Tt Electronics Plc · LSE:TTG
Tt Electronics — H1 2007 Earnings Presentation
29 slides from Tt Electronics's earnings presentation, 2007
Slide 1: 2007 Half-Year Results
2007 HALF-YEAR RESULTS To see comments made by Neil Rodgers, Chief Executive at the 2007 Half-Year Results Presentation, place your cursor over the icons. View comments with Adobe Acrobat version 6
Slide 2: Highlights
HIGHLIGHTS • Operating profit increased to £18.9m (2006 : £18.2m) • EPS from continuing operations 7.4p (2006 : 7.2p) • Exit from cables business • Interim dividend maintained at 3.69p
Slide 3: Financial Summary
FINANCIAL SUMMARY £Ms 2007 2006 2006 2006 1st Half st 1 Half nd 2 Half Full Year Revenue 270.5 272.3 267.1 539.4 Operating profit 18.9 18.2 18.3 36.5 Exceptional item - - 8.8 8.8 18.9 18.2 27.1 45.3 Interest to third parties (2.1) (1.5) (2.0) (3.5) Finance cost on pension (0.8) (0.9) (0.9) (1.8) Pro
Slide 4: Business Performance
LTT :electronics ple BUSINESS PERFORMANCE
Slide 5: Analysis of Revenue by Product
ANALYSIS OF REVENUE BY PRODUCT 2007 2006 2006 2006 1st Half st 1 Half nd 2 Half Full Year £m % £m % £m % £m % Electronic: Sensors and electronic systems 90.7 34 99.0 36 85.8 32 184.8 34 Electronic components 67.5 25 71.2 26 68.7 26 139.9 26 EMS 44.5 16 33.0 12 39.1 14 72.1 14 202.7 75 203.2 74 193.6
Slide 6: Operating Profit by Product
OPERATING PROFIT BY PRODUCT 2007 2006 2006 2006 £Ms 1st Half 1st Half 2nd Half Full Year Electronic: Sensors and electronic systems 5.5 5.7 5.9 11.6 Electronic components 4.6 4.6 6.8 11.4 EMS 1.9 2.0 (0.7) 1.3 12.0 12.3 12.0 24.3 Electrical: Power systems 1.8 2.0 3.4 5.4 Power transmission 5.1 3.9 2
Slide 7: Analysis of Revenue by Market
ANALYSIS OF REVENUE BY MARKET 2007 2006 2006 2006 1st Half st 1 Half nd 2 Half Full Year £m % £m % £m % £m % Electronic: Automotive 108.7 40 117.2 43 106.2 40 223.4 42 Telecom and Computer 37.0 14 37.0 13 39.0 14 76.0 14 Industrial 57.0 21 49.0 18 48.4 18 97.4 18 202.7 75 203.2 74 193.6 72 396.8 74
Slide 8: Geographical Analysis of Ongoing Revenue
GEOGRAPHICAL ANALYSIS OF ONGOING REVENUE Origin Destination 31% (2006:30%) 27% (2006:26%) 38% (2006:38%) 11% (2006:11%) 14% (2006:14%) 26% (2006:27%) 32% (2006:32%) 21% (2006:22%) United Kingdom Rest of Europe North America Rest of the World
Slide 9: Ongoing Revenue and Operating Profit by Origin
ONGOING REVENUE AND OPERATING PROFIT BY ORIGIN Revenue Operating Profit 31% (2006:30%) 34% (2006:37%) 11% (2006:11%) 18% (2006:17%) 26% (2006:27%) 32% (2006:32%) 36% (2006:31%) 12% (2006:15%) United Kingdom Rest of Europe North America Rest of the World
Slide 10: Sensors and Electronic Systems
SENSORS AND ELECTRONIC SYSTEMS Highlights z German demand remains strong z Autopad® production commences 2008 z Chinese manufacturing capability established z First orders won for Indian joint venture
Slide 11: Electronic Components
ELECTRONIC COMPONENTS Highlights z Completed acquisition of patented DAPS technology z Resistor manufacturing capability established in China z Additional capacity coming on stream to support demand for thin film products z Solid state lighting development projects progressing on time
Slide 12: Electronic Manufacturing Services
ELECTRONIC MANUFACTURING SERVICES Highlights z Order intake 45% above H1 2006 z Cost problems in transfer of products to Malaysian facility z Defence revenues achieve 11% of total – further growth anticipated z Growth continues in China
Slide 13: Power Systems and Transmission
POWER SYSTEMS AND TRANSMISSION Highlights z Improved profit z Sale of AEI Cables completes exit from cable business z Continued good performance from Mexican genset operation z Interconnection systems business order intake up 60% on H1 2006
