Judges Scientific Plc · LSE:JDG
Judges Scientific — H1 2024 Earnings Presentation
39 slides from Judges Scientific's earnings presentation, Sep 19, 2024
Slide 1: Interim Results
Interim Results Six months ended 30 June 2024 David Cicurel, CEO Brad Ormsby, CFO Mark Lavelle, COO Tim Prestidge, GBDD 19th September 2024
Slide 2: Judges Scientific: a buy and build group in the scientific instrument market
Judges Scientific: a buy and build group in the scientific instrument market Three pillars of shareholder value Buy and build strategy Long term drivers Shareholder M&A Low capital use value Large deal pool Extensive and well diversified customer base globally Execution of strategy 2005 – 2023 Other
Slide 3: A highly experienced management team
A highly experienced management team Brad Ormsby David Cicurel Chief Financial Chief Executive Officer Tim Prestidge Mark Lavelle Group Business Chief Operating Officer Development Director Ian Wilcock Group Commercial Director
Slide 4: Acquisition criteria
Acquisition criteria • Strict acquisition discipline • Acquisition attributes: – Strong exporters in their global niche markets; solid EBIT margins – Generate sustainable profits and cashflows – Pay 3 to 7 times EBIT according to size – Borrow up to 3 times EBITDA @ 3 to 8% Recent acquisitions: Redu
Slide 5: The Judges Group
The Judges Group KE FIRE 2005 2006 2006 2006 2009 2010 2011 2012 2012 2013 2015 2016 2016 KE CoolLED FIRE Fire Testing PE. UHV Aitchee Quorum Sircal Deben GDS Scientifica Armfield Technology fibreoptics Design Engineering Technologies Instruments Instruments Developments 2024 2024 2024 2023 2023 202
Slide 6: Post acquisition
Post acquisition Focus on Autonomy long-term Good financial Promoting controls excellence
Slide 7: Key messages
Key messages Challenging environment Subdued trading Ongoing strategic execution Volatile geopolitical Continued soft order intake Two acquisitions in H1 environment Weakened cash conversion 10% increase to interim China intake dividend Solid order book maintained Post-period: acquisition, No 2024 c
Slide 8: Performance Review
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Slide 9: Highlights
Highlights Organic revenue Cash from operations -3% £7.8m Total revenue down 1% (FY 2023: £11.5m) Organic order intake Interim dividend -4% +10% Organic order book 17.2 weeks 29.7p per share Adjusted operating profit Adjusted net debt -13% £52.3m Starting 2024 with a solid £12.3 million (31 December
Slide 10: Performance
Performance HY 2024 HY 2023 Variance Variance (£m) (£m) (£m) (%) 3% organic revenue decline partially offset by recent acquisitions Revenue 60.8 61.3 (0.5) (1%) Operating costs (48.5) (47.1) (1.4) 3% Operating margin reduced to 20.2% Adjusted operating profit 12.3 14.2 (1.9) (13%) (H1 2023: 23.2%) –
Slide 11: Order intake
Order intake • H1 Organic order intake 4% below 2023 • Geographically: – China down 65% – North America down 7% – Rest of Europe up 2% – Rest of the World up 31% – UK up 8% • Organic order book of 17.2 weeks at 30 June 2024 (31 Dec 2023: 17.0 weeks) • Total order book of 16.8 weeks at 30 June 2024 •
Slide 12: Profit bridge
Profit bridge 20 18 16 14 12 10 8 6 4 2 0 H1 2023 contribution* Organic growth Organic decline Acquisitions H1 2024 contribution* *Contribution is EBIT from trading subsidiaries before central costs
Slide 13: Balance sheet and cash flow
Balance sheet and cash flow Jun 24 Dec 23 H1 2024 H1 2023 Balance Sheet summary Cashflow summary (£m) (£m) (£m) (£m) Cash 6.9 13.7 Adjusted EBITDA 14.2 15.6 Debt (excl IFRS 16) (59.2) (58.9) Working capital movements (6.2) (4.0) Adjusted net debt (52.3) (45.2) Exceptional transaction costs (0.2) (0.
