Babcock International Group Plc · LSE:BAB
Babcock International — Corporate Update (September 2007)
67 slides from Babcock International's corporate update, Sep 26, 2007
Slide 1: Site visit, 26-27 September 2007 Presentations
Site visit, 26-27 September 2007 Presentations
Slide 2: Contents
Contents 1. Briefing – The civil nuclear market 2. Babcock Marine 3. DML Group overview
Slide 3: Briefing – The Civil Nuclear Market
BRIEFING – THE CIVIL NUCLEAR MARKET 26 SEPTEMBER 2007 N U C L E A R A member of Babcock International Group
Slide 4: Agenda
Agenda • UK market features • BNS Nuclear Services • Summary
Slide 5: UK Market - Customers
UK Market - Customers Now Future BE BE NDA + BNFL New Tier 1 Contractors NDA + UKAEA New Tier 1 Contractors AWE AWE
Slide 6: UK Markets – Contractor Tiers
UK Markets – Contractor Tiers Tier 1 Tier 2 Tier 3
Slide 7: UK Market Features – Spend
UK Market Features – Spend Specific Estimated Value • Support existing operational plant £850M p.a. • De-fuelling and decommissioning shut down reactors £80bn • Waste management and storage Over 25 years • Decommissioning of redundant nuclear facilities £13bn Over 10 years • Potential new reactor bu
Slide 8: Market Segment: Operational Reactor Support
Market Segment: Operational Reactor Support British Energy - 7 Advanced Gas-cooled Reactors (AGR’s) - 1 Pressurised Water Reactor (PWR) - Outage support - Refurbishment - Life extension - ALSTEC a critical supplier - BE considering bigger long-term contracts
Slide 9: Market Segment: Operational Reactor Support (continued)
Market Segment: Operational Reactor Support (continued) Magnox North - 2 Magnox Reactors - Oldbury (close end 2008) - Wylfa (close end 2010) - De-fuelling requirement - ALSTEC contacted to support Support to Thorpe and MOX operations - INS contract at Sellafield
Slide 10: UK Market Features – Spend
UK Market Features – Spend Specific Estimated Value • Support existing operational plant £850M p.a. • De-fuelling and decommissioning shut down reactors £80bn • Waste management and storage Over 25 years • Decommissioning of redundant nuclear facilities £13bn Over 10 years • Potential new reactor bu
Slide 11: Market Segment: De-fuelling and Decommissioning
Market Segment: De-fuelling and Decommissioning • Magnox reactors being progressively shut down • Speed up and safety improvements to existing de- defuelling equipment • ALSTEC completed Sizewell A, involved in Chapelcross and Calder Hall • Contracted to Magnox to support Oldbury and Wylfa
Slide 12: Market Segment: Waste Retrieval, Sortation, Encapsulation and Storage
Market Segment: Waste Retrieval, Sortation, Encapsulation and Storage • Wastes to recover and sort from vaults at shut down power stations • Wastes to retrieve from high hazard areas and other NDA sites • Significant plant, equipment and supporting services required • INS established at Sellafield a
Slide 13: Market Segment: Decommissioning of Redundant Facilities
Market Segment: Decommissioning of Redundant Facilities • Major portion of NDA expenditure (approx 40%) • Large programme of work at Sellafield and Dounreay • INS well established with MDDH and Decommissioning framework contracts on high hazard areas at Sellafield • Very significant programme at AWE
Slide 14: Market Segment: Research and Experimentation
Market Segment: Research and Experimentation • Significant programme of work in Fusion programme at Culham • Project ISIS • Future experimental facilities at Harwell
Slide 15: Market Segment: New Reactor Build
Market Segment: New Reactor Build • Conditions being developed to encourage new build (planning, pre-licensing) • Four designs possible – all water reactors • ALSTEC and DML have significant PWR experience • Long term relationships with British Energy, AREVA and Westinghouse
Slide 16: Babcock Civil Nuclear
Babcock Civil Nuclear • Will combine resources of: ALSTEC Group INS (part owned) Babcock Marine DML Frazer-Nash Consultancy (FNC) • Will become one of the largest players in the UK nuclear market for nuclear engineering and support services with 1,500 skilled people • Will have significant reach bac
