Slide 1: Annual Results Presentation, Year ended 31 March 2024
Year ended 31 March 2024 ANNUAL RESULTS PRESENTATION 26 JUNE 2024 NAT ROTHSCHILD Executive Chairman JON BOADEN Chief Financial Officer
Slide 2: Agenda
Agenda Highlights – Nat Rothschild Financial review – Jon Boaden Strategic update – Nat Rothschild Summary and outlook – Nat Rothschild Q &A 2
Slide 3: FY24 highlights
FY24 highlights Revenues doubled since FY21, whilst achieving record profits • Revenue growing organically despite temporary variability in demand dynamics • Underlying operating margin improved by 50bps to 9.8% (remains in 9-10% target range) $912.8m Revenue Diversified markets create through-cycle
Slide 4: Critical connectivity solutions for the world's biggest technology companies
Critical connectivity solutions for the world’s biggest technology companies Partnering innovators in precision Licensed manufacturer for the widely agricultural technology, passenger mobility, adopted Tesla North American Charging construction and material handling Standard FY24 Proforma revenue by
Slide 5: Unrivalled global footprint supporting localisation trends
Unrivalled global footprint supporting localisation trends China 3 production sites North America 2,200 people 41% of sales Cable extrusion 7 production sites 2,100 people to NA 39% of sales to R&D centre PCBa capability customers European customers Opportunities Penetration into China EV Opportunit
Slide 6: Providing choice for our customers
Providing choice for our customers Geographic location Capabilities Capacity Low-cost Centre of excellence High-volume Tariff-free Specialist products High-mix Near-shoring Accreditations Scale New product development Small sites tend to be closer to customer, whilst large sites can be more cost-eff
Slide 7: Financial Review
ee FINANCIAL REVIEW
Slide 8: Record financial performance
Record financial performance Underlying Underlying Revenue operating margin operating profit FY2024 +26.3% $912.8m FY2024 +33.3% $89.7m FY2024 +50bps 9.8% FY2023 $722.8m FY2023 $67.3m FY2023 9.3% FY2022 $614.6m FY2022 $56.2m FY2022 9.1% Organic revenue Profit before tax Total dividend per growth sha
Slide 9: Electric Vehicles
Electric Vehicles FY2024 highlights Market trends Products Organic decline of 9.6%, although Electric vehicle adoption increasing due Charging cables returned to growth in Q4 to continued focus on sustainability AC and DC charging systems Impacted by customers reducing buffer Transition to EVs backe
Slide 10: Consumer Electricals
Consumer Electricals FY2024 highlights Market trends Products Organic decline of 7.6% Smart home appliances Custom wiring and cable harnesses Demand suppressed due to supply Energy efficient products Power cords, plugs, connectors and chain normalisation and customers receptacles Enhanced digitaliza
Slide 11: Medical
Medical FY2024 highlights Market trends Products Organic growth of 15.3% Technology solutions for quicker PCBa, complete system integration and diagnosis box build Improved component availability Increase in preventative remote care Medical applications include Dental Customers fulfilling substantia
Slide 12: Complex Industrial Technology
Complex Industrial Technology FY2024 highlights Market trends Products Organic growth of 31.9% Development of next generation data Custom cable harnesses for advanced centre products fabrication technologies Strong growth in high-speed data centre cables due to improved availability of Growth in Art
Slide 13: Off-Highway
Off-Highway FY2024 highlights Market trends Products Organic growth of 39.9% Growth in population increases need Custom ruggedised wiring harnesses for freight vehicles Immediate scale in sector following Interior electrical components Murat Ticaret acquisition Agricultural technology advances Chass
Slide 14: Maintaining underlying operating margins in target range
Maintaining underlying operating margins in 14 target range • Relentless focus on continuous improvement provides efficiency benefits • Inflation well-managed through combination of cost optimisation, FX gains and product mix • Acquisitions positively impacted margins in the year • Targeted investme
Slide 15: Cash flow
Cash flow $56.8m Underlying Underlying $70.6m EBITDA working Acquisition spend, net Underlying free cash of share issues capital flow $111.6m Capex $6.7m Dividend payments Underlying EBITDA Interest and tax $1.5m 1.0x Covenant net debt : Underlying working EBITDA leverage capital inflow $76.4m net d
Slide 16: Capital allocation priorities to deliver sustainable growth
Capital allocation priorities to deliver sustainable growth Organic growth • Capital investments key to strategic growth • Usually between 3-4% of revenue, ~5% in FY25 Acquisitions • Enhance capabilities and grow customer base • Acquire at attractive valuations Ordinary dividends • Sustainable throu
Slide 17: Excellent returns
Excellent returns • Maintained strong returns, despite doubling revenue over last three years • Backdrop of increased investment into the business: • Additional working capital required • Capex as a % of revenue increased to fund growth to over 3%, expected to be ~5% in FY25 • Significant acquisitio
Slide 18: Strategic Update
