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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.”
35SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 35
STRATEGIC REPORT / SUSTAINABILITY / SOCIAL
People and culture
Guided by our Values, our operating business
leaders are empowered and accountable,
setting the tone for their operations. As
business conditions continue to improve,
we remain focused on recruiting and retaining
talent in order to sustain business resource
requirements and growth. In order to meet
demand, we are continuing to focus on building
strong relationships with local technical colleges,
universities and education establishments, and
partnering with recruitment firms. We are
extending our use of job boards and other
approaches to advertising and attracting
applicants, and have now completed the roll-out
of Recruit, our talent acquisition system, to all
our UK and US businesses. We have also been
working with organisations such as Glassdoor
and Indeed as well as operating business
utilising platforms, for example LinkedIn, to
enhance our employer brand. Although we
have seen a significant improvement in our
employee voluntary turnover rates, the job
market remains competitive for certain
geographies and skills, and we have worked
hard to secure the right talent.
We have continued to work with colleagues
to enhance our employee proposition, making
Senior an even more attractive place to work.
Examples of the steps we have taken include,
introducing flexible working, promoting our
employee assistance programmes, and our US
Benefits Advocate helpline, and in the UK, we
have introduced a financial wellbeing service.
This gives all UK employees access to a host
of resources covering topics such as mortgage
advice, planning for retirement and financial
“health checks”. In January 2023 we increased
the level of employer pension contributions
available to the majority of our UK employees.
This was very well received by employees,
being seen as a generous and valuable benefit.
We continue to be vigilant regarding rates of
pay and the cost of living, ensuring we are
paying people fairly for the work they do and
benchmarking pay rates in local markets,
making adjustments if appropriate.
Training and development was a priority in 2023
with more face-to-face training being provided.
In our autonomous and collaborative operating
model, business leaders work with their teams
and HR to plan and design training to meet their
business needs. This includes technical, on the
job, and skills training. We continue to view the
provision of development opportunities and
training across the Group as vital to our success.
We have seen more emphasis on supervisor,
management, leadership and behavioural skills
training, typically partnering with external
providers to build our bench strength and
support succession planning. Examples include
programmes such as Achieving your Potential,
Leading Growth through our Values, Coaching
Skills and Motivation and Leadership for new
managers and supervisors. We have also
continued with other training activities such as
Toolbox talks, “lunch and learns”, technical
training, as well as sponsoring individuals
undertaking external and more academically
orientated courses and training, for example
engineering degree courses.
We were pleased to restart our global leadership
programme, Leading for Excellence, and have
delivered the training to two cohorts in 2023.
The programme runs over six months and is a
mix of virtual and face-to-face sessions as well
as one-to-one coaching. The programme
culminates in the delegates presenting business
projects they have worked on to hone their
skills, embed their learning and return real
business benefits through delivering a key
project for their operating business.
In 2023 we enhanced our training content
in Learn, our best in class eLearning platform.
The catalogue covers areas such as IT skills,
Leadership and Management, Project
Management, Health & Wellbeing and
Communication skills and provides the training
in all our languages. Individuals can select
courses and manage their own learning. Learn
also enables us to deliver our Code of Conduct
training and other compliance training such
as Cybersecurity, Securing Unclassified
Information and Anti-Harassment training.
In 2023 we developed our own TCFD training
modules and delivered it across the business to
leaders, responsible for General Management/
Operations, Finance, and Health Safety &
Sustainability via Learn.
As evidenced in the Global Employee Opinion
Survey at the end of 2022, peer relationships
remain a strength and colleagues help and
support each other. We have an open and
honest culture of respect and trust, and people
value teamwork and the teams they work in
and with. This has been particularly important
during 2023 as our headcount grew and we
welcomed new employees to our operations.
Many of our businesses have been enhancing
their onboarding processes to ensure that new
team members feel welcome and well
informed, enabling them to become valued
team members. A significant proportion of
learning is on the job and our culture of sharing
knowledge and supporting colleagues remains
central to developing technical competencies in
our operations.
Learning and development needs are assessed
during individual performance reviews, with
“Perform”, our Performance and Development
system, providing a framework for managers
and team members to discuss feedback,
performance, behaviours linked directly to our
Values, set clear objectives, both business and
personal development and create development
plans. The output of these discussions feed into
our succession planning process. The Executive
Committee scrutinises the plans and talent
pipeline, identifying successors or interim cover
for key roles across the Group. The Executive
Committee also focuses on functional capability,
for example engineering, as well as operational
leadership. Personal development plans are
recorded and monitored in Perform to enable
individuals to fulfil their potential. The Board
reviews the succession plans for the Executive
team and their direct reports on a regular basis,
with a special emphasis on encouraging
diversity and inclusion.
Our culture is to build on our success and say
thank you, with our businesses holding regular
employee recognition and team building events.
We encourage open and honest feedback with
potential issues or concerns being raised with
local management. The feedback from our
survey run at the end of 2022, was consistent
with this and confirms that employees believe
that people are treated fairly and that we do not
tolerate misconduct. As outlined in our Values
and Code of Conduct, we work together with
mutual trust and respect and operate with
integrity and in an ethical manner. On the rare
occasion when things cannot be resolved by
local management, employees are encouraged
to raise their concerns through our third-party
whistle-blowing service, Ethics Point. All
concerns raised are investigated and learning
points are actioned by local leadership teams
as appropriate.
36 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202336
Employee wellbeing
Communities
The health and wellbeing of our colleagues
remains a priority. Following the Global
Employee Opinion Survey, which was rolled out
in the autumn of 2022, and included a specific
Health & Wellbeing question set, our operating
businesses have developed actions related to
employees’ health and wellbeing.
In common with many businesses, where
possible, we are offering employees more
flexibility with working patterns by offering
hybrid working and altering or being more
creative with shift patterns, thereby improving
individual work life balance.
Our operating businesses provide wellbeing
support and education to employees as
appropriate to their local needs. Many have
promoted specific health drives, for example,
prostate cancer testing, menopause awareness,
“Know your Numbers” health checks, Healthy
Eating Week, flu vaccinations, and road safety
education. We have a number of individuals
specially trained to support colleagues with
mental health issues and employee assistance
programmes in many of our businesses. Other
examples of how we support employees
include offering subscriptions to wellbeing apps,
creating quiet spaces for employees to relax,
and start of shift exercise stretching classes.
Senior’s businesses actively support
communities in which they operate by
undertaking a range of education focused and
charitable activities. Here are some examples, to
name but a few, of the activities our businesses
and employees have undertaken to support their
local communities:
Lymington Precision Engineering (“LPE”)
worked with an infant’s school as part of the
school’s engineering week, launching a
competition for students to design and create
a model for how LPE could accomplish
self-generation of energy. The winning team
had their design 3D printed. Businesses have
hosted local trade schools and technical
colleges, providing an insight into working for an
engineering company and giving students an
opportunity to see engineering in action.
Our Senior Aerospace AMT and Damar
businesses joined forces to raise money for a
local foodbank and hosted an “Employee Giving
Tree”. Other operations also contributed to local
foodbanks with Senior Flexonics Pathway
donating turkeys to a local Women’s Shelter.
Senior Aerospace Jet and Ketema support local
veterans and their families by participating in the
Wounded Warrior Project’s 5k run and Toys for
Tots, which is sponsored by US Marines
Reserve. The project gathers and distributes
toys to less fortunate children at Christmas.
Other locations held charity and fund raising
events, with all our UK business demonstrated
their baking skills and raising money for the
Macmillan Coffee morning. In 2023, Senior
Metal Bellows was a Silver Sponsor of
HEESCO’s St. Patrick’s 5K with 20 employees
participating to successfully defend their 2022
1st place finish. HESSCO provides support and
services for individuals living with a disability,
and their caregivers.
Senior Flexonics India has continued their
collaboration with local charities. For example,
they sponsored midday meals for 120 children
at a government primary school in Bati Village,
Mathura, Uttar Pradesh. They also collaborated
with an NGO, “Janta Rehabilitation center”
to support 35 blind students by providing four
desktops and one colour printer for their
computer education. Similar to 2022, Senior
Flexonics Crumlin created a Secret Garden for
a local primary School.
Colleagues also enjoy participating in sports
activities, team-building and sports events,
supported by Senior, for example a team from
Senior Aerospace Thailand came together to
complete in the Pattaya Marathon. We also have
wellbeing content on Learn such as Mindfulness
at Work and Positive Mental Health delivered in
multiple languages. It goes without saying that
we remain vigilant regarding occupational health,
for example ergonomics, supported by our
Health and Safety frameworks.
STRATEGIC REPORT / SUSTAINABILITY / SOCIAL CONTINUED
37SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 37
Senior’s Purpose – “We help engineer
the transition to a sustainable world for
the benefit of all our stakeholders” –
articulates our commitment to long-term
value creation for our stakeholders. We
recognise that effective governance of
sustainability-related matters is essential
to ensure that decision-making is aligned
with the Company’s overarching Purpose.
Senior’s Executive Committee is
responsible for the management of
sustainability-related matters. The Board
of Directors has oversight over such
matters through regular updates provided
during the scheduled Board meetings on
the Group’s sustainability performance
and initiatives.
READ MORE ABOUT:
Anti-bribery & Corruption on page 90
Agents Policy on page 90
Gifts and Hospitality Policy on page 90
Whistle-blowing on page 90
Human Rights and Modern Slavery on page 90
Responsible Sourcing on page 90
Cybersecurity and data protection on page 91
International Trade Compliance on page 91
Uphold high standards of ethical integrity
Senior’s Code of Conduct (the Code), updated in
2021 and available on the Company’s website,
plays an important role in supporting the Value
of Integrity within the Group. It contains
work-related scenarios, together with a selection
of questions and answers, to help employees
to understand the Code and relate it to their
individual roles and working environment. The
Code provides a clear framework on which to
base decisions when conducting day-to-day
business. It does this by:
• clearly setting out the behaviour expected of
all employees;
• providing guidelines which help employees to
apply our Values; and
• enabling employees to raise a concern or ask
a question if in doubt.
Governance
In July 2021, all employees were issued with a
personal copy of the Group’s updated Code of
Conduct booklet and provided with training on
the revised Code. All new joiners are issued
with a copy of the booklet and provided with
training on the Code. The Code of Conduct
booklet is available in all languages applicable
to the Group’s employees. A compulsory 2023
Global Code of Conduct online training course
was rolled out across the Group to all employees
during the year. Further details of the training
modules contained within the 2023 course
can be found on page 96. All employees and
Directors were required to achieve a Pass grade,
as a minimum. In 2023, 95% of employees
completed the annual Code of Conduct training
allowing for new starters who have not
completed their training immediately on joining.
In 2023, the Group Chief Executive Officer, the
Group Finance Director and other members of
the Executive Committee visited the Group’s
operating businesses as part of the Employee
Roadshow. The Roadshow was an effective
way of communicating directly with the Group’s
employees, providing them with updates on the
Group’s performance and strategy. The
Executive Leadership team also used the
Roadshow to reinforce the Code and the
importance of maintaining an absolute
commitment to the highest possible standards
of ethics and a zero tolerance towards bribery
and corruption.
The Company conducts annual Control Self
Assessments, encompassing questions related
to the Code, across all operating businesses.
These are further supported by internal audits,
which test, among other matters, compliance
with sections of the Code and the prominent
display of the Group’s whistle-blowing
procedures at all operating businesses. In
addition, risk assessments considering areas of
the Code, are conducted at operating business
and Group levels. Through its assurance
programme, the Board is able to ensure that
employees receive mandatory training and that
the Group’s operating businesses uphold high
standards of ethical integrity. All alleged
violations or complaints are investigated, and
any remedial actions are taken as necessary.
Any fraud issues that have come to the attention
of the Director of Risk and Assurance are
discussed by the Audit Committee, noting the
cause, the actions taken and any improvements
to internal controls implemented as a result.
Operating with integrity and in an ethical
manner builds trust and strengthens long-
term relationships with customers and other
stakeholders, underpinning the Board’s
strategic objectives and protecting the
Group’s reputation.
Responsible Taxation
Senior’s “Approach to Tax”, which can be found
on the Company’s website, is aligned with the
principles set out in the Code, which underpins
the way we go about our day-to-day business
across the Group and places integrity and ethical
behaviour at the heart of what we do. Once a
year, the Board of Directors approves the
Group’s tax strategy.
Product safety
Product quality is absolutely core in all of
Senior’s operating businesses and activities.
All of Senior’s businesses have ISO 9001
accreditation for manufacturing. The operating
businesses have additional aerospace and
automotive accreditations, dependent upon
their intended markets. Ultimate responsibility
for product quality and safety lies with the
senior manager of each business unit.
All products undergo service/safety risk
assessments, as required in Senior’s demanding
markets. Employees receive regular training on
product and service safety. All the Group’s
operating businesses have in place incident
investigation and corrective action policies and
procedures and quality testing programmes.
Product/service objectives or targets are set
by the operating businesses to meet customer
requirements and regular external product/
service safety audits are conducted, where
standards require.
ADDITIONAL RESOURCES
www.seniorplc.com/sustainability.aspx
STRATEGIC REPORT / SUSTAINABILITY / GOVERNANCE
38 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202338
STRATEGIC REPORT / INVESTMENT CASE
Investment case
Improving returns creating value for our shareholders
Our Purpose
We do this by:
• Using technology expertise in fluid
conveyance and thermal management
to provide safe and innovative products
for demanding applications in some of
the most hostile environments
• Enabling our customers, who operate in
some of the hardest-to-decarbonise
sectors, to transition to low-carbon and
clean energy solutions
• Staying at the forefront of climate
disclosure and action by ensuring
our own operations achieve our
Net Zero commitments
We help engineer the transition to a sustainable world
for the benefit of all our stakeholders
Read more on pages 70 to 73
Clear strategy to maximise shareholder value
Focus on IP-rich fluid
conveyance & thermal
management technology
and capabilities.
These capabilities are supported by a strong
body of design and manufacturing process
intellectual property and know-how.
Aerospace
Flexonics
Differentiated
Business Model
Focused strategic
priorities
Leading position in
attractive markets
Long-term growth and
value creation
Trusted and collaborative high value-added engineering and manufacturing company
Delivering minimum 13.5% ROCE (return on capital employed) over the medium-term
Strong core end markets Our differentiators Sustainability leadership
• Safety & ethics are always our highest priorities
• High performance operating system
• Intrinsically strong cash generation
• Autonomous and collaborative business
model with a robust control framework
• Strong balance sheet
• Technology, product and process innovation
supporting transition to clean energy
• Effective capital deployment
• Global footprint
Read more about on page 6
• The first company, worldwide in the A&D sector, to have
greenhouse gas reduction targets verified and approved by the
Science Based Targets initiative
• In September 2023 we were successful in having our Net Zero
(2040) carbon reduction targets verified by the SBTi
• CDP leadership rating of A on climate change for 2022 and 2023
• A rating from CDP for our progress on supplier engagement
for 2022
• Lost Time Injury Illness Rate improved by 68% and Total
Recordable Injury Rate improved by 78% from 2015 to 2023
• Early adopters of FTSE Women Leaders and Parker
Reviews on gender and ethnic diversity targets
Read more about on pages 16 to 37
Civil Aerospace
Increasing passenger
demand to fly and higher air
traffic drives the need for
new and replacement aircraft.
Environmental pressures to
focus on clean technology
is ideal for Senior’s product
and technology portfolio
Defence
Defence remains a priority
for the US and has increased
in importance for other
countries given the current
geopolitical situation. Senior
has key positions on major
funded aircraft programmes
Land Vehicle
Demand driven by
tightening global emission
control regulations for truck,
off-highway and
passenger vehicles
Power & Energy
Market leader of complex
fluidsystems and products
used within industrial, oil
& gas, petrochemical and
power generation sectors
Read more about our end markets on page 13
39SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 39
STRATEGIC REPORT / INVESTMENT CASE
Improving returns creating value for our shareholders
Our Purpose
We do this by:
• Using technology expertise in fluid
conveyance and thermal management
to provide safe and innovative products
for demanding applications in some of
the most hostile environments
• Enabling our customers, who operate in
some of the hardest-to-decarbonise
sectors, to transition to low-carbon and
clean energy solutions
• Staying at the forefront of climate
disclosure and action by ensuring
our own operations achieve our
Net Zero commitments
We help engineer the transition to a sustainable world
for the benefit of all our stakeholders
Read more on pages 70 to 73
Clear strategy to maximise shareholder value
Focus on IP-rich fluid
conveyance & thermal
management technology
and capabilities.
These capabilities are supported by a strong
body of design and manufacturing process
intellectual property and know-how.
Aerospace
Flexonics
Differentiated
Business Model
Focused strategic
priorities
Leading position in
attractive markets
Long-term growth and
value creation
Delivering sustainable growth
Delivering minimum 13.5% ROCE (return on capital employed) over the medium-term
David Squires | Group Chief Executive Officer
“ Our strategy and positioning in attractive and structurally
resilient core markets; technical capabilities and sustainability
credentials; underpins our commitment to continuing to deliver
a strong performance, which in turn will deliver enhanced value
for our shareholders.”
Strong core end markets Our differentiators Sustainability leadership
• Safety & ethics are always our highest priorities
• High performance operating system
• Intrinsically strong cash generation
• Autonomous and collaborative business
model with a robust control framework
• Strong balance sheet
• Technology, product and process innovation
supporting transition to clean energy
• Effective capital deployment
• Global footprint
Read more about on page 6
• The first company, worldwide in the A&D sector, to have
greenhouse gas reduction targets verified and approved by the
Science Based Targets initiative
• In September 2023 we were successful in having our Net Zero
(2040) carbon reduction targets verified by the SBTi
• CDP leadership rating of A on climate change for 2022 and 2023
• A rating from CDP for our progress on supplier engagement
for 2022
• Lost Time Injury Illness Rate improved by 68% and Total
Recordable Injury Rate improved by 78% from 2015 to 2023
• Early adopters of FTSE Women Leaders and Parker
Reviews on gender and ethnic diversity targets
Read more about on pages 16 to 37
Civil Aerospace
Increasing passenger
demand to fly and higher air
traffic drives the need for
new and replacement aircraft.
Environmental pressures to
focus on clean technology
is ideal for Senior’s product
and technology portfolio
Defence
Defence remains a priority
for the US and has increased
in importance for other
countries given the current
geopolitical situation. Senior
has key positions on major
funded aircraft programmes
Land Vehicle
Demand driven by
tightening global emission
control regulations for truck,
off-highway and
passenger vehicles
Power & Energy
Market leader of complex
fluidsystems and products
used within industrial, oil
& gas, petrochemical and
power generation sectors
Read more about our end markets on page 13
40 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202340
STRATEGIC REPORT / OUR STRATEGIC PRIORITIES
Our
strategic
priorities
The following seven
strategic priorities are
key elements of our
Business Model which
drive the creation of
stakeholder value.
Our progress since
these priorities were
established is shown
and they continue to
receive specific attention
and focus.
Focus on growth Considered and effective
capital deployment
Talent and development Enhance Senior’s
autonomous and
collaborative
Business Model
Competitive cost
country strategy
Maintain a
high-performance
operating system
Sustainability
Senior’s end markets have structural
long-term growth drivers. We
believe it is possible to outgrow our
end markets and we seek to do that
both organically and through
acquisition by:
• growing market share, particularly
with key customers;
• focusing on technology and
product innovation;
• geographical expansion; and
• seeking out and exploiting
adjacent opportunities organically
and through acquisition.
What we did in 2023
• Outgrew a strong Heavy-Duty
truck market in North America
and Europe supported by new
contract wins.
• Increased aerospace hydraulic
fittings revenue strongly (Spencer
acquisition) and secured first
fittings orders in Europe.
Advanced new technology in
both divisions, including battery
cooling, thermal management
of inverters, hydrogen gas
compression and fuel cells.
• Commenced series production
of additive-manufacturing
components for low-pressure
ducting applications.
• Won contracts for prototype
metal additive manufacturing
components on single-aisle
aircraft and helicopter platforms.
• Started manufacturing and
achieved certification of metallic
flanges to vertically integrate and
support our customers’ high rate
production requirements.
Our plans for 2024
• Continue to expand our capability
for the design, qualification,
manufacture and supply of
hydraulic fittings in Europe
through the expansion of
Senior Aerospace Ermeto.
• Commence manufacturing
and supply of fluid distribution
systems for hydrogen powered
fuel cells for marine and
industrial applications.
Governance
Growth opportunities are regularly
reviewed by the Executive
Committee and Board. The
Technology Council is in place
under the chairmanship of the
Group Director of Business
Development & Strategy and
progress on strategic technology
and product developments are
regularly presented to, and
discussed by, the Executive
Committee and the Board.
The long-term strategic growth
plan is evaluated at the annual
Board Strategy Review and
monitored continuously.
Senior understands the importance
of considered and effective capital
deployment in the interest of
maximising the creation of
shareholder value. All significant
investments undertaken by Senior
are assessed using a rigorous
investment appraisal process and
are supported by a business case.
The Group has a financial objective
to maintain an overall return on
capital employed in excess of the
Group’s cost of capital and to target
a minimum pre-tax return on capital
employed of 13.5% on a post IFRS
16 basis.
What we did in 2023
• Increased ROCE by 240 bps
through significantly improved
profitability.
• Maintained our pricing and return
on capital discipline when
negotiating contracts and
assessing investments.
• The integration of Spencer
Aerospace is progressing well
and we are pursuing collaborative
opportunities to grow the
business in line with the
business plan.
• Continued to actively manage
the portfolio by reviewing our
operating businesses and
evaluating them in terms of
strategic fit within the Group.
• Grew the dividend in respect of
the full year (total paid and
proposed) by 77%.
Our plans for 2024
• Continue to increase the
Group’s ROCE.
• Continue to explore strategic
options for the Aerostructures
business which includes
the potential divestment
of the business.
• Continue to drive working capital
efficiencies at all operations.
Governance
The Board regularly reviews the
Group’s portfolio to ensure that
long-term value is being generated
for shareholders. Where
appropriate, divestments will be
considered. M&A opportunities
are evaluated and discussed at
each Board meeting, as appropriate,
and the M&A and Prune To Grow
strategies are reviewed at the
Board Strategy Review.
Senior has a skilled workforce and
highly experienced entrepreneurial
business leaders. It aims to further
develop and attract new talent,
supporting employees with online
tools to enable personal and skills
development. The Group has a
strong focus on diversity and
inclusion across the business
including on our Board and
Executive team.
What we did in 2023
• Focused on implementing the
action plans from the 2022 Global
Employee Opinion Survey
feedback thereby enhancing
the employee experience.
• Continued to provide internships
and expand our work with
universities and technical colleges
to attract, develop and build a
strong talent pipeline. Grew and
developed our workforce through
skills and technical training
including increased
apprenticeships.
• Finalised the implementation of
Recruit, our online recruitment
system in the UK, to help develop
and build a strong talent pipeline.
• Continued to grow our skills and
personal development eLearning
library in Learn, our global learning
management system.
• Continued to focus on diversity
and inclusion across the business
with a particular focus on gender.
• Delivered our Group Leadership
Development Programme.
Our plans for 2024
• To engage with employees with a
Global Employee Opinion Survey
in 2024.
• Continue to focus on diversity and
inclusion across the business,
with a particular focus on gender
by launching a women’s network.
• Focus on talent acquisition,
retention plans, and future skills.
Governance
The Executive Committee conducts
an extensive review of operating
businesses’ leadership succession
plans. The review scrutinises
our talent pipeline, identifying
successors or interim cover for
key roles across our businesses.
Appropriate development plans are
in place and recorded in “Perform”,
our performance management
system, to enable individuals to fulfil
their potential. The Board formally
reviews the succession plans for the
Executive team and their direct
reports on a bi-annual basis.
Senior’s Business Model is
one of empowering and holding
accountable our operating
businesses, operating within a
clearly defined control framework.
Business plans are developed in
line with overall Group strategy.
Increasing collaboration amongst
operating businesses in the Group
is a priority in order to address our
customers’ needs whilst maintaining
an autonomous business structure.
Business leaders throughout
Senior are actively embracing
collaboration activities.
What we did in 2023
• Formed new Global Market
Teams (GMT) for hydrogen,
nuclear, and electronics cooling
applications with both Flexonics
and Aerospace participants.
• Successfully launched Senior’s
inaugural Group-wide Innovation
Competition aimed at inspiring
innovation and encouraging
greater collaboration. Two Gold
Awards for innovation were
presented, including an award to
Senior Aerospace Thailand for
their innovative energy saving
project (see page 26).
• The IT Council held quarterly
conferences to share best
practice and collaborate on
initiatives that support our InfoSec
Strategy with a particular focus on
cybersecurity.
• Participated in R&D projects
with our customers, focusing
on new technologies that will be
employed on future programmes.
• Held a global leadership
conference where Senior’s
senior leaders came together
to strengthen relationships
and collaborate.
Our plans for 2024
• To build on the success of
Senior Aerospace Spencer
and Senior Aerospace Ermeto
working together to qualify
high pressure fitting parts for
European customers.
• Continue to foster group-wide
innovation and collaboration
through the Senior Technology
Council.
Governance
The Executive Committee and
the Board regularly review the
organisational design of the Group
to ensure it is aligned to our
strategic plan.
We aim to enhance Senior’s global
footprint to ensure our operating
businesses stay competitive at both
a capability and cost level. Key
investments have been made in
Thailand, Malaysia, China, India,
Mexico, South Africa, and the Czech
Republic to help ensure we meet
our customers’ cost and price
challenges whilst enhancing returns
on investment. We have established
increasingly sophisticated capabilities
in these competitive cost countries
and optimised production capacity to
align with growing demand.
What we did in 2023
• Continued to increase the
production volume of Senior
Aerospace Mexico by transferring
Fluid Systems products from our
US businesses.
• Invested in machining capacity
in both Malaysia and Thailand to
support contract wins and
support the production ramp in
commercial aerospace.
• Launched production of new land
vehicle products in the Czech
Republic.
• Launched production of flexible
tube products for passenger car
OEM customers at Senior
Flexonics Mexico.
• Secured contracts to fill capacity
in our cost competitive country
locations.
Our plans for 2024
• Continue to transfer cost sensitive
product lines to competitive cost
locations to support customer rate
increase where appropriate.
• Continue to transfer fluid systems
parts to our Saltillo facilities from
US facilities.
• Complete industrial tube
transfer from France to the
Czech Republic.
• Ramp up production in Malaysia
and Thailand for recently won
Aerospace contracts.
Governance
The Executive Committee conducts
quarterly Business Reviews of all
operations. The Group Chief
Executive Officer and Group Finance
Director report and discuss progress
at each Board meeting. The overall
progress of the competitive cost
country strategy is reviewed at
the Board Strategy Review on
a regular basis.
Senior strives for excellence through
a high-performance operating
system, drawing on the many
worldclass practices from across the
Group. The key elements include:
• the Senior Operating System: an
operational toolkit incorporating
best practice processes such as
lean and continuous improvement
techniques, supplier
management, new product
introduction, 5/6S methodology,
factory visual management
systems, risk and financial
management; and
• a comprehensive business review
process utilising a balanced
scorecard incorporating KPIs with
a focus on performance, growth,
operational excellence and talent
development.
What we did in 2023
• Our Aerospace Division Lean
Council met monthly to
collaborate and share best
practices, while our Flexonics
Division lean champions
continued to leverage the Senior
Operating System tools.
• Both divisions conducted multiple
lean events with continuing focus
on cycle time reduction and cost
reduction, together with
continued targeted inventory
improvement workshops.
• Established a supplier council to
focus on improving supplier
on-time delivery, the risk of supply
interruption, cost reduction and
insourcing opportunities.
Our plans for 2024
• Focus on inventory reduction
through lean manufacturing and
Kaizen events.
• Continue deployment of product
lifecycle management (PLM).
• Recruit new Senior Vice President
for Operational Excellence
in Aerospace.
Governance
Our Vice President of Operational
Excellence chairs the Aerospace
Lean Council on a monthly basis.
The Executive Committee reviews
operational performance and the
Group CEO reports progress to the
Board at every Board meeting.
Sustainability is a fundamental
component of our strategic
approach. 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. Our engineering
proficiency plays a crucial role in
addressing the challenges of climate
change and promoting clean air,
particularly during the global shift
towards a lower-carbon economy.
This objective is realised by
leveraging our expertise and
advanced technology across a
diverse range of applications in
sectors that pose challenges for
decarbonisation.
What we did in 2023
• In September we were successful
in having our Net Zero (2040)
carbon reduction targets verified
by the SBTi.
• In March 2023, Senior was
awarded the highest leadership
status in CDP’s annual supplier
engagement ratings.
• CO
2
emissions were reduced
further in our operations, keeping
us on track to deliver our Scope 1,
2 and 3 SBTi verified Near-Term
(2025) Targets.
• 48% of our electricity was
sourced from renewable energy,
an increase from 41% in 2022.
• We secured multiple
development contracts for
clean energy projects.
Our plans for 2024
• Continue to deliver our Scope 1, 2
and 3 SBTi Near-Term Science
Based Targets.
• Maintain our CDP
leadership status.
• Extend our Supplier engagement
plan by offering support to
suppliers who have yet to set
carbon reduction targets.
Governance
The Executive Committee and the
Board reviews progress against our
sustainability targets at the regular
Board meetings, through the CEO’s
monthly report and during the annual
Strategy Review. The Board also
receives presentations from key
engineering and technology leaders
explaining progress with product
development aligned to our
customers’ decarbonisation goals.
Read more about Risks and
Uncertainties on pages 58 to 69
41SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 41
STRATEGIC REPORT / OUR STRATEGIC PRIORITIES
Focus on growth Considered and effective
capital deployment
Talent and development Enhance Senior’s
autonomous and
collaborative
Business Model
Competitive cost
country strategy
Maintain a
high-performance
operating system
Sustainability
Senior’s end markets have structural
long-term growth drivers. We
believe it is possible to outgrow our
end markets and we seek to do that
both organically and through
acquisition by:
• growing market share, particularly
with key customers;
• focusing on technology and
product innovation;
• geographical expansion; and
• seeking out and exploiting
adjacent opportunities organically
and through acquisition.
What we did in 2023
• Outgrew a strong Heavy-Duty
truck market in North America
and Europe supported by new
contract wins.
• Increased aerospace hydraulic
fittings revenue strongly (Spencer
acquisition) and secured first
fittings orders in Europe.
Advanced new technology in
both divisions, including battery
cooling, thermal management
of inverters, hydrogen gas
compression and fuel cells.
• Commenced series production
of additive-manufacturing
components for low-pressure
ducting applications.
• Won contracts for prototype
metal additive manufacturing
components on single-aisle
aircraft and helicopter platforms.
• Started manufacturing and
achieved certification of metallic
flanges to vertically integrate and
support our customers’ high rate
production requirements.
Our plans for 2024
• Continue to expand our capability
for the design, qualification,
manufacture and supply of
hydraulic fittings in Europe
through the expansion of
Senior Aerospace Ermeto.
• Commence manufacturing
and supply of fluid distribution
systems for hydrogen powered
fuel cells for marine and
industrial applications.
Governance
Growth opportunities are regularly
reviewed by the Executive
Committee and Board. The
Technology Council is in place
under the chairmanship of the
Group Director of Business
Development & Strategy and
progress on strategic technology
and product developments are
regularly presented to, and
discussed by, the Executive
Committee and the Board.
The long-term strategic growth
plan is evaluated at the annual
Board Strategy Review and
monitored continuously.
Senior understands the importance
of considered and effective capital
deployment in the interest of
maximising the creation of
shareholder value. All significant
investments undertaken by Senior
are assessed using a rigorous
investment appraisal process and
are supported by a business case.
The Group has a financial objective
to maintain an overall return on
capital employed in excess of the
Group’s cost of capital and to target
a minimum pre-tax return on capital
employed of 13.5% on a post IFRS
16 basis.
What we did in 2023
• Increased ROCE by 240 bps
through significantly improved
profitability.
• Maintained our pricing and return
on capital discipline when
negotiating contracts and
assessing investments.
• The integration of Spencer
Aerospace is progressing well
and we are pursuing collaborative
opportunities to grow the
business in line with the
business plan.
• Continued to actively manage
the portfolio by reviewing our
operating businesses and
evaluating them in terms of
strategic fit within the Group.
• Grew the dividend in respect of
the full year (total paid and
proposed) by 77%.
Our plans for 2024
• Continue to increase the
Group’s ROCE.
• Continue to explore strategic
options for the Aerostructures
business which includes
the potential divestment
of the business.
• Continue to drive working capital
efficiencies at all operations.
Governance
The Board regularly reviews the
Group’s portfolio to ensure that
long-term value is being generated
for shareholders. Where
appropriate, divestments will be
considered. M&A opportunities
are evaluated and discussed at
each Board meeting, as appropriate,
and the M&A and Prune To Grow
strategies are reviewed at the
Board Strategy Review.
Senior has a skilled workforce and
highly experienced entrepreneurial
business leaders. It aims to further
develop and attract new talent,
supporting employees with online
tools to enable personal and skills
development. The Group has a
strong focus on diversity and
inclusion across the business
including on our Board and
Executive team.
What we did in 2023
• Focused on implementing the
action plans from the 2022 Global
Employee Opinion Survey
feedback thereby enhancing
the employee experience.
• Continued to provide internships
and expand our work with
universities and technical colleges
to attract, develop and build a
strong talent pipeline. Grew and
developed our workforce through
skills and technical training
including increased
apprenticeships.
• Finalised the implementation of
Recruit, our online recruitment
system in the UK, to help develop
and build a strong talent pipeline.
• Continued to grow our skills and
personal development eLearning
library in Learn, our global learning
management system.
• Continued to focus on diversity
and inclusion across the business
with a particular focus on gender.
• Delivered our Group Leadership
Development Programme.
Our plans for 2024
• To engage with employees with a
Global Employee Opinion Survey
in 2024.
• Continue to focus on diversity and
inclusion across the business,
with a particular focus on gender
by launching a women’s network.
• Focus on talent acquisition,
retention plans, and future skills.
Governance
The Executive Committee conducts
an extensive review of operating
businesses’ leadership succession
plans. The review scrutinises
our talent pipeline, identifying
successors or interim cover for
key roles across our businesses.
Appropriate development plans are
in place and recorded in “Perform”,
our performance management
system, to enable individuals to fulfil
their potential. The Board formally
reviews the succession plans for the
Executive team and their direct
reports on a bi-annual basis.
Senior’s Business Model is
one of empowering and holding
accountable our operating
businesses, operating within a
clearly defined control framework.
Business plans are developed in
line with overall Group strategy.
Increasing collaboration amongst
operating businesses in the Group
is a priority in order to address our
customers’ needs whilst maintaining
an autonomous business structure.
Business leaders throughout
Senior are actively embracing
collaboration activities.
What we did in 2023
• Formed new Global Market
Teams (GMT) for hydrogen,
nuclear, and electronics cooling
applications with both Flexonics
and Aerospace participants.
• Successfully launched Senior’s
inaugural Group-wide Innovation
Competition aimed at inspiring
innovation and encouraging
greater collaboration. Two Gold
Awards for innovation were
presented, including an award to
Senior Aerospace Thailand for
their innovative energy saving
project (see page 26).
• The IT Council held quarterly
conferences to share best
practice and collaborate on
initiatives that support our InfoSec
Strategy with a particular focus on
cybersecurity.
• Participated in R&D projects
with our customers, focusing
on new technologies that will be
employed on future programmes.
• Held a global leadership
conference where Senior’s
senior leaders came together
to strengthen relationships
and collaborate.
Our plans for 2024
• To build on the success of
Senior Aerospace Spencer
and Senior Aerospace Ermeto
working together to qualify
high pressure fitting parts for
European customers.
• Continue to foster group-wide
innovation and collaboration
through the Senior Technology
Council.
Governance
The Executive Committee and
the Board regularly review the
organisational design of the Group
to ensure it is aligned to our
strategic plan.
We aim to enhance Senior’s global
footprint to ensure our operating
businesses stay competitive at both
a capability and cost level. Key
investments have been made in
Thailand, Malaysia, China, India,
Mexico, South Africa, and the Czech
Republic to help ensure we meet
our customers’ cost and price
challenges whilst enhancing returns
on investment. We have established
increasingly sophisticated capabilities
in these competitive cost countries
and optimised production capacity to
align with growing demand.
What we did in 2023
• Continued to increase the
production volume of Senior
Aerospace Mexico by transferring
Fluid Systems products from our
US businesses.
• Invested in machining capacity
in both Malaysia and Thailand to
support contract wins and
support the production ramp in
commercial aerospace.
• Launched production of new land
vehicle products in the Czech
Republic.
• Launched production of flexible
tube products for passenger car
OEM customers at Senior
Flexonics Mexico.
• Secured contracts to fill capacity
in our cost competitive country
locations.
Our plans for 2024
• Continue to transfer cost sensitive
product lines to competitive cost
locations to support customer rate
increase where appropriate.
• Continue to transfer fluid systems
parts to our Saltillo facilities from
US facilities.
• Complete industrial tube
transfer from France to the
Czech Republic.
• Ramp up production in Malaysia
and Thailand for recently won
Aerospace contracts.
Governance
The Executive Committee conducts
quarterly Business Reviews of all
operations. The Group Chief
Executive Officer and Group Finance
Director report and discuss progress
at each Board meeting. The overall
progress of the competitive cost
country strategy is reviewed at
the Board Strategy Review on
a regular basis.
Senior strives for excellence through
a high-performance operating
system, drawing on the many
worldclass practices from across the
Group. The key elements include:
• the Senior Operating System: an
operational toolkit incorporating
best practice processes such as
lean and continuous improvement
techniques, supplier
management, new product
introduction, 5/6S methodology,
factory visual management
systems, risk and financial
management; and
• a comprehensive business review
process utilising a balanced
scorecard incorporating KPIs with
a focus on performance, growth,
operational excellence and talent
development.
What we did in 2023
• Our Aerospace Division Lean
Council met monthly to
collaborate and share best
practices, while our Flexonics
Division lean champions
continued to leverage the Senior
Operating System tools.
• Both divisions conducted multiple
lean events with continuing focus
on cycle time reduction and cost
reduction, together with
continued targeted inventory
improvement workshops.
• Established a supplier council to
focus on improving supplier
on-time delivery, the risk of supply
interruption, cost reduction and
insourcing opportunities.
Our plans for 2024
• Focus on inventory reduction
through lean manufacturing and
Kaizen events.
• Continue deployment of product
lifecycle management (PLM).
• Recruit new Senior Vice President
for Operational Excellence
in Aerospace.
Governance
Our Vice President of Operational
Excellence chairs the Aerospace
Lean Council on a monthly basis.
The Executive Committee reviews
operational performance and the
Group CEO reports progress to the
Board at every Board meeting.
Sustainability is a fundamental
component of our strategic
approach. 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. Our engineering
proficiency plays a crucial role in
addressing the challenges of climate
change and promoting clean air,
particularly during the global shift
towards a lower-carbon economy.
This objective is realised by
leveraging our expertise and
advanced technology across a
diverse range of applications in
sectors that pose challenges for
decarbonisation.
What we did in 2023
• In September we were successful
in having our Net Zero (2040)
carbon reduction targets verified
by the SBTi.
• In March 2023, Senior was
awarded the highest leadership
status in CDP’s annual supplier
engagement ratings.
• CO
2
emissions were reduced
further in our operations, keeping
us on track to deliver our Scope 1,
2 and 3 SBTi verified Near-Term
(2025) Targets.
• 48% of our electricity was
sourced from renewable energy,
an increase from 41% in 2022.
• We secured multiple
development contracts for
clean energy projects.
Our plans for 2024
• Continue to deliver our Scope 1, 2
and 3 SBTi Near-Term Science
Based Targets.
• Maintain our CDP
leadership status.
• Extend our Supplier engagement
plan by offering support to
suppliers who have yet to set
carbon reduction targets.
Governance
The Executive Committee and the
Board reviews progress against our
sustainability targets at the regular
Board meetings, through the CEO’s
monthly report and during the annual
Strategy Review. The Board also
receives presentations from key
engineering and technology leaders
explaining progress with product
development aligned to our
customers’ decarbonisation goals.
42 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202342
STRATEGIC REPORT / TECHNOLOGY
Technology
Supporting our
customers today...
Fluid conveyance: Industrial & Land Vehicle
Off-road heavy-duty vehicles
Off-road heavy-duty vehicles are considered hard-to-
decarbonise. Consequently, OEMs have developed
more efficient combustion engines that can operate with
diesel, natural gas or hydrogen fuels. Senior offers
fluid-conveyance solutions for such engines, including
flexible exhaust hoses and coolant delivery modules.
Hydrogen Proton-Exchange Membrane (“PEM”)
fuel-cell based powerplants are anticipated to be the
most likely new mode of power for off-road heavy-duty
vehicles in the future. Working with our OEM
customers, Senior has developed fluid conveyance
products, including hydrogen inlet tubes and exhaust
manifolds for such fuel-cell based solutions.
Marine transportation
Operators of inland-marine transportation vessels are
exploring fuel-cell based propulsion systems to address
their GHG emissions. Using our expertise in precision
bellows technology, Senior has developed a solution to
improve the performance of a PEM fuel-cell propulsion
system that is currently being field tested in the EU.
43SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 43
STRATEGIC REPORT / TECHNOLOGY
IN THIS SECTION
44 Our technology themes
46 Our enabling technology
...to develop their
hydrogen fuel cell
capabilities for
tomorrow
Martin Barnes | Director of Business Development & Strategy
“We continue to work collaboratively across
Senior to progress the key technology themes
that future-proof our product portfolio and enable
sustainable growth across our end markets.”
44 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202344
STRATEGIC REPORT / OUR TECHNOLOGY THEMES
Our technology themes
Senior’s fluid conveyance and thermal
management businesses have design IP
(intellectual property) and our structures
businesses have manufacturing process
IP and know-how.
Both are underpinned by our extensive design
and engineering expertise and continued
investment in advanced manufacturing
technology, and supported by ongoing
collaboration through our Technology Council.
Our core technology themes support deliverable
growth opportunities in all our end markets.
Fluid conveyance
and thermal
management
Senior has extensive background IP
in fluid conveyance applications. For
example, Senior maintains a market
leading position in the design and
manufacture of bleed-air systems
on modern turbofan engines for
commercial aerospace applications,
and in low pressure ducting for
cabin-air and environmental control
systems on business jets and
emerging applications, such as
urban air mobility. In land vehicle
and industrial markets, we have
applied our extensive expertise in
fluid conveyance systems to multiple
applications, ranging from exhaust
systems for diesel engines, to
bespoke piping and ducting systems
for Proton-Exchange Membrane fuel
cells used in heavy-duty trucks and
marine transport.
On the thermal management side,
our technology and IP is used to
develop products that can prolong
the life of the battery and increase
charging speed. Senior has already
developed custom solutions for both
passenger car and heavy-duty
Battery Electric Vehicles. We are also
leveraging our expertise to develop
PEM fuel-cell recuperators, cooling
plates (for power electronics) and
heat exchangers used on large-
capacity electrolyser systems.
Capability highlights
• World class design capability for
complex fluid conveyance systems
incorporating zero-leakage flexible
joints and couplings to
compensate for vibration and
thermal displacement.
• Industry leader in the design and
fabrication of highly engineered
edge-welded and formed bellows
from 3.2 millimetres to 5.1 metres
diameter for various applications,
including frictionless servo-
pneumatic actuators.
• Component and system level
simulation and analysis, including
Finite Element Analysis (“FEA”),
Computational Fluid Dynamics
(“CFD”) and vibration analysis, plus
verification and qualification testing.
• Extensive expertise with thin-wall
aluminium, copper and stainless
steel structures for demanding
thermal management solutions,
for battery cooling, power
electronics cooling, fuel cell
and cryogenic applications.
• Additive Manufacturing
(“AM”) capabilities in both
metal and polymer materials
as an enabling technology for
complex high-pressure and
low-pressure fluid conveyance
systems, components of
thermal management systems
and high-efficiency heat
exchanger designs.
Case study
BATTERY COOLING PLATE FOR HEAVY-
DUTY COMMERCIAL VEHICLES
Senior’s expertise in both fluid conveyance and
thermal management neatly came together in a
recent project to develop a battery cooling plate for
a major commercial truck manufacturer. The
customer came to us with a preliminary design,
which was not efficient enough and caused a much
higher pressure drop than expected. Using our
experience and capability in modelling fluid
dynamics, we were able to develop a design that
was significantly more efficient in terms of heat
transfer, and reduced the observed pressure drop
by a factor of seven compared to the original
design. Hot spots seen with the original design
during battery recharging were also resolved via
Computational Fluid Dynamics and thermal
modelling, providing a uniform temperature across
the entire battery pack area which enabled higher
recharge current.
In addition, we were able to suggest a thinner
material for the battery plate, reducing overall
system weight while maintaining strength and
reliability. This led to a smaller system pump
specification and overall lower vehicle weight,
resulting in increased vehicle range, improved
battery life and reduced charging time.
This solution fulfilled our customer’s high expectations and led to a
significant number of prototypes on order.
Group revenue by technology theme
45SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 45
STRATEGIC REPORT / OUR TECHNOLOGY THEMES
30%
Structures
Complex Machining and
Manufacturing Know-
How: Process IP
70%
Fluid Conveyance &
Thermal Management
Product and System
Design & Manufacturing IP
Structures
Modern airframes and turbine
engines require durable lightweight
components manufactured to
extremely tight tolerances that
operate in extreme environments.
Senior is a trusted partner for high
value-added engineering and
manufacturing of critical structural
components for the leading OEMs in
the civil and military aviation sectors.
Our capabilities and strong
customer relationships have
secured substantial content on
the key aerospace platforms.
Capability highlights
• Extensive expertise in
manufacturing, assembly and
qualification of a wide range of
complex airframe, aero-engine
and power/energy components
• State-of-the-art capabilities in
complex 5-axis machining and
fabrication, including toolpath
optimisation, robotics, on-machine
probing and vibration dampening.
• Highly vertically integrated,
with wide-ranging process
qualifications (including Nadcap)
across complex assembly,
machining, Non-Destructive
Testing (“NDT”), special
processes, welding and forming.
• High level of collaboration
between operations in North
America, the UK and Southeast
Asia including software model-
based engineering capabilities.
Case study
RAPID NEW PRODUCT INTRODUCTION
CAPABILITY TO SUPPORT CUSTOMER
PROGRAMMES
A major OEM customer asked Senior Aerospace
AMT (AMT) in Arlington, WA, to take on an urgent
transfer of a complex package of airframe
components for a widebody freighter programme.
The programme consisted of 144 individual floor
beam assemblies and the transfer had to be
completed in a very short lead time to meet critical
delivery dates to keep the production line running.
As AMT began working on the program, multiple
challenges became apparent. AMT worked closely
with the customer to identify and resolve the
engineering issues, and to identify an alternative
method of manufacture to replace a legacy
chemical milling operation utilising a complex
machining programme incorporating an adaptive
milling process. This unique and innovative
approach was highly praised by the customer.
To reliably deliver the various floor beam
configurations at a high production rate, AMT held
a number of Kaizen events and utilised lean tools
and processes within the Senior Operating System,
developing specific colour-coded point-of-use
assembly tooling and ergonomic workstations.
Throughout the program, AMT worked closely with
the customer to resolve multiple challenges and
completed the programme transfer on-time.
Optimised assembly tooling and workstations developed for
high-rate production
Case study
HIGH VOLUME PRODUCTION
PROCESS WITH ADDITIVE
MANUFACTURING
Senior Aerospace BWT (“BWT”) is
advancing the AM capabilities of the
Group through the adoption and
development of non-metallic
AM processes.
We have established a dedicated
facility at BWT for non-metallic AM
which includes the proven Fused
Deposition Modelling (“FDM”)
technology, supported by a
leading OEM.
The FDM process is now in series
production for a business jet platform
with a leading aircraft manufacturer
(>600 sub-assembly components
per shipset, with a targeted production
rate of four shipsets per month). During
2023 >18,000 AM components were
manufactured and this is expected
to increase to >30,000 components
in 2024.
The FDM AM facility was subject
to a full process validation and product
qualification in close collaboration with
the customer, including performance,
functional and environmental testing/
certification.
Now AS 9100 accredited and proven
to be stable and controllable at a
production scale, the AM process is
seamlessly integrated into the
manufacturing organisation with fully
developed procedures, training and
proven stable process parameters
subject to ongoing process monitoring
and audits.
We continue to enhance our non-
metallic AM capabilities by further
expanding the application of the FDM
process and investing in other AM
technologies such as Selective Laser
Sintering (“SLS”) targeting potential
weight and performance advantages
across increasingly higher complexity
components, delivering lower cost vs.
traditional manufacturing methods.
46 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202346
STRATEGIC REPORT / OUR ENABLING TECHNOLOGY
Our enabling technology
In support of our core technology themes,
Senior continues to progress two key enabling
technologies that underpin innovation
throughout our product development and
manufacturing lifecycle: Additive Manufacturing
and Digitisation. Ongoing engagement through
our company-wide Technology Council ensures
that these technologies are collaboratively
promoted and developed to ensure that we
continue to provide safe and innovative products
for applications in some of the most hostile
environments, in line with Our Purpose.
Additive
Manufacturing
Additive Manufacturing (“AM”) is a
key enabling technology for Senior that
underpins the development of novel product
designs across our entire product portfolio.
AM offers multiple possibilities to develop
unique and innovative product designs. This
enables the designs to be optimised for a
multitude of different characteristics such
as weight, performance parameters and
physical envelope.
Senior has invested in developing internal
AM capability since 2017, starting with
the establishment of our metal Advanced
Additive Manufacturing Centre at our
Senior Aerospace SSP site in Burbank, CA.
Our non-metal AM capability development
is spearheaded by our Senior Aerospace
BWT site in Macclesfield, UK. We have
focused on developing a very high degree
of vertical integration within the entire AM
process, starting from design-for-AM all
the way through build, post-processing and
finishing. Our AM design expertise builds
on our established pedigree in using
advanced design simulation and analysis
tools, as well as AM-specific design tools
and build-process simulation software.
Our highly skilled engineering teams and
on-site materials laboratory are integral
to AM process development for different
materials as well as extremely complex
design features.
Our AM philosophy has always focused
on ensuring production rate readiness,
including building an extensive proprietary
dataset on AM-specific materials properties
and machine-material-process interactions.
This allows our customers to have
complete confidence in our ability to
produce AM parts for serial production, in
addition to prototyping. Our AM capability
has also been recognised by industry-
specific accreditation bodies, as evidenced
by our renewed Nadcap certification for AM
processes from the Performance Review
Institute (“PRI”); a rare achievement, which
only a handful of companies worldwide
have achieved to date.
We are currently working with a number
of Aerospace OEMs and Tier 1 suppliers
on qualifying various AM components for
production, ranging from fuel and oil flow
components for high volume single-aisle
aerospace applications, to critical structural
components for next generation defence
and helicopter platforms.
Capability highlights
• AM capabilities in both metal and
polymer materials as an enabling
technology for complex high-pressure
and low-pressure ducting systems and
heat exchanger designs.
• Full vertical integration of the AM design
and manufacturing process, including all
post-processing and finishing steps.
• Significant experience integrating
AM-derived subcomponents into
complex assemblies.
• Nadcap certification renewed via annual
audit for metal AM process capability –
highlighting the robustness of our AM
production system.
• AM-specific design software and tools
allow us to generate complex geometries
that would be impossible to manufacture
via conventional methods. We have also
invested in end-to-end digital platforms to
manage the AM product design.
• AM process simulation and extensive
process parameter datasets allow us to
predict and optimise various designs for
predictable build performance. Design
simulation and analysis capabilities help
us fully demonstrate AM benefits such
as part consolidation, performance
improvement and weight reduction in
a variety of demanding applications.
Case study
AUGMENTED REALITY
FOR MACHINE OPERATOR
TRAINING
There are some interesting use cases
we are now exploring in the Industry
4.0 space. For example, Senior
Aerospace Thailand in collaboration
with a local government agency has
explored the use of Augmented Reality
/ Virtual Reality (“AR”/”VR”) for
training of new machine operators.
The traditional method of machine
operator training requires the trainer
to physically demonstrate the various
steps required to perform a particular
task on the machine. The AR
technology tested allowed the expert to
set up a headset with suitable graphics
and visual aids within specific views to
illustrate specific action sequences and
modes of machine operation. As the
trainees looked at the machine control
panel, the AR interface recognised
specific views and highlighted the
specific buttons to press in the
correct sequence according to the
specific task.
The technology can be leveraged
across many use cases, which are
under development. Some examples
include a digital workbench with
assembly instructions that can also
incorporate fail-safe and error-checking
methodology if required.
Another potential use is for equipment
maintenance and repair, with remote
instructions and/or guidance on proper
steps to be followed.
47SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 47
STRATEGIC REPORT / OUR ENABLING TECHNOLOGY
Additive Manufacturing
Our internal expertise in
Additive Manufacturing
allows us to overcome
constraints of traditional
manufacturing processes
in developing innovative,
high-performance solutions
for demanding applications.
Digitisation
We are actively pursuing
Digitisation as an enabling
technology across all our
product and process technology
development processes to
improve efficiencies and
promote collaboration at
all levels.
Digitisation
Digitisation, or the fourth industrial
revolution, is a broad subject with multiple
workstreams covering the adoption of
digital technologies in manufacturing. Many
of Senior’s customers are already focusing
on operational data collection for value
generation throughout the entire product
lifecycle. To this end, we have seen
increasing requirements specified by OEMs
for a minimum level of digital capabilities
throughout their supply chains, and regular
scorecards grading suppliers’ capabilities in
terms of digital readiness, automated data
exchange and native product data formats.
We continue to improve our internal and
external capabilities in this field through
three specific focus areas:
1. Standardised design and engineering
development toolsets related to product
and process design and simulation/
analysis cycles. These design and
analysis tools are used within a number
of Senior’s operating businesses to
accelerate product development
lead-time and achieve manufacturing
cost synergies. In addition, we are
exploring the delivery of these tools
via cloud services to enable maximum
flexibility and scalability.
2. Project management and engineering
data management, covering Product
Lifecycle Management (“PLM”) and
Model Based Design (“MBD”). Adoption
and implementation of PLM is essential
to streamline our product development
cycles by encouraging reuse of common
engineering data, and eliminating
inefficiencies and lost time due to
design data change/version control
issues. Our MBD efforts are focused
on using data rich models with
embedded manufacturing and quality
control information and requirements,
removing the need for additional
documents and drawings.
3. Operations Technology toolkit: Various
operating businesses are working on
monitoring real-time process data with
the use of Industrial Internet of Things
(“IIOT”) and machine monitoring to
optimise resource usage and production
planning. This machine/resource
monitoring data can be directly
connected to their ERP system,
providing fresh insights to resource
planning and operations scheduling.
Capability highlights
• PLM solutions in use across multiple
operating businesses, especially in the
build-to-spec environment
• Engineering project management via
cloud based tools for New Product
Introduction (“NPI”) project portfolio
management and reducing lead times
for standard engineering workflows,
such as change notices, approval
cycles and data requests.
48 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202348
STRATEGIC REPORT / STAKEHOLDER ENGAGEMENT
Stakeholder engagement
Senior’s engagement with stakeholders is a continuous process with the full
involvement of our Board and Executive Leadership team.
Our stakeholders are people, communities and
organisations with an interest or concern in our
Purpose, strategy, operations, and actions.
Senior engages with five key groups – our
employees, customers, suppliers, shareholders,
and communities. By engaging and collaborating
with our stakeholders we can ensure our
business delivers long-term sustainable value.
Our Business Model lists our stakeholders
alongside the environment. We protect the
environment through our sustainability
frameworkas outlined in the sustainability
section pages 16 to 37.
Our stakeholders
CONTINUOUS
STAKEHOLDER
ENGAGEMENT
Career development opportunities
Employees
The calibre and capabilities of the people within the Group
drive our success and we recognise the importance of
attracting the best talent into the business and retaining and
developing individuals to enable them todotheir best work.
Read more on page 49
Skills, loyalty and value creation
Safe and high performance products
and value creation
Customers
Our core Value of “Customer Focus” firmly establishes
thatwe put our customer at the heart of everything we do.
Read more on page 50
Trust and long-lasting relationships
Respectful relationships and
supply chain stability
Suppliers
Constructive engagement with suppliers sets fair
expectations on safety, quality, ethical behaviour,
commercial terms and delivery performance.
Read more on page 51
Safe, high quality, ethical and cost-
effective suppliers
Sustainable growth in operating profit,
cash flow and shareholder value
Shareholders
Senior engages regularly with our investors to ensure
ourpriorities are aligned on strategy, capital deployment,
sustainability goals and value creation.
Read more on page 52
Investment and valuable feedback
Local support and value creation
Communities
We recognise our responsibility to the communities inwhich
we operate.
Read more on page 53
Talent for recruitment and
sense of community
49SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 49
Employees
How we engage
Employee engagement remains an area of
focus and in particular implementing the action
plans developed by our operating businesses
following the Global Employee Opinion Survey,
completed in October 2022. Business leaders
are now back into a regular cadence of holding
face-to-face, all-hands briefings and team
meeings, which we had not been able to do
during the pandemic restrictions. In addition, we
reinstated the global “Employee Roadshows”.
The Roadshows provide an opportunity for
members of the Executive Committee to
present business updates to all employees
following our 2022 year-end results, and answer
questions posed by employees. The Roadshows
cover Senior’s business strategy and business
performance, health & safety, sustainability,
cybersecurity and employee survey feedback.
Operating business leaders also present
information related to their individual business,
for example their local business strategy,
business performance metrics, product
development and customer wins.
We continued to utilise other methodologies to
engage with employees face-to-face such as
smaller group meetings, question and answer
sessions, skip level meetings and employee
focus groups. We also used tried and tested
methods like newsletters and meeting with
employee representative bodies such as works
councils and unions, and increased our use of
technology, for example employee apps, TV
information screens, and video messages.
While the Employee Opinion Survey is
a valuable tool in assessing employee
engagement, our operations recognise
the importance of maintaining lines of
communication and making sure employees
have mechanisms for making suggestions and
raising concerns, both formally and informally,
and have appropriate mechanisms in place to
facilitate this.
Mary Waldner, the non-executive Director who
took on the Board responsibility for employee
engagement in April 2023, and Jane Johnston,
Group HR Director have continued their
programme of face-to-face focus groups. In total
there were 28 focus groups of which 20 were
attended by Mary Waldner.
Outcome of engagement
At the beginning of 2023 all our operating
businesses communicated the outcome of the
Employee Opinion Survey to their teams and
developed action plans as a result of the
feedback. Action plans were developed in a
number of different ways, including consulting
with employee representative bodies and
unions, holding focus groups to better
understand the feedback and setting up action
planning sub committees.
We have received positive feedback on many
of the actions taken so far by the operations as
a result of the survey feedback and we remain
focused on communicating the actions we have
taken and the impact of those actions – “You
said, we did”.
Company actions responding
toengagement outcome
Management-level actions
Operating business action plans were developed
following the 2022 Global Employee Opinion
Survey. Progress against the plans were
monitored by the Executive Committee and
updates provided by the operating businesses
throughout the year via formal business reviews.
“Mission”, which is linked to strategy and
indicates whether people are inspired by the
purpose of the business, was identified as an
area for improvement. It was highlighted in the
prior survey (2021) and although there was a
small improvement, our business leaders will
continue to focus on communicating their
strategy and mission to their teams.
The next Global Employee Opinion Survey will
be in May 2024.
Following every focus group, the Group
HR Director provides feedback to operating
business leaders and HR leads, linking it to the
Employee Opinion Survey feedback and making
recommendations for actions.
Board-level actions
As referenced above, Mary Waldner and Jane
Johnston, Group HR Director have continued
their programme of face-to-face focus groups.
In addition, Mary attended a dinner and the final
delegate presentations on our Leading for
Excellence Group development programme and
in June attended the global HR Monthly calls.
Attending these events provided Mary with an
opportunity to understand more about the
culture of Senior, and in relation to the HR calls,
to better understand the people priorities being
worked on around the Group. The focus groups
and other interactions, afford an opportunity to
engage directly with a cross section of
employees, allowing them to ask questions and
provide feedback. As always, all the discussions
were positive, enthusiastic and interactive.
The Board reviewed progress against the 2022
Global Employee Opinion Survey action plans
and received regular updates on employee
engagement from Jane Johnston, the Group HR
Director and Mary Waldner, who has spent time
reviewing the feedback and doing a deeper dive
into the data.
STRATEGIC REPORT / STAKEHOLDER ENGAGEMENT
Case study
SENIOR LEADERSHIP
CONFERENCE 2023
In September 2023, approximately 80
senior leaders from across Senior gathered
in Toronto for our first Senior Leadership
Conference since 2018. The focus of the
conference was “How to Thrive and Grow
Through the Transition to a More Sustainable
World”. It is worth noting that we offset the
environmental impact of the travel for the 80
delegates. During the event we heard about
the fantastic progress we have made towards
meeting our environmental targets and how
we are developing technologies to support
our customers on their transition to a
sustainable world. We heard from key
stakeholders, gained a customer perspective,
shareholder perspective, a view from the
Board and were privileged to hear from Paul
Dickinson, Founder and Chair of CDP via a
prerecorded video. One of the highlights of
the conference was hearing from the winners
of Senior’s inaugural Group-wide Innovation
Competition. Throughout the Conference
there was plenty of active discussion and
debate, sharing of knowledge, collaboration
and networking. Delegates enjoyed the
opportunity to discuss key business issues in
smaller groups during the breakout sessions.
The feedback from the event was excellent,
and all who attended valued the opportunity
to meet face-to-face, to strengthen the
connections with existing colleagues and
meet and welcome new colleagues to
Senior. Delegates left with a renewed
focus on sustainability.
50 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202350
Customers
How we engage
We maintain an ongoing dialogue with our
customers across Senior, including at an
operating business, Division, Group and senior
management level. Division-level Customer
Relationship Managers and Global Marketing
Teams are in place in Europe, the UK, and the
USA to interact with and support all levels of
our largest customers, ensuring that we
monitor and understand as much as possible
the fundamental dynamics impacting their
businesses and the potential knock-on effects
on their end-markets. This regular and cross-
functional insight gives us the ability to respond
appropriately when issues arise and to quickly
capitalise on opportunities across the whole
Group. These interactions also provide the
information necessary for Senior to develop
strategies that link up with our customers’
forward-focused efforts, such as their
sustainability goals, including the transition to
a low-carbon economy, their new competitive
offerings to the marketplace, and mutual
investments in research and technology.
We actively seek feedback from our
customers via frequent interactions between
our operating business’s customer account
and business development managers, with
monthly reporting of activities and monitoring
of customer performance scorecards across
Senior’s operating businesses. Whilst Senior
regularly receives customer awards for
operational excellence, in those cases where
our performance falls short of expectations,
we actively engage with the customer to
agree improvement targets, implementation
schedules, resource dedication, and
executive involvement.
Furthermore, we continued to conduct regular
senior management meetings, including at CEO
level, with our major customers in 2023 as well
as frequent interactions regarding any supply
chain and labour issues, operational metrics,
communications, growth strategies, and market
dynamics. These executive-level meetings,
as well as forming a vital part of our ongoing
relationship management, helped to clarify
and focus our mutual activities towards driving
success for both Senior and its customers.
Remaining close to our Aerospace customers
helped us to support them through a challenging
supply chain and operational environment, which
has helped to position Senior as a valued and
trusted supply partner.
Outcome of engagement
The close partnerships we have nurtured with
our customers has allowed us to respond to
the growth in our core markets and to mitigate
operational challenges, which stemmed from
industry-wide supply chain and labour
shortages. Together, we have worked to solve
these challenges, supporting our customers
production and development programmes
to the maximum extent possible.
We continue to have strong engagement with
customers particularly in relation to clean energy
solutions and technology development.
Company actions responding to
engagement outcome
Management-level actions
Listening to and understanding our customers,
their programme/market issues and
opportunities provides valuable insight to Senior,
which helps to inform our future technology,
product development, and innovation
investments and activities towards ensuring
Senior remains a healthy, vibrant, and reliable
supplier in all the industries we operate in.
Board-level actions
Our Board receives detailed monthly updates
relating to customer activities, both current
programmes and new work we are bidding on.
During Board site visits detailed discussions take
place with operating business management
regarding the performance for our customers.
STRATEGIC REPORT / STAKEHOLDER ENGAGEMENT CONTINUED
Mike Sheppard
Flexonics Division Chief Executive
“Actively seeking feedback from
our customers and working
collaboratively to develop new
solutions enabled us to win
market share and outperform
the end-markets.”
Case study
EXTENDING OUR SUSTAINABILITY
SKILL BASE TO HELP SENIOR’S
CUSTOMERS ON THEIR PATH
TONET ZERO
Life Cycle Analysis (“LCA”) is becoming
increasingly important as part of the design
and development process, and we have
had an increasing number of customers
requesting that we adopt this. In 2023,
we trained some of our key engineering
personnel in LCA; this means we can offer
detailed information on environmental
impact of our products.
LCA assesses the environmental footprint of
a product from its inception, encompassing
resource utilisation during creation, its
utilisation by the end user, up to its ultimate
end-of-life disposition. LCA meticulously
gauges the environmental implications
associated with every specific phase of
product development and usage, including
factors such as energy consumption in
production, fuel expenditure in transportation,
and ecological costs at the end of its life
cycle. This comprehensive evaluation allows
for meaningful comparisons between
products, materials and methodologies,
furnishing valuable insights that guide
informed decision-making for both us
and ourcustomers on the path towards
achieving Net Zero.
51SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 51
Suppliers
How we engage
We engage with our suppliers in a variety
of ways, including during tender and bid
processes, scheduled status updates and
on-site visits and audits where appropriate.
As constraints in certain segments of our
supply chain persisted through 2023, the
Group continued to foster bilateral, collaborative
communication with its supplier base to help
mitigate the impacts of material shortages,
labour disruption and inflationary pressures
across our operating businesses. Our efforts
included close co-ordination with suppliers
regarding lead times, demand changes,
transportation options and other sources of
volatility. The Executive Committee continues
to closely monitor the health and performance
of critical Group suppliers and supports the
operating businesses in their engagement
with suppliers where necessary.
In line with our Contract Review Policy, which
is mandatory for all operating businesses, we
continue to communicate the requirements of
the Group’s Responsible Sourcing Policy to key
suppliers and provide feedback to our suppliers
on their performance and, where necessary,
will agree improvement action plans.
The Group also completes bi-annual reporting
pursuant to The Reporting on Payment Practices
and Performance Regulations (2017),
demonstrating our commitment to remain a
strong financial partner with our suppliers. The
Board reviews the bi-annual reports for our UK
subsidiaries to monitor compliance with
negotiated vendor payment terms.
For Scope 3 Greenhouse Gas emissions, Senior
has a commitment that 82% of its suppliers by
spend, covering purchased goods and services
and capital goods, will have Science Based
Targets by 2025. We continue to engage with
our suppliers to support them in setting
Science Based Targets by 2025.
Outcome of engagement
During 2023, our collaboration with suppliers
enabled the operating businesses to mitigate
ongoing supply chain volatility through lead
time management, order flexibility and other
cooperative solutions.
As part of CDP’s supply chain engagement
programme, we identified and engaged with
over 300 suppliers. We increased the number
of companies responding from 160 in 2022 to
182 in 2023. The insights from the engagement
programme are being used to set strategy and
prepare for the 2024 supplier climate programme.
CDP once again awarded Senior the highest
leadership status in its annual engagement
ratings based on our 2022 Supplier Engagement
Rating (“SER”). This put us in the top 8% of
companies on this metric.
Company actions responding to
engagement outcome
Management-level actions
Supply chain challenges and inflation
remained principal risks to the Group in 2023.
The Aerospace supply chain started to improve
with the volume of parts shortages and specific
supply chain challenges reducing considerably.
However, there are still some challenges on
certain material and component categories that
require ongoing attention. These supply chain
challenges, and actions to address them,
continued to be focal points during operating
business reviews and Executive Committee
meetings throughout the year. One of our
key suppliers in Thailand had a serious fire in
their factory which caused operations there to
cease. We worked proactively with their parent
company and our customers to mitigate the
impact while the factory is being rebuilt.
We continued to engage with our largest
suppliers on our Scope 3 greenhouse gas
emission targets and regular updates are
provided to the Board on progress.
Board-level actions
The Group Director of HSE & Sustainability
attended two Board meetings in 2023 and
provided an in-depth review on the progress
in engaging with suppliers in respect of the
Group’s Scope 3 targets. When necessary, the
Group CEO has actively intervened at executive
level with critical under-performing suppliers.
Read more in the Risk & Uncertainties Section
on page 58
Read more in the Sustainability Section on page 16
STRATEGIC REPORT / STAKEHOLDER ENGAGEMENT CONTINUED
Engaged with over
300
suppliers through CDP’s
supply chain programme
Launie Fleming
Aerospace Division Chief Executive
“Close interaction with suppliers
enabled us to mitigate ongoing
supply chain issues and support
our customers.”
