Slide 1: Half Year Results 2021
HALF YEAR RESULTS 2021 HALF YEAR 2021 RESULTS © TT Electronics 1
Slide 2: Delivering on our strategy: growing business momentum
DELIVERING ON OUR STRATEGY GROWING BUSINESS MOMENTUM Significant momentum across the business Record order book Expected strong 2021 revenue growth fully covered Good visibility building for 2022 Significant new customer wins, reflecting focus on sustainable growth markets underpinned by m
Slide 3: A responsible business
A RESPONSIBLE BUSINESS We help solve electronic challenges by providing solutions that are cleaner, smarter and healthier, which help our customers reduce their environmental impacts. At the same time, we also seek to optimise our own operations to reduce our impact on the environment. OUR SUSTAINAB
Slide 4: Moving into high growth, high margin markets
MOVING INTO HIGH GROWTH, HIGH SHIFT IN END MARKET EXPOSURES MARGIN MARKETS Transformation into markets with structural growth drivers 2015 H1 21 1. Increased exposure to structural growth markets, providing solutions for a cleaner, smarter and healthier world 2. Customer intimacy and R&D collaborati
Slide 5: Good exposure to structural growth markets
GOOD EXPOSURE TO STRUCTURAL GROWTH MARKETS MEDIUM TERM % OF TT REVENUE H1 21 MARKET SUSTAINABILITY DRIVERS GROWTH RATE 26% Healthcare +5-7% Demographic and social change 19% Aerospace & Defence +3-4% Climate change and resource scarcity 38% Automation & Electrification +4-6% Technological change; th
Slide 6: Increased visibility to deliver 10%+ margins
INCREASED VISIBILITY TO DELIVER 10%+ MARGINS Covid recovery: Bouncing back to towards 2019 CLEAR PATH TO 10%+ MARGINS revenue and margin levels this year • Recovery: from COVID-19 impact Growth: Ongoing growth momentum delivering • Self-help: £11-12m run rate benefit by 2023 from site closures and o
Slide 7: Financial review: Mark Hoad, CFO
FINANCIAL REVIEW MARK HOAD, CFO HALF YEAR 2021 RESULTS © TT Electronics 7
Slide 8: Group financial performance
GROUP FINANCIAL PERFORMANCE £m (except where stated) Change HY 21 HY 20¹ Core markets generally returned to growth constant fx 12% organic revenue growth Revenue 235.6 210.0 16 % Operating profit up 27% on constant currency basis Operating profit* 15.9 13.2 27% Adjusted operating margin of 6
Slide 9: Good recovery in operating margin
GOOD RECOVERY IN OPERATING MARGIN Good operational leverage on revenue growth Realising benefits from self-help programme Adding back discretionary costs as planned Margin accretion from Torotel Run-rate margins at 2019 levels (excluding Virolens related costs) Adjusted operating margin
Slide 10: Power & Connectivity
POWER & CONNECTIVITY 17% revenue growth at constant currency, 1% organic as Change commercial aero revenues dropped to run-rate vs tougher HY 21 HY 20 Change constant fx Q1 comp; growth in other end markets Revenue (£m) 68.2 60.0 14% 17% Strong contribution from Torotel acquisition - £9.7m reven
Slide 11: Global Manufacturing Solutions
GLOBAL MANUFACTURING SOLUTIONS 18% organic growth in revenue, strong performance in Change healthcare, automation and electrification HY 21 HY 20 Change constant fx Order book growth, benefiting from new customer wins Revenue (£m) 109.6 95.5 15% 18% Operating profit and margins impacted by low
Slide 12: Sensors and Specialist Components
SENSORS AND SPECIALIST COMPONENTS Revenue grew by 13% organically Change HY 21 HY 20 Change constant fx Strong demand in automation and electrification 57.8 54.5 6% 13% Customers booking orders to secure capacity; order book Revenue (£m) for 2022 already building Input cost inflation being r
Slide 13: Continued focus on cash and leverage
CONTINUED FOCUS ON CASH AND LEVERAGE Cash performance in H1 impacted by £18.9m working capital outflow Increased receivables reflecting high revenue growth Decision to invest in inventory due to supply chain constraints and to protect H2 order book Partially mitigated by sale of Covina prope
Slide 14: Expanded self-help programme progressing well
EXPANDED SELF-HELP PROGRAMME PROGRESSING WELL Programme scope 3 main site closures £m 2020 2021 2022 Total Net headcount reductions c. 500 FTEs Cash cost Relocation/end-of-life lower margin product lines Restructuring (2) (3) 1 (4) Progressing to plan Barbados, Carrollton and smaller Tunisia
Slide 15: CEO quote on 2021 order coverage and margins
“With 2021 expected revenues already fully covered by orders, continuing demand momentum and the benefits of our successful self-help programme being realised, we are confident in delivering improved full year 2021 results and have increased visibility over our path to double digit margins.” RICHARD
Slide 16: TT Electronics: cleaner, smarter & healthier technology
