Slide 1: TT Electronics plc 2017 Preliminary Results
Engineering smarter solutions together TT Electronics plc 2017 Preliminary Results March 2018
Slide 2: 2017 overview
2017 overview TT is becoming a higher • Pivotal year for TT margin, higher quality business • Strong revenue and profit growth • All three divisions delivered organic revenue growth • Realising benefits from management actions started in 2015 • Portfolio transformation with disposal of Transportatio
Slide 3: Portfolio transformation
Portfolio Disposal of Transportation division • Strategic progress achieved enabled transformation us to realise value for the business earlier than anticipated Disposal of Transportation • TT is becoming a higher margin, division in 2017 and offer higher quality business for Stadium Group plc in 20
Slide 4: Strong organic profitable growth
Strong organic profitable growth Excellent business performance with organic growth from all three divisions Realising benefits from management actions started in 2015 • Increased customer focus: new customer wins and sales to existing customers • New products launched: increased R&D investment unde
Slide 5: Strong organic profitable growth
Strong organic Business development • New customer wins include: profitable growth • Aerospace and defence OEM in the US • Existing customer growth include: Realising benefits from • Rolls-Royce • Semi conductor equipment manufacturer management actions started in 2015 Value-added product solutions
Slide 6: Financial review
Financial review Mark Hoad, CFO
Slide 7: Financial overview
Financial overview Pivotal year for TT with • 5% organic revenue growth strong revenue and profit growth • Underlying operating profit up 12%, PBT up 28% at constant currency • Underlying operating margins increased to 6.8%, up by 60 basis points • Excellent underlying cash conversion at 98% • 140 b
Slide 8: Group financial performance
Group financial performance Continuing operations £m (except where stated) 2017 2016 Change Change constant fx 360.0 332.7 8% 5% • Revenue up 5% Strong improvement Revenue against all key financial Operating profit* 24.3 20.6 18% 12% • Operating profit up 12%, metrics PBT up 28% Profit before tax* 2
Slide 9: Group operating profit bridge
Group operating profit bridge Continuing operations (2017 vs 2016), £m Positive divisional performance driving profit (0.2) growth 1.0 (0.9) 2.5 24.3 21.7 1.1 0.2 20.6 2016 FX 2016 like- Acquisitions Sensors and Power Global Corporate 2017 for-like Specialist Electronics Manufacturing costs Componen
Slide 10: Sensors and Specialist Components
Sensors and Specialist Components Financial Summary • Organic revenue up 6% Change constant • Good underlying market demand 2017 2016 Change fx • Market share gains in current sensing, circuit protection and signal conditioning Revenue (£m) 142.3 129.5 10% 6% • Operating profit up 15% Underlying ope
Slide 11: Power Electronics
Power Electronics Financial Summary • Revenue up 14%, up 12% organically Change constant • Cletronics contributed revenue of £1.4m 2017 2016 Change fx • Increased sales to existing customers • One-off last time buy activity Revenue (£m) 64.2 56.2 14% 14% • Improvement in underlying operating Underly
Slide 12: Global Manufacturing Solutions
Global Manufacturing Solutions Financial Summary • Returned to growth in H2 as expected, FY Change revenues up 2% constant 2017 2016 Change fx • Strong growth in Asia • New medical customers won in the year Revenue (£m) 153.5 147.0 4% 2% • Operating profit down 3% Underlying operating profit (£m) 6.
