Bodycote Plc · LSE:BOY
Bodycote — H1 2010 Earnings Presentation
29 slides from Bodycote's earnings presentation, Jul 28, 2010
Slide 1: 2010 Interim Results
2010 Interim Results 28 July 2010!
Slide 2: Introduction
Introduction" Stephen Harris" Chief Executive! Honeycomb brazing" Specialised process for applying honeycomb to aircraft and IGT engine components to provide abradable seals.! 2 ! 2010 Interim Results!
Slide 3: Agenda
Agenda" Highlights: ! !Stephen Harris! Financial Review: !David Landless! Business Review: !Stephen Harris! 3 ! 2010 Interim Results!
Slide 4: Highlights
Highlights" Demand: ! !Recovery started but uneven across sectors! Revenue: ! !8.1% higher than H1-2009! Headline margin: !9.1% (compared to -0.7% H1-2009)! Restructuring: !Cost savings £12.7m higher than H1-2009! Cash: ! !Profit to cash conversion at 100% !! Capital expenditure: !Tightl
Slide 5: Financial Review
Financial Review" David Landless" Group Finance Director! Gas nitriding" Controlled treatment for high surface hardness, improved fatigue properties and strength, with minimal component distortion.! 5 ! 2010 Interim Results!
Slide 6: Interim Results Summary
Interim Results Summary 6 ! 2010 Interim Results!
Slide 7: Profit Bridge
Profit Bridge £m" Constant currency change: " (H1-2010 Vs H1-2009)! Revenue ! + £20.1m! Headline OP! + £24.7m! 7 ! 2010 Interim Results! Headline Operating Profit is stated pre exceptional items!
Slide 8: Restructuring
Restructuring £6.2m cash spent in H1-2010. No additional P&L charge! Restructuring complete in most parts of the Group. France, Brazil and Italy to be finished by end of Q1-2011! Expenditure beyond Q1-2011 relates to environmental remediation! Expected full year cumulative savings £44.5m! 8
Slide 9: Operating Cash Flow
Operating Cash Flow" Ongoing effective tax rate expected to be c.27% (H1-2010: 26.7%) ! 9 ! 2010 Interim Results!
Slide 10: Net Debt
Net Debt" Low net debt, conservative gearing! Committed facility headroom of £116m! 2009 final and interim dividends paid in H1-2010 ! 10 ! 2010 Interim Results!
Slide 11: Finance Charge
Finance Charge" Effective interest rate including fees of 4.3%! Bodycote continues to benefit from an advantageous margin on the 2013, €125m facility, agreed pre-credit crisis! Financing costs increased due to fees relating to refinanced £110m and $20m bank facilities! 11 ! 2010 Interim Result
Slide 12: Business Review
Business Review" Stephen Harris" Chief Executive! HIP of Tungsten Carbide" Hot Isostatic Pressing eliminates closed porosity and gives a high surface finish to tungsten carbide.! 12 ! 2010 Interim Results!
Slide 13: Costs By Type
Costs By Type Annualised £m at Constant Exchange Rates" 13 ! 2010 Interim Results!
Slide 14: Daily Sales Trend – Group
Daily Sales Trend – Group Constant Exchange Rates" 14 ! 2010 Interim Results!
Slide 15: Daily Sales Trend – By Business
Daily Sales Trend – By Business Constant Exchange Rates" 15 ! 2010 Interim Results!
Slide 16: Demand - Aerospace & Defence Sector
Demand - Aerospace & Defence Sector" Some modest destocking continues, at a lower rate than witnessed last year! 16 ! 2010 Interim Results!
Slide 17: Demand – Energy Sector
Demand – Energy Sector" Improvement in oil and gas demand! Power generation very weak due to lower industrial gas turbine demand and destocking in Europe! 17 ! 2010 Interim Results!
Slide 18: Demand - Automotive & Truck Sector
Demand - Automotive & Truck Sector" ʻShareʼ includes change in market share with respect to direct and indirect (substitute) competition as well as outsourcing and reversal of insourcing! ʻOtherʼ includes price and mix! 18 ! 2010 Interim Results!
Slide 19: Demand - General Industrial Sector
Demand - General Industrial Sector" ʻShareʼ includes change in market share with respect to direct and indirect (substitute) competition as well as outsourcing and reversal of insourcing! ʻOtherʼ includes price and mix! 19 ! 2010 Interim Results!
Slide 20: Aerospace, Defence & Energy
Aerospace, Defence & Energy" Market Sector! 60 Revenue £m 40 Steady demand from aerospace OEMs! Aerospace aftermarket weak, as flying hours 20 remain low! Continued weakness in power generation, particularly in Europe! 0 Aerospace Energy General and Defence Industrial H1-‐2009 H1-‐2010 Geogr
Slide 21: Automotive & General Industrial
Automotive & General Industrial" Market Sector! 80 60 Revenue £m 40 Widespread and strong recovery in automotive sales! 20 General industrial performance improved at a slower rate! 0 AutomoLve Truck General Energy / Industrial Other H1-‐2009 H1-‐2010 Geographic Analysis! 17% Western Europe 14%
Slide 22: Strategic Progress
Strategic Progress" Retain benefit of lower cost base • Gearing of 132%, equivalent to 63% following restructuring" without restructuring! Selective capex regime" • Capex to depreciation ratio 0.7x ! Enhance business processes" • Increased value of sales mix! • Management team strengthened Enhance ʻ
Slide 23: Outlook
Outlook" In the recent Trading Update, issued on 9 July 2010, the Board stated that the Group has continued to see a steady and broad based improvement in demand since the time of the Interim Management Statement on 28 April 2010, as evidenced in these interim results, and noted that future demand l
Slide 24: 2010 Interim Results
24 ! 2010 Interim Results!
Slide 25: H1-2010 Statutory Income Statement
H1-2010 Statutory Income Statement 25 ! 2010 Interim Results!
Slide 26: Financial Information
Financial Information" Average shares in issue H1-2010: 185.1m (H1-2009: 185.9m)! Exchange rates:! Net debt and interest related financial ratios:! 1. Earnings before exceptionals, interest, tax, depreciation, amortisation, impairment and share based payments, calculated on a LTM basis! 26 ! 2
Slide 27: Pensions
Pensions" 27 ! 2010 Interim Results!
Slide 28: Segmental Revenue
Segmental Revenue 2006 to 2009 Continuing Operations" 28 ! 2010 Interim Results!
Slide 29: Segmental Headline Operating Profit
Segmental Headline Operating Profit 2006 to 2009 Continuing Operations" 29 ! 2010 Interim Results!