Trifast Plc · LSE:TRI
Trifast — H1 2021 Earnings Presentation
44 slides from Trifast's earnings presentation, Nov 24, 2020
Slide 1: HY2021 Presentation for the six months ended 30 September 2020
HY2021 Presentation for the six months ended 30 September 2020 Our fastenings enable innovation today to build a better tomorrow
Slide 2: Our purpose: Trusted Reliability at every turn
To provide Trusted Reliability at every turn to our customers in global industry, empowering them to deliver products and solutions that add value to society. Our fastenings enable innovation today to build a better tomorrow
Slide 3: Contents
Contents 02 04 22 HY2021 Financial and Trifast - the highlights business next stage of review the journey Leading international specialist in the design, engineering, manufacture and distribution of high quality industrial and Category ‘C’ components principally to major global assembly industries T
Slide 4: HY2021 highlights
HY2021 highlights
Slide 5: HY2021 highlights
HY2021 highlights • Resilient performance in extremely challenging macroeconomic conditions • Swift and effective operational and cost saving actions secure underlying operating profit margins of 5.7% (HY2020: 10.7%) In the month of September, • Recovery begins across all sectors and regions during
Slide 6: Financial and business review
Financial and business review
Slide 7: Financial results
Financial results HY2021 Change HY2021 Change HY2020 CER at CER AER at AER Revenue £81.5m -21.0% £81.0m -21.4% £103.1 m GP% 27.1% -170bps 27.0% -180bps 28.8% Underlying operating profit (UOP)* £4.6m -58.0% £4.6m -58.9% £11.1 m UOP%* 5.7% -500bps 5.6% -510bps 10.7% Underlying profit before tax* £4.1m
Slide 8: Revenue by region and sector (CER)
Revenue by region and sector (CER) HY2021 £81.5m † -21.0% HY2020 £103.1m † Revenue split by region* External revenue split by sector 11% 17% 2021 2021 £22.7m 11% 9% 15% £28.8m £29.6m 20 202 £38.4m 12% 0 20 £5.5m 33% £4.3m 20% £37.1m 11% 27% 22% £31.5m 12% Change Change UK -25.0% Electronics -11.4% E
Slide 9: External revenue (CER) quarterly growth year on year
External revenue (CER) 6.1% 10% 2.7% 0% -5.6% -10% -10.0% Quarterly growth year on year -13.7% -20% -30% -32.7% -36.6% -36.7% -37.8% -40% -50% -51.5% -60% UK Europe USA Asia Group Q1 HY21 Q2 HY21 Trifast plc HY2021 07
Slide 10: Europe
Europe Revenue (CER)* Distribution sites HY2021 £31.5m -15.1% Manufacturing & distribution sites HY2020 £37.1m Distribution sites • A resilient performance and a quicker recovery drives overall Technical & innovation centres regional growth in Q2 • Automotive production line shutdowns and subsequent
Slide 11: Asia
Asia Revenue (CER)* Distribution sites HY2021 £22.7m -23.4% TR Asia Headquarters HY2020 £29.6m Manufacturing & distribution sites • Lockdowns and reduced manufacturing volumes in Malaysia Distribution sites decrease electronics, domestic appliances and automotive sales in Q1 • Recovery starts to fee
Slide 12: UK
UK Revenue (CER)* Distribution sites HY2021 £28.8m -25.0% Head office Trifast plc HY2020 £38.4m Manufacturing & distribution sites • Automotive shutdowns extend longer into Q1 and subsequent Distribution sites manufacturing volumes have been slower to recover than in any Technical & innovation centr
Slide 13: USA
USA Revenue (CER)* Distribution sites HY2021 £4.3m -21.5% Distribution sites HY2020 £5.5m Technical & innovation centres • After more than 2 years of double digit growth, reduced automotive production volumes drive a decrease in sales across a number of key multinational Tier 1 customers • Q2 shows
Slide 14: Underlying operating profit bridge
