Welcome to the Luxfer Group's Fourth Quarter Conference Call. We will first hear from Luxfer Chief Executive, Brian Purves, who will provide a market overview for the quarter; followed by Group Financial Director, Andy Beaden, who will review the financial performance for the quarter and year-to-date. Brian will then return to sum up and offer an outlook. After that, Brian and Andy will be glad to take your questions. [Operator Instructions] Thank you for your cooperation. We will now turn the call over to Brian Purves.

Thank you. Good morning, ladies and gentlemen, and welcome to the conference call on the fourth quarter of 2014 and the full year results. As usual, I'll take you through the summary results on the market situation, and then Andy will go through the detailed financials. On the fourth slide, looking at quarter 4, trading performance during the fourth quarter was mixed, with the positive being that the important SCBA sector finished strongly, neutral on the weak level of demand from European sectors, generally and for U.S. military powders, and negative on alternative fuel or AF, despite the commencement of sales of our 26-inch Type 4 cylinder out of the Utah facility. With the contribution from our new acquisition, our overall revenue was 7% up on quarter 4 2013. But with sales elsewhere below planned, incremental costs from added capacity on a weaker mix of sales, the Q4 trading result remained well below 2013, although prior to impairments broadly as expected. Given a specific issue with one customer on the generally deteriorated outlook for AF, however, we felt it necessary to reflect some impairment of AF working capital and so the reported operating profit ended up worse than indicated. Some good work around our tax charges, however, meant that adjusted fully diluted EPS of $0.32 was in line with expectations. With that said, we would work to reduce working capital, and quarter 4 cash generation was good despite the deferment of a year-end receivable. Turning to Slide 5, the disruption in the SCBA market was felt almost up to year end, with MSA only announcing the approval for their G1 equipment on November 21. Some smaller companies in this field still do not have approvals, but the market is now being serviced by the 2 biggest companies and so has…

Thank you, Brian, and welcome, everyone, to the call. Brian covered the divisional sales analysis, and my first slide, Slide 14, shows how that consolidates into the group revenue changes for Q4 and the full year. Total revenue for Q4 2014 was $123.4 million, with net revenue of $123.1 million, and the rare earth chemical surcharge was therefore only $0.3 million. Luxfer Magtech had another good quarter, achieving $8.2 million of sales, and Luxfer Utah achieved $0.9 million of sales. The group's other revenues for Q4 were up 2% or $2.4 million, excluding surcharge changes and adjusting out a negative $3.4 million FX translation difference. For the full year 2014, underlying net revenue, adjusted for translation and acquisitions, was down 1.4%, with Elektron flat, and Gas Cylinders down 2.6%. The bigger impact on 2014 was the shift in the mix of sales in Gas Cylinders, with composite cylinders sales well down when compared to 2013, and aluminum cylinders sales slightly up. I will come back to the impact on profits of these shifts, along with other impacts on profits in a few minutes. Slide 15 shows the trend in sales Q4 2014 by geographic regions. You can see the largest variances are North America has benefited from the Luxfer Magtech acquisition, along with some improvements in self-contained breathing apparatus sales and despite weaker U.S. countermeasure powder sales. Europe is significantly down, impacted by the weaker economic activity in mainland industrial Europe, particularly general automotive, bus and industrial gas markets. Turning to the profit and adjusted EBITDA results on Slide 16. The Q4 2014 group trading profit was $10.7 million versus $15 million for Q4 2013. Elektron's result, at $9.8 million, was slightly weaker than last year's Q4 of $10.2 million but up on the prior Q3 2014. Luxfer Magtech offsetting…

Thank you, Andy. Turn to Slide 25, summarizing quarter 4, our Cylinder business continued to struggle, although it was good to see the breathing apparatus sector returning to near normality at the end of the quarter. Our major issue in cylinders is now the AF market, where our sales have been below planned and the outlook for the sector has deteriorated with the collapse on the price of oil. Impairments of inventories and the receivables damaged the Q4 profitability, as did the focus on stock reduction, which did, however, help our cash generation. The specialty material side of the group did well, despite continued weakness in European automotive catalysis and in the U.S. Military market. Within the division, our new acquisition is performing as expected. Overall, our trading result was below expectations because of the impairments. The lower tax charge brought EPS back into line. On Slide 26, summarizing the full year. Our Cylinder business struggled all year, firstly with the SCBA regulatory delays, but latterly, with weak AF sales. The Superform business, while still a small component of the group, has had record sales on tooling in 2014. Generally, we made progress in the Elektron, but results were held back by the particular weakness of the countermeasure flare market, not helped by the accident at a customer facility that affected their capacity for much of the year. Overall, we are certainly unhappy with the result for the year, but we can reasonably expect some of the headwinds that we experienced in 2014 to recede in 2015. So turning to the outlook on Slide 27. As we enter 2015, the order book for military flares was looking better and has done for some time and we still believe that sales will recover somewhat from the low point of 2014. The…

[Operator Instructions] Your first question is from the line of Julian Mitchell, Crédit Suisse

Just a question on the cylinders business. If you could quantify at all this sort of cost savings you expect to drive in 2015, and whether you think that in Q1 of '15 there's a chance that, that business moves into a loss?

