Strategic Priorities

Strategic Priorities

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.

FOCUS ON GROWTH
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2023
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;
  • Seeking out and exploiting adjacent opportunities organically and through acquisition.
  • Succeeded in expanding our Space business for both low orbit satellites and launch vehicles;
  • Secured higher share of dual sourced content as a result of strong operational performance;
  • Senior Flexonics Bartlett launched EGR cooler production for heavy duty truck engine replacing an incumbent;
  • Completed the acquisition of Spencer Aerospace Manufacturing;
  • Continued to pursue the utilisation of Additive Manufacturing ("AM"), both non-metallic and metallic, in our product offerings. Senior now has AM products on both civil and military programmes;
  • Developed new material technologies in support of our customers’ requirements for thermal management applications for passenger car and commercial vehicles.
  • Develop capability for the manufacture of highly engineered standard parts, which will include hydraulic fittings, metallic flanges and clamps to vertically integrate and support our customers’ high rate production requirements;
  • Establish and develop capability for the design, qualification, manufacture and supply of hydraulic fittings in Europe to support European OEMs;
  • Develop products for battery cooling, thermal management of inverters, hydrogen gas compression and fuel cells;
  • Develop fluid distribution systems for hydrogen powered fuel cells & electrolysers.
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.
CONSIDERED AND EFFECTIVE CAPITAL DEPLOYMENT
WHAT IT IS WHAT WE'VE DONE
 OUR PLANS FOR 2023
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.
  • Increased ROCE by 370 bps through significantly improved profitability;
  • Maintained our pricing and return on capital discipline when negotiating contracts and assessing investments;
  • Acquired Spencer Aerospace a Fluid Systems fittings business, a company specialising in highly engineered, high-pressure hydraulic fittings for fluid conveyance applications;
  • Continued to actively manage the portfolio by reviewing our operating businesses and evaluating them in terms of strategic fit within the Group;
  • Reinstated dividend in 2022.
  • Continue to increase the Group's ROCE;
  • Integrate and grow Spencer Aerospace in line with the business plan;
  • Continue to drive working capital efficiencies at all operations;
  • Continue to actively manage portfolio.
Governance
The Board regularly reviews its 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’s Strategic Review.
TALENT AND DEVELOPMENT
WHAT IT IS WHAT WE'VE DONE
 OUR PLANS FOR 2023
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. We were early adopters of Hampton Alexander and Parker Review recommendations on gender and ethnic diversity targets.
  • Ongoing actions as a result of the Global Employee Opinion Survey feedback;
  • Focused on attracting and developing talent. To support this, we continued to implement “Recruit”, our online recruitment system, and supplemented local training and development activities by launching more skills and personal development eLearning, via “Learn”, our global learning management system;
  • Continued to focus on diversity and inclusion across the business with a particular focus on gender;
  • Undertook our second Global Employee Opinion Survey to assess culture and employee engagement across the Group.
  • Developing and implementing action plans following the Global Employee Opinion Survey run in October 2022;
  • Relaunching our Group Leadership Development Programme;
  • Continue to focus on diversity and inclusion across the business with a particular focus on gender;
  • Focus on talent acquisition and 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.
ENHANCE SENIOR’S AUTONOMOUS AND COLLABORATIVE BUSINESS MODEL
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2023
Senior’s business model is one of empowering and holding accountable our operating businesses to operate within a clearly defined control framework to develop and deliver business plans in line with overall Group strategy. Increasing collaboration amongst operating businesses in the Group is a priority to ensure profitable, risk-reduced solutions are created to address our customers’ needs whilst maintaining the autonomous business structure.Business leaders throughout Senior are actively embracing collaboration activities with priorities set at both divisional and Group level in consultation to address and expand in our evolving markets.
  • In line with customer expectations, we established an AS 13100 Council to share best practice and co-ordinate efforts to ensure on time completion of the certification;
  • Refocused our Technology Council to align our technology investment with our purpose, focusing on research and development that supports growth in low carbon technologies, completing projects aligned to renewables;
  • Participated on R&D projects with our customers, focusing on new technologies that will be employed on future programmes.
  • Form a new Global Market Team (GMT) for Hydrogen with both Flexonics and Aerospace participants.
  • Launch inaugural Group-wide Innovation Competition sponsored by the Technology Council aimed at inspiring innovation and encouraging greater collaboration and participation with our wider Technology Council activities;
