BOC Report and accounts 2005 - Alle jaarverslagen

42 The BOC Group plc Annual report and accounts 2005
Operating review (comparing 2005 with 2004)
Turnover, including share of joint
ventures and associates
£ million
5,000
4,000
3,000
2,000
1,000
0 03 04 05
Profit before tax
£ million
600
500
400
300
200
100
0 03 04 05
Group
Turnover including the Group share of joint ventures and associates was £4,605.0 million in 2005, similar to the
£4,599.3 million reported in 2004. Operating profit was £543.5 million, down three per cent compared with
£559.5 million in 2004.After crediting operating and non-operating exceptional items totalling £87.9 million and
charging net interest and other financing items of £58.5 million, profit before tax was £593.6 million, up 44 per cent
compared with £412.3 million in 2004. Earnings per share were 74.1p, up 39 per cent compared with 53.5p in
2004. Excluding the exceptional items, adjusted operating profit for the year was £564.2 million, adjusted profit
before tax was £505.7 million and adjusted earnings per share were 67.5p, a record level for BOC.
Comparisons with 2004 are affected by exchange rate movements. For the currencies that principally
affect the Group’s results, movements in the Australian dollar and the South African rand were favourable and
movements in the US dollar and Japanese yen were adverse. If the results of a year ago had been translated at the
rates applied to this year, turnover would have been increased by £3.8 million.There would have been an increase
in operating profit of £4.9 million and an increase in adjusted operating profit of £4.5 million.Adjusted profit
before tax would have been £5.2 million higher and adjusted earnings per share would have been 0.5p higher.
The table set out below summarises results reported both under UK GAAP and as adjusted. Results for
2004 are shown both as reported in that year and on a constant currency basis.
2004 (at 2005
2005 2004 exchange rates) 1
Turnover including share of joint ventures and associates (£ million) 4,605.0 4,599.3 4,603.1
Operating profit (£ million) 543.5 559.5 564.4
Adjusted operating profit (£ million) 2 564.2 576.9 581.4
Profit before tax (£ million) 593.6 412.3 420.5
Adjusted profit before tax (£ million) 2 505.7 504.3 509.5
Earnings per share 74.1p 53.5p 54.5p
Adjusted earnings per share 2 67.5p 63.2p 63.7p
1. A reconciliation of turnover, operating profit and adjusted operating profit for 2004 at 2004 and at 2005 rates of exchange is shown on page 40.
2. A reconciliation of adjusted results with UK GAAP results is shown on page 41 and in the profit and loss account on page 86.
Exceptional items in 2005 amounted to a profit of £87.9 million.This comprised £84.9 million profit on the disposal
of a majority shareholding in Afrox Healthcare Limited, £13.2 million profit relating to the disposal in 2004 of the
US packaged gas business, £10.5 million profit on the disposal of the majority of a shareholding in the US beverage
dispense company, NuCo2 Inc, partly offset by a charge of £20.7 for restructuring in BOC Edwards.
Exceptional items in 2004 amounted to a charge of £92.0 million.This comprised a loss of £79.5 million on
disposal of the US packaged gas business, a charge of £14.8 million for restructuring the remaining business in the
US following the disposal, a charge of £2.6 million relating to the integration of the industrial and medical gases
businesses of BOC and Air Liquide in Japan, and a profit of £4.9 million on the disposal of fixed assets.
Adjusted return on capital employed for the year to 30 September 2005 was 16.2 per cent. Return on
capital employed for the year to 30 September 2005 was 15.6 per cent. Free cash flow (as defined on page 41)
was £18.6 million in 2005. Net cash flow, after acquisitions, disposals and other investing activities, and including
exceptional cash items, was £91.6 million in 2005.A reconciliation of these measures is shown on page 41.
A first interim dividend for 2005 of 15.9p per share was paid in February 2005 and a second interim dividend
of 25.3p per share was paid in August 2005. In aggregate this was a 3 per cent increase over the annual dividend
of the previous year.A first interim dividend for 2006 of 16.3p per share has been declared for payment in
February 2006.
Capital expenditure by subsidiaries (including interest capitalised) was £397.3 million in 2005, compared with
£256.1 million in 2004.This was covered by cash inflow from operating activities. Capital expenditure by joint
ventures and associates was £285.9 million in 2005, of which the BOC share was £144.0 million. Equivalent
expenditure in 2004 was £109.0 million, of which the BOC share was £49.2 million.The Group also made
acquisitions of businesses of £57.1 million in 2005 and proceeds from disposals were £224.1 million. Equivalent
items in 2004 were £50.9 million and £98.3 million respectively.
Process Gas Solutions (PGS)
Change
on 2004 1
2005 Change (constant
£ million on 2004 currency)
Turnover 1,466.3 +15% +16%
– Europe 332.3 +13% +12%
– Americas 631.5 +21% +25%
– Africa 38.6 +7% +4%
– Asia/Pacific 463.9 +10% +10%
Operating profit 207.2 +9% +10%
Adjusted operating profit 2 207.2 +9% +9%
1. A reconciliation of results for 2004 at 2004 and at 2005 rates of exchange is shown on page 40.
2. A reconciliation of adjusted operating profit with operating profit is shown on page 41.
3. All comments below are on a constant currency basis.