Tt Electronics Plc · LSE:TTG
Tt Electronics — H1 2012 Earnings Presentation
26 slides from Tt Electronics's earnings presentation, August 2012
Slide 1: TT electronics
‘Trielectronics
Slide 2: Introduction
Introduction * Resilient first half performance in uncertain macroeconomic environment * Some slowdown in recent months affecting certain end markets * Mix and self help initiatives underpin margin progression and future performance * Investing in products, people and emerging markets * Strong pipel
Slide 3: Financial Summary: Key Financials
Financial Summary Key Financials 2012 2011 15 half 1st half Continuing operations £m £m Change Revenue 271.2 281.8 (2.9)%! Operating profit? 15.1 15.2 (0.7)% Operating profit margin 5.6% 54% 20bps Profit before tax? 13.3 13.3 - Earnings per share (pence)? 6.0 57 5.3% Underlying operating cash flow?
Slide 4: Financial Summary: Operating Profit Bridge
Financial Summary Operating Profit Bridge Operating profit £15.2m £(0.1)m £(1.7)m £2.9m £15.1m Op profit H1 2011 Foreign exchange — Volume change Inflation on SG&A Productivity, pricing Op profit H1 2012 & margin August 2012: Half Year Results ©2012 TT electronics plc
Slide 5: Financial Summary: Operating Cash Flow
Financial Summary Operating Cash Flow 2012 2011 15 half 1st half £m £m Operating profit 15.1 15.2 Depreciation 8.5 9.6 Amortisation of intangible assets 3.1 4] Working capital (23.1) (23.3) Other 0.2 14 Underlying operating cash flow 3.8 7.0 Exceptional costs (2.2) (0.4) Special pension fund payment
Slide 6: Financial Summary: Net Cash Flow
Financial Summary Net Cash Flow 2012 2011 15t half 1st half £m £m Cash (used in)/generated from operations (0.3) 48 Tax and interest (0.9) (6.1) Capital expenditure (including software) (11.9) (8.0) Development expenditure (2.1) (3.0) Disposals - 0.8 Proceeds of sale from fixed assets 0.2 04 Dividen
Slide 7: Summary of Major Investments
Summary of Major Investments Costs Benefits Components closure of Boone * Exceptional £5.5m (2011/12) * £2.5m pa. from 2013 (USA) with transfer of production —+ Operating £0.8m (2011/12) * Proceeds from property sale to Mexico * Capex £1.9m (2011/12) * Establish best cost centre in Americas Componen
Slide 8: Divisional Review: Components
Divisional Review Components 2012 2011 2011 15 half 1s half Full year £m £m £m Revenue 116.4 124.2 2427 Operating profit 7.3 7.1 14.8 Operating profit margin 6.3% 5.7% 6.1% * Underlying revenue (excluding FX) decreased by 6.1% reflecting reductions in inventory levels and shorter lead times * Gainin
Slide 9: Divisional Review: Components (cont'd)
lectronics Divisional Review Components (cont'd) * Focus on product management and sales delivering increased new business opportunities * Significant increase in business won year to date * Closure of Boone facility and transfer of production to Mexicali ahead of plan * Further scaling Mexicali * P
Slide 10: Divisional Review: Sensors
Divisional Review Sensors 2012 2011 2011 15 half 1s half Full year £m £m £m Revenue 79.6 85.6 166.9 Operating profit 4.1 45 8.8 Operating profit margin 5.2% 5.3% 5.3% * Growth from top 3 German automotive customers in line with expectations * Underlying revenue (excluding FX) decreased by 2.5% prima
Slide 11: Divisional Review: Sensors (cont'd)
Divisional Review Sensors (cont'd) ° Margins will improve in 2nd half due to agreed price increases and productivity benefits * Continuing to exit lower margin programmes — improving profitability but impacting volume * Significant new business won and identified which will move into volume producti
Slide 12: Divisional Review: IMS
Divisional Review IMS 2012 2011 2011 15 half 1st half Full year £m £m £m Revenue 51.2 51.8 100.0 Operating profit 2.9 2.9 5.1 Operating profit margin 5.7% 5.6% 5.1% ¢ Underlying revenue (excluding FX) decreased by 3.8% - a good performance in a challenging market * Base business impacted by macroeco
