Slide 1: TT Electronics plc 2015 Final Results
TT Electronics plc 2015 Final Results March 2016
Slide 2: Review of 2015
Review of 2015 • Successful year of transition, business now stabilised • Operational Improvement Plan largely complete – Well ahead of schedule, £7 million lower cost • Results in line with expectations, excellent cash conversion • Final dividend maintained TT Electronics plc Final Results 2015 1
Slide 3: Group Progress
Group Progress • Step up in customer focus, pipeline improvement, new customer and contracts wins • R&D - encouraging improvements, new launches from increased investment • ‘BE Lean’ freeing capacity and cash • OIP execution vastly improved • Employee engagement and culture change • Aero Stanrew acq
Slide 4: Aero Stanrew: Business Overview
Aero Stanrew: Business Overview Market leader in the design, development and production of electromagnetic components and electronic sub-systems Engine control systems Power systems Supply into performance Engine ignition and control Sub-sea power electronics critical applications Avionics Test equi
Slide 5: Aero Stanrew: Complementing TT's Strategy
Aero Stanrew: Complementing TT’s Strategy • Clear fit with the Group’s strategy – Robust, highly engineered products – Harsh environment applications – Highly complementary to Advanced Components division • Strengthens our position in Aerospace & Defence market • Significant market and customer over
Slide 6: Financial Review
Financial Review Mark Hoad, Chief Financial Officer TT Electronics plc Final Results 2015 5
Slide 7: Group Financial Performance
Group Financial Performance 2015 2014 Change Change £m (except where stated) constant fx Revenue 509.9 524.3 (3)% (2)% • Organic revenue decline 3% - 2014 one-off contracts Operating profit* 21.7 29.2 (26)% (30)% • OP reduced by 30% as Profit before tax* 19.2 27.6 (30)% (36)% expected EPS* (pence) 8
Slide 8: Group Operating Profit Bridge
Group Operating Profit Bridge Group Operating Profit Bridge (2015 vs 2014) 1.4 (5.0) 29.2 25.6 0.3 (2.5) (0.9) (4.2) 3.4 21.7 2014 FX Non-recurring 2014 Acquisitions R&D expense Depreciation TS&C price- Volume, 2015 orders like -for-like downs productivity TT Electronics plc Final Results 2015 7
Slide 9: Transportation Sensing and Control
Transportation Sensing and Control Financial Summary 2015 2014 Change Change constant fx Revenue (£m) 205.8 230.5 (11)% (3)% Op. (loss)/profit (£m)* (1.4) 1.4 (200)% (171)% Operating margin* (0.7)% 0.6% (130)bps (100)bps * Underlying, before exceptional and one-off costs • Modest organic revenue dec
Slide 10: Industrial Sensing and Control
Industrial Sensing and Control Financial Summary 2015 2014 Change Change constant fx Revenue (£m) 61.0 58.8 4% (3)% Operating profit (£m)* 11.4 12.8 (11)% (18)% Operating margin* 18.7% 21.8% (310)bps (330)bps * Underlying, before exceptional and one-off costs • Strong like-for-like performance • 10%
Slide 11: Advanced Components
Advanced Components Financial Summary 2015 2014 Change Change constant fx Revenue (£m) 95.3 98.8 (4)% (7)% Operating profit (£m)* 6.0 9.5 (37)% (38)% Operating margin* 6.3% 9.6% (330)bps (320)bps * Underlying, before exceptional and one-off costs • 7% organic revenue decline – Prior period includes
Slide 12: IMS
IMS Financial Summary 2015 2014 Change Change constant fx Revenue (£m) 147.8 136.2 9% 4% Operating profit (£m)* 5.7 5.5 4% (11)% Operating margin* 3.9% 4.0% (10)bps (50)bps * Underlying, before exceptional and one-off costs • Revenue increased by 4% organically – Strong performance in China and US •
Slide 13: Free Cash Flow and Net Debt
Free Cash Flow and Net Debt Free Cash Flow • Tighter control over capital and £m 2015 2014 development expenditure - 0.9x DA Underlying EBITDA 42.0 51.5 • Much improved working capital Net capital expenditure (16.8) (28.0) performance Capitalised development (1.3) (6.8) expenditure • Exceptional spe
Slide 14: Exceptional Items
Exceptional Items Exceptional Items (P&L) • Restructuring costs: Mainly OIP related £m 2015 2014 • Acquisition costs: Deal costs and intangible Restructuring costs 2.9 22.2 amortisation, net of credit relating to Acquisition related costs 0.8 1.9 Roxspur earnout Asset impairments 1.7 9.4 • Impairmen
