Slide 1: FY2022 Annual Results
HALF YEAR RESULTS FY2022 ANNUAL RESULTS Year ended 3 April 2022 NAT ROTHSCHILD Executive Chairman JON BOADEN Chief Financial Officer 23 June 2022
Slide 2: Record performance, ahead of medium-term targets
Record performance, ahead of medium-term targets… 2 Record performance • Group revenue up 38.6% year-on-year, 19.4% organic growth • Underlying operating profit up 31.0% to $56.2m, at margin of 9.1% • Final dividend increased by 9.1% to 2.4 pence per share Winning in attractive markets • Electric Ve
Slide 3: Global capabilities enabling market share gains
Global capabilities enabling market share gains 3 North America 6 production sites Asia 1,500 people 6 production sites PCBa capability 4,400 people R&D centre Cable extrusion Europe 6 production sites Sector key India 1,400 people Electric Vehicles 1 production sites Consumer Cable extrusion Electr
Slide 4: Financial Review
FINANCIAL REVIEW JON BOADEN Chief Financial Officer
Slide 5: Strong financial performance
Strong financial performance 5 Revenue Underlying Underlying operating profit operating margin $614.6m +38.6% $56.2m 9.1% -60bps +31.0% FY2021: $443.3m FY2021: $42.9m FY2021: 9.7% Organic revenue Profit before tax Total dividend per growth share 19.4% $36.2m 3.6 pence +23.1% +9.1% FY2021: $29.4m FY2
Slide 6: Delivering long-term growth and diversifying the customer base
Delivering long-term growth and diversifying the customer base 6 FY18 Sector Mix 650 $100.0m Complex Electric Vehicles $615m Industrial 2% Technology 600 $90.0m 16% $80.0m 550 Medical 5 year organic 20% revenue CAGR of 6% $70.0m Consumer 500 Electricals 62% $60.0m $443m 450 $56.2m $50.0m FY22 Sector
Slide 7: Confident in continuing to mitigate inflationary pressures
Confident in continuing to mitigate inflationary pressures 7 Copper LME Prices ($ per tonne) Freight costs ($ per 40ft container) PVC Resin ($ per tonne) 12,000 2,000 12,000 1,800 10,000 1,600 10,000 1,400 8,000 8,000 1,200 6,000 1,000 6,000 800 4,000 4,000 600 400 2,000 2,000 200 0 0 0 Apr Jun Aug
Slide 8: Underlying operating margin
Underlying operating margin 8 FY2021 FY2021 FY2021 before Foreign Cost Product mix Acquisitions Inflation FY2022 employment tax savings exchange and optimisation tax savings other • Operating expenses as a percentage of revenue improved 250 bps to 11.3% from 13.8% in FY2022, assisted by ongoing effi
Slide 9: Group Cash Flow
Group Cash Flow 9 Covenant net debt $m FY22 FY21 Underlying EBITDA 66.1 50.8 $111m $200.0m Net capital expenditure (14.5) (7.4) extra borrowing Underlying working capital (35.9) (7.6) capacity 1.3x Net interest and tax (8.0) (3.7) $89.4m Other including pension (1.6) (0.4) Underlying Free Cash Flow
Slide 10: Investing for growth
Investing for growth 10 Higher levels of investment supported our organic growth this Capital investment as a % of revenue 2.4% year as invested in vertical integration and the next generation 1.8% of high-speed data cables. Now have capability to produce own 1.3% cable in multiple locations 0.9% 0.