52 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202352
STRATEGIC REPORT / STAKEHOLDER ENGAGEMENT CONTINUED
How we engage
In 2023, the Group continued its engagement
with shareholders, both by the Executive
Leadership team and the Group Chair.
The Group’s Chair attended the full-year and
interim results announcements in February and
August 2023, respectively. Additionally, the
Chair undertook a series of solo meetings with
the largest shareholders to receive feedback on
strategy, capital allocation and management.
Through its Investor Relations programme,
the Group engaged with shareholders
throughout the year using a diverse and
tailored range of channels:
• twice during the year following the
announcement of the full-year and interim
results, the Group Chief Executive Officer,
Group Finance Director and Director of
Investor Relations & Corporate
Communications undertook a series of
face-to-face and virtual meetings (by video
conference or telephone conference call)
with our major shareholders. These meetings
centred around the detailed performance of
the business, the Group’s strategic objectives
and how Senior’s fluid conveyance and
thermal management capabilities are key
enablers as we transition to a low-carbon
economy. We used these meetings to
understand our shareholders’ views and
address any concerns they may have
about the Group;
• in addition, we issued three market updates,
on each occasion offering major shareholders
the opportunity of a follow-up call with the
Executive Leadership team;
• the Group undertook a roadshow, to the
US in April (New York). The Group Finance
Director and Director of Investor Relations &
Corporate Communication met with current
shareholders as well as potential shareholders
to update on Senior’s investment case,
performance and strategy;
• the Group organised one investor site visit
during the year. This involved visiting two of
our UK sites: Senior Aerospace Bird Bellows
and Senior Aerospace BWT. The management
teams of these operating businesses hosted
institutional shareholders and sell-side
analysts. The visit showcased the fluid
conveyance and thermal management
capabilities of the Group and the practical
applications of our products and services;
• management used the opportunity presented
by the Paris Air Show to meet with members
of the investment community. Executives,
including the Director of Strategy & Business
Development and the Aerospace Division
Chief Executive hosted members of the
investment community, including
shareholders and analysts at the
Group’s stand at the Air Show;
• Senior hosted its first Technology Teach-In.
Experts from the Group’s operating
businesses provided an overview of the
Group’s technological capabilities, focusing on
fluid conveyance and thermal management.
A number of presentations illustrated the
Group’s differentiated technology. Investors
were able to gain a better understanding of
the opportunities presented by new products
being developed by the Group, which will help
customers operating in sectors that are hard
to de-carbonise as they transition to a
low-carbon economy; and
• the Group has also leveraged digital platforms
to keep our investors up-to-date. Tools such
as our newly upgraded website homepage
and more widespread use of LinkedIn
provided investors with updates on the Group.
A range of topics (from contract wins to
sustainability, community case studies and
our technological capabilities) were covered.
Throughout the year we responded to
requests from investors and analysts for
further information and addressed any
questions or concerns.
The Group typically makes constructive use
of the Annual General Meeting (“AGM”) to
communicate with its private shareholders,
whose engagement we value. Held in April
2023, this forum provides private shareholders
with the opportunity to hear directly from the
Group Chief Executive Officer about the
performance of the business. Private
shareholders had the opportunity to submit
questions to the Directors and listen to
their responses.
Barbara Jeremiah, non-executive Director
and Chair of the Remuneration Committee,
had a number of conversations with major
shareholders on remuneration matters,
including in respect of the renewal of the
Directors’ Remuneration Policy.
Regular investor updates were provided to
the Board as part of the reporting cycle, which
included feedback on investor perceptions and
the financial-market environment. The feedback
was provided either directly from shareholders,
from the Group’s Investor Relations function
or from our corporate broker. Updates from
Group-level engagement with shareholders
are also provided to the Board as appropriate.
Outcome of engagement
• Positive engagement via the Investor
Relations function and management with
current and potential shareholders.
• Shareholders were kept fully informed of the
market dynamics, strategy and progress of
the Group through various channels including
in-person meetings, investor site visits, a
Technology Teach-In and via social platforms
(i.e. website/LinkedIn).
• Maintained open channel of communications
with our shareholders on key topics such as
remuneration and targets.
• Focused engagement with selected ESG
ratings providers to ensure shareholders
viewing this information have accurate
and up-to-date insight.
• Provided reassurance that the Group
continues to be in a strong position and
remains a good investment opportunity.
• Received better understanding of shareholder
expectations in respect of strategic decisions
and sustainability, including climate change
risks and opportunities.
Company actions responding to
engagement outcome
Management-level actions
Engagement with shareholders during 2023
emphasised how focused they are on the
Group’s performance, strategy, end-market
recovery, and fluid conveyance and thermal
management capabilities. In response, we
continued with our normal Investor Relations
engagement programme which included
management presentations, in-person
meetings, investor site visits, virtual
presentations and the use of social platforms.
Investors were able to gain an appreciation for
the wider Senior leadership team and a practical
understanding of the Group’s markets and new
technological developments in fluid conveyance
and thermal management applications.
Board-level actions
Feedback received from engagement
with our shareholders has been taken into
consideration when making decisions on
Executive remuneration.
Shareholders
Ian King | Chair
“In 2023, the Board and
Executive team continued
extensive engagement
with shareholders.”
53SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 53
STRATEGIC REPORT / STAKEHOLDER ENGAGEMENT CONTINUED
Communities
• Through their charitable endeavours, Senior
Flexonics India improved the provision of
safe drinking water to 1200 students, and
a midday meal for 120 socio-economically
disadvantaged children.
• 135 men attended the Prostate Cancer
testing session hosted at Senior Aerospace
Weston. 70 of the men who attended were
Weston employees and 65 from the local
community. Nine men had raised PSA levels
thereby potentially providing early detection
of prostate cancer. The event also helped to
raise awareness of the importance of men’s
health issues.
• The charitable support for the women’s
homeless centre provided much needed
essential goods. Senior Flexonics Cape
Town’s support of Lawrence House has
helped support a centre that creates
an environment of safety and care for
abandoned and orphaned refugee children,
and unaccompanied foreign minors.
Company actions responding to
engagement outcome
Management-level actions
Our operating businesses continue to make
a positive contribution to the communities
in which they operate by participating and
supporting local education establishments,
contributing to charities serving causes local
to them, including fund raising, supporting
food banks, children’s homes, education
programmes, providing support for employees’
families such as flu vaccinations, cancer
foundations and charities supporting positive
mental health and the elderly.
Jane Johnston | Group HR Director
“It is always inspiring to hear how our operating businesses engage
with their local communities to make a positive impact.”
How we engage
In addition to providing employment
opportunities, our Group’s operations
support their local communities and nurture
good relationships with their stakeholders,
finding ways to contribute to local society.
Examples of our community engagement
programmes include:
• Senior Aerospace Thailand (“SAT”) supports
a number of education focused initiatives
including Eastern Economic Corridor Human
Resource Development (“EEC HDC”). This
is a new education model that supports the
21st century and will play an important role in
Thailand’s future economic development, by
developing talent in the Eastern Economic
Corridor (“EEC”). In addition SAT has
collaborated with the University of Technology
North Bangkok and Burapha to provide
hands-on factory experiences, and was
invited to speak to 132 female students from
local colleges about work readiness and
STEM subjects.
• Senior Aerospace AMT & Damar, along with
other local manufacturers, participated in an
event hosted by a community college’s
Advance Manufacturing Training and
Education centre. The event attracted 500
middle school and senior school students.
• Each year Senior Flexonics India identifies a
number of community projects and charities
they are going to support during the year. In
2023 they provided support to the People
Animal Trust, an organisation that rescues
a large number of stray animals, continued
their support for a local school for the blind,
sponsored a midday meal partnering with the
Akshay Patra Foundations and increased the
capacity of safe drinking water at a
government school.
• Senior Aerospace Weston partnered with the
Barry Kilbride Prostate Cancer Appeal to host
a Testing Day for employees and men in the
local community.
• Our Senior Flexonics Cape Town operation
supported two charities, one for homeless
women, by donating toiletries and non-
perishable food, and Lawrence House, a
home for orphaned boys and girls.
Outcome of engagement
• Senior Aerospace Thailand was honoured
by the EEC HDC with an award recognising
their support for education, and they have
supported manufacturing careers in Thailand
by providing University students with the
opportunity to experience a manufacturing
environment first hand. SAT has also
supported female students in local colleges
to inspire them to choose a career in
manufacturing, by role modelling the
opportunities available and encouraging
women to take up careers in engineering
and manufacturing.
• By participating in the Community College
event Senior AMT & Damar provided
students with valuable experiences and
helped inspire students to pursue careers
in the field of manufacturing.
Board-level actions
The Board is cognisant of its responsibility to
thecommunities in which we operate and the
need to have a positive impact and strong
employer brand. The Board receives updates in
the Group HR Director’s monthly Board reports.
Read more in the Social Section on page 32
Orphaned boys and girls are welcomed to
Lawrence House.
Cape Town operation supporting women’s
homeless charity.
54 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202354
STRATEGIC REPORT / SECTION 172 STATEMENT
Section 172 statement
This section describes how the Directors have had regard to the
matters set out in section 172 (1)(a) to (f) when performing their duties
under section 172 of the Companies Act 2006.
(a) the likely consequences of any decision in the long-term
Our Purpose Pages 4 and 5
Our Business Model Pages 6 and 7
Senior’s Strategic Sustainability Pages 18 to 21
Our strategic priorities Pages 40 to 41
Dividends 76
Viability Statement Page 78
Annual Board Strategy Review Page 89
(b) the interests of the Company's employees
Sustainability – Equality, Diversity and Inclusion Page 34
Sustainability – People and Culture Page 35
Sustainability – Employee Wellbeing Page 36
Stakeholder Engagement – Employees Page 49
(c) the need to foster the Company's business relationships with suppliers,
customers and others
Our Technology and Product Development on the Road to Net Zero Pages 20 and 21
Stakeholder Engagement – Customers and Suppliers Pages 50 and 51
Modern Slavery www.seniorplc.com
Anti-bribery and corruption Page 90
(d) the impact of the Company's operations on the community and the environment;
Sustainability – Environment Pages 22 to 24
TCFD Pages 25 to 31
Sustainability – Communities Page 36
Stakeholder Engagement – Communities Page 53
(e) the desirability of the Company maintaining a reputation for high standards of
business conduct
Sustainability – Governance Page 37
Culture and Values Pages 6 and 7
Whistle-blowing Page 90
Human Rights Page 90
(f) the need to act fairly between members of the Company
Progressive Dividend Policy Page 76
Stakeholder Engagement – Shareholders Page 52
Investment Case Pages 38 and 39
AGM Page 99
Section 172 disclosures
Section 172 of the Companies Act 2006 requires
a director of a company to act in the way that he
or she considers, in good faith, would most likely
promote the success of the company for the
benefit of its members as a whole. In doing so,
section 172 requires directors to have regard to,
amongst other matters):
(a) the likely consequences of any decision in
the long-term;
(b) the interests of the Company’s employees;
(c) the need to foster the Company’s business
relationships with suppliers, customers
and others;
(d) the impact of the Company’s operations on
the community and the environment;
(e) the desirability of the Company maintaining a
reputation for high standards of business
conduct; and
(f) the need to act fairly between members of
the Company.
We recognise that effective integration of
considerations outlined in section 172 into the
Board decision-making ensures a broader
stakeholder-oriented approach and long-term
sustainability of the Company. Senior takes the
following steps to incorporate section 172 into
the decision-making process by the Directors:
• Board training: all Board Directors receive
training on their legal duties, including those
under section 172.
• Terms of Reference: section 172
considerations are integrated into the schedule
of Matters Reserved for the Board and the
Terms of Reference of all Board Committees.
• Board Meeting Papers: all Board meeting
packs start with a cover letter explicitly stating
directors’ obligations under section 172.
• Stakeholder Engagement: regular
engagement initiatives with Senior’s
stakeholders, as outlined on pages 48
to 53, provide the Directors with valuable
insights into their expectations and concerns.
These insights help the Directors to better
understand the likely impact that certain
decisions or strategic options are likely to
have on various stakeholders.
55SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 55
STRATEGIC REPORT / SECTION 172 STATEMENT
Examples of s.172 considerations in practice
This section provides some examples of the decisions taken or implemented by the Board in 2023. The Directors acknowledge that every decision
they make will not always result in a positive outcome for all of Senior’s stakeholders. However, by considering the Company’s Purpose, Vision and
Values, together with our strategic priorities and having a process in place for decision-making, we aim to ensure that our decisions are considered,
proportionate and balanced.
Integration of Senior Aerospace Spencer
Following the acquisition of Senior Aerospace Spencer (Spencer) in November 2022, the Board oversaw integration of Spencer into
the Group’s operations. The Board was provided with regular updates from the Group Chief Executive Officer on the progress of the
integration process during every scheduled Board meeting.
S.172 Considerations
(b) interests of Company’s
employees
The Board recognised that strengthening Spencer’s approach to health and safety would be one of the first
focus areas; as a result a member of Senior’s sustainability team visited Spencer and helped strengthen its
EHS practices.
(c) fostering relationships with
the Company’s suppliers,
customers and others
The Board considered strategic requirements of Spencer’s customers and the opportunities these presented
for other Group operations.
(e) maintaining a reputation
for high standards of
business conduct
All employees of Spencer have been provided with a copy of Senior’s Code of Conduct booklet and enrolled
into the Group’s training programme.
(f) need to act fairly
between members
The Board was cognisant that the integration of Spencer was important in creating long-term value
for shareholders.
Outcome: The Board promoted cooperation between Spencer and Senior Aerospace Ermeto in developing the European fittings strategy.
Setting of Ethnic Minority Percentage Target for the Group Senior Management Team
The Board supported the recommendations of the Parker Review to set ethnic diversity targets for senior management.
S.172 Considerations
(a) the likely consequences of
any decision in the long-term
The implementation of the initiatives to promote ethnic inclusivity at all levels of Senior can bring numerous
benefits in the long-term, such as better-informed decision-making, innovative problem-solving approaches,
enhanced understanding of the market needs resulting in more agile strategic response.
(c) fostering relationships with
the Company’s suppliers,
customers and others
(b) interests of Company’s
employees
The Board was supportive of the recommendations of the Parker Review. Creating a workplace where diversity
is actively promoted is likely to create a positive organisational culture and engaged workforce.
(e) maintaining a reputation
for high standards of
business conduct
Setting the diversity target for the Group’s senior management creates accountability, encouraging Senior to
implement and foster an inclusive work environment. It shows commitment to act fairly and equitably,
upholding high standards of integrity.
Outcome: The Board approved the target of 30%, to be achieved by December 2027, in respect of the Group’s senior management positions that
will be occupied by ethnic minority executives.
Approval of Contracts and Capital Expenditure Requests
During the course of the year, the Board considered requests for contract extensions and capital expenditure from our operating
businesses.
S.172 Considerations
(a) the likely consequences
of any decision in the
long-term
As part of its decision-making, the Board assessed such factors as the impact on the Group’s budget and
financial planning, the returns on investment, environmental impact, opportunities to leverage the existing skills
of the employees and the alignment with the Group’s long-term strategy.
The Board reviewed the proposal for Senior Aerospace Ketema to sign the contract with an engine OEM, as
well as the capital expenditure request by Senior Flexonics New Delhi in respect of the funding to manufacture
products for its existing customer. Both requests represented significant future opportunities to accelerate the
profitability of the two operating businesses; they also played to the technical expertise of the workers
employed by them.
(b) interests of Company’s
employees
(c) fostering relationships with
the Company’s suppliers,
customers and others
(f) need to act fairly
between members
In both decisions, the Board has given due regard to make the best use of the Company’s financial resources.
Outcome: The Board approved the contract extension and capital expenditure requests for the operating businesses.
56 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202356
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
STRATEGIC REPORT / KEY PERFORMANCE INDICATORS
Key performance indicators
The Group highlights five financial and two non-financial metrics to
measure progress in implementing its strategy.
Non-financial metrics
The Group’s non-financial objectives are
asfollows:
• to reduce the Lost Time Injury Illness Rate
(per 100 employees) to 0.3 by 2025; and
• to reduce the absolute Scope 1 and 2
Greenhouse Gas (“GHG”) emissions
by30% by 2025 (compared to 2018
baseyear).
The key performance indicators (“KPIs”)
aredetermined as follows:
• CO
2
emissions is an estimate of the
Group’s carbon dioxide emissions in
tonnesequivalent; and
• lost time injury illness frequency rate is the
number of OSHA (or equivalent) recordable
injury and illness cases involving days away
from work per 100 employees.
The Group’s approach to calculating and
reporting our GHG emissions follows the
GHG Protocol.
2023’s reporting has incorporated Scope 2
greenhouse gas emissions (associated with
electricity consumption) calculated using both
the Location and Market Based methods.
The Scope 1 and 2 emissions Location Based
and Market Based (FY23) are independently
verified in accordance with the International
Standard on Assurance Engagements ISAE
3410 (limited assurance).
In calculating GHG emissions, the Group
has used 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.
Senior is on track to meet our 2025 targets
for Scope 1 and 2 GHG emissions and lost
time injury illness rate. Further details of the
Group’s performance, including its long-term
performance trends, are shown on pages 20
to 24. More detail on the Methodology can be
found on page 23.
Increased Decreased Unchanged
Carbon dioxide emissions Scope 1 and 2 (Market Based)
(Total tonnes CO
2
e)
29.5%from 2018 base year
In 2023, our absolute Scope 1 and 2 Greenhouse Gas (“GHG”) emissions reduced
from 57,418 tCO
2
e (2018) to 40,491 tCO
2
e. We are on track to meet our SBTi 2025
target with a 29.5% reduction against our 2018 base year.
We experienced a decrease in the Lost Time Injury and Illness Rate from 0.38 in 2022 to 0.32 in
2023. The total number of injuries has fallen as indicated by the Total Recordable Injury and
Illness Rate reduction from 0.93 in 2022 to 0.63 in 2023, a reduction of around 32%.
Lost Time Injury Illness Rate
(incidents per 100 employees p.a.)
16%
0
10,000
20,000
30,000
40,000
50,000
60,000
2018 2019 20232021 20222020
Target Total tonnes CO
2
e
Scope 1 & 2 Market Based Emissions
56,99257, 418
46,747
46,540
44,878
40,491
Scope 1 & 2 Market Based Emissions
57SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 57
963.5
1,102
8 47.1
22
23
22
23
4.7
7.1
22
23
3.4
4.8
10.28
4.36
22
23
57.7
41.4
22
23
STRATEGIC REPORT / KEY PERFORMANCE INDICATORS
Financial metrics
Increased Decreased Unchanged
The Group’s financial objectives are
asfollows:
• to achieve revenue growth (at constant
exchange rates) in excess of the rate
ofinflation;
• to increase the Group’s return on revenue
margin each year;
• to increase adjusted earnings per share
on anannual basis;
• to generate sufficient cash to enable the
Group to fund future growth and to follow
aprogressive dividend policy; and
• to maintain an overall return on capital
employed in excess of the Group’s cost
of capital and to target a pre-tax return in
excess of 13.5% on a post IFRS 16 basis.
The KPIs are determined as follows:
• revenue growth is the rate of growth of
Group revenue, at constant exchange rates;
• return on revenue margin is the
Group’s adjusted operating profit
divided by revenue;
• adjusted operating profit is defined in
Note 9;
• adjusted earnings per share is defined in
Note 12;
• net cash from operating activities is
available from the Consolidated Cash
Flow Statement; and
• return on capital employed is the Group’s
adjusted operating profit divided by the
average of the capital employed at the start
and end of the period, capital employed
being total equity plus net debt (defined
in Note 32c).
As discussed in the Group Chief Executive
Officer’s Statement, the year-on-year increase
reflected the strong growth in our core
markets and our positioning on key growth
platforms across both Aerospace and
Flexonics. The impact on the Divisions is set
out in the Divisional Reviews, on pages 70 to
73. The overall increase in Group revenue was
a result of higher revenues in both Aerospace
and Flexonics year-on-year.
The Group generated net cash from operating
activities of £41.4m, which funded gross
capital expenditure of £35.9m in 2023.
The year-on-year decrease was mainly
driven by working capital requirements,
as trading increased, to meet customer
demand and mitigate ongoing supply
chain issues in Aerospace.
The Group’s adjusted operating margin
increased by 140 basis points, to 4.8% for
the full year. This improvement in profitability
principally reflected volume related operating
leverage across our businesses, whilst
absorbing the impact of disruption caused by
supply chain issues. Inflationary pressures
were successfully mitigated by increasing
prices and surcharges.
The year-on-year improvement arose from
improved profitability and 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).
Return on capital employed (“ROCE”)
increased to 7.1%. The increase in ROCE
was mainly a result of the significant increase
in adjusted operating profit compared to
prior year.
Revenue growth
(£m)
+13.7%
Return on revenue margin
(%)
+140bps
Return on capital employed
(%)
+240bps
Adjusted earnings per share
(pence)
+135.8%
Net cash from operating
activities (£m)
-28.2%
58 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202358
STRATEGIC REPORT / RISKS AND UNCERTAINTIES
Risks and uncertainties
Amy Legenza | Group Director of Risk
and Assurance
“The Group’s robust risk
management framework
continues to serve as an
adaptable and insightful
strategic management tool
in an industrial landscape
that presents both challenges
and opportunities.”
Our approach to risk management
Identifying and effectively managing risks
is essential to the achievement of the Group’s
strategic priorities and supporting the Group’s
Purpose and sustainability initiatives.
The Group’s Business Model is described
on pages 6 and 7, our strategic priorities are
on pages 40 and 41, our Purpose is described
on pages 4 and 5 and Sustainability starts on
page 16.
The Board is responsible for the Group’s
integrated risk and assurance framework,
ensuring that the Group's risk process and
systems of internal control are robust,
continuously monitored and evolve to address
changing business conditions and threats. The
Board also provides direction and sets the tone
on the importance of risk management.
Responsibility for the monitoring and review
of the effectiveness of the Group’s risk and
assurance framework has been delegated by
the Board to the Audit Committee. The risk
process is reviewed and agreed annually with
the Audit Committee. The Director of Risk and
Assurance delivers a comprehensive report on
risk, assurance and compliance activities at each
Audit Committee meeting and presents to the
Board twice a year.
The Group embeds risk management within
its existing business processes across all levels
within the Group. Risk tolerance is reflected
throughout our control framework by way of
the Group’s Delegation of Authority, Code of
Conduct and internal controls system. The
Group's principal risk register is derived from a
catalogue of approximately 50 identified risks
encompassing strategic, financial, operational,
environmental and other external risks. This
catalogue of identified risks serves as the
foundation for comprehensive risk assessments
completed by every operating business and by
the Executive Committee as part of the annual
strategic planning process. The risk
assessments also consider emerging risks
as detected through internal workshops and
external sources. Emerging risks are risks which
may develop but have a greater uncertainty
attached to them in terms of likelihood, timing
and velocity. Emerging risks are monitored and
formally added to our identified risk catalogue
when the risk solidifies within the Group’s
strategic planning horizon.
The Group also conducts functional risk
assessments, targeting areas such as fraud, tax
evasion facilitation and climate change. The risk
assessment specific to climate change follows
the Group’s standard risk assessment process
but considers multiple time horizons, with some
elements contemplated over a 20+ year time
frame, and applies Scenario Analysis to the
most material transition and physical risks.
Climate-related risks are also considered as part
of the overall Group risk assessment completed
during the annual strategic planning process and
rank as one of the Group’s principal risks.
59SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 59
STRATEGIC REPORT / RISKS AND UNCERTAINTIES
Our approach to risk management
STRATEGIC REPORT / RISKS AND UNCERTAINTIES
During the risk assessment process, all risks
in the identified risk catalogue are evaluated
against our Purpose, strategy and Values to
understand their likelihood and impact of
occurrence, with those risks deemed as
significant forming our register of principal risks.
Once the principal risks have been identified,
mitigating controls and relevant policies are
documented and additional mitigating actions
are developed where appropriate. An owner
and due date are assigned to each action
and progress towards completion is closely
monitored. The operating business risk
registers are refreshed regularly and reviewed
by Divisional Management and the Executive
Committee. The Executive Committee conducts
its risk assessment twice a year and principal
risks are discussed at each Executive
Committee meeting. Every principal risk is
assessed for our financial viability scenarios to
see if they could have a material financial impact
individually or if they materialised together.
The Board performs robust, semi-annual
assessments of the principal and emerging risks
facing the Group. In addition, the Board regularly
assesses outputs from the integrated risk and
assurance framework and takes comfort from
the “three lines of defence” risk assurance
model. The first line represents operational
management who own and manage risk on
a day-to-day basis through effective internal
controls. The Group Executive Committee and
Divisional Management monitor and oversee
these activities, representing governance and
compliance as the second line.
The third line is the independent assurance
over these activities provided by internal and
other external assurance. The internal assurance
programme includes a combination of broad
scope internal audits, evaluating financial,
information technology and security, human
resources, governance and other controls, plus
limited scope thematic reviews designed to
provide assurance over targeted risk areas.
Internal audits are conducted either in person
or virtually, with all Group businesses audited
on a multi-year rotational schedule based on a
variety of factors, including site specific risks,
prior audit results and changes within local
management. Thematic reviews are deployed
across the entirety or a cross section of the
Group dependent on the risk being targeted.
In addition, all Group businesses must complete
a comprehensive annual Controls Self-
Assessment, allowing the Group to identify
and address gaps in compliance with the
Group’s governance policies and internal
control standards. Divisional Management,
the Executive Committee and the Audit
Committee monitor the completion progress
of improvement actions resulting from internal
audits, thematic reviews and the Controls
Self-Assessment.
The key elements of the Senior risk
management process are shown on the
following page.
Risk and assurance highlights
Conducted four thematic assurance
reviews addressing key risk areas for
the Group, including ongoing supply
chain constraints, trade compliance,
information security patching and
vulnerability management and
payment fraud controls
Piloted the Group’s climate change
related risks and opportunities
assessment process at one of our
largest operating businesses with
additional sites planned for an
expanded roll-out in 2024
Completed 22 internal assurance
audits and assessments, including nine
broad scope internal controls audits, 10
information security assessments and
three trade compliance “deep dive”
assessments; the 2024 plan includes
an additional 20 internal audits and
assessments across the Group
Evaluated the Group’s risk and
assurance systems in light of the UK
Government’s audit and corporate
governance reform framework to
inform and drive our response activities
into 2024
Refreshed critical policies within our
Corporate Framework, including the
Group’s Whistle-blowing, Contract
Review and Agents policies with
updates to our Code of Conduct and
Sustainable Sourcing policies planned
for 2024
60 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202360
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
The Board
• Has overall responsibility for ensuring the
Group's risk management process and
systems of internal controls are robust
and continually monitored
• Establishes the Group’s Purpose, Values and
strategy and defines the Group’s risk tolerance
and culture
• Monitors the nature, extent and management
of risk exposure for the Group’s principal and
emerging risks
• Provides direction and sets the tone on
the importance of risk management and
internal controls
Audit
Committee
• Supports the Board in monitoring risk exposure
in line with its Terms of Reference
• Reviews the effectiveness of the Group’s risk
management and internal control systems and
reports to the Board for consideration
Executive
Committee
and
Divisional
Management
• Development and implementation
of strategy, operational plans, policies,
procedures and budgets
• Monitoring of operating and financial
performance including prioritisation and
allocation of resources
• Assessment, control and mitigation of risk –
including emerging risks
Group
Corporate
Functions
• Lead and co-ordinate the Group's risk and
control related processes
• Assesses and supports the Group in
mitigating the Group’s risks through policies
and procedures, control self-assessments,
specialist support, business reviews and
other activities
Operating
Businesses
• Operating businesses identify, assess and
mitigate their key risks
• Risk assessments are reviewed and discussed
by Divisional Management and the Executive
Committee
1
Identify risks
The risks to the achievement of the Group’s strategic
priorities are identified from a top down and bottom up
perspective. Existing and emerging risks are considered.
2
Evaluate gross (inherent) risks
The gross level of risk, considering impact and likelihood,
to the achievement of the strategic priorities is assessed.
3
Identify existing controls and processes
The existing controls and processes which mitigate the
risks are identified and assessed for adequacy.
4
Risk response planning
Based on the controls and processes already in place,
the net risk from an impact and likelihood perspective is
evaluated. Where the net risk is considered to be higher
than the Group’s tolerance level for that risk, additional
mitigating actions are identified and owners assigned.
5
Monitor and assure
The most significant risks are closely monitored. Second
line assurance and internal audit activity is conducted to
assess whether key controls are effective and risks are
mitigated to an acceptable level. Timely implementation
of resulting actions is monitored.
6
Risk reporting and review
The status of the most significant risks, top down
and bottom up, are regularly reviewed to ensure any
changes to the risk profile are captured and acted upon.
The consolidated risk, assurance and control position is
reported to the Audit Committee and the Board.
Key responsibilities within the
risk management strategy
Senior’s risk management process
61SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 61
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
RISK DEFINITIONS
Strategic
1 Economic and Geopolitical Impact
2 Climate Change
3 Innovation and Technological
Change
4 Implementation of Strategy
5 Pandemic
Operational
6 Cyber/Information Security
7 Supply Chain Challenges
8 Customer Disruption
9 Programme Management
10 Price-down Pressures
People and Culture
11 Talent and Skills
Financial
12 Inflation
13 Financing and Liquidity
Compliance
14 Corporate Governance Breach
Impact of Occurrence
Likelihood of Occurrence
Low
High
Low
High
14
4
1
11
7
3
10
8
2
9
5
13
12
Increased Residual Risk Decreased Residual Risk
Residual Risk Unchanged
6
Risk heat map (Residual risk after mitigations)
62 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202362
Principal Group risks
During 2023, the Group carried out assessments of the principal risks
and uncertainties that could threaten the Group’s Business Model or
achievement of its strategic priorities. The risk assessments included
consideration of emerging risks (as defined on page 58) which for
2023 included the potential risks to the Group from the introduction
of artificial intelligence capabilities into our systems, processes and
markets and the escalating compliance and resource pressures
resulting from rapidly expanding sustainability and governance
reporting requirements. Based on the results of the risk
assessments, the Group’s principal risks remain unchanged
since our 2022 Annual Report and Accounts.
Strategic
Economic and geopolitical impact
2
3
4
5
A
B
C
D
E
Principal Risk
There is a risk that there will be a global economic downturn impacting some or
all of the sectors within which the Group operates.
Changes in critical trade relations factors, such as tariffs, sanctions and
exchange rates, resulting from geopolitical events have created uncertainty
over the future impacts on international trade, including export revenues,
material availability and cost and the ability to employ foreign nationals. Shifts
in political regimes and government spending programmes can lead to higher
taxation and have an impact on earnings.
These events may result in supply chain disruptions, rising energy prices
and labour shortages which can escalate inflationary pressure on earnings.
Additional detail regarding our inflation risk and responses can be found
on page 68.
How we manage it
Divisional Management and the Executive Committee closely monitor
economic and geopolitical trends that may impact the operating businesses
through regular business reviews. Contingency planning is undertaken to
minimise operational disruption where necessary.
The Group employs tax, treasury and trade compliance specialists who
maintain the Group’s trade-related compliance programmes and continually
monitor the impacts of evolving trade relations from regulatory, supply chain,
people and financial perspectives.
The Board ensures that it is kept informed of significant trade developments in
order to assess the impact on the Group and take action as appropriate.
The Group’s Treasury Committee closely monitors potential changes to
international tax and treasury regulations and tariff programmes to understand
the likely impacts on the Group.
Focus in 2023
Persistent supply chain constraints and inflationary pressures extended
economic uncertainty through 2023. As a result, the Group remained focused
on sustaining the benefits of prior restructuring projects and carefully managing
growth in working capital and headcount as customer demand continues to
recover from the effects of the COVID-19 pandemic, labour disruptions and
other recent industry disturbances.
In response to continued trade tensions resulting from the ongoing crisis in
Ukraine and the evolving Israel-Gaza crisis, the Group conducted a targeted
assurance review across the operating businesses to confirm that our relevant
trade compliance controls continue to operate effectively.
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
The principal potential risks and uncertainties,
together with actions that are being taken to mitigate
each risk, are:
Increased residual risk
Decreased residual risk
Residual risk unchanged
Areas of strategic priorities
1
Enhance Business Model
2
Focus on growth
3
High performance operating system
4
Competitive cost countries
5
Capital deployment
6
Talent and development
7
Sustainability
Key Performance Indicators
A
Organic Revenue Growth
B
Return on Revenue Margin
C
Adjusted Earnings per Share
D
Net Cash from Operating Activities
E
Return on Capital Employed
F
Carbon Dioxide Emissions
G
Lost Time Injury Illness Rate
All of the Group’s principal risks are factored into the severe but
plausible downside scenario applied in the Group’s viability
assessment as described on page78.
63SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 63
Strategic
Climate change
2
5
7
B
F
G
Principal Risk
There is a risk that climate change and/or the measures taken to address it may
have an adverse impact on the Group. Climate change may result in extreme
weather events that may impact our ability, or that of a supplier, to meet our
customers’ requirements.
Our customers’ products may evolve to require new technology, such as
electrification. This also presents an opportunity for the Group to be involved in
replacement technologies.
Increasing legislation aimed at accelerating decarbonisation may increase our
operating costs. It may also change consumer behaviours impacting on our end
markets. For example, consumers may fly less often.
How we manage it
To mitigate the impact of catastrophic events, such as an extreme weather
event, each site has a scenario-based Business Continuity Plan which is tested
on an annual basis. The Group also has insurance which helps to protect profits
in such situations.
The Group continues to invest in and develop solutions relevant to changing end
markets. Examples include battery cooling, waste heat recovery, heat sink in
hybrid cars technologies and additive manufacturing solutions for aerospace.
A comprehensive climate change risk and opportunity assessment exercise is
conducted annually by a multi-disciplinary team to evaluate transitional and
physical risks, as well as resource efficiency opportunities. The assessment
considers multiple time horizons, with some elements contemplated over a
20+ year time frame. The exercise also applies Scenario Analysis to the most
material transition and physical risks as per TCFD. The Group’s SBTi approved
emissions reductions targets covering GHG emissions from the Group’s
operating businesses are consistent with reductions required to limiting climate
warming to 1.5°C and are aligned with Net Zero as Near-Term Targets. SBTi has
approved the following targets:
• Overall Net Zero Target – The Group commits to reach Net Zero GHG
emissions across its value chain by 2040 from a 2018 base year;
• Near-Term Targets – We commit to reduce our absolute Scope 1 and 2 GHG
emissions by 30% by 2025 compared to a 2018 base year and for Scope 3
GHG emissions, the Group also commits that 82% of its suppliers by spend,
covering purchased goods and services and capital goods, will have Science
Based Targets by 2025; and
• Long-Term Targets – The Group commits to reduce absolute Scope 1, 2 and
3 GHG emissions 90% by 2040 from a 2018 base year.
Focus in 2023
In 2023, the Group was awarded the highest possible “leadership” rating of A
from the globally recognised CDP for our climate change disclosures.
In support of our Science Based Targets, the Group has achieved a 29.5%
reduction in combined Scope 1 and 2 carbon emissions through 2023
compared with the 2018 base year, on track to meet our 2025 Near-Term
SBTi Target.
During 2023, the Group engaged with over 300 of its leading suppliers
regarding climate change. 182 of these suppliers provided a full disclosure on
their climate change programmes, representing a 14% increase from the level
of response in 2022. CDP awarded the Group with the status of Supplier
Engagement Leader in recognition of our efforts in 2022 to raise the level of
climate action across our supply chain.
The Group’s 2040 Net Zero targets were successfully validated by SBTi in
September 2023.
In 2023, the Group’s climate change risk and opportunity assessment
programme was expanded through a pilot assessment process conducted
at one of the Group’s largest operating businesses.
For further details on TCFD and Sustainability, including how the Group is
leveraging our technology and product development to drive progress towards
Net Zero, please see pages 16 to 31.
Strategic
Innovation and technological change
1
2
5
7
A
B
C
E
F
Principal Risk
The Group must innovate in order to continue to win new business and achieve
profitable growth. There is a risk that the Group does not continue to innovate
and implement technological change, resulting in its technology and/or
products becoming uncompetitive, less desirable or obsolete.
New technologies may have an impact on the Group’s markets, for example
electric vehicles and hydrogen aircraft.
How we manage it
The Group develops products to support the move to low-carbon technologies
and sustainability in the land vehicle, industrial and aerospace markets.
The Group has identified specific technology themes and focus areas that
inform the product life cycle and technology development roadmaps across
both the Aerospace and Flexonics divisions. The Group also has a Technology
Collaboration forum which meets regularly to discuss innovation and
technological changes across our various businesses and markets.
The Group invests in two enabling technologies which underpin our product
development activity across all market sectors: Additive Manufacturing ("AM")
and Digitisation. Our Advanced Additive Manufacturing Centre ("AAMC")
continues to maintain and add various industry-leading AM process
certifications. The AAMC team continues to improve its design capability to
re-engineer existing product designs via AM to deliver significant weight
savings and performance enhancements.
Global Marketing Teams for each technology focus area co-ordinate
development activities across various operating businesses to ensure that
customer requirements and industry trends are addressed.
The Group invests in machining and fabrication technology enhancements to
improve process efficiency and reduce cost.
The Senior Operating System delivers best practice tools for innovation and
product development across the Group.
The Technology section, starting on page 42, details the Group’s technology
themes and product development case studies.
Focus in 2023
In 2023, the Group focused on five specific Technology Focus areas –
Hydrogen, Electrification, Aerospace Heat Exchanger development, Additive
Manufacturing and Digitisation. We continue to invest in new product
development and emerging technologies within these focus areas, with
significant progress being made on a number of key projects, including:
• introduction of several innovative products for battery, power
electronics and fuel cell cooling, including ultra-thin patented designs
for very demanding environments;
• development of innovative heat exchanger designs for
aerospace applications;
• design and manufacture of complete inlet and exhaust piping and ducting
system for a polymer exchange membrane fuel cell designed for use in
marine applications;
• continued development of an extensive process parameter dataset for
complex metallic AM component design and manufacture in multiple
high-performance materials, including full vertical integration of the complete
AM process chain; and
• entered series production with non-metallic (polymer) AM for low-pressure
ducting applications on a business jet platform, successfully completing
a full process validation and product qualification in close collaboration
with the customer, including performance, functional and environmental
testing/certification.
In 2023, we hosted the first Group Innovation Competition which invited
our operating businesses to submit innovation projects focused on process
technology, new products or environmental cost savings for judging and
recognition. More information regarding the Innovation Competition can
be found on page 26.
The Group remains focused on sustainability as a driver for new product
development and market expansion through leveraging existing capabilities,
expertise and products in thermal management and fluid conveyance into new
adjacent markets such as space, marine, advanced nuclear and hydrogen.
Additional detail can be found on pages 20 and 21.
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
64 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202364
Strategic
Implementation of strategy
1
2
3
4
5
6
B
D
E
Principal Risk
An inability to implement the Group’s strategy and/or effectively manage the
Group’s portfolio could have a significant impact on the Group’s ability to
generate long-term value for shareholders.
Ambiguity surrounding the Group’s strategy and strategic priorities may result
in investors failing to recognise the value of the Group’s investment case.
How we manage it
The Group regularly reviews its strategy and portfolio to ensure that
long-term value is maximised for shareholders. Where appropriate,
divestments will be considered.
M&A opportunities continue to be evaluated and discussed at the Board’s
strategic review. Processes are in place to ensure that the Group is aware of
emerging acquisition opportunities.
The Group has a well-established M&A framework that includes proven
valuation, due diligence and integration processes designed to be efficiently
executed by an experienced cross-functional team.
A comprehensive process for efficiently completing strategic divestments is in
place and has been successfully deployed with past divestments.
Post-acquisition/divestment reviews are conducted as appropriate.
The Group has incorporated the experiences gained from navigating
strategic challenges, such as the COVID-19 pandemic, into an adaptable
response framework to ensure sufficient focus remains on the Group’s
core strategic priorities while responding to critical operational, strategic
and financial challenges.
Focus in 2023
The Executive Committee and Board carried out annual assessments of our
strategic objectives, end markets, capabilities and technologies and determined
that the Group is well positioned to deliver its strategy and continue the
transition through the evolving Net Zero world.
The Group continues to focus on:
• investment in new technology and product development in our core
markets with an emphasis on Fluid Conveyance, Thermal Management
and expansion of our Additive Manufacturing capabilities;
• expanding our presence in markets with attractive structural growth
potential, such as space, low-carbon propulsion systems and advanced
nuclear technologies such as small modular reactors, through leveraging
the expertise we have developed in our traditional core markets; and
• liquidity, effective cash management and a healthy balance sheet.
The Group completed the integration of Senior Aerospace Spencer, a leading
manufacturer of highly engineered, high-pressure hydraulic fluid fittings for
commercial and military aerospace applications. Senior Aerospace Spencer
was acquired in 2022 to expand the Group’s fluid conveyance capabilities.
Strategic
Pandemic
2
3
6
A
B
C
D
E
Principal Risk
A pandemic, such as the recent COVID-19 pandemic, could have a
significant impact on business operations affecting our employees, our
supply chain and ultimately our ability to meet customer requirements.
There is also the potential for a pandemic to create a global slowdown in
demand impacting our end markets.
An adverse indirect consequence may result from our customers having
to reduce production rates even where our supply chain and production
remains intact.
How we manage it
The Group has a proven Incident Response Plan in place to manage the Group’s
response to a pandemic.
Emerging threats are monitored and advice provided to employees as
appropriate. This may include travel restrictions, temporary site closures
and additional safety measures when at work.
Where a pandemic threat does emerge, we liaise with our suppliers and
customers to manage the situation to the greatest extent possible.
Focus in 2023
The COVID-19 pandemic began to transition into an endemic stage in 2023
as the US and other countries ended their official public health emergency
declarations and lifted remaining disruptive COVID-19 restrictions. Despite
the welcomed improvement in the pandemic’s status during 2023, the Group
remains vigilant to the potential impacts of a resurgence of the COVID-19
pandemic or a manifestation of a completely new regional or global pandemic.
The response measures enacted in response to the COVID-19 pandemic
remain in effect and form the basis for the Group’s pandemic response
playbook. These measures include effective business continuity and incident
response planning and testing, deployment of an oversight committee, fluid
communication with customers and suppliers to manage demand fluctuations,
flexible work arrangements for employees and strong relationships with Group
investors and other stakeholders.
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
65SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 65
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
Operational
Cyber/information security
1
3
B
Principal Risk
The risk that the Group is subjected to external threats from malware, hackers
or other malicious actors, potentially causing critical or sensitive data to be lost,
corrupted, made inaccessible, or accessed by unauthorised users, resulting in
the potential for business disruption and financial and/or reputational loss.
The cyber threat landscape is continually evolving, with threat actors developing
and implementing new methods to identify and exploit gaps in Information
Security ("IS") defences. In addition, alternate work arrangements, such as
remote working or hybrid schedules, are now common in today’s office
environment and can increase IS risks.
How we manage it
The Group has a strategic roadmap to continually improve IS with focus on
people, process and technology.
The Group has dedicated IS capability in place with a wide range of proactive
and reactive security controls, including up-to-date antivirus capability across
our operating businesses and network and system monitoring to identify
vulnerabilities and potential threats.
A multi-year rotational IS assurance review programme is in place to assess and
enhance compliance with established IS controls, policies and procedures.
Vulnerability metrics have been developed and are actively reviewed by
Divisional Management and the Executive Committee.
The Group has a risk management framework specific to Information
Technology (“IT”)/IS.
With our decentralised Business Model, each operating business deploys a
suite of protection and monitoring services, including endpoint detection and
response, vulnerability management and cyber threat intelligence. These are
fully monitored by our centralised Group IS team to ensure consistency,
continuity and rapid remediation.
Technology-led security controls are further supported by a clear and
documented series of policies, standards and playbooks.
Employees receive annual awareness training on cyber-related issues
and the Group maintains a cyber-awareness campaign to alert employees
to cyber threats.
A near miss and incident reporting process is deployed across the Group to
alert IT/IS teams of immediate cyber threats.
Focus in 2023
The Group remains committed to full compliance to our IT/IS policies and
diligent monitoring of the IS environment. 2023 actions included:
• continued deployment of our three-year IS strategy and roadmap to account
for the dynamic nature of the cyber threat landscape, including development
of our layered security defence model consisting of preventative, detective
and responsive technical controls;
• commissioned an independent review and baseline of our cyber security
maturity against leading industry frameworks, with the output incorporated
into our IS strategy;
• enhanced the collaboration between our various IT, IS and external partner
teams, including establishment of a Group-wide IT/IS council that meets
regularly to discuss technology advancements and security matters;
• continued to seek independent accreditation against external security
frameworks, including taking the Group’s UK-based operating businesses
through the National Cyber Security Centre (NCSC) accredited Cyber
Essentials scheme;
• refreshed annual user training and awareness programme to ensure
training materials and content remain relevant and aligned to current
security threats; and
• conducted a thematic assurance review designed to assess and improve the
effectiveness of critical patching and vulnerability management controls.
Operational
Supply chain challenges
1
2
3
4
A
B
C
D
E
Principal Risk
Suppliers may be unable or unwilling to respond to increases or decreases in
demand, impacting our ability to supply our customers, our ability to operate
efficiently and/or optimise inventory held.
Critical materials or components may become temporarily or permanently
unavailable, leading to an inability to meet production commitments.
Supply chain disruption can lead to higher volatility in delivery schedules as
customers adjust demand to protect their production capabilities. This may
challenge the Group’s ability to meet customer schedule, quality and cost
requirements, resulting in potential delays, penalties and cost overruns.
In extreme cases some suppliers may face financial difficulties and go
out of business.
How we manage it
The resilience of the supply chain is monitored and, where possible, over-
reliance on individual suppliers is reduced.
The Group closely monitors the resources required to deliver
customer demand.
The Group has deployed the Senior Operating System to provide
operating businesses with a toolkit to optimise the use of lean and
continuous improvement techniques, supplier management and other
operational best practice processes.
Operating businesses are required to maintain strong internal controls over
supplier management from new supplier selection to performance monitoring
and management of existing suppliers.
Our core Values (see page 6) emphasise operating with integrity and
respect, which allows the Group to cultivate strong, long-term relationships
with critical suppliers.
Focus in 2023
While supply chain constraints have begun to show signs of improvement
across several industries and markets, residual pockets of disruption persisted
through 2023, as delivery lead times remain protracted, incidents of labour
disruption increased and some suppliers faced financial difficulties and
operational disruption. The ongoing crisis in Ukraine continues to impact
availability of certain materials although alternate sourcing has been secured
wherever possible. The Group has maintained the initiatives previously
deployed to mitigate the impacts of supply chain challenges, including:
• spotlighting ongoing supply chain challenges in operating business reviews
and Executive Committee meetings to ensure the challenges are being
effectively addressed;
• maintaining close and frequent communication with customers regarding
delivery schedules, the need to qualify additional supply sources, options for
alternate materials or components and potential incremental costs to
mitigate supply chain disruptions;
• working with suppliers to manage lead times and maximise the benefits
from long-term supply agreements, where applicable;
• holding appropriate levels of safety stock, where necessary, to ensure a
consistent flow of materials and/or components for production;
• leveraging supplier relationships across the Group to identify alternate
supply sources and opportunities to streamline or consolidate supply
requirements; and
• applying the Senior Operating System and our engineering expertise to
generate innovative solutions to supply chain challenges.
During 2023, a follow-up assessment to a 2022 supply chain assurance review
was conducted to gauge improvement in supply chain conditions, identify
ongoing constraints and measure the effectiveness of actions implemented
to reduce the frequency and/or severity of supply chain disruptions.
66 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202366
Operational
Customer disruption
1
2
5
A
B
C
E
Principal Risk
Supply chain constraints, labour shortages and other operational disruptions
may leave customers unable to meet current sales commitments and/or
respond to increases in market demands. As a result, there is a risk that
customers do not honour firm order schedules, delay programme ramp-up and/
or postpone new programmes.
How we manage it
The Group has fostered long-lasting and cooperative relationships across its
customer base.
In furtherance to its strategic priorities, the Group actively seeks to
grow the business through diversification of its customer base and
new product innovation.
The Group closely monitors market trends and developments through in-house
market research analysis.
There is a Group Contract Review policy which is mandatory for all operating
businesses and requires comprehensive financial modelling and sensitivity
analysis of contractual terms and assumptions.
Focus in 2023
The Group benefitted from continued strengthening in trading performance
across both divisions in 2023 but the pace of volume growth in certain markets
remained dampened by persistent supply chain and labour issues preventing
some customers from increasing production to rates necessary to meet
market demand.
In 2023, the Group continued to focus on:
• collaborating with our customers to understand their demand variability,
potential schedule changes and identify acceptable solutions to mitigate
supply chain constraints;
• diligently managing supply chain challenges to meet our product delivery
objectives in support of customer operations; and
• adapting staffing levels in response to programme fluctuations while
maintaining a focus on planning for anticipated long-term labour and skills
requirements and continuing to identify overhead reductions through
efficiency improvements where possible.
Operational
Programme management
1
2
3
5
6
A
B
C
D
E
Principal Risk
The ability to introduce new products in line with customer requirements and to
respond appropriately to increases or decreases in demand thereafter is key to
achieving the Group’s strategic objectives.
There is a risk that the Group is unable to respond quickly enough to changes in
demand, potentially resulting in excess inventory and/or an inability to meet
schedule and cost requirements resulting in delays, penalties, cost overruns or
asset write-downs.
Changes across a variety of production requirements, such as fluctuations in
material supplies, volatility in customer ordering and employee retention and
training, may challenge the Group’s ability to maintain programme quality
specifications, leading to the potential for higher costs of quality or greater risk
of product defects.
How we manage it
The Group is experienced in bidding and launching new products. Formal New
Product Introduction (“NPI”) processes, such as Advanced Product Quality
Planning (“APQP”) are in use across our operating businesses.
There is a Group Contract Review policy which is mandatory for all operating
businesses and requires comprehensive financial modelling and sensitivity
analysis of contractual terms and assumptions.
The Senior Operating System maintains a strong focus on lean manufacturing
and operational efficiency.
NPI programmes are subject to regular review by Divisional and Group
management to ensure that schedule, cost or quality issues are identified and
dealt with promptly.
The Group monitors market and customer data so that we can be prepared to
respond to changing market dynamics.
A variety of tools are deployed throughout the Group to prevent, detect and
manage quality issues, including supplier audits, comprehensive quality
management systems, internal quality audits, Gemba walks and documented
root cause analysis.
Focus in 2023
Persistent supply chain constraints and labour availability issues combined with
demand fluctuations stemming from customer disruption continued to sustain
programme management challenges during 2023. In response, the Group
maintained its focus on:
• spotlighting programme management issues in operating business reviews
and Executive Committee meetings to ensure issues receive adequate
resourcing and action;
• continuing to work with our customers to ensure that, wherever possible,
orders within firm windows can be delivered;
• working with our suppliers and managing inventory to balance inventory
levels where there are delays in firm orders and/or ensure adequate supply to
meet production demands;
• qualifying additional supply sources, options for alternate materials
or components at potential incremental costs to mitigate supply
chain disruptions;
• maintaining flexible labour resource plans to adapt to variations in demand
and production schedules; and
• responding to the ongoing, elevated level of new requests for quotation.
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
67SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 67
Operational
Price-down pressures
1
3
4
5
A
B
C
E
Principal Risk
Customer pricing pressure is an ongoing challenge within our industries, driven
by the expectations of airlines, land vehicle operators and governments seeking
to purchase more competitively priced products in the future. This may put
some pressure on the Group’s future operating margins.
How we manage it
The Group works closely with its customers to find innovative ways to produce
products at a lower cost, thus helping customers meet pricing challenges.
The Group is able to consider bundles of products that in total help meet
customer pricing challenges.
Where appropriate, the Group will actively pass work to some of its
cost competitive facilities such as Mexico, Thailand, the Czech Republic,
South Africa, India, China and Malaysia with a view to helping satisfy
customer challenges.
There is a Group Contract Review policy which is mandatory for all operating
businesses and requires comprehensive financial modelling and sensitivity
analysis of contractual terms and assumptions.
Focus in 2023
While inflation rates have eased in most regions around the world, the
incremental costs necessary to mitigate persistent supply chain disruption and
labour challenges continue to impact margins in certain industries. As a result,
customers remain focused on containing supplier price escalations with some
resuming price-down discussions with their supply base. In 2023, the Group
continued to focus on:
• following our pragmatic and adaptable pricing response framework across
the Group;
• working in partnership with customers to support their priorities within the
contractual terms of existing agreements;
• balancing supplier capabilities and customer demand to manage material
costs, including approval of alternate supply sources where appropriate; and
• driving labour and overhead cost reductions through efficiency
improvements where possible.
People and culture
Talent and skills
2
6
7
A
B
D
Principal Risk
There is a risk that the Group, particularly in the US and UK, is unable to attract
sufficient skills and talent and/or is unable to retain the skills and talent it has in
order to meet demand. Margins may be impacted by higher wage rates
necessary to retain current employees and/or attract new employees.
As demand increases there may be a disproportionate increase in the number
of indirect heads, reversing some of the cost savings that the Group has
achieved through its restructuring programme.
A notable portion of the Group’s workforce may reach retirement age at the
same time, creating a gap in skills and labour availability.
The Group may have insufficient talent to respond to all strategic priorities.
How we manage it
Employee retention and recruitment challenges are regularly discussed
within the operating businesses, Divisional Management and the
Executive Committee.
The Group HR Director hosts focus groups across a cross section of the
operating businesses to solicit constructive feedback from employees and
foster open communication.
Operating businesses partner with technical colleges and apprenticeship
schemes to create talent pipeline programmes.
A Group-wide succession planning exercise is conducted annually to identify
successors and interim cover for key roles and ensure appropriate development
plans are in place to support employees in meeting their career goals.
The Nominations Committee reviews management development and
succession plans twice a year, making recommendations to the Board
regarding size, structure and composition where applicable.
The Perform performance and development system is utilised across the
Group to facilitate objective setting, development planning and performance
and behaviour assessment.
The Group HR Director regularly provides people and culture feedback
to the Board.
Focus in 2023
Labour availability improved in 2023 across most of the Group’s operating
businesses but retention and recruitment difficulties persist within particular
roles and geographic locations. We continue to closely monitor and manage
staffing levels, recruitment and retention challenges and employment trends
across the Group. Actions in 2023 included:
• ongoing reassessment of compensation levels against industry
and regional benchmarks, with off-cycle wage increases or lump sum
payments offered where necessary to mitigate the impact of ongoing
inflationary pressures on employees and to ensure the Group’s
compensation offerings are competitive;
• enhanced sign-on and candidate referral incentive opportunities for new and
existing employees;
• resumed the Group’s internal leadership development programme with two
sessions offered in 2023;
• expanded employee benefit offerings in certain locations to broaden
healthcare coverage and other wellbeing programme options;
• developed and implemented localised action plans to respond to employee
feedback received through the Global Employee Opinion Survey conducted
in 2022, such as employee activities, newsletters, employee suggestion/
feedback channels and management meetings. More information on
employee engagement can be found on page 49;
• hosted a global leadership conference to foster unity and collaboration across
the Group;
• launched an optimisation project to elevate the Group’s employer profile and
brand across critical web-based employment platforms; and
• issued a new Group Human Rights policy to reaffirm our commitment to
respecting and promoting the rights and dignity of all people within the
Group and its suppliers and customers.
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
68 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202368
Financial
Inflation
2 3 A
B
C
D
E
Principal Risk
Inflationary pressures stemming from a confluence of labour constraints, supply
chain disruption and shifting customer demand could result in a reduction of
earnings from existing programmes if the Group is unable to secure mitigating
price adjustments from customers.
Higher production costs resulting from material, energy and labour cost inflation
can reduce our ability to remain cost competitive and win new business.
Inflationary pressures may result in higher interest rates, which could impact
the Group’s earnings.
How we manage it
The Group’s Treasury Committee actively monitors the economic forces
impacting the Group and consider a variety of viable containment strategies
where necessary.
There is a Group Contract Review policy which is mandatory for all operating
businesses and requires comprehensive financial modelling and sensitivity
analysis of contractual terms and assumptions.
A significant portion of the Group’s external debt is at fixed rates of interest,
which mitigates the effect of higher benchmark interest rates that can result
from inflationary pressures.
The Group utilises the Senior Operating System to deploy lean and continuous
improvement techniques with a focus on improving labour efficiencies and cost
reduction initiatives.
Focus in 2023
Inflationary pressures eased somewhat across most major world economies in
2023 despite continued strength in consumer spending, as wage growth
slowed in response to a tightening labour market, energy prices began to
stabilise and supply chain issues eased in many industries. Despite the
favourable movement in this critical economic indicator during the year, the
Group remained diligent in its efforts to manage inflation impacts in 2023 by:
• retaining a focus on inflationary trends and impacts and the effectiveness of
mitigating actions in operating business reviews and Executive Committee
meetings;
• continuing to engage with customers to secure price increases, delay
contractual price decreases and/or pass through higher production costs
to mitigate the impact on Group margins where inflationary pressures
persist; and
• expanding our supplier networks, where appropriate, to obtain lower pricing
and drive higher operational efficiencies from better delivery performance.
Financial
Financing and liquidity
2 3 5 7 C
D
E
Principal Risk
The Group could have insufficient financial resources to fund its growth strategy
or meet its financial obligations as they fall due or insufficient liquidity to meet
financingcovenants.
Foreign exchange movements could have a material impact on the Group’s
financial performance, both on the balance sheet (translation risk) and income
statement (transaction risk).
How we manage it
The Group’s overall treasury risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse
effects on the Group’s financial performance.
The Group enters forward foreign exchange contracts to hedge the
transactional exchange risk arising on operations’ trading activities in foreign
currencies; however, it does not enter into or trade financial instruments,
including derivative financial instruments, for speculative purposes.
The Group does not hedge translation risk, but aims to match the foreign
currency of its net debt in similar proportions to its generation of foreign
currency EBITDA, where practical and economic in order to provide a natural
hedge against the Group’s principle lending covenant.
The Group monitors liquidity risks monthly and ensures sufficient headroom in
its committed borrowing facilities to meet financial obligations across the Group
as they fall due.
The Group’s Treasury policy is updated and approved by the Board regularly.
Compliance with financial policies, exposure limits and headroom/liquidity limits
are reviewed by the Group’s Treasury Committee on a regular basis.
A global notional cash pooling solution is utilised to manage working capital
funding in the operations and minimise central borrowings.
The Group’s viability assessment process considers a base case and risk case
scenario, which considers the principal risks and uncertainties.
Focus in 2023
Financing and liquidity initiatives remain vital to mitigating the ongoing impacts
of the supply chain challenges, inflation and customer disruption. Actions taken
in 2023 included:
• extending the main committed revolving credit facility in the UK to
a 2027 tenor;
• responsibly managing growth in inventory requirements where customer
demand is increasing and/or supply chain disruptions are continuing to occur;
• continued compliance with transactional foreign exchange hedging policy to
mitigate income statement volatility from currency movements; and
• the Group’s Treasury Policy was updated and approved by the Board in
September 2023.
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
69SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 69
Compliance
Corporate governance breach
1
2
3
7
A
B
C
Principal Risk
Corporate governance legislation (such as the UK Bribery Act and the US
Foreign Corrupt Practices Act), regulations and guidance (such as the UK
Corporate Governance Code and global health and safety regulations) and
corporate reporting requirements are increasingly complex and onerous. A
serious breach of these rules and regulations could have a significant impact on
the Group’s reputation, lead to a loss of confidence on the part of investors,
customers or other stakeholders, result in financial penalties or fines and
ultimately have a material adverse impact on the Group’s enterprise value.
How we manage it
The Group has a well-established set of governance policies and procedures
covering all key areas, including a Group Code of Conduct, anti-bribery
procedures, a Health & Safety Charter, an Agents Policy and various policies
and procedures over the review and reporting of risk management and internal
control activities.
Governance and regulatory compliance updates are provided to the Board and
the Executive Committee at appropriate intervals, and to key Division and
operational management.
All employees are required to complete annual Code of Conduct training.
All EU sites have received training on the General Data Protection Regulations
and employees in other locations have received training as appropriate to
their roles.
Focus in 2023
Employees received annual refresher training on our Code of Conduct during
2023. The completion rates typically hover around 94%, allowing for new
starters who have not yet completed their training immediately on joining. The
course included content related to trade compliance, human rights, health and
safety and cyber security.
Additional training was conducted for appropriate employee groups on other
topics including prevention of payment fraud, information security, climate
change and anti-money laundering.
Updates have been issued to various Group policies including our Agents policy,
Delegation of Authority and Whistle-blowing policy.
A formal Human Rights policy was issued by the Group.
The Group’s 2023 internal audit programme and Controls Self-Assessment
were completed as planned, providing a level of assurance that the Group’s
Code of Conduct, controls, policies and procedures are being followed.
STRATEGIC REPORT / RISKS AND UNCERTAINTIES CONTINUED
70 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202370
Aerospace Division
Launie Fleming | Aerospace Division Chief Executive
“ The civil aerospace sector had
strong growth during the year
as aircraft production rates
increased.“
Aerospace sales across the Group
42%
Civil aircraft
8%
Other
14%
Defence
64%
Revenue
+11.5%
£616.5m
(2022 – £553.0m)
Adjusted operating profit
+33%
£27.0m
(2022 – £20.3m)
Adjusted operating margin
+70 bps
4.4%
(2022 – 3.7%)
Revenue by large commercial platforms
(on a derived basis)
39%
Boeing
61%
Airbus
The Aerospace Division represents 64%
(2022 – 65%) of Group revenue and consists
of 14 operations. These are located in North
America (six), the United Kingdom (four), France
(two), Thailand and Malaysia. This Divisional
review is on a constant currency basis, whereby
2022 results have been translated using 2023
average exchange rates and on an adjusted basis
to exclude amortisation of intangible assets from
acquisitions and net restructuring costs/income.
The Division’s operating results on a constant
currency basis are summarised below:
2023
£m
2022
(1)
£m Change
Revenue 616.5 553.0 +11. 5%
Adjusted
operating profit 27.0 20.3 +33.0%
Adjusted
operating margin 4.4% 3.7% +70bps
(1) 2022 results translated using 2023 average
exchange rates – constant currency.
Divisional revenue increased by £63.5m (11.5%)
to £616.5m (2022 – £553.0m) whilst adjusted
operating profit increased by £6.7m (33.0%)
to £27.0m (2022 – £20.3m). See Note 4 for a
reconciliation of adjusted and reported
operating profit.
Revenue Reconciliation £m
2022 revenue 553.0
Civil aerospace 72.0
Defence 10.4
Other adjacent markets (18.9)
2023 revenue 616.5
Revenue in the Aerospace Division increased
by 11.5% year-on-year on a constant currency
basis. The year-on-year increase reflected the
ramp up in civil aircraft production rates and
growth in the defence market. As anticipated,
sales to semiconductor equipment customers
(which are included in our “Other Aerospace”
(Adjacent Markets) segment within Aerospace
Division) reduced due to lower cyclical
market demand.
The civil aerospace sector had the strongest
growth during the year with Senior’s sales
increasing by 21.3%. Aircraft production rates
were higher in 2023 compared to 2022, with
key platforms, both single aisle and widebody
aircraft, contributing to the growth. 22% of civil
aerospace sales were from widebody aircraft in
2023, with the other 78% of sales being from
single aisle, regional and business jets.
Total revenue from the defence sector
increased by £10.4m (8.5%) primarily from
increased demand for legacy platforms and
higher aftermarket.
Revenue in our Aerospace Division derived
from adjacent markets such as space, power &
energy, medical and semiconductor equipment,
where the Group manufactures products using
very similar technology to that used for certain
aerospace products, decreased by £18.9m
(20.5%). This is primarily as a result of the
decrease in demand from the semiconductor
equipment market.
STRATEGIC REPORT / DIVISIONAL REVIEW
71SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 71
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.
Both Airbus and Boeing are planning increases
in build rates in 2024 and beyond. In terms of
end markets:
• demand for large commercial aircraft
continued to recover strongly with order
levels for single-aisle aircraft reaching a
new peak in 2023. Airbus received 1,675
net orders for A320 family aircraft during the
year. They confirmed at their FY2023 results
that the A320 Family programme continues to
progress to a build rate of 75 in 2026 as they
attempt to meet this strong demand;
• Boeing achieved strong growth in its
single-aisle order book, which increased by
883 in 2023. Whilst Boeing is having to limit
the production of its B737-MAX model to 38
per month, it has asked suppliers to maintain
production of parts at previously agreed
levels. Any further increase in production
needs approval from the FAA. Boeing had
previously stated that, following achieving
a production rate of 38 aircraft per month,
it was aiming to increase production of
B737-MAX aircraft to 50 per month by
the 2025/2026 timeframe;
• the recovery in the long-haul air-passenger
market continued during 2023. International
passenger traffic is now at 89% of 2019
levels according to IATA. Orders for wide-
body aircraft rose significantly as airlines
responded to this recovery by seeking to
During the period, adjusted operating profit
increased by 33.0% to £27.0m (2022 – £20.3m)
and the adjusted operating margin increased by
70 basis points to 4.4% (2022 – 3.7%). Price
increases secured during the period more than
offset the impact of continued inflationary cost
increases, including of raw materials. As
expected, inefficiencies largely caused by
certain supply chain challenges are temporarily
dampening volume related drop through
benefits. Overall 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 issues with 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.
grow and modernise their fleets. Both
Airbus and Boeing are aiming to meet this
demand by raising production rates of
wide-body aircraft;
• Airbus has confirmed production rates of its
A330 wide-body aircraft at four per month
and is targeting an increase in the production
rate of A350 aircraft from nine per month
currently to 10 per month in 2026; and
• Boeing, meanwhile, have announced the
resumption of production of the B777X, with
a goal of producing 4 per month in 2025/2026,
and an increase in the production of the B787
from 5 per month currently, to 10 per month
in 2025/2026.
In the defence market, Senior has a presence on
multiple military aircraft programmes including
the F-35, C-130J and A400M. Lockheed Martin
has confirmed that they anticipate production of
156 F-35 aircraft per annum for the foreseeable
future. Senior is also well positioned on the T-7A
fighter-jet training aircraft with Low-Rate Initial
Production due to begin in 2024.
In other adjacent markets, demand in
the semiconductor equipment market is
anticipated to remain flat during H1 2024
before beginning to recover in the second half.
In the longer term the proliferation of low-earth-
orbit satellites and semiconductor markets
provides growth opportunities.
“ In 2023, global air traffic
almost returned to 2019
levels.”
14 Global Aerospace operations Revenue reconciliation (£m)
Sales in civil aerospace
increased by
21%
(2022 – 32% increase)
STRATEGIC REPORT / DIVISIONAL REVIEW
A 2022 revenue
B Civil aerospace
C Defence
D Other adjacent markets
E 2023 revenue
A B C D
£m
553.0
72.0 10.4
-18.9
E
616.5
North America 6
United Kingdom 4
Continental Europe 2
Thailand 1
Malaysia 1
72 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202372
STRATEGIC REPORT / DIVISIONAL REVIEW CONTINUED
Flexonics Division
Mike Sheppard | Flexonics Division Chief Executive
“Continued strong customer demand
in land vehicle and good momentum
in power & energy markets drove
an increase in sales of 18.0%
in 2023.“
Flexonics sales across the Group
21%
Land vehicle
36%
15%
Power & Energy
Revenue
+18%
£348.0m
(2022 – £294.9m)
Adjusted operating profit
+48%
£37.5m
(2022 – £25.3m)
Adjusted operating margin
+220 bps
10.8%
(2022 – 8.6%)
The Flexonics Division represents 36%
(2022 – 35%) of Group revenue and consists
of 12 operations which are located in North
America (four), continental Europe (two), the
United Kingdom (two), South Africa, India, and
China (two including the Group’s 49% equity
stake in a land vehicle product joint venture).
This Divisional review, presented before the
share of the joint venture results, is on a constant
currency basis, whereby 2022 results have been
translated using 2023 average exchange rates
and on an adjusted basis to exclude net
restructuring costs and site relocation costs.
The Division’s operating results on a constant
currency basis are summarised below:
2023
£m
2023
(1)
£m Change
Revenue 348.0 294.9 +18. 0%
Adjusted
operating profit 37.5 25.3 +48.2%
Adjusted
operating margin 10.8% 8.6% +220bps
(1) 2022 results translated using 2023 average
exchange rates – constant currency.
Divisional revenue increased by £53.1m (18.0%)
to £348.0m (2022 – £294.9m) and adjusted
operating profit increased by £12.2m (48.2%)
to £37.5m (2022 – £25.3m). See Note 4 for
a reconciliation of adjusted and reported
operating profit.
Revenue Reconciliation £m
2022 revenue 294.9
Land vehicle 37.9
Power & energy 15.2
2023 revenue 348.0
In Flexonics, strong customer demand and
market share gains in land vehicle as well as
good momentum in power & energy markets
increased sales in 2023 by 18.0% compared to
the prior year, with double-digit growth in all
core markets.
