Inspecs Group Plc · LSE:SPEA
Inspecs — H1 2024 Earnings Presentation
35 slides from Inspecs's earnings presentation, 2024
Slide 1: 2024 Interim Results Presentation
2024 INTERIM RESULTS PRESENTATION
Slide 2: Presenters
PRESENTERS Richard Peck CHRIS KAY
Slide 3: Contents
Contents Operational highlights Financial overview Segmental analysis – Frames & Optics Group income statement Segmental analysis – Manufacturing Underlying EBITDA bridge Segmental analysis – Lenses Working capital and net debt Net debt bridge Current trading & outlook Group cash flow
Slide 4: Summary
summary As previously guided, revenue for H1 2024 decreased by 7.3% to £103.0m Operational efficiencies delivered, including the successful integration of subsidiaries within the USA Strong cash generation in the period, including working capital reduction, allowing the continued reduction in net de
Slide 5: 2024 Interim Financial Review
2024 INTERIM FINANCIAL REVIEW
Slide 6: Financial overview
Financial overview H1 2024 H1 2023 H1 2024 H1 2024 H1 2024 H1 2023 H1 2023 H1 2023 H1 2024 H1 2023 H1 2024 H1 2024 H1 2024 30 June 2024 H1 2023 H1 2023 H1 2023 31 December 2023 1 ‘Constant currency’: figures at constant currency exchange rates have been calculated using the average exchange rates in
Slide 7: Group Income Statement
Group INCOME STATEMENT • Revenue £103.0m (£111.2m H1 23) a decrease of 7.3% • Revenue on a constant currency basis £105.4m (£111.2m H1 23) a decrease of 5.2% H1 2024 H1 2024 H1 2024 H1 2024 • Underlying EBITDA £10.1m (£12.1m H1 23) a decrease of 16% • Gross profit margin of 52.4% (51.4% H1 23) an in
Slide 8: Underlying EBITDA Bridge
14.0 Underlying EBITDA Bridge 13.0 -£2.0m v H1 2023 (-16%) 12.1 12.0 11.0 0.9 0.2 0.3 10.1 10.0 (0.0) (0.2) (0.3) 9.0 (2.9) 8.0 7.0 6.0 5.0 Frames and Optics Manufacturing Lenses Consolidation decrease in gross profit gross profit increase in gross profit (gross profit and opex) H1 2023 Underlying E
Slide 9: Working capital and net debt
Working capital and net debt Cash at bank 20.1 • Strong cash generation in the period, with a continued reduction in net debt Borrowings (44.3) • £4.4m (18%) reduction in net debt (excluding leases) in the last Lease liabilities (17.9) six months Net debt (42.1) Net debt (excluding leases) (24.2) Qu
Slide 10: Net debt (excl. leases) Bridge
Net debt (excl. leases) Bridge 24.2 24.0 £4.4m Reduction in net debt (excluding leases) in 22.0 last six months 20.0 0.4 19.8 1.8 18.0 2.6 16.0 0.8 (9.6) 1.8 14.0 0.3 12.0 (2.4) 10.0 Operating activities Interest paid (on leases) Tax paid Lease repayments Net debt excl. leases at 30 Jun 2024 Net deb
Slide 11: Group Cash Flow
Group Cash Flow Operating cash flow Net movement in working capital: decrease of £2.4m (H1 2023: increase of £0.6m) Interest paid (2.1) (1.8) Tax paid (0.7) (1.3) Purchase of intangible fixed assets £0.6m (H1 2023: £0.1m) Net cash from operating activities Purchase of plant and equipment £1.2m (H1 2
Slide 12: 2024 Interim Operational Review
2024 INTERIM operational review
Slide 13: Operational Highlights
Operational Highlights Successful launch of key eyewear Construction completed on time and New low vision products developed brand into all stores of a major on budget with fit out ongoing during H1 for release in H2 2024 worldwide retailer Additional facility gives the potential Work ongoing in the
Slide 14: Segmental Analysis – Frames & Optics
Segmental Analysis – Frames & Optics Revenue decrease as anticipated primarily due to a slow down in Key Accounts in northern Europe Key brand launched into all stores of a H1 2023 major global retailer H1 2023 Additional brands with two major retail chains in the United States from Q4 Improved 150
Slide 15: Segmental Analysis – Manufacturing
Segmental Analysis – Manufacturing Sales below H1 2023 due to global retail customers adjusting buying patterns post Covid Increased gross profit margin H1 2023 driven by improved sales mix and reduced material costs H1 2023 New Vietnam facility now at the fit Improved 400 basis points out stage fol
Slide 16: Segmental Analysis – Lenses
Segmental Analysis – Lenses Growth in both key accounts and independent sales channels Significant new key account signed and further negotiations ongoing H1 2023 H1 2023 Increased 21.6% Improved by 220 basis points New leadership team well embedded Norville instrumental in assisting the R&D departm
Slide 17: Current Trading & Outlook
IN? CURRENT TRADING & OUTLOOK
Slide 18: Current trading & outlook
Current trading & outlook As of 31 August, H2 trading to date exceeds the prior year, with order books also 7% ahead Commencing distribution of key brands into major chains across the USA and Canada Eschenbach Optik will be launching new low vision aids in H2 2024 Our operational efficiency drive is
Slide 19: Appendix
Wee: APPENDIX
Slide 20: Vertically Integrated Business Model / Competitive Edge
