Tt Electronics Plc · LSE:TTG
Tt Electronics — Investor Day (November 2018)
56 slides from Tt Electronics's investor day presentation, Nov 15, 2018
Slide 1: Charged for growth
Charged for growth 15 November 2018 Confidential © TT Electronics 1
Slide 2: Agenda
AGENDA 15:00 What is TT now Richard Tyson, CEO Tim Roberts, Sensors and Leveraging R&D to differentiate and grow Specialist Components Expanding our capabilities in power solutions Tom Garvey, Power Q&A Coffee break Richard Tyson Mark Hoad Tim Roberts 16:05 Our new offering: connectivity Charlie Pep
Slide 3: What is TT now?
What is TT now? Richard Tyson Confidential © TT Electronics 3
Slide 4: TT's capabilities now
TT’s capabilities now TT is a global provider of engineered electronics for performance critical applications Sensing Power Connectivity Confidential © TT Electronics 4
Slide 5: Market growth driving demand for our solutions
Market growth driving demand for our solutions Structural growth drivers leading to increasing sales for our sensing, power management and connectivity capabilities % revenues as Example end application Key macro trend at HY18 • Automation and control • Robotics and industrial automation 46% • Energ
Slide 6: Our strategy is delivering
Our strategy is delivering Reshaped portfolio 1 Positioned in structural growth markets 7.5% margin, up from 4.2% 3 years ago ...and we have 2 Create differentiated capabilities We are growing at 5% set TT up to deliver more… 3 Work with our customers to solve their toughest Clear focus on capabilit
Slide 7: Advancing our strategy through our four strategic priorities
Advancing our strategy through our four strategic priorities 1 Positioned in structural growth markets Strategic business Value-added product 2 Create differentiated development solutions and R&D capabilities 3 Work with our customers to solve their toughest electronic challenges Value-enhancing Ope
Slide 8: Leveraging R&D to differentiate and grow; power; connectivity; business development
Leveraging R&D to differentiate and grow Tim Roberts Expanding our capabilities in power solutions Tom Garvey Our new offering: connectivity Charlie Peppiatt Business development and strategic partnerships Michael Leahan Confidential © TT Electronics 8
Slide 9: Leveraging R&D to differentiate and grow
Leveraging R&D to differentiate and grow Tim Roberts Confidential © TT Electronics 9
Slide 10: Meeting our customers needs
Meeting our customers needs • Our customers’ core needs • Speed to market for new products • Engineering expertise and product understanding • Superior power management and sensing technology • Why our customers choose us • Trusted long-term partner • Platform products with customised solutions • Ra
Slide 11: Platforms combined with customised solutions
Platforms combined with customised solutions • Developing new platforms can take 3 years to develop • Supports customer products for 7-10 years+, underpinning growth • Credibility as innovators and investor in R&D • Custom solutions; capturing more value • Dedicated engineers focused on custom devel
Slide 12: Application of a new material to take capabilities to aerospace
Application of a new material to take capabilities to aerospace • Market growth from the more electric aircraft Market: Aerospace and defence • New process developed; resistors printed onto steel instead of ceramic • Reduced weight; improving aircraft fuel efficiency • Greater reliability; withstand
Slide 13: Scalable platform approach for revenue growth across multiple markets
Scalable platform approach for revenue growth across multiple markets • Launched a major new platform for signal conditioning in 2015 Market: Industrial following 2 years of development • New technology delivering • Extreme precision • Leading moisture resilience • Technology for aerospace and defen
Slide 14: Aligning R&D to structural growth markets
Aligning R&D to structural growth markets • c.6% CAGR in automation and control to 2023 Market: Industrial • Over 20 years experience in industrial automation; over 10 million units shipped • High resolution sensor optimises robot performance • Next platform development underway; 2019 launch schedul
Slide 15: Technical capabilities driving growth
Technical capabilities driving growth • Launched major new infrared light sensor platform in 2017 Market: Industrial • New capability developed; calibrated sensor to detect colours and transparency as well as position • Miniaturised technology; ultra-small space saving solution • Worked with Datacar
Slide 16: New joint venture announced with Uniroyal
New joint venture announced with Uniroyal • Uniroyal is the world’s second largest manufacturer of resistors • Longstanding relationship; more than 10 years • Uniroyal brings manufacturing scale and broader Asia sales presence • TT brings technical expertise and worldwide distribution channels • Hig
Slide 17: Leveraging R&D to differentiate and grow
Leveraging R&D to differentiate and grow • Focused on markets with structural growth drivers • Differentiated technology and deep engineering talent • Investing in new platforms and providing custom solutions faster • Well positioned to win more business with more customers Confidential © TT Electro
Slide 18: Expanding our capabilities in power solutions
