1 / 51

Cookson Group plc Preliminary Results 2004 15 March 2005

Cookson Group plc Preliminary Results 2004 15 March 2005. Highlights of 2004 Results. Operating profit up 60% at constant exchange rates All three divisions record strong increases Significant improvement in return on sales EPS before exceptionals increases three-fold

zazu
Download Presentation

Cookson Group plc Preliminary Results 2004 15 March 2005

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Cookson Group plc Preliminary Results 2004 15 March 2005

  2. Highlights of 2004 Results • Operating profit up 60% at constant exchange rates • All three divisions record strong increases • Significant improvement in return on sales • EPS before exceptionals increases three-fold • Marked reduction in net debt • New £200m bank facility announced in March 2005 • Strategic review concluded

  3. Dennis Millard Group Finance Director

  4. vs GrowthReported 20032004 rates 2004 Actual Turnover £739m +5% +11% Ceramics – Turnover* % of Group Turnover 44% *Excludes JVs

  5. Growth vs 2003 at 2004 rates 2004 Actual Ceramics – Turnover by Sector* Iron & Steel £478m +13% Foundry & IP £172m +3% Glass £89m +18% Division £739m +11% *Excludes JVs

  6. Continental Europe: sound growth Ceramics – Turnover 2004* By location of operation Turnover 2004 - £739m Asia-Pacific: share of total double since 2002;strong growth in sales &profitability USA:strong growth; steel production increases 13% 30% RoW 16% 10% 31% UK *Excludes JVs

  7. GrowthReported 20032004 rates 2004 Actual Operating Profit* £56.8m +14% +23% Ceramics % of Group Turnover 44% vs Turnover £739m +5% +11% Return on Sales* 7.7% 2003 : 7.0% * Before amortisation of intangibles and exceptional items. All numbers exclude JVs

  8. £m % £m 2003 2004 2003 2004 2004 Ceramics – Half Year Trends (at 2004 exchange rates) Return on Sales* Turnover Operating Profit* 2003 * Before amortisation of intangibles and exceptional items. All numbers exclude JVs

  9. % of Group Turnover 39% Turnover £626m +10% +19% Electronics – Turnover* vs GrowthReported 20032004 rates 2004 Actual *Excludes JVs

  10. Growth vs 2003 at 2004 rates 2004 Actual Chemistry £214m +5% Laminates £132m +26% Division £626m +19% Electronics – Turnover by Sector* Assembly Materials £280m +28% *Excludes JVs

  11. UK Electronics – Turnover 2004 By location of operation Turnover 2004 - £626m* Asia-Pacific:increased share; strongest growth & most profitable USA: strong recovery in H1; rate of growth slowed in Q4 27% 40% 24% Continental Europe: electronics products flat, non-electronics growth 4% 5% RoW *Excludes JVs

  12. % of Group Turnover vs GrowthReported 20032004 rates 2004 Actual 39% Electronics Turnover £626m +10% +19% Operating Profit* £49.5m +138% +155% • Higher raw materials prices – tin, copper foil, resin • Lower manufacturing and SG&A costs • Healthy operational leverage (31%) • Turnover: +£99m • Profit: +£30m * Before amortisation of intangibles and exceptional items. All numbers exclude JVs

  13. % of Group Turnover vs GrowthReported 20032004 rates 2004 Actual 39% Electronics Turnover £626m +10% +19% Operating Profit* £49.5m +138% +155% Return on Sales* 7.9% 2003 : 3.7% * Before goodwill amortisation and exceptional items. All numbers exclude JVs

  14. Electronics – Operating Profit* By sector Growth vs 2003* £m 2004 Actual £22.2m +7.3 Assembly Materials Chemistry £27.2m +8.4 Laminates £0.1m +14.4 Division £49.5m +30.1 * 2003 at 2004 exchange rates; before amortisation of intangibles and exceptional items; excludes JVs

  15. 2003 2003 2003 2004 2004 2004 Electronics – Half Year Trends(at 2004 exchange rates) Turnover Return on Sales* Operating Profit* £m £m £m * Before amortisation of intangibles and exceptional items. All numbers exclude JVs

  16. % of Group Turnover vs GrowthReported 20032004 rates 2004 Actual 17% Turnover £288m Net Sales Value (NSV)* £116m -7% -7% -1% -1% Precious Metals * Excludes precious metal content

  17. % of Group Turnover 17% Division £288m -1% Precious Metals – Turnover Growth vs 2003 at 2004 rates 2004 Actual USA £151m +9% UK and Cont Europe £137m -10%

  18. % of Group Turnover vs GrowthReported 20032004 rates 2004 Actual 17% Turnover £288m -7% -1% 2003 : 6.9% Precious Metals Operating Profit* £9.3m +8% +22% Return on NSV* 8.0% * Before amortisation of intangibles and exceptional items

  19. £m £m £m 2004 2003 2004 2003 Precious Metals – Half Year Trends(at 2004 exch rates) Turnover & Net Sales Value Return on Net Sales Value* Operating Profit* 2004 2003 Net Sales Value * Before amortisation of intangibles and exceptional items