TT ELECTRONICS: CLEANER, SMARTER & HEALTHIER TECHNOLOGY Torotel (Kansas City) Awarded Contract from TT Secures Contract with New Healthcare Major A&D Prime Customer for In-Vitro Diagnostics Product • New win from the Torotel (Kansas City) business • Selected as hardware partner to Telenor, a leading
Slide 17: Record order book visibility, further margin growth
RECORD ORDER BOOK VISIBILITY FURTHER MARGIN GROWTH Record order book and continued strong order intake with good visibility building for 2022 Improving quality of the business and margins Self-help programme on-track; £5m incremental benefits in 2021; reduced net cost by £2m following sale of
Slide 18: Delivering value through M&A: Torotel
DELIVERING VALUE THROUGH M&A: TOROTEL Benefits New client wins Additional Tier 1 OEM relationships Over £11m of new orders in H1 Growing number of cross selling opportunities Significant contract wins secured on existing and new programs Collaboration on how different sites can work with s
Slide 19: Outlook
OUTLOOK Order and sales momentum continue; 2021 expected revenues fully covered Further increase in full year profit expectations Anticipate strong improvement in adjusted operating margins and cash conversion in H2 Increased visibility in path to double digit margins HALF YEAR 2021 RESULTS
Slide 20: Delivering growth and creating value
DELIVERING GROWTH AND CREATING VALUE Megatrends driving revenue growth A high quality, IP rich business, Strong cash generation to invest in IP and demand for products that with cleaner, smarter and and value-enhancing acquisitions contribute to a more sustainable world healthier solutions 90%+ cash
Slide 21: Thank you
THANK YOU HALF YEAR 2021 RESULTS © TT Electronics 21
Slide 22: Our divisions
OUR DIVISIONS PICTURE TO FOLLOW Power and Connectivity Global Manufacturing Solutions Sensors and Specialist Components Revenue: £68.2m Revenue: £109.6m Revenue: £57.8m Operating profit: £3.6m Operating profit: £8.5m Operating profit: £7.4m Operating profit margin: 5.3% Operating profit margin: 7.8%
Slide 23: Capital allocation priorities
CAPITAL ALLOCATION PRIORITIES Our objective is to maintain a strong financial position and provide flexibility for growth Free cash flow priorities Maximise organic investment including R&D to 1 support growth 2 Maintain our progressive dividend policy Continue to support our strategy with targeted,
Slide 24: The TT Electronics business
THE TT ELECTRONICS BUSINESS Revenue (H1 2021) Underlying operating profit (H1 2021) Revenue by market (H1 2021) Revenue by geography (H1 2021) Power & Connectivity 29% Power & Connectivity 23% Healthcare 26% UK 20% Global Manufacturing Solutions 46% Global Manufacturing Solutions 53% Aerospace & Def
Slide 25: Revenue by market and geography by division
REVENUE BY MARKET AND GEOGRAPHY BY DIVISION Power and Connectivity Global Manufacturing Solutions Sensors and Specialist Components Revenue by market (%) Revenue by market (%) Revenue by market (%) Healthcare 11% Healthcare 50% Healthcare 1% Automation and Automation and Automation and electrificait
Slide 26: Summary income statement
SUMMARY INCOME STATEMENT (£m) H1 2021 H1 20201 Revenue 235.6 210.0 Adjusted operating profit 15.9 13.2 Net finance cost (1.8) (1.9) Adjusted profit before taxation 14.1 11.3 Adjusting items (6.6) (14.3) Profit / (loss) before taxation 7.5 (3.0) Taxation (1.7) - Profit / (loss) after taxation 5.8 (3.
Slide 27: Summary of revenue and operating profit by division, impact of FX
SUMMARY OF REVENUE AND OPERATING PROFIT BY DIVISION IMPACT OF FX Global Sensors and Power and Manufacturing Specialist Connectivity Solutions Components Corporate Group Revenue (£m) HY 2021 68.2 109.6 57.8 - 235.6 HY 2020 at 2021 rates 58.1 93.1 51.3 - 202.5 FX impact (1.9) (2.4) (3.2) - (7.5) HY 20
Slide 28: Income statement – adjusting items
INCOME STATEMENT – ADJUSTING ITEMS £m H1 2021 H1 20201 Operating profit 9.3 (1.1) Adjusted to exclude: Restructuring and other items Restructuring INCOME STATEMENT – ADJ USTING ITEMS (3.3) (11.4) Property disposals 1.3 - Pension and past service charge 0.6 - (2.6) (11.4) Acquisition related costs Am
Slide 29: Cash conversion
CASH CONVERSION £m H1 2021 H1 20201 Adjusted operating profit 15.9 13.2 Depreciation and amortisation 8.0 8.7 Net capital expenditure (6.2) (3.0) Capitalised development expenditure (1.0) (1.5) Working capital (18.9) (11.2) Other 1.1 0.8 Operating cash flow after capex2 (1.1) 7.0 Operating profit 15
Slide 30: Movement in net debt
MOVEMENT IN NET DEBT £m H1 2021 H1 20201 Operating cash flow after capex2 (1.1) 7.0 Net interest and tax (4.0) (3.0) Lease liability repayments (1.9) (1.8) Restructuring and acquisition related costs2 (0.6) (4.7) Pensions (2.7) (2.7) Free cash flow (10.3) (5.2) Dividends (8.2) - Acquisitions and dis
Slide 31: Cautionary statement
CAUTIONARY STATEMENT 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 forward-looking statement