Gooch & Housego Plc · LSE:GHH
Gooch & Housego — FY2024 Earnings Presentation
24 slides from Gooch & Housego's earnings presentation, Dec 3, 2024
Slide 1: Full Year Results
FULL YEAR RESULTS Year ended 30 September 2024 3rd December 2024
Slide 2: Agenda
AGENDA • Highlights • Acquisition of Phoenix Optical • Financial Results • Business Update • Environmental, Social & Governance • Strategy Update • Outlook & Summary Charlie Peppiatt - CEO Chris Jewell - CFO PRELIMINARY RESULTS PRESENTATION – FY 2024 PAGE 2
Slide 3: Highlights
HIGHLIGHTS • Positive progress implementing foundational changes to deliver the Group’s strategic plan • Second half revenue 15% higher than the first half which was impacted by customer destocking • Revenue from continuing operations up 0.7% to £136.0m (FY2023: £135.0m) • Adjusted operating profit
Slide 4: Acquisition of Phoenix Optical
ACQUISITION OF PHOENIX OPTICAL • Phoenix Optical acquired Oct-24 for total consideration up to £6.75m • Well regarded UK precision optics designer and manufacturer • Strong team located in St Asaph, a hub for photonics talent • Well invested facility with impressive diamond turning capabilities • Lo
Slide 5: Summary Income Statement
SUMMARY INCOME STATEMENT Year Ended 30 September 2024 2023 % Change • Revenue grew by 0.7%; organic, constant currency (Continuing Operations) £m £m down 3.0% Revenue 136.0 135.0 0.7% • Growth from our A&D and Life Sciences markets but Industrial revenue down Gross profit 41.6 40.3 3.4% • Gross marg
Slide 6: Cash Flow
CASH FLOW Year Ended 30 September 2024 2023 £m £m • Total investment in tangible and intangible assets of Reported operating profit from continuing ops 4.2 6.0 £5.2m (2023: £6.8m) Loss from discontinued operations (9.9) (1.0) • Increase in working capital of £3.6m with a reduction Loss on disposal o
Slide 7: Industrial
INDUSTRIAL Financials (50% of revenue) FY24 FY23 Change Revenue £67.9m £74.7m (9.1)% Adjusted £7.8m £10.6m (25.9)% Operating Profit % Margin 11.5% 14.2% (270)bps Order Book £39.0m £46.5m (16.1)% • Customer destocking in H1. Some recovery in second half but full year organic constant currency revenue
Slide 8: Aerospace & Defence
AEROSPACE & DEFENCE Financials (25% of revenue) FY24 FY23 Change Revenue £34.5m £27.3m 26.0% Adjusted £(1.2)m £(1.8)m 35.5% Operating Profit % Margin (3.5)% (6.8)% 330bps Order Book £42.8m £37.9m 12.9% • Revenue grew by 10.3% on an organic constant currency basis compared with FY2023 • Strong demand
Slide 9: Life Sciences
LIFE SCIENCES Financials (25% of revenue) FY24 FY23 Change Revenue £33.6m £33.0m 1.8% Adjusted £4.6m £4.3m 7.3% Operating Profit % Margin 13.8% 13.1% 70bps Order Book £22.7m £30.9m (26.5)% • Revenues grew by 1.3% on an organic constant currency basis compared with FY2024 • Significant inventory corr
Slide 10: Responsible Business
RESPONSIBLE BUSINESS Environment • Reduction in our carbon intensity measure by 14.3% • 81% of the Group’s purchased electricity now from non-carbon sources • On track to achieve target of being net zero scope 1 & 2 by 2035 • Scope 3 assessments to be undertaken in FY2025 • 50% of sites now ISO 1400
Slide 11: Strategy Update
STRATEGY UPDATE 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 dynamic Deliver except
Slide 12: Strategic Progress
STRATEGIC PROGRESS PEOPLE FY2022 FY2023 FY2024 RAG TECHNOLOGY FY2022 FY2023 FY2024 RAG Open Positions 78 52 24 ● R&D Investment (£m) excluding EM4 7.2 7.4 7.8 ● ISO14001 Accreditions 1 3 5 ● R&D Investment (% Sales) 6.2% 5.5% 5.8% ● HRIS Implementation - - US Sites ● New Products Revenue (£m) 17.9 2
