TT Electronics plc · LSE:TTG
TT Electronics — FY2006 Earnings Presentation
30 slides from TT Electronics's earnings presentation, 2007
Slide 1: 2006 Full Year Results
2006 FULL YEAR RESULTS To see comments made by Neil Rodgers, Chief Executive at the 2006 Full Year Results Presentation, place your cursor over the icons. View comments with Adobe Acrobat version 6
Slide 2: Highlights
HIGHLIGHTS • Operating profit before exceptional items growth of 21 per cent • Global footprint for EMS through acquisition of Apsco • 39 per cent of employees now operate in low cost economies • Earnings per share before exceptional profit from continuing activities increase to 14.1p compared with
Slide 3: Financial Summary
FINANCIAL SUMMARY £Ms 2006 2006 2006 2005 Full Year nd 2 Half st 1 Half Total Revenue 600.3 298.5 301.8 565.3 Operating profit 36.2 18.4 17.8 29.9 Exceptional items 8.8 8.8 - 2.1 Total 45.0 27.2 17.8 32.0 Net interest payable (3.8) (2.2) (1.6) (3.1) Net finance cost on pension (1.9) (1.0) (0.9) (2.1
Slide 4: Exceptional Items
EXCEPTIONAL ITEMS Effect of curtailment on future pension benefits £8.8m The pensionable salaries of all major UK pension schemes have been frozen for three years. This has the effect of a permanent reduction in the pensions to be paid out in three years time by approximately 8 per cent
Slide 5: Geographical Analysis of Revenue
GEOGRAPHICAL ANALYSIS OF REVENUE Origin Destination 28% (2005:25%) 34% (2005:35%) 25% (2005:23%) 10% (2005:8%) 15% (2005:13%) 23% (2005:26%) 39% (2005:41%) 26% (2005:29%) United Kingdom Rest of Europe North America Rest of the World
Slide 6: Geographical Analysis of Revenue and Operating Profit by Origin
GEOGRAPHICAL ANALYSIS OF REVENUE AND OPERATING PROFIT BY ORIGIN Revenue Operating Profit 28% (2005:25%) 44% (2005:37%) 10% (2005:8%) 15% 23% (2005:26%) (2005:16%) 39% (2005:41%) 34% (2005:31%) 7% (2005:16%) United Kingdom Rest of Europe North America Rest of the World
Slide 7: Sector Performance
UT: SECTOR PERFORMANCE
Slide 8: Analysis of Revenue by Product
ANALYSIS OF REVENUE BY PRODUCT 2006 2006 2006 2005 Full Year nd 2 Half st 1 Half Total £m % £m % £m % £m % Electronic: Sensors and electronic systems 184.8 31 85.8 29 99.0 33 195.0 34 Electronic components 139.9 23 68.7 23 71.2 23 129.6 23 EMS 72.1 12 39.1 13 33.0 11 60.3 11 396.8 66 193.6 65 203.2
Slide 9: Analysis of Operating Profit by Product
ANALYSIS OF OPERATING PROFIT BY PRODUCT 2006 2006 2006 2005 £Ms Full Year 2nd Half 1st Half Total Electronic: Sensors and electronic systems 11.6 5.9 5.7 9.1 Electronic components 11.4 6.8 4.6 8.7 EMS 1.3 (0.7) 2.0 2.0 24.3 12.0 12.3 19.8 Electrical: Power systems 5.4 3.4 2.0 4.6 Power transmission
Slide 10: Analysis of Revenue by Market
ANALYSIS OF REVENUE BY MARKET 2006 2006 2006 2005 Full Year nd 2 Half st 1 Half Total £m % £m % £m % £m % Electronic: Automotive 223.4 37 106.2 36 117.2 39 226.8 40 Telecom and computer 76.0 13 39.0 13 37.0 12 66.6 12 Industrial 97.4 16 48.4 16 49.0 16 91.5 16 396.8 66 193.6 65 203.2 67 384.9 68 Ele
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Slide 12: Sensors and Electronic Systems
SENSORS AND ELECTRONIC SYSTEMS Highlights z Profits up 27 per cent z Further Autopad® orders won in 2006 z £11m steering sensors contract won in Korea using new DAPS technology z Agreement entered to form a joint venture to benefit from growth in the Indian automotive market
Slide 13: Electronic Components
ELECTRONIC COMPONENTS Highlights z Strong order intake – up by 9 per cent from 2005 z First AnothermTM orders won for flat screen LCD TV’s z AnothermTM automotive orders taken worth £50m with expected delivery commencing 2009 z Achieved 4,700 design-ins to yield up to £50m sales per annum
Slide 14: Electronic Manufacturing Services
ELECTRONIC MANUFACTURING SERVICES Highlights z Acquisition of Apsco transforms EMS operations into global service provider z Consolidation of UK operations with closure of loss-making UK manufacturing facility z China and Malaysia operations expanded further z £16m of new business won in defence
