Business
AB Dynamics : 2022 Annual Report
AB Dynamics : 2022 Annual
About this update from Ab Dynamics Plc
Delivering strategic growth AB Dynamics plc Annual Report 2022 Strategic report Governance Financial statements Leadership and innovation in engineering and technology Building a platform for growth Having invested in our Group product range, capability, leadership and new product development and leveraging our existing core strategy and technologies, the Group has delivered a strong set of results, and continues to build solid foundations as a platform for growth and long-term sustainability. Read more about our investment case page 5 Read more about our markets page 8 Read more about our strategy page 8 Strategic report Governance Financial statements 1 Highlights of 2022 60 Chairman's introduction to corporate governance 94 Independent auditor's report 2 At a glance 61 Statement of corporate governance 98 Consolidated statement of comprehensive income 4 How we are evolving 62 Board of Directors 99 Consolidated statement of financial position 5 Investment case 64 Executive Committee 100 Consolidated statement of changes in equity 6 Chairman's statement 66 Statement of corporate compliance 101 Consolidated cash flow statement 8 Our markets and strategy 77 Nomination Committee report 102 Notes to the consolidated financial statements 12 AB Simulation 79 Audit and Risk Committee report 123 Company statement of financial position 14 Business model 81 ESG Committee report 123 Company statement of changes in equity 16 Chief Executive Officer's review 82 Remuneration Committee report 124 Notes to the Company financial statements 19 Q&A with Dr James Routh 90 Directors' report 129 Notice of Annual General Meeting 20 Operational review - Track testing 93 Statement of Directors' responsibilities Operational review - Laboratory testing and simulation Chief Financial Officer's review Key performance indicators ABD Solutions ABD Solutions architecture Environmental, social and governance (ESG) strategy S172(1) statement and stakeholder engagement 54 Risk management Discover more at 56 Principal risks and uncertainties abdynamics.com Strategic report Governance Financial statements Highlights of 2022 Strong strategic progress and financial performance Financial highlights Revenue £80.3m +23% (2021: £65.4m) EBITDA £16.4m +21% (2021: £13.5m) Adjusted* operating profit £12.7m +18% (2021: £10.8m) Operational highlights Whilst the current macroeconomic operating environment still presents challenges in relation to supply chain disruption, the Group has been successful in delivering output and mitigating inflationary cost pressures through price increases for new orders Revenue increased by 23% with the recovery of sales to China and the full year's contribution of VadoTech. Organic revenue increased by 18% Further progress made on the implementation of strategic initiatives targeting diversification alongside the established pillars and opening up new markets beyond automotive through the launch of ABD Solutions ABD Solutions was awarded its first development contract by an industrial equipment supplier in Japan for a driverless retrofit solution for mining vehicles New product development continued in line with our technology roadmap for existing track testing and simulation markets and development of the core technology for ABD Solutions. Along with the successful launch of our new range of ADAS dummies, the full AB Dynamics LaunchPad product range and GST 120 have now been certified for use in Euro NCAP testing VadoTech Group has been successfully integrated into the Group and delivered a solid performance since it was acquired in March 2021 Growth in percentage of Group's recurring revenue to 41%, up from 35%, enhanced by the strengthening of the APAC regional footprint Post-year-end acquisition of Ansible Motion and the creation of a new market-facing business unit, AB Simulation, enhances the Group's simulation capabilities, expands its simulator product range and achieves critical mass in this attractive sector Adjusted* operating margin 15.8% -80 bps (2021: 16.6%) Net cash £29.2m (2021: £22.3m) Adjusted * diluted earnings per share (EPS) 44.5p +19% (2021: 37.4p) Dividend per share 5.3p +10% (2021: 4.8p) Adjusted to exclude amortisation of acquired intangibles, acquisition related charges and exceptional items. All profit and earnings per share figures going forward refer to adjusted business performance as defined on page 28 with a reconciliation to statutory measures. AB Dynamics plc Annual Report and Accounts 2022 01 Strategic report Governance Financial statements At a glance Developing Global locations our business China Japan UK USA Germany Singapore Global sales revenue by region Revenue by sector Revenue by customer category Proportion of recurring revenue £m 0 1% 4% 70 24% .6m 60 24% 23% 0 40 30 41% £64.7m 20 3 % 73% 10 51% 0 2021 2 22 24 24 £ + U 20 15 51 + U 70 80 5 + U 2 UK/Europe Laboratory testing and simulation Automotive OEMs Recurring Asia Pacific Track testing Service providers Original equipment North America Tier 1 suppliers and technology Rest of World 02 AB Dynamics plc Annual Report and Accounts 2022 Strategic report Governance Financial statements At a glance continued Track testing Track testing products and services represent 81% of total Group revenue. The products are used for the test and verification of Advanced Driver Assistance Systems (ADAS), autonomous systems and vehicle dynamics. Test vehicles and ADAS platforms, such as the Guided Soft Target (GST) and LaunchPad, are controlled using complex control software for accurate control and synchronisation of multiple test objects. This enables our customers to conduct complex, multi-object test scenarios with a simple-to-use software interface to satisfy internal or external regulatory test requirements. The Group also provides testing services including the provision of ADAS and vehicle dynamics tests through a comprehensive test facility based in California, USA. Following the acquisition of VadoTech, the Group also offers on-road testing services, with operations in China and Japan. Revenue £64.7m Read more about our track testing page 20 Laboratory testing and simulation Laboratory testing and simulation represents 19% of total Group revenue and includes products relating to simulation, noise and vibration and the assessment of kinematics and compliance in vehicles; and simulation software. These products are used to evaluate vehicle dynamics, noise, vibration and harshness and ADAS across a wide range of applications including conventional vehicles, motorsport and automated vehicles. Our simulator products along with our market-leading physics based simulation software reduce new vehicle development timescales by allowing meaningful testing earlier in the development process which form the core of our new market-facing business unit, AB Simulation. The use of simulation reduces new vehicle development timescales by allowing meaningful evaluation earlier in the development process. Revenue £15.6m Read more about our laboratory testing and simulation page 23 Delivering a stronger business As we expand our portfolio of products and services, we are reducing our reliance on specific market sectors and geographic territories. Continued progress in developing our service and support offering through both organic and acquisitive growth has increased the proportion of recurring and service-based revenue. The launch of ABD Solutions in the prior year and the formation of AB Simulation enables us to drive growth in core and adjacent markets, and our investment in skills, capacity and leadership ensures we have a platform for sustainable long-term growth. ABD Solutions leverages the core technologies of AB Dynamics into new adjacent markets where the customer is the end user of the equipment, developing solutions to automate vehicle applications specifically in the mining, defence and agriculture sectors. In the current year AB Simulation has been formed as a market-facing business unit focusing on the supply of advanced simulation products and services to the automotive and motorsport industries. This brings together the Group's existing simulators and simulation business as well as the recently acquired Ansible Motion as a coherent unit with critical mass in this attractive market. AB Dynamics plc Annual Report and Accounts 2022 03 This is an excerpt of the original content. To continue reading it, access the original document here .