1. No category

CORPORATE PRESENTATION
MARCH 2015
CORPORATE PRESENTATION MARCH 2015
Alent today
A GLOBAL SUPPLIER OF SPECIALTY CHEMICALS AND ENGINEERED MATERIALS
SEGMENT
Electronic interconnect materials, primarily
solder in all forms:
Assembly
Materials
(ALPHA)
2014 Net sales value (NSV)(1)
END-MARKET
KEY PRODUCTS
•
Printed circuit board assembly
•
Semiconductor packaging
Predominantly
electronics
market focused
50%
Specialty electroplating chemicals:
Surface
Chemistries
(ENTHONE)
•
Semiconductor fabrication
•
Printed circuit board fabrication
•
Corrosion and wear-resistant,
and decorative coatings
Serving mainly
the electronics
and
automotive/
industrial
markets
Assembly Materials
(1)
£413m(1) 50%
Surface Chemistries
Net sales value = Revenue less commodity metals that pass
through to customers (tin, silver and gold)
MARKET LEADING POSITIONS #1 OR #2
2
CORPORATE PRESENTATION MARCH 2015
Alent products
SURFACE CHEMISTRIES
ASSEMBLY MATERIALS
Bar Solder
Chemistry
Wire Solder
Solder paste
Preforms
Copper Damascene
EVERYTHING WITH AN ON/OFF SWITCH – EVERY DAY, EVERYWHERE
3
CORPORATE PRESENTATION MARCH 2015
Alent model
• A Global Market Leader
+
Outperformance of
attractive end-markets
• Competitive Advantage
+
• Financial Strength
DELIVERING LONG-TERM GROWTH AND SUSTAINABLE MARGIN IMPROVEMENT
4
CORPORATE PRESENTATION MARCH 2015
A global market leader: Competitive landscape
Assembly Materials
Surface Chemistries

Alent (Alpha)

Atotech (Total)

Senju (Japan/Private)

Alent (Enthone)

Tamura (Japan/Public)

MacDermid (Platform)

Indium (US/Private)

Dow (Rohm & Haas)

Kester (ITW - US/Listed)

OMG (US/Listed)

Henkel (Europe/Listed)

Coventya (Europe/Private)

Shenmao (Taiwan/Private)

