2008 PRELIMINARY RESULTS Introduction Stephen Harris CEO - - PowerPoint PPT Presentation

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2008 preliminary results introduction
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2008 PRELIMINARY RESULTS Introduction Stephen Harris CEO - - PowerPoint PPT Presentation

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2008 PRELIMINARY RESULTS Introduction Stephen Harris CEO David Landless Group FD John Hubbard former CEO 2008 Preliminary results 2 1 2008 Preliminary results Introduction Stephen Harris CEO

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2008 PRELIMINARY RESULTS

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2008 Preliminary results

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Introduction

  • Stephen Harris – CEO
  • David Landless – Group FD
  • John Hubbard – former CEO

1 2008 Preliminary results

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North America: 43 Western Europe: 115 Emerging Market: 35

2 2008 Preliminary results

  • Stephen Harris – CEO
  • David Landless – Group FD
  • John Hubbard – former CEO

Introduction

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3 2008 Preliminary results

  • Stephen Harris – CEO
  • David Landless – Group FD
  • John Hubbard – former CEO

Western Europe: 115 North America: 43 Emerging Market: 35

Introduction

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Highlights

1 Pre exceptional items and interest and tax on associates.

4 2008 Preliminary results

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Statutory Results

5 2008 Preliminary results

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Headline Results

6 2008 Preliminary results

1 Earnings before exceptionals, interest, tax, depreciation, amortisation, impairment and shared-based payments. 2 Pre exceptional items and interest and tax on associates. 3 Pre exceptional items and tax on associates. 4 Pre exceptional items.

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Profit Reconciliation – Continuing Operations

7 2008 Preliminary results

1 Pre exceptional items and tax on associates.

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Profit Bridge – Thermal Processing (£m)

8 2008 Preliminary results

Headline Operating Profit is stated pre exceptional items and interest and tax on associates.

+6.5 +5.3

  • 0.8
  • 15.1
  • 3.7

+8.7 71.2 70.3 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 70.0 75.0 80.0 85.0 90.0

Headline OP 2007 Price increases Volume growth Input costs Greenfield Acquisitions Foreign exchange Headline OP 2008

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Revenue and Operating Profit - By Region

1 Pre exceptional items and interest and tax on associates.

9 2008 Preliminary results

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YoY Change in Revenue

10 2008 Preliminary results

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Headline Operating Margins

11 2008 Preliminary results

1 Pre exceptional and interest and tax on associates.

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Revenue By Market – Continuing Operations

12 2008 Preliminary results

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Finance Charge

13 2008 Preliminary results

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Year End Cash and Debt at Various Exchange Rates

14 2008 Preliminary results

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Treasury

15 2008 Preliminary results

  • Balance Sheet Hedging will be relaxed
  • £225m RCF matures in August 2010 but could refinance in 2009
  • Significant margin increase and fees expected for any refinancing
  • 125m RCF matures July 2013
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Taxation

16 2008 Preliminary results

1 Pre exceptional items and tax on associates.

  • 2009 anticipated tax rate on Headline Profit Before Tax1 25.0%
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Financial Information

17 2008 Preliminary results

  • Shares in issue – 2008 average 310.9m 2009 187.5m
  • FX rates 2008 average

Year H1 H2 USD 1.87 1.98 1.75

EUR 1.26 1.29 1.23

2009 current* USD 1.44

EUR 1.13

‘*Closing rate 24 February 2009.

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Pension Deficits

18 2008 Preliminary results

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Summary Cash Flow

19 2008 Preliminary results

1 Earnings before exceptionals, interest, tax, depreciation, amortisation, impairment and shared-based payments. 2 Earnings before interest, tax, depreciation, amortisation, impairment and shared based payment.

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Financial Ratios

20 2008 Preliminary results

1 Earnings before interest, tax, depreciation, amortisation, impairment and shared-based payments. 2 Pre exceptional items and interest and tax on associates.

