Babcock International Group Plc · LSE:BAB
Babcock International — FY2004 Earnings Presentation
22 slides from Babcock International's earnings presentation, June 2004
Slide 1: Preliminary Results Presentation for Year Ending March 2004
Preliminary Results Presentation for Year Ending March 2004 Gordon Campbell Peter Rogers Bill Tame 1
Slide 2: Babcock Strategy 2000
Babcock Strategy 2000 • To enhance shareholder value by • Sales growth in the training and support transforming itself into a fast growing businesses between 2002/03 and 2003/04 support services business was 41%. Group order book up from £0.6 billion to £1.0 billion • To exit low growth, cyclical ma
Slide 3: Financial Review
Financial Review Bill Tame 3
Slide 4: Group Operating Result
Group Operating Result £ Million 2003/04 2002/03 % change Turnover • Continuing operations 438.0 377.9 16 • Discontinued operations 14.0 45.6 Total 452.0 423.5 Operating profit * • Continuing operations 25.5 23.0 11 • Discontinued operations (0.3) (2.2) Total 25.2 20.8 Joint ventures & associates 0.
Slide 5: Divisional Performance
Divisional Performance Turnover (£m) Operating Profit (£m)* 2003/04 2002/03 % change 2003/04 2002/03 % change Training & Support • Naval Services (BNS) 87.6 48.7 5.3 1.2 • Infrastructure Services 24.3 16.5 1.0 0.9 (BIS) • Defence Services (BDS) 59.5 63.7 5.3 6.7 • Babcock Africa (BAS) 81.5 49.9 3.8
Slide 6: Divisional Performance
Divisional Performance Turnover (£m) Operating Profit (£m)* 2003/04 2002/03 % change 2003/04 2002/03 % change Training & Support • Naval Services (BNS) 87.6 48.7 5.3 1.2 • Infrastructure Services 24.3 16.5 1.0 0.9 (BIS) • Defence Services (BDS) 59.5 63.7 5.3 6.7 • Babcock Africa (BAS) 81.5 49.9 3.8
Slide 7: The Transformation
The Transformation 500 Turnover Operating Profit 35 450 30 400 Operating Profit £ million Turnover £ million 25 350 300 20 250 15 200 150 10 2001/02 2002/03 2003/04 2001/02 2002/03 2003/04 Years Years Technical Services BNS BDS Africa BIS Technical Services BNS BDS Africa BIS 7
Slide 8: Tax, EPS & Dividend
Tax, EPS & Dividend £ Million 2003/04 2002/03 % Change Profit before tax, pre-goodwill and exceptionals 23.1 18.0 28 Goodwill and exceptionals (3.3) (4.6) Profit before tax 19.8 13.4 48 Tax (3.4) (5.1) Profit after tax 16.4 8.3 98 Effective tax rate on continuing operations 15.7% 26.0% Basic EPS on
Slide 9: Goodwill and Exceptionals
Goodwill and Exceptionals £ Million 2003/04 2002/03 Operating profit • Goodwill (3.3) (1.9) Loss on sale of operations • BMH Marine (2.5) - • Sale of non trading subsidiary 0.8 - • Sale of Chronos Richardson - (2.7) (1.7) (2.7) Exceptional interest • Sale of financial asset 1.7 - Total goodwill and
Slide 10: Taxation
Taxation • Underlying rate 03/04 15.7% (i.e. tax as 15.7% of PBT pre-goodwill and exceptionals) • Benefits from utilisation of prior year losses • Anticipated rate 04/05 24% • Thereafter 26% subject to changes in tax legislation 10
Slide 11: Group Operating Cash Flow
Group Operating Cash Flow £ Million 2003/04 2002/03 Group operating profit 21.9 18.9 Amortisation 3.3 1.9 Depreciation 4.9 9.1 Increase in working capital (2.1) (18.6) Capital expenditure – net (1.6) (2.7) Operating cash flow 26.4 8.6 11
Slide 12: Group Net Cash Flow
