Slide 1: Results for the year ending 31 August 2021
Results for the year ending 31 August 2021 November 2021
Slide 2: 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 or organis
Slide 3: Agenda
Agenda Introduction and Highlights Operational Review Financial Review Growth Strategy Summary and Outlook Tim Carroll Sally McKone 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. Used by audio professionals and amateur musicians alike, its solutions facilitate the high- quality production of recorded and live sound. Founded in 1989. Eigh
Slide 5: Highlights for the year ended August 2021
Highlights for the year ended 31 August 2021 o Revenue up 34%1 (28% organic constant currency growth2) o Growth across all geographic regions and brands o EBITDA 3 up 67% to £47.5 million o Completed the acquisition of Sequential in April 2021 for $20 million net + advisers’ fees o Launch of Optimal
Slide 6: Product sectors: Focusrite
Product sectors: Focusrite Focusrite FY21 FY20 % growth % organic £m £m Revenue 97.2 76.2 28% 32% o Segment growth of 28% driven by strong demand for Scarlett o Growth in customer base during lockdowns and maintained post-COVID o Customers reverting to their passion for making music o Wider uses inc
Slide 7: Product sectors: Focusrite Pro
Product sectors: Focusrite Pro Focusrite Pro FY21 FY20 % growth % organic £m £m Revenue 4.9 3.5 40% 44% o Overall segment increase of 40% o Initial slowdown due to pandemic lockdowns but quickly returned to growth supported by o New products and updates introduced and well received o Ongoing strong
Slide 8: Product sectors: Novation
“The SL Mark III does Product sectors: Novation indeed change the game for controllers and sets a new benchmark for which future controllers will be judged.” Novation FY21 FY20 % growth % organic £m £m Loopop Revenue 22.3 19.4 15% 19% o Novation up 15% on prior year o New generation Launchpad and La
Slide 9: Product sectors: Ampify
Product sectors: Ampify o Bundled with all Focusrite and Novation hardware o Expands Group’s offering into iOS and cross platform desktop solutions o 1.4 million downloads of iOS apps o Introduction of new annual subscription service o 565,000 in app purchases o 5,700 active subscribers at the end o
Slide 10: Product sectors: ADAM Audio
Product sectors: ADAM Audio ADAM Audio FY21 FY20 % growth % organic £m £m Revenue 23.9 17.4 37% 36% o Revenue up 37% on the prior year o Comfortably ahead of plans made at time of acquisition and successfully integrated into the Group o ADAM now distributor of Focusrite in Germany & Austria – and vi
Slide 11: Product sectors: Martin Audio
Product sectors: Martin Audio Martin Audio FY21 FY20 % growth % organic £m £m Revenue 20.4 12.0 70% 23% o First full year in FY21 compared to eight months in PY o Revenue up 70% compared to PY (23% organic) o With live music impacted by lockdowns the team refocussed on installed sound with delivery
Slide 12: Product sectors: Sequential
Product sectors: Sequential Sequential FY21 £m Revenue 5.3 o Leading American synthesiser company and iconic brand headquartered in San Francisco o Purchased in April 2021, $20m on completion with up to $4m future potential earn out o New CEO, David Gibbons, recruited to support business growth o Ne
Slide 13: Financial highlights for the year ended August 2021
Financial highlights for the year ended 31 August 2021 o Group revenue up by 34% to £173.9 million (FY20: £130.1 million) o Organic revenue growth 28% - adjusted for acquisitions and foreign currency o Adjusted EBITDA1 up by 67% to £47.5 million (FY20: £28.6 million) o Adjusted diluted earnings per
Slide 14: Regional performance
FY20: Regional performance FY21 Revenue FY21 FY20 % growth % organic £m £m North America 74.6 50.9 47% 46% ROW Europe, Middle East and Africa 69.3 56.4 23% 15% 17% North Rest of World 30.0 22.8 32% 25% America 43% Consolidated revenue 173.9 130.1 34% 28% EMEA 40% o North America: up 47% to £74.6m (o
Slide 15: Income Statement
Income Statement FY21 FY20 o Revenue up 34% (organic 28%) £m £m Revenue 173.9 130.1 o Gross margin 48.5% (FY20: 46.0%) Cost of sales (89.8) (70.2) o One off duty benefit £1.5 million – underlying Gross profit 84.1 59.9 Operating expenses before non- 47.5% underlying items (42.7) (36.9) Operating pro
Slide 16: Balance Sheet
Balance Sheet FY21 FY20 £m £m o Intangible fixed assets Intangible assets 59.2 48.2 o £14m increase due to Sequential acquisition, Tangible assets 3.6 4.1 £12m of brand and technology, £2.4m of Total non current assets 62.8 52.3 goodwill Inventories 20.8 19.4 Debtors and other investments 16.3 18.0
Slide 17: Cash flow
Cash flow FY21 FY20 £m £m o Investing £20.6m, (FY20: £44.9m) EBITDA 47.5 28.6 o Acquisition of Sequential (£13.9m) Movement in working capital 1.6 12.3 Operating cash flow 49.1 40.9 o Capitalised R&D £4.9m (FY20: £4.6m). Total R&D Interest paid (0.9) (0.8) spend of 4.5% of revenue is lower than 6%-7
Slide 18: Ongoing challenges have been well managed
Ongoing challenges have been w ell managed o COVID 19 o Lockdowns led to increased demand, with the Group expanding manufacturing and purchasing o Return to work protocols now in place at all sites, supported by a robust infrastructure to enable remote working o Component supply issues o Ongoing cha
Slide 19: Embedding best practice within our strategy
Embedding best practice within our strategy People: Building a great place Health and Safety to work and engaging with our Talent attraction and retention broader communities Diversity & Inclusion Community Engagement Planet: Designing each Climate change generation of products to have a GHG emissio
Slide 20: Focusrite Growth Strategy
Focusrite Growth Strategy Creating a great place to work We embrace the diverse foundations of the world of audio and nurture our talent to build a culture of equity and inclusion. We now have a full time Head of Sustainability as well as numerous working groups focussed on Diversity and Inclusion.
