Babcock International Group Plc · LSE:BAB
Babcock International — FY2006 Earnings Presentation
19 slides from Babcock International's earnings presentation, 2006
Slide 1: Preliminary Results Presentation for Year Ending March 2006
Preliminary Results Presentation for Year Ending March 2006 Babcock is an asset management business. We manage fixed infrastructure and mobile assets. Babcock integrates labour, technical capabilities, systems and supply chain partners to meet the outsourcing needs of customers for ‘mission-critical
Slide 2: Business Highlights
Business Highlights • Fourth successive year of double digit growth in sales, profits and EPS • Further increase in margin to 6% • Major contract wins underpin continuing growth • Order book at £2.3 billion • Cash conversion at 119% - net debt £38.2 million • Well placed for further acquisitions 2
Slide 3: Context
Context Turnover* Operating Profit* – Before Unallocated Costs £ Million £ Million 900 50 800 45 UK Support 700 Services 40 UK Support 600 Engineering & 35 services Plant 30 Engineering & 500 Sub Total 25 Plant 400 20 Sub Total 300 Technical 15 200 Services 10 Technical Total Services 100 5 0 0 2002
Slide 4: Financial Review
Financial Review Bill Tame 4
Slide 5: Results Summary
Results Summary £ million % Growth 2006 2005 Turnover 836.7 729.0 15% EBITDA 57.5 49.2 17% Operating Profit 49.9 41.5 20% Margin 6.0% 5.7% PBT 44.6 35.7 25% Basic EPS (pence) 17.18 14.48 19% Dividend 6.0 4.0 50% Dividend cover 2.9 3.6 Continuing businesses only Pre-amortisation and exceptional items
Slide 6: Segmental Analysis
Segmental Analysis £ million Turnover Growth Operating Profit Growth 2006 2005 2006 2005 Defence Services 271.7 245.1 11% 21.8 16.8 30% 8.0% 6.9% Technical Services 130.5 159.0 (18%) 9.0 14.3 (37%) 6.9% 9.0% Engineering & Plant 144.2 112.7 28% 9.7 4.8 102% 6.7% 4.3% Networks 73.0 45.2 62% 6.4 2.9 11
Slide 7: Summary Group Income Statement
Summary Group Income Statement £ million % Growth 2006 2005 Operating Profit* 49.9 41.5 20% Joint ventures (0.1) 0.2 Memo: Acquired intangibles amortisation (3.1) (4.4) Exceptional items (0.2) (1.8) Net interest (5.2) (6.0) Loss on disposal & impairment (3.3) (1.6) Related tax credit 1.7 0.0 Profit
Slide 8: Cash flow, net debt and gearing
Cash flow, net debt and gearing £ million 2006 2005 Operating Profit* 45.6 34.6 Non-cash items 12.1 28.2 2006 2005 Working capital (3.6) (19.3) Net debt £m 38.2 62.9 Interest £m 5.2 6.0 Cash generated from operations 54.1 43.5 Interest cover (x) 9.6 6.9 Cash conversion % 119 126 Net Debt/EBITDA 0.7
Slide 9: Summary Balance Sheet
Summary Balance Sheet £ million 2006 2005 Non current assets - Intangibles and Investments 178.4 176.8 - Property, Plant and Equipment 25.3 36.0 - Assets held for resale 5.8 - Working capital (27.6) (13.1) Pensions surplus 29.3 (20.3) Financial working capital (2.4) (4.1) Capital employed 208.8 175.
Slide 10: Operations Review
Operations Review Peter Rogers 10
Slide 11: Defence Services
Defence Services Turnover (£m) Operating Profit* (£m) 2006 2005 2006 2005 271.7 245.1 21.8 16.8 • Extension for 5 years to HMNB Clyde contract secured • Regional Prime Contract (East) won – started on 8th March • Royal School of Military Engineering close to award • DTR and Diego Garcia bids awaitin
Slide 12: Technical Services
Technical Services Turnover (£m) Operating Profit* (£m) 2006 2005 2006 2005 130.5 159.0 9.0 14.3 • Profitable future for Rosyth assured • Only 40% of projected revenue is warship refit • Current CVF projections give Rosyth more of workload than previously planned • Surface Ship Support outcome bette
Slide 13: Engineering & Plant Services
Engineering & Plant Services Turnover (£m) Operating Profit* (£m) 2006 2005 2006 2005 144.2 112.7 9.7 4.8 • Outstanding year for Africa • Bidding process for power generation started • Continuing to gain market share for Volvo • ABB powerlines negotiations ongoing • Construction equipment market ver
Slide 14: Networks
Networks Turnover (£m) Operating Profit* (£m) 2006 2005 2006 2005 73.0 45.2 6.4 2.9 • New National Grid programme confirms expenditure will more than double • Total value of transmission market for 2007 expected to be between £150m and £200m • Some renewables expenditure now coming through, although
Slide 15: Rail
Rail Turnover (£m) Operating Profit* (£m) 2006 2005 2006 2005 217.3 167.0 8.8 8.4 • Track – renewals at capacity • Signalling at capacity for last quarter – full order book • Secured business for 2007 at £157 million, 148% ahead of last year • High output performance is good • Scottish Executive con
Slide 16: Major opportunities
Major opportunities Bidding opportunity Opportunity value Likely award date RSME £1,100m / 30 years Financial close mid 2007 DTR £2,500m / 25 years Preferred bidder late 2006 Grid Framework £150-£200m Autumn 2006 ISP Gibraltar £50m / 5 Years December 2006 LLW Repository £30m / 5 years October 2007 1
Slide 17: Summary and Prospects
Summary and Prospects • Another excellent year - financial position very strong • Continuing growth in sales and profits • CAGR sales since 2002 - 28% • CAGR Operating Profit since 2002 - 26% • New contracts underpin growth • Over £5 billion in bids submitted awaiting decision • Well placed for futu
Slide 18: Preliminary Results Presentation for Year Ending March 2006
Preliminary Results Presentation for Year Ending March 2006 Babcock is an asset management business. We manage fixed infrastructure and mobile assets. Babcock integrates labour, technical capabilities, systems and supply chain partners to meet the outsourcing needs of customers for ‘mission-critical
Slide 19: Context
Context 2002 2003 2004 2005 2006 CAGR £m £m £m £m £m Turnover UK Support Services 63.6 128.9 171.4 457.3 562.0 72% Engineering & Plant 50.6 60.9 86.5 112.7 144.2 30% 114.2 189.8 257.9 570.0 706.2 57% Technical Services 193.0 188.0 180.0 159.0 130.5 (9%) Total 307.2 377.8 437.9 729.0 836.7 28% Operat
Babcock International Group — FY2006 Earnings Presentation on 6ix