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Cookson Group plc. Interim Results 2002. Interim Results 2002 : Summary. H1 2002 £m. H2 2001 £m. H1 2001 £m. Continuing operations - Turnover 903 915 1,097 - Operating profit* 17.6 2.4 54.1 Profit before tax* (11.9) (24.2) 30.9 Free cash flow before dividends 31.5 10.8 62.5

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Cookson Group plc

Interim Results 2002


Interim results 2002 summary
Interim Results 2002 : Summary

H1 2002

£m

H2 2001

£m

H1 2001

£m

Continuing operations

- Turnover 903 915 1,097

- Operating profit*17.6 2.4 54.1

Profit before tax* (11.9) (24.2) 30.9

Free cash flowbefore dividends 31.5 10.8 62.5

Net debt - period end 749 750 775

* Before goodwill amortisation and exceptional items


Turnover
Turnover

H1 2002

£m

H2 2001

£m

H1 2001

£m

Continuing operations 903 915 1,097

- Electronics 358 359 497

- Ceramics 345 350 381

- Precious Metals 200 206 219

Discontinued - 29 58

Group 903 944 1,155


Quarterly turnover 2001 2002
Quarterly Turnover 2001 - 2002*

£m

£m

276

Group Continuing Operations

Electronics

600

275

574

250

550

513

225

215

500

470

200

460

455

186

+8%

182

450

+8%

433

176

172

175

400

150

350

125

300

100

Q1

Q2

Q3

Q4

Q1

Q2

Q1

Q2

Q3

Q4

Q1

Q2

£m

£m

2001

2002

2001

2002

Precious Metals

Ceramics

200

120

195

186

113

181

178

180

173

110

+10%

107

164

105

103

160

100

+5%

100

98

140

90

120

100

80

Q1

Q2

Q3

Q4

Q1

Q2

Q1

Q2

Q3

Q4

Q1

Q2

2001

2002

2001

2002

* At 30/6/02 average exchange rates; extracted from management accounts


Operating profit
Operating Profit*

Continuing operations 17.6 2.4 54.1

- Electronics (11.7) (25.2) 10.9

- Ceramics 18.6 13.9 26.6

- Precious Metals 10.7 13.7 16.6

Discontinued - 0.1 2.5

Group 17.6 2.5 56.6

H1 2002

£m

H2 2001

£m

H1 2001

£m

* Before goodwill amortisation and exceptional items


Operating profit 2001 2002

Group - Continuing Operations (£m)

40

Variance vs

35

2001 Q2

£m

2002 Q2

£m

2002 Q1

£m

30

(43)

0

Sales 470 +37

Operatingprofit 19 +20

20

19

19

10

2

1

0

-1

Costsavings

Operational leverage

Q1

Q2

Q3

Q4

Q1

Q2

-10

2001

2002

Operating Profit* 2001 - 2002

* Before goodwill amortisation and exceptional items, quarterly data based on unaudited management accounts


Trading results expense reductions 1

Other Expenses (£m)

550

535

500

473

472

450

400

0

H1

H2

H1

2001

2002

Trading Results & Expense Reductions(1)

Group - Continuing Operations

Turnover 903 1,097 (194)

Prime margin(2)490 589 (99)

- % sales 54.2% 53.7%

Other expenses 472 535 63

Operating profit(3)18 54 (36)

Fav./ (Unfav)

Variance

£m

H1 2001

£m

H1 2002

£m

(1) Extracted from unaudited management accounts

(2) Turnover minus raw materials

(3) Before goodwill amortisation and exceptional items


Trading results and operational gearing
Trading Results and Operational Gearing

For Illustrative Purposes Only

H1 2002£m

% of

sales

Turnover 903100

Prime Margin(1)49054

Other Expenses

- “Variable(2)” c.20% of 9410

Marginal Contribution 39644%

Other expenses

- “Fixed(2)” c.80% of 378

Operating Profit(3)18

H1 2002

Electronics 51%

Ceramics 65%

PreciousMetals 41%

(1) Turnover minus raw materials

(2) Estimates; applies notionally to +/- 10% of current levels of activity

(3) Before goodwill amortisation and exceptional items; group - continuing operations


Profit before tax
Profit Before Tax*

H1 2002

£m

H2 2001

£m

H1 2001

£m

Operating profit 17.6 2.5 56.6

Interest (29.5) (26.7) (25.7)

On borrowings (net) (27.4) (26.2) (25.4)

Amortisation of fees, costs (2.1) (0.5) (0.3)

Profit / (loss) before tax (11.9) (24.2) 30.9

* Before goodwill amortisation and exceptional items


Exceptional items
Exceptional Items

H1 2002

£m

H2 2001

£m

H1 2001

£m

Operating - Rationalisation 8.0 23.8 7.4

Non-operating 5.4 54.3 (8.2)

(Profit) / loss on business sales 5.7 54.9 4.5

(Profit) / loss on property disposals (2.3) (3.5) (12.7)

Other 2.0 2.9 -


Operating cash flow
Operating Cash Flow

Group

EBITDA* 50 33 91

Working capital 16 64 5

Capex - gross (13) (40) (29)

- sale proceeds 8 13 21

Rationalisation (10) (20) (12)

Operating Cash Flow 51 50 76

H1 2002

£m

H2 2001

£m

H1 2001

£m

* Operating profit of subsidiaries before goodwill amortisation and exceptional items + depreciation + associated co. dividends


Net cash flow
Net Cash Flow

Group

Operating Cash Flow 51 50 76

Interest - on borrowings (29) (31) (28)

- swap proceeds 10 2 26

Tax - (10) (12)

Dividends - (32) (40)

Free Cash Flow 32 (21) 22

Investing activities (net) (16) 22 13

Exchange/other (15) 24 (16)

Net decrease in debt 1 2519

H1 2002

£m

H2 2001

£m

H1 2001

£m


Interim results 2002 highlights
Interim Results 2002 : Highlights

  • Turnover improves Q2 v Q1

  • Operating profit improves- H1 2002 v H2 2001 - Q2 v Q1 2002

  • Pre-tax profit in Q2 2002

  • Significant reduction in operating costs

  • Operational gearing potential

  • Positive free cash flow in H1

  • Net debt unchanged


Borrowings 30 june 2002
Borrowings - 30 June 2002

£m

USPP loan notes 380

Convertible bonds 80

£450m syndicatedbank facility - drawings 297

Overdrafts etc. 20

Cash (28)

Net debt 749

Maturities: 2005 - 2012

Maturity: 09 / 04

Headroom: £153m

Facility maturity:

-£50m 04 / 03

-£100m 09 / 03

-£300m 09 / 04

Fully secured


Group funding arrangements
Group Funding Arrangements

  • Consigned precious metals- normal industry practice- ownership does not pass - leasing costs c. 2-3% pa- at 30/6/02: £273m (at 31/12/01: £233m) - uncommitted, short term

  • Asset securitisation- limited programme - at 30/6/02: £12m (at 31/12/01: £15m)


Group funding arrangements cont d
Group Funding Arrangements (cont’d)

  • USPP loan notes- normal terms and conditions- security granted to banks- leverage covenant: 50% (current 46%)

  • Bank facilities- margins - security- covenants: debt and interest to EBITDA (LTM)- restrictions: dividends, acquisitions, disposals etc.- timing of refinancing of facilities


Rights issue
Rights Issue

Pro forma at 30 June 2002

Before

After

Net Assets

Borrowings (net)

Gearing

Leverage*

£575m

£749m

130%

46%

£853m

£471m

55%

36%

* Gross borrowings as % (US GAAP shareholders’ funds + gross borrowings)


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