Description Page - Doosan Power Systems

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DOOSAN BABCOCK ENERGY Annual Report and Financial Statements 2007 Chief Financial Officer’s Statement Delivering growth and performance It has been a very successful period of significant growth and financial performance in the first year with Doosan Heavy Order Intake (£m) 800 600 400 200 14 0 Mar 04 Profit Before Tax (£m) 25 20 15 10 5 0 Mar 04 Mar 05 Mar 05 Mar 06 Mar 06 Mar 07 Mar 07 Dec* 07 Dec* 07 Turnover (£m) 500 400 300 200 100 0 Cash (£m) Mar 04 Mar 05 Stephen Moore Chief Financial Officer *12 months proforma In order to give the most helpful commentary on the development of the business the figures within the Chief Financial Officer’s Statement compare the proforma 12 months ended 31 December 2007 with the 12 months ended 31 March 2007. 80 60 40 20 0 Mar 04 Mar 05 Mar 06 Mar 06 Mar 07 Mar 07 Dec* 07 Dec* 07
Five Year Summary Major Growth The first year of trade following the acquisition by Doosan Heavy Industries & Construction has been extremely successful with record performance being achieved in a number of areas. Both order intake at more than £770m and profit before tax at over £22m are records for Doosan Babcock and highlight both excellent current operational performance and strong growth for the future. The past year has seen substantial developments within the company. The anticipated synergies and benefits following the acquisition and the alignment with such a well matched parent have been comfortably exceeded. The cost competitiveness of our major projects has been significantly improved and with a much larger scope to tackle the worldwide energy market (which is in considerable need of our services), Doosan Babcock has huge potential to grow year on year in significant terms and is looking to break £1bn order intake in the short term. Financial Results In the year to December 2007, turnover was 15% higher than in the year to March 2007 at £472m, reflecting growth in the Services business particularly in implementing NOx solutions and in the New Build business where major orders recently won are just starting to come through the books. Group operating profit before exceptional items over the same periods more than doubled from £8.3m to £19.4m. This represents a superb performance in terms of our Services business which has seen its operating profit ratio increase by more than 25% on the back of excellent operational performance. Both we and our customers are benefiting from the excellent management and delivery which allows deadlines to be constantly met or exceeded, reducing lost generation time: the largest cost for our customers. The New Build business contribution remains modest as orders are in their early stages and so the profit is still to come through. However with the recently won major orders and those in the pipeline this area of the businesses will soon be meeting or exceeding the strong returns already being achieved by the Services side. Net interest receivable increased from £3.1m to £4.8m reflecting our continuing exceptional cash management which is so important in DOOSAN BABCOCK ENERGY Annual Report and Financial Statements 2007 our industry. This was combined with an increase in our pension assets with the resultant increase in our expected return on assets. Profit before tax also more than doubled from £11.1m to £22.7m, in line with the growth in both interest receivable and operating profit. With a tax charge of £5.3m related in the main to deferred tax and withholding tax on overseas royalties, profit after tax at £17.4m is 132% higher than in the prior year reflecting a major step in our aim to become a very significant global company. Cash Management Cash generation has been a continuous key indicator for Doosan Babcock over recent years, reflecting the potentially significant funding requirements of a labour-intensive service business and large projects with substantial commitments. 2007 has been another year where attention to this area has been extremely successful, reflected by a cash balance of over £72m at the year end (March 2007: £51m). Strong operating cash generation has been added to by advanced payments on recently awarded contracts resulting in the 42% increase in the period. The Future 2007 was another year of records for Doosan Babcock, following on from those in the previous year. The company has been transformed following the acquisition with a whole new horizon in terms of growth plans. The last year has shown that these targets are not just plans but reality as we make the first significant step to being a much larger business. 2008 is already looking like being another year of records with major opportunities available and continuous development of our capabilities in conjunction with our parent; highlighting again the exciting future for Doosan Babcock. Stephen Moore Chief Financial Officer 12 months to March March March March December 2004 2005 2006 2007 2007** £000 £000 £000 £000 £000 as restated* as restated* Order Intake 433 375 345 505 771 Turnover 306 396 431 410 472 Operating profit from continuing operations before exceptional items 4.3 15.3 9.2 8.3 19.4 Profit on ordinary activities before taxation 4.2 10.7 9.1 11.1 22.7 Profit on ordinary activities after taxation and minority interests 3.2 4.9 6.3 7.5 17.4 Equity shareholders' funds 15.3 20.0 14.9 22.8 33.1 Net assets before pension liability 38.8 41.5 44.4 41.1 44.1 Cash 49.4 46.7 56.5 51.3 72.7 *Restated for FRS17 disclosure **12 months proforma 15
Page 1 and 2: Annual Report and Financial Stateme
Page 3 and 4: Financial Highlights * ORDER INTAKE
Page 5 and 6: An international presence From Atla
Page 7 and 8: On 14 December 2006 the Korean corp
Page 9 and 10: Our subsidiaries in Germany and Pol
Page 11 and 12: We are expanding and developing our
Page 13 and 14: Description Page DOOSAN BABCOCK ENE
Page 15: Board of Directors Gee Won Park Dir
Page 19 and 20: The major uncertainty in terms of t
Page 21 and 22: Independent auditors' report to the
Page 23 and 24: Consolidated balance sheet as at 31
Page 25 and 26: Consolidated cash flow statement fo
Page 27 and 28: Notes to the financial statements 1
Page 29 and 30: 2. Geographical analysis DOOSAN BAB
Page 31 and 32: (b) Operating profit is stated afte
Page 33 and 34: 4. Employees and directors (continu
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Page 37 and 38: 7. Intangible fixed assets DOOSAN B
Page 39 and 40: 8. Tangible fixed assets (continued
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Page 43 and 44: 14. Provisions for liabilities (con
Page 45 and 46: 18. Cash flow (a) Reconciliation of
Page 47 and 48: 19. Analysis of changes in net fund
Page 49 and 50: 23. Reconciliation of movements in
Page 51 and 52: Contacts Main Offices Global Headqu

Description Page - Doosan Power Systems

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