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