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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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Cookson Group plc

Interim Results 2002


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

H1 2002

£m

H2 2001

£m

H1 2001

£m

Continuing operations9039151,097

- Electronics358359497

- Ceramics345350381

- Precious Metals200206219

Discontinued-2958

Group9039441,155


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*

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


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


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

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*

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

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

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

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

  • 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

£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

  • 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)

  • 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

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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