Slide 15: Other Financial Matters / Guidance for 2016
Other Financial Matters / Guidance for 2016 • Restructuring costs – Remaining OIP P&L charge £4m; cash costs £6m in 2016, £2m in 2017-2020 – Further footprint change circa £7m cash cost – even split over 2016 and 2017 likely • Capital and development expenditure – Depreciation and amortisation circa
Slide 16: Divisional Review and Outlook
Divisional Review and Outlook Richard Tyson, Chief Executive Officer TT Electronics plc Final Results 2015 15
Slide 17: Transportation Sensing and Control
Transportation Sensing and Control • Early contract wins in target growth markets – Next-gen haptic pedal – Wins in China on pedals, temperature sensors, crankshaft sensors – Global project for chassis height sensor • Good progress on product innovation – Development order for linear sensor for susp
Slide 18: Industrial Sensing and Control
Industrial Sensing and Control • Strong Underlying organic performance • Key programme wins – First production order for latest phased diode array – Offset large one off order through multiple wins for position and torque sensors for recreational and off-road vehicles • Roxspur integration complete
Slide 19: Advanced Components
Advanced Components • Multiple new product launches • Record number of new customer positions won • Invested in new state-of-the art cleanroom - opened Jan 2016 • Aero Stanrew acquisition to team up with Power & Hybrid business TT Electronics plc Final Results 2015 18
Slide 20: IMS
IMS • Strong growth in China supported by additional contract wins – Metro train systems – Domestic narrow body aircraft • Global contract renewal with one of largest customers • Renewal of division-wide NADCAP certifications; major customer audits; customer awards TT Electronics plc Final Results 2
Slide 21: Summary and Outlook
Summary and Outlook • Successful year of transition, business now stabilised • Results in line with expectations, cash performance excellent • Strategy execution on track • OIP largely complete, further footprint changes • Tougher macro-economic environment • Self-help and Aero Stanrew contribution
Slide 22: Q&As
Q&As TT Electronics plc Final Results 2015 21
Slide 23: Appendices
Appendices TT Electronics plc Final Results 2015 22
Slide 24: Appendix: TT Electronics Business
Appendix: TT Electronics Business Revenue (FY 2015) Operating Profit (FY 2015) Transportation Transportation Sensing & Control 40% Sensing & Control -6% Industrial Industrial Sensing & Control 12% Sensing & Control 52% Advanced Advanced Components 19% Components 28% IMS 29% IMS 26% Revenue by market
Slide 25: Operational Improvement Plan: Progress
Operational Improvement Plan: Progress • Large, complex project has progressed very well • All twelve lines now transferred and OIP To 2017- Total / 2015 2016 qualified £m 2014 2020 Run Rate • Layout tidy-up in Germany completed H2 P&L charge (18.1) (1.8) (2.5) (1.1) (23.5) 2016 Cash cost (7.2) (7.4
Slide 26: Appendix: Impact of FX
Appendix: Impact of FX Transportation Industrial Sensing and Sensing Advanced Sales (£m) Control and Control Components IMS Group At 2014 rates 224.4 56.9 92.2 141.6 515.1 FX impact (adverse) / (18.6) 4.1 3.1 6.2 (5.2) favourable As published 205.8 61.0 95.3 147.8 509.9 Operating Profit (£m) At 2014
Slide 27: Appendix: Cash Conversion
Appendix: Cash Conversion Cash Conversion (£m) 2015 2014 Underlying EBITDA 42.0 51.5 Net capital expenditure (16.8) (28.0) Capitalised development expenditure (1.3) (6.8) Working capital 4.6 (16.8) Other 1.0 1.0 Underlying Operating Cash Flow (£m) 29.5 0.9 Underlying Operating Profit 21.7 29.2 Cash
Slide 28: Disclaimer
Disclaimer IMPORTANT INFORMATION • For the purposes of the following disclaimers, references to this “document” shall be deemed to include references to the presenters’ speeches, the question and answer session and any other related verbal or written communications. • This document contains certain