Download
slide1 n.
Skip this Video
Loading SlideShow in 5 Seconds..
Cookson Group plc Preliminary Results 2002 4 March 2003 PowerPoint Presentation
Download Presentation
Cookson Group plc Preliminary Results 2002 4 March 2003

Cookson Group plc Preliminary Results 2002 4 March 2003

176 Vues Download Presentation
Télécharger la présentation

Cookson Group plc Preliminary Results 2002 4 March 2003

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Cookson Group plc Preliminary Results 2002 4 March 2003

  2. Stephen Howard Group Chief Executive Preliminary Results 2002

  3. 2002: Overview • Operating profit of £56.8m; in line with expectations • Sharp improvement in operating profit* in H2 2002 • - Profit of £34.4m versus loss of £1.2m in 2001 • - All divisions recorded improved profitability  • Benefits of cost reduction programmes showed through as year progressed • Operating profit* for continuing operations up 6% • Strong cash flow for eighth successive year • - Free cash flow of £64m • Net debt reduced by £367m • Exited 2002 a stronger business, with high operational gearing *(Before goodwill amortisation and exceptional items)

  4. Dennis Millard Group Finance Director Preliminary Results 2002

  5. Group - Continuing Operations vs GrowthReported 2001 2002 Actual 2002 rates Turnover £1,721m -11% -8% +7% Operating Profit* £48.2m +6% Return on Sales* 2.8% 2001 : 2.4% *(Before goodwill amortisation and exceptional items)

  6. Operating Profit* £ m 46.8 50 34.4 25 13.8 0 (1.2) H1 H1 H2 H2 H1 H1 H2 H2 2001 2001 2002 2002 Group - Continuing Operations Turnover £ m 1,100 1,050 1,000 879 900 864 857 800 700 *(Before goodwill amortisation and exceptional items)

  7. Volume: £(109)m + 2% Margin: £34m Trading Results and Expense Reductions Group - Continuing Operations Variance £m 2001 £m 2002 £m Turnover 1,721 1,929 (208) Prime margin(1)939 1,014 (75) - % sales 54.6% 52.6% (1) Turnover minus raw materials

  8. 550 500 450 400 0 Trading Results and Expense Reductions Group - Continuing Operations Variance £m 2001 £m £ m 2002 £m Other Expenses (£m) 515 Turnover 1,721 1,929 (208) Prime margin(1)939 1,014 (75) 456 453 - % sales 54.6% 52.6% Other expenses 77 Operating profit(2)4846 2 435 (891) (968) H1 H2 H1 H2 2001 2002 (1) Turnover minus raw materials (2) Before goodwill amortisation and exceptional items

  9. % of Continuing Group Turnover vs GrowthReported 2001 2002 Actual 2002 rates Electronics 40% Turnover £694m -18% -16%

  10. Electronics: Turnover by Sector vs Growth 2001 2002 Actual 2002 rates Division £694m -16% PWB Laminates £112m -32% PWB Chemistry £259m -6% -10% Assembly Materials £233m -26% Equipment £90m

  11. Electronics % of Continuing Group Turnover vs GrowthReported 20012002 rates 2002 Actual 40% Turnover £694m -18% -16% -13% Operating Loss £(14.9)m -6% Return on Sales (2.1)% 2001 : (1.7)%

  12. Volume: £(79)m + 1.8% Margin: £12m Trading Results and Expense Reductions Electronics Variance £m 2001 £m 2002 £m Turnover 694852 (158) Prime margin(1)361428 (67) - % sales 52.0%50.2% (1) Turnover minus raw materials

  13. 250 200 150 100 0 Trading Results and Expense Reductions Electronics Variance £m 2001 £m £ m 2002 £m Other Expenses (£m) 240 Turnover 694852 (158) Prime margin(1)361428 (67) 202 198 178 - % sales 52.0%50.2% Other expenses (376)(442)66 Operating loss(2)(15)(14)(1) H1 H2 H1 H2 2001 2002 (1) Turnover minus raw materials (2) Before goodwill amortisation and exceptional items

