Babcock International Group PLC · LSE:BAB
Babcock International — H1 2003/04 Earnings Presentation
21 slides from Babcock International's earnings presentation, November 2003
Slide 1: Interim Results to 30 September 2003
Babcock International Group PLC INTERIM RESULTS TO 30 SEPTEMBER 2003 Peter Rogers Bill Tame Kevin Thomas 1
Slide 2: Babcock Strategy 2000
BABCOCK STRATEGY 2000 2000 Strategy 2003 Position To enhance shareholder value by: • Transforming into a fast growing • Formally classified as support support services business services • Growth in continuing businesses - Sales 38% - Operating profit 22% • Exiting low growth, cyclical Materials Comp
Slide 3: Financial Review
Financial Review Bill Tame 3
Slide 4: Group Operating Result 6 months to 30 September
Group Operating Result 6 months to 30 September FY £ million 2003 2002 % change 2002/03 Turnover Continuing operations 214.9 155.8 +38% 377.9 Discontinued operations 10.2 25.7 45.6 Total 225.1 181.5 +24% 423.5 Operating profit* Continuing operations 12.3 10.1 +22% 23.0 Discontinued operations (0.2)
Slide 5: Divisional Performance 6 months to 30 September
Divisional Performance 6 months to 30 September Turnover Operating profit* FY FY £ million 2003 2002 % change 2002/3 2003 2002 % change 2002/3 Technical Services Babcock Engineering Services (BES) 85.8 87.3 188.1 7. 2 7.2 15.5 Babcock Eagleton 2.9 4.5 11.0 0.1 0.0 0.7 Total 88.7 91.8 -3% 199.1 7.3 7
Slide 6: Divisional Performance 6 months to 30 September
Divisional Performance 6 months to 30 September Turnover Operating profit* FY FY £ million 2003 2002 % change 2002/3 2003 2002 % change 2002/3 Technical Services Babcock Engineering Services (BES) 85.8 87.3 188.1 7.2 7.2 15.5 Babcock Eagleton 2.9 4.5 11.0 0.1 0.0 0.7 Total 88.7 91.8 -3% 199.1 7.3 7.
Slide 7: Divisional Performance – Phasing
Divisional Performance – Phasing Turnover Operating Profit £m £m Technical Training & Technical Training & 140 Services Support Services Support 10 120 9 100 8 7 80 6 5 60 4 40 3 2 20 1 0 0 02/03 First Half 02/03 Second Half 03/04 First Half 02/03 First Half 02/03 Second Half 03/04 First Half 02/03
Slide 8: Tax, EPS & Dividend 6 months to 30 September
Tax, EPS & Dividend 6 months to 30 September FY £ million 2003 2002 % change 2002/03 Profit before tax, pre-goodwill and exceptionals 11.1 7.8 42% 18.0 Goodwill (1.6) (0.8) (1.9) Exceptionals (0.1) - (2.7) Profit before Tax 9.4 7.0 +34% 13.4 Tax (1.4) (2.0) (5.1) Profit after Tax 8.0 5.0 +60% 8.3 Ef
Slide 9: Group Operating Cash Flow 6 months to 30 September
Group Operating Cash Flow 6 months to 30 September FY £ million 2003 2002 2002/03 Group Operating Profit 10.5 8.1 18.9 Depreciation and amortisation 4.1 5.4 11.0 Increase in working capital (1.2) (7.7) (18.6) Capital expenditure – net (0.5) (1.6) (2.7) Operating cash flow 12.9 4.2 8.6 9
Slide 10: Group Net Cash Flow 6 months to 30 September
Group Net Cash Flow 6 months to 30 September FY £ million 2003 2002 2002/03 Operating cash flow 12.9 4.2 8.6 Acquisitions, disposals & investments (0.3) (24.5) (27.6) Interest 0.8 (0.8) (2.5) Tax (0.7) (1.4) (3.0) Dividends (2.7) (2.5) (4.2) Translation differences\other 0.5 (0.2) (0.1) Net cash flo
Slide 11: Group Balance Sheet 6 months to 30 September
Group Balance Sheet 6 months to 30 September FY £ million 2003 2002 2002/03 Fixed assets Tangible 15.0 19.9 16.5 Intangible 78.8 79.5 78.5 93.8 99.4 95.0 Investments 5.5 4.4 4.3 Working capital (10.5) (23.7) (11.7) Pension pre-payments 70.2 70.9 71.3 Tax & dividends (6.4) (6.8) (6.9) Provisions (31.
