Judges Scientific Plc · LSE:JDG
Judges Scientific — FY2023 Earnings Presentation
37 slides from Judges Scientific's earnings presentation, Mar 21, 2024
Slide 1: Final Results
Final Results Year ended 31 December 2023 David Cicurel, CEO Brad Ormsby, CFO Mark Lavelle, COO Tim Prestidge, GBDD 21st March 2024
Slide 2: Judges Scientific: a buy and build group in the scientific instrument market
Judges Scientific: a buy and build group in the scientific instrument market Three pillars of shareholder value Buy and build strategy Long term drivers Shareholder M&A Low capital use value Large deal pool Extensive and well diversified customer base globally Execution of strategy Other research To
Slide 3: A highly experienced management team
A highly experienced management team Brad Ormsby David Cicurel Chief Financial Chief Executive Officer Tim Prestidge Mark Lavelle Group Business Chief Operating Officer Development Director
Slide 4: Acquisition criteria
Acquisition criteria Recent acquisitions: • Strict acquisition discipline • Acquisition attributes: – Strong exporters in their global niche markets; solid EBIT margins • Specialising in imaging measurement technology – Generate sustainable profits and cashflows – Pay 3 to 7 times EBIT according to
Slide 5: The Judges Group
The Judges Group KE 2005 2006 2006 2006 2009 2010 2011 2012 2012 2013 2015 Fire Testing PE. UHV Aitchee Quorum Sircal Deben GDS KE Scientifica Armfield Technology fibreoptics Design Engineering Technologies Instruments Instruments Developments FIRE 2024 2023 2023 2022 2020 2020 2019 2017 2016 2016 2
Slide 6: Post acquisition
Post acquisition Focus on Autonomy long-term Good financial Promoting controls excellence
Slide 7: Key messages
Key messages Ongoing strategic Record 2023 Current trading execution performance Two small acquisitions Record organic revenues Commencing 2024 with solid organic order book Strengthened management Record cash generation team Timing of next coring Record Adjusted EPS expedition uncertain Positive lo
Slide 8: Performance Review
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Slide 9: 2023 Highlights
2023 Highlights Organic revenue Cash from operations +15% £31.1m Total revenue up 20% (FY 2022: £24.0m) Organic order intake Full Year dividend + 7% + 17% Organic order book 17.0 weeks 95p per share Adjusted operating profit Adjusted net debt + 16% £45.1m Starting 2024 with a solid £34.8 million (31
Slide 10: Performance
Performance FY 2023 FY 2022 Variance Variance 15% organic revenue growth with (£m) (£m) (£m) (%) balance from full year of Geotek Revenue 136.1 113.2 22.9 20% and 2024 acquisitions Operating costs (101.3) (83.1) (18.2) 22% Organic operating margin reduced Adjusted operating profit 34.8 30.1 4.7 16%
Slide 11: Order intake
Order intake • Organic order intake 7% above 2022 150 Millions • Geographically: 140 130 – North America up 4% 120 – Rest of Europe up 4% 110 100 – China up 27% (end of China 90 lockdown); Rest of the World down 80 11% 70 – UK up 30% 60 50 • Organic order book of 17.0 weeks at 31 40 December 2023 (3
Slide 12: Profit bridge
Profit bridge 50 45 40 35 30 25 20 15 10 5 0 2022 contribution* Organic growth Organic decline Acquisitions 2023 contribution* *Contribution is EBIT from trading subsidiaries before central costs
Slide 13: Balance sheet and cash flow
Balance sheet and cash flow Dec 23 Dec 22 2023 2022 Balance Sheet summary Cashflow summary (£m) (£m) (£m) (£m) Cash 13.7 20.8 Adjusted EBITDA 38.4 32.7 Debt (excl IFRS 16) (58.8) (72.8) Working capital movements (6.9) (5.2) Adjusted net debt (45.1) (52.0) DB pension contributions - (0.4) Working Cap
Slide 14: Return on Total Invested Capital
Return on Total Invested Capital ROTIC (Trailing 12 months)* FTT acquisition 50% GDS March 2012 THT May 2020 40% Organic Scientifica June 2013 (excl. Geotek) 30% 20% 10% Geotek May 0% 2022 *excludes central costs and properties, and the effect of R&D capitalisation
Slide 15: Well diversified across the business
Well diversified across the business Group revenue Group organic revenue Group organic orders Group revenue by end by geography by geography market UK Geotechnical Rest of Europe Life science/semicon North America Industry optimisation China/Hong Kong Other >85% of revenue exported
Slide 16: Financial history
Financial history Revenue and profit 200 EPS and Dividends (Excluding special dividends) 400.0 150,000 150 300.0 100,000 100 200.0 50 50,000 100.0 0 - - 12 13 14 15 16 17 18 19 20 21 22 23 12 13 14 15 16 17 18 19 20 21 22 23 Revenue H1 Revenue H2 Operating Profit H1 Operating Profit total Cash gener
Slide 17: Growth Strategy
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Slide 18: Growth drivers
Growth drivers Organic M&A growth
Slide 19: Acquisitions
Acquisitions @ 8 Judges Scientific plc
Slide 20: Acquisition of Henniker
