Volex Plc · LSE:VLX
Volex — FY2016 Earnings Presentation
16 slides from Volex's earnings presentation, June 2016
Slide 1: Volex - Preliminary Results 2015/16
Volex - Preliminary Results 2015/16 Nat Rothschild, Executive Chairman Daren Morris, Chief Financial Officer June 2016
Slide 2: Presentation disclaimer
This Presentation has been prepared by Volex PLC (the “Company”) in connection with the publication of the Company's preliminary results for the fifty-two weeks to April 3 2016. This Presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any
Slide 3: Introduction
Introduction Volex * We haveorganisation-wide agreement on the key issues to address * Central management was detached from our factories, sales team and customers * The last strategy added a lot of cost and a lot of new people - and in the process Volex lost focus on its core areas of expertise ¢ W
Slide 4: Priorities for FY17
Priorities for FY17 Volex * Align cost base to our competition, by completing current lean manufacturing initiatives * Improve sales effectiveness with best-in-class RFQ response times and competitive pricing ¢« Removeall loss-making and in-efficient activities— by P/N, office and factory * Improve
Slide 5: Key Summary - FY2016 Results
Key Summary - FY2016 Results Volex * 13% reduction in sales (9% on a like for like basis— extra week and FX) * Our major markets saw reduced demand - global PC sales volumes fell more than 10% in 2015; our largest cutomer tablet sales down 22% * Cost control resulted in small reduction in gross marg
Slide 6: Revenue trend 2011/12 to 2015/16
600 500 -15.4% +5.8% -13.2% 400 $m 300 200 100 0 2011/12 2012/13 2013/14 2014/15 2015/16 • • • • • • •
Slide 7: Power Cords and Cable Assemblies – FY2015 to FY2016
Power Cords – FY2015 to FY2016 Cable Assemblies – FY2015 to FY2016 (15.9)% (8.3)% 2014/15 2015/16 2014/15 2015/16 • • • • • • • •
Slide 8: Financial Review
Volex Financial Review
Slide 9: Financial Summary
Financial Summary Volex sm Revenue Gross Profit - Gross Margin Operating Costs Operating Profit - Operating Margin Exceptional Items / Share based payments Finance Costs Tax Profit After Tax Underlying EPS Cash Generated by Operations Net Cash / (Debt) FY15 423.4 70.9 16.7% (62.1) 8.8 2.1% (13.4) (2
Slide 10: Exceptional costs
• Significant reduction in exceptional costs in the year • Impairment charge is non-cash and relates to write-down of fixed assets • Restructuring costs relate to the removal of the majority of the former executive management and ongoing down-sizing activities • The onerous lease charge relates to t
Slide 11: Central costs
Central costs relate to central finance, HR, Legal, Board and London listing costs
Slide 12: Power Cords results
• Revenue decline due to reduction of business with largest customers • Overall margin fall not as marked as at half year, due to cost cutting in H2 • Growth forecast for FY17 from current revenue low-point
Slide 13: Cable Assemblies results
• Significant reduction in sales volumes in consumer electronic end-markets • Largest customer saw tablet sales volume fall 22%; Global PC market sales volumes fell nearly 11% • High fixed costs mean that the business is operationally geared, and is operating close to breakeven
Slide 14: Cash Flow
$20 $15 $10 Cash Flow ($m) $5 $0 1.9 -3.2 -$5 -$10 -$15 FY15 Net Cash Cash utilised Interest and Capex Other FY16 Net Cash generated by non Tax Debt from recurring operations items • Cash positive – before non recurring items • Improvement on H1 net debt position • Current bank facilities extended t
Slide 15: Balance Sheet
$m FY15 FY16 Goodwill & Intangibles 4.3 3.7 • Reduction in working capital as Property, Plant and Equipment 35.2 33.3 Other 1.9 2.4 revenue has reduced Non-current Assets 41.4 39.5 Inventories Trade & other receivables 43.4 75.2 41.5 64.1 • $45m bank facility with June Cash and bank balances 33.7 30
Slide 16: Outlook
Outlook Volex Current expectations are that revenues will be in the range of $340 to $360 millionin FY17 * Power Cord volumes and pricing pressures continue but pipeline is now stable * Cable Assemblies pipeline is encouraging - aiming for growth this year A full year of cost savings from actions ta