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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 9151,097 - Operating profit* 17.6 2.454.1 Profit before tax* (11.9) (24.2)30.9 Free cash flow before dividends 31.5 10.862.5

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Interim Results 2002

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Interim results 2002

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

- Turnover9039151,097

- Operating profit*17.62.454.1

Profit before tax*(11.9)(24.2)30.9

Free cash flowbefore dividends31.510.862.5

Net debt - period end749750775

* Before goodwill amortisation and exceptional items


Turnover

Turnover

H1 2002

£m

H2 2001

£m

H1 2001

£m

Continuing operations9039151,097

- Electronics358359497

- Ceramics345350381

- Precious Metals200206219

Discontinued-2958

Group9039441,155


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 operations17.62.454.1

- Electronics(11.7)(25.2)10.9

- Ceramics18.613.926.6

- Precious Metals10.713.716.6

Discontinued-0.12.5

Group17.62.556.6

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

Sales470+37

Operatingprofit19+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

Turnover9031,097(194)

Prime margin(2)490589(99)

- % sales 54.2% 53.7%

Other expenses47253563

Operating profit(3)1854(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

Turnover903100

Prime Margin(1)49054

Other Expenses

- “Variable(2)” c.20% of 9410

Marginal Contribution39644%

Other expenses

- “Fixed(2)” c.80% of 378

Operating Profit(3)18

H1 2002

Electronics51%

Ceramics65%

PreciousMetals41%

(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 profit17.62.556.6

Interest(29.5)(26.7)(25.7)

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

Amortisation offees, 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 - Rationalisation8.023.87.4

Non-operating5.454.3(8.2)

(Profit) / losson business sales5.754.94.5

(Profit) / losson property disposals (2.3)(3.5) (12.7)

Other2.02.9-


Operating cash flow

Operating Cash Flow

Group

EBITDA*503391

Working capital16645

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

- sale proceeds81321

Rationalisation(10)(20)(12)

Operating Cash Flow515076

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 Flow515076

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

- swap proceeds10226

Tax-(10)(12)

Dividends-(32)(40)

Free Cash Flow32(21)22

Investing activities (net) (16)2213

Exchange/other (15)24(16)

Net decrease in debt12519

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 notes380

Convertible bonds80

£450m syndicatedbank facility - drawings297

Overdrafts etc. 20

Cash(28)

Net debt749

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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