Volex plc · LSE:VLX
Volex — FY2009 Earnings Presentation
30 slides from Volex's earnings presentation, June 2009
Slide 1: Preliminary Results for year ended 5 April 2009
Preliminary Results for year ended 5 April 2009 Presentations – 1 and 2 June 2009
Slide 2: Personal introductions
Personal introductions • Experienced CEO, with Euronext and Nasdaq experience • Track record of driving operational excellence • Deep knowledge of Volex’s key Telecom, Datacom and Consumer target sectors • Wide experience across Europe, Asia and the Americas • Graduate FCA with MBA • 4th CFO positio
Slide 3: Contents
Contents 1. Recent achievements 2. Quick refresher on Volex 3. FY 2009 financial results 4. Unlocking the potential of Volex
Slide 4: Recent achievements
Recent achievements ; Volex
Slide 5: Recent achievements
Recent achievements 1. New management appointed • Following appointment of 3 new non-execs during 2008, new executive team appointed including new CEO and Group FD 2. Disposed of loss-making Wiring Harness division • Enhances profit and cashflow profile of the Group • Eliminates major management dis
Slide 6: Recent achievements – financial highlights
Recent achievements – financial highlights 1. Banking facilities extended to 2012 2. Revenues up 19% at £265.1m • 11% up in Power Products and 31% in Interconnect 3. Operating profits* up from £7.3m to £11.2m 4. Normalised pre-tax profit* up from £4.7m to £8.2m 5. Cash generated by operations before
Slide 7: Quick refresher on Volex
Quick refresher on Volex
Slide 8: What we sell
What we sell 8 Power Products Interconnect Products
Slide 9: Telecoms illustration
Telecoms illustration Volex is here Volex is here Volex is here Volex is here Volex is here
Slide 10: Datacoms illustration
Datacoms illustration Volex is here Volex is here Volex is here Volex is here Volex is here
Slide 11: Our customers
Our customers PHILIPS Were Qh « jenmovo Panasonic SONY BOSCH EPSON = QUAILCoMM« et” TOSHIBA Alcatel-Lucent @ FUJITSU Canon yifi.ifs Wy oNpds u ——— OLYMPUS Cl sc re) v
Slide 12: Markets & positioning
Markets & positioning Powercords Interconnect ¾ $2bn power cord market ¾ $15bn cable assembly market growing 8% p.a., with ¾ Market leader with ~12% share opportunity to expand into $44bn ¾ Margins of 10 - 15% of adjacent markets ¾ Manufacture and sales are ¾ 8th largest player with 1.3% Asian centr
Slide 13: Global presence servicing global OEMs
Global presence servicing global OEMs Main factories Main offices UK North Carolina Poland Japan Suzhou, China Shenzen & Zhongshan, China Mexico Vietnam Chennai, India Singapore Indonesia UK & Europe £68m Brazil 22% Asia UK & Europe £138m £108m 45% Asia 36% £183m 60% Americas £52m Americas 17% £57m
Slide 14: World class management
World class management Mike McTighe, Chairman Richard Arkle, NED Karen Slatford, NED Chris Geoghegan, NED Chairman Pace plc and director NED of SDI Group plc and Cash Chairman of Neverfail Group and Chairman of Hampson Industries of OFCOM. Ex Carrier 1, Management Systems Ltd. EMEA advisory board me
Slide 15: FY09 financial results
FYO9 financial results ;
Slide 16: Financial summary – Income Statement
Financial summary – Income Statement £millions 2009 2008 Revenue from continuing operations 265.1 223.4 Operating profit before non-recurring items 11.2 7.3 Non-recurring items (4.6) (2.5) Operating profit 6.6 4.8 Net finance costs (3.0) (2.6) Profit on ordinary activities before taxation 3.6 2.1 Ta
Slide 17: Summary financials - Revenue
Summary financials - Revenue • 11% up in Power Products at £150.7m • Strong year-on-year and quarter-over-quarter growth in first half • Declined September through January but stabilised in Q4 and expected to recover during FY 2010 • 31% up in Interconnect at £114.4m • Consistent quarter on quarter
Slide 18: Summary financials – Operating profit
Summary financials – Operating profit • Full year operating profit before non-recurring items and share based payments up from £7.3m to £11.2m • Similarly normalised pre-tax profit up from £4.7m to £8.2m • Following profits warnings in H2 FY2008, the Group have delivered consistent half-on-half grow
Slide 19: Financial summary – Balance Sheet
Financial summary – Balance Sheet £millions 2009 2008 Non current assets 11.2 10.3 Working capital 27.6 46.6 Cash 16.9 4.3 Current provisions (3.7) (3.4) Other (6.3) (4.4) Net current assets 34.5 43.1 Bank overdrafts and loans (31.7) (25.3) Long term provisions (5.4) (3.8) Pension obligations (1.7)
Slide 20: Financial summary – Cash Flow Statements
Financial summary – Cash Flow Statements £millions 2009 2008 Cash generated by operations before non recurring 21.8 (2.2) items Cash utilised by non recurring items (4.4) (3.9) Cash generated by operations 17.4 (6.1) Taxation paid (1.6) (0.9) Net interest paid (2.2) (1.4) Net cash inflow/(outflow) f
Slide 21: Summary financials – Net debt
Summary financials – Net debt • Lloyds facility (US$62.7m) and HBOS facility (€6.8m) both extended to March 2012 • Simplified covenants • Net borrowings reduced to £14.8m • Undrawn committed borrowing facilities of £14.7m (2008: £8.1m) • Adequate covenant and liquidity headroom
Slide 22: Unlocking the potential of Volex
Unlocking the potential of Volex
Slide 23: Improvement programs
Improvement programs • Procurement, supply chain and manufacturing – previously each of five business units operated autonomously – opportunities to gain global scale economies in materials procurement (annual spend of ~£180 - 200m representing nearly 65 - 70% of revenues) – plan to reduce productio
Slide 24: Improvement programs
Improvement programs • Marketing, sales and product development – again each of five business units operated autonomously with limited cross selling between regions and product groups – long standing relationships with global OEMs (of whom top 25 represent around 80% of revenues) – opportunity to im
Slide 25: Improvement programs
Improvement programs • Skills, information, processes and systems – currently upskilling several key functions and augmenting management with new hires – enhancing management information systems to improve visibility and control of the business – streamlining processes to reduce costs and increase a
Slide 26: Conclusions
Conclusions ; Volex
Slide 27: Future prospects
Future prospects • Stabilised the Group in the last 12 months, with refinancing, disposal of Wiring Harnesses division and appointment of new management • Next year is focused on unlocking the potential of Volex through improved execution in the operational, commercial and financial arenas • Success
Slide 28: Appendices
Appendices ;
Slide 29: Relative share performance and valuations
Relative share performance and valuations Volex & Key Competitors Relative Share Performance 250% Ampheno Volex Amphenol Leoni Tyco Molex Tyco Molex l Leoni Volex 200% Revenue $14.8bn $3.3bn $3.2bn €2.9bn £0.3bn 150% Operating 12% 10% 20% 2% 4% 100% profit % Market 50% $7.9bn $2.7bn $5.3bn €0.3bn £3
Slide 30: Contact Details
Contact Details CEO Ray Walsh +44 7775 602 577 ray.walsh@volex.com CFO Andrew Cherry +44 780 123 3366 andrew.cherry@volex.com London Stock Exchange code : VLX Current address Address from July 2009 Dornoch House 10 Eastbourne Terrace Kelvin Close Paddington Birchwood Science Park London W2 6LG Warri