Transcript Slide 1
KBC Advanced Technologies plc
Investor Presentation First Half Results 30 June 2006
7 September 2006
Highlights
• Significant turnaround in business - return to profitability • Revenues of £17.3m up 27% from prior year • Strong current trading and contract awards • Continued growth in revenues and earnings expected in second half
© 2006 KBC. All Rights Reserved.
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Strategy
• New management team initially focused on improved profitability and delivering results through: – – – Improved contract execution Increasing revenues from high margin software Establishing a significant Petro SIM™ installed base • Longer term aim to expand services to align with client needs : – – – Leverage lower Asian cost base to deliver an increasing proportion of revenues Continued organic growth in scope of services Supplemented by suitable acquisitions and alliances
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Operational overview
• • • • • • Growth in all operating regions Increasing presence in Asia; Beijing office opened in May Petro SIM sales increased to 32 sites, total sales £4.9m to date Petro-SIM
Express
, launched in June, provides additional market opportunity Collaboration with EPC contractors enhancing KBC’s market reach in all operating regions TTS acquisition completed and cross-selling opportunities being delivered
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Operational overview (cont’d)
• Consulting services: – Sinopec – continued progress on two major Profit Improvement Programs – Recent Pemex award – US$6.3m 5-site clean fuels study including software • Technical services partnerships – growing source of long-term revenue and earnings worldwide • Strategic financial services – Inter-America Development Bank and other M&A related engagements • Human Performance Improvement – TTS projects with major US oil companies
© 2006 KBC. All Rights Reserved.
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Summarised group income statement – first half 2006
6 months to 30 Jun 2006 £000
6 months to 30 Jun 2005 £000 12 months to 31 Dec 2005 £000
Revenue Profit/(loss) before tax and financing 17,288 399
Net Interest
Profit/(loss) before tax
(18)
381
Taxation
Profit/(loss) after tax
(142)
239 13,601
(1,673) (12) (1,685) (77)
(1,762)
28,493 (2,037) 3 (2,034) (15)
(2,049) Earnings/loss per share
– basic 0.46p
diluted 0.44p
(3.67p) (3.67p) (4.23p) (4.23p) Average number of shares in issue 51m 48m 48.5m
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Summarised group cash flow statement – first half 2006
Net cash flow from operations
Operating exceptional items Net interest (paid)/received Tax paid Capital expenditure Issue of shares Acquisition of TTS (net of funds acquired) Translation difference
6 months to 30 Jun 2006 £000
6 months to 30 Jun 2005 £000 12 months to 31 Dec 2005 £000
(831) (18)
(288) 665 (12) (381) 695 3
(427) (83) 1,126 (1,117)
(705) (137) (726) (270) 763 762 -
(13) (1,363)
4 290 23 106
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Summarised group balance sheet – first half 2006
Non-current assets Current assets (excl cash) Net cash Non-current liabilities Current liabilities Net assets Share capital and reserves Retained earnings
6 months to 30 Jun 2006 £000
10,889 12,044 439 (105) (5,621) 17,646 6 months to 30 Jun 2005 £000 7,695 11,040 1,986 (4,343) 16,378 12 months to 31 Dec 2005 £000 7,907 10,806 1,802 (172) (4,110) 16,233 7,759 9,887 17,646 6,076 10,302 16,378 6,068 10,165 16,233
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Contract awards by region – first half 2006
0.0
2006 1.0
2.0
6 m to June 2005 3.0
ASIA AMERICAS EMEA
4.0
£ million
5.0
6.0
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Contract awards since 30 June
• Cumulative contract awards at end of August ahead of 2005: 2005 2006 • Pemex Refinaci ón, Mexico – – – US$6.3m announced in August Clean fuels studies, refinery configuration work Petro-SIM license with multiple refinery simulation models
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Order book value – first half 2006
25 20 15 10 5 0 Jun-04 Dec-04 within next 12 mths > 12 mths ahead Jun-05 © 2006 KBC. All Rights Reserved.
