Volex Plc · LSE:VLX
Volex — H1 FY2018 Earnings Presentation
16 slides from Volex's earnings presentation, Nov 10, 2017
Slide 1: Volex – Interim Results 2017/18
Volex – Interim Results 2017/18 Nat Rothschild Daren Morris 10 November 2017
Slide 2: Volex is bringing power and connectivity
Volex is bringing power and connectivity to equipment that is changing how we work and live!
Slide 3: Disclaimer
Disclaimer This Presenta,on does not cons,tute or form part of any offer or invita,on to sell or issue, or any solicita,on of any offer to purchase or subscribe for, any securi,es to any person in any jurisdic,on to whom or in which such offer or solicita,on is unlawful, nor shall it (or any part of it
Slide 4: Summary of H1 Results
Summary of H1 Results • Consolidated revenue fell 2.8% to $162million • Excluding our largest Power customer, group revenue increased by 5% • Pre-excep>onal opera>ng profits up 27% to $5.5million despite fall in overall sales, driven by cost reduc>on and improvement in mix • Pre-excep<onal opera<ng p
Slide 5: Strategy for FY18 and beyond
Strategy for FY18 and beyond Improved execu<on in our Sales and Opera<ons: • Diversify our revenue stream to make business more resilient • Improved use of engineering resources to develop new customers and products • Introduce lean-manufacturing mentality into all sites • Leverage our global sourci
Slide 6: Financial Review
Financial Review
Slide 7: Revenue Progression
Revenue Progression • The top 3 customers as a propor>on of the total sales has reduced: from 47% in FY15 to Volex Sales - last 3 years 38% in H1 FY18 200 180 160 • Excluding sales to our largest customer, 140 revenue increased by 5% in H1 FY18 120 $ millions 100 80 60 • This is an accelera>on on th
Slide 8: H1 Revenue Performance
H1 Revenue Performance Power Cord – HY2017 to HY2018 Cable Assemblies – HY2017 to HY2018 -10% +8% -25% -47% -3% +20% H1-2016/17 H1-2017/18 H1-2016/17 H1-2017/18 Specified Customers Other Customers Specified Customers Other Customers • Sales fell from $100 to $91 million • Sales increased from $66 to $
Slide 9: Financial Summary
Financial Summary $m FY16 FY17 H1-17 H1-18 • Sales diversifica>on and growth strategy star>ng to Revenue 367.5 319.6 166.1 161.5 show benefits Gross Profit 60.4 55.5 28.0 28.9 - Gross Margin 16.4% 17.4% 16.9% 17.9% • Gross margin shows an increase as lean ini>a>ves Operating Costs (53.2) (46.4) (23.7)
Slide 10: Cable Assemblies
Cable Assemblies $m FY16 FY17 H1-17 H1-18 Change Revenue 137.3 131.3 65.7 70.9 7.9% Gross Profit* 30.6 27.9 13.8 14.8 7.2% Gross Margin* 22.3% 21.2% 21.0% 20.9% Operating Costs 20.8 17.4 9.0 9.6 6.7% Operating Profit* 9.8 10.5 4.8 5.2 8.3% Operating Margin* 7.2% 8.0% 7.3% 7.4% *Underlying measure be
Slide 11: Power Cords
Power Cords $m FY16 FY17 H1-17 H1-17 Change Revenue 230.2 188.3 100.4 90.5 -9.9% Gross Profit* 29.8 27.5 14.2 14.0 -1.4% Gross Margin* 12.9% 14.6% 14.2% 15.5% Operating Costs 27.5 24.3 12.8 11.3 -11.4% Operating Profit* 2.3 3.2 1.5 2.7 80.0% Operating Margin* 1.0% 1.7% 1.5% 3.0% *Underlying measure
Slide 12: Cash Flow
Cash Flow $30 $25 $20 $15 Cash Flow ($m) $10 $5 5.8 $0 -$5 -$10 -$15 FY17 Net Cash Opera<ng Investment Interest and Investment Other (largely H118 Net Cash Cash Flow into Working Tax into Plant & FX on loan Capital Machinery revalua<on) • A reasonable opera>ng cash performance has been absorbed by i
Slide 13: Outlook
Outlook • Current expecta>ons are that revenues will show a slight recovery in FY18 • Power Cord expected to show a decline with improved margin • Cable Assemblies pipeline is encouraging and we should see reasonable growth • Gross margin % to be consolidated at least at FY17 levels • Opera>ng expen
Slide 14: Additional Information
Additional Information
Slide 15: Our customers
Our customers Consumer Datacom Telecom Industrial Healthcare Transporta/on
Slide 16: 8 world class manufacturing sites
8 world class manufacturing sites Volex Heng Gang, Shenzhen – 1745pax Volex Zhongshan, Guangdong – 1388pax Volex Batam, Indonesia – 1200pax Volex de Mexico, Tijuana – 503pax Volex Chennai, India – 288pax Volex Hanoi, Vietnam – 283pax Volex Suzhou, China – 587pax Volex Poland, Bydgoszcz – 323pax