Ct Automotive Group Plc · LSE:CTA
Ct Automotive — H1 2023 Earnings Presentation
33 slides from Ct Automotive's earnings presentation, September 2023
Slide 1: Delivering margin improvement
Innovation Defines Us Delivering margin improvement CT Automotive Group plc 2023 Interim Results
Slide 2: Agenda
Agenda 1. Highlights Simon Phillips Anna Brown 2. Financial results CEO CFO Simon co-founded CT in 2000, having Anna brings substantial experience in 3. Business review identified an opportunity to disrupt the strategic and operational finance in listed automotive tooling market. companies. Prior to
Slide 3: Highlights
Highlights Positive trading, strong first half of 2023 © 2023 CT Automotive Group PLC. All rights reserved
Slide 4: Financial highlights
Financial highlights Revenue Gross profit Underlying* EBITDA Underlying* PBT $68.2m $17.8m $6.7m $2.5m +$14.0m +$7.3m +$11.2m +$10.9m PBT Earnings per share Net debt $1.3m 1.70c $9.0m +$9.3m +16.9c +$11.2m Note: H1 2023 and H1 2022 are presented as continuing operations excluding UK discontinued ope
Slide 5: Encouraging trading performance
Encouraging trading performance • Revenues ahead of the Board's expectations at $68.2m, up by 26% on H1 2022 o Production revenue of $65.8m up 26% reflecting the improved trading environment o Tooling revenue expected to be weighted towards H2 reflecting the timing of customer projects • Gross profi
Slide 6: Good progress on operations and strategy
Good progress on operations and strategy • Global production volumes recovered and automotive supply chain issues eased • Efficiency initiatives in China and Türkiye progressing as planned • Impact of hyperinflation in Türkiye partially offset by improved pricing and cost escalation system • Perform
Slide 7: Financial Review
Financial Review Improvement across all key metrics © 2023 CT Automotive Group PLC. All rights reserved
Slide 8: Income statement
Income statement H1 2022 $m H1 2023 (restated) Production 65.9 52.3 Tooling 2.3 1.9 • Revenue growth driven by increase in both production Revenue 68.2 54.2 revenue and tooling revenue Cost of sales (50.4) (43.7) Gross profit 17.8 10.5 • Gross profit increased on the back of improved trading conditi
Slide 9: Non-underlying items
Non-underlying items $m H1 2023 H1 2022 Release of previously capitalised tooling overheads 0.3 - Restructuring and margin improvement costs 0.9 - Impact of applying IAS29 - 0.6 Irrecoverable excess freight costs - 0.1 Total 1.2 0.7 Change in estimating tooling overheads: Restructuring and margin im
Slide 10: Balance sheet
Balance sheet At 31 At 30 June $m December 2023 2022 Non-current assets • Net assets increased to $11.1m supported by the fundraise in May 2023 Intangible assets and goodwill 1.7 1.8 Tangible fixed assets 6.2 7.3 • Inventory levels reduced by $2.0m as the group pursued a Right of use assets 9.0 10.8
Slide 11: Revenue bridge
Revenue bridge H1 2023 external revenue by plant: • China: $54.0m • Türkiye: $9.4m • Mexico: $4.8m $(3.0)m $13.7m $(0.2)m $0.5m $68.2m $57.2m $54.2m H1 2022 Revenue Discontinued operations Restated H1 2022 Revenue Production revenue growth Hyperinflation adjustment in Tooling revenue growth H1 2023
Slide 12: Gross profit margin bridge
Gross profit margin bridge +1.2% +2.8% +2.8% 26.2% 19.4% H1 2022 Gross profit margin Increased Tooling margin Increased Production Reduced Production costs H1 2023 Gross profit margin revenue © 2023 CT Automotive Group PLC. All rights reserved
Slide 13: Underlying EBITDA bridge
Underlying EBITDA bridge $2.1m $5.9m $0.1m $(1.0)m $1.3m $2.9m $6.7m $(4.6)m Production Other operating income Admin expenses movement Freight cost reduction Forex H1 2023 Underlying EBITDA H1 2022 Underlying EBITDA Tooling (excl. forex) © 2023 CT Automotive Group PLC. All rights reserved
Slide 14: Net debt bridge
Net debt bridge $9.2m increase in trade receivables: • Customer payment terms return back to normal • Mexico VAT $4.8m $(6.9)m $(0.4)m $9.1m $(2.0)m $(1.4)m $12.2m $9.0m FY 2022 Net debt Operating cash flow Working capital movement CAPEX Fundraise, net of transaction Interest and lease liability For
Slide 15: Business review
Business review Efficiency initiatives delivering margin improvement © 2023 CT Automotive Group PLC. All rights reserved
Slide 16: Strong revenue visibility and new business pipeline
Strong revenue visibility and new business pipeline Revenue visibility New business pipeline • Strong visibility of revenue for the remainder of 2023 and into • Recovery in new business activity into H2 2023 FY24 - FY25 from contracted production programmes o Reduced new tendering activity at start
Slide 17: Review of key operations: China
