Stadium Group Plc Interim Results th September Stadium Group Plc Interim Results 2016

Transcription

1 Stadium Group Plc Interim Results th September 2016 Stadium Group Plc Interim Results th September 2016

2 PRESENTING TEAM CHARLIE PEPPIATT, CHIEF EXECUTIVE OFFICER Joined in Oct 2011 from Laird plc, a FTSE 250 global electronics technology company Appointed CEO in June 2013 Formerly Vice President of Global Operations for Laird Technologies with operational responsibility for a division with turnover of US$400m and circa 6,000 staff covering eleven sites worldwide During 20 years with Laird plc, held senior roles in the USA, Canada, Europe, India and Asia JOANNE ESTELL, CHIEF FINANCIAL OFFICER 2 Joined in Sept 2012 from Survitec Group Ltd, a marine safety equipment manufacturer Previously Finance Director of Specialised Businesses for John Crane, a division of Smiths Group plc, from , leading various successful acquisition processes for the Group Former roles include Group Financial Controller, Smiths Detection and Sealing Solutions Division Joanne is a Chartered Management Accountant

3 PRESENTING AGENDA TEAM Overview Business Review Financial Results Outlook - Charlie Peppiatt - Charlie Peppiatt - Joanne Estell - Charlie Peppiatt 3

4 FINANCIAL HIGHLIGHTS Order intake 30.7m [+22.5%] (2015 H1: 25.0 million) Gross margin 24.1% [+250bps] (2015 H1: 21.6%) Normalised PBT 1.6m [+14.3]% (2015 H1: 1.4m) Revenue 24.3m [-3.2%] (2015 H1: 25.1m) Net Debt Reduction 2.4 m [2016 H1 : 3.5m] (2015 H1: 5.9m) Technology Products growth 14.0% [2016 H1: 13.9m] (2015 H1: 12.2m) Normalised operating margin* 7.7% [+120bps] (2015 H1: 6.5%) Interim dividend 0.95p [+5.6%] (2015 H1: 0.9p) 4 * Adjusted for non-recurring expenses, amortisation of acquired intangibles and interest charged on the fair value of deferred consideration

5 BUSINESS HIGHLIGHTS BUSINESS HIGHLIGHTS Technology Products now 57% of Group revenue (H1 2015: 49%) Integration of Stontronics completed Stockholm regional design centre established Leadership and technical talent recruitment UK operations optimised by consolidating four manufacturing sites into two Head Office relocated to Reading 5

6 6 BUSINESS REVIEW CHARLIE PEPPIATT CEO

7 DELIVERING STOCKHOLM ON RDC STRATEGY Transition from an electronics manufacturer to a design-led technology Group

8 RESHAPING OUR BUSINESS RESHAPING OUR BUSINESS 76% 75% 51% 43% 24% 25% 49% 57% H H H H1 Technology Products Revenues Electronics Assembly Revenues 8

9 OPERATIONAL CENTRES OF EXCELLENCE GROUP STRUCTURE TECHNOLOGY PRODUCTS ELECTRONICS WIRELESS POWER HMI ASSEMBLIES What we do Machine to machine (M2M) / IoT wireless solutions What we do Custom and standard power supplies, transformers What we do Intelligent human machine interface (HMI) solutions What we do End-to-end electronic solutions Primary markets Smart home, security, telematics, healthcare and wearable technologies Primary markets CCTV, fire & security and industrial, medical, lighting and Smart home Primary markets Defence, marine, aerospace, medical, security, infotainment and broadcast Primary markets Specialist lighting, security, medical, industrial, HVAC and automotive 9

10 OPERATIONAL CENTRES OF EXCELLENCE THE RIGHT OPERATING MODEL REGIONAL DESIGN CENTRES (RDC) MANUFACTURING CENTRES OF EXCELLENCE (MCE) REGIONAL FULFILMENT CENTRES (RFC) Stockholm, Sweden Hartlepool, UK Reading, UK Southampton, UK Dongguan, China Kowloon, HK Norwich, UK Southampton, UK Shanghai, China 10

11 OPERATIONAL CENTRES OF EXCELLENCE STOCKHOLM WIRELESS RDC Located in Kista Science City, Stockholm global hi-tech hub Investment to support high growth M2M/IoT Wireless business Experienced and talented team of wireless design engineers and technical sales specialists Strong relationships in Wireless connectivity vertical markets Encouraging pipeline of new business opportunities 11

