Bodycote plc · LSE:BOY
Bodycote — H1 2009 Earnings Presentation
41 slides from Bodycote's earnings presentation, 2009
Slide 1: 2009 Interim Results
Bodycote 2009 INTERIM RESULTS
Slide 2: Introduction
Introduction • Stephen Harris – CEO - Low Pressure Carburising - Improved fatigue performance and cleanliness 1 2009 Interim results
Slide 3: Overview
Overview • Revenue down 19.4% to £227.9m (2008: £282.8m) and 31.0% at constant exchange rates • Headline operating loss of £1.7m (2008: profit £41.0m) • Positive operating cash flow of £14.5m (2008: £29.0m) • Restructuring programme extended and progressing as planned • Unchanged interim dividend of
Slide 4: Financial results
Financial results • David Landless – Group FD - Hot Isostatic Pressing - Casting densification and complex near net shapes 3 2009 Interim results
Slide 5: Interim Statutory Results (Continuing Operations)
Interim Statutory Results (Continuing Operations) 4 2009 Interim results
Slide 6: Interim Headline Results
Interim Headline Results 1 Earnings before exceptionals, interest, tax, depreciation, amortisation, impairment and share-based payments. 2 Pre exceptional items and share of associates’ interest and tax. 3 Pre exceptional items and share of associates’ tax. 5 2009 Interim results 4 Pre exceptional i
Slide 7: Profit Reconciliation
Profit Reconciliation 6 2009 Interim results 1 Pre exceptional items and share of associates’ tax.
Slide 8: Profit Bridge
Profit Bridge (Continuing Operations £m) 90.0 85.0 80.0 75.0 70.0 65.0 60.0 55.0 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 7 2009 Interim results Headline Operating Profit is stated pre exceptional items share of associates’ interest and tax.
Slide 9: Operational Gearing – Current (with falling revenue)
Operational Gearing – Current (with falling revenue) 8 2009 Interim results
Slide 10: Restructuring
Restructuring 9 2009 Interim results
Slide 11: Revenue and Operating Profit - By Region
Revenue and Operating Profit - By Region 10 2009 Interim results 1 Pre exceptional items share of associates’ interest and tax.
Slide 12: Summary Cash Flow
Summary Cash Flow 1 Earnings before exceptionals, interest, tax, depreciation, amortisation, impairment and share-based payments. 11 2009 Interim results 2 Earnings before interest, tax, depreciation, amortisation, impairment and share-based payments.
Slide 13: Cash and Debt
Cash and Debt 12 2009 Interim results
Slide 14: Treasury
Treasury • Gross Debt reduced by £170.8m in H1 • £225m RCF matures in August 2010 but plan to refinance in H2 • Significant margin increase and fees expected for any refinancing • 125m RCF matures July 2013 13 2009 Interim results
Slide 15: Financial Ratios
Financial Ratios 1 Earnings before interest, tax, depreciation, amortisation, impairment and share-based payments. EBITDA Rolling 12 months. 14 2009 Interim results
Slide 16: Business Review
Business Review • Stephen Harris – CEO - Thermal Spray - High performance coatings for corrosion and wear resistance 15 2009 Interim results
Slide 17: What's happening in our markets and Bodycote
- What’s happening in our markets - What’s happening in Bodycote - Some insights into the period ahead Some of the material involves management judgements. 16 2009 Interim results
Slide 18: H1 Bodycote sales
H1 Bodycote sales 2008 H1 £283m 2009 H1 £228m Aerospace Aerospace General & Defence & Defence 24% General Industry Industry 18% 40% 42% Automotive 20% Automotive Energy 28% 16% Energy 12% • Overall sales down 19% - Automotive is the most affected by far • At constant exchange overall reduction is 31
Slide 19: Average Daily Sales at Constant Exchange Rates
Average Daily Sales at Constant Exchange Rates 1,000 900 800 Western Europe A&GI North America A&GI 700 Emerging Markets A&GI 600 Western Europe ADE North America ADE 500 400 300 200 100 - P9 2008 P10 P11 P12 P1 2009 P2 P3 P4 P5 P6 • Quarter 2 weaker than Quarter 1 • Run rate has stabilised 18 2009
Slide 20: General Industry
General Industry 140.0 End Market -25% 120.0 £119m Supply chain 100.0 destocking -6% Exchange Closed sites -2% £92m 80.0 60.0 Constant currency decline: Western Europe -35% 40.0 North America -29% Emerging Markets -33% Overall -33% 20.0 H1- 2008 H1- 2009 0.0 H1-2008 End Market Supply chain de- Close
