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RESPONSE TO THE DOWNTURN
From late September 2008 there has been a rapid and significant weakening of the Group’s main end-markets, reflecting the severe global economic downturn.
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| In response, the following management actions have been initiated: |
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| Cost reduction |
Cash and debt |
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Phase I completed Q4 2008 (annualised savings >£17m); 600 headcount reduction, extensive salary freeze, extended plant shutdowns etc. |
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Phase II underway in Q1 2009 (annualised savings >£23m); permanent closure of 6 plants and further overhead cuts, >750 headcount reduction |
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Phase III; further plant closures and overhead reductions under evaluation, should markets deteriorate further |
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Rights issue completed 4 March 2009 – £241m net proceeds |
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Focus on reducing working capital in line with reduced activity, including new incentive scheme |
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Suspending expansion CAPEX, dividends and UK pension ‘top-up’ payments – reduces cash outflow by >£85m compared to 2008 |
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Early repayment of first maturity of bank facility in exchange for a one year delay in tightening of net debt to EBITDA covenant |
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WELL POSITIONED FOR WHEN THE GLOBAL ECONOMY RECOVERS
Longer-term we believe the Group is well positioned, with a portfolio of businesses supplying high-technology consumable products with leading positions in markets with sound prospects for growth as the global economy recovers. |
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| 2008 Revenue by customer location |
2008 Revenue by operating location |
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| Balanced geographic market presence |
Manufacturing in our regional markets |
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| 2008 Trading profit by operating location |
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| Most profitable in highest growth markets |
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