Delivering Our vision, our future. Full year results for the year ended 31 March 2016

Transcription

1 Delivering Our vision, our future Full year results for the year ended 31 March 2016

2 Safe harbour statement The information contained in this presentation may include forward looking statements about e2v s financial and operational performance and results and the markets in which it operates. These statements can be identified by terminology that includes, without limitation, estimates, believes, anticipates, intends, expects, plans, targets and predicts and all similar words and statements of a predictive nature. By their very nature, all forward looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of e2v. These statements are based on current information, forecasts, expectation and belief and will be subject to variations in these factors as they involve elements of risk and uncertainty. These risks and uncertainties are discussed in detail in e2v s Annual Report & Financial Statements, announcements to the market and presentations to analysts and investors. Consequently, these variations could cause the actual performance, results and markets to be materially different than those predicted in the forward looking statements. The forward looking statements in this presentation are accurate only as at the date of this presentation and e2v undertakes no obligation to revise or update forward looking statements to reflect subsequent events or circumstances, except as may be required by applicable law and regulation (including Listing Rules). No statement in this presentation is intended to be a profit forecast or be relied upon as a guide to future performance. 2

3 Agenda Highlights Steve Blair, Group CEO Finance review Charles Hindson, Group FD Business update & outlook Steve Blair, Group CEO Q&A 3

4 FY16 highlights FY16 good financial performance revenue growth 5.1% adjusted operating profit up 4.7%, despite FX headwind Dividend up 5.9% Progress on Our vision, our future Solid platform for growth Revenue driven growth, trusted expert partner, resilient financial profile 4

5 Financial summary Year ended 31 March Reported At constant FX*** FY16 FY15 Change FY16 FY15 Change Reported revenue 236.4m 224.9m 5.1% 230.6m 224.9m 2.5% Adjusted* operating profit 42.0m 40.1m 4.7% 44.7m 36.7m 21.8% Adjusted* operating margin 17.8% 17.8% 19.4% 16.3% 310bps Adjusted* profit before tax 40.8m 39.0m 4.6% Adjusted** earnings per share 14.59p 13.68p 6.7% Dividend 5.4p 5.1p 5.9% Net borrowings ( 21.1m) ( 5.2m) ( 15.9m) Basis of preparation: *Adjusted operating profit is before specific items **Adjusted earnings per share (EPS) is before specific items less tax where applicable *** Revenue at FY15 rates, adjusted operating profit at FY15 rates before FX gains and losses 5

6 Finance review revenue bridge FY16 revenue ( m) growth of 5.1% Organic 3.2m Net M&A 2.6m Organic revenue Growth: Industrial vision Space Radiotherapy Lower activity: RF defence Semiconductors Net acquisitions: AnaFocus + 4.4m SP Devices + 0.6m Thermal imaging 2.4m FX benefit of 2.4% 6

7 Finance review operating profit bridge FY16 adjusted operating profit of 42.0m growth of 4.7% Organic growth contribution Cost profile discipline Good cost control Used flexibility Benefit of reorganisations AnaFocus met earn out targets FX swing 5.5m FX losses 2.1m (FY15 gain 3.4m) 7

8 Finance review cash flow bridge FY16 profile Operating cash generation 20.9m Net M&A ( 9.0m) Financing ( 27.8m) Adjusted operating profit Dep n,amort less CAPEX Working capital M&A net of disposals Interest, tax & other Dividend Increase in net borrowings Growth ( 5.1m): Imaging inventory ( 3.0m) Trade receivables ( 2.1m) Reorganisation and cost flex ( 6.5m) Customer focus ( 5.2m): Securing supply chains for customers ( 1.9m) Support Q4 deliveries ( 0.6m) Delivery on programmes ( 2.7m) CAPEX reduced in Q4 Acquisition( 13.0m): Net M&A ( 9.0m) Product line acquisitions ( 4.0m) Other Purchase of own shares ( 3.7m) 8

