senior plc
5961 high street
rickmansworth
hertfordshire
wd3 1rh
united kingdom 
tel 44 01923 775547
fax 44 01923 896027
wwwseniorplccom
senior plc annual report  accounts 2002
senior plc annual report  accounts 2002 £1646 million


Summary:
 4 senior plc
during another difficult year with most 
of our markets remaining very challenging
the group has reduced its debt and
continued to work on operational
improvements in all respects
the improvement strategy adopted in 2000 and pursued during 2001
continued unabated during 2002 we worked on improving operational
performance in all respects and irrespective of the generally lower level
of customer demand we kept our central costs low and delivered lower
costs and reduced working capital in the subsidiaries we continued
to effect disposals amongst the european industrial businesses and most
importantly we again reduced the group net debt which ended the year
at £874m a reduction of 29 in the year and a reduction of nearly
50 from when the debt reduction programme started in may 2000
gross capital expenditure in the year was reduced to 74 of
depreciation however necessary and justifiable investment was
maintained indeed two new factories were opened in the year to
relocate senior aerospace bwt and senior aerospace ermeto into
modern efﬁcient factories
during the course of the year manufacturing recessionary inﬂuences
became more obvious in most of the developed industrialised world
economic conditions in germany were particularly weak throughout
2002 with those in the rest of continental europe and the usa
weakening during the period canada and to a lesser extent 
the uk were relatively buoyant
the global airline industry continued to react adversely to the
economic slowdown and the threat of international terrorism 
whilst there was some recovery in traffic volumes during 2002 
airline profitability particularly in the usa remains very poor 
as a consequence the major suppliers to the airlines – the aircraft 
and engine builders who are our customers – continued to adjust 
their production schedules downwards throughout 2002 hopefully
2003 will see more settled levels of demand
senior automotive encountered mixed market conditions in europe
the overall demand for vehicles fell by about 3 but the proportion
of diesel engine vehicles continued to climb in the usa demand
remained higher than we had originally expected primarily because 
of dealer incentives and cheap financing as a result vehicle sales
remained at healthy levels 168m cars and light trucks and importantly
dealer stocks of vehicles were at the same level in december 2002 
as they were in december 2001 – 59 days destocking in 2003 should
not therefore be a signiﬁcant issue although demand levels are
expected to show declines over 2002
in the industrial markets in which we participate uk construction
was satisfactory semiconductor equipment continued to be
severely depressed oil and gas was slightly better than expected
power generation started well but ﬁnished weaker and process plant
eg chemicals and steel remained tough
prospects
we enter 2003 with many business opportunities in aerospace the
joint strike ﬁghter programme jsf at lockheed martin is gathering
momentum with many of our operations being involved as they are
with the new large airbus a380 in automotive volume increases
are being seen in our south africa facility and in the longer term
diesel engine performance is beginning to attract more interest 
in the usa the common rail system having transformed the diesel
engine’s fortunes in europe 
throughout the operations we continue to seek operational performance
and management improvements in all areas – lean production more
effective design and rigorous ﬁnancial routines whilst we plan to
continue our existing policies and strategies throughout 2003 now
the debt level is much lower we can look forward to being able to
review these in the medium term in order to take better advantage 
of the economic upturn when it comes
our employees have made valuable contributions during another period
of challenge and change and as an acknowledgement of the part 
they have played the annual report features a small selection of the
men and women of our organisation in addition to the hardware
traditionally highlighted
chief executive’s review annual report  accounts 2002 5
aerospace
senior aerospace had to adjust capacity
almost monthly throughout 2002 as the
industry reduced demand we squeezed 
out cost and working capital and ended 
the year with an improving performance 
demand continued to slow during the year and all operations
experienced rescheduling by customers resulting almost without
exceptionin lower volumes consequently many capacity 
adjustments needed to be made the operations responded 
well to these circumstances
metal bellows which specialises in edgewelded bellows applications
primarily for inﬁnitelife lowmaintenance pumps accumulators and
reservoirs performed exceptionally well despite the semiconductor
industry failing to recover they were helped by an increase in
defence and military spending during the year medical application
volumes increased installation of a new business computer system
began and design engineering proposals were made for substantial
work on jsf 
in san diego california senior aerospace has two machine shops
making structural parts for civil and military jet engines as well as
the engine mountings into the nacelles on the aeroplanes at ketema
the two main customers both adjusted schedules downwards and the
company suffered considerable disruption as a result by the last quarter
of the year however a degree of stability had returned at jet products
volumes came down signiﬁcantly primarily as a result of the boeing
737 buildrate being halved as a result of the need to reduce capacity
its small feeder factory was closed and the operations moved into 
the main facility towards the end of the year the managements 