Group sales to land vehicle markets
increased by 23.1% driven by increased market
and customer demand and market share gains
for both commercial and passenger vehicles.
Senior’s sales to the truck and off-highway
market increased by £10.4m (11.4%) in North
America and by £12.4m (39.6%) in Europe,
whilst also growing in India. Our strong sales
in truck markets were aided by production
increases on recently won contracts. Group
sales to passenger vehicle markets increased by
£14.7m (43.1%) in the year, benefiting from the
launch and ramp up of new programmes in
North America and Europe.
73SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 73
STRATEGIC REPORT / DIVISIONAL REVIEW CONTINUED
• S&P forecasts that European truck and bus
production will fall by 11% in 2024 due to
macro headwinds including inflation and
higher financing costs. Subsequently growth
will be driven by replacement demand and
the need to comply with new environmental
regulations. In 2025, growth of 4% is
expected by S&P; and
• Light-vehicle production is forecast to fall
by 3% in Europe and grow by 3% in India
in 2024.
In power & energy markets we anticipate a
rebalancing of inventory by our upstream oil &
gas customers in 2024, however, activity levels
in the more important downstream and nuclear
sectors are likely to remain strong. In terms of
end markets:
• activity in upstream oil & gas markets is
anticipated to remain positive in 2024 as
investment to increase production continues.
Global demand for oil is forecast to increase
by ~1% in 2024, and grow at this rate each
year until 2028, according to the IEA;
• oil refining capacity is forecast to expand by
1% per annum. Growth in Asia will be offset
by rationalisation of refining capacity in OECD
countries where the peak in demand for oil is
anticipated to occur first; and
• global demand for petrochemicals is forecast
to increase by ~2% per annum until 2030
according to the IEA. Growth in production
capacity will be concentrated in certain
markets; India, the Middle East and the US.
We will monitor end market conditions carefully
across the various regions in which we operate
and seek to maximise growth opportunities.
In the Group’s power & energy markets good
momentum continued as sales increased by
£15.2m (11.6%) in the year. Sales to oil & gas
customers increased by £13.0m (31.8%), as a
result of higher demand mainly from upstream
activity as well as growth in downstream
maintenance and overhaul activity. Sales to
power generation and nuclear markets
decreased by £3.2m (7.3%) as growth in nuclear
was offset by the non-repeat of prior year catch
up maintenance activity in powerplants. Sales to
other industrial markets increased by £5.4m
reflecting growth in sales to aerospace, medical
and steel industry customers.
Adjusted operating profit increased by £12.2m
compared to prior year and the divisional adjusted
operating margin increased by 220 basis points
to 10.8% (2022 – 8.6%). This significant
improvement in profitability reflected the volume
related operating leverage across our operating
business and the benefits from recurring price
increases and one-off cost recoveries which
offset inflationary cost increases.
After a strong performance in 2023, Senior’s
overall sales to land vehicle markets in 2024 are
expected to reflect the market outlook for more
normalised levels of production. In terms of the
end markets:
• ACT Research is forecasting a 16% decline in
North American heavy-duty truck production
in 2024. Following the strength in the market
during 2023, demand is anticipated to
normalise in 2024 before returning to
growth in 2025;
• North American medium-duty truck
production is forecast to decline by 11% in
2024 due to the need for high inventory levels
to correct, before growing again in 2025;
2023 was an excellent
year for heavy-duty
truck production in
North America
12 Global Flexonics operations
(1) Including joint venture.
North America 4
Continental Europe 2
United Kingdom 2
India 1
South Africa 1
China
(1)
2
Revenue reconciliation (£m)
Sales to land vehicle
markets increased by
23%
(2022 – 29% increase)
A 2022 revenue
B Land vehicle
C Power & energy
D 2023 revenue
A B C D
£m
249.9
37.9
15.2 348.0
74 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202374
STRATEGIC REPORT / FINANCIAL REVIEW
Financial review
Financial detail
Group revenue
Group revenue was £963.5m (2022 – £848.4m).
Excluding the adverse exchange rate impact of
£1.3m, Group revenue increased by £116.4m
(13.7%) with growth across both Aerospace and
Flexonics year-on-year. In 2023, 59% of revenue
originated from North America, 17% from the
UK, 13% from the Rest of Europe and 11% from
the Rest of the World.
Operating profit
Adjusted operating profit increased by £17.3m
(60.7%) to £45.8m (2022 – £28.5m). Excluding
the adverse exchange rate impact of £0.1m,
adjusted operating profit increased by £17.4m
(61.3%) on a constant currency basis. After
accounting for £2.2m amortisation of intangible
assets from acquisitions (2022 – £0.2m), £5.6m
net restructuring cost (2022 – £4.2m net
income) and £0.1m site relocation costs (2022
– £nil), reported operating profit was £37.9m
(2022 – £32.5m).
The Group’s adjusted operating margin increased
by 140 basis points, to 4.8% for the full year. This
improved profitability principally reflected volume
related operating leverage across our
businesses, whilst absorbing the impact of
disruption caused by supply chain issues.
Inflationary pressures were successfully more
than offset by increasing prices and surcharges.
Good financial progress
Adjusted Operating Profit
+61%
£45.8m
(2022 – £28.5m)
Free Cash Flow
-44%
£15.5m
(2022 – £27.7m)
ROCE
+240 bps
7.1%
(2022 – 4.7%)
Bindi Foyle | Group Finance Director
“ Senior delivered strong trading performance in 2023, maintaining a
healthy balance sheet and enabling investment in future growth.”
Financial Summary
A summary of the Group’s operating results (at reported currency) is set out in the table below.
Further detail on the performance of each Division is set out in the Divisional Review.
Revenue
Adjusted
operating profit
(1)
Margin
2023
£m
2022
£m
2023
£m
2022
£m
2023
%
2022
%
Aerospace 616.5 553.6 27.0 20.3 4.4 3.7
Flexonics
(2)
348.0 295.6 37.5 25.4 10.8 8.6
Share of results of
joint venture – – 1.0 0.4 – –
Inter-segment sales (1.0) (0.8) – – – –
Central costs – – (19.7) (17.6) – –
Group total 963.5 848.4 45.8 28.5 4.8 3.4
(1) See table below for reconciliation of adjusted operating profit to reported operating profit.
(2) Flexonics results are presented before share of results of joint venture.
Adjusted operating profit may be reconciled to the operating profit that is shown in the Consolidated
Income Statement as follows:
2023
£m
2022
£m
Adjusted operating profit 45.8 28.5
Amortisation of intangible assets from acquisitions (2.2) (0.2)
Net restructuring (cost)/income (5.6) 4.2
Site relocation costs (0.1) –
Operating profit 37.9 32.5
75SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 75
STRATEGIC REPORT / FINANCIAL REVIEW
As set out in Note 9, 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 cost (2022 – £4.2m net income)
and £0.1m site relocation costs (2022 – £nil).
Adjusted profit before tax is also stated before
costs associated with corporate undertakings
of £7.6m (2022 – £1.7m).
Restructuring
In 2020 the Group had focused on taking
actions to conserve cash to manage through
the pandemic, including curtailing capital
expenditure, tightly managing working capital
and implementing further cost cutting actions.
In 2023, some residual restructuring activity
took place in response to further specific
end market conditions affecting some of
the businesses.
The Group has continued to review inventory
and asset exposures on programmes that have
been reduced, cancelled or where the Group
will no longer participate. As part of the
restructuring focus, we have assessed critically
any inventory or asset exposures on these
programmes and written down the carrying
values on excess holdings and assets where
there is no alternate use.
The restructuring resulted in net cost of £5.6m
(2022 – net income £4.2m; of which £4.0m
related to an aerospace manufacturing grant).
Ofthis, £2.4m related to consultancy and other
costs (2022 – £1.2m net charge). For certain
specific programmes, and in conjunction with
the continued focus on restructuring,
management also identified further inventory
impairment of £2.0m where customer demand
decreased (2022 – £2.7m reversal reflected
separate and specific demand increase), and
impairment provisions on property, plant and
equipment of £1.2m (2022 – £1.3m) to cover
the risk where there are no alternative uses.
Net cash outflow related to restructuring
activities was £2.1m (2022 – £2.1m net cash
inflow). At31 December 2023, a restructuring
provision of £0.5m (31 December 2022 –
£0.2m) was recognised and is expected
to be utilised in2024.
Finance costs and income
Finance costs, net of finance income and before
interest unwind of deferred and contingent
consideration decreased to £7.5m (2022 –
£8.4m) and comprise IFRS 16 interest charge
on lease liabilities of £2.9m (2022 – £2.5m), net
finance income on retirement benefits of £2.1m
(2022 – £1.2m), net interest charge of £10.2m
(2022 – £7.1m) and interest unwind on uncertain
tax positions of £3.5m (2022 – £nil), which will
not repeat in 2024 and is described further
below in the tax section. The £3.1m increase in
net interest charge was mainly driven by higher
underlying interest rates on variable rate debt
and higher levels of indebtedness in 2023
versus the prior year.
Gross finance costs, including interest unwind
of deferred and contingent consideration were
£20.5m (2022 – £10.6m) and finance income
was £10.1m (2022 – £1.9m), which includes
the benefit of interest unwind on uncertain
tax positions of £3.5m (2022 – £nil).
Corporate undertakings
Costs associated with corporate undertakings
were £7.6m (2022 – £1.7m), of which £1.5m
acquisition costs (2022 – £1.2m) and £2.9m
interest unwind of deferred and contingent
consideration (2022 – £0.3m) relate to the
acquisition of Spencer Aerospace in November
2022 and £3.2m costs are associated with
potential disposal and other corporate activities
(2022 – £0.2m). See Note 31 to the Financial
Statements for further details.
In 2023, net cash outflow related to corporate
undertakings was £25.8m, comprising £23.9m
net deferred consideration for the acquisition of
Spencer Aerospace and £1.9m of acquisition
related costs and potential disposal activities.
In 2022, net cash outflow related to corporate
undertakings was £26.7m, comprising £25.3m
for the acquisition of Spencer Aerospace and
£1.4m of acquisition related costs and other
corporate activities.
Profit before tax
Adjusted profit before tax increased by 90.5% in
2023 to £38.3m (2022 – £20.1m). This includes
£3.5m benefit (2022 – £nil) from interest unwind
on uncertain tax positions that will not repeat in
2024, and is described further below in the tax
section. Reported profit before tax was £22.8m
(2022 – £22.4m). The reconciling items between
adjusted profit and reported profit before tax are
shown in Note 9 to the Financial Statements.
Tax credit/charge
The adjusted tax rate for the year was 11.0%
credit (2022 – 10.0% charge), being a tax credit
of £4.2m (2022 – £2.0m charge) on adjusted
profit before tax of £38.3m (2022 – £20.1m).
The adjusted tax rate benefitted from a release
of £7.0m of provision for uncertain tax positions
in the second half of 2023 as described below.
The adjusted tax rate also benefitted from
enhanced R&D deductions in the US, the
UK Super-deduction for capital expenditure
and the geographical mix of taxable profits.
Towards the end of 2023, the Group
implemented a series of steps to simplify the
legal ownership of its Americas legal entity
holding structure. As part of the exercise,
provisions held for estimated uncertain tax
positions around the historical establishment of
the Americas legal structure were reassessed.
As a result, in accordance with IAS 12 and IFRIC
23 (Uncertainty over Income Tax Treatments),
provisions for the uncertain tax positions of
£7.0m and associated interest of £3.5m have
been released to the consolidated income
statement during the year.
The reported tax rate was 36.4% credit, being
a tax credit of £8.3m on reported profit before
tax of £22.8m. This included £7.0m credit
related to the release of provision for uncertain
tax positions as described above and £4.1m net
tax credit against items excluded from adjusted
profit before tax, of which £0.6m credit related
to amortisation of intangible assets from
acquisitions, £1.5m credit related to net
restructuring costs, £0.1m credit related to
site relocation costs and £1.9m credit related
to corporate undertakings in the year. The 2022
reported tax rate was 9.8% charge, being a tax
charge of £2.2m on reported profit before tax
of £22.4m. This included £0.2m net tax charge
against items excluded from adjusted profit
before tax, of which £0.7m charge related to net
restructuring income and a £0.5m credit related
to corporate undertakings in the year.
Cash tax paid was £5.6m (2022 – £3.5m) and
is stated net of refunds received of £2.8m (2022
– £1.1m) of tax paid in prior periods, arising from
the offset of tax losses against taxable profits
ofprior periods.
Revenue (£m)
+14%
963.5
848.4
22
23
Adjusted operating profit (£m)
+61%
45.8
28.5
22
23
Free cash flow (£m)
-44%
15.5
27.7
22
23
76 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202376
STRATEGIC REPORT / FINANCIAL REVIEW CONTINUED
Tax policy
The Group acts with integrity in all tax matters, in
accordance with the Group’s ethics and business
conduct programme. It is the Group’sobligation
to pay the amount of tax legally due and to
observe all applicable rules and regulations in the
jurisdictions in which itoperates. While meeting
this obligation, theGroup also has a responsibility
to manage and control the costs of our business,
including the taxes we pay for the benefit of all
our stakeholders. The Group seeks to achieve
thisby conducting business affairs in a way
thatis efficient from a tax perspective,
includingmaintaining appropriate levels
of debtin the countries we operate in and
claimingavailable tax reliefs and incentives.
TheGroup iscommitted to building and
maintaining constructive working relationships
with the tax authorities of the countries in
whichit operates. Further details on our
approach to tax may be found on Senior’s
website at www.seniorplc.com.
Earnings per share
The weighted average number of shares, for the
purposes of calculating undiluted earnings per
share, decreased to 413.3 million (2022 – 415.3
million). The decrease arose principally due to
the purchase of shares held by the employee
benefit trust partly offset by shares released
from the trust to satisfy the vesting of certain
share-based payments during 2023. The
adjusted earnings per share was 10.28 pence
(2022 – 4.36 pence), which includes benefit of
2.54 pence from the release of the provision for
uncertain tax positions as described above, that
will not repeat in 2024. Basic earnings per share
was 7.52 pence (2022 – 4.86 pence). See Note
12 for details of the basis of these calculations.
Return on capital employed (“ROCE”)
ROCE, a key performance indicator for the
Group as defined on page 57, increased by 240
basis points to 7.1% (2022 – 4.7%). The increase
in ROCE was mainly a result of the significant
increase in adjusted operating profit compared
to prior year.
Research and design
The Group’s expenditure on research and
design was £20.0m during 2023 (2022 –
£19.8m). Expenditure was incurred mainly
on funded and unfunded work, which primarily
relates to designing and engineering products
in accordance with individual customer
specifications and investigating specific
manufacturing processes for their production.
The Group also incurs costs on general
manufacturing improvement processes which
are similarly expensed. Unfunded costs in the
year have been expensed, consistent with the
prior year, as they did not meet the strict criteria
required for capitalisation.
Exchange rates
A proportion of the Group’s operating profit
in 2023 was generated outside the UK and
consequently, foreign exchange rates, principally
the US Dollar against Sterling, can affect the
Group’s results.
The 2023 average exchange rate for the
US Dollar applied in the translation of income
statement and cash flow items was $1.24
(2022 – $1.24). The exchange rate for the US
Dollar applied to the translation of Balance
Sheet items at 31 December 2023 was
$1.27 (31 December 2022 – $1.21).
Using 2023 average exchange rates would
have decreased 2022 revenue by £1.3m and
decreased 2022 adjusted operating profit by
£0.1m. A 10 cents movement in the £:$
exchange rate is estimated to affect forecast
full-year revenue on average by £46m, adjusted
operating profit by £3m and net debt by £12m.
Cash flow
The Group generated free cash flow of £15.5m
in 2023 (2022 – £27.7m) as set out in the
tablebelow:
2023
£m
2022
£m
Operating profit 37.9 32.5
Amortisation of intangible
assets from acquisitions 2.2 0.2
Net restructuring
cost/(income) 5.6 (4.2)
Site relocation costs 0.1 –
Adjusted operating profit 45.8 28.5
Depreciation (including
amortisation of software) 49.5 49.6
Working capital and
provisions movement, net
of restructuring items (27.6) (12.1)
Pension contributions (1.4) (2.9)
Pension service and
running costs 1.3 1.5
Other items
(1)
1.6 5.6
Interest paid, net (12.9) (9.0)
Income tax paid, net (5.6) (3.5)
Capital expenditure (35.9) (30.5)
Sale of property, plant
andequipment 0.7 0.5
Free cash flow 15.5 27.7
Corporate undertakings (25.8) (26.7)
Net restructuring (cash
paid)/proceeds (2.1) 2.1
US pension settlement (0.9) –
Dividends paid (6.6) (1.2)
Purchase of shares held
by employee benefit trust (5.6) (4.5)
Net cash flow (25.5) (2.6)
Effect of foreign exchange
rate changes 8.5 (14.2)
IFRS 16 non-cash
additions and
modifications including
acquisition (7.9) (9.0)
Change in net debt (24.9) (25.8)
Opening net debt (178.9) (153.1)
Closing net debt (203.8) (178.9)
(1) Other items comprises £4.1m share-based payment
charges (2022 – £4.3m), £(1.0m) profit on share of
joint venture (2022 – £(0.4m)), £(1.3m) working
capital and provision currency movements (2022 –
£1.8m) and £(0.2m) profit on sale of fixed assets
(2022 – £(0.1m)).
Capital expenditure
Gross capital expenditure of £35.9m (2022 –
£30.5m) was 0.9 times depreciation excluding
the impact of IFRS 16 (2022 – 0.8 times). The
disposal of property, plant and equipment raised
£0.7m (2022 – £0.5m). 2024 capital investment
is expected to be slightly above depreciation
(excluding the impact of IFRS 16). We are
prioritising new investment on growth projects
where contracts have been secured, important
replacement equipment for current production
and sustainability related items.
Working capital
Working capital increased by £29.6m in
2023 to £160.9m as at 31 December 2023
(31 December 2022 – £131.3m), of which
£6.6m decrease related to foreign currency
movements. The underlying increase reflects
increased trading in the period. Receivables
were higher as a result of revenue growth and
inventory was higher with planned investment
to enable us to meet the strong increase in
demand from our customers, as well as to
mitigate ongoing supply chain issues in
Aerospace. In 2023, working capital increased
as a percentage of sales by 120 basis points to
16.7% (2022 – 15.5%). We are likely to see an
increase in working capital over the coming year
to support the growth anticipated in Aerospace.
Our medium-term target remains for working
capital as a percentage of sales to reduce
towards the 15% level.
The Group participates in some non-recourse
reverse factoring schemes which are arranged
by our customers as a way of reducing credit
risk. The trade receivables reverse factored
under such non-recourse schemes at 31
December 2023 were £29.1m (31 December
2022 – £24.9m). The net impact of reverse
factoring on 2023 was a cash inflow in working
capital of £5.5m (2022 – £6.2m inflow) and the
discount interest presented within other finance
costs is a charge of £0.8m in 2023 (2022 –
£0.6m). These arrangements follow standard
market terms and conditions and, as noted
above, are 100% non-recourse to the Group,
thereby transfer all credit risk to the financial
institutions who provide the factoring schemes.
Dividend
The Board is proposing a final dividend of
1.70 pence per share (2022 – 1.00 pence). If
approved, it would be paid on 31 May 2024 to
shareholders on the register at the close of
business on 3 May 2024 and payment would
total £7.0m. This would deliver total dividends
paid and proposed in respect of 2023 of 2.30
pence per share (2022 – 1.30 pence). At the
level recommended, the full year dividend would
be covered 4.5 times by adjusted earnings per
share, which benefitted from the release of the
provision for uncertain tax positions as
described above. The cash outflow incurred
during 2023 in respect of dividends was £6.6m
(2022 – £1.2m) relating to the final dividend for
2022 and the interim dividend for 2023.
We will continue to follow a progressive
dividend policy reflecting earnings per share,
free cash flow generation, market conditions
and dividend cover over the medium-term.
77SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 77
STRATEGIC REPORT / FINANCIAL REVIEW CONTINUED
Goodwill
The decrease in goodwill from £199.7m
at 31 December 2022 to £193.3m at
31December 2023 reflects foreign
exchange differences of £6.4m.
Retirement benefit schemes
The retirement benefit surplus in respect
of the Group’s UK defined benefit pension plan
(“the UK Plan”) decreased by £3.3m to £48.5m
(31December 2022 – £51.8m) due to £5.0m net
actuarial losses and £0.8m running costs partly
offset by £2.5m net interest income. Retirement
benefit deficits in respect of the US and other
territories decreased by £4.1m to £8.0m
(31 December 2022 – £12.1m). During 2023,
one ofthe US defined benefit plans was settled
following a combination of lump sum payments
and annuity purchase. A net expense of £nil and
cash outflow of £0.9m (see Note 32b) was
recorded in 2023 in relation to this settlement.
The latest triennial actuarial valuation of the UK
Plan as at 5 April 2022 showed a surplus of
£24.5m (5 April 2019 – deficit of £10.2m).
TheGroup’s deficit reduction cash contributions,
including administration costs, to the UK Plan
ceased on 30 June 2022.
The estimated cash contributions expected
to be paid during 2024 in the US funded
plans is £0.9m (£0.9m was paid in 2023,
excluding the contribution related to the
US pension settlement).
Net debt
Net debt which includes IFRS 16 lease
liabilities increased by £24.9m to £203.8m
at 31 December 2023 (31 December 2022 –
£178.9m). As noted in the cash flow above, the
Group generated net cash outflow of £25.5m
(as defined in Note 32c), after £8.5m favourable
foreign currency movements and £7.9m
non-cash changes in lease liabilities due to
additions andmodifications.
Net debt excluding IFRS 16 lease liabilities
of£71.8m (31 December 2022 – £78.4m)
increased by £31.5m to £132.0m at 31
December 2023 (31 December 2022 –
£100.5m), due to free cash inflow of £15.5m
and £4.2m favourable foreign currency
movements being more than offset by
£25.8mcash outflow in respect of corporate
undertakings, £10.2m capital repayment of
leases and £15.2m net cash outflows for
dividends, purchase of shares, restructuring
andUS pension settlement.
Funding and Liquidity
As at 31 December 2023, the Group’s gross
borrowings excluding leases and transaction
costs directly attributable to borrowings were
£181.0m (31 December 2022 – £145.3m),
with 61% of the Group’s gross borrowings
denominated in US Dollars (31 December
2022 – 64%). Cash and bank balances were
£47.6m (31 December 2022 – £43.2m).
The maturity of these borrowings, together
with the maturity of the Group’s committed
facilities, can be analysed as follows:
Gross
borrowings
(2)
£m
Committed
facilities
£m
Within one year 1.8 –
In the second year 78 .1 111.5
In years three to five 101.1 162.9
After five years – –
181.0 274.4
(2) Gross borrowings include other loans and
committed facilities, but exclude leases of £71.8m
and transaction costs directly attributable to
borrowings of £(1.4)m.
At the year-end, the Group had committed
facilities of £274.4m comprising private
placement debt of £122.2m and revolving
credit facilities of £152.2m. The Group is in
a strong funding position, with headroom at
31December 2023 of £142.4m in cash and
undrawn facilities.
During the second half of 2023, the Group
extended the maturity of the sustainability linked
UK revolving credit facility to November 2027
with a continued commitment of £115m. New
private placement loan notes of $50m (£39.4m)
were issued and drawn down in February 2024.
These notes carry an interest rate of 6.26% and
are due for repayment in February 2030.
The weighted average maturity of the Group’s
committed facilities at 31 December 2023 was
2.9 years. The current weighted average
maturity of the Group’s facilities, updated for the
February 2024 loan notes of $50m, is 3.2 years.
The Group has £1.8m (2022 – £0.5m) of
uncommitted borrowings which are repayable
on demand.
The Group has two covenants for committed
borrowing facilities, which are tested at June
and December: the Group’s net debt to EBITDA
(defined in the Notes to the Financial Headlines
on page 1) must not exceed 3.0x and interest
cover, the ratio of EBITDA to interest must be
higher than 3.5x. At 31 December 2023, the
Group’s net debt to EBITDA was 1.6x and
interest cover was 12.6x, both comfortably
within covenant limits.
Bindi Foyle
Group Finance Director
Net debt/EBITDA
1.6x
1.47x
22
23
Funding headroom (£m)
142
179
22
23
Return on capital employed (%)
22
23
4.7
7.1
78 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 202378
STRATEGIC REPORT / VIABILITY STATEMENT
Viability statement
Following a robust assessment, the Directors have concluded that
the Group and Parent Company have sufficient funds to operate for
the foreseeable future (evaluated to 31 December 2026), even in a
severe but plausible downside scenario.
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. According to S&P, European
passenger vehicle production grew by 12% in
2023 and it is forecast to decline by 3% in 2024.
In power and energy markets, 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.
In determining a severe but plausible downside
scenario, the base case projections are flexed to
reflect the weighted probability and cumulative
estimated effects of all the Group’s principal
risks and uncertainties, as disclosed on pages
62 to 69. This scenario reflects the combined
probabilistic effect of all principal risks, rather
than individual scenarios for each risk, according
to impact and likelihood of occurrence and
include mitigations where appropriate to
maintain liquidity. These effects drive key
metrics in revenue growth, operating profit
margin and borrowing rates. The top 5 principal
risks with the highest estimated effect on key
metrics include Economic and Geopolitical
impact, Cyber/Information Security, Inflation,
Climate Change and Price-Down Pressures.
The remaining risks, such as Pandemic, Supply
Chain Challenges and Customer Disruption,
have relatively equal weighting in the scenario,
with Corporate Governance Breach and
Implementation of Strategy having the
lowest estimated effect.
To address the impacts under the severe but
plausible downside, the Board has considered
the mitigating actions within the Group’s direct
control. These include a continued focus on
conserving cash through vigilant management
of capital expenditure and working capital
together with further restructuring actions
and limiting non-critical discretionary spend.
Committed facilities and debt covenants
At 31 December 2023, the Group held
committed borrowing facilities of £274.4m with
liquidity headroom of £142.4m. New private
placement loan notes of $50m (£39.4m) were
issued and drawn down in February 2024.
These notes carry an interest rate of 6.26% and
are due for repayment in February 2030. The
weighted average maturity of the Group’s
The Board has considered a three-year
period, as this reflects the normal mid-term
planning cycle of its business operations while
adequately covering customer lead times for
both new and expansion investment. In addition,
this period provides sufficient clarity to consider
the business prospects and continued recovery
from the pandemic under a base case, while
also assessing impacts under a severe but
plausible downside scenario.
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 vehicles 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.
The base case projections of the viability
assessment are based on the Group’s Budget
for 2024, the latest forecast for 2025 collected
at the same time as the budget and the Group’s
Strategy for 2026. 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 by demand in Asia-Pacific. The
lower operating cost and better sustainability
of new aircraft, on which Senior has significant
content, will continue to be a necessity for the
airline industry. In the Group’s other key
markets, defence sees the Group 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.
In Flexonics, ACT expects the North American
heavy-duty truck 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
committed facilities at the end of December
2023 was 2.9 years. The current weighted
average maturity of the Group’s facilities,
updated for the February 2024 loan notes of
$50m, is 3.2 years. Net debt (defined in Note
32c) was £203.8m, including £71.8m of
capitalised leases which do not form part of
the definition of debt under the committed
facilities and do not impact the Group’s
lending covenants.
The Group has two covenants for committed
borrowing facilities, which are tested at June
and December: the Group’s net debt to EBITDA
(defined in the Notes to the Financial Headlines
on page 1) must not exceed 3.0x and interest
cover, the ratio of EBITDA to interest must be
higher than 3.5x. At 31 December 2023, the
Group’s net debt to EBITDA was 1.6x and
interest cover was 12.6x, both comfortably
within covenant limits.
Board’s conclusion
Modelling the base case and severe but
plausible downside scenario and mitigations
indicate that the Group is in compliance with all
debt covenants at all measurement dates out to
31 December 2026. The scenarios also highlight
sufficient liquidity headroom throughout the
period in light of the committed facilities
available. Accordingly, following a robust
assessment the Directors have concluded that
the Group and Parent Company have sufficient
funds to operate for the foreseeable future, even
in a severe but plausible downside scenario. For
the going concern assessment, the foreseeable
future covers a minimum period of 12 months
from the date of approval of these Financial
Statements, and with the viability period
evaluated out to 31 December 2026.
Going concern
As a consequence of the work undertaken
to support the viability statement above, the
Directors have, at the time of approving these
Financial Statements, a reasonable expectation
that the Group and Parent Company have
adequate resources to continue in operational
existence for the foreseeable future, being a
period of at least 12 months from the date of
approval of these Financial Statements.
Accordingly, they continue to adopt the going
concern basis of accounting in preparing these
Financial Statements, having undertaken a
rigorous assessment of the financial forecasts.
Approval
The Strategic Report from pages 1 to 79 was
approved by the Board of Directors on 1 March
2024 and signed on its behalf by
David Squires
Group Chief Executive Officer
79SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023 79
STRATEGIC REPORT / VIABILITY STATEMENT
In compliance with the Non-Financial Reporting requirement set out in sections 414CA and 414CB of the Companies Act 2006, the table below
illustrates where our stakeholders can find information in respect of non-financial matters.
Non-financial information Section of the report Pages
Business Model Our Business Model 6
Principal Risks Risks and Uncertainties 58
Non-Financial KPIs Key Performance Indicators 56
Climate-Related Financial Disclosures Task Force on Climate-Related Financial Disclosures (TCFD) 25
Non-financial
information Policies
Related
principal risk Due dilligence and outcomes Pages
Environmental
Matters
Sustainability Framework – reflects Senior’s commitment to
creating long-term value for the environment, employees,
communities and business partners.
Climate
change
• Sustainability – Environment
• Streamlined Energy and
Carbon Reporting
• Climate-Related Financial
Disclosures
22
23
25
Health, Safety and Environmental Policy – sets out Senior’s
commitment to creating a safe and healthy work environment free
of occupational injuries, ill-health and environmental incidents.
Employees Code of Conduct – provides a clear framework outlining the
expected behaviour and ethical standards for Senior’s employees.
Corporate
Governance
Breach
• Sustainability – Governance
• Internal Controls and Risk
Management
37
89
Whistle-blowing Policy – encourages employees to report
suspected or observed wrongdoing, unethical behaviour within
the workplace and provides contact details of an independent,
third-party whistle-blowing service.
Perform – Senior’s performance and development system
is designed to manage and enhance the performance of
its employees.
Talent and
Skills
• Sustainability – People
and Culture
• Sustainability – Health
& Safety
35
32
Learn – Senior’s global learning management platform is
designed to deliver and track training courses, promoting
continuous learning and development among employees.
Environmental Health & Safety Management Framework
comprising:
• Senior’s Safety Standards – define the minimum health and
safety requirements for all Group operating businesses.
• Senior’s Health & Safety Essential Behaviours – the
behaviour model helping its employees understand the
behaviours they “should” and “should not” display to
strengthen the Company’s health and safety culture.
• Senior’s Golden Rules – safety principles and guidelines
designed to prevent accidents and protect wellbeing of
employees, contractors, suppliers and visitors whilst on
Senior’s premises.
Respect for
Human Rights
Human Rights Policy – sets out standards Senior expects
from its employees, customers and suppliers regarding
human rights.
Corporate
Governance
Breach
• Internal Controls and
Risk Management
89
Modern Slavery Act Statement – outlines the Company’s
actions to assess potential modern slavery risks and processes to
minimise any risk of slavery or human trafficking.
Anti-corruption
and anti-bribery
Agents Policy – applies to business dealings with agents
contracted to represent and act on behalf of Senior in any
sales capacity.
Corporate
Governance
Breach
• Internal Controls and
Risk Management
89
Gifts and Hospitality Policy – restricts the receiving and giving
of gifts and hospitality from, and to, third parties.
Whistle-blowing Policy
Social matters Diversity and Inclusion Executive Commitment – dedication
and involvement of Senior’s leaders in promoting diversity and
inclusion, creating the environment where individuals from
diverse background feel valued, respected and have equal
opportunities for success.
Talent and
Skills
• Sustainability – Equality,
Diversity and Inclusion
• Sustainability – Communities
34
36
Sustainability Framework
For more information please visit: www.seniorplc.com
Non-Financial and Sustainability Information Statement
80 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE /
Governance
Developing fluid
conveyance solutions for
production today...
Fluid conveyance solutions for
aerospace applications
Senior is a leading provider of high performance
fluid conveyance solutions for the most demanding
aerospace applications. We design and manufacture
complex components and assemblies that enable
the safe and efficient performance of air, fuel and
hydraulic systems in challenging civil, defence
and space applications.
Modular connector for technology
demonstrator platform
Managing the myriad fluid connections between the
fuselage and wing-mounted gas turbine engine is a
complex and challenging task. Senior developed an
innovative, modular assembly that groups together all
the major fluid system inputs and outputs, providing
major advantages in assembly time and build quality
for a technology demonstrator platform for a large
aerospace OEM.
81SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE /
IN THIS SECTION
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
GOVERNANCE /
...helping our customers
deliver their innovative
technologies to the
marketplace tomorrow
82 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / CHAIR’S GOVERNANCE LETTER
Chair’s governance letter
Dear Shareholder,
On behalf of the Board, I am pleased to present
the Senior plc Corporate Governance Report for
the year ended 31 December 2023.
Over the past 12 months, the Company
maintained a strong performance despite
challenging business and geopolitical
circumstances. I would like to thank my fellow
Directors for their continued stewardship,
dedication and commitment. The decisions
made and the direction taken by the Board
were guided by the long-term interests of
our stakeholders.
In 2023, the Board continued with in-person
Board meetings and made site visits to two of
the Group’s operating businesses – Senior
Aerospace Metal Bellows and Senior Flexonics
Bartlett, both located in the USA. These visits
offered an opportunity for the Directors to
engage directly with local management teams
and employees, and to learn more about the
challenges and opportunities faced by the
operating businesses.
This year, Celia Baxter and Giles Kerr retired
from the Board following the conclusion of the
Company’s AGM in April 2023 after nine years
of service. Their expertise, leadership and
dedication were invaluable to the Board’s
discussions and decision-making during their
tenures, and we wish them all the best in their
future endeavours. Barbara Jeremiah and Mary
Waldner, the two Directors who have taken
over as Chairs of the Remuneration and Audit
Committee respectively, have settled into their
roles exceptionally well, bringing fresh
perspectives and insights into our discussions.
With Barbara stepping into the role of the
Senior Independent non-executive Director
following the conclusion of the 2023 AGM,
the Company continued its commitment to
upholding high governance standards. At the
same time, Mary Waldner, who has taken over
from Celia Baxter as the non-executive Director
designated to engage with the Group’s
employees, maintained focus on employee
engagement initiatives. She proactively
participated in site visits and employee focus
groups, bringing valuable insights from the
Group’s employees to Board discussions.
Acting on the outcomes of our 2022 Board
performance review, the Board took the
opportunity to further enhance the breadth of its
skills and expertise. With effect from 1January
2024, Joe Vorih was appointed to the Board as a
non-executive Director. I am very pleased to
welcome Joe to the team, and the Board is
confident that Joe’s leadership and engineering
background, coupled with his broad international
experience in Senior’s industrial sectors, will
complement the current Board and prove
invaluable to Senior’s continued development.
Maintaining focus on the Board’s diversity has
remained a priority. We believe that a diverse
Board composition is critical to good governance
and decision-making. I am pleased to confirm
that as at 31 December 2023, the Company met
the objectives of the Board Diversity Policy with
57% of the Board comprising female Directors,
and two Board Directors being from a minority
ethnic background. In addition, following the
publication of an update report from the Parker
Review in March 2023, the Board decided
to set the target of 30%, to be achieved by
December 2027, in respect of the Group’s
senior management positions that will be
occupied by ethnic minority executives.
Recognising the importance of understanding
the needs and expectations of our stakeholders,
the Board continued its engagement activities
in 2023. More information on these activities
can be found on pages 48 to 53 of the
Strategic Report.
Senior’s Purpose reinforces our commitment to
sustainability; this was further evidenced by the
approval of our Net Zero targets by the Science
Based Targets initiative, putting us firmly on
course to significantly reduce our carbon
emissions. As we move into next year, the
Company will continue to drive progress on
innovative solutions to support its customers
in transition to low-carbon and clean energy
options and to achieve its own environmental
objectives. The Board will continue to provide
guidance and constructive challenge.
This year’s AGM will take place on 26 April 2024
as a physical meeting, and we look forward to
seeing you on the day.
In conclusion, the Board and I would like to
thank you for your ongoing support. We remain
committed to upholding the highest standards
of governance.
Ian King
Chairman
1 March 2024
Ian King | Chair
“The decisions made and the
direction taken by the Board
were guided by the long-term
interests of our stakeholders.”
Statement of compliance with
theCorporate Governance Code
As a Premium Listed company, Senior plc is
subject to the UK Corporate Governance Code
2018 (the Code). The code is published by the
Financial Reporting Council and available at
www.frc.org.uk. The Company has been
compliant with the Code throughout the
financial year under review.
Further information on how the Company has
applied the Principles and complied with the
Provisions of the Code can be found on the
following pages:
Board Leadership and
Company Purpose 88 to 91
Division of
Responsibilities 92 to 93
Composition,
Succession
and Evaluation 94 to 97
Audit, Risk and
Internal Control 100 to 105
Remuneration 106 to 127
83SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD AT A GLANCE
Board at a glance
The Board is responsible for Group decisions affecting governance, strategy
and the approval of annual operating budgets and Financial Statements.
Board and Committee membership as at 31 December 2023 and meeting attendance in 2023
The membership and attendance record of the full Board Meetings and its full Committee Meetings during 2023 are shown in the table below:
Main Board Audit Committee Nominations Committee Remuneration Committee
Chair Ian King Mary Waldner Ian King Barbara Jeremiah
Ian King 11/11 – 6/6 7/7
Celia Baxter
(1)
3/3 1/1 2/2 2/2
Susan Brennan 11/11 5/5 6/6 6/7
Bindi Foyle 11/11 – – –
Barbara Jeremiah 11/11 5/5 6/6 7/7
Giles Kerr
(2)
3/3 1/1 2/2 2/2
Rajiv Sharma 11/11 5/5 6/6 7/7
David Squires 11/11 – – –
Mary Waldner 11/11 5/5 6/6 7/7
Total number of meetings 11 5 6 7
(1) Celia Baxter stepped down from the Board on 21 April 2023.
(2) Giles Kerr stepped down from the Board on 21 April 2023.
Board and Executive Committee gender and ethnicity metrics as at 31December 2023
Number of
Board members
Percentage of
the Board
Number of senior
positions
on the Board
(Group CEO,
Group FD, SID,Chair)
Number in Executive
Committee
% of Executive
Committee
Gender representation
Men 3 43% 2 5 62%
Women 4 57% 2 3 38%
Not specified – – – – –
Ethnicity
White British or other White
(including minority-white groups) 5 71% 3 7 87%
Mixed/Multiple Ethnic groups – – – – –
Asian/Asian British 2 29% 1 1 13%
Black/African/Caribbean/
Black British – – – – –
Other ethnic group,
including Arab – – – – –
Not specified – – – – –
Celia Baxter and Giles Kerr were excluded from the tables relating to the Board gender and ethnicity representation.
Joe Vorih was appointed to the Board on 1 January 2024 and has not been included in the tables above.
84 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD OF DIRECTORS
Board of Directors
Ian King Barbara Jeremiah Susan Brennan Bindi Foyle Rajiv Sharma David Squires
Company Chair and Chair of the
Nominations Committee
Senior Independent Non-Executive Director,
Chair of the Remuneration Committee
Independent Non-Executive Director
Group Finance Director
Independent Non-Executive Director Group Chief Executive Officer
Committee membership:
Nominations and Remuneration.
Independence
Ian met the UK Corporate Governance
Code’s independence criteria on his
appointment as Company Chair.
Qualifications
Fellow of the Chartered Institute of
Management Accountants.
Skills and experience
Ian King joined the Board in November 2017
as a non-executive Director and became Chair
in April 2018. For more than 40 years Ian has
held many senior management and
directorship roles, including finance, executive
management, customer support and strategic
planning. Ian joined Marconi in 1976 and held
a number of roles with them. He was Chief
Executive of Alenia Marconi when Marconi
and British Aerospace merged in 1999 to
form BAE Systems plc. He then became
Group Strategy and Planning Director of BAE
Systems; Ian was its Chief Executive from
2008 until his retirement in June 2017. He
was also the senior independent director of
Rotork plc until June 2014.
External appointments
Ian is the Senior Independent Director of
Schroders plc, having been appointed to its
Board on 1 January 2017, the lead non-
executive director of the Department for
Transport, a non-executive director of High
Speed Two (HS2) Limited, and is a senior
adviser at Gleacher Shacklock LLP.
Specific contribution to the Company’s
long-term success
Ian leads the Board in defining the strategy of
the Group and driving the Company’s Vision
to produce sustainable growth in operating
profit, cash flow and shareholder value. Ian
has relevant direct experience in Aerospace,
a key element of Senior’s strategy.
Committee membership:
Audit, Nominations and Remuneration.
Upon the retirement of Celia Baxter following
the conclusion of the 2023 AGM, Barbara
was appointed the Chair of the Remuneration
Committee and the Senior Independent
non-executive Director.
Qualifications
BA in Political Science and a qualified lawyer.
Skills and experience
Barbara Jeremiah was appointed to the
Board on 1 January 2022. Barbara is a US
citizen and has over 30 years’ experience
with Alcoa Inc, ina number of positions,
including Executive Vice President, Corporate
Development andChairman’s Counsel. She
was formerly Chairwoman of Boart Longyear
Limited and anon-executive director of
Premier Oil plc and Russel Metals Inc.
Barbara was most recently anon-executive
director and Remuneration Committee Chair
of Aggreko plc from March 2017 to August
2021.
External appointments
Barbara was appointed a non-executive
Director of Johnson Matthey Plc with effect
from 1 July 2023. She was also appointed
Senior Independent Director of Johnson
Matthey Plc following the conclusion of their
AGM on 20 July 2023. Barbara has been the
Chair of The Weir Group plc since April 2022,
having been appointed a non-executive
director of that company in August 2017.
Specific contribution to the Company’s
long-term success
Barbara’s extensive experience in a number
of Senior’s key markets as an executive and a
non-executive director complements those
of the existing members of the Board.
Committee membership:
Audit, Nominations
and Remuneration.
Qualifications
BSc in Microbiology and MBA.
Skills and experience
Susan Brennan joined the Board in January
2016. Susan has more than 30 years of
manufacturing experience, including
commercial vehicle electric battery, fuel cell,
automotive vehicle, powertrain, and
component assembly. Susan has dedicated
her career to improving American
manufacturing. In her time as a
manufacturing practitioner, she has always
been a strong proponent of sustainability.
From August 2021 to October 2022, Susan
was the President and Chief Executive
Officer of Romeo Power, Inc. In the past, she
served as Chief Operations Officer of Bloom
Energy and in a variety of leadership roles for
major automakers, including Nissan and Ford.
Susan is the founder and a board member of
the Southern Automotive Women’s Forum
and is an adviser to many other women’s
empowerment groups.
External appointments
Susan is currently the Chief Executive Officer
and a board member of 5E Advanced
Materials, Inc., a company positioned to
become a vertically integrated global leader
in BORON + advanced materials with a focus
on enabling decarbonisation as well as
critical, high value applications within electric
transportation, clean energy, food and
domestic security. Susan was appointed to
this role with effect from 24 April 2023.
Specific contribution to the Company’s
long-term success
Susan brings valuable manufacturing
experience to the Board, especially in areas
of key technological advances. Her
operational and executive experience,
particularly in automotive and component
assembly, means she is well placed to
understand issues at both operational and
strategic levels.
Committee membership:
Group’s Executive Committee and the
Treasury Committee, which is not formally
appointed as a Committee of the Board.
Qualifications
BSc (Hons) in Economics & Accounting
andaChartered Accountant.
Skills and experience
Bindi Foyle joined the Board as an executive
Director in May 2017 and became Group
Finance Director in July 2017. Bindi joined
Senior as Group Financial Controller in
January 2006, a role she held until July
2014 when she became responsible for the
Group’s Investor Relations activities. Prior
to her appointment as an executive Director,
Bindi was Director of Investor Relations and
Corporate Communications for the Group.
Prior to joining Senior, Bindi held senior
finance roles at Amersham plc and GE,
having previously worked with BDO
Stoy Hayward.
External appointments
Bindi is a non-executive director of
AvonProtection plc and is the Chair
ofitsAuditCommittee.
Specific contribution to the Company’s
long-term success
Bindi’s experience of financial control and
investor relations and communications
means that she is ideally placed to
implement the strategy and policies
approved by the Board. Since joining the
Group in 2006, she has gained extensive
knowledge of the running of all the Group’s
operations and is instrumental in managing
the Group’s finances and assisting the Group
Chief Executive Officer in the management
of the Executive team.
Committee membership:
Audit, Nominations
and Remuneration.
Qualifications
BTech in Mechanical Engineering and MBA,
Marketing & Strategy.
Skills and experience
Rajiv Sharma was appointed to the Board in
January 2019. Rajiv has nearly 30 years’
experience which includes commercial,
operations, M&A, strategy, digital and general
management. Rajiv joined Coats Group plc in
November 2010 as Global CEO Industrial and
was responsible for developing and executing
a growth strategy. He has lived and worked in
the US, Europe and Asia and has multi-
industry global experience. He has managed
complex businesses with blue-chip
companies. The majority of his career has
been dedicated to growing or turning around
businesses and he has been on the board of
joint ventures. During his career, Rajiv has
held senior roles in various companies,
including Honeywell, GE and Shell.
External appointments
Rajiv has been the Group Chief Executive
ofCoats Group plc since January 2017,
havingserved as an executive director
sinceMarch 2015.
Specific contribution to the Company’s
long-term success
Rajiv has had a long career running and
growing multinational companies across the
world, particularly in Southeast Asia. His
background in mechanical engineering
means that he brings operational and
technical understanding to the Board’s
discussions. His experience of developing
and executing growth strategy makes his
contribution to delivering the Company’s
long-term success an important one.
Committee membership:
David chairs the Group’s Executive
Committee. He is also the Chair of the
Health, Safety & Environment Committee,
which meets formally three times a year to
formulate the Group’s HSE strategy and
objectives for approval by the Board.
Qualifications
BA in Business Management Studies,
a Fellow of the Chartered Institute of
Purchasing and Supply and Fellow of the
Royal Aeronautical Society.
Skills and experience
David Squires was appointed to the Board in
May 2015 and became Group Chief
Executive Officer in June 2015. A graduate in
business management, a Fellow of the
Chartered Institute of Purchasing and Supply
and Fellow of the Royal Aeronautical Society.
David has held senior posts in operations and
procurement, business development,
programme management and general
management. David started his career in the
oil industry working for Shell; however, most
of his working life has been spent in the
aerospace industry, initially with Hughes
Aircraft Company (now Raytheon), then
GEC-Marconi/BAE Systems and Eaton
Corporation. Prior to joining Senior plc in May
2015, David was Chief Operating Officer of
Cobham plc.
External appointments
David holds no other directorships.
Specific contribution to the Company’s
long-term success
David has a long-established career in
manufacturing, for the most part having
specialised in the aerospace sector. He
brings extensive knowledge of the aerospace
industry and broad international experience,
as well as understanding of supply chain and
business development to the Board. David
has been the guiding force in driving the
Group’s Vision and operating in a safe and
ethical manner.
85SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD OF DIRECTORS
Ian King Barbara Jeremiah Susan Brennan Bindi Foyle Rajiv Sharma David Squires
Company Chair and Chair of the
Nominations Committee
Senior Independent Non-Executive Director,
Chair of the Remuneration Committee
Independent Non-Executive Director
Group Finance Director
Independent Non-Executive Director Group Chief Executive Officer
Committee membership:
Nominations and Remuneration.
Independence
Ian met the UK Corporate Governance
Code’s independence criteria on his
appointment as Company Chair.
Qualifications
Fellow of the Chartered Institute of
Management Accountants.
Skills and experience
Ian King joined the Board in November 2017
as a non-executive Director and became Chair
in April 2018. For more than 40 years Ian has
held many senior management and
directorship roles, including finance, executive
management, customer support and strategic
planning. Ian joined Marconi in 1976 and held
a number of roles with them. He was Chief
Executive of Alenia Marconi when Marconi
and British Aerospace merged in 1999 to
form BAE Systems plc. He then became
Group Strategy and Planning Director of BAE
Systems; Ian was its Chief Executive from
2008 until his retirement in June 2017. He
was also the senior independent director of
Rotork plc until June 2014.
External appointments
Ian is the Senior Independent Director of
Schroders plc, having been appointed to its
Board on 1 January 2017, the lead non-
executive director of the Department for
Transport, a non-executive director of High
Speed Two (HS2) Limited, and is a senior
adviser at Gleacher Shacklock LLP.
Specific contribution to the Company’s
long-term success
Ian leads the Board in defining the strategy of
the Group and driving the Company’s Vision
to produce sustainable growth in operating
profit, cash flow and shareholder value. Ian
has relevant direct experience in Aerospace,
a key element of Senior’s strategy.
Committee membership:
Audit, Nominations and Remuneration.
Upon the retirement of Celia Baxter following
the conclusion of the 2023 AGM, Barbara
was appointed the Chair of the Remuneration
Committee and the Senior Independent
non-executive Director.
Qualifications
BA in Political Science and a qualified lawyer.
Skills and experience
Barbara Jeremiah was appointed to the
Board on 1 January 2022. Barbara is a US
citizen and has over 30 years’ experience
with Alcoa Inc, ina number of positions,
including Executive Vice President, Corporate
Development andChairman’s Counsel. She
was formerly Chairwoman of Boart Longyear
Limited and anon-executive director of
Premier Oil plc and Russel Metals Inc.
Barbara was most recently anon-executive
director and Remuneration Committee Chair
of Aggreko plc from March 2017 to August
2021.
External appointments
Barbara was appointed a non-executive
Director of Johnson Matthey Plc with effect
from 1 July 2023. She was also appointed
Senior Independent Director of Johnson
Matthey Plc following the conclusion of their
AGM on 20 July 2023. Barbara has been the
Chair of The Weir Group plc since April 2022,
having been appointed a non-executive
director of that company in August 2017.
Specific contribution to the Company’s
long-term success
Barbara’s extensive experience in a number
of Senior’s key markets as an executive and a
non-executive director complements those
of the existing members of the Board.
Committee membership:
Audit, Nominations
and Remuneration.
Qualifications
BSc in Microbiology and MBA.
Skills and experience
Susan Brennan joined the Board in January
2016. Susan has more than 30 years of
manufacturing experience, including
commercial vehicle electric battery, fuel cell,
automotive vehicle, powertrain, and
component assembly. Susan has dedicated
her career to improving American
manufacturing. In her time as a
manufacturing practitioner, she has always
been a strong proponent of sustainability.
From August 2021 to October 2022, Susan
was the President and Chief Executive
Officer of Romeo Power, Inc. In the past, she
served as Chief Operations Officer of Bloom
Energy and in a variety of leadership roles for
major automakers, including Nissan and Ford.
Susan is the founder and a board member of
the Southern Automotive Women’s Forum
and is an adviser to many other women’s
empowerment groups.
External appointments
Susan is currently the Chief Executive Officer
and a board member of 5E Advanced
Materials, Inc., a company positioned to
become a vertically integrated global leader
in BORON + advanced materials with a focus
on enabling decarbonisation as well as
critical, high value applications within electric
transportation, clean energy, food and
domestic security. Susan was appointed to
this role with effect from 24 April 2023.
Specific contribution to the Company’s
long-term success
Susan brings valuable manufacturing
experience to the Board, especially in areas
of key technological advances. Her
operational and executive experience,
particularly in automotive and component
assembly, means she is well placed to
understand issues at both operational and
strategic levels.
Committee membership:
Group’s Executive Committee and the
Treasury Committee, which is not formally
appointed as a Committee of the Board.
Qualifications
BSc (Hons) in Economics & Accounting
andaChartered Accountant.
Skills and experience
Bindi Foyle joined the Board as an executive
Director in May 2017 and became Group
Finance Director in July 2017. Bindi joined
Senior as Group Financial Controller in
January 2006, a role she held until July
2014 when she became responsible for the
Group’s Investor Relations activities. Prior
to her appointment as an executive Director,
Bindi was Director of Investor Relations and
Corporate Communications for the Group.
Prior to joining Senior, Bindi held senior
finance roles at Amersham plc and GE,
having previously worked with BDO
Stoy Hayward.
External appointments
Bindi is a non-executive director of
AvonProtection plc and is the Chair
ofitsAuditCommittee.
Specific contribution to the Company’s
long-term success
Bindi’s experience of financial control and
investor relations and communications
means that she is ideally placed to
implement the strategy and policies
approved by the Board. Since joining the
Group in 2006, she has gained extensive
knowledge of the running of all the Group’s
operations and is instrumental in managing
the Group’s finances and assisting the Group
Chief Executive Officer in the management
of the Executive team.
Committee membership:
Audit, Nominations
and Remuneration.
Qualifications
BTech in Mechanical Engineering and MBA,
Marketing & Strategy.
Skills and experience
Rajiv Sharma was appointed to the Board in
January 2019. Rajiv has nearly 30 years’
experience which includes commercial,
operations, M&A, strategy, digital and general
management. Rajiv joined Coats Group plc in
November 2010 as Global CEO Industrial and
was responsible for developing and executing
a growth strategy. He has lived and worked in
the US, Europe and Asia and has multi-
industry global experience. He has managed
complex businesses with blue-chip
companies. The majority of his career has
been dedicated to growing or turning around
businesses and he has been on the board of
joint ventures. During his career, Rajiv has
held senior roles in various companies,
including Honeywell, GE and Shell.
External appointments
Rajiv has been the Group Chief Executive
ofCoats Group plc since January 2017,
havingserved as an executive director
sinceMarch 2015.
Specific contribution to the Company’s
long-term success
Rajiv has had a long career running and
growing multinational companies across the
world, particularly in Southeast Asia. His
background in mechanical engineering
means that he brings operational and
technical understanding to the Board’s
discussions. His experience of developing
and executing growth strategy makes his
contribution to delivering the Company’s
long-term success an important one.
Committee membership:
David chairs the Group’s Executive
Committee. He is also the Chair of the
Health, Safety & Environment Committee,
which meets formally three times a year to
formulate the Group’s HSE strategy and
objectives for approval by the Board.
Qualifications
BA in Business Management Studies,
a Fellow of the Chartered Institute of
Purchasing and Supply and Fellow of the
Royal Aeronautical Society.
Skills and experience
David Squires was appointed to the Board in
May 2015 and became Group Chief
Executive Officer in June 2015. A graduate in
business management, a Fellow of the
Chartered Institute of Purchasing and Supply
and Fellow of the Royal Aeronautical Society.
David has held senior posts in operations and
procurement, business development,
programme management and general
management. David started his career in the
oil industry working for Shell; however, most
of his working life has been spent in the
aerospace industry, initially with Hughes
Aircraft Company (now Raytheon), then
GEC-Marconi/BAE Systems and Eaton
Corporation. Prior to joining Senior plc in May
2015, David was Chief Operating Officer of
Cobham plc.
External appointments
David holds no other directorships.
Specific contribution to the Company’s
long-term success
David has a long-established career in
manufacturing, for the most part having
specialised in the aerospace sector. He
brings extensive knowledge of the aerospace
industry and broad international experience,
as well as understanding of supply chain and
business development to the Board. David
has been the guiding force in driving the
Group’s Vision and operating in a safe and
ethical manner.
86 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD OF DIRECTORS CONTINUED
Our Board as at 31 December 2023
Gender diversity
57% Female
43% Male
Ethnic diversity
71% White British or other White
(including minority-white groups)
29% Asian/Asian British
Tenure
3 Over six years
2 Over three and up to six years
2 Up to three years
Joe Vorih Mary Waldner
Independent Non-Executive Director Independent Non-Executive Director,
Chair of the Audit Committee and
Director designated to engage with
the Group’s employees
Committee membership:
Audit, Nominations and Remuneration.
Qualifications
BS and MS in Mechanical Engineering
and MBA
Skills and experience
Joe Vorih joined the Board on 1 January
2024. Joe was previously the President of
HBK, a division of and key platform business
within Spectris plc. Prior to that, he worked
for Clarcor Corporation, a NYSE listed
business delivering filtration solutions;
Stanadyne Corporation, a private-equity
owned global fuel injection maker; and
Danaher Corporation, also a US listed global
business in industrial, test and medical
equipment. Joe was also a Board Director of
Muth Mirror Systems, a specialised
automotive supplier.
External appointments
Joe is the Group Chief Executive Officer of
Genuit plc, a leading provider of sustainable
water, climate and ventilation products and
systems. He is also a partner in Rocky Neck
Partners, LLC.
Specific contribution to the Company’s
long-term success
Joe brings broad international engineering
expertise in the automotive, aerospace and
industrial sectors where Senior operates. His
experience in integrating businesses and
managing businesses through transition and
lean transformation – in both public and
private equity environments – will enable him
to make valuable contributions to the Board.
Committee membership:
Audit, Nominations and Remuneration.
Upon the retirement of Giles Kerr and Celia
Baxter following the conclusion of the 2023
AGM, Mary was appointed the Chair of the
Audit Committee and the Director designated
to engage with the Group’s employees.
Qualifications
MA (Hons) in Physics and a Fellow of the
Chartered Institute of Management
Accountants.
Skills and experience
Mary Waldner joined the Board in December
2021. Mary held a number of senior roles
within the aerospace and automotive sectors
at British Airways and General Motors. At
Ultra Electronics, Mary gained experience of
working within the defence, security and
energy markets. She was previously the
Group Finance Director of Ultra Electronics
Holdings plc, the Director of Group Finance
at QinetiQ Group plc and Group Financial
Controller of 3i Group plc.
External appointments
Mary is Chief Financial Officer of Lloyd’s
Register, the global professional services
company specialising in engineering and
technology for the maritime industry. She is
also a non-executive director and Chair of the
Audit and Risk Committee of Oxford
Instruments plc, a provider of high
technology products and services to the
world’s leading industrial manufacturers and
scientific research institutes.
Specific contribution to the Company’s
long-term success
Mary’s background and experience in
finance and in the engineering sector
complements the current Board
membership and is invaluable in
Senior’s continued development.
Andrew Bodenham
Group Company Secretary
Andrew was appointed Group Company
Secretary in 2002. He acts as Secretary to
the Senior plc Board and its Committees; he
is also a member of the Group’s Executive
Committee and of the Treasury Committee.
Prior to joining Senior, Andrew had gained
experience working for businesses in
technology/software, manufacturing,
insurance and aviation services sectors.
87SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD OF DIRECTORS CONTINUED
Executive Committee
The Executive Committee oversees the running of all Senior Group Operations.
David Squires Martin Barnes Andrew Bodenham Launie Fleming
Bindi Foyle Jane Johnston Mike Sheppard Amy Legenza
Executive Committee
membership and meeting
attendance
The Executive Committee, led by
the Group Chief Executive Officer,
is responsible for the
implementation of the decisions
made by the Board and for the
day-to-day conduct of the Group’s
operations. Its Terms of Reference
can be found on the Company’s
website. The Executive Committee
met nine times during 2023.
David Squires
See biography on page 85.
Bindi Foyle
See biography on page 85
Martin Barnes
Martin became the Director of
Business Development & Strategy
in October 2021 and was appointed
to the Executive Committee on that
date. Prior to this appointment,
Martin was the CEO of Senior
Flexonics Lymington and of Senior
Flexonics Upeca. Martin joined the
Senior Group in April 2016.
Jane Johnston
Jane joined Senior as Group HR
Director in May 2016. A Fellow of
the Chartered Institute of Personnel
and Development, Jane has
considerable experience heading
up HR functions across a range of
global geographies. She has
worked in a number of different
sectors, including technology, drug
development, construction,
professional services and, prior to
joining Senior, was Group HR
Director at Pace plc.
Andrew Bodenham
See biography on page 86
Mike Sheppard
A US citizen, Mike has worked for
the Group for over 30 years and is
the Chief Executive of the Flexonics
Division. A qualified engineer,
Mike’s previous positions within the
Group included operational roles at
the two largest Flexonics
businesses, Pathway and Bartlett.
Launie Fleming
A US citizen, Launie has worked for
the Group for over 20 years. Launie
joined the Executive Committee
upon his appointment as Chief
Executive of Aerospace Fluid
Systems in September 2008. In
October 2020, Launie was
appointed Chief Executive of the
Aerospace Division, formed by the
consolidation of the Aerospace
Fluid Systems division and
Aerospace Structures division. Prior
to these divisional roles, Launie
was the Chief Executive of Senior
Aerospace SSP.
Amy Legenza
A US citizen, Amy became the
Director of Risk and Assurance on
1January 2023 and was appointed
to the Executive Committee on that
date, having previously served as
the Group’s Head of Risk &
Compliance. A Certified Public
Accountant, Amy joined the Group
in 2008 and has broad experience in
senior finance and accounting roles.
88 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD LEADERSHIP AND COMPANY PURPOSE
Role of the Board
The role of Senior’s Board is to promote
long-term, sustainable success of the Company,
generating value for shareholders and creating
positive outcomes for all stakeholders. It is
responsible for the Group’s strategic planning,
establishing and upholding the governance
framework and the approval of annual operating
budgets and Financial Statements. Directors
have a fiduciary duty to act within powers,
promote the success of the Company, exercise
independent judgment, exercise reasonable
care, skill and diligence, and avoid conflict of
interests. The Matters Reserved for the Senior
Board, describing the responsibilities of the
Board, are available on the Company’s website.
The Board met regularly during 2023 and
effectively considered and addressed
opportunities and risks to the future success of
the Company. This was done through regular
reviews of the Group’s risk management and
internal controls framework, holding a dedicated
Board strategy session and maintaining
oversight over the Group’s sustainability
progress. Throughout the year, governance
supported the effective delivery of the
Company’s strategic priorities, as set out on
pages 40 and 41.
The Board plays an important role in ensuring
that the necessary resources are in place for the
Company to meet its objectives. As part of the
annual cycle of Strategic Review and Budget
meetings, the Board identifies, reviews and
approves the Company’s financial, technological,
human and capital resources required to meet
its objectives. The Board monitors the
Company’s financial performance through a
number of financial and non-financial KPIs,
details of which can be found on pages 56 and
57 to measure progress in implementing the
strategy. The Group’s remuneration framework
is reviewed annually to ensure it remains market
competitive to attract and retain high quality
executives. Succession plans for key leadership
roles are also assessed bi-annually to ensure
continuity of critical expertise.
Key Board activities during the year
Activities
Strategy • Revisiting the Company’s Purpose.
• Updates on the Group’s markets and technologies, divisional
strategies, divestments and acquisitions, including the integration of
Senior Aerospace Spencer.
• Feedback from the Executive Strategy session.
• Board Strategy session.
Financial, contractual
and operational
matters
• Approval of the Group’s full year 2022 and half year 2023 results.
• Approval of the 2022 final and 2023 interim dividends.
• Approval of various contracts and capital expenditure requests.
• Approval of the Group’s insurance renewal terms.
• Business updates from senior management.
• Approval of the 2024 Group Budget.
• Updates on tax and treasury matters.
Governance • Participating in, and reviewing the recommendations of the annual
Board effectiveness review. agreeing the actions for implementation.
• Review and approval of the Modern Slavery Statement. Review of
the Gender Pay Gap Report.
• Review of the Directors’ Conflicts of Interests Register.
• AGM.
• Review and approval of the Board Diversity and Inclusion Policy.
• Review and approval of the Human Rights Policy.
• Review and approval of the Delegated Authority Matrix.
• Approval of Joe Vorih’s appointment.
• Updates on legal, regulatory and corporate governance
developments.
Risk and compliance • Review of the material financial and non-financial risks facing the
Group.
• Update on trade compliance.
• Updates on information security.
Employees • Update from the Group HR Director and the Director designated to
engage with the Group’s employees.
Stakeholder
Engagement
• Updates from financial advisers and feedback from the investor
roadshows.
Sustainability • Updates on the Group’s sustainability matters.
• Review of the Group’s 2023 Group’s climate risk assessment.
To enable the members of the Board and its Committees to discharge their duties effectively,
the Chair ensures that relevant and reliable information is provided to all Directors in a timely
manner in advance of meetings. The Group Company Secretary supports the Board to ensure
that it has in place appropriate policies, processes, time and resources to enable it to operate
efficiently and effectively.
There is a procedure by which all Directors can obtain independent professional advice at the
Company’s expense in furtherance of their duties, if required, and they have been made aware
of this.
Board leadership and
Company Purpose
89SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD LEADERSHIP AND COMPANY PURPOSE
Company Purpose, Values and culture
The Board is responsible for agreeing and
defining the Company’s Purpose. In 2023,
we revisited our Purpose to align it with our
strategic focus on fluid conveyance and thermal
management, to better support our customers
in transitioning to a low-carbon economy and to
emphasise our environmental responsibility and
Net Zero commitments. Our Purpose and
Values can be found on pages 4 and 5.
We recognise the importance of aligning our
Purpose, Values and strategy. In September
2023, we held a Leadership Conference “How
to Thrive and Grow Through the Transition to a
Low-Carbon World”. Attended by the Group’s
leadership teams and employees involved in the
strategic planning process, the event reiterated
the alignment of the revised Purpose and the
Group’s strategic direction by providing insight
into our customers’ changing perspectives and
showcasing how Senior’s evolving technologies
and products contributed to the revised Purpose.
Further details can be found on page 49.
In Senior, we foster a culture that encourages
and celebrates innovation. Within the framework
of Senior’s Technology Collaboration Forum, we
launched our first Group-wide Innovation
Competition. As a result of the 2023 Innovation
Competition – “Innovation on the Road to Net
Zero” – we were able to foster innovation at the
operating business level, to engage our junior
engineering, design and manufacturing talent
across the businesses, providing an opportunity
for personal and professional development; and
to encourage our engineering talent to be bold
and creative, challenge the status quo and take a
pioneering approach. Further information can be
found on page 26.
The Board recognises its role in assessing and
monitoring the culture of the Group. In the first
instance, the desired culture and Values are
communicated to all employees through our
Code of Conduct. This is further supported by
Group-wide policies and practices. The Group
ensures that its workforce policies and practices
align with the Company’s Values and support its
long-term sustainable success. Our disclosures
on pages 37, 79 and 90 and 91 illustrate how the
design of policies and procedures across the
Group is aligned with our Values.
The Board deploys various initiatives to monitor
culture, including:
• engaging with the local workforce during
regular off-site Board meetings, and the
presentations made by the operating
businesses to the Board during such
meetings;
• initiatives on workforce engagement, carried
out by Mary Waldner with the support of the
Group HR Director, Jane Johnston;
• reviewing quantitative reporting metrics and
health and safety, training completion
percentage;
• reviewing qualitative reporting, such as results
of employee engagement surveys, whistle-
blowing notifications and succession plans;
and
• monitoring findings from the Group’s internal
and external audits by the Audit Committee.
Further information can be found on pages 35.
Internal controls and risk management
The Board has ultimate accountability for the
Group’s risk management process.
The Board determines the nature and extent
of the significant actions necessary to achieve
its strategic objectives and maintains a sound
system of internal controls. The Company’s
Audit Committee reports to and, for certain
matters, advises the Board of Directors. The
Audit Committee Report on pages 100 to 105
describes the role and activities of the Audit
Committee, together with the significant risks
and judgments that it considered in relation
to the 2023 Financial Statements and its
relationship with the internal and external
auditors. Details of the Group’s approach to
risk management and its Risk and Assurance
Framework can be found on pages 58 to 69.
Case study
BOARD STRATEGY MEETING
Background
Dedicated Board Strategy meetings are
typically held at one of the Group’s large
operating business sites on an annual basis
as a full day event. The purpose of these
meetings is to provide space for focused
discussions around the Company’s long-term
goals and priorities, allowing the Board to
review and, if necessary, adapt the strategy
in response to the changing market
conditions. In 2023, the Board Strategy
meeting was held at Senior Flexonics
Bartlett, USA.
Strategy Meeting Agenda and Outcomes
1. Markets and technology updates: Having
received a detailed presentation on current
market trends and customer requirements,
the Board was able to better understand
new business opportunities opening up to
Senior as part of the transition to a
low-carbon economy. This information is
critical when deciding on resource
allocation and capital expenditure.
2. Divisional updates: The Board reviewed
performance of the Aerospace and the
Flexonics Divisions, including financial
results, technology investments and
competitive landscape. This analysis is
useful in understanding how the Divisions
are performing, the degree of their
alignment with the overall Company
strategy and their contribution to the
Company’s long-term goals.
3. Risk review and people planning: The
Board considered the key risks that had the
potential to impact the Company’s strategy.
This helped in understanding the emerging
risks and ensuring that they are integrated
into broader strategic planning and decision-
making. Strategic Board discussions on
HR-related matters recognised the
need to develop programmes to upskill
employees, enhance employee satisfaction
and continue to develop strategies to
improve diversity, in particular developing
talented women.