Underlying operating profit bridge* £12.0m £10.0m £11.1m £8.0m £6.0m £2.3m £0.3m £4.0m £4.6m £7.9m £0.4m £2.0m £0.8m £0.0m HY2020 Sales Gross margin Strategic Movement in FX Overhead HY2021 CER & decrease◊ change+ Investments translation saving HY2021 AER^ * Before separately disclosed items which a
Slide 15: Gross margins decrease to 27.1%
Gross margins Product mix Government decrease to 27.1% shifts and stock support Reducing sales (HY2020: 28.8%) largely provisioning programmes help as a result of: increases to offset Swift and effective cost saving actions help Underlying operating to offset the impact margin holds up of revenue re
Slide 16: Underlying operating profit and margin by region (CER)
Underlying operating profit and margin by region (CER)* HY2021 £4.6m † 5.7% HY2020 £11.1m † 10.7% £0.6m 2.1% £4.0m 10.3% £4.7m 15.9% £3.3m 14.4% £2.3m 7.4% £0.3m -£0.2m 4.8% £3.1m -4.2% 8.5% UK Europe USA Asia * Before separately disclosed items which are shown in the financial statements † After de
Slide 17: UK, Europe, USA, Asia profit commentary
UK • Reduced sales feed through to Europe underlying operating margin • Reduced sales feed through to • Gross margins decrease as higher underlying operating margin margin distributor sales reduce and • Cost savings help to offset stock provisioning levels rise • Cost savings help to offset USA Asia
Slide 18: Adjusted net cash bridge (AER)
Adjusted net cash bridge (AER)^ £15.0m £10.0m £2.8m £5.5m £0.9m £1.1m £5.0m £1.1m £0.5m £3.4m £15.4m £1.5m £0.0m -£5.0m -£10.0m -£15.0m -£15.2m -£20.0m Net debt Shares Operating Working Capital Atlas Interest & Tax paid Dividends Adjusted FY2020 issued cash inflow capital expenditure foreign net cas
Slide 19: Strong cash generation and investment funding growth
Investment Funding growth • £0.9m of plant and machinery routine maintenance spend across • Successful £15.4m net equity raise puts the Group in a net cash our manufacturing sites position from June 2020, and • Net working capital reduction of £2.8m: • Significant facility headroom of £40.6m at 30 S
Slide 20: Dividend
Dividend Dividend progression Dividend cover 4.50p 2020 4.00p 8.8× 3.50p 2019 3.00p 3.4× 2.50p 2018 2.00p 3.6× 1.50p 2017 1.00p 3.7× 0.50p 2020 £16.0 2016 0.00p 3.6× 2016 2018 2015 2017 2019 2015 4.1× Interim Final 18 Trifast plc HY2021
Slide 21: Dividends play their part in our TSR
Dividend • In order to allow us to appropriately manage our financial position and flexibility in the current uncertain times, we are not proposing an interim dividend for HY2021 (FY2020: interim of 1.20p, final of 0.0p) As a Board, we are keen that • The Board plans to review this decision before y
Slide 22: Underlying EPS Bridge
Underlying EPS Bridge* 7.00 6.52p 6.00 0.34p 5.00 4.00 1.11p 3.00 0.08p 2.31p 2.00 1.00 4.90p 0.00 Underlying EPS Share dilution Underlying profit Underlying tax Foreign exchange impact Underlying EPS Sept 2019 before tax reduction on P&L translation Sept 2020 CER * Before separately disclosed items
Slide 23: Trifast plc HY2021
Trifast plc HY2021 21;
Slide 24: Trifast - the next stage of the journey
Trifast - the next stage of the journey
Slide 25: Operational Executive Board (OEB) in action
Operational Executive Board (OEB) in action The OEB’s focus has been primarily centred on a review and development of the Group’s organic growth and efficiency opportunities, to drive operational gearing benefits Initiatives include: • Strategic sales expansion – product, sector, geography • Sourcin
Slide 26: Acquisitions
