Volex plc · LSE:VLX
Volex — FY2004/05 Earnings Presentation
15 slides from Volex's earnings presentation, 2005
Slide 1: Full Year Results 2004/2005
Volex Group plc Full Year Results 2004/2005
Slide 2: Highlights
Highlights 2004/05 2003/04 £m £m Sales 244.6 238.4 Operating profit* 1.5 2.5 Exceptional operating items, goodwill amortisation & profit on property disposals 6.9 7.0 Loss before tax** (2.6) (1.3) Tax charge 4.4 2.9 Adjusted loss per share (23.8p) (14.7p) * Before exceptional operating items and goo
Slide 3: Turnover
Turnover TURNOVER BY DESTINATION Europe 27% UK Americas 26% Asia TURNOVER BY MARKET SECTOR 31% Data/Telecommunications 16% Consumer Appliances TURNOVER BY PRODUCT Consumer Electronics Industrial & Medical Data/Telecommunications Transport Power Cords Harnesses 12% 12% 10% 39% 45% 43% 19% 20% Volex G
Slide 4: Regional Operations - Asia
Regional Operations - Asia Sales improved by approximately 5.5% over prior year (Local Currency) Power cord operation in Europe aligned into Volex Asia Power cord significantly impacted by copper price effect New programs with consumer electronics and appliances OEMs Two site closures announced (Mal
Slide 5: Regional Operations - America
Regional Operations - America Sales increase by 3.5%, market demand improving Tijuana fire impacted restructuring programs Operational recovery complete success, protected customer base Management changed in Q3, Don Payzant appointed Closure of Conover announced, purchasing and planning centralised
Slide 6: Regional Operations - Europe
Regional Operations - Europe Sales (excluding UK) increase by 12% over prior year, strong telecoms performance Medical sector developed VWS business impacted by demand from largest customer – CNH Some restructuring achieved, Estonia capability enhanced Demand in Aerospace strong, execution issues Ne
Slide 7: Trading and Exceptional Items
Trading and Exceptional Items Foreign exchange impact - sales adverse by £ 13.3m - operating profit adverse by £ 0.2m Increased copper prices - additional costs c. £ 6.0m Tijuana fire - additional operating costs £ 0.6m - under-recovery on insurance claim £ 0.9m Other exceptional items - restructuri
Slide 8: Taxation
Taxation 2004/05 £m Current tax UK corporation tax - Foreign tax 2.6 2.6 Adjustments in respect of prior year UK corporation tax - Foreign tax 0.9 Total current tax 3.5 Deferred tax 0.9 Total tax charge 4.4 Tax charge impacted by: • £1.1m tax charge at overseas subsidiary relating to prior periods •
Slide 9: Balance Sheet
Balance Sheet 2005 2004 £m £m Tangible fixed assets 13.6 23.9 Stocks 28.0 29.3 Debtors 50.4 50.3 Creditors (40.2) (43.3) Provisions (4.2) - Capital employed 47.6 60.2 Goodwill 1.8 3.8 Net debt (30.5) (31.5) Net assets employed 18.9 32.5 Gearing 162% 97% Volex Group plc Full Year Results 2004/05 9
Slide 10: Cash Flow
Cash Flow 2004/05 2004/05 2004/05 2003/04 2003/04 2003/04 Ongoing Except. Total Ongoing Except. Total £m £m £m £m £m £m Free cashflow 2.0 (0.4) 1.6 8.1 (2.5) 5.6 Capital expenditure* (2.2) - (2.2) (2.5) - (2.5) Proceeds from disposals 0.6 7.2 7.8 0.5 1.2 1.7 Operating cashflow 0.4 6.8 7.2 6.1 (1.3)
Slide 11: Group Capital Expenditure
Group Capital Expenditure Half Year 1 Half Year 2 Capex multiple of depreciation 0.36 2005 0.8 1.4 1.2 1.3 0.39 2004 0.35 2003 1.2 1.2 3.2 1.4 0.54 2002 6.7 7.5 1.8 2001 0 5 10 15 £m Volex Group plc Full Year Results 2004/05 11
Slide 12: Current Funding Position
Current Funding Position At end of 2004/05 • cash balances of £15.0m • gross debt of £45.5m • debt fully serviced throughout year However………….. the Group is cash constrained: • scheduled debt repayments (totalling £5m) deferred • substantial interest and debt arrangement fees (£4.1m in 2004/05) • fr
Slide 13: Profit Improvement Strategy
Profit Improvement Strategy Manufacturing cost base • reduce the manufacturing footprint and move to lower cost locations Addressing the top line • new and expandable markets • extension of product range Build alliances • with cable and connector manufacturers Volex Group plc Full Year Results 2004/
Slide 14: Equity Raising and New Debt Facilities
Equity Raising and New Debt Facilities Raising approximately £15.8 million, net of costs Re-negotiated bank terms • multi-currency revolvers • 3 year money • improving interest margins on repayments EGM 29 June 2005 Volex Group plc Full Year Results 2004/05 14
Slide 15: Current Trading and Outlook
Current Trading and Outlook Profit improvement strategy under way Strengthened senior management team 3 sites announced for closure FY2006 – First 2 months’ trading in line with budget Potential for significant margin improvement Post refinancing, strong balance sheet with appropriate gearing Volex