Slide 17: Babcock Civil Nuclear: Resource distribution and UK geographic coverage
Babcock Civil Nuclear: Resource distribution and UK geographic coverage DOUNREAY KEY FASLANE ROSYTH GLASGOW HUNTERSTON A TORNESS Babcock Marine HUNTERSTON B CHAPELCROSS SELLAFIELD CALDERHALL HARTLEPOOL HEYSHAM 1 MANCHESTER HEYSHAM 2 WYLFA RISLEY WARRINGTON WHETSTONE •220 •220 BURTON-ON TRENT SIZEWEL
Slide 18: Summary
Summary Significant market opportunity because Babcock has: • Experience of working at most nuclear sites • Relevant and extensive domain knowledge in each of the market areas • Significant depth and breadth of suitably qualified and experienced resource • An ability to address most parts of the ava
Slide 19: Contents
Contents 1. Briefing – The civil nuclear market 2. Babcock Marine 3. DML Group overview
Slide 20: Babcock Marine
Babcock Marine
Slide 21: Babcock Marine
Babcock Marine • Faslane, Clyde •Devonport •Rosyth
Slide 22: Babcock Marine
Babcock Marine DML BNS BES Devonport Faslane Rosyth • Submarines • Submarine Support • Submarines Upkeep/ Afloat Storage Redundant • Minor War Vessel Support/Disposal • Surface Warships Support • Surface Warships Upkeep/ Support Upkeep/ Support • Naval Base • CVF Aircraft Carriers • Defence Systems
Slide 23: Submarine Support
Submarine Support • Babcock Marine is sole Submarine Support partner – Vanguard Class – Trafalgar Class – Astute Class • Unique Strategic Facilities – Refit complex Devonport – Ship-lift Faslane – New Astute Jetty at Faslane • Future Programmes – Submarine Decommissioning (Project ISOLUS) – Future N
Slide 24: Surface Warship Support
Surface Warship Support • Babcock Marine provides 75% of upkeep at Rosyth/Devonport • 50% of surface fleet base ported at Devonport • Unique facilities including Frigate Complex, Aircraft Carrier docks • Involved in support of ALL current classes of ships • Tier 1 Partner in CVF Aircraft Carrier All
Slide 25: Babcock Marine Core Strategic Aim: Through Life Class Management
Babcock Marine Core Strategic Aim : Through Life Class Management Of all classes of Submarines and Warships Through Life Class Management Configuration Design Material Waterfront Management
Slide 26: Defence Industrial Strategy: Alignment
Defence Industrial Strategy: Alignment CVF •Babcock Marine •Jasper JV •Aircraft Carrier Alliance •BAE •Thales SECA SSSA •Babcock Marine •Babcock Marine •BAE Barrow •BAE / VT JV •Rolls Royce •Submarine Enterprise Collaboration •Surface Ship Support Alliance Agreement
Slide 27: Ministry of Defence: Customer Alignment
Ministry of Defence: Customer Alignment Defence Equipment & Support Director General Director General Chief Of Material Ships Subs FLEET • CVF • SECA • WSMI • SSSA • TSS • Base Reform • DSA • SSMG • Improved use • RFA • Future Deterrent of Facilities • MARS • Nuclear Facilities • FSC
Slide 28: Strategic Alignment
Babcock Marine Devonport Faslane Rosyth Submarines Warships Defence Systems Naval Bases & Ports Commercial Strategic Operational Alignment Alignment Babcock Marine Through Life Class Management Defence Naval Bases & Submarines Warships Systems Ports Commercial Devonport Faslane Configuration Design
Slide 29: Terms of Business Agreement
Babcock Marine Naval Base Surface Ships Submarines Support Defence Systems Strategic Development Terms of Business Agreement •CVF •TSS •Naval Base •SSSA •SECA Reform DG SHIPS DG SUBS COM Fleet D E&S
Slide 30: Contents
Contents 1. Briefing – The civil nuclear market 2. Babcock Marine 3. DML Group overview
Slide 31: DML Group Overview
DML Group Overview Site visit to Devonport Management Limited 26 – 27 September 2007
Slide 32: DML Group
DML Group a ca a gr af 5 sac ge Bors, ris ae g
Slide 33: DML Group UK locations
DML Group UK locations Glasgow Frazer-Nash Burton on Trent Faslane Frazer-Nash Support Office Lichfield LSC Bristol Frazer-Nash Keynsham DML Appledore Woking LSC Shipbuilding Yard Plymouth Devonport Dockyard Dorking Frazer-Nash
Slide 34: Devonport – looking South
Devonport – looking South
Slide 35: Range of activities
Range of activities
Slide 36: Business overview