Acquisitions Our new full-time M&A lead, recruited in August, is settling in well with a key focus on driving proactive pipeline generation In a fragmented market, Initial activities include: and with a track record • An ongoing review of our acquisition criteria, process and of successful opportuni
Slide 27: Trifast plc HY2021
Trifast plc HY2021 25:
Slide 28: Project Atlas
Project Atlas A transformational investment to build an integrated Achieved in HY2021 global business • Upfront site by site preparations • Additional development and training of our teams • A focus on increasing internal expertise and self-sufficiency We are delighted to report that all of this cul
Slide 29: Project Atlas – investment underpinning growth
Investment to date As a consequence of the work undertaken to date, we have incurred direct costs of £1.1 m (cumulative costs to date: £11.1 m) Project Atlas – an investment Of this, we have capitalised £0.6m (cumulative capitalisation to date: £5.0m) in accordance with International Accounting Stan
Slide 30: Summary & outlook
Summary & outlook
Slide 31: We are excited by the activity levels and pipeline
• The Group delivered a resilient performance despite the extremely challenging market conditions and the impact of COVID-19 • Volumes have begun to recover in all key end markets - in September the Group returned to year-on-year growth We are not complacent, • An uncertain macroeconomic environment
Slide 32: Appendices
Appendices
Slide 33: Five year history (AER)
Five year history (AER) FY2017 FY2018 FY2019 FY2020 HY2020 HY2021 Revenue £186.5m £197.6m £209.0m £200.2m £103.1 m £81.0m GP margin 31.1 % 30.5% 30.0% 27.5% 28.8% 27.0% Underlying EBITDA* £22.9m £24.7m £26.4m £23.5m £13.7m £7.4m Underlying operating profit* £21.0m £22.7m £24.2m £18.1 m £11.1 m £4.6m
Slide 34: TR's global supply network
TR’s GLOBAL SUPPLY NETWORK Think global, network regionally and supply locally 18 Countries 7 Manufacturing sites 32 Global 3 Technical & facilities innovation centres Manufacturing and distribution sites Head office Trifast plc TR Asia Headquarters Manufacturing & distribution sites Distribution si
Slide 35: The world of Trifast
The world of Trifast Our sites are based in 32 global locations UK Asia Trifast plc & Group Services – Uckfield TR Asia headquarters – Singapore Belfast China – Shanghai & Beijing Birmingham India – Bangalore, Chennai & Pune East Grinstead Malaysia – Penang (disposed of 4 November 2020) & Kuala Lump
Slide 36: Manufacturing and distribution revenue split
Manufacturing and distribution revenue split HY2021 HY2020 33% 33% 67% 67% Manufacturing Distribution 34 Trifast plc HY2021
Slide 37: Our customers
Our customers Trifast plc HY2021 35
Slide 38: Our PLC team
Our PLC team Jonathan Shearman Mark Belton Clare Foster Chair Chief Executive Officer Chief Financial Officer (Appointed 1 April 2020) 36 Trifast plc HY2021
Slide 39: Our PLC team (continued)
Clive Watson Scott Mac Meekin Claire Balmforth Senior Independent Independent Independent Non-Executive Director Non-Executive Director Non-Executive Director (Appointed 31 July 2020) (Appointed 1 April 2020) Trifast plc HY2021 37
Slide 40: Notes: Disclaimer
Notes Disclaimer: This document contains certain forward-looking statements which reflect the knowledge and information available to the Company during the preparation and up to the publication of this document. By their very nature, these statements depend upon circumstances and relate to events th
Slide 41: Trifast plc HY2021
Trifast plc HY2021 39:
Slide 42: Notes
‘Notes : 40 Trifast plc HY2021
Slide 43: Slide 43
Slide 44: Trifast House, Bellbrook Park, Uckfield
Trifast House, Bellbrook Park, Uckfield, East Sussex TN22 1QW Tel: +44 (0)1825 747366 Fax: +44 (0)1825 747368 www.trifast.com