Carclo Plc · LSE:CAR
Carclo — H1 2024 Earnings Presentation
28 slides from Carclo's earnings presentation, Nov 28, 2023
Slide 1: Half Year Results H1 2024 Investor Presentation
Half Year Results H1 2024 Investor Presentation
Slide 2: Agenda
Agenda Introduction Frank Business Highlights Frank Financial Review Eric Business Update Eric Strategy Frank Summary and Outlook Frank 2
Slide 3: Carclo at a glance
Life Science •• •• • •• • Precision Tech • • • Aerospace • Optics 1,050 13 UK 3 £125m+ 4 Team members facilities Head Office Regions Annual Revenue Key Markets 3
Slide 4: Delivering Exceptional Value with Every Integrated Step
"Our strategy is to leverage our recognised expertise in the production and delivery of precision components into the life science and speciality markets worldwide, through innovation in products and performance." Design & Component Assembly & Supply chain Engineering Manufacturing Decoration servic
Slide 5: Business Highlights
Business Highlights 5
Slide 6: Overview
Overview Rising to the challenge of Harsh market conditions post-COVID boom Uncertainty driven by macro issues Financial markets are strained Carclo achievements Increased segment operating margins to offset demand decrease Delivered strong cash generation Reduced debt Continued to invest in the bus
Slide 7: H1 2024 Results
H1 2024 Results Revenue (£m) Revenue change at Net Cash Flow (£m) Net Debt (£m) constant FX £66.9 -4.8% £7.3 £29.5 H1 2023 Variance H1 2023 H1 2023 Variance £72.2 -7.2% £(1.2) £36.8 -20% Working capital as % Cash Conversion Return on Sales Return on Assets of Sales Employed 6.9% 418% 3.3% 8.4% H1 20
Slide 8: Adapting to Market Challenges
Adapting to Market Challenges External Environment Carclo Resilience Customer demand down post the COVID-19 PCR testing Responded with timely price increases surge Sought to temper price inflation through purchase Operating in high inflation environment negotiations Interest rates at the highest poi
Slide 9: Margins Rise Amid Demand Decline
Margins Rise Amid Demand Decline uOperating profit bridge Lower volumes driven by reduced demand from our H1 2024 vs H1 2023 customers, linked to a decline in COVID-19 diagnostic testing needs Focus on operational excellence and efficiency led to improved manufacturing contribution margins, particul
Slide 10: Movements Input Costs
Movements Input Costs Polymer price movements UK Electricity pricing Monthly Average Prices £/tonne Forward Delivery Contract Prices £/MWH 2,500 5,000 600 4,500 500 2,000 4,000 400 1,500 3,500 300 1,000 3,000 200 500 2,500 100 0 2,000 0 Jan-22 Jan-23 Apr-22 Jul-22 Apr-23 Jul-23 Oct-21 Oct-22 Oct-23
Slide 11: Financial Review
Financial Review 11
Slide 12: Half Year Financial KPIs (1/2)
Half Year Financial KPIs (1/2) Revenue (£m) Underlying operating profit (£m) Underlying Earnings per Share (pence) 12
Slide 13: Half Year Financial KPIs (2/2)
Half Year Financial KPIs (2/2) Return on assets employed Net debt (£m) Return on Sales (%) (%) 12% 40 6% 10% 30 8% 4% 6% 20 10.1% 36.8 5.0% 4% 8.4% 29.5 2% 10 3.3% 2% 0% 0 0% H1 2023 H1 2024 Sep-22 Sep-23 H1 2023 H1 2024 13
Slide 14: Segmental performance
Segmental performance CTP Aerospace £m Revenues 69.1 H12023 Revenues 3.0 12023 88% Y 63.1 H1 2024 27.5%R 3.8 H12024 uEBIT §—-8.0% Y 4.0 3.7 H12023-H12024 uEBIT 48.9 & 1.0 0.7 12023 12024 $$ Carclo Design & Engineering projects delivering manufacturing sales Drop in demand from life science analytics
