Tt Electronics Plc · LSE:TTG
Tt Electronics — H1 2010 Earnings Presentation
35 slides from Tt Electronics's earnings presentation, Aug 19, 2010
Slide 1: Half Year Results Presentation
Business Group Strategy Review 14th November 2008 Half Year Results Presentation 6 months ended 30 June 2010 19 August 2010 Geraint Anderson, Group Chief Executive Shatish Dasani, Group Finance Director 1
Slide 2: Agenda
Agenda 1. First Half Summary 2. Group Strategy 3. Group Profile 4. Divisional Review 5. Financial Summary 6. Outlook 7. Conclusion 8. Q&A August 2010: Half Year Results 2
Slide 3: First Half Summary
First Half Summary • Significant improvement in trading in the first six months of the year • Focus on creating a platform for sustainable growth for the medium to long term • Actions continuing to improve operational excellence • Increased visibility for the second half of the year but uncertainty
Slide 4: First Half Summary
First Half Summary • Group revenue up 23% to £280.7m (2009: £227.6m). On an underlying basis, excluding the impact of FX and business closures, Group revenue increased by 27% • Profit before tax and exceptional items of £9.3m (2009: loss of £3.8m) with headline earnings per share of 4.0 pence (2009:
Slide 5: Group Strategy: Strategic Focus
Group Strategy Strategic Focus “STRATEGIC FOCUS” “DEVELOPMENT” “RUN FOR VALUE” Heartland to the brand / group Scalable Opportunities Value Businesses Components/Connectors/Sensors IMS Secure Power General Industrial AEI Compounds BAS Components • Major driver of shareholder • Have potential to deliv
Slide 6: 2010 - Framework for Priorities
Group Strategy 2010 - Framework for Priorities Phase I Phase II Phase III 2009-2010 2010-2011 2011 • Complete strategy review and • Execution announce to market - People - Focus on “Operational Excellence” • Core Business “Fit for • Reorganise Divisional structures Purpose” Customer Focus • Bolste
Slide 7: Progress to Date
Group Strategy Progress to Date Establish clear strategy Group and divisional strategies in place Simplify organisational structure New divisional structure Strengthen management team 4 senior management hires, numerous actions within divisions Restructure business Annualised cost savings deli
Slide 8: Operational Excellence Focus
Group Strategy Focus Operational Excellence • Customer focus • Product innovation • Manufacturing Building a platform for People sustainable • Develop management strength in depth growth • Employee engagement • Cultures and values August 2010: Half Year Results 8
Slide 9: Revenue by Division
Group Profile Revenue by Division H1 2010 H1 2009 General General Industrial Industrial Secure £18.6m £22.0m Sensors Secure Power Sensors Power (7%) Secure Power Secure & Industrial £68.5m (10%) £46.8m £38.0m & Industrial Power £146.5m (25%) (24%) (20%) (14%) £146.5m £26.4m (12%) (25%) IMS IMS £42.7
Slide 10: Revenue by Destination and Market
Group Profile Revenue by Destination Revenue by Market H1 2010 (H1 2009) H1 2010 (H1 2009) Defence & Aerospace ROW UK 12% 18% 18% (14%) (14%) Automotive (20%) 36% (34%) North America Rest of Industrial 25% Europe 41% (26%) 39% (37%) 7% (40%) (12%) Telecom & Computer Medical 4% (3%) August 2010: Half
Slide 11: Operating Profit / (Loss) by Division
Group Profile Operating Profit / (Loss) by Division* H1 2010 H1 2009 £m £m Components 5.2 2.4 Sensors 1.1 (4.3) IMS 1.8 Secure 1.5 Power Secure Power 2.5 £2.8m 2.0 (29%) General Industrial 0.7 (2.1) Total 11.3 (0.5) (*before exceptional items) August 2010: Half Year Results 11
Slide 12: Divisional Review: Components