Slide 13: Divisional Review: Secure Power
Divisional Review Secure Power 2012 2011 2011 15 half 1s half Full year Continuing operations £m £m £m Revenue 24.0 20.2 50.9 Operating profit 0.8 0.7 3.7 Operating profit margin 3.3% 3.5% 73% * Completed disposal of Dale Power Solutions on 31 July for £10m, business treated as discontinued * Result
Slide 14: Summary
Summary * Resilient first half performance in an uncertain macroeconomic environment *Some slowdown in recent months affecting certain end markets, moderated expectations for full year ° Further margin progression supported by productivity and mix improvements * Continuing to win new business and ga
Slide 15: Future Growth
Future Growth * Significant new business won and identified for Sensors based on global capabilities and reputation * New business opportunities and contract wins in Components reflect investment in product management and sales ¢ Will continue to deliver on margin commitments and fund investment pla
Slide 16: Portfolio management, volume, productivity
2011 Portfolio Volume Productivity 2014 management
Slide 17: Q&A
ctronics Friel Q&A August 2012: Half Year Results ©2012 TT electronics plc17
Slide 18: Appendix
Appendix August 2012: Half Year Results ©2012 TT electronics plc18
Slide 19: Global Reach, Growth Markets
“electronics Balance Global Reach Growth Markets Telecom and % Rest of World Defence and computer . aerospace Central & South America p Other transportation North America Medical & Passenger car Power generation 1 Asia United Kingdom Rest of Europe Industrial Revenue by geography Revenue by market A
Slide 20: Income Statement
Appendix Income Statement 2012 2011 2011 15 half 1st half Full year Continuing operations £m £m £m Revenue 271.2 281.8 560.5 Gross profit margin! 19.6% 20.4% 20.4% Operating profit’ 15.1 15.2 324 Net interest payable (1.5) (1.5) (3.7) Net finance cost on pension schemes (0.3) (0.4) (1.0) Profit befo
Slide 21: Taxation
Appendix Taxation 2012 2011 1% half 1s half £m £m Tax charge Underlying 3.9 44 Exceptional items (0.3) - 3.6 44 Effective tax rate Underlying 29.1% 30.2%! 1 as published in 2011 Annual Report * Further progress in reducing effective rate due to proactive tax planning * Cash tax repayment received in
Slide 22: Earnings Per Share
Appendix Earnings Per Share 2012 2011 15 half 1st half £m £m Profit before tax and exceptional items 13.3 13.3 Tax (3.9) (4.4) Underlying earnings 9.4 8.9 Average number of shares (million) 155.5 154.9 Headline earnings per share (pence) 6.0p 5.7p Basic earnings per share (pence) Continuing operatio
Slide 23: Working Capital
Appendix Working Capital 180.0 30% 160.0 f 25% 140.0 120.0 20% 100.0 r 15% frff00 60.0 10% 40.0 r 5% 20.0 0% Dec 2008 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Jun 2011 Dec 2011 Jun 2012 GBT otal trade working capital —#- Working capital / sales % August 2012: Half Year Results ©2012 TT electronics plc23
Slide 24: Banking Facilities
Financial Summary Banking Facilities * Re-financing of existing three year £60m club facility completed in August 2012 * New committed revolving credit facility of £70m agreed with 6 relationship banks — HSBC, RBS, Santander UK, Fifth Third Bank, Barclays Bank and Comerica going out 5 years to Augus
Slide 25: Pensions
[Ff electronics Appendix Pensions 2012 2011 2011 1 half 1st half Full year IAS 19 valuation £m £m £m Fair value of assets 363.9 347.8 378.0 Liabilities (401.8) (377.8) (413.5) Deficit (37.9) (30.0) (35.5) * UK defined benefit scheme closed to future accrual in 2010 * Deficit recovery plan in place:
Slide 26: Discontinued Operations
Appendix Discontinued Operations 2012 2011 15t half 1st half £m £m Revenue 14.4 24.7 Operating profit 0.5 0.9 Exceptional items (0.9) - (Loss)/profit from discontinued operations (0.4) 0.9 ¢ Includes Dale Power Solutions Ltd in 2012 (disposed of in July 2012) * Also includes AEI Compounds Ltd in 201