Umicore (Europe/Listed)
Top 7 suppliers =
80% of the Market
Top 7 suppliers =
65% of the Market
MARKET LEADING POSITIONS #1 AND #2
5
CORPORATE PRESENTATION MARCH 2015
Strong global presence
2014 revenue by geography
2014 NSV by geography
28%
28%
39%
43%
£644.8m
£413.0m
29%
Americas
Europe
Present in over 100 countries
33%
Americas
Asia
“Just in time” supply chain
6
Europe
Asia
Recent investments in high
growth Asia region
CORPORATE PRESENTATION MARCH 2015
Focus on high unit volume end-markets
Auto/Industrial c30% of NSV
8
7
6 Auto Electroplating
7 Water Treatment
8 Other Electroplating
1
Electronics c70% of NSV
6
1 Personal Computers
2 Mobile & Infrastructure
3 Microelectronics
& Semiconductors
4 Auto Electronics
5 Other Electronics
2
5
3
4
MARKET LEADING POSITIONS INTO TARGETED END-MARKETS
1
2
3
4
5
7
6
7
8
CORPORATE PRESENTATION MARCH 2015
What makes end-markets attractive for Alent
HIGH UNIT
VOLUME
APPLICATIONS
HIGH UNIT
END-MARKETS
HIGH GROWTH
POTENTIAL
GLOBAL
CONSUMER
BASE
GLOBAL
PRODUCTION
BASE
ALENT TARGETS HIGH UNIT VOLUME GROWTH APPLICATIONS
8
CORPORATE PRESENTATION MARCH 2015
Alent’s competitive advantage
DELIVERING LONG-TERM GROWTH AND SUSTAINABLE MARGIN IMPROVEMENT
• Differentiated OEM customer model
• Customer-driven, “fast cycle” R&D
• Technical services
• Global footprint
9
CORPORATE PRESENTATION MARCH 2015
Differentiated customer model
Designs, Specifies, Manages Subcontractors (or In-House)
Mandates Alent materials and
processes
• Sometimes sole supplier
• Sometimes dual source supplier
SUBCONTRACTORS CONTACT
ALENT WITH PROBLEMS
10
CORPORATE PRESENTATION MARCH 2015
Alent OEM competitive advantage
• Market leadership and globally recognised brands gets us to the table
• Global team of value-in-use technical sales personnel
• Customer-driven, “fast cycle” R&D, enabling innovation and new
product pipeline
• R&D facilities to model customer processes and generate data to
demonstrate increased efficiencies and yield
• Value-in-use strategy ensures long-term relationship and price stability
• Strategic proximity to subcontractors (“customers”)
EXCELLENT EXECUTION PROVIDES HIGH BARRIERS TO ENTRY
11
CORPORATE PRESENTATION MARCH 2015
Customer-driven R&D
Approximate Allocation Strategy
CORE PRODUCT
DEVELOPMENT
ADJACENT
MARKETS
NEXT
GENERATION
PRODUCTS &
TECHNOLOGIES
70%
20%
10%
• Customer focused
product development
• Gain market share by
continuous stream of
innovative products
• Strategic Technology
Initiatives for
adjacent markets
• Explore, select and nurture
Emerging / Breakthrough /
Disruptive Technologies
• Key Customer engagements
to feed Innovation Pipeline
• “Learn Programs” to
demonstrate feasibility
•
Approximately 60 R&D projects per year
•
Results in c30-40 new products per year
DISCIPLINED ALLOCATION OF R&D RESOURCES ENSURES A SUSTAINABLE & ROBUST ROI
12
CORPORATE PRESENTATION MARCH 2015
“Fast cycle” R&D
• Mobile requires rapid/continuous development
• In only months Alent technology can reach volume manufacturing
• Automotive requires intensive material characterisation to demanding
segment specific reliability testing
• Greater than a year for Alent technology to reach volume manufacturing
Fast/long cycle
YEARS
1
2
3
4
5
6
7
8
Mobile
Automotive
Product approval
Product lifecycle
ABILITY TO SERVE BOTH MODELS DEMONSTRATES THE STRENGTH OF OUR INTEGRATED OEM/VOC
R&D STRATEGY
13
CORPORATE PRESENTATION MARCH 2015
Technical services
• Global team of experienced engineers
• Deep understanding of customers’ processes
• Walking the floor, solving problems in real time
• Not every problem requires a new product
• “Fast cycle” R&D – develop, test and improve
ON THE FRONT LINE, SOLVING PROBLEMS
14
CORPORATE PRESENTATION MARCH 2015
Global footprint
•
Global presence, enabling access to all key growth markets
•
Strategically positioned manufacturing and R&D presence close to industry defining customers
•
Longstanding and collaborative customer relationships
•
Leading position in innovation and product development
•
Strong presence in Asia, particularly China
GLOBAL PRESENCE WITH CLOSE PROXIMITY TO OUR GLOBAL CUSTOMERS’ LOCAL SITES
15
15
CORPORATE PRESENTATION MARCH 2015
