BOC Report and accounts 2005 - Alle jaarverslagen

06 The BOC Group plc Annual report and accounts 2005
Chief executive’s review
2005 was a year of underlying strong
performance punctuated by events that
challenged and brought out the best in
BOC and its people.We continue to see an
accelerating rise in energy prices, the move of
manufacturing activity from higher- to lowercost
economies and relatively slow growth in
an historical context for the semiconductor
industry. Faced with these long-term trends
we have responded by investing for growth
while concentrating on energy efficiency,
cost containment and high levels of
customer service.
In the year, the biggest structural change in the Group was the
reduction in our ownership of Afrox hospitals. Elsewhere, among
the highlights, we continued our penetration of the north American
refinery market with a string of new hydrogen orders, maintained the
pace of our developments in China, and saw BOC Edwards enter
into an important customer relationship in Korea. In contrast, events
such as the Asian tsunami, the London bombings, hurricane Katrina
and most recently the Pakistan earthquake saw BOC businesses
helping where they could, notably with medical gases, and BOC
people giving freely of their time and money.
Against this background BOC produced good results, with turnover
similar to last year at £4,605 million, adjusted operating profit down
three per cent to £564.2 million, adjusted profit before tax down one
per cent at £505.7 million and record adjusted earnings per share of
67.5p. Adjusted figures eliminate exceptional items.Year-on-year
comparisons at constant currency show the performance of our
businesses in the markets where they operate without any distortions
from changes in the sterling exchange rate. Our statutory results
include exceptional items and reflect currency movements and on this
basis turnover was similar to last year with operating profit down by
three per cent and profit before tax up by 44 per cent.
Our two gases lines of business, Process Gas Solutions and Industrial
and Special Products, contribute over 80 per cent of Group operating
profit and both of them made good progress. Process Gas Solutions
continues to increase the percentage of its business that comes from
long-term tonnage schemes, with the emphasis recently on winning
hydrogen contracts and building on our strong position in Asia, and
particularly in China.There has been a steady flow of new orders
with some £500 million of new plant due to enter service over the
next couple of years. Our Process Systems team works closely with
customers to identify and deliver solutions for their industrial gases
needs.This approach has seen us win a disproportionate share of
the new business available. In China our success has been founded
on our willingness to enter joint ventures with our key customers,
enabling us to share the risks and rewards of China’s industrial growth.
Our joint venture plant building operation, Linde BOC Process Plants,
gives us reliable and cost-effective plant to fulfil our customers’ needs.
This year Process Gas Solutions grew turnover by 16 per cent and
adjusted operating profit by nine per cent.