Business overview Unique site Unique capabilities Developing niche High visibility of commercial DML Turnover and Operating Profit potential future markets workload Developing through-life Well invested capability business management Coherent strategy Cash generative Strong record of performance imp
Slide 37: Devonport – a unique site
Devonport – a unique site UNIQUE NUCLEAR FACILITIES • frigate numbers base- • operational squadron ported in Devonport shares refit are important overheads • amphibious ships add to critical mass • Fleet Time support work important Surface Ship Submarine Operations Operations • shared nuclear overhe
Slide 38: Unique capabilities
Unique capabilities • £900 million recent investment in Devonport’s nuclear facilities Unique & recently • Further £180 million MoD investment just approved upgraded • Sole dockyard with submarine re-fuelling and full nuclear facilities refit capabilities in the UK • Required to remain licensed whil
Slide 39: Coherent strategy
Coherent strategy COMMERCIAL WORK Leveraging the capabilities and facilities developed for the core business for commercial and non-military work
Slide 40: Developing capabilities
Developing capabilities Specify work Plan and supply material Concept Design Construct Operate Maintain Upkeep and Dispose update Collate and manage data Develop processes and techniques Maintain and develop infrastructure
Slide 41: Submarine business
Submarine business • £204 million revenue in financial year ending 31 December 2006 • Currently employs 2,650 people • 4 submarine-capable docks • Second of four Vanguard Class refuelling refits in progress • Final Trafalgar Class refuelling refit completes early 2009 • Continuous stream of Trafalga
Slide 42: Vanguard Class revenue stream
Vanguard Class revenue stream 9 Dock Facility • Commissioned 2002 • Vanguard Class submarine refuelling refit • 2 million man hours per project • 165 week duration • recent planning contract worth £30 million for next refit – HMS Vigilant
Slide 43: Trafalgar Class revenue stream
Trafalgar Class revenue stream Submarine Refit Complex (14 Dock) • T Class (SSN) refuelling refit • 2 million man hours per project • 180 week duration
Slide 44: SSN docking revenue stream
SSN docking revenue stream 10 Dock • T Class (SSN) Revalidation and Maintenance Periods (RAMPs) • Projects undertaken under WSMI contract • 230,000 man hours per project • 40 week duration
Slide 45: Submarine decommissioning
Submarine decommissioning SRC (15 Dock) • S Class lay up preparation • 80,000 man hours per project • 25 week duration
Slide 46: Modern nuclear facilities
Modern nuclear facilities Primary Circuit Decontamination • Reactor head removal and replacement • Used fuel removal • Assembly of new core 9 Dock RAH Nuclear Transfer Low Level Refuel Route (NTR) Facility • 9 Dock to Low Level Refuelling Facility (LLRF)
Slide 47: Future Nuclear Facilities
Future Nuclear Facilities • Fleet Time Dockings – contract signed £180 million – remove main fuel handling crane – strengthen buildings – generate safety case • Defuelling – new reactor access house and crane – training rig – reactor chemical treatment facility – civil works
Slide 48: Future business
Future business • Vanguard Class non-refuelling refits – 3 to undertake • S & T Class lay-up and defuelling – 12 SSNs to be defuelled • Submarine disposal – 27 submarines to be dismantled • Class management – Trafalgar Class – Vanguard Class
Slide 49: Surface ship business overview
Surface ship business overview • Surface ship upkeep and competitive Fleet Time fitting • Revenue of £28 million in 2007 • Single stream upkeep refitting over recent years • Current programme – HMS Cumberland T22 Refit (£18 million) – HMS Ocean LPH Docking Period October 2007 (£30 million) contract
Slide 50: Refits and dockings
Refits and dockings • 5 year docking cycle • Initial specification likely to change • Complex integration in the latter stages
Slide 51: Surface ship facilities
Surface ship facilities SFM/DML collocated Fleet Time Support Group Frigate Refit Complex (FRC) 2 Basin non-tidal outfitting and maintenance berths 1 Wharf tidal outfitting and maintenance berth
