Tt Electronics Plc · LSE:TTG
Tt Electronics — H1 2015 Earnings Presentation
23 slides from Tt Electronics's earnings presentation, August 2015
Slide 1: TT Electronics plc 2015 Interim Results
TT Electronics plc 2015 Interim Results August 2015
Slide 2: H1 2015 Highlights
H1 2015 Highlights • 2015 is a year of transition • Encouraging first half performance in line with expectations • Strategy implementation well underway • Cost improvement taking effect and initial benefits realised • Operational Improvement Plan now progressing well • Encouraging cash flow performa
Slide 3: Financial Review
Financial Review Mark Hoad, Chief Financial Officer TT Electronics plc Interim Results 2015 2
Slide 4: Group Financial Performance
Group Financial Performance H1 2015 H1 2014 Change Change constant fx • Constant currency revenue Revenue (£m) 263.6 261.1 1% 1% growth at 1% Operating profit (£m)* 10.4 13.1 (21)% (30)% • OP reduced by 30% as Profit before tax* 9.1 12.5 (27)% (37)% expected EPS* 4.2p 6.0p (30)% (40)% • Effective t
Slide 5: Group Operating Profit Bridge
Group Operating Profit Bridge Group Operating Profit Bridge (H1 2015 vs H1 2014) 1.2 (0.5) 0.3 13.8 (1.4) 13.1 (1.9) (2.1) 1.7 10.4 H1 2014 FX Non-recurring H1 2014 Acquisitions R&D expense Price-downs IMS Vol. growth / H1 2015 orders like -for-like TS&C Cost reduction TT Electronics plc Interim Res
Slide 6: Transportation Sensing & Control
Transportation Sensing & Control Financial Summary H1 H1 Change Change 2015 2014 constant fx Revenue (£m) 107.5 118.9 (10)% (1)% Op. (loss)/profit (£m)* (0.9) 2.3 (139)% (139)% Operating margin* (0.8)% 1.9% (270)bps (270)bps * Underlying, before exceptional and one-off costs Re-presented to exclu
Slide 7: Industrial Sensing & Control
Industrial Sensing & Control Financial Summary H1 H1 Change Change 2015 2014 constant fx Revenue (£m) 33.8 24.7 37% 26% Operating profit (£m)* 6.4 4.3 49% 33% Operating margin* 18.9% 17.4% 150bps 90bps * Underlying, before exceptional and one-off costs Re-presented to exclude acquisition costs fr
Slide 8: Advanced Components
Advanced Components Financial Summary H1 H1 Change Change 2015 2014 constant fx Revenue (£m) 49.8 48.1 4% - Operating profit (£m)* 3.4 3.8 (11)% (13)% Operating margin* 6.8% 7.9% (110)bps (100)bps * Underlying, before exceptional and one-off costs Re-presented to exclude acquisition costs from un
Slide 9: IMS
IMS Financial Summary H1 H1 Change Change 2015 2014 constant fx Revenue (£m) 72.5 69.4 4% (1)% Operating profit (£m)* 1.5 2.7 (44)% (59)% Operating margin* 2.1% 3.9% (180)bps (230)bps * Underlying, before exceptional and one-off costs Re-presented to exclude acquisition costs from underlying oper
Slide 10: Free Cash Flow and Net Debt
Free Cash Flow and Net Debt Free Cash Flow H1 H1 • Tighter control over capital and £m 2015 2014 development expenditure Underlying EBITDA 20.4 24.0 – 0.9x DA for H1 Net capital expenditure (8.1) (15.0) – Still expect 1.3x for FY Capitalised development (0.8) (3.4) • Much improved working capital ex
Slide 11: Exceptional Items
Exceptional Items Exceptional Items (P&L) H1 H1 £m 2015 2014 Restructuring costs 2.2 12.7 • Restructuring costs: Mainly OIP related, continue to anticipate £10m for full year Acquisition related costs 0.6 0.2 Total Exceptional Items • Acquisition costs: Largely intangible 2.8 12.9 amortisation Excep
Slide 12: Operations and Strategy Update
Operations and Strategy Update Richard Tyson, Chief Executive Officer TT Electronics plc Interim Results 2015 11
Slide 13: Our plan to return to sustainable growth
Our plan to return to sustainable growth Three Phases Refocus Rebuild Sustainable Growth Six Strategic Priorities Market Enhanced Targeted and A lean, agile Financial Operational discipline and leading customer efficient and learning performance efficiency position focus R&D spend organisation manag
Slide 14: Strategic Priorities - Our progress (1/2)
Strategic Priorities - Our progress (1/2) • Innovation Award VARENA – small high density power controller Market • IMS contract win in US for single-box solution for Next Gen flight Leading Position information • Roxspur new long term service contract - Tata • Transportation – Secured a series of ke
Slide 15: Strategic Priorities - Our progress (2/2)
Strategic Priorities - Our progress (2/2) • Group Operations Council and Procurement Council established • Common metrics introduced Operational Efficiency • Launched “BE LEAN” – 16 lean master practitioners in place, pilot scheduled Q4 • Strengthened global HS&E leadership focus on zero-harm enviro
Slide 16: Operational Improvement Plan: Progress
Operational Improvement Plan: Progress Total / OIP To 2015 2016 2017 Run £m 2014 Rate P&L charge (18.1) (8.6) (3.3) - (30.0) Cash cost (7.2) (17.1) (5.7) - (30.0) Run-rate 1.3 1.3 2.8 3.8 5.5 Photo: Timisoara site benefit • Large, complex project progressing well Continued operational progress in Ro
Slide 17: Summary & Outlook
Summary & Outlook • H1 in line with expectations and good progress on cash • Market remains challenging especially Europe • Order book solid and outlook unchanged • Near-term focus on – Improving returns of Transportation Sensing and Control – Building the order book and opportunity pipeline for 201
Slide 18: Q&As
Q&As TT Electronics plc Interim Results 2015 17
Slide 19: Appendix
Appendix TT Electronics plc Interim Results 2015 18
Slide 20: Appendix: TT Electronics Business
Appendix: TT Electronics Business Revenue (H1 2015) Operating Profit (H1 2015) Transportation Transportation Sensing & Control 41% Sensing & Control -9% Industrial Industrial Sensing & Control 13% Sensing & Control 62% Advanced Advanced Components 19% Components 33% IMS 27% IMS 14% Revenue by market
Slide 21: Appendix: Impact of FX
Appendix: Impact of FX Transportation Industrial Sales Sensing and Sensing and Advanced £m Control Control Components IMS Group At H1 2014 rates 117.2 31.2 47.9 68.7 265.0 FX impact (adverse) / (9.7) 2.6 1.9 3.8 (1.4) favourable As published 107.5 33.8 49.8 72.5 263.6 Operating Profit £m At H1 2014
Slide 22: Appendix: Cash Conversion
Appendix: Cash Conversion Cash Conversion £m H1 2015 H1 2014 Underlying EBITDA 20.4 24.0 Net capital expenditure (8.1) (15.0) Capitalised development expenditure (0.8) (3.4) Working capital (4.5) (33.5) Other 0.4 1.0 Underlying Operating Cash Flow 7.4 (26.9) Underlying Operating Profit 10.4 13.1 Cas
Slide 23: Disclaimer
Disclaimer IMPORTANT INFORMATION • 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 certain