Slide 14: Strategy: A Look at the Past Years
STRATEGY A LOOK AT THE PAST 3 YEARS Reorganised operations for greater profitability • Exited electrical cable manufacture (2005 and 2007) • Exited loss making activities in: - PCB manufacture in UK (2005) - Climate systems manufacture in France (2005) - Volume telecom EMS manufacture in UK (2006) •
Slide 15: Strategy: A Look at the Past 3+ Years
STRATEGY A LOOK AT THE PAST 3+ YEARS Acquired businesses to support future growth • Transformed EMS operations to achieve global footprint - acquired China manufacturing capability (2005) - acquired USA manufacturing capability (2006) - set up volume telecom manufacture in Malaysia (2007) • Acquired
Slide 16: Strategy: Results
STRATEGY A LOOK AT THE PAST 3+ YEARS Results • Group operating profitability significantly enhanced • Operating margins improved from 4% in 2003 to 7% in H1 2007 • Electrical revenue decreased to 25% in H1 2007 of group total (from 34% in 2003)
Slide 17: Strategy: A Look Forward
STRATEGY A LOOK FORWARD • Sensors and electronic systems Capitalise on our market leadership in automotive sensors in global markets • Electronic components Capitalise on our specialist component technologies • EMS Capitalise on the global footprint focussing on the supply of integrated systems
Slide 18: Strategy: A Look Forward (Electrical)
STRATEGY A LOOK FORWARD • Electrical Maintain levels of profitability and generate value • Power systems To drive growth in expanding markets using low cost manufacturing capability and relationships with key customers • Power transmission To improve returns with increased low cost manufacturing
Slide 19: Slide 19
Slide 20: Cash Flow
‘electronics ple CASH FLOW
Slide 21: Cash Flow from Operations
CASH FLOW FROM OPERATIONS £Ms 2007 2006 2006 2006 1st Half 1st Half 2nd Half Full Year Profit for the period (3.1) 10.8 17.2 28.0 Finance costs 3.1 2.5 3.2 5.7 Taxation 4.6 4.5 6.8 11.3 Pension curtailment gain (1.1) - (8.8) (8.8) Provision against assets 13.5 - - - Depreciation and amortisation 15.
Slide 22: Cash Flow from Operations
CASH FLOW FROM OPERATIONS £Ms 2007 2006 2006 2006 1st Half 1st Half 2nd Half Full Year Operating cash flow before movements in working capital 26.2 30.8 29.1 59.9 (Increase) in inventories (8.8) - (0.8) (0.8) (Increase) / Decrease in receivables (6.1) (13.0) 6.4 (6.6) and derivatives Increase / (Dec
Slide 23: Group Cash Flow
GROUP CASH FLOW £Ms 2007 2006 2006 2006 1st Half 1st Half 2nd Half Full Year Cash inflow from operations 14.5 14.6 10.5 25.1 Capital expenditure (15.0) (9.2) (11.4) (20.6) Purchase of patents (0.6) - - - Development expenditure (4.4) (4.9) (3.7) (8.6) Sale of fixed assets and grants received 3.3 4.4
Slide 24: Assets Held for Sale
ASSETS HELD FOR SALE £Ms Non-current assets – plant and equipment 1.5 Inventories 17.3 Trade and other receivables 15.3 Trade and other payables (5.4) 28.7 Less provision against assets (13.5) Net assets held for sale 15.2
Slide 25: Group Balance Sheet
GROUP BALANCE SHEET 2007 2006 2006 £Ms June December June Non-current assets 174.5 177.7 176.1 Deferred tax asset 8.6 21.0 22.6 183.1 198.7 198.7 Inventories 91.0 99.8 93.9 Receivables and financial instruments 95.9 105.2 108.3 Cash and cash equivalents 5.0 9.5 22.2 191.9 214.5 224.4 Current payable
Slide 26: Slide 26
Slide 27: The Future
‘electronics ple THE FUTURE
Slide 28: Outlook
OUTLOOK • Move to higher margin business • Generate product revenues for new technologies • Exploit existing technologies in emerging markets • Acquisitions as appropriate • Current trading in line with expectations
Slide 29: A World Leader in Sensor and Electronic Component Technology
A World Leader in Sensor and Electronic Component Technology