Slide 1: Results for the year ending 31 August 2017
Results for the year ending 31 August 2017 November 2017 1
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 Strategy Evolution Final Comment Tim Carroll Jeremy Wilson Chief Executive Chief Financial Officer Officer 3
Slide 4: Introduction
Introduction Focusrite plc is a global music and audio products group that develops and markets proprietary hardware and software products. Our portfolio is used by both audio professionals and amateurs alike in order to enhance the creative process and realise the highest quality production of reco
Slide 5: Financial highlights for the year ended 31 Aug 2017
Financial highlights for the year ended 31 Aug 2017 Revenue £m 70 Revenue up 21.6% (13% at constant exchange 60 66.1 rates) 50 54.3 Growth across both major segments and in all 40 48.0 41.0 regions. 30 36.1 20 25.3 10 new products this year. 20.2 10 13.9 9.1 Significant strengthening of Laun
Slide 6: Sectors: Focusrite
Sectors: Focusrite RedNet: Enterprise, Live, Broadcast, Education. Networked Audio over IP $3,000 upwards 2-3% market share Red: Creative Professional, Music, Post $2,500 to $3,500 c.3% market share Clarett: Intermediate / Professional user $500 to $1,300 Now c.17% market share Scarlett: Mass market
Slide 7: Sectors: Focusrite
Sectors: Focusrite Focusrite FY17 FY16 Growth £m £m % Revenue 44.6 37.6 18.6% Scarlett, Clarett and Rednet all grew in absolute and market share terms Scarlett 2nd Generation particularly strong and market share now c50%. Number one audio interface in the world. Focusrite Pro launched to suppo
Slide 8: Sectors: Novation
Sectors: Novation Portfolio designed for creation of Electronic Music Controllers: Physical interfaces to control music creation software Standalone: Function on their own as sound generating devices Software: iOS apps that allow creation of music on iPhones/iPads CONTROLLERS Grid controllers: Launc
Slide 9: Sectors: Novation
Sectors: Novation Novation FY17 FY16 Growth £m £m % Revenue 18.9 13.7 37.8% Launchpad, Launchkey and Synthesisers all grew strongly leading to business segment growth of 37.8%. Also larger penetration from on-line distribution channels such as Amazon helped Launchpad volumes to grow 39%. 3 new
Slide 10: Sectors: UK Distribution
Sectors: UK Distribution Distribution FY17 FY16 Growth £m £m % Revenue 2.6 3.1 -13.6% Add-on products within music-making industry but UK only and small overall. Mostly KRK monitors. Falling due to ageing range. Also some revenue from sE microphones: Range of studio quality microphones suited
Slide 11: Agenda
Agenda Introduction and Highlights Product Sectors Markets Financial Review Strategy Evolution Final Comment Tim Carroll Jeremy Wilson Chief Executive Chief Financial Officer Officer 11
Slide 12: Financial highlights for the year ended 31 August 2017
Financial highlights for the year ended 31 August 2017 All major financial measures growing. Group revenue up by 21.6% to £66.1 million (FY16: £54.3 million) Adjusted EBITDA1 up by 27.9% to £13.1 million (FY16: £10.2 million) Operating profit up by 32.6% to £9.5 million (FY16: £7.1 million)
Slide 13: 2017: Markets
2017: Markets FY17 Segmental Revenue FY17 FY16 Growth RoW, £m £m % 20% USA 28.0 21.4 30.9% Europe, Middle East and Africa 25.2 22.6 11.4% USA, Rest of World 12.9 10.3 24.9% 42% Consolidated revenue 66.1 54.3 21.6% EMEA, 38% USA: up 30.9% to £28.0m − Constant FX growth 18%. − Expansion of Los Angel
Slide 14: Income Statement
Income Statement Revenue up 21.6%. £ million FY17 FY16 Growth – Constant FX growth 13%. Revenue 66.1 54.3 21.6% Cost of sales -39.7 -33.4 – All major territories increasing. Gross profit 26.4 20.9 26.3% Operating expenses before non-underlying items -16.9 -13.3 28.0% Gross margin 39.9% (FY16, 38
Slide 15: Balance Sheet
Balance Sheet £ million FY17 FY16 Intangible fixed assets include £4.1m of capitalised Intangible assets 5.0 4.8 R&D and £0.9m of goodwill & other intangibles Tangible assets 1.3 1.6 – Capitalise c70% and write off over 3 years. Total non current assets 6.3 6.4 – R&D expenditure c6% of revenue Inv
Slide 16: Cash flow
Cash flow £ million FY17 FY16 Working capital reduction. Adjusted EBITDA 13.1 10.2 – Lower stock and continued careful management Movement in wc (ex non- of debtors. underlying items) 0.7 -6.2 Operating cash flow (ex non- Investing £3.7m, (FY16, £3.7m) underlying items) 13.8 4.0 Interest (paid)
Slide 17: Summary and current trading
Summary and current trading Revenue up 21.6% with growth in both brands and all major territories. R&D remains important: 10 further new products launched. Significant increase in demand for Novation products, especially Launchpad where volumes up 39%. Adjusted EBITDA up by 27.9% to £13.1 mi
Slide 18: Agenda
Agenda Introduction and Highlights Product Sectors Markets Financial Review Strategy Evolution Final Comment Tim Carroll Jeremy Wilson Chief Executive Chief Financial Officer Officer 18
Slide 19: 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 19
Slide 20: 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 PARADIGM 1 PARADIGM 2 PARADIGM 3 to enable the creative process Consoles, Home
Slide 21: 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 21
Slide 22: Expand into new markets
Expand into new markets Leverage current portfolio and IP to enter new markets Expand efforts in geographies with large potential Careful consideration of acquisitions 22
Slide 23: Final words
Final words Three core goals − Growing our customer base − Increasing the lifetime value of our customers − Expanding into new market segments in both price and product. Continue to see strong market acceptance across our portfolio New product introduction pipeline continues to grow. Since y
Slide 24: Making Music Easy to Make
Making Music Easy to Make 24