Slide 1: Results for the period ended 31 August 2024
Results for the period ended 31 August 2024 27 November 2024 1
Slide 2: Agenda
Agenda Introduction & Highlights Tim Carroll Sally McKone Slide 3 Chief Executive Officer Chief Financial Officer Operational Review Slide 6 Financial Review Slide 20 Strategic Update Slide 28 Summary & Outlook Slide 40 Additional Information Slide 42 Section Quick links Results for the period ended
Slide 3: Introduction and Highlights
Introduction and Highlights Results for the period ended 31 August 2024 3
Slide 4: A global music and audio products group
A global music and audio products group Content Creation Audio Reproduction 70% of revenue 30% of revenue FY24 77% FY24 23% Focusrite: audio recording ADAM Audio: studio Martin Audio: live and installed sound, equipment monitors, acquired July 2019 acquired December 2019 Focusrite Pro: audio
Slide 5: Review of the year ended August 2024
Review of the year ended 31 August 2024 Group Summary Content Creation Audio Reproduction Strategic update Content Creation sales Audio Reproduction Strategy delivery ongoing Diverse solutions delivering decrease of 19.1% vs FY23 growth of 14.9% vs FY23 resilience in tough markets (-17.4% OCC1
Slide 6: Operational Review
Operational Review Results for the period ended 31 August 2024 6
Slide 7: Content Creation
CONTENT CREATION Results for the period ended 31 August 2024 7
Slide 8: Content Creation Growth by brand
Content Creation Growth by brand FY24 FY23 Reported OCC1 £m £m growth growth Focusrite: Focusrite (inc. Pro) 60.3 86.3 -30.2% -28.2% Overall decline driven by market softness, and destocking Novation (inc. Ampify) 16.2 16.6 -1.9% 0.6% in H2, as flagged at the half year, and FY23 comparators includin
Slide 9: Content Creation Regional revenue performance
Content Creation Regional revenue performance FY24 FY23 Reported OCC1 North America £m £m growth growth Maintained our market share in a declining market, North America 49.3 65.0 -24.1% -21.7% with planned destocking in H2 at our US distributor EMEA 47.7 52.9 -9.9% -9.3% and key closure of US retail
Slide 10: Content Creation Direct to customer channel
Content Creation Direct to customer channel eCommerce revenue: 7% of Content Creation sales focusrite.com & novationmusic.com Further growth through refreshed D2C channel 46% 33% growth Focusrite and Novation operating well with plans to growth 7% share extend functionality Sonnox live on 22
Slide 11: Content Creation Continuing market softness
Content Creation Continuing market softness US market data is the only widely available source for our industry (US Music Trades census) ‒ US Sales down 6.8% in FY24 for Recording products (-5.4% FY23) ‒ US sales down 5.4% in FY24 for Electronic Musical Instruments (-5.9% FY23) Overall market de
Slide 12: Content Creation Underlying demand remains strong
Content Creation Underlying demand remains strong End user registrations holding steady on prior year Despite ongoing weakness in the market, end user demand for our key Scarlett product Scarlett product registrations by month has remained strong End user registrations for FY23 FY24 FY24 are bro
Slide 13: An introduction to audio interfaces
Content Creation An introduction to audio interfaces Why Scarlett wins Four decades of pro studio heritage Originated from studio consoles designed What audio interfaces do by Rupert Neve for George Martin Think of an audio interface as a digital video Superior audio quality camera, but for sound
Slide 14: The evolution of Scarlett
Content Creation The evolution of Scarlett Scarlett product registrations Gen 3: User-focused innovation by generation Gen 1: Breaking new ground Easy Start tool, 3-year warranty Gen 4: High I/O and 24/7 support The first affordable, high- (Input/Output) Gen 3 Solo Gen 3 Other Gen 4 Comprehens
Slide 15: Maintaining a market leading position
Content Creation Maintaining a market leading position We have outperformed our category across multiple distributors Our products are consistently shown in the top 5 most Thomann Sweetwater Amazon popular products in our (large EU online retailer) (large US online retailer) 46k ratings category a
Slide 16: Audio Reproduction
AUDIO REPRODUCTION Results for the period ended 31 August 2024 16
Slide 17: Audio Reproduction
Audio Reproduction Martin Audio, Linea Research, Optimal Audio, TiMax, Live events 20 new product Immersive audio OutBoard and panLab Live events and experiences introductions New acquisitions have FY24 £m strong at premium end but Across the brands, 20 new expanded our offering in this with market
Slide 18: Audio Reproduction Regional revenue performance
Audio Reproduction Regional revenue performance FY24 FY23 FY24 FY23 Reported OCC1 Audio Reproduction £m £m growth % growth % Strong growth globally outside of US North America 11.4 12.7 -10.1% -6.8% Asia particularly strong reflecting ongoing bounce back EMEA 19.2 16.6 15.9% 10.8% from ending of C
Slide 19: 2 new acquisitions delivering immersive audio excellence
Audio Reproduction 2 new acquisitions delivering immersive audio excellence TiMax: Pioneers of immersive panLab: For every user and scale Synergies for Group audio of production While TiMax and panLab will Pioneering immersive audio for over In 2024, Focusrite Group also remain loudspeaker agn
Slide 20: Leveraging product portfolio to grow in a normalising market
Audio Reproduction Leveraging product portfolio to grow in a normalising market Challenging market conditions Integrated product portfolio The post-COVID boom has subsided, and the Audio Our product portfolio is more comprehensive Reproduction market is now normalising than ever, allowing us to
Slide 21: Financial Review
Financial Review Results for the period ended 31 August 2024 21
Slide 22: Financial summary