  20. Group – Joint Ventures* Turnover 45.2 39.1 +16% Operating Profit 4.0 1.7 +135% Return on Sales 8.8 4.3 £ million % Increase/ (decrease) 2004 2003 *At constant exchange rates

  21. vs GrowthReported 20032004 rates 2004 Actual Turnover £1,698m +5% +11% Return on Sales* 7.0% 2003 : 5.0% Group – Continuing Operations (including JVs) Operating Profit* £119.6m +47% +60% * Before amortisation of intangibles and exceptional items

  22. £m £m % 2003 2003 2003 2004 2004 2004 Group – Continuing Operations At reported exchange rates Operating Profit* Turnover Return on Sales * Before amortisation of intangibles and exceptional items

  23. Group Operating Profit* £ million 2004 Variance vs 2003 2003 CONTINUING OPERATIONS120 75 45 - at 2004 exchange rates Ceramics 57 46 11Electronics 50 19 31 Precious Metals 9 8 1 Joint Ventures 4 2 2 EXCHANGE RATE IMPACT - 6 (6) DISCONTINUED OPERATIONS - (17)17 Speedline - (16) 16 Precision Products, Others-(1)1GROUP - at reported exchange rates 120 64 56 * Before amortisation of intangibles and exceptional items

  24. Includes £5m deferred income from close-out of swaps in both 2003 & 2004 Group Profit Before and After Tax* £ million Variance vs 2003 2004 2003 OPERATING PROFIT120 64 56 Interest (27) (32) 5 • Positive exchange rate effect £3m • Lower amortisation of fees * Before amortisation of intangibles and exceptional items; at reported exchange rates

  25. Group Profit Before and After Tax* £ million 2004 2003 Variance vs 2003 OPERATING PROFIT120 64 56 Interest (27) (32) 5 PROFIT BEFORE TAX 93 32 61 * Before amortisation of intangibles and exceptional items; at reported rates

  26. 2003 2004 Group Profit Before Tax* Half year trends £m * Before amortisation of intangibles and exceptional items; at reported exchange rates

  27. Group Profit Before and After Tax* £ million 2004 2003 Variance vs 2003 OPERATING PROFIT120 64 56 Interest (27) (32) 5 PROFIT BEFORE TAX 93 32 61 Taxation (26) (10) (16) Minorities (4) (2) (2) PROFIT FOR YEAR 63 2043 Effective rate: 28% (2003: 30%) * Before amortisation of intangibles and exceptional items; at reported exchange rates

  28. Earnings and Dividend per Share 2004 2003 EARNINGS PER SHARE Headline* No. of shares (ave.) DIVIDEND PER SHARE 3.3p 1,883m nil 1.1p 1,880m nil *Before amortisation of intangibles and exceptional items

  29. Operating Exceptionals £ million 2004 P&L 2004 Cash Flow ELECTRONICS102 - Laminates 91 - Other11 CERAMICS – USA31 PRECIOUS METALS – Europe106 2003 INITIATIVES- 5 23 14 CASH RELATED 15 NON-CASH/ASSET WRITE-DOWNS8 23

  30. Non-Operating Exceptionals & Amortisation – 2004 £ million • Business Disposals* 40 • European brick businesses 33 • Other; mainly Fukuda JV dissolution 7 • Net Loss on Disposal of Fixed Assets 17 • Impairment of ELI investment 18 • Other; net surplus on sale of property (1) • TOTAL NON-OPERATING EXCEPTIONALS 57 • AMORTISATION OF INTANGIBLES 33 * Includes goodwill written-back/off

  31. Profit/EPS – Headline and Basic • Before amortisation of intangibles and exceptional items • After amortisation of intangibles and exceptional items

  32. Net Cash Flow from Operating Activities £ million Variancevs 2003 Inflows/(Outflows) 2004 2003 • EBITDA* 162 115 47 • Continuing operations 162 130 32 • - Discontinued operations - (15) 15 • Rationalisation (14) (14) - 20042005/6 £m£m Ceramics 1 2 Electronics 78 Precious Metals 64 1414 * Operating profit before amortisation of intangibles and depreciation; excl JVs

  33. Net Cash Flow from Operating Activities £ million Variancevs 2003 Inflows/(Outflows) 2004 2003 • EBITDA* 162 115 47 • Rationalisation (14) (14) - • Working Capital (3) 6 (9) • Trade (17) 10 (27) • Other 14 (4) 18 • Net Cash Flow fromOperating Activities145 107 +38 * Operating profit before amortisation of intangibles and depreciation; excl JVs

  34. £m % Cash flow – Working Capital : 2002-2004 Period end Trade Working Capital* & Average as % of Sales 25.2% 23.1% 22.8% 21.3% *Trade working capital = trade debtors + stock – trade creditors at period end; average is monthly average for period

  35. Operating Cash Flow £ million Variancevs 2003 Inflows/(Outflows) 2004 2003 NET CASH FLOW FROMOPERATING ACTIVITIES145 107 38 Capital Expenditure (40) (42) 2 - Capital Expenditure (gross) (42) (48) 6 - Asset Disposals 2 6 (4) Dividends from Joint Ventures 2 2 - OPERATING CASH FLOW107 67 40 * Before amortisation of intangibles and exceptional items; continuing operations

