Volex plc · LSE:VLX
Volex — FY2012 Earnings Presentation
23 slides from Volex's earnings presentation, May 2, 2012
Slide 1: Preliminary results for the financial year ending 1 April 2012
Preliminary results for the financial year ending 1 April 2012 The Power behind the Power
Slide 2: Warning
Warning THIS PRESENTATION CONTAINS FORWARD LOOKING STATEMENTS THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER MATERIALLY. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE GENERAL ECONOMIC CONDITIONS, CURRENCY FLUCTUATIONS, COMPETITIVE FACTORS, THE LOSS O
Slide 3: Financial highlights for FY2012
Financial highlights for FY2012 1. Revenues of $517.8m, up 6% year-on-year 2. Normalised gross margin of 19.8%, up 1 percentage point from 18.8% in FY2011 3. Normalised1 operating profit of $32.0m, up 23% year-on-year 4. Normalised1 diluted EPS of 42.4 cents, up 31% year-on-year 5. Free cash flow of
Slide 4: Operational and strategic highlights
Operational and strategic highlights 1. Strengthened relationship with key customers 2. Enhanced manufacturing capabilities 3. Operational efficiencies 4. Process and system improvements 5. Culture Substantial achievements in the year – set for continued growth in revenues, margins and profits throu
Slide 5: Investing for growth
Investing for growth Significant investment in .. Example 1. People • David McKinney, new Chief Operations Officer • Linda Starr, new Chief Sales & Marketing Officer • John Osbourne, new Datacom/Telecom sector head • Rick Naylor, new Industrial sector head • Other key hires in sales, engineering and
Slide 6: Group-wide Financial Highlights
Group-wide Financial Highlights
Slide 7: Resilient revenue performance
Resilient revenue performance Quarterly revenue by sector, $m 160 140 120 100 80 60 40 20 0 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Consumer Telecoms / Datacoms Healthcare Industrial Revenue, $m FY12 FY11 Growth Norm. gross margin % FY12 FY11 G
Slide 8: Asian revenue growth; external market challenges holding back other regions
Asian revenue growth; external market challenges holding back other regions Quarterly revenue by geographic region of origin, $m 160 140 120 100 80 60 40 20 0 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Q1 FY11 Q2 FY11 Q3 FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Asia Americas Europe India $m FY12 FY11 Growth Asi
Slide 9: Gross margin % improving
Gross margin % improving Quarterly gross profit $m Quarterly gross margin % 29.3 24.8 25.0 23.9 24.2 20.3% 20.5% 19.7% 19.6% 22.5 22.7 19.0% 19.4% 22.1 18.0% 18.0% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 • Absolute gross profit up quarter-over-
Slide 10: Upward trend in operating profit maintained
Upward trend in operating profit1 maintained Quarterly operating profit1, $m Quarterly operating profit1 as % of sales 9.5 8.6 7.0 7.1 7.1% 6.8 6.8 6.6% 6.3 5.9 5.5% 5.7% 5.3% 5.4% 5.0% 5.4% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 • Trend of qu
Slide 11: Strong cash generation enabling increased investment and shareholder returns
Strong cash generation enabling increased investment and shareholder returns Summarised cash flow, $m FY2012 FY2011 FY2010 Free cash flow bridge FY11 to FY12, $m Operating cash flow before working capital 27.5 25.2 18.0 Movement in working capital 8.8 (4.5) 7.3 Cash generated by operations 36.3 20.7
Slide 12: Free cash flow and return on capital employed
Free cash flow and return on capital employed Free cash flow1 $m Return on capital employed (ROCE)2, % 58% 18.3 16.1 45% 41% 5.8 FY10 FY11 FY12 FY10 FY11 FY12 • Consistently strong free cash • Improving ROCE trend reflecting flow generation increasing profitability, prudent investment and tight work
Slide 13: Non-recurring start-up costs - update
Non-recurring start-up costs - update • Q4 FY12 non-recurring start-up costs of $0.8m, better than management’s expectations. Total for year $5.0m, at the lower end of the $5.0 - $6.0m guidance. • New high precision moulding machines, associated tooling and manufacturing processes now in place - yie
Slide 14: Individual Sector Performance
Individual Sector Performance
Slide 15: Consumer – growth despite market conditions
Consumer – growth despite market conditions Consumer revenues, $m 100 90 80 70 60 50 40 30 20 10 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY10 FY10 FY10 FY10 FY11 FY11 FY11 FY11 FY12 FY12 FY12 FY12 Asia Americas Europe India • Consumer revenue up 9% yoy • Sales to the largest customer in the sector dro
Slide 16: Telecoms / Datacoms – reduced network operator spend but margins improved
Telecoms / Datacoms – reduced network operator spend but margins improved Telecoms / Datacoms revenue, $m 35 30 25 20 15 10 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY10 FY10 FY10 FY10 FY11 FY11 FY11 FY11 FY12 FY12 FY12 FY12 Asia Americas Europe India • FY12 revenue down 10% on FY11 due to reduced in
Slide 17: Healthcare – strong revenue and margin performance
Healthcare – strong revenue and margin performance Healthcare revenue, $m 16 14 12 10 8 6 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY10 FY10 FY10 FY10 FY11 FY11 FY11 FY11 FY12 FY12 FY12 FY12 Asia Americas Europe India • FY12 revenue up 24% on prior year • FY12 gross margin increased to 27.5%, from
Slide 18: Industrial – record revenue and margins up
Industrial – record revenue and margins up Industrial revenues, $m 12 10 8 6 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY10 FY10 FY10 FY10 FY11 FY11 FY11 FY11 FY12 FY12 FY12 FY12 Asia Americas Europe India • Revenue up 6% year on year, with second half impacted by de-stocking • Gross margins were up
Slide 19: Conclusions
Conclusions • Resilient revenue despite some tough market conditions • Strong profit growth and cash generation, enabling significant further OPEX and CAPEX investment • Well positioned, both operationally and financially, for solid medium and longer term growth • Substantial acquisition opportuniti
Slide 20: Appendices: Abridged financial statements
Appendices Abridged financial statements
Slide 21: A. Abridged income statement
A. Abridged income statement $m FY 12 FY11 Revenue 517.8 490.0 Cost of sales (415.3) (397.9) Gross margin 102.5 92.1 Operating expenses (70.5) (66.0) Operating profit (b/f non-recurring items & share based payments) 32.0 26.1 Non-recurring items (5.0) - Share based payments (4.0) (2.6) Operating pro
Slide 22: B. Abridged statement of financial position
B. Abridged statement of financial position $m FY12 FY11 Goodwill 3.1 3.1 Property, plant and equipment and intangible assets 22.9 14.6 Other non-current assets 5.6 2.5 Total Non-current Assets 31.6 20.2 Inventories 49.8 51.9 Trade receivables 90.6 105.2 Other receivables 17.2 13.6 Cash and cash equ
Slide 23: C. Abridged statement of cash flows
C. Abridged statement of cash flows $m FY12 FY11 Operating cash flow before working capital movements 27.5 25.2 Movement in working capital 8.8 (4.5) Cash generated by operations 36.3 20.7 Tax and interest payments (6.0) (9.5) Purchases of tangible and intangible assets (12.0) (5.4) Free cash flow 1