABILITY / TCFD CONTINUED
32 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202332
Social
Health & safety
The health and safety of our employees
remains a core focus for Senior. The pursuit
of world class health and safety in all of our
undertakings is a recognised priority at all
levels in our business.
In 2023, we continued to build on our sustained
improvements in injury performance. The Lost
Time Injury/Illness Rate of 0.32 represents a
16% decrease compared to the 2022 figure of
0.38. Additionally, the Total Recordable Injury
Illness Rate, which includes factors such as lost
time, job transfers, minor medical treatment,
etc., demonstrates a significant decrease of
approximately 32% in 2023 compared to the
previous year. These positive trends underscore
our ongoing commitment to fostering a safer and
healthier work environment for our employees.
In 2023 there were no work-related employee
or contractor fatalities and no major injuries
(serious/life-changing).
To ensure we maintain a proactive safety
culture, we urge all employees to identify
and report unsafe work practices or potentially
hazardous situations. In 2023, we received
15,310 such “near miss” reports, demonstrating
a substantial improvement from the 12,615
reports received in 2022.
Senior maintains a comprehensive Group-
wide Environment, Health & Safety (“EHS”)
Management Framework, inclusive of risk
evaluation and operational controls for all our
facilities. This framework undergoes an annual
audit by ISO-trained staff. Seven of our
operating businesses have successfully
transitioned from OHSAS 18001 to ISO 45001,
reinforcing our commitment to aligning with
the latest international standards.
Regular environment, health, and safety training
are mandatory for employees at our operating
businesses, tailored to their specific roles, work
areas, job functions, and responsibilities.
In 2023 Safety initiatives in 2023
Decreased our Total Recordable Injury
and Illness Rate by around 32% compared
to 2022
32%
• Embed our new group-wide
hand-safety standard.
• Monthly safety performance
bulletin produced for our operating
business leaders.
• Regional in-person and virtual
meetings with our global health
and safety professionals.
• Senior Aerospace Spencer health
and safety onboarding.
• Increased onsite safety/
environment reviews.
Looking forward to 2024, our plans
include:
• a new behavioural safety programme
for our supervisors;
• a new Senior Safety Standard covering
ergonomic assessments; and
• additional assistance for those
businesses with the most challenges
and improvement opportunitites.
Decreased our Lost Time Injury and Illness
Rate by around 16% compared to 2022
16%
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2018 2019 20232021 20222020
Total Recordable Injury Illness RateLost Time Injury Illness Rate
Number of Lost Time Injuries
0.50
1.48
0.44
1.69
0.32
1.09
1.17
0.32
0.38
0.93
0.63
0.32
Lost Time Injury and Illness Rate (“LTIIR”), defined as the
number of work-related lost time injury or illness cases
(losing more than one complete shift) per 100 employees.
The Total Recordable Injury Illness Rate is defined as the
number of cases of lost workdays, restricted work
activities, job transfers, medical care beyond first aid and
work-related illnesses expressed per 100 employees.
Senior Group Injury rates
STRATEGIC REPORT / SUSTAINABILITY / SOCIAL
33SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 33
STRATEGIC REPORT / SUSTAINABILITY / SOCIAL
Case study
SAFETY BEHAVIOURS PROJECT
AT SENIOR AEROSPACE JET
PRODUCTS AND KETEMA
The team at Senior Aerospace Jet Products
and Ketema implemented an Essential
Safety Behaviours improvement project at
their two facilities in San Diego, California.
At each weekly meeting, the site business
leaders and supervisors review a specific
set of the standards and remind all team
leaders of their requirements to enforce the
rules of the Essential Behaviours Standards.
Additionally, a specific Essential Behaviour
for everyone is reviewed at the daily
management meeting.
Senior plc, as a whole, implemented The
Essential Behaviours Standard several
years ago, and various business units
employ diverse methods to communicate
these standards to employees. In the case
of Senior Aerospace Jet Products and
Ketema, business leaders and supervisors
pledge to adhere to the requirements
outlined in the standard.
The Environmental, Health & Safety
Manager, David Ivester, organises and
communicates new elements of the
standard each week.
Senior Aerospace Jet Products and Ketema
have maintained a zero lost time incident
rate for a considerable number of years.
This exemplary safety record underscores
the clear focus on safety behaviours,
demonstrating its pivotal role in achieving
and sustaining such outstanding safety
performance. The commitment to
reinforcing safety practices through
continuous communication and
engagement proves that a proactive
approach helps maintain a secure
working environment.
34 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202334
STRATEGIC REPORT / SUSTAINABILITY / SOCIAL CONTINUED
Equality, diversity and inclusion
Our core Values underpin our culture
Senior’s leaders aim to create a working
environment in which everyone can thrive,
achieve their full potential, and contribute to the
success of Senior, and where all decisions are
based on skills and merit. We are committed to
ensuring equal opportunities, fairness of
treatment, work-life balance, and the elimination
of all forms of discrimination in the workplace for
employees and job applicants. We recognise the
benefits of different perspectives and local
cultures and encourage individuals to speak
freely, as diverse contributions lead to better
solutions and business outcomes. The Group’s
Equality, Diversity and Inclusion Policy is
contained within the Code of Conduct, and
every employee receives a personal copy of
the booklet. In 2023, we launched a Human
Rights Policy clearly laying out our expectations.
The policy was translated into our designated
languages and we included a module on
Protecting Human Rights in our annual Code
of Conduct training.
Senior promotes a culture and working
environment in which everyone can make the
best use of their skills, free from discrimination
or harassment. Our Values define how we treat
people, and reinforce our commitment to be
open and straightforward with colleagues,
customers, suppliers and other stakeholders.
We expect people to treat everyone they meet
in the course of business with respect and
dignity. As well as our Vaues, the right
behaviours are reinforced in our people policies
and processes; for example, talent acquisition,
succession planning, promotions and learning
and development opportunities.
The Executive Committee and business leaders
continue to focus on providing a diverse and
inclusive workplace. Gender diversity receives
much attention in Senior, however we believe
that there remains an opportunity for further
improvement, particularly in our operating
businesses general management. In 2023 we
continued our global participation in Mission
Gender Equity Mentoring. The programme
supports and encourages the development of
talented women. In 2024 we plan to launch a
Women’s Network. We believe this will provide
a forum to empower individuals as it will bring
women across businesses together to discuss
ideas and shared experiences in a supportive
and productive environment, creating strong
peer-to-peer support and confidence, as well
as providing an impartial and open forum to
encourage and inspire.
The table below shows the Group’s Board of
Directors, Executive Committee and operational
senior management in 2023 by gender.
Male Female
All employees 78% 22%
Senior managers who
report directly to the
Executive Committee
80% 20%
Executive Committee 62% 38%
Board 43% 57%
We strive to reflect the diversity of the
communities we work in at all levels across
our workforce. Senior is an equal opportunities
employer. The Board seeks to ensure a diverse
workforce that supports all employees,
irrespective of age, disability, gender
reassignment, marriage and civil partnership,
race, religion or belief, gender or sexual
orientation. We will not tolerate any form of
unlawful discrimination against our colleagues,
or any third parties be they potential employees,
customers, subcontractors, suppliers or
members of the public.
In accordance with the Equality Act 2010
(Gender Pay Gap Information) Regulations 2017,
Senior publishes its Gender Pay Gap Report, as
required on the Company’s website.
Jane Johnston | Group HR Director
“At Senior we are committed to
providing equal opportunities for
all and promoting an inclusive
culture where individuals can
thrive, and diversity is valued.”