Presentation Transcript
Slide1: Cookson Group plc
Interim Results 2004
27 July 2004
Slide2: Bob Beeston
Slide3: Steve Howard
Highlights: Highlights Significant increase in pre-tax profit*: £42.0m versus £5.5m
Sales and operating profit increases in all three divisions
Continued strong rebound in Electronics
operating profit more than triples
Laminates sector returns to profit
Precious Metals division strategic review: retain division
Further improvement in working capital ratios
Current activity levels and order books remain solid
Recovery accelerated by recent actions
Improved performance should continue *(Before amortisation of intangible assets and exceptional items)
Recovery accelerated by recent actions: Recovery accelerated by recent actions Loss-making and under-performing businesses addressed
Laminates
Speedline
Precious Metals: USA & France
Asia-Pacific capacity increased
New products introduced
Fixed cost base lowered
Interest costs reduced
Pricing initiatives implemented
Electronics – market environment: Electronics – market environment Sound economic fundamentals
Strong demand in Asia-Pacific; USA recovering; Europe more muted
Asia-Pacific continues to be the major growth engine
Mobile handset and personal computer markets enjoy strong growth
Pricing environment allowing pass-on of raw material cost increases
Electronics – H1 overview: Electronics – H1 overview Note: Excludes Speedline Profit exceeds H1 2001 levels
Return on sales rises to 7.8%
Growth continued throughout H2 2003 and into H1 2004
Pricing initiatives successfully addressing impact of raw material price increases
Turnover (£m) Operating Profit (£m)
Electronics – H1 overview: Electronics – H1 overview Assembly Materials
Sound demand in both electronic and industrial sectors
Continued investment in new product development (lead free; Indian R&D facility)
Laminates
Positive momentum accelerated through H1; returned to profit in Q2
Capacity rationalisation nearing completion
In-house manufacture of GETEK range due to commence in H2
Chemistry
Healthy demand for electronics, industrial and automotive applications
Strong growth from semiconductor copper partnership with ATMI
Ceramics – H1 overview: Ceramics – H1 overview Iron & Steel sector continues growth
Driven by increased steel production in USA and EU and continued strong growth in emerging markets
Issues surrounding steel producers’ raw material shortages receeding
Steady performance from Foundry sector but challenging environment in Industrial Processes sector
Buoyant performance from Glass sector, in both consumables and relining Turnover (£m) Operating Profit (£m)
Precious Metals – H1 overview: Precious Metals – H1 overview Much improved performance versus H1 2003
Strong demand for silver products
Demand for gold products improved despite higher gold price (+14% on prior year)
Destocking of Q2 2003 by US retailers has not been repeated
Benefits of 2003 cost reduction programmes showing through Turnover (£m) Operating Profit (£m)
Precious Metals: Precious Metals Strategic review determines that the division should be retained
Outright disposal would not create value at this point
Sale of certain non-core parts of business remains under consideration
Rationalisation of French operations to be completed in 2005
Social Plan agreed
4 sites to be closed
132 headcount reduction
Realignment of European manufacturing capacity
Annual benefits of some £4m (total cash cost c.£10m)
Strategic review and restructuring
Current priorities: Current priorities Capitalise fully on Electronics market recovery
Maximise benefits from recent initiatives
Achieve further improvement in operational performance
Continue to take action on under-performing businesses
Pursue further opportunities for margin enhancement
Focus on cash generation at all levels of the business
Slide13: Dennis Millard
Group – continuing operations: Group – continuing operations Return on Sales 6.5% 2003: +2.5pts *(Before amortisation of intangible assets and exceptional items) H1 2004
Actual Growth versus H1 2003
Reported 2004 rates
Electronics: H1 2004
Actual Growth versus H1 2003
Reported 2004 rates % Group turnover 39% Return on Sales* 7.8% 2003 : +5.3pts Electronics *(Before amortisation of intangible assets and exceptional items)
Electronics: Electronics Return on Sales (All data at 2004 exchange rates; operating profit is before amortisation of intangible assets and exceptional items)
Electronics – H1 2004: Electronics – H1 2004 Turnover by location of customer * (At constant exchange rates)
Electronics – Assembly Materials: H1 2004
Actual Growth versus H1 2003
