Gooch & Housego PLC · LSE:GHH
Gooch & Housego — The Cavendish Conference 2024
24 slides from Gooch & Housego's conference presentation, May 15, 2024
Slide 1: The Cavendish Conference
THE CAVENDISH CONFERENCE 15th May 2024 gandh.com
Slide 2: Agenda
AGENDA • Company Overview • Environmental, Social & Governance • Strategy Update • FY2024 Financial Results • Business Update • Outlook & Summary Charlie Peppiatt - CEO Chris Jewell - CFO THE CAVENDISH CONFERENCE - 15th MAY 2024 PAGE 2
Slide 3: Business Overview
BUSINESS OVERVIEW 2023 Revenue: £148.5M (2022: £124.8M) Aerospace Industrial Life and and Sciences Defence Telecom 22% 26% 52% LIFE SCIENCES AEROSPACE & DEFENSE INDUSTRIAL & TELECOM Emerging applications increasingly employ photonics as the enabler. • Medical imaging • Navigation • Laser manufacturi
Slide 4: G&H Key Areas
G&H KEY AREAS Quantum photonics for LiDAR for Lasers for High-capacity telecom Comms & sensing wind sensing semiconductor & machining fibre networks Industrial Imaging systems for Armoured vehicle Laser comms Laser Directed UAVs, space & turrets imaging systems for UAVs & satellites Energy Weapons A
Slide 5: Broad Photonics Expertise with Global Reach
BROAD PHOTONICS EXPERTISE WITH GLOBAL REACH Acquisitive Growth G&H employs over 900 skilled employees In 2023 G&H acquired: across 10 manufacturing and design facilities. GS Optics, Rochester NY (Polymer Optics) Artemis Optical, UK (Coating specialist)
Slide 6: Responsible Business
RESPONSIBLE BUSINESS Environment • Reduction in our carbon intensity measure of 33% • Site plans in place to reduce energy usage • 69% of the Group’s purchased electricity now from non-carbon sources • On track to achieve target of being net zero scope 1 & 2 by 2035 • CDP (Carbon Disclosure Project)
Slide 7: G&H Strategy – Sustainable Growth
G&H STRATEGY – SUSTAINABLE GROWTH New strategy focused on becoming an ‘innovative customer focused technology company’ making a ‘better world with photonics’ and the ‘first choice’ for all our stakeholders OFFERING DIFFERENTIATED PERFORMANCE THROUGH 4 KEY STRATEGIC PRIORITIES: 1 2 3 4 Establish dyna
Slide 8: Strategy Progress
STRATEGY PROGRESS Path to mid-teens returns (700-800 bps accretion) over the medium term, net of investments excluding portfolio changes People Self-Help Technology Investment • Recruitment recovery • Operational output • Technology Roadmap • GS Optics • Sustainability agenda • Delivery performance
Slide 9: Outsourcing
OUTSOURCING Proactive outsourcing of products earlier in their life cycle where technological sovereignty is not a differentiator • Dedicated leadership and resources added • Supply of acousto-optic products expanding • Hi-Rel couplers qualified and in production with ramp-up planned in FY2024 • Add
Slide 10: Acquisitions
ACQUISITIONS GS Optics – Total consideration up to $15.7m • Polymer precision optics design, manufacture and coating • Life Sciences (50%), Industrial and A&D applications • Located in Rochester NY, a hub for photonics talent • G&H’s US Life Sciences ‘centre of excellence’ Artemis Optical – Total co
Slide 11: Value Creation from Technology Focus
VALUE CREATION FROM TECHNOLOGY FOCUS • Technology roadmap review complete with focus on where G&H can differentiate and drive ‘value creation’ • Plan deployed prioritising R&D effort and investment behind seven ‘vital few’ areas • Investment into innovation hubs and R&D organisation to enable strate
Slide 12: FY2023 Results Highlights
