Slide 1: TT Electronics Full Year Results 2024
TT ELECTRONICS FULL YEAR RESULTS 2024 © TT Electronics 1
Slide 2: Introduction
INTRODUCTION WARREN TUCKER, CHAIRMAN © TT Electronics 2
Slide 3: Eric Lakin, Acting CEO
ERIC LAKIN ACTING CEO © TT Electronics 3
Slide 4: 2024 – Good strategic progress offset by challenges in North America
2024 – GOOD STRATEGIC PROGRESS OFFSET BY CHALLENGES IN NORTH AMERICA Organic revenue decline of 2%, strong growth in Europe offset by North American region Good operational improvements across most of the Group • European margin up 440 bps to 14.4% • Asian margin up 410 bps to 15.2% North American r
Slide 5: Looking forward: executing the order book and driving performance
LOOKING FORWARD EXECUTING THE ORDER BOOK AND DRIVING PERFORMANCE ▪ Improving operational execution from actions taken • Kansas City plan delivering • Cleveland improvement plan in place, but full benefits expected to take longer to impact ▪ Continuing progress on execution of Project Dynamo ▪ Increa
Slide 6: Financial Review
FINANCIAL REVIEW MARK HOAD, CFO © TT Electronics 6
Slide 7: Group financial performance
GROUP FINANCIAL PERFORMANCE £m (except where 2023 Change • 2% organic revenue decrease excluding pass- 2024 Change constant stated) restated fx through Revenue 521.1 613.9 (15)% (13)% • Operating profit down 17% on constant currency basis, 13% ex Albert divestment 505.0 545.3 (7)% (5)% Excl divestme
Slide 8: Group financial performance
GROUP FINANCIAL PERFORMANCE £m (except where 2023 • Cash generation reflecting inventory reduction, capital 2024 Change stated) restated discipline and pension surplus refund Free cash flow 27.7 23.9 16% • 117% cash conversion • Leverage within 1-2x target range Net debt/EBITDA† 1.8x 1.9x (10)bps •
Slide 9: End market revenue
END MARKET REVENUE £m (except where stated) Change 2024 2023 restated Change constant fx Healthcare 115.7 140.9 (18)% (14)% Aerospace & Defence 137.9 110.3 25% 27% Automation and Electrification 165.2 172.9 (4)% (1)% Distribution 86.2 121.2 (29)% (27)% • Healthcare revenue decline includes 7% impact
Slide 10: Europe – strong improvement
EUROPE – STRONG IMPROVEMENT ▪ Organic revenue up 14% Change 2024 2023 Change constant fx ▪ Organic adjusted operating profit up 64% and margins up Revenue (£m) 146.3 169.6 (14)% (14)% 440 basis points Revenue ex divestment 134.5 118.3 14% 14% ▪ Margin enhancement from Albert divestment and much impr
Slide 11: North America – a difficult year
NORTH AMERICA – A DIFFICULT YEAR ▪ Revenue impacted by industry-wide de-stocking in 2023 Change Components 2024 restated Change constant fx ▪ Margin impacted by loss of high margin components Revenue (£m) 184.4 229.5 (20)% (17)% business, severance costs and factory inefficiencies ▪ Impairment refle
Slide 12: Asia – strong performance
ASIA – STRONG PERFORMANCE Change ▪ Underlying revenue (ex-divestment & pass through) up 2024 2023 Change constant fx 6% Revenue (£m) 190.4 214.8 (11)% (7)% ▪ Adjusted operating profit growth in part driven by operational leverage on volume growth Revenue ex divestment 186.1 197.5 (6)% (1)% ▪ Margin
Slide 13: Strong cash generation and debt reduction
STRONG CASH GENERATION AND DEBT REDUCTION 117% conversion ▪ 117% cash conversion supported by £13m inventory reduction and capital discipline ▪ Minimal cash exceptionals ▪ Further £11.2m surplus refund from UK pension scheme, £1.8m outflow on US pension buy-out in H1 ▪ Free cash flow £27.7m ▪ Net de
Slide 14: Eric Lakin, Acting CEO
ERIC LAKIN ACTING CEO © TT Electronics 14
Slide 15: Looking forward: 2025 focus
LOOKING FORWARD 2025 FOCUS Clear action plans to recover North American operational performance, though short term headwinds in Cleveland Execution of Project Dynamo self-help programme Reduction in debt and leverage Strategic assessment of components business Focus on margin improvement and deliver
Slide 16: Addressing specific issues in two North American sites
ADDRESSING SPECIFIC ISSUES IN TWO NORTH AMERICAN SITES Progress Kansas Progress on key focus areas to-date Factory layout improvements Delivering material increases in throughput Engineering team utilisation Expected to be fully utilised over 2025 Order book Provides greater coverage for higher 2025
Slide 17: Project Dynamo: significant benefits being delivered
PROJECT DYNAMO: SIGNIFICANT BENEFITS BEING DELIVERED Efficiency Growth Innovation ▪ £6m of SG&A savings ▪ £8m of additional efficiency projects scoped Opportunity £17m potential benefit ▪ £7m of growth and innovation benefits ▪ £(4)m reinvestment to support delivery and growth Reduced SG&A costs, re
Slide 18: Inventory management underpinning cashflow