12 OPERATIONAL CENTRES OF EXCELLENCE TECHNOLOGY LEADERSHIP INVESTMENT MARTIN BRABHAM MANAGING DIRECTOR POWER Joined Stadium after 15 years with XP Power, formerly Sales Director Southern Europe, General Manager France and Italy, and Industry Director Communications and Defence. Achieved the XP President s Award for highest EU growth in Previously held roles at Microstar Laboratories and Vepac Electronics. 25 years in global power business. KJELL KARLSSON MANAGING DIRECTOR WIRELESS Formerly Managing Director EU & USA for Sunway Communications where he grew the business by 300% in 4 years to US$150 million with large OEM customers. Responsible for global design and sales teams located in California, Taiwan, China and Sweden. Previously held senior engineering roles at Allgon and Laird Technologies. 20 years in global Wireless business. 12

13 INTERIM FINANCIAL RESULTS JOANNE ESTELL CFO

14 INCOME STATEMENT Six months ended 30 June Year ended Revenue 24,335 25,126 53,872 Gross normalised profit * 5,858 5,417 12,507 Gross normalised profit margin * % 24.1% 21.6% 23.2% Operating expenses (3,977) (3,776) (7,929) Operating profit normalised * 1,881 1,641 4,578 Net normalised finance costs (258) (233) (564) Normalised profit before tax * 1,623 1,408 4,014 Non-recurring items / amortisation of acquired intangibles (914) (738) (2,310) Profit before tax ,704 EPS (pence) EPS normalised * (pence) * Adjusted for non-recurring expenses, amortisation of acquired intangibles and interest charged on the fair value of deferred consideration 14

15 PROFIT RECONCILIATION Six months ended 30 June Year to Normalised profit before tax from continuing operations 1,623 1,408 4,014 Acquisition costs - - (201) Factory relocation costs - (68) (615) Electronic Assembly division reorganisation and severance costs - - (156) Technology Products division reorganisation and severance costs (383) - (178) Interest charge on the fair value of deferred consideration (82) (63) (134) Amortisation of acquired intangible assets (449) (607) (1,026) Profit before tax attributable to equity holders of the parent ,704 15

16 674k 145k 183k 629k 232k 670k 167k NORMALISED PROFIT GROSS PROFIT BRIDGE Leveraging global footprint/ procurement savings Lost wireless customer/ price Technology Products Cost savings from PYR re-org Electronic Assembly volume/ mix/ price Labour inflation/ other 16 Half year impact of the Stontronics acquisition 1,641k Normalised operating profit ,881k Normalised operating profit 2016 Net investment in Regional Design Centres

17 BALANCE SHEET As at 30 June Year ended Tangible assets 4,678 3,335 4,363 Intangible assets 17,326 12,912 17,602 Other receivables Inventory 7,337 7,558 7,518 Receivables 11,617 11,977 13,739 Payables (11,148) (12,065) (13,488) Working Capital 7,806 7,470 7,769 Bank Net cash 4,679 2,795 6,200 Invoice securitisation (26) 0 (2,399) Bank loans (7,625) (8,000) (7,875) HP / finance leases (596) (655) (608) Net debt incl finance leases (3,568) (5,860) (4,682) Net pension liability (4,117) (5,229) (4,164) Other non-trade payables (2,232) (1,815) (2,150) Other (provisions, deferred tax) (652) (444) (736) Net assets 19,400 10,522 18,158 17

18 CASH FLOW 18 Six months ended 30 June Year ended Normalised operating profit 1,881 1,641 3,552 Non-recurring items (832) (675) (1,150) Deprec / amort / share option costs / FX / profit on sale of FA 1,276 1,083 2,643 Working capital movement 193 (1,865) (1,476) Capital expenditure and development costs (790) (338) (1,850) Net cash from trading activities 1,728 (154) 1,719 Proceeds from sale of property, plant and equipment Acquisition costs - - (4,738) Equity share capital subscribed 673-5,568 Pension contributions (252) (311) (717) Net proceeds / (repayment) invoice discounting (2,373) 0 2,023 Loans rec d & repaid / interest / lease payments (420) (162) (525) Tax / dividends (1,044) (469) (1,142) Net (decrease) / increase in cash (1,683) (1,094) 2,228 Exchange gain on cash and cash equivalents 162 (15) 66 Closing cash 4,679 2,796 6,200 Closing cash net of invoice discounting 4,653 2,796 3,801 Net cash / net debt (3,568) (5,860) (4,682)

19 FX CASH MOVEMENT FLOW IMPACT SALES - H USD Euro Sterling High proportion of sales invoiced in USD Majority of new business expected to be Sterling 53% USD 46% denominated in USD Minimal exposure to transactional currency effects Risk from input price increases dominated in $, Euro 1% likely to be offset by price increases to customers 19

