Volex plc · LSE:VLX
Volex — H1 2006/07 Earnings Presentation
19 slides from Volex's earnings presentation, November 2006
Slide 1: Interim Results 2006/07
Volex Group plc Interim Results 2006/07 November 2006
Slide 2: Briefing agenda
Briefing agenda 1. Introduction Heejae Chae, Group CEO 2. Results overview Heejae Chae 3. Financials Derek Walter, Group FD 4. Divisional operations Heejae Chae 5. Summary Heejae Chae Volex Group plc Interim results 2006/07 2
Slide 3: Results highlights
Results highlights 9 Sales increased by 3.1% to £127.7m (1H06: £123.9m) 9 Operating profit of £6.1m including £1.1m gain on sale of property (1H06: loss £0.3m after charging £1.7m restructuring charges): underlying operating profit increased to £5.0m (1H06: £1.4m) 9 Sale of Butts Mill, Leigh, for £1
Slide 4: Financial review
Volex Group plc Financial review
Slide 5: Income statement
Income statement FY2006 FY2007 1H 2H FY 1H £m £m £m £m Sales 123.9 126.5 250.4 127.7 Operating profit* 1.4 3.9 5.3 5.0 Major restructuring programme (1.7) (6.9) (8.6) 1.1 (charge)/credit Net interest (1.7) (1.7) (3.4) (1.6) PBT* (0.3) 2.2 1.9 3.4 PBT (2.0) (4.7) (6.7) 4.5 Tax (charge) (1.2) (1.2) (2
Slide 6: External sales by product
External sales by product Interconnect 2006/07 Percentage variation on prior H1 Powercord Wiring Harness 14.8% 15% 2.5% 0% 13% (15%) (9.3%) 50% 2006/07 Percentage variation on prior H2 37% 4% 2.7% 0% (0.3)% (1.9)% (4%) Volex Group plc Interim results 2006/07 6
Slide 7: External sales by source
External sales by source 2006/07 Percentage variation on prior H1 Europe United Kingdom 19.5% 20% North America 5.1% Asia & S. America 0% (4.7%) (12.7%) (20%) 43% 17% 2006/07 Percentage variation on prior H2 10% 13% 6.2% 6.0% 27% 0% (4.2%) (6.7%) (10%) Volex Group plc Interim results 2006/07 7
Slide 8: Locations
Locations Factories Sales/Support Total End 05 25 17 42 Conover 9 Malaysia Philippines 9 Tczew Aguascalientes Fremont 9 Thailand 9 (7) 4 (3) End 06 18 21 39 Butts Mill – sold Aug ‘06 Quincy – closing Dec ‘06 Clinton – closed Oct ‘06 Fremont – closing Dec ’06 Stoke – closing Dec ‘06 (3) (2) (5) End 0
Slide 9: Tax charge
Tax charge FY2006 FY2007 Current tax 1H 2H Year 1H £m £m £m £m Charge for the period 1.2 0.6 1.8 1.2 Adjustment in respect of 0.2 0.4 0.6 - previous periods Total current tax 1.4 1.0 2.4 1.2 Deferred tax (0.2) 0.2 - - Total tax charge 1.2 1.2 2.4 1.2 Effective tax rate (on PBT* of £3.357m) 35% * Bef
Slide 10: Capital employed
Capital employed 1 Oct 2 April 2 Oct 2006 2006 2005 Actual Actual Actual £m £m £m Tangible fixed assets 10.3 11.5 13.2 Inventories 34.6 30.3 30.7 Trade and other receivables 56.3 52.8 55.2 Trade creditors & accruals (49.1) (42.7) (42.8) Working capital 41.8 40.4 43.1 Capital employed 52.1 51.9 56.3
Slide 11: Balance sheet
Balance sheet 1 Oct 2 Apr 2 Oct 2006 2006 2005 Actual Actual Actual £m £m £m Capital employed 52.1 51.9 56.3 Intangible assets 2.1 2.1 2.1 Net debt (13.7) (13.3) (17.5) Current & deferred tax balances (2.4) (1.8) (2.5) Retirement benefit obligation (3.2) (3.5) (3.8) Other provisions & long term (7.7
Slide 12: Operating cash flow
Operating cash flow 1H 2007 1H 2006 Ongoing MRP Total Ongoing MRP Total £m £m £m £m £m £m Operating profit/(loss) 5.0 1.1 6.1 1.4 (1.7) (0.3) Amort, dep’n and impair. 1.8 - 1.8 2.0 - 2.0 Profit on disposal - (1.1) (1.1) - - - Working capital (4.2) (0.1) (4.3) 0.1 (0.2) (0.1) Provisions (0.4) (1.3) (
Slide 13: Cash flow
Cash flow 1H 2007 1H 2006 £m £m Ongoing operating cash flow 0.6 2.1 Tax paid (0.5) (2.3) Net interest paid (0.9) (1.4) Ongoing cash flow (0.8) (1.6) Cash flows of major restructuring programme 0.1 (1.1) Issue of share capital - 17.6 Refinancing costs paid (0.2) (2.4) FX movement 0.8 (2.0) Subtotal (
Slide 14: Divisional operations
Volex Group plc Divisional operations
Slide 15: Divisional operations – Powercord
Divisional operations – Powercord Powercord – 1H07 Segment Highlights • Strong revenue – 15% growth vs. 1H06 1H07 1H06 £’000 £’000 • Strong demand in consumer segment • Positive outlook albeit cautious against slowing economy Revenue 64,125 55,581 • Material cost still at high level; expect no major
Slide 16: Divisional operations – Interconnect
Divisional operations – Interconnect Interconnect – 1H07 Segment Highlights 1H07 1H06 • Revenue decline due to rationalisation of low £’000 £’000 margin accounts • Positive outlook in medical and telecom equipment sectors Revenue 47,218 52,052 • Leveraging Preferred Supplier status Operating profit/
Slide 17: Divisional operations – Wiring Harness
Divisional operations – Wiring Harness Wiring Harness – 1H07 Segment Highlights • Revenue remains stable with positive outlook in 1H07 1H06 construction and defence sector £’000 £’000 • Continue to struggle with high cost basis • Restructuring the operation to low cost area to be Revenue 16,396 15,9
Slide 18: Summary
Volex Group plc Summary
Slide 19: Summary
Summary Continue the positive 9 Operating profit* improved 250% on 1H06 trend and focus on the 9 Restructuring ahead of schedule next stage of the 9 Most of restructuring benefit reflected strategy 9 Tight cash flow control 9 Focus on revenue growth: • Leverage Preferred Supplier status • Promote en