Financial strength - strong cash generation
Working Capital/Sales %
18.3
16.9
Working capital
19.2
17.5
12.7
• £6m cash inflow during 2013
• Continued improvement from 13% in
2010 to 19% of sales in 2014
• Continuous improvement through
•
•
•
•
Improved supply chain
Reduced overdue receivables
Continued SKU consolidation
Supplier partnership and term extension
2010
2011
2012
Cash Generation %
2013
2014
99.7
90.4
90.2
81.1
61.3
Strong cash conversion
• 90% of EBITDA in 2014
– Inventory build to support plant rationalisation
and commissioning
2010
2011
2012
2013
2014
STRONG CASH GENERATION TO SUPPORT GROWTH
16
CORPORATE PRESENTATION MARCH 2015
Solid platform for growth
Operational CAPEX £m /
% of depreciation
189%
Asset light
• Capex of 1.3x depreciation in 2014
• Manufacturing footprint largely complete
• Continued focus on R&D facilities
184%
152%
129%
16.1m
16.4m
13.7m
11.7
2011
2012
2013
2014
1.3
Net Debt/EBITDA (times)
1.0
1.0
Net debt
• Net Debt at £108.3m or 1x EBITDA
• Significant headroom from existing facilities
2012
2013
2014
RoCE %
Return on capital employed
• Returns in excess of 20%
50.6
15.9
2010
61.8
56.1
53.0
56.8
21.0
20.7
20.2
20.9
2011
2012
2013
2014
Inc. goodwill
Exc. goodwill
BALANCE SHEET STRENGTHENED PROVIDING SOLID PLATFORM FOR GROWTH
17
CORPORATE PRESENTATION MARCH 2015
Growth platform - capital allocation
Reinvest for
organic
growth
Progressive
dividend
policy
2
1
Acquisitions
in line with
strategy
3
Return
excess to
shareholders
4
DISCIPLINED BALANCE BETWEEN INVESTMENT FOR GROWTH AND RETURNS TO SHAREHOLDERS
18
18
CORPORATE PRESENTATION MARCH 2015
Alent’s performance vs end-markets – FY 2014
World production of electronic equipment % growth rates
Converted at 2013 exchange rates
4.6
3.3
Automotive production growth in units (m)
5.1
105.3
-3.0
83.1
2013
2014
2015
85.6
2016
Source: Henderson, January 2015
2013 2014 2015 2016 2017 2018
Source: Prismark Partners, November 2014; IHS Automotive, January 2015
Alent’s exposure to end-market
Alent’s Growth (2014)
Surface Chemistries (50% automotive/industrial-focused)
4.7%
•
Performance Coatings
3%
•
Plating on Plastics
4%
Assembly Materials (100% electronics-focused)
•
Alent vs Market (2014)
4.4%
Surface Mount Assembly
13%
•
Paste
10%
•
Wire
7%
Surface Chemistries (50% electronics-focused)
4.7%
•
Electronics Chemistries
7%
•
Printed Circuit Board Chemistry
6%
•
Copper Damascene
8%
•
Microelectronics Plating Chemistry
9%
19
CORPORATE PRESENTATION MARCH 2015
INVESTING FOR
GROWTH
20
CORPORATE PRESENTATION MARCH 2015
Investing for Growth
Routes to Market
• OEM, Technical Support, R&D teams
+
The Benefits
•
•
Product Development
• New products and new markets
+
Accelerate growth
Increase market share
• New high growth markets
• High margin products
Capital Expenditure
• Manufacturing and R&D facilities
TARGETED INVESTMENT PROGRAMME ALIGNED TO OUR COMPETITIVE ADVANTAGES
21
21
CORPORATE PRESENTATION MARCH 2015
APPENDICES
22
CORPORATE PRESENTATION MARCH 2015
Alent history
TODAY
A MARKET-LEADING SPECIALTY CHEMICALS AND ENGINEERED MATERIALS COMPANY
2013 – 2014
•
Consistently outperformed end-markets
•
Delivered strong cash generation
•
Alent plc listed on the London Stock Exchange in December 2012
•
Constituent of the FTSE250 - Specialty Chemicals Sector
•
Significant period of growth
•
Net sales value +21.9% / Return on net sales value from 13.0% to 21.8%
2003 - 2007
•
Disposal of several non-core businesses (equipment, laminates, EMC)
1999
•
Acquisition of Enthone Inc., the #2 global supplier of electroplating chemicals
1990s
•
The electronics “boom” in the early 1990s provided opportunities to acquire further
electronics companies
1985
•
Alpha expansion into Asia
1984
•
Acquisition of Alpha Metals Inc., a supplier of interconnect materials to the electronics
business
1944
•
Cookson acquired Fry Metals
2012
2008 - 2011
ALPHA & ENTHONE - #1 or #2 GLOBALLY RECOGNISED BRANDS
23
CORPORATE PRESENTATION MARCH 2015
Assembly Materials – Product lines
Surface Mount Assembly – Products for use in electronic equipment
•
•
•
•
Solder paste - Using a stencil to place small deposits of solder onto a printed circuit board
Wire solder - Used in touch-up and rework applications
