Gooch & Housego Plc · LSE:GHH
Gooch & Housego — FY2019 Earnings Presentation
19 slides from Gooch & Housego's earnings presentation, Dec 3, 2019
Slide 1: Preliminary Full Year Results – Year Ended 30 September 2019
PRELIMINARY FULL YEAR RESULTS YEAR ENDED 30 SEPTEMBER 2019 CEO: Mark Webster / CFO: Chris Jewell
Slide 2: Key highlights – strategic progress
Key highlights – strategic progress Trading: as previously disclosed, challenging macro-economic environment in our industrial laser sector, contrasted with record levels of demand for fibre optics, hi-reliability fibre couplers used in undersea cables and life science products Industrial laser
Slide 3: Key highlights – strategic progress (financial)
Key highlights – strategic progress Financial Revenue of £129.1 million, 3.4% ahead of previous year, flat excluding foreign exchange Adjusted profit before tax of £15.0 million, down 19.9%. This reflects both the lower market demand for relatively higher margin critical components for industria
Slide 4: Financial headlines – Summary Income Statement
Financial headlines Summary Income Statement Year Ended 30 September 2019 2018 % Change £’000 £’000 Revenue growth of 3.4% yoy, (0.2)% excluding foreign exchange, (8.0)% excluding foreign Revenue 129,133 124,883 3.4% exchange and acquisitions/disposals. Gross profit 44,902 50,072 (10.3)% 46:54%
Slide 5: Financial headlines – Cash Flow
Financial headlines Cash Flow Year Ended 30 September 2019 2018 £6.6 million build in working capital, primarily driven £’000 £’000 by inventory Net cash flow from operating 11,646 9,170 activities 50% of the inventory growth to support growth in FY Cash flow from investing activities 2020 from
Slide 6: Industrial
Industrial Financials (47% of FY19 revenue) FY19 FY18 Reported growth Revenue £60.9m £72.9m (16.5)% Adjusted operating £9.0m £12.3m (26.8)% profit % margin 14.8% 16.9% (210bp) Revenue decline driven by cyclical slowdown in industrial lasers, US/China tariff dispute and a very strong comparator yea
Slide 7: Aerospace & Defence
Aerospace & Defence Financials (34% of FY19 revenue) FY19 FY18 Reported growth Revenue £44.2m £40.8m 8.4% Adjusted operating £3.5m £5.7m (38.6)% profit % margin 7.9% 14.0% 610bp Revenue growth of £3.4 million or 8.4%, on an organic basis 5.9% G&H is now able to bring a wide range of photonic cap
Slide 8: Life Sciences/Biophotonics
Life Sciences/Biophotonics Financials (19% of FY19 revenue) FY19 FY18 Reported growth Revenue £24.1m £11.2m 114.7% Adjusted operating £5.1m £1.6m 212.8% profit % margin 21.2% 14.6% 660bp Revenue growth of £12.9 million or 114.7%, on an organic basis by 22.4% Driven by growth across three main G&
Slide 9: Our Strategy
Our Strategy Remains diversification & moving up the value chain Diversify Aim to establish ‘critical mass’ in both the A&D and Life Science sectors and in an ‘ideal world’ there would be an equal split between the three market sectors across G&H. A&D represents 34% of FY 2019 revenue, Life Sciences
Slide 10: Performance improvement programme
Performance improvement programme On track, delivering sustainable benefits The three manufacturing centres – Acousto Optics/Electro Optics, Fibre Optics and Precision Optics/Systems – now cover ten of our twelve manufacturing sites. Each manufacturing centre head’s role is to ensure that best pra
Slide 11: Key messages & Outlook
Key messages & Outlook • Trading: as previously disclosed, challenging macro-economic environment in our industrial lasers sector, contrasted with record levels of demand for our fibre optic products, hi-reliability fibre couplers used in undersea cables and life science products • Industrial lasers
Slide 12: Key messages & Outlook
Key messages & Outlook • G&H is committed to making further investment in R&D target areas that represent the highest return for our photonic technologies. In FY 2019 we delivered 48* new products which contributed £13.5 million (FY 2018: £12.0 million) to group revenue • We will continue to activel
Slide 13: Appendices
Appendices dm Gooch & Housego ENABLING PHOTONIC TECHNOLOGIES
Slide 14: G&H photonics – part of our everyday lives
G&H photonics – part of our everyday lives You probably use G&H photonics every time you use the internet or make a transatlantic phone call Your smartphone or tablet was manufactured and tested using G&H photonic components: - Lasers containing G&H acousto- and electro-optics are used in virtuall
Slide 15: Key Customers
Key Customers PAGE 15 Preliminary Announcement December 2019
Slide 16: Targeted R&D
Targeted R&D New products Precision Acousto/ Fibre Optics & Electro-Optics Optics Systems Aerospace & 29 1 Defence Industrial 6 3 Life Sciences 6 3 48* new products launched in FY 2019 compared with 29 in prior year “R&D is the life blood of the business. We have released 48 new products to the ma
Slide 17: Prior Year Restatement and Non Underlying Items
Prior Year Restatement and Non Underlying Items Prior Year Restatement Non Underlying Items Total non underlying items of £9.1m In support of the establishment of the manufacturing centres the Group has M&A related - £8.1m standardized its approach as to which costs are included within its inv
Slide 18: IFRS 16
IFRS 16 New accounting standard for leases effective 1st October 2019 Requires operating leases to be accounted for as finance leases on the balance sheet No restatement of comparatives No net cashflow or bank covenant impact – bank covenant continues to be calculated according to the prior
Slide 19: Investor Timetable
Investor Timetable 19th February 2020 - AGM Trading Update 7th April 2020 – Half Year Trading Update June 2020 – Interim Announcement October 2020 – Full Year Trading Update December 2020 – Preliminary Announcement PAGE 19 Preliminary Announcement December 2019