Slide 11: Earnings per share
Earnings per share 11 Underlying basic EPS before tax (cents) EPS (cents Before tax Current Deferred Other After tax per share) tax tax asset deferred tax recognition movements FY22 32.7 (6.5) 1.8 (1.1) 26.9 FY21 27.3 (2.4) 8.5 (1.3) 32.1 FY21 EPS before Profit growth Finance costs Change in FY22 EP
Slide 12: Electric Vehicles revenue growing strongly; Consumer Electricals higher
Electric Vehicles revenue growing strongly 12 $104m • Another very strong year in Electric Vehicles responding to increasing demand for EVs $53m • Our customer base has diversified and we have successfully developed our range of products +96% • We continue to optimise our manufacturing capabilities
Slide 13: Medical recovered strongly; Complex Industrial Technology robust
Medical has recovered strongly with high levels of customer demand 13 $128m • Strong return of demand for medical - 10% higher $113m than pre-Covid levels • Our major customers are reporting significant increases in order books +14% • Strong demand expected to be sustained over the medium term with
Slide 14: Strategy and Operations
STRATEGY AND OPERATIONS -_
Slide 15: Acquiring complementary 'bolt-on' businesses at attractive valuations
Acquiring complementary ‘bolt-on’ businesses at attractive valuations 15 Sector key TC Electric Irvine 3,700 sqm - Montreal Vehicles Consumer 4,600 sqm - California Electricals 100 people Medical 100 people Wiring harnesses Complex Industrial PCBa capability Technology Defence sector Defence sector
Slide 16: Our ESG journey so far
Our ESG journey so far 16 What • Launched a unified Group Health and Safety policy have we • Develop and encourage a diversity of talent in our organisation done • Established Safety, Environment and Sustainability committee • Approved sustainability framework and implemented sustainability reportin
Slide 17: Capital allocation to deliver sustainable growth
Capital allocation to deliver sustainable growth 17 Invest to drive organic growth Capital expenditure focused on Payback in 2 years for many projects high-growth areas Enhance capability, grow customer Acquire and integrate attractive Target net debt to base, acquire at attractive valuations busine
Slide 18: Ambitious new five year plan
Ambitious new five year plan 18 New plan: FY2023 – FY2027 Revenue Underlying Revenue from operating margin acquisitions $1,200m By end of FY27 9-10% $200m Last plan: FY2020 – FY2024 $650m by end of FY2024 10% 10% each year
Slide 19: Sustainable growth markets supporting our strategic plans
Sustainable growth markets supporting our strategic plans 19 Consumer Complex Industrial Electric Vehicles Medical Electricals Technology • Next generation • Evolving EV • Technological • Vertical integration data centre charging market advancements Opportunities and automation products • Expand cus
Slide 20: Summary and Outlook
| SUMMARY AND OUTLOOK : pnp = Al im rg .
Slide 21: Summary and outlook
Summary and outlook 21 • Record performance in FY2022, significantly ahead of FY2020-FY2024 plan • Launching new ambitious long-term target of $1.2bn revenue and 9-10% operating profit • FY2023 has started well with strong demand from our customers • Our diversification across sectors, customers and
Slide 22: Appendices
APPENDICES
Slide 23: Sector detail: Electric Vehicles and Consumer Electricals
Sector detail: Electric Vehicles and Consumer Electricals 23 Our advantage Electric Vehicles Experienced design team developing technical Ability to incorporate and manufacture multiple safety products with significant safety features features Scale from first mover advantage Technical expertise to
Slide 24: Sector detail: Medical and Complex Industrial Technology
Sector detail: Medical and Complex Industrial Technology 24 Our advantage Medical Significant expertise and experience in the market Global footprint aids customer flexibility/near-shoring supporting complex customer requirements Ability to manufacture to stringent medical Reputation for quality and
Slide 25: Gross margin movements and inflation effect
Gross margin movements and inflation effect 25 FY2021 FY2021 Foreign Inventory Cost Product mix Acquisitions Margin Inflation FY2022 employment exchange provision optimisation before tax savings inflation Dealing successfully with inflation • We pass on higher raw material costs to our customers thr
Slide 26: Modelling guidance
Modelling guidance 26 FY22 FY23 Operating margin 9.1% Expected to remain broadly flat Net finance expense $5.2m Expected to increase due to the larger facility in place from February 2022 P&L effective tax rate 17.7% ETR blended up through acquisition of profitable businesses Working capital 25.9% W
Slide 27: Return on capital employed
Return on capital employed 27 The acquisitions we make reduce the return on capital of the Group due to: • Consideration is higher than net asset value, generating additional assets (goodwill and intangibles) on acquisition • We acquire businesses that are smaller than Volex, which require a higher
Slide 28: Balance sheet
Balance sheet 28 $m FY2022 FY2021 Goodwill and intangible assets 129.9 107.6 Property, plant and equipment 62.8 50.4 Investments 1.5 0.9 Inventories 119.3 76.9 Trade and other receivables 138.2 115.4 Trade and other payables (147.7) (140.1) Pensions and provisions (5.6) (7.3) Taxation (net) 5.4 7.5
Slide 29: Volex
Volex