Preforms - Solder components engineered into specific shapes/forms
Stencils - Used to apply adhesive and solder paste onto a printed circuit board
Wave Solder Assembly – Products for use in electronic equipment
•
Bar solder and flux – Used in mature wave soldering process
Microlectronics – Products for use in semiconductors
•
•
•
•
Electronic polymers – Used for packaging, sealing and conductive adhesives
Solder spheres – Used for integrated circuit and printed circuit board connections
Die attach – Used to attach the semiconductor chip to the package
PV ready ribbon – A pre-fluxed solder coated copper ribbon used for connecting solar cells within
a solar panel
Other
•
•
Reclaim – Metal recycling business – reclaim of waste solder, reused in solder processes
Water treatment – Produces chemicals for industrial end-markets
24
CORPORATE PRESENTATION MARCH 2015
Surface Chemistries – Product lines
Performance Coatings – Products for use in industrial/automotive end-markets
•
•
•
Decorative coatings - Decorative electroplating chemistries developed to enable plating directly
onto plastic in industrial and automotive markets
Wear resistant coatings - Chromium electroplating chemistries used in industrial applications and
for use on auto parts such as engine valves and shock absorber cylinders
Corrosion resistant coatings - Zinc alloy electroplating chemistries used in industrial, building
and auto markets (e.g. on brake calipers and fasteners)
Electronics
•
•
•
Copper damascene - Electroplating chemistry used to create the wires within a semiconductor
integrated circuit chip
Wafer bumping chemistries - Electroplating for connections within the integrated circuit
Interconnect materials - Electroplating chemistries for fabrication of printed circuit boards
25
CORPORATE PRESENTATION MARCH 2015
Automotive
Auto Electronics
Steering
Wheel Trim
 Critical safety systems
(ABS, airbag)
Interior Console, Bezel
Trim, Knobs
Head lamp
Reflectors
Emblems
Shifter Knob
Interior, Exterior
Door Handles
Body Side
Moulding
Side View Mirror
 External lighting
 Cabin electronics
 Communications
system
 Underhood controllers
Electronics
 Entry/exit security
Front Grilles
 Climate control
Bumper
Performance Coatings
Aluminium Wheels,
Plastic Clad Wheels
 Decorative
External
Lighting
Underhood
Controllers
Cabin Electronics
-
Communications System
Entry/Exit
Security
Critical Safety Systems
(ABS, airbag)
Internal and
external
 Anti-wear
 Corrosion resistance
Climate
Control
26
CORPORATE PRESENTATION MARCH 2015
Electronics
Assembly Materials
 Solder paste
 Solder spheres
Camera Modules
Accelerameters
Microprocessors
 Preforms
 Wire
 Die attach adhesives
Printed Circuit Board
Surface Chemistries
 Copper damascene
Molded Antennas
 Semiconductor wafer level
packaging
 Printed circuit board
metallisation
 Printed circuit board final
finishes
 Molded interconnect
devices
27
CORPORATE PRESENTATION MARCH 2015
Growth markets - Automotive
World production of electronic equipment % growth rates
Converted at 2013 exchange rates
4.6
Automotive production growth in units (m)
105.3
5.1
3.3
83.1
85.6
2013
2014
-3.0
2013
2014
2015
2016
2016
2017
2018
Source: Prismark Partners, November 2014; IHS Automotive, January 2015
Source: Henderson, January 2015
• Global automotive production expected to
grow above historic rates driven by
emerging markets
2015
• The electronics content within a vehicle is growing at a rate
that significantly exceeds the underlying automotive unit
growth rate
•
• Electronics content within a vehicle growing at
an even higher rate
•
28
Electronics value is on average ~US$2,000 per automobile
today
Electronics content as a percentage of the total vehicle cost is
expected to rise significantly as market penetration of hybrid
and electric vehicles increases
CORPORATE PRESENTATION MARCH 2015
Growth markets - Electronics
2018F – Total: $2.0b
2013 – Total: $1.7b
Smartphones
$341b/17.0%
Smartphones
$288b/17.2%
Tablets
$78b/4.6%
Rest of the
Electronics
Industry
$885b/52.8%
3.7% CAAGR
Servers/Storage/
Comms.Infra
$249b/14.8%
Tablets
$111b/5.5%
Rest of the
Electronics
Industry
$1,019b/50.8%
Servers/Storage/