Slide 52: Surface ship facilities (continued)
Surface ship facilities (continued) 10 Dock large ship dock from 2008 for LP(H), LP(D) & CVS 8 Dock large ship dock for LP(D), T22, T42/T45 5 Basin East – non-tidal outfitting and maintenance berths for large ships
Slide 53: Future business
Future business • Allocated docking periods and refits • Ongoing Fleet Time maintenance and upgrades • Class Management of amphibious ships (Albion, Bulwark, Ocean) • Class Management of frigates
Slide 54: Naval Base support contract - WSMI
Naval Base support contract - WSMI • Revenue of £102 million p.a. • Contract awarded in September 2002 • Contract extension to April 2009 just signed - £188 million • Unfinished privatisation business • Scope includes: – submarine and ship engineering – waterfront berthing services – facility manage
Slide 55: WSMI Engineering activities
WSMI Engineering activities • £30 million + engineering spend • 800,000 manhours • 60+ planned maintenance periods • Management of 300 RN seconded staff • Planning and integration responsibility • OPDEF support worldwide
Slide 56: WSMI Estate Management
WSMI Estate Management • Utilities • Operational electricity – 60m KW/hrs • Planned maintenance – 60,000 tasks • Reactive maintenance & Helpdesk – 5000 calls • Forward building repair plan - £5 million p.a. • New works < £250k - £2 million p.a.
Slide 57: WSMI Waterfront Services
WSMI Waterfront Services • 23 operational tidal berths • 24/7 berthing service • 2,200 berthing operations per year • Helpdesk service for berthed ships
Slide 58: WSMI Logistics
WSMI Logistics • Regional distribution hub for the Southwest • 50 licensed drivers • Warehousing of 55,000m² • Inventory of £400m+
Slide 59: Defence systems
Defence systems • Platform Support • Equipment and logistics • Combat systems • Future programmes
Slide 60: Defence Systems business – developing new capabilities
Defence Systems business – developing new capabilities Specify work Plan and supply material Concept Design Construct Operate Maintain Upkeep and Dispose update Collate and manage data Develop processes and techniques Maintain and develop infrastructure
Slide 61: Defence Systems - Platforms
Defence Systems - Platforms • Submarine support – existing prime contract for design support of all current classes – covers whole boat excluding reactor and strategic weapon system – covers design changes, configuration management, safety cases, studies – new contract will expand scope – to include
Slide 62: Defence Systems - Equipment
Defence Systems - Equipment • Long term contracts for equipment availability – pumps – domestic equipment – 4.5” gun – Phalanx gun • Spares provision contracts – submarines – landing craft • Build and support of specialist military vehicles – recent follow-on contract for 154 vehicles – £30 million
Slide 63: Defence Systems – Combat Systems
Defence Systems – Combat Systems • Support – Commissioning and support for combat systems capability in Maritime sector – Delivering coherency to legacy systems through application of System Engineering – Sophisticated communication shore integration facilities • Capability Insertion – Skilled resou
Slide 64: Future platforms
Future platforms • Further growth opportunities • existing role in CVF design and equipment supply • Key personnel seconded into successor programme for new deterrent submarine • New auxiliary ships – MARS • New frigate - FSC
Slide 65: Other business streams
Other business streams • Nuclear market – specialist equipment design and build – Berkeley NDA contract award imminent – £13m – also providing safety case support to MoD (Faslane) • Consultancies – Frazer-Nash – complex engineering design and analysis (aerospace, civil nuclear, defence) – LSC – logi
Slide 66: Summary
Summary • Unique nuclear facilities and submarine expertise • Supported by major investment • Devonport/Rosyth - a great surface ship combination • High visibility of future work streams • Well-positioned for future business development
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