Chemring Group Plc · LSE:CHG
Chemring — H1 2025 Earnings Presentation
32 slides from Chemring's earnings presentation, Jun 3, 2025
Slide 1: 2025 Interim results: Delivering the plan
UK MOD © Crown copyright 2022 Chemring Group PLC 2025 Interim results Delivering the plan Presented on 3rd June 2025 by: Michael Ord – Group Chief Executive James Mortensen – Chief Financial Officer Photo credit: United Launch Alliance
Slide 2: Michael Ord, Group Chief Executive
Michael Ord Group Chief Executive
Slide 3: Delivering the plan
Delivering the plan Operational and trading performance in line with expectations Robust returns and good cash conversion Record order book – underpinned by geopolitical environment Strategic organic and inorganic investment continues to plan Increasing momentum as we build for future growth On trac
Slide 4: H1 2025 good progress across KPIs
H1 2025 good progress across KPIs In line with our expectations Growth Earnings Cash generation Order intake Revenue Operating Earnings Cash Net debt: margin per share conversion EBITDA +42% +5% 11.6% 6.8p 80% 0.95x £488m £234m (H1 2024: 11.2%) (H1 2024: 6.6p) (H1 2024: 83%) (H1 2024: 0.85x) (H1 202
Slide 5: James Mortensen, Chief Financial Officer
James Mortensen Chief Financial Officer Photo Credit: United Launch Alliance
Slide 6: Financial highlights
Financial highlights H1 2025 H1 2024 2024 Order book £1,304m +25% £1,041m £1,038m Summary: Revenue £234.3m +5% £223.4m £510.4m » Record order book Operating profit £27.1m +8% £25.0m £71.1m » Good sales and profit growth Operating margin 11.6% +40 bps 11.2% 13.9% » Operating margin improving » EPS gr
Slide 7: Group and segmental performance
Group and segmental performance Operating Operating Revenue Revenue profit profit Operating profit (£m) growth (£m) growth margin Countermeasures & Energetics 141.7 +20% 20.4 +73% 14.4% Sensors & Information 92.6 (12)% 16.1 (26)% 17.4% Group 234.3 +5% 27.1 +8% 11.6% » Countermeasures & Energetics –
Slide 8: Group net debt bridge
Group net debt bridge Opening Operating Tax & Other Capex Grant Dividend Purchase Closing net debt cash finance funding of own net debt cost shares » Continued focus on cash management, with cash conversion of 80% » £46m capex, of which £35m spent on Energetics capacity expansion » £17m returned to
Slide 9: Capital allocation
Capital allocation Invest in the business Focused M&A Ordinary dividends Surplus capital » Investment in our Energetics » Bolt-on acquisitions in our » Key part of total shareholder » Returned to shareholders businesses to capitalise on core and close adjacencies – return » Share buy-back has return
Slide 10: £1bn revenue ambition
£1bn revenue ambition » Energetics: >£170m revenue » >£100m for expansion programmes already >150 £1bn announced >25 >30 » plus >£70m from underlying mid-single digit CAGR >100 >170 » Roke: >£100m revenue Revenue (£m) 510 » US Sensors: >£30m revenue » Countermeasures: >£25m from low single digit CAG
Slide 11: Guidance and financial outlook
Guidance and financial outlook FY25 guidance Potential near-term headwinds » Overall guidance unchanged » Near-term budget timing disruption in the US and the Strategic » 85% of expected revenue delivered or in the order book Defence Review in the UK » Countermeasures & Energetics targeting low doub
Slide 12: Driving innovation
Driving innovation » We have over 1,000 engineers, scientists, and subject matter experts working at the cutting edge of technology – in AI and Data Science alone we have over 100 engineers and scientists » We spend c.£115m a year on R&D, of which c.90% is customer funded Innovation showcase : EM-Vi
Slide 13: Michael Ord – Group Chief Executive
Michael Ord – Group Chief Executive
Slide 14: Market update
Market update Evolving market environment H12025 Revenue by Geography » Escalating and rapidly evolving geopolitical tensions » Accelerating pace and widening range of threats ROW 17% » Growing European defence budgets with increased focus on strategic self-reliance 47% UK » Strong emphasis on energ
Slide 15: Chemring's growth is underpinned by three core drivers
Chemring’s growth is underpinned by three core drivers European threats… UK National Security threats… Asia Pacific threats… » Driving demand for traditional defence » Driving demand for active-cyber defence Photo credit: United Launch Alliance » Driving demand for missiles and long- UK MOD © Crown
Slide 16: Energetics expansion projects on track
Energetics expansion projects on track September 2023 April 2025 Scotland - £45m investment Norway - £55m net investment (£90m grant funded) - +£30m pa incremental revenue - +£60m pa incremental revenue - Buildings complete, equipment being installed - Current facility expansion in line with plan -
Slide 17: Roke – Increasing strategic positions underpin long-term growth