Expanding our capabilities in power solutions Tom Garvey Confidential © TT Electronics 18
Slide 19: Electrification of aircraft means growing demand
Electrification of aircraft means growing demand Step change in electronic generating • Hydraulics and pneumatics capacity in successive platforms replaced with electrical Usage of electrical power for aircraft systems 1600 systems 1400 B787 • Electrification increasing Electrical generating capacit
Slide 20: Our pedigree and how we can build on our position
Our pedigree and how we can build on our position • Market leading customers in airframe, engine and avionic systems • Core capabilities at the heart of system requirements • Electromagnetics, hybrid microcircuits and power modules • c.1,000 people, 3 continents, c.125 engineers • Focused on leverag
Slide 21: © TT Electronics
© TT Electronics
Slide 22: Power and control
POWER AND CONTROL MICROCIRCUIT a Aid SWITCHED MODE POWER SUPPLY MAGNETICS ease '- | DIGITAL ENGINE CONTROL UNIT
Slide 23: Meeting Rolls-Royce's technical challenges
Meeting Rolls-Royce’s technical challenges • Strategic partner to Rolls-Royce for the brain of the aircraft engine • Provide electromagnetic and power and hybrid microcircuit solution • Chosen to work with Rolls-Royce because we could: – Improve yield – Reduce cost, weight and size – Manage product
Slide 24: © TT Electronics
“6 ‘Electronics iS TRANSFORMER RECTIFIER UNIT (_.) | RUGGEDISED PLASTIC ELECTRIC LOW PRESSURE FUEL PUMPING SYSTEM 7 _—
Slide 25: Developing a strategic partnership with Eaton
Developing a strategic partnership with Eaton • Solved technical challenge for Eaton on A380 fuel pump • Expanded relationship with Eaton • Our engineers act as the go-to partner for technical challenges • Won positions on MC21 and other business jet platforms • Exposure across multiple customers an
Slide 26: Moving up the value chain
Moving up the value chain Component heritage TT Designed Prototypes Power and Control Microcircuit Transformer Rectifier Unit ATRU (Auto Transformer Rectifier Unit) Flyback Value Added Products Transformer Ruggedised Power Module Manufacturing and system design Wound Components support Power Distrib
Slide 27: Acquisitions provide new geographic reach in North America
Acquisitions provide new geographic reach in North America • Cletronics (2017) and Precision (2018) provide new opportunity for growth in North America • Large North American market provides new opportunities, particularly in defence • Precision’s electromagnetic products add a differentiated capabi
Slide 28: Further opportunity in North America, and to move up the value-chain
Further opportunity in North America, and to move up the value-chain • Building a significant aerospace and defence capability • Strong customer relationships in the UK • Growth potential in North America • Customers starting to pull us up the value-chain Confidential © TT Electronics 28
Slide 29: Q&A
Q&A Confidential © TT Electronics 29
Slide 30: Coffee Break
Coffee Break Confidential © TT Electronics 30
Slide 31: Our new capability: connectivity
Our new capability: connectivity Charlie Peppiatt Confidential © TT Electronics 31
Slide 32: Integration of Stadium ahead of plan
Integration of Stadium ahead of plan • TT enhances Stadium’s opportunities: • Increased R&D investment • Greater scale • Optimised supply chain • Global operating footprint • Prospects for cross-selling Confidential © TT Electronics 32
Slide 33: What is connectivity? What connectivity brings to TT
What is connectivity? Technology to wirelessly network devices allowing you to exchange information that is enabling the digital transformation of enterprises. What connectivity brings to TT • Huge, growing industrial connectivity market • Connectivity offering is a new capability for TT • Potential
Slide 34: Positive market fundamentals in Industrial IoT
Positive market fundamentals in Industrial IoT Cellular IoT device shipment forecast (World 2016–2023) • Large, established market; adoption underway and (thousands) 1,200,000 1,000,000 accelerating 800,000 600,000 • Exponential growth; appetite to 400,000 monitor and manage data to 200,000 0 improv
Slide 35: Connectivity roadmap
Connectivity roadmap Hardware requirements from consumer electronics now become mainstream in Industrial IoT Roadmap focused on: • Increasing miniaturisation • Feature-rich devices • Higher operating speeds and associated memory capacity • Better power management and battery efficiency • Reliable wi
Slide 36: Our technology and where we operate in connectivity
Our technology and where we operate in connectivity Clear end-market focus across industrial, medical and transportation Sensors Connect Gateway Industrial Medical Transportation Confidential © TT Electronics 36
Slide 37: Industrial connectivity in action
Industrial connectivity in action What Managed cloud service • Developing a connectivity solution for preventative maintenance in a paper mill • Ability to monitor filtration cylinders for blockages Gateway hub Gateway hub (S-Track) (S-Track) How • Custom connectivity device can be linked to pressur
Slide 38: Connectivity capabilities
Connectivity capabilities Shenzhen, China, R&D centre • Two R&D centres in wireless design hubs • Speed to market • Developing core platform products; c.75% standardised, 25% customisable design • Reduces time to market by c.6-12 months • Two connectivity platforms launched in 2018 Kista, Sweden, R&
