BOC Report and accounts 2005 - Alle jaarverslagen

Operating review (comparing 2004 with 2003) 53
New pumping and exhaust systems were introduced for semiconductor, flat panel display and other vacuum
applications.A new range of iGX pumps for the semiconductor industry provides better control and monitoring
capabilities and use less power than before. BOC Edwards also launched high capacity pumps of its own design
and manufacture for flat panel applications. New turbomolecular and scroll pumps were designed for scientific
instrumentation.Wet chemical abatement systems were introduced to expand and complement the capabilities
of BOC Edwards’ exhaust abatement systems.
Increased production of semiconductors was reflected in better demand for electronic materials.
Production of nitrogen trifluoride was expanded further in 2004 to over 100 tonnes a year. New investments in
semiconductor facilities also provided opportunities for nitrogen supply contracts. BOC Edwards has become one
of the leading suppliers of bulk gas to the growing semiconductor industry in China and continued to benefit from
the expansion of semiconductor manufacturing in Taiwan, Japan and Singapore. New nitrogen generators were
installed at several customer sites and further capacity was added to satisfy growing demand from customers
within the Hsinchu science park in Taiwan.
Accelerated investment in new flat panel display production facilities led to significant orders for large capacity
pumping systems in both Taiwan and Korea. Gas supply contracts were also signed with a number of display
manufacturers in Taiwan and Japan. Liquid crystal display production leads to substantial demand for chamber
cleaning chemicals. Onsite fluorine generation equipment is now installed at a number of semiconductor and flat
panel manufacturers.A full commercial-scale generator is functioning at LG Philips’ new sixth generation plant in
Korea.
Demand for pharmaceutical freeze-drying and packaging equipment picked up in 2004 leading to better sales
and adjusted operating profit.A new non-contact check-weighing machine was introduced. Nuclear magnetic
resonance technology allows every package to be checked, enables packing lines to operate at higher speeds and
facilitates immediate correction of any deviation from specification.
The basis of accounting for BOC’s gases business in Japan changed during 2003 as a result of a merger.
Full details can be seen in the PGS section on page 49. Electronic gases turnover increased significantly in 2004 as a
result of the pick up in the semiconductor industry.The benefit of increased turnover on gases adjusted operating
profit was amplified by synergy benefits arising from the merger.
Contracts were won in Asia and Europe furthering a strategy to expand the range of value-added services to
electronic manufacturers.These include gases management, chemicals supply, support services and materials
logistics. Other developments included an improved offering of gases and vacuum systems for lithography and
supercritical carbon dioxide cleaning technology.
Afrox hospitals
Change
on 2003 1
2004 Change (constant
£ million on 2003 currency)
Turnover 432.1 +22% +9%
Operating profit 59.8 +30% +16%
Adjusted operating profit 2 59.8 +30% +16%
1. A reconciliation of results for 2003 at 2003 and at 2004 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.
Adjusted operating profit increased faster than turnover as a result of careful control of overhead costs and positive
pricing trends. Hospital occupancy rates remained similar to a year ago.Acquisitions were a minor factor in the
turnover increase.The Lifecare chronic care facilities and Afrox occupational health services both delivered a good
performance in 2004.
The change to a new reimbursement system that began during 2003 was completed in 2004.The previous
system of paying health care providers a fee for their services changed to a fixed payment for each kind of
procedure as well as a per day tariff structure.