4. Portfolio review: The Group’s portfolio
related to potential divestments and value
enhancing acquisitions is reviewed in
detail with the Board. These reviews are
critical in ensuring the delivery of the
Group’s long-term strategy as well as
enhancing the Group’s long-term value
and return on its investments.
90 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
Anti-bribery & Corruption
Risks related to corruption are identified,
assessed and managed using Senior’s risk
management process as shown on page 60.
Senior has a zero tolerance policy for bribery
and corruption, which means we do not offer,
pay, solicit or accept bribes, kickbacks,
facilitation payments, or other advantage in any
form, either directly or indirectly. We will not
participate in any kind of corrupt activity directly
or through third parties. In particular,
subcontracts, purchase orders or agency or
consultancy agreements must not be used as a
means of channelling payments to any third
party. Senior’s Code of Conduct clearly states
that Senior will follow all applicable bribery and
corruption laws that apply in the countries
where we do business, including the UK
Bribery Act 2010 and the US Foreign Corrupt
Practices Act. This principle is embedded in our
Code and supported by three policies: Agents
Policy, Gifts and Hospitality Policy and Whistle-
blowing Policy.
Agents Policy: The Group recognises that the
use of third-party intermediaries can increase
potential bribery and corruption risks within the
markets in which we operate. The Company
conducts appropriate due diligence and ongoing
monitoring of third parties with which it works,
including regular screening, risk assessments,
and compliance health checks. The Company
also subscribes to third-party rating organisations
to support its due diligence process, particularly
when appointing agents and distributors. The
Group’s operating businesses are required to
report on the agents and advisers appointed by
them, on a biannual basis, to the Group
Company Secretary. In addition, the Group
Company Secretary must be notified when new
agents are appointed. Biannual reporting is
reviewed by the Audit Committee.
Employees are provided with training to raise
awareness of the risks and potential
consequences of corruption.
Gifts and Hospitality Policy: The Board
recognises that gifts and hospitality have the
potential to create a conflict of interest, or the
perception of a conflict of interest. As a result,
there is a Group policy restricting the receiving
and giving of gifts and hospitality from, and to,
third parties. This policy requires that all gifts and
hospitality must be recorded annually through a
self-declaration process. Employees must
declare any gift or hospitality provided or
received with the individual or annual aggregate
value in excess of £200 (or lower amount) as
specified in the Group Gifts and Hospitality
Policy. The internal audits assess adherence to
the Group’s Gifts and Hospitality Policy during
the on-site or remote audits conducted
throughout the year.
Whistle-blowing
As part of our commitment to operate ethically,
the Company has a Whistle-blowing Policy that
is communicated throughout the Group. This
Policy provides employees with the opportunity
to report suspected unethical or illegal corporate
conduct confidentially and anonymously.
Senior is committed to maintaining high ethical
standards across the Group. Employees and
representatives of Senior have an obligation to
act honestly, with integrity and to comply with
applicable laws. Consequently, employees are
encouraged to report any suspected unethical
or illegal corporate conduct in accordance with
this Policy.
Senior will not tolerate the harassment or
victimisation (including the application of
informal pressure) of a person reporting
corporate conduct in good faith. In addition to
the legal protection provided to such employees,
Senior will treat retaliatory conduct in violation of
this Policy as a serious disciplinary offence.
The Group encourages its employees to discuss
any ethical concerns that they may have with
local management, or at Group level if more
appropriate. Where an employee feels unable to
approach local or Group management, or is
dissatisfied with the response, they can contact
Senior’s third-party free whistle-blowing service
provider by telephone, a web reporting tool or, in
some languages, an app. The provider will pass
on information to an investigating employee
within Senior, maintaining anonymity of the
individual, if requested. This service is available
in all languages appropriate to our global
locations.
All reports of suspected unethical or illegal
corporate conduct are independently
investigated and tracked from inception to
resolution and, where necessary, actions are
taken to rectify any weakness in systems that
may have been identified. These actions, and
the overall integrity of the reporting system, are
subject to regular scrutiny by the Audit
Committee. This process is also available to
third parties, such as suppliers and customers.
Subject to confidentiality considerations, the
outcome of each investigation is provided,
insofar as it is possible, to the individual who
reported the concern. All reported whistle-
blowing incidents are reviewed by the Board of
Directors, which the Company believes to be
the most appropriate forum.
The Group Company Secretary provides
information on any reported whistle-blowing
cases in regular secretarial reports to the Board
of Directors. This is a standing agenda item at
every Board meeting. In addition, the Group HR
Director summarises the total cases and
assesses if any patterns or trends are emerging.
This is included in every Group Chief Executive
Officer’s report to the Board. The Director
of Risk and Assurance provides whistle-
blowing case information in her report to
the Audit Committee.
Human Rights and Modern Slavery
During its September 2023 meeting, the Board
approved the Group’s Human Rights Policy. The
Policy, along with the Code of Conduct and
Modern Slavery Statement, sets out the
standards we expect from our employees,
customers and suppliers regarding human
rights. The Policy can be found on the
Company’s website.
At Senior, we strive to do business in a
responsible way, respecting the human rights of
our workers and everyone we come into contact
with. We also expect our suppliers to respect
and adhere to the Policy. We believe, no matter
where in the world we do business, we should
do so responsibly, respecting the rights of our
workforce and the communities in which we
operate. We make choices all the time that
affect people. The Group recognises the
importance of the Universal Declaration of
Human Rights and adheres to the core principles
and values defined within it. The majority of
countries in which Senior operates have their
own laws banning child labour and promoting
human rights. Senior monitors the ages of its
workforce across the world to ensure
compliance and identify any potential issues.
Senior is committed to preventing slavery and
human trafficking in its corporate activities and
throughout its supply chain. Senior does not
restrict any of its employees in any of the
countries in which it operates from joining a
trade union if they wish to do so. Senior also
works closely with its suppliers to ensure that
they at least meet internationally recognised
minimum requirements for workers’ welfare and
conditions of employment. Senior publishes the
Modern Slavery Act Statement, which is kept
under review and updated as necessary. The
current statement, signed by the Group Chief
Executive Officer and published in February
2023, can be found on the Company’s website.
Responsible Sourcing
The Group has in place a Responsible
Sourcing Policy which establishes the minimum
sustainability standards expected of our supply
chain. The Policy sets out Senior’s Responsible
Sourcing Principles, in support of the
internationally recognised standards, including
the UN Guiding Principles on Business and
Human Rights and the Universal Declaration
of Human Rights. Suppliers are expected to
adhere to these principles at all times.
91SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
Cyber security and data protection
Recognising critical importance of cyber security
to the Group’s sustainability, we maintained
strong focus over this area.
The Group’s Information Security Strategy:
The purpose of the Group’s Information Security
Strategy is to provide assurance that there is
sufficient focus on reducing risks of significant
cyber attacks. In order to help us measure and
understand the cyber security capabilities across
the Group, we have scheduled independent
cyber security maturity assessments for 2023
and 2025 using the NIST Cyber Security
Framework, which is widely regarded by
regulators and peers.
The executive responsibility for both Information
Technology (“IT”) and Information Security has
been brought under one person with clear lines
of accountability from operational IT leads to the
Group Director of Information Security &
Information Technology.
Security awareness and training: In 2023,
all Group employees received training on
Global Cyber Security Basics, which covered
such topics as proper password management,
understanding cyber security risks and dangers
of email attacks. Employees also received
regular guidance on how to identify and
respond appropriately to potential cyber security
threats, both in their personal lives as well as
when at work.
Risk management: Information security risk
assessments are routinely conducted across the
Group, an example of which includes assessing
third-party suppliers to ensure systems are
secure by design. Risks identified by subject
matter experts are reviewed with applicable risk
owners and steps agreed to mitigate.
Board oversight: In 2023, the Group Director
of Information Security & Information
Technology presented to the Board on two
occasions, providing updates on progress
against the Group’s Information Security
Strategy, identifying specific focus areas for
2023, security issues identified during the year,
the improvements to security made and the
plans for the future.
Certification: The Group’s Information Security
Policy is based upon a number of recognised,
international standards, including ISO 27001,
NIST Cyber Security Framework and the CIS top
20 controls, which all Group operating
businesses are required to follow.
Procedures for outsourced data processing:
Where third-party data processing is utilised, the
Group follows its internal data protection policies
and risk assessment procedures, including
reviewing contractual provisions for both
existing and new providers.
Compliance: The Group has established
mechanisms to ensure compliance with
specific regulatory requirements. An
Acceptable Use Policy is in place to provide
guidelines for the acceptable and appropriate
use of the Group’s information technology and
operational technology assets by all Group
employees. The Policy sets out the controls
that are in place to help reduce the risk
associated with the inappropriate use of the
Group’s information technology and
operational technology assets, which could
lead to data loss, manufacturing disruption,
virus or malware infection or other issues that
could have a negative financial or reputational
impact on the Group. In compliance with the
Data Protection (Charges and Information)
Regulations 2018, the Company is registered
with the Information Commissioner’s Office.
To ensure compliance with the General Data
Protection Regulations (“GDPR”), both in the EU
and the UK, the Company and all relevant Group
operations have in place a GDPR policy and
breach incident procedure which have been
communicated to their employees. As the
Company is not a public authority, its core
activities do not require regular and systematic
monitoring of individuals on a large scale and it
does not process special categories of personal
data, criminal convictions or offences data on a
large scale, it is not required to appoint a data
protection officer. However, the Company and
relevant Group operations each have a Data
Protection Champion, whom employees can
approach for guidance if they have any queries
or concerns relating to data protection.
Compliance with data protection regulations will
continue to be monitored on an ongoing basis.
Plans for 2024: As part of our ongoing
assessments of our security and technical
capabilities, we will continue to invest in and
implement continual controls testing at both
technical and operational levels, to ensure
we remain resilient against the ever-changing
cyber risks.
We will also be implementing additional
regulatory assessments to evidence and
demonstrate our alignment and adherence to
the additional and newly updated regulations
that will be introduced across our industry
sectors in 2024.
International Trade Compliance
The Code of Conduct includes a section
dedicated to Complying with International
Sanctions and Trade Compliance Requirements.
It states “Senior will conduct its business in
full compliance with all global trade laws and
regulations and all relevant sanctions for the
import and export of goods and services in the
countries within which it operates.”
Read more about communicating the Senior Code
ofConduct and operating with integrity on page 37.
Read more about conflicts of interest procedure on
page98.
Engagement with Stakeholders
The Board engages with a broad range of
stakeholders through multiple channels. A
summary of the Group’s engagement with its
key stakeholders can be found on pages 48 to
53 of the Strategic Report, and page 109 of the
Remuneration Report.
The statement of compliance with section 172
can be found on pages 54 and 55.
Mary Waldner is the Director designated to
engage with the Group’s employees. The Board
believes that Mary is well-suited to lead on the
initiatives around employee engagement.
Mary’s excellent communication skills and
empathy with diverse employee perspectives
have helped establish trust and form strong
connections with the workforce. In addition,
Mary’s background in the engineering sector
has enabled her to resonate with employees
and their challenges. Further details of the
employee engagement initiatives can be found
on page 49.
The Board considers various factors when
assessing the effectiveness of its engagement
mechanisms with the Group’s stakeholders.
Participation rates in employee engagement
activities, employee satisfaction rates, nature of
feedback received from shareholders, nature
and frequency of whistle-blowing reports are
some examples that the Board uses to measure
the effectiveness. The Board remained
confident in the effectiveness of the Group’s
engagement mechanisms and will continue its
commitment to sustaining and adapting, where
necessary, its approach.
92 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / DIVISION OF RESPONSIBILITIES
Board roles and responsibilities
Role Director Key responsibilities
Company Chair
and Chair of the
Nominations Committee
Ian King (a) Leadership of the Board, setting the Board’s agenda, the style and tone of Board discussions
and ensuring that adequate time is available for discussion of all agenda items, in particular
strategic issues;
(b) supporting the Group Chief Executive Officer in the development of strategy and, more
broadly, to offer guidance to the Group Chief Executive Officer;
(c) promoting a culture of openness and debate by facilitating the effective contribution of non-
executive Directors, and ensuring constructive relations between non-executive Directors and
executive management;
(d) ensuring that the Directors receive relevant, reliable, timely and clear information;
(e) ensuring, in conjunction with the Group Chief Executive Officer, effective communication with
shareholders; and
(f) ensuring that the performance of the Board, its main committees and individual Directors are
formally evaluated on an annual basis.
Group Chief
Executive Officer
David Squires Leadership of the Company, managing the Group’s business, developing and implementing the
strategy and policies approved by the Board.
Group Finance
Director
Bindi Foyle To manage the Group’s financial affairs and to contribute to the management of the Group’s
business, and the implementation of the strategy and policies approved by the Board.
Senior Independent
Non-Executive Director,
Chair of the Remuneration
Committee
Barbara
Jeremiah
To support the Chair and to act as an intermediary for other non-executive Directors, if necessary.
To chair the Remuneration Committee.
Independent
Non-Executive Director,
Chair of the
Audit Committee and
Director designated to
engage with the Group’s
employees
Mary Waldner To challenge the executive Directors and monitor the delivery of the strategy within the risk and
control framework set by the Board.
To chair the Audit Committee and focus its agenda on its key matters: quality of financial
reporting and controls, financial accounting, corporate reporting and effective internal controls.
Mary is also a Director designated to engage with the Group’s employees.
Independent Non-Executive
Directors
Susan Brennan,
Rajiv Sharma and
Joe Vorih
(1)
To challenge the executive Directors and monitor the delivery of the strategy within the risk and
control framework set by the Board.
Group Company Secretary Andrew
Bodenham
To provide advice to the Directors on all corporate governance matters and ensure the Company
complies with legal and regulatory matters and good practice. Andrew acts as Secretary to the
Senior plc Board and its committees.
(1) Joe Vorih was appointed to the Board with effect from 1 January 2024
Board Leadership
Senior’s Board is led by Ian King, the non-
executive Chair, who was independent upon
appointment as Chair of the Company in 2018.
As at 31 December 2023, the Board comprises
the Chair, four independent non-executive
Directors and two executive Directors. The
Board approved the appointment of Joe Vorih
as a non-executive Director with effect from 1
January 2024.
Division of
responsibilities
All Directors were selected for appointment
because of their wide industrial and commercial
experience. The Board considers all non-
executive Directors of the Company continue to
be independent, having taken into account a list
of relationships and circumstances that may
appear relevant in determining independence.
Details of the members of the Board and of the
Executive Committee can be found on pages 84
to 87.
Division of Responsibilities
The Directors are confident that an effective
Board is in place, with a clear division of
responsibilities between the running of
the Board and the running of the Group’s
operating businesses.
During 2023, the Chair met with the non-
executive Directors to discuss matters in
confidence, without the executive Directors
being present; this is in line with good practice.
Likewise, the Senior Independent non-executive
Director met with the non-executive Directors to
appraise the Chair’s performance in 2023.
93SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / DIVISION OF RESPONSIBILITIES
Time commitments
The time commitments of the Directors is
kept under review, and the potential for over-
boarding monitored and discouraged. During
the recruitment process, the Company clearly
defines the expected time commitments to the
potential Board Directors. At the same time,
existing commitments of all Board candidates
are assessed to ensure they have sufficient
capacity and time to fulfil their directors’ duties
effectively. In 2023, the Board approved the
appointment of Joe Vorih as a non-executive
Director. During the short-listing process, the
Board noted that Joe Vorih held a Chief
Executive Officer role at Genuit Group plc and no
other appointments that would conflict his role at
Senior plc. Directors are required to disclose their
significant external directorships, together with
any conflicts that such directorships may pose,
as part of the Conflict of Interests Register. In
2023, the Board reviewed the Register several
times throughout the year and remained satisfied
that the existing commitments of the Board
Directors did not compromise the time
commitment required. The Board undertakes its
annual performance review which, among other
matters, considers the performance of Board
Directors, including their participation in and
contribution to Board meetings.
Governance structure
The Board delegates a certain number of its
responsibilities to the Audit, Remuneration and
Nominations Committees.
There are procedures in place to ensure that all
Directors are properly briefed, so that decisions
taken by the Board are based on the fullest,
up-to-date, available information.
Other committees are appointed by the
Board to deal with treasury matters,
disclosure matters and specific matters
such as acquisitions and disposals.
HSE Committee
The HSE Committee is appointed by the
Executive Committee; it oversees all health,
safety and environmental matters across the
Group. Its Terms of Reference can be found on
the Company’s website. The Committee met
three times during the year, and there was full
attendance at every meeting. In 2023, the
minutes arising from all Board and HSE
Committee meetings were made available to
the Board. The Committee membership is
shown in the table below:
Role
David Squires
(Chair)
Group Chief Executive
Officer
Launie Fleming
Chief Executive of the
Aerospace Division
Mike Sheppard
Chief Executive of the
Flexonics Division
Andrew Bodenham Group Company Secretary
Mark Roden
Group HSE & Sustainability
Director
Nominations Committee Remuneration CommitteeAudit Committee
Board of Directors
The Group Chief
Executive Officer
reports on the activities of
the Executive and HSE
Committees to the Board
after each meeting
Committee Chairs report to the Board on activities after each meeting
Executive Committee
Responsibility over:
• the development and
implementation of strategy,
operational plans, policies,
procedures and budgets;
• the monitoring of operating and
financial performance;
• the assessment and control of risk;
• the prioritisation and allocation of
resources; and
• the monitoring of competitive forces
in each area of operations.
HSE Committee
Responsibility over:
• the Group’s HSE strategy and
objectives; and
• performance against HSE
objectives
Our governance structure
94 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Composition, succession
and evaluation
Dear Shareholder,
On behalf of the Board, I am pleased to present
the Nominations Committee Report for the year
ended 31 December 2023 and provide you with
an overview of the Committee’s work in key
focus areas for 2023, such as Board
appointments, succession planning, Board
performance review and diversity.
One of the Committee’s focus areas was the
recruitment process of the new non-executive
Director, in line with the recommendations of
the 2022 Board performance review. On
9November 2023, we announced the
appointment of Joe Vorih who assumed the
position of a non-executive Director with effect
from 1 January 2024. Further details of the
recruitment process we followed can be
found on page 95.
Succession planning remains a priority for
Senior, and the Committee supported the
Company in overseeing its succession plans,
both for Board-level and key leadership
positions. For executive succession planning,
this work includes ensuring that potential future
leaders are identified, supported and nurtured,
enabling them to transition to leadership
positions more seamlessly. More information
on these activities can be found on page 96.
Our commitment to diversity has continued to
be of paramount importance. The recruitment
process for the new non-executive Director
was designed to ensure that Senior’s Board
representation in terms of experience,
perspectives and backgrounds contributed to
the depth and richness of its discussions. The
Board’s progress in meeting the objectives of
its Diversity Policy can be found on page 96. We
recognise the importance of diversity at all levels
of leadership. In 2023, the Committee reviewed
and discussed the recommendations of the
Parker Review that FTSE 350 companies should
set their own targets for the percentage of their
senior management who self-identify as being
an ethnic minority. The Committee approved the
target of 30%, to be achieved by December
2027, in respect of the Group’s senior
management positions that will be occupied
by ethnic minority executives. The decision to
support the Parker Review with setting our
internal target demonstrates our commitment
to embedding diversity initiatives at all levels of
the organisation, therefore developing a more
diverse succession pipeline.
Recognising the importance of continued
improvement, we conducted the annual
performance review of the Board and its
Committees. Overall, the review concluded that
the Board had exercised strong governance and
was operating effectively. Further information
can be found on page 97.
In 2024, we shall continue our focus on
succession planning and other initiatives to
strengthen Board effectiveness.
This report was reviewed and approved by the
Nominations Committee and signed on its
behalf by:
Ian King
Chair of the Nominations Committee
1 March 2024
Ian King | Chair
“Our commitment to diversity
has continued to be of
paramount importance.”
Committee membership and meeting attendance in 2023
The Committee met six times during the year under review. Details on meeting
attendance can be found on page 83.
Member Role
Ian King Chair of the Nominations Committee
Barbara Jeremiah Senior Independent non-executive Director
Susan Brennan Independent non-executive Director
Rajiv Sharma Independent non-executive Director
Mary Waldner Independent non-executive Director
Joe Vorih will become a member of the Committee with effect from 1 January 2024. The Group
Company Secretary acts as Secretary to the Committee. Senior members of management and
advisers are invited to attend meetings, as appropriate. Two members constitute a quorum for the
Nominations Committee.
GOVERNANCE / COMPOSITION, SUCCESSION AND EVALUATION
95SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Nominations
Committee Report
GOVERNANCE / NOMINATIONS COMMITTEE REPORT
Responsibilities
The Company’s Nominations Committee leads
the process for Board appointments and
supervises leadership development and
succession planning. It also makes
recommendations to the Board on all new Board
appointments and re-appointments. Primary
responsibilities of the Committee include:
• reviewing the structure, size and composition
(including the skills, knowledge, experience
and diversity) of the Board, and making
recommendations to the Board with regard to
any changes;
• ensuring plans are in place for orderly
succession to Board and senior management
positions, and overseeing the development of
a diverse pipeline for succession;
• keeping under review the leadership needs of
the organisation (both executive and non-
executive) with a view to ensuring the
continued ability of the organisation to
compete effectively in the marketplace;
• identifying and nominating for the approval of
the Board, candidates to fill Board vacancies
as and when they arise;
• leading the process of Board appointments;
• reviewing the time required from non-
executive Directors; and
• reviewing the results of the Board
performance evaluation process that relate
to the composition of the Board and
succession planning.
The Nominations Committee’s Terms of
Reference can be found on the Company’s
website. These are reviewed annually; any
changes required as a result of the review are
recommended to the Board.
Committee activities during the year
Membership of Board Committees,
Independence and re-election
The Committee reviewed the composition of
the Board Committees and confirmed that it
remained appropriate. The Committee noted
that, following Celia Baxter’s and Giles Kerr’s
retirement from the Board following the
conclusion of the 2023 AGM, the Board would
consist of the Chair, four independent non-
executive Directors and two executive Directors.
Cognisant of the need to ensure that the mix of
skills and experience of the Board and its
Committees aligned with the Company’s
strategic objectives, the Committee decided that
the recruitment of an additional non-executive
Director, would commence later in the year.
Following the annual evaluation of the
performance of each Director based on such
factors as commitment to the role, contribution
to Board discussions and attendance, the
Committee recommended to the Board that all
continuing Directors in office at the time of the
meeting stand for re-election at the 2023 AGM.
Having reached their nine-year anniversary with
Senior in 2022, Celia Baxter and Giles Kerr
retired from the Board following the conclusion
of the 2023 AGM.
Following the 2023 year end, having
considered the composition of the Board
and its Committees, the Nominations
Committee made recommendations to the
Board concerning the election and re-election
of Directors at the 2024 AGM.
The Nominations Committee and the Board
consider all of the non-executive Directors to
be fully independent and free from conflicting
interests which could cause difficulties whilst
performing their duties. Senior considers its
non-executive Directors to be proactive in
contributing their respective experiences and
skills gained from a range of sectors. Conflicts
of interest are fully disclosed by Directors upon
appointment and are reviewed on a regular basis
throughout each year.
Details of the Directors’ external statutory
appointments can be found in their biographies
on pages 84 to 86. The Board believes that the
Directors’ experience of working with other
companies adds value to their contribution to
the Company’s Board and Committee meetings.
The Board confirms that in 2023 all Directors
in office at the time worked assiduously and
diligently. Each Board member made a very
positive contribution to the running of the
Company and the Board confirms that
they will all continue to work to ensure its
long-term success.
In compliance with the Corporate Governance
Code, all Directors will offer themselves for
re-election at the 2024 AGM. Joe Vorih was
appointed to the Board in January 2024; he will
stand for election at the AGM to be held in April
2024. Annual election and re-election of
Directors’ promotes accountability to
shareholders and demonstrates good
governance practice.
The resolutions to be put to shareholders at the
2024 AGM can be found in the Notice of Annual
General Meeting, which is available on the
Company’s website.
Appointments to the Board
The Company follows a rigorous, formal
and transparent procedure for its Board
appointments, which is conducted in
accordance with the Board Diversity and
Inclusion Policy. New appointments are made
on merit, taking account of the specific skills
and experience, independence and knowledge
needed to ensure a rounded Board, with
diverse and inclusive Board and Committee
composition. The Committee only engages
with executive recruitment firms that have
signed up to the Voluntary Code of Conduct
for Executive Search Firms.
In 2023, we engaged Sam Allen Associates Ltd,
an executive search consultancy firm, to assist
with the recruitment of a new non-executive
Director, as part of the Board’s succession
planning process. Sam Allen Associates is a
member of the Standard Voluntary Code of
Conduct for Executive Search Firms. The firm
has no connection to the Company or any
individual Directors.
As part of this recruitment process the
Committee reviewed the list of potential
candidates and discussed their suitability for
the role. The Chair provided feedback to the
Committee on each candidate he had
interviewed; short-listed candidates were further
interviewed by other members of the Board. In
addition, they went through a strict referencing
process during this stage. Following the
conclusion of the interviews, Joe Vorih was
identified as the most suitable candidate for the
role of a non-executive Director. His appointment
was announced on 9 November 2023.
The decision to proceed with the recruitment
process demonstrates the Committee’s focus
on identifying and addressing the areas where
Board composition could be improved as the
Group’s strategy evolves.
Board induction and development
All Directors receive induction upon joining
the Board and are encouraged to update their
knowledge and skills on a frequent basis. The
induction process typically includes the
following key elements:
• introduction to the Company’s business;
• governance structure;
• legal compliance and Group policies;
• information on Group strategy;
• financial information;
• meetings with the Chair and
non-executive Directors;
• meetings with the executive Directors and
members of the Executive Committee; and
• site visits.
Directors receive training throughout the
year, and the Group Company Secretary
provides the Board with statutory and
regulatory updates at every Board meeting
and notifies them of any pressing points
96 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / NOMINATIONS COMMITTEE REPORT CONTINUED
that are relevant between meetings. We
recognise the importance of providing regular
training to the Board Directors – this ensures
they are well-equipped with the skills and
competencies to fulfil their role effectively
as the business and operating landscapes
evolve. In 2023, the Directors completed
the following training modules:
Taskforce
on Climate-
Related
Financial
Disclosures
• Climate Change &
Financial Stability
• Introduction to TCFD
• Scope 1, 2 and 3
Emissions and SBTi
Global Cybersecurity Basics
2023 Code of
Conduct
• Cybersecurity
• Promoting Safety and
Security at Work
• Protecting Human Rights
• International Trade
Compliance
Anti-Money Laundering
In addition, the Board received an update on
various regulatory developments from the
Company’s legal advisers.
The Directors believe that the Board and its
Committees have the appropriate
combination of skills, experience and
knowledge to enable them to perform their
duties effectively. Membership of the Board
and its Committees is kept under regular
review and refreshed when appropriate,
taking into account the Directors’ lengths of
service and their ability to devote sufficient
time to Company matters. The Nominations
Committee reviews the composition of the
Board at least annually.
Board diversity and inclusion
During its May 2023 meeting, the Committee
reviewed and approved minor amendments
to its Board Diversity and Inclusion Policy
(The Policy). The Policy provides an effective
framework for the Nominations Committee
and the Board to follow in assessing the
composition of the Board and its Committees
and recommending the appointment of new
Directors. The Company is committed to
maintaining and promoting all aspects of
diversity among the members of its Board
and its Committees, including, amongst other
qualities, diversity of age, gender, socio-
economic, ethnical, professional or educational
backgrounds, sexual orientation, disability, as
well as cognitive and personal strengths.
The Policy is linked to the Company strategy
in a number of ways. A diverse Board brings a
broader range of perspectives, which enhance
strategic discussions and decision-making.
Furthermore, extending the pool of applicants to
individuals from diverse backgrounds improves
the Company’s strategic agility, as it allows it to
draw on a wide spectrum of candidates.
The objectives of the Policy in force for the
year-end 31 December 2023 include:
• maintaining no less than 40% of female
representation on the Board, including
having at least one female director in
the senior Board position (Chair, CEO,
Senior Independent Director or Chief
Financial Officer);
• maintaining no less than one director from
a minority ethnic background on the Board;
• embedding diversity and inclusion principles
into the recruitment process for Board
appointments and succession planning by
only engaging with executive recruitment
firms that have signed up to the Voluntary
Code of Conduct for Executive Search Firms;
and
• working with executive recruitment
partners to widen the pool of candidates
by considering candidates from
diverse backgrounds.
As at 31 December 2023, the Board has met all
of the objectives set by the Policy.
In addition, we confirm that the Company
has met the targets stipulated in the Listing
Rule 9.8.6R(9) as at 31 December 2023. The
numerical data on the ethnic background and the
gender identity of the individuals on the Board of
the Company and in its Executive Committee as
at 31 December 2023 is set out on page 83. On
1 January 2024, Joe Vorih was appointed to the
Board. Data used for the purpose of making
the disclosures was collected through the
Company’s diversity monitoring forms
completed by the individuals on the Board of
the Company and in its Executive Committee.
The information on the gender balance of those
in senior management and their direct reports
can be found on page 34.
Succession planning
We recognise that orderly succession planning
is necessary to ensure continuity in leadership,
strategic oversight and decision-making. The
Committee regularly considers succession
planning for Board-level and the Group’s senior
management roles.
In 2023, the Group Chief Executive Officer and
Group HR Director provided two scheduled
updates on the organisation’s succession plans
to the Committee. The Committee was able to
examine succession plans for the Executive
Committee and their direct reports as well as
the succession plans for key Divisional and
Group roles. In addition, the Committee
reviewed talent profiles for various individuals on
the succession maps using the nine-box matrix,
which evaluated employees based on two key
dimensions – performance and potential. The
matrix was used as a starting point for
discussions around development needs and
workforce strategies that may be considered for
the individuals shown on the matrix. When
reviewing succession plans, the Committee
recognised the benefits of a diverse workforce,
diversity of thought and employing individuals
from diverse backgrounds and experience
across the organisation, including Board
members and senior managers.
In 2023, as part of the succession planning
process, the Company continued with its
leadership development programme – “Leading
for Excellence” – with a specific focus on people
management skills. In addition, a number of
individuals included in the succession maps
undertook The High Potential Trait Indicator
assessment, which helped identify individuals’
leadership strengths and specific areas for
improvement. Both initiatives support the
Company’s focus on developing and nurturing
those individuals who are capable of taking on
leadership roles.
As part of its continued focus on improving
gender balance in operational roles, the
Nominations Committee considered various
opportunities that could be used to support
better gender balance, such as the use of
different recruitment consultants, encouraging
women to aspire to taking the next step in their
careers as well as supporting the development
of a women’s network. During 2023, Senior
continued to participate in the “Mission
Gender Equality”, a cross-Company
mentoring programme.
The Committee remained satisfied with the
evolution and progression of the succession
planning process and was supportive of the
initiatives to prepare high potential employees
for future leadership roles.
97SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / NOMINATIONS COMMITTEE REPORT CONTINUED
Board Performance Review
2022 Board performance review findings and the progress made in 2023
To recruit a non-executive Director with
relevant industrial and business experience,
ideally with a background in the fluid control/
conveyance and thermal management sector.
Joe Vorih was appointed as a non-executive Director with effect from 1 January 2024. The Board
felt that Joe’s leadership and engineering background coupled with his broad international
experience in Senior’s industrial sectors would complement the current Board and prove invaluable
to Senior’s continued development.
To review the structure of the Nominations
Committee meetings to give more time to
discussions on Board composition and
management succession planning, including
development plans for individuals.
In addition to regular Nominations Committee meetings, we now hold stand-alone Committee
sessions dedicated solely to succession planning. This approach has ensured that sufficient time is
allocated for such in-depth discussions.
To review the structure of the Board meeting
agenda to ensure more time is given to debate
and engagement.
We have enhanced the design of our Board agendas by showing whether an agenda item is for
decision, discussion or information. This has enabled more informed and focused discussions.
To optimise the Board meeting packs to ensure
they are focused and relevant.
We have made improvements to the Board meeting packs by prioritising the most important
information. To ensure the packs were not overloaded, background and supplementary
information was included in the appendices or a separate section of the digital platform
used for the meeting packs.
How the 2023 Board performance review has been conducted
In 2023, the Board selected Clare Chalmers Ltd to undertake its annual performance review. This was the second year of the Board’s engagement
with Clare Chalmers Ltd, which has no other connection with the Company or its Directors, or any persons leading its appointment process. The
performance review was carried out using a questionnaire-based approach, tailored in consultation with the Chair and the Company Secretary. The
questionnaire covered the activities of the Board, such as Board Composition and Culture, Board Oversight, Stakeholders and Board Efficiency. In
addition, it also assessed the effectiveness of the Board Committees (Audit, Remuneration and Nominations Committees). All Board Directors and
members of the Executive Committee completed the questionnaire and provided their responses to the external reviewer. The responses were
consolidated into a report and presented to the Board meeting in January 2024.
The outcomes and actions taken
Overall, the Board performance review concluded that the Board had exercised strong governance and was operating effectively.
The recruitment of Joe Vorih had complemented the Board skills, and the Board was looking forward to his contribution.
Board sessions had a good level of challenge and discussion, with appropriate and constructive input from non-executive Directors. There was a
clear alignment between the Company’s Purpose, strategy, Values and the overall culture within Senior. The Company had a strong and structured
approach to risk management. The Board’s approach to workforce engagement was effective in providing a direct channel to understand a broad
range of views from the Group’s employees.
The Chair was committed and fully engaged in the discussions taking place both within and beyond Board meetings. Barbara Jeremiah and Mary
Waldner made a strong start in their respective committee Chair roles following the retirement from the Board of Celia Baxter and Giles Kerr.
Barbara was effective in her role as the Senior Independent non-executive Director, supporting the Chair and making strong contributions on
remuneration and governance matters. Mary Waldner – the new chair of the Audit Committee – was strong, experienced and knowledgeable.
She was fully dedicated to her role of the designated non-executive Director for employee engagement.
The Board agreed the following focus areas for 2024:
• continue the focus on Board skills and succession; strengthen the induction process for new Board members with emphasis on Senior’s strategy,
products and technology awareness, including site visits;
• adopt a more formalised structured agenda and broader role for the Nominations Committee, to enhance its oversight of succession planning,
approach to training, development and talent;
• continue to streamline Board processes by making the Board meeting packs more concise; and
• provide further opportunities for the Group employees to engage with and meet the members of the Board.
98 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / REPORT OF THE DIRECTORS
Report of the Directors
The Directors present their Report and supplementary reports, together with
the audited Financial Statements for the year ended 31 December 2023.
Conflicts of Interest
The Board has a procedure for identifying
and managing Directors’ potential conflicts
of interest. The Group Company Secretary
maintains the Register of Directors’ Potential
Conflicts of Interest. Directors are required to
declare their own potential conflicts, together
with those of their close family members, their
partners, any trust to which they are a
beneficiary, a corporate body in which they have
a 20% interest or above, or a firm in which they
are a partner. The Directors review and confirm
their Register entries at least annually. At every
Board meeting, the Directors are required to
declare if they have any potential conflicts of
interest in the business to be discussed at the
meeting. In 2023, the Directors confirmed there
were no potential or actual conflicts of interest.
Directors’ indemnities
Qualifying third-party indemnity provisions for
the benefit of the Directors were renewed by
the Company during the year and remain in
force at the date of this Report.
Research and Design
In 2023, the Group incurred £20.0m (2022 –
£19.8m) on research and design. Product
development and improving manufacturing
processes represent the primary focus of
the Group’s research and design activities.
Political donations
No political donations were made by the
Company or any of the Group’s operations
during the year.
Policy on employee disability
Senior provides support, training and
development opportunities to all our employees
irrespective of any disabilities they may have.
We give full and fair consideration to disabled
applicants, and where an existing employee
becomes disabled during their employment,
we will make every effort to ensure they are
able to continue working for Senior in their
original or an alternative role.
Employee share plans
Details of employee share plans are set out in
Note 33.
There are no specific restrictions on the size
of a holding nor on the transfer of shares, which
are both governed by the general provisions of
the Company’s Articles of Association and
prevailing legislation. The Directors are not
aware of any agreements between holders
of the Company’s shares that may result in
restrictions on the transfer of securities or on
voting rights. No person has any special rights
of control over the Company’s share capital,
and all issued shares are fully paid.
With regard to the appointment and
replacement of Directors, the Company is
governed by its Articles of Association, the
UK Corporate Governance Code 2018, the
Companies Act 2006 and related legislation.
The Articles may be amended by special
resolution of the shareholders. The powers of
Directors are described in the Matters Reserved
for the Senior plc Board, which may be found on
the Company’s website. Each year, shareholder
approval is sought to renew the Board’s
authority to allot relevant securities.
There are also a number of other agreements
that take effect, alter or terminate upon a
change of control of the Company, such as
commercial contracts, bank loan agreements,
property lease arrangements, and employee
share plans. None of these are considered to be
significant in terms of their likely impact on the
business of the Group as a whole. Furthermore,
the Directors are not aware of any agreements
between the Company and its Directors or
employees that provide for compensation
for loss of office or employment that occurs
because of a takeover bid.
Disclosures located elsewhere in the
Annual Report & Accounts 2023
The Strategic Report on pages 1 to 79 includes
details of Senior’s Business Model, strategic
priorities, financial and non-financial key
performance indicators, risks and uncertainties,
market overview, key growth drivers and a
summary of the Group’s 2023 performance.
Acquisitions and disposals 175
Corporate governance
statement of compliance 82
Directors 84
Directors’ share interests 123
Employee engagement 49
Future developments 20
Greenhouse gas emissions 23
Anti-bribery 90
Modern slavery 90
Related-party transactions 191
Risk management 58
Section 172 statement 54
Share capital 173
Use of Financial Instruments 165
Whistle-blowing 90
Activities and business review
Senior plc is a holding company. The nature of
the Group’s operations and its principal activities
are set out in the Strategic Report on pages 1 to
79. Its Group undertakings are shown on pages
193 and 194. Six of the Company’s operating
businesses are located in the UK and 20 in the
Rest of the World.
Dividends
An interim dividend of 0.60 pence per share
(2022 – 0.30 pence) has already been paid and
the Directors recommend a 2023 final dividend
of 1.70 pence per share (2022 – 1.00 pence).
The final dividend, if approved, will be payable
on 31 May 2024 to shareholders on the Register
of Members at the close of business on 3 May
2024. This would bring the total dividend for
the year to 2.30 pence per share (2022 –
1.30 pence).
99SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / REPORT OF THE DIRECTORS
Major shareholdings
The Company has been notified that
the following shareholders were interested
in 3% or more of the issued share capital of
the Company:
% at
13 February
2024
Alantra Asset Management 14.15
Franklin Templeton 9.29
Aberforth Partners 6.24
Heronbridge Investment Management 5.67
Vanguard Group 4.78
Fidelity International 4.45
Columbia Threadneedle Investments 4.08
BlackRock 4.07
Janus Henderson Investors 3.47
So far as is known, no other shareholder had a
notifiable interest amounting to 3% or more of
the issued share capital of the Company, and
the Directors believe that the close company
provisions of the Income and Corporation
Taxes Act 1988 (as amended) do not apply
to the Company.
Annual General Meeting
The Notice of Annual General Meeting
describes the business to be considered at
the AGM to be held at 11.30 am on Friday
26 April 2024 at Senior plc, 59/61 High Street,
Rickmansworth, Hertfordshire, WD3 1RH.
Please see the Notice of Annual General
Meeting 2024 for the details of the AGM;
a copy of the Notice can be found on the
Company’s website.
Authority to purchase the Company’s
own shares
The Company purchased no ordinary shares of
10 pence each in the capital of the Company;
3,234,988 shares in the Company (2022–
2,992,477 shares) were purchased by the Senior
plc Employee Benefit Trust in the year to satisfy
the future vesting of executive share awards and
employee share plans. At the end of the year, the
Directors had authority, under a shareholders’
resolution dated 21 April 2023, to make market
purchases of the Company’s shares up to
an aggregate nominal amount of £42m (2022
– £42m), which represented approximately 10%
of the issued share capital of the Company. A
resolution to renew this authority will be
proposed at the forthcoming AGM.
Auditor
Each of the persons who is a Director of the
Company at the date of approval of this Annual
Report & Accounts confirms that so far as the
Director is aware, there is no relevant audit
information of which the Company’s Auditor is
unaware; and the Director has taken all steps that
he/she ought to have taken as a Director in order
to make himself/herself aware of any relevant
audit information and to establish that the
Company’s Auditor is aware of that information.
This information is given and should be
interpreted in accordance with the provisions
of Section 418 of the Companies Act 2006.
In 2016, the Group undertook a formal tender
process for its external audit function, which
resulted in KPMG LLP being appointed the
Group’s External Auditor for the financial year
commencing 1 January 2017. KPMG’s
re-appointment was last approved by the
Company’s shareholders at the 2023 AGM. In
accordance with Section 489 of the Companies
Act 2006, a resolution for the re-appointment of
KPMG LLP as Auditor of the Company is to be
proposed at the forthcoming AGM.
By Order of the Board
Andrew Bodenham
Group Company Secretary
1 March 2024
100 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / AUDIT COMMITTEE REPORT
Audit Committee
Report
Board approval which contain financial
information where practicable and consistent
with any prompt reporting requirements.
Where the Committee is not satisfied with
any aspect of the proposed financial reporting
by the Company, it shall report its views to
the Board;
• reviewing the Company’s statement
on the Annual Report & Accounts prior to
endorsement by the Board, that taken as a
whole the Annual Report & Accounts is fair,
balanced and understandable and provides
the information necessary to assess the
Group’s position and performance, Business
Model and strategy;
• discussing with the External Auditor issues
and reservations, if any, arising from the
year-end audit and the half-year review,
and any other matters the External Auditor
may raise;
• reviewing and approving the terms of the
External Auditor’s engagement, including
the management representation letter
addressed to the External Auditor at the
start of each audit;
• reviewing the longer-term viability and
the going concern basis of accounting in
preparation of the Financial Statements
of the Group;
• approving the appointment or termination
of appointment of the Director of Risk
and Assurance;
• reviewing the effectiveness of the internal
audit function (currently headed by the
Director of Risk and Assurance); considering
the major findings of internal audit activities
and management’s response; ensuring
co-ordination between the internal audit
function and the External Auditor; reviewing
and approving the role and mandate of the
internal audit function. Annually approving
the Internal Audit Charter, ensuring it is
appropriate for the Group’s current needs,
that the function is adequately resourced and
has appropriate standing within the Group;
• ensuring the internal audit function has
unrestricted scope, the necessary resources
and access to information to enable it to fulfil
its mandate, ensuring there is open
communication between different functions
and that the internal audit function evaluates
the effectiveness of these functions as part
of its internal audit plan, and ensuring that the
internal audit function is equipped to perform
in accordance with appropriate professional
standards for internal auditors;
• ensuring the internal Auditor has direct
Dear Shareholder,
I am pleased to present my first Audit
Committee Report to you since taking over as
Chair of the Audit Committee on 21 April 2023,
upon Giles Kerr’s retirement from the Board.
Giles was a member of the Board and chaired
the Audit Committee for nearly ten years and I
would like to express the appreciation of the
Board for Giles’s significant contribution. I joined
the Company in December 2021; this was
planned to ensure there was appropriate time
for the handover process of the Audit
Committee Chair to run smoothly. Giles brought
much knowledge and experience to the role and
I am continuing his approach to maintaining the
integrity of the Company’s financial reporting
and risk management and internal control
procedures; my biography can be found
onpage86.
The Audit Committee has been established by
the Board and consists entirely of independent
non-executive Directors. The primary role of the
Audit Committee is to maintain the integrity of
the financial reporting of the Group and to
ensure appropriate risk management and
internal control procedures. To enable the Audit
Committee to fulfil this role, its main
responsibilities include:
• conducting the process for selecting the
External Auditor and making recommendations
to the Board, and ultimately shareholders for
approval, of the appointment of the External
Auditor, the audit fee, initiating tender
processes in accordance with regulatory
requirements, and the resignation or
dismissal of the External Auditor;
• if an External Auditor resigns, investigating the
issues leading to this and deciding whether or
not any action is required;
• monitoring and assessing annually the
independence and objectivity of the External
Auditor, its compliance with regulatory
requirements, the effectiveness of the
external audit process and authorising the
provision, if any, of non-audit services and
the impact this may have on independence;
• monitoring the integrity of the Company’s
financial reporting, including its annual and the
half-yearly reports, preliminary
announcements and related formal
statements. Reviewing and reporting to the
Board on significant financial reporting issues
and judgments which those statements
contain, having regard to matters
communicated to it by the Auditor.
Reviewing any other statements requiring
Mary Waldner | Chair of the Audit Committee
“In 2023, during my first year as
Chair, I was pleased to note the
Group further strengthened its
risk management processes”
101SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / AUDIT COMMITTEE REPORT
access to the Board Chair and to the Audit
Committee Chair, providing independence
from the Executive and accountability to the
Audit Committee;
• carrying out an annual assessment of the
effectiveness of the internal audit function;
• reviewing the effectiveness of the Group’s
internal control systems that identify, assess,
manage and monitor financial risks, and other
internal control and risk management
systems;
• developing and recommending to the Board
the Group’s Policy for the Provision of
Non-Audit Services by the External Auditor,
including specifying permitted non-audit
services and their approval requirements;
• ensuring the External Auditor’s remuneration
fee level is appropriate to enable an effective
and high quality audit;
• monitoring the External Auditor’s processes
for maintaining independence, its compliance
with relevant law, regulation, other
professional requirements and the Ethical
Standard;
• agreeing with the Board a Policy on the
Employment of Former Employees of the
Group’s External Auditor, taking into account
the Ethical Standard and legal requirements,
and monitoring the application of this Policy;
• understanding the strategy at both Group and
operational levels to ensure that business
risks and other relevant issues are effectively
identified and communicated to the Board;
• assessing the Audit Committee’s capabilities
in relation to diversity, risk experience and the
financial expertise of its members;
• understanding the implications of changes to
accounting standards;
• ensuring the Company’s corporate ethics,
anti-bribery and compliance procedures are
up to date in terms of addressing the potential
risks of fraud and misconduct;
• reviewing the Group’s Whistle-blowing Policy,
to ensure that appropriate procedures are in
place for employees, contractors and external
parties to raise, in confidence, any concerns
that they may have relating to suspected
malpractice, illegal acts, omissions or other
unethical corporate conduct, regarding
financial or other matters; and ensuring that
arrangements are in place for investigation
of such matters and follow-up action;
• giving due consideration to all relevant laws
and regulations, the provisions of the Code
and published guidance, the requirements of
the FCA’s Listing Rules, Prospectus Rules and
Disclosure Guidance and Transparency Rules
sourcebook, and any other applicable rules;
• after each Audit Committee meeting, the
Audit Committee Chair formally reports to
the Board on its proceedings and how the
Committee has discharged its duties;
• working and liaising with all other Board
Committees, ensuring interaction between
the Committees and the Board is reviewed
regularly; and
• considering any other topics specifically
delegated to the Audit Committee by the
Board from time to time.
The Audit Committee is required to report its
findings to the Board, identifying any matters
where it considers that action or improvement
isneeded, and to make recommendations as
tothe steps taken.
Composition of the Audit Committee
The Terms of Reference for the Audit
Committee state that the Audit Committee shall
be appointed by the Board from amongst the
independent non-executive Directors of the
Company, excluding the Company Chair, at least
one of whom shall have recent and relevant
financial experience. The Audit Committee shall
consist of not less than three members, of
which all shall be independent of any business
connection with the Group. Appointments to the
Audit Committee shall be for a period of up to
three years, which may be extended by a
maximum of two additional three-year periods,
subject to the members remaining independent.
One member of the Audit Committee, Barbara
Jeremiah, Senior Independent Non-Executive
Director and Chair of the Remuneration
Committee was appointed a non-executive
director of Johnson Matthey Plc with effect
from 1 July 2023. Johnson Matthey Plc, a
related party of the Group, has been renting
excess car parking space from one of the
Group’s operating businesses on a rolling
monthly basis. The lease contract was in place
prior to the acquisition of Thermal Engineering in
2013 by the Group and Barbara has had no
involvement in the contract; further details can
be found on page 191.
The Audit Committee is composed entirely of
independent non-executive Directors, as shown
in the table above.
Two members constitute a quorum for the Audit
Committee. The Group Company Secretary acts
as Secretary to the Audit Committee.
There was full attendance at every Audit
Committee Meeting held during 2023.
Collectively, the members of the Audit
Committee have significant commercial and
financial experience at a senior management
level. I have the recent and relevant financial
experience required by the UK Corporate
Governance Code to chair the Audit Committee.
I succeeded Giles Kerr as Chair of the Audit
Committee on 21 April 2023, when he retired
from the Board as planned.
For details of the qualifications of members of
the Audit Committee, please refer to the Board
of Directors’ biographies shown on pages 84
to86.
No member of the Audit Committee has any
connection with the company’s External Auditor,
KPMG LLP.
Audit Committee’s Terms of Reference
Periodically, the Audit Committee’s Terms of
Reference are reviewed to take into account
current views on good practice and recent
updates to the UK Corporate Governance Code.
The UK Corporate Governance Code 2018 was
adopted by the Audit Committee from the
accounting period beginning on 1 January 2019.
The Audit Committee’s Terms of Reference
were updated in December 2023, reflecting
adoption of the FRC’s Audit Committees and
External Audit: Minimum Standard.
The Board expects the Audit Committee to have
an understanding of:
• the principles, contents and developments in
financial reporting, including the applicable
accounting standards and statements of
recommended practice;
• the key aspects of the Group’s operations,
including corporate policies, its products and
services, Group financing, and systems of
internal control;
• the matters that could influence or distort the
presentation of accounts and key figures;
• the principles of, and developments in,
company law, sector-specific laws and other
relevant corporate legislation;
• the roles of internal and external auditing and
risk management; and
• the regulatory framework for the Group’s
operating businesses.
The full Terms of Reference of the Audit
Committee may be found on the Company’s
website.
Member Appointment date Retirement date
Mary Waldner (Committee Chair) 1 December 2021 –
Susan Brennan 1 January 2016 –
Barbara Jeremiah 1 January 2022 –
Rajiv Sharma 1 January 2019 –
Joe Vorih* 1 January 2024 –
Giles Kerr 2 September 2013 21 April 2023
Celia Baxter 2 September 2013 21 April 2023
* Joe Vorih was appointed to the Board on 1 January 2024 and became a member of the Audit Committee on
that date.
102 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / AUDIT COMMITTEE REPORT CONTINUED
Activities of the Audit Committee
The Audit Committee met on 21 February 2023 to consider the 2022 year-end report and during the subsequent 12 months conducted the following
business on the four standard scheduled meeting dates, as indicated below:
24 May 2023 25 July 2023
• Discussed and approved the external audit plan and strategy
proposed by KPMG LLP for the 2023 audit, including materiality,
scope, significant risks and other areas of audit focus, the audit
cycle and auditor reporting.
• Reviewed KPMG LLP’s 2023 Audit Fee Estimate.
• Reviewed and approved the terms of the proposed letter of
engagement addressed to the External Auditor.
• Reviewed KPMG LLP’s confirmation of its objectivity and
independence, including identification of a permissible non-audit
service that was carried out in 2022 from two residual components
which was not communicated to the Group Auditors prior to
commencement of the service. The Audit Committee was satisfied
with the conclusions and actions taken by the Auditor.
• Received and considered reports presented by the Director of Risk and
Assurance including internal audit and risk management activities and
an update on Audit and Corporate Governance Reform.
• Received an update from the Group’s Internal Audit Manager.
• Received and reviewed KPMG LLP’s assessment on its objectivity and
independence.
• Reviewed the accounting presentation and judgmental issues, and the
funding and liquidity reports for the half-year ended 30 June 2023.
• Reviewed, challenged and agreed the basis for going concern to be
adopted for the 2023 Interim Results.
• Reviewed the Tax Memorandum for the half-year ended 30 June 2023.
• Reviewed and accepted KPMG LLP’s Report to the Audit Committee
on the half-year review for the six months ended 30 June 2023.
• Reviewed and approved the terms of the management representation
letter addressed to the External Auditor.
• Discussed the Group’s draft Announcement of the 2023 Interim
Results together with the draft slides for the analysts’ presentation.
• Approved KPMG LLP’s proposed fees for the 2023 Audit.
• Noted the FRC’s Audit Quality Review of KPMG LLP’s audit work in
2022/23.
27 September 2023 28 February 2024
• Reviewed the effectiveness of the external audit process.
• Assessed the significant risks that are considered by the Audit
Committee, agreeing they would be broadly unchanged from 2022,
apart from the removal of acquisition accounting as a significant risk,
subject to review at the next meeting.
• Addressed governance agency recommendations on the Company’s
Annual Report & Accounts 2022, agreeing areas that could be better
signposted in the Annual Report & Accounts 2023.
• Received and considered a report presented by the Director of Risk
and Assurance which included internal audit activities.
• Reviewed the results of the bi-annual agents and advisors’
status report.
• Reviewed the effectiveness and quality of the 2022 external audit.
• Approved the existing Policy for the Provision of Non-Audit
Services by the External Auditor and the Policy on the Employment
of Former Employees of the Company’s External Auditor, with no
changes required.
• Approved the draft updated Whistle-blowing Policy, to
clarify practice.
• Approved the draft updated Terms of Reference of the Audit
Committee, to bring it line with good practice.
• Reviewed the accounting presentation and judgmental issues, and
the viability assessment report for the year ended 31 December 2023,
which included consideration of compliance with all debt covenants at
all measurement dates out to 31 December 2025.
• Reviewed and approved the statements included in the Annual Report
& Accounts 2023 concerning internal control, risk management,
including the assessment of principal risks and emerging risks, TCFD
and the Viability Statement.
• Reviewed, challenged and agreed the going concern basis to be
adopted for the 2023 Accounts.
• Reviewed the Tax Memorandum for the year ended 31 December 2023.
• Reviewed and accepted KPMG LLP’s Report to the Audit Committee
on the audit of the Financial Statements for the year ended 31
December 2023.
• Reviewed KPMG LLP’s confirmation of its independence
and objectivity.
• Reviewed and approved the terms of the management representation
letter addressed to the External Auditor.
• Approved the Audit Committee Report for 2023.
• Reviewed the effectiveness of the Group’s risk management and
internal control systems and disclosures made in the Annual Report &
Accounts 2023.
• Reviewed an assessment of potential fraud during the year
and were satisfied that risk of fraud and misconduct was
addressed appropriately.
• Reviewed the draft Annual Report & Accounts 2023 and reviewed the
Company’s statement on the draft Annual Report & Accounts prior to
endorsement by the Board, that, taken as a whole, the draft Annual
Report & Accounts is fair, balanced and understandable and provides
the information necessary to assess the Group’s position and
performance, Business Model and strategy.
• Discussed the Group’s draft Announcement of the 2023 Final
Results together with the draft slides for the analysts’ presentation.
• Reviewed the Notice of Meeting for the 2024 AGM and the Proxy
Form for the 2024 AGM.
• Received and considered a report presented by the Director of Risk
and Assurance, which included the proposed 2024 internal audit plan.
• Reviewed and approved the Internal Audit Charter.
• Assessed the effectiveness of the internal audit function.
103SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / AUDIT COMMITTEE REPORT CONTINUED
The Audit Committee held a private meeting with the External Auditor and a private meeting with the Group’s Director of Risk and Assurance on
25July 2023 and 28 February 2024, without Executive management being present.
In addition to the four scheduled meetings summarised above, two Audit Committee meetings were held in November 2023, to discuss the Audit and
Corporate Governance Reform proposals and to approve the draft Trading Update for the 10-month period ended October 2023; the latter being
subject to final confirmation by the Disclosure Committee.
During the year, the Audit Committee held discussions on the Audit and Corporate Governance Reform proposals and considered how best
to address the possible changes; it agreed to monitor the situation and take appropriate action once the reforms have been clarified and the
implementation date announced.
Audit Committee Attendance and Separate Discussions
The Audit Committee typically invites the non-executive Chair, Group Chief Executive Officer, Group Finance Director, Group Financial Controller, the
Group’s Director of Tax & Strategic Finance, the Group’s Director of Risk and Assurance and senior representatives of the external audit firm to attend
its meetings, although it reserves the right to request any of these individuals to withdraw from any meeting.
During 2023, the Audit Committee also held separate discussions with the External Auditor and the Group’s Director of Risk and Assurance, without
Executive management being present. In addition, the Chair of the Audit Committee held separate meetings with each of these during the course of
the year.
Significant risks considered by the Audit Committee
The table below summarises the significant risks considered by the AuditCommittee, including significant judgments and estimates:
Significant risks considered by the Audit Committee How the risk was addressed by the Audit Committee
Other provisions
Provisions are held where management considers there is an obligation,
payment is probable and the amount payable can be reliably estimated.
Provisions held by the Group include but are not limited to:
• those held against legal claims and contractual matters, product
warranties; and
• tax provisions for uncertain risk exposures.
There is a risk that other provisions overstate or understate the
associated liability.
The Audit Committee considered the basis upon which management had
made its accounting judgments to determine the level of other provisions.
The Audit Committee receives a separate report from the Group Head
ofTax & Strategic Finance that sets out the various uncertain risk
exposures and any related provisions that are based on the best estimate
of the amounts likely to bepayable. The Audit Committee carefully
considers the assumptions applied and provides appropriate challenge
including an assessment of the related sensitivities (See Note 21). These
were further discussed with the ExternalAuditor.
The Audit Committee believes there are no further reportable issues
arising from these significant areas.
Acquisition accounting, which was a significant risk in the Annual Report & Accounts 2022, is no longer considered a significant risk due to the
acquisition being in the prior year.
Other judgments and estimates
The Audit Committee considered other areas of focus where judgments and estimates have a significant effect on the amounts recognised in the
2023 Financial Statements. These areas of focus and how they were addressed by the Audit Committee are described below:
Other focus area considered by the Audit Committee How these were addressed by the Audit Committee
Other key judgments and estimates
These include, but are not limited to, judgments and estimates in
areas not covered by significant risks such as inventory net realisable
value, going concern and viability, goodwill impairment assessment,
retirement benefits, leases and tax (excluding provisions for uncertain
tax which is a significant risk).
The Audit Committee reviewed the accounting presentation and
judgmental issues paper, including a funding and liquidity report, for the
related reporting period from the Group Financial Controller. In addition,
the Audit Committee received a tax memorandum paper for the related
reporting period from the Group’s Head of Tax & Strategic Finance.
In its review of these presentation papers, the Audit Committee
challenged management on the critical accounting judgments, and
thekey sources of estimation and uncertainty that were taken in the
preparation of the Financial Statements, and concluded that they
wereappropriate.
The Audit Committee believes there are no further reportable issues
arising from these other key judgments and estimates.
104 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / AUDIT COMMITTEE REPORT CONTINUED
Presentation of results
The Board has a policy, which has been clarified
in 2023, to separately disclose items it considers
are outside the normal course of management
oversight and control on a day-to-day basis and
are not reflective of in-year trading performance.
Indicative criteria such as period to which
the item relates and external driven factors
that are outside of the control of the Group
in combination with the magnitude and
consistency of application are also considered.
The Audit Committee assessed the presentation
to ensure a fair and balanced treatment of what
is and is not included as an adjusting item.
The Audit Committee considered the
accounting policy applied to exclude adjusted
items by reference to guidance issued by the
FRC and the European Securities and Markets
Authority (“ESMA”), and the need to ensure
any alternative performance measures are
presented with equal prominence to reported
figures and on a consistent basis year-on-year.
The Audit Committee discussed the
presentation of adjusted items with the External
Auditor, and concurs with management’s view
that the presentation of items excluded from
and include in adjusted results, combined
with wider disclosures throughout the Annual
Report, provides useful information to aid the
understanding of the performance of the Group.
External audit
Independence of the External Auditor and
policy on the provision of non-audit services
To fulfil its responsibility regarding the
independence of the External Auditor, the Audit
Committee reviewed:
• a report from the External Auditor describing
the arrangements that had been made to
identify, report and manage any conflicts of
interest and to maintain its independence; and
• the FRC’s Audit Inspection Unit public report
on KPMG LLP.
The Audit Committee’s policy in respect of
services provided by the External Auditor and
itsPolicy on the Provision of Non-Audit Services
by the External Auditor are as follows:
• The External Auditor is invited to provide
services which, in its position as auditor, it
must or is best placed to undertake. This
includes formalities relating to borrowings,
shareholder and other circulars, various other
regulatory reports and certain work in respect
of larger acquisitions and disposals;
• The Company has a Policy on the Provision
of Non-Audit Services by the External Auditor,
which is in line with the recommendations
set out in the Financial Reporting Council’s
(“FRC”) Guidance on Audit Committees
(2016) and the requirements of the FRC’s
Revised Ethical Standard (2019) (the
“Ethical Standard”). In line with these
recommendations and requirements, the
external audit firm is only appointed to
perform a service when doing so would be
consistent with both the requirements and
the overarching principles of the Ethical
Standard, and when its skills and experience
make it the most suitable supplier. In addition,
the Ethical Standard requires an assessment
of whether it is probable that an objective,
reasonable and informed third party would
conclude independence is not compromised.
The approval of the Audit Committee must
be obtained before the External Auditor is
engaged to provide any non-audit services
and these services are limited to activities
which feature on the approved Permitted
Non-Audit Services list. The total fees for
non-audit services shall be limited to no more
than 70% of the average of the statutory audit
fee for the Company, of its controlled
undertakings and of the consolidated Financial
Statements paid to the External Auditor in the
last three consecutive financial years;
• Other services may not be provided where
precluded by law, regulation, or Ethical
Standards or where the Audit Committee
believes that it would compromise audit
independence and objectivity; and
• All proposed contracts for permitted services
to be provided by the External Auditor require
the Audit Committee’s approval. Approval for
permitted services below £0.050m has been
delegated by the Audit Committee to its
Chair and below £0.025m to the Group
Finance Director.
In 2023, the level of permitted services
undertaken by KPMG LLP was broadly
unchanged, as set out in the table below.
The Audit Committee considered that it was
beneficial for the Company to retain KPMG LLP
for a small amount of permitted non-audit work
and audit related services, because of the firm’s
knowledge of the Group and our requirements
that the Interim audit to be performed by the
External Auditor. The Audit Committee
continues to closely monitor the nature
and level of such permitted non-audit work.
Fees 2023 2022
Interim review £0.06m £0.06m
Permissable tax audit
required in India,
assessment of tax
incentives in Thailand and
certification of expenses
in UK and France (2022
– assessment of tax
incentives in Thailand
and certification of
expenses in India) £0.01m £0.01m
Total audit-related services: £0.07m £0.07m
Non-audit related services: £nil £nil
KPMG have not performed any non-audit
services during the year ended 31 December
2023 or subsequently which are prohibited by
the FRC Ethical Standard.
Policy on tendering
In order to maintain auditor independence
and comply with FRC, EU guidance and the
provisions of the CMA Order 2014 on audit
tendering, the Group undertook a formal tender
of its external audit during the first half of 2016,
led by the Audit Committee. The appointment
of KPMG LLP as the Group External Auditor for
the financial year commencing 1 January 2017
received approval by shareholders at the Annual
General Meeting held in April 2017. The Audit
Committee reviews annually whether it is
appropriate to put the external audit out to
tender and concluded in 2023 that it was not
appropriate to do so. The Audit Committee
fully evaluates auditor performance and
independence annually but does not
favour mandatory five-year rotation.
105SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / AUDIT COMMITTEE REPORT CONTINUED
Assessment of external audit quality
andeffectiveness
The Audit Committee reviewed the
effectiveness of the External Auditor and the
external audit process, including an assessment
of the quality of the audit, at its September
2023 meeting.
In 2023, the effectiveness of the external
audit process was again performed by
assessing a range of key areas through a
formal questionnaire that was individually
distributed to all the members of the Audit
Committee and all other Executive and
non-executive Directors. This framework
required consideration of performance areas
which needed future focus by the External
Auditor, the areas where the External Auditor
was meeting expectations and those where it
was considered to have a strength.
Senior management received answers
and comments from all questionnaires and
consolidated them into a report. The Audit
Committee used this report to facilitate a
debate at its September 2023 meeting and to
assist in assessing the level of external audit
effectiveness. The Audit Committee discussed:
the calibre of the external audit firm, the
robustness of the external audit process and
degree of challenge to matters of significant
audit risk and areas of management subjectivity,
the degree of professional scepticism applied
by the External Auditor, the quality of delivery
of the audit and the service provided by the
External Auditor, the Audit Partner, the audit
approach and planning, the role of
management, the communication by the
Auditor to the Audit Committee, the provisions
of support for the work of the Audit Committee
by the Auditor, the sharing of insights and
adding value by the Auditor, the audit fee, the
Auditor’s independence and objectivity, and the
quality of formal reporting by the Auditor to the
Audit Committee. Examples of the Auditor’s
professional scepticism and challenge of
management’s assumptions, as noted by the
Committee, include reviewing the range of
outcomes to assess the levels of provision
for uncertain tax positions, performing
benchmarking of management’s assumptions
for the valuation of defined benefit obligations
by comparing assumptions using their
independent expectations and challenging
assumptions on recognition and measurement
basis of customer claims provisions. Feedback
about the effectiveness of the external audit
process from the local management teams was
also considered by the Audit Committee. The
Audit Committee concluded that the External
Auditor had challenged the thinking of the
Company and of the Audit Committee on a
number of significant issues and had
maintained its independence, notwithstanding
the provision of an insignificant non-audit
service to a residual component of the Group
as discussed in the previous section.
In July 2023, the Financial Reporting Council
(FRC) published its 2022/2023 Audit Quality
Inspection Reports (AQIR) for each of the
largest audit firms, including KPMG; at its July
2023 meeting, the Audit Committee noted the
key findings of this report with respect to
KPMG, together with areas of good practice that
had been identified. Following completion of the
assessment process outlined above, the Audit
Committee concluded that it was satisfied with
the effectiveness of the External Auditor; as a
consequence, the Audit Committee has
recommended to the Board that KPMG LLP
be re-appointed as Auditor for 2024.
Specific areas referred to the
ExternalAuditor
In 2023, the Audit Committee has not asked
the Auditor to explicitly review any specific
areas because the significant risks and other
focus areas considered by the Auditor where
aligned with the significant risks considered by
the Audit Committee. The Audit Committee
was satisfied with the results of the Auditor’s
results and findings.
Internal audit
The Audit Committee is required to assist the
Board in fulfilling its responsibilities relating to
the effectiveness, resourcing and the plans of
the Group internal audit function, which were
headed by the Director of Risk and Assurance
throughout 2023. The Internal Audit Manager
reports to the Director of Risk and Assurance.
In 2023, as set out on pages 58 to 60,
the Group further strengthened its risk
management procedures and these have
been reviewed by the Audit Committee. Risk
has been assessed on a top down and bottom
up basis, and including the consideration of
emerging risks. A risk-based programme of
internal audit has been conducted in the year.
In 2023, the internal audit programme was
delivered through a combination of face-to-face
and remote working methods.
The Chair and non-executive Directors are
actively encouraged to visit the Group’s
operating businesses unaccompanied by
executive Directors. Such visits enable the
Directors to meet the local management teams
and employees and also undertake site tours to
review matters including production methods,
health and safety and the status of internal audit
findings. These visits are viewed by the Audit
Committee as making a positive contribution
to the internal control framework.
Conclusion
As a result of its work during the year, the Audit
Committee has concluded that it has acted fully
in accordance with its Terms of Reference. At
its meeting held on 28 February 2024, the Audit
Committee considered each section of the draft
Annual Report & Accounts 2023, and the
document as a whole, as proposed by the
Company; it reached a conclusion and advised
the Board that it considered the draft Annual
Report & Accounts 2023 to be fair, balanced
and understandable and that it provided the
information necessary for shareholders to
assess the Group’s position and performance,
Business Model and strategy. As the Chair of
the Audit Committee, I will continue, where
appropriate, to be available to engage with
shareholders on the scope of the external audit
and other significant matters related to the Audit
Committee’s areas of responsibility and I will
be available at the 2024 AGM to answer any
shareholders’ questions about the work of
the Audit Committee.
Approval
This Report was reviewed and approved by the
Audit Committee and signed on its behalf by:
Mary Waldner
Chair of the Audit Committee
1 March 2024
106 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / REMUNERATION: CHAIR’S ANNUAL STATEMENT
Remuneration Committee Report
Chair’s Annual Statement
Dear Shareholder,
Following my appointment as Chair of the
Remuneration Committee in April 2023,
I am delighted to introduce the Report of
the Committee for the financial year ended
31 December 2023. I would like to acknowledge
my predecessor Celia Baxter and her expert
chairing of the Committee over the previous
nine years. This statement sets out the work
of the Committee during the year and provides
the context for the decisions taken.
During the year, the Committee undertook
a full review of the Directors’ Remuneration
Policy in advance of proposing a new Policy for
shareholder approval at the AGM in April 2024.
