Areas of Strategic Focus

The following six strategic priorities were identified as key elements of our business model, which will drive the creation of shareholder value. They will receive specific attention and focus over the coming years.

ENHANCE SENIOR’S AUTONOMOUS AND COLLABORATIVE BUSINESS MODEL
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2017
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. Increasing collaboration amongst business in the Group is a priority to ensure economies of scale are realised whilst maintaining the autonomous business structure. Business leaders throughout Senior are actively embracing collaboration activities with priorities set at Group level in consultation with the businesses.
  • Implemented engagement guidelines to help optimise the transfer of work to cost competitive locations and to facilitate higher level solutions to meet customer needs; 
  • Customer Relationship Managers appointed during the year for key customers; 
  • Updated management incentive schemes to encourage greater collaboration: all senior managers across the Company now have part of their incentive tied to Group performance as well as their business unit; and 
  • Rolled out “Spark”, an online Groupwide interactive communication tool.
  • Focus front end collaboration efforts on multi-site business opportunities; 
  • Deliver supply chain savings from Procurement Council collaboration; and 
  • Further improve safety practices across the Group in line with 2020 objective including the launch of a Senior behavioural safety standard.
FOCUS ON GROWTH
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2017
Senior’s end markets grow naturally at around 4% through the cycle. 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 innovation; 
  • Geographical expansion; and
  •  Seeking out and exploiting adjacent opportunities organically and through acquisition.
  • Customer Relationship Managers appointed during the year for key customers; 
  • Established a Group-wide technology council to focus on advanced engineering and manufacturing methods such as additive manufacturing; 
  • New production programmes were launched in India, Mexico, Malaysia and Thailand; and 
  • Steico successfully integrated into the Group.
  • Extend successful Customer Relationship Manager approach to other customers;
  • Target growth in new orders from specific key customers in support of their cost down activities;
  • Win more new business for our cost competitive Asian businesses; and 
  • Further investments in 3D printing/ additive manufacturing capability.
INTRODUCE A HIGH PERFORMANCE OPERATING SYSTEM
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2017
Senior is implementing a high performance operating system of its own, drawing on the many excellent practices from across the Group. The key elements of this system include:
  • 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 strengthened business review process utilising a balanced scorecard incorporating KPIs with focus on performance, growth, operational excellence and talent development.
  • Implemented a new and more intensive business review process; updated the Group’s reporting systems to incorporate best-in-class real-time digital dashboard; and established Group-wide balanced scorecard with KPI’s;
  • Established a procurement council to leverage our global spend; initial focus on consumables generating significant savings; and
  • Some progress made towards introducing best practice operational toolkit and processes, with plans to develop further in 2017.
  • Introduce best practice lean manufacturing processes and toolkit;
  • Undertake targeted performance improvement workshops in underperforming businesses; and
  • Deliver savings on indirect and direct material through Group-wide procurement council and by utilising Senior’s cost competitive sources. 
COMPETITIVE COST COUNTRY STRATEGY
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2017
Enhance Senior’s global footprint to ensure our businesses stay competitive at a capability and cost level, with key investments in Thailand, Malaysia, China, India, Mexico and the Czech Republic to help ensure we meet our customers’ cost and price challenges whilst protecting margins. We are actively moving products and establishing increasingly sophisticated capabilities in these competitive cost economies to free up capacity in our European and North American factories, which is needed to satisfy anticipated increasing levels of demand.
  • Opened new airframe structures facility in Thailand in June 2016;
  • Ramping up cooler and common rail production at our facilities in India and Mexico; and
  • Approved the construction of a facility expansion in the Czech Republic to support new Flexonics programmes.
  • Continue to ramp up new and transferred Aerospace programmes in Thailand and Malaysia;
  • Ramp up cooler production in Cape Town;
  • Transfer various fluid systems and structures work packages to Aerospace Mexico; and
  • Expand facility in the Czech Republic support new Flexonics programmes.
CONSIDERED AND EFFECTIVE CAPITAL DEPLOYMENT
WHAT IT IS WHAT WE'VE DONE
OUR PLANS FOR 2017 
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 pre-tax return in excess of 15%.
  • Disposed loss making small commodity composites business based in Wichita;
  • Invested £52.8m in organic capital expenditure to support growth programmes;
  • Dividend increased by 6% to 6.57 pence per share (total paid and proposed); and
  • Working capital stabilised at 15.1% of revenue at the end of the year.
  • Continue to invest in organic capital expenditure to support future growth;
  • Continue to pay a progressive dividend reflecting earnings per share and free cash flow generation over the medium term; and
  • Maintain the level of working capital as a percentage of revenue.
TALENT DEVELOPMENT
WHAT IT IS WHAT WE'VE DONE
OUR PLANS FOR 2017
Senior has a skilled workforce and some highly experienced entrepreneurial business leaders. We are bringing renewed focus to further developing leadership talent and upgrading functional capability across the Group. We are ensuring robust succession plans are in place across our businesses. We are working with capable external partners to deliver tailored training and development programmes for Senior's top talent.
  • Jane Johnston joined Senior in May 2016 as Group HR Director, responsible for HR strategy across the Group;
  • Continued to work with external partners such as Ashridge, to deliver advanced leadership development for our top talent from around the world; and
  • Improved succession planning process.
  • Implement Group-wide Performance Development Review process for senior managers; and
  • Collaborate across the Group on recruitment and selection.