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Heat Treatment

Operating Profit - Margins

38.8 44.8 50.3 61.6 60.0 10 20 30 40 50 60 70 2004 2005 2006 2007 2008 5 10 15 20 25

£m %

21 2008 Preliminary results

Revenue (£m)

328.7 349.2 375.0 421.7 499.9 100 200 300 400 500 600 2004 2005 2006 2007 2008

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Hot Isostatic Pressing

22 2008 Preliminary results Revenue (£m)

32.1 35.2 38.9 43.5 51.9 10 20 30 40 50 60 2004 2005 2006 2007 2008

Operating Profit - Margins

7.1 9.5 12.8 15.4 15.3 2 4 6 8 10 12 14 16 18 2004 2005 2006 2007 2008 10 20 30 40 50

£m %

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Restructuring

  • Match cost base with reduced demand
  • Position business for recovery post recession
  • Removing unprofitable and low value added parts of the network
  • 31 facilities being closed or consolidated
  • Headcount is being reduced by at least 10%
  • Annualised cost saving £18m

23 2008 Preliminary results

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Restructuring

24 2008 Preliminary results

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Major Strategic Actions in 2008

  • Value of Testing Realised
  • Balance sheet strengthened
  • Restructuring underway
  • Selective acquisitions

25 2008 Preliminary results

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Outlook

  • Following the sale of the Testing activities Bodycote is a focused

business with a strong balance sheet. While automotive markets have softened, demand from aerospace, power generation and oil & gas markets remain steady.

  • Despite the uncertain economic environment, we remain confident in

the medium and long term prospects for the Group.

26 2008 Preliminary results

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2008 PRELIMINARY RESULTS

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Continuing Operations Financial Highlights

27 2008 Preliminary results

Target: Mid to high single digit % Target: TP: 40%

Organic revenue growth2

7.6 4.4 5.3 6.9 0.5 1 2 3 4 5 6 7 8 2004 2005 2006 2007 2008 %

People costs as a percentage of revenue3

42.5 43.0 42.2 41.2 41.6

40 41 41 42 42 43 43 44 2004 2005 2006 2007 2008 % Revenue

360.8 384.4 413.9 465.2 551.8

100 200 300 400 500 600 2004 2005 2006 2007 2008

£m CAGR 11%

Headline Operating Profit1

43.1 51.5 58.4 70.3 71.2

10 20 30 40 50 60 70 80 2004 2005 2006 2007 2008

£m CAGR 13% 1 Pre exceptional items and interest and tax on associates. 2 to 3 see definitions Appendix page 33.

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Key Performance Indicators non financial

6 to 9 see definitions Appendix page 33.

28 2008 Preliminary results

Target: >80% Target: >80% Target: All facilities Target: Zero

Utilisation Heat Treatment6

67.0 71.0 72.0 74.0 73.0 62 64 66 68 70 72 74 76 2004 2005 2006 2007 2008 % Accident frequency9

2.8 2.5 3.1 2.4 2.0 1 1 2 2 3 3 4 2004 2005 2006 2007 2008 ISO 14001 compliant facilities8 131 137 100 105 110 115 120 125 130 135 140 2007 2008

Utilisation HIP7

66.0 70.0 72.0 71.0 71.0 63 64 65 66 67 68 69 70 71 72 73 2004 2005 2006 2007 2008 %

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Acquisitions, Capital Expenditure & Depreciation

29 2008 Preliminary results

5 see definitions Appendix page 33.

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Analysis Of Organic/Acquisition Growth

30 2008 Preliminary results

1 Includes annualised sales/operating profit from closed sites. 2 Pre exceptional items and interest and tax on associates.

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Impact Of Exchange Rates

1 Pre exceptional items and interest and tax on associates.

31 2008 Preliminary results

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Emerging Markets

32 2008 Preliminary results

1.8% 2.2% 3.6% 9.3% 10.0%

0.0% 5.0% 10.0%

2004 2005 2006 2007 2008

Emerging markets as a % of Thermal Processing sales

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Key performance indicators definitions

33 2008 Preliminary results

1. Headline operating profit as a percentage of average capital employed. Capital employed includes tangibles and intangibles assets including all previously amortised/impaired goodwill and all non interests bearing assets and liabilities. Headline operating profit is stated pre exceptional items and interest and tax on associates. 2. Headline operating profit as percentage of revenue from continuing operations. Headline operating profit is stated pre exceptional items and interest and tax on associates. 3. Year on year increase in revenue, at constant currencies from continuing operations excluding revenue from acquisitions made within the prior twelve months. 4. The salary and benefit costs of all employees as a percentage of revenue from continuing operations. 5. Net capital expenditure divided by depreciation. 6. Actual revenues expressed as a percentage of theoretical maximum revenue assuming that heat treatment facilities operate 24 hours per day, 365 days per year. 7. The number of facilities holding registrations for ISO 14001. 8. Accident frequency - the number of accidents x 200,000 (approximating 100 man years), divided by the total hours worked.

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