of ketema and jet products were amalgamated not only as a cost
reduction measure but also to instil the very highest standards of
manufacturing excellence necessary to profitably meet the demands
of this sector of the market these two operations enter 2003 in 
good operational shape and with demand slightly ahead of plan
in france ermeto moved out of ﬁve old buildings into one new modern
facility the prospects for the company continue to be encouraging
and it was one of the few operations to grow its sales during the
year at calorstat an unsatisfactory loss in 2001 was replaced by 
a breakeven trading result in 2002 as a result of the cost reduction
measures taken 2003 has an improved outlook as new business from
airbus is in production
bosman in holland had an eventful year with the rebuilding of the
main assembly hall following the roof collapse in 2001 reductions
in customer schedules and a major reduction in its airline repair
business to counter this the company successfully developed
aftermarket business for the industrial gas turbine sector the company
ended the year with an encouraging order book for 2003
senior aerospace has two composite ducting businesses bwt in the
uk and composites in the usa bwt suffered a substantial schedule
downturn from its main customer bombardier which coincided with
bwt moving into a new facility together with composites bwt is
working on the design and development of the cockpit ducting system
for the a380 the costs of which are being expensed as incurred it is
expected that this work will be ﬁnished early in 2003 as a result of
the relationship on this programme additional work with airbus may
be secured composites had a solid order book throughout 2002 and
despite a small reduction in sales over 2001 increased its profit 
the key to this was a full year deployment of lean manufacturing
techniques however their biggest customer cessna recently 
reduced its schedules for 2003
at bird bellows in the uk a modest reduction in sales for the year
was accompanied by a similarly modest reduction in profitability 
this company is the sole supplier to airbus for the flexible wing 
duct joints and has been nominated for the a380 programme
at ssp in los angeles schedules strengthened helped by the ramp
up of the rollsroyce trent 500 programme and the higher levels 
of spending on military programmes by the us government the
financial performance of the company improved and is expected to
improve further in 2003 this company is an industry leader in high
temperature ducting system design modernisation of the existing
leasehold facility is anticipated to begin during 2003
throughout senior aerospace improvements in ontime delivery and
inventory turns have been delivered as a result of the strategy to
improve operational effectiveness further improvements are expected
capital expenditure for the division is likely to be signiﬁcantly less
than depreciation in 2003 because with the industry in the doldrums
the division needs little additional capacity however few programmes
in the industry have been cancelled and the sales and engineering
staff have remained busy the principal exception to this was fairchild
dornier’s receivership when the fd728 development was halted and
we had to write off £03m due to our continued engineering activity
we do not expect to lose market share whilst the industry awaits an
upturn instead we expect to win additional future programmes to allow
us to grow again when conﬁdence returns to the aerospace industry
1 graham menzies with sylvio deveau
dino pettiford and peter fontecchio
who have all completed 40 years’
service with senior aerospace
metal bellows
2 john williams and tony shannon
at senior aerospace jet products
3 the management team of senior
aerospace ermeto outside their
new factory
4 greg frye presents cessna’s
recognition award to wade bailey
at senior aerospace composites
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automotive
1 jizelle lawrence pictured at 
senior automotive cape town
2 john schmitz gary castello and
julian hernandez are members 
of the design team at senior
automotive bartlett
3 the management team at senior
automotive new delhi
4 some of the team at senior
automotive kassel
senior automotive has continued throughout
2002 to work on product development 
both in the usa and in europe particularly 
in diesel engine applications where use
worldwide continues to grow 
senior automotive operates in two main markets – north america and
europe demand in the usa was slightly higher than expected during
2002 and continued to defy the slowing economy throughout the year
incentives offered by the vehicle manufacturers substantially helped
to maintain demand and 2002 ended with modest stocks in europe
2002 saw a 3 fall in overall demand and 2003 is anticipated 
to be flat at best overall we are cautious about economic 
conditions for 2003
helped by better than expected demand senior automotive bartlett
located near chicago had a good year with proﬁt and cash ﬂow ahead
of plan development work on a number of new products continued
with a variety of customers in particular prototype work has begun
on components for common rail diesel engines for vehicles destined
for the north american market this signiﬁcant development could
lead to substantial new business in the future however the ﬂexible
exhaust connectors for one programme that only commenced shipment
in early 2002 has now been removed from the vehicles this will
make the operation’s performance difficult to repeat in 2003 
at senior automotive blois in france performance improved in 2002
over 2001 but not yet to a satisfactory level management strengthening
and ongoing product rationalisation should enable the business to
make further progress in 2003 the demand for common rail diesel
engine fuel system components is strong and development work on
complete systems continues we have a technical leadership inherent
in this operation which is not yet reﬂected in its performance