Roke – Increasing strategic positions underpin long-term growth Significant strategic progress in Roke’s products business: » MRA – Won strategic multi-year supply agreement with major US prime contractor » STORM – Won strategically important £251m UK MOD multi-year missile defence contract » Signif
Slide 18: Summary and outlook
Summary and outlook H1 2025: In line with expectations Longer-term outlook increasingly robust » Strong performance despite near-term S&I headwinds. » Strong growth predicted over at least the next decade – Recovery in H2 expected well positioned in high margin and growing markets » Record order int
Slide 19: Appendices
Appendices ay “¢ 24 Chemring Innovating to protect
Slide 20: Organisation
Organisation Sensors & Information Countermeasures & Energetics Roke Roke US Countermeasures Countermeasures Countermeasures Energetic Energetics Chemring Technology USA Sensors UK USA Australia Devices UK Nobel Solutions BUs/capabilities Operational mission support services ● Active cyber defence &
Slide 21: Delivering on our strategic imperatives
Delivering on our strategic imperatives Our strategic imperatives: Grow Accelerate Protect Investing in capacity, technology and Investing in value-enhancing bolt-on Investing to protect sole-source and people to drive organic growth: acquisitions to accelerate growth, e.g. market-leading positions:
Slide 22: Group performance 2020 – H1 2025
Group performance 2020 – H1 2025 500 70 25 400 60 20 50 300 40 15 200 30 10 20 100 5 10 0 0 0 2020 2021 2022 2023 2024 H1 2025 2020 2021 2022 2023 2024 H1 2025 2020 2021 2022 2023 2024 H1 2025 Revenue (£m) Operating profit (£m) Earnings per share (pence) 20% 120 100 100 80 15% 80 60 10% 60 40 40 5%
Slide 23: Order book
Order book Total orderbook Growth 2025 Coverage £1,304m 25% 85% Countermeasures & Energetics Sensors & Information Orderbook Growth 2025 Coverage Orderbook Growth 2025 Coverage £1,222m 39% 96% £82m (48)% 67% » Expected 2026 revenue 86% covered and 2027 64% covered » Continued strong order intake for
Slide 24: Countermeasures & Energetics
Countermeasures & Energetics Revenue (£m) H2 H1 Business update Growth 350 300 » Record order intake (£418m) and order book (£1,222m) 250 20% 200 » Growth in revenue and operating profit as our businesses 150 100 perform to plan 50 0 2023 2024 2025 » Capital investment plan on track, £35m capex spen
Slide 25: Sensors & Information
Sensors & Information Revenue (£m) H2 H1 Business update 250 Growth » Roke revenue decreased by 12%. Excluding passthrough the 200 150 (12)% decrease would be 11% 100 50 » Operating margin decreased to 17.4% 0 2023 2024 2025 » US Sensors in receipt of $15m EMBD order, deliveries in 2025 Operating pr
Slide 26: Adjusting items
Adjusting items H1 2025 Growth H1 2024 £m £m Statutory operating profit 29.5 69% 17.5 Acquired intangibles amortisation 0.7 1.0 Acquisition related expenses 0.8 1.7 Mark to market gain on FX forward contracts (5.5) (1.1) Pension Buy-in / Buy-out 0.1 5.0 Restructuring 1.5 - Change of senior managemen
Slide 27: Medium term financial objectives and assumptions
Medium term financial objectives and assumptions Revenue » Group – targeting mid-single digit growth in the near term, accelerating to low double-digit % growth as new capacity comes online » S&I – targeting segmental mid-single digit % growth from double digit growth in Roke and US Sensors expected
Slide 28: Impact of foreign exchange translation
Impact of foreign exchange translation Constant H1 2025 restated at currency 2024 rates H1 2024 H1 2025 movement £m £m £m Revenue +6% 236.0 223.4 234.3 EBITDA +14% 40.4 35.5 39.8 Operating profit +10% 27.5 25.0 27.1 Order book +28% 1,328 1,041 1,304 Sensitivities Translation » 40% of revenue is deno
Slide 29: Balance sheet
Balance sheet » Net debt of £93.3m and net debt: EBITDA ratio £m H1 2025 H1 2024 2024 of 0.95x Goodwill & intangibles 125.2 107.9 108.5 Development costs 18.9 17.5 18.6 » Over the 2 year period, 98% of EBITDA has been Property, plant & equipment 303.8 261.0 287.8 converted to operating cash funding
Slide 30: Market consensus
Market consensus » The Group is aware of seven analysts 2025 2026 2027 publishing independent research on the Revenue (£m) 537 599 673 Group Underlying operating profit (£m) 75.5 88.7 106.6 » The Group has compiled consensus data* Underlying earnings per share (pence) 19.7 23.3 28.4 from the researc
Slide 31: Glossary
Glossary Acronym Meaning Acronym Meaning CCM UK Chemring Countermeasures UK ISTAR Intelligence, Surveillance, Target Acquisition, and Reconnaissance CCM US Chemring Countermeasures USA JBTDS Joint Biological Tactical Detection System CED Chemring Energetic Devices LRIP Low rate initial production CE
Slide 32: Disclaimer
Disclaimer 2025 Chemring Group PLC The information in this document is the property of Chemring group PLC (“Chemring”) and may not be copied or communicated to a third party or used for any purpose other than that for which it is supplied without the express written consent of Chemring. This present