KBC Advanced Technologies plc Investor Presentation First Half Results 30 June 2006 7 September...

KBC Advanced Technologies plcKBC Advanced Technologies plc

Investor Presentation

First Half Results

30 June 2006

7 September 2006

© 2006 KBC. All Rights Reserved. 2

Highlights 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


StrategyStrategy

• 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


Operational overviewOperational 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


Operational overview (cont’d)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


Summarised group income statement Summarised group income statement – first half 200– first half 20066

6 months to30 Jun 2006

£000

6 months to30 Jun 2005

£000

12 months to31 Dec 2005

£000

Revenue 17,288 13,601 28,493Profit/(loss) before tax and financing 399 (1,673) (2,037)Net Interest (18) (12) 3Profit/(loss) before tax 381 (1,685) (2,034)Taxation (142) (77) (15)Profit/(loss) after tax 239 (1,762) (2,049)

Earnings/loss per share – basic 0.46p (3.67p)

(4.23p)

diluted 0.44p (3.67p)

(4.23p)

Average number of shares in issue 51m 48m

48.5m


Summarised group cash flow statement Summarised group cash flow statement – first half 2006– first half 2006

6 months to30 Jun 2006 £000

6 months to 30 Jun 2005 £000

12 months to 31 Dec 2005 £000

Net cash flow from operations (831) (288) (381)

Operating exceptional items -

665

695

Net interest (paid)/received (18) (12) 3

Tax paid (427) (705) (726)

Capital expenditure (83) (137) (270)

Issue of shares 1,126

763

762

Acquisition of TTS (net of funds acquired)

(1,117) - -

Translation difference (13)

4 23

(1,363)

290 106


Summarised group balance sheetSummarised group balance sheet– first half 2006– first half 2006

6 months to30 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

Net cash 439 1,986 1,802

Non-current liabilities (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


Contract awards by region Contract awards by region – first half 2006– first half 2006

ASIA

AMERICAS

EMEA

0.0 1.0 2.0 3.0 4.0 5.0 6.0£ million

2006 6 m to June 2005


Contract awards since 30 JuneContract awards since 30 June

• Cumulative contract awards at end of August ahead of 2005:

• Pemex Refinación, Mexico– US$6.3m announced in August– Clean fuels studies, refinery configuration work– Petro-SIM license with multiple refinery simulation models

2005

2006


Order book value – first half 200Order book value – first half 20066

0

5

10

15

20

25

Jun-04 Dec-04 Jun-05 Dec-05 Jun-06

£ m

illio

n

within next 12 mths > 12 mths ahead


Market overviewMarket overview

• Oil refining fundamentals remain unchanged:

– Record refining margins and crude prices

– Shortage of processing capacity

– More heavy crude to be processed



Refinery capacity and oil/product demand forecasts

Source: KBC PEL Market Services



• 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


KBC’s opportunity 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


Outlook 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


AppendicesAppendices


Global track recordGlobal track record


KBC evolutionKBC evolution

1979KBC founded as independent consulting company, specialised in energy improvement in refineries

1986 Development of Petrofine simulation software leads to first refinery-wide Yield & Energy Survey

1993 Yield & Energy Survey develops into comprehensive Profit Improvement Program (PIP)

1996 Development of new business area in Reliability, Availability & Maintenance

1997

KBC extends into oil and gas market analysis with PEL acquisition and enhances energy services with Linnhoff March acquisition

2002

KBC Office Locations

KBC listed on London Stock Exchange

2005Petro-SIM launch

2006 Acquisition of TTS

2006 Beijing office opens


Delivering competitive advantage …

Technology

& Tools

Methodology

People

Technology

& Tools

Technology

& Tools

Methodology

PeoplePeople

Mission and strengthsMission and strengths

… in partnership with our clients

Independence

Proven track record

Methodology

Unique toolsets

Breadth & depth of experience

Change management experience


KBC’s solutionKBC’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


Capital Excellence (CapX)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


Operational Excellence (OpX)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


Petro-SIMPetro-SIM

Naphtha Hydrotreater

CDU

Reformer

Visbreaker

FCC

HF Alky Unit

Blend optimizerKero Hydro treater

DieselHydro treater


Revenues by business area Revenues by business area – first half 2006– first half 2006

8.0

6.2

1.6

5.5

2.2

6.8

4.9

2.6

5.3 5.4

1.9

5.35.5

2.0

5.9

4.8

3.3

8.2

5.6

2.8

7.2

Process Consulting Other Consulting Software

H1'03 H2'03 H1'04 H2'04 H1'05 H2'05 H1'06


Revenues by region Revenues by region – first half 2006– first half 2006

2005 12 mths - £m

10.5

8.3

9.7

Europe/Middle East/Africa Americas Asia

2005 6 mths - £m

5.1

4.3

4.2


34% 36%30%

38%32%

30%

2006 6 mths - £m

5.9

4.8

6.6


37%34%

28%

KBC Advanced Technologies plc Investor Presentation First Half Results 30 June 2006 7 September...

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