Review of key operations: China Tooling • Completed 5 tooling projects generating $2.3m revenue • Our internal toolroom is fully utilised and ensures maximum product control and margins • Tooling revenue is weighted towards the second half this year • 11 projects are due to complete in H2 2023 with
Slide 18: Progress on margin improvement
Progress on margin improvement • CT is on track to deliver a 10.5% run rate underlying PBT margin by the end of 2023 • The main drivers of improvement continue to be: ✓ Materials: ongoing material cost improvements driven by rationalisation of suppliers via dedicated supplier quality teams, driving
Slide 19: Review of key operations: Türkiye and Mexico
Review of key operations: Türkiye and Mexico Türkiye • Türkiye continued to be impacted by hyperinflation • An improved pricing and cost escalation system with key customers has been effective in protecting local operations Mexico • Opened in late 2022 to support our North American customers • Perfo
Slide 20: Summary and outlook
Summary and outlook • Encouraged by stabilising order volumes, pricing and inventory patterns since the start of FY23 • Entered H2 2023 with good visibility of production schedules and tooling projects • Continued signs that customer schedules are strengthening as OEMs supply chain issues are contin
Slide 21: Appendices
Appendices © 2023 CT Automotive Group PLC. All rights reserved
Slide 22: Appendix 1: Investment Case
Appendix 1: Investment Case © 2023 CT Automotive Group PLC. All rights reserved
Slide 23: Overview of CT Automotive
Overview of CT Automotive Specialist supplier of interior kinematic systems and finishers CT Automotive offers two principal services: • ED&D – Full Engineering Design and Development of complex kinematic interior components. • Production – Lean, efficient, vertically integrated manufacturing of int
Slide 24: Investment Case
Investment Case Niche market with Innovative business Embedded Long term visibility of Focus on self help Recent fundraise high barriers to entry model with European relationships with pipeline with production margin improvement enabled further expertise and low-cost growing blue chip levels stabili
Slide 25: Board Of Directors
Board Of Directors Raymond Bench Francesca Ecsery Geraint Davies Nick Timberlake Simon Phillips Anna Brown Independent Non-Executive Senior Independent Non- Independent Non-Executive Non-Executive Director Chief Executive Officer Chief Finance Officer Director, Chairman Executive director, Chair of
Slide 26: Global Footprint
Global Footprint CT Czech Republic CT Ganzhou plant 1 CT Ganzhou plant 3 Kolin, Czechia c400 staff c350 staff Warehousing, assembly, Ganzhou, China Ganzhou, China ultrasonic welding for Cut & sew – wrapped trim Light guide injection & CT UK c30 staff European customers parts Armrests/IP assembly, ho
Slide 27: Customers
Customers Strong reputation with both OEMs and Tier 1 customers across the industry Volume brands Premium brands Electric vehicles OEMs > 15 years > 10 years > 5 years Newest Customers Tier 1 Suppliers © 2023 CT Automotive Group PLC. All rights reserved
Slide 28: Product Range
Product Range 1 2 6 Wrapped assemblies Decorative finishes CT’s vast tailoring and trim department caters for CT’s in-house chrome plating, painting and and provides the very highest-quality wrapped trim finishing divisions allow for a full range of high- 1 panels, shifter assemblies and consoles, w
Slide 29: Appendix 2: Prior Period Adjustments
Appendix 2: Prior Period Adjustments © 2023 CT Automotive Group PLC. All rights reserved
Slide 30: H1 22 Restatement reconciliation
H1 22 Restatement reconciliation As previously stated in H1 2022 Prior period adjustments Adjustments Results Presentation • Two prior period adjustments were Prior period Prior period Impact of UK Impact of IAS 29 monetary H122 identified during the audit of the 2022 (USD M) Reported H1 22 inventor
Slide 31: Appendix 3: Use of Fundraise Proceeds
Appendix 3: Use of Fundraise Proceeds © 2023 CT Automotive Group PLC. All rights reserved 30
Slide 32: Use of fundraise proceeds
Use of fundraise proceeds • Achieved total gross proceeds of $9.6m mid-May 2023 $m • Net proceeds of $9.1m have been used during June – August 2023 Gross proceeds 9.6 to: Less: Fundraising costs (0.5) ✓ Repaid $5.9m to Chinese and UK creditors; ✓ Invested $464k in injection moulding production proce
Slide 33: Disclaimer
Disclaimer The information contained in this document (“Presentation”) has been prepared by CT Automotive Group This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, plc (the “Company”) solely for information purposes and does not purport to be co