Sdi Group Plc · LSE:SDI
Sdi — H1 FY2023 Earnings Presentation
34 slides from Sdi's earnings presentation, December 2022
Slide 1: Interim Results to 31 October 2022
Interim Results to 31 October 2022 SDI GROUP PLC
Slide 2: Disclaimer
Disclaimer No representation or warranty, expressed or implied, is made or given by or on behalf of SDI Group plc (the “Company” and, together with its subsidiaries and subsidiary undertakings, the “Group”) or any of its directors or any other person as to the accuracy, completeness or fairness of t
Slide 3: Agenda
Agenda Group Summary Board of Directors Group Overview UK and World Presence H1 FY23 Results Operations & Outlook Appendices Acquisition Process and Timeline Group Brands Track Record Capital Structure SVS specialises in custom Physical Vapour Deposition (PVD) of thin film coatings on semiconductor
Slide 4: Board of Directors
Board of Directors Mike Creedon David Tilston Andrew Hosty Chief Executive Officer Non-Executive Director Non-Executive Director Ken Ford Ami Sharma Chairman Chief Financial Officer Mike joined the Board in 2010 David joined the Board in July Andrew Hosty joined the as Finance Director, and was 2017
Slide 5: Group Overview
Group Overview The strength of our business model: • Federated structure for rapid but nuanced response • Profitable & cash-generative businesses able to withstand external shocks • Diverse portfolio of companies not relying on a single sector or region • Resources to invest for organic and acquired
Slide 6: UK & World Presence
UK & World Presence SDI GROUP PLC 6
Slide 7: H1 FY23 Results
H1 FY23 Results LTE autoclave manufacturing SDI GROUP PLC 7
Slide 8: Financial Highlights
Financial Highlights Revenue Adjusted Operating Profit* Adjusted Profit before Tax* 28% 19% 14% To £31.7m (H1 FY22:£24.7m) To £6.9m (H1 FY22:£5.8m) To £6.5m (H1 FY22:£5.7m) including 3.8% organic growth Cash Generated From Basic Earnings Per Share Adjusted Diluted EPS* Operations 15% 28% (57)% To 4.
Slide 9: Income Statement
Income Statement Half Year Half Year • Organic growth of 3.8% driven by 31 Oct 31 Oct Percentage Atik Cameras order for cameras to go £000 2022 2021 change into PCR machines • £6.1m turnover from acquisitions Revenues 31,720 24,655 +28% Gross profit % 62.9% 64.4% • Margin change mix related - new ac
Slide 10: Revenue Bridge
Revenue Bridge £m 0.3 0.7 31.7 32 6.1 30 28 26 24.7 3.2 24 2.8 22 20 4.6 18 16 14.1 14 12 10 8 6 4 2 0 Sales H1 FY21 2021 Organic Organic Sales H1 FY22 2022 Organic Organic Sales H1 FY23 acquisitions growth 1-time growth other acquisitions growth 1-time growth other COVID* COVID* *Organic growth 1-t
Slide 11: Segment Highlights
Segment Highlights Digital Imaging Turnover increased to £12.5m (39% of Group revenue) from £11.4m Organic growth of 10.4% Adjusted Operating Profit* increased to £4.7m (2022: £4.3m) as the segment continued to benefit from Atik’s orders of cameras from an international OEM for use in PCR DNA
Slide 12: Cash Flow
Cash Flow Half Year Half Year • Build-up of inventories of £1.9m to mitigate the 31 Oct 31 Oct Percentage impact of component shortages and in relation to £000 change H2 PCR camera deliveries 2022 2021 • In previous years there has been a build-up of Operating cash flows before movement in advanced
Slide 13: Net Cash/Debt Bridge
Net Cash/Debt Bridge £m 10 7.7 8 (1.1) 6 (1.9) 4 1.1 (2.8) 2 (0.6) (0.7) 0 (0.5) -2 -4 -6 -8 -10 -12 -14 -16 (16.6) (15.4) -18 Net cash April Op. cash flow Atik customer Movement in Other movement Capital Taxes paid Other (FX, Acquisitions Net debt* 2022 before mvt in downpayments inventories in wkg
Slide 14: Balance Sheet
Balance Sheet As at 31 Oct As at 30 Apr As at As at £000 2022 2022 £000 31 Oct 2022 30 Apr 2022 Assets Non-current assets Cash 3,619 5,106 Intangible assets 47,264 36,035 Loan – revolving (19,000) (4,000) Property, plant and equipment 15,015 11,379 Deferred tax asset 1,547 1,586 Net (debt) / cash (1
Slide 15: Operations & Outlook
Operations & Outlook Atik Cameras production facility in Lisbon, Portugal SDI GROUP PLC 15
Slide 16: LTE Scientific
LTE Scientific Sensors & Control Background & Operations Acquired August 2022. Specialises in the design and manufacture of sterilizers, decontamination and thermal processing equipment, used in the life science and medical market sectors. A leading UK manufacturer of autoclave sterilizers, which st
Slide 17: Fraser Anti-Static Techniques
Fraser Anti-Static Techniques Sensors & Control Background & Operations Acquired October 2022. A leading UK manufacturer of anti- static products which eliminate, clean, generate or measure static electricity in a variety of industries including plastics, packaging, printing, food processing, medica
Slide 18: Growth Drivers
