Slide 1: Full Year Results 2022
FULL YEAR RESULTS 2022 FULL YEAR 2022 RESULTS © TT Electronics 1
Slide 2: 2022 Performance Ahead of Expectations, Good Momentum into 2023
2022 PERFORMANCE AHEAD OF EXPECTATIONS GOOD MOMENTUM INTO 2023 ▪ Record order intake in 2022, book to bill at 118% ▪ Organic growth of 20%, revenue now over £600m ▪ Adjusted operating profit up 19% ▪ Outstanding performance from GMS and S&SC ▪ Improvement in P&C on track ▪ Leverage down, with more r
Slide 3: Higher Growth and Creating Value
HIGHER GROWTH AND CREATING VALUE Megatrends driving revenue growth A high quality, IP rich business, Strong cash generation to invest in IP and demand for products that with cleaner, smarter and and value-enhancing acquisitions contribute to a more sustainable world healthier solutions 10%+ operatin
Slide 4: Building a Sustainable Business: Cleaner, Smarter, Healthier
BUILDING A SUSTAINABLE BUSINESS Our technologies enable our customers to meet their sustainability objectives CLEANER SMARTER HEALTHIER TT developed a Ultra lightweight, high TT developed physically smaller current sensors custom, high-voltage voltage DC-DC with improved environmental performance an
Slide 5: Financial Review – Mark Hoad, CFO
FINANCIAL REVIEW MARK HOAD, CFO FULL YEAR 2022 RESULTS © TT Electronics 5
Slide 6: Group Financial Performance
GROUP FINANCIAL PERFORMANCE £m (except where stated) Change 2022 2021 Change ▪ 20% organic revenue increase - 14% ex pass-through (c. 3% constant fx price, 11% volume) Revenue 617.0 476.2 30% 22% ▪ Strong growth drivers in automation & electrification, 47.1 34.8 35% 19% healthcare and distribution c
Slide 7: Power & Connectivity
POWER & CONNECTIVITY Change ▪ FY revenue up 5% at constant currency, down 1% organic. 2022 2021 Change constant fx Adjusted operating profit down 9% Revenue (£m) 154.2 140.2 10% 5% ▪ H1 impacted by supply chain, timing of programme revenues and COVID related shutdowns Adjusted operating profit (£m)
Slide 8: Global Manufacturing Solutions
GLOBAL MANUFACTURING SOLUTIONS Change ▪ 37% organic growth (25% ex-pass through) in revenue, strong 2022 2021 Change constant fx performance in healthcare, automation & electrification Revenue (£m) 323.0 220.1 47% 37% ▪ Order book growth, benefiting from new contract wins – 2023 revenues fully cover
Slide 9: Sensors and Specialist Components
SENSORS AND SPECIALIST COMPONENTS ▪ Revenue increased by 12% organically Change 2022 2021 Change constant fx ▪ Strong demand through our distribution network 139.8 115.9 21% 12% ▪ Customers committing orders further ahead to secure Revenue (£m) capacity giving us greater visibility ▪ Input cost infl
Slide 10: Expanded Self-Help Programme Complete
EXPANDED SELF-HELP PROGRAMME COMPLETE Programme scope ▪ 3 main site closures + 4 smaller sites £m 2020-22 2023 Total ▪ Net headcount reductions c. 500 FTEs Cash cost ▪ Relocation/end-of-life lower margin product lines Original plan (18) - (18) ▪ Original project expanded with additional benefits Pro
Slide 11: Operating Margin & Growth Evolution 2019 to 2022
OPERATING MARGIN & GROWTH EVOLUTION 2019 TO 2022 P&C GMS (ex pass-through) S&SC 18.0% 18.0% 18.0% 2022 2022 2022 16.0% 16.0% 2019 16.0% 2019 2019 14.0% H2 2022 14.0% 14.0% 12.0% 12.0% 12.0% 10.0% 10.0% 10.0% Margin Margin Margin 8.0% 8.0% 8.0% 6.0% 6.0% 6.0% 4.0% 4.0% 4.0% 2.0% 2.0% 2.0% 0.0% 0.0% 0
Slide 12: Working Capital Investing in Growth