Slide 39: Platform strategy in action
Platform strategy in action • Trend: Increased need for efficient maintenance of rail infrastructure • Application: Fitted on underside of train carriages to sense, detect and transmit movement of the train across the track to signal track damage • Benefit: Enables customer to identify precisely whe
Slide 40: Platform strategy in action
Platform strategy in action • Trend: Government agencies, logistics providers and insurance companies managing and monitoring assets remotely • Application: Device placed on assets to track location and quality of goods • Benefit: Improved efficiency and cost-saving by monitoring and managing vital
Slide 41: Well positioned for sizeable opportunity
Well positioned for sizeable opportunity • Large fast moving industrial connectivity market • Talent and technical capabilities to address demand • Differentiated go-to-market strategy; ability to execute at speed • Global operating footprint Confidential © TT Electronics 41
Slide 42: Business development and strategic partnerships
Business development and strategic partnerships Michael Leahan Confidential © TT Electronics 42
Slide 43: What makes us different
What makes us different Instead of being transactional and tactical, TT offers: • Business partnering approach • Testing and value-engineering services • World-class operational excellence Confidential © TT Electronics 43
Slide 44: Exciting progress
Exciting progress 6% 13 Organic revenue growth (HY18) New customers won so far this year (up from 7 in 2017) 20% 7% YoY growth with globally managed Operating profit margin strategic customers (HY18, up from 3.3% HY17) Confidential © TT Electronics 44
Slide 45: What makes us different?
What makes us different? “ TT really gets our business. They’ve helped us achieve our own strategic growth goals by streamlining our supply chain and taking the burden off some of our engineers so that they can focus on R&D. In fact, our engineering teams often work collaboratively on new designs or
Slide 46: Target customers
Target customers • Focused on parts of underserved low volume high mix markets • Aerospace and defence • Medical • High-end industrial • The “right fit” customers matter • Engineers supporting complex end-product and systems manufacturing Confidential © TT Electronics 46
Slide 47: What makes us different?
What makes us different? “ TT Electronics has truly become an extension of our engineering organisation. Their extensive technical capabilities coupled with a collaborative approach to supporting the product development cycle has set them apart ” from the competition. Mark Walker, Director EMEA Oper
Slide 48: Our focus on business development
Our focus on business development Starting to deploy sophisticated approach to business development across TT: • Company-wide training program • Business development council • Key account management program Confidential © TT Electronics 48
Slide 49: What makes us different?
What makes us different? “ At TT, world-class customer service isn’t just a tag line, its embedded in their culture and visible throughout the organisation. From the line operators to senior leadership, the organisation is truly committed to delivering the best service ” possible. Jacintha Walsh, Eu
Slide 50: Growing existing customer relationships
Growing existing customer relationships Trend: market for smart labels projected to grow at c.17% CAGR to $10bn by 2021 • The “right fit” customer: global industrial labeling and packaging device company • Growing business with global footprint • New product pipeline requiring support from a manufac
Slide 51: Cross selling with TT's blue-chip customers
Cross selling with TT’s blue-chip customers Trend: supply chain consolidation in aerospace and defence • The “right fit” customer: leading aerospace and defence manufacturer • Existing strategic relationship with our Power business • Customer had problems with operational performance in pre-existing
Slide 52: Supporting TT's product capabilities
Supporting TT’s product capabilities • TT’s product divisions are moving up the value- chain, requiring greater manufacturing capability • Connectivity is vertically integrated • More opportunity for Global Manufacturing Solutions to operate as TT’s global manufacturing foundation Confidential © TT
Slide 53: Global Manufacturing Solutions delivering value
Global Manufacturing Solutions delivering value • Proven business development approach winning new business and growing our existing relationships • Value-added services for customers with highly complex products • World-class operations • Delivering results…more to come Confidential © TT Electronic
Slide 54: TT's position for the future
TT’s position for the future Richard Tyson Confidential © TT Electronics 54
Slide 55: Well positioned for growth and margin progression
Well positioned for growth and margin progression • Higher-quality, higher-margin business • Well placed in growing markets • Investing to enhance capabilities Industrial Medical Aerospace and Defence Transportation Confidential © TT Electronics 55
Slide 56: Q&A
Q&A Confidential © TT Electronics 56