Bodycote Plc · LSE:BOY
Bodycote — FY2008 Earnings Presentation
36 slides from Bodycote's earnings presentation, February 2009
Slide 1: 2008 Preliminary Results
2008 PRELIMINARY RESULTS Bodycote
Slide 2: Introduction
Introduction • Stephen Harris – CEO • David Landless – Group FD • John Hubbard – former CEO 2008 Preliminary results 2 1 2008 Preliminary results
Slide 3: Introduction
Introduction • Stephen Harris – CEO • David Landless – Group FD • John Hubbard – former CEO North America: 43 Western Europe: 115 Emerging Market: 35 2008 Preliminary results 3 2 2008 Preliminary results
Slide 4: Introduction
Introduction • Stephen Harris – CEO • David Landless – Group FD • John Hubbard – former CEO North America: 43 Western Europe: 115 Emerging Market: 35 2008 Preliminary results 4 3 2008 Preliminary results
Slide 5: Highlights
Highlights 2008 Preliminary results 5 4 2008 Preliminary results 1 Pre exceptional items and interest and tax on associates.
Slide 6: Statutory Results
Statutory Results 2008 Preliminary results 6 5 2008 Preliminary results
Slide 7: Headline Results
Headline Results 2008 Preliminary results 1 Earnings before exceptionals, interest, tax, depreciation, amortisation, impairment and shared-based payments. 2 Pre exceptional items and interest and tax on associates. 7 3 Pre exceptional items and tax on associates. 6 2008 Preliminary results 4 Pre exc
Slide 8: Profit Reconciliation – Continuing Operations
Profit Reconciliation – Continuing Operations 2008 Preliminary results 8 7 2008 Preliminary results 1 Pre exceptional items and tax on associates.
Slide 9: Profit Bridge – Thermal Processing
Profit Bridge – Thermal Processing (£m) 90.0 85.0 +8.7 -3.7 80.0 -15.1 75.0 +6.5 70.0 +5.3 65.0 -0.8 60.0 55.0 50.0 45.0 40.0 35.0 70.3 71.2 30.0 25.0 20.0 15.0 10.0 5.0 0.0 Headline OP Price increases Volume growth Input costs Greenfield Acquisitions exchange Headline OP Foreign 2007 2008 2008 Prel
Slide 10: Revenue and Operating Profit - By Region
Revenue and Operating Profit - By Region 2008 Preliminary results 10 9 2008 Preliminary results 1 Pre exceptional items and interest and tax on associates.
Slide 11: YoY Change in Revenue
YoY Change in Revenue 2008 Preliminary results 11 10 2008 Preliminary results
Slide 12: Headline Operating Margins
Headline Operating Margins 2008 Preliminary results 12 11 2008 Preliminary results 1 Pre exceptional and interest and tax on associates.
Slide 13: Revenue By Market – Continuing Operations
Revenue By Market – Continuing Operations 2008 Preliminary results 13 12 2008 Preliminary results
Slide 14: Finance Charge
Finance Charge 2008 Preliminary results 14 13 2008 Preliminary results
Slide 15: Year End Cash and Debt at Various Exchange Rates
Year End Cash and Debt at Various Exchange Rates 2008 Preliminary results 15 14 2008 Preliminary results
Slide 16: Treasury
Treasury • Balance Sheet Hedging will be relaxed • £225m RCF matures in August 2010 but could refinance in 2009 • Significant margin increase and fees expected for any refinancing • 125m RCF matures July 2013 2008 Preliminary results 16 15 2008 Preliminary results
Slide 17: Taxation
Taxation 2008 Preliminary results • 2009 anticipated tax rate on Headline Profit Before Tax1 25.0% 17 16 2008 Preliminary results 1 Pre exceptional items and tax on associates.
Slide 18: Financial Information
Financial Information • Shares in issue – 2008 average 310.9m 2009 187.5m • FX rates 2008 average Year H1 H2 USD 1.87 1.98 1.75 EUR 1.26 1.29 1.23 2009 current* USD 1.44 EUR 1.13 2008 Preliminary results 18 17 2008 Preliminary results ‘*Closing rate 24 February 2009.
Slide 19: Pension Deficits
Pension Deficits 2008 Preliminary results 19 18 2008 Preliminary results
Slide 20: Summary Cash Flow
Summary Cash Flow 2008 Preliminary results 20 1 Earnings before exceptionals, interest, tax, depreciation, amortisation, impairment and shared-based payments. 19 2008 Preliminary results 2 Earnings before interest, tax, depreciation, amortisation, impairment and shared based payment.