Slide 14: Amendment and extension of banking facilities
Amendment and extension of banking facilities • Previous: – £100m bank facility maturing 26 May 2026 – Consisted of £25m term loan, £55m RCF and £20m accordion • Now: – £140m facility consisting £90m RCF and £50m accordion – Facility now matures on 1 July 2028 • No change to existing covenants: – Ge
Slide 15: Return on Total Invested Capital
Return on Total Invested Capital ROTIC (Trailing 12 months)* FTT acquisition 50% GDS March 2012 THT May 2020 40% Scientifica June 2013 30% 20% 10% Geotek May 2022 0% *excludes central costs and properties, and the effect of R&D capitalisation
Slide 16: Well diversified across the business
Well diversified across the business Group revenue Group organic revenue Group organic orders Group revenue by end by geography by geography market UK Geotechnical Rest of Europe Life science/semicon North America Industry optimisation China/Hong Kong Other >85% of revenue exported
Slide 17: Financial history
Financial history Revenue and profit 400.0 EPS and Dividends (Excluding special dividends) 150,000 300.0 100,000 200.0 100.0 50,000 - - 12 13 14 15 16 17 18 19 20 21 22 23 24 12 13 14 15 16 17 18 19 20 21 22 23 24 Revenue H1 Revenue H2 Operating Profit H1 Operating Profit total Cash generation Speci
Slide 18: Growth Strategy
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Slide 19: Growth drivers
Growth drivers Organic M&A growth
Slide 20: Acquisitions
Acquisitions @ 8 Judges Scientific plc
Slide 21: Acquisition of Luciol Instruments SA
Acquisition of Luciol Instruments SA • Manufacturer and seller of instruments to measure properties of optic fibre • Based in Mies, Vd, Switzerland • Cash consideration of CHF2.0m + earn- out payment equal to 4x average adjusted EBIT for 4 yrs ended 31 December 2023 • Complementary to P.E. Fibreopti
Slide 22: Acquisition of Rockwash Geodata
Acquisition of Rockwash Geodata • Specialises in rock cuttings and chippings digitalisation • Based in Llandudno, Wales • Cash consideration of £2.25m • Total consideration, cash plus earn-out, is capped at £6m if EBIT reaches £1m in 2024 or 2025 • Strongly synergistic with Geotek 22
Slide 23: Acquisition of Magsputter/Teer Coatings
Acquisition of Magsputter/Teer Coatings • Teer Coatings manufactures specialised coating instruments and provides coating services • Based in Droitwich Spa, England • Consideration of £12.3m including £1.9m property • £1.74m EBIT at 6x multiple 23
Slide 24: Organic Growth
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Slide 25: Organic model
Organic model Finance and Governance Operational Excellence • Implement robust financial controls • Require excellent monthly forecasting and delivery performance • Culture and processes for governance and compliance • Operational and performance KPIs • Improve business information, data, and • Grou
Slide 26: Outlook and Investment Case
Outlook and Investment Case
Slide 27: Outlook
Outlook Business model proven Post balance sheet events Current trading robust Healthy financial position Amended and extended Expecting improved H2 bank facility Positive long-term Order intake now 3.4% Acquisition of fundamentals ahead of prior year, Magsputter/Teer Coatings including coring Focus
Slide 28: Investment Case
Investment Case Diverse Sustainable Growing Portfolio Returns Dividends • Robust business model; pursued with discipline • Large pool of targets, every acquisition is earnings enhancing • Strong long-term growth drivers in higher education and process optimization • Well diversified by geography and
Slide 29: Judges Scientific plc
@® Judges Scientific plc
Slide 30: Major shareholders – as at Sept 2024
Major shareholders – as at Sept 2024 David Cicurel (including SIPP, SIP and 67,000 non-beneficial) 671,337 10.1% Odin Global 455,926 6.9% Capital Group 395,543 6.0% Broadcrest 276,982 4.2% Liontrust Asset Management 223,256 3.4% Hargreaves Landsdown 217,911 3.3% Interactive Investor 215,472 3.2% Ste
Slide 31: Environment, Social & Governance
Environment, Social & Governance • Nature of our business is not capital intensive manufacturing and environmental impact is limited. Environment • Aim to minimise environmental impact across all aspects of business, including consideration for energy consumption and packaging of instruments. • Resp
Slide 32: Our businesses
Our businesses 1 2 3 FTT is internationally recognised as the PE.fiberoptics is a leading manufacturer of UHV Design, founded in 1993, specialises in the world’s leading supplier of fire testing test equipment that measures optical and design, manufacture and supply of high precision instrumentation
Slide 33: Our businesses
Our businesses 4 5 6 Aitchee Engineering is a well established East Sussex-based Quorum Technologies Sircal designs, manufactures and distributes precision engineering company that can manufactures market-leading scientific rare gas purifiers typically for use in metal offer high end sheet metalwork
Slide 34: Our businesses
Our businesses 7 8 9 Deben is a precision engineering company GDS designs, develops and manufactures Scientifica is a multi-award winning, globally providing innovative solutions for SEM and equipment and software used for the recognised manufacturer of advanced μX-Ray CT in-situ tensile testing. De
Slide 35: Our businesses
Our businesses 10 11 12 Armfield offers unrivalled experience in the CoolLED designs and manufactures cutting-edge Dia-Stron is the leading manufacturer of design and provision of teaching equipment illumination systems for microscopy and other automated measurement systems for single fibres aligned
Slide 36: Our businesses
Our businesses 13 14 15 EWB Solutions specialises in the design Oxford Cryosystems is a market-leading Moorfield Nanotechnology design and and manufacture of edge-welded metal manufacturer of cryogenic devices. Spun out manufactures R&D/pilot-scale laboratory bellows where a high integrity hermetic
Slide 37: Our businesses
Our businesses 16 17 18 THT is a world leader in the design, Korvus Technology sells and manufactures Geotek Ltd. (UK) specialises in high- manufacture and supply of specialised highly modular thin film deposition systems resolution, non-destructive analysis of calorimeters for use in the chemical a
Slide 38: Our businesses
Our businesses 19 20 21 Henniker designs and manufactures Founded in 2018 by experts in optics and Luciol is active in the field of fiber optic plasma surface treatment systems and non-destructive testing, Bossa Nova Vision is measurement and instrumentation, providing processes for advanced cleanin
Slide 39: Our businesses
Our businesses 22 23 Rockwash Geodata is a geological analysis Teer Coatings is a leading provider of advanced laboratory and service company founded in surface engineering solutions, specialising in the 2010 with headquarters in Llandudno application of cutting-edge coatings to enhance Junction, No