Carclo Plc · LSE:CAR
Carclo — H1 FY2025 Earnings Presentation
34 slides from Carclo's earnings presentation, Dec 5, 2024
Slide 1: Change as Catalyst: Elevating Performance
Change as Catalyst: Elevating Performance Half-year results for the six months ended 30 September 2024 December 5, 2024 1
Slide 2: Delivering Turnaround Success
Delivering Turnaround Success Precision, Growth, and Value Creation. Carclo is delivering a transformative turnaround: strengthened margins, reduced debt, and a clear strategy to capitalise on growth opportunities in precision-driven sectors. AGENDA Leading Through Change Frank Doorenbosch Performan
Slide 3: Leading Through Change
Leading Through Change Frank Doorenbosch CEO 3
Slide 4: CTP and Speciality: Delivering Excellence Across Diverse Markets
Carclo plc CTP and Speciality: Delivering Excellence Across Diverse Markets CTP DIVISION Life Science and Precision Components • In Vitro Diagnostics • Drug Delivery • Precision Components SPECIALITY DIVISION ** Cable & Wires, Light & Motion, Machined Components • Aerospace • Light & Motion • Precis
Slide 5: Significant Improvement in Health & Safety Performance Across All Our Operations
H&S Performance Significant Improvement in Health & Safety Performance Across All Our Operations 43% REDUCTION IN TOTAL INCIDENT RATES DEMONSTRATES OPERATIONAL EXCELLENCE. • Significant improvements in Health & Safety reflect Carclo’s 2.55 commitment to operational excellence and risk management. 2.
Slide 6: Driving Growth in Core Operations While Exiting Short Run Non-Scalable Business
Growth in Manufacturing Solutions and Strategic Transition in Sales Driving Growth in Core Operations While Exiting Short Run Non-Scalable Business Strategic Shifts Reshaped Our Revenue Mix, Driving Growth in Manufacturing (+4.5%) and Speciality Division (+8.9%). 140.0 TTM** REVENUE BRIDGE IN £M 135
Slide 7: Advancing Financial Efficiency and Moving Towards Our Target Performance
Strong TTM Financial Performance on all Fronts Advancing Financial Efficiency and Moving Towards Our Target Performance EVOLUTION IN ACTION ROS 6.2% (5.0% FY24) ROS and ROCE Break New Ground 8% %%ROCE 30 Springboard Driven by operational efficiencies ROCE Target 4% and higher-value focus, fuelling s
Slide 8: Performance in Numbers
Performance in Numbers Eric Hutchinson CFO 8
Slide 9: Strong Margins and Debt Reduction Supporting Resilience
Financial KPI Overview Strong Margins and Debt Reduction Supporting Resilience RESILIENT FINANCIAL RESULTS Focus on margin ahead of revenue. Considerable uEBIT growth and improved working capital position, resulted in significant reduction in net debt versus September 2023. REVENUE CONTRIB. MARGIN u
Slide 10: KPIs continue to demonstrate delivery of the strategy (1)
Financial KPI Overview KPIs continue to demonstrate delivery of the strategy (1) TTM REVENUE (£M) TTM UNDERLYING OPERATING PROFITS (£M) 26 20 21 25 21 17 D&E 18 116 123 117 112 110 MS 7.9 98 104 7.0 6.6 6.1 6.0 5.9 4.6 HY22 FY22 HY23 FY23 HY24 FY24 HY25 HY22 FY22 HY23 FY23 HY24 FY24 HY25 TTM RETURN
Slide 11: KPIs continue to demonstrate delivery of the strategy (2)
Financial KPI Overview KPIs continue to demonstrate delivery of the strategy (2) TTM CASH CONVERSION* NET DEBT (£M) 9 7 7 6 4 5 7 6 PROPERTY 1 4 4 LEASE 5 6 315% 4 P&M LEASE 22 22 24 23 161% 18 18 17 NET DEBT EX LEASE 64% 84% 87% 43% 37% HY22 FY22 HY23 FY23 HY24 FY24 HY25 HY22 FY22 HY23 FY23 HY24 FY
Slide 12: Stable Financials with Focus on Margins Over Growth
Income Statement Stable Financials with Focus on Margins Over Growth KEY POINTS £'000 HY25 HY24 Change Revenue 60,957 66,921 (5,964) • Revenue as expected: as we exited low margin business, and the lower D&E revenue anticipated. Contribution 23,019 23,178 (159) Contribution margin 37.8% 34.6% 3.2%pt
