Discoverie Group Plc · LSE:DSCV
Discoverie — Investor Presentation (June 2022)
28 slides from Discoverie's investor presentation, June 2022
Slide 1: Investor Presentation June 2022
Investor Presentation June 2022 discoverIE Group plc 1
Slide 2: discoverIE is / is NOT
discoverIE is: discoverIE is NOT: ◼ A FTSE 250 international specialist electronic ◼ A distributor or reseller engineering company ◼ A contract manufacturer or outsourcing partner ◼ Designing and manufacturing customised electronic components for industrial applications ◼ A supplier of standardised
Slide 3: Our global footprint
discoverIE is an international electronic engineering firm, designing and Our global footprint manufacturing customised electronic components for industrial applications. 30 Manufacturing sites 60% Group revenue 20 16% Group revenue 1,460 24% Countries in Employees which we 440 Group revenue operate
Slide 4: Financial Highlights
Financial Highlights UNDERLYING OPERATING PROFIT (1)(2) CAGR 34% CAGR 19% 10.9% 10.9% CAGR 10% organic sales 10.2% 10.2% 8.4% 7.6% COVID year COVID year FY18 FY19 FY20 FY21 FY22 FY23E FY18 FY19 FY20 FY21 FY22 FY23E UNDERLYING EPS(2) RETURN ON CAPITAL EMPLOYED(4) CAGR 26%(3) 15.4% 16.0% 14.5% 14.7% 1
Slide 5: Magnetics & Controls
Magnetics & Controls ▪ Electronics for; ▪ Signal conditioning, power conversion and switching ▪ Monitoring & remote control, communication & interface control ▪ 62% of Group Revenue ▪ 56% of Group profit contribution ▪ 12.7% operating margin ▪ 3 acquisitions in the last 4 years ▪ 8 business across 1
Slide 6: Sensing & Connectivity
Sensing & Connectivity ▪ Electronics for; ▪ Sensing & measuring movement, temperature, pressure, position, force, load & x-ray detection ▪ Connection, switching, wireless transmission & receipt, fibre optic connection & electromagnetic shielding ▪ 38% of Group Revenue ▪ 44% of Group profit contribut
Slide 7: Why invest in discoverIE
WHY INVEST IN DISCOVERIE discoverIE Group plc 7
Slide 8: Why invest: five key reasons
1 SUSTAINABLE GROWTH MARKET Focus on industrial applications and prioritise four target markets with structural, sustainable growth 2 Customised electronics and systems HIGHLY designed and produced for specific industrial DIFFERENTIATED applications, addressing a niche segment of PRODUCTS the electr
Slide 9: Sustainable Growth Market
REVENUE FROM TARGET FIVE YEAR ORGANIC SUSTAINABLE MARKETS GROWTH BY MARKET 1 ▪ Global trends driving structural growth (% of total revenue) GROWTH ▪ Product development driven by technology Target Markets MARKET 12% ▪ Increasing electronic content Other Industrial & Other ▪ Essential products Connec
Slide 10: Highly Differentiated Products
HIGHLY 2 DIFFERENTIATED PRODUCTS Position Sensor Customised Applications Wind Power Medical Used in wind scanners to Used in the centre of an help site wind farms to MRI scanner to detect ensure maximum the patient position efficiency and yield Solar Power Industrial Used in solar trackers to Used t
Slide 11: Clear & Proven Strategy
Add underpined by strong cash flow, sustainable returns,. CLEAR & x Key strategic indicators. See Our strategic aim is to grow our business in customised electronics next slide for details. 3 PROVEN STRATEGY by focusing on markets with sustained growth prospects, driven by increasing electronic cont
Slide 12: Clear & Proven Strategy: Key Strategic Indicators
3 CLEAR & PROVEN STRATEGY Key Strategic Indicators 1 Increase Underlying Operating Margin 2 Build Sales Beyond Europe(1) 3 Target Market Sales(1) 4 Carbon Emission Reduction (tonnes/£m sales)(2) 45% 85% 13.5% 40% 76% 31.6 68% 25.5 10.9% 56% 21.0 6.3% 19% 15.8 3.4% 5% FY14 FY18 FY22 FY25 Target FY14
Slide 13: Strong Financials: Organic growth and acquisitions
4 STRONG FINANCIALS H2 22 Organic growth and HALF YEARLY ORGANIC SALES 20% Yo2Y Acquisitions GROWTH 19% H1 22 15% ◼ Strong organic growth Yo2Y ◼ 10% CAGR since FY18 Q4 17 H1 18 H2 18 H1 19 H2 19 H1 20 H2 20 8% 9% 12% 11% 10% 10% 7% 5% (2%) ◼ High quality acquisitions over 11 years (7%) H2 21 H1 21 ◼
Slide 14: Strong cash flow & balance sheet
