In This Article:
-
Revenue: Down 13% on a constant currency basis; 5% excluding divestments; 2% on a like-for-like basis.
-
Adjusted Operating Profit: Declined by 17% on constant currency; 13% excluding divestments.
-
Adjusted Operating Margin: Dropped by 60 basis points to 7.1% at constant currency; 7.4% excluding divestments.
-
Earnings Per Share: Declined by 30% at constant currency.
-
Free Cash Flow: GBP27.7 million inflow; cash conversion at 117%.
-
Inventory Reduction: GBP13 million reduction in inventory.
-
Leverage: 1.8 times, within target range of 1 to 2 times.
-
Order Intake: Up 9% organically over 2023; book-to-bill ratio at 103%.
-
Noncash Write-down: GBP52.2 million in goodwill and asset write-down costs.
-
Adjusted Operating Profit Forecast: Expected to be in the range of GBP32 million to GBP40 million.
-
Dividend: Final dividend paused due to macroeconomic uncertainty.
Release Date: April 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
TT Electronics PLC (STU:7TT) reported excellent performance in Europe and Asia, with significant margin improvements driven by operational efficiency.
-
The company achieved a 9% organic increase in order intake over 2023, with a positive book-to-bill ratio of 103%.
-
Strong cash flow generation was highlighted, with a cash conversion rate of 117% and a GBP13 million reduction in inventory.
-
The pension scheme issue was significantly addressed, resulting in a GBP11 million net pension surplus refund.
-
Project Dynamo has been successful in driving operational efficiency, growth, and innovation across the company.
Negative Points
-
TT Electronics PLC (STU:7TT) faced significant challenges in North America, with destocking in the components market leading to volume and revenue shortfalls.
-
Operational issues in Kansas and Cleveland negatively impacted results, leading to noncash goodwill and asset write-down costs of GBP52.2 million.
-
The company experienced a 13% decline in revenue on a constant currency basis, with a 17% decline in adjusted operating profit.
-
The Board decided to pause the final dividend for 2024 due to macroeconomic uncertainty and associated business risks.
-
The company does not expect revenue growth in North America in 2025, partly due to the deferral of some revenues into 2026.
Q & A Highlights
Q: With the change in management, will there be any alterations to Project Dynamo? A: Eric Lakin, Acting CEO, stated that Project Dynamo is a valuable tool for continuous improvement across the business. It encourages initiatives at all levels and helps offset business headwinds, including inflationary pressures. The project will continue as it is beneficial for driving improvement and initiatives.