KBC Advanced Technologies plc

1
KBC Advanced Technologies plc

• Investor Presentation
• Half-Year Results
• 30 June 2004

2
Agenda

• Review of 1st half 2004 slides 3 4
• Strategy update slides 5 9
• Financial summary slides 10 18
• Customer market conditions and outlook slides 19
  20
• Appendix Background on KBC slides 21 24

3
Overview First half 2004

• Business is in transition
• Realignment of KBC services to client needs in
  progress
• Strengthening client relationships and key
  account management
• Investment in developing software applications
  and best practices
• Strong growth in software revenue
• Repositioning for growth in 2005

4
Operational highlights First half 2004

• Launch of ProfitManager applications and best
  practices in May
• Improved sales performance in UK office with good
  contract wins in FSU, Middle East and South
  Africa
• Sales remain strong in Japan and Korea
• Revenue in the Americas reduced from previous
  years
• Process and other consulting revenues remain
  under pressure during the transition
• Growth in Software, Planning, Upstream and
  Petrochemicals

5
Strategy

• Refocus on client relationships and regional
  business strategies
• Implement strategy for growth for 2005 and beyond
  
• Restructure core business to deliver competitive
  advantage through continuous profit improvement
  built on sustainable partnerships
• Evolve scope and functionality of Petro-SIM and
  ProfitManager to support industry best practice
• Broaden consulting into Strategic Planning and
  Risk Management
• Diversify and expand into Petrochemical and
  Upstream markets
• Align internal work processes and implement new
  MIS

6
ProfitManager - Continuous Improvement Process
Profit Tracker Management Tools
Monitor Optimize Adjust
Monitoring Tools
Sustain
Continuous Improvement
Plan Demonstrate Report
Implement
Technical feasibility Operating feasibility
Economics
Evaluate
Interview and observe Apply engineering
fundamentals Challenge constraints
Identify
Petro-SIM Software
Benchmark
Refinery performance Process operations Base case
simulation
7
(No Transcript)
8
Petro-SIM

• Development team recruited in August comprised of
  ex-Hyprotech employees
• Petro-Sim release announced on 8 September 2004
• Initial release in October 2004
• First update scheduled for first quarter 2005
• Discussions with customers under way
• Demonstration in September at annual NPRA
  conference

9
Petro-SIM
Reformer
Naphtha Hydrotreater
CDU
Blend optimizer
Kero Hydro treater
Diesel Hydro treater
HF Alky Unit
Visbreaker
FCC
10
Summarised profit and loss account
6 months to 6 months to 12 months
to 30 Jun 2004 30 Jun 2003 31 Dec
2003 000 000
000
Turnover 15,907 16,699 32,274 Operating
profit 487 39 704 Goodwill amortisation (245) (280
) (490) Other operating exceptional
items (496) (1,020) (2,397) Net Interest 26
74
200 Loss before tax (228) (1,187) (1,983) Ta
xation 79 171
499 Loss after tax (149) (1,016) (1,484) Dividend
s (93) (605) (1,906) Retained loss
(242) (1,621) (3,390)
Earnings/(loss) per share - basic (0.32p)
(2.18p)
(3.19p)
- fully diluted (0.32p)
(2.15p) (3.17p)
- basic before goodwill
and exceptional items 0.91p
(0.02p) 1.37p
Average number of shares in issue
46.5m 46.5m 46.5m
11
Foreign exchange impact
6 months to 6 months to 6 months to 30 Jun
2004 30 Jun 2004 30 Jun 2003 000 000 000 at
constant exchange rate
Turnover 15,907 16,878 16,699 Operating
costs 15,420 16,303 16,660 _____ _____ _____ Oper
ating profit before goodwill and exceptional
487 575 39 items _____ _____ _____
12
Exceptional costs
6 months to Year ended 30 Jun 2004 31 Dec
2003 000 000

Software dispute, legal fees,
etc 496 1,325 Reorganisation - 878 Strategic
review - 194 ___ _____ Total 496 2,397
13
Summarised group cash flow statement
6 months to 30 Jun 2004 000 6 months to 30 Jun 2003 000 12 months to 31 Dec 2003 000
Net cash from operations 1,243 (892) 275
Operating exceptional items (282) (1,021) (1,846)
Net interest received 26 74 200
Tax (paid) refunded (214) 352 769
Capital expenditure (259) (112) (257)
Dividends paid (1,302) (1,302) (1,906)
Translation difference (33) (19) (173)
Net cash outflow from acquisitions - - (410)
(821) (2,920) (3,348)
14
Summarised group balance sheet
At 30 Jun At 30 Jun At 31 Dec 2004 2003 2003
000 000 000
Fixed assets 6,353 7,630 7,071 Net current
assets (excl cash) 8,879 9,208 8,032 Cash 3,454 4
,294 4,275 Creditors due after 1 year
- (300) (300) Provisions
(1,132) (704)
(1,180) Net assets 17,554 20,128 17,898 Share
capital and reserves 6,781 6,781 6,781 Profit
and loss 10,773 13,347 11,117 17,554 20,128 1
7,898 Note 2003 comparatives restated for
UITF38 reclassification of ESOP investment in own
shares
15
Revenues by region
20
13
25
27
62
53
37
30
33
16
Revenues by business area
17
Consultant utilisation
18
Order book value
19
Market observations

• Refinery utilisation and margins at an all-time
  high
• Plans/projects for increased capex for
  expansion/upgrade
• Renewed emphasis on energy conservation
• Efficiency improvements increasingly driven by
  best practices
• Recognition of shortage of key skills and
  experience

20
Outlook for 2004

• Revenues expected to remain flat in second half
• Additional costs of Petro-SIM development in
  second half estimated to be annual cost of 1m
  with 400k impacting 2004
• Operating profit before exceptionals and goodwill
  for full year expected to remain flat compared
  with 2003
• Year of transition
• Client relationship building
• Work on strategic initiatives
• Investment in software development
• Activity level high
• Consultant morale and enthusiasm restored

21
KBC The preferred partner to deliver
sustainable competitive advantage
APPENDIX

• Leading independent consultants to the downstream
  oil industry
• Serves the refining, petrochemical and process
  industries
• Proprietary software tools and methodology,
  together with
• unrivalled experience of consultants are key
  differentiators
• Global operations serving over 200 clients
  worldwide

22

• KBC evolution

2004
KBC establishes Moscow office to serve FSU clients
2002
KBC extends into oil and gas market analysis with
PEL acquisition and enhance energy services with
Linnhoff March acquisition
2000
Core skills and competencies extrapolated into
Petrochemicals, Gas Processing and Energy
industries
2000
KBC extends its operations to include a
comprehensive risk management program with the
acquisition of Risk Solutions
KBC Office Locations
1997
KBC Listed on the London Stock Exchange
1996
Development of new business area in Reliability,
Availability Maintenance
1995
On-site Implementation Services takes KBC profit
improvement deliverable to a new dimension
1993
Yield Energy Survey develops into comprehensive
Profit Improvement Program (PIP)
1986
Development of Petrofine simulation software
leads to first refinery-wide Yield Energy Survey
1983
First yield energy study applied to
petrochemicals (ethylene plant)
1979
KBC founded as independent consulting company,
specialised in energy improvement in refineries
23
Global Track Record
24
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