9 FY17 selected guidance CAPEX &tax c. 14m CAPEX > c. 11m depreciation Effective tax rate c.29% Re classification of R&D tax credits FX Outlook based on March 2016 rates FX revenue tailwind of c.7%, adjusted profit tailwind of c.4% Profile H1/H2 split expected to be in line with FY16 Rebuild flexibility and benefit of reorganisation Improve working capital Available debt capacity for acquisitions (up to 1.5x) FY17 outlook unchanged 9

10 Key metrics Financial metric Objective FY16 FY15 Revenue growth GDP + specialist sector and new product growth Execute on organic growth programmes Accelerate with targeted acquisitions in divisions 5.1% 3.3% Margins Manage to mid teens operating profit margin over the cycle Build margins once effectiveness established 17.8% 17.8% R&D 90% of R&D customer aligned 87% 86% Cash conversion >80% adjusted operating profit 2 year recapitalisation phase 50% 99% Use of capital Mid 20% ROCE 20% 23% Net debt Net borrowings/ebitda 1.5x through acquisition cycle 0.40x 0.10x Dividends Adjusted earnings cover: c.2.5x 2.7.x 2.7x Acquisitions 3 year Cash Flow Return on Investment > 10% Revenue driven growth, trusted expert partner, resilient financial profile 10

11 Imaging FY16 FY15 Change Revenue 103.5m 88.7m 16.7% Operating profit 15.7m 9.3m 68.8% Operating margin 15.2% 10.5% 470bps Status H2 FY16 objectives FY17 objectives Professional Gained traction from new products in industrial vision and data collection systems AnaFocus grew revenue from new products and custom programmes Space Stepped up delivery on existing programmes Delivered operational improvement Secured specific programmes for FY17 Professional Grow revenue from new products and markets in industrial vision and sensors AnaFocus continue to grow custom design programmes and sensor sales Space Continue to focus on operational improvement Secure follow on orders for specific programmes for FY17 delivery Growth focus: Industrial Imaging and Space 11

12 RF Power FY16 FY15 Change Revenue 80.5m 84.2m 4.4% Operating profit 18.7m 19.4m 3.6% Operating margin 23.2% 23.0% 20bps Status H2 FY16 objectives Radiotherapy renewed customer contract in Q4 Completed the current defence reorganisation Delivered against specific defence programmes FY17 objectives Continue to support our radiotherapy OEMs Ongoing reorganisation of Chelmsford site Grow Lincoln defence activities from existing programmes Secure specific defence programmes Growth focus: Radiotherapy 12

13 Semiconductors FY16 FY15 Change Revenue 52.4m 52.0m 0.8% Operating profit 14.2m 11.9m 19.3% Operating margin 27.1% 22.9% 420bps Status H2 FY16 objectives Completed acquisition of SP Devices and partnership with Peregrine Secured orders for H2 delivery Engaged with customers as a key partner Built order book for FY17 FY17 objectives Secure orders for within year delivery Grow revenue from Peregrine and other product line acquisitions Microprocessors higher revenue in H2, underpinned by last time buy Integrate SP Devices and delivery of first year plan Growth focus: Modules, signal path, IP partners 13

14 Focus on our foundations Progress in first year Progress in second year Next steps Customer Focus Listening to customers to drive innovation Key customers trusting us as partners Improved customer ratings and feedback Increase customer intimacy Broaden strategic customer base Operational Excellence Improved delivery performance Margin improvement in all three divisions Ongoing operational improvement in Space Focus on process effectiveness Reduce inventory cycle time Simplification Clarity of communication and consistency of message Reducing complexity and simplified approvals Divisions with end to end P&L responsibility Portfolio optionality People Refreshed leadership team, strengthened management Developing talent Leverage best practice and team work across Group Financial Acquisition and integration of AnaFocus Acquisition of SP Devices Good financial performance in challenging markets Continue to build acquisition pipeline In all that we do: Does this drive growth? 14

15 Investment priorities to drive growth 79% Group revenues (FY14: 72%) Divisions Imaging RF Power Semiconductors Industrial Vision Space Radiotherapy Modules & ADC, IP partners and distributors Investment Discretionary R&D (% sector revenue) 8% 4% 5% 11% Acquisitions AnaFocus SP Devices/PLAs* Four areas of focus 89% of Group R&D focused in chosen areas delivering growth Two acquisitions completed in Industrial Vision and Semiconductors Driven by customers, markets and opportunities *Product Line Acquisitions 15