Okay. I'll throw a couple of things in there because the switch from the AF businesses, which made a profit in 2013 to making a loss in 2014, is -- is a big, big part of the downturn in the Cylinder business. So I suppose the good news is that it's -- the issue is basically concentrated into one business stream. And I think that we have to target, making at least $4 million or $5 million worth of savings in order to ensure that we get that business stream into an ongoing -- that minimum breakeven situation. So that would be our initial target. And in quarter 1, I don't expect the division to go into losses. I think the AF business stream will continue to make losses in the first quarter but with the SCBA market turning up, I would still hope that we can generate a positive return there and we're certainly counting on that in the context of the full-year improvement that we've given here.

And then just my follow-up would be on balance sheet usage. When you look at your sort of leverage level today, you obviously did a couple of acquisitions last year. How does the M&A pipeline look today? And how much kind of balance sheet capacity do you think you have to use for acquisitions?

Well, we've quite regularly said that both Andy and I are comfortable managing the leverage between 1x and 2x and we're closer to the 2x than we would ideally want to be, so for the moment any significant acquisitions are kind of off our agenda. Of course we are focused on generating cash as fast as possible over the course of the year. So we hope to create -- recreate some headroom in the not too distant future. And I wouldn't like to say we would never do anything, because there are opportunities out there that if they became available, we'd want to find a way to do. But they're certainly not on our agenda at the moment. We're more focused on getting the alternative fuel business back in order and generating cash.

[Operator Instructions] Your next question is from the line of Luke Folta, Jefferies.

First question is on, I guess, on Cylinders. Can you -- with respect to alternative fuel, I guess, you're saying that you'd have to cut $4 million to $5 million in order for that business to get back to breakeven. Should I be inferring that, that's about the loss that was incurred in the second half?

Yes. That's right. If you take out things like the impairment, which are one-off, so the loss would've been bigger than the $4 million or $5 million, but that's including one-off actions that wouldn't necessarily expect to be repeated. But if you take that out then $4 million to $5 million should certainly do the job, again to breakeven. Of course, on the assumption the level of revenue is similar.

Right. So that's my next question. If you could just give us some indication how you're thinking about the topline in both the self-contained breathing apparatus market and then in alternative fuels, heading into 2015, I guess, how much of a snapback are we expecting in SCBA? And I took from your comments that we're looking for lower sales of alternative fuels in '15, although improved costs. Is that the right way to think about it?

Yes, I think, I wouldn't necessarily say lower sales. I mean, I think, if we're planning our, roughly a basis of about $40 million in alternative fuels, so that's -- we ended up with $37 million in 2014, albeit that the second half was far weaker than the average. So we're still planning on improving on the average that we have in the second half. But certainly, we're no longer thinking in the context of the $75 million that we might have talked about 18 months ago. So basically, drawing our horns in and building a business that will be capable of supporting $40 million of revenue, and at least breaking even on that sort of level, while we see how the market pans out. On the SCBA side, over the last couple of quarters, that did start to perform better. And so we didn't end the year, hugely down. Obviously, the profile was quite damaging in terms of capacity utilization. But over the course of the year, we wouldn't have ended up hugely down on the SCBA revenues, certainly not globally. But originally, for 2014, we'd hope to see that market growing by 10% or so. And indeed, as you'll recall, we put capacity in it in order to be able to accommodate that. So we do hope that we'll start to see the market growing towards that sort of level again. The underlying reason certainly, in the North American market, are still there. But we believe there is a replacement cycle there from the post 9/11 sales. And so we do hope that we see some of that to start to flow through. Now, both MSA and Scott, who are the 2 biggest players by far are now freely supplying the market. But there are some smaller players out there who still do not have 2013 approved kits. We don't know how that's going to affect the overall market, but it's much, much healthier than it has been for the whole of 2014.

[Operator Instructions] We have no questions at this time. Are there any closing remarks?

Okay. Well, if that's it, thank you, gentleman and lady. And we will speak to you again in the early May on the first quarter, and give you an update on the outlook for the year at that point. Thank you. Goodbye.

An encore recording of this conference call will be available in about 2 hours. Telephone numbers to access the recording will be available on the Luxfer Group website at www.luxfer.com. Thank you. You may now disconnect.