Slide 1: 2005 Preliminary Results
BBodycote 2005 PRELIMINARY RESULTS
Slide 2: Highlights
Highlights • Revenue +10% 1 • Headline Operating Profit +28% • Headline EPS +25% 1 • ROCE +30% • Testing Sales Growth +32% • 14 bolt-on Acquisitions (Forecast Sales) £32m/y • Outsourcing +36% • Dividend +5% 1 pre impairment of goodwill, amortisation of acquired intangibles, and interest and tax on a
Slide 3: Preliminary Results
Preliminary Results 2005 2004 Change £m £m % Restated Sales 470.9 426.4 +10 1 EBITDA 109.1 97.1 +12 Headline Operating 1 Profit 67.8 53.1 +28 2 Headline Profit before Tax 58.8 44.3 +33 Profit before Tax 52.8 33.1 +60 Tax (11.9) (4.6) Profit after tax 40.9 28.5 +44 Free cashflow 42.1 57.3 Headline EP
Slide 4: Profit Bridge
Profit Bridge £m HT HIP SE TESTING HQ Group Headline Operating Profit 1 2005 38.8 7.1 (2.4) 12.4 (2.8) 53.1 Selling Prices 6.5 0.3 0.8 7.6 Sales Volume 4.3 2.3 1.1 7.7 Salary/Wage Inflation (2.8) (0.1) (0.6) (3.5) Energy Costs (2.8) (0.1) (0.1) (3.0) CoatAlloy Start-Up/US Maintenance (0.8) - - - (0.
Slide 5: Sales and Operating Profit - By Region
Sales and Operating Profit - By Region 2004 2005 Europe Americas Rest of World £m £m £m £m £m Revenue 328.7 Heat Treatment 349.2 236.4 112.8 - 32.1 Hot Isostatic Pressing 35.2 15.5 19.7 - 65.6 Testing 86.5 45.7 34.2 6.6 426.4 470.9 297.6 166.7 6.6 30.8 PVD/Electroplating 1.5 1.5 - - 457.2 472.4 299.
Slide 6: Sales By Market
Sales By Market 2005 2004 % % Sector Automotive - Cars & Light Truck 21 24 - Heavy Truck & Bus 6 5 Aerospace/Defence 19 17 Construction, Agricultural, Railways & Marine 16 15 Tooling 9 11 Oil & Gas 7 6 Power Generation 5 5 Consumer Products 3 4 Health Science & Environmental 7 5 Electronics & Teleco
Slide 7: Summary Cash Flow and Financial Ratios
Summary Cash Flow and Financial Ratios 2005 2004 £m £m EBITDA 1 109.1 97.1 Non-cash Movements (2.0) 0.7 Working Capital Movement (3.1) 8.1 CAPEX (44.1) (34.4) Interest (9.5) (8.8) Tax (8.3) (5.4) Free Cash Flow 42.1 57.3 Net Debt/EBITDA 1.0x 0.9x Interest Cover 1 9.1x 6.6x Gearing 25% 21% Free Cash
Slide 8: Balance Sheet
Balance Sheet 2005 2004 £m £m Goodwill 154.2 139.7 Tangible and Intangible Fixed Assets 446.6 427.3 Investments 9.2 6.2 Trading Working Capital 29.2 24.3 Other Net Current Assets (97.1) (85.1) 542.1 512.4 Shareholders’ Funds 432.1 421.0 Minority Interests 1.4 1.0 Net Borrowings 108.6 90.4 542.1 512.
