Slide 1: Bodycote Testing Group - an introduction
Bodycote Testing Group - an introduction Midlands Tour 10 May 2006
Slide 2: Format
Format 1. Introduction 2. Business Model 3. Financial KPI’s 4. Services/Markets/Competition 5. Growth Strategy 6. Summary, Q&A 2
Slide 3: Introduction Testing Group
Introduction Testing Group • One of 2 core Strategic Business Units within Bodycote International plc – Testing Group – Thermal Processing • 90 accredited laboratories / 60 at 2005 year end • £85m at 2005 year end • Growing to 40% of Bodycote sales by 2010 • 2,800 employees - scientists, engineers,
Slide 4: What We Do
What We Do “But the Contractor said his tests passed” BTG is a knowledge based company providing independent, accredited materials testing services to almost every business sector. The results of testing facilitate product development, production release, forensic analysis and certification. 4
Slide 5: Business Model Strategic Plan Elements
Business Model Strategic Plan Elements Value Proposition Provision of Value added service tailored to clients needs Distinctive Attributes • Structure operations along business streams • Align business development to core markets, e.g. Aerospace, Pharma, etc • Leverage Intellectual Property • Mainta
Slide 6: Overall Testing Group Organisation
Overall Testing Group Organisation BODYCOTE PLC TESTING Group S.I.M. BOARD MIDDLE EUROPE AMERICAS EAST & ASIA ENGINEERING ENGINEERING & ENGINEERING & MATERIALS HEALTH MATERIALS & HEALTH MATERIALS HEALTH TECHNOLOGY METROLOGY ENVIRONMENTAL TECHNOLOGY TESTING SCIENCES TESTING TECHNOLOGY SCIENCES TESTIN
Slide 7: Sales Growth 1990 - 2006
Sales Growth 1990 - 2006 160 90 140 120 £m 100 60 80 No. of Laboratories 53 60 40 43 46 37 33 40 29 23 20 15 16 15 16 18 11 13 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 7
Slide 8: Group Sales Analysis
Group Sales Analysis Metrology Materials 10% Environmental 28% 12% Environmental Health Sciences 17% Materials 17% 44% Health Sciences Engineering & 15% Technology Eng/Tech 27% 30% 2005 2006 8
Slide 9: 'Materials' – core services
Services/Markets/Competition ‘Materials’ – core services Tensile testing Impact testing Exposure cabinet CNC specimen machining Microscopy Micro-focus radiography 9
Slide 10: 'Engineering & Technology' - core services
‘Engineering & Technology’ - core services High load test on Airbag activation test Fracture mechanics – aircraft skin bridge damper Turbine blade test Vehicle testing Corrosion testing 10
Slide 11: 'Health Sciences' - core services
‘Health Sciences’ - core services Food testing Advisory services Testing and surveying Testing and evaluating 11 for asbestos in buildings pharmaceuticals
Slide 12: 'Environmental' - core services
‘Environmental’ - core services Sampling hazardous substances Testing soil and water Stack emission testing Eco-toxicology Lagoon water sampling 12
Slide 13: 'Metrology' – core services
‘Metrology’ – core services Telecommunications Healthcare Metrology Avionics 13
Slide 14: Where is the service provided from?
Where is the service provided from? Americas - 32 Middle East - 7 Europe – 50 Australia – 1 14
Slide 15: What sectors does Bodycote Testing serve?
What sectors does Bodycote Testing serve? Almost all industries:- Aerospace Automotive Construction Defence Electronics General Engineering Oil & Gas Power Generation Rail Medical Water Environmental 15
Slide 16: Sales Segmentation 2005
Sales Segmentation 2005 Health Science & Automotive Environ. 9% Aerospace/ 29% Defence 21% Power Generation Construct., Agricul., 5% R/way, Marine Miscellaneous 11% Oil & Gas 7% 18% 16
Slide 17: Competition
Competition • Numerous smaller independents >1000 globally • A few larger independents – Staveley, USA; Stork, US & Europe; Canspec, Canada • Manufacturers with in-house facilities • Multinational certification companies – DNV, SGS, Intertek – in a few areas only • Universities & Technical instituti
Slide 18: Growth Strategy
Growth Strategy Bodycote plans to grow the testing group both organically and by acquisition. 1. Diversify away from routine and commodity testing by expanding further up the value chain 2. Increase BTG exposure to regulatory driven markets, as opposed to cyclical engineering/manufacturing markets 3
Slide 19: List of outsourcing wins + value
List of outsourcing wins + value Acquisition Country Sales Sector Dubai Light Railway UAE £3.4M Materials Festival City UAE £1.3M Materials Effluent Analysis UAE £0.5M Environmental Engine Testing Mexico £2.0M Eng/Tech Emissions Testing US £3.0M Eng/Tech Effluent Analysis Canada £0.4M Environmental
Slide 20: List of 2006 acquisitions (sector)
List of 2006 acquisitions (sector) Acquisition Country Sales PA Sector Tetra UK £0.5M HS WCAL USA £5M HS Norwest Canada £10M ENV/HS Warrington Fire UK/Belgium £10M ENG/TECH ACT Labs US £7M ENG/TECH Saab Metech Scandinavia/ £17M Metrology Germany 20
Slide 21: Strategy for Growth
Strategy for Growth New Geographical Markets Bodycote are investigating projects/acquisitions/outsourcing in the following countries: COUNTRY Division MARKET SECTOR France ME / MT Aerospace Germany ME / MT Aerospace/Gen. Engineering Croatia MT Oil/Gas Poland ME / MT Automotive Ireland HS Food/Pharma
Slide 22: Summary
Summary • A proven track record of consistent revenue EBIT and ROCE performance • Growth strategy moving forwards with business expanded >150% in last 12 months • Business Development function provides pipeline of outsourcing/organic/acquisition opportunities • Integration planning resource to ensur
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