VERTICALLY INTEGRATED business model Vertically integrated from frame and lens manufacturing to design, brands, sales, marketing and distribution Eyewear Eyewear Lens Manufacturing, design, sales Design, sales & Design, sales & Design, sales & Sales & manufacturing manufacturing manufacturing & dist
Slide 21: Group Balance Sheet
Group Balance Sheet Assets Non-current assets 120.1 123.9 123.9 Current assets (excluding assets held for sale) 97.3 97.2 107.4 (Cash and cash equivalents) 24.6 20.1 25.9 Total assets Net current assets/(current liabilities) 30.0 31.3 37.7 Equity Total equity Liabilities Non-current liabilities 49.0
Slide 22: Market Overview
Market OVERVIEW Global eyewear market is expected to be valued at $148.6 billion in 2024 Accounted for the largest market share in 2023, with a value of $98.5 billion Projected to reach $174.1 billion by 2028 with a CAGR of 4.04% (2024 – 2028) Witnessed significant growth On average, every person wo
Slide 23: Environmental, Social and Governance Roadmap
Environmental, Social and Governance Roadmap As a global Group, we span many different cultures and communities. We foster a culture of equity and mutual respect where all employees feel valued, and their contributions recognised. Bringing in community engagement has inspired our teams to help other
Slide 24: Our Brands: global footprint
Our Brands: global footprint North America Africa Our brands portfolio includes both proprietary and licensed brands. We target South America Asia specific market segments with our proprietary brand offer, we elevate group-owned United Kingdom Australia patents and manufacturing techniques by buildi
Slide 25: Brand Map
Brand Map LUXURY Leading brands within group portfolio PREMIUM MID LEVEL ENTRY Original Equipment Manufacture (OEM) • Original Design Manufacture (ODM)
Slide 26: Recent Timeline
Recent Timeline INTERNATIONAL BUSINESS AWARDS LENS INTERNATIONAL TRADEMARKS BRANDS & DISTRIBUTION MANUFACTURING EXPANSION MANUFACTURE OWNED EYEWEAR & LICENCES DISTRIBUTION COMPANIES 2017 - Killine Group 2020 (Feb) – 2020 - QUEEN’S 2020 (Jul) - Norville 2020 (Nov) - 2021 (Oct) – Hardy 2021 (Dec) - Eg
Slide 27: Inspecs Limited
INSPECS LIMITED Founded in 1988 Winner of two Queen’s awards for International trade Head office, design studio and showroom in Bath, UK In-house Licensed Brand Management working with the UK’s leading brands Trend forecasting team travelling globally International design team experienced delivering
Slide 28: Killine
KILLINE JOINED GROUP IN 2017 40 years experience in OEM, design and technological products. TORKAI Factory New Vietnam Factory Killine’s team of 50+ technicians and engineers from multi-national backgrounds are dedicated to being first to market with new innovations. State-of-the-art factories in Ch
Slide 29: Eschenbach
ESCHENBACH JOINED GROUP IN 2020 70+ highly qualified in-house opticians No.1 in Germany for prescription frames Engineering DNA and Expertise in design Strong consumer recognition– ‘Made in Germany’ Premium quality and optical engineering Award Winning designs Red Dot Award Winner 2022, 2023 and 202
Slide 30: Eschenbach Optik
ESCHENBACH OPTIK JOINED GROUP IN 2020 Optical precision for more than 100 years with discerning design & technical know-how Vision Technology Readers & filters, magnifiers, easy and low vision aids – building on expertise in product specification and lens design (e.g. diffractive optics) Consumer Op
Slide 31: Tura
TURA JOINED GROUP IN 2020 Founded in 1938 85 employees + 110 sales representatives Head office, design studio and showroom in New York Distribution: USA, Canada & Mexico Distribution centre in Muncy, PA. Customer service, accounting, credit and collections, IT, warehouse and distribution facility. 4
Slide 32: Norville
NORVILLE JOINED GROUP IN 2020 Founded in 1898 specialist lens supplier UK manufacturing, Gloucester facility has 5,000m2 production area 75+ team that are passionate on delivering exceptional customer experience
Slide 33: Ego Eyewear
EGO EYEWEAR JOINED GROUP IN 2021 EGO mainly distributes brands to major optical chains and is known for its innovative and creative designs. EGO's design studio in Stockholm adds to our existing teams in the UK, Portugal, Germany and New York. Viktor & Rolf creates spectacular beauty Born in the Sco
Slide 34: BoDe Design
BODE DESIGN JOINED GROUP IN 2021 BoDe have been our long-term partner in Germany, distributing to chains and online retailers. This energetic team’s focus compliments the Eschenbach business, which primarily sells to independent opticians.
Slide 35: Disclaimer
Disclaimer This presentation and information communicated verbally to you, may contain certain projections and other forward-looking statements, with respect to the financial condition, results of operations, businesses and prospects of INSPECS Group plc. These statements are based on current expect