Slide 21: Automotive & Trucks
Automotive & Trucks 90.0 End Market 80.0 -25% £77m 70.0 a in Supply cha destocking 60.0 -14% In-sourcing 50.0 -6% Closed site es -4% Exchange £44m 40.0 30.0 20.0 Constant currency decline: Western Europe -51% 10.0 North America -42% H1- 2008 Emerging Market -46% H1- 2009 Overall -49% 0.0 First Half
Slide 22: Aerospace & Defence
Aerospace & Defence 60.0 End Market -5% Supply chain Exchange destocking -8% Closed 50.0 £54m £52m sites -2% 40.0 30.0 Constant currency decline: Western Europe -13% North America -16% 20.0 Emerging Markets -15% Overall -15% 10.0 H1- 2008 H1- 2009 0.0 H1-2008 End Market Supply chain de- Closed sites
Slide 23: Energy
Energy Exchange End Market -7% £38m £35m Constant currency decline: Western Europe -2% North America -19% Emerging Markets +54% Overall - 7% H1- 2008 H1- 2009 H1-2008 End Market Exchange Finish First Half • Mixed picture: Ahead? - Power gen – up 5% • Long term growth - Oil production – flat • Pick u
Slide 24: Process Lines and Site Closure
Process Lines and Site Closure • Sites closed Through H1 – 2009 H2 – 2009 & Later 17 16 • Process lines decommissioned: Through H1 – 2009 H2 – 2009 & Later Mothball 96 26 Taking out of service 93 29 End 2009 • Total sites left: 171 • Total Process lines operational: 1,709 23 2009 Interim results
Slide 25: Matching costs to volume
Matching costs to volume Headcount 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jun 08 Dec 08 Jun 09 Dec 09 • June headcount is 23% down year on year • Actions in hand achieve further 7% reduction 24 2009 Interim results
Slide 26: Restructuring Cash Spend (£m)
Restructuring Cash Spend (£m) 25 20 Other personnel savings 15 10 Restructuring 5 0 Q4 2008 H1 2009 H2 2009 2010 Later 25 2009 Interim results
Slide 27: Restructuring Annualised Savings (£m)
Restructuring Annualised Savings (£m) Other personnel savings Restructuring • June - £30m restructuring savings run rate – plus £25m other personnel savings 26 2009 Interim results
Slide 28: Good things happening...
Good things happening... • Delayered management • Selected new hires • Increased focus on key markets and customers • Market share 27 2009 Interim results
Slide 29: Outlook
Outlook • Demand visibility limited • Summer shutdowns expected to be longer than usual • Aerospace and oil & gas demand continues to soften • Restructuring extended, savings being delivered • Final dividend to be assessed in the light of outlook in early 2010 • Poised to benefit from the upturn whe
Slide 30: 2009 Interim Results
Bodycote 2009 INTERIM RESULTS
Slide 31: Financial Information
Financial Information • Average shares in issue, H1 - 2009 185.9m H1 - 2008 318.6m • FX rates H1 2009 average vs H1 2008 average H1 - 2009 H1 - 2008 USD 1.48 1.98 EUR 1.11 1.29 • The 2009 anticipated tax rate on normal trading profit continues to be circa 25%. 29 2009 Interim results
Slide 32: Impact Of Exchange Rates
Impact Of Exchange Rates 30 2009 Interim results 1 Pre exceptional items and share of associates’ interest and tax.
Slide 33: Analysis Of Organic/Acquisition Growth
Analysis Of Organic/Acquisition Growth 1 Includes sales/operating profit from closed sites. 31 2009 Interim results 2 Pre exceptional items and share of associates’ interest and tax.
Slide 34: YoY Change in Revenue
YoY Change in Revenue 32 2009 Interim results
Slide 35: Headline Operating Margins
Headline Operating Margins 33 2009 Interim results 1 Pre exceptional items and share of associates’ interest and tax.
Slide 36: Revenue By Market – By Region in %
Revenue By Market – By Region in % 34 2009 Interim results *At constant currency
Slide 37: Acquisitions, Capital Expenditure & Depreciation H1
Acquisitions, Capital Expenditure & Depreciation H1 35 2009 Interim results 1. Net capital expenditure divided by depreciation.
Slide 38: Finance Charge
Finance Charge 36 2009 Interim results
Slide 39: Taxation
Taxation 37 2009 Interim results 1 Pre exceptional items and share of associates’ tax.
Slide 40: Pension Deficits
Pension Deficits 38 2009 Interim results
Slide 41: Slide 41