Growth Drivers Organic growth • 3.8% organic growth in H1 FY23 (H1 FY22: 22% organic growth, due to weak comparatives) • Atik sales in FY23 and FY24 expected to be lower than the comparative years, based on confirmed PCR orders only • COVID related tailwinds abating in FY24 • SDI has strong market p
Slide 19: Buy & Build Strategy Execution
Buy & Build Strategy Execution Capital Employed (£m) Return on CE (%) Capital Employed 40 40% • Has increased by c35% CAGR for 6 years from £6m to £35m 35 35% • Entirely due to acquisitions (“Buy”) 30 30% Return on Capital Employed • Has increased over time from c12% to 25 25% 34% in 2022 • Acquired
Slide 20: Operations
Operations We continue to invest across the Group in facility improvement and expansion, capital equipment, R&D, marketing and people, to enable and accelerate organic growth. Examples include: • Building refurbishment continues at Graticules Optics, part of a rolling programme across the Group driv
Slide 21: Our Priorities for H2 FY23
Our Priorities for H2 FY23 Build • Continue to manage supply chain issues, labour shortages, inflation • Generate synergies via our businesses that make products for lab markets • Leverage the combined resources of the Group to the benefit of all of our businesses, without diluting accountability Bu
Slide 22: Summary & Outlook
Summary & Outlook Outlook • We look forward to delivering a full year performance in line with market expectations • We will continue to invest in our existing portfolio of companies to drive organic growth • The Group continues to look for complementary acquisitions fitting our criteria Board chang
Slide 23: Appendices
Appendices Acquisition Process & Timeline Group Brands Track Record Capital Structure Dutch Company Geveke WTB collaborated with MPB to produce this floating production storage unit SDI GROUP PLC 23
Slide 24: Acquisition Process
Acquisition Process Why join SDI? Main Acquisition Criteria The business will retain its independence, brands and culture Strong exporters within Scientific / technical Focus on growth their instruments / Strong financial support and access to niche sector manufacturing specialist resources wi
Slide 25: Acquisition Timeline
Acquisition Timeline SDI GROUP PLC 25
Slide 26: Digital Imaging
Digital Imaging ATIK CAMERAS The cameras are designed and developed in Norwich, UK with manufacturing based in Lisbon, Portugal. The company has developed and sells a range of cameras under three brands Atik, Quantum Scientific Imaging and Opus Instruments. Atik Atik Cameras designs and manufactures
Slide 27: Digital Imaging
Digital Imaging SYNOPTICS Synoptics based in Cambridge is the headquarters and manufacturing site for Syngene, Synbiosis, Synoptics Health and Fistreem International products. It also has a US sale and marketing office based in Frederick USA. Syngene Syngene develops and manufactures systems and sof
Slide 28: Sensors & Control
Sensors & Control APPLIED THERMAL CONTROL / THERMAL EXCHANGE Applied Thermal Control (ATC) is based in Coalville and was acquired in August 2017. Thermal Exchange (TE) is based in Leicester and was acquired in February 2019. We took the decision to merge the two businesses in December 2019 in Barrow
Slide 29: Sensors & Control
Sensors & Control MPB INDUSTRIES MPB Industries (MPB) designs and manufactures flowmeters, flow alarms, flow indicators, flow switches, calibration cylinders and sight glasses for the measurement of liquids and gases by well-known industrial and scientific users. Based in East Peckham, UK, MPB opera
Slide 30: Sensors & Control
Sensors & Control FRASER ANTI-STATIC TECHNIQUES Fraser Anti-Static Techniques is one of the leading global manufacturers of anti-static products which eliminate, clean, generate or measure static electricity in a variety of industries including plastics, packaging, printing, food processing, medical
Slide 31: Sensors & Control
Sensors & Control MONMOUTH SCIENTIFIC LIMITED Monmouth Scientific (Monmouth) is one of the UK’s leading designers, manufacturers, and suppliers of Clean Air Solutions. The company specialises in Filtration Fume Cupboard and Ducted Fume Cupboard installations alongside Laminar Flow and Class I/Class
Slide 32: Track Record
Track Record Revenue (£m) Adjusted Operating Cash Generated from 49.7 Profit (£m) Operations (£m) 14.7 12.1 35.1 11.7 31.7 7.7 24.5 6.9 17.4 4.6 5.2 14.5 10.7 H1 3.1 H1 3.6 8.5 2.3 2.5 2.9 1.3 1.9 0.8 1.3 H1 '16 '17 '18 '19 '20 '21 '22 '23 '16 '17 '18 '19 '20 '21 '22 '23 '16 '17 '18 '19 '20 '21 '22
Slide 33: Capital Structure
Capital Structure Listing AIM:SDI Market Capitalisation ~£168m Ordinary Shares in issue 102,699,676 Options, including LTIP 3,732,143 (3.6% of issued share capital) Percentage of Number of issued share Shareholders ordinary shares capital Berenberg Wealth and Asset Management 9,651,726 9.4% Herald I
Slide 34: www.sdigroup.com
www.sdigroup.com SDI GROUP PLC 34