Slide 1: 2014 Preliminary Results & Strategy Review Update
2014 Preliminary Results & Strategy Review Update March 12, 2015
Slide 2: Agenda
Agenda Highlights Richard Tyson, Chief Executive Officer Financial Review Mark Hoad, Chief Financial Officer Strategy Review - Update Richard Tyson, Chief Executive Officer Q&A TT Preliminary Results 2014 & Strategy Review Update 1
Slide 3: 2014 Highlights
2014 Highlights • Challenging year for the Group • Revenue and underlying operating profit broadly unchanged at constant currency • Operational Improvement Programme reset, restructured and making progress • New management team in place • Cost improvement programme underway • Strong balance sheet; g
Slide 4: Financial Review
Financial Review Mark Hoad, Chief Financial Officer TT Preliminary Results 2014 & Strategy Review Update 3
Slide 5: Income statement
Income statement Income Statement • Constant currency revenue 2014 2013 Change Change growth at 3% constant fx Revenue (£m) 524.3 532.2 (1)% 3% • OP unchanged at constant currency - includes £5m Operating profit (£m)* 29.2 30.8 (5)% - one-off benefit Operating profit margin* 5.6% 5.8% (20)bps (10)b
Slide 6: Sensing & Control
Sensing & Control Financial Summary 2014 2013 Change Change constant fx Revenue (£m) 289.3 285.2 1% 7% Operating profit (£m)* 14.2 17.5 (19)% (13)% Operating profit margin* 4.9% 6.1% (120)bps (110)bps * Underlying, before exceptional and one-off costs Re-presented to exclude acquisition costs fro
Slide 7: Components
Components Financial Summary 2014 2013 Change Change constant fx Revenue (£m) 98.8 100.4 (2)% 1% Operating profit (£m)* 9.5 4.3 121% 126% Operating profit margin* 9.6% 4.3% 530bps 530bps * Underlying, before exceptional and one-off costs Re-presented to exclude acquisition costs from underlying o
Slide 8: IMS
IMS Financial Summary 2014 2013 Change Change constant fx Revenue (£m) 136.2 146.6 (7)% (4)% Operating profit (£m)* 5.5 9.0 (39)% (33)% Operating profit margin* 4.0% 6.1% (210)bps (190)bps * Underlying, before exceptional and one-off costs Re-presented to exclude acquisition costs from underlying
Slide 9: Exceptional Items
Exceptional Items Exceptional Items (P&L) (£million) 2014 2013 • Restructuring costs: £15m OIP, balance Restructuring costs 22.2 10.2 other site closures and org restructuring Acquisition related costs 1.9 1.6 • Acquisition costs: Roxspur plus intangible amortisation Asset impairments 9.4 - • Asset
Slide 10: Cash Flow and Debt
Cash Flow and Debt Cash Flow & Debt £million 2014 2013 • Free cash outflow driven by Underlying EBITDA 51.5 51.8 Capital and development expenditure Net capital expenditure (28.0) (23.9) at 1.6x DA Development expenditure (6.8) (5.2) Working capital correction on trade payables Working capital (
Slide 11: Other financial matters / Guidance for 2015
Other financial matters / Guidance for 2015 • Exceptional Items – Remaining OIP P&L charge £9m in 2015, £3m in 2016; cash costs £17m in 2015 and £6m in 2016 – Circa £1m P&L and cash cost to complete other site rationalisation commenced in 2014 • Tax – Effective rate expected to similar to 2014 – Cas
Slide 12: Strategy Review: Re-focus, Re-build, Sustainable Growth
Agenda Strategy Review Re-focus, Re-build, Sustainable Growth Richard Tyson, Chief Executive Officer TT Preliminary Results 2014 & Strategy Review Update 11
Slide 13: Transforming our business performance
Transforming our business performance Six Sustainable Three Three strategic phases outcomes Growth priorities TT Preliminary Results 2014 & Strategy Review Update 12
Slide 14: Transforming our performance: Three phases
Transforming our performance: Three phases Return to Sustainable Growth Refocus Rebuild Sustainable Growth 2014 2015 2016 2017 2018 2019 2020 TT Preliminary Results 2014 & Strategy Review Update 13
Slide 15: Business review - Scope
Refocus Business review - Scope Market Environment • End use market dynamics & growth drivers • Product demand outlook Competitive • Competitors’ business models Landscape • Positioning of TT Customer Feedback • 120+ customer interviews Product performance • Product profitability & Investment priori
Slide 16: Business review - Conclusions
Refocus Business review - Conclusions Issues Opportunities Market Environment •Performance-critical electronics expertise Competitive •Industrial S&C and •Transportation Europe Landscape Components businesses Customer Feedback •Customer base •Ineffective R&D Product performance •Broad experience & p
Slide 17: Operational Improvement Plan: Re-set & progressing
Refocus Operational Improvement Plan: Re-set & progressing • Large, complex project now underway. OIP (£m) To date 2015 2016 2017 Total / Run Rate • Final agreement reached with the P&L charge (18.1) (8.6) (3.3) - (30.0) trade union and workers council late 2014 Cash cost (7.2) (17.1) (5.7) - (30.0)
Slide 18: Six strategic priorities – Unlocking our potential
Rebuild Six strategic priorities – Unlocking our potential Refocus Rebuild Sustainable Growth Financial Market Enhanced Targeted & A lean, agile Operational discipline & leading customer efficient and learning efficiency performance position focus R&D spend organisation management TT Preliminary Res
Slide 19: Three outcomes
Three outcomes Expertise in performance-critical electronics Improved Improved Improved Returns and Customer Operational Cash Performance Performance Generation Transforming our business performance - cultural, operational and financial. TT Preliminary Results 2014 & Strategy Review Update 18
Slide 20: Summary & Outlook
Summary & Outlook • 2015, an important year of transition as the new strategic direction is implemented – Engage new organisation and mobilise to deliver – Launch process improvement initiatives – Clear R&D investment plans aligned to customer opportunities – OIP continuing to progress to plan – Cle
Slide 21: Q&As
Q&As TT Preliminary Results 2014 & Strategy Review Update 20
Slide 22: Appendix
Appendix TT Preliminary Results 2014 & Strategy Review Update 21
Slide 23: Appendix: TT Electronics Business
Appendix: TT Electronics Business Revenue (2014) Operating Profit (2014) Sensing & Control 55% Sensing & Control 49% IMS 26% IMS 19% Components 19% Components 32% Revenue by market (2014) Revenue by region (2014) Passenger Car 41% Rest of Europe 49% Industrial 28% UK 16% Aerospace & Defence 12% Nort
Slide 24: Appendix: Impact of FX
Appendix: Impact of FX Sensing and Sales Control IMS Components Group At 2013 rates 304.4 141.2 101.3 546.9 FX impact (adverse) / favourable (15.1) (5.0) (2.5) (22.6) As published 289.3 136.2 98.8 524.3 Operating Profit At 2013 rates 15.2 6.0 9.7 30.9 FX impact (adverse) / favourable (1.0) (0.5) (0.
Slide 25: Disclaimer
Disclaimer IMPORTANT INFORMATION • For the purposes of the following disclaimers, references to this “document” shall be deemed to include references to the presenters’ speeches, the question and answer session and any other related verbal or written communications. • This document contains certain