In This Article:
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Organic Revenue Growth: Up 1% excluding pass-through revenue and Project Albert divestment.
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Adjusted Operating Margin: Unchanged at constant currency; run rate margin at 9.3% after adjustments.
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Order Intake: Increased by 15% over H1 2023; book-to-bill ratio at 110%.
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Adjusted Operating Profit: Declined by 8% at constant currency; 5% excluding divestment.
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Earnings Per Share: Declined by 12% at constant currency.
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Free Cash Outflow: GBP7.8 million, driven by GBP21 million working capital outflow.
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Return on Invested Capital: 13.2% excluding Project Albert.
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Dividend Increase: 5% increase to 2.25p per share.
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Headcount Reduction: Reduction of nearly 400 employees for annualized savings of GBP9 million.
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Regional Performance: Strong growth in Europe and Asia; challenges in North America with 14% organic revenue decline.
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Net Debt: GBP110 million, leverage at 1.9x.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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TT Electronics PLC (TTGPF) reported a 1% organic revenue growth, excluding divestments and pass-through revenue adjustments.
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Strong order intake was observed, with a 15% increase over H1 2023 and a book-to-bill ratio of 110%.
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Project Dynamo has identified GBP17 million in potential cost savings and incremental margin improvements.
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The European and Asian regions showed strong growth, with Europe achieving a 74% increase in adjusted operating profit.
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The company declared a 5% increase in the dividend to 2.25p per share, reflecting confidence in future performance.
Negative Points
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North American operations faced significant challenges, with a 14% organic revenue decline due to prolonged destocking in the components business.
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Adjusted operating profit declined by 8% at constant currency, impacted by severance costs and divestments.
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Earnings per share decreased by 12% at constant currency, partly due to higher interest expenses.
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There was a GBP7.8 million free cash outflow in the first half, driven by a GBP21 million working capital outflow.
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The healthcare market experienced a 17% decline at constant currency, affected by the unwind of zero-margin pass-through revenues.
Q & A Highlights
Q: How will TT Electronics handle a sudden demand increase in North America after reducing headcount due to destocking? A: Peter France, Chief Executive Officer, stated that TT Electronics has a good pool of workforce available and is an employer that people want to return to. They have a waiting list of people wanting to join, so they are not worried about re-recruiting as necessary when demand returns. The expectation is not to bring back all the costs as activity resumes.