Description Page - Doosan Power Systems

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DOOSAN BABCOCK ENERGY Annual Report and Financial Statements 2007 Chief Executive Officer’s Statement A bright future It has been just over a year since Babcock was acquired by Doosan Heavy Industries & Construction. Since then, the business has developed considerably with many initiatives aimed at improving performance, increasing capacity and achieving ‘preferred employer’ status with all our employees through best-in-class conditions and standards. In our first year as Doosan Babcock, we have achieved significant growth, booking record order intake and improved operating profits. This has been achieved on the back of improved operating performance across the business. Our organisational structure has been altered in order to ensure that there is clear accountability for all functions across the business - the main growth area will be in ‘big ticket’ items, that is, major projects often involving Engineering, Procurement and Construction, and our organisation has been structured to address such new business. We have had a number of notable successes during the last 12 months - a major order was received for two 800 MW state of the art ultra-supercritical coal fired units in Germany, our first major new build order in Europe for decades and an excellent reference plant for the company incorporating our best available technology and very high efficiency. We signed the Mechanical, Engineering & Technology Support long-term support contract with British Energy, which will see Doosan Babcock providing Engineering support to the UK’s Advanced Gas-Cooled Reactor fleet for the next seven years. We signed emissions reduction and upgrade contracts in Hong Kong as well as significant plant upgrade contracts in mainland China. Our business in the USA continues to attract good upgrade business and we are in the process of delivering our first large utility 02 Iain Miller Chief Executive Officer plant, a 750 MW supercritical coal fired unit in Kentucky. Overall, it has been an excellent start for Babcock as part of the Doosan family. Significant synergies have been achieved by becoming part of the Doosan Heavy Industries & Construction (Doosan Heavy) business during the course of 2007. Doosan Heavy have now adopted the ‘Babcock’ Original Equipment Manufacturer (OEM) product as their new standard for all future utility applications. Doosan Babcock have adopted Doosan Heavy’s Changwon manufacturing facility for future major new build work. The Doosan Babcock operation in Chennai will host a variety of support functions for both Doosan Babcock and Doosan Heavy in the future and we have opened a new office with increased resources to address this need. We have incorporated some of the ‘best practice’ processes developed by Doosan Heavy and have achieved notable successes in improving our utility boiler design, our procurement processes and we are implementing new integrated delivery systems for our major projects business. We have adopted Doosan Heavy’s risk management processes and these are proving highly effective. Our aim is to achieve our order intake targets whilst controlling risk, an essential element of our future success. Looking ahead, the future looks very encouraging for the company in all of our main markets. Rising demand for new and replacement power plant will drive growth in our business for the foreseeable future. In our home market, the UK, there is already activity developing new ‘clean coal’ stations by major utilities. In parallel, some UK clients see the advantage of major
An international presence From Atlanta in the US, through to our headquarters in the UK, and on to Shanghai in China, Doosan Babcock is present across the globe. Order Intake (£m) 800 700 600 500 400 300 200 100 0 345 06 07 07 Mar Mar Dec* *12 months proforma 505 771 Profit Before Tax (£m) 25 20 15 10 5 O 9.1 11.1 22.7 06 07 07 Mar Mar Dec* retrofits for their plants which incorporate state-of-theart technology and low emissions. Doosan Babcock expect to secure a significant share of these projects in the short term. Longer term in the UK, Doosan Babcock will be fully engaged in the execution of Carbon Capture & Storage projects and in Nuclear New Build - the UK government have indicated their support for both of these energy initiatives for the future and Doosan Babcock are well positioned to benefit through our OEM capability coupled with our strong Field Services business. We continue to aggressively seek opportunities in mainland Europe, North & South America, Southern Africa and China - we are planning to secure major projects in all of these territories over our 5 year plan. There is a growing demand for our OEM product in all of these markets and we plan to reinforce our sales presence to ensure that we secure our fair share of opportunities. During the last year, we created a dedicated R&D group based at our Renfrew facility, the intent being to invest heavily over the next few years in our core OEM utility boiler product, in emissions reduction and in carbon capture technology. All of this investment will position Doosan Babcock at the forefront of power plant technology in the future. In 2007, we recruited our largest intake of graduates and trainees for decades - this is another area where we intend to excel, building a long-term future for the younger people in the business, an area where we • believe we have a competitive advantage through investment over the last 10 years or so. Our most important performance indicators are in the Quality, Health and Safety & Environmental areas since we aim at high standards across our business in order to satisfy our customer needs and to protect our employees and others affected by our operations. We are all pleased that our QHS&E standards have again improved during the year, with record numbers of customer compliments, the award of the RoSPA gold award for Health and Safety performance and we incurred zero environmental incidents during 2007. I look forward to working with the rest of the Executive Team and our staff to ensure we capitalise upon the very bright future that we foresee for the company. Iain Miller Chief Executive Officer DOOSAN BABCOCK ENERGY Annual Report and Financial Statements 2007 •• • Left: British Energy CEO, Bill Coley, shakes hands with Doosan Babcock’s GW Park at the signing of the 7-year support deal worth over £550m. • • •• • Below left : Iain Miller cuts the ribbon to officially open the new Chennai office in India. Below: Doosan Babcock’s Global Headquarters in Crawley, UK. 03
Page 1 and 2: Annual Report and Financial Stateme
Page 3: Financial Highlights * ORDER INTAKE
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 and 16: Board of Directors Gee Won Park Dir
Page 17 and 18: Five Year Summary Major Growth The
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Page 21 and 22: Independent auditors' report to the
Page 23 and 24: Consolidated balance sheet as at 31
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Page 29 and 30: 2. Geographical analysis DOOSAN BAB
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Description Page - Doosan Power Systems

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