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Slide 19: Coherent strategy driving our investment proposition
Coherent strategy driving our investment proposition Growing, sustainable markets Vertical integration Strong position in specialist markets with 01 02 Enhancing cost competitiveness, while structural drivers, investing in developing improving quality and control over supply market-leading product s
Slide 20: Advancing our ESG agenda
Advancing our ESG agenda Our planet • Committed to net zero scope 1 and 2 by 2035 28% • Improved carbon and water intensity Reduction in carbon • Responsible water use policy launched intensity from FY19 • Included as 2024 FT Europe’s Climate Leader Our • Tree-planting projects 9% communities • Cele
Slide 21: Interconnected end-markets
Interconnected end-markets Electric Leading Blue chip Vehicles positions customers Our chosen Off- Highway Consumer Electricals markets Diverse Multiple structural manufacturing growth drivers locations Highly Complex fragmented Industrial Medical Technology Capabilities Vertical Wire harness Automo
Slide 22: A complex manufacturer
A complex manufacturer Proportion of products >70% Of products are complex Electric Consumer Medical Complex Off-Highway Vehicles Electricals Industrial Technology High-volume Complex Definition Advantages Importance of quality High-volume Manufactured in significant Scale Safety when dealing with p
Slide 23: Successful acquisition strategy
Successful acquisition strategy Over the last 3 years Customers 112 targets reviewed 33% off- Geography Markets market deals Criteria 21 offers made 88% Capabilities Culture Europe 6 Businesses acquired and NA Valuation Since FY2019: Strong returns: 12 15.3% Businesses acquired FY24 Operating Profit
Slide 24: Acquisition and integration of Murat Ticaret
Acquisition and integration of Murat Ticaret Strong post-acquisition results $196m total Progress since acquisition consideration Excellent customer engagement Further growth potential Identification of prospective cross-sales 5.3x CY2022 EBITDA Significant opportunity in North America multiple Cont
Slide 25: Investment in Growth
Investment in Growth Programme of targeted investments, led by customer demand, localisation and capability enhancement Manufacturing sites Locations allow for 28 specialisation to accommodate higher value-add activities x2 Floor space 325,000m2 Further 80,000m2 expansion of 5 sites to be completed
Slide 26: Confident of delivering in-flight five-year plan
Confident of delivering in-flight five-year plan 5-year plan to FY2027 Revenue Underlying operating margin Revenue from acquisitions $1,200m 9-10% $200m 9% Murat Ticaret FY24* $200m FY24 $nil $1.2bn $nil RDS 0% 10% FY24* Key delivery objectives Expand EV customer Vertical integration and Support cus
Slide 27: Summary and Outlook
SUMMARY AND OUTLOOK
Slide 28: Summary and outlook
Summary and outlook Excellent results, revenues doubled in 3 years and margin maintained in target range Indications destocking impact is reducing in Electric Vehicles and Consumer Electricals end-markets Expanding Off-Highway penetration in North America Increasing operational and capital investmen
Slide 29: Q&A
Q&A
Slide 30: Appendices
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Slide 31: Our value proposition
Our value proposition Commitments Our purpose Strengths Priorities (By FY2027) Manufacturing Customer service Revenue of excellence $1.2bn Unique global At least $200m Continuous Delivering best-in- footprint from acquisitions improvement class critical connections Operating Leading positions margin
Slide 32: Management team
Management team Volex is led by a group of highly committed and experienced individuals that shape and drive the direction of the organisation Nat Rothschild Mark Kray Paul Bullock Executive Chairman Chief Operating Officer – North America Chief Operating Officer – Europe • Nat joined Volex in 2015
Slide 33: Regional operating model
Regional operating model Day-to-day running of the business is done on a regional basis, through five regions, with leadership team in each: North Europe Türkiye China Asia America Advantages: Leadership on More efficient Increased Proximity to same time zone decision making resilience customers as
Slide 34: Half-yearly organic performance
Half-yearly organic performance FY2022 FY2023 FY2024 H1 H2 H1 H2 H1 H2 Electric Vehicles 210.3% 53.0% 52.5% 17.7% (15.8%) (3.5%) Consumer Electricals * 16.2% 11.8% 4.0% (8.6%) (9.0%) (6.0%) Medical 11.7% 12.5% 11.9% 19.9% 17.8% 13.1% Complex Industrial Technology * (5.7%) 2.3% 9.2% 26.9% 30.1% 33.5%
Slide 35: Balance sheet
Balance sheet $m FY2024 FY2023 Goodwill and intangible assets 253.1 124.1 Property, plant, equipment and right-of-use assets 130.2 84.6 Investments 8.1 2.6 Inventories 174.3 120.5 Trade and other receivables 215.1 155.5 Trade and other payables (261.4) (151.0) Pensions and provisions (11.0) (3.9) Ta
Slide 36: FY25 technical guidance
FY25 technical guidance Cash flow Income statement Depreciation $25m - $30m Net finance costs ~$20m Underlying effective tax 22.5% of underlying profit Capital expenditure 5% of revenue rate before tax Tax payments $15m - $20m Number of shares in issue 181.6m Interest payments $15m - $20m Dividend p
Slide 37: Volex
Volex