Group Net Cash Flow £ Million 2003/04 2002/03 Operating cash flow 26.4 8.6 Acquisitions, disposals & investments • Acquisitions / joint ventures - (24.1) • Disposals – net 1.1 (2.6) • Purchase of own shares (0.4) (0.9) 0.7 (27.6) Movement in share capital 1.7 0.5 Interest (0.4) (2.5) Tax (1.6) (3.0)
Slide 13: Group Balance Sheet
Group Balance Sheet £ million 2003/04 2002/03 Fixed assets • Tangible 12.2 16.5 • Intangible 77.5 78.5 89.7 95.0 Working capital (8.7) (11.7) Pensions pre-payments 69.0 71.3 Provisions (29.0) (27.4) Financial Items (4.5) (2.6) 116.5 124.6 Financed by • Shareholder funds 101.1 87.3 • Minority interes
Slide 14: Operations Review
Operations Review Peter Rogers 14
Slide 15: Operations Review 2004: Training & Support - BNS
Operations Review 2004 Training & Support - BNS Turnover (£m) Operating Profit (£m) * 2003/04 2002/03 2003/04 2002/03 Babcock Naval Services 88 49 5.3 1.2 • First full year of contract • All KPIs met • Improved service levels for fleet – customer delighted with cost and delivery • First significant
Slide 16: Operations Review 2004: Training & Support - BIS
Operations Review 2004 Training & Support - BIS Turnover (£m) Operating Profit (£m) * 2003/04 2002/03 2003/04 2002/03 Babcock Infrastructure Services - BIS 24 17 1.0 0.9 • Fully integrated • High bid costs on Prime contracts • SLAM contract slower than hoped – now accelerating • South West Regional
Slide 17: Operations Review 2004: Training & Support - BDS
Operations Review 2004 Training & Support - BDS Turnover (£m) Operating Profit (£m) * 2003/04 2002/03 2003/04 2002/03 Babcock Defence Services 60 64 5.6 6.7 • Turnover and profit falls attributable to British departure from Kosovo • Success in gaining NATO, UN and US business in Kosovo • RAF Valley
Slide 18: Operations Review 2004: Training & Support - BAS
Operations Review 2004 Training & Support – BAS Turnover (£m) Operating Profit (£m) * 2003/04 2002/03 2003/04 2002/03 Babcock Africa Services 82 50 3.8 1.3 • Growth of 60% in sales, 200% in operating profit • Volvo franchise has underpinned growth – Volvo Construction Equipment ‘Dealer of the Year’
Slide 19: Operations Review 2004: Technical Services
Operations Review 2004 Technical Services Turnover (£m) Operating Profit (£m) * 2003/04 2002/03 2003/04 2002/03 Technical Services 185 199 14.4 16.1 • Decline in turnover in Rosyth refit and FBM – as expected • Terminal 5 work has just started – more work to come • HMS Illustrious on time and to bud
Slide 20: Bid Activity
Bid Activity • Sole Bidder y Others RSME No change MFTS Withdrawn DTR Qualified • Bids Submitted South East Prime Awaiting decision AVTS Awaiting decision CVF At Top Table ASSP Awaiting decision Hydrographic Office Preparation NPPO Contract Won Central Prime Under Preparation Terminal 5 Contracts Wo
Slide 21: Peterhouse Bid
Peterhouse Bid • Excellent option for Babcock and Peterhouse shareholders • Good managerial fit • Combined balance sheet strong • Scope for substantial synergies • Widens growth opportunities and expertise • Produces well balanced business 21
Slide 22: Summary & Prospects
Summary & Prospects • Transformation to a Support Services company complete • Good relationships with MoD • Order book up by over 60% to £1.0 billion • Next phase in development started with Peterhouse bid BABCOCK IS WELL PLACED TO WIN FURTHER BUSINESS AS PUBLIC SECTOR BUDGET ISSUES ARE PROGRESSIVEL
Babcock International Group — FY2004 Earnings Presentation on 6ix