Slide 1: Preliminary Results 1999
centrica Preliminary Results 1999
Slide 2: Results in Brief
Results in Brief 1998 1999 restated Sales £7,217m £7,481m Operating profit (continuing operations) £365m £162m Earnings pre-exceptionals £331m £176m Operating cash flow pre-exceptionals £1,453m £870m Ordinary dividend per share 2.5p - Employees (FTE) 25,843 15,677 Earnings are pre-amortisation of go
Slide 3: 1999 Achievements
1999 Achievements • Strong financial performance in competitive markets • Acquisition of the AA • Growth of electricity business - 2.6m contracts • Gas customer retention - 14.8m customers • Home services growth & improved profitability • Establishment of strong financial services business through A
Slide 4: Gas Consumers Council
Gas Consumers Council Category A complaints Services Gas Gas competition 40,000 30,000 20,000 10,000 0 1996 1997 1998 1999 Category A complaints are those where the customer dealt with British British Gas and the reply they received was not to their satisfaction
Slide 5: Energy Supply: Number of accounts (millions)
Energy Supply Total domestic gas on supply & electricity contracts 20 Number of accounts (millions) 19 18 17 16 15 6 8 97 7 98 99 9 00 l-9 l-9 l-9 l-9 n- n- n- n- Ju Ju Ju Ju Ja Ja Ja Ja
Slide 6: Energy Supply
Energy Supply • Non-domestic market • Regulation – Price review – PES distribution review – Utility Bill & Competition Act • New pricing – Removal of standing charge – Further reductions ahead
Slide 7: Energy Management
Energy Management • Record production from Morecambe • CRL integration complete & synergy savings achieved • Energy sourcing – Gas contract renegotiations – Electricity • On the day gas Commodity Market & NETA • European trading capability enhanced
Slide 8: Home Services
Home Services • Improved financial performance • Strong sales growth • Growth in number of gas appliance service contracts • Security system installations & monitoring contracts growth • Successful launch of plumbing and kitchen appliance cover
Slide 9: Road Services
Road Services • Integration • Performance – Financial – Membership • Investment & growth opportunities
Slide 10: Financial Services
Financial Services • Combined business established • Strong performance from Goldfish card • Extending motor finance • Home & Motor insurance • Evaluating savings & investment product opportunities
Slide 11: E-Commerce
E-Commerce • Single point of responsibility • Activities – Financial Services – Energy – Information – Accessibility • Investment
Slide 12: Telecoms
Telecoms • Launch September 2000 • Fixed, mobile and internet • Target 1m customers by end 2001 • Investment £150m • Management team recruited • Operations being established
Slide 13: Business Outlook
Business Outlook • Customer satisfaction • Growth – Energy Supply – Home and Road Services – Financial Services • AA acquisition benefits • Telecoms • E-commerce • International
Slide 14: Results in Brief
Results in Brief 1998 1999 restated Sales £7,217m £7,481m Operating profit (continuing operations) £365m £162m Earnings pre-exceptionals £331m £176m Operating cash flow pre-exceptionals £1,453m £870m Ordinary dividend per share 2.5p - Employees (FTE) 25,843 15,677 Earnings are pre-amortisation of go
Slide 15: Gas Volumes, Pricing & Cost
Gas Volumes, Pricing & Cost 1999 1998 Domestic sales Volume (m therms) 9,424 10,922 Price (p/therm) 44.9 45.2 Non-domestic sales Volume (m therms) 5,711 6,328 Price (p/therm) 18.2 18.6 Equity production (m therms) 4,007 3,213 Gas costs (p/therm) 15.6 18.3
Slide 16: Domestic Consumption year & year comparison
Domestic Consumption 10 year & 65 year comparison Average domestic consumption (therms) 700 680 65 yr average 660 640 10 yr average 620 Actual 600 580 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Slide 17: Weather impact
Weather impact • Impact of warm weather on turnover £m 1999 1998 65 year series (317) (323) 10 year series (73) (46) • Impact of warm weather on earnings £m 1999 1998 65 year series (109) (77) 10 year series (24) (10)
Slide 18: Turnover
Turnover £m 1999 1998 Domestic @ SNT 4,360 5,031 Non-domestic @ SNT 1,051 1,187 Weather (73) (46) Total Gas 5,338 6,172 Electricity 240 5 Gas production 37 7 Accord 771 600 Total Energy Supply 6,386 6,784 Home Services 592 526 Road Services 112 - Financial Services 26 - Other Activities 18 2 Total c
Slide 19: Operating Profit Analysis
Operating Profit Analysis (pre exceptionals & amortisation of goodwill) 1998 £m 1999 restated Domestic @ SNT 293 92 Non-domestic @ SNT 20 (129) Weather (24) (10) Total Gas 289 (47) Electricity (156) (86) Gas production 302 350 Accord 26 31 Total Energy Supply 461 248 Home Services 20 9 Road Services
Slide 20: Operating Costs
Operating Costs (pre exceptionals & amortisation of goodwill) £m 1999 1998 Established business Energy Supply Gas 694 663 Electricity 40 10 Home Services 212 195 Financial Services 4 3 AA 91 - 1,041 871 Investment Electricity 127 75 Other 42 14 169 89 Total continuing operations 1,210 960 Retail (di
Slide 21: Earnings
Earnings 1998 £m 1999 restated Operating profit 428 214 Associates/joint ventures (4) (1) Net interest (7) 39 Taxation (86) (76) Underlying performance 331 176 Exceptionals & goodwill (149) (85) Earnings 182 91
Slide 22: Exceptionals & Goodwill amortisation
Exceptionals & Goodwill amortisation £m 1999 1998 Restructuring/severance costs Energy Supply 18 2 Home Services 2 - Retail (discontinued) 60 1 AA integration 16 - Gas contract renegotiations 30 63 Year 2000 costs 10 19 Goodwill amortisation Energy Supply 1 - AA 12 - Total 149 85
Slide 23: Cash Flow before Financing
Cash Flow before Financing £m 1999 1998 Operating performance 727 462 Working capital 726 408 Operating cash flow 1,453 870 Capital expenditure (143) (70) Taxation, interest & dividends rec’d (133) (156) Sub-total 1,177 644 Acquisitions (1,162) (101) Exceptional payments (135) (211) Dividends (570)
Slide 24: AA Operating Profit (inc JVs)
AA Operating Profit (inc JVs) (pre exceptionals & amortisation of goodwill) £m Q4 1999 1998 Road Services (3) (9) (19) Financial Services 6 26 18 Business Development (3) (6) (3) Total - 11 (4)
Slide 25: Financial Outlook
Financial Outlook • Gas supply price and operating cost reductions • Increase in Q4 gas costs - oil escalators • AA further integration benefits • Electricity investment will reduce • Telecoms investment • PRT impact on cash