Slide 13: Operational excellence transforms rising costs into sustainable margin gains
Half-Year Margin Performance Analysis Operational excellence transforms rising costs into sustainable margin gains HY24 TO HY25 CONTRIBUTION MARGIN BRIDGE 0.8% 1.2% 2.9% 37.8% -1.7% 34.6% Improved mix Factory as moved Speciality away from low Elevated Sustainability Strategy performing Energy Prices
Slide 14: Restructuring Charges Reflect Strategic Realignment
Exceptional Charges Restructuring Charges Reflect Strategic Realignment EXCEPTIONAL COSTS KEY POINTS £'000 HY25 HY24 FY24 • Strategic restructuring of the US manufacturing business continued as Derry and Tucson closures were finalised. US manufacturing capability centred around Latrobe operation. Ra
Slide 15: Pension Deficit Movement
Pension Deficit Pension Deficit Movement KEY POINTS £m Sep 24 Mar 24 Sep 23 • IAS19 valuation shows minimal change over recent periods. Deficit b/f (37.2) (34.5) (34.5) • The triennial valuation as of 31 March 2024 is Net interest cost (0.9) (1.8) (0.8) underway, with results expected in the first c
Slide 16: Strengthening the Balance Sheet for Long-Term Resilience
Balance Sheet Strengthening the Balance Sheet for Long-Term Resilience £m Sep 24 Mar 24 Sep 23 Sep 24 Mar 24 Sep 23 Tangible Fixed Assets 35.7 40.1 43.8 Return on capital employed* 17.5% 13.1% 8.6% Fixed asset utilisation* 3.5 3.3 3.2 T Inventories 11.7 11.3 12.5 Working capital to revenue* 7.3% 7.9
Slide 17: Strong Cash Flow Generation Supporting Debt Reduction
Cash Flow Strong Cash Flow Generation Supporting Debt Reduction £m HY25 HY24 FY24 KEY POINTS Underlying EBITDA 7.1 6.2 14.6 • Underlying operating profit growth. Change in working capital 2.0 7.0 4.6 • Working capital now at a sustainable level. Trading cash 9.1 13.2 19.2 • Capex spend kept minimal.
Slide 18: Continued Debt Reduction with Improved EBITDA Leverage
Net Debt Waterfall & Net Debt to EBITDA Continued Debt Reduction with Improved EBITDA Leverage NET DEBT REDUCTION (£M) REFINANCING EXPECTED TO BRING SUBSTANTIAL BENEFITS • Project substantially progressed. • Secure committed funding for the next three years to facilitate the change catalyst to eleva
Slide 19: Strategy in Motion
Strategy in Motion Frank Doorenbosch CEO 19
Slide 20: Advancing a Balanced Strategy for Operational Excellence and Future Innovation
Strategy Pyramid Advancing a Balanced Strategy for Operational Excellence and Future Innovation EXPANSION 3 INNOVATION INCUBATOR Accelerating Growth Through Driving Innovation Through Proprietary Capturing High-Value Opportunities 2 Technology, Products and Materials and Expanding Market Reach FINAN
Slide 21: Delivering a Strong Foundation with Financial Resilience and Operational Excellence
Financial Resilience & Operational Excellence Delivering a Strong Foundation with Financial Resilience and Operational Excellence... 1 FINANCIAL RESILIENCE 1 OPERATIONAL EXCELLENCE Net Debt Declines, Ratio Improve, Working Capital Efficiency Improved, Profit Efficiency Climbing, And Assets Work Hard
Slide 22: Accelerating Growth Through Strategic Expansion and Innovation
Expansion & Innovation Incubator ...While Accelerating Growth Through Strategic Expansion and Innovation 2 EXPANSION 3 INNOVATION INCUBATOR • CTP MS achieves 4.5% like-for-like TTM growth, aligning with market trends • Innovating new processing technologies to drive efficiency. • Speciality revenue
Slide 23: Speciality Division Emerges: Aerospace + Optics