  • Further enhance effectiveness of the IT Council through quarterly conferences to share best practice and collaborate on initiatives that support our InfoSec Strategy for 2023 to 2025.
Governance
The Executive Committee and the Board regularly review the organisational design of the Group to ensure it is aligned to our strategic plan.
COMPETITIVE COST COUNTRY STRATEGY
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2023
Enhance Senior’s global footprint to ensure our operating businesses stay competitive at both a capability and cost level, with key investments 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. Establishing increasingly sophisticated capabilities in these competitive cost countries and optimising production capacity to align with growing demand.
  • Doubled the production volume of Senior Aerospace Mexico by transferring key EBU assemblies from our US businesses;
  • Continued to invest and enhance the capability of Senior Aerospace Mexico to support production of Fluid Systems products including machining, welding and assembly;
  • Secured contracts to fill capacity in our cost competitive country locations;
  • Continued to transfer product lines to locations where our customers operate reducing supply chain risk and supporting customer cost expectations.
  • Continue investing and transferring Fluid Systems product to Senior Aerospace Mexico;
  • Invest in more machining capacity to support the production ramp in Malaysia;
  • Investing in machining to support recently awarded A320 contracts as rates increase in Malaysia and Thailand;
  • Continue to transfer cost sensitive product lines to competitive cost locations to support customer rate increase where appropriate;
  • Launch production of products being relocated from a Western European truck customer’s facility to our plant in the Czech Republic;
  • Relocate industrial products from our operation in France to Czech Republic, driven by customer’s assembly being in the Czech Republic. This will allow for planned growth of aerospace fittings in France.
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.
INTRODUCED A HIGH PERFORMANCE OPERATING SYSTEM
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2023
Senior has implemented a high performance operating system, drawing on the many excellent 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;
  • A comprehensive business review process utilising a balanced scorecard incorporating KPIs with focus on performance, growth, operational excellence and talent development.
  • 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;
  • Added continuous improvement champions to key Aerospace businesses to drive faster improvements;
  • Both divisions conducted multiple lean events with continuing focus on cycle time reduction and cost reduction, together with continued targeted inventory improvement workshops;
  • Completed the roll-out of APQP process standards across our Aerospace operating businesses.
  • Mitigated freight, materials, labour, and energy inflation with appropriate pricing actions.
  • Continue to diligently manage supply chain and inflationary pressures by having active dialogue with our customers and suppliers and mitigating for inflation where possible as part of negotiations in contract renewals;
  • Continue events focused on improving efficiencies and output as demand increases;
  • Work to improve capacity and throughput in our Aerospace operating businesses;
  • Establish a supplier council focused on improving supplier on-time delivery, risk of supply reduction, cost reduction and insourcing opportunities;
  • Continue to work to improve the SOS Lean skill set of new Continuous Improvement leaders and Manufacturing Engineers across the business;
  • Continue to focus on improving working capital efficiencies.
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
WHAT IT IS WHAT WE'VE DONE OUR PLANS FOR 2023
Sustainability is an integral part of our strategy. We continuously aim to deliver our products in a manner that is both environmentally sustainable and supports economic growth and long-term value creation for shareholders through sustainable methods. Our engineering expertise is key in helping to tackle the climate change and clean air challenge as the world transitions to a lower carbon economy. We achieve this by applying our expertise and technology across many different applications in hard to decarbonise sectors.
  • Awarded the top ‘A’ score by CDP in its global annual ranking for disclosure and actions on climate change.
  • In February 2022, Senior was awarded the highest leadership status in CDP’s annual supplier engagement ratings.
  • CO2 emissions were reduced further in our operations, keeping us on track to deliver our Scope 1, 2 and 3 Science Based Target Initiative (“SBTi”) verified Near Term (2025) Targets.
  • We have submitted our long-term Scope 1,2 and 3 Net Zero Targets to SBTi for validation.
  • 41% of our electricity was sourced from renewable energy, an increase from 36% in 2021.
  • We secured multiple development contracts for clean energy projects.
  • Continue to deliver our Scope 1, 2 and 3 Science Based Target Initiative (“SBTi”) verified Near Term (2025) Targets.
  • Maintain our CDP leadership status.
  • Achieve verification from SBTi of our long-term Scope 1,2 and 3 Net Zero targets.
  • Secure additional development and production clean energy contracts.
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.