20 20 OUTLOOK CHARLIE PEPPIATT CEO

21 SUMMARY AND OUTLOOK OUTLOOK Continued growth in order book underpinning 2016 and beyond Accelerated shift to a design-led hi-tech business Operations reconfigured for vertical integration and integrated cross sell Investment aligned towards higher growth Wireless and Power businesses Acquisitions to enhance technology offering, market reach and global footprint 21

22 22 APPENDIX

23 BOARD OF DIRECTORS BOARD OF DIRECTORS NICK BRAYSHAW OBE, CEng, FIMechE, FRSA, CHAIRMAN CHARLIE PEPPIATT, CEO JOANNE ESTELL, GROUP FINANCE DIRECTOR & COMPANY SECRETARY CHRIS GILL ACA SENIOR INDEPENDENT DIRECTOR Nick Brayshaw was appointed as a nonexecutive director in April 2005 and Chairman in April He began his career with Rio Tinto plc and Caradon plc, before being appointed Group Chief Executive of Wagon plc until March He was an independent member of the Business and Innovation Group Board of the Department of Trade and Industry from 2000 to 2006 and Chairman of the CBI Manufacturing Council from 2003 to Nick is also Chairman of several private equity-backed companies. Charlie Peppiatt joined Stadium as Group Operations Director in October 2011 from Laird plc, a FTSE 250 global electronics company. He was appointed CEO of Stadium in June Charlie was formerly Vice President of Global Operations for Laird Technologies with operational responsibility for a division with turnover of USD$400m and 6,000 staff covering eleven sites worldwide. During 18 years with Laird plc, Charlie held other senior roles in the USA, Canada, Europe, India and throughout Asia. Joanne Estell is a Chartered Management Accountant and joined Stadium in September 2012 from Survitec Group Ltd, a marine safety and survival equipment manufacturer. Previous to that she was Finance director of Specialised Businesses for John Crane a division of Smiths Group plc from She led various successful acquisition processes for the Group. Former roles include Group Financial Controller for Smiths Detection and the Sealing Solutions Division. She began her career in 1996 with Whitbread plc. Chris Gill is a Chartered Accountant and was appointed as a nonexecutive director in Chris is currently a director at Walker Filtration Limited and Banks Group Limited; previous roles include Finance Director of Wellstream Holdings plc and at Domnick Hunter Group plc and a number of senior international finance roles at Black and Decker. 23

24 THE RIGHT MARKETS CORE MARKETS AUTOMOTIVE & TRANSPORT SECURITY ENERGY & SMART HOME INDUSTRIAL HEALTHCARE DEFENCE, AVIATION & MARINE 24

25 GLOBAL STOCKHOLM FOOTPRINT RDC

26 INCOME STATEMENT STATUTORY PRESENTATION Six months ended 30 June Year ended Revenue 24,335 25,126 53,872 Cost of sales (18,477) (19,709) (41,365) Cost of sales non-recurring (135) - - Gross Profit 5,723 5,417 12,507 Operating expenses (4,426) (4,383) (8,955) Operating expenses non-recurring (248) (68) (1,150) Operating profit 1, ,402 Interest (258) (233) (564) Interest on the fair value of deferred consideration (82) (63) (134) Profit before tax ,704 Non-recurring items/ amortisation of acquired intangibles (2,176) Normalised Profit before Tax 1,623 1,408 4,014 EPS (basic) 1.7p 2.0p 4.2p EPS adjusted (basic) 3.7p 4.2p 9.9p 26

27 PENSION LEGACY ISSUE (1974 SCHEME) PENSION - LEGACY ISSUE (1974 SCHEME) 000 s 2016 Interim Assets 28,487 28,487 29,038 27,497 26,229 24,690 Liabilities (33,632) (33,692) (35,692) (33,074) (33,153) (31,131) Net pension liability (5,145) (5,205) (6,654) (5,577) (6,924) (6,441) Net liability after tax (4,117) (4,164) (5,324) (4,462) (5,332) (4,831) Corporate bond interest rates 2.0% 3.6% 3.4% 4.4% 4.4% 5.5% Employer contributions ,063 2, June 2016 m s Accounting Buyout Assets Liabilities (36.7) (57.0) Gross deficit (6.9) (24.0) Net deficit (5.5) (19.2) 27 Annual employer cash contributions now agreed at c. 0.5m versus previous agreement of 1.0m 705 members pensioners (354 have been insured off to L&G) and 221 deferred