Slide 1

Report
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.
2
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
© 2006 KBC. All Rights Reserved.
3
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
© 2006 KBC. All Rights Reserved.
4
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.
5
Summarised group income statement
– first half 2006
6 months to
30 Jun 2006
£000
6 months to
30 Jun 2005
£000
Revenue
17,288
Profit/(loss) before tax and financing
399
Net Interest
(18)
Profit/(loss) before tax
381
Taxation
(142)
Profit/(loss) after tax
239
Earnings/loss per share – basic
 diluted
Average number of shares in issue
13,601
(1,673)
(12)
(1,685)
(77)
(1,762)
12 months to
31 Dec 2005
£000
28,493
(2,037)
3
(2,034)
(15)
(2,049)
0.46p
(3.67p)
(4.23p)
0.44p
(3.67p)
(4.23p)
51m
48m
48.5m
© 2006 KBC. All Rights Reserved.
6
Summarised group cash flow statement
– first half 2006
Net cash flow from operations
6 months to
30 Jun 2006
£000
6 months to
30 Jun 2005
£000
12 months to
31 Dec 2005
£000
(831)
(288)
(381)
-
665
695
(18)
(12)
3
(427)
(705)
(726)
(83)
(137)
(270)
1,126
763
762
(1,117)
-
-
(13)
4
23
(1,363)
290
106
Operating exceptional items
Net interest (paid)/received
Tax paid
Capital expenditure
Issue of shares
Acquisition of TTS (net of funds
acquired)
Translation difference
© 2006 KBC. All Rights Reserved.
7
Summarised group balance sheet
– first half 2006
6 months to
30 Jun 2006
£000
6 months to
30 Jun 2005
£000
12 months to
31 Dec 2005
£000
Non-current assets
10,889
7,695
7,907
Current assets (excl cash)
12,044
11,040
10,806
439
1,986
1,802
(105)
-
(172)
Current liabilities
(5,621)
(4,343)
(4,110)
Net assets
17,646
16,378
16,233
Share capital and reserves
7,759
6,076
6,068
Retained earnings
9,887
10,302
10,165
17,646
16,378
16,233
Net cash
Non-current liabilities
© 2006 KBC. All Rights Reserved.
8
Contract awards by region
– first half 2006
ASIA
AMERICAS
EMEA
0.0
1.0
2006
2.0
3.0
6 m to June 2005
© 2006 KBC. All Rights Reserved.
4.0
£ million
5.0
6.0
9
Contract awards since 30 June
• Cumulative contract awards at end of August ahead of 2005:
2005
2006
• Pemex Refinación, Mexico
– US$6.3m announced in August
– Clean fuels studies, refinery configuration work
– Petro-SIM license with multiple refinery simulation models
© 2006 KBC. All Rights Reserved.
10
Order book value – first half 2006
25
£ million
20
15
10
5
0
Jun-04
within next 12 mths
Dec-04
Jun-05
Dec-05
Jun-06
> 12 mths ahead
© 2006 KBC. All Rights Reserved.
11
Market overview
• Oil refining fundamentals remain unchanged:
– Record refining margins and crude prices
– Shortage of processing capacity
– More heavy crude to be processed
© 2006 KBC. All Rights Reserved.
12
Market overview
Refinery capacity and oil/product demand forecasts
Source: KBC PEL Market Services
© 2006 KBC. All Rights Reserved.
13
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
© 2006 KBC. All Rights Reserved.
14
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
© 2006 KBC. All Rights Reserved.
15
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
© 2006 KBC. All Rights Reserved.
16
Appendices
© 2006 KBC. All Rights Reserved.
17
Global track record
© 2006 KBC. All Rights Reserved.
18
KBC evolution
2006
2006
2005
Beijing office opens
Acquisition of TTS
Petro-SIM launch
KBC Office Locations
2002
1997
1996
1993
1986
1979
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
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
© 2006 KBC. All Rights Reserved.
19
Mission and strengths
Delivering competitive advantage …
People
 Independence
Technology
 Proven track record
& Tools
 Methodology
 Unique toolsets
Methodology
 Breadth & depth of experience
 Change management experience
… in partnership with our clients
© 2006 KBC. All Rights Reserved.
20
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
© 2006 KBC. All Rights Reserved.
21
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
© 2006 KBC. All Rights Reserved.
22
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
© 2006 KBC. All Rights Reserved.
23
Petro-SIM
Reformer
Naphtha
Hydrotreater
CDU
Kero
Hydro treater
Blend optimizer
Diesel
Hydro treater
HF Alky Unit
Visbreaker
FCC
© 2006 KBC. All Rights Reserved.
24
Revenues by business area
– first half 2006
8.2
8.0
7.2
6.8
6.2
5.9
5.5
5.3 5.3
5.6
5.4 5.5
4.8
4.9
3.3
2.8
2.6
2.2
1.9 2.0
1.6
Process Consulting
H1'03
Other Consulting
H2'03
H1'04
H2'04
H1'05
© 2006 KBC. All Rights Reserved.
Software
H2'05
H1'06
25
Revenues by region
– first half 2006
2006 6 mths - £m
2005 12 mths - £m
6.6
5.9
34%
37%
9.7
34%
30%
28%
36%
10.5
8.3
4.8
Europe/Middle East/Africa
Europe/Middle East/Africa
Americas
Americas
Asia
Asia
2005 6 mths - £m
4.2
30%
32%
38%
5.1
4.3
Europe/Middle East/Africa
Americas
© 2006 KBC. All Rights Reserved.
Asia
26

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