JPMC European Technology CEO Conference. 18 June 2013

Transcription

1 JPMC European Technology CEO Conference 18 June

2 Q1 IMS 2013 Revenue 2% lower year on year Organic growth 6% lower Q1 revenue was lower from softness in B2B markets; and revenue decline from our largest customer Operating margin impacted by lower revenue and lower overhead absorption on an expanded production base Expect Q2 revenues to be similar to Q1 with a return to growth in H2 H2 weighting from ours and our customers product launches and increase in R&D investment 2

3 Ind/Med/Mil Notebook Automotive - OEM Market Handset Automotive - T1 Laird Telecom - Wireless Other IT Telecom - Wired Tablet Consumer * 'Other' represents broadly mixed geography Significant change at Laird Laird s differentiation captured Growth opportunities identified Operations aligned to refined Business Model Growth Opportunities Segment OEM Design Opportunity and Laird Penetration Regional OEM Design Opportunity and Laird Penetration Market Laird USA RoEMEA Taiwan Germany Japan Korea China RoA RoAPAC Other New segments in Industrial / Medical and Automotive Expansion in Automotive and Wireless Telecom Handset target one or two additional key OEMs Notebook strategic saturation and commoditization Germany and Europe growth in new segments Expand current capabilities into China, Korea, and Japan through local OEM s 3

4 Our differentiation Speed Customer Mindshare Innovation Reliable Fulfilment 4

5 Business Model Company Roles & Responsibility Existing MARKET New Market Development New segments to Laird New geographies to Laird Adjacent segments Cross Business Unit Core Business Customer and product focused growth Division enables BU-Company and Cross-BU interaction Mergers & Acquisitions New Laird business New geographic expansion Business Unit strategic Technology Development Organic business development New Business Unit products Business Unit Roles & Responsibility Existing PRODUCT New 5

6 Outlook Innovation, reliable fulfilment and speed are key to delivering future growth Positioned in growth markets with comprehensive product offering Increasing investment on innovation through disciplined R&D Strategic direction for growth aligned to selected markets, not OEMs Strong balance sheet 2013 revenue seasonally weighted to second half of the year Confident in our ability to deliver on medium to long-term targets 6

7 7 The Business

8 Serving the right market segments FY 2012 REVENUE 520.2m BY MARKET SEGMENT (%)* BY PRODUCT SEGMENT (%) 6% 8% 11% 28% Wireless systems 8% 16% 22% 43% Performance Materials 3% 11% 25% IT / Telecom Industrial Transportation Medical Handsets Other Consumer * % has been reclassified from Industrial to Transportation from H Wireless systems 5% 14% EMI Shielding Performance Thermal Materials Signal Integrity Telematics / Wireless Modules Infrastructure Antennae Wireless Automation and Control 8

9 Performance Materials Division performance BY PRODUCT SEGMENT 9% 22% 69% EMI Thermal Signal Integrity 2012 REVENUE 325m Revenue up 6% YoY Organic revenue up 1% Sequential growth in 2012 Good margin improvements BY MARKET SEGMENT 5% 4% IT/Telecom Handset 8% 35% 23% 25% Other Consumer Medical Transportation EMI Shielding Revenue up 11% YoY Strong demand for tablets & smartphones Additional capacity expansion serving us well Telecoms and IT markets remained subdued Lower demand seen for some consumer electronics e.g. plasma display TVs Supplying the Handset, IT,/datacom & automotive sectors Thermal Solutions Revenue down 8% YoY Telecoms demand remained subdued Some initial signs of demand improving Supplying the IT/datacom, medical & consumer sectors Signal Integrity Revenue up 2% YoY IT & Printer sales remained weak Maintained market position with the customers we serve [despite this] Supplying the IT, consumer & automotive sectors 9

10 Performance Materials: what we do Owning the Electronics Environment Products & Services Gaskets, Seals and RF Absorbers Markets Personal Computing Smartphones Laptops Tablets EMI Shields Active Cooling Systems Thermal Interface Materials Thermally Conductive Circuit Boards Precision Connectors & Structural Components Consumer Electronics Gaming Consoles Televisions Telecom Infrastructure Base Stations Switches and Routers Medical Diagnostics Imaging Equipment Automotive Infotainment Vehicle Control 10 Signal Integrity Products LED Lighting Displays Street Lighting