Slide 15: Electrical
ELECTRICAL Highlights z Operating profit up by 18 per cent z Mexican low cost genset operation achieves strong growth in sales and profits z Cable accessory manufacturing successfully relocated in the UK z Cable accessories and connection systems manufacturing established in China z Connection syste
Slide 16: Group Strategy
GROUP STRATEGY To focus upon core technologies and improve margins in key business areas • Target organic sales growth from: innovative technologies emerging markets wider product offering design-ins • Selective acquisitions in core business sectors • Focus on efficient and low cost manufact
Slide 17: Sector Strategy: Sensors and Electronic Systems
SECTOR STRATEGY SENSORS AND ELECTRONIC SYSTEMS • Build upon success of new sensor technology • Grow sales in emerging markets • Expand low cost manufacturing capability • Continued rationalisation of electronic systems
Slide 18: Sector Strategy: Components
SECTOR STRATEGY COMPONENTS • New product development to hold world leading position in specialist technologies • Sell private label products to broaden product offering • Focus on new product design-ins to secure long-term future sales growth • Establish TT electronics as a niche player in the emerg
Slide 19: Sector Strategy: Electronic Manufacturing Services
SECTOR STRATEGY ELECTRONIC MANUFACTURING SERVICES • Capitalise on position as global EMS provider • Continue to grow low cost manufacturing operations in Malaysia and China • Target high margin defence and medical business • Maintain high margin strategy (target 10 per cent ROS)
Slide 20: Sector Strategy: Electrical
SECTOR STRATEGY ELECTRICAL • Continue development of low cost sources of supply • Establish lowest cost manufacturing capability • Focus on higher margin areas
Slide 21: Conclusion
CONCLUSION z TT electronics profits up 21 per cent on 2005 z Focus upon electronics with electrical performing strongly z Technology leader with drive on new product development z Balanced portfolio of businesses serving the following markets: Automotive Telecom/Computer Defence/Aerospace In
Slide 22: Cash Flow
‘electronics ple CASH FLOW
Slide 23: Cash Flow from Operations
CASH FLOW FROM OPERATIONS £Ms 2006 2006 2006 2005 Full Year 2nd Half 1st Half Full Year Profit for the year 28.0 17.2 10.8 13.0 Finance costs 5.7 3.2 2.5 6.1 Taxation 11.3 6.8 4.5 5.2 45.0 27.2 17.8 24.3 Depreciation and amortisation 32.3 16.3 16.0 37.2 Gain on sale of fixed assets (2.0) - (2.0) (12
Slide 24: Cash Flow from Operations (contd.)
CASH FLOW FROM OPERATIONS (CONTD.) £Ms 2006 2006 2006 2005 Full Year 2nd Half 1st Half Full Year Operating cash flow before movements 59.9 29.1 30.8 36.2 in working capital (Increase)/decrease in property and derivatives (1.0) (0.9) (0.1) 0.8 (Increase)/decrease in inventories (0.8) (0.8) - 5.1 (Inc
Slide 25: Group Cash Flow
GROUP CASH FLOW £Ms 2006 2006 2006 2005 Full Year 2nd Half 1st Half Total Cash inflow from operations 25.1 10.5 14.6 49.6 Capital expenditure (20.6) (11.4) (9.2) (15.6) Development expenditure (8.6) (3.7) (4.9) (8.7) Proceeds from sale of assets and grants received 7.1 2.7 4.4 21.3 Proceeds from sal
Slide 26: Group Balance Sheet
GROUP BALANCE SHEET £Ms 2006 2006 2005 December June December Non-current assets 177.7 176.1 186.2 Deferred tax asset 21.0 22.6 30.0 198.7 198.7 216.2 Inventories 99.8 93.9 93.9 Receivables and financial instruments 105.2 108.3 95.1 Cash and cash equivalents 9.5 22.2 24.0 214.5 224.4 213.0 Current p
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Slide 28: The Future
‘electronics ple THE FUTURE
Slide 29: Outlook
OUTLOOK • Improved performance with recent cost reductions and elimination of loss-makers • Improvement in dividend cover • Introduction of new products driving demand forward • Momentum across the group is positive • Successful acquisition of Apsco and Indian joint venture, further acquisitions in
Slide 30: A World Leader in Sensor and Electronic Component Technology
A World Leader in Sensor and Electronic Component Technology