Transcript KBC Advanced Technologies plc

KBC Advanced Technologies plc
Interim Results
Six months to 30 June 2002
KBC - Leading consultants in the
downstream oil industry
Formed in 1979 as an independent consulting business
Global operation
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USA/UK/Holland/Singapore/Japan
Serves the hydrocarbon
process industry
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Over 200 clients worldwide
Independent consultant
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No conflict with contractors, process
licensors, catalyst and hardware
suppliers or operating oil companies
IMPROVING DOWNSTREAM PROFITS
August 2002
2
KBC - Service Offering
1. Process Consulting

Profit Improvement Program (PIP)
 11 month program
 Development of refinery simulation base case
 Identification of profit improvement opportunities
2. Implementation Services
2nd and 3rd year program
 Implementation of opportunities identified in PIP

3. Reliability, Availability & Maintenance (RAM)

Turnaround and shut down optimisation
 Inspection and preventative maintenance best practice
IMPROVING DOWNSTREAM PROFITS
August 2002
3
KBC - Service Offering
4. Planning and Scheduling

Management of crude and feedstock costs
 Reduction of inventories and internal movements
5. Other Services





Remote monitoring and technical outsourcing
Energy conservation and clean fuel studies
Project risk assessment and analysis
Capital project design
Economic and market evaluation
6. Software
Petrofine – refinery wide simulation
 Refinery reactor models

IMPROVING DOWNSTREAM PROFITS
August 2002
4
Overview – First Half 2002

Global economic slowdown gives rise to difficult trading
conditions

Sales order cycle slow for first four months of the year

Signs of improvement in May and June

Successful integration of Petroleum Economics and Linnhoff
March

Sale of Hyprotech by AEA to Aspen Technology Inc delays
commercialisation of HYSYS.Refinery
IMPROVING DOWNSTREAM PROFITS
August 2002
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Operational Highlights – First Half 2002

Slow start to 2002 with low utilisation

Pick up by end of period with six new PIPs started since
1 June

First PIP in Russia and second Petrochemical PIP started

Continued growth in South America with award of $15m
multi–refinery, 30 month contract

Strong growth in Reliability and Maintenance services
IMPROVING DOWNSTREAM PROFITS
August 2002
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Summarised profit and loss account
6 months to
30 June 2002
6 months to
30 June 2001
12 months to
31 Dec 2001
£000
£000
£000
20,186
1,253
(204)
(851)
204
402
(140)
262
(636)
(374)
19,347
1,872
7,414
315
9,601
(3,011)
6,590
(620)
5,970
42,000
4,158
7,414
713
12,285
(3,972)
8,313
(2,002)
6,311
0.54p
0.54p
13.67p
13.58p
17.20p
17.09p
2.19p
48.5m
2.90p
48.2m
6.46p
48.3m
Turnover
Operating profit
Goodwill amortisation
Other operating exceptional items
Net Interest
Profit before tax
Taxation
Profit after tax
Dividends
Retained (loss)/profit
Earnings per share - basic
- fully diluted
- basic before goodwill
and expectional items
Average number of shares in issue
IMPROVING DOWNSTREAM PROFITS
August 2002
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Summarised group cash flow statement
6 months to
30 June 2002
£000
6 months to
30 June 2001
£000
12 months to
31 Dec 2001
£000
Net cash from operations
Operating exceptional items
Net interest received
Tax paid
Capital expenditure
Dividends paid
New shares issued
Net cash outflow from acquisitions
1,668
(851)
204
(1,586)
(397)
(1,361)
36
(5,179)
4,592
7,414
315
(1,000)
(1,851)
(1,249)
121
-
5,435
7,414
713
(3,176)
(2,166)
(1,893)
127
____ -
Net cash generated
(7,466)
8,342
6,454
IMPROVING DOWNSTREAM PROFITS
August 2002
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Summarised group balance sheet
At 30 June
2002
£000
At 30 June
2001
£000
At 31 Dec
2001
£000
Fixed assets
Net current assets (excl cash)
Cash
Creditors due after 1 year
Provisions
Net assets
11,154
6,994
10,744
(600)
(719)
27,573
6,358
2,426
20,158
(804)
28,138
5,937
4,786
18,218
(775)
28,166
Share capital and reserves
Profit and loss
7,466
20,107
27,573
7,424
20,714
28,138
7,430
20,736
28,166
IMPROVING DOWNSTREAM PROFITS
August 2002
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Revenues by region
2001 12 mths - £m
2002 1st 6 mths - £m
7.7
4.3
20%
22%
5.8
21%
58%
29%
50%
22.5
11.8
10.1
Europe/Middle East/Africa
Americas
IMPROVING DOWNSTREAM PROFITS
Europe/Middle East/Africa
Asia
August 2002
Americas
Asia
10
Revenues by business area
£m
10.1
8.5
6.9
5.5
6.5
5.96.1
5.9
4.7
4.8
5.3
5.2
4.5
5.0
3.9
1.9
PIP/Process
Consulting
Implementation
Services
H2'99
IMPROVING DOWNSTREAM PROFITS
H1'00
H2'00
2.4
2.8
1.9 1.72.1
Other Consulting
H1'01
August 2002
H2'01
2.2
1.81.9
Software (excluding
Sigmafine)
H1'02
11
Order book value
30
25
£ Millions
20
15
10
5
0
Dec-98
Dec-99
Dec-00
Jun-01
Dec-01
Jun-02
£17M
£21M
£35M
£40M
£28M
£29M
within next 12 mths - base fees
> 12 mths ahead - base fees
IMPROVING DOWNSTREAM PROFITS
within next 12 mths - fees @ risk
> 12 mths ahead - fees @ risk
August 2002
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Consultant utilisation
90
80
79
73
74
70
65
64
60
50
%
40
30
20
10
0
H1
-
00
IMPROVING DOWNSTREAM PROFITS
H2
-
00
H1
-
01
August 2002
H2
-
01
H1
-
02
13
Acquisitions profit and loss account
6 months to
30 June 2002
£000
Turnover
Operating profit
Goodwill amortisation
Operating profit after
Goodwill amortisation
Integration costs
IMPROVING DOWNSTREAM PROFITS
1,279
298
_(204)
94
(206)
August 2002
14
Acquisitions - continued
Petroleum Economics: Operations relocated to KBC Walton office
(PEL)
PEL services added to PIP proposals
Core business on plan
New opportunities arise in due diligence and
other services to Financial Institutions
Linnhoff March:
(LM)
Operations integrated with KBC Energy
Business Line, now led from LM office in
Manchester
Technology and tools rationalised to pick
best in class from each company
Core business ahead of plan
New opportunities being pursued – refining
and other process industries
IMPROVING DOWNSTREAM PROFITS
August 2002
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Software alliance