We are not making fundamental changes to the
structure of the Policy or to our overall approach
to incentives, but we have taken the opportunity
to update the Policy in recognition of Senior’s
continuing progress and the growth observed
during 2023. Full details are set out below.
The link between strategy
andremuneration
Senior’s Vision remains unchanged: we aim to
be a trusted and collaborative high value-added
engineering and manufacturing company
producing sustainable growth in operating profit,
cash flow and shareholder value. This Vision is
supported by a number of key strategic priorities,
explained in detail in the Strategic Report.
The Remuneration Policy and its implementation
aligns with the Vision and the strategy. In
particular, the incentive structures – the annual
bonus plan and the Long-Term Incentive Plan
(“LTIP”) – reward participants for meeting
stretching targets tied closely to our core
financial goals and the focus on shareholder
returns. Over time we have evolved our
approach to performance measures to reflect
changes in strategic focus and the views of
shareholders. This year is no different, as we
have decided to introduce non-financial
measures to a portion of the annual bonus for
2024, linking incentives closely with Senior’s
sector-leading approach to sustainability and
wider ESG matters. Our rationale is explained
further below.
Senior’s performance during 2023
Committee decisions on remuneration
outcomes for 2023 and the Remuneration
Policy approach for 2024 take into account the
good level of performance reported for the year
under review. As explained in the Chair’s
Statement and the Group Chief Executive
Officer’s Statement, Senior has continued
to make strategic, operational and financial
progress, with good order intake across
the Group. Key headlines include:
• the Group’s revenue increased by 14%
(on a constant currency basis);
• adjusted operating profit increased by 61%
(on a constant currency basis);
• the Group’s adjusted operating margin
increased by 140 basis points, to 4.8%
for the full year;
• adjusted Earnings per Share (“EPS”)
increased by 136%, to 10.28 pence; and
• the Group generated free cash flow of
£15.5m.
2023 was another strong year for our
sustainability strategy as we achieved validation
of our Net Zero emission reduction targets by
the Science Based Targets Initiative (“SBTi”).
Executive Directors’
remunerationfor2023
In January 2023, the basic salaries of the Group
Chief Executive Officer and the Group Finance
Director were increased by 5.4% and 5.5%
respectively. In setting these salaries, the
Committee was cognisant of the increases
applied to the wider UK workforce, which were
typically 6% or higher, depending on skills and
geographic location. The Committee also
undertook a comprehensive benchmarking
exercise of the Executive Committee roles
and of other key executives.
BarbaraJeremiah | Chair of the Remuneration
Committee
“ We are extending the scope
of our remuneration targets to
acknowledge the importance
of outstanding performance in
managing our impact on the
environment and inspiring
our people.”
107SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / REMUNERATION: CHAIR’S ANNUAL STATEMENT
Both executive Directors were eligible for
an annual bonus of up to 125% of basic salary,
payable subject to the achievement of targets
linked to adjusted EPS (60% weighting) and free
cash flow (40% weighting). The Committee
considered the 2022 outturn before setting
specific targets for the 2023 annual bonus and
these targets are disclosed in the Annual Report
on Remuneration on page 121. Given the strong
level of performance for the year, bonuses were
achieved at a level of 85.4% of the maximum,
leading to payments of 106.8% of basic salary
for both Directors. In reviewing this outcome,
the Remuneration Committee considered the
wider performance of the business during the
year and the contributions of the management
team to the successful implementation of the
strategy for the year. In line with the
Remuneration Policy, bonuses will be paid
two-thirds in cash and one-third in Senior
shares, deferred for three years.
Shortly after the 2023 year-end, the Committee
considered the level of performance achieved
against the targets set for the LTIP award
granted in 2021. This was the first award in
which we added Return on Capital Employed
(“ROCE”) as a measure to complement
adjusted EPS and relative Total Shareholder
Return (“TSR”), each metric having a one-third
weighting. Senior’s progress and recovery over
the full three-year performance period was
illustrated by the extent to which the targets
were met; the adjusted EPS and relative TSR
performances were above the respective
maximum thresholds, whereas the ROCE
performance was below the relevant minimum
threshold. Taking into account these
achievements, the Committee determined that
the 2021 award will vest at a level of 66.7%.
The Committee did not exercise any discretion
to adjust the LTIP outcome. The awards will vest
in March 2024 and will be subject to a two-year
post-vesting holding period.
A further LTIP award was granted in March
2023 to the executive Directors and around 50
senior leaders within the Group. As explained in
last year’s report, the grant size for this award
was increased to drive material outperformance
during the next stage of Senior’s business
recovery. For the executive Directors, this
meant that the award was granted at a level of
200% of basic salary, an increase above the
normal level of 150%. In recognition of the
higher grant size, additional stretch was built in
to performance targets such that full vesting
will require a level of performance in excess of
what would have been required for a grant at a
level of 150%. We retained a mix of ROCE,
adjusted EPS and relative TSR for the award,
these continue to be measures which align well
with our strategy and with the priorities of many
of Senior’s major shareholders.
The Committee was delighted with the level
of support received from investors, noting in
particular the 99% vote in favour of the
Directors’ Remuneration Report resolution
at last year’s AGM.
A new Directors’ Remuneration Policy
The Directors’ Remuneration Policy was last
approved by shareholders at the AGM in 2021
and, in accordance with the UK regulations, is
due for renewal at the AGM to be held in April
2024. During 2023, the Committee reviewed
the Policy and considered whether any changes
are required in light of the evolution of Group
strategy, wider market trends, regulatory
changes and evolution in investor expectations.
We concluded that the Policy remains
consistent with Senior’s focus on recovery,
as aerospace customers gradually return to
pre-COVID production levels along with our
strategy and positioning in attractive and
structurally resilient core markets. The Policy
is also fully compliant with the UK Corporate
Governance Code. As a result, no fundamental
changes to the overall shape and structure of
the Policy are proposed. We have decided to
retain the same mix of fixed and variable
remuneration, with incentives provided through
the annual bonus plan and the LTIP. The
modifications set out below – including in
respect of the proposed implementation of the
Policy for 2024 – are designed to ensure that
the Policy remains appropriate for the next
three-year period.
1. Annual bonus plan. The maximum bonus
opportunity will increase from 125% to 150%
of basic salary for both executive Directors.
The Committee believes that this enhanced
incentive is appropriate given the executive
Directors have proved themselves to be
highly capable leaders of a company that has
made a strong recovery over the post-
pandemic period. A maximum bonus of
150% is more closely aligned with standard
market practice at relevant UK comparators
and is suitably competitive. We recognise
that a higher bonus multiple should be
accompanied by targets which are
appropriately stretching, and we have
adopted this approach for the plan design
for 2024. As explained below, we have also
introduced new non-financial metrics into
the plan, extending the strategic linkage for
incentives. The deferral mechanism in the
bonus plan – requiring one-third of any
bonus to be paid in deferred shares –
remains unchanged.
2. LT I P. The approach of granting equity awards
which vest after three years, subject to the
satisfaction of challenging performance
targets, works well and aligns with Senior’s
focus on long-term, sustainable
performance. Each year, we will continue to
set stretching targets which are consistent
with the strategic priorities of the business,
and vested awards will continue to be
subject to a two-year holding period. The one
change we are making is that the maximum
grant level will be 200% of basic salary, an
increase from the 150% limit in the current
Policy. This higher level provides an
appropriate level of upside reward potential
for the current stage of the recovery and
growth of the business and for the
outstanding levels of performance which
are required to hit maximum vesting levels
under the LTIP. As evidenced by the targets
agreed for the 2024 award, we deliberately
set stretching goals which, if achieved,
would represent an outstanding level of
performance which we believe should
be rewarded accordingly.
3. Post-employment shareholding
requirements. We introduced these
requirements at the time of the last Policy
renewal in 2021, and we are now making
one minor modification. At present, the
requirement applies for two years following
cessation at the lower of (1) 80% of the
in-employment shareholding guideline in
place prior to cessation, and (2) the actual
shareholding held at the time of cessation.
We are changing this so that the first part
relates to 100% of the in-employment
guideline, which is consistent with the
general preference of investors. We are
also clarifying that this post-employment
requirement excludes shares purchased
by the executive Directors from their own
resources or shares retained at vesting rather
than being sold to cover tax liabilities (i.e.
where the executive Director elects to pay
the tax themselves).
108 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / REMUNERATION: CHAIR’S ANNUAL STATEMENT CONTINUED
For the final 20% of the bonus, we have decided
to introduce two new quantitative non-financial
measures. The first measure (representing 10%
of the total bonus) rewards absolute reductions
in Scope 1 and Scope 2 emissions in 2024
consistent with our SBTi-validated target of a
30% reduction in these emissions by 2025
(from a 2018 baseline). The second measure
(representing the final 10% of the total bonus)
mandates improvements to Senior’s employee
engagement survey score in 2024 compared to
the survey results from 2022, highlighting the
importance of a highly engaged workforce to
achieving outstanding results. The introduction
of these new measures extends the scope of
performance assessment to areas which are of
strategic importance to Senior and recognises
the enthusiasm of our employees and
shareholders for ESG-focused incentives.
Reducing greenhouse gas emissions is a key
priority in line with our Purpose of helping
engineer the transition to a sustainable world for
the benefit of all our stakeholders. Improving
employee engagement is aligned to our
strategic focus on talent and development
across the multiple businesses within Senior as
we seek to continually improve the employee
experience, retain and reward our talented
employees, and make Senior a preferred place
to work, wherever we operate around the world.
The specific targets for each element of the
2024 bonus plan are considered commercially
confidential but will be published in full in the
2024 Directors’ Remuneration Report. Any
bonus payment will be subject to the usual
deferral arrangements and the standard malus
and clawback provisions.
The LTIP award to be granted in 2024 will be
at a level of 200% of basic salary, in line with
the new Directors’ Remuneration Policy.
The headline performance metrics will be
unchanged, with the retention of the existing
mix of ROCE, relative TSR and adjusted EPS,
each with a one-third weighting. These metrics
provide for a combined focus on absolute
financial performance, returns to shareholders
and efficient use of capital, all of which are
critically important to the business and to
investors. After consultation with our major
shareholders about the possible addition of a
non-financial metric, consistent with our
discussion around Bonus metrics, we decided
to the keep the focus of the LTIP entirely on
financial measures.
The specific targets for the 2024 LTIP award
are considered suitably challenging over the
performance period, which runs to the end
of the 2026 financial year. This approach
recognises our long-standing belief that
maximum vesting should require material
outperformance. The threshold vesting level
for each element will be 25%.
For the ROCE measure, we will assess the
ROCE forecasted to be achieved in 2026. We
are targeting a level of 13.5% for threshold
vesting, rising on a sliding scale to 17.0%
for fullvesting.
The relative TSR element will again involve
measuring Senior’s TSR against a general group
of FTSE 350 companies, excluding those in
certain sectors. Threshold vesting will depend
on the achievement of median performance
against the peer group, rising to upper quintile
performance for full vesting.
For the final performance condition, we will
measure the level of adjusted EPS achieved in
2026. Threshold vesting will begin for adjusted
EPS of 12.00p, rising on a sliding scale to 19.00p
for maximum vesting. This is a challenging
target in the context of the 10.28p adjusted EPS
outcome achieved for 2023 which included
2.54p benefit following a legal entity
simplification as noted in the Strategic Report.
Any awards which vest will be subject to the
usual Committee assessment of overall
performance over the LTIP period as well as
a two-year post-vesting holding period. Malus
and clawback provisions will apply.
The Committee believes that these changes will
provide a Policy framework which will work well
for the next three-year period as Senior embarks
on the next stage of its growth trajectory. The
full Policy can be found on pages 111 to 117.
Alongside the Policy, the Committee has also
agreed a new set of formal LTIP rules, as the
current plan reaches the end of its 10-year life
in 2024. The rules are fully aligned with the new
Policy, and shareholders will be asked to vote on
both the new Policy and the new rules at the
forthcoming AGM.
Implementation of the Policy for 2024
As part of the Policy review, the Committee
also considered carefully how executive
remuneration should operate for the year ahead.
Basic salaries will increase by 4.8% and 5.0%
for the Group Chief Executive Officer and the
Group Finance Director respectively, with effect
from 1January 2024. This compares with an
average increase of 6% for employees across
our UK operations. Pension contributions for
the Directors will remain at 15% of basic salary,
aligned with the contribution rate available to
the majority of the UK workforce.
Subject to shareholder approval of the new
Policy, the executive Directors will have the
opportunity to earn up to 150% of basic salary
as an annual bonus for 2024. A total of 80% of
the bonus will remain subject to the
achievement of challenging financial targets
linked to adjusted EPS and free cash flow. The
weightings between the two measures are
unchanged (60%/40%).
109SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / REMUNERATION: CHAIR’S ANNUAL STATEMENT CONTINUED
Consultation with stakeholders during
the year
Consultation with shareholders
Since taking over as Chair of the Remuneration
Committee I have had a number of conversations
with major shareholders on remuneration
matters, including in respect of the renewal of the
Directors’ Remuneration Policy and our proposals
for implementing the Policy in 2024. I am pleased
to report that most shareholders were supportive
of the Committee’s approach, including the
intention to increase the reward opportunities
under the incentive schemes. There is
widespread recognition among the investor base
of the leadership that has been shown by the
executive Directors over the last few years in
getting the Group through a very challenging
period and putting in place the foundations for a
solid recovery. I firmly believe in the importance
of genuine two-way dialogue and, as noted
above, we elected to retain our current metrics in
the LTIP for 2024 after shareholder consultation.
Further shareholder engagement on
remuneration matters will take place as
appropriate over the coming year.
Consultation with employees regarding
executive remuneration
Direct engagement between the Board and
with employees is rightly given a high priority
at Senior. Following Celia Baxter’s retirement
from the Board in 2023, I continued her practice
of reviewing executive remuneration with
employee representatives from the UK
operating businesses. In addition, Mary
Waldner, as the designated non-executive
Director with responsibility for employee
engagement, met with employees across
the wider Group and discussed a variety of
subjects, including remuneration.
Wider workforce remuneration
The Committee continues to pay close attention
to remuneration policies and practices across
the wider workforce, and takes these into
account when agreeing the shape and level
of executive Directors’ remuneration. During
the year, this included consideration of how
employees were impacted by levels of inflation
which, although declining, remain high by
recent historical standards.
Participation in the LTIP extends to around 50
senior executives within the business, all of
whom are subject to the same performance
conditions as the executive Directors. The new
ESG performance measures introduced into the
Directors’ annual bonus plan for 2024 have been
rolled out to all those senior executives who
have an element of Group performance in
their bonus assessment.
Equity awards in the form of restricted shares
are granted to select individuals who are
considered to have significant potential or who
are key contributors. All-employee share plan
arrangements are offered to employees in the
UK, US and continental Europe in the interests
of encouraging wider levels of share ownership
across the business.
AGM
At the AGM on 26 April 2024, shareholders will
be asked to vote on the following resolutions:
1. A binding resolution to approve the new
Directors’ Remuneration Policy, incorporating
the changes as explained above;
2. An advisory resolution to approve the
Directors’ Remuneration Report (excluding
the new Policy); and
3. A separate resolution to approve new
LTIP rules.
I trust that the Committee will have your
support for all three resolutions. If you have any
questions on this Report or on remuneration
matters more generally, I can be contacted via
the Group Company Secretary.
Barbara Jeremiah
Chair of the Remuneration Committee
1 March 2024
110 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / 2023 REMUNERATION REPORT AT A GLANCE
Overview of our remuneration framework for 2023
Element of remuneration Key features
Salary and employment benefits Market competitive to attract and retain high quality executives (including fully expensed car or car
allowance, private medical insurance, life insurance, income protection, and defined contribution
retirement benefits orallowances)
Annual bonus:
Adjusted EPS 60%
Free Cash Flow 40%
Rewards achievement against annual performance objectives:
• Maximum bonus is 125% of salary
• 1⁄3 of any award is paid in shares, deferred for three years
• Group Chief Executive Officer and Group Finance Director target: 62.5% of salary
Long-Term Incentive Plan:
Adjusted EPS (33.3%)
TSR (33.3%)
Return on Capital Employed (33.3%)
Supports the Company’s longer-term strategic aims to create sustainable growth in shareholder value
andtoincentivise, motivate and retain senior talent:
• Maximum award is 200% of salary and normal awards are 150% of salary
• 25% vesting at “threshold”
Shareholding requirements Equivalent to 200% of executive Directors’ salary
Post-employment shareholding requirement applies for a period of two years following cessation,
as set out on page 114
Clawback and malus provisions Cash Bonus Awards subject to clawback
Share awards (LTIP and unvested deferred shares) subject to clawback, malus and post-employment
shareholding requirement
Performance highlights and incentive outcomes
Annual bonus Target Actual
Bonus achieved
(% of
maximum)
Performance condition
Free Cash Flow £14.5m £15.5m 63.6%
Adjusted EPS
(1)
6.14p 10.72p 100%
Bonus award to Group Chief Executive Officer and Group Finance Director: 85.44% of maximum
(1) Adjusted EPS is measured on a constant currency basis to reduce the impact of exchange rate movements on bonus outcomes.For information, the maximum
performance threshold for the adjusted EPS element of the annual bonus was met without including the benefit arising from the legal entity simplification.
Long-Term Incentive Plan (2021 award) Targets (threshold – maximum) Actual
Achieved
(% of
maximum)
Adjusted EPS (33.3%) 5.67p (minimum threshold) to 7.56p (maximum threshold) for
the final Financial Year of the three-year performance period
10.28p
(1)
100%
Return on Capital Employed (33.3%) 9.8% (minimum threshold) to 11.0% (maximum threshold) for
the final Financial Year of the three-year performance period
7.1% 0%
Total Shareholder Return (33.3%)
66.7% of the LTIP 2021 award of the
Group Chief Executive Officer and Group
Finance Director shall vest in March 2024.
TSR ranking: 50th percentile (minimum threshold) to75th
percentile (maximum threshold)
98th percentile 100%
(1) For information, adjusted EPS excluding the 2.54p benefit following a legal entity simplification would be 7.74p.
2023 Remuneration Report at a glance
Changes made in 2023
There were no changes to the Remuneration Policy in 2023. The details of the full Remuneration Policy are for ease of reference laid out on
pages 111 to 117.
About this Report
The rest of this Remuneration Report includes the new Directors’ Remuneration Policy pages 111 to 117 and the Annual Report on
Remuneration pages 118 to 127. These have been prepared in accordance with the Directors’ Remuneration Reporting Regulations and the
relevant provisions of the Listing Rules of the Financial Conduct Authority. Parts of the Annual Report on Remuneration are subject to audit,
as indicated within this Report.
111SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / 2023 REMUNERATION REPORT: POLICY
2023 Remuneration Report: Policy
This part of the Report sets out the proposed Remuneration Policy to be
put to a binding vote of the shareholders at the AGM to be held on
26April 2024. This policy applies for a maximum of three years from the
date of approval. In developing the updated policy, which builds on the
policy approved by shareholders at our 2021 AGM, the limited number of
proposed modifications are intended to ensure that the policy remains
appropriate in the context of Senior’s strategic priorities, wider market
developments and evolution of the views of investors.
When developing policies and practices, the Remuneration Committee
regularly considers the approach to remuneration and makes decisions to
ensure it is aligned to the business strategy. We do this by developing an
overall package that reflects the skills and experience of the individuals
and incorporating appropriate short- and long-term incentive plans. The
key performance metrics for both the bonus plan and the long-term
incentive plan are directly linked to the delivery of the strategy and the
creation of shareholder value.
Bonus – One Policy change: we are increasing the maximum annual
bonus opportunity for the executive Directors from 125% to 150% of
basic salary. This is appropriate given the introduction of the new,
non-financial, performance measures which will apply for 2024 and the
intended stretch in the target range. Further, it more closely aligns with
standard market practice at relevant UK comparators, thus ensuring that
our reward offering is suitably competitive. As salary structure for the
executive Directors remains market competitive, the real benefit to the
CEO and CFO of this Policy change will result from improvements in
business performance over the year.
LTIP – Our approach to the LTIP remains broadly unchanged: the LTIP
continues to operate effectively as a multi-year incentive tied to long-term
performance goals. For 2024, we intend to retain the existing mix of
ROCE, relative TSR, and Adjusted EPS as the core performance
measures for the LTIP.
After further consideration and based on last year’s discussions of raising
the maximum LTIP grant size to 200%, we are making the change
permanent. We believe having additional upside LTIP reward available for
outstanding performance, particularly in the financial metrics, is an
appropriate adjustment at this stage of recovery in our markets.
The current LTIP rules were approved by shareholders at the AGM in
2014 and, as a result, will be subject to renewal in 2024. The new rules
will effectively replicate the existing rules, updated as required to fully
align with the Directors’ Remuneration Policy and to reflect current
market practice.
Post-employment shareholding requirements – As outlined on page 114,
these requirements were introduced in the 2021 Policy renewal. We are
making one change: at present, the post-employment requirement
applies for two years following cessation at the lower of (1) 80% of the
in-employment shareholding guideline in place prior to cessation, and (2)
the actual shareholding held at the time of cessation. We are changing
this so that the first part relates to 100% of the in-employment guideline.
This post-employment requirement excludes shares purchased by the
executive Directors in their own right or shares retained at vesting rather
than being sold to cover tax liabilities (i.e. where the executive Director
elects to pay the tax from their own resources).
Factors considered in reviewing the Policy
The Committee is comfortable that the Policy and its implementation are
fully consistent with the factors set out in Provision 40 of the 2018 UK
Corporate Governance Code (set out below):
• Clarity – The Policy and the way it is implemented is clearly disclosed in
this policy section of the Directors’ Remuneration Report, with full
transparency of all elements of Directors’ remuneration.
• Simplicity – The Policy is simple and straightforward, based on a mix of
fixed and variable pay. The annual bonus and LTIP include performance
conditions which are aligned with Senior’s business strategy.
• Risk – The Committee believes that the performance targets in place
for the incentive schemes provide appropriate rewards for stretching
levels of performance without driving behaviour which is inconsistent
with the Company’s risk profile and Values. Potential reward is aligned
with market levels of peer companies and the reputational risk from a
perception of “excessive” pay-outs is limited by the maximum award
levels set out in the Policy and the Committee’s discretion to adjust
formulaic remuneration outcomes.
• Predictability – The Policy includes full details of the individual limits in
place for the incentive schemes as well as “scenario charts” on page
115 which set out potential pay-outs in the event of different levels of
performance, based on a number of reasonable assumptions. Any
discretion exercised by the Committee in implementing the Policy will
be fully disclosed.
• Proportionality – The link between the delivery of strategy, long-term
performance, shareholder return and the remuneration of the executive
Directors is set out in the Remuneration Report.
• Alignment to culture – The approach to Directors’ remuneration is
consistent with the Group’s culture and Values.
Summary of decision-making Process for Policy changes
In determining and implementing the Policy, the Committee follows a
robust process which includes discussions on the content of the Policy
at Remuneration Committee meetings. To support this process, the
Committee receives advice from independent advisers. It also considers
representations from other key stakeholders, including shareholders,
executive management and employees (whilst ensuring potential conflicts
of interest are suitably managed), in the context of the evolving corporate
governance landscape. The Committee monitors changes in corporate
governance guidance and regulations to ensure the Policy remains
compliant. The implementation of the Policy takes account of the
remuneration of the wider workforce and is aligned with the Group’s
strategy by appropriately incentivising the executive Directors to deliver
the strategic objectives.
Policy for executive Directors
The overall shape of the Policy remains consistent with our focus on
recovery from the challenges faced by our aerospace customers as
they recover to pre-COVID production levels along with our strategy
and positioning in attractive and structurally resilient core markets.
The Committee does not intend to make fundamental changes with the
implementation of the proposed updated Policy. We will retain the same
mix of fixed and variable remuneration, with incentives provided through
the annual bonus scheme and the LTIP. The modifications set out below
are intended to ensure that the Policy remains appropriate in the context
of Senior’s strategic priorities, wider market developments and evolution
of the views of investors.
The proposed changes in the 2024 Policy have been highlighted in
boldinthe table below. Other proposed changes to the Policy are
of a housekeeping nature or changes which are intended to provide
some degree of future-proofing as we set down the Policy for the
next three years.
112 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Element
Purpose and link
tostrategy Operation Maximum Performance assessment
Salary • Reflects the
performance of the
executive Director,
hisor her skills and
experience over time
and the responsibilities
of the role
• Provides an appropriate
level of basic fixed pay
avoiding excessive risk
arising from over-
reliance on variable
income
• Will normally be reviewed
annually with effect from
1January
• Benchmarked periodically
against companies with
similarcharacteristics and
sector companies
• Normally positioned within a
range around the mid-market
level taking into account the
experience and performance
inthe role of the individual,
complexity of the role, market
competitiveness and the
impact of salary increases
ontotal remuneration
• Other than to reflect change
in the size and complexity
ofthe role/Company, the
Committee will have
regardto the basic salary
percentage increases taking
place across the Company
more generally when
determining salary increases
for the executive Directors
• No maximum salary cap
• Individual performance in the
role and Group performance
are among the factors taken
into consideration when
awarding increases
Bonus • Incentivises annual
delivery of corporate
financial and non-
financial goals
• Delivery of a proportion
of bonus in deferred
shares provides
alignment with
shareholders and
assists with retention
• Up to 100% of salary paid in
cash with up to a further
50% of salary paid as a
conditional award of
deferred shares
• Maximum bonus only
payablefor achieving
demanding targets
• Deferred shares are released
three years after award but
aresubject to forfeiture by
a“bad leaver”
• Executives are entitled to
receive the value of dividend
payments that would have
otherwise been paid in respect
of vested deferred shares
• All bonus payments are at the
discretion of the Committee
• Different performance
conditions may be set when
recruiting an executive Director
• The Committee may review
the performance conditions
from time to time
• The Committee has the
discretion in certain
circumstances to grant and/or
settle an award in cash. In
practice, this will only be used
in exceptional circumstances
for executive Directors
• The Committee has the
discretion to adjust bonus
targets or outcomes if deemed
appropriate, where the bonus
outcome feels perverse. In
practice, this will only be used
in exceptional circumstances
for executive Directors
• Overall maximum of 150%
of salary
• The Committee determines
appropriate performance
targets and weightings at
thestart of each year
• Details of the performance
targets will normally be
disclosed in the following
Annual Report on
Remuneration for reasons of
commercial sensitivity
• The Committee may include
non-financial metrics up to
25% of the overall award
• Performance below threshold
results in zero payment.
Payment rises from 0%
to100% of the maximum
opportunity for levels of
performance between
thethreshold and
maximumtargets
• For financial targets, typically,
threshold is around 90% of
target, and on-target
performance delivers
approximately 50% of the
maximum opportunity
• Subject to clawback at the
Committee’s discretion over
cash bonus outcomes and
unvested deferred shares
inthe event of situations such
as material misstatement,
gross misconduct, serious
reputational damage
orcorporate failure and,
ifrequired, over any
unvestedLTIP awards
GOVERNANCE / 2023 REMUNERATION REPORT: POLICY CONTINUED
113SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / 2023 REMUNERATION REPORT: POLICY CONTINUED
Element
Purpose and link
tostrategy Operation Maximum Performance assessment
Long-Term
Incentive Plan
(LTIP)
• Incentivises sustained
performance over the
longer term
• The use of longer-term
performance targets
and delivery of awards
in shares rewards the
achievement of the
Company’s strategic
goals and increases
inshareholder value
• Annual grants of performance
shares which vest subject
toperformance (normally
measured overthree years) and
continuedservice
• Executives are entitled to
receive the value of dividend
payments that would have
otherwise accrued during the
three-year vesting period in
respect of vested LTIP awards
• All awards are subject to the
discretions contained in the
planrules
• The Committee may review the
performance conditions from
time to time
• The Committee has the
discretion in certain
circumstances to grant and/or
settle an award in cash. In
practice, this will only be used
inexceptional circumstances
forexecutive Directors
• A two-year post-vesting holding
period applies to LTIP awards
(excluding those shares required
to be sold to pay tax on vesting),
creating a five-year period
between the grant of the
awardsand their final release
• 200% of salary • The Committee determines
performance conditions and
weightings at the start of each
year depending on the
stategic priorities of the
business at that time
• In respect of each
performance element,
performance below the
threshold target results in zero
vesting. Vesting of each
performance element starts at
the 25% threshold and rises
to 100% for maximum level of
performance
• Subject to malus during the
the period prior to vesting and
to clawback during the period
of three years following the
date ofvesting, at the
Committee’s discretion, in
circumstances such as
material misstatement,
grossmisconduct, fraud,
dishonesty, serious
reputational damage or
corporate failure
All-
Employee
Share
Schemes
• Employees, including
executive Directors, are
encouraged to become
shareholders through
the operation of the
Sharesave Plan, the
HMRC-approved
all-employee share plan
• The Sharesave Plan has
standard terms under which
participants can normally enter
a savings contract in return for
which they are granted options
to acquire shares at the market
value of the shares at the start
of the performance period
• The rules for this plan were
first approved by shareholders
at the 2006 AGM and the
updated rules were approved
at the 2016 AGM
• Employees can normally
electfor a three-year savings
contract under standard terms
and within HMRC limits
• The option price for Sharesave
awards can be set at a
discount of up to 20% of the
market value of the shares
atthe start of the savings
contract, although to date
noawards granted under the
Sharesave Plan have been set
at a discount
• N/A
Pension • Provides competitive
retirement benefits for
the Group’s employees
• The executive Directors may
participate in the Senior plc
Group Flexible Retirement Plan
(“Senior GFRP”), a contract-
based, money purchase
pension plan and/or receive
cash allowances
• Bonuses are not included in
calculating retirement benefits
• Executive directors receive a
pension contribution in line
with that available to the
majority of employees in the
relevant jurisdiction
• The pension contributions
or pension allowance for
executive Directors were
aligned with the majority
of the UK workforce by
the end of 2022
• The pension contributions or
allowances for executive
Directors of 15% of salary
aligns with the pension
contribution available to the
majority of the UK workforce
• N/A
114 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Element
Purpose and link
tostrategy Operation Maximum
Performance
assessment
Other
benefits
• Provides a competitive
package of benefits that
assists with recruitment
and retention
• Benefits include provision of afully expensed car
or car allowance, private medical insurance, life
insurance andincome protection, taxequalisation
and relocationbenefits
• Any reasonable business-related expenses
(including tax thereon) can be reimbursed
• The value of
benefits is based
on the cost to the
Company and is
not predetermined
• There is no
monetary cap
onother benefits
• N/A
Shareholding
guidelines
• Aligns executive
Directors’ interests
withthose of other
shareholders in
theCompany
• Executive Directors to retain atleast 50% of the
shares thatvest under the LTIP and Deferred
Bonus Award, after allowing for tax liabilities, until
a shareholding equivalent in value to 200% of base
salary is built up
• Post-employment shareholding requirements
apply, for all LTIP awards granted from 2021
onwards and any shares that vest from deferred
bonus from the 2021 bonus scheme onwards,
for a period of two years following cessation of
employment at the lower of (1) 100% of the
in-employment shareholding guideline in
place prior to cessation and (2) the actual
shareholding held at the time of cessation.
• N/A • N/A
Recruitment of executive Directors
Salaries for newly appointed executive Directors will be set to reflect their
skills and experience, the Company’s intended pay positioning and the
market rate for the role.
Where it is appropriate to offer a below median salary initially, the
Committee will have the discretion to allow phased salary increases over
time for newly appointed directors, even though this may involve
increases in excess of the rate for the wider workforce and inflation.
Benefits will be provided in line with those offered to other employees,
with national or international relocation expenses/arrangements (e.g.
schooling, tax equalisation) provided for if necessary.
The aggregate incentive offered to new recruits will be no higher than that
outlined in the Policy on pages 111 to 117. Different performance
measures may be set initially for the annual bonus and LTIP, taking into
account the responsibilities of the individual, and the point in the financial
year that they joined.
Current entitlements (including benefits, bonus, share schemes) may be
bought out on terms that are no more favourable than as calculated on a
like-for-like basis (with a comparable time horizon, fair value and subject to
performance conditions). Existing incentive arrangements will be used to
the fullest extent possible, subject to performance conditions (where
relevant), although awards may also be granted outside these schemes if
necessary and as permitted under the Listing Rules. In the case of an
internal hire, any outstanding variable pay awarded in relation to the
previous role will be allowed to pay out according to its terms of grant
(adjusted as relevant to take into account the Board appointment).
Rationale behind performance metrics and targets
The performance-related elements take into account the Company’s risk
policies and systems and are designed to align the Directors’ interests
with those of shareholders. Variable pay elements aim to reward
executive Directors for performance at the highest levels and, as such,
the Committee aims to set targets that are both stretching and achievable.
The Committee reviews the annual bonus measures set for all the
Company’s senior executives (not only the executive Directors) every year
in order to ensure that they are aligned with the Company’s strategy and
annual goals and to ensure that bonus arrangements amongst the
Company’s senior Executive team are consistent.
The annual bonus may include a mix of financial and non-financial
measures reflecting the key annual priorities of the Group. The financial
metrics currently include two of the Company’s KPIs: Free Cash Flow,
which is a key measure of the business’s ability to fund future
acquisitions; and Adjusted EPS, which will reflect the Group’s ability to
expand into new regions and product markets and increase the
profitability of the existing operations. Adjusted EPS is measured on a
constant currency basis to reduce the impact of exchange rate
movements on bonus outcomes. Where non-financial measures are
selected, these may include reference to the Group’s sustainability, safety,
people and organisational goals.
For 2024, the annual bonus will be based 80% on financial measures and
20% on non-financial measures. For the financial element, the weighting
of 60% Adjusted EPS and 40% Free Cash Flow used in previous years
has been retained. For the non-financial element, two new measures
have been introduced, weighted equally: reduction in Scope 1 and Scope
2 carbon emissions, and improvements to Senior’s employee
engagement survey score.
The performance measures used in the LTIP awards currently consist of
Adjusted EPS, TSR and ROCE. In line with the Policy, the Committee
retains the ability to amend performance measures to reflect changes in
market conditions and business strategy. For 2024, the existing equally
weighted mix of Adjusted EPS, relative TSR and ROCE will remain the
core performance measures for the LTIP.
The use of a climate measure for the annual bonus recognises the
importance of this issue to the business and introduces additional
incentive to outperform our already aggressive reduction targets.
The targets will be reviewed prior to each grant by taking account of
internal and external expectations. The targets for awards granted under
this Remuneration Policy are set out in more detail in the Annual Report
on Remuneration.
Relationship between executive Director and employee pay
The Remuneration Policy for the executive Directors is designed taking
into account the policy for employees across the Group as a whole. There
are some differences in the structure of the Remuneration Policy for the
executive Directors and other senior employees, which the Remuneration
Committee believes are necessary to reflect the different levels of
responsibility of employees across the Company and reflect different
market norms for different roles. The key differences in remuneration
policy between the executive Directors and employees across the Group
are the increased emphasis on performance-related pay and the inclusion
of a share-based long-term incentive plan for executive Directors.
GOVERNANCE / 2023 REMUNERATION REPORT: POLICY CONTINUED
115SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
The majority of senior managers are eligible to participate in annual bonus
arrangements with challenging targets tied to the performance of their
operating business, Division and, for the most senior executives, the
Group’s performance.
Long-term incentives are provided to the most senior executives and
those anticipated as having the greatest potential to influence
performance levels within the Company. A lower aggregate incentive
quantum operates below the senior executive level, with levels driven by
the impact of the role and market comparatives.
Awards under the Restricted Share Award Plan, a deferred share
award plan without performance conditions, are a retention tool and
are made to selected individuals who do not typically benefit from other
long-term incentives but are considered to have significant potential or
are key contributors.
In order to encourage wider employee share ownership, the Company
operates a Sharesave Plan in which employees in the UK, North America
and continental Europe, including executive Directors, may participate.
How employees’ pay is taken into account when setting
executive Director remuneration
The Committee also reviews the salaries of senior corporate, divisional
and operational managers and therefore is fully cognisant of pay levels in
the Group when determining the pay of the executive Directors.
In addition, the Committee’s policy is that salary increases for the
executive Directors and senior executives should not normally be greater
than the general level of increases awarded to other senior managers in
Europe and North America, other than when an executive changes role or
when it is necessary in order to ensure levels of remuneration remain
market competitive.
Recognising the impact of higher rates of inflation in recent years, Senior
has taken steps to help the broader workforce including salary
settlements that reflect regional costs of living pressures. The impact of
higher inflation has been particularly felt by our more junior employees
and therefore, although approaches varied between businesses, these
employees had been targeted for higher salary increases.
As previously reported, the pension contributions of the executive
Directors were reduced from 1January 2023 to 15% which aligns with
the pension contribution available to the majority of the UK workforce.
As laid out in the Remuneration Committee Chair’s Annual Statement, the
Company consulted with UK employee representatives in 2023 regarding
executive Director remuneration.
Policy on outside appointments
The Remuneration Committee believes that it is beneficial both for the
individual and the Company for an executive Director to take up one
external non-executive appointment. Fees paid for the appointment may
be retained by the executive.
Executive Directors’ service agreements and loss
ofofficepayments
The table below summarises the key provisions of each executive
Director’s contract:
Provision Detailed terms
Employment
contract dates
David Squires – 5 January 2015
Bindi Foyle – 3 May 2017
Notice period 12 months from both the Company and the
executive Director
Termination payment Contracts may be terminated without notice
bythe payment of a sum equal to the sum of
salary due for the unexpired notice period, and
the value of pension contributions and other
benefits such as use of company car, lifecover,
income protection and private healthcare
There are no provisions in the agreements, or
otherwise, for additional termination payments
Payments may be made in monthly instalments
and, in these circumstances, there is a
requirement for the Director to mitigate loss
Change of control There are no enhanced provisions in relation
toa change of control
Copies of the executive Directors’ service contracts are available from
theGroup Company Secretary at the Company’s Registered Office during
normal business hours. The Committee’s policy in the event of early
termination of employment is set out on page 116.
GOVERNANCE / 2023 REMUNERATION REPORT: POLICY CONTINUED
Application of Remuneration Policy
The chart below shows how the composition of each of the executive Directors’ packages varies at different levels of performance under the
Remuneration Policy. The assumptions noted for “target” performance in the graph below are provided for illustration purposes only.
This chart is based on the following assumptions:
Below
Target
Target
Max. Below
Target
Target
Max.
Group Chief Executive Officer Group Finance Director
0
500
1,000
1,500
2,500
£000s
Salary
Benefits and Pension
Annual Bonus
Long-Term Share Awards
2,000
3,000
4,000
3,500
Long-Term Share Price Growth
84% 41% 21%
20%
43%
84% 41% 21%
20%
43%
31%
32%
31%
32%
732
1,500
3,499
502
1,027
2,392
Threshold Targe t Maximum
Fixed pay Salary is the 2024 basic salary
The value of Benefits and Pension is taken from the single
total figure of remuneration for 2023
Annual
bonus
Nil 75% of 2024
basic salary
150% of 2024
basic salary
Long-term
share
awards
Nil 25% vesting under
the LTIP (i.e. 25% of
(200% x 2024 basic
salary)) and set out at
face value, assuming
no share price growth
or dividend.
100% vesting under
the LTIP (i.e. 100%
of (200% x 2024
basic salary)) and
set out at face value,
assuming 50% share
price growth and no
dividend.
116 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Policy on payment for departure from office
On termination of an executive Director’s service contract, the Committee will take into account the departing executive Director’s duty to mitigate his
or her loss when determining the amount of compensation. The Committee’s policy in respect of the treatment of executive Directors leaving the
Group is described below and is designed to support a smooth transition from the Company, taking into account the interests of shareholders:
Component
of pay
Voluntary resignation
or termination for cause Death, ill health, disability, redundancy, retirement
Departure on
agreed terms
Base salary,
pension and
benefits
Paid for the proportion of
the notice period worked
Paid up to the date of death or leaving, including any untaken
holidays prorated to such date. In the case of ill health, a payment
in lieu of notice may be made and, according to circumstances,
may be subject to mitigation. In such circumstances, some
benefits such as company car or medical insurance may be
retained until the end of the notice period
Any agreed terms will
normally fall between the
two treatments described
inthe previous columns,
subject to the discretion of
the Committee and the terms
of any termination agreement
Annual bonus
cash
Cessation of employment
during a bonus year will
normally result in no cash
bonus being paid
Cessation of employment during a bonus year or after the
year-end but prior to the normal bonus payment date will result in
cash and deferred bonus being paid and prorated for the relevant
portion of the financial year worked and performance achieved
Annual bonus
deferred shares
Unvested deferred share
awards will lapse
In the case of the death of an executive Director, all deferred
shares will be transferred to the estate as soon as possible
afterdeath. In all other cases, subject to the discretion of the
Committee, unvested deferred shares will be transferred to
theindividual on a date determined by the Committee
LTIP share
awards
Unvested LTIP share
awards will lapse
Subject to the discretion of the Committee, unvested LTIP
shareawards will remain subject to the relevant performance
conditions and normally be measured and vest at the original
vesting date. The awards will normally be prorated for the relevant
proportion of the performance period worked. However, in the
case of the death of an executive Director, the Committee will
determine theextent of vesting within 12 months of the date of
death
Options under
Sharesave
As per HMRC regulations As per HMRC regulations
Other None Statutory payments and disbursements such as any legal costs
and outplacement fees
Notes
a) The Committee will have the authority to settle any legal claims against the Company e.g. for unfair dismissal etc. that might arise on termination.
b) There are no enhanced provisions in relation to a change of control. The treatment of outstanding LTIP awards in such circumstances is subject to the provisions of the
LTIP rules. These provide for awards to vest subject to an assessment of performance and, unless the Committee determines otherwise, for a pro-rata reduction to
reflect the proportion of the performance period which has elapsed as at the date of the change of control.
How shareholder views are taken into account
The Remuneration Committee considers shareholder feedback received
in relation to the AGM each year and guidance from shareholder
representative bodies more generally. As with previous renewals of the
Remuneration Policy, major shareholders were consulted on the updating
of the Remuneration Policy and its implementation for the 2024 financial
year. Consultation with shareholders has always been constructive.
During 2023, discussions regarding the Policy and executive
remuneration were undertaken and these will continue with individual
shareholders as per their request. Major shareholders and the key
governance agencies were consulted with regard to the implementation
of the 2024 Long-Term Incentive Plan and annual bonus which is detailed
in the Remuneration Chair’s Annual Statement. The Committee listened
to the views of shareholders and made changes to proposals to take
account of their feedback.
Discretions of the Remuneration Committee
The Committee operates the Group’s various incentive plans according to
their respective rules and in accordance with HMRC rules where relevant.
To ensure the efficient administration of these plans, the Committee
mayapply certain operational discretions. These include the following:
• selecting the participants for the annual bonus plan and LTIP awards;
• determining the timing of grants and/or payments;
• determining the quantum of grants and/or payments (within the limits
set out in the Policy table commencing on page 112;
• determining the extent of LTIP vesting based on the assessment of
performance, including the discretion to allow the override of formulaic
outcomes;
• determining “good leaver” status and the extent of vesting in the case
of the LTIP and deferred shares;
• determining the extent of vesting in the case of the LTIP in the event of
a change of control;
• making the appropriate adjustments required in certain circumstances
(e.g. rights issues, corporate restructuring events, variation of capital
and special dividends);
• varying the performance conditions to apply to LTIP awards if an event
occurs which causes the Committee to consider that it would be
appropriate to amend the performance conditions, provided the
Committee considers the varied conditions are fair and reasonable and
not materially less challenging than the original conditions would have
been but for the event in question;
• undertaking the annual review of weighting of performance measures,
and setting targets for the annual bonus plan and LTIP from year to
year;
• adjusting bonus and LTIP targets or outcomes if deemed appropriate,
for example to take account of material M&A activity or other
exceptional circumstances when they arise; and
• adjusting bonus targets or outcomes if deemed appropriate, where the
bonus outcome feels perverse.
GOVERNANCE / 2023 REMUNERATION REPORT: POLICY CONTINUED
117SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Policy for non-executive Directors
Element
Purpose and
link to strategy Operation Maximum
Performance
assessment
Non-executive
Directors and
Chair of the
Board fees
• Takes account of
recognised practice
andset at a level that
issufficient to attract
and retain high calibre
non-executive Directors
• The Chair of the Board is paid a single fee for all their
responsibilities as determined by the Remuneration
Committee. The non-executive Directors are paid a basic fee.
The Senior Independent Director, the Chairs of the Audit and
Remuneration Committees, and the Director with
responsibility for employee engagement receive additional
fees to reflect their extra responsibilities
• When reviewing fee levels, account is taken of market
movements in non-executive Director fees, Board Committee
responsibilities, ongoing time commitments and the general
economic environment
• Fee increases, if applicable, are normally effective from
1 January
• The Chair of the Board and non-executive Directors do not
participate in any pension, bonus, share incentive or other
share option plans
• The remuneration of the non-executive Directors is
determined by the Board of Directors. The non-executive
Directors do not participate in any discussion or decisions
relating to their own remuneration
• Any reasonable business-related expenses (including tax
thereon) can be reimbursed
• Other than when a
non-executive
Director changes
role or where
benchmarking
indicates fees
require realignment,
fee increases will not
normally exceed the
general level of
increases for the
Group’s employees
• N/A
Non-executive Directors’ letters of appointment
The Chair of the Board and non-executive Directors do not have service agreements but the terms of their appointment, including the time
commitment expected, are recorded in letters of appointment. The Chair’s appointment may be terminated on providing 12 months’ notice by either
party. The appointments of the other non-executive Directors may be terminated by the Company or non-executive Director on providing one month’s
notice. Copies of the Chair’s and non-executive Directors’ letters of appointment are available from the Group Company Secretary at the Company’s
Registered Office during normal business hours.
Non-executive Directors’ terms of appointment
In September 2022, Celia Baxter and Giles Kerr reached the ninth anniversary of their respective appointments to the Board. Both Directors
retired from the Board at the conclusion of the AGM in April 2023; at which time Barbara Jeremiah became Senior Independent Director and
Chair of the Remuneration Committee, and Mary Waldner became Chair of the Audit Committee and the Director designated to engage with
Group’s employees.
On 9 November 2023, it was announced that Joe Vorih had been appointed a non-executive Director with effect from 1 January 2024.
Name Date original term commenced
Date current term
commenced
Expected expiry date of
current term
Ian King Joined the Board November 2017
and became Chair of Board in April 2018 – –
Susan Brennan January 2016 January 2022 December 2024
Barbara Jeremiah January 2022 January 2022 December 2027
Rajiv Sharma January 2019 January 2022 December 2027
Mary Waldner December 2021 December 2021 November 2027
GOVERNANCE / 2023 REMUNERATION REPORT: POLICY CONTINUED
118 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Summary of the Committee’s Terms of Reference
The Terms of Reference of the Remuneration Committee, available in full
on the Company’s website, are summarised below:
• determine and agree with the Board the framework or broad policy
forthe remuneration of the Chair of the Board, the executive Directors
and other members of the executive management as it is designated
toconsider;
• within the terms of the agreed Policy and in consultation with the Chair
of the Remuneration Committee and/or Group Chief Executive Officer,
as appropriate, determine the total individual remuneration package of
the Chair of the Board, each executive Director, and other designated
senior executives including bonuses, incentive payments and share
options or other share awards;
• approve the design of, and determine targets for, any
performance-related pay plans operated by the Company and approve
the total annual payments made under such plans;
• review the design of all share incentive plans for approval by the Board
and shareholders. For any such plans, determine each year whether
awards will be made and, if so, the overall amount of such awards, the
individual awards to executive Directors, and other designated senior
executives and the performance targets to be used; and
• oversee any major changes in employee benefits structures throughout
the Group.
Members
The Remuneration Committee consists entirely
of non-executiveDirectors.
Member
Number of
meetings during
term
(1)
Number of
meetings
attended
Barbara Jeremiah – Chair 7 7
Celia Baxter
(2)
2 2
Susan Brennan 7 6
Giles Kerr
(2)
2 2
Ian King 7 7
Rajiv Sharma 7 7
Mary Waldner 7 7
(1) The full Committee met seven times in 2023. In addition, authority was
delegated to two members of the Committee, Celia Baxter and Ian King, to hold
one additional meeting to confirm the granting and vesting of share awards.
(2) Celia Baxter and Giles Kerr retired from the Board at the conclusion of the AGM
in April 2023.
Other attendees at Remuneration Committee meetings
The Group Chief Executive Officer and Group HR Director attend
meetings by invitation and the Group Company Secretary acts as
secretary to the Committee but no executive Director or other employee
is present during discussions relating to his or her own remuneration.
Advisers
Before recommending proposals for Board approval, the Remuneration
Committee may seek advice from external remuneration consultants to
ensure that it is fully aware of comparative external remuneration practice
as well as shareholder, legislative and regulatory developments. The
Committee also considers publicly available sources of information
relating to executive remuneration.
All advisers to the Remuneration Committee are appointed and instructed
by the Committee. During the year, the Committee was advised by Korn
Ferry in relation to remuneration advice and benchmarking, LTIP
performance monitoring and the provision of LTIP advice, and by FIT
Remuneration Consultants in relation to the provision of LTIP advice.
During 2023, the Company incurred fees of £45,344 from Korn Ferry
andof £1,434 from FIT Remuneration Consultants, and these costs were
based on a combination of hourly rates and fixed fees for specific items
ofwork.
The Committee does not have a formal policy of subjecting its
remuneration consultants to a regular fixed-term rotation, although the
Committee remains cognisant of the need to seek objective advice and
good value whilst also benefiting from the consultants’ knowledge of the
Company. Other than described above, neither remuneration consultants
have other connections with the Company or its Directors. The
Committee is satisfied that the advice it has received during 2023 has
been objective and independent.
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION
2023 Remuneration Report:
Annual Report on Remuneration
119SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION
Principal activities and matters addressed during 2023
The Committee has a calendar of standard items within its remit and in addition it held in-depth discussions on specific topics during the year. The
Committee typically meets four times each year. In addition, authority was delegated to two members of the Committee, Celia Baxter and Ian King, to
hold one additional meeting to confirm the grant and vesting of share awards. The table below shows the items considered at each meeting, leading
up to the meetings in February and March where the key decisions regarding performance, outcomes and grants for the coming year are determined.
Standard agenda items Ad hoc items
January Preliminary review of performance and outcomes under the Annual Bonus and Deferred
Bonus Award.
Preliminary Review of performance and vesting under long-term incentives.
Discuss incentive structure and targets for the 2023 financial year.
Discuss and approve launch of the
2023 Sharesave.
February Review of performance and outcomes under the Annual Bonus and Deferred Bonus Award.
Review of performance and vesting under long-term incentives.
Determine incentive structure for the 2023 financial year including finalisation of targets.
Review and approve draft Remuneration Report.
Review gender pay gap reporting
andCEO Pay Ratio.
March Confirmation of grants of LTIP, Deferred Bonus Awards and Restricted Share Awards.
Confirmation of vestings of Deferred Bonus Awards and Restricted Share Awards.
May Review of the Group’s Remuneration
Policy and consideration of the
potential changes.
Review of LTIP in preparation
for renewal at the 2024 AGM.
Consideration of non-financial
performance measures for
LTIP awards.
September Review of executive Directors
remuneration benchmarking exercise.
Review of the Group’s Remuneration
Policy and potential changes.
Review of potential changes to
the LTIP rules.
November Consideration of non-financial
KPIs in executive remuneration
Review Shareholder Consultation
letter for proposed Policy
amendments.
December
(two meetings)
Review and approval of Directors’ and senior managers’ salary and total remuneration
packages for the following financial year taking into consideration available salary market data.
Performance update on outstanding incentive and bonus awards.
Discussion on 2024 LTIP and bonus targets; and associated shareholder consultation.
Determine remuneration of the Chair of the Board.
Review of Committee’s Terms of Reference.
Review feedback from UK
employeeconsultation.
Statement of voting at General Meeting
At the AGM held on 21 April 2023, shareholder votes on the Directors’ Remuneration Report were cast as follows:
Voting For Against Total Withheld
(1)
Reason for vote
against, (if known)
Action taken by
Committee
Remuneration Report Votes 335,966,487 3,695,341 339,661,828 25,205 N/A N/A
% 9 8 .91% 1.09% 100% N/A
(1) A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast “For” and “Against” a resolution.
The Committee consulted extensively with major shareholders prior to the 2023 AGM concerning executive remuneration. Strong support for the
Remuneration Report was received from shareholders.
120 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Single total figure of remuneration (Audited information)
The following table shows a single total figure of remuneration in respect of qualifying service for the 2023 financial year for each Director, together
with comparative figures for 2022. Aggregate Directors’ emoluments are shown at the end of the Single Total Figure of Remuneration section.
Salaries and
fees
£000s
Taxable benefits
and allowances
(1)
£000s
Bonus
(2)
£000s
Long-term
incentives
(3)
£000s
Pension benefits
including cash in
lieu of pension
£000s
Total fixed
remuneration
£000s
Total variable
remuneration
£000s
Total
(4)
£000s
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2023 2023 2022
Executives
David Squires 587 557 29 24 627 696 805 0 88 111 704 1,432 2,136 1,388
Bindi Foyle 400 379 22 12 427 474 538 0 60 76 482 965 1,447 941
Total remuneration 987 936 51 36 1,054 1,170 1,343 0 148 187 1,186 2,397 3,583 2,329
Non-executives
Ian King 208 197 2 2 – – – – – – 210 – 210 199
Celia Baxter
(5)
26 73 – – – – – – – – 26 – 26 73
Susan Brennan 58 55 1 – – – – – – – 59 – 59 55
Barbara Jeremiah
(5)
71 55 – – – – – – – – 71 – 71 55
Giles Kerr
(5)
21 64 – – – – – – – – 21 – 21 64
Rajiv Sharma 58 55 – – – – – – – – 58 – 58 55
Mary Waldner
(5)
68 55 – – – – – – – – 68 – 68 55
Total remuneration 510 554 3 2 – – – – – – 513 – 513 556
(1) Taxable benefits for executive Directors include the provision of a fully expensed company car or car allowance and private medical insurance. Taxable benefits for
non-executive Directors are travel expenses.
(2) Awards for the deferred share element of the Bonus in respect of 2023 performance will be granted following the announcement of the 2023 results. The deferred
bonus element that is to be granted in the form of shares to David Squires and Bindi Foyle following the announcement of the 2023 results, is included in the Bonus
figure and will be equivalent in value to one-third of the Bonus figure, namely £208,972 and £142,400 respectively.
(3) Part of the performance conditions attached to David Squires’ and Bindi Foyle’s 2021 LTIP Awards were achieved, and therefore 66.7% of this award will vest in March
2024. Further details on the performance conditions can be found on page 110. The estimated value of shares to vest in the next period includes an amount for the
dividend equivalent shares and was calculated using the average of daily closing market value of the shares over the last three months of 2023 of 166.2p.
(4) The aggregate amount of remuneration paid to or receivable by Directors in respect of qualifying services as per paragraph 9 of SI 2008/40 Schedule 5 was £2,604,745.
(5) Celia Baxter and Giles Kerr retired from the Board at the conclusion of the AGM held on 21 April 2023 and their 2023 fees are the amounts paid to that date. From
22 April 2023, Barbara Jeremiah became Chair of the Remuneration Committee and the Senior Independent Director, and Mary Waldner became Chair of the Audit
Committee and the Director with responsibility for employee engagement; and their respective fees were adjusted accordingly.
Fees received for outside appointments
The Board supports executive Directors taking up appointments outside the Company to broaden their knowledge and experience. Each executive
Director is permitted to accept one non-executive appointment from which they may retain any fee. Any external appointment must not conflict with
aDirector’s commitments to Senior plc.
David Squires does not hold any outside appointments for which he is remunerated. Bindi Foyle was appointed to the Board of Avon Protection plc
as a non-executive director with effect from 1 May 2020 and retained fees of £60,675 for the year ending 31 December 2023 (£60,000 for the year
ended 31 December 2022). Prior to her taking up this appointment, the Nominations Committee considered the time commitment required for this
new role and was supportive of her taking up that appointment.
Annual fees of non-executive Directors
The non-executive Directors do not participate in any pension, bonus, share incentive or other share option plans. Their remuneration reflects both
the time given and the contribution made by them to the Company’s affairs during the year, including membership or chairing of the Board or its
Committees. The remuneration of the non-executive Directors is determined by the Board of Directors. The non-executive Directors do not participate
in any discussion or decisions relating to their own remuneration.
Having considered Senior’s financial performance, the then current market conditions experienced by the Group and its 2023 outlook, the Board
agreed that the salaries and fees paid to the Directors would increase in 2023 as follows:
Fees
(1)
2023
£
2022
£
Percentage
change
Chair of Board 208,000 197,000 5.58%
Non-executive Director 57,500 54,500 5.50%
Chair of Audit Committee 10,000 9,000 11.11%
Chair of Remuneration Committee 10,000 9,000 11.11%
Senior Independent Director 10,000 9,000 11.11%
Director with responsibility for employee engagement
(2)
6,000 – N/A
(1) No additional fees are payable for Committee membership.
(2) The Committee considered the significant time commitment required of the non-executive Director with designated responsibility for employee engagement and
determined that it would be appropriate for a fee of £6,000 p.a. be paid for this role with effect from 1 January 2023.
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION CONTINUED
121SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Senior managers’ emoluments
In addition to setting the remuneration of the executive Directors, the Remuneration Committee oversees the remuneration of other senior managers.
The table below shows the cumulative benefits of the two Divisional CEOs, the two Divisional CFOs and the most senior corporate managers.
2023
Total
£000s
2022
Total
£000s
Short-term employee benefits 3,231 3,325
Post-employment benefits 70 55
Share-based payments 1,156 1,356
Total 4,457 4,736
Performance against performance targets for annual bonus (audited information)
Bonuses are earned by reference to the financial year and paid in March following the end of the financial year. Consistent with recent years, the
bonuses accruing to the executive Directors in respect of 2023 have been determined by Adjusted EPS and Free Cash Flow performance as set out in
the table below.
A summary of the measures, weightings and performance achieved is provided in the table below:
2023 2022
Threshold Target Maximum
Actual
achieved
Maximum
bonus
achievable
Percentage
of maximum
achieved
Bonus
payable
(% of 2023
salary)
(1)
Maximum
bonus
achievable
Percentage
of maximum
achieved
Bonus
payable
(% of 2022
salary)
(1)
Free Cash Flow targets £12.0m £14.5m £20.0m £15.5m 50.00% 63.6% 31.8% 50.00% 100.00% 50%
Adjusted EPS targets
(2)
5.54p 6.14 p 7.06p 10.72p 75.00% 100% 75.0% 75.00% 100.00% 75%
Totals 125.00% 85.44% 106.8% 125.00% 100.00% 125%
(1)
When bonus is payable, this is paid two-thirds in cash and one-third in deferred shares. The deferred share element of the 2022 bonus was awarded on 14 March 2023
based on a share price of £1.57 and shall ordinarily vest on the third anniversary of the award on 14 March 2025. The deferred element of any 2023 bonus shall be
awarded following the announcement of the 2023 annual results in 2024 and the details disclosed in the 2024 Remuneration Report.
(2) The adjusted EPS target is calculated on a constant currency basis. For information, the maximum performance threshold for the adjusted EPS element of the annual
bonus was met without including the benefit arising from the legal entity simplification.
Total pension entitlements (audited information)
The 2023 single figure remuneration for pension benefits for David Squires and Bindi Foyle consisted of a cash allowance of £88,050 (2022 –
£111,400) and £60,000 (2022 – £75,800) respectively, this being 15% of the respective base salaries.
Further detail may be found on page 113 of the Remuneration Report: Policy section.
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION CONTINUED
122 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Payments for loss of office (audited information)
There were no payments made in the year for loss of office.
Performance against performance conditions for LTIP vesting
The performance conditions are set out below.
By reference to performance in the financial year (audited information)
Set out below are the performance conditions attached to the 2021 LTIP award. The performance conditions were partially achieved and therefore
66.7% of the 2021 LTIP awards are to vest as shown in the table below.
Performance condition
Target
(25%vesting)
Maximum
(100% vesting) Actual
Percentage
of total award
achieved
Total shareholder return percentile ranking (33.3% of Award) 50th 75th 98th 33.33%
Adjusted earnings per share for the final Financial Year of the
Performance Period (33.3% of Award) 5.67p 7.5 6p 10.28p
(1)
33.33%
Return on Capital Employed for the final Financial Year of the
Performance Period (33.3% of Award) 9.8% 11.0% 7.1% 0%
(1) For information, adjusted EPS excluding the 2.54p benefit following a legal entity simplification would be 7.74p.
Scheme interests awarded during the financial year (audited information)
Directors Scheme Basis of award
Face value
£000s
Percentage vesting
at threshold
performance
Number of
shares
Performance period
end date
David Squires
(1)
LTIP Annual award 1,174 25% 747,770 31 December 2025
Bindi Foyle
(1)
LTIP Annual award 800 25% 509,554 31 December 2025
(1) The face value of the awards represented 200% of the executive Directors’ respective 2023 base salaries.
Current position on outstanding LTIP awards (non-audited information)
The following table shows the current position against performance targets for LTIP awards outstanding from 2022 and 2023.
Conditional share awards granted in 2023 Conditional share awards granted in 2022
Performance condition
Threshold
(25% vesting)
Maximum
(100% vesting) Actual to date
Threshold
(25% vesting)
Maximum
(100% vesting) Actual to date
Total shareholder return ranking 50th percentile 80th percentile 85th percentile 50th percentile 75th percentile 86th percentile
Adjusted EPS performance for
the final Financial Year of the
performance period 11.77p 18.50p 10.28p
(2)
10.05p 12.35p 10.28p
(1)
Return on Capital Employed 12.5% 17.0% 7.1%
(4)
10.0% 13.5% 7.1%
(3)
(1) Actual to date figure of 10.28p represents the Adjusted EPS for the second year of the three-year performance period for the 2022 LTIP award.
(2) Actual to date figure of 10.28p represents the Adjusted EPS for the first year of the three-year performance period for the 2023 LTIP award.
(3) Actual to date figure of 7.1% represents the Return on Capital Employed during the first two years of the three-year performance period for the 2022 LTIP award.
(4) Actual to date figure of 7.1% represents the Return on Capital Employed during the first year of the three-year performance period for the 2023 LTIP award.
To ensure a suitably broad peer group, the TSR comparator group applicable to LTIP awards is the FTSE 350 index, excluding sectors with limited
direct relevance to Senior and those exhibiting high volatility. TSR is averaged over three months prior to the start and end of the performance period.
The acquisition of Spencer Aerospace completed on 25 November 2022; the Committee reviewed the potential impact of the acquisition on the three
performance targets for the outstanding LTIP awards: Total Shareholder Return; Earnings per Share; Return on Capital Employed, and agreed that the
original targets for the outstanding LTIP awards should remain unaltered.
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION CONTINUED
123SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Shareholder dilution
Percentage of issued shares
Discretionary
schemes
(maximum 5%)
All schemes
(maximum 10%)
4.48% 5.52%
Shares awarded as % of issued shares
Headroom
1.71%3.29%
The Company complies with the dilution guidelines contained within The Investment Association Principles of Executive Remuneration.
At 31 December 2023, awards outstanding and shares issued in the previous 10 years under the Senior plc 2005 Long-Term Incentive Plan (the 2005
LTIP), the Senior plc 2014 Long-Term Incentive Plan (the 2014 LTIP), and the 2006 Savings-Related Share Option Plan (the Sharesave Plan)) amounted
to 3.29% of the issued ordinary share capital of the Company. At 31 December 2023, awards outstanding and shares issued in the previous 10 years
under executive (discretionary) plans (the 2005 LTIP and 2014 LTIP) amounted to 4.48% of the issued ordinary share capital of the Company.
During 2023, all share awards were satisfied using market-purchased shares. The Remuneration Committee monitors the flow rates of the Company’s
share plans, in particular before new share awards are made, to ensure the flow rates remain within the Investment Association dilution guidelines.
Statement of Directors’ shareholding and share interests (audited information)
The Remuneration Committee encourages Directors to own shares in the Company and, in support of this policy, it expects executive Directors to
retain at least 50% of the shares that vest under the LTIP awards and the deferred share element of the Bonus, after allowing for tax liabilities, until a
shareholding equivalent in value to 200% of base salary is built up. Included within the Directors’ holdings are 325,000 shares and 38,788 shares that
David Squires and Bindi Foyle purchased respectively.
The table below shows how each Director complies with this requirement. Shares are valued using the Company’s closing share price on
31December 2023 of 177.6p (31 December 2022 – 125.2p). No options under the Sharesave Plan were exercised by the executive Directors
during the year.
Executive Directors
Number of shares
required to be held
(equivalent to 200%
of basic salary at
31December 2023)
Number of shares
held (including
unvested deferred
shares net of tax) at
31 December 2023
Share ownership
requirements met
Unvested awards, subject to
performance conditions
Unvested awards, not subject
to performance conditions
LTIP award
(1)
Sharesave
Total deferred
share award
David Squires 661,036 909,541 No – 137.6% 2,156,3 50 10,066 413,560
Bindi Foyle 450,450 408,173 No – 90.6% 1,459,441 10,066 278,233
(1) The maximum threshold was exceeded for two of the three performance conditions attached to David Squires’ and Bindi Foyle’s 2021 LTIP awards over 718,085
shares, and 480,053 shares respectively (included within their respective LTIP award figures above) and therefore 478,723 shares and 320,035 shares respectively of
these awards shall vest in March 2024.
The interests of Directors have remained unchanged between the date of the review and the date of the signing of the Annual Report & Accounts 2023.
Number of shares
owned outright
(including connected
persons) at
1 January 2023
Shares vested
during 2023
(1)
Shares retained
from 2023
vested shares
Shares purchased
during 2023
Number of shares
owned outright
(including connected
persons) at
31 December 2023
Executive Directors
David Squires 620,355 90,427 70,000 0 690,355
Bindi Foyle 228,817 60,284 31,893 0 260,710
Non-executive Directors
Ian King 814,297 – – – 814,297
Susan Brennan 5,900 – – – 5,900
Barbara Jeremiah 25,000 – – – 25,000
Rajiv Sharma – – – 15,000 15,000
Mary Waldner 10,000 – – – 10,000
(1) In 2023, the following gains were made by David Squires and Bindi Foyle: £152,288 and £101,524 respectively upon the vesting of the deferred share element of the
Bonus and dividend equivalent shares. The gains were calculated by multiplying the number of shares that vested by the average share price secured by all recipients
that sold vested shares on the vesting day of 9 March 2023 of 168.41p.
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION CONTINUED
124 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Performance graph
Share price performance
The closing middle market price of the shares at 31 December 2023 was 177.6p (2022 – 125.2p). During 2023, the shares traded in the range of
123.4p to 181.2p.
Senior plc total shareholder return
The following TSR graph compares the total shareholder return of the Company’s shares against the FTSE All-Share, Aerospace & Defence index, and
the FTSE 250 Index over a 10-year period (where dividends are included gross of tax). This graph allows a comparison to be made against
organisations facing broadly similar economic and market conditions as the Company.
0
50
100
150
200
250
300
Dec 22 Dec 23Dec 21Dec 20Dec 19
Dec 18
Dec 17Dec 16Dec 15Dec 14Dec 13
FTSE All-Share A&DSenior FTSE250
Source: Refinitiv Eikon Datastream
Remuneration of Group Chief Executive Officer
2014 2015
(1)
2016 2017 2018
(2)
2019 2020 2021 2022 2023
CEO single figure of total remuneration (£000s) 1,316 1,020 790 1,009 1,107 1,203 917 1,350 1,388 2,136
Annual variable element award rates against maximum
opportunity (%) 54 14 31 79 75 58 40 100 100 85.4
Long-term incentive vesting rates against maximum
opportunity (%) 91.8 21 0 0 0 28 0 0 0 66.7
(1) During 2015, Mark Rollins retired from the Board on 31 May 2015 and David Squires was appointed a Director on 1 May 2015. The CEO single figure of total
remuneration includes the combined 2015 values for Mark Rollins and David Squires.
(2) The annual variable maximum bonus opportunity increased from 105% to 125% in 2018.
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION CONTINUED
125SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Percentage change in remuneration of Directors
The table below shows how the percentage changes in Directors’ salary, benefits and bonus between 2020 and 2021, 2021 and 2022, and between
2022 and 2023 compare with the percentage change in the average of each of those components of pay for Senior plc employees. Employees who
joined or left in either year have been excluded to prevent distortion.