  14. Q4: Break-even (1) Q4: +2% vs 2001 H1 H2 H1 H2 H1 H2 H1 H2 Electronics (2) Turnover Operating Profit £ m £ m 495 11.0 500 400 (3.2) 357 357 337 (11.7) 300 (25.1) 2001 2002 2001 2002 • at 2002 exchange rates • Before goodwill and amortisation and exceptional items

  15. GrowthReported 2001 2002 Actual Ceramics % of Continuing Group Turnover vs 41% 2002 rates Turnover £705m 4% -1% +16% +14% Operating Profit* £46.1 Return on Sales* 6.5% 2001 : 5.5% *(Before goodwill amortisation and exceptional items)

  16. 400 30 25 350 20 300 15 250 10 H1 H2 H1 H2 H1 H2 H1 H2 2001 2002 2001 2002 Ceramics Turnover Operating Profit* £ m £ m Q4: ROS 9% 27.5 382 26.3 360 349 345 18.6 14.1 *(Before goodwill amortisation and exceptional items)

  17. Precious Metals % of Continuing Group Turnover vs GrowthReported 2001 2002 Actual 19% 2002 rates Turnover £323m -7% -5% -9% -12% Operating Profit* £17.0m Return on Sales* 5.3% 2001 : 5.6% *(Before goodwill amortisation and exceptional items)

  18. Group Operating Profit* £ million 2002 Inc/(Dec) vs 2001 CONTINUING OPERATIONS 482 Electronics (15) (1) Ceramics 46 5 Precious Metals 17 (2) DISCONTINUED OPERATIONS 2002: Precision Products, Others9 (2)2001: Mouldings, Magnesia Chemicals-(2) GROUP 57(2) *(Before goodwill amortisation and exceptional items)

  19. Higher rates • -Current ave. 6.6% • Higher fees • - £4m in 2002 • Lower borrowings • -Rights issue • - Positive NCF Group Profit Before Tax* £ million 2002 Inc/(Dec) vs 2001 OPERATING PROFIT57 (2) Less: Interest(53) (1) *(Before goodwill amortisation and exceptional items)

  20. Group Profit Before Tax* £ million 2002 Inc/(Dec) vs 2001 OPERATING PROFIT57 (2) Less: Interest(53) (1) PROFIT BEFORE TAX 4 (3) *(Before goodwill amortisation and exceptional items)

  21. Group Profit Before Tax* £ m 35 31 30 25 20 16 15 10 5 0 -5 -10 (12) -15 -20 -25 (24) H1 H2 H1 H2 2001 2002 *(Before goodwill amortisation and exceptional items)

  22. FRS 19 restate £44m Group Profit Before and After Tax* £ million 2002 Inc/(Dec) vs 2001 OPERATING PROFIT57 (2) Interest(53) (1) PROFIT BEFORE TAX 4 (3) Taxation (1) (40) *(Before goodwill amortisation and exceptional items)

  23. Group Profit Before and After Tax* £ million 2002 Inc/(Dec) vs 2001 OPERATING PROFIT57 (2) Interest(53) (1) PROFIT BEFORE TAX 4 (3) Taxation (1) (40) Minorities(2) (1) PROFIT FOR YEAR 1(44) *(Before goodwill amortisation and exceptional items)

  24. Earnings and Dividends per Share 2002 2001 EARNINGS PER SHARE Headline* - pre-FRS 19 - post-FRS 19 Basic and diluted N/A (8.7)p (14.9)p 0.7p 6.0p 0.1p DIVIDEND Interim Final - - - 4.5p 4.5p - *(Before goodwill amortisation and exceptional items)

  25. Operating Exceptionals £ million ELECTRONICS Laminates 18 - Announced: H2/Jan 2003 8 - US East Coast and Europe 10 Other sectors7 25 CERAMICS 4 PRECIOUS METALS 2 31 Cash related 15 Asset write downs 16 • C/F to 2003 2

  26. Non-Operating Exceptionals - 2002 £ million 21 LOSS ON BUSINESS DISPOSALS* 15 -Loss before goodwill 6 -Goodwill written back/off 11 NET LOSS ON DISPOSAL OF FIXED ASSETS 8 -ESOP shares 3 -Other 32 * Dental Products and others - excludes gain on disposal of Precision Products £1.5m