WORKING CAPITAL INVESTING IN GROWTH Inventory as a % of order Days Sales Outstanding book 54 33% 51 32% 50 29% 29% FY 2019 FY 2020 FY 2021 FY 2022 2019-2021 H1 2022 FY 2022 ▪ Investment in inventory backed by a committed ▪ DSO trends consistent over time order book ▪ H2 cash flow impacted by very hi
Slide 13: Free Cash Flow Inflecting, Leverage Reducing
FREE CASH FLOW INFLECTING LEVERAGE REDUCING FY 2022 ▪ £13m free cash outflow – impacted by investment in working capital and self-help programme ▪ Working capital supporting high levels of revenue growth ▪ H2 improvement - £10m free cash inflow ▪ Leverage back into 1-2x target range as anticipated –
Slide 14: UK Pension Scheme Buy-in, Balance Sheet De-risked
UK PENSION SCHEME BUY-IN BALANCE SHEET DE-RISKED ▪ Buy-in of c. £360m pension liabilities completed in November with Legal & General ▪ Successful culmination of many years work to improve scheme funding, cleanse scheme data and optimise approach with insurers ▪ Secured benefits for c. 5,000 current
Slide 15: Richard Tyson, CEO
RICHARD TYSON, CEO FULL YEAR 2022 RESULTS © TT Electronics 15
Slide 16: Winning in Growing Markets
WINNING IN GROWING MARKETS ▪ Over 50 significant contract wins delivering over £125m of multi-year revenues ▪ Growth in customer accounts ▪ Strong pipeline of new business opportunities ▪ Increasing confidence in ▪ Higher revenue growth ▪ Margin improvement FULL YEAR 2022 RESULTS © TT © TT Electroni
Slide 17: Growth from Business Development in Our Target End Markets
GROWTH FROM BUSINESS DEVELOPMENT IN OUR TARGET END MARKETS Healthcare Aerospace and Defence Automation and Electrification Electromagnetic tracking Defence Automation • New medical manufacturer customer win using • Multiple programmes for Boxer, the main UK army • Industrial customer currently testi
Slide 18: Business Development Success Growing Our Top 40 OEM Customers
BUSINESS DEVELOPMENT SUCCESS GROWING OUR TOP 40 OEM CUSTOMERS 400 +43% revenue growth ▪ Revenue from top 40 OEM customers up 43% (vs 2019) - now accounts for 58% 350 of revenue 300 ▪ Built a broader list of material strategic key accounts with multi-year revenue stream – 40 OEM customers now £2m+ wi
Slide 19: Order Book Strength and Momentum Giving Good Visibility
ORDER BOOK STRENGTH AND MOMENTUM GIVING GOOD VISIBILITY ▪ Expected 2023 revenue c.90% covered at December, book to bill of 118% ▪ Recovery of inflation and transparent pass-through of extreme cost increases ▪ Gross profit margins maintained with margin improvement to come from growth ▪ Our largest c
Slide 20: Greater Potential from Structural Growth Markets
GREATER POTENTIAL FROM STRUCTURAL GROWTH MARKETS UPDATED MEDIUM TERM % OF TT REVENUE FY22 MARKET MARKET GROWTH RATE ORGANIC REVENUE GROWTH 28% Healthcare +6-8% 20 15 14%1 15% Aerospace & Defence +4-5% 10 4% 37% 5 -3% 0 Automation & Electrification +5-6% -5 2015 2019 2022 20% -10 1 Distribution Sales
Slide 21: Positive Outlook for 2023
POSITIVE OUTLOOK FOR 2023 ▪ Order book strength providing great visibility to 2023 revenues ▪ Mindful of wider macro environment but TT is well-aligned with global mega trends, driving demand from high-growth markets ▪ 10% operating margin in sight ▪ Strong free cash flows and a continued reduction
Slide 22: Higher Growth and Creating Value
HIGHER GROWTH AND CREATING VALUE Megatrends driving revenue growth A high quality, IP rich business, Strong cash generation to invest in IP and demand for products that with cleaner, smarter and and value-enhancing acquisitions contribute to a more sustainable world healthier solutions 10%+ operatin
Slide 23: Thank You
THANK YOU FULL YEAR 2022 RESULTS © TT Electronics 23