Comms.Infra
$305b/15.2%
Automotive Electronics
$177b/10.6%
Automotive Electronics
$231b/11.5%
2013-2018 CAAGR
Smartphones
3.4%
Tablets
7.4%
Servers/Storage/Comms.Infra
4.1%
Auto Electronics
5.5%
Rest of Electronics Industry
2.9%
TOTAL
3.7%
Source: Prismark Partners, March 2014
29
CORPORATE PRESENTATION MARCH 2015
Investing for Growth
Routes to Market
• OEM, Technical Support, R&D teams
+
The Benefits
•
•
Product Development
• New products and new markets
+
Accelerate growth
Increase market share
• New high growth markets
• High margin products
Capital Expenditure
• Manufacturing and R&D facilities
TARGETED INVESTMENT PROGRAMME ALIGNED TO OUR COMPETITIVE ADVANTAGES
30
30
CORPORATE PRESENTATION MARCH 2015
Routes to Market and Product Development
• £7m investment/increase headcount by around 100 people
• Additional OEM headcount with focus on Asia
• Additional R&D headcount with focus on India and US
– Solder paste for new packaging applications
– Engineered polymers for die-attach
– Performance coatings for enhanced processing in wear and
corrosion resistant products
– Copper damascene for latest nodes
– Copper development for functional decorative coatings
The Benefits
• Additional technical support in all regions
+
Capital Expenditure
TARGETED INVESTMENT PROGRAMME TO SECURE PROXIMITY TO CUSTOMERS
31
31
CORPORATE PRESENTATION MARCH 2015
Capital Expenditure
• 2015 CAPEX of 1.5 – 1.8x depreciation
• Invest in manufacturing capability
– US
• Wafer level packaging
• Copper damascene process line
– Asia
• Powder manufacturing capability
The Benefits
• Invest in R&D equipment with a focus on high margin products
– Die-attach, LED and nano silver in India
– Wafer fabrication research in the US
– Coating development equipment in Europe
+
Routes to Market and Product Development
TARGETED INVESTMENT PROGRAMME ALIGNED TO OUR COMPETITIVE ADVANTAGES
32
32
CORPORATE PRESENTATION MARCH 2015
The Benefits
Routes to Market
The Benefits
+
•
•
Product Development
•
Accelerate growth
Increase market share
• New high growth markets
• High margin products
Continued outperformance of end-markets
The Timing
• Expect benefits to start in 2016
• Full NSV growth benefit in 2017
+
Capital Expenditure
TARGETED INVESTMENT PROGRAMME ALIGNED TO OUR COMPETITIVE ADVANTAGES
33
33
CORPORATE PRESENTATION MARCH 2015
Group financial highlights
Reported
Change %
2014
2013
Reported
Constant
413.0
420.1
(1.7)
4.6
(162.0)
(168.7)
4.0
(2.9)
Gross margin (£m)
251.0
251.4
(0.2)
5.7
Gross margin (%)
60.8
59.8
1.0 pts
0.7 pts
(155.9)
(157.3)
0.9
(4.6)
Adjusted operating profit (£m)
95.1
94.1
1.1
7.6
NSV margin (%)
23.0
22.4
0.6 pts
0.6 pts
Adjusted profit before tax (£m)
91.5
88.0
4.0
11.1
Adjusted earnings per share (pence)
25.0
24.1
3.7
Adjusted cash generated from operations (£m)
94.0
102.8
(8.6)
108.3
96.5
(12.2)
1.0
1.0
20.9
20.2
Net sales value (NSV) (£m)
Manufacturing and raw material costs (£m)
Overheads (£m)
Net debt (£m)
Leverage (x EBITDA)
Return on capital employed (%)
• Group NSV increased 5% - outperforming principal end-markets
• Market share capture through outperformance of key end-markets
• Pricing remained solid with gross margin increasing to 61%
34
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CORPORATE PRESENTATION MARCH 2015
Segmental analysis
Reported
Change %
2014
2013
Reported
Constant
Assembly Materials
204.9
209.5
(2.2)
4.4
Surface Chemistries
208.1
210.6
(1.2)
4.7
Alent Group (£m)
413.0
420.1
(1.7)
4.6
Assembly Materials
57.6
58.2
(1.0)
5.3
Surface Chemistries
44.6
42.7
4.4
10.4
Corporate
(7.1)
(6.8)
(4.4)
(6.0)
Alent Group (£m)
95.1
94.1
1.1
7.6
Assembly Materials
28.1
27.8
0.3 pts
0.2 pts
Surface Chemistries
21.4
20.3
1.1 pts
1.1 pts
Alent Group (%)
23.0
22.4
0.6 pts
0.6 pts
NSV (£m)
Adjusted operating profit (£m)
NSV Margin (%)
35
35
CORPORATE PRESENTATION MARCH 2015
Assembly Materials
Reported £m
NSV
Change %
2014
2013 Reported
Wave Solder Assembly
49.2
54.7
(10.1)
(1.0)
Surface Mount Assembly
99.2
93.7
5.9
13.2
Microelectronics Products
11.4
11.5
(0.1)
4.6
Other
45.1
49.6
(9.1)
(6.0)
204.9
209.5
(2.2)
4.4
57.6
58.2
(1.0)
5.3
28.1%
27.8%
0.3 pts
0.2 pts
Total NSV
Adjusted operating profit
NSV Margin