2002 was the ﬁrst full year of production at the new greenﬁeld site
in olomouc in the czech republic disappointingly the plant did not
come into proﬁt as planned in 2002 but it should do in 2003 when
further products are transferred from blois and a new third party
programme launches midway through the year
senior automotive kassel traded in very weak markets – all current
production goes to the industrial sector primarily the german
chemical and solar heating industries – and the operations recorded
an unsatisfactory result cost reduction measures are being taken
progress is being made however in developing german automotive
component business for the future with several promising development
programmes underway for heavy truck and fuel control applications
using the group’s hose and bellows technologies
in brazil at senior automotive sao paulo 2002 turned out to be 
a better year than 2001 thanks to the cost reduction measures 
taken in 2001 and a more stable economy the second half of 2002
was particularly strong as a result of some large industrial projects
being completed shipped and invoiced
senior automotive new delhi made good progress in 2002 and
produced another strong performance the company has continued 
to win new work for the indian car assembly market whilst
maintaining its supply of aftermarket components to asia 
europe and the usa
at senior automotive crumlin 2002 was the second year of change
with the product mix moving away from exhaust ﬂexible connectors
and more towards exhaust gas control mechanisms like bartlett 
new product development is a priority
in south africa senior automotive cape town grew its sales by 48
as a result of the new product lines introduced in 2001 and 2002
proﬁtability also increased but was hampered by temporary local raw
material supply problems fortunately not all products specify locally
sourced stainless steel in 2003 it is planned that a new and much
larger factory will be commissioned close to the existing facility 
to cope with substantial new business particularly from peugeot 
we expect to invest around £15m in this business during 2003
whilst the automotive industry continues to build a similar number of
vehicles the desire of the car assemblers for lower costs is relentless
excellent ontime delivery and quality standards are the norm with
technical expertise and price the differentiators senior automotive
with its experienced engineering resource dedication to process and
product development and its access to lower cost manufacturing
sites in south africa india the czech republic and brazil is well
placed to face these challenges
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4 annual report  accounts 2002 7
specialised industrial
specialised industrial improved its profit
and cash ﬂow in markets that were generally
unrewarding pathway canada and hargreaves
contributed well
market conditions were mixed in this sector of our business europe
was quite weak particularly in germany whilst canada enjoyed strong
conditions in the usa markets weakened as the year progressed
the business in canada had a strong year under new leadership and
sales proﬁt and cash ﬂow all improved during 2002 the decision was
taken to close a small service factory to further improve performance
the oil and gas markets were healthy and the canadian steel mills 
an important market sector operated in better market conditions than
were enjoyed by steel companies in most other parts of the world
the hose business in romeoville illinois improved its performance
but remained a modest contributor as the semiconductor market
failed to recover
pathway with operations in new braunfels texas and oakridge
tennessee had another good year despite the downturn in the us
power generation original equipment market the company is the
world leader in the design and manufacture of large expansion joints
for process plant applications and has the physical capacity to build
the largest sizes speciﬁed 2003 is likely to see slightly weaker markets 
in sweden our teﬂon hose business habia generated a decent cash
ﬂow in subdued market conditions that led to lower sales and proﬁts
turnover of the three european metal hose operations in the uk holland
and france reduced a little in aggregate in subdued market conditions
prospects appear slightly better for 2003 primarily because of the 
reequipping of the uk gas distribution infrastructure a strengthening
position in the seagoing tanker discharge market for composite hose
in holland and due to lower costs and a rising order book in france
the four businesses that comprised our european expansion joint
operations based in the uk denmark poland and the czech republic
were sold during 2002 we wish everyone employed in these businesses
well for the future 
at senior hargreaves 2002 started with a good quality order book 
and finished with year on year improvement in sales profits and 
cash ﬂow this business is the uk market leader in the manufacture
and installation of air conditioning ducting looking forward the
commercial construction industry is slowing whilst medium term
opportunities are returning in nuclear decommissioning public
service and infrastructure projects
overall the division improved its quality of earnings during 2002
sales were down very marginally but the return on sales before
goodwill amortisation and exceptional items increased from 36 
to 42 with cash inﬂow well ahead of operating proﬁt and 12
higher than in 2001 this represented a valuable contribution 
to the group’s earnings and debt reduction strategy
graham menzies chief executive
1 andrew bridgewater producing gas
meter connections at united flexible
2 makram ebeid is a machine design
engineer at romeoville
3 ken may is a member of the
pathway production team
4 brian ward 46 years’ service
william bateson 39 years 
tony burke 49 years and 
kevin white 31 years 
at senior hargreaves
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