Slide 21: Financial Ratios
Financial Ratios 2008 Preliminary results 21 1 Earnings before interest, tax, depreciation, amortisation, impairment and shared-based payments. 20 2008 Preliminary results 2 Pre exceptional items and interest and tax on associates.
Slide 22: Heat Treatment
Heat Treatment Revenue (£m) 600 499.9 500 421.7 400 375.0 349.2 328.7 300 200 100 0 2004 2005 2006 2007 2008 % Operating Profit - Margins £m 70 25 61.6 60.0 60 50.3 20 50 44.8 38.8 40 15 30 10 20 5 10 0 0 2008 Preliminary results 2004 2005 2006 2007 2008 22 21 2008 Preliminary results
Slide 23: Hot Isostatic Pressing
Hot Isostatic Pressing Revenue (£m) 60 51.9 50 43.5 38.9 40 35.2 32.1 30 20 10 0 2004 2005 2006 2007 2008 % Operating Profit - Margins £m 18 15.4 15.3 50 16 14 12.8 40 12 9.5 10 30 7.1 8 20 6 4 10 2 0 0 2008 Preliminary results 2004 2005 2006 2007 2008 23 22 2008 Preliminary results
Slide 24: Restructuring
Restructuring • Match cost base with reduced demand • Position business for recovery post recession • Removing unprofitable and low value added parts of the network • 31 facilities being closed or consolidated • Headcount is being reduced by at least 10% • Annualised cost saving £18m 2008 Preliminar
Slide 25: Restructuring
Restructuring 2008 Preliminary results 25 24 2008 Preliminary results
Slide 26: Major Strategic Actions in 2008
Major Strategic Actions in 2008 • Value of Testing Realised • Balance sheet strengthened • Restructuring underway • Selective acquisitions 2008 Preliminary results 26 25 2008 Preliminary results
Slide 27: Outlook
Outlook • Following the sale of the Testing activities Bodycote is a focused business with a strong balance sheet. While automotive markets have softened, demand from aerospace, power generation and oil & gas markets remain steady. • Despite the uncertain economic environment, we remain confident in
Slide 28: 2008 Preliminary Results
2008 PRELIMINARY RESULTS Bodycote
Slide 29: Continuing Operations Financial Highlights
Continuing Operations Financial Highlights Revenue CAGR 11% Headline Operating Profit1 CAGR 13% 600 551.8 80 70.3 71.2 500 465.2 70 413.9 58.4 384.4 60 400 360.8 51.5 £m £m 50 43.1 300 40 200 30 20 100 10 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Target: TP: 40% Target: Mid to high singl
Slide 30: Key Performance Indicators non financial
Key Performance Indicators non financial Target: >80% Target: >80% Utilisation HIP7 Utilisation Heat Treatment6 76 73 72.0 74.0 72 71.0 71.0 74 73.0 72.0 71 70.0 72 71.0 70 69 70 % % 68 68 67.0 67 66.0 66 66 65 64 64 62 63 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Target: All facilities Targ
Slide 31: Acquisitions, Capital Expenditure & Depreciation
Acquisitions, Capital Expenditure & Depreciation 2008 Preliminary results 31 29 2008 Preliminary results 5 see definitions Appendix page 33.
Slide 32: Analysis Of Organic/Acquisition Growth
Analysis Of Organic/Acquisition Growth 2008 Preliminary results 32 1 Includes annualised sales/operating profit from closed sites. 30 2008 Preliminary results 2 Pre exceptional items and interest and tax on associates.
Slide 33: Impact Of Exchange Rates
Impact Of Exchange Rates 2008 Preliminary results 33 31 2008 Preliminary results 1 Pre exceptional items and interest and tax on associates.
Slide 34: Emerging Markets
Emerging Markets Emerging markets as a % of Thermal Processing sales 10.0% 9.3% 10.0% 5.0% 3.6% 2.2% 1.8% 0.0% 2004 2005 2006 2007 2008 2008 Preliminary results 34 32 2008 Preliminary results
Slide 35: Key performance indicators definitions
Key performance indicators definitions 1. Headline operating profit as a percentage of average capital employed. Capital employed includes tangibles and intangibles assets including all previously amortised/impaired goodwill and all non interests bearing assets and liabilities. Headline operating pr
Slide 36: Bodycote
Bodycote