Discoverie Group Plc · LSE:DSCV
Discoverie — Investor Presentation (June 2021)
31 slides from Discoverie's investor presentation, June 2021
Slide 1: Investor presentation June 2021
Investor presentation June 2021 discoverIE Group plc June 2021
Slide 2: Introduction to discoverIE
Introduction to discoverIE ◼ Design, Manufacture & Supply customised electronic components ◼ Highly differentiated products ◼ Customers: Original Equipment Manufacturers (OEMs) ◼ Essential products, repeating revenue ◼ Sustainable growth markets ◼ Renewable energy, transportation, medical, industria
Slide 3: Sustainable growth Company, resilient in tough conditions
Sustainable growth Company, resilient in tough conditions SALES(1) We aim to provide investors with ◼ Returns of 15 – 20% pa +19% CAGR(1) ◼ A progressive dividend +6% CAGR(1) COVID year In 5yrs to FY18: ◼ Sales(2) up > 2x ◼ Underlying EPS up > 2x FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 ◼ Operat
Slide 4: Our business
Our business Business fundamentals Attractive rewards ▪ Growth markets ▪ GDP++ organic growth ▪ Designed-in products, difficult to replace ▪ High levels of repeating revenue ▪ Distinct business, competitive advantage ▪ Sustainable margins ▪ Low customer concentration ▪ Reduced risk ▪ Design, not pri
Slide 5: Consistent, proven strategy
Consistent, proven strategy ◼ Sales growth well ahead of GDP over the economic cycle ◼ Move up the value chain into higher margin products ◼ Acquire businesses with attractive growth prospects and strong operating margins ◼ Further internationalise the business ◼ Generate strong cash flows and long
Slide 6: Focused on delivering key targets
Focused on delivering key targets Key Strategic Indicators FY25 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Targets 1. Increase share of Group revenue from D&M (1) 18% 37% 48% 52% 57% 61% 64% 65% >75% 2. Increase underlying operating margin 3.4% 4.9% 5.7% 5.9% 6.3% 7.0% 8.0% 7.7% 12.5% (1) 3. Build sale
Slide 7: Focused on sustainable growth markets
▪ Global trends driving structural growth FOCUSED ON ▪ Product development driven by technology SUSTAINABLE ▪ Increasing electronic content GROWTH MARKETS ▪ Essential products ▪ Markets aligned with UN SDG(1) Renewable Transportation Medical Industrial & Energy Connectivity Artificial Connectivity,
Slide 8: Our planet, Our people, Our products
Our planet, Our people, Our products Environmental, Social & Governance (ESG) priorities for a better world Environment Health & Safety Diversity Governance Tonnes CO2/£m turnover Accidents per employee Gender split Internal audit covers 80% Head office staff Group EBIT & 67% Group 22.91 64% Stock o
Slide 9: Design & Manufacturing division
Design & Manufacturing division REVENUE FROM TARGET MARKETS ▪ 65% of Group Revenue REVENUE BY BY REGION (% of total revenue) REVENUE REGION ▪ 6% Organic CAGR over last 5 years (pre FY21) ▪ 75% in faster growing target markets UK UK 10% ▪ Generating 87% of FY21 Group profit contribution Asia 10% 23%
Slide 10: Strong cash flow and returns
Strong cash flow and returns Operating cash flow ◼ Strong growth in operating & Free cash flow free cash flows Operating & £49.7m free cash flow ◼ Consistently high conversion rate £39.3m £37.6m ◼ Aiming to be self sufficient in funding over time £28.6m £27.3m £27.1m £22.1m £16.3m £19.2m ◼ High qual
Slide 11: Acquisition case study – Noratel Group
Acquisition case study – Noratel Group Noratel FY15-21 ◼ Acquired July 2014 Noratel Revenue growth FY15-21 7% CAGR ◼ Products – Power Transformers Revenue growth Operating margin 10% → 14% 7% CAGR ◼ Developments since acquisition: Operating ROCE margin 10% →→ 24% 12% 14% ◼ Developed long term strate
Slide 12: Outlook, financing & dividends
Outlook, financing & dividends Latest recommendations (1) Latest Rec Date Peel Hunt 835p Buy Apr-21 Berenberg 850p Buy Apr-21 ◼ Outlook FinnCap 833p Buy Apr-21 ◼ Fundamentals in place for long term growth to Jefferies 800p Buy Feb-21 resume: strong order growth, good levels of design wins, pipeline
Slide 13: Appendix: Board, GEC & History
APPENDIX Board, GEC & History
Slide 14: Board of Directors