FY2023 RESULTS HIGHLIGHTS • Revenue up 19% to £148.5m (FY2022: £124.8m) with continued strong growth in all three end markets • Significant improvement in operational execution and further reduction in overdue backlog • Adjusted operating profit up 28% to £11.3m (FY2022: £8.9m) • Normalised order bo
Slide 13: Summary Income Statement
SUMMARY INCOME STATEMENT Year Ended 30 September 2023 2022 % Change £m £m • Revenue grew by 19%; organic, constant currency up 13.6% Revenue 148.5 124.8 19.0% • Good growth across all three of our end markets Gross profit 44.0 39.1 12.7% • Gross margin declined to 29.6%; inflation continued to impac
Slide 14: Cash Flow
CASH FLOW Year Ended 30 September 2023 2022 £m £m • Total investment in tangible and intangible assets of Reported operating profit/(loss) 6.9 (1.6) £6.9m (2022: £8.6m) Depreciation, amortisation & impairment 11.0 17.2 • Increase in working capital of £2.0m with £3.5m Net capital expenditure (5.8) (
Slide 15: Industrial
INDUSTRIAL Financials (52% of revenue) FY23 FY22 Change Revenue £77.1m £64.6m 19.5% Adjusted £10.5m £8.4m 24.9% Operating Profit % Margin 13.6% 13.0% 60bps Order Book £46.9m £57.5m (18.5)% • Additional productive capacity successfully added to deliver organic constant currency revenue growth of 13.7
Slide 16: Aerospace & Defence
AEROSPACE & DEFENCE Financials (26% of revenue) FY23 FY22 Change Revenue £38.6m £30.6m 26.2% Adjusted £(2.3)m £(2.7)m 14.8% Operating Profit % Margin (6.0)% (8.7)% 270bps Order Book £45.5m £53.5m (14.9)% • Revenue grew by 20.4% on a constant currency basis compared with FY2022 • Additional capacity
Slide 17: Life Sciences
LIFE SCIENCES Financials (22% of revenue) FY23 FY22 Change Revenue £32.8m £29.7m 10.4% Adjusted £4.1m £4.0m 3.9% Operating Profit % Margin 12.5% 13.3% (80)bps Order Book £31.7m £36.6m (13.4)% • Revenues grew by 6.2% compared with FY2022, on a constant currency basis • Strong medical laser demand esp
Slide 18: Appendices
APPENDICES G&H PRELIM RESULTS PRESENTATION FY2023
Slide 19: Non Underlying Items
NON UNDERLYING ITEMS Total non underlying charge of £4.6m (of which cash £2.0m) • Amortisation of acquired intangibles: £1.7m (of which cash - £nil) • Acquisitions: £1.2m (of which cash - £1.1m) • Site closures: £0.9m - closure of our Shanghai facility and transfer of ITL US to our Rochester, NY sit
Slide 20: Other Financial Items
OTHER FINANCIAL ITEMS R&D Spend • The Group’s R&D charge in the year totalled £9.3m (FY2022: £9.2m). This represented 6.2% of revenue (FY2022: 7.4%) • The Group capitalises a portion of its R&D spend in accordance with IFRS. The amount held on the balance sheet is £1.7m (FY2022: £1.9m). Tax • The ta
Slide 21: Targeted R&D
TARGETED R&D New products Precision Acousto/ Fibre Optics launched in the Optics & Electro-Optics year Systems Aerospace & 36 2 4 Defence Industrial 6 2 4 Life Sciences 2 - 1 • New products generated £26.1m of revenue in FY2023 (FY2022: £17.9m) “We are increasingly focusing our engineering skills fr
Slide 22: Acousto Optics
ACOUSTO OPTICS G&H has been manufacturing world class acousto-optic devices DEFLECTORS and RF drivers for 40+ years. Our AO product line is vertically integrated, from crystal growth to device packaging. MODULATORS We offer both custom OEM designs, optimized for a wide variety of applications, and s
Slide 23: Electro Optics
ELECTRO OPTICS Our electro-optic and crystal growth facility was founded in 1973. LARGE CRYSTALS All aspects of the design and manufacturing process are proprietary and managed internally. We offer custom OEM designs optimized for a wide variety of POCKELS CELLS applications as well as standard prod
Slide 24: & G&H
& G&H