Divisional Review Components 2010 2009 2009 1st Half 1st Half Full Year £m £m £m Revenue 112.9 93.9 190.8 Operating Profit 5.2 2.4 5.9 Operating Profit Margin 4.6% 2.6% 3.1% • Underlying revenue (excluding FX) increased by 22% • Improvement in operating margin to 4.6% resulting from increased volume
Slide 13: Divisional Review: Sensors
Divisional Review Sensors 2010 2009 2009 1st Half 1st Half Full Year £m £m £m Revenue 68.5 46.8 105.4 Operating Profit 1.1 (4.3) (3.9) Operating Profit Margin 1.6% (9.2)% (3.7)% • Underlying revenue (excluding FX) increased significantly by 50% compared to weak first half 2009 • Operating profit of
Slide 14: Divisional Review: IMS
Divisional Review IMS 2010 2009 2009 1st Half 1st Half Full Year £m £m £m Revenue 42.7 38.5 75.1 Operating Profit 1.8 1.5 2.4 Operating Profit Margin 4.2% 3.9% 3.2% • Underlying revenue increased by 12% (excluding FX) • Operating profit margin improved to 4.2% (2009: 3.9%) • Some impact from compone
Slide 15: Divisional Review: Secure Power
Divisional Review Secure Power 2010 2009 2009 1st Half 1st Half Full Year £m £m £m Revenue 38.0 26.4 59.1 Operating Profit 2.5 2.0 4.8 Operating Profit Margin 6.6% 7.6% 8.1% • Underlying revenue (excluding FX) increased by 38% • Operating profit margin reduced to 6.6% (2009: 7.6%) • Strong performan
Slide 16: Divisional Review: General Industrial
Divisional Review General Industrial 2010 2009 2009 1st Half 1st Half Full Year £m £m £m Revenue 18.6 22.0 49.7 Operating Profit 0.7 (2.1) (2.7) Operating Profit Margin 3.8% (9.5)% (5.4)% • AB Automotive climate control business closed in 2009 (2009 first half revenue £5.4m, operating loss £2.2m) •
Slide 17: Income Statement
Financial Summary Income Statement 2010 2009 2009 1st Half 1st Half Full Year Continuing operations £m £m £m Revenue 280.7 227.6 480.1 Operating profit 11.3 (0.5) 6.5 Net interest payable (1.7) (2.2) (3.4) Net finance cost on pension schemes (0.3) (1.1) (2.3) Profit before taxation and exceptional i
Slide 18: Exceptional Items
Financial Summary Exceptional Items 2009 2009 2010 1st Half 1st Half Full Year £m £m £m Pension curtailment gain from scheme closure 4.3 - - Profit on sale of property interest 1.0 - - Onerous property leases (0.8) - - Restructuring costs - (10.6) (14.2) Goodwill impairment - - (3.8) TOTAL 4.5 (10.6
Slide 19: Restructuring Benefits – Annualised Cost Reduction
Financial Summary Restructuring Benefits – Annualised Cost Reduction Previous Achieved Estimate To Date £m £m Exceptional AB Automotive – climate control exit 4.0 4.0 Sensors – European restructuring 8.2 8.2 Sensors – Romford closure 1.6 2.4 IMS – UK consolidation 1.9 1.9 BI Technologies – closure o
Slide 20: Operating Cash Flow
Financial Summary Operating Cash Flow 2009 2009 2010 1st Half 1st Half Full Year £m £m £m Operating profit 11.3 (0.5) 6.5 Depreciation 10.7 12.3 24.1 Amortisation of intangibles 5.2 6.2 11.8 Working capital (6.1) 13.1 47.2 Other (0.6) (2.7) (5.7) Underlying operating cash flow 20.5 28.4 83.9 Excepti
Slide 21: Net Cash Flow
Financial Summary Net Cash Flow 2010 2009 2009 1st Half 1st Half Full Year £m £m £m Cash generated from operations 15.8 22.1 72.1 Tax and interest (3.8) (6.4) (9.1) Capital expenditure (5.0) (4.8) (9.4) Development expenditure (3.3) (3.7) (6.9) Proceeds from sale of fixed assets 1.3 1.0 5.7 Acquisit
Slide 22: Group Cash Flow Waterfall
Financial Summary Group Cash Flow Waterfall: 18 months to 30 June 2010 £m 90 80 70 60 50 40 30 20 10 0 22
Slide 23: Trade Working Capital