Strong cash flow & 4 STRONG FINANCIALS balance sheet ◼ Strong growth in operating & free cash flows ◼ Consistently high conversion rate Operating & free cash flow (LTM) ◼ Aiming to be self sufficient in funding acquisitions over time ◼ Robust balance sheet £43.4m Covid impact: ◼ £240m revolving cred
Slide 15: Consistent Shareholder Return
CONSISTENT 5 We aim to provide investors with SHAREHOLDER ◼ Returns of 15 – 20% pa +26% CAGR(1) RETURN ◼ A progressive dividend +6% CAGR(1) Our Value Creation Model Dividends TSR 10.80p Organic revenue 10.15p Focus on target markets and design wins 515% growth 9.55p 9.00p 8.50p 8.05p 7.60p Value Cre
Slide 16: Sustainability
SUSTAINABILITY discoverIE Group plc 16
Slide 17: Our Positive Impact
Our Positive Impact How our products create impact We supply duel energy linear We design and supply this We supply the lasers for The nanocrystalline cores and Our system in this remote X-ray detector and generator modular DC disconnect LiDAR remote measurement a range of magnetic temperature contr
Slide 18: Progress To Date
Progress To Date Our Planet Our People Our Products Making positive impacts on Keeping our people Ensuring product reliability & our environment safe & happy sustainability CARBON EMISSION(1) (tCO2e/£m) GENDER DIVERSITY REVENUE COVERED BY ISO 14001 -33% 80% 36% 31.6 63% 61% 25.5 21.0 18% 15.8 2019 2
Slide 19: Appendices
APPENDICES Board, GEC, History & Share information discoverIE Group plc 19 19
Slide 20: Board of Directors
Board of Directors Malcolm Diamond MBE - Chairman Bruce Thompson – Senior Non-Executive Director Malcolm was appointed a Non-Executive Director in November 2015 Bruce joined the Board as a Non-Executive Director in February 2018. He is and became Chairman in April 2017. Malcolm was previously Chief
Slide 21: Group Executive Management
Group Executive Management Nick Jefferies – Group Chief Executive* Simon Gibbins – Group Finance Director* Nick was appointed Group Chief Executive in January 2009. His Simon was appointed as Group Finance Director in July 2010. A experience of electronics and the components industry comes from Char
Slide 22: History Since Incorporation
History Since Incorporation Acquisitions Disposals Fundraising Incorporation BFi Optilas SAS Compotron, Myrra, YEG & RSG Noratel Flux Variohm Holdings Cursor Controls Sens-Tech Limitor Beacon (£59m) & Hectronic & MTC (£13m) (total £13m) (£71m) (£3m) (£12m) (£19m) (£58m) (£13m) Antenova (£18m) (total
Slide 23: discoverIE Group structure
discoverIE Group structure Magnetics & Controls Sensing & Connectivity Sensing components for sensing, Connectivity components for switching, Magnetic components for use in power Controls components for use in remote measuring and controlling transmitting & receiving wirelessly, fibre conversion, si
Slide 24: Acquisition Case Study
Acquisition Case Study: ◼ Acquired: July 2014 FY2015 FY2022 ◼ Products: Power transformers Revenue growth 9% CAGR ◼ Division: Magnetics & Controls Operating margin 10% 15% ◼ Developments since acquisition: ◼ Developed long term strategic plan ROCE 12% 25% ◼ Organic growth in target markets ◼ Upscale
Slide 25: Acquisition Case Study
Acquisition Case Study: FY2017 FY2022 ◼ Acquired: January 2017 Revenue growth 7% CAGR ◼ Products: Sensors & switches Op profit growth 13% CAGR ◼ Division: Sensing & connectivity Operating margin 11% 14% ◼ Developments since acquisition: ◼ Developed long term strategic plan ROCE 21% 28% ◼ Organic gro
Slide 26: Our customers & the European Mittelstand
Our customers & the European ‘Mittelstand’ discoverIE Group plc 26
Slide 27: Share and Shareholder Information
Share and Shareholder Information Share information as of 7 June 2022 % of shares Top shareholders Country issued* Ticker DSCV Abrdn UK 12.66% Exchange London Stock Exchange BlackRock UK 7.03% Index FTSE 250 Kempen Capital Management The Netherlands 5.31% Sector Technology Impax Asset Management UK
Slide 28: Thank You
THANK YOU Investor Relations Contact: e: IR@discoverIEplc.com t: +44 (0) 1483 544 522 discoverIE Group plc 28