Bodycote plc · LSE:BOY
Bodycote — H1 2012 Earnings Presentation
27 slides from Bodycote's earnings presentation, Jul 26, 2012
Slide 1: 2012 Interim Results
2012 Interim Results 26 July 2012
Slide 2: Introduction
Introduction Stephen Harris Chief Executive Plasma nitriding A low temperature, short cycle form of nitriding which produces very clean surfaces. It is typically used for treating stainless steels and other high alloy steels. 2012 Interim Results
Slide 3: Agenda
Agenda Highlights Stephen Harris Financial Review David Landless Business Review Stephen Harris 2012 Interim Results
Slide 4: Highlights
Highlights Revenue up 5%; 7% at constant currency Good growth from North American Automotive & General Industrial and Aerospace & Energy in all geographies Headline operating profit up 10%, with margin up to 15.8% Recent US acquisition performing well 110% headline operating cash conversio
Slide 5: Financial Review
Financial Review David Landless Finance Director Brazing A precision metal joining technique suitable for many component configurations in a wide range of materials. It can be used for high-integrity joining of unweldable, dissimilar and non-metallic materials. 2012 Interim Results
Slide 6: Summary
2012 Interim Results Summary £m (actual rates) H1 2012 margin H1 2011 margin Increase Revenue 301.3 288.2 5% Headline: Operating profit1 47.5 15.8% 43.2 15.0% 10% Profit before taxation1 45.7 40.8 12% Exceptional: Acquisition costs 1.2 - Headline operating cash flow2 52.3 39.8 Net debt 16.7 33.7 Hea
Slide 7: Divisional Summary
Divisional Summary Underlying Currency CW HT Total £m H1 2012 H1 2011 growth Euro Other acqn growth ADE Divisions Revenue 130.3 115.9 11.3 10% (1.4) -1% 1.1 0% 3.4 3% 14.4 12% Headline Operating Profit (1) 31.3 25.2 5.0 20% (0.3) -1% 0.3 1% 1.1 4% 6.1 24% Margin 24.0% 21.7% AGI Divisions Revenue 171
Slide 8: Operating Profit Bridge
Operating Profit Bridge (£m) 1.6 -5.1 3.5 5.7 -0.7 -0.7 47.5 43.2 2012 Interim Results
Slide 9: Cash Flow
Cash Flow £m H1 2012 H1 2011 Headline operating profit 47.5 43.2 Add back: Depreciation and amortisation 25.1 24.9 Share-based payments 3.0 2.5 Capex to depreciation: H1 2012: 1.1x Headline EBITDA 1 75.6 70.6 H1 2011: 0.8x Net capital expenditure (26.6) (20.6) Working capital 3.3 (10.2) Headline ope
Slide 10: Business Review
Business Review Stephen Harris Chief Executive Densification of superalloy castings Turbine blades from the high-temperature section of jet engines are HIPed to ensure removal of microporosity and to optimise the properties of single crystal cast blades. 2012 Interim Results
Slide 11: General Industrial
General Industrial End markets 2011 H1 2012 Future Heavy machinery Economy General capital goods dependent in short term Supply chain stock build Technology driven change Bodycote revenues £121m Organic growth +1%* North American sales strong, particularly mining & agricultural machinery Western
Slide 12: Automotive
Automotive End markets 2011 H1 2012 Future European car production Economy dependent US car production in short term Heavy trucks Technology driven change Bodycote revenues £72m Organic growth -2%* North American sales up 19% with increased sales to major accounts Western European sales down 4%
Slide 13: Aerospace & Defence
Aerospace & Defence End markets 2011 H1 2012 Future Commercial new build Spares requirement Defence Supply chain stock build Bodycote revenues £66m Organic growth +16%* Strong sales growth in Europe and North America Good visibility of order backlog at OEMs New capacity in Mexico, London Ohio
Slide 14: Energy