11 Value Sweet Spot : Matching demand in Performance Materials OEM Design Contract Manufacture Component Supply DESIGN DESIGN DESIGN Commodity Available from many sources Minimal differentiation Minimal engineering required Sales through distribution Custom Engineered Capabilities enable design freedom Engineered customer cost saving Low cost relative to core parts Provide customer design resource Short customer design time System Core Significant customer resource to design and purchase Large part of customer BOM Specialised supply base Typically capital intensive Life-cycle driver Well positioned to provide as devices become smaller, faster and higher powered

12 Innovation in Performance Materials Thermal interface material used to cool microprocessors Robotic arm used in small part process assembly for smartphones and tablets Existing MARKET New Existing PRODUCT New x Existing MARKET New x Existing PRODUCT New x Business Unit Roles Business Unit Roles & Responsibility & Responsibility

13 Acquisition of Nextreme Year-long relationship with Nextreme prior to acquisition Enabled us to test the market Deep understanding of the product De-risked the acquisition Innovative technology Enables us to move into complementary new markets Existing MARKET New Thermal thin film energy harvesting Existing PRODUCT New x Business Unit Roles & Responsibility 13

14 Wireless Systems Division performance BY PRODUCT SEGMENT 2012 REVENUE 196m BY MARKET SEGMENT 22% 21% 57% Telematics & "M2M" WACS Infrastructure & other antennae Revenue up 5% YoY Organic revenue 1% lower Variable performance dependent on specific markets and geographies Good margin improvements 17% 4% Transportation 21% 58% Industrial IT/Telecom Other Telematics/M2M Revenue up 1% YoY N.American auto market remained robust M2M products rationalised to avoid more standardised areas Vertical integration has helped improve margins Supplying the transportation and industrial sectors Wireless Automation & Control Solutions Revenue down 6% YoY Capital spend in rail markets has been deferred Solid after-market revenues Supplying the rail, industrial (transportation) and mining sectors Infrastructure Antennae Revenue up 25% YoY Strong demand from WLAN, RFID, cellular networks Demand driven by increasing bandwidth requirements Supplying the IT/datacom and industrial sectors 14

15 Wireless Systems Enabling Wireless Communication Products & Services Client / Server applications Wireless Automation And Control Tracking Devices/Smart Antennas Enablement Markets Transportation Rail Automotive and commercial truck Fleet management Turning data into insights and actions in real time predictive and preventive thorough innovative Software solutions Sensing, Connecting Industrial and collecting data to and from devices Heavy and equipment systems and of mining all Material handling things via embedded Energy wireless and remote and monitoring sensing technology Embedded Radio Modules Wireless infrastructure WLAN Telecom (WWAN) Public Safety Industrial and Commercial Wireless Improve wireless devices and system performance thorough antenna technology Antennas Rechargeable Power Powering remote or handheld wireless communication devices Medical Hospital equipment Home health care devices Client Server application

16 Innovation in Wireless Systems Smart 4G MIMO antenna for use in automotive global navigation and communication systems Bluetooth Low Energy (BLE) modules enable short range wireless connectivity for ultra-low power sensor applications. Launching in Q Existing MARKET New Existing PRODUCT New x Existing MARKET New Existing PRODUCT New x Business Unit Roles Business Unit Roles & Responsibility & Responsibility 16

17 Financials

18 Continuing operations revenue & profit millions Full Year Full Year Revenue % Operating profit Finance costs (7.4) (6.7) Profit before tax % 18 before exceptionals, amortisation of acquired intangibles, gain or loss on disposal of businesses, fair valuing of financial instruments and acquisition transaction costs

19 Performance Materials revenue bridge 400 EMI -12%* %* $14m EMI acq $15m Thermal $4m Thermal acq 2%* $1m SIP $514m Thermal $21m EMI $489m Performance Materials organic revenue growth was 1% Smartphones and tablet shielding principal driver of EMI growth Thermal revenues impacted by subdued Telecoms market Signal Integrity Products * year on year organic growth in US$ refers to Klüver acquisition made in 2011

20 Performance Materials Division Year ended 31 December ($ millions) Year Year Revenue % Operating profit % Return on sales 15.1% 14.1% $3m profit contribution from acquisitions 20 before exceptionals, amortisation of acquired intangibles and acquisition transaction costs