Financial summary Revenue impacted by a challenging global market down 11.2% reported (-10.0% organic constant currency) Gross margin at 44.5% is 3.0% points lower than FY23 impacted by a one of stock clearance and elevated freight rates Adjusted EBITDA1 down to £25.2m from £38.6m in FY23 refl
Slide 23: Income statement
Income statement FY24 FY23 £m £m Revenue -11.2% Revenue 158.5 178.5 (organic constant currency -10.0%) Cost of sales (88.0) (93.7) Gross margin 44.5% (FY23: 47.5%) ‒ 1.3% point impact from Vocaster stock Gross profit 70.5 84.8 reduction Administrative expenses before adjusting items (45.3) (46.2
Slide 24: Gross margin impacted by stock clearance and freight
Gross margin impacted by stock clearance and freight Overall decrease of 3.0% points vs FY23 to FY24 margin bridge prior year 1.5% Provision, and then subsequent sell out, of Vocaster stock has had a full 47.5% 45.8% year negative 1.3% point impact 44.5% 1.7% 1.5% 1.3% Freight costs have incre
Slide 25: Balance sheet
Balance sheet FY24 FY23 £m £m Intangible fixed assets ‒ Acquisitions: £2.2m increase from Sheriff and Intangible assets 82.9 83.4 Innovate Audio ‒ Investment: £8.8m of R&D and £3.0m of Tangible assets 11.1 12.5 licences Total non current assets 94.0 95.9 ‒ Impairment of Sequential £5.4m Inventorie
Slide 26: Cash flow
Cash flow FY24 FY23 £m £m Adjusted Free cash flow as a % of EBITDA EBITDA 25.2 38.6 -17.9% Adjusting and non-cash items (0.5) (2.0) ‒ Long term average approx. 45% - 50% Movement in working capital (8.9) (7.6) ‒ Impact of Scarlett stock and debtors phasing Operating cash flow 15.8 29.0 at period e
Slide 27: Cash flow movements
Cash flow movements Outflow in the year H1 outflow of Stock reduction due US distributor Creditors increase at of £11.2m due to £26m significantly to lower Scarlett Gen debtor hold back year end to support working capital reversed in H2 – 3 stock. Audio significantly reduced holiday sales
Slide 28: Strategic Update
Strategic Update Results for the period ended 31 August 2024 28
Slide 29: Our growth strategy has remained consistent
Our growth strategy has remained consistent Create a Great Place to Work Focus on providing development at all levels across the organisation with improved channels for feedback Employee engagement score increased from +21 to +33 eNPS Grow the Core Customer Base Investing in R&D to continue to deliv
Slide 30: Our second and expanded Environment and Climate Report
Our second and expanded Environment and Climate Report Our most comprehensive environmental disclosure to date. Key achievements this year include: The Group has committed to set Science- based targets for decarbonisation Our first Net Zero transition plan Completed our first Carbon Disclosure
Slide 31: China based manufacturing: tariff risks
China based manufacturing: tariff risks Level of China manufacturing Mitigating actions already taken Managed inventory build up in the US across all brands to offset immediate impact Production already in Malaysia for high volume Content Creation products Manufacturing established and increas
Slide 32: Future growth expectations
Future growth expectations Market growth – low single digit over the medium term, flat in next Overall growth period assumptions Content Focusrite brands maintain market share with other brands gaining Mid to high single Creation share across regions digit organic growth Growth through new p
Slide 33: Summary & Outlook
Summary & Outlook Review Results for the period ended 31 August 2024 33
Slide 34: Current trading and outlook
Current trading and outlook Current Trading Content Creation: market is stabilising, but greater uncertainty with recent US election results and potential tariff impacts Audio Reproduction: market normalising, but the expanded product range should enable us to continue to take market share Outlook R
Slide 35: Summary
Summary Maintaining market leadership in a tough market Scarlett Gen 4 full range introduced Routes to market driving growth ADAM Audio and Novation brands growing with revitalised regional marketing and aligned routes to market Expanded Audio Reproduction 2 acquisitions successfully integrated and
Slide 36: Thank you Q&A
Thank you Q&A 27 November 2024 focusriteplc.com
Slide 37: Additional Information
Additional Information Results for the period ended 31 August 2023 37
Slide 38: Year end change
Year end change Feb 25 Aug 25 Feb 26 Accounting reference date moving from August to February 6 months Better align to industry cycles, Publication of unaudited interim results for the six months especially around the key ended 28 February 2025 - by 31 May 2025 holiday season sales Next audited
Slide 39: Our market
Our market Results for the period ended 31 August 2024 39
Slide 40: Environment and climate change
Environment and climate change FY24 FY23 2nd year of compliance with UK Climate Related tCO₂e tCO₂e Disclosures (TCFD) Scope 1 & 2 ‒ We are compliant and have assessed climate change as low Net 0 0 risk in the short term (up to 2030). Gross 287 434 We now calculate our GHG Emissions footprin
Slide 41: Foreign exchange
Foreign exchange FY24 FY23 Natural hedge for USD Exchange Rates £m £m US and ROW revenue. Average Total c50% of revenue but US$:£ 1.26 1.21 almost all cost of sales so minor net profit inflow €:£ 1.18 1.15 Year end rate Euro hedged US$:£ 1.31 1.27 c75% of major Euro flows hedged for year €:£ 1
Slide 42: Disclaimer
Disclaimer The contents of this document (the “Presentation”) and any securities of Focusrite plc (the “Company”) In particular, certain statements in this Presentation may constitute forward-looking statements and referred to in this Presentation have not been approved by an authorised person withi
Slide 43: Enriching lives through music
Enriching lives through music 27 November 2024 focusriteplc.com