Avon Technologies PLC · LSE:AVON
Avon Technologies — Avon Rubber p.l.c. — H1 2006 Earnings Presentation
31 slides from Avon Technologies's earnings presentation, May 22, 2006
Slide 1: Interim Results Avon Rubber p.l.c.
INTERIM RESULTS AVON RUBBER p.l.c. 22 May 2006 1
Slide 2: Terry Stead, Chief Executive
INTERIM RESULTS TERRY STEAD Chief Executive 22 May 2006 2
Slide 3: Highlights of Transaction
HIGHLIGHTS OF TRANSACTION TOTAL VALUE - £63 MILLION ANTICIPATED NET PROCEEDS – £54.4 MILLION CASH PROCEEDS - £52.1 MILLION PROCEEDS TO BE USED FOR:- • DEBT REDUCTION • PRODUCT DEVELOPMENT • GROWTH 3
Slide 4: Background
BACKGROUND LOW MARGINS IN AUTOMOTIVE GROWTH OPPORTUNITIES IN PROTECTION HIGHER MARGINS SUSTAINABLE EARNINGS 4
Slide 5: Avon Automotive
AVON AUTOMOTIVE COMPETITIVE MARKET LARGE CUSTOMERS PRICE DOWNS RAW MATERIAL COSTS MOVE TO LOW LABOUR COSTS AREAS CLOSURE COSTS 5
Slide 6: Automotive Risks
AUTOMOTIVE RISKS COMMODITY PRODUCTS CUSTOMER BASE VOLUME MOVEMENT SIZE CHINA 6
Slide 7: Automotive Funding Needs
AUTOMOTIVE FUNDING NEEDS PLANT CLOSURES CHINESE EXPANSION PRODUCT DEVELOPMENT 7
Slide 8: Protection Funding Needs
PROTECTION FUNDING NEEDS INVESTMENT IN JSGPM ACQUISITION OF ISI INVESTMENT IN FILTERS DEVELOPMENT OF HOODS DEVELOPMENT/ACQUISITION OF TECHNOLOGIES 8
Slide 9: Capital Structure
CAPITAL STRUCTURE ISI ACQUISITION PENSIONS PRODUCT DEVELOPMENT GROWTH FUTURE ACQUISITIONS 9
Slide 10: Highlights
HIGHLIGHTS • RECOMMENDED OFFER RECEIVED OF £63 MILLION FOR AUTOMOTIVE BUSINESS • GROUP REPORTS FOR THE FIRST TIME UNDER IFRS • UNDERLYING PROFIT IMPROVEMENT FROM CONTINUING BUSINESSES • STRONG PERFORMANCE FROM ISI • RESTRUCTURING OF UK OPERATION ANNOUNCED • DELIVERY OF THE NEW GENERATION MILITARY RE
Slide 11: Financial Summary
FINANCIAL SUMMARY 2006 2005 £’m £’m Revenue 133.6 114.9 Operating profit 4.2 2.3* PBT 3.6 1.8 Dividend (pence) 3.7p 3.7p *pre exceptional items 11
Slide 12: Peter Slabbert, Group Finance Director
INTERIM RESULTS PETER SLABBERT Group Finance Director 22 May 2006 12
Slide 13: Income Statement
INCOME STATEMENT Half year to 31 March 2006 Year 2006 2005 £’m £’m Continuing operations Revenue 36,929 24,514 Operating profit/(loss) from continuing operations 114 (1,074) Operating /loss is analysed as: Before exceptional items 114 (902) Reorganisation costs - (172) Interest receivable 100 112 In
Slide 14: Income Statement (IFRS in UK GAAP format)
INCOME STATEMENT IFRS numbers in UK GAAP format - Half year to 31 March 2006 2006 2005 % change Revenue 133,631 114,886 +16% Operating profit 4,157 2,333 +78% Exceptional items -- (1,932) Provision for loss on disposal (15,889) -- (Loss)/profit before interest and tax (11,732) 401 Interest and other
Slide 15: Segmental Analysis (IFRS) - Continuing Business
SEGMENTAL ANALYSIS (IFRS) - Continuing Business Half year to 31 March 2006 2006 2005 £’m £’m Revenue 36.9 24.5 Operating profit before exceptional items 0.1 (0.9) Return on sales 0.3% (3.7%) 15
Slide 16: Segmental Analysis (IFRS) - Discontinued Operations