Slide 12: Pensions - Profit and loss account impact
Pensions - Profit and loss account impact Main DB Schemes £ million SSAP 24 Sept 03 Sept 02 Charged in arriving at Operating profit Service cost (net of variation) 3.1 2.5 Interest on surpluses (2.1) (3.0) Net charge/(credit) 1.0 (0.5) FRS 17 - First Half 2003/4 net charge £3.6m - First Half 2002/3
Slide 13: Operations Review 2003: Technical Services
OPERATIONS REVIEW 2003 Technical Services Turnover (£m) Operating Profit (£m)** BES 85.8 (87.3)* 7.2 (7.2)* Eagleton 2.9 (4.5) 0.1 (0.0) • BES profits flat on marginally reduced turnover – a busy second half • Terminal 5 module construction won • Oil and gas market for construction picking up • Prog
Slide 14: Operations Review 2003: Training & Support
OPERATIONS REVIEW 2003 Training & Support Turnover (£m) Operating Profit (£m)** Defence Services (BDS) 29.0 (31.7)* 2.5 (3.2)* Naval Services (BNS) 42.2 (8.7) 1.8 (0.2) Infrastructure Services (BIS) 55.0 (23.6) 2.8 (0.7) Defence Services • Win at RAF Valley compensates for disappointment of losing C
Slide 15: Operational Review 2003: Naval Services
OPERATIONAL REVIEW 2003 Naval Services • First year of Clyde contract completed • All savings targets exceeded • All KPIs met throughout the period • First full docking periods successfully accomplished • Plans now exist to meet fully the first 5 year savings 15
Slide 16: Operations Review 2003: Infrastructure Services
OPERATIONS REVIEW 2003 Infrastructure Services • South West Regional Prime won – growth expected • Metropolitan Police facilities management contract won • African sales doubled as Volvo and power businesses both prospered • Africa margin slightly ahead – turnover doubled 16
Slide 17: South West Regional Prime Contract
OPERATIONS REVIEW 2003 Infrastructure Services South West Regional Prime Contract • Debut Services appointed as Preferred Bidder (PB) - a JV between Babcock and Bovis • A ‘one stop shop’ for all property maintenance and capital works for the majority of MoD bases in South West England - reactive mai
Slide 18: Prime Contracting future opportunities
OPERATIONS REVIEW 2003 Infrastructure Services Scotland awarded to AMEC/Turner Prime Contracting future opportunities South East Region – c. £65m p.a. Central Central Region – c. £80m p.a. A. AMEC/Turner B. Balfour Beatty/Atkins Eastern Region – c. £75m p.a. C. Carillion D. Debut East At pre-qualifi
Slide 19: Bid Activity – Update on July Status
Bid Activity – Update on July Status Status Status • Sole Bidder • Bids Being Prepared - RSME No change - RAF Valley Won - Cranwell Lost • Bids Submitted - RAF Exhibitions Won - AVTS BAFO - Navy Mac Under evaluation - ASSP No change - Marine Services Pre-bid - SWRP Won - Oil Rig Manifolds Some won -
Slide 20: Bid Activity - New
Bid Activity - New Status • Submitted since July • In Preparation - RAF Brize Norton Lost - Hydrographic Office - UAE Training Won - Central Prime - Metropolitan Police Won - Libya Power Reinstatement - Ealing 2 year extension Won - Mondi Power - Crown Estates 2 year - Allenby Connaught sub-contract
Slide 21: Summary and Prospects
SUMMARY AND PROSPECTS • Consistent strategy • Objectives set in 2000 have been met • Sales and profit growth in core businesses • Conversion of Preferred Bidder contracts will almost double order book 21
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