Volex Plc · LSE:VLX
Volex — FY2014 Earnings Presentation
23 slides from Volex's earnings presentation, June 2014
Slide 1: 2014 Preliminary Results & Group Refinancing
2014 Preliminary Results & Group Refinancing Karen Slatford, Chairman Christoph Eisenhardt, CEO Nick Parker, CFO June 2014
Slide 2: Disclaimer
Disclaimer For the purpose of this disclaimer, the presentation that follows (the “Presentation”) shall mean and include a hard copy of the slides, the speeches of the presenter(s), the question and answer session and any materials distributed at, or in connection with, it. The Presentation has been
Slide 3: Summary
Summary Results for Sales in line with expectations at $400m year ended Restructuring and exceptional items $11.1m 30 March Operating profits of $4.5m 2014 Year end net debt at $32.2m (September 2013:$41.4m) Volex Transformation Plan (VTP) is delivering: Significant new customer wins Cur
Slide 4: Legacy Issues
Legacy Issues Revenue decline Business focus on high margin Data product portfolio rather than Power products Price increases & strategic “no bid” decisions throughout the Power division Certain large infrastructure projects coming to an end in the Data division • Reduced margins Low level
Slide 5: Volex Specifics
Volex Specifics Blue chip customer base Volex brand values Technology and innovation Quality and reliability Design to specification / target price due to flexible supply chain Global presence Local for local sales, engineering, manufacturing and services © 2014 Volex plc. 5
Slide 6: Volex
Volex Leading global provider of interconnect solutions and power products, servicing telecommunications, datacoms / data-centre, industrial, medical, consumer electronics and home appliances sectors since 1919. Volex Power Volex Data Wire & Cable Power Connectors Microwave © 2014 Volex plc. 6
Slide 7: Power Division
Power Division PVC power cords HF power cords Duck-Heads © 2014 Volex plc. 7
Slide 8: Power Division
Power Division Volex Market Share Volex Customer Specifics Dynamic customer sourcing through allocations Volume driven, price sensitive but engineered Regional safety regulations Increasing cosmetic requirements Emerging demand for localised supplier base Others © 2014 Volex plc. 8
Slide 9: Data Division
Data Division High Speed Cables Internal Cables / Harnesses © 2014 Volex plc. 9
Slide 10: Data Division
Data Division Volex Market Share Customer Specifics Market currently segmenting into volume and niche value providers: Engineered products with long lifecycle Volex 4.5% Technical specification and performance Long term established supplier-customer relationships Others Increasing requiremen
Slide 11: FY2014 Review
Volex FY2014 Review
Slide 12: Income Statement
Income Statement $m FY2012 FY2013 FY2014 Revenue 517.8 473.2 400.2 Gross Profit* 102.5 85.3 66.5 Gross margin* 19.8% 18.0% 16.6% Operating Profit* 32.0 12.3 4.5 Operating margin* 6.2% 2.6% 1.1% Exceptionals (5.0) (8.0) (11.1) Share Based Payments (3.9) (0.2) 2.3 Finance costs (3.9) (2.2) (3.3) Tax (
Slide 13: Power Division
Power Division $m FY2012 FY2013 FY2014 Revenue 332.6 323.1 265.4 Gross profit* 60.4 48.5 34.5 Gross margin* 18.2% 15.0% 13.0% Operating costs (28.6) (29.7) (27.2) Operating profit* 31.8 18.8 7.3 Operating margin* 9.6% 5.8% 2.7% *Underlying measure before Share Based Payments and Exceptional items
Slide 14: Data Division
Data Division $m FY2012 FY2013 FY2014 Revenue 185.1 150.1 134.8 Gross profit* 42.1 36.7 32.0 Gross margin* 22.7% 24.5% 23.8% Operating costs (25.0) (24.0) (19.4) Operating profit* 17.1 12.8 12.7 Operating margin* 9.2% 8.5% 9.4% *Underlying measure before Share Based Payments and Exceptional items
Slide 15: Cash Flow
Cash Flow Net debt increased due to supplier payment profiles and flagship capex projects in 2012 Share proceeds relate to December 2013 share issue Following current fund raising exercise net debt falls to $4 million © 2014 Volex plc. 15
Slide 16: Balance Sheet
Balance Sheet $m FY2013 FY2014 Goodwill & Intangibles 7.1 8.7 Property, Plant & Equipment 39.7 38.7 Other 5.3 1.3 Non-current Assets 52.1 48.7 Inventories 43.0 40.0 Trade & Other Receivables 85.3 78.3 Cash and Bank Balances 25.0 13.7 Current Assets 153.3 132.0 Trade & Other Payables 98.1 79.4 Overdr
Slide 17: The Refinancing
The Refinancing BANK FACILITIES Existing $75m revolving credit facility expired in June 2015 Current debt $33m (vs $32m at year end) Extended and amended facility agreed with current banking syndicate Revolving Credit Facility of $45m Three year term to June 2017 Normal covenants – net d
Slide 18: The Refinancing (cont'd)
The Refinancing (cont’d) EQUITY ISSUE 4 for 11 Open Offer to shareholders raising £18.1m gross ($30.3m) Investec has underwritten and procured sub-underwriters for the Open Offer EXPECTED TIMETABLE Announcement of Results, Share Issue and new Bank Facilities – 12 June General Meeting of Shar
Slide 19: Update on Volex Transformation Plan
Update on Volex Transformation Plan
Slide 20: Restoring Value
Restoring Value Defined and implemented the Volex Transformation Plan Hired new Board and Executive management team Initiated people transformation within sales and operations Implemented two division structure and four sales regions Returned to revenue growth at improved margins Enforci
Slide 21: Volex Transformation Plan (VTP)
Volex Transformation Plan (VTP) Scope Deliver sustainable and profitable Customer Relationship revenue growth by aggressively Management leveraging Volex competitive strengths Areas of focus Local customer proximity across sales Supply Chain and supply chain Management Increase efficiency in s
Slide 22: Outlook
Volex Outlook
Slide 23: FY2015 Outlook
FY2015 Outlook Volex Transformation Plan is delivering: Revenue growing Margins improving Cash neutral Revenue in April and May 13% higher than prior year Factory loading for Q1 indicates revenue will be: 10% ahead of Q1 FY2014; and 4% ahead of Q4 FY2014 Strong order intake for hig