16 Global end market focus FY16 & FY15 revenues by key global end markets FY16 Automation Healthcare Communications Safety Discovery Environment FY15 e2v medium term growth potential High High Medium Low Medium High Current profile Challenging markets: Taking market share through innovation/service Making new markets through new product introductions Continuing corporate change Increased focus on acquisitions m Principal end market drivers by division: Imaging automation, healthcare, environment & discovery RF Power healthcare, automation, safety & communications Semiconductors communications & safety 16

17 Geographic reach FY15 revenues by geography m 3.9 FY16 revenues by geography m Growth 5.1% United Kingdom Europe North America Asia Pacific Rest of world Growth coming from Asia Pacific (20%) 17

18 FY17 Divisional overview Imaging Professional imaging growth: make new markets, take market share. Focus on key market leaders/oems Space: embed operational improvement, with ongoing margin improvement FY17 view Good growth RF Power Gradual growth in Radiotherapy, OEM customers focused on value Steady Semiconductors Product line acquisitions and micro last time buys Cards, subsystems and IP moving up the value chain Step up 18

19 Summary & outlook FY16 performance: Performance Growth Reported revenue growth of 5.1% Adjusted operating profit up 4.7% Full year dividend up 5.9% Platform for growth: Focus on take/make market in challenging markets Investment in R&D in areas of focus Cost profile discipline and benefit of reorganisations SP Devices and building acquisition pipeline Outlook FY17 outlook unchanged Revenue driven growth, trusted expert partner, resilient financial profile 19

20 Q&A 20

21 Appendices 21

22 Our vision, our future 22

23 Our three divisions Imaging FY16 revenues: 44% We add value to our customers through our technology platforms, innovative product development and space qualified manufacturing capability. Selected customers Canon, Carl Zeiss Meditec, Optopol, Orbotech, Basler, ESA, NASA, CNES, CAST, Astrium, Ball Aerospace, Lockheed Martin, Thales, Oxford Instruments, Hamamatsu, Roper Picture of the Churyumov Gerasimenko comet taken from our image sensors on Rosetta Eliixa + cameras for industrial inspection systems RF Power FY16 revenues: 34% We add value to our customers through consistently supplying reliable application specific products, addressing difficult engineering challenges and providing long term continuity support. Selected customers Accuray, Elekta, Varian, BAE Systems, Furuno, Airbus, Raytheon, Selex Galileo, Thales RF Power components and systems for Elekta cancer radiotherapy equipment Marine radar to avoid collisions at sea Semiconductors FY16 revenues: 22% We add value to our customers through our market leading design, packaging and screening technology to meet the demanding specifications that our aerospace and defence customers require, with security of supply. Strategic partnerships Freescale, Everspin, Maxim, Micron, Peregrine Selected customers Arrow, Avnet, Boeing, Thales, Raytheon, Airbus Hi reliability semiconductors for safety critical civil aerospace systems Space qualified data convertors for satellite communications c.1,750 employees across 9 engineering locations and 6 sales offices 23

24 Summary divisional performance Imaging RF Power Semiconductors Total FY16 FY15 FY16 FY15 FY16 FY15 FY16 FY15 Revenue 103.5m 88.7m 80.5m 84.2m 52.4m 52.0m 236.4m 224.9m Revenue growth 16.7% 4.4% 1.0% 5.1% Adjusted operating profit 15.7m 9.3m 18.7m 19.4m 14.2m 11.9m 42.0m* 40.1m* Adjusted operating profit margin 15.2% 10.5% 23.2% 23.0% 27.1% 22.9% 17.8%* 17.8%* Group revenues 44% 40% 34% 37% 22% 23% *Includes Corporate centre costs of 4.5m (FY15: 4.0m) and FX losses of 2.1m (FY15 gains 3.4m) 24

25 Our journey from November 2014 Key priorities Group Making it real Embed new culture Operational excellence Platform for further expansion Imaging Industrial product introductions Space project activity RF Power Sub systems growth Semiconductors Partners & modules Goal x