REG - TT Electronics PLC - Trading Update

TT electronicsAnnouncement

23/11/2021 07:00

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RNS Number : 1902T  TT Electronics PLC  23 November 2021

 

 

 

 

23 November 2021

 

TT Electronics plc

 

Trading Update

 

TT Electronics plc ("TT", "the Group"), a global provider of engineered
electronics for performance critical applications, publishes the following
trading update on the Group's performance in the four-month period ended 30
October 2021 ("the Period").

 

Strong Demand

 

The strength in the Group's performance has continued with year-to-date
organic(1) revenue growth of 10 per cent, as expected. Revenue in the four
months to October is 11 per cent higher than the previous year on a constant
currency basis and 8 per cent higher on an organic basis.

 

Our order intake continues to run well ahead of strongly growing revenue with
book to bill of 140% and we have delivered additional contract wins in the
period. As a result, the Group's order book is at record levels and provides
excellent visibility into 2022, underpinning our growth expectations.

 

Second Half Cost Pressures & Progress on Self-Help

 

Global supply chain constraints have continued in the second half and in some
areas have tightened, principally impacting Power and Connectivity. The
increased material and freight costs are being broadly offset by efficiencies
and price management and supported by the self-help programme which continues
to progress well and we remain on track to deliver the anticipated run-rate
benefits of £11-12m in 2023.

 

Virolens

 

Positive dialogue continues with regulators in a number of jurisdictions. The
product line is established to meet potential demand but as yet no further
orders have been received.

 

Balance sheet

 

The ongoing strength of demand and supply chain constraints mean that we
continue to hold higher levels of inventory. Despite this, we expect the year
end leverage position to improve compared to leverage at the half year.

 

Outlook

 

Given the strong growth in our revenues, we expect to deliver adjusted
operating profit of circa £35m for the current financial year, despite the
significant cost headwinds referred to above.

 

The orderbook strength, customer wins and benefits of our self-help programme
position us well for 2022.

 

 

Richard Tyson, TT Chief Executive Officer commented:

 

"I'm really pleased with the trading performance in the business. Customer
demand and order intake has been very strong in the period, across all our
divisions reflecting customer wins and market demand for our design-led
solutions across structural growth markets. I am proud of how our people are
managing the supply chain challenges and increased cost headwinds.

 

We expect to deliver further margin improvement this year as we continue on
our path to double digit margins."

 

 

 

 

 For further information please contact:

 TT Electronics plc                       Tel: +44 (0)1932 827 779
 Richard Tyson, Chief Executive Officer

 Mark Hoad, Chief Financial Officer

 Kate Moy, Head of Investor Relations and Communications

 MHP                                      Tel: +44 (0)20 3128 8100
 Tim Rowntree / Rachel Mann

 

Notes:

 

1.   Organic growth is stated at constant currency and is calculated by
comparing current year actual results to prior year results retranslated at
current year actual exchange rates.  Organic revenue excludes the impact of
acquisitions and disposals.

2.   Analyst consensus expectations for 2021 adjusted operating profit are
£35.0m to £37.0m.

 

3.   TT will announce its full year results on 9 March 2022.

 

 

About TT Electronics

TT Electronics is a global provider of engineered electronics for performance
critical applications.

The company operates in industries where there are structural growth drivers,
working with market-leading customers primarily in the industrial, medical,
aerospace and defence sectors. Products designed and manufactured include
sensors, power management devices and connectivity solutions. TT has design
and manufacturing facilities in the UK, US, Sweden and Asia.

The company has three divisions. The Power and Connectivity division designs
and manufactures power application products and connectivity devices which
enable the capture and wireless transfer of data. We collaborate with our
customers to develop innovative solutions to optimise their electronic
systems. The Global Manufacturing Solutions division provides manufacturing
services and engineering solutions for our product divisions and to customers
that often require a lower volume and higher mix of different products. We
manufacture complex integrated product assemblies for our customers and
provide engineering services including designing testing solutions and
value-engineering. The Sensors and Specialist Components division works with
customers to develop standard and customised solutions including sensors and
power management devices. Our solutions improve the precision, speed and
reliability of critical aspects of our customers' applications.

Cautionary statement

This update contains forward-looking statements. These have been made by the
directors in good faith based on the information available to them up to the
time of their approval of this update. The directors can give no assurance
that these expectations will prove to have been correct. Due to the inherent
uncertainties, including both economic and business risk factors underlying
such forward-looking information, actual results may differ materially from
those expressed or implied by these forward-looking statements. The directors
undertake no obligation to update any forward-looking statements whether as a
result of new information, future events or otherwise.

 

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