Gooch & Housego Plc · LSE:GHH
Gooch & Housego — H1 2024 Earnings Presentation
22 slides from Gooch & Housego's earnings presentation, Jun 4, 2024
Slide 1: Interim Results, Half year ended 31 March 2024
INTERIM RESULTS Half year ended 31st March 2024 INTERIM RESULTS 4th June 2024 Half year ended 31 March 2024 4th June 2024
Slide 2: Agenda
AGENDA • Highlights • Financial Results • Segmental Update • Environmental, Social & Governance • Strategy Update • Outlook & Summary Charlie Peppiatt - CEO Chris Jewell - CFO INTERIM RESULTS PRESENTATION – H1 2024 PAGE 2
Slide 3: Highlights
HIGHLIGHTS • Solid foundations established to support the delivery of the Group’s strategic plan • Revenue from continuing operations declined 1.4% to £63.6m (H1 2023: £64.5m) • Divestment of EM4 business represents an important milestone in reshaping the Group’s portfolio • Adjusted operating profi
Slide 4: Summary Income Statement
SUMMARY INCOME STATEMENT HY Ended 31 March 2024 2023 £m £m • Industrial and medical laser market impacted by Continuing operations prolonged customer destocking, as previously reported Revenue 63.6 64.5 • EM4 sold – important step in reshaping our A&D business Gross profit 18.5 18.4 • Revenue fell 1
Slide 5: Cashflow
CASHFLOW HY Ended 31 March 2024 2023 £m £m • Working capital increased £4.4m driven by Net cash flow from operating 2.5 6.0 outflows from payables at September 2023 activities Cash flow from investing activities • Inventory levels now trending down Purchase of property, plant and • Capital investmen
Slide 6: Industrial
INDUSTRIAL Financials (50% of Group revenue) HY24 HY23 Change Revenue £31.7m £36.4m (13.1)% Adjusted Operating £3.5m £5.5m (36.8)% Profit % Margin 10.9% 15.0% (410)bps • Industrial revenue declined by 13.4% on an organic, constant currency basis compared with H1 2023 • Destocking by customers in Ind
Slide 7: Aerospace & Defence
AEROSPACE & DEFENCE Financials (26% of Group revenue) HY24 HY23 Growth Revenue £16.6m £12.2m 35.8% Adjusted Operating £(1.6)m £(1.9)m n/a Profit % Margin (9.4)% (15.5)% 610bps • Revenue grew 19.6% on an organic, constant currency basis • Growth from super polished optical components used in ring las
Slide 8: Life Sciences
LIFE SCIENCES Financials (24% of Group revenue) HY24 HY23 Growth Revenue £15.3m £15.9m (3.4)% Adjusted Operating £2.2m £2.3m (2.9)% Profit % Margin 14.7% 14.6% 10bps • Revenues declined by 5.9% compared with H1 2023 on an organic, constant currency basis • Medical laser customers destocking through
Slide 9: A Responsible Business
A RESPONSIBLE BUSINESS Environment • Migration of more sites to renewable electricity supplies • Further investment to reduce our environmental impact • Carbon emissions reduced by 15.0% • Two more sites recommended for ISO 14001 – Environmental Management – accreditation, in addition to three alrea
Slide 10: G&H Strategy – Sustainable Growth
G&H STRATEGY – SUSTAINABLE GROWTH 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 dyna
Slide 11: Strategy Progress
STRATEGY PROGRESS Path to mid-teens returns (700-800 bps accretion) over the medium term People Self-Help Technology Investment ● Sustainability agenda ● Operational output ● Technology Roadmap ● GS Optics ● Recruitment recovery ● Delivery performance ● Vital few ‘Lucky 7’ ● Artemis Optical ● Talent
Slide 12: Outsourcing
OUTSOURCING Proactive outsourcing of products earlier in their life cycle where technological sovereignty is not a differentiator • Dedicated leadership and resources in place • Supply of acousto-optic products expanding • Hi-Rel couplers qualified, now in production • Additional six product lines t
Slide 13: Value Creation from Technology Focus
VALUE CREATION FROM TECHNOLOGY FOCUS • R&D spend £3.6m (H1 FY2023: £3.5m) • Technology roadmaps refocused on seven ‘vital few’ to drive ‘value creation’ • Investment to strengthen acoustic-optic engineering and product line team • Fibre optics progress with next generation systems for semi fab, subm
Slide 14: Acquisitions / Portfolio
ACQUISITIONS / PORTFOLIO GS Optics (Acquired June 2023) • Polymer precision optics design, manufacture and coating • Rochester NY is a hub for photonics talent • US Life Sciences ‘centre of excellence’ now open Artemis Optical (Acquired July 2023) • Customised system enabling optical filters and mir
Slide 15: FY2024 Outlook
FY2024 OUTLOOK Revenue / Order Book (£m) • Outlook for the full year unchanged 160 150 • FY2024 order book remains strong despite 140 130 divestment of EM4 120 110 • 70% reduction in past due backlog over the 100 90 last 18 months 80 70 • Positive book to bill ratio continues and 60 current order bo
Slide 16: Summary
SUMMARY • Order book remains strong across all three end markets • Operational improvements positions G&H well to benefit from upturn in semiconductor and other markets • Further progress with outsourcing strategy with the qualification of additional product lines underway • Engineering resources fo
Slide 17: Appendices
APPENDICES
Slide 18: Financial Guidance – Year Ending Sept 2024
FINANCIAL GUIDANCE – YEAR ENDING SEPT 2024 • Capital expenditure o Circa £7m-8m • Research & Development o Circa £7m (5-6% of revenue) • Working capital o Some further reduction in inventory in the second half • Tax o Adjusted effective tax rate of 19-20% • Foreign exchange o USD 1 cent = £0.7m reve
Slide 19: Discontinued operations
Discontinued operations 31 March 31 March 30 September 2024 2023 2023 £000 £000 £’000 Revenue 4,343 6,752 13,435 Cost of revenue (3,644) (4,556) (9,708) Gross profit 699 2,196 3,727 Operating expenses (1,287) (2,517) (4,691) Operating profit (588) (321) (964) Interest payable - (7) (18) Profit befor
Slide 20: Investor Timetable
INVESTOR TIMETABLE • 26 July 2024 – Interim Dividend Payment Date • 8 October 2024 – Full Year Trading Update • 3 December 2024 – Preliminary Announcement INTERIM RESULTS PRESENTATION – H1 2024 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 2024 PAGE 22
INTERIM RESULTS PRESENTATION – H1 2024 PAGE 22