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KBC Advanced Technologies plc

KBC Advanced Technologies plc. Investor Presentation Half-Year Results 30 June 2004. Agenda. Review of 1 st half 2004 slides 3 – 4 Strategy update slides 5 – 9 Financial summary slides 10 – 18 Customer market conditions and outlook slides 19 – 20

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KBC Advanced Technologies plc

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  1. KBC Advanced Technologies plc Investor Presentation Half-Year Results 30 June 2004

  2. Agenda • Review of 1st half 2004 slides 3 – 4 • Strategy update slides 5 – 9 • Financial summary slides 10 – 18 • Customer market conditions and outlook slides 19 – 20 Appendix: Background on KBC slides 21 – 24

  3. Overview – First half 2004 • Business is in transition • Realignment of KBC services to client needs in progress • Strengthening client relationships and key account management • Investment in developing software applications and best practices • Strong growth in software revenue • Repositioning for growth in 2005

  4. Operational highlights – First half 2004 • Launch of ProfitManager applications and best practices in May • Improved sales performance in UK office with good contract wins in FSU, Middle East and South Africa • Sales remain strong in Japan and Korea • Revenue in the Americas reduced from previous years • Process and other consulting revenues remain under pressure during the transition • Growth in Software, Planning, Upstream and Petrochemicals

  5. Strategy • Refocus on client relationships and regional business strategies • Implement strategy for growth for 2005 and beyond • Restructure core business to deliver competitive advantage through continuous profit improvement built on sustainable partnerships • Evolve scope and functionality of Petro-SIM and ProfitManager to support industry best practice • Broaden consulting into Strategic Planning and Risk Management • Diversify and expand into Petrochemical and Upstream markets • Align internal work processes and implement new MIS

  6. ProfitManager - Continuous Improvement Process Profit Tracker Management Tools Monitor Optimize Adjust Monitoring Tools Sustain Continuous Improvement Plan Demonstrate Report Implement Technical feasibility Operating feasibility Economics Evaluate Interview and observe Apply engineering fundamentals Challenge constraints Identify Petro-SIM Software Benchmark Refinery performance Process operations Base case simulation

  7. Petro-SIM • Development team recruited in August comprised of ex-Hyprotech employees • Petro-Sim release announced on 8 September 2004 • Initial release in October 2004 • First update scheduled for first quarter 2005 • Discussions with customers under way • Demonstration in September at annual NPRA conference

  8. Petro-SIM Reformer Naphtha Hydrotreater CDU Blend optimizer Kero Hydro treater Diesel Hydro treater HF Alky Unit Visbreaker FCC

  9. Summarised profit and loss account 6 months to 6 months to 12 months to 30 Jun 2004 30 Jun 2003 31 Dec 2003 £000 £000 £000 Turnover 15,907 16,699 32,274 Operating profit 487 39704 Goodwill amortisation (245) (280) (490) Other operating exceptional items (496) (1,020) (2,397) Net Interest 26 74 200 Loss before tax (228) (1,187) (1,983) Taxation 79 171499 Loss after tax (149) (1,016)(1,484) Dividends (93) (605) (1,906) Retained loss (242) (1,621) (3,390) Earnings/(loss) per share- basic (0.32p) (2.18p) (3.19p) - fully diluted (0.32p) (2.15p) (3.17p) - basic before goodwill and exceptional items 0.91p (0.02p) 1.37p Average number of shares in issue 46.5m 46.5m 46.5m

  10. Foreign exchange impact 6 months to 6 months to 6 months to 30 Jun 2004 30 Jun 2004 30 Jun 2003 £000 £000 £000 at constant exchange rate Turnover 15,907 16,878 16,699 Operating costs 15,420 16,303 16,660 __________ _____ Operating profit before goodwill and exceptional 487 575 39 items _____ _____ _____

  11. Exceptional costs 6 months to Year ended 30 Jun2004 31 Dec 2003 £000 £000 Software dispute, legal fees, etc 496 1,325 Reorganisation - 878 Strategic review - 194 ___ _____ Total 496 2,397

  12. Summarised group cash flow statement

  13. Summarised group balance sheet At 30 Jun At 30 Jun At 31 Dec 2004 2003 2003 £000 £000 £000 Fixed assets 6,353 7,630 7,071 Net current assets (excl cash) 8,879 9,208 8,032 Cash 3,454 4,294 4,275 Creditors due after 1 year - (300) (300) Provisions (1,132)(704) (1,180) Net assets 17,554 20,128 17,898 Share capital and reserves 6,781 6,781 6,781 Profit and loss 10,77313,34711,117 17,554 20,128 17,898 Note: 2003 comparatives restated for UITF38 reclassification of ESOP investment in own shares

  14. Revenues by region 13% 25% 20% 27% 62% 53% 30% 37% 33%

  15. Revenues by business area

  16. Consultant utilisation

  17. Order book value

  18. Market observations • Refinery utilisation and margins at an all-time high • Plans/projects for increased capex for expansion/upgrade • Renewed emphasis on energy conservation • Efficiency improvements increasingly driven by best practices • Recognition of shortage of key skills and experience

  19. Outlook for 2004 • Revenues expected to remain flat in second half • Additional costs of Petro-SIM development in second half estimated to be annual cost of £1m with £400k impacting 2004 • Operating profit before exceptionals and goodwill for full year expected to remain flat compared with 2003 • Year of transition • Client relationship building • Work on strategic initiatives • Investment in software development • Activity level high • Consultant morale and enthusiasm restored

  20. APPENDIX KBC – “The preferred partner to deliver sustainable competitive advantage” • Leading independent consultants to the downstream oil industry • Serves the refining, petrochemical and process industries • Proprietary software tools and methodology, together with unrivalled experience of consultants are key differentiators • Global operations serving over 200 clients worldwide

  21. 2004 KBC establishes Moscow office to serve FSU clients 2002 KBC extends into oil and gas market analysis with PEL acquisition and enhance energy services with Linnhoff March acquisition KBC evolution 2000 Core skills and competencies extrapolated into Petrochemicals, Gas Processing and Energy industries 2000 KBC extends its operations to include a comprehensive risk management program with the acquisition of Risk Solutions KBC Office Locations 1997 KBC Listed on the London Stock Exchange 1996 Development of new business area in Reliability, Availability & Maintenance 1995 On-site Implementation Services takes KBC profit improvement deliverable to a new dimension 1993 Yield & Energy Survey develops into comprehensive Profit Improvement Program (PIP) 1986 Development of Petrofine simulation software leads to first refinery-wide Yield & Energy Survey 1983 First yield & energy study applied to petrochemicals (ethylene plant) 1979 KBC founded as independent consulting company, specialised in energy improvement in refineries

  22. Global Track Record

  23. Mission and Strengths • Delivering competitive advantage • Independence • Proven track record • Methodology • Unique toolsets • Breadth & depth of experience • Change management experience in partnership with our clients

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