2022 vs 2023 2021 vs 2022 2020 vs 2021
Salary
Taxable
benefits and
allowances Bonus Salary
Taxable
benefits and
allowances Bonus Salary
Taxable
benefits and
allowances Bonus
Percentage
change
(1)
Percentage
change
(2)
Percentage
change
Percentage
change
(1)
Percentage
change
Percentage
change
Percentage
change
(1)
Percentage
change
Percentage
change
Executive Directors
David Squires 5.39% 19.81% -9.96% 3.2% -12.3% 3.2% 0% 3.4% 150.0%
Bindi Foyle 5.54% 81.91% -9.83% 5.0% -44.3% 5.0% 0% 4.8% 150.0%
Non-executive Directors
Ian King 5.58% – – 3.1% – – 3.1% – –
Susan Brennan 5.50% – – 2.8% – – 2.8% – –
Barbara Jeremiah
(3)
30.68% – – N/A – – N/A – –
Rajiv Sharma 5.50% – – 2.8% – – 0% – –
Mary Waldner
(3)
25.64% – – N/A – – N/A – –
Celia Baxter
(3)
N/A – – 2.1% – – 0% – –
Giles Kerr
(3)
N/A – – 2.4% – 0% – –
Senior plc Employees,
excluding Directors 7.31% -0.23% -10.7% 6.7% 7.0% 6.7% 3.3% 2.0% 158.6%
(1) The Salary Percentage change figure also includes any merit increases awarded to Directors and employees. The percentage change of Salary Percentage change
figures for the 2021 and 2020 comparison are calculated using the 2020 salaries before the voluntary reduction in salaries and fees for the Directors and some Senior
plc employees during the pandemic.
(2) David Squires’ percentage change in Taxable benefits and allowances reflects the increase in 2023 of the annual premium of his private health insurance which
amounted to £587. Bindi Foyle’s percentage change in Taxable benefits and allowances in 2023 mainly reflects the transition from having a car allowance to having a
company car during 2022.
(3) Upon the retirement from the Board of Celia Baxter and Giles Kerr at the conclusion of the AGM held on 21 April 2023, Barbara Jeremiah was appointed the Senior
Independent Director and the Chair of the Remuneration Committee and Mary Waldner was appointed the Chair of the Audit Committee and the Director with
responsibility for employee engagement, and their respective fees were adjusted accordingly at that time.
CEO Pay Ratio narrative
The CEO Pay Ratio is calculated using Option B, by taking the gender pay gap data (based on Senior’s largest UK employer, Senior UK Limited) and
adding the data for Senior’s two additional UK employing entities. For the purpose of making a valid comparison, leavers were excluded. Using the
same principles as the gender pay data, the best equivalents were identified, namely: the 25th, 50th and 75th percentile. The full-time equivalents
payand benefits figures for the year ending December 2023 were calculated, and then reviewed to ensure that the selected best equivalents were
reasonably representative. The overall increase in the CEO pay ratio is driven by the vesting of the 2021 LTIP. The underlying salary, bonus and benefits
showed a reduction in the CEO pay ratio from 2022. We believe the reduction compared to prior years was mainly due to the increase in allowances,
bonuses and employer pension contributions for employees compared to a reduction in bonus and pension contributions for the CEO during 2023.
Pay ratio
Year
Method
(1)
25th percentile 50th percentile 75th percentile
2023 B 78 : 1 57 : 1 45 : 1
2022 B 51 : 1 44 : 1 36 : 1
2021 B 53 : 1 49 : 1 33 : 1
2020
(2)
B 25 : 1 20 : 1 16 : 1
2019 B 53 : 1 39 : 1 32 : 1
(1) Method B was selected as the most appropriate basis for selecting the 25th percentile, median and 75th percentile pay ratios because the Gender Pay Gap data was
more readily available.
2) The pay ratios in 2020 had been impacted by the pandemic leading to significant numbers of employees being on furlough and/or made redundant, as well as reduced
total remuneration for the CEO.
Year 2023 25th percentile 50th percentile 75th percentile
Base salary £20,919 £24,798 £26,973
Total £27, 29 9 £37,659 £47,4 3 4
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION CONTINUED
126 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Relative importance of spend on pay
The following table sets out the percentage change in profit, dividends and overall spend on pay in the financial year ended 31 December 2023
compared with the financial year ended 31 December 2022.
2023
£m
2022
£m
Percentage
change
Employee remuneration costs (excluding social security)
(1)
261.3 234.7 11. 3%
Adjusted profit before tax 38.3 20.1 90.5%
Dividends paid 6.6 1.2 450.0%
(1) The Employee Remuneration costs include those incurred by Senior Aerospace Spencer from the completion of its acquisition in November 2022.
2024 Remuneration (non-audited information)
Salaries and fees for 2024
Recognising the impact of inflation throughout the year, Senior has continued to take steps to help the broader workforce, including salary settlements
that reflected regional costs of living pressures. The impact of this has been particularly felt by our more junior employees and therefore although
approaches vary between businesses, these employees have been targeted for higher salary increases or other initiatives. When determining the
2024 basic salaries of the Group Chief Executive Officer and Group Finance Director, which were increased by 4.8% and 5.0% respectively, the
Committee was cognisant of the increases applied to the wider UK workforce, which were typically 6% or higher, depending upon skills and
geographic location.
Although determined by the Board, rather than the Remuneration Committee, the 2024 base fee for the non-executive Directors was increased by
4.4% and had been determined after considering the increasing time commitment of the non-executive Directors, and the increases applied to the
wider UK workforce, and to those for the executive Directors.
2024
£
2023
£
Percentage
change
Executive Directors
David Squires 615,000 587,000 4.77%
Bindi Foyle 420,000 400,000 5.00%
Non-executive Directors
(1)
Chair of Board 218,000 208,000 4.81%
Non-executive Directors 60,000 57, 500 4.35%
Chair of Audit Committee 11,000 10,000 10.00%
Chair of Remuneration Committee 11,000 10,000 10.00%
Senior Independent Director 11,000 10,000 10.00%
Director with responsibility for employee engagement 6,500 6,000 8.33%
(1) No additional fees are payable for Committee membership.
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION CONTINUED
127SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Annual bonus for 2024
The maximum bonus opportunity has been increased for the 2024 annual bonus and is 150% of basic salary, with two-thirds payable in cash and
one-third in deferred shares. In addition to the Free Cash Flow and Adjusted EPS targets, two new non-financial KPIs have been introduced. The first
non-financial KPI (representing 10% of the total bonus) will reward absolute reductions in Scope 1 and Scope 2 emissions in 2024 consistent with our
SBTi-validated target of a 30% reduction in these emissions by 2025 (from a 2018 baseline). The second non-financial KPI (representing the final 10%
of the total bonus) will involve improvements to Senior’s employee engagement survey score in 2024 compared to the survey results from 2022,
highlighting the importance of a highly engaged workforce to achieving outstanding results. The individual weightings of the KPIs for the executive
Directors for the annual bonus are set out below.
2024 2023
Maximum possible
cash award
Maximum share
award
Maximum
possible cash
award
Maximum share
award
Free Cash Flow target – full year 32.00% 16.0% 33.33% 16.67%
Adjusted EPS target – full year internal target 48.00% 24.00% 50.00% 25.00%
Reductions in Scope 1 and Scope 2 emissions 10.00% 5.00%
Improvements to Senior’s employee engagement survey score in 2024 10.00% 5.00%
Totals 100.00% 50.00% 83.33% 41.67%
The actual targets are currently considered commercially sensitive because of the information that this provides to the Company’s competitors. Full
disclosure of the 2024 targets will be in the 2024 Annual Report.
LTIP Awards for 2024
The Remuneration Committee sets stretching targets which are consistent with the strategic priorities of the business, and vested awards will
continue to be subject to a two-year holding period. The new proposed Policy includes a change to the maximum grant level which will be 200% of
basic salary, an increase from the 150% limit in the current Policy. This higher level provides an appropriate level of upside reward potential for the
current stage of the recovery of the business and for the outstanding levels of performance which are required to hit maximum vesting levels under
the LTIP. As evidenced by the targets for the 2024 award set out in the table below, stretching goals have been set which, if achieved, would represent
an outstanding level of performance which the Committee believes should be rewarded accordingly.
Adjusted EPS, TSR and ROCE metrics will be retained as the performance measures in the LTIP and have equal weighting of 33.3%: 33.3%: 33.3%.
The Adjusted EPS target has been set to be stretching and challenging. The target is expressed as an absolute value achieved in 2026. TSR
performance will continue to be measured against the FTSE 350 (excluding companies in the following sectors: Banks; Financial Services (other than
Closed End Investments); Life and Non-life Insurance; Oil, Gas & Coal; Precious Metals & Mining; Industrial Support Services; and Real Estate
Investment Services and Trusts). The excluded sectors remain the same to those used in previous years. The Company has consistently stated that its
medium-term ROCE target is a minimum of 13.5% pre-tax, post IFRS 16 and this has not changed. The targets are set at a stretching level that takes
account of market conditions and the minimum stated target.
The Thresholds and Maximum for 2023 and 2024 are set out in the table below:
2024 2023
Weighting
(%)
Threshold
(25% vesting)
Maximum
(100% vesting)
Weighting
(%)
Threshold
(25% vesting)
Maximum
(100% vesting)
Return on Capital Employed 33.33% 13.5% 17.0% 33.33% 12.5% 17.0%
Total Shareholder Return ranking 33.33%
Median
or higher
Upper quintile
or higher 33.33%
Median
or higher
Upper quintile
or higher
Adjusted earnings per share 33.33% 12.0% 19.0% 33.33% 11.77p 18.5p
Approval of the Directors’ Remuneration Report
The Directors’ Remuneration Report was approved by the Board on 1 March 2024.
Signed on behalf of the Board
Barbara Jeremiah
Chair of the Remuneration Committee
1 March 2024
GOVERNANCE / 2023 REMUNERATION REPORT: ANNUAL REPORT ON REMUNERATION CONTINUED
128 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS
Statement of Directors’ Responsibilities in respect of
the Annual Report and the Financial Statements
The Directors are responsible for preparing
theAnnual Report and the Group and Parent
Company Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to
prepare Group and Parent Company Financial
Statements for each financial year. Under that
law they arerequired to prepare the Group
Financial Statements in accordance with
UK-adopted international accounting standards
and applicable law and have elected to prepare
theParent Company Financial Statements in
accordance with UK accounting standards
andapplicable law, including FRS 101
ReducedDisclosure Framework.
Under company law the Directors must not
approve the Financial Statements unless they
aresatisfied that they give a true and fair view
ofthe state of affairs of the Group and Parent
Company and of the Group’s profit or loss for
that period. In preparing each of the Group
andParent Company Financial Statements,
theDirectors are required to:
• select suitable accounting policies and
thenapply them consistently;
• make judgements and estimates that are
reasonable, relevant, reliable and prudent;
• for the Group Financial Statements, state
whether they have been prepared in
accordance with UK-adopted international
accounting standards;
• for the Parent Company Financial Statements,
state whether applicable UK accounting
standards have been followed, subject to any
material departures disclosed and explained
inthe Parent Company Financial Statements;
• assess the Group and Parent Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
togoing concern; and
• use the going concern basis of accounting
unless they either intend to liquidate the
Group or the Parent Company or to cease
operations, or have no realistic alternative
butto do so.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Parent Company’s
transactions and disclose with reasonable
accuracy at any time the financial position of
theParent Company and enable them to ensure
that its Financial Statements comply with the
Companies Act 2006. They are responsible
forsuch internal control as they determine is
necessary to enable the preparation of Financial
Statements that are free from material
misstatement, whether due to fraud or error, and
have general responsibility for taking such steps
as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the
Directors are also responsible for preparing a
Strategic Report, Directors’ Report, Directors’
Remuneration Report and Corporate
Governance Statement that complies with
thatlaw and those regulations.
The Directors are responsible for the
maintenance and integrity of the corporate and
financial information included on the Company’s
website. Legislation in the UK governing the
preparation and dissemination of Financial
Statements may differ from legislation in
otherjurisdictions.
Responsibility statement of the Directors
in respect of the annual financial report
We confirm that to the best of our knowledge:
• the Financial Statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair
viewof the assets, liabilities, financial position
and profit or loss of the Company and the
undertakings included in the consolidation
taken as a whole; and
• the Strategic Report includes a fair review
of the development and performance of the
business and the position of the issuer and
the undertakings included in the consolidation
taken as a whole, together with a description
of the principal risks and uncertainties that
they face.
We consider the Annual Report and Accounts,
taken as a whole, is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the
Group’s position and performance, business
model and strategy.
David Squires Bindi Foyle
Group Chief Executive Officer Group Finance Director
1 March 2024 1 March 2024
129SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SENIOR PLC
Independent auditor’s report
to the members of Senior plc
1. Our opinion is unmodified
We have audited the financial statements of
Senior plc (“the Company”) for the year ended
31 December 2023 which comprise the
Consolidated Income Statement, the
Consolidated Statement of Comprehensive
Income, Consolidated balance sheet,
Consolidated statement of changes in equity,
Consolidated cash flow statement, Company
balance sheet and Company statement of
changes in equity and the related notes,
including the accounting policies in note 2.
In our opinion:
• the financial statements give a true and fair
view of the state of the Group’s and of the
parent Company’s affairs as at 31 December
2023 and of the Group’s profit for the year
then ended;
• the Group financial statements have
been properly prepared in accordance with
UK-adopted international accounting
standards;
• the parent Company financial statements
have been properly prepared in accordance
with UK accounting standards, including FRS
101 Reduced Disclosure Framework; and
• the financial statements have been prepared
in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities
are described below. We believe that the audit
evidence we have obtained is a sufficient and
appropriate basis for our opinion. Our audit
opinion is consistent with our report to the
audit committee.
We were first appointed as auditor by the
shareholders on 21 April 2017. The period of
total uninterrupted engagement is for the seven
financial years ended 31 December 2023.
We have fulfilled our ethical responsibilities
under, and we remain independent of the
Group in accordance with, UK ethical
requirements including the FRC Ethical
Standard as applied to listed public interest
entities. No non-audit services prohibited
by that standard were provided.
Overview
Materiality:
Group financial
statements as
awhole
£3.2m (2022: £3.2m)
0.3% (2022: 0.4%) of
Group Revenue
Coverage
• 76% (2022: 75%) of Group revenue
• 87% (2022: 80%) of Group profit before
tax
• 83% (2022: 84%) of Group total assets
Key audit matters vs 2022
Recurring risks • Provision for
uncertain tax
positions
• New:
completeness
and accuracy
of warranty
provisions
• Recoverability
of the Parent
Company’s
investment in
its subsidiary

130 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SENIOR PLC CONTINUED
2. Key audit matters: our assessment of
risks of material misstatement
Key audit matters are those matters that,
in our professional judgement, were of most
significance in the audit of the financial
statements and include the most significant
assessed risks of material misstatement
(whether or not due to fraud) identified by us,
including those which had the greatest effect
on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts
of the engagement team. We summarise below
the key audit matters, in decreasing order of
The risk Our response
Provision for uncertain tax positions
The Group released a provision for an
uncertain tax position totalling £7.0m
current tax and £3.5m interest for the
year ended 31 December 2023.
Refer to the Audit Committee Report in the
Governance section on page 103, Note 2
(significant accounting policies), Note 7
(finance income), Note 10 and Note 21
(taxation).
Accounting treatment
The Group operates in a number of different
tax jurisdictions and judgement is required to
determine tax provisions across the Group,
principally in the US.
Determination of provisions for tax
uncertainties is subject to judgement in
assessing the probable outflow of taxes that
will be borne by the Group relating to matters
where the relevant tax authority’s final
assessment of the tax treatment is uncertain.
During the year the Group undertook a
review of the provision recognised for the
Americas legal structure, in response to a
simplification of the legal ownership. As a
result, the Directors determined that the
uncertain tax provision of £7.0m and related
interest of £3.5m was no longer required in
accordance with IAS 12 and IFRC 23 and
was released during 2023. The release of this
provision and it’s presentation in the Group
financial statements, due to its materiality,
is considered to be one of the areas that had
the greatest effect on our overall Group audit.
The remaining tax risk provisions held in
connection with transfer pricing, including
inter-company royalty charges, are not
considered to have a high degree of
estimation uncertainty. We therefore
do not consider these as one of the most
significant risks in our current year audit.
Our procedures included:
• Our tax expertise: We have used our own
tax specialists to challenge the Directors on the
assumptions used to determine the release of
the uncertain tax provision for the Americas legal
structure. This is based on our knowledge and
experiences of the application of the tax
legislation, and our understanding of the steps
taken to simplify the associated legal structure.
• Assessing application: We have challenged the
Directors over the inclusion of the uncertain tax
provision release in underlying trading
performance against the Group’s policy.
• Assessing transparency: We assessed the
adequacy of the Group’s disclosures in respect
of the release of the Americas provision.
We performed the tests above rather than seeking
to rely on any of the Group’s controls because the
nature of the balance is such that we would expect
to obtain audit evidence primarily through the
detailed procedures described.
Our results
• We found the presentation of the uncertain tax
provision release to be acceptable.
audit significance, in arriving at our audit opinion
above, together with our key audit procedures
to address those matters and, as required for
public interest entities, our results from those
procedures. These matters were addressed,
and our results are based on procedures
undertaken, in the context of, and solely for the
purpose of, our audit of the financial statements
as a whole, and in forming our opinion thereon,
and consequently are incidental to that opinion,
and we do not provide a separate opinion on
these matters.
131SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
GOVERNANCE / INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SENIOR PLC CONTINUED
2. Key audit matters: our assessment of
risks of material misstatement continued
The risk Our response
Completeness and accuracy of
warranty provisions
(£11.0m included within warranty
provisions of £17.9m)
Refer to page 148 (accounting policy) and
note 24 (financial disclosures).
Subjective estimate
There are significant judgements and
estimates involved in the assumptions
underlying the warranty provision in relation
to a disputed commercial position.
The effect of these matters is that, as part
of our risk assessment, we determined that
the provision in respect of this warranty claim
have a high degree of estimation uncertainty,
with a potential range of reasonable
outcomes greater than our materiality
for the financial statements as a whole.
The financial statements (note 24) disclose
the sensitivity estimated by the Group.
Our procedures included:
• Assessing methodology: Evaluating the
methodology applied by management to the
estimation to assess its reasonableness.
• Our sector experience: Evaluating the
assumptions using our sector knowledge
and inspecting commercial agreements.
• Tests of detail: We assessed the accuracy
of the cost of replacement through testing a
sample of cost lines to relevant source data.
• Personnel interviews: Corroborating
judgements through discussions with
commercial and production level staff.
• Assessing transparency: Assessing whether
the disclosures of the effect of reasonably
possible changes in key judgements and
assumptions reflects the risks inherent in
the provisions’ estimation.
We performed the tests above rather than seeking
to rely on any of the Group’s controls because the
nature of the balance is such that we would expect
to obtain audit evidence primarily through the
detailed procedures described.
Our results
• We found the level of provision in respect of this
disputed commercial position to be acceptable.
Recoverability of the Parent Company’s
investment in its subsidiary
The parent Company recorded an
investment carrying value of £259.9m as
at 31 December 2023 (2022: £259.9m).
Refer to pages 143 to 148 (accounting
policy) and Note 38 (financial disclosures).
Low risk, high value:
The carrying amount of the Parent
Company’s investment in its subsidiary
represents 52% of its total assets. Its
recoverability is not at a high risk of significant
misstatement or subject to significant
judgment. However, due to its materiality in
the context of the Parent Company Financial
Statements, this is considered to be the area
that had the greatest effect on our overall
Parent Company audit.
Our procedures included:
• Tests of detail: We compared the carrying
amount of the investment with the relevant
subsidiary’s draft statutory balance sheet to
identify whether its net assets, being an
approximation of its minimum recoverable
amount, was in excess of its carrying amount
and assessed whether the subsidiary has
historically been profit-making.
We performed the tests above rather than seeking
to rely on any of the Group’s controls because the
nature of the balance is such that we would expect
to obtain audit evidence primarily through the
detailed procedures described.
Our results:
• We found the company’s conclusion that there is
no impairment of its investment in it’s subsidiary
to be acceptable. (2022 result –acceptable.)
Last year, in response to a material acquisition in the period, we reported the valuation of Spencer Aerospace intangible assets and contingent
consideration as a key audit matter. As there are no material business acquisitions in the period, we have not identified this as a recurring risk of
significant importance.
Group revenue Group materiality
Group materiality
Group revenue Group materiality
Group revenue
£963.5 million (2022: £848.4 million)
£3.2 million (2022: £3.2million)
£3.2 million
Whole financial statements
materiality (2022: £3.2 million)
£2.4 million
Whole financial statements
performance materiality
(2022: £2.4 million)
£1.8 million
Range of materiality
at 18 components
(£0.5 million - £1.8 million)
(2022: £0.4 million to £1.8 million)
£0.16 million
Misstatements reported
to the audit committee
(2022: £0.16 million)
Group revenue Group profit before tax
44%
32%
51%
76%
(2022 – 75%)
24%
54%
33%
26%
54%
87%
(2022 – 80%)
Group total assets
Specified risk-focused audit purposes 2023
Full scope for group audit purposes 2023
Full scope for group audit purposes 2022
Specified risk-focused audit purposes 2022
Residual components
31%
82%
84%
(2021 – 82%)
18%
52%
14%
70%
83%
(2022 – 84%)
132 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
3. Our application of materiality and an
overview of the scope of our audit
Materiality for the Group financial statements
as a whole was set at £3.2 million (2022: £3.2
million), determined with reference to a
benchmark of Group revenue of which it
represents 0.3% (2022: 0.4%).
We consider total revenue to be the most
appropriate benchmark as it provides a more
stable measure year on year than Group profit
before tax.
Materiality for the parent Company financial
statements as a whole was set at £2.9 million
(2022: £2.9 million), determined with reference
to a benchmark of Company total assets, of
which it represents 0.6% (2022: 0.7%).
In line with our audit methodology, our
procedures on individual account balances
and disclosures were performed to a lower
threshold, performance materiality, so as to
reduce to an acceptable level the risk that
individually immaterial misstatements in
individual account balances add up to a
material amount across the financial
statements as a whole.
Performance materiality was set at 75% (2022:
75%) of materiality for the financial statements
as a whole, which equates to £2.4 million (2022:
£2.4 million) for the Group and £2.2 million
(2022: £2.2 million) for the parent Company. We
applied this percentage in our determination of
performance materiality because we did not
identify any factors indicating an elevated level
of risk.
We agreed to report to the Audit Committee
any corrected or uncorrected identified
misstatements exceeding £160,000 (2022:
£160,000), in addition to other identified
misstatements that warranted reporting on
qualitative grounds.
Of the Group’s 31 (2022: 31) reporting
components (excluding the Parent Company),
we subjected 9 (2022: 10) to full scope audits
for group purposes and 8 (2022: 4) to specified
risk-focused audit procedures. The latter were
not individually financially significant enough to
require a full scope audit for group purposes, but
did present specific individual risks that needed
to be addressed.
The components within the scope of
our work accounted for the percentages
illustrated opposite.
The remaining 24% (2022: 25%) of total Group
revenue, 13% (2022: 20%) of Group profit
before tax and 17% (2022: 16%) of total Group
assets is represented by 14 (2022: 17) reporting
components, none of which individually
represented more than 7% (2022: 5%) of any of
total Group revenue, Group profit before tax or
total Group assets. For these components, we
performed analysis at an aggregated group level
to re-examine our assessment that there were
no significant risks of material misstatement
within these.
GOVERNANCE / INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SENIOR PLC CONTINUED
£963.5 million (2022: £848.4 million) £3.2 million (2022: £3.2 million)
133SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
We have read the Group’s and the Parent
Company’s disclosure of climate related
information in the front half of the annual report
as set out on pages 25 to 31, and considered
consistency with the financial statements and
our audit knowledge.
5. Going concern
The directors have prepared the financial
statements on the going concern basis as they
do not intend to liquidate the Group or the
Company or to cease their operations, and as
they have concluded that the Group’s and the
Company’s financial position means that this is
realistic. They have also concluded that there are
no material uncertainties that could have cast
significant doubt over their ability to continue as
a going concern for at least a year from the date
of approval of the financial statements (“the
going concern period”).
We used our knowledge of the Group, its
industry, and the general economic environment
to identify the inherent risks to its business
model and analysed how those risks might
affect the Group’s and Company’s financial
resources or ability to continue operations over
the going concern period. The risks that we
considered most likely to adversely affect the
Group’s and Company’s available financial
resources and/or metrics relevant to debt
covenants over this period were:
• The impact of a global economic downturn on
the Group’s key end markets, including
increasing inflationary pressures; and
• The volatility of and disruption to supply chain
affecting critical materials or components.
We considered whether these risks could
plausibly affect the liquidity or covenant
compliance in the going concern period by
comparing severe, but plausible downside
scenarios that could arise from these risks
individually and collectively against the level
of available financial resources and covenants
indicated by the Group’s financial forecasts.
We considered whether the going concern
disclosure in Note 2 to the financial statements
gives a full and accurate description of the
Directors’ assessment of going concern,
including the identified risks and dependencies.
We assessed the completeness of the going
concern disclosure.
Our conclusions based on this work:
• we consider that the directors’ use of
the going concern basis of accounting in
the preparation of the financial statements
is appropriate;
• we have not identified, and concur with the
directors’ assessment that there is not, a
material uncertainty related to events or
conditions that, individually or collectively,
may cast significant doubt on the Group’s
or Company’s ability to continue as a going
concern for the going concern period;
• we have nothing material to add or draw
attention to in relation to the directors’
statement in Note 2 to the financial
statements on the use of the going concern
basis of accounting with no material
uncertainties that may cast significant doubt
over the Group and Company’s use of that
basis for the going concern period, and we
found the going concern disclosure in Note 2
to be acceptable; and
• the related statement under the Listing
Rules set out on page 78 is materially
consistent with the financial statements
and our audit knowledge.
However, as we cannot predict all future events
or conditions and as subsequent events may
result in outcomes that are inconsistent with
judgements that were reasonable at the time
they were made, the above conclusions are not
a guarantee that the Group or the Company will
continue in operation.
6. Fraud and breaches of laws and
regulations – ability to detect
Identifying and responding to risks of
material misstatement due to fraud
To identify risks of material misstatement due
to fraud (“fraud risks”) we assessed events or
conditions that could indicate an incentive or
pressure to commit fraud or provide an
opportunity to commit fraud. Our risk
assessment procedures included:
• Enquiring of directors, those charged with
governance, internal audit, management and
inspection of policy documentation as to the
Group’s high-level policies and procedures to
prevent and detect fraud, including the internal
audit function, and the Group’s channel for
“whistleblowing”, as well as whether they
have knowledge of any actual, suspected or
alleged fraud.
• Reading Board and Audit Committee
meeting minutes.
• Considering remuneration incentive schemes
and performance targets for management
and Directors including the long-term
incentive plan for Management remuneration
• Using analytical procedures to identify any
unusual or unexpected relationships.
• Our forensic specialists assisted us in
designing and executing relevant audit
procedures to respond to identifying fraud
risks. This included holding a discussion
between the forensic specialist and the
engagement partner and engagement
manager.
We communicated identified fraud risks
throughout the audit team and remained alert
to any indications of fraud throughout the audit.
This included communication from the Group
audit team to all component audit teams of
relevant fraud risks identified at the Group level
and request to all component audit teams to
report to the Group audit team any instances
of fraud that could give rise to a material
misstatement at the Group level.
3. Our application of materiality and an
overview of the scope of our audit
continued
The Group team instructed component auditors
as to the significant areas to be covered,
including the relevant risks detailed above and
the information to be reported back. The Group
team approved the component materialities,
which ranged from £0.5 million to £1.8 million
(2022: £0.4 million to £1.8 million), having regard
to the mix of size and risk profile of the Group
across the components. The work on all 17
components (2022: 10 of the 14 components)
was performed by component auditors. The
audit of the parent Company (2022: 4 out of 14
components, including the audit of the parent
Company) was performed by the Group team.
The scope of the audit work performed was
fully substantive as we did not rely upon the
Group’s internal control over financial reporting.
The Group team visited 3 (2022: 5) component
locations in the US and UK (2022: US and UK)
to assess the audit risk and strategy. Video and
telephone conference meetings were also held
with these component auditors and all others
that were not physically visited. At these visits
and meetings, the findings reported to the
Group team were discussed in more detail, and
any further work required by the Group team
was then performed by the component auditor.
4. The impact of climate change on
ouraudit
We have considered the potential impacts of
climate change on the financial statements as
part of planning our audit.
Climate change impacts the Group in a variety of
ways including the impact of climate risk on the
substitution of existing products and services
with lower emissions options, increased costs
to transition to lower emissions technology
andthe impact on useful lives of assets from
physical and obsolescence risks. There is also
potential reputational risk associated with the
Group’s delivery of its climate related initiatives,
and greater emphasis on climate related
narrative and disclosure in the annual report.
As part of our audit we have made enquiries
ofmanagement to understand the extent of
thepotential impact of climate change risk
onthe Group’s financial statements. We have
performed a risk assessment of how the impact
of climate change may affect the financial
statements and our audit. We held discussions
with our own climate change professionals to
challenge our risk assessment, including the
goodwill impairment assessment, the estimates
made regarding useful economic lives of
property, plant and equipment, and the valuation
of inventory, recoverability of trade receivables
and going concern. Taking into account the
extent of headroom on goodwill, the expected
remaining useful lives of property, plant and
equipment, the nature of customers and
products, our assessment is that the climate
related risks to the Group’s business, strategy
and financial planning did nothave a significant
impact on our key audit matters given the nature
of the Group’s operations and knowledge gained
of its impact on critical accounting estimates
during our riskassessment procedures
andtesting.
GOVERNANCE / INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SENIOR PLC CONTINUED
134 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
6. Fraud and breaches of laws and
regulations – ability to detect
continued
As required by auditing standards, and taking
into account possible pressures to meet profit
targets and market consensus, we perform
procedures to address the risk of management
override of controls and the risk of fraudulent
revenue recognition. In particular:
• the risk that revenue is overstated through
recording revenues in the wrong period; and
• the risk that Group and component
Management may be in a position to make
inappropriate accounting entries; and
• the risk of bias in accounting estimates
and judgements such as the, provisions for
uncertain tax positions, provisions for litigation
and claims, and pension assumptions
We did not identify any additional fraud risks.
We performed procedures including:
• Identifying journal entries and other
adjustments to test for all full scope
components based on risk criteria and
comparing the identified entries to supporting
documentation. These included those posted
by unexpected individuals, journals posted to
seldom used accounts, journals with certain
descriptions, round number journals, and
those with unusual account pairings.
• Assessing whether the judgements made in
making accounting estimates are indicative of
a potential bias
We discussed with the audit committee matters
related to actual or suspected fraud, for which
disclosure is not necessary, and considered any
implications for our audit.
Identifying and responding to risks
of material misstatement due to non-
compliance with laws and regulations
We identified areas of laws and regulations that
could reasonably be expected to have a material
effect on the financial statements from our
general commercial and sector experience and
through discussion with the Directors (as
required by auditing standards), and discussed
with the Directors the policies and procedures
regarding compliance with laws and regulations.
As the Group is regulated, our assessment
of risks involved gaining an understanding
of the control environment including the
entity’s procedures for complying with
regulatory requirements.
We communicated identified laws and
regulations throughout our team and remained
alert to any indications of non-compliance
throughout the audit . This included
communication from the Group audit team to
all component audit teams of relevant laws and
regulations identified at the Group level, and a
request for all component auditors to report to
the Group audit team any instances of non-
compliance with laws and regulations that
could give rise to a material misstatement
at the Group level.
The potential effect of these laws and
regulations on the financial statements
varies considerably.
Firstly, the Group is subject to laws and
regulations that directly affect the financial
statements including financial reporting
legislation (including related companies
legislation), distributable profits legislation,
pension scheme legislation and taxation
legislation, and we assessed the extent of
compliance with these laws and regulations
as part of our procedures on the related
financial statement items.
Secondly, the Group is subject to many other
laws and regulations where the consequences
of non-compliance could have a material effect
on amounts or disclosures in the financial
statements, for instance through the imposition
of fines or litigation or the loss of the Group’s
license to operate. We identified the following
areas as those most likely to have such an effect:
health and safety, data protection regulation,
environmental laws and regulations, anti-bribery
and corruption, contract legislation, employment
law and export laws and regulations, recognising
the financial and regulated nature of the Group’s
activities. Auditing standards limit the required
audit procedures to identify non-compliance with
these laws and regulations to enquiry of the
directors and inspection of regulatory and legal
correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or
evident from relevant correspondence, an audit
will not detect that breach.
Context of the ability of the audit to detect
fraud or breaches of law or regulation
Owing to the inherent limitations of an audit,
there is an unavoidable risk that we may not
have detected some material misstatements
in the financial statements, even though we
have properly planned and performed our audit
in accordance with auditing standards. For
example, the further removed non-compliance
with laws and regulations is from the events
and transactions reflected in the financial
statements, the less likely the inherently limited
procedures required by auditing standards
would identify it.
In addition, as with any audit, there remained a
higher risk of non-detection of fraud, as these
may involve collusion, forgery, intentional
omissions, misrepresentations, or the override
of internal controls. Our audit procedures are
designed to detect material misstatement.
We are not responsible for preventing non-
compliance or fraud and cannot be expected
to detect non-compliance with all laws
and regulations.
7. We have nothing to report on the
otherinformation in the Annual Report
The directors are responsible for the other
information presented in the Annual Report
together with the financial statements. Our
opinion on the financial statements does not
cover the other information and, accordingly,
we do not express an audit opinion or, except
as explicitly stated below, any form of assurance
conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider whether,
based on our financial statements audit work,
the information therein is materially misstated or
inconsistent with the financial statements or our
audit knowledge. Based solely on that work we
have not identified material misstatements in
the other information.
Strategic report and directors’ report
Based solely on our work on the other
information:
• we have not identified material misstatements
in the strategic report and the directors’ report;
• in our opinion the information given in those
reports for the financial year is consistent
with the financial statements; and
• in our opinion those reports have been
prepared in accordance with the Companies
Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’
Remuneration Report to be audited has been
properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks
and longer-term viability
We are required to perform procedures
to identify whether there is a material
inconsistency between the directors’
disclosures in respect of emerging and principal
risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing
material to add or draw attention to in relation to:
• the directors’ confirmation within the Viability
Statement on page 78 that they have carried
out a robust assessment of the emerging and
principal risks facing the Group, including
those that would threaten its business model,
future performance, solvency and liquidity;
• the Risks and uncertainties disclosures
describing these risks and how emerging
risks are identified, and explaining how they
are being managed and mitigated; and
• the directors’ explanation in the Viability
Statement of how they have assessed the
prospects of the Group, over what period they
have done so and why they considered that
period to be appropriate, and their statement
as to whether they have a reasonable
expectation that the Group will be able
to continue in operation and meet its
liabilities as they fall due over the period
of their assessment, including any related
disclosures drawing attention to any necessary
qualifications or assumptions.
GOVERNANCE / INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SENIOR PLC CONTINUED
135SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
7. We have nothing to report on the
otherinformation in the Annual Report
continued
We are also required to review the Viability
Statement, set out on page 78 under the
Listing Rules. Based on the above procedures,
we have concluded that the above disclosures
are materially consistent with the financial
statements and our audit knowledge.
Our work is limited to assessing these matters
in the context of only the knowledge acquired
during our financial statements audit. As we
cannot predict all future events or conditions and
as subsequent events may result in outcomes
that are inconsistent with judgements that were
reasonable at the time they were made, the
absence of anything to report on these
statements is not a guarantee as to the
Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures
to identify whether there is a material
inconsistency between the directors’ corporate
governance disclosures and the financial
statements and our audit knowledge.
Based on those procedures, we have
concluded that each of the following is
materially consistent with the financial
statements and our audit knowledge:
• the directors’ statement that they consider
that the annual report and financial statements
taken as a whole is fair, balanced and
understandable, and provides the information
necessary for shareholders to assess the
Group’s position and performance, business
model and strategy;
• the section of the annual report describing
the work of the Audit Committee, including
the significant issues that the audit committee
considered in relation to the financial
statements, and how these issues were
addressed; and
• the section of the annual report that
describes the review of the effectiveness
of the Group’s risk management and
internal control systems.
We are required to review the part of the
Corporate Governance Statement relating to
the Group’s compliance with the provisions of
the UK Corporate Governance Code specified
by the Listing Rules for our review. We have
nothing to report in this respect.
8. We have nothing to report on the other
matters on which we are required to
report by exception
Under the Companies Act 2006, we are
required to report to you if, in our opinion:
• adequate accounting records have not been
kept by the parent Company, or returns
adequate for our audit have not been received
from branches not visited by us; or
• the parent Company financial statements
and the part of the Directors’ Remuneration
Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set
out on page 128, the directors are responsible
for: the preparation of the financial statements
including being satisfied that they give a true and
fair view; such internal control as they determine
is necessary to enable the preparation of
financial statements that are free from material
misstatement, whether due to fraud or error;
assessing the Group and parent Company’s
ability to continue as a going concern, disclosing,
as applicable, matters related to going concern;
and using the going concern basis of accounting
unless they either intend to liquidate the Group
or the parent Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue our opinion in an auditor’s report.
Reasonable assurance is a high level of
assurance, but does not guarantee that an
audit conducted in accordance with ISAs (UK)
will always detect a material misstatement
when it exists. Misstatements can arise from
fraud or error and are considered material if,
individually or in aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on
the basis of the financial statements.
A fuller description of our responsibilities is
provided on the FRC’s website at www.frc.org.
uk/auditorsresponsibilities.
The Company is required to include these
financial statements in an annual financial report
prepared under Disclosure Guidance and
Transparency Rule 4.1.17R and 4.1.18R. This
auditor’s report provides no assurance over
whether the annual financial report has been
prepared in accordance with those requirements.
10. The purpose of our audit work and
towhom we owe our responsibilities
This report is made solely to the Company’s
members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so
that we might state to the Company’s members
those matters we are required to state to them
in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone
other than the Company and the Company’s
members, as a body, for our audit work, for this
report, or for the opinions we have formed.
Mike Barradell
(Senior Statutory Auditor)
for and on behalf of KPMG LLP,
Statutory Auditor
Chartered Accountants
15 Canada Square, London, E14 5GL
1 March 2024
GOVERNANCE / INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SENIOR PLC CONTINUED
136 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Financial
Statements
Employing innovative
design and manufacturing
processes today...
Development of Additive Manufacturing
Senior has invested in developing a highly vertically
integrated Additive Manufacturing (AM) capability for
both metals and non-metals. On the metallic AM side,
we are concentrating on developing innovative solutions
for the most demanding high-temperature and high-
pressure applications for both aerospace and industrial
applications. On the non-metal AM side we have
developed production-ready processes for low-pressure
cabin air and environmental control systems, primarily
used on business-jet and regional aircraft.
Senior’s AM pedigree and end-to-end capabilities, including
Nadcap certification for AM, are why large OEM customers
are working closely with us on multiple AM projects.
FINANCIAL STATEMENTS /
137SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
IN THIS SECTION
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
...solving complex
engineering challenges
for tomorrow
FINANCIAL STATEMENTS /
138 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Consolidated Income Statement
For the year ended 31 December 2023
Year endedYear ended
20232022
Notes£m£m
Revenue
3
96 3.5
8 48 .4
Trading profit
36.9
3 2 .1
Share of joint venture profit
15
1.0
0.4
Operating profit
5
3 7. 9
3 2.5
Finance income
7
1 0 .1
1 .9
Finance costs
8
(2 0. 5)
(1 0.6)
Corporate undertakings
9
(4 .7)
(1. 4)
Profit before tax
22.8
2 2.4
Tax credit/(charge)
10
8.3
(2. 2)
Profit for the period
3 1 .1
20. 2
Attributable to:
Equity holders of the parent
3 1 .1
20. 2
Earnings per share
Basic
12
7 .52p
4.8 6p
Diluted
12
7. 3 2p
4 .7 3p
(1)
Adjusted operating profit
9
45.8
28 .5
(2)
Adjusted profit before tax
9
38.3
2 0 .1
(3)
Adjusted earnings per share
12
10. 28p
4.36p
(4)
Adjusted and diluted earnings per share
12
10.0 0p
4. 24p
(1)
(2)
(3)
(4)
FINANCIAL STATEMENTS /
139SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Consolidated Statement of
Comprehensive Income
For the year ended 31 December 2023
Year endedYear ended
20232022
Notes£m£m
Profit for the period
3 1 .1
20. 2
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Gains/(losses) on foreign exchange contracts – cash flow hedges during the period
2 .7
(4.5)
Reclassification adjustments for losses included in profit
0. 9
2. 2
Gains/(losses) on foreign exchange contracts – cash flow hedges
28
3.6
(2.3)
Exchange differences on translation of overseas operations
28
(1 6 . 9)
24 .5
Tax relating to items that may be reclassified
10
(0. 9)
0 .7
(14 . 2)
22.9
Items that will not be reclassified subsequently to profit or loss:
Actuarial losses on defined benefit pension schemes
34
(2 .6)
(23. 1)
Tax relating to items that will not be reclassified
10
0. 6
5 .7
(2 .0)
(1 7. 4)
Other comprehensive income for the period, net of tax
(16 . 2)
5.5
Total comprehensive income for the period
14 . 9
2 5 .7
Attributable to:
Equity holders of the parent
14 . 9
2 5 .7
FINANCIAL STATEMENTS /
140 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Consolidated Balance Sheet
As at 31 December 2023
Year endedYear ended
20232022
Notes£m£m
Non-current assets
Goodwill
13
1 93.3
19 9 .7
Other intangible assets
14
3 3 .1
36.2
Investment in joint venture
15
5 .1
4.4
Property, plant and equipment
16
28 4 .7
3 0 7. 2
Deferred tax assets
21
2 0 .7
1 0.9
Retirement benefits
34
48.5
51. 8
Trade and other receivables
18
0. 8
0.4
Total non-current assets
586. 2
6 10.6
Current assets
Inventories
17
2 0 7. 5
19 4 . 3
Current tax receivables
21
2 .3
2 .1
Trade and other receivables
18
141 .7
12 6 . 7
Cash and bank balances
32c
4 7. 6
43.2
Total current assets
3 9 9 .1
3 66.3
Total assets
985.3
9 76.9
Current liabilities
Trade and other payables
23
18 8 .4
19 1. 2
Current tax liabilities
21
10 .0
1 7. 7
Lease liabilities
22, 32c
12 . 4
12 . 7
Bank overdrafts and loans
19
1. 8
0.5
Provisions
24
10 .5
16.7
Contingent/deferred consideration
31
10 .5
23.4
Total current liabilities
233.6
262. 2
Non-current liabilities
Bank and other loans
19
17 7. 8
14 3 . 2
Retirement benefits
34
8 .0
12 .1
Deferred tax liabilities
21
7. 0
4 .7
Lease liabilities
22, 32c
5 9.4
6 5 .7
Provisions
24
15 .0
2.9
Contingent consideration
31
18 . 5
28.9
Others
23
8.9
7. 8
Total non-current liabilities
2 94.6
265 .3
Total liabilities
528.2
5 2 7. 5
Net assets
4 5 7.1
4 4 9.4
Equity
Issued share capital
25
41 . 9
4 1 .9
Share premium account
26
14 . 8
14 . 8
Equity reserve
27
7. 9
6.4
Hedging and translation reserve
28
37 .3
51. 5
Retained earnings
29
3 6 8.0
34 6.5
Own shares
30
(1 2 . 8)
(11 . 7 )
Equity attributable to equity holders of the parent
4 5 7.1
4 4 9.4
Total equity
4 5 7.1
4 4 9.4
The Financial Statements of Senior plc (registered number 282772) were approved by the Board of Directors and authorised for issue on 1 March 2024. They
were signed on its behalf by:
David Squires Bindi Foyle
Director Director
FINANCIAL STATEMENTS /
141SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Consolidated Statement
of Changes In Equity
For the year ended 31 December 2023
All equity is attributable to equity holders of the parent
IssuedShare
sharepremiumEquityHedgingTranslationRetainedOwnTotal
capitalaccountreservereservereserveearningssharesequity
Notes£m£m£m£m£m£m£m£m
Balance at 1 January 2022
41. 9
14 . 8
5. 8
(3 7. 2)
6 5. 8
3 4 3. 2
(9.2)
4 2 5 .1
Profit for the year 2022
–
–
–
–
–
20 .2
–
20. 2
Losses on foreign exchange contracts –
cash flow hedges
28
–
–
–
(2. 3)
–
–
–
(2. 3)
Exchange differences on translation of
overseas operations
28
–
–
–
–
24 .5
–
–
24 .5
Actuarial gains on defined benefit pension schemes
34
–
–
–
–
–
(23. 1)
–
(23. 1)
Tax relating to components of other
comprehensive income
10
–
–
–
0 .7
–
5 .7
–
6.4
Total comprehensive income/(expense)
for the period
–
–
–
(1. 6)
24 .5
2.8
–
2 5 .7
Share-based payment charge
33
–
–
4 .3
–
–
–
–
4. 3
Purchase of shares held by employee benefit trust
30
–
–
–
–
–
–
(4.5)
(4 .5)
Use of shares held by employee benefit trust
30
–
–
–
–
–
(2. 0)
2. 0
–
Transfer to retained earnings
29
–
–
(3 .7)
–
–
3 .7
–
–
Dividends paid
11
–
–
–
–
–
(1. 2)
–
(1. 2)
Balance at 31 December 2022
41. 9
14 . 8
6 .4
(38.8)
9 0. 3
3 4 6. 5
(11. 7)
4 4 9. 4
Profit for the year 2023
–
–
–
–
–
3 1 .1
–
3 1 .1
Gain on foreign exchange contracts –
cash flow hedges
28
–
–
–
3.6
–
–
–
3.6
Exchange differences on translation of
overseas operations
28
–
–
–
–
(1 6 . 9)
–
–
(1 6 . 9)
Actuarial losses on defined benefit pension schemes
34
–
–
–
–
–
(2 .6)
–
(2. 6)
Tax relating to components of other
comprehensive income
10
–
–
–
(0. 9)
–
0. 6
–
(0 . 3)
Total comprehensive income/(expense)
for the period
–
–
–
2 .7
(1 6 . 9)
2 9 .1
–
14 . 9
Share-based payment charge
33
–
–
4 .1
–
–
–
–
4 .1
Tax relating to share-based payments
10
–
–
–
–
–
0. 9
–
0.9
Purchase of shares held by employee benefit trust
30
–
–
–
–
–
–
(5.6)
(5.6)
Use of shares held by employee benefit trust
30
–
–
–
–
–
(4 .5)
4.5
–
Transfer to retained earnings
29
–
–
(2 .6)
–
–
2 .6
–
–
Dividends paid
11
–
–
–
–
–
(6. 6)
–
(6. 6)
Balance at 31 December 2023
41. 9
14 . 8
7. 9
(3 6 .1)
73. 4
3 68 .0
(1 2 . 8)
4 5 7.1
FINANCIAL STATEMENTS /
142 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Year endedYear ended
20232022
Notes£m£m
Net cash from operating activities
32a
41 . 4
5 7. 7
Investing activities
Interest received
4.3
0 .7
Proceeds on disposal of property, plant and equipment
0.7
0.5
Purchases of property, plant and equipment
16
(3 3 .7)
(2 8 .7)
Purchases of intangible assets
14
(2 . 2)
(1 .8)
Acquisition of Spencer
31
(23 .9)
(25.3)
Net cash used in investing activities
(5 4. 8)
(5 4.6)
Financing activities
Dividends paid
11
(6 .6)
(1. 2)
New loans
13 6. 2
9 0.8
Repayment of borrowings
(9 6 . 2)
(90 .4)
Purchase of shares held by employee benefit trust
(5.6)
(4.5)
Repayment of lease liabilities
(10 . 2)
( 9 .1)
Net cash generated/(used) in financing activities
1 7. 6
(14 . 4)
Net increase/(decrease) in cash and cash equivalents
4.2
(11 . 3)
Cash and cash equivalents at beginning of period
4 2 .7
5 1.1
Effect of foreign exchange rate changes
(1 .1)
2.9
Cash and cash equivalents at end of period
32c
4 5.8
4 2.7
Consolidated Cash Flow Statement
For the year ended 31 December 2023
FINANCIAL STATEMENTS /
143SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Notes to the Consolidated
Financial Statements
1. General information
Senior plc is a Company incorporated in England and Wales under the
Companies Act 2006. The address of the registered office is given on the
inside back cover. The nature of the Group’s operations and its principal
activities are set out in Note 3 and on pages 1 to 79.
Items included in the Financial Statements of each of the Group’s entities
are measured using the currency of the primary economic environment
in which the entity operates (the functional currency). These Financial
Statements are presented in Pounds Sterling, which is the Company’s
functional and the Group’s presentation currency.
2. Significant accounting policies
Basis of accounting
These Financial Statements have been prepared in accordance with
UK-adopted international accounting standards. They have been prepared
on the historical cost basis, except for the revaluation of certain financial
instruments and retirement benefit costs measured in accordance with
IAS 19.
Going concern
In determining the appropriate basis of preparation of the Financial
Statements for the year ended 31 December 2023, the Directors are
required to consider whether the Group and Parent Company can
continue in operational existence for the foreseeable future, being
a period of at least 12 months from the date of approval of these
Financial Statements (the going concern period).
The Board has applied a robust process to assess the resilience of the
forecast out-turns. This assessment included applying severe but plausible
downside risks as set out in the Viability Statement on page 78. To address
these risks the Board has considered mitigating factors within the Group
and Parent Company’s control that could be employed that would address
the impact and provide options to the Group and Parent Company.
The Group has two covenants for committed borrowing facilities, which are
tested at June and December: the Group’s net debt to EBITDA (defined in
the Notes to the Financial Headlines on page 1) must not exceed 3.0x and
interest cover, the ratio of EBITDA to interest must be higher than 3.5x.
At 31 December 2023, the Group’s net debt to EBITDA was 1.6x and
interest cover was 12.6x, both comfortably within covenant limits.
Based on the above assessment, the Board has concluded that the Group
and Parent Company will continue to have adequate financial resources to
realise its assets and discharge its liabilities as they fall due over the going
concern period. Accordingly, the Directors have formed the judgement
that it is appropriate to prepare these Consolidated Financial Statements
on the going concern basis.
Changes in accounting policies
At the date of authorisation of these Financial Statements, there are
no relevant and material new standards, amendments to standards or
interpretations which are effective for the year ended 31 December 2023.
Basis of consolidation
The Consolidated Financial Statements incorporate the Financial
Statements of Senior plc and the entities controlled by it (its subsidiaries)
made up to 31 December 2023. Control is achieved when Senior plc has
the power to govern the financial and operating policies of an invested
entity so as to obtain benefits from its activities.
Acquisitions of subsidiaries and businesses are accounted for using the
acquisition method. The consideration transferred for each acquisition
is the aggregate of the fair values (at the date of exchange) of assets
transferred, liabilities incurred or assumed, and equity interests issued
by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement.
Acquisition-related costs are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed are measured
initially at their fair values at the acquisition date. On an acquisition-by-
acquisition basis, the Group recognises any non-controlling interest in
the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net assets.
The results of subsidiaries acquired or disposed of during the year are
included in the Consolidated Income Statement from the effective date
of acquisition or up to the effective date of disposal, as appropriate.
The results of joint ventures are accounted for using the equity
accounting method.
Where necessary, adjustments are made to the Financial Statements of
subsidiaries to bring the accounting policies used in line with those used
by the Group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Goodwill
Goodwill arising on consolidation, which was acquired in a business
combination, is measured as the excess of the consideration transferred,
the amount of any non-controlling interest in the acquiree and the
acquisition date fair value of any previous equity interest in the acquiree
over the fair value of the Group’s share of the identifiable net assets
acquired. Goodwill is recognised as an asset and allocated, at acquisition,
to the group of cash-generating units (CGU groups) that are expected to
benefit from that business combination. If the consideration transferred,
the amount of any non-controlling interest in the acquiree and the
acquisition date fair value of any previous equity interest in the acquiree is
less than the fair value of the net assets acquired (i.e. bargain purchase),
the difference is credited to the Consolidated Income Statement in the
period of acquisition.
CGU groups to which goodwill has been allocated are tested for
impairment at least annually and reviewed for indicators of impairment
at the Balance sheet date. If impairment indicators exist, the individual
assets within the CGUs, and the individual CGUs excluding goodwill, are
tested for impairment before the CGU group is tested for impairment. Any
impairment is recognised immediately through the Consolidated Income
Statement and is not subsequently reversed. The determination of the
recoverable amount of the CGU group is disclosed in the Notes to the
Financial Statements (Note 13). If the recoverable amount of the CGU
group is less than its carrying amount, the impairment loss is allocated
first to reduce the carrying amount of any goodwill allocated to the CGU
group and then to the other assets of the CGU group pro rata on the basis
of the carrying amount of each asset in the CGU group.
On disposal of a subsidiary or part thereof, the attributable amount of
goodwill is included in the determination of the profit or loss on disposal.
Goodwill acquired in a business combination prior to the date of transition
to IFRS has been retained at the previous UK GAAP amount subject to
being tested for impairment at that date. Goodwill written off to reserves
under UK GAAP prior to 1998 has not been reinstated and is not included
in determining any subsequent profit or loss on disposal.
Revenue recognition
The Group predominantly has one revenue stream relating to engineered
components or systems (products), which are customer specific, with
a secondary revenue stream of funded development revenue. Both
streams have identifiable customer contracts and pricing specific
performance obligations.
The transaction price is the amount of consideration to which an entity
expects to be entitled in exchange for transferring promised goods or
services to a customer. Revenue is recognised net of discounts, VAT and
FINANCIAL STATEMENTS /
144 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
other sales related taxes. The determination of the transaction price is
based upon pricing specified in the customer contract i.e. a price per unit.
Revenue is recognised as the identified performance obligations
are satisfied.
The performance obligation for goods is a specific point in time when
the customer obtains control, which is upon delivery or when available
for collection. Allocation of transaction price to performance obligations
is given in the contract i.e. a unit delivered or available for collection.
The performance obligation for development revenue is a specific point
in time when the customer obtains control of the output, for example a
first article good, which is the acceptance milestone specified in the
customer contract.
Any portion of a change in transaction price that is allocated to a satisfied
performance obligation is recognised as revenue or as a reduction in
revenue when the transaction price changes.
Dividend income from investments is recognised when the shareholders’
legal rights to receive payment have been established.
Interest
Interest receivable/payable is credited/charged to the Consolidated
Income Statement using the effective interest method.
Deferred and contingent consideration related to business combinations
which is paid, including related interest unwind incurred since acquisition
date, is classified as investing activities within the Consolidated Cashflow
Statement. Any cash settlement relates to obtaining control rather than
settlement of financing provided by the seller.
Leasing
At inception of a contract, the Group assesses whether a contract is,
or contains, a lease. A contract is, or contains, a lease if the contract
conveys a right to control the use of an identified asset for a period of
time in exchange for consideration. The assessment of control includes
whether the Group has a right to obtain substantially all of the economic
benefits from the use of the asset throughout the period of use and the
right to direct the use of the asset.
As a lessee, the Group recognises a right-of-use asset and lease
liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the
lease liability adjustment for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate
of costs to dismantle or restore the underlying asset, less any lease
incentives received.
Lease payments comprise fixed payments and variable lease payments
based on an index or rate. The right-of-use asset is subsequently
depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the asset or the end
of the lease term. The lease term includes optional extensions or
terminations which are reasonably certain to be exercised by the Group.
These optional terms are reassessed periodically or when there is a
significant event which affects the lease. The estimated useful lives of
the right-of-use assets are determined on the same basis as those of
property, plant and equipment. Periodically the right-of-use asset is
reduced for impairment, if necessary, as well as re-measurements
of the lease liability.
The lease liability is measured at amortised cost using the effective
interest method, which is initially equal to the present value of lease
payments that are not paid at the commencement date, discounted using
an incremental borrowing rate determined on a lease portfolio basis. The
lease liability is re-measured either as a modification or reassessment.
Modification occurs where there is a change in terms, such as rental
payments, which did not form part of the original terms of the contract.
In this case, the lease liability is re-measured using the revised terms
and a revised incremental borrowing rate at the modification date.
Reassessment occurs where there are changes within the scope of the
original terms of the contract, such as rental payments changes with
reference to an index. For reassessment changes, the lease liability is
re-measured in the same way as for a modification, except for the
incremental borrowing rate, which is not changed from the original
commencement date of the contract.
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases which have a lease term of 12 months
or less and leases of low-value assets. The Group recognises the lease
payments associated with these leases as an expense on a straight-line
basis over the lease term. When the Group acts as a lessor, it determines
at lease inception whether each lease is a finance lease or an operating
lease. To classify each lease, several indicators are assessed, such as the
present value of the lease payments amounting to at least substantially all
of the fair value of the asset. When the Group is an intermediate lessor, it
accounts for its interest in the head lease and the sub-lease separately.
The Group assesses the classification of the sub-lease with reference to
the right-of-use asset arising from the head lease. The Group recognises
lease payments received under operating leases as income on a straight-
line basis over the lease term.
Foreign currencies
Transactions in currencies other than the functional currency are recorded
at the rates of exchange prevailing on the date of the transaction. At each
Balance Sheet date, monetary assets and liabilities that are denominated
in foreign currencies are retranslated at the rates prevailing on the Balance
Sheet date. Non-monetary items carried at fair value that are denominated
in foreign currencies are translated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured at
historical cost in a foreign currency are not retranslated. Gains and losses
arising on retranslation are included in profit or loss for the period, except
for exchange differences arising on non-monetary assets and liabilities
where the changes in fair value are recognised directly in equity, subject
to meeting the requirements under IAS 21.
In order to hedge its exposure to certain foreign exchange risks, the Group
enters into forward exchange contracts (see section below on derivative
financial instruments and hedging for details of the Group’s accounting
policies in respect of such derivative financial instruments).
On consolidation, the assets and liabilities of the Group’s overseas
operations are translated at exchange rates prevailing on the Balance
Sheet date. Income and expense items are translated at the average
exchange rates for the period. Exchange rate differences arising, if any,
are classified as equity and transferred to the Group’s translation reserve.
Such translation differences are recognised as income or expense in the
period in which the operation is disposed.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate on the relevant Balance Sheet date.
The exchange rates for the major currencies applied in the translation of
results were as follows:
Average Average Year-end Year- end
rates rates rates rates
2023 2022 2023 2022
US Dollar
1.24
1.24
1.27
1.21
Government grants
Government grants received for items of a revenue nature are recognised
as income over the period necessary to match them with the related
2. Significant accounting policies continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
145SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
costs, which are deducted in reporting the related expense and
presented net of the costs to which they relate. Government grants
relating to investment in property, plant and equipment are deducted
from the initial carrying value of the related capital asset.
Retirement benefit costs
Payments to defined contribution retirement plans are charged as an
expense as they fall due. Payments made to state-managed retirement
benefit plans are dealt with as payments to defined contribution plans
where the Group’s obligations under the plans are equivalent to those
arising in a defined contribution retirement plan.
For defined benefit retirement plans, the cost of providing benefits is
determined using the Projected Unit Method, with full actuarial valuations
being carried out on a triennial basis, and updated at each Balance Sheet
date. Actuarial gains and losses are recognised in full in the period in
which they occur. They are recognised outside the Consolidated
Income Statement and are presented in the Statement of
Comprehensive Income.
Past service cost is recognised as an expense at the earlier of a plan
amendment, curtailment, or restructuring.
The retirement benefit obligation recognised in the Consolidated Balance
Sheet represents the present value of the defined benefit obligation, and
as reduced by the fair value of scheme assets.
Taxation
Provisions for uncertain tax positions are included within current tax
liabilities on the Consolidated Balance Sheet representing Management’s
best estimate of the likely cash outflow related to the uncertainty. There
are transactions and activities that the Group engages in where the
ultimate tax determination is uncertain and a provision may be made
against the tax benefit. For example, the Group seeks to price
transactions between Group companies on an arms length basis and in
compliance with OECD transfer pricing principles and the laws of the
relevant jurisdictions. The application of OECD principles and local tax
laws require interpretation, and accordingly involves the application of
judgment and is open to challenge by the relevant tax authorities. This
gives rise to a level of uncertainty. Provisions for uncertain tax positions
are established in accordance with IFRIC 23 based on an assessment
of the range of likely tax outcomes in open years and reflecting the
strength of technical arguments. Amounts are provided for individual
tax uncertainties based on Management’s assessment of whether
the most likely amount or an expected amount based on a probability
weighted methodology is the more appropriate predictor of amounts
that the company is ultimately expected to settle. When making this
assessment, the Group utilises specialist in-house tax knowledge and
experience and takes into consideration specialist tax advice from third
party advisers on specific items.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in
the Financial Statements and the corresponding tax bases used in the
computation of taxable profit, and is accounted for using the Balance
Sheet liability method. Deferred tax liabilities are generally recognised
for all taxable temporary differences, including for taxable temporary
differences arising on investments in subsidiaries and associates, and
interests in joint ventures, except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets are recognised to the extent that it is probable
that future taxable profits will be available for their utilisation before
their expiry. Amounts will be recognised first to the extent that taxable
temporary differences exist and it is considered probable that they will
reverse and give rise to future taxable profits against which losses or other
assets may be utilised before their expiry. Assets will then be recognised
to the extent that forecasts or other evidence support the availability
of future profits against which assets may be realised.
Deferred tax assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition of goodwill
(other than in a business combination) of other assets and liabilities in a
transaction that affects neither the Group’s taxable profit nor its
accounting profit.
The carrying value of deferred tax assets is reviewed at each
Balance Sheet date and reduced to the extent it is no longer probable
that sufficient taxable profits will be available to allow all or part of the
deferred tax asset to be recovered. Deferred tax is calculated at the tax
rates that are expected to apply in the period when the liability is settled
or the asset is realised based on tax laws and rates that have been
enacted at the Balance Sheet date. Deferred tax is charged or credited
in the Consolidated Income Statement, except when it relates to items
charged or credited to Other Comprehensive Income or directly to
Equity, in which case the deferred tax is also dealt with in Other
Comprehensive Income or Equity.
Property, plant and equipment
Land and buildings held for use in the production or supply of goods
or services, or for administrative purposes, are stated in the Balance
Sheet at their historical cost, or at modified historical cost, being a
revaluation undertaken in 1988 which has been taken as the effective
cost on transition to IFRS. Land and buildings were revalued to fair
value at the date of revaluation. The Group does not intend to
conduct annual revaluations.
Plant and equipment are stated at cost less accumulated depreciation and
any recognised impairment loss. Depreciation is charged to write off the
cost of an asset on a straight-line basis over the estimated useful life of
the asset, and is charged from the time an asset becomes available for
its intended use. Annual rates are as follows:
Freehold land Nil
Freehold buildings 2%
Right-of-use land
and buildings
on the same basis as owned assets or,
where shorter, over the lease term
Leasehold building
improvements
on the same basis as owned assets or,
where shorter, over the lease term
Plant and equipment 5%–33%
Right-of-use plant and
equipment
on the same basis as owned assets or,
where shorter, over the lease term
The Group primarily leases land and buildings for manufacturing use.
The lease term, including options to extend which are reasonably certain,
typically range from two to fifteen years. The Group also leases plant and
equipment, including office equipment, vehicles and manufacturing
equipment, with lease terms typically ranging from one to four years.
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the sale proceeds and the carrying
amount of the asset at disposal and is recognised in the Consolidated
Income Statement.
Internally generated intangible assets – development expenditure
An intangible asset arising from unfunded development work shall be
recognised if the following can be demonstrated:
i. the asset can be separately identified.
ii. it is probable that the asset created will generate future economic
benefits.
iii. the development cost of the asset can be measured reliably during its
development.
2. Significant accounting policies continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
146 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
iv. it is technically feasible to complete the asset so that it will be available
for use or sale.
v. there is intention to complete the asset and use or sell it.
vi. the Group has ability to use or sell the asset.
vii. the Group has availability of adequate technical, financial and other
resources to complete the development work and to use or sell
the asset.
Internally generated intangible assets are amortised on a straight-
line basis over their useful lives. Costs incurred in relation to funded
development work are accumulated in inventory and are recognised when
the related billings are made. Any amounts held in inventory are subject to
normal inventory valuation principles. Expenditure on research, design and
other development activities, that do not meet the capitalisation criteria
above, is recognised as an expense in the period in which it is incurred.
Other intangible assets
Other intangible assets include computer software and intangible assets
acquired as part of a business combination. The cost of acquiring computer
software (including associated implementation and development costs
where applicable) is classified as an intangible asset. Costs associated with
maintaining computer software programs are recognised as an expense as
incurred. Capitalised computer software is amortised over its estimated
useful life of between three and five years on a straight-line basis, and
is stated at cost less accumulated amortisation and impairment losses.
Intangible assets acquired as part of a business combination principally
comprise qualified parts list, customer relationships, contracts and trade
names. They are shown at fair value at the date of acquisition less
accumulated amortisation. At the Balance Sheet date, Intangible assets
which incurred amortisation during the year, are being amortised at rates of
between sixteen and eighteen on a straight-line basis since acquisition date.
Impairment of tangible and intangible assets excluding goodwill
At each Balance Sheet date, the Group reviews the carrying amounts of
its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where the
asset does not generate cash flows that are independent from other
assets, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
The recoverable amount is the higher of the fair value less the costs to sell
and the value in use. In assessing the value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its
carrying amount, the carrying amount of the asset is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued amount, in
which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of
the asset is increased to the revised estimate of its recoverable amount,
so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognised for the asset in prior years. A reversal of an impairment loss is
recognised as income immediately, unless the relevant asset is carried at
a revalued amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs
comprise direct materials and, where applicable, direct labour costs and
an appropriate allocation of production overheads. Cost is calculated using
the first-in, first-out method. Net realisable value represents the estimated
selling price less the estimated costs of completion and the costs to be
incurred in marketing, selling and distribution.
Financial instruments
Financial assets and liabilities are recognised when the Group becomes
a party to the contractual provisions of the relevant instrument and
derecognised when it ceases to be a party to such provisions.
Financial instruments are classified as cash and cash equivalents, bank
overdrafts and loans, lease liabilities, trade receivables, trade payables,
deferred consideration receivable or payable, contingent consideration
payable, other receivables and other payables, as appropriate.
Non-derivative financial assets are categorised as “Financial assets at
amortised cost” and non-derivative financial liabilities are categorised
as “Financial liabilities at amortised cost”. Derivative financial assets and
liabilities that are not designated and effective as hedging instruments
are categorised as financial assets at fair value through profit or loss and
financial liabilities at fair value through profit or loss, respectively. The
classification depends on the nature and purpose of the financial assets
and liabilities and is determined at the time of initial recognition.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal
value as reduced by loss allowance. The Group has elected to measure
loss allowance for trade receivables at an amount equal to the lifetime
expected credit losses (ECLs), which are based on quantitative and
qualitative credit risk assessments, using historical and forward looking
information. Changes in the carrying amounts of the loss allowance are
recognised in the Consolidated Income Statement.
Trade receivables in default are considered uncollectible and are written off
against the loss allowance. The Group considers a trade receivable to be in
default when the customer is experiencing significant financial difficulties,
bankruptcy, financial reorganisation or is in default or delinquent in paying
its credit obligations to the Group in full. Subsequent recoveries of
amounts previously written off are credited against the loss allowance.
Trade receivables are derecognised when reverse factored, without
recourse, through schemes with financial institution counterparties
who assume the risk of non-payment by the customer. Derecognition
occurs when cash is received from the financial institution (less reverse
factoring discount). For further details, see Strategic Report and the
financial instrument credit risk section in the notes to the Consolidated
Financial Statements.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and other short-term
highly liquid investments that are readily convertible to a known amount
of cash and are subject to an insignificant risk of changes in value.
Non-derivative financial liabilities
Non-derivative financial liabilities are stated at amortised cost using the
effective interest method. The effective interest method is a method of
calculating the amortised financial liability and of allocating interest over
the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the expected life of
the financial liability, or, where appropriate, a shorter period, to the net
carrying amount on initial recognition. For borrowings, their carrying value
includes accrued interest payable, as well as unamortised issue costs.
Equity instruments
Equity instruments issued by the Company are recorded at the value of
the proceeds received, net of direct transaction costs.
2. Significant accounting policies continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
147SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Derivative financial instruments and hedging
The Group’s activities expose it primarily to the financial risks of changes
in foreign currency exchange rates and interest rates. The Group uses
foreign exchange contracts and, on occasion, interest rate swap contracts
to hedge these exposures. The use of financial derivatives is governed by
the Group’s Treasury Policies as approved by the Board of Directors,
which provides written principles on the use of derivatives. The Group
does not use derivative financial instruments for speculative purposes.
Certain derivative instruments do not qualify for hedge accounting. These
are categorised as fair value through profit or loss and are stated at fair
value, with any resultant gain or loss recognised in the Income Statement.
The Group designates certain hedging instruments in respect of foreign
currency risk as cash flow hedges. At the inception of the hedge relationship,
the Group documents the relationship between the hedging instrument and
the hedged item, along with its risk management objectives and strategy
for undertaking various hedging transactions. The Group also documents,
both at hedge inception and on an ongoing basis, whether the hedging
instrument that is used in a hedging relationship is highly effective in
offsetting changes in fair values or cash flows of the hedged item.
For the Group’s cash flow hedges of highly probable forecast transactions
in foreign currencies, the hedged risk is always considered to be 1:1. If the
underlying exposure changes over time, either due to commercial factors
or timing differences, the hedging instruments will be rebalanced to
ensure that the hedge ratio of 1:1 is maintained.