INVENTORY MANAGEMENT UNDERPINNING CASHFLOW Process improvement actions improved: Inventory controls • Review of key parameters – processing times, safety stock, Minimum Order Quantities • Central spending caps and constraints for certain sites Next phase: Enhancement of planning and factory loading
Slide 19: Medium term financial targets
MEDIUM TERM FINANCIAL TARGETS GROWTH MARGINS1 Bridge to 12% operating margin % Ahead of end market growth of 12% in medium 4-6% term CASH ROIC Self-help GENERATION 85%+ cash conversion Strong FCF Mid to high generation teens ROIC2 1. Adjusted operating margin 2. Pre-tax return on invested capital ©
Slide 20: Summary and outlook
SUMMARY AND OUTLOOK ▪ Underlying fundamental attractions remain ▪ Operational improvement and execution of Project Dynamo remains the key focus ▪ Increased market uncertainty arising from recently announced trade tariffs and potential impact on demand patterns • Given current macro backdrop the Boar
Slide 21: Q&A
Q&A © TT Electronics 21
Slide 22: Financial guidance for 2025
FINANCIAL GUIDANCE FOR 2025 Revenue Capital and development expenditure ▪ Nil contribution from divestment (£16m in 2024) ▪ Capex and devex circa £13-15m ▪ Reduction in pass-through £5m (-1% organic) Working capital Interest ▪ Modest outflows ▪ Circa £1m reduction from lower drawn debt ▪ Some potent
Slide 23: Power & Connectivity
POWER & CONNECTIVITY Change 2024 2023 Change constant fx Revenue (£m) 169.5 169.7 0% 2% Adjusted operating profit (£m) 20.9 13.8 51% 55% Adjusted operating margin (%) 12.3 8.1 420bps 420bps © TT Electronics 23
Slide 24: Global Manufacturing Solutions
GLOBAL MANUFACTURING SOLUTIONS 2023 Change 2024 restated Change constant fx Revenue (£m) 252.8 299.2 (16)% (12)% Adjusted operating profit (£m) 24.7 22.4 10% 17% Adjusted operating margin (%) 9.8 7.5 230bps 250bps © TT Electronics 24
Slide 25: Sensors & Specialist Components
SENSORS & SPECIALIST COMPONENTS Change 2024 2023 Change constant fx Revenue (£m) 98.8 145.0 (32)% (30)% Adjusted operating profit (£m) (0.9) 19.0 (105)% (105)% Adjusted operating margin (%) (0.9) 13.1 (1400)bps (1390)bps © TT Electronics 25
Slide 26: The TT Electronics business
THE TT ELECTRONICS BUSINESS Revenue (2024) Underlying operating profit (2024) Revenue by end market (2024) Europe 51% Healthcare 23% Europe 28% North America (7)% Aerospace & Defence 27% North America 35% Asia 77% Automation & Electrification 33% Asia 37% Central costs (21)% Distribution sales chann
Slide 27: Revenue by market and geography
REVENUE BY MARKET AND GEOGRAPHY Europe North America Asia Revenue by market (%) Revenue by market (%) Revenue by market (%) Healthcare 2% Healthcare 16% Healthcare 45% Automation & Electrification Automation & Electrification Automation & Electrification 18% 28% 51% Aerospace & Defence 59% Aerospace
Slide 28: Summary income statement
SUMMARY INCOME STATEMENT £m 2024 2023 restated Revenue 521.1 613.9 Adjusted operating profit 37.1 47.1 Net finance cost (9.9) (9.8) Adjusted profit before taxation 27.2 37.3 Adjusting items (60.6) (44.1) Loss before taxation (33.4) (6.8) Taxation (20.0) (4.5) Loss after taxation (53.4) (11.3) © TT E
Slide 29: Summary of revenue and operating profit by region, impact of FX
SUMMARY OF REVENUE AND OPERATING PROFIT BY REGION IMPACT OF FX North Europe America Asia Corporate Group Revenue (£m) 2024 146.3 184.4 190.4 - 521.1 20231 at 2024 rates 169.6 222.0 205.6 - 597.2 FX impact - (7.5) (9.2) - (16.7) 20231 as published 169.6 229.5 214.8 - 613.9 Operating Profit (£m) 2024
Slide 30: Income statement – adjusting items
INCOME STATEMENT – ADJUSTING ITEMS £m 2024 2023 Operating profit (23.5) 3.0 Adjusted to exclude: Restructuring and other items Restructuring (0.1) 2.0 Pension restructuring costs INCOME STATEMENT – ADJ USTING ITEMS 1.3 1.9 Asset write-downs Assets held for sale 32.5 Goodwill & fixed asset write-down
Slide 31: Cash conversion
CASH CONVERSION £m 2024 2023 restated Adjusted operating profit 37.1 47.1 Depreciation and amortisation 13.8 16.5 Net capital expenditure (6.9) (22.4) Capitalised development expenditure (1.8) (1.6) Working capital (1.2) 6.8 Other (2.4) 2.4 Operating cash flow after capex 43.4 48.8 Operating profit
Slide 32: Leverage calculation
LEVERAGE CALCULATION £m 2024 2023 restated Adjusted operating profit 37.1 47.1 Depreciation and amortisation 13.8 16.5 Adjustment for IFRS 16 (5.3) (5.3) Covenant EBITDA 45.6 58.3 Net debt excluding leases (80.1) (105.4) Covenant adjustment 2.0 4.9 Covenant Net Debt (82.1) (110.3) Leverage 1.8x 1.9x
Slide 33: Movement in net debt
MOVEMENT IN NET DEBT £m 2024 2023 Operating cash flow after capex 43.4 48.8 Net interest and tax (20.3) (19.7) Pensions 9.4 3.2 Lease liability repayments (4.2) (4.4) Restructuring and acquisition related costs (0.6) (4.0) Free cash flow 27.7 23.9 Dividends (12.2) (11.3) Lease payments 4.2 4.4 Acqui
Slide 34: 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