  27. 2003 (estimate)Cash outflow : £15m Operating Cash Flow £ million Inflows/(Outflows)2002 Surplus/(Deficit)vs 2001 EBITDA* Capital Expenditure - Capital Expenditure (gross) - Asset Disposals Rationalisation 117 (35 ) (43 ) 8 (20 ) (7 ) (1 ) 25 (26 ) 12 * (EBITDA from subcos plus dividends from JVs)

  28. Operating Cash Flow £ million Inflows/(Outflows)2002 Surplus/(Deficit)vs 2001 EBITDA* Capital Expenditure - Capital Expenditure (gross) - Asset Disposals Rationalisation Working Capital /other 117 (35 ) (43 ) 8 (20 ) 37 (7 ) (1 ) 25 (26 ) 12 (31 ) • Inventory reduction: £30m • Improved receivables: £14m * (EBITDA from subcos plus dividends from JVs)

  29. Operating Cash Flow £ million Inflows/(Outflows)2002 Surplus/(Deficit)vs 2001 EBITDA* Capital Expenditure - Capital Expenditure (gross) - Asset Disposals Rationalisation Working Capital /other 117 (35 ) (43 ) 8 (20 ) 37 (7 ) (1 ) 25 (26 ) 12 (31 ) 99 OPERATING CASH FLOW (27 ) CASH CONVERSION:- % of operating profit 174% * (EBITDA from subcos plus dividends from JVs)

  30. Ave. 99% Cash Conversion - 5 Year History Continuing Operations £ m 280 240 200 160 120 80 40 0 Average 1998 1999 2000 2001 2002 Operating cash flow Operating profit before goodwill amortisation and exceptional items

  31. Free Cash Flow £ million Inflows/(Outflows)2002 Surplus/(Deficit)vs 2001 OPERATING CASH FLOW Interest - paid - swap proceeds 99 (46) (56) 10 (27) (15) 3 (18) 11 Taxation 33 Clawback of US prior period tax losses

  32. Free Cash Flow £ million Inflows/(Outflows)2002 Surplus/(Deficit)vs 2001 OPERATING CASH FLOW Interest - paid - swap proceeds 99 (46) (56) 10 (27) (15) 3 (18) 11 64 - 64 Taxation FREE CASH INFLOW - before dividend Dividends FREE CASH INFLOW - after dividend 33 (9) 72* 63 * (2000 Final and 2001 Interim)

  33. Free Cash Flow - 8 Year History Before dividend £ m 120 100 Avg. £80.4m 80 60 40 20 0 1995 1996 1997 1998 1999 2000 2001 2002

  34. Net Cash Flow - 2002 £ million2002 FREE CASH INFLOW INVESTING ACTIVITIES Disposals Acquisitions Other 64 (28) 4 (15) (17) NET CASH INFLOW - before financing 36 RIGHTS ISSUE - net proceeds 277 NET CASH INFLOW - after financing 313

  35. Borrowings and Ratios 31 December2001 31 December2002 • £750mNET DEBT£428m • RATIOS • 1.6 times EBITDA: Interest 2.5 times • 6.3 timesNet Borrowings: EBITDA 3.7 times • Leverage (US GAAP) 773 (23) 470 (42) Grossborrowings Cash 37% 47%

  36. 773 (23) 425 (42) Borrowings and Ratios Pro-Forma* 31 December2001 31 December2002 • £750mNET DEBT£383m • RATIOS • 1.6 times EBITDA: Interest 2.5 times • 6.3 timesNet Borrowings: EBITDA 3.6 times • Leverage (US GAAP) Grossborrowings Cash 35% 37% * (assumes cash proceeds of £45m from sale of Precision Products in January 2003 received at 31/12/02)

  37. £263m Unutilised Committed Facilities and Drawings 31 December 2002 £725m Syndicated bank facility £291m* £28m £80m Convertibles £80m USPP notes £354m £354m Facilities Drawings * (reduced to £250m in January 2003 following sale of Precision Products)