Changes in the fair value of derivative financial instruments that are
designated and are effective as a cash flow hedge are recognised
directly in equity and the ineffective portion is recognised immediately
in the Consolidated Income Statement. If the cash flow hedge of a firm
commitment or forecasted transaction results in the recognition of an
asset or a liability, then, at the time the asset or liability is recognised,
the associated gains or losses on the derivative that had previously
been recognised in equity are included in the initial measurement of
the asset or liability. For hedges that do not result in the recognition
of an asset or a liability, amounts deferred in equity are recognised in
the Income Statement in the same period in which the hedged item
affects profit or loss.
For an effective hedge of an exposure to changes in fair value, the
hedged item is adjusted for changes in fair value attributable to the risk
being hedged with the corresponding entry in the Consolidated Income
Statement. Gains or losses from remeasuring the derivative are also
recognised in the Consolidated Income Statement. If the hedge is
effective, these entries will offset in the Consolidated Income Statement.
Changes in the fair value of derivative financial instruments that do not
qualify for hedge accounting are recognised in the Consolidated Income
Statement as they arise.
Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated, exercised, or no longer qualifies for
hedge accounting. At that time, any cumulative gain or loss on the
hedging instrument recognised in equity is retained in equity until the
forecasted transaction occurs. If a hedged transaction is no longer
expected to occur, the net cumulative gain or loss recognised in Equity
is transferred to the Consolidated Income Statement for the period.
Gains and losses accumulated in Equity are recognised in the
Consolidated Income Statement on disposal of the overseas business.
Assets and disposal groups held for sale
Assets are classified as held for sale if their carrying amount will be
recovered by sale rather than by continuing use in the business. Where a
group of assets and their directly associated liabilities are to be disposed
of in a single transaction, such disposal groups are also classified as held
for sale. For this to be the case, the asset or disposal group must be
available for immediate sale in its present condition, and Management
must be committed to and have initiated a plan to sell the asset or
disposal group which, when initiated, was expected to result in a
completed sale within 12 months. Assets that are classified as held for
sale are not depreciated. Assets or disposal groups that are classified as
held for sale are measured at the lower of their carrying amount and fair
value less costs to sell.
Provisions
Provisions are recognised when the Group has a present obligation (legal
or constructive) as a result of a past event, it is probable that the Group
will be required to settle that obligation and a reliable estimate can be
made of the amount of the obligation. Provisions are measured at the
Directors’ best estimate of the expenditure required to settle the
obligation at the Balance Sheet date, taking into account the risks and
uncertainties (such as timing or amount) surrounding the obligation.
They are not discounted to present value if the effect is not material.
Provisions for restructuring are recognised when the Group has
a detailed formal plan for the restructuring and the plan has been
communicated to the affected parties. Provisions for the expected
cost for warranty obligations under local sale of goods legislation are
recognised at the date of sale of the relevant products.
Share-based payments
The Group applies the requirements of IFRS 2 Share-based payments.
The Group issues equity-settled share-based payments to certain
employees. The fair value (excluding the effect of non-market-related
conditions), as determined at the grant date, is expensed on a straight-line
basis over the vesting period, based on the Group’s estimate of the
number of shares that will eventually vest and adjusted for the effect
of non-market-related conditions.
Fair value is measured by use of a Black-Scholes model for the share
option plans, and a binomial model for the share awards under the 2014
Long-Term Incentive Plan.
The liability in respect of equity-settled amounts is included in Equity.
Critical accounting judgments
IAS 1 requires disclosure of the judgments Management makes when
applying its significant accounting policies and that have the most
significant effect on amounts that are recognised in the Group’s Financial
Statements. In the course of preparing the Financial Statements, no
significant critical judgments have been made in the process of applying
the Group’s accounting policies, other than leases and those involving
estimations, which are dealt with separately below. Management makes
other judgments in the normal course of conducting business, such as
those in relation to legal claims and contractual matters (see Note 24 for
further details).
Leases
Where a lease includes the option for an extension to the lease term,
Management makes a judgment as to whether they are reasonably
certain the option will be taken. This will take into account the length of
time remaining before the option is exercisable, current and forecasted
plans for utilising the asset and the level and type of planned future capital
investment. As at 31 December 2023, these extension options have an
approximate average remaining lease term of seven years. These
judgments are reassessed at each reporting period or when there is a
significant event affecting the lease, which could result in a recalculation
of the lease liability and a material adjustment to the associated balances.
Key sources of estimation and uncertainty
When applying the Group’s accounting policies, Management must make
assumptions and estimates concerning the future that affect the carrying
amounts of assets and liabilities at the Balance Sheet date and the
amounts of revenue and expenses recognised during the period.
2. Significant accounting policies continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
148 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Such assumptions are based upon factors including historical experience,
the observance of trends in the industries in which the Group operates,
and information available from the Group’s customers and other external
sources. The key sources of estimation and uncertainty at the Balance
Sheet date that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial
year and beyond include:
Income taxes
In determining the Group provisions for income tax and deferred tax,
it is necessary to consider transactions in a small number of key tax
jurisdictions for which the ultimate tax determination is uncertain. To the
extent that the final outcome differs from the tax that has been provided,
adjustments will be made to income tax and deferred tax provisions held in
the period the determination is made. The carrying amount of net current
tax liability and deferred tax asset at 31 December 2023 was £7.7m (2022
– £15.6m) and £13.7m (2022 – £6.2m), respectively. On 27th November
2023 the group implemented a series of steps to simplify the legal
ownership of its Americas legal entity holding structure. As part of the
exercise, provisions held for estimated uncertain tax positions around the
historical establishment of the Americas legal structure were reassessed.
As a result, in accordance with IAS 12 and IFRIC 23 (Uncertainty over
Income Tax Treatments), provisions for the uncertain tax positions of
£7.0m and associated interest of £3.5m have been released to the
Consolidated Income Statement during the year. The provisions released
include £3.8m tax and £1.0m interest that was previously recognised
through retained earnings on 1 January 2019 on the adoption of IFRIC 23
measurement criteria. Further details on these estimates are set out in
Notes 10 and 21.
Retirement benefits
Management makes assumptions and estimates, for the next financial
year and beyond, which affect the value of the carrying amount of the UK
Plan retirement benefit obligation at 31 December 2023. Management
follows actuarial advice from a third party when determining estimation
uncertainty on the valuation of the UK gross defined benefit obligation,
the significant assumptions being discount rate, inflation and life
expectancy (see Note 34). The carrying amount of the UK Plan’s
retirement benefits at 31 December 2023 was a surplus of £48.5m
(2022 – surplus of £51.8m), being the present value of the defined
benefit obligations of £199.2m (2022 – £198.4m) and fair value of plan
assets of £247.7m (2022 – £250.2m). Further details and sensitivities
from changes in estimates are set out in Note 34g.
Warranty
The warranty costs include a provision of £11.0m (2022 – £8.6m) related
to one specific disputed commercial matter. The range of reasonably
possible outcomes considered by the Board is £5.4m, which reflects a
reasonably possible increase or decrease of £2.7m. No further details on
the matter are disclosed to avoid prejudicing the contractual position.
Other estimates
The Board previously approved a restructuring plan that was initiated in
2019. In response to the pandemic, the Group implemented further cost
cutting actions which included asset write downs. In 2023, some residual
restructuring activity took place in response to further specific end market
conditions affecting some of the businesses. At 31 December 2023, a
provision of £0.5m (2022 – £0.2m) is recorded relating to committed
restructuring plans that have been communicated to those effected and
where the cash outflow is anticipated to occur in 2024. The restructuring
charges recorded in 2023 include impairments related to property, plant
and equipment and inventory where demand on specific programmes
has ceased or significantly decreased, and where there is no alternate
use. Management does not anticipate further material adjustments to
the restructuring provision recorded at 31 December 2023 over the next
financial year as the commitments are settled, subject to unforeseen
changes in market conditions.
Acquisition accounting (prior year)
On 25 November 2022, the Group acquired substantially all of the assets
of Spencer Aerospace Manufacturing, LLC, for total consideration of
$100m split between initial, deferred and contingent payments. Acquisition
accounting is no longer considered a key source of estimation uncertainty
given the fair value at acquisition date is an estimate related to the prior
year. As at 31 December 2023, a range of contingent consideration
estimated most likely outcome is disclosed in Note 31.
Consideration of climate change
In preparing the Financial Statements, the Directors have considered the
impact of climate change, particularly in the context of the risks identified
in the TCFD disclosure on pages 25 to 31. There has been no material
impact identified on the financial reporting judgements and estimates.
In particular, the Directors considered the impact of climate change in
respect of the following areas:
• Useful lives of assets – The useful lives of assets could be reduced
by climate-related matters, for example as a result of physical risks,
obsolescence or legal restrictions. The change in useful lives would
have a direct impact on the amount of depreciation or amortisation
recognised each year from the date of reassessment. The Directors’
review of useful lives has taken into consideration the impacts of the
Group’s net zero commitments and has not had a material impact on
the results for the year.
• Inventory valuation – Climate-related matters may affect the value of
inventories as they could become obsolete as a result of a decline in
selling prices or a reduction in demand. After consideration of the
typical inventory days compared to the rate of change in the market
the Directors consider that inventory is appropriately valued.
• Going concern and viability – risks identified in the TCFD disclosures in
pages 25 to 31 have been factored into the going concern and viability
assessment. See page 78 further details.
• Goodwill Impairment assessment – cash flow forecasts used in the
impairment assessment of goodwill have considered potential changes
in demand over the next 5 years as a result of changing customer
preferences on Senior’s products. This is not expected to have a
material impact on the cashflows, with longer term growth rates based
on forecasted market demand. Aerospace market rates were used for
the Aerospace CGU and long-term GDP rates for advanced economies
were used for the Flexonics CGU. Sensitivity analysis (See Note 13)
shows that a 1 percent decrease in growth rate would not result in the
carrying amount of CGU groups exceeding their recoverable amount.
• Recoverability of trade receivables – After consideration of the typical
receivable days compared to the rate of change in the market, the
Directors consider that receivables at 31 December 2023 are not
adversely affected by climate change.
• Valuation of the UK Plan retirement gross benefit obligation – there is no
material impact on key financial assumptions which are set according to
market yields. Mortality assumptions take account of current views of
possible climate pathways that may develop. Asset values are set
according to market valuations which incorporate market expectations
of climate impacts.
The Directors are aware of the ever-changing risks attached to climate
change and will regularly assess these risks against judgements and
estimates made in preparation of the Group’s Financial Statements.
2. Significant accounting policies continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
149SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
3. Revenue
Total revenue is disaggregated by market sectors as follows:
Year ended Year ended
2023 2022
£m £m
Civil Aerospace
410.5
339.4
Defence
132.6
122.1
Other
73.4
9 2.1
Aerospace
616.5
553.6
Land Vehicle
201.7
16 4.1
Power & Energy
146.3
131.5
Flexonics
348.0
295.6
Eliminations
(1.0)
(0.8)
Total revenue
963.5
848.4
Other Aerospace comprises space and non-military helicopters and
other markets, principally including semiconductor, medical, and
industrial applications.
The Group applies the practical expedient in paragraph 121 of IFRS 15 and
does not disclose information about remaining performance obligations
that have original expected durations of one year or less.
Applying the practical expedient in paragraph 94 of IFRS 15, the Group
recognises the incremental costs of obtaining contracts as an expense
when incurred if the amortisation period of the assets that the Group
otherwise would have recognised is one year or less.
Notes to the Consolidated
Financial Statements continued
4. Segment Information
The Group reports its segment information as two operating Divisions
according to the market segments they serve, Aerospace and Flexonics,
which is consistent with the oversight employed by the Executive
Committee. The chief operating decision-maker, as defined by IFRS 8,
is the Executive Committee. The Group is managed on the same basis,
as two operating Divisions.
The accounting policies of the reportable segments are the same as the
Group’s accounting policies described in Note 2 and the sales between
segments are carried out at arm’s length. Adjusted operating profit, as
described in Note 9, is the key measure reported to the Group’s Executive
Committee for the purpose of resource allocation and assessment of
segment performance. Finance income, finance costs and tax are not
allocated to segments, as this type of activity is driven by the central
tax and treasury functions.
Segment assets include directly attributable computer software assets,
property, plant and equipment (including right-of-use assets), working
capital assets, goodwill and intangible assets from acquisitions. Cash,
deferred and current tax and other financial assets (except for working
capital) are not allocated to segments for the purposes of reporting
financial performance to the Executive Committee.
Segment liabilities include directly attributable working capital liabilities
and lease liabilities. Debt, retirement benefits, deferred and current tax
and other financial liabilities (except for working capital) are not allocated
to segments for the purposes of reporting financial performance to the
Executive Committee.
Central costs, assets and liabilities are corporate items not allocated
to segments, which is consistent with the format used by the chief
operating decision-maker.
Segment information for revenue, operating profit and a reconciliation
to entity and profit after tax is presented below:
Eliminations/ Eliminations/
central central
Aerospace Flexonics costs Total Aerospace Flexonics costs Total
Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
2023 2023 2023 2023 2022 2022 2022 2022
Notes £m £m £m £m £m £m £m £m
External revenue
615.7
347.8
–
963.5
553.0
295.4
–
848.4
Inter-segment revenue
0.8
0.2
(1.0)
–
0.6
0.2
(0.8)
–
Total revenue
616.5
348.0
(1.0)
963.5
553.6
295.6
(0.8)
848.4
Adjusted trading profit
27.0
37.5
(19.7)
44.8
20.3
25.4
(17.6)
28.1
Share of joint venture profit
–
1.0
–
1.0
–
0.4
–
0.4
Adjusted operating profit
27.0
38.5
(19.7)
45.8
20.3
25.8
(17.6 )
28.5
Amortisation of intangible assets
from acquisitions
9
(2.2)
–
–
(2.2)
(0.2)
–
–
(0.2)
Net restructuring (cost)/income
9
(3.6)
(2.0)
–
(5.6)
4.2
–
–
4.2
Site relocation costs
9
–
(0.1)
–
(0.1)
–
–
–
–
Operating profit
21.2
36.4
(19.7)
37.9
24.3
25.8
(17.6)
32.5
Finance income
10.1
1.9
Finance costs
(20.5)
(10.6)
Corporate undertakings
9
(4.7)
(1.4)
Profit before tax
22.8
22.4
Tax
8.3
(2.2)
Profit after tax
31.1
20.2
Trading profit and adjusted trading profit is operating profit and adjusted operating profit respectively before share of joint venture profit. See Note 9 for
the derivation of adjusted operating profit.
FINANCIAL STATEMENTS /
150 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Segment information for assets, liabilities, additions to non-current assets and depreciation and amortisation is presented below:
Year ended Year ended
2023 2022
Assets £m £m
Aerospace
646.5
6 47. 8
Flexonics
215.4
217.3
Segment assets for reportable segments
861.9
865.1
Unallocated
Central
4.0
3.6
Cash
47.6
43.2
Deferred and current tax
23.0
13.0
Retirement benefits
48.5
51.8
Others
0.3
0.2
Total assets per Consolidated Balance Sheet
985.3
976.9
Year ended Year ended
2023 2022
Liabilities £m £m
Aerospace
18 3.1
189.5
Flexonics
79.9
79.7
Segment liabilities for reportable segments
263.0
269.2
Unallocated
Central
22.2
19.2
Debt
179.6
143.7
Deferred and current tax
17.0
22.4
Retirement benefits
8.0
12.1
Contingent/deferred consideration
29.0
52.3
Others
9.4
8.6
Total liabilities per Consolidated Balance Sheet
528.2
527.5
Additions to Additions to Depreciation Depreciation
non-current non-current and and
assets assets amortisation amortisation
Year ended Year ended Year ended Year ended
2023 2022 2023 2022
£m £m £m £m
Aerospace
24.4
18.6
38.2
35.9
Flexonics
12.6
13.5
13.0
13.4
Sub total
37.0
32.1
51.2
49.3
Central
0.9
0.4
0.5
0.5
Total
37.9
32.5
51.7
49.8
The Group’s revenues from its major products is presented below:
Year ended Year ended
2023 2022
£m £m
Aerospace – Structures
253.0
242.6
Aerospace – Fluid Systems
362.7
310.4
Aerospace total
615.7
553.0
Land vehicle
201.7
164.1
Power & Energy
146.1
131.3
Flexonics total
347.8
295.4
Group total
963.5
848.4
No individual customer accounted for more than 10% of external revenue in 2023 or 2022.
4. Segment Information continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
151SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Geographical information
The Groups’ operations are located principally in North America and UK.
The following table provides an analysis of the Group’s sales by geographical market, irrespective of the origin of the goods. The carrying values of
segment non-current assets are analysed by the geographical area in which the assets are located.
Segment Segment
Sales Sales non-current non-current
revenue revenue assets assets
Year ended Year ended Year ended Year ended
2023 2022 2023 2022
£m £m £m £m
USA
459.6
417.1
273.3
296.5
UK
156.8
140.6
157.1
158.8
Rest of the World
347.1
290.7
135.1
144.4
Sub total
963.5
848.4
565.5
599.7
Unallocated amounts
–
–
20.7
10.9
Total
963.5
848.4
586.2
610.6
The unallocated amounts on non-current assets relate to deferred tax assets.
5. Operating profit
Operating profit can be analysed as follows:
Year ended Year ended
2023 2022
£m £m
Revenue
963.5
848.4
Cost of sales
(789.5)
(698.7)
Gross profit
174.0
149.7
Distribution costs
(6.9)
(6.3)
Administrative expenses
(130.4)
(111.4)
Profit on sale of fixed assets
0.2
0.1
Share of joint venture profit
1.0
0.4
Operating profit
37.9
32.5
Operating profit for the period has been arrived at after charging:
Year ended Year ended
2023 2022
£m £m
Net foreign exchange losses
0.4
4.6
Research and design costs
20.0
19.8
Depreciation of property, plant and equipment
48.0
4 8.1
Amortisation of intangible assets included in administration expenses
3.7
1.7
Cost of inventories recognised as expense
789.5
698.7
Provision for loss allowance against receivables
0.4
1.5
Restructuring: provision charge/(release) for impairment of property, plant and equipment and inventories
3.2
(1.4)
Restructuring: staff and other costs
2.4
1.2
Aerospace manufacturing grant (income)
–
(4.0)
Staff costs are disclosed in Note 6. The majority of research and design costs incurred during the year have been expensed in line with Note 2 Group’s
accounting policies.
The analysis of the Auditor’s remuneration is as follows:
Year ended Year ended
2023 2022
£m £m
Fees payable to the Company’s Auditor and their associates for the audit of the Company’s annual accounts
0.6
0.5
Fees payable to the Company’s Auditor and their associates for other services to the Group
– The audit of the Company’s subsidiaries
1.7
1.7
Total audit fees
2.3
2.2
4. Segment Information continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
152 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Fees payable to Company’s Auditor and their associates for non-audit services to the Company are not required to be disclosed because the
Consolidated Financial Statements are required to disclose such fees on a consolidated basis.
The Group paid £0.06m (2022 – £0.06m) to the Company’s Auditor for audit related services and £nil (2022 – £nil) for non-audit related services during
2023, in line with the Company’s policy on the use of Auditors for non-audit services.
Details of the Company’s policy on the use of auditors for non-audit services, the reasons why the Auditor was used rather than another supplier and
how the Auditor’s independence and objectivity were safeguarded are set out in the Audit Committee Report on pages 100 to 105. No services were
provided pursuant to contingent fee arrangements.
6. Staff costs
The average monthly number of employees (including Directors) was:
Year ended Year ended
2023 2022
Number Number
Production
5,743
5,297
Distribution
85
64
Sales
260
249
Administration
539
495
Total
6,627
6,10
5
The actual number of employees at 31 December 2023 was 6,679 (2022 – 6,361).
Year ended Year ended
2023 2022
Notes £m £m
Their aggregate remuneration comprised:
Wages and salaries
261.3
234.7
Social security costs
31.8
26.9
Termination benefits
0.7
–
Other pension costs – defined contribution
34a
10.2
8.9
Other pension costs – defined benefit
34e
0.5
0.8
Share-based payments
33
4.1
4.3
Aggregate remuneration
308.6
275.6
The Group also incurred medical and other employee benefit expenses during the year of £23.4m (2022 – £24.6m).
7. Finance income
Year ended Year ended
2023 2022
£m £m
Interest on bank deposits and other finance income
4.5
0.7
Net finance income on retirement benefits
34e
2.1
1.2
Interest unwind on uncertain tax positions
10
3.5
–
Total income
10.1
1.9
5. Operating profit continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
153SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
8. Finance costs
Year ended Year ended
2023 2022
Notes £m £m
Interest on bank overdrafts and loans
9.8
2.0
Interest on other loans and other finance costs
4.9
5.8
Interest on lease liabilities
2.9
2.5
Interest unwind on acquistion consideration
9,31
2.9
0.3
Total finance costs
20.5
10.6
9. Adjusted operating profit and adjusted profit before tax
The presentation of adjusted operating profit and adjusted profit before tax measures, derived in accordance with the table below, has been included
to identify the performance of the Group prior to the impact of amortisation of intangible assets from acquisitions, net restructuring cost/income, site
relocation costs, and costs associated with corporate undertakings. The Board has a policy, which has been clarified in 2023, to separately disclose
items it considers are outside the normal course of management oversight and control on a day-to-day basis and are not reflective of in-year trading
performance. Indicative criteria such as period to which the item relates and external driven factors that are outside of the control of the Group in
combination with the magnitude and consistency of application are also considered.
The amortisation charge relates to the acquisition of Spencer Aerospace. It is charged on a straight-line basis and reflects a non-cash item for the
reported year. The Group implemented a restructuring programme in 2019, which continued into 2022 in response to the impact of the COVID-19
pandemic on some of the Group’s end markets. In 2023, some residual restructuring activity took place in response to further specific end market
conditions. Site relocation costs relate to transfer of business activities into new or existing cost competitive facilities to support the Group’s strategic
initiatives. Corporate undertakings relate to business acquisition and disposal activities. In the prior year, the aerospace manufacturing grant within net
restructuring income, represents incentives specific to only part of the Group for a limited time period. None of these charges are reflective of in year
performance. Therefore, they are excluded by the Board and Executive Committee when measuring the operating performance of the businesses.
Year ended Year ended
2023 2022
Notes
£m
£m
£m
£m
Operating profit
37.9
32.5
Amortisation of intangible assets from acquisitions
2.2
0.2
Net restructuring cost/(income)
5.6
(4.2)
Site relocation costs
0.1
–
Adjusted operating profit
45.8
28.5
Profit before tax
22.8
22.4
Adjustments to profit before tax as above
Corporate undertakings
4.7
7.9
1.4
(4.0)
Corporate undertakings – interest
2.9
0.3
Total Corporate undertakings
7.6
1.7
Adjusted profit before tax
38.3
20.1
Net restructuring costs/income
In 2020 the Group had focused on taking actions to conserve cash to manage through the pandemic, including curtailing capital expenditure, tightly
managing working capital and implementing further cost cutting actions. In 2023, some residual restructuring activity took place in response to further
specific end market conditions affecting some of the businesses. The Group has continued to review inventory and asset exposures on programmes
that have been reduced, cancelled or where the Group will no longer participate. As part of the restructuring focus, we have assessed critically any
inventory or asset exposures on these programmes and written down the carrying values on excess holdings and assets where there is no alternate
use.
The restructuring resulted in net cost of £5.6m (2022 – net income £4.2m; of which £4.0m related to an aerospace manufacturing grant). Of this,
£2.4m related to consultancy and other costs (2022 – £1.2m net charge). For certain specific programmes, and in conjunction with the continued
focus on restructuring, management also identified further inventory impairment of £2.0m where customer demand decreased (2022 – £2.7m
reversal reflected separate and specific demand increase), and impairment provisions on property, plant and equipment of £1.2m (2022 – £1.3m)
to cover the risk where there are no alternative uses.
Net cash outflow related to restructuring activities was £2.1m (2022 – £2.1m net cash inflow). At 31 December 2023, a restructuring provision of
£0.5m (31 December 2022 – £0.2m) was recognised and is expected to be utilised in 2024.
Site relocation costs
In 2023, £0.1m of site relocation costs have been incurred related to the initial costs of transferring our Senior Flexonics Crumlin business to a nearby
high-tech facility in Wales to better showcase its design, development, test and qualification capabilities in support of the Group’s strategic initiatives.
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
154 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Corporate undertakings
Costs associated with corporate undertakings were £7.6m (2022 – £1.7m), of which £1.5m acquisition costs (2022 – £1.2m) and £2.9m interest
unwind of deferred and contingent consideration (2022 – £0.3m) relate to the acquisition of Spencer Aerospace in November 2022 and £3.2m costs
are associated with potential disposal and other corporate activities (2022 – £0.2m). See Note 31 for further details on the financial impact of the
acquisition in 2023.
10. Taxation
Year ended Year ended
2023 2022
£m £m
Current tax:
Current year
10.7
8.2
Adjustments in respect of prior periods – Americas uncertain tax positions
(7.0)
–
Adjustments in respect of prior periods – other
(4.3)
(1.9)
(0.6)
6.3
Deferred tax (Note 21):
Current year
(5.8)
(3.5)
Adjustments in respect of prior periods
(1.9)
(0.6)
(7.7)
(4.1)
Total tax (credit)/charge
(8.3)
2.2
On 24th May 2021, a future increase in UK corporation tax rate from 19% to 25% was substantially enacted with an effective date of 1 April 2023.
Deferred tax assets and liabilities are measured at the rates that are expected to apply to the year when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been enacted or substantially enacted at the Balance Sheet date. The impact of the tax rate change to 25%
on deferred tax assets and liabilities has been reflected at the Balance Sheet date and this has resulted in a current year charge of £0.2m recognised in
the Income Statement and a credit of £0.1m through Other Comprehensive Income. Taxation for other jurisdictions is calculated at the rates prevailing
in the respective jurisdictions.
On 27th November 2023 the Group implemented a series of steps to simplify the legal ownership of its Americas legal entity holding structure.
As part of the exercise, provisions held for estimated uncertain tax positions around the historical establishment of the Americas legal structure were
reassessed. As a result, in accordance with IAS 12 and IFRIC 23 (Uncertainty over Income Tax Treatments), provisions for the uncertain tax positions
of £7.0m and associated interest of £3.5m have been released to the Consolidated Income Statement during the year. The provisions released
include £3.8m tax and £1.0m interest that was previously recognised through retained earnings on 1 January 2019 on the adoption of IFRIC 23
measurement criteria.
The OECD Pillar Two Globe Rules introduce a global minimum corporate tax rate, initially at 15%, applicable to multinational enterprise (MNE) groups
with global revenue over €750m. All participating OECD members are required to incorporate these rules into national legislation. On 20th June 2023
the UK substantially enacted legislation to apply Pillar Two Globe rules into UK law which will first apply to the Group from 1 January 2024. The Group
considers that the new rules are unlikely to have significant impact on its ETR in 2024 and future periods.
9. Adjusted operating profit and adjusted profit before tax continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
155SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
The total charge for the year can be reconciled to the profit before tax per the Consolidated Income Statement as follows:
Year ended Year ended Year ended Year ended
2023 2023 2022 2022
£m % £m %
Profit before tax
22.8
22.4
Expected tax charge at the UK standard corporation tax rate 23.5%/19.0%
5.4
4.3
Effect of different statutory rates in overseas jurisdictions
a
(0.4)
0.3
Tax incentives and credits
b
(1.9)
(1.2)
Tax losses not recognised
c
(0.3)
(0.4)
Impact of share options
d
(0.1)
0.2
Effect of difference in treatment of financing activities between jurisdictions
e
(0.1)
(0.4)
Non-deductible expenses and other permanent differences
f
1.9
1.5
Effect of changes in UK tax rate on deferred tax items
g
0.2
0.2
Withholding taxes
h
0.2
0.2
Adjustments in respect of prior periods – Americas uncertain tax positions
i
(7.0)
–
Adjustments in respect of prior periods – other current tax items
j
(4.3)
(1.9)
Adjustments in respect of prior periods – deferred tax items
k
(1.9)
(0.6)
Tax (credit)/charge and effective tax rate for the year
(8.3)
(36.4%)
2.2
9.8%
a. Attributable to profit mix at both higher and lower rates of taxes in different jurisdictions.
b Includes a £1.6m benefit from enhanced US R&D deductions and the UK capital allowance super-deduction.
c. Includes tax losses utilised on which deferred tax was not recognised due to uncertainty around their use (£0.1m) and prior year tax losses recognised in the year (£0.2m).
d. Impact of non-tax deductible share-based payment charges net of current tax deductions for share exercises in the year and the deferred tax asset recognition for
future exercises.
e. Effect of different rates of tax between jurisdictions on internal financing activities.
f. Non-deductible expenses and other permanent differences includes £1.6m charge in respect of uncertain tax positions in accordance with IFRIC 23 principles.
g. Relates to the Income Statement impact of the retranslation of UK deferred tax assets and liabilities following the substantial enactment of the future 25% tax rate effective from
1 April 2023.
h. Arises from irrecoverable withholding taxes.
i. Release of £7.0m Americas restructuring provisions during the year in accordance with IFRIC 23 measurement criteria principles.
j. Includes a credit in respect of the uncertain tax positions which have been resolved, settled or released in accordance with IFRIC 23 principles of £2.4m as well as prior year
items arising from the true up of tax accruals in line with local tax filings which in many cases have an equal and opposite prior year item in deferred tax.
k. Arises from the true-up of deferred tax estimates following the finalisation of entity statutory accounts and local tax returns.
10. Taxation continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
156 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
In addition to the amount charged to the Consolidated Income Statement, the following amounts relating to tax have been recognised directly in other
comprehensive income:
2023 2022
£m £m
Deferred tax:
Items that will not be reclassified subsequently to profit and loss:
Tax on actuarial items
0.5
4.3
Effect of change in UK tax rate
0.1
1.4
Items that may be reclassified subsequently to profit or loss:
Tax on foreign exchange contracts – cash flow hedges
(0.9)
0.7
Total tax (charge)/credit recognised directly in other comprehensive income
(0.3)
6.4
In addition to the amount charged to the Consolidated Income Statement and Other Comprehensive Income, the following amounts relating to tax
have been recognised directly in equity:
Year ended Year ended
2023 2022
£m £m
Deferred tax:
Excess tax deductions related to share-based payments in exercised options
0.9
–
Total tax credit recognised directly in equity
0.9
–
Deferred tax (Note 21)
0.6
6.4
11. Dividends
Year ended Year ended
2023 2022
£m £m
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2022 of 1.00p per share (2021 – £nil)
4.1
–
Interim dividend for the year ended 31 December 2023 of 0.60p per share (2022 – 0.30p)
2.5
1.2
6.6
1.2
Proposed final dividend for the year ended 31 December 2023 of 1 .70p per share (2022 – 1.00p)
7.0
4.1
12. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Year ended Year ended
2023 2022
Number of shares Million Million
Weighted average number of ordinary shares for the purposes of basic earnings per share
413.3
415.3
Effect of dilutive potential ordinary shares:
Share options
11.7
11.6
Weighted average number of ordinary shares for the purposes of diluted earnings per share
425.0
426.9
10. Taxation continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
157SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Year ended 2023
Year ended 2022
Earnings EPS Earnings EPS
Earnings and earnings per share
Notes
£m pence £m pence
Profit for the period
31.1
7.52
20.2
4.86
Adjust:
Amortisation of intangible assets from acquisitions net of
tax of £0.6m (2022 – £nil)
1.6
0.39
0.2
0.05
Net restructuring cost/(income) net of tax of £1.5m (2022 – £0.7m)
9
4.1
0.99
(3.5)
(0.84)
Site relocation costs net of tax of £0.1m (2022 – £nil)
9
–
–
–
–
Corporate undertakings net of tax of £1.9m (2022 – £0.5m)
5.7
1.38
1.2
0.29
Adjusted earnings after tax
42.5
10.28
18.1
4.36
Earnings per share
– basic
7.52p
4.86p
– diluted
7.32p
4.73p
– adjusted
10.28p
4.36p
– adjusted and diluted
10.00p
4.24p
The denominators used for all basic, diluted and adjusted earnings per share are as detailed in the table above.
The presentation of adjusted earnings per share, derived in accordance with the table above, has been included to identify the performance of
the Group prior to the impact of amortisation of intangible assets from acquisitions, net restructuring cost/income, site relocation costs, and costs
associated with corporate undertakings. The Board has a policy, which has been clarified in 2023, to separately disclose items it considers are outside
the normal course of management oversight and control on a day-to-day basis and are not reflective of in-year trading performance. Indicative criteria
such as period to which the item relates and external driven factors that are outside of the control of the Group in combination with the magnitude and
consistency of application are also considered. See Note 9 for further details.
13. Goodwill
Year ended Year ended
2023 2022
Notes £m £m
Cost
At 1 January
360.4
308.5
Corporate undertakings
31
–
42.0
Exchange differences
(7.4)
9.9
At 31 December
353.0
360.4
Accumulated impairment losses
At 1 January
160.7
158.3
Exchange differences
(1.0)
2.4
At 31 December
159.7
160.7
Carrying amount at 31 December
193.3
199.7
In 2023, goodwill has decreased by £6.4m due to net foreign exchange difference. In 2022, goodwill increased by £49.5m, of which £42.0m related to
the acquisition of Spencer Aerospace, with £7.5m net foreign exchange differences.
Goodwill is allocated to the group of CGUs (CGU groups) namely Aerospace and Flexonics, reflecting the lowest level at which management exercises
oversight and monitors the Group’s performance. The table below highlights the carrying amount of goodwill allocated to these CGU groups, all of
which are considered significant in comparison with the total carrying amount of goodwill.
Year ended Year ended
2023 2022
£m £m
Aerospace
139.0
143.6
Flexonics
54.3
56.1
Total
193.3
199.7
The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. The timing of the annual
assessment at 30 September 2023 coincided with the Board’s review of the most recent financial strategy. Management applied the value in use
methodology to assess impairment. The key assumptions on which the value in use calculations were based relate to business performance over the
next five years, long-term growth rates beyond 2028 and the discount rates applied. The discount rates were pre-tax measures based on the rate of
10-year government bonds issued in the relevant market and in the same currency as the cash flows, adjusted for a risk premium to reflect both the
12. Earnings per share continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
158 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
increased risk of investing in equities generally and the systematic risk of the CGU group. The key estimates were the level of revenue and operating
margins anticipated and the proportion of operating profit converted into cash flow in each year, long-term growth rates and discount rates applied.
The forecast compound annual growth rate in revenue from 2023 to 2028 was 8% (2022 – 2022 to 2027 was 8%), reflecting continued market
recovery post COVID-19 pandemic.
Forecasts used in the cash flow were based on the most recent financial strategy, as approved by Management for the next five years to 2028. These
estimates up to 2028, where appropriate, take account of the current economic environment as set out in the Strategic Report on pages 1 to 79.
Cash flows after 2028 have been extrapolated based on estimated long-term growth rates into perpetuity, which has been determined by the lower
of the long-term market growth rates and the historical forecast compound annual growth in revenue to 2028. For Aerospace, the long-term market
growth rate is 3.8% per annum (2022 – 3.7%), which does not exceed the long-term average growth rate forecast for the aerospace market as
included in market outlooks from Boeing and Airbus. For Flexonics, the long-term market growth rate is 1.6% per annum (2022 – 1.5%), which is
based on the world long-term forecast GDP growth for advanced economies.
The pre-tax discount rates applied to discount the pre-tax cash flows for Aerospace and Flexonics are 11.6% and 12.3% respectively (2022 – 10.9%
and 13.7%); these discount rates include CGU group specific risk adjustments which are the measurements used by Management in assessing
investment appraisals specific to each CGU group.
Sensitivities reflecting reasonable possible changes have also been considered in individuality for each CGU group in relation to the value in use
calculations: Revenue was reduced by 10 percentage points in the terminal value, operating margins were reduced by 1 percentage point in the
terminal value, the proportion of operating profit converted into cash flow was reduced by 5 percentage points in the terminal value, the long-term
growth rate assumption was reduced by 1 percentage point and the discount rate was increased by 1 percentage point. This did not result in the
carrying amount of the CGU groups exceeding their recoverable amount.
Further to the 30 September 2023 annual impairment test, the Board considered whether there were any triggering events as at the 31 December
2023 reporting date. The Board concluded that the market factors considered as at 30 September were largely unchanged and remained relevant
for the year end reporting date, with no new triggers identified for impairment.
14. Other intangible assets
Computer
software
Intangible assets from acquisitions
and others
Total
Qualified Customer Order Fully
parts list relationships backlog amortised Total
Year ended Year ended Year ended Year ended Year ended Year ended Year ended
2023 2023 2023 2023 2023 2023 2023
Year ended 31 December 2023 £m £m £m £m £m £m £m
Cost
At 1 January
24.0
6.5
0.5
126.3
157.3
25.3
182.6
Additions
–
–
–
–
–
2.2
2.2
Acquired on acquisition
–
–
–
–
–
–
–
Disposals
–
–
–
–
–
(0.1)
(0.1)
Restructuring impairment and disposal
–
–
–
–
–
–
–
Reclassification
–
–
(0.5)
0.5
–
–
–
Exchange differences
(1.2)
(0.3)
–
(4.4)
(5.9)
(1.0)
(6.9)
At 31 December
22.8
6.2
–
122.4
151.4
26.4
177.8
Amortisation
At 1 January
0.2
–
–
126.3
126.5
19.9
146.4
Charge for the year
1.3
0.4
0.5
–
2.2
1.5
3.7
Disposals
–
–
–
–
–
(0.1)
(0.1)
Restructuring impairment and disposal
–
–
–
–
–
–
–
Reclassification
–
–
(0.5)
0.5
–
–
–
Exchange differences
(0.1)
–
–
(4.4)
(4.5)
(0.8)
(5.3)
At 31 December
1.4
0.4
–
122.4
124.2
20.5
144.7
Carrying amount at 31 December
21.4
5.8
–
–
27.2
5.9
33.1
Intangible assets from acquisitions are being amortised over following periods; qualified parts 18 years and 1 month, customer relationships 16 years
and 1 month and order backlogs 1 year and 1 month.
13. Goodwill continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
159SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Computer
software
Intangible assets from acquisitions
and others
Total
Qualified Customer Order Fully
parts list relationships backlog amortised Total
Year ended Year ended Year ended Year ended Year ended Year ended Year ended
2022 2022 2022 2022 2022 2022 2022
Year ended 31 December 2022 £m £m £m £m £m £m £m
Cost
At 1 January
–
–
–
117.5
117.5
22.8
140.3
Additions
–
1.8
1.8
Acquired on acquisition
24.0
6.5
0.5
–
31.0
–
31.0
Disposals
–
–
–
–
–
(1.2)
(1.2)
Restructuring impairment and disposal
–
–
–
–
–
(0.4)
(0.4)
Reclassification
–
–
–
–
–
0.6
0.6
Exchange differences
–
–
–
8.8
8.8
1.7
10.5
At 31 December
24.0
6.5
0.5
126.3
157.3
25.3
182.6
Amortisation
At 1 January
–
–
–
117.5
117.5
18.6
13 6.1
Charge for the year
0.2
–
–
–
0.2
1.5
1.7
Disposals
–
–
–
–
–
(1.2)
(1.2)
Restructuring impairment and disposal
–
–
–
–
–
(0.4)
(0.4)
Reclassification
–
–
–
–
–
–
–
Exchange differences
–
–
–
8.8
8.8
1.4
10.2
At 31 December
0.2
–
–
126.3
126.5
19.9
146.4
Carrying amount at 31 December
23.8
6.5
0.5
–
30.8
5.4
36.2
Intangible assets from acquisitions are being amortised over following periods; qualified parts 18 years and 1 month, customer relationships 16 years
and 1 month and order backlogs 1 year and 1 month.
14. Other intangible assets continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
160 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
15. Investment in joint venture
The Group has a 49% interest in Senior Flexonics Technologies (Wuhan) Limited, a jointly controlled entity incorporated in China, which was set up in
2012. Senior Flexonics Technologies (Wuhan) Limited is a precision manufacturer of automotive components.
The results of the joint venture are accounted for using equity accounting.
The Group’s investment of £5.1m represents the Group’s share of the joint venture’s net assets as at 31 December 2023 (2022 – £4.4m). The following
amounts represent the aggregate amounts relating to the revenue and expenses and assets and liabilities of Senior Flexonics Technologies (Wuhan)
Limited for the years ended 31 December 2023 and December 2022.
2023 2022
£m £m
Revenue
10.1
7.0
Expenses
(8.0)
(6.2)
Profit
2.1
0.8
Total assets
13.1
11.5
Total liabilities
(2.6)
(2.6)
Net assets
10.5
8.9
Group’s share of profit
1.0
0.4
Group’s share of net assets
5.1
4.4
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
161SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
16. Property, plant and equipment
Leasehold Right-of- Right-of- Leasehold Right-of- Right-of-
Freehold building Plant use use Freehold building Plant use use
land and improve- and Land and Plant and land and improve- and Land and Plant and
buildings ments equipment Buildings equipment Total buildings ments equipment Buildings equipment Total
Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
2023 2023 2023 2023 2023 2023 2022 2022 2022 2022 2022 2022
£m £m £m £m £m £m £m £m £m £m £m £m
Cost or
valuation
At 1 January
113.0
8.3
570.2
99.1
9.3
799.9
104.6
4.5
518.8
88.2
6.5
722.6
Additions
2.0
0.4
31.3
–
1.9
35.6
1.2
0.3
27.2
0.8
1.2
30.7
Acquired
on acquisition
–
–
–
–
–
–
–
–
1.1
2.6
2.1
5.8
Lease
Modifications
–
–
–
5.6
0.4
6.0
–
–
–
2.7
(0.5)
2.2
Exchange
differences
(4.5)
(0.3)
(25.9)
(5.2)
(0.3)
(36.2)
9.4
0.5
46.2
6.3
0.5
62.9
Disposals
–
(0.2)
(8.4)
(1.3)
(2.6)
(12.5)
(0.3)
–
(11.2)
(1.5)
(0.5)
(13.5)
Reclassification
0.2
–
(1.1)
0.1
–
(0.8)
–
3.0
(6.7)
–
–
(3.7)
Restructuring
impairment
and disposal
–
–
(2.2)
–
–
(2.2)
(1.9)
–
(5.2)
–
–
(7.1)
At 31 December
110.7
8.2
563.9
98.3
8.7
789.8
113 .0
8.3
570.2
99.1
9.3
799.9
Accumulated
depreciation
and impairment
At 1 January
40.6
5.4
409.1
32.9
4.7
492.7
36.3
3.5
360.9
23.6
3.7
428.0
Charge for
the year
2.4
0.3
34.8
9.0
1.5
48.0
2.6
0.3
34.9
8.7
1.6
4 8 .1
Lease
Modifications
–
–
–
–
–
–
–
–
–
0.3
(0.4)
(0.1)
Exchange
differences
(1.7)
(0.2)
(18.6)
(1.6)
(0.1)
(22.2)
3.9
0.5
32.2
1.8
0.3
38.7
Eliminated
on disposals
–
(0.2)
(7.9)
(1.3)
(2.6)
(12.0)
(0.3)
–
(10.8)
(1.5)
(0.5)
(13.1)
Reclassification
0.1
–
(0.6)
0.3
(0.2)
(0.4)
–
1.1
(4.2)
–
–
(3.1)
Restructuring
impairment
and disposal
–
–
(1.0)
–
–
(1.0)
(1.9)
–
(3.9)
–
–
(5.8)
At 31 December
41.4
5.3
415.8
39.3
3.3
505.1
40.6
5.4
40 9.1
32.9
4.7
492.7
Carrying
amount at
31 December
69.3
2.9
148.1
59.0
5.4
284.7
72.4
2.9
161.1
66.2
4.6
307.2
As part of the restructuring programme, £1.2m (2022 – £1.3m) of property, plant and equipment has been impaired in 2023, of which £0.6m relates to
Aerospace and £0.6m relates to Flexonics. The recoverable amount of the assets was determined based on value-in-use for assets with confirmed
orders, or fair value less costs to sell, where assets are to be disposed.
At 31 December 2023, the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to £4.0m
(2022 – £1.9m).
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
162 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
17. Inventories
Year ended Year ended
2023 2022
£m £m
Raw materials
86.5
7 7.5
Work-in-progress
84.6
80.6
Finished goods
36.4
36.2
Total
207.5
194.3
Inventory write-downs recognised as an expense in 2023 were £8.9m (2022 – £1.9m releases), after charges of £2.0m (2022 – £2.7m releases)
relating to restructuring (see Note 9).
18. Trade and other receivables
Trade and other receivables at 31 December comprise the following:
Year ended Year ended
2023 2022
£m £m
Non-current assets
Foreign exchange contracts
0.6
0.3
Other receivables
0.2
0.1
0.8
0.4
Current assets
Trade receivables
124.9
110.6
Value added tax
3.4
2.9
Foreign exchange contracts
2.0
2.4
Prepayments
11.2
10.7
Other receivables
0.2
0.1
141.7
126.7
Total trade and other receivables
142.5
127.1
Credit risk
The Group’s principal financial assets are bank balances and cash and trade receivables. The credit risk on liquid funds and derivative financial
instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the Consolidated Balance Sheet are net of loss
allowances. There are no other credit or impairment losses for other classes of financial assets.
Further disclosures on credit risk are included in Note 20.
The average credit period taken on sales of goods is 58 days (2022 – 55 days). An allowance has been made for estimated irrecoverable amounts from
the sale of goods of £2.3m (2022 – £3.3m). In determining the recoverability of trade receivables, the Group considers any change in the credit quality
of the trade receivable from the date credit was initially granted up to the reporting date. At 31 December 2023, the carrying amount of the receivable
from the Group’s most significant customer was £6.7m (2022 – £8.3m from the same customer). The Group has no other significant concentration of
credit risk, with exposure spread over a large number of counterparties and customers. Accordingly, the Directors believe that there is no further credit
provision risk in excess of the loss allowance.
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
163SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Expected credit loss
Year ended Year ended
2023 2022
£m £m
Movements in loss allowance:
At 1 January
3.3
2.0
Provision for impairment
0.4
1.5
Amounts written off as uncollectible
(0.7)
(0.2)
Amounts recovered
(0.6)
(0.2)
Exchange differences
(0.1)
0.2
At 31 December
2.3
3.3
Ageing analysis of past due, net of loss allowance:
Up to 30 days past due
13.2
10.4
31 to 60 days past due
3.5
3.0
61 to 90 days past due
1.9
1.5
91 to 180 days past due
1.7
1.9
Total past due, net of loss allowance
20.3
16.8
Not past due
104.6
93.8
Total current trade receivables
124.9
110.6
There are no items past due in any other class of financial assets except for trade receivables.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value. The maximum exposure to credit risk at
the reporting date is the fair value of each class of receivable above. The Group does not hold any collateral as security.
19. Bank overdrafts and loans
Year ended Year ended
2023 2022
£m £m
Bank overdrafts
1.8
0.5
Bank loans
55.9
17.4
Other loans
121.9
125.8
179.6
143.7
The borrowings are repayable as follows:
On demand or within one year
1.8
0.5
In the second year
78.0
–
In the third to fifth years inclusive
99.8
118. 5
After five years
–
24.7
179.6
143.7
Less: amount due for settlement within 12 months (shown under current liabilities)
(1.8)
(0.5)
Amount due for settlement after 12 months
177.8
143.2
At 31 December 2023, bank loans of £57.0m are drawn and there are £1.1m of capitalised revolving credit facility transaction costs. At 31 December
2022, bank loans of £18.6m were drawn and there were £1.2m of capitalised revolving credit facility transaction costs.
18. Trade and other receivables continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
164 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Analysis of borrowings by currency
Pound US
Total Sterling Euros Dollars Others
31 December 2023 £m £m £m £m £m
Bank overdrafts
1.8
–
0.8
–
1.0
Bank loans
55.9
15.9
–
40.0
–
Other loans
121.9
27.0
24.2
70.7
–
179.6
42.9
25.0
110.7
1.0
Pound US
Total Sterling Euros Dollars Others
31 December 2022 £m £m £m £m £m
Bank overdrafts
0.5
–
0.5
–
–
Bank loans
17. 4
(1.2)
–
18.6
–
Other loans
125.8
26.9
24.7
74.2
–
143.7
25.7
25.2
92.8
–
The weighted average interest rates paid were as follows:
Year ended Year ended
2023 2022
% %
Bank loans and overdrafts
6.42
3.64
Other loans
3.09
3.07
Bank loans and overdrafts of £58.8m (2022 – £19.1m) are arranged at floating rates, thus exposing the Group to cash flow interest rate risk. Other
borrowings are mainly arranged at fixed interest rates and expose the Group to fair value interest rate risk. No interest rate swaps were taken out in
2022 or 2023.
The Directors estimate the fair value of the Group’s borrowings to be as follows:
Year ended Year ended
2023 2022
£m £m
Bank loans and overdrafts
57.7
17.9
Other loans
115.5
116. 3
173.2
134.2
The fair value of Other loans has been determined by applying a make-whole calculation using the prevailing treasury bill yields plus the applicable
credit spread for the Group (level 2 of the fair value hierarchy as defined in Note 20).
The other principal features of the Group’s borrowings are as follows:
Bank overdrafts are repayable on demand. The effective interest rates on bank overdrafts are determined based on SONIA, SOFR and appropriate
LIBOR rates plus applicable margins.
The Group’s main loans are unsecured guaranteed loan notes in the US private placement market and revolving credit facilities.
a) Loan notes of €28m, 2023 £24.3m (2022 – £24.8m) were taken out in January 2017, carry interest at the rate of 1.51% and mature on 1 February
2027.
b) Loan notes of $60m, 2023 £47.3m (2022 – £49.6m) were taken out in October 2015 and are due for repayment in October 2025. The loan notes
carry interest at the rate of 3.75% per annum.
c) Loan notes of £27m were drawn down in January 2018, carry interest at a rate of 2.35% and are due for repayment in January 2025.
d) Loan notes of $30m, 2023 £23.6m (2022 – £24.8m) were taken out in September 2018, carry interest at the rate of 4.18% and are due for
repayment in September 2028.
Transaction costs of £0.3m, directly attributable to the Euro notes (£0.1m) and the US Dollar notes (£0.2m), have been deducted from their
carrying value.
New private placement loan notes of $50m (£39.4m) were issued in February 2024. The loan notes were also drawn down in February 2024, carry an
interest rate of 6.26% and are due for repayment in February 2030.
The Group also has two revolving credit facilities.
19. Bank overdrafts and loans continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
165SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
A committed multi-currency revolving credit facility in the UK of £115m (2022 – £115m) was extended in November 2023 and matures in November
2027. At 31 December 2023, £53.2m was outstanding under the £115m facility, comprising $46.0m (£36.2m) and £17.0m. At 31 December 2022,
£16.5m was outstanding under the £115m facility, comprising $20m.
A committed $50m single bank (£39.4m) loans and letter of credit facility matures in June 2025. There were $4.9m (£3.8m) loans with reference to
Term SOFR which are drawn under the facility on 31 December 2023 and $2.6m (£2.1m) loans drawn on 31 December 2022 and there were letters
of outstanding credit of $2.7m (£2.2m) (2022 – £2.6m).
As at 31 December 2023, the Group had available £95.1m (2022 – £135.1m) of undrawn committed borrowing facilities in respect of which all
conditions precedent had been met. The weighted average maturity of the Group’s committed facilities at 31 December is 2.9 years (2022 –
3.5 years). The current weighted average maturity of the Group’s facilities, updated for the February 2024 loan notes of $50m, is 3.2 years.
20. Financial instruments
Capital risk management
The Group manages its capital structure to safeguard its ability to continue as a going concern whilst maximising the return to stakeholders through
the optimisation of the balance between debt and equity. In considering the appropriate level of net debt, the Group pays close attention to its level
as compared to the cash generation potential of the Group, measured by EBITDA (defined in the Notes to the Financial Headlines). The Group also
monitors capital on the basis of a gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is derived in Note 32c. Lease
liabilities are excluded from net debt in calculating the gearing ratio. Total capital is the equity shown in the Consolidated Balance Sheet.
The Group’s strategy in respect of gearing is to target a long-term gearing ratio within the range of 30% to 60%. The gearing ratio for the Group at the
end of 2023 was 29% (2022 – 22%).
All of the Group’s external borrowing facilities at 31 December 2023 have a requirement for the ratio of net debt to EBITDA to be less than 3.0x (US
Private Placements) or 3.5x (UK RCF and US RCF). IFRS 16 does not impact the Group’s lending covenants as these are currently based on frozen
GAAP, hence figures quoted below exclude the impact of IFRS 16 on net debt, interest and EBITDA. As required by the covenant definition, net debt
is restated using 12-month average exchange rates (consistent with EBITDA definition).
The Group has two covenants for committed borrowing facilities, which are tested at June and December: the Group’s net debt to EBITDA (defined in
the Notes to the Financial Headlines) must not exceed 3.0x and interest cover, the ratio of EBITDA to interest must be higher than 3.5x.
At 31 December 2023, the Group’s net debt to EBITDA was 1.60x (31 December 2022 – 1.47x) and interest cover was 12.6x (31 December 2022 –
9.4x), both comfortably within the covenants limits.
Financial risk management
The Group’s activities expose it to a variety of financial risks including foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Group’s
overall treasury risk management programme focuses on the unpredictability of financial markets, and seeks to minimise potential adverse effects on
the Group’s financial performance.
The Group uses derivative financial instruments to hedge certain risk exposures. The use of financial derivatives is governed by the Group’s policies
approved by the Board, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and
non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the Group’s
Treasury Committee on a regular basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for
speculative purposes.
Foreign exchange risk management
The Group enters into forward foreign exchange contracts to hedge the exchange risk arising on the operations’ trading activities in foreign currencies.
Where commented on below, the sensitivity analysis of the Group’s exposure to foreign currency risk at the reporting date has been determined based
on the change taking place at the beginning of the financial year and left unchanged throughout the reporting period, with all other variables held
constant (such as interest rates). The sensitivity assumptions are based on analysis reviewed by the Group’s Treasury Committee.
Translation risk
The Group derived 83% of its revenue from businesses outside the United Kingdom, with 59% relating to operations in North America. Fluctuations
in the value of the US Dollar and other currencies in relation to Pound Sterling have had, and may continue to have, a significant impact on the results
of the Group’s operations when reported in Pound Sterling. The Group decided not to hedge this translation risk. In addition, the majority of assets are
denominated in foreign currency, particularly in US Dollars. In order to provide a hedge against volatility in the value of these assets compared to the
Group’s loss/earnings, and hence provide a natural hedge against the Group’s principal lending covenant (the ratio of net debt to EBITDA), the Group
aims to borrow in foreign currencies in similar proportions to its generation of foreign currency EBITDA, where practical and economic. A 10%
appreciation (or depreciation) of all other currencies against the Pound Sterling would have increased (or decreased) 2023 Group adjusted operating
profit by £5.1m (£3.5m of which would have been due to the US Dollar movement) and would have increased (or decreased) equity by £32.1m
(£20.0m of which would have been due to the US Dollar movement).
19. Bank overdrafts and loans continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
166 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Notes to the Consolidated
Financial Statements continued
Transaction risk
The Group has a number of transaction-related foreign currency exposures, particularly between the US Dollar and the Pound Sterling, Thai Baht and
Malaysian Ringgit. The Group seeks to hedge between 0% to 100% of transaction-related exposures mainly on a rolling 15 to 18-month forward basis,
but in some cases for periods of up to 60 months and applies hedge accounting where the forwards can be designated in a qualifying cash flow hedge
relationship. Based on the net of the annual sales and purchase-related exposures, all transaction-related foreign currency exposures to Group profit
after hedging in existence at 31 December 2023 are immaterial. The impact on equity is determined by the unrecognised portion of open forward
contracts at the year-end. A 10% appreciation (or depreciation) of the US Dollar against the Pound Sterling, Thai Baht and the Malaysian Ringgit
would have decreased (or increased) equity by £0.4m, £1.8m and £1.1m, respectively.
Interest rate risk management
The Group has a policy of maintaining approximately 60% of its borrowing costs at fixed interest rates. The Group generally borrows long-term in
fixed rates but at times may borrow at floating rates and swap into fixed depending on credit market conditions. Occasionally a portion of fixed debt
interest is swapped into floating rates. The combination of maintaining an acceptable balance of fixed and floating rate debt, and the Group’s policy of
borrowing in foreign currency in proportion to its generation of foreign currency earnings, provides an effective hedge against the impact of interest
rate and foreign currency volatility on total interest costs. As at year end 2023, the percentage of debt at fixed interest was 68% (2022 – 87%),
excluding IFRS 16 lease liabilities from debt.
The following sensitivity analysis of the Group’s exposure to interest rate risk in 2023 has been retrospectively determined based on the exposure
to applicable interest rates on financial assets and liabilities held throughout the financial year, with all other variables held constant (such as foreign
exchange rates). The sensitivity assumptions are based on analysis reviewed by the Group’s Treasury Committee. If variable interest rates had been
0.5% lower (or higher), the Group’s profit before tax would have increased (or decreased) by £0.4m. Any fixed interest debt is held to maturity and not
fair value adjusted through the Consolidated Income Statement. An increase (or decrease) of 0.5% in the market interest rate for the fixed rate debt
held up to maturity would have decreased (or increased) the fair value of the Group’s borrowings by £1.3m. The Group’s sensitivity to interest rates
has remained broadly consistent with prior period due to the high proportion of fixed debt.
Credit risk management
The Group’s credit risk is primarily attributable to its trade receivables. The credit quality of customers is assessed taking into account their financial
position, past experience and other factors. Further details on determining the recoverability of trade receivables is provided in Note 18. The Group is
guarantor under one lease of a current subsidiary entity in the UK. Credit risk on liquid funds and derivative financial instruments is limited because the
counterparties are financial institutions with high credit ratings assigned by international credit rating agencies. The carrying amount of financial assets
recorded in the Financial Statements, which is net of impairment losses, represents the Group’s maximum exposure to credit risk.
The Group participates in some non-recourse reverse factoring schemes which are arranged by customers. These are a form of non-recourse factoring
that are common practice within the aerospace sector and with large customers in the Flexonics Division. In a reverse factoring scheme, a financial
counterparty commits to pay supplier invoices ahead of due date in exchange for a discount interest charge. It is a funding solution initiated by the
customer to provide the supplier with an alternative financing arrangement. The Group participates in reverse factoring schemes as a way of reducing
credit risk. The trade receivables reverse factored at 31 December 2023 were £29.1m (2022 – £24.9m). The net impact of reverse factoring on 2023
was a cash inflow in working capital of £5.5m (2022 – £6.2m inflow) and the discount interest presented within other finance costs is a charge of
£0.8m in 2023 (2022 – £0.6m).
Liquidity risk management
Liquidity risk reflects the risk that the Group will have insufficient resources to meet its financial liabilities as they fall due. The Group manages liquidity
risk by maintaining adequate reserves, banking facilities and revolving credit facilities, by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities. Cash flow forecasts are produced monthly, together with appropriate capacity planning
and scenario analysis, to ensure that bank covenant and liquidity targets will be met. The Directors also regularly assess the balance of capital and debt
funding of the Group, as part of a process to satisfy the Group’s long-term strategic funding requirements.
As noted in the Financial Review on pages 74 to 77, the Group is currently in a well-funded position, with significant headroom under its committed
borrowing facilities. It is considered unlikely that the Group will face any significant funding issues in the foreseeable future.
20. Financial instruments continued
FINANCIAL STATEMENTS /
167SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Notes to the Consolidated
Financial Statements continued
Categories of financial instruments
Year ended Year ended
2023 2022
£m £m
Carrying value of financial assets:
Cash and cash equivalents
47.6
43.2
Trade receivables
124.9
110.6
Other receivables
0.4
0.2
Financial assets at amortised cost
172.9
154.0
Foreign exchange contracts – cash flow hedges
2.5
2.5
Foreign exchange contracts – held for trading
0.1
0.2
Total financial assets
175.5
156.7
Carrying value of financial liabilities:
Bank overdrafts and loans
179.6
143.7
Lease liabilities
71.8
78.4
Trade payables
102 .1
103.4
Deferred consideration
–
23.4
Other payables
67.8
65.1
Financial liabilities at amortised cost
421.3
414.0
Contingent Consideration – fair value through profit or loss
29.0
28.9
Foreign exchange contracts – cash flow hedges
4.1
8.5
Foreign exchange contracts – held for trading
0.1
0.1
Total financial liabilities
454.5
451.5
Undiscounted contractual maturity of financial liabilities at amortised cost:
Amounts payable:
On demand or within one year
191.8
228.9
In the second to fifth years inclusive
234.5
14 9.1
After five years
46.7
81.5
473.0
459.5
Less: future finance charges
(51.7)
(45.5)
Financial liabilities at amortised cost
421.3
414.0
The contingent consideration which is potentially payable in less than 1 year and also more than one year but less than five years has a gross value at
31 December 2023 of $40m (£31.5m) and a discounted value of $36.9m (£29.0m). At 31 December 2022 the gross value was $40m (£33.1m) and a
discounted value was $35m (£28.9m).
The carrying amount is a reasonable approximation of fair value for the financial assets and liabilities, excluding leases, noted above except for bank
overdrafts and loans, disclosure of which are included within Note 19.
An ageing analysis of trade receivables is disclosed within Note 18.
20. Financial instruments continued
FINANCIAL STATEMENTS /
168 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
20. Financial instruments continued
Forward foreign exchange contracts
The Group enters into forward foreign exchange contracts to hedge the exchange risk arising on the operation’s trading activities in foreign currencies
in accordance with the Group’s accounting policy as set out in Note 2. At 31 December 2023, total notional amounts and fair values of outstanding
forward foreign exchange contracts that the Group have committed are given below:
Year ended Year ended
2023 2022
£m £m
Notional amounts:
Foreign exchange contracts – cash flow hedges
157.2
159.4
Foreign exchange contracts – held for trading
7.0
0.5
Total
164.2
159.9
Less: amounts maturing within 12 months
(111.4)
(99.4)
Amounts maturing after 12 months
52.8
60.5
Contractual maturity:
Cash flow hedges balances due within one year:
Outflow
(105.6)
(101.5)
Inflow
105.8
99.9
Cash flow hedges balances due between one and two years:
Outflow
(23.8)
(22.9)
Inflow
23.0
22.0
Cash flow hedges balances due between two and five years:
Outflow
(30.9)
(42.5)
Inflow
30.0
38.6
Held for trading balances due within one year:
Outflow
(6.9)
(0.5)
Inflow
6.9
0.5
Fair values:
Foreign exchange contracts – cash flow hedges
(1.6)
(6.0)
Foreign exchange contracts – held for trading
–
0.1
Total liability
(1.6)
(5.9)
These fair values are based on market values of equivalent instruments at the Balance Sheet date, comprising £2.6m (2022 – £2.7m) assets included
in trade and other receivables and £4.2m (2022 – £8.6m) liabilities included in trade and other payables. The fair value of currency derivatives that are
designated and effective as cash flow hedges amounting to £1.3m loss (2022 – £4.9m loss) has been deferred in equity.
Fair values
The following table presents an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels
1–3 based on the degree to which the fair value is observable:
Level 1 those fair values derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 those fair values derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 those fair values derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
There has not been any transfer of assets or liabilities between levels. There are no non-recurring fair value measurements. Level 2 fair values are
derived from future cash flows, of open forward contracts at 31 December, translated by the difference between contractual rates and observable
forward exchange rates.
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
169SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
20. Financial instruments continued
Level 1 Level 2 Level 3 Total
31 December 2023 £m £m £m £m
Assets
Foreign exchange contracts – cash flow hedges
–
2.5
–
2.5
Foreign exchange contracts – held for trading
–
0.1
–
0.1
Total assets
–
2.6
–
2.6
Liabilities
Contingent Consideration – fair value through profit or loss
–
–
29.0
29.0
Foreign exchange contracts – cash flow hedges
–
4.1
–
4.1
Foreign exchange contracts – held for trading
–
0.1
–
0.1
Total liabilities
–
4.2
29.0
33.2
Level 1 Level 2 Level 3 Total
31 December 2022 £m £m £m £m
Assets
Foreign exchange contracts – cash flow hedges
–
2.5
–
2.5
Foreign exchange contracts – held for trading
–
0.2
–
0.2
Total assets
–
2.7
–
2.7
Liabilities
Contingent Consideration – fair value through profit or loss
–
–
28.9
28.9
Foreign exchange contracts – cash flow hedges
–
8.5
–
8.5
Foreign exchange contracts – held for trading
–
0.1
–
0.1
Total liabilities
–
8.6
28.9
37.5
An amount of £0.7m gain (2022 – £0.8m loss) has been transferred to the Consolidated Income Statement, and is included within operating profit.
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure
that an economic relationship exists between the hedged item and hedging instrument. The Group enters into hedge relationships where the critical
terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed. If
changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the
hedging instrument, the Group uses the hypothetical derivative method to assess effectiveness.
Ineffectiveness is recognised on a cash flow hedge where the cumulative change in the designated component value of the hedging instrument
exceeds on an absolute basis the change in value of the hedged item attributable to the hedged risk. In hedges of the above foreign exchange
contracts this may arise if the timing of the transaction changes from what was originally estimated.
The hedged forecast transactions denominated in foreign currency are expected to occur at various dates during the next 60 months. Amounts
deferred in equity are recognised in the Consolidated Income Statement in the same period in which the hedged items affect profit or loss, which
is generally within 12 months from the Balance Sheet date.
In 2022 and 2023 some cash flow hedging relationships were discontinued because forecast foreign currency transactions were no longer highly
probable and no longer expected to occur. Previously accumulated gains or losses on the forward contracts were immediately reclassified to the
income statement. These forward contracts, and the forward contracts entered to unwind the position, that remained at 31 December 2022 and
31 December 2023 were presented in the balance sheet as held for trading assets.
The fair value of contingent consideration is based on the expected present value technique, using risk-adjusted discount rate to discount probability
weighted cashflows.
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
170 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
21. Tax balance sheet
Current tax
The current tax receivable of £2.3m (2022 – £2.1m) includes excess tax paid to tax authorities that is expected to be recovered within 12 months by
way of offset against future tax liabilities or refund.
The majority of the Group’s taxable profits arise in countries, including the US, where the estimated tax liabilities are paid in on-account instalments
during the year to which they relate and are largely paid at the Balance Sheet date. The current tax liability of £10.0m (2022 – £17.7m) includes £2.3m
(2022 – £1.5m) tax due on profits of the current and prior years as well as £7.7m (2022 – £16.2m) provisions for tax uncertainties that represent
amounts expected to be paid but by their nature, there is uncertainty over timing and eventual settlement. During the year provisions totalling £7.0m in
respect of historical Americas uncertain tax positions were released as well as other net releases of £0.8m. Amounts receivable of £nil (2022 – £2.8m)
that are considered to have a right of offset against provisions for tax uncertainties are also included within the current tax liability.
The Group recognises provisions for tax items which are considered to have a range of possible tax outcomes and separately accounts for interest that
may be due thereon. These uncertainties exist due to a number of factors including differing interpretations of local tax laws and the determination of
appropriate arm’s length pricing in accordance with OECD transfer pricing principles on internal transactions and financing arrangements. In calculating
the carrying amount of provisions, Management estimates the tax which could become payable as a result of differing interpretations and decisions by
tax authorities in respect of transactions and events whose treatment for tax purposes is uncertain. In accordance with IFRIC 23, individual provisions
are established based on an assessment of whether it is the most likely individual outcome, or the expected outcome on a probability basis that is
likely to best reflect the resolution of the uncertainty. The range of reasonably possible outcomes considered by the Board is not expected to increase
the provision by a material amount.
Deferred tax liabilities and assets
The following are the deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior reporting period:
Accelerated Unrealised Goodwill and Other
tax FX intangible Retirement R&D Tax temporary
depreciation gains amortisation benefits tax credits losses differences Total
£m £m £m £m £m £m £m £m
At 1 January 2022
(13.2)
0.4
(5.6)
(15.6)
5.8
4.6
18.8
(4.8)
(Charge)/credit to Consolidated
Income Statement
(2.6)
–
(1.4)
(0.6)
(3.1)
0.3
11.5
4.1
(Charge)/credit to other
comprehensive income
–
0.7
–
5.7
–
–
–
6.4
(Charge)/credit direct to equity
–
–
–
–
–
–
–
–
Exchange differences
(1.7)
–
(0.7)
0.3
–
(0.7)
3.3
0.5
At 1 January 2023
(17.5)
1.1
(7.7)
(10.2)
2.7
4.2
33.6
6.2
(Charge)/credit to Consolidated
Income Statement
(2.3)
0.1
(0.7)
(0.4)
(1.9)
(0.7)
13.6
7.7
(Charge)/credit to other
comprehensive income
–
(0.9)
–
0.6
–
–
–
(0.3)
(Charge)/credit direct to equity
–
–
–
–
–
–
0.9
0.9
Exchange differences
1.1
–
0.4
(0.1)
–
(0.1)
(2.1)
(0.8)
Asset/(liability) at
31 December 2023
(18.7)
0.3
(8.0)
(10.1)
0.8
3.4
46.0
13.7
Other temporary differences include assets in the US of £17.3m (2022 – £15.6m) in respect of inventory provisions, accruals and other expenses
where tax relief is only available when items are realised or paid as well other timing differences for interest costs of £4.9m (2022 – £2.3m) and R&D
expenditure expected to be deductible in future periods of £10.5m (2022 – £4.8m). Also included are assets held in respect of IFRS16 of £1.9m (2022
– £1.9m) and share-based compensation £3.7m (2022 – £1.9m).