Regional Business Performance Speciality Division Emerges: Aerospace + Optics FOCUSED LEADERSHIP DELIVERS GROWTH TTM REVENUE BY PRODUCT GROUP £13m Rev. Revenue HY25: £13.0m; FY24: £11.8m; +9.6% Cables & Wires Continue steady growth after surging when travel picked up after COVID Aerospace Expertise
Slide 24: Executing Strategic Growth Across Our Global CTP Division
Regional Business Performance Executing Strategic Growth Across Our Global CTP Division DESIGN & ENGINEERING (D&E) - GLOBAL MANUFACTURING SOLUTIONS - EMEA Revenue HY25: £16.7m; FY24: £20.7m; -19.5% Revenue HY25: £37.1m; FY24: £36.8m; +0.7% Strategic Project Transition to Manufacturing Stable sales l
Slide 25: Factory Specialisation in CTP Completed Across APAC & EMEA; US On Track
Strategic Priority: Maximising Global Footprint Factory Specialisation in CTP Completed Across APAC & EMEA; US On Track ADVANCING OUR JOURNEY OF GLOBAL FOCUS AND SPECIALISATION, … “Lights out MANUFACTURING SOLUTIONS OPERATIONAL OPTIMISATION Manufacturing” • APAC and EMEA Operational ◉ Factory specia
Slide 26: Building on Strengths to Create Long-Term Value Through Sustainable Growth
Strategic Focus Building on Strengths to Create Long-Term Value Through Sustainable Growth Carclo’s transformation is delivering results today and positioning us for sustainable, long-term growth through targeted investments and operational excellence. SHORT-TERM - RESILIENCE Reinforcing financial s
Slide 27: Change as Catalyst: Elevating Performance Through Strategy
Summary & Outlook Change as Catalyst: Elevating Performance Through Strategy DELIVERING FINANCIAL STRENGTH... THROUGH OPERATIONAL EXCELLENCE... WHILE BUILDING MARKET LEADERSHIP ◉ ROS rises to 6.2% ◉ Health & Safety strengthened throughout ◉ Optimising Strategic Portfolio and exited the all operation
Slide 28: Thank you
Thank you Carclo plc Delivering Precision. Creating Value. 47 Wates Way, CR4 4HR Mitcham, Surrey, United Kingdom Tel: +44 20 8685 0500 Email: investor.relations@carclo-plc.com 28
Slide 29: Appendix
Appendix Carclo plc Delivering Precision. Creating Value. 29
Slide 30: A Partner for End-to-End Solutions, When Precision Matters
Multi-Component Assembled Precision Solutions A Partner for End-to-End Solutions, When Precision Matters DESIGN & GLOBAL ASSEMBLY & SUPPLY CHAIN Global ENGINEERING MANUFACTURING DECORATION SOLUTIONS Key 1 2 3 4 Partners 5 CTP DIVISION PROJECT INJECTION MOULDING, WELDING, DECORATION, MANAGEMENT ASSEM
Slide 31: Restructured, Reliable, and Ready to Deliver
Building a Resilient and Sustainable Business Restructured, Reliable, and Ready to Deliver KEY MESSAGES BUILDING FINANCIAL STRENGTH – CONSISTENT PROGRESS %30 ROCE • Successful execution of restructuring plan, delivering Springboard Target profitability on planned revenue reductions. 20 HY25* FY24 •
Slide 32: Aligned to Life Sciences and Speciality Opportunities
Capturing Growth in High-Demand Markets Aligned to Life Sciences and Speciality Opportunities Global In Vitro Diagnostics (IVD) Global Drug And Gene Delivery LIFE SCIENCES: "Innovating Diagnostics and Drug Market Size & Outlook Devices Market Size & Outlook $B 150 $B 1,500 Delivery Solutions" Outloo
Slide 33: Carclo: Positioned for Resilient Growth and Long-Term Value
A Balanced Investment Case Carclo: Positioned for Resilient Growth and Long-Term Value. WHY CARCLO? MOMENTUM PROVEN EXECUTION RESTRUCTURING MOMENTUM • HY25 results demonstrate turnaround success, with restructuring • Restructuring nearly complete, with margin expansion starting FY25 and creating a s
Slide 34: Thank you
Thank you Carclo plc Delivering Precision. Creating Value. 47 Wates Way, CR4 4HR Mitcham, Surrey, United Kingdom Tel: +44 20 8685 0500 Email: investor.relations@carclo-plc.com 34