Board of Directors M M Diamond MBE - Chairman B M Thompson – Senior Non-Executive Director Malcolm was appointed a Non-Executive Director in November 2015 and Bruce joined the Board as a Non-Executive Director in February 2018. He became Chairman in April 2017. Malcolm was previously Chief Executive
Slide 15: Group Executive Management
Group Executive Management N J Jefferies – Group Chief Executive* S M Gibbins – Group Finance Director* Nick was appointed Group Chief Executive in January 2009. His Simon was appointed as Group Finance Director in July 2010. A Chartered experience of electronics and the components industry comes fr
Slide 16: History since incorporation
History since incorporation BFi Optilas Compotron, Myrra, YEG & Variohm Cursor Incorporation Hectronic & Noratel Flux Hobart Sens-Tech Limitor SAS RSG Holdings Controls MTC (£71m) (£3m) (£12m) (£58m) (£13m) (£13m) (total £9m) (total £13m) (£12m) (£19m) Admission to the official list Sale of AES Cont
Slide 17: Appendix: Sales model and customers
APPENDIX Sales model and customers
Slide 18: Our engineering led sales model
Our engineering led sales model ▪ Customer needs ▪ Helping customers solve their technical challenges to create more efficient, productive and sustainable equipment and comply with increasingly stringent environmental, health, safety and performance requirements. ▪ Enduring customer relationships ▪
Slide 19: Our customers & the European Mittelstand
Our customers & the European ‘Mittelstand’ discoverIE Group plc June 2021 19
Slide 20: Appendix: Target Markets
APPENDIX Target Markets
Slide 21: Essential products into growth markets
Essential products into growth markets Technology discoverIE Mega trends Market drivers integration solutions Decarbonisation ◼ Geopolitical consensus ◼ Increasing scale of wind ◼ Power inductors ◼ Growing public awareness turbines ◼ Turbine blade pitch & Diversification ◼ Legislative and regulatory
Slide 22: Renewable Energy
Renewable Energy Applications Airflow, temperature and pressure switches Wind measurement and pitch controller Turbine power converters and inductors High voltage, high current DC and AC switches Power supply for pitch controller discoverIE Group plc June 2021 22
Slide 23: Medical
Medical Applications Embedded computers and displays Foot switches to control the height and position of the operating table Cabling and connectors for medical equipment Toroidal isolation transformers used in C-Arm X-ray machines and X-ray generators Power isolator and protection for operating thea
Slide 24: Transportation
Transportation Applications Rail carriage door controls and connectors Driver desk indicators and controls, speedometer and monitors Vehicle electrification charging infrastructure Drum switches and connectors Transformers and inductors, smaller battery solutions for in-train power discoverIE Group
Slide 25: Industrial & Connectivity
Industrial & Connectivity Applications Power unit for satellite propulsion Wireless communications for industrial metering Telematics for remote control of industrial equipment Power & signal electronics for industrial drive unit Position sensor for extensometers Fibre optic switching module for tes
Slide 26: Refining our industrial market focus
Refining our industrial market focus Growth areas where electronics will drive efficiency, intelligence and sustainability ▪ Industrial applications that support & enable sustainability Industrial & ▪ Energy efficiency, Connectivity automation & communication ▪ Focus on improvement ▪ Enablers of new
Slide 27: Case study: Our unique solutions for Renewable energy
Case study: Our unique solutions for Renewable energy ▪ Strong and trusted customer relationships across supply chain ▪ Providing innovation-led, bespoke solutions to essential customer requirements ▪ Multi-year design cycles provide strong visibility & recurring revenues ▪ Complementary technologie
Slide 28: Appendix: Sustainability in action
APPENDIX Sustainability in action
Slide 29: Sustainability in action: Electrification of Transportation
Sustainability in action Advancing the Electrification of Transportation discoverIE Group plc June 2021 29
Slide 30: Sustainability in action: Quality of life and care
Sustainability in action Enhancing the Quality of life and care for people discoverIE Group plc June 2021 30
Slide 31: END
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