Financial Summary Trade Working Capital £m 180 30% 160 25% Total Trade Working 140 Capital (LHS) 120 20% Working capital / sales % (RHS) 100 15% 80 60 10% 40 5% 20 0 0% Dec 08 June 09 Dec 23 09 June 10
Slide 24: Group Banking Facilities
Financial Summary Group Banking Facilities Facilities • New committed facility of £70m to May 2013 with a club of four banks • Total facilities available of more than £110m Loan covenants on new facility (tested quarterly on rolling 12 month basis): Covenant June 2010* Net debt / EBITDA (before exce
Slide 25: Pensions
Financial Summary Pensions 2010 2009 2009 June June December £m £m £m Fair value of assets 317.8 268.5 306.5 Liabilities (361.4) (301.7) (350.2) Deficit (43.6) (33.2) (43.7) • Deficit in line with December 2009 • Pension scheme closed to future accrual in April 2010 following extensive consultation:
Slide 26: Group Balance Sheet
Financial Summary 2010 2009 2009 Group Balance Sheet June June December £m £m £m Tangible and intangible assets 185.3 202.6 194.8 Deferred tax assets 4.9 9.6 4.9 Total non-current assets 190.2 212.2 199.7 Inventories 94.9 93.2 83.9 Trade and other receivables 98.5 91.3 85.4 Cash and cash equivalents
Slide 27: Key Performance Indicators
Financial Summary Key Performance Indicators Indicator Target H1 Actuals Organic revenue growth Mid to high single digits for the next five years 27% Operating profit margin Components 10% in the medium term 4.6% Sensors 10% in the longer term 1.6% IMS 6-8% in the medium term 4.2% Secure Power 10% i
Slide 28: Outlook
Outlook • Increased demand across majority of end markets in first half of 2010 maintained in the second half to date – Components: strong order levels with continuing shortages suggesting that re-stocking of supply chain is not yet complete – Sensors: strong first half performance, automotive volum
Slide 29: Outlook: Trading Ahead of Expectations
Outlook • Continuing broad based recovery with increased visibility for the second half of the year • Uncertainty remains around macro economic conditions and the general economic recovery • Overall trading for the full year ahead of the Board‟s previous expectations August 2010: Half Year Results 2
Slide 30: Conclusion
Conclusion • Good progress against the Group‟s strategy • The fundamental dynamics of our end markets remain attractive • Restructuring actions identified in 2008/09 are now materially complete • Our focus is on improving performance and strengthening the Group‟s platform for sustainable medium and
Slide 31: Disclaimer
Disclaimer IMPORTANT INFORMATION • For the purposes of the following disclaimers, references to this “document” shall be deemed to include references to the presenters‟ speeches, the question and answer session and any other related verbal or written communications. • This document contains certain
Slide 32: Q&A
Q&A August 2010: Half Year Results 32
Slide 33: Appendix
Appendix August 2010: Half Year Results
Slide 34: Taxation
Appendix Taxation 2010 2009 2009 1st Half 1st Half Full Year £m £m £m Tax charge - Underlying 3.1 0.9 2.6 - Exceptional items - - (0.4) 3.1 0.9 2.2 Effective tax rate - Underlying 33% - - • Tax charge arises from profits generated by overseas countries, in particular USA, Mexico and China • No tax p
Slide 35: Earnings Per Share
Appendix Earnings Per Share 2010 2009 2009 1st Half 1st Half Full Year £m £m £m Profit before tax and exceptional items 9.3 (3.8) (0.8) Tax (3.1) (0.9) (2.2) Underlying earnings 6.2 (4.7) (3.0) Average number of shares (million) 155.0 155.0 155.0 Headline earnings per share (pence) 4.0p (3.0)p (1.2)