Slide 15: Summary Income Statement
Summary Income Statement £000 Continuing operations: H1 2024 H1 2023 R evenue 66,921 72,1 51 Underlying operating profit 2,232 3,593 Operating profit before exceptional items 2,232 3,593 Exceptional items (2,095) (332) Operating profit 1 37 3,261 Finance revenue 283 60 Finance expense (2,91 8) (1 ,6
Slide 16: Pension
Pension £m H1 2024 FY2023 H1 2022 Comments Deficit b/f (34.5) (26.0) (26.0) Net interest cost (0.8) (0.7) (0.3) Administration cost (0.4) (1 .4) (0.8) Company Contributions 1 .8 4.1 2.4 Discount rate increased from 4.9% in FY 2023 to 5.55% in H1 Change in Liabilities 7.8 40.7 49.6 2024 Asset return
Slide 17: Financial Position
Financial Position £m Sep 23 Mar 23 Sep 22 Sep 23 Mar 23 Sep 22 Tangible Fixed Assets 43.8 45.3 49.5 Net debt (29.5) (34.4) (36.8) Inventories 1 2.5 1 5.2 1 8.1 Net debt to uEBITDA* 2.3 2.5 2.7 Other working capital (3.2) 0.6 3.5 Undrawn facilities - - 3.5 Working capital 9.3 1 5.8 21 .6 * last twel
Slide 18: Net Debt Progression H1 2024 (£m)
Net Debt Progression H1 2024 (£m) 18
Slide 19: Cash Generation
> Cash Generation $3 Carclo £m H12024 22023 H1 2023 spanse Comments Underlying EBITDA 6.2 6.5 7.5 (1.3) Change in working capital 7.0 3.5 (4.7) 11.7 Effect of proactive Working Capital management Interest paid (2.2) (1.8) (1.2) (1.0) Rising interest rates Net taxes paid (0.7) (0.5) (0.6) (0.1) Net p
Slide 20: Business Update
Business Update 20
Slide 21: Business Update
Business Update Focus Revenue development Comments 20 Completing customer programs Innovation, 15 Revitalisation program of customer Automation, 10 tooling Design & Validation, 5 Developing new internal back-end Engineering Education automation 0 CTP 80 Operational 60 Reduction PCR testing demand. E
Slide 22: Strategy
Strategy 22
Slide 23: Resilience
Adaptability at Work Reduction in PCR testing after COVID-19 has reduced Business Focus market demand for our customers Carclo 2025 Plan: "Focus and Value” Improving Divisional Margin and Cash Conversion Market Advancing Technologies and convenience, Strengthen our Balance Sheet fuel growth of the u
Slide 24: Delivering on our Strategy
Delivering on our Strategy Safety & Wellbeing Operational Excellence Safety Culture implemented Increased operational performance and asset utilisation More incidents being reported Global standardisation of processes Reduced the lost time incidents Optimizing material processing for enhanced effici
Slide 25: The Opportunity
The Opportunity Focus Area Market / Growth Driver Carclo Positioning We operate in global Strong global manufacturing footprint markets with solid base with focused factories with proven growth In vitro Diagnostic Drug Delivery track record on multi component Technology Advances Convenience & Selfca
Slide 26: Our Colleagues & Culture
Our Colleagues & Culture Diverse and in-depth talent pool Diversity across all dimensions strengthens our decision-making Success through engaging and empowering all employees Our core values Together, we create more than products 26
Slide 27: Summary & Outlook
Summary & Outlook H1 2024 FY 2024 First half-year Near-term priorities marked by reduced In • Restructuring our US operations to reduce cost and drive efficiency vitro Diagnostics • Maintain strong operational grip of the business sales post COVID-19; • Rolling out our global procurement concept Enh
Slide 28: Onward to New Horizons
$$ Carclo Onward to New Horizons