Slide 13: Free cash flow and net funds
Free cash flow and £m 2017 2016 Underlying EBITDA 37.1 32.8 • Capital and net funds Net capital expenditure & capitalised development (14.7) (13.0) development expenditure at 1.1x DA Working capital (1.9) (5.4) Significant financial Cash flow from discontinued operations (3.4) 11.0 • Good working ca
Slide 14: Increased proceeds from Transportation division disposal
Increased proceeds from Transportation division disposal £10m increase in net Circular proceeds £m Total Latest Total Proceeds 118.8 123.2 Costs and tax (18.1) (12.2) 100.7 111.0 • Proceeds increased due to £4.4m working capital adjustment • Costs and tax improved by £5.9m with expected tax burden s
Slide 15: Other financial matters / guidance for 2018
Other financial matters / guidance for 2018 Restructuring costs Tax • £2m cash costs for Global Manufacturing Solutions • Effective rate at lower end of 20-22% guidance range Romania (P&L expense in 2017) • Cash payments circa 90% of P&L charge Capital and development expenditure Pensions • Capex an
Slide 16: Strategy and outlook
Strategy and outlook Richard Tyson, CEO
Slide 17: Our strategy
Our strategy The right strategy to Clear market focus deliver growth and value • We are focused on building leading positions in areas of the market where there for our shareholders are structural growth drivers, and the proliferation of electronics is driving demand for our solutions Creating diffe
Slide 18: Strategy in action
Strategy in action Structural Investing in our Driving growth for our growth drivers capabilities for future in our markets growth Driving organic Stadium Group plc performance TT Electronics plc preliminary results 2017 18
Slide 19: Structural growth drivers in our markets
Structural growth drivers in our Industrial Aerospace and Medical Transportation markets defence Areas of our markets where there is increasing electric content Market growth Market growth Market growth Market growth trends: trends: trends: trends: • ‘Factory 4.0’ • The ‘more electric • More sophist
Slide 20: Investing in our capabilities for growth
Investing in our capabilities for Sensors and Specialist Power Electronics Global Manufacturing growth Components Solutions Investing for growth where we have the strongest capabilities Focus for growth Focus for growth Focus for growth • Optoelectronic assembly • Electromagnetics • Design for manuf
Slide 21: Driving organic performance
Driving organic Business development performance • Develop sales approach to match business model evolution • Increased focus on strategic customer accounts Additional investments to deliver more value-added solutions to our customers Value-added product solutions • Enhance product capabilities thro
Slide 22: Recommended offer for Stadium
Recommended Benefits of the acquisition offer for Stadium • Greater presence in attractive sectors Accelerates strategy of • Enhanced product capabilities in power electronics and connectivity building leading positions • Extended R&D capabilities in sectors where increasing • Complementary customer
Slide 23: Summary and outlook
Organic growth ahead of the market Summary and outlook Cash conversion of 80%+ Confident of making strong progress in 2018 R&D investment to • Pivotal year for TT support growth • Strong organic revenue and profit growth Operating margin progression • Transforming the portfolio • Momentum gives us c
Slide 24: Appendix
Appendix TT Electronics plc preliminary results 2017 24
Slide 25: Appendix: The TT Electronics business
Appendix: The TT Electronics business Revenue (FY17) Underlying operating profit (FY17) Sensors and Specialist Components 39% Sensors and Specialist Components 77% Power Electronics 18% Power Electronics 26% Global Manufacturing Solutions 43% Global Manufacturing Solutions 27% Central costs (30)% Re
Slide 26: Appendix: Impact of FX
Appendix: Impact of FX Sensors and Global Specialist Power Manufacturing Continuing Sales (£m) Components Electronics Solutions Corporate Operations 2017 142.3 64.2 153.5 - 360.0 2016 at 2017 rates 134.5 56.3 151.2 - 342.0 FX impact 5.0 0.1 4.2 - 9.3 2016 as published 129.5 56.2 147.0 - 332.7 Operat
Slide 27: Appendix: Cash Conversion
Appendix: Cash Conversion Cash Conversion (£m) 2017 2016 Underlying EBITDA (continuing operations) 37.1 32.8 Net capital expenditure (13.1) (12.2) Capitalised development expenditure (1.6) (0.8) Working capital (1.9) (5.4) Other 3.4 1.9 Underlying Operating Cash Flow 23.9 16.3 Underlying operating p
Slide 28: Exceptional Items
Exceptional Items Exceptional Items (P&L) • Restructuring costs: restructuring £m 2017 2016 £3.7m offset by PIE £1.9m and property disposals gains £0.2m Restructuring costs (1.6) 2.0 Acquisition related costs (2.7) (3.8) • Acquisition costs: Amortisation of acquisition intangibles £2.3m and Asset im
Slide 29: Recommended offer for Stadium
Recommended offer for Stadium Stadium’s technologies Technology Products underpinned by electronic Connectivity Power products HMI assembly capabilities Wireless IoT connectivity solutions Standard and customised power and cable products Intelligent human machine interface Applications include: Appl
Slide 30: Disclaimer
IMPORTANT INFORMATION For the purposes of the following disclaimers, references to this “document” shall be deemed to include Disclaimer • references to the presenters’ speeches, the question and answer session and any other related verbal or written communications. • This document contains certain