21 Wireless Systems revenue bridge Telematics / M2M +25%* $310m $299m $(9)m TELE Inventory transfer -1%* $13m M2M acq $m WACS -6%* $(4)m WACS $13m IAS Wireless Automation & Control Solutions $(2)m TELE/M2M Infrastructure Antennae Revenue on an organic basis 1% lower Good demand from the automotive and wireless infrastructure markets Weaker industrial and European market demand * year on year organic growth in US$

22 Wireless Systems Division Year ended 31 December ($ millions) Year Year Revenue % Operating profit % Return on sales 13.2% 12.2% $2m profit contribution from acquisitions Margin improvement driven by vertical integration and product rationalisation 22 before exceptionals, amortisation of acquired intangibles and acquisition transaction costs

23 Margin performance Actual 2012 US$m Actual 2011 US$m Revenue Cost of sales (494.1) (491.1) Gross margin % % SG&A (169.2) (160.4) Gross R&D (58.0) 7.0% (49.7) 6.3% Net capitalised development Operating profit % % Stepping up R&D spend in 2012/ before exceptionals, amortisation of acquired intangibles, gain or loss on disposal of businesses and acquisition transaction costs

24 Strong cash conversion millions Discontinued Continuing Full Year Operating profit Depreciation Amortisation of capitalised development Other and non-cash Decrease / (increase) in working capital (0.3) Capitalised development - (8.5) (9.1) Capital expenditure (0.3) (13.3) (12.0) Operating cash flow Total 86.7 Cash conversion of 109 % (2011, 104%) from continuing operations 24 after adjusting for creditor decreases on exceptional items of 12.4m at 31 December 2012

25 Healthy financial position millions 31 December 31 December Shareholders equity Net borrowings Capital employed Interest cover (covenant basis) Net borrowings / EBITDA Net borrowings/ebitda of 1.2 times, 34% of maximum permitted 25 minimum of 3.0 times required by Group s loan facilities (2011, 3.0 times) maximum of 3.5 times required by Group s loan facilities

26 Earnings and dividend progression Pence per share Year to 31 December Earnings per share % Underlying tax rate 16.5% 17.1% Dividend per share % Average number of shares (million) Underlying tax rate in 2013 expected to be in the range of 17% - 18% Final dividend of 6.6 pence proposed; 10.0 pence for full year 26 before exceptionals, amortisation of acquired intangibles, gain or loss on disposal of businesses, deferred tax on acquired intangible assets and goodwill, fair valuing of financial instruments and acquisition transaction costs

27 27 Appendix

28 Measuring our strategic progress Target: Medium to Long-term FY 2012 result Organic revenue growth averaging 10% per annum Flat/+1% in a low growth environment Underlying return on sales margin of 15% 13.1% from operating efficiencies, product mix and vertical integration Dividend per share of 10p for 2012 Total dividend of 10p declared 28

29 2012 highlights: delivering growth Revenue up 6% on 2011 Flat organic growth (in USD) with sequential improvements throughout 2012 Underlying profit before tax up 17% Strong profit improvement from operational efficiencies and management of a beneficial product mix Full year underlying earnings per share of 19.1 pence, up 18% Final dividend per share declared of 6.6 pence, total 2012 dividend of 10.0 pence, in-line with recommendations 29

30 Segmental analysis in and US$ Actual 2012 m Actual 2011 m % Δ Actual 2012 $m Actual 2011 $m % Δ Performance Materials (PM) Revenue % % Operating profit % % Wireless Systems (WS) Revenue % % Operating profit % % Unallocated costs (6.6) (7.3) (10.5) (11.7) Total Revenue % % Operating profit % % 30 before exceptionals, amortisation of acquired intangibles, gain or loss on disposal of businesses and acquisition transaction costs

31 Reconciliation to movement in borrowings millions Full Year Full Year Operating cash flow Finance costs (7.0) (7.0) Tax (17.9) (9.5) Trading cash flow Dividends (23.2) (18.4) Acquisitions / disposals (16.4) (21.0) Exceptionals (13.3) (22.6) Other (2.8) (15.8) Exchange on cash and borrowings Decrease / (increase) in net borrowings 10.9 (14.1) Trading cash flow covers dividends 2.7 times 31