Volex plc · LSE:VLX
Volex — FY2007 Earnings Presentation
25 slides from Volex's earnings presentation, 2007
Slide 1: Volex Group plc Full Year Results 2006/07
Volex Group plc Full Year Results 2006/07
Slide 2: Agenda
Agenda 2006/07 Highlights Financial Review Divisional Performance Strategy for Growth Outlook 2 Volex FY2007
Slide 3: 2006/07 Highlights
2006/07 Highlights 3 Volex FY2007
Slide 4: 2006/07 Highlights
2006/07 Highlights Revenues decreased by 0.7% to £248.7m. In local currencies terms, revenue increased 3.3%. Operating profit increased by 75% to £9.3m. Net debt at £9.6 m (2006: £13.3m) reducing gearing to 37%. Entered into three year US$76m facility with Lloyds TSB. Closed three manufacturing faci
Slide 5: Financial Review
Financial Review 5 Volex FY2007
Slide 6: FY2007 Group P&L
FY2007 Group P&L FY2007 FY2006 £’m £’m Revenue 248.7 250.4 (1) Operating Profit 9.3 5.3 Major Restructuring Programme Charge (2.0) (8.6) Net Interest (2.1) (2.7) Debt Issue Costs (2.4) (0.7) Profit/(Loss) before Tax 2.8 (6.7) Tax (2.0) (2.4) Profit/(Loss) after Tax 0.9 (9.1) (2) Adjusted Earnings Pe
Slide 7: Cash Flow
Cash Flow FY2007 FY2006 £’m £’m Operating Cash before Working Capital 12.5 8.6 Working Capital Movement (1.8) 4.6 Operating Cash Flow 10.7 13.2 Major Restructuring Programme (4.1) (1.5) Capital Expenditure (2.3) (2.3) Net Interest Paid (1.8) (2.5) Tax Paid (0.8) (4.4) Sale of Assets 1.9 - Net Cash G
Slide 8: Balance Sheet
Balance Sheet FY2007 FY2006 £’m £’m Intangible Assets 2.0 2.1 Tangible Assets 9.5 11.7 Net Current Assets 43.3 46.0 Non Current Liabilities (28.7) (33.7) Net Assets 26.1 26.1 Gearing % 37% 51% Opening Net Debt (13.3) Cash Generated 3.7 Exchange Movement 1.0 Shares Issued 1.3 Debt Issue Costs (2.3) C
Slide 9: Volex Global Footprint
Volex Global Footprint 15 Manufacturing Units (3 significantly downsized) 10 Sites Closed Over 50% of manufacturing sites closed over 2 years. 9 Volex FY2007
Slide 10: Restructuring Overview
Restructuring Overview Exceptional Charges 10 9 8 7 Property +1.2 Disposal 6 £'m 5 4 3 2 Harness 1 -3.2 Restructuring 0 2002 2003 2004 2005 2006 2007 -1.5 Re-banking 10 Volex FY2007
Slide 11: Low Cost Proposition
Low Cost Proposition Tyco Electronics 62 38 Molex 50 50 Amphenol 36 64 Volex 4 96 0 20 40 60 80 100 High Cost Regions Low Cost Regions Source: Company reports, Thomson Financial, RBC Capital Markets 11 Volex FY2007
Slide 12: Revenue Analysis: Product and Market Sectors
Revenue Analysis: Product and Market Sectors Market Sector Product Wiring Harness Vehicle & Aerospace £34.1m £34.9m (+2.6%) (+4.4%) Consumer Industrial & Power Products Medical £28.2m Products £112.7m (+1.4%) £123.3m (+12.2%) Interconnect (+4.2%) £91.3m Data & (-8.2%) Telecom £72.9m (-17.2%) 12 Vole
Slide 13: Revenue Analysis: Geography
Revenue Analysis: Geography Revenue by Source of Manufacturing Revenue by Destination 140 100 90 120 80 100 70 80 60 £'m £'m 50 60 40 40 30 20 20 10 0 0 Asia N. Am erica UK Europe Asia N. Am erica UK Europe FY07 FY06 FY07 FY06 13 Volex FY2007
Slide 14: Divisional Performance
Divisional Performance 14 Volex FY2007
Slide 15: Power Products
Power Products FY2007 FY2006 Segment Highlights: Power Products £’m £’m Revenue grew by 4.2%. In local currencies terms, Revenue 123.3 118.3 grew 8.8%. Operating Profit 6.2 3.6 Consolidated production from North America and Asia into the low cost region of South East China. Negatively impacted by co
Slide 16: Interconnect
Interconnect Interconnect FY2007 FY2006 Segment Highlights: £’m £’m Revenue declined 8.2% as we continue to Revenue 91.3 99.4 reposition the business. Operating Profit/(Loss) 4.6 (3.0) Operating margin increased significantly from (3.0)% to 5.0%. Focus on high growth and high margin opportunities th
Slide 17: Wiring Harness
Wiring Harness Wiring Harness FY2007 FY2006 Segment Highlights: £’m £’m Revenue increased 4.4%. Revenue 34.1 32.7 Secured significant long term contract with Rolls-Royce. Operating (Loss) (3.5) (3.9) Restructuring programme on schedule. Closed two UK facilities. Restructuring cost £3.2 million. Prof
Slide 18: Strategy for Growth
Strategy for Growth 18 Volex FY2007
Slide 19: Well Positioned in Attractive and Diverse Markets
Well Positioned in Attractive and Diverse Markets Consumer Participate mostly through Power Products. Focused on application specific products. Growth driven by “must have” products such as Apple iPhone & Nintendo Wii. Slow down in personal computer and DIY tool market. Volex revenue grew 12% despit
Slide 20: Redefining Addressable Market
Redefining Addressable Market Total Interconnect US$40 billion Powercords & Cable Assembly US$13.9 billion Volex current products account for only 35% of the total interconnect spend. Source: 2006 Fleck Report 20 Volex FY2007
Slide 21: Defining Interconnect Solutions
Defining Interconnect Solutions Total Product Supply Services Total Cable Portfolio Management Approved Vendor List Control Level 5 Solution Provider Outsource/In-source Management Engineering Portfolio NPI Product/Solution Services Rationalization Management Design Level 4 Supply Hubbing/ JIT-to-Li
Slide 22: Strategy
Strategy Power Products Maintain its momentum of strong top line growth. Further drive its market leader position by leveraging its reputation for quality, reliability and service. Global participation given our broad product safety certifications in the market. Continue to be supplier of choice in
Slide 23: Strategy
Strategy Interconnect Reposition into high growth and margin businesses. Focus on key high growth interconnect technology: High Speed (5 yr CAGR: 118.2%) Radio Frequency (17.5%) Fibre (11.4%) Significant expansion of engineering resources with experience in advanced interconnect technology. Expand p
Slide 24: Outlook
Outlook 24 Volex FY2007 Volex
Slide 25: Outlook
Outlook Diversity of markets and strong customer base provide great opportunity for growth. The financial and operational restructuring provide a competitive platform to succeed in the highly fragmented interconnect market. Focus on technology and application specific opportunities will strengthen V