Bodycote plc · LSE:BOY
Bodycote — H1 2017 Earnings Presentation
27 slides from Bodycote's earnings presentation, Jul 27, 2017
Slide 1: 2017 Interim Results
Slide 2: Introduction
Introduction Stephen Harris Group Chief Executive 2
Slide 3: Agenda
Agenda Summary Financial review Business review Outlook 3
Slide 4: Summary
Summary Growth - Strong constant currency revenue growth of 8.3% - 3.5% contribution from acquisitions - 2.0% contribution from recent greenfield investments - Continuing Specialist Technologies contribution Margins - Headline operating margin 17.8% (H1 2016: 16.9%) Cash generation - Strong fr
Slide 5: Financial review
Financial review Dominique Yates Chief Financial Officer 5
Slide 6: 2017 Interim results summary
2017 Interim results summary H1 H1 Constant £m Currency Total change 2017 2016 exchange rates Revenue 345.7 291.0 24.2 8.3% 30.5 54.7 18.8% Headline: Operating profit 61.7 49.3 6.6 13% 5.8 12.4 25% M argin 17.8% 16.9% Profit before tax 60.5 48.1 6.6 14% 5.8 12.4 26% Headline tax rate 25.5% 27.5% Net
Slide 7: Headline operating profit bridge
Headline operating profit bridge £m 7
Slide 8: Divisional summary: ADE
Divisional summary ADE H1 H1 Constant £m Currency Total change 2017 2016 exchange rates Revenue 136.1 121.9 2.5 2.1% 11.7 14.2 11.6% Headline operating profit 30.7 27.4 0.6 2% 2.7 3.3 12% M argin 22.6% 22.5% Excl. oil & gas, constant currency revenue growth 3.6% Includes 1.1% incremental revenue
Slide 9: Divisional summary: AGI
Divisional summary AGI H1 H1 Constant £m Currency Total change 2017 2016 exchange rates Revenue 209.6 169.1 21.7 12.8% 18.8 40.5 24.0% Headline operating profit 36.9 27.9 5.8 21% 3.2 9.0 32% M argin 17.6% 16.5% Acquisitions contributed 6.1% to constant currency revenue growth 5 sites acquired la
Slide 10: Cash flow
Cash flow H1 2017 Headline EBITDA = £94m 90 H1 2016 80 Headline EBITDA = £77m Depreciation 70 Depreciation Working Capital 60 Capex Tax, Interest 50 & Other Restructuring 40 Working Capital Tax, Interest 30 Headline & Other £42m Operating Restructuring 20 Profit free £21m cash 10 free cash 0 Headlin
Slide 11: H1 2017 Revenue and operating profit by currency
H1 2017 Revenue and operating profit by currency Revenue Headline 120% operating profit GBP 7% 100% Other Other 18% 80% 18% USD GBP stated net of central costs 36% 60% USD 35% H1 operating profit translation benefit £6m 40% EUR 20% EUR 48% 40% 0% GBP -20% -2% 11
Slide 12: Taxation and balance sheet
Taxation and balance sheet Taxation Headline tax rate 25.5% (H1 2016: 27.5%) Balance sheet Net cash £17.7m Facilities: - Committed facility headroom of £230m at 30 June 2017 - Successful facility extension in H1 places facility maturity in 2022 12
Slide 13: Business review
Business review Stephen Harris Group Chief Executive 13
Slide 14: Aerospace & defence
Aerospace & defence Revenue: £81m Constant currency growth: 1.0% Revenue, £m At constant rates Civil aerospace revenues up 4.4% Defence revenues (principally North America) declined Includes 1.3% incremental revenue growth from recent greenfield investments 14 Includes 1.3% incremental revenu
Slide 15: Energy
Energy Revenue: £27m Constant currency decline: - 4.1% Revenue, £m At constant rates Strong growth in onshore oil & gas in North America in Q2 Declines in oil & gas elsewhere Includes 1.0% incremental revenue growth from recent greenfield investments 15
Slide 16: Automotive
Automotive Revenue: £103m Constant currency growth: 14.3% Revenue, £m At constant rates Car & light truck constant currency revenues up 15.5% ‒ Acquisitions contributed 5.3% to constant currency revenue growth ‒ Includes 5.0% incremental revenue growth from recent greenfield investments 16
Slide 17: General industrial
General industrial Revenue: £135m Constant currency growth: 11.8% Revenue, £m At constant rates Broad based recovery across all geographies reversing 3-year negative trend Acquisitions contributed 5.3% to constant currency revenue growth Includes 0.7% incremental revenue growth from recent gre
Slide 18: Specialist Technologies' revenues
Specialist Technologies’ revenues* H1 2017 constant currency growth 20% - General Automotive Industrial Specialist IGT Revenues £79.3m, up 5.6% at 10% - Technologies constant currency Specialist Technologies Aero & Defence Excl. oil & gas, Specialist 0% - Technologies’ revenues up 10.2% -10% -
Slide 19: Powdermet Hybrid with 3D printing
Powdermet® Hybrid with 3D printing http://www.bodycote.com/en/services/hot-isostatic-pressing/powdermet.aspx 3D printed sectional view Finished component post HIP Unconsolidated Consolidated powder powder Unconsolidated powder 100% consolidated 3D printed exterior Conventional 3D printing consolid
Slide 20: Summary and Outlook
Summary and Outlook Bodycote achieved strong revenue growth in the first half, with good momentum in virtually all parts of the Group. Notably, the General Industrial business, which represents almost 40% of Group revenues, experienced a broad based recovery after over three years of decline. Automo
Slide 21: Slide 21
Slide 22: Definitions
Definitions Term Definition Headline Operating Profit Operating profit before exceptional costs and amortisation of acquired intangibles Headline Profit Before Tax Profit before tax, exceptional costs and amortisation of acquired intangibles Headline Operating Cash Flow Cash generated by operations,
Slide 23: H1 2017 Statutory income statement
H1 2017 Statutory income statement £m H1 2017 H1 2016 Revenue 345.7 291.0 Headline operating profit 61.7 49.3 Amortisation of acquired intangible fixed assets (2.3) (2.2) Operating profit 59.4 47.1 Net finance costs (1.2) (1.2) Profit before tax 58.2 45.9 Headline earnings per share (pence) H1 2017
Slide 24: H1 2017 Cash flow
H1 2017 Cash flow £m H1 2017 H1 2016 Headline operating profit 61.7 49.3 Add back: Depreciation and amortisation 29.7 26.0 Share-based payments 2.7 1.6 Net capex to depreciation Headline EBITDA 94.1 76.9 ratio 1.0 times (2016: 1.2 times) Net capital expenditure (29.7) (31.0) Net working capital move
Slide 25: Specialist Technologies
Specialist Technologies What are they? HIP Services Application of high temperature and pressure to densify cast material Removal of porosity defects improves strength, toughness and machinability Can eliminate internal voids created by additive manufacturing methods HIP Method of manufactur
Slide 26: Net finance charge
Net finance charge £m H1 2017 H1 2016 FY 2016 Net interest payable - - 0.2 Financing and bank charges 1.0 1.0 2.1 Pension finance charge 0.2 0.2 0.3 Net finance charge 1.2 1.2 2.6 26
Slide 27: Financial information
Financial information Shares in issue H1 2017 H1 2016 Weighted average 190.3m 190.1m Exchange rates H1 2017 H1 2016 EUR Average (P&L) 1.17 1.29 Closing (B/S) 1.14 1.20 USD Average (P&L) 1.27 1.43 Closing (B/S) 1.30 1.32 SEK Average (P&L) 11.20 11.92 Closing (B/S) 10.97 11.29 27