The deferred tax liability in respect of retirement benefits relates primarily to the Senior plc UK defined benefit pension plan £12.0m (2022 – £12.9m),
net of deferred tax assets on other schemes.
UK deferred tax assets and liabilities at the Balance Sheet date have been stated at the future rate of UK corporation tax of 25% at which assets are
expected to be realised or liabilities settled. This has resulted in an overall increase in the net deferred tax liability at 31 December 2023 of £0.4m.
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances, after offset:
Year ended Year ended
2023 2022
£m £m
Deferred tax assets
20.7
10.9
Deferred tax liabilities
(7.0)
(4.7)
13.7
6.2
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
171SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available, including those arising from the reversal
of other taxable temporary differences, against which the assets can be utilised.
At the Balance sheet date the Group has recognised deferred tax assets in respect of losses of £3.4m (2022 – £4.2m), including £1.6m (2022 – £3.1m)
recognised against deferred tax liabilities and £1.8m (2022 – £1.1m) recognised based on anticipated profits in the Group’s five year forecast to 2028 as
approved by the Board.
Due to uncertainty as to the availability of future profits against which tax losses may be utilised, £23.1m (2022 – £24.0m) of losses have not been
recognised. Included in unrecognised tax losses are losses of £13.2m (2022 – £12.2m) that will expire over a period of one to nine years. Other losses
may be carried forward indefinitely.
At the Balance Sheet date, a deferred tax liability of £0.3m (2022 – £0.2m) has been recognised in respect of the aggregate amount of temporary
differences associated with undistributed earnings of subsidiaries expected to reverse in the foreseeable future. No temporary difference has been
recognised in respect of £28.0m (2022 – £35.1m) of undistributed earnings, which may be subject to a withholding tax, as the Group is in a position to
control the timing of the reversal of the temporary differences and it is not probable that such differences will reverse in the foreseeable future.
At the Balance Sheet date, the Group had £5.0m (2022 – £5.0m) of surplus Advanced Corporation Tax (‘ACT’), previously written off, for which no
deferred tax asset has been recognised as it is unlikely to be recovered in the foreseeable future due to the UK earnings profile. The Group also has
£18.0m (2022 – £18.0m) of unused capital losses.
22. Lease liabilities
When measuring lease liabilities, the Group discounts lease payments using incremental borrowing rates, determined on a lease portfolio basis.
Year ended Year ended
2023 2022
Undiscounted contractual maturity of lease liabilities: £m £m
Amounts payable:
On demand or within one year
12.7
12.9
In the second to fifth years inclusive
37.7
3 8.1
After five years
46.7
55.7
97.1
106.7
Less: future finance charges
(25.3)
(28.3)
Lease liabilities
71.8
78.4
Year ended Year ended
2023 2022
Amounts recognised in the Consolidated Income Statement: £m £m
Interest on lease liabilities
2.9
2.5
Income from sub-leasing right-of-use assets
–
(0.1)
Expenses relating to short-term leases
0.1
0.1
3.0
2.5
Year ended Year ended
2023 2022
Amounts recognised in the Consolidated Cash Flow Statement £m £m
Cash outflow for leases
13.1
11.6
Notes to the Consolidated
Financial Statements continued
21. Tax balance sheet continued
FINANCIAL STATEMENTS /
172 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
23. Trade and other payables
Trade and other payables at 31 December comprise the following:
Year ended Year ended
2023 2022
£m £m
Current liabilities
Trade payables
102 .1
103.4
Social security and PAYE
5.2
4.8
Value added tax
1.3
1.6
Foreign exchange contracts
2.1
3.9
Accrued expenses
77.7
77.5
Total trade and other payables
188.4
191.2
Foreign exchange contracts of £2.1m (2022 – £4.7m) and advance payments of £4.9m (2022 – £1.0m) is included in Others, under Non-current
liabilities on the Consolidated Balance Sheet.
The Directors consider that the carrying amount of trade payables approximates to their fair value.
The average credit period taken for trade purchases is 58 days (2022 – 63 days).
24. Provisions
Legal claims
and contractual
Warranty Restructuring matters Total
£m £m £m £m
At 1 January 2022
6.9
1.3
7.8
16.0
Additional provision in the year
3.7
1.2
6.2
11.1
Utilisation of provision
(0.1)
(2.3)
(2.5)
(4.9)
Release of unused amounts
(0.3)
–
(3.3)
(3.6)
Exchange differences
0.6
–
0.4
1.0
At 1 January 2023
10.8
0.2
8.6
19.6
Additional provision in the year
4.4
2.4
4.4
11.2
Reclassification
4.8
–
(4.8)
–
Utilisation of provision
(1.3)
(2.1)
(0.1)
(3.5)
Release of unused amounts
(0.3)
–
(0.9)
(1.2)
Exchange differences
(0.5)
–
(0.1)
(0.6)
At 31 December 2023
17.9
0.5
7.1
25.5
Included in current liabilities
3.0
0.5
7.0
10.5
Warranty
Provisions for warranty costs are based on an assessment of future claims with reference to past experience. £3.0m of costs are expected to
settle within the next 12 months. The warranty costs include a provision of £11.0m related to one specific disputed commercial matter. In 2022,
this provision was £8.6m, of which £4.8m was recorded in Legal claims and contractual matters and subsequently reclassified to Warranty in 2023
following a review of the overall nature of the matter. The range of reasonably possible outcomes considered by the Board is £5.4m, which reflects
a reasonably possible increase or decrease of £2.7m. No further details on the matter are disclosed to avoid prejudicing the contractual position.
Restructuring
The Group continued to implement further restructuring in 2023, discussed in further detail in Note 9. The amount recorded is expected to be fully
utilised in 2024.
Legal claims and contractual matters
Provisions at 31 December 2023 comprise £7.1m (2022- £8.6m, of which £4.8m was subsequently reclassified to Warranty in 2023 as explained
above) relating to contractual matters that have arisen in the ordinary course of business, the settlement of which are subject to ongoing discussions.
Management exercises judgment to determine the best estimate of the most likely outcome, having considered each provision separately and the
possible range of outcomes. Amounts are recorded for known issues based on past experience of similar items and other known factors and
circumstances. As with any judgment there is a high degree of inherent uncertainty, particularly with legal proceedings and claims, and the actual
amounts of the settlement could differ from the amount provided.
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
173SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
25. Share capital
Year ended Year ended
2023 2022
£m £m
Issued and fully paid:
419.4 million ordinary shares of 10p each
41.9
41.9
No shares were issued during 2023 and 2022.
The Company has one class of ordinary shares which carry no right to fixed income.
26. Share premium account
Year ended Year ended
2023 2022
£m £m
Balance at 1 January
14.8
14.8
Movement in year
–
–
Balance at 31 December
14.8
14.8
27. Equity reserve
Year ended Year ended
2023 2022
£m £m
Balance at 1 January
6.4
5.8
Transfer to retained earnings reserve
(2.6)
(3.7)
Movement in year
4.1
4.3
Balance at 31 December
7.9
6.4
The transfer to retained earnings reserve is in respect of equity-settled share-based payments that vested during the year.
The movement in the year of £4.1m (2022 – £4.3m) is in respect of the share-based payment charge for the year.
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
174 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Notes to the Consolidated
Financial Statements continued
28. Hedging and translation reserves
Hedging Translation Hedging Translation
reserve reserve Total reserve reserve Total
Year ended Year ended Year ended Year ended Year ended Year ended
2023 2023 2023 2022 2022 2022
£m £m £m £m £m £m
Balance at 1 January
(38.8)
90.3
51.5
(37. 2)
65.8
28.6
Exchange differences on translation of overseas operations
–
(16.9)
(16.9)
–
24.5
24.5
Change in fair value of hedging derivatives
3.6
–
3.6
(2.3)
–
(2.3)
Tax on foreign exchange contracts – cash flow hedges
(0.9)
–
(0.9)
0.7
–
0.7
Balance at 31 December
(36.1)
73.4
37.3
(38.8)
90.3
51.5
Hedging Reserve
At 31 December 2023, the hedging reserve comprises net investment hedging losses of £35.2m (2022 – £35.2m), foreign exchange contracts – cash
flow hedge losses of £1.3m (2022 – £4.9m) and related tax gains of £0.4m (2022 – £1.3m).
Movement in fair value of foreign exchange contracts – cash flow hedges:
Derivatives at Derivatives at Derivatives at Derivatives at
fair value fair value fair value fair value
through through through through
Hedging Income Hedging Income
Reserve Statement Total Reserve Statement Total
Year ended Year ended Year ended Year ended Year ended Year ended
2023 2023 2023 2022 2022 2022
£m £m £m £m £m £m
Balance at 1 January
(4.9)
(1.0)
(5.9)
(2.6)
(0.2)
(2.8)
Fair value movement recognised in Hedging reserve
2.7
–
2.7
(4.5)
–
(4.5)
Fair value movement recognised in Income Statement
–
1.6
1.6
–
1.4
1.4
Fair value movement recognised in Hedging reserve
and Income Statement
0.9
(0.9)
–
2.2
(2.2)
–
Balance at 31 December
(1.3)
(0.3)
(1.6)
(4.9)
(1.0)
(5.9)
The Group uses foreign currency forward contracts to manage its foreign currency risk associated with its highly probable forecast transactions. These
contracts are designated as cash flow hedge relationships. To the extent these hedges are effective, the change in fair value of the hedging instrument
is recognised in the hedging reserve. The sum of the fair value of foreign exchange contracts deferred in the hedging reserve and recognised in the
Income Statement is presented as foreign exchange contracts – cash flow hedges. See Note 20 for further details.
Costs of Hedging
The group designates the forward component of foreign currency forward contracts as hedging instruments in cash flow hedge relationships .
29. Retained earnings
Year ended Year ended
2023 2022
£m £m
Balance at 1 January
346.5
343.2
Dividends paid
(6.6)
(1.2)
Profit for the year
31.1
20.2
Pension actuarial loss
(2.6)
(23.1)
Transfer from equity reserve
2.6
3.7
Transfer from own share reserve
(4.5)
(2.0)
Tax on deductible temporary differences
1.5
5.7
Balance at 31 December
368.0
346.5
FINANCIAL STATEMENTS /
175SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Notes to the Consolidated
Financial Statements continued
30. Own shares
Year ended Year ended
2023 2022
£m £m
Balance at 1 January
(11.7)
(9.2)
Transfer to retained earnings reserve
4.5
2.0
Purchase of new shares
(5.6)
(4.5)
Balance at 31 December
(12.8)
(11.7)
The own shares reserve represents the cost of shares purchased in the market and held by the Senior plc Employee Benefit Trust to satisfy options
under the Group’s share option schemes (see Note 33).
At 31 December 2023, the number of own shares held by the Senior Plc Employee Benefit Trust is 6,758,973 (2022 – 5,716,834).
31. Acquisition and disposal activities
Acquisition of Spencer Aerospace Manufacturing, LLC
On 25 November 2022, the Group acquired substantially all of the assets of Spencer Aerospace Manufacturing, LLC, a leading manufacturer of highly
engineered, high-pressure hydraulic fluid fittings for use in commercial and military aerospace applications, located in Valencia, California, USA. This
acquisition enhances Senior’s industry leading fluid conveyance capabilities and is an important step in our strategy to optimise our portfolio and
maximise value for shareholders.
The initial consideration was $30m (£24.8m) paid in cash at completion, with a net working capital adjustment of $0.2m (£0.2m), of which
$0.6m (£0.5m) was paid in cash initially and $0.4m (£0.3m) cash adjustment was received in January 2023. A further $30m (£24.2m) was paid
in November 2023. Additionally, there is contingent consideration of $40m (£29.0m) potentially payable, in milestone amounts, dependent on the
financial performance of Spencer Aerospace during the period between completion and 31 December 2026. The most likely range of this contingent
element is estimated between $30m and $40m. The fair value of contingent consideration assumes expanding the relationship with Spencer’s
established customers and leveraging Senior’s strong relationships with OEMs, Tier 1 integrators and after market customers around the world
to exploit opportunities for Spencer Aerospace.
In 2023, £1.5m costs (2022 – £1.2m) were incurred related to the acquisition.
The movement of deferred and contingent consideration payable since acquisition date is shown below:
Year ended Year ended
2023 2022
£m £m
Balance at 1 January
52.0
–
Consideration payable on acquisition
–
76.9
Cash paid net of working capital received/paid
(23.9)
(25.3)
Interest unwind charged to the Income Statement
2.9
0.3
Effect of movements in exchange rates
(2.0)
0.1
Balance at 31 December
29.0
52.0
Amounts falling due within one year
10.5
23.4
Amounts falling due after one year
18.5
28.9
Deferred and contingent consideration at 31 December
29.0
52.3
Working capital receivable at 31 December
–
(0.3)
Also in 2023, £3.2m costs associated with potential disposal and other corporate activities were incurred (2022 – £0.2m).
FINANCIAL STATEMENTS /
176 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
32. Notes to the consolidated cash flow statement
A) Reconciliation of operating profit to net cash from operating activities
Year ended Year ended
2023 2022
£m £m
Operating profit
37.9
32.5
Adjustments for:
Depreciation of property, plant and equipment
48.0
4 8.1
Amortisation of intangible assets
3.7
1.7
Profit on sale of fixed assets
(0.2)
(0.1)
Share-based payment charges
4.1
4.3
Pension contributions
(1.4)
(2.9)
Pension service and running costs
1.3
1.5
Corporate undertaking costs
(1.9)
(1.4)
Share of joint venture
(1.0)
(0.4)
Increase in inventories
(21.7)
(34.2)
Increase in receivables
(20.4)
(18.8)
Increase in payables and provisions
16.8
37.5
Restructuring impairment of property, plant and equipment and software
1.2
1.3
US pension settlement
(0.9)
–
Working capital and provisions currency movements
(1.3)
1.8
Cash generated by operations
64.2
70.9
Income taxes paid
(5.6)
(3.5)
Interest paid
(17.2)
(9.7)
Net cash from operating activities
41.4
57.7
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
177SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
B) Free cash flow
Free cash flow, a non-statutory item, enhances the reporting of the cash-generating ability of the Group prior to corporate activity such as acquisitions,
restructuring, disposal activities, financing and transactions with shareholders. It is used as a performance measure by the Board and Executive
Committee and is derived as follows:
Year ended Year ended
2023 2022
Notes £m £m
Net cash from operating activities
41.4
57.7
Corporate undertaking costs
9
1.9
1.4
Net Restructuring cash paid/(received)
2.1
(2.1)
Site relocation costs
0.1
–
US pension settlement cash paid
0.9
–
Interest received
4.3
0.7
Proceeds on disposal of property, plant and equipment
0.7
0.5
Purchases of property, plant and equipment
(33.7)
(28.7)
Purchase of intangible assets
(2.2)
(1.8)
Free cash flow
15.5
27.7
C) Analysis of net debt
At Net Other At
1 January Cash Exchange Lease 31 December
2023 flow movement Movements 2023
Notes £m £m £m £m £m
Cash and bank balances
43.2
5.5
(1.1)
–
47.6
Overdrafts
(0.5)
(1.3)
–
–
(1.8)
Cash and cash equivalents
42.7
4.2
(1.1)
–
45.8
Debt due within one year
–
–
–
–
–
Debt due after one year
(143.2)
(39.9)
5.3
–
(177.8)
Lease liabilities
22
(78.4)
10.2
4.3
(7.9)
(71.8)
Liabilities arising from financing activities
(221.6)
(29.7)
9.6
(7.9)
(249.6)
Total
(178.9)
(25.5)
8.5
(7.9)
(203.8)
(1)
(1) The change in lease liabilities in the year ended 31 December 2023 includes lease rental payments of £13.1m (£2.9m of these payments relates to lease interest),
£4.3m exchange movement and £7.9m other movements which are related to lease additions and modifications.
At Net Other At
1 January Cash Exchange Lease 31 December
2022 flow movement Movements 2022
Notes £m £m £m £m £m
Cash and bank balances
51.1
(10.8)
2.9
–
43.2
Overdrafts
–
(0.5)
–
–
(0.5)
Cash and cash equivalents
51.1
(11.3)
2.9
–
42.7
Debt due within one year
(14.8)
17.2
(2.4)
–
–
Debt due after one year
(116.2)
(17.6)
(9.4)
–
(143.2)
Lease liabilities
22
(73.2)
9.1
(5.3)
(9.0)
(78.4)
Liabilities arising from financing activities
(204.2)
8.7
(17.1)
(9.0)
(221.6)
Total
(153.1)
(2.6)
(14.2)
(9.0)
(178.9)
(2)
(2) The change in lease liabilities in the year ended 31 December 2022 includes lease rental payments of £11.6m (£2.5m of these payments relates to lease interest),
£5.3m exchange movement and £9.0m other movements, which comprise £4.3m related to lease additions and modifications and £4.7m related to lease acquired on
acquisition.
32. Notes to the consolidated cash flow statement continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
178 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
32. Notes to the consolidated cash flow statement continued
Year ended Year ended
2023 2022
£m £m
Cash and cash equivalents comprise:
Cash and bank balances
47.6
43.2
Overdrafts
(1.8)
(0.5)
Total
45.8
42.7
Cash and cash equivalents (which are presented as a single class of assets on the face of the Consolidated Balance Sheet) comprise cash at bank and
other short-term highly liquid investments with a maturity of three months or less. The Directors consider that the carrying amount of cash and cash
equivalents approximates to their fair value.
D) Analysis of working capital and provisions
Working capital comprises the following:
Year ended Year ended
2023 2022
£m £m
Inventories
207.5
194.3
Trade and other receivables
141.7
126.7
Trade and other payables
(188.4)
(191.2)
Working capital, including derivatives
160.8
129.8
Items excluded:
Foreign exchange contracts
0.1
1.5
Total
160.9
131.3
Working capital and provisions movement, net of restructuring items, a non-statutory cash flow item, is derived as follows:
Year ended Year ended
2023 2022
£m £m
Increase in inventories
(21.7)
(34.2)
Increase in receivables
(20.4)
(18.8)
Increase in payables and provisions
16.8
37.5
Working capital and provisions movement, excluding currency effects
(25.3)
(15.5)
Items excluded:
(Increase)/decrease in restructuring related inventory impairment
(2.0)
2.7
(Increase)/decrease in net restructuring provision and other receivables
(0.3)
0.7
Total
(27.6)
(12.1)
33. Share-based payments
The Group recognised total expenses of £4.7m (2022 – £4.6m) related to share-based payments, of which £4.1m (2022 – £4.3m) related to equity-
settled share-based payments, and £0.6m (2022 – £0.3m) related to social security costs on share-based payments. As at 31 December 2023, the
Group had a liability of £1.1m (2022 – £0.6m) arising from share-based payments relating to social security costs.
A) 2014 Long-Term Incentive Plan
Equity-settled Long-Term Incentive Plans
On 14 March 2023, 5,159,842 shares were awarded under the 2014 Long-Term Incentive Plan. Awards made under this plan have a three-year
vesting period, and are subject to the following equally weighted performance conditions: adjusted earnings per share (EPS), total shareholder return
(TSR), and for awards granted from 2021, there is also a return on capital employed (ROCE) performance condition. The adjusted EPS and ROCE
performance conditions’ targets are expressed as absolute numbers for the final financial year of the three-year performance period. The threshold
of the TSR performance condition requires the Company’s TSR performance to fall within the top half of a comparator group at the end of the
three-year performance period. Vesting levels increase with higher performance. The awards are settled by delivering shares to the participants.
The estimated fair value for the awards granted in the year, excluding for the Executive Directors, with EPS and ROCE conditions is 157.00p,
which is the share price at the date of grant. The estimated fair value for the awards granted in the year, excluding for the Executive Directors, with
TSR conditions is 117.70p per share reflecting an adjustment of 33% to the fair value of the awards with EPS conditions due to the stringent TSR
condition. The respective fair values for awards made to the Executive Directors is 128.70p and 96.50p reflecting the two year retention period.
These fair values were calculated by applying a binomial option pricing model. This model incorporates a technique called “bootstrapping”, which
models the impact of the TSR condition. The model inputs at the date of grant were the share price (157.00p for the main award), expected volatility
of 60% per annum, and the performance conditions as noted above. Expected volatility was determined by calculating the historical volatility of the
Group’s share price over the previous three years.
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
179SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
33. Share-based payments continued
The following share awards were outstanding as at 31 December 2023 and 2022:
Year ended Year ended
2023 2022
Number of Number of
shares shares
Outstanding at 1 January
11,038,212
9,434,241
Granted
5,159,842
4,307,035
Exercised
–
–
Forfeited
(3,060,946)
(2,703,064)
Outstanding at 31 December
13,137,108
11,038,212
B) Enhanced SMIS Deferred Share Award
On 14 March 2023, 1,248,825 shares were awarded under the Enhanced SMIS Deferred Share Award. Shares earned under this award have a
three-year deferral period and would be subject to forfeiture by a “bad leaver” over that deferral period. There are no performance criteria for this
award. The awards are settled by delivering shares to the participants.
The estimated fair value for the awards granted in the year is 157.00p per share, which is the share price at the date of grant.
The following share awards were outstanding as at 31 December 2023 and 2022:
Year ended Year ended
2023 2022
Number of Number of
shares shares
Outstanding at 1 January
2,542,363
2,003,691
Granted
1,250,446
1,353,612
Exercised
(657,5 84)
(677,193)
Forfeited
–
(137,747)
Outstanding at 31 December
3,135,225
2,542,363
C) Savings-Related Share Option Plan
The Company operates a Savings-Related Share Option Plan for eligible employees across the Group. There are no performance criteria for this
arrangement and options are issued to all participants in accordance with the HM Revenue & Customs rules for such savings plans. Savings-Related
Share Options were last issued on 5 May 2023.
The following options were outstanding as at 31 December 2023 and 2022::
Year ended 2023
Year ended 2022
Weighted Weighted
Number of average Number of average
share exercise share exercise
options price options price
Outstanding at 1 January
2,956,614
124.90p
4,253,504
144.61p
Granted
2
,737,
69 5
156.30p
–
–
Exercised
(6,315)
118.40p
(1,905)
118 .4 0 p
Forfeited
(745,004)
149.06p
(545,138)
148.81p
Expired
–
–
(749,847)
219.30p
Outstanding at 31 December
4,942,990
138.66p
2,956,614
124.90p
Exercisable at 31 December
–
–
190,580
219.30p
6,315 shares were exercised in 2023 (2022 – 1,905 shares). The options outstanding at 31 December 2023 had exercise prices of 156.30p and
118.40p per share, and a weighted average remaining contractual life of 2.0 years. The options outstanding at 31 December 2022 had exercise
prices of 118.40p and 219.30p per share, and a weighted average remaining contractual life of 1.8 years.
D) Restricted Share Awards
On 14 March 2023, 245,000 shares were awarded under this plan. Shares granted under this award have a three-year deferral period and would be
subject to forfeiture by a “bad leaver” over that deferral period. There are no performance criteria for this award. The awards are settled by delivering
shares to the participants.
The estimated fair value for the awards granted in the year is 157.00p per share, which is the share price at the date of grant.
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
180 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
The following share awards were outstanding as at 31 December 2023 and 2022:
Year ended Year ended
2023 2022
Number of Number of
shares shares
Outstanding at 1 January
1,823,950
1,930,115
Granted
245,000
205,000
Exercised
(1,528,950)
(60,000)
Forfeited
–
(251,16
5)
Outstanding at 31 December
540,000
1,823,950
34. Retirement benefit schemes
The Group operates a number of pension plans in the UK, North America and Europe. These include both defined contribution arrangements and
defined benefit arrangements. The Senior plc Pension Plan (“the UK Plan”), which is a funded scheme in the UK and closed to future accrual at the
end of 6 April 2014, has the largest pension obligation in the Group and Company. This plan provides benefits based on final pensionable emoluments
for the employees of the Group and Company. The latest full actuarial valuation was carried out as at 5 April 2022 and, for the purposes of accounting
under IAS19, this valuation has been rolled forward to 31 December 2023.
In addition, the Group operates two defined benefit plans in the US, one of which was fully settled following a combination of lump sum payments and
annuity purchase. A net expense of £nil (2022 – £nil), comprising £0.3m settlement gain offset by £0.3m associated professional fees, was recognised
as an adjusting item to operating profit, and cash outflow of £0.9m (see Note 32b) was recorded in relation to this settlement. The second plan was
closed to future participants from September 2013, and the Executive section was also closed to future accruals from December 2013. Separate
disclosure is made for the funded UK and US defined benefit arrangements. In both the UK and US, the assets of funded plans are held in separate
trustee administered funds managed by independent financial institutions and have pension costs assessed by consulting actuaries using the
Projected Unit Method. The Trustees are required to act in the best interests of the plans’ beneficiaries.
The Group also has a small number of unfunded post-retirement plans, including a closed healthcare scheme in the US. Separate disclosure is provided
for these arrangements.
Further details on the arrangement of the UK Plan are given below.
The Trustee of the UK Plan is Senior Trustee Limited. The appointment of the Directors to the Board is determined by the Articles of Association of
Senior Trustee Limited. There are seven Trustee Directors in total and in accordance with statutory requirements under the Pensions Act 2004, at least
one-third of trustees must be a Member Nominated Director. Currently, there are three Member Nominated Directors and four Directors who have
been nominated by the Company, of which the Chairman and one other Director are viewed as independent.
The UK Plan exposes the Company to a number of risks. In particular:
• Uncertainty in benefit payments – the value of the obligations will ultimately depend on the amount of benefits paid out. This in turn will depend on
factors such as the level of inflation and how long individuals live.
• Volatility in asset values – the value of the assets held to meet future benefit payments is volatile, for example due to changes in stock markets and
interest rates.
• Uncertainty in cash funding – movements in the value of the UK Plan’s obligations or assets may result in the Company being required to provide
higher levels of cash funding.
The investment strategy for the UK Plan is decided by the Trustee in consultation with Senior plc. The primary investment objective is for the Plan to be
able to meet benefit payments as they fall due. The UK Plan’s average duration is around 12 years and benefits are expected to be paid for the next 60
years. These cash flow payments are expected to reach a peak around 2031, and gradually decline thereafter as the membership matures. In setting this
strategy, the Trustee considers a wide range of asset classes, the risk and rewards of a number of possible asset allocation options, the sustainability of
each asset class within each strategy, and the need for appropriate diversification between different asset classes. The Trustee’s current investment
strategy is to invest 100% in lower risk assets, consisting of corporate bonds, liability driven investments (‘LDI’), gilts and cash. The LDI allocation
helps to mitigate investment risk for the UK Plan by minimising the fluctuations in the UK Plan’s funding levels arising from changes in the value of
the liabilities. This is achieved through hedging movements in the funding liabilities caused by changes in interest rates and inflation expectations.
The Trustee continues to review its investment strategy and adjust it in response to changes in the Plan’s funding position and/or market conditions.
The UK Plan was in a surplus position of £24.5m as at 5 April 2022 when measured on the Trustee’s funding basis and is in a surplus position of
£48.5m as at 31 December 2023 (31 December 2022 – £51.8m surplus) when measured on an IAS 19 basis. The difference between the triennial
funding and annual IAS 19 valuation relates to the assumptions used. For example, the funding discount rate is based on the UK Plan’s stated
investment strategy, as opposed to the yields available on corporate bonds for the IAS 19 discount rate.
The IAS 19 surplus position on the UK Plan is recognised as an asset in the Consolidated and Company Balance Sheet, with no requirement
to recognise an additional liability on the UK Plan, on the grounds that the Company has an unconditional right to a refund, assuming the gradual
settlement of Plan liabilities over time until all members have left. In considering this, the Company has taken into account that the Trustees do
not have unilateral powers to wind up the Plan or modify benefits.
33. Share-based payments continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
181SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Cash contributions to the UK Plan are set by agreement between the Company and the Trustee of the UK Plan. These are set in accordance
with legislation and take account of the intention to further reduce the risk associated with the UK Plan’s investment strategy, as set out above.
The contributions were last reviewed as at 5 April 2022 and were based on a forecast surplus at that time, as part of the 2022 triennial funding
valuation. The Company agreed with the Trustee of the UK Plan to make scheduled contributions in respect of administrative expenses and PPF
levies from 5 April 2022 until 30 June 2022, with no further contributions after this date. The estimated contributions expected to be paid during
2024 in the US funded plans is £0.9m.
The Group is ultimately responsible for making up any shortfall in the UK Plan over a period agreed with the Trustees. To the extent that actual
experience is different from that assumed, the funding position will be better or worse than anticipated. As such, the contributions required by
the Group could vary in the future.
a) Defined contribution schemes
The Group has a number of different defined contribution and government-sponsored arrangements in place in the countries in which it operates.
None of these are individually material to the Group and the aggregate cost of such schemes for the period was £10.2m (2022 – £8.9m).
b) Defined benefit schemes
The amount included in the Consolidated Balance Sheet arising from the Group’s obligations in respect of its defined benefit plans is set out below.
31 December 2023
31 December 2022
UK plans US plans Unfunded UK plans US plans Unfunded
funded funded plans Total funded funded plans Total
£m £m £m £m £m £m £m £m
Present value of defined benefit obligations
(199.2)
(37.3)
(5.2)
(241.7)
(198.4)
(49.4)
(5.4)
(253.2)
Fair value of plan assets
247.7
34.5
–
282.2
250.2
42.7
–
292.9
Plan surplus/(deficit) per Consolidated
Balance Sheet
48.5
(2.8)
(5.2)
40.5
51.8
(6.7)
(5.4)
39.7
c) Movements in the present value of defined benefit obligations were as follows:
31 December 2023
31 December 2022
UK plans US plans Unfunded UK plans US plans Unfunded
funded funded plans Total funded funded plans Total
£m £m £m £m £m £m £m £m
At 1 January
198.4
49.4
5.4
253.2
294.9
56.2
5.7
356.8
Current service cost
–
0.3
0.2
0.5
–
0.5
0.3
0.8
Interest cost
9.3
2.0
0.1
11.4
5.5
1.7
–
7.2
Experience on benefit obligations
1.9
(0.3)
–
1.6
0.8
1.2
–
2.0
Actuarial losses/(gains) – financial
4.7
(0.9)
0.1
3.9
(89.6)
(12.1)
(0.5)
(102.2)
Actuarial gains – demographic
(3.0)
–
–
(3.0)
(1.4)
–
–
(1.4)
Benefits paid
(12.1)
(3.0)
(0.5)
(15.6)
(11.8)
(4.3)
(0.4)
(16.5)
Settlement
–
(8.1)
–
(8.1)
–
–
–
–
Exchange differences
–
(2 .1)
(0.1)
(2.2)
–
6.2
0.3
6.5
At 31 December
199.2
37.3
5.2
241.7
198.4
49.4
5.4
253.2
d) Movements in the fair value of plan assets were as follows:
31 December 2023
31 December 2022
UK plans US plans Unfunded UK plans US plans Unfunded
funded funded plans Total funded funded plans Total
£m £m £m £m £m £m £m £m
At 1 January
250.2
42.7
–
292.9
3 67.1
50.9
–
418.0
Interest on plan assets
11.8
1.7
–
13.5
6.9
1.5
–
8.4
Actual return on plan assets less interest
(1.4)
1.3
–
(0.1)
(113 .4)
(11.3)
–
(124.7)
Contributions from employer
–
1.5
–
1.5
2.1
0.4
–
2.5
Benefits paid
(12.1)
(3.0)
–
(15.1)
(11.8)
(4.3)
–
(16.1)
Running costs
(0.8)
–
–
(0.8)
(0.7)
–
–
(0.7)
Settlement
–
(7.8)
–
(7.8)
–
–
–
–
Exchange differences
–
(1.9)
–
(1.9)
–
5.5
–
5.5
At 31 December
247.7
34.5
–
282.2
250.2
42.7
–
292.9
34. Retirement benefit schemes continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
182 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
e) Amounts recognised in the Consolidated Income Statement in respect of these defined benefit schemes are as follows:
31 December 2023
31 December 2022
UK plans US plans Unfunded UK plans US plans Unfunded
funded funded plans Total funded funded plans Total
£m £m £m £m £m £m £m £m
Current service cost included within operating
profit
–
0.3
0.2
0.5
–
0.5
0.3
0.8
Running costs
0.8
–
–
0.8
0.7
–
–
0.7
Charge included within operating profit
0.8
0.3
0.2
1.3
0.7
0.5
0.3
1.5
Included within finance income
(2.5)
0.3
0.1
(2.1)
(1.4)
0.2
–
(1.2)
Amount recognised in the Income Statement
(1.7)
0.6
0.3
(0.8)
(0.7)
0.7
0.3
0.3
f) Amounts recognised in other comprehensive income are as follows:
31 December 2023
31 December 2022
UK plans US plans Unfunded UK plans US plans Unfunded
funded funded plans Total funded funded plans Total
£m £m £m £m £m £m £m £m
Net actuarial (losses)/gain in the year due to:
– Change in financial assumptions
(4.7)
0.9
(0.1)
(3.9)
89.6
12.1
0.5
102.2
– Change in demographic assumptions
3.0
–
–
3.0
1.4
–
–
1.4
– Experience adjustments on benefit obligations
(1.9)
0.3
–
(1.6)
(0.8)
(1.2)
–
(2.0)
Actual return on plan assets less interest on
benefit obligations
(1.4)
1.3
–
(0.1)
(113 .4)
(11.3)
–
(124.7)
(Losses)/gains recognised in other
comprehensive income
(5.0)
2.5
(0.1)
(2.6)
(23.2)
(0.4)
0.5
(23.1)
Actuarial losses of £2.6m (2022 – £23.1m) have been recognised in the Statement of Comprehensive Income. The cumulative amount of actuarial
losses recognised in the Statement of Comprehensive Income as at 31 December 2023 is £48.7m (2022 – £46.1m).
g) Assets and assumptions in funded plans
UK plans funded
US plans funded
2023 2022 2023 2022
£m £m £m £m
Fair value of plan assets
Bonds
105.7
102.4
34.5
42.7
Gilts
136.0
139.3
–
–
Cash and net current assets
6.0
8.5
–
–
Total
247.7
250.2
34.5
42.7
Actual return on plan assets
10.4
(106.5)
3.0
(9.8)
The UK Plan’s assets are invested in pooled funds, which are invested exclusively within instruments with quoted market prices in an active market,
with the exception of the Plan’s holdings in insurance annuity policies which are included in cash and net current assets, valued at £3.6m (2022
– £4.0m). The value of the invested assets has been measured at bid value and the value of the scheme benefits covered by the insurance annuity
policies has been set equal to the value of the corresponding obligations.
The Plan’s corporate bond allocation is split between an actively managed mandate and a “buy and maintain” mandate, which seeks to hold a high
quality portfolio while minimising portfolio turnover. Both mandates are predominantly invested in investment grade UK corporate bonds and are
exposed to a fairly typical range of UK businesses. The majority of the Plan’s gilts are passively invested in a range of UK fixed-interest and index-linked
government bonds, with the remainder actively invested in a range of swap instruments linked to movements in government bond prices. The risks
associated with the Plan’s bond and gilt investments are largely offset by corresponding risks present within the pricing of the Plan’s benefit obligations.
34. Retirement benefit schemes continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
183SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
The UK Plan does not invest directly in property occupied by the Company or in financial securities issued by the Company.
UK plans funded
US plans funded
2023
2022
2023
2022
Major assumptions (per annum %)
Inflation
3.20%
3.40%
N/A
N/A
Increase in salaries
N/A
N/A
N/A
N/A
Increase in pensions
3.00%
3.20%
0.00%
0.00%
Increase in deferred pensions
3.20%
3.40%
0.00%
0.00%
Rate used to discount plan liabilities
4.50%
4.80%
5.00%
4.78%
Life expectancy of a male aged 65 at the year-end
20.2
20.6
19.7
19.7
Life expectancy of a male aged 65, 20 years after the year-end
21.6
22.0
21.3
21.2
Benefits under the US funded plans are not linked to inflation.
The UK Plan retirement benefit obligation is discounted at a rate set by reference to market yields at the end of the reporting period on high quality
corporate bonds. Estimation is required when setting the criteria for bonds to be included in the population from which the yield curve is derived. The
most significant criteria considered for the selection of bonds include the issue size of the corporate bonds, quality of the bonds and the identification
of outliers which are excluded. The assumption for estimating future Retail Prices Index (RPI) inflation is based on the difference in yields on fixed-
interest and index-linked gilts. Demographic assumptions are set broadly in line with the most recent actuarial valuation of the UK plan. The mortality
assumption is 95% of the standard mortality tables with an allowance for future improvements in line with the CMI 2022 enhanced projections, with
a long-term annual rate of improvement of 1.25% for males and for females, with no weighting on 2020 and 2021 mortality data and a 40% weighting
on 2022 mortality data to make an allowance for the impact of Covid-19 and other factors.
For the UK Plan, the estimated impact on the plan surplus at 31 December 2023 for changes in assumptions is as follows:
Increase/
(decrease)
in plan surplus
£m
0.5% decrease in the discount rate
(11.6 )
One-year increase in life expectancy
(8.2)
0.5% increase in inflation
(7. 2)
These sensitivities have been calculated to show the movement in the surplus, including allowance for an increase to the value of insured annuity
assets, but assuming no other changes in assets as at 31 December 2023. This is unlikely in practice – for example, a change in discount rate is
unlikely to occur without any movement in the value of the assets held by the Plan.
h) Other post-retirement liabilities
This balance comprises an unfunded German pension plan of £2.6m (2022 – £2.7m), unfunded closed pension and post-retirement healthcare plans in
the US of £0.4m (2022 – £0.3m), a provision for post-retirement payments in France of £1.4m (2022 – £1.5m) and £0.8m for post-retirement payments
in Thailand (2022 – £0.9m).
The closed pension and post-retirement healthcare plans in the US have been valued on a Projected Unit Method using a discount rate of 5.0% (2022
– 4.8%). No participants were eligible for medical benefits under the healthcare plan in 2023. The German plan has been subject to formal actuarial
valuation on a Projected Unit Method with the following assumptions: discount rate 3.7%, salary growth nil% and pension increase 2.2% (2022 –
3.5%, nil% and 2.2%). In France, the provision arises from a legal obligation to make payments to retirees in the first two years post-retirement. Hence,
it is not subject to discounting to the same extent as the other longer-term post-retirement liabilities. The Thailand plan has been subject to a formal
actuarial valuation on a Projected Unit Method with the following assumptions: discount rate 3.75%, inflation rate 3.0% and salary growth 6.0% (2022
– 2.8%, 2.8% and 6.0%).
35. Contingent liabilities
The Group is subject to various claims which arise from time to time in the course of its business including, for example, in relation to commercial
matters, product quality or liability, and tax audits. Where the Board has assessed there to be a more likely than not outflow of economic benefits,
provision has been made for the best estimate as at 31 December 2023 (see Note 24). For all other matters, the Board has concluded that it is not
more likely than not that there will be an economic outflow of benefits. While the outcome of some of these matters cannot be predicted with any
certainty, the Directors do not expect any of these arrangements, legal actions or claims, after allowing for provisions already made where appropriate,
to result in significant loss to the Group.
34. Retirement benefit schemes continued
Notes to the Consolidated
Financial Statements continued
FINANCIAL STATEMENTS /
184 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Company Balance Sheet
As at 31 December 2023
Notes
Year ended
2023
£m
Year ended
2023
£m
Non-current assets
Investment in subsidiaries 38 259.9 259.9
Property, plant and equipment 39 1.1 1.1
Other intangible assets 37 0.3 0.1
Other receivables 40 31.2 3.3
Retirement benefits 49 48.5 51.8
Total non-current assets 341.0 316.2
Current assets
Other receivables 40 154.8 121.1
Cash and bank balances 46 1.2 1.6
Total current assets 156.0 122.7
Total assets 497.0 438.9
Current liabilities
Trade and other payables 42 61.6 61.8
Lease liabilities 47 0.3 0.2
Bank overdrafts and loans 41 – –
Total current liabilities 61.9 62.0
Non-current liabilities
Bank and other loans 41 150.5 116 .4
Lease liabilities 47 0.8 0.9
Deferred tax liabilities 48 8.9 8.8
Total non-current liabilities 160.2 126.1
Total liabilities 222.1 18 8.1
Net assets 274.9 250.8
Equity
Issued share capital 43 41.9 41.9
Share premium account 14.8 14.8
Equity reserve 7.9 6.4
Retained earnings 44 22 3.1 199.4
Own shares 45 (12.8) (11.7)
Total equity 274.9 250.8
The Profit for the Company for the year ended 31 December 2023 was £35.6m (2022 – £34.8m).
The Financial Statements of Senior plc (registered number 282772) were approved by the Board of Directors and authorised for issue on 1 March
2024. They were signed on its behalf by:
David Squires Bindi Foyle
Director Director
FINANCIAL STATEMENTS /
185SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Company Statement of
Changes In Equity
For the year ended 31 December 2023
All equity is attributable to equity holders of the Company
Notes
Issued
share
capital
£m
Share
premium
account
£m
Equity
reserve
£m
Retained
earnings
£m
Own
shares
£m
Total
equity
£m
Balance at 1 January 2022 41.9 14.8 5.8 181.6 (9.2) 234.9
Profit for the year 2022 – – – 34.8 – 34.8
Actuarial losses on defined benefit pension schemes – – – (23.2) – (23.2)
Tax relating to components of other comprehensive income – – – 5.7 – 5.7
Total comprehensive income for the period – – – 17.3 – 17. 3
Share-based payment charge – – 4.3 – – 4.3
Purchase of shares held by employee benefit trust – – – – (4.5) (4.5)
Use of shares held by employee benefit trust 45 – – – (2.0) 2.0 –
Transfer to retained earnings 44 – – (3.7) 3.7 – –
Dividends paid 11 – – – (1.2) – (1.2)
Balance at 31 December 2022 41.9 14.8 6.4 199.4 (11.7) 250.8
Profit for the year 2023 – – – 35.6 – 35.6
Actuarial losses on defined benefit pension schemes – – – (5.0) – (5.0)
Tax relating to components of other comprehensive income – – – 1.3 – 1.3
Total comprehensive income for the period – – – 31.9 – 31.9
Share-based payment charge – – 4.1 – – 4.1
Tax relating to share-based payments – – – 0.3 – 0.3
Purchase of shares held by employee benefit trust 45 – – – – (5.6) (5.6)
Use of shares held by employee benefit trust 45 – – – (4.5) 4.5 –
Transfer to retained earnings 44 – – (2.6) 2.6 – –
Dividends paid 11 – – – (6.6) – (6.6)
Balance at 31 December 2023 41.9 14.8 7.9 2 23.1 (12.8) 274.9
FINANCIAL STATEMENTS /
186 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
36. Accounting policies
Basis of accounting (company only)
These Financial Statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”). In
preparing these Financial Statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted international
accounting standards (“Adopted IFRSs”), but makes amendments where necessary in order to comply with Companies Act 2006 and has taken
advantage of the FRS 101 disclosure exemptions for share-based payments, financial instruments, fair value measurements, capital management,
presentation of a cash flow statement and disclosure of related party transactions.
The Financial Statements have been prepared on the historical cost basis. They have also been prepared on the going concern basis, as set out in
the basis of preparation, Note 2 to the Consolidated Financial Statements. The principal accounting policies adopted are the same as those set out in
Note 2 to the Consolidated Financial Statements, except in respect of investments in subsidiaries, which are stated at cost less, where appropriate,
provisions for impairment. The carrying values of investments in subsidiaries are reviewed for impairment if events or changes in circumstances
indicate the carrying values may not be recoverable.
The Company is incorporated in England and Wales under the Companies Act.
37. Other intangible assets
Year ended
2023
Computer
software
£m
Year ended
2022
Computer
software
£m
Cost
At 1 January 0.8 1.0
Additions 0.3 –
Disposal – (0.2)
At 31 December 1.1 0.8
Amortisation
At 1 January 0.7 0.9
Charge for the year 0.1 –
Disposals – (0.2)
At 31 December 0.8 0.7
Carrying amount at 31 December 0.3 0.1
38. Investments in subsidiaries
A list of the significant investments in subsidiaries, including the name, country of incorporation, and proportion of ownership interest is given on pages
193 to 194.
Year ended
2023
£m
Year ended
2022
£m
At 1 January and 31 December 259.9 259.9
Notes to the Company
Financial Statements
FINANCIAL STATEMENTS /
187SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
39. Property, plant and equipment
Year ended
2023
Plant and
equipment
£m
Year ended
2022
Plant and
equipment
£m
Cost
At 1 January 2.3 2.4
Additions 0.2 0.1
Disposals – (0.2)
At 31 December 2.5 2.3
Accumulated depreciation
At 1 January 1.2 1.1
Charge for the year 0.2 0.3
Eliminated on Disposals – (0.2)
At 31 December 1.4 1.2
Carrying amount at 31 December 1.1 1.1
The carrying amount includes £1.0m of right-of-use assets (2022 – £1.0m)
40. Other receivables
Other receivables comprise the following:
Year ended
2023
£m
Year ended
2022
£m
Other receivables: amounts due more than one year
Due from subsidiaries 31.2 3.3
31.2 3.3
Other receivables: amounts due within one year
Value added tax 0.5 0.3
Prepayments and accrued income 1.3 1.1
Due from subsidiaries 153.0 119.7
154.8 121.1
Total other receivables 186.0 124.4
The Directors consider that the carrying amount of debtors approximates to their fair value. The maximum exposure to credit risk at the reporting date
is the fair value of each class of receivable above. The Company does not hold any collateral as security.
The carrying amounts due from subsidiaries approximates to their fair value. There are no past due receivable balances and expected credit losses are
immaterial (2022 – immaterial).
As at 31 December 2023, other receivables due in more than one year consist of £6.8m (2022 – £3.3m) due in accordance with the vesting periods of
share-based payments and £24.4m (2022 – £nil) of loans to subsidiaries at market rates of interest.
Notes to the Company
Financial Statements continued
FINANCIAL STATEMENTS /
188 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Notes to the Company
Financial Statements continued
41. Bank overdrafts and loans
Year ended
2023
£m
Year ended
2022
£m
Bank overdrafts – –
Bank loans 52.1 15.3
Other loans 98.4 101.1
Total 150.5 116 .4
The borrowings are repayable as follows:
On demand or within one year – –
In the second year 74.2 –
In the third to fifth years inclusive 76.3 116 .4
After five years – –
150.5 116. 4
Less: amount due for settlement within 12 months (shown under current liabilities) – –
Amount due for settlement after 12 months 150.5 116 .4
At 31 December 2023, bank loans are £53.2m and there are £1.1m of capitalised revolving credit facility transaction costs. At 31 December 2022, bank
loans were £16.5m and there were £1.2m of capitalised revolving credit facility transaction costs.
Analysis of borrowings by currency
31 December 2023
Pound
Sterling
£m
Euros
£m
US
Dollars
£m
Total
£m
Bank overdrafts – – – –
Bank loans 15.9 – 36.2 52 .1
Other loans 27.0 24.2 47.2 98.4
42.9 24.2 83.4 150.5
31 December 2022
Pound
Sterling
£m
Euros
£m
US
Dollars
£m
Total
£m
Bank overdrafts – – – –
Bank loans (1.2) – 16.5 15.3
Other loans 26.9 24.7 49.5 101.1
25.7 24.7 66.0 116 .4
The weighted average interest rates paid were as follows:
Year ended
2023
%
Year ended
2022
%
Bank loans and overdrafts 6.57 3.93
Other loans 2.82 2.83
Bank loans of £53.2m (2022 – £16.5m) are arranged at floating rates, thus exposing the Company to cash flow interest rate risk. Other borrowings
are mainly arranged at fixed interest rates and expose the Company to fair value interest rate risk. No interest rate swaps were taken out in 2022 or
2023. Transaction costs of £1.1m (2022 – £1.2m) have been deducted from the bank loans carrying value. Transaction costs of £0.2m (2022 – £0.2m),
directly attributable to the GBP notes (£nil), the Euro notes (£0.1m) and the US Dollar notes (£0.1m) have been deducted from the carrying value of
Other loans.
The Directors estimate the fair value of the Company’s borrowings to be as follows:
Year ended
2023
£m
Year ended
2022
£m
Bank loans and overdrafts 52 .1 15.3
Other loans 93.7 93.4
145.8 108.7
FINANCIAL STATEMENTS /
189SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Notes to the Company
Financial Statements continued
42. Trade and other payables
Trade and other payables comprise the following:
Year ended
2023
£m
Year ended
2022
£m
Trade and other payables: amounts falling due within one year
Trade payables 3.7 1.6
Social security and PAYE 0.2 0.2
Other payables and accruals 9.2 7.1
Due to subsidiaries 48.5 52.9
Total trade and other payables 61.6 61.8
The Directors consider that the carrying amount of trade payables approximates to their fair value.
43. Issued share capital
Year ended
2023
£m
Year ended
2022
£m
Issued and fully paid:
419.4 million ordinary shares of 10p each 41.9 41.9
No shares were issued during 2022 and 2023.
The Company has one class of ordinary shares, which carry no right to fixed income.
44. Retained earnings
Year ended
2023
£m
Year ended
2022
£m
Balance at 1 January 199.4 181.6
Dividends paid (6.6) (1.2)
Profit for the year 35.6 34.8
Pension actuarial (loss)/gain (5.0) (23.2)
Transfer from equity reserve 2.6 3.7
Transfer from own share reserve (4.5) (2.0)
Tax on deductible temporary differences 1.6 5.7
Balance at 31 December 223.1 199.4
£7.5m (2022 – £7.5m) of the Company’s retained earnings are considered undistributable.
In accordance with Section 408 of the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income, including
the Income Statement and related Notes.
45. Own shares
Year ended
2023
£m
Year ended
2022
£m
Balance at 1 January (11.7) (9.2)
Transfer to retained earnings 4.5 2.0
Purchase of new shares (5.6) (4.5)
Balance at 31 December (12.8) (11.7)
The own shares reserve represents the cost of shares purchased in the market and held by the Senior plc Employee Benefit Trust to satisfy options
under the Group’s share option schemes (see Note 33).
The nominal value of each share is £0.1 (2022 – £0.1). The total number of treasury shares at 31 December 2023 is 6,758,973 (2022 – 5,716,834).
FINANCIAL STATEMENTS /
190 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Notes to the Company
Financial Statements continued
46. Cash and bank balances
Year ended
2023
£m
Year ended
2022
£m
Cash and cash equivalents comprise:
Cash 1.2 1.6
Cash and bank balances held by the Company (which are presented as a single class of assets on the face of the Balance Sheet) comprise cash at
bank and other short-term highly liquid investments with a maturity of three months or less. The Directors consider that the carrying amount of cash
and cash equivalents approximate to their face value.
47. Lease liabilities
When measuring lease liabilities, the Company discounts lease payments using incremental borrowing rates, determined on a lease portfolio basis.
Undiscounted contractual maturity of lease liabilities:
Year ended
2023
£m
Year ended
2022
£m
Amounts payable:
On demand or within one year 0.3 0.2
In the second to fifth years inclusive 0.8 0.9
After five years – –
1.1 1.1
Less: future finance charges – –
Lease liabilities 1.1 1.1
In 2023, the Company recognised income of £nil (2022 – £0.1m) in the Company Income Statement from sub-leasing right-of-use assets and had
lease cash outflow of £0.3m (2022 – £0.2m).
As at the date of approving the accounts, the Company has guaranteed £0.4m (2022 – £0.4m) of annual lease commitments of a current
subsidiary entity.
48. Tax balance sheet
Current tax
The current tax receivable is £nil (2022 – £nil).
Deferred tax liabilities
The following are the major deferred tax liabilities and assets recognised by the Company and movements thereon during the current and prior
reporting period:
Accelerated
tax
depreciation
£m
Retirement
benefits
£m
Share-based
payments
£m
Tax
Losses
£m
Total
£m
At 1 January 2022 (0.3) 18.0 (0.4) (3.1) 14.2
Charge to income – 0.7 (0.4) – 0.3
Charge to equity – – – – –
Credit to other comprehensive income – (5.7) – – (5.7)
At 1 January 2023 (0.3) 13.0 (0.8) (3.1) 8.8
Charge to income 0.1 0.4 (0.3) 1.5 1.7
Charge to equity – – (0.3) – (0.3)
Credit to other comprehensive income – (1.3) – – (1.3)
As at 31 December 2023 (0.2) 12.1 (1.4) (1.6) 8.9
Deferred tax assets and liabilities are offset where the Company has a legally enforceable right to do so. The following is the analysis of the deferred
tax balances, after offset:
Year ended
2023
£m
Year ended
2022
£m
Deferred tax liabilities 8.9 8.8
At the Balance Sheet date, the Company has unused capital losses of £15.6m (2022 – £15.6m) available for offset against future capital gains. No
deferred tax asset has been recognised as no such capital gains are anticipated to arise in the foreseeable future.
FINANCIAL STATEMENTS /
191SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
49. Retirement benefit scheme
The Company’s defined benefit scheme is shown in Note 34 in the “UK plans funded” column.
50. Related party transactions
Barbara Jeremiah, Senior Independent Non-Executive Director and Chair of the Remuneration Committee was appointed a non-executive director of
Johnson Matthey Plc with effect from 1 July 2023. Johnson Matthey Plc, a related party of the Group, has been renting excess car parking space from
one of the Group’s operating businesses on a rolling monthly basis. The lease contract was in place prior to the acquisition of Thermal Engineering in
2013 by the Group. In 2023, £0.06m car park rental was received (2022: £0.06m). There are no outstanding amounts at 31 December 2023
(31December 2022: £nil).
The remuneration of the Directors and Senior Managers, who are the key management personnel of the Group, is set out in the Remuneration Report
on pages 106 to 127. In 2023, the Company recognised share-based payment expense of £0.8m (2022 – £1.1m) in relation to the executive Directors.
The Group has related party relationships with a number of pension schemes. Transactions between the Group and these pension schemes are
disclosed in Note 34.
51. Share-based payments
The Company has a number of share-based payment arrangements that existed during 2023, the details of which can be found in Note 33.
For the savings-related share option plan, no shares were exercised in 2023 (2022 – 1,905). The options outstanding at 31 December 2023 had
exercise prices of 118.40p and 156.30p per share, and a weighted average remaining contractual life of 2.3 years. The options outstanding at
31December 2022 had exercise prices of 118.40p per share, and a weighted average remaining contractual life of 2.0 years.
Share-based payment costs relating to subsidiaries are recharged from the Company.
Notes to the Company
Financial Statements continued
FINANCIAL STATEMENTS /
192 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Five-year summary
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
Group income statement
Revenue
Continuing operations 963.5 848.4 658.7 733.6 1,110.70
Adjusted operating profit
Continuing operations 45.8 28.5 6.1 3.7 89.4
Amortisation of intangible assets from acquisitions (2.2) (0.2) – (7.7) (13.1)
Goodwill impairment and write-off – – – (134.3) –
Net restructuring income/(cost) (5.6) 4.2 4.4 (39.0) (12.1)
Site relocation costs (0.1) – – – –
US class action lawsuits – – – – (2.6)
Operating profit/(loss) 37.9 32.5 10.5 (177. 3) 61.6
Finance income/finance costs, net (excluding lease liabilities) (9.6) ( 7.4) (5.8) (7.8) (8.1)
Interest on lease liabilities (2.9) (2.5) (2.6) (3.0) (3.5)
Net finance income of retirement benefits 2.1 1.2 0.4 0.9 0.7
Corporate undertakings (4.7) (1.4) 21.2 (4.6) (22.0)
Profit/(loss) before tax 22.8 22.4 23.7 (191.8) 28.7
Tax 8.3 (2.2) 0.5 33.3 0.5
Profit/(loss) for the year 31.1 20.2 24.2 (158.5) 29.2
Depreciation and amortisation of intangibles excluding right-of-use assets 41.2 39.5 38.3 51.4 57.5
Depreciation on right-of-use assets 10.5 10.3 9.5 10.2 10.2
Gross capital expenditure 35.9 30.5 21.3 26.8 64.8
Basic earnings/(loss) per share 7.52p 4.86p 5.82p (38.20)p 7.0 4 p
Diluted earnings/(loss) per share 7.32p 4.73p 5.73p (38.20)p 7.01p
Adjusted earnings/(loss) per share 10.28p 4.36p 0.17p (0.84)p 16 .17p
Dividends in respect of years – per share 2.30p 1.30p – – 2.28p
– value 9.5 5.3 – – 9.5
Group Balance Sheet
Non-current assets excluding right-of-use assets 521.8 539.8 463.5 482.7 651.4
Right-of-use assets IFRS 16 64.4 70.8 6 7.4 72.5 82.3
Non-current assets 586.2 610.6 530.9 555.2 733.7
Net current assets 165.5 10 4.1 110.3 89.2 102.5
Non-current liabilities (294.6) (265.3) (216.1) (251.1) (276.6)
Net assets 457.1 449.4 425.1 393.3 559.6
Net debt pre IFRS 16 (132.0) (100.5) (79.9) (129.4) (145.9)
Lease liabilities IFRS16 (71.8) (78.4) (73.2) (76.5) (83.7)
Net debt (203.8) (178.9) (153.1) (205.9) (229.6)
Group cash flow
Net cash from operating activities 41.4 57.7 27.0 48.9 115. 9
Corporate undertaking costs 1.9 1.4 4.8 4.6 3.4
Net Restructuring cash (received)/paid 2.1 (2.1) 0.9 15.2 2.9
Site relocation costs 0.1 – – – –
US class action lawsuits – – 2.3 3.9 –
US pension settlement cash paid 0.9 – – – –
Interest received 4.3 0.7 0.1 0.2 0.2
Proceeds from disposal of property, plant and equipment 0.7 0.5 0.2 0.5 0.7
Purchase of property, plant and equipment – cash (33.7) (28.7) (20.2) (25.2) (63.0)
Purchase of intangible assets (2.2) (1.8) (1.1) (1.6) (1.8)
Free cash flow 15.5 27.7 14.0 46.5 58.3
Dividends paid (6.6) (1.2) – – (31.2)
Acquisition costs/Disposal proceeds (23.9) (25.3) 51.7 0.4 2.9
Corporate undertaking costs (1.9) (1.4) (4.8) (4.6) (3.4)
Net Restructuring cash (paid)/received (2.1) 2.1 (0.9) (15.2) (2.9)
US class action lawsuits – – (2.3) (3.9) –
Site relocation costs (0.1) – – – –
US pension settlement cash paid (0.9) – – – –
Purchase of shares held by employee benefit trust (5.6) (4.5) – – (6.3)
Increase/(decrease) in loans 40.0 0.4 (21.1) (7. 2) (3.2)
Decrease in lease liabilities (10.2) (9.1) (8.4) (7.9) (7.8)
Increase/(decrease) in cash and cash equivalents 4.2 (11.3) 28.2 8.1 6.4
FINANCIAL STATEMENTS /
193SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
ADDITIONAL INFORMATION / GROUP UNDERTAKINGS
Group undertakings
Operating Companies Business Units Locations Country of Incorporation
Senior UK Limited Senior Aerospace Bird
Bellows
Congleton England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Aerospace BWT Macclesfield
Senior Flexonics Crumlin Crumlin
Senior Aerospace Weston Colne
Senior Aerospace Thermal
Engineering
Royston
Lymington Precision Engineers
Co. Limited
Senior Flexonics Lymington Lymington England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Flexonics Czech s.r.o. Senior Flexonics Czech Olomouc, Czech Republic Czech Republic Olomouc, Průmyslová 733/9, 779
00, Czech Republic
Senior Aerospace Ermeto SAS Senior Aerospace Ermeto Blois, France France Z.A Euro Val de Loire, 8 rue du
ClosThomas, 41330 Fosse, France
Senior Calorstat SAS Senior Aerospace Calorstat Dourdan, France France 11 Rue des Soufflets, 91410,
Dourdan, France
Senior Flexonics GmbH Senior Flexonics Kassel Kassel, Germany Germany Frankfurter Strasse 199, 34121
Kassel, Germany
Senior India Private Limited Senior Flexonics New Delhi New Delhi, India India 4th Floor, Rectangle No.1,
Commercial Complex D-4,
Saket-New Delhi-110017, India
Senior Operations (Canada)
Limited
Senior Flexonics Canada Brampton, Ontario Canada 134 Nelson Street West, Brampton,
Ontario, L6X 1C9, Canada
Senior Flexonics SA (Pty)
Limited
Senior Flexonics Cape Town Cape Town, South Africa South Africa 11 Thor Circle, Viking Place,
Thornton, Cape Town, 7460,
SouthAfrica
Senior Operations LLC Senior Aerospace AMT Arlington, Washington USA Corporation Trust Center, 1209
Orange Street, Wilmington,
DE19801, USA
Senior Aerospace Jet
Products
San Diego, California
Senior Aerospace Ketema El Cajon, California
Senior Aerospace Metal
Bellows
Sharon, Massachusetts
Senior Aerospace Damar Monroe, Washington
Senior Aerospace SSP Burbank, California
Senior Flexonics Bartlett Bartlett, Illinois
Senior Flexonics GA Franklin, Wisconsin
Senior Flexonics Pathway New Braunfels, Texas &
Lewiston, Maine
Senior Aerospace Spencer Valencia, California
Steico Industries, Inc. Senior Aerospace Steico
Industries
Oceanside, California USA 818 West Seventh St., Ste. 930,
LosAngeles, CA90017, USA
Senior Aerospace (Thailand)
Limited
Senior Aerospace Thailand Chonburi, Thailand Thailand 789 /115 -116 Moo1, Pinthong
Industrial Estate, Sainhongkor-
Lamchabang Road, Tambol
Nhongkham, Amphur Sriracha,
ChonBuri Province 20230, Thailand
Upeca Aerotech Sdn Bhd Senior Aerospace Upeca Selangor, Malaysia Malaysia Level 13, Menara 1 Sentrum, 201,
Jalan Tun Sambanthan, Brickfields,
50470 Kuala Lumpur, Malaysia
Upeca Flowtech Sdn Bhd Senior Flexonics Upeca Selangor, Malaysia Malaysia Level 13, Menara 1 Sentrum, 201,
Jalan Tun Sambanthan, Brickfields,
50470 Kuala Lumpur, Malaysia
Upeca Engineering (Tianjin) Co Ltd Senior Flexonics Upeca
(China)
Tianjin, China China No. 12 QuanHe Road, Wu Qing
Development Area, Tianjin 301700,
PR China
194 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
ADDITIONAL INFORMATION / GROUP UNDERTAKINGS CONTINUED
Operating Companies Business Units Locations Country of Incorporation
Atlas Composites Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Flexonics Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Lymington Precision Engineering
(LPE) Limited
England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Aerospace Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Americas One Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Americas Two Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Automotive Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Engineering Investments
Limited
England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Finance Four Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Finance Seven Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Finance Six Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Five Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Flexonics Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior Trustee Limited England & Wales 59/61 High Street, Rickmansworth,
Hertfordshire, WD3 1RH, UK
Senior France SAS France 11 Rue des Soufflets, 91410,
Dourdan, France
Senior Investments (Deutschland)
GmbH
Germany Frankfurter Strasse 199, 34121
Kassel, Germany
Upeca Technologies Sdn Bhd Malaysia Level 13, Menara 1 Sentrum, 201,
Jalan Tun Sambanthan, Brickfields,
50470 Kuala Lumpur, Malaysia
Senior Aerospace Bosman B.V. Netherlands Bergen 6, 2993 LR Barendrecht,
Netherlands
Senior Investments GmbH Switzerland Fronwagplatz 10, CH-8200,
Schaffhausen, Switzerland
Senior IP GmbH Switzerland Fronwagplatz 10, CH-8200,
Schaffhausen, Switzerland
Flexonics, Inc. USA Corporation Trust Center,
1209Orange Street, Wilmington,
DE19801, USA
Senior Holdings LLC USA Corporation Trust Center,
1209Orange Street, Wilmington,
DE19801, USA
Senior US Holdings Inc USA Corporation Trust Center,
1209Orange Street, Wilmington,
DE19801, USA
Senior Aerospace and Flexonics Business Units in Mexico are operated by a third party under contract manufacturing agreements.
The Group has a 49% interest in Senior Flexonics Technologies (Wuhan) Limited, a jointly controlled entity incorporated in China.
All Group undertakings are wholly and directly owned by subsidiary undertakings of Senior plc, and in every case the principal country of operation
isthe country of incorporation.
Senior Aerospace Bosman ceased trading in 2021, and Senior Flexonics Upeca, Malaysia ceased manufacturing in 2021.
Group undertakings continued
195SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
ADDITIONAL INFORMATION / ADDITIONAL SHAREHOLDER INFORMATION
Additional shareholder
information
Analysis of shareholders at 31 December 2023
Shareholders
Number
Shareholders
%
Issued Shares
Millons
Issued Shares
%
By category
Corporate bodies 372 19.16 411.45 9 8.10
Other shareholders 1,570 80.84 7.97 1.90
1,942 100.00 419.42 100.00
By range of holdings
1 – 24,999 1,655 85.22 5.54 1.32
25,000 – 49,999 66 3.40 2.30 0.55
50,000 – 249,999 101 5.20 11.80 2.81
250,000 – 499,999 36 1.85 13.06 3.11
500,000 – 999,999 27 1.39 19.90 4.75
1,000,000 – and over 57 2.94 366.82 87.46
1,942 100.00 419.42 100.00
The number of shares in issue at 31 December 2023 was 419,418,082.
Share Registrars
All shareholder records are maintained by Equiniti and all correspondence should be addressed to the Registrars, Senior plc at the Equiniti address
shown on the inside back cover, quoting the reference number starting with 0228 detailed on your dividend vouchers. The Registrars should be
notified regarding changes to name or address, loss of share certificate, or request for, or change to, a dividend mandate.
Equiniti provides a range of shareholder information online. Shareholders can check their holdings, update details and obtain practical help on
transferring shares at: www.shareview.co.uk.
Instead of payment by post to your registered address, dividends can be paid through the BACS system direct into a UK bank or building society
account, with the dividend voucher still sent to your registered address. If you wish to use this facility and have not previously applied, then please
apply direct to Equiniti and request a dividend mandate form. Shareholders who are currently receiving duplicate sets of Company mailings, as
a result of any inconsistency in name or address details, should write direct to Equiniti so holdings can be combined, if appropriate.
CREST Proxy Voting
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Annual General
Meeting to be held on 26 April 2024 and any adjournment(s) thereof by using the procedures described in the CREST manual. Further details relating
to voting via CREST may be found on the 2024 AGM Notice of Meeting and Form of Proxy.
196 SENIOR PLC ANNUAL REPORT AND ACCOUNTS 2023
Officers and advisers
Secretary and registered office
Andrew Bodenham
Senior plc
59/61 High Street, Rickmansworth, Hertfordshire WD3 1RH
Registered in England and Wales No. 00282772
Registrars
Equiniti Ltd
Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
Auditor
KPMG LLP
15 Canada Square, London E14 5GL
ShareGift
If you have only a small number of shares which would cost more for
youto sell than they are worth, you may wish to consider donating
themto the charity ShareGift (Registered Charity 1052686) which
specialises in accepting such shares as donations. The ShareGift
TransferForm may be obtained from Equiniti, the Company’s Registrars,
at www.shareview.co.uk. There are no implications for Capital Gains
Taxpurposes (no gain or loss) on gifts of shares to charity and it is also
possible to obtain income tax relief. Further information about ShareGift
may be obtained on 020 7930 3737 or from www.ShareGift.org.
Solicitors
Slaughter and May
One Bunhill Row, London EC1Y 8YY
Bankers
HSBC UK Bank plc
71 Queen Victoria Street, London EC4V 4AY
KBC Bank NV, London Branch
111 Old Broad Street, London EC2N 1BR
Financial advisers
Lazards & Co., Limited
50 Stratton Street, London W1J 8LL
Financial Public Relations
FGS Global
The Adelphi
1-11 John Adam Street
London WC2N 6HT
Joint Corporate Brokers
Jefferies International Limited
100 Bishopsgate
London EC2N 4JL
Numis Securities Limited (trading as Deutsche Numis)
45 Gresham Street
London EC2V 7BF
ADDITIONAL INFORMATION / OFFICERS AND ADVISERS
Design and production
Printed by Park Communications
Senior plc
59/61 High Street,
Rickmansworth,
Hertfordshire
WD3 1RH
United Kingdom
www.seniorplc.com
T +44 (0) 1923 775547