Slide 24: Financial Guidance for 2023
FINANCIAL GUIDANCE FOR 2023 Adjusting items cash spend Pension ▪ £1m on pensions ▪ No further deficit contributions ▪ £2m on M&A integration ▪ Assess buy-out of UK scheme during 2023 Tax Capital and development expenditure ▪ Effective rate for year increasing to c.24-25% ▪ Capex and devex circa £22-
Slide 25: Our Divisions
OUR DIVISIONS PICTURE TO FOLLOW Power and Connectivity Global Manufacturing Solutions Sensors and Specialist Components Revenue: £154.2m Revenue: £323.0m Revenue: £139.8m Operating profit: £7.9m Operating profit: £25.2m Operating profit: £21.8m Operating profit margin: 5.1% Operating profit margin:
Slide 26: The TT Electronics Business
THE TT ELECTRONICS BUSINESS Revenue (2022) Underlying operating profit (2022) Revenue by market (2022) Revenue by geography (2022) Power & Connectivity 25% Power & Connectivity 17% Healthcare 28% UK 21% Global Manufacturing Solutions 52% Global Manufacturing Solutions 54% Aerospace & Defence 15% Res
Slide 27: Revenue by Market and Geography by Division
REVENUE BY MARKET AND GEOGRAPHY BY DIVISION Power and Connectivity Global Manufacturing Solutions Sensors and Specialist Components Revenue by market (%) Revenue by market (%) Revenue by market (%) Healthcare 13% Healthcare 47% Healthcare 1% Automation & Automation & Automation & Electrification 35%
Slide 28: Summary Income Statement
SUMMARY INCOME STATEMENT £m 2022 2021 Revenue 617.0 476.2 Adjusted operating profit 47.1 34.8 Net finance cost (6.7) (3.3) Adjusted profit before taxation 40.4 31.5 Adjusting items (50.5) (15.5) Profit before taxation (10.1) 16.0 Taxation (3.1) (3.2) Profit after taxation (13.2) 12.8 FULL YEAR 2022
Slide 29: Summary of Revenue and Operating Profit by Division, Impact of FX
SUMMARY OF REVENUE AND OPERATING PROFIT BY DIVISION IMPACT OF FX Global Sensors and Power and Manufacturing Specialist Connectivity Solutions Components Corporate Group Revenue (£m) 2022 154.2 323.0 139.8 - 617.0 2021 at 2022 rates 147.4 235.5 124.8 - 507.7 FX impact 7.2 15.4 8.9 - 31.5 2021 as publ
Slide 30: Income Statement – Adjusting Items
INCOME STATEMENT – ADJUSTING ITEMS £m 2022 2021 Operating profit (3.4) 19.3 Adjusted to exclude: Restructuring and other items Restructuring 6.3 9.7 INCOME STATEMENT – ADJ USTING ITEMS Property disposals - (1.7) Pension restructuring costs 2.0 - Pension enhanced value transfer 11.8 - Pension and pas
Slide 31: Cash Conversion
CASH CONVERSION £m 2022 2021 Adjusted operating profit 47.1 34.8 Depreciation and amortisation 16.1 16.1 Net capital expenditure (11.7) (14.9) Capitalised development expenditure (2.3) (1.9) Working capital (38.8) (14.7) Other 5.3 3.3 Operating cash flow after capex 15.7 22.71 Operating profit 47.1
Slide 32: Movement in Net Debt
MOVEMENT IN NET DEBT £m 2022 2021 Operating cash flow after capex1 15.7 22.7 Net interest and tax (13.4) (8.7) Lease liability repayments (4.3) (3.9) Restructuring and acquisition related costs1 (11.1) (5.9) Pensions - (5.5) Free cash flow (13.1) (1.3) Dividends (10.2) (11.4) Acquisitions and dispos
Slide 33: Guided by a Clear Capital Allocation Policy
GUIDED BY A CLEAR CAPITAL ALLOCATION POLICY Free cash flow priorities Application Maximise organic investment including R&D to £11.0m investment in R&D; £11.7m capex spend; 1 1 £6.3m on self-help net of property disposals support growth 2 Maintain progressive dividend policy 2 £10.2m paid in year, 1
Slide 34: 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 statement