  38. Borrowings as at December 2002 Maturity Profile £ million Maturities USPP Loan notes 354 2005-2012 Convertible bond 80 Nov. 2004 Syndicated bank facility 28 Sept. 2004 462

  39. Summary Operating profit improvement - Strong Y-O-Y and sequential growth in H2 2002 - Beneficial impact of cost savings initiatives - Electronics: break-even Q4: high operational gearing - Ceramics: sharp improvement in H2 Strong cash flow - Further working capital reductions - Positive free cash flow for 8th successive year - High cash conversion Borrowings reduced significantly - Rights issue and cash flow - Disposal of Precision Products £45m - Long term committed facilities - Stable financial position

  40. Stephen Howard Group Chief Executive Preliminary Results 2002

  41. Agenda • 2002 strategic actions • Benefits of cost reduction and efficiency programmes • Trading overview • Group strategy • 2003: Focus on further profitability improvement • Current trading and prospects

  42. 2002 Strategic Actions Debt Reduction • Rights issue raised £277m (net) • £63.8m of free cash flow generated- 8th year in succession of positive free cash flow • Further year-on-year working capital reduction of £42.3m • Sale of Precision Products completed January 2003- Cash proceeds £45.4m Pro-forma debt reduced by 49%

  43. 2002 Strategic Actions Cost Reduction and Efficiency Programmes • Significant programmes initiated in 2001 • - Headcount reductions, plant closures • New initiatives introduced in 2002 • - Optimisation and rebalancing of installed laminates capacity • Since end of 2000 • - Group headcount reduced by 17% • - Group cost base reduced by £100m • Operating efficiencies gained through increased inventory turns, improved accounts receivable collections,etc. • Benefits showed through clearly as 2002 progressed

  44. Ceramics - Overview Operating Profit • Steady improvement in trading conditions as year progressed • Increase in steel production, especially in US market • Improved conditions in Glass sector in H2 • Q4 saw highest RoS since 2000, highlighting benefits of restructuring programmes Q4: ROS 9% 30 27.5 26.3 25 20 18.6 15 14.1 10 H1 H2 H1 H2 2001 2002

  45. Q4: Break-even H1 H2 H1 H2 Electronics - Overview Operating Profit • Severe downturn appeared to bottom out during 2002 • Stabilisation reflected in essentially unchanged turnover over past three half-year periods • Q4 witnessed year-on-year turnover growth, and operating profit at break-even £ m 11.0 (3.2) (11.7) (25.1) 2001 2002

  46. 12 9 6 3 0 Precious Metals - Overview Operating Profit • Slower consumer demand for jewellery in US and Europe • Traditional inventory build-up ahead of Q4 holiday period failed to materialise • Despite this, year-on-year profit improvement in H2 10.1 9.8 9.5 6.9 H1 H2 H1 H2 2001 2002

  47. 50 25 0 H1 H1 H2 H2 H1 H1 H2 H2 2001 2001 2002 2002 Sales and Profit Trends Operating Profit* Turnover £ m £ m 1,100 1,050 46.8 1,000 34.4 879 900 864 857 800 13.8 700 (1.2) *(Before goodwill amortisation and exceptional items)

  48. Near-Term Strategy • Concentrate on existing opportunities in core markets • Build on continuing leadership positions • Exploit high operational leverage • Focus on improvement in profitability and margin enhancement

  49. Ceramics Market Leading Business • World leadership position enhanced during 2002 • Long-term record of resilient performance • Established presence in emerging markets and regions-Asia-Pacific (China), India, Eastern Europe, South America • Leadership position in technologies for new production methods- Thin slab, direct strip, secondary steelmaking processes • Investment in new high growth market segments- Solar crucibles • Increased competitiveness derived from sharply reduced cost base

  50. Electronics Long-Term Growth Business • Total electronics end-market $1 trillion • High long-term growth in demand for electronic devices • -2001-2005: CAGR 6% (forecast)* • Cookson market served: $13.5bn (materials and equipment) • Cookson leadership in markets served * Source: Prismark, Henderson Ventures