Reported 2004 rates % divisional turnover 41% *(Before amortisation of intangible assets and exceptional items) Electronics – Assembly Materials
Electronics – Assembly Materials: Return on Sales 2003 2004 % Electronics – Assembly Materials (All data at 2004 exchange rates; operating profit is before amortisation of intangible assets and exceptional items)
Electronics – Laminates: H1 2004
Actual Growth versus H1 2003
Reported 2004 rates Electronics – Laminates % divisional turnover 20% *(Before amortisation of intangible assets and exceptional items) Excluding Cookson Fukuda
Electronics - Laminates: Electronics - Laminates (All data at 2004 exchange rates; operating profit is before amortisation of intangible assets and exceptional items)
Electronics - Chemistry: H1 2004
Actual Growth versus H1 2003
Reported 2004 rates Return on Sales* 11.6% 2003 : +3.2pts Electronics - Chemistry % divisional turnover 39% *(Before amortisation of intangible assets and exceptional items)
Electronics - Chemistry: Electronics - Chemistry Operating Profit 2003 2004 £m Turnover £m 2003 2004 Return on Sales 2003 2004 % (All data at 2004 exchange rates; operating profit is before amortisation of intangible assets and exceptional items)
Electronics: operating profit by sector: H1 2004
Actual (£m) Variance vs H1 2003*
(£m) *(2003 at 2004 exchange rates) Electronics: operating profit by sector
Ceramics: H1 2004
Actual Growth versus H1 2003
Reported 2004 rates Return on Sales* 7.2% 2003 : +0.4pts % Group turnover 43% *(Before amortisation of intangible assets and exceptional items) Ceramics
Ceramics: turnover by sector: H1 2004
Actual Growth versus H1 2003
Reported 2004 rates Ceramics: turnover by sector
Ceramics: H1 2004: Asia-Pacific
sales up 33%*
increased share: 13% to 17% 29% 18% 8% 28% 17% Turnover by location of customer Ceramics: H1 2004 *(At constant exchange rates)
Ceramics: Ceramics Operating Profit 2003 2004 £m Turnover £m 2003 2004 Return on Sales 2003 2004 % (All data at constant 2004 exchange rates; operating profit is before amortisation of intangible assets and exceptional items)
Precious Metals: H1 2004
Actual Growth versus H1 2003
Reported 2004 rates *Net Sales Value excludes precious metal content % Group turnover 18% Precious Metals
Precious Metals: net sales value by region: H1 2004
Actual Growth versus H1 2003
Reported 2004 rates Note: Excludes precious metal content Precious Metals: net sales value by region
Precious Metals: Precious Metals H1 2004
Actual Growth versus H1 2003
Reported 2004 rates Turnover £151m +2% +9% Operating Profit* £3.3m +383% +691% Return on Sales* 2.2% 2003 : 1.9% % Group turnover 18% *(Before amortisation of intangible assets and exceptional items)
Group Operating Profit*: Group Operating Profit* £ million (Before amortisation of intangible assets and exceptional items)
Group profit before and after tax*: £ million Group profit before and after tax* *(Before amortisation of intangible assets and exceptional items)
Operating exceptionals: Operating exceptionals * (£2.3m costs, mainly asset write-offs booked in H2 2003)
Non-operating exceptionals: Non-operating exceptionals
Earnings: Earnings (1) Before amortisation of intangible assets and exceptional items
(2) After amortisation of intangible assets and exceptional items
Net cash flow - operating activities: Net cash flow - operating activities * Operating profit of subcos plus depreciation and amortisation of intangibles £million
Trade working capital and activity levels: Trade working capital and activity levels *(At 30 June 2004 exchange rates) 31 December 2003 & 30 June 2004*
Trade working capital 2001- H1 2004: Trade working capital 2001- H1 2004 Continuing operations
Operating cash flow: Operating cash flow £million
Free cash flow: Free cash flow £million (2003: £9m)
Net cash flow and increase in net debt: Net cash flow and increase in net debt
Borrowings and ratios: Borrowings and ratios *12 months ended 30 June 2004
Committed facilities and borrowings : 30 June 2004 Committed facilities and borrowings
Group financial highlights: H1 2004: Sales & operating profit* up 13% and 86%
Electronics operating profit up £19m
Ceramics and Precious Metals profits rise
PBT* rises £36.5m to £42.0m
Free cash outflow of £21.1m
Increased working capital on higher activity levels
Working capital ratios improve
Borrowings at £386m
Well within committed facilities
Refinancing of convertible bond in place *(Before amortisation of intangible assets and exceptional items) Group financial highlights: H1 2004
Slide46: Nick Salmon
Slide47: Cookson Group plc
Interim Results 2004
27 July 2004