SEGMENTAL ANALYSIS (IFRS) - Discontinued Operations Half year to 31 March 2006 2006 2005 £’m £’m Revenue 96.7 90.4 Operating profit before exceptional items 4.0 3.2 Return on sales 4.2% 3.6% 16
Slide 17: Segmental Analysis (IFRS) - With allocation of central costs
SEGMENTAL ANALYSIS (IFRS) - With allocation of central costs Half year to 31 March 2006 2006 2005 £’m £’m Protection and Engineered Products 2.0 0.8 Automotive Components 2.2 1.5 4.2 2.3 17
Slide 18: Segmental Analysis (UK GAAP) - With allocation of central costs
SEGMENTAL ANALYSIS (UK GAAP) - With allocation of central costs Half year to 31 March 2006 2006 2005 £’m £’m Protection and Engineered Products 2.1 0.8 Automotive Components 2.1 1.9 4.2 2.7 18
Slide 19: Reconciliation of IFRS Adjustments
RECONCILIATION OF IFRS ADJUSTMENTS Half year to 31 March 2006 £’m Operating profit (pre-exceptional items) under IFRS 4,157 Development costs capitalised and amortisation and impairment of development costs and other intangibles 516 Goodwill amortisation (540) Share options 197 Reduced depreciation
Slide 20: Cashflow
CASHFLOW Half year to 31 March 2006 2006 2005 £’m £’m Net cashflow from operations 7.3 (0.2) Tax 0.3 (1.3) Interest (1.3) (1.0) Capital expenditure (8.4) (3.3) Pension payment (1.0) -- Exchange and other (0.4) 0.9 Dividend (1.3) (1.3) (4.8) (6.2) Opening net debt (51.7) (29.7) Closing net debt (56.5
Slide 21: Group Cashflow History
GROUP CASHFLOW HISTORY 2001 2002 2003 2004 2005 2006 Total Year £’m £’m £’m £’m £’m Half year £’m £’m Cash profit pre exceptional items 20.7 24.4 22.4 21.0 17.4 9.6 115.5 Working capital movement 10.2 5.8 (2.9) 0.1 (5.7) (1.2) 6.3 Cash effect of exceptional items (3.2) (5.3) (0.9) (0.1) (3.0) (2.1)
Slide 22: Summary Balance Sheet
SUMMARY BALANCE SHEET At 31 March 2006 Year 2006 2005 £’m £’m Goodwill and intangibles 16.8 17.9 Tangible fixed assets 31.6 69.9 Other non current assets 3.2 9.4 Current assets 25.6 71.5 Current liabilities (15.9) (48.6) Other non current liabilities (5.7) (2.2) Pension and other retirement liabilit
Slide 23: Terry Stead, Chief Executive
TERRY STEAD Chief Executive 23
Slide 24: Strategy for Continuing Business
STRATEGY FOR CONTINUING BUSINESS 24
Slide 25: Ve@N
Ve@N 25
Slide 26: Major Markets Served
MAJOR MARKETS SERVED RESPIRATORY PROTECTION DAIRY AEROSOL GASKETS ENGINEERED FABRICATIONS 26
Slide 27: Established Businesses
ESTABLISHED BUSINESSES HI-LIFE ISI ENGINEERED FABRICATIONS 27
Slide 28: Restructuring Opportunities
RESTRUCTURING OPPORTUNITIES HAMPTON PARK WEST EUROPEAN MIXING 28
Slide 29: Respiratory Protection
RESPIRATORY PROTECTION ISI CADILLAC HAMPTON PARK WEST 29
Slide 30: Outlook
OUTLOOK • SIGNIFICANT STRATEGIC ADVANCE • BALANCED PORTFOLIO FOR FUTURE • GROWTH IN RESPIRATORY PROTECTION • EXCITING RANGE OF NEW PRODUCTS • STRONG PERFORMANCE FROM ISI, HI-LIFE AND ENGINEERED FABRICATIONS • RESTRUCTING IN UK • CONFIDENT OF GROWTH IN CONTINUING BUSINESSES 40
Slide 31: Interim Results Avon Rubber p.l.c.
INTERIM RESULTS AVON RUBBER p.l.c. 22 May 2006 41