Bodycote Plc · LSE:BOY
Bodycote — Bodycote International — H1 2004 Earnings Presentation
18 slides from Bodycote's earnings presentation, 2004
Slide 1: Interim Results 2004
BODYCOTE INTERNATIONAL plc Bodycote outsourcing for industry 2004 Interim Results
Slide 2: Interim Results
Interim Results H1 2004 H1 2003 Change £m £m % Restated Sales 231.4 228.1 +1 EBITDA* 47.8 45.2 +6 Operating Profit* 26.6 22.8 +17 Profit before Tax* 22.2 17.7 +25 Free cashflow 24.7 13.5 +83 Headline EPS 6.0p 5. 0p+20 Dividend/Share 2.25p 2.10p +7 *pre Goodwill and Exceptional items slide number 2
Slide 3: Sales/Operating Profit - By Region
Sales/Operating Profit - By Region H1 2003 H1 2004 Europe North America UK £m £m £m £m £m Sales 155.8 Heat Treatment 154.8 89.4 51.5 13.9 29.7 Materials Testing 30.5 6.8 13.6 10.1 13.5 Hot Isostatic Pressing 16.0 4.6 9.2 2.2 15.8 Metallurgical Coatings 17.1 12.4 2.7 2.0 214.8 218.4 113.2 77.0 28.2 1
Slide 4: Impact Of Exchange Rates
Impact Of Exchange Rates Sales Operating Profit £m £m H1 2004 As Reported 231.4 26.6 H1 2004 Using 2003 Rates 242.8 28.3 (11.4) Impact (1.7) slide number 4
Slide 5: Sales By Market
Sales By Market H1 2004 2003 % % Sector Automotive - Cars & Light Truck 23 23 - Heavy Truck & Bus 5 5 Aerospace/Defence 17 17 Construction, Agricultural, Railways & Marine 16 15 Tooling 11 13 Oil & Gas 6 6 Power Generation 5 4 Consumer Products 5 4 Health Science & Environmental 4 4 Electronics & Te
Slide 6: Exceptional Items
Exceptional Items H1 2004 H1 2003 2003 Exceptional Items £m £m £m Wet Coatings asset write down - Goodwill - - (11.1) - Fixed Assets - - (18.9) - - (30.0) Redundancy/notice payments (1.7) - - Plant closure costs (2.1) - - Asset write down (1.6) - - (5.4) - - Profit on disposal of discontinued operat
Slide 7: Summary Cash Flow/Financial Ratios
Summary Cash Flow/Financial Ratios H1 2004 H1 2003 £m £m EBITDA* 47.8 45.2 Working Capital Movement (2.7) (5.3) CAPEX (16.0) (18.2) Interest (4.5) (5.4) Tax 0.1 (2.8) Free Cash Flow 24.7 13.5 Net Debt/EBITDA (Annualised) 1.3x 2.5x Interest Cover* 6.0x 4.5x Gearing 30% 56% Free Cash Flow 11% 6% Capex
Slide 8: Acquisitions, Capital Expenditure & Depreciation
Acquisitions, Capital Expenditure & Depreciation £ million Acquisitions 104 Capital Expenditure Depreciation 84 61 63 54 46 40 43 37 38 31 33 27 21 16 10 3 3 1999 2000 2001 2002 2003 2004H1 Capex/Dep 3.1x 1.9x 1.6x 1.3x 0.8x 0.75x slide number 8
Slide 9: Balance Sheet
Balance Sheet H1 2004 H1 2003 Restated £m £m Goodwill 135.1 151.1 Tangible Fixed Assets 455.7 503.5 Investments 0.8 0.9 Trading Working Capital 30.0 37.0 Other Net Current Assets (68.4) (64.7) 553.2 627.8 Shareholders’ Funds 425.2 400.7 Minority Interests 0.9 0.9 Net Borrowings 127.1 226.2 553.2 627
Slide 10: Heat Treatment
Heat Treatment H1 Revenue (₤m) 200 177.5 180 156.6 155.8 154.8 160 Leveraging customer 140 120 115.5 base 100 80 60 40 20 Rolling out 0 2000 2001 2002 2003 2004 proprietary processes H1 Operating Profit (₤m) 40 35.5 35 Eastern Europe 30 26.9 25 19.8 19.0 20 17.4 15 10 Danish acquisition 5 0 2000 200
Slide 11: Materials Testing
Materials Testing H1 Revenue (₤m) 35 29.7 30.5 30 26.4 26.2 25 20.8 Spreading technologies 20 15 10 5 Outsourcing 0 2000 2001 2002 2003 2004 H1 Operating Profit (₤m) 6 5.6 5.4 5.3 Canadian acquisition 5 4 4.3 4.6 3 2 1 0 2000 2001 2002 2003 2004 slide number 11
Slide 12: Hot Isostatic Pressing
Hot Isostatic Pressing H1 Revenue (₤m) 18 16.5 16.6 16.0 16 15.0 Volume growth plus 13.5 14 12 operational gearing 10 8 6 Applications being 4 2 developed: 0 2000 2001 2002 2003 2004 • ALON H1 Operating Profit (₤m) • Metal Matrix Composites 6 5.4 • Extruded duplex pipe 5 4.3 • Densal II® 4 3.5 3 2.5
Slide 13: Metallurgical Coatings
Metallurgical Coatings (excluding electroplating) Physical Vapour Deposition (PVD) H1 Revenue (₤ m) 18 17.1 15.8 16 13.9 13.9 Diffusion bonding 14 12 K Tech 10 8 6.7 CoatAlloy® 6 4 Sherardizing 2 Thermal Spray 0 2000 2001 2002 2003 2004 H1 Operating Profit (₤ m) Anodising 4 3.1 3 2.6 2.1 2 1.8 1.5 1
Slide 14: Electroplating
Electroplating H1 Revenue (₤ m) 9 of 17 plants sold/closed 20 18 17.0 17.3 16 £30m charge in 2003 14 13.6 13.3 13.0 12 £5.4m in H1 2004 10 8 £3.0m proceeds 6 4 2 Earnings enhancing 0 2000 2001 2002 2003 2004 Eliminates cash drain Frees up management time H1 Operating Profit (₤ m) 4 3.0 3 2 1.0 1 0 2
Slide 15: Current Trading and Prospects
Current Trading and Prospects H1 04 in line with expectations Market stable with some encouraging signs H2 organic sales impacted by holidays Energy costs expected to increase Outsourcing demand continues slide number 15
Slide 16: Benefits of Rights Issue
Benefits of Rights Issue Strengthened balance sheet Facilitated exit from electroplating Able to capture outsourcing opportunities Made two modest acquisitions in existing markets Expanding into lower cost areas slide number 16
Slide 17: Strategy Implementation
Strategy Implementation Bodycote positioned as subcontractor of choice Focused on core business Competitive advantages being exploited Roll-out proprietary value added processes Infill existing markets Follow customer expansion into low cost areas Development of people slide number 17
Slide 18: Bodycote - outsourcing for industry
Heat Treatments Hot Isostatic Pressing MaterialsTesting Metallurgical Coatings Bodycote outsourcing for industry
Bodycote International — H1 2004 Earnings Presentation on 6ix