Slide 9: Strategy Implementation
Strategy Implementation • Testing taking greater role in growth • Competitive advantages as outsourcing partner of choice • Technology transfer continuing • Consolidating existing markets • Follow customer expansion into growing manufacturing areas • Development of people 9 2005 Preliminary Results
Slide 10: Heat Treatment
Heat Treatment Revenue (₤m) 354.1 349.2 350 320.9 328.7 319.4 • France/USA 280 210 • Leveraging customer base 140 70 • Outsourcing 0 2001 2002 2003 2004 2005 • Technology roll-out Operating Profit (₤m) 70 62.9 60 50 • Manufacturing growth markets 40 38.6 38.8 44.8 33.8 30 20 10 0 2001 2002 2003 2004
Slide 11: Hot Isostatic Pressing
Hot Isostatic Pressing Revenue (₤m) 40 35.2 35 32.0 32.1 • Volume growth/operational gearing 30 28.5 27.6 25 20 • Applications being developed: 15 10 • Densal II® 5 0 • Additional capacity being added 2001 2002 2003 2004 2005 Operating Profit (₤m) • Approaching ROCE goal 10 9.5 9 8 7.3 7.1 7 6 5 4.5
Slide 12: Testing
Testing Revenue (₤m) • Integrating acquisitions 100 90 86.5 80 70 65.6 61.2 • Margins maintained 60 52.3 56.6 50 40 30 • Organic growth 20 10 0 2001 2002 2003 2004 2005 • Outsourcing wins Operating Profit (₤m) 18 16.3 16 • Acquisition pipeline 14 12 10.9 11.4 12.4 9.9 10 8 6 • Asia 4 2 0 2001 2002 2
Slide 13: Current Trading and Prospects
Current Trading and Prospects • 06 started in line with expectations • Aerospace, IGT and oil and gas markets continue to grow • Automotive and tooling sectors volatile • Impact of energy costs being managed • Outsourcing initiatives continue to deliver growth • Confident of further progress in 06 1
Slide 14: Appendix
2005 Preliminary Results Appendix
Slide 15: Operational Locations
Operational Locations Heat Treatment HIP Testing IonBond TOTAL USA 42 4 11 10 67 UK 22 3 29 2 56 France 31 1 - 6 38 Canada 2 - 18 2 22 Germany 17 1 - 2 20 Sweden 12 1 6 1 20 Czech Republic 6 - 1 2 9 Netherlands 5 - 2 1 8 Italy 4 - 2 1 7 Finland 6 - - - 6 Switzerland 2 - - 4 6 Poland 5 - - - 5 Austri
Slide 16: Analysis Of Organic/Acquisition Growth
Analysis Of Organic/Acquisition Growth HT HIP Testing PVD/Electroplating Head Office Total £m £m £m £m £m £m Sales 2004 328.7 32.1 65.6 30.8 457.2 Organic 13.5 3.0 6.0 - 22.5 Acquisition 6.6 - 13.2 - 19.8 Disposal (1.9) - - (29.3) (31.2) Currency 2.3 0.1 1.7 - 4.1 2005 349.2 35.2 86.5 1.5 472.4 Oper
Slide 17: Impact Of Exchange Rates
Impact Of Exchange Rates Sales Operating Profit 1 £m £m 2005 As Reported 470.9 67.8 2005 Using 2004 Rates 466.7 67.1 Impact 4.2 0.7 1 Pre impairment of goodwill, amortisation of acquired intangibles and interest and tax on associates 17 2005 Preliminary Results
Slide 18: Acquisitions, Capital Expenditure & Depreciation
Acquisitions, Capital Expenditure & Depreciation £ million 104 Acquisitions Capital Expenditure Depreciation 63 54 46 44 44 40 43 41 38 34 32 10 10 3 2001 2002 2003 2004 2005 Capex/Dep 1.6x 1.3x 0.8x 0.8x 1.1x 18 2005 Preliminary Results
Slide 19: Financial Highlights
Financial Highlights Sales Operating Profit1 80.2 479.4 472.4 67.8 53.1 457.2 49.4 41.7 £'m £'m 448.4 440.1 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 Sales (excl. Electroplating and Operating Profit (Excl. PVD) 470.9 Electroplating and PVD)1 78.5 67.8 438.4 52.7 55.5 426.4 47.2 £'m £'m 409.7
Slide 20: Financial Highlights
Financial Highlights EBITDA1 Group Profit Before Tax1 66.3 119.7 58.8 109.0 92.4 97.2 87.4 46.7 38.2 32.0 £'m £'m 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 Headline Earnings Per Share2 Dividend Per Share3 17.0 6.4 14.6 11.7 6.1 9.9 9.1 Pence Pence 5.7 5.7 5.7 2001 2002 2003 2004 2005 2001 20
Slide 21: BBodycote
BBodycote