Energy End markets 2011 H1 2012 Future Oil & Gas production Oil & Gas exploration Power generation Supply chain stock build Bodycote revenues £42m Organic growth +18%* Western European surface technology business expanding customer base and growing strongly North American heat treatment business
Slide 15: Daily Sales Trend
Daily Sales Trend Constant Exchange Rates (£m) Acquisition of heat treatment business from CW 3 2 2012 2011 1 0 2012 Interim Results
Slide 16: Growth mix overview
Growth mix overview Organic H1 growth Soft Macro- Secular Economics Europe ADE +17% -2% Western Europe AGI NA ADE NA AGI New Technologies Brazil Other Emerging markets +3% ex Brazil 2012 Interim Results Growth rates at constant currency
Slide 17: Acquisition of HT business of Curtiss-Wright
Acquisition of HT business of Curtiss-Wright Purchase price £33m 3 month contribution: £6.5m sales £1.6m operating profit High margin High aerospace & energy content Excellent network infill Loss making plant closed Bodycote synergies Existing Bodycote plants being realised: Acquired P
Slide 18: Five Year Perspective
Five Year Perspective 2012 includes £6.5m from acquired plants Sales* (£m) 291 287 259 H2 210 H1 321 291 301 223 246 08 09 10 11 12 2012 Interim Results *Continuing operations only at 2012 rates at 2011 currency rates
Slide 19: Five Year Perspective
Five Year Perspective Headline operating profit * (£m) Margin (%) H1 H2 H2 H1 42 16 14 15 15 30 11 12 27 9 44 43 48 5 20 -1 7 08 09 10 11 12 08 09 10 11 12 Headline operating cash flow (£m) Average headcount Includes 140 H2 relating to 7,503 H1 acquisition 6,020 5,672 5,603 5,532 56 47 38 10 52 40 2
Slide 20: Summary
Summary Strong first half performance despite currency headwind and weakened demand in the Eurozone economies 5% revenue growth; 7% in constant currency 10% headline operating profit growth Margin expansion to 15.8% Excellent cash flow Low net debt 2012 Interim Results
Slide 21: Outlook
Outlook “Looking forward into the second half, growth in aerospace and energy together with new technologies, is expected to counteract the effect of slowing economies. The Board remains confident that the ongoing execution of the Group’s strategy will continue to deliver superior through-cycle shar
Slide 22: Slide 22
Slide 23: H1 2012 Statutory Income Statement
H1 2012 Statutory Income Statement £m H1 2012 H1 2011 Revenue 301.3 288.2 Headline operating profit 1 47.5 43.2 Amortisation of acquired intangible fixed assets (0.7) (0.5) Acquisition costs (1.2) - Operating profit 45.6 42.7 Net finance costs (1.8) (2.4) Profit before taxation 43.8 40.3 Headline ea
Slide 24: Net Finance Charge / Facilities
Net Finance Charge / Facilities £m H1 2012 H1 2011 Net interest payable 0.2 0.7 Financing costs 0.6 1.1 Other charges 0.4 0.3 Pension finance charge 0.6 0.3 Net finance charge 1.8 2.4 Committed facilities from several sources over a spread of maturities Committed facilities total £232.5m Facil
Slide 25: Pensions – net deficit
Pensions – net deficit £m H1 2012 H1 2011 UK Funded 2.4 0.3 Other Western Europe Funded 0.7 0.8 Other Western Europe Unfunded 11.2 10.2 Western Europe Total 14.3 11.3 North America Funded 0.8 0.4 Emerging Markets Unfunded 0.2 0.2 Total retirement benefit obligations 15.3 11.9 2012 Interim Results
Slide 26: Financial Information
Financial Information Average shares in issue H1 2012: 188.4m (H1 2011: 185.5m) Exchange rates: Currency Description H1 2012 H1 2011 Euro Average (P&L) 1.21 1.15 Closing (B/S) 1.24 1.11 US Dollar Average (P&L) 1.58 1.61 Closing (B/S) 1.57 1.61 SEK Average (P&L) 10.75 10.23 Closing (B/S) 10.83 10
Slide 27: Bodycote
Bodycote