Hyprotech sold by AEA to Aspen Technology

Rights to HYSYS.Refinery remain with AEA for duration of
agreement with KBC

Arbitration continues to resolve commercial difficulties

Discussions with Aspen Technology and AEA are ongoing to
attempt to find resolution of all issues

Sales of HYSYS.Refinery software on hold until disagreement
resolved
IMPROVING DOWNSTREAM PROFITS
August 2002
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Longer term industry outlook

Fall in refinery margins in last 12 months and continued overcapacity leading to focus on costs and profitability

Budgetary constraints reduce discretionary expenditure for
consulting services in current economic downturn

Competitive pressures of globalisation, deregulation and clean fuel
specifications will continue to impact the oil industry

Short term prospects of improvement in product demand limited

No significant change in the number of large complex sites – the
key market for KBC’s services
IMPROVING DOWNSTREAM PROFITS
August 2002
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Penetration of Available PIP Market
at 30 June 2002
KBC Penetrated
Available Market
80
TOTAL AVAILABLE
MARKET
70
Excludes ref ineries
owned by Exxon orShell
Number of refineries
60
Excludes ref ineries under
50
30,000 barrels a day (bbl)
Includes:-
40
25%of ref ineries
30,000-50,000bbl
30
50%of ref ineries
20
50,000-70,000bbl
10
100%of ref ineries
over 70,000bbl
0
KBC experience has
N America
Tot al Ref ineries
Available Market
S America
W Europe
EE / FSU
Africa
Asia Pacific
Middle East
151
75
85
94
37
98
67
69
33
67
65
14
71
42
IMPROVING DOWNSTREAM PROFITS
August 2002
shown t hat prof it
opport unit ies are
great er f or more complex
ref ineries over 70,000bbl
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Strategy

Resolve difficulties with Software partnership with AEA and Aspen
Technology

Develop a ‘World Class Refining’ product to meet the vision and the needs
of our clients, typically a 5 year program

Develop and/or acquire a broad range of services to address the expanded
product requirements

Seek to increase further the length of client engagements through
evergreen technical support services

Reduce vulnerability of KBC revenue streams to economic cycle
IMPROVING DOWNSTREAM PROFITS
August 2002
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