Slide 21: Summary and Outlook
Summary and Outlook o Revenue up 34%1 (28% organic constant currency growth2) o EBITDA 3 up 67% to £47.5 million o Completed the acquisition of Sequential in April 2021 for $20 million net + advisers’ fees o Launch of Optimal Audio in April 2021 o Year end net cash £17.6m after paying off the loan d
Slide 22: Additional Information
Additional Information November 2021 22
Slide 23: Customers and markets: audio creation
Customers and markets: audio creation Strong demands on gear Highly skilled musician Highly skilled musician Very likely to have little May or may not play /technology to achieve or audio engineer or audio engineer or no previous musical traditional instruments knowledge professional-level results D
Slide 24: Customers and markets: Live venues
Customers and markets: Live venues Hospitality: Cafes, bars, restaurants Worship: From 50 seat chapels to and hotels such as Caesar's, W and 10,000 seat mega churches, including Marriott Westminster Abbey and Calvary Church Nightclubs: From Beijing, London to LA, nightclubs of all sizes, including M
Slide 25: Focusrite and Focusrite Pro product ranges
Product sectors: Focusrite Focusrite Scarlett: Mass market interface. Home user $100 to $500 Clarett: Intermediate / Professional user $400 to $1,200 Focusrite Pro RedNet: Enterprise, Live, Broadcast, Education. Networked Audio over IP $3,000 upwards Red: Creative Professional, Music, Post $2,000 to
Slide 26: Novation and Ampify products
Product sectors: Novation i n c lu d i n g A m p i f y Novation CONTROLLERS Physical interfaces to control music creation software Grid controllers: Launchpad - $100 to $300. Keyboard controllers: Launchkey - $100 to $250. STANDALONE Function on their own as sound generating devices Grid: Circuit -
Slide 27: Product sectors: ADAM Audio
Product sectors: ADAM Audio T Series AX Series S Series Entry level studio monitor: Mid level studio monitor: High end studio monitor: $400-$500 per pair $700-$2,000 per pair $1,750-$20,000 per unit Subwoofers Headphones $700-$8,000 per unit SP-5 headphones: $500 27
Slide 28: Product sectors: Martin Audio
Product sectors: Martin Audio TH Series Small Sound Systems Medium Format Systems Large Format Systems For up to 250 people. From From 250-1500 people: prices from From 1500 to 10,000+ people. $500 $2,000 Prices from $40,000 28
Slide 29: Product sectors: Optimal Audio
Product sectors: Optimal Audio ZonePad wall controllers Zone processors SmartAmp DSP amplifiers Up ceiling speakers Sub sub-woofers Cuboid on-wall speakers Systems start from £2,000 29
Slide 30: Product sectors: Sequential
Product sectors: Sequential 30
Slide 31: Foreign exchange
Foreign exchange Exchange rates FY21 FY20 o Average US$ weakened by 7%. Average o US and ROW. Total c50% of revenue but almost US$:£ 1.36 1.27 all cost of sales so minor net profit inflow €:£ 1.14 1.14 Average rate of forward contracts o Average reported € little changed. €:£ 1.12 1.11 Weighted aver
Slide 32: Number of shares in issue
Number of shares in issue Shares FY21 FY20 Shares in issue 58,661,639 58,111,639 o Shares in issue currently 58,661,639 Less shares held by (554,712) (359,483) o But required to deduct EBT shares for EPS calculation EBT Weighting through (113,899) (72,437) year Weighted average 57,993,028 57,679,719
Slide 33: Earnings per share
Earnings per share Earnings per share FY21 FY20 Movement p p Basic 48.8 7.1 588% Diluted 48.2 7.0 589% Adjusted basic 58.2 33.2 75% Adjusted diluted 57.5 32.8 75% Increase in EPS (75%) slightly higher than increase in EBITDA (67%) o Depreciation and amortisation increase, but at much lower rate o Fi
Slide 34: Enriching Lives Through Music
Enriching Lives Through Music 34