  36. Free Cash Flow £ million Inflows/(Outflows) Variancevs 2003 2004 2003 • OPERATING CASH FLOW 107 67 40 • INTEREST & SERVICING OF FINANCE(34) (30) (4)- paid (net) (31) (34) 3- swap proceeds - 5 (5) • dividends to minorities (3) (1) (2) • TAXATION(21) (21) - • FREE CASH FLOW 52 16 36

  37. Net Cash Flow and Decrease in Net Debt £ million2004 FREE CASH FLOW 52 INVESTING ACTIVITIES (21) Acquisitions - 2004(2) - Deferred consideration (10) Disposals - 2004 1 - Prior period trailing costs (10) NET CASH FLOW BEFORE FINANCING 31 Refinancing costs – 2003 facility (1) Exchange rate translation adjustments 22 DECREASE IN NET DEBT52 At 31/12/04 £m 2005 (8) Thereafter (5) Total (13)

  38. Borrowings and Ratios 31/12/04 31/12/03 NET DEBT£307m £358m Grossborrowings 354 415 Cash(47) (57) RATIOS EBITDA : Interest 6.7 times4.3 times Net Borrowings : EBITDA 1.8 times 2.7 times Leverage (US GAAP) 32%36%

  39. New Bank Facility • Announcement: 1 March 2005 • Replaces £148m facility due to mature March 2006 • New facility: £200 million • 9 core banks • Until March 2008 plus 2 x 1 year options • Unsecured (security from previous facilities fully released) • Improved terms and lower margins

  40. Committed Facilities and Drawings FACILITIES - current DRAWINGS @ 31/12/04 FACILITES @ 31/12/04 £497m Headroom £445m £148m Bank facility £200m £108m £40m USPP notes* £297m £297m £297m * $570 million

  41. Facilities – Current Maturity Profile Maturity Profile £ million Maturities USPP LOAN NOTES 297 13 2005 - 2006 94 2007 - 2008 190 2009-2012 NEW BANK FACILITY 200 March 2008* 497 Ave. 4.3yrs * Options to extend 1yr x 2

  42. Summary • Strong improvement in operating profit and return on sales • up 60% at constant exchange rate • all divisions register strong increases • Profit before tax*: £93m significantly higher than 2003 • EPS* trebles to 3.3p • Strong positive free cash flow in H2 • Borrowings decrease by £51m to £307m • New £200m bank facility * Before goodwill and amortisation and exceptional items

  43. Re-cap on 18 January 2005Strategy PresentationNick SalmonChief Executive

  44. Cookson Today We are: • Not a pure-play electronics company • Less than 30% Group sales and profits from electronics • Laminates is only sector operating solely in electronics • Most cyclical business (Speedline) sold in 2003 • Not a “one stop shop” for the electronics industry • Market has evolved; customers are more diverse • Customer buying is focused on specific needs • Reorganising and restructuring our 3 “Electronics” sectors • Leverage our strong brands in their separate sectors • Maximise internal synergies • Eliminate central costs • Share market intelligence

  45. Cookson Today/continued We are: • A leading global supplier of speciality materials: • Strong market share in all our sectors • Competitive products – leader in technology • Balanced and competitive geographic footprint • Above GDP growth prospects • Reduced cyclicality • Benefiting from some synergies across Group: • Funding • HS&E • Precious Metals consignment lines A Materials Science Company

  46. Strategy • Programme to enhance operational and financial performance of core businesses • Improved profitability and cash flow • Disposals of some non-core activities across all three divisions • Expecting proceeds of £100m over next 2 years • Resume sustainable dividend payment as soon as possible • Funded out of free cash flow

  47. Objectives • Sales growth • > GDP • Reduced cyclical • Profitability improvement : by 2007 • Electronics: ROS* > 10% • Ceramics: ROS* > 10% • Precious Metals: RONSV* > 15% • Investment return criteria • Capex/acquisitions: > WACC • Restructuring: <2 years cash payback *Before exceptional items and amortisation of intangibles

  48. Objectives/continued • Progressive debt reduction • Enhanced profitability • Tight working capital management • Non-core business disposals • Disposal proceeds > £100m over 2 years • Renegotiation of banking facilities in 2005 • Return to sustained dividend payment • Out of free cash flow • Linked to underlying earnings • As soon as possible

  49. Achievements since 18 January 2005 • Refinancing • £200m, 3 year (extendable) facility dated 1 March with significantly improved terms and lower costs • Ceramics • NAFTA programme to shift production from USA to Mexico completed • Laminates • German social plan signed end of February; implementation in March for cost savings from Q2 onwards • China: third line now in full production • Chemistry • Labs in Shenzhen and Shanghai

  50. Current Trading and Outlook for 2005 • Ceramics • Robust market conditions continuing • Electronics • Evidence of customer destocking of some high margin products in late January/February, momentum now returning • Precious Metals • Weak environment remains but industry observers optimistic of recovery • Confident of delivering further improvements in 2005 • Q1 Trading Update – 5 May 2005

More Related