Slide 1: Results for the period ending 28 February 2018
ocusrite Results for the period ending 28 February 2018 April 2018
Slide 2: Disclaimer
Disclaimer The content of this document (the “Presentation”) has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 (“FSMA”), as amended. Reliance on this document for the purpose of engaging in any investment activity may expose an individual
Slide 3: Agenda
| Agenda Introduction and Highlights Product Sectors Markets Financial Review Growth Strategy Conclusions Tim Carroll Chief Executive Officer Jeremy Wilson Chief Financial Officer Focusrite ?
Slide 4: Introduction
Introduction Focusrite and Focusrite Pro: Novation: Ampify: 4
Slide 5: Highlights for the six months ended February 2018
Highlights for the six months ended 28 February 2018 5
Slide 6: Focusrite
Focusrite RedNet: Red: Clarett: Scarlett: 6
Slide 7: Focusrite
Focusrite Focusrite HY18 HY17 FY17 Growth £m £m £m % Revenue 25.7 20.8 44.6 23.2 Scarlett, Clarett and Rednet all grew in absolute terms. Scarlett continues to sell strongly, and remains the number one audio interface in the world. Clarett sales up 28%, driven by launch of our USB range this h
Slide 8: Novation
Novation Controllers: Standalone: Software: CONTROLLERS Launchpad - $100 to $300. Launchkey - $80 to $400. STANDALONE Circuit - $330. Bass Station II - $400. SOFTWARE $2 8
Slide 9: Novation
Novation Novation HY18 HY17 FY17 Growth £m £m £m % Revenue 11.4 9.6 18.9 18.9 Launchpad and Synthesisers grew strongly leading to business segment growth of 18.9%. Launchpad range up 26%. Wider market acceptance by increasingly mainstream audiences. Christmas holiday strong and could signal
Slide 10: UK Distribution
UK Distribution Distribution HY18 HY17 FY17 Growth £m £m £m % Revenue 1.7 1.6 2.6 9.4 Add-on products within music-making industry but UK only and small overall. Mostly KRK monitors. Ageing range. Also sE microphones: Range of studio quality microphones suited for vocal and instrument recordin
Slide 11: Financial highlights for the six months ended February 18
Financial highlights for the six months ended 28 February 2018 Group revenue up by 21.2% to £38.8 million (HY17: £32.0 million) EBITDA1 up by 30.0% to £8.0 million (HY17: £6.1 million) Operating profit up by 36.3% to £6.2 million (HY17: £4.6 million) Profit before tax up by 26.8% to £5.8 mil
Slide 12: 2018: Regional performance
2018: Regional performance Regional split of revenue Segmental Revenue HY18 HY17 FY17 Growth £m £m £m % USA 16.1 13.2 28.0 21.7 Europe, Middle East and Africa 16.0 13.0 25.2 23.5 Rest of World 6.7 5.8 12.9 15.2 Consolidated revenue 38.8 32.0 66.1 21.2 USA: up 21.7% to £16.1m Constant FX growth 3
Slide 13: Income Statement
Income Statement HY18 HY17 FY17 Growth Revenue up 21.2% £ million £ million £ million % Constant FX growth 26% Revenue 38.8 32.0 66.1 21.2 Cost of sales -22.6 -19.1 -39.7 All major territories increasing Gross profit 16.2 12.9 26.4 26.0 Operating expenses -10.0 -8.3 -16.9 Gross margin 41.7%
Slide 14: Balance Sheet
Balance Sheet HY18 HY17 FY17 £ million £ million £ million Intangible assets 5.2 5.2 5.0 Intangible fixed assets include £4.2m of Tangible assets 1.4 1.5 1.3 capitalised R&D and £1.0m of goodwill & other Total non current assets 6.6 6.7 6.3 intangibles Inventories 10.9 10.2 8.3 R&D expenditure c
Slide 15: Cash flow
Cash flow HY18 HY17 FY17 Further working capital decrease (cash inflow). £ million £ million £ million Higher revenue would normally lead to an EBITDA 8.0 6.1 13.1 increase in working capital. Movement in working capital 1.0 0.0 0.6 Operating cash flow 9.0 6.1 13.7 Interest paid -0.0 -0.0 -0.0
Slide 16: Summary and current trading
Summary and current trading Revenue up 21.2% with growth in both brands and all major territories. EBITDA up by 30.0% to £8.0 million (HY17: £6.1 million). Strong cash generation: Cash up from £14.2 million at FY17 to £19.7 million. Interim dividend of 1.0 pence, up 33.3% (HY17: 0.75 pence)
Slide 17: Focusrite Growth Strategy
Focusrite Growth Strategy Expand into new and high potential markets Increase lifetime value of customers Grow core customer base Innovation Disruption Expansion 17
Slide 18: Market sizing of our customer personas and how our brands align
Market sizing of our customer personas and how our brands align New Creator Passionate Maker Serious Aspiring The Master Enterprise/Facility Producer $200-300M $200-250M $75-100M $50-100M $50-100M Foc
Slide 19: Grow our customer base
Grow our customer base New product offerings as well as next New, disruptive solutions that increase our generation versions and enhancements to addressable market current portfolio Customer relevant hardware & software to enable the creative process PARADIGM 1 PARADIGM 2 PARADIGM 3 Consoles, Home
Slide 20: Lifetime value of our Customers
Lifetime value of our Customers Connected Experience Hub Building a connected experience to tie our solutions together Add-on software tools and content Participation in more of the traditional value chain 20
Slide 21: Expand into new customer markets
Expand into new customer markets Leverage current portfolio and IP to enter new markets Focusrite Pro: Post Production Broadcast Education Installed Sound Focusrite Scarlett range Gaming 21
Slide 22: Expand into new geographic markets
Expand into new geographic markets Expand efforts in geographies with large potential Careful consideration of acquisitions 22
Slide 23: Conclusions
Conclusions Great half year operationally and financially. Since year end revenue and cash have both grown. Product plans talking shape. Geographic expansion continues. Strategy developments bearing fruit. − Growing our customer base. − Increasing the lifetime value of our customers. − Exp
Slide 24: Making Music Easy to Make
Making Music Easy to Make Focusrite