Gooch & Housego Plc · LSE:GHH
Gooch & Housego — H1 2023 Earnings Presentation
22 slides from Gooch & Housego's earnings presentation, Jun 6, 2023
Slide 1: Interim Results and Strategy Update
INTERIM RESULTS Half year ended 31 March 2023 and STRATEGY UPDATE 6th June 2023
Slide 2: Agenda
AGENDA • Highlights • Financial Results • Segmental Update • Environmental, Social & Governance Charlie Peppiatt – CEO Chris Jewell - CFO • Strategy Update • Summary & Outlook INTERIM RESULTS PRESENTATION – H1 2023 PAGE 2
Slide 3: Highlights
HIGHLIGHTS • H1 revenue up 31.7% to £71.3m (H1 2022: £54.1m) reflecting strong growth in all market segments • Increase in productive capacity and steady reduction in overdue backlog • Adjusted operating profit up 32.9% to £5.2m (H1 2022: £3.9m) • Cost inflation persists but is being passed on with
Slide 4: Summary Income Statement
SUMMARY INCOME STATEMENT HY Ended 31 March 2023 2022 Change £m £m • Strong growth in revenue in all market segments • Recruitment in production areas now substantially Revenue 71.3 54.1 31.7% complete Gross profit 20.6 17.3 18.9% • Supply chain issues mitigated by higher levels of safety stocks Adju
Slide 5: Cashflow
CASHFLOW HY Ended 31 March 2023 2022 £m £m • £3.5m increase in working capital since September Net cash flow from operating 6.0 4.0 2022. Inventory added to support growing demand activities • Capital investment - further precision optics Cash flow from investing activities equipment and investment
Slide 6: Industrial
INDUSTRIAL Financials (53% of Group revenue) HY23 HY22 Growth Revenue £37.9m £27.7m 36.7% Adjusted Operating £5.3m £4.1m 29.0% Profit % Margin 14.1% 14.9% (80)bp • Industrial revenue grew by 22.1% on a constant currency basis compared with H1 2022 • Ramp-up continues into semiconductor market led by
Slide 7: Aerospace & Defence
AEROSPACE & DEFENCE Financials (25% of Group revenue) HY23 HY22 Growth Revenue £17.5m £13.1m 33.6% Adjusted Operating £(1.9)m £(2.2)m n/a Profit % Margin (10.8)% (17.1)% 630bp • Revenue growth primarily from production ramp-up for advanced guidance system programmes at our Boston facility • Ukraine
Slide 8: Life Sciences
LIFE SCIENCES Financials (22% of Group revenue) HY23 HY22 Growth Revenue £15.8m £13.3m 19.3% Adjusted Operating £2.3m £2.1m 8.0% Profit % Margin 14.3% 15.8% (150)bp • Revenues grew by 13.6% compared with H1 2022, on a constant currency basis • Medical lasers continued to benefit from the return of e
Slide 9: A Responsible Business
A RESPONSIBLE BUSINESS We are focused on creating a long-term sustainable business Environment ▪ All of our UK manufacturing sites generate energy from solar sources ▪ Additional solar panels and batteries to store electricity installed at our Ashford facility ▪ Carbon emissions intensity measure re
Slide 10: Strategy Update: Delivering sustainable margin growth
STRATEGY UPDATE Delivering sustainable margin growth 6th June 2023
Slide 11: Agenda
AGENDA • Photonics Market • New Strategy • Strategic Priorities • End-market Focus • Path to Mid-teen Returns “A new approach delivered with agility and wisdom to avoid repeating the problems of the recent past” INTERIM RESULTS PRESENTATION – H1 2023 PAGE 11
Slide 12: Photonics Market - Growing Rapidly
PHOTONICS MARKET - GROWING RAPIDLY Photonics Tailwinds from Photonics at the Photonics Closer integration components mega-trends heart of next components of lasers, optics enable $1.4 trillion increasing generation landscape and sensors end-market* and attractiveness of innovation and increasingly c
Slide 13: G&H New Strategy
G&H NEW STRATEGY New strategy focused on becoming an ‘innovative customer focused technology company’ making a ‘better world with photonics’ and the ‘first choice’ for all our stakeholders OFFERING DIFFERENTIATED PERFORMANCE THROUGH 4 KEY STRATEGIC PRIORITIES: 1 2 3 4 Establish dynamic Deliver excep
Slide 14: Strategic Priorities
STRATEGIC PRIORITIES Retained - But better execution and greater focus • Diversification - within limits and with greater discipline on delivering synergies & simplification • Move up the value chain – coatings, packages, sub systems and systems • Focus on customers – behaviour and systems change re
Slide 15: End-market Focus
END-MARKET FOCUS INDUSTRIAL A&D LIFE SCIENCES • Advanced microelectronics • Imaging in harsh environments • In-vivo imaging & sensing • Photolithography systems • Counter-measures and sensing • In-vitro microscopy & analytics • Space photonics • Hi-reliability communications • Aesthetic lasers & las
Slide 16: Path to Mid-Teen Returns
PATH TO MID-TEEN RETURNS Return on sales accretion potential of 700-800 bps over medium term, net of required investments excluding portfolio changes Portfolio c.200 bps New Products c.150 bps Productivity c.200 bps Outsourcing c.150 bps Volume c.100 bps People Self-Help Technology Investment INTERI
Slide 17: Summary and Outlook
SUMMARY AND OUTLOOK • Significant increase in productive capacity and reduction in overdue backlog • Order book remains strong despite trend towards more normalised levels • Contract manufacturing partner on track to commence supply of additional product lines • Pricing adjustments to offset cost in
Slide 18: Appendices
APPENDICES
Slide 19: Financial Guidance – Year Ending Sept 2023
FINANCIAL GUIDANCE – YEAR ENDING SEPT 2023 • Capital expenditure o Circa £8-9m • Research & Development o Circa £9m (6% - 7% of revenue) • Working capital o Inventory levels likely to remain higher as supply chain constraints continue • Tax o Adjusted effective tax rate of 17-19% • Foreign exchange
Slide 20: Investor Timetable
INVESTOR TIMETABLE • 28 July 2023 – Interim Dividend Payment Date • 3 October 2023 – Full Year Trading Update • 5 December 2023 – Preliminary Announcement INTERIM RESULTS PRESENTATION – H1 2023 PAGE 20
Slide 21: Cautionary Statement
CAUTIONARY STATEMENT ▪ For the purposes of the following disclaimers, references to this ‘document’ shall be deemed to include references to the presenters’ speeches, the questions and answers session and any other related verbal or written communications. ▪ This document contains forward-looking st
Slide 22: INTERIM RESULTS PRESENTATION – H1 2023 PAGE 22
INTERIM RESULTS PRESENTATION – H1 2023 PAGE 22