Acquisition of Henniker • Manufacturer of plasma deposition instruments based in Runcorn, Cheshire • Initial consideration of £1.8m (4x multiple) • Earn-out capped at £0.5m based on calendar year 2023 EBIT 20
Slide 21: Acquisition of Bossa Nova Vision (BNV)
Acquisition of Bossa Nova Vision (BNV) • Manufacturer of imaging measurement instruments for the cosmetic industry • Based in Los Angeles, California • Cash consideration of $1.6m (4x multiple) • Complementary to Dia-Stron 21
Slide 22: Acquisition of Luciol Instruments SA
Acquisition of Luciol Instruments SA • Manufacturer and seller of instruments to measure optic fibre properties • Based in Mies, Vd, Switzerland • Cash consideration of CHF2.0m + earn- out payment equal to 4x average adjusted EBIT for 4 yrs ended 31 December 2023 • Complementary to P.E. Fibreoptics
Slide 23: Organic Growth
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Slide 24: Organic model
Organic model Finance and Governance Operational Excellence • Implement robust financial controls • Require excellent monthly forecasting and delivery performance • Culture and processes for governance and compliance • Operational and performance KPIs • Improve business information, data, and • Grou
Slide 25: Outlook and Investment Case
Outlook and Investment Case
Slide 26: Outlook
Outlook Business model Uncertainty remains Current trading proven robust Strong cash generation Volatile geopolitical Healthy order book with supporting robust balance environment order intake marginally sheet below 2023 Sterling still competitive Timing of next Geotek Positive long-term expedition
Slide 27: Investment Case
Investment Case Diverse Sustainable Growing Portfolio Returns Dividends • Robust business model; pursued with discipline • Large pool of targets, every acquisition is earnings enhancing • Strong long-term growth drivers in higher education and process optimization • Well diversified by geography and
Slide 28: Judges Scientific plc
@® Judges Scientific plc
Slide 29: Major shareholders – as at February 2024
Major shareholders – as at February 2024 David Cicurel (including SIPP, SIP and 63,000 non-beneficial) 711,332 10.7% Odin Global 425,926 6.4% Capital Group 331,935 5.0% Broadcrest 276,982 4.2% JP Morgan Asset Management 248,124 3.7% Liontrust Asset Management 223,256 3.4% Interactive Investor 219,49
Slide 30: Environment, Social & Governance
Environment, Social & Governance • Nature of our business is not capital intensive manufacturing and environmental impact is limited. Environment • Aim to minimise environmental impact across all aspects of business, including consideration for energy consumption and packaging of instruments. • Resp
Slide 31: Our businesses
Our businesses 1 2 3 FTT is internationally recognised as the PE.fiberoptics is a leading manufacturer of UHV Design, founded in 1993, specialises in the world’s leading supplier of fire testing test equipment that measures optical and design, manufacture and supply of high precision instrumentation
Slide 32: Our businesses
Our businesses 4 5 6 Aitchee Engineering is a well established East Sussex-based Quorum Technologies Sircal designs, manufactures and distributes precision engineering company that can manufactures market-leading scientific rare gas purifiers typically for use in metal offer high end sheet metalwork
Slide 33: Our businesses
Our businesses 7 8 9 Deben is a precision engineering company GDS designs, develops and manufactures Scientifica is a multi-award winning, globally providing innovative solutions for SEM and equipment and software used for the recognised manufacturer of advanced μX-Ray CT in-situ tensile testing. De
Slide 34: Our businesses
Our businesses 10 11 12 Armfield offers unrivalled experience in the CoolLED designs and manufactures cutting-edge Dia-Stron is the leading manufacturer of design and provision of teaching equipment illumination systems for microscopy and other automated measurement systems for single fibres aligned
Slide 35: Our businesses
Our businesses 13 14 15 EWB Solutions specialises in the design Oxford Cryosystems is a market-leading Moorfield Nanotechnology design and and manufacture of edge-welded metal manufacturer of cryogenic devices. Spun out manufactures R&D/pilot-scale laboratory bellows where a high integrity hermetic
Slide 36: Our businesses
Our businesses 16 17 18 THT is a world leader in the design, Korvus Technology sells and manufactures Geotek Ltd. (UK) specialises in high- manufacture and supply of specialised highly modular thin film deposition systems resolution, non-destructive analysis of calorimeters for use in the chemical a
Slide 37: Our businesses
Our businesses 19 20 21 Henniker designs and manufactures Luciol is active in the field of fiber optic Founded in 2018 by experts in optics and plasma surface treatment systems and measurement and instrumentation, providing non-destructive testing, Bossa Nova Vision is processes for advanced cleanin