Dec-05 Jun-06 11
Market overview
• Oil refining fundamentals remain unchanged: – Record refining margins and crude prices – Shortage of processing capacity – More heavy crude to be processed
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Market overview
Refinery capacity and oil/product demand forecasts
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Source: KBC PEL Market Services
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Market overview
• • Tightening in industry characteristics provides opportunities for KBC The business is being shaped to deliver services related to: – Large-scale investment plans for new refineries and refinery upgrading – – Heightened focus on plant reliability and availability Safe operating procedures – – Shortage of skilled engineering resources Increased transaction activity in refining assets
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KBC’s opportunity
• Continued focus on consulting and services to meet the needs of our clients in this buoyant environment: – Capital project support – Operational excellence – Strategy consulting and investment planning – Continuing PIP opportunities
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Outlook
• Recent contract awards underpin our expectations for 2006 • Robust market environment delivering significant opportunities for continued organic growth • Profitable acquisition opportunities will continue to be pursued • Confidence in our ability to deliver growth in earnings in 2007 and beyond
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Appendices
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Global track record
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KBC evolution
2006
Beijing office opens
2006
Acquisition of TTS
2005
Petro-SIM launch
KBC Office Locations 1979 1997 2002
KBC extends into oil and gas market analysis with
PEL
acquisition and enhances energy services with
Linnhoff March
acquisition KBC listed on London Stock Exchange
1986 1993 1996
Development of new business area in
Reliability, Availability & Maintenance
Yield & Energy Survey develops into comprehensive
Profit Improvement Program (PIP)
Development of
Petrofine
simulation software leads to first
refinery-wide Yield & Energy Survey
KBC founded as
independent consulting company
, specialised in energy improvement in refineries
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Mission and strengths
Delivering competitive advantage …
Independence Proven track record Methodology Unique toolsets Breadth & depth of experience Change management experience
… in partnership with our clients © 2006 KBC. All Rights Reserved.
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KBC’s solution
KBC offers independent consulting and cutting edge technology that enable its worldwide owner/operator clients in the oil & gas, refining, petrochemical, and other processing industries to increase their competitive advantage within defined markets through Capital Excellence and Operational Excellence in business performance and asset utilisation • • CapX = Capital Excellence – Typically decided at the client HQ level OpX = Operational Excellence – Typically decided at the plant level
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Capital Excellence (CapX)
KBC supports client growth strategies and capital utilisation through Capital Excellence consulting that supports activities for acquisitions, disposals and construction of new facilities
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Operational Excellence (OpX)
KBC supports client progress towards Operational Excellence through: – An OpX model describing best practices for production-centered manufacturing – – Assessments, strategy development and deployment, and process and profit improvement Other unique offerings
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Petro-SIM
CDU Visbreake r Naphtha Hydrotreater Reformer Kero Hydro treater Diesel Hydro treater Blend optimizer HF Alky Unit FCC © 2006 KBC. All Rights Reserved.
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Revenues by business area – first half 2006
8.2
8.0
7.2
6.8
5.3
5.3
5.9
6.2
5.5
4.9
5.4
5.5
4.8
5.6
1.6
2.2
2.6
1.9
2.0
3.3
2.8
Process Consulting H1'03 H2'03 Other Consulting H1'04 H2'04 H1'05 H2'05 Software H1'06 © 2006 KBC. All Rights Reserved.
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Revenues by region – first half 2006
2006 6 mths - £m 2005 12 mths - £m
6.6
37% 28% 34%
5.9
9.7
34% 30% 36%
10.5
8.3
Europe/Middle East/Africa Americas Asia 4.8
Europe/Middle East/Africa Americas Asia
2005 6 mths - £m
4.2
30% 32% 38%
5.1
4.3
Europe/Middle East/Africa Americas Asia
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