Volex Plc · LSE:VLX
Volex — FY2008 Earnings Presentation
17 slides from Volex's earnings presentation, Jun 9, 2008
Slide 1: 2008 Review
2008 Review 9 June 2008 June 08 1
Slide 2: Content
Content 2008 Highlights Financial Overview 2008 Challenges Development Strategy Power Products Interconnect Wiring Harness Division Summary Outlook June 08 2
Slide 3: 2008 Highlights
2008 Highlights FY2008 was a difficult year with challenging market conditions and delayed restructuring. Record high revenue at Power Products; strong new business pipeline. Focus on emerging markets and new technologies delivering. India revenue doubled; trending same growth rate. Breakthrough win
Slide 4: Financial Overview
Financial Overview Revenues £259.8m (2007: £248.7m). Adjusted operating profit £4.3m (2007: £9.6m). Adjusted profit before tax £1.7m (2007: £6.7m). Incurred exceptional charge of £2.7m. Cash flow from operations £(2.2)m (2007: £10.7m). Adjusted earnings per share of (1.5)p (2007: 8.4p). June 08 4
Slide 5: 2008 Profit and Loss
2008 Profit and Loss 2008 2007 £’m £’m Revenue 259.8 248.7 Operating profit* 4.3 9.6 Net interest (2.1) (2.0) Debt issue costs – Amortisation (0.5) (0.9) Profit before tax* 1.7 6.7 Major Restructuring Programme Charge (2.7) (2.0) Share Based Payments 0.1 (0.4) Debt issue costs – Write-off - (1.5) (L
Slide 6: 2008 Cash Flow
2008 Cash Flow 2008 2007 £’m £’m Operating Cash Flow (2.2) 10.7 Major Restructuring Programme (3.9) (4.1) Tax (0.9) (0.8) Interest (1.5) (1.8) Net Capital Expenditure (1.7) (2.2) Sale of property - 1.9 Cash Flow before Financing (10.2) 3.7 June 08 6
Slide 7: 2008 Balance Sheet
2008 Balance Sheet 2008 2007 £’m £’m Non Current Assets 10.3 11.6 Working Capital 46.6 38.4 Cash 4.3 12.2 Provisions (3.3) (3.9) Other (4.5) (3.4) Net Current Assets 43.1 43.3 Loans (25.3) (21.7) Provisions (3.8) (4.0) Pension Obligations (1.5) (2.5) Other (0.2) (0.6) Net Assets 22.6 26.1 Net Debt (
Slide 8: Operating Profit & Revenue by Division
Operating Profit & Revenue by Division O pe rating Profit 12.0 9.6 10.0 8.2 8.0 6.2 6.0 4.8 4.3 2008 £'m 4.0 2007 2.0 0.0 (0.8) (2.0) (1.4) (4.0) (3.1) Pow e r Products Inte rconne ct W iring Ha rne ss Tota l 2008 Re v e nue by Div ision £36.3m +6.5% £87.1m £136.3m -4.6% +10.5% Power Products Interc
Slide 9: 2008 Challenges
2008 Challenges Wiring Harness UK Redundancy programme eliminated targeted cost. Transfer from UK to Croatia was problematic. Systems and poor programme management delayed efficiency ramp up. Incurred significant additional costs to meet customers’ requirements. Interconnect Sudden and severe downtu
Slide 10: Development Strategy
Development Strategy We understand the issues that impacted us and recognize the areas of improvement Produced a three year plan outlining our focus Plan is an evolution of achievements to date; not a new strategy Focus Points of the 3 Year Plan Capitalise dominant market leadership position in Powe
Slide 11: Power Products – Dominant Market Leader
Power Products – Dominant Market Leader Revenue & Margin Market Leadership £140 7.0% £135 6.0% £130 5.0% M illio n s £125 4.0% £120 3.0% £115 2.0% £110 1.0% £105 0.0% FY 06 FY 07 FY 08 PowerCord Revenue Profit Margin June 08 11
Slide 12: Interconnect – Repositioning the Business
Interconnect – Repositioning the Business Diversify The Telecom Exposure Focus on Growth Market and Technologies to Drive Margin. China 3G Subscriber Base Development £100.0 India EMS Market £90.0 Forecast £80.0 60.7% 60.7% 3000 68.8% 300 M illio n s £70.0 M illio n s 2500 68.8% £60.0 250 2000 7% No
Slide 13: Wiring Harness – Achieve Operational Excellence
Wiring Harness – Achieve Operational Excellence Added new operational leadership both at the Division and Corporate. Deployed a task force pulled from across the Group. Rationalise customer base to optimise operations. Prioritised the issues and tackling them aggressively. Upgraded the information s
Slide 14: Power Products
Power Products Record high revenue with strong new business pipeline. Revenues £136m, an increase of 10.6% (17.4 % at constant exchange rate). Increase in operating profit against challenging commodity environment. Operating profit £8.2m (2007: £6.2m) Return on sales 6.0% (2007: 5.0%) Strong perform
Slide 15: Interconnect
Interconnect Revenue £87m, a decrease of 4.5% (3.9% at constant exchange rates) Operating loss of £0.8m due to the following: Revenue decline of our largest customer. Increased overhead cost to ramp up for new business. Cost associated with consolidation of facilities in Europe. Wireless infrastruct
Slide 16: Wiring Harness
Wiring Harness Revenue £36m, an increase of 6.4%. Operating loss of £3.1m due to delayed restructuring. UK redundancy programme eliminated targeted cost. Efficiency ramp up significantly delayed. Incurred additional costs to meet customers requirements. Rate of losses stabilised. Expect the benefits
Slide 17: Outlook
Outlook Demand for Power Products remains resilient despite weakness in North American market. Taking prudent approach to Power Products new business growth as we continue to out perform the market. High commodity prices pose a challenge to margin and working capital in Power Products. Market dynami