Slide 13: Value Creation from Technology Focus
VALUE CREATION FROM TECHNOLOGY FOCUS ● • Technology roadmap providing focus on where G&H can differentiate and drive ‘value creation’ ● • R&D effort and investment prioritised and deployed behind ‘vital few’ areas ● • Investment into innovation hubs and ● R&D organisation to enable strategy • 6 out
Slide 14: Example – Undersea Fibre-Optics
EXAMPLE 1 – UNDERSEA FIBRE-OPTICS Significant multi-year design wins for hi-reliability couplers and amplifier modules to enable next generation of higher capacity submarine links • Design and qualification of couplers for new compact undersea repeater systems in final phase • Mass production ramp-u
Slide 15: Example – Precision Optics Value-Add
EXAMPLE 2 – PRECISION OPTICS VALUE-ADD G&H Artemis has now been successfully integrated into the Optical Systems business unit providing best in class laser protection, especially for A&D applications • Lasers are in widespread use on the battlefield, with applications including target designation a
Slide 16: Outlook
OUTLOOK • Prior years’ order books flattered by high past due backlog • FY2024 order book normalised but remains solid with strong demand for medical diagnostics products in Life Sciences • Refocused A&D business with positive multi-year demand outlook • Semiconductor recovery delayed into H2 CY2025
Slide 17: Summary
SUMMARY • G&H’s refocused technologies and capabilities aligned to mega trends • Order book healthy despite delayed recovery in semiconductor market • Well positioned for growth from operational improvements and proactive outsourcing • ‘Value creation’ synergies from Artemis and GS Optics acquisitio
Slide 18: Appendices
Appendices G&H PRELIM RESULTS PRESENTATION FY2023
Slide 19: 2025 Expected Financial Calendar
2025 EXPECTED FINANCIAL CALENDAR • 24th February 2025 – AGM Trading Update • 8th April 2025 – Half Year Trading Update • 3rd June 2025 – Interim Announcement • October 2025 – Full Year Trading Update • December 2025 – Full Year Results Announcement PRELIMINARY RESULTS PRESENTATION – FY 2024 PAGE 19
Slide 20: Non-Underlying Items
NON-UNDERLYING ITEMS Total non-underlying charge of £3.9m (of which cash £2.1m) • Amortisation of acquired intangibles: £2.0m (of which cash £nil) • Acquisitions (including interest of deferred consideration): £0.4m (of which cash £0.2m) • Site closures: £0.6m - closure of our Shanghai facility and
Slide 21: Other Financial Items
OTHER FINANCIAL ITEMS R&D Spend • The Group’s R&D investment in the year totalled £7.8m (FY2023: £7.4m). This represented 5.7% of revenue (FY2023: 5.5%) • The Group capitalises a portion of its R&D spend in accordance with IFRS. The amount held on the balance sheet is £2.4m (FY2023: £2.3m) Tax • The
Slide 22: Targeted R&D
TARGETED R&D New products Precision Acousto/ Fibre Optics launched in the Optics & Electro-Optics year Systems Aerospace & 19 - - Defence Industrial 11 6 6 Life Sciences 6 - - • New products generated £25.3m of revenue in FY2024 (FY2023: £23.7m) “Our more focused technology development programmes ar
Slide 23: 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 question and answer session and any other related verbal or written communications. ▪ This document contains forward-looking stat
Slide 24: PRELIMINARY RESULTS PRESENTATION – FY 2024 PAGE 24
PRELIMINARY RESULTS PRESENTATION – FY 2024 PAGE 24