Constant
• Improving trends in electronics market
• Wave Solder Assembly
– Continued shift from Wave Solder Assembly to higher margin Surface Mount Assembly
• Double digit growth in Surface Mount Assembly
– Paste volume up 10% with further progress in margins as we leverage our OEM marketing and selling strategy
– Packaged preforms delivered strong growth in both volume and margin on the back of design wins in European automotive space
– Wire volume up 7% driven by increased demand in Asia
• Microelectronics NSV up 5%
– Promising prospects in die-attach technology
• Other – NSV progression in water treatment business, offset by performance of reclaim business
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CORPORATE PRESENTATION MARCH 2015
Surface Chemistries
Reported £m
NSV
Change %
2014
2013
Reported
Constant
Performance Coatings
97.6
100.4
(2.8)
3.3
Electronics Chemistries
103.1
101.8
1.3
7.1
7.4
8.4
(11.9)
(6.3)
208.1
210.6
(1.2)
4.7
44.6
42.7
4.4
10.4
21.4%
20.3%
1.1 pts
1.1 pts
Other
Total NSV
Adjusted operating profit
NSV Margin
• Modest growth in automotive and industrial markets
• Performance Coatings and Electronics Chemistries segments outperformed underlying markets
• Continued progress in Performance Coatings segment
– PCB Chemistry volume up 6% through market share gain
– Performance Coatings NSV up 3% due to stronger demand in automotive markets and market share capture
• Electronics Chemistries
– Copper damascene NSV increased 7.8%, driven by ramp up of 28/20nm advanced nodes
– Continued progress at 14/10nm nodes with product evaluations at a number of key customers
– Settlement of litigation
• NSV margin increased 1.1pts to 21.4%
37
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CORPORATE PRESENTATION MARCH 2015
Net debt
£m
2014
2013
Adjusted free cash flow
64.3
73.2
Demerger costs
(0.2)
(4.8)
Pension top-ups
(2.4)
(1.9)
(66.3)
(23.3)
(7.2)
4.7
Movement on net debt in the year
(11.8)
47.9
Net debt at start of year
(96.5)
(144.4)
Net debt at end of year
(108.3)
(96.5)
1.0x
30.7
1.0x
22.0x
Dividends paid to shareholders
Other, including foreign exchange & deferred consideration
Financial covenants:
Net debt to EBITDA (last 12 months) ≤3.0x
EBITDA to net interest ≥4.0x
Facility:
£300m syndicated bank facility
Debt maturity extended 2 years to 2019
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CORPORATE PRESENTATION MARCH 2015
Dividends
2014
2013
Change
Interim (pence)
3.0
2.89
3.8
Final (pence)
6.0
5.71
5.1
Full year (pence)
9.0
8.60
4.7
2.8x
2.8x
-
Dividend cover
• Special dividend
– 15.0 pence per share, representing a total payment of £42m
– Paid to shareholders on 17 October 2014
• The Board has recommended a final dividend of 6.0 pence per share
– 2014 full year dividend of 9.0 pence per share
– 4.7% growth over the 2013 full year dividend
• Progressive dividend policy maintained
– Dividend at least in line with earnings growth
– Dividend cover within a range of 3.0 to 2.8 times
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CORPORATE PRESENTATION MARCH 2015
Definitions
The following are referred to throughout this presentation:• NSV is revenue less commodity metals (tin, silver, gold).
• Adjusted operating profit, adjusted profit before tax, adjusted profit for the year and adjusted earnings per share are,
where appropriate, each stated before: exceptional items; amortisation of acquired intangible assets; deferred tax on
acquired intangible assets and goodwill; utilisation of deferred tax assets (where initial recognition was as an
exceptional item); acquisition costs; the impact arising from the fair valuing of financial instruments; and profits or
losses arising on business disposals.
• Adjusted cash generated from operations is cash generated from operations after adding back £0.2m (2013: £4.8m)
for demerger cash costs.
• Free cash flow is defined as net cash from operating activities after net outlays for the purchase and sale of property,
plant and equipment and dividends from joint ventures but before additional funding contributions to Group pension
plans.
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CORPORATE PRESENTATION MARCH 2015