TT Electronics : Investor Factsheet

1. Electronics | Investment proposition 2023

INVESTOR FACTSHEET

1. Electronics is a global provider of design-led, advanced electronics technologies for performance critical applications in specialised markets. We solve technology challenges for a sustainable world. We do this by delivering solutions for our customers that enable products that are cleaner, smarter and healthier that will benefit our planet and people for future generations.

TT INVESTMENT CASE

Megatrends driving revenue growth and demand for products that contribute to a more sustainable world.

4-6% revenue CAGR

High quality, IP rich business, with cleaner, smarter and healthier solutions.

10%+ operating margin

Strong cash generation to invest in IP and value-enhancing acquisitions.

90%+ cash conversion and strong free cash flow generation

OUR STRATEGY

TECHNOLOGY AND CAPITAL INVESTMENT to drive growth and consolidate

customer positions

		INTEGRATION
MARGIN	OUR	OF ESG
ENHANCEMENT	and sustainability matters
through portfolio change,	STRATEGIC	into decision-making
operational leverage and	PRIORITIES	and business practices,
self-help actions		from product development
		to recruitment

TARGETED AND

COMPLEMENTARY

M&A

to expand technology

capabilities and customer

and market reach

TARGET MARKETS

GROUP REVENUE (%)

Healthcare

We provide design and manufacturing solutions for a range of diagnostic, surgical and direct patient care devices critical to the identification, treatment and prevention of disease.

Expected market growth rates

6-8%

Aerospace and defence	Expected market
We provide solutions for	growth rates
high-reliability applications	4-5%
across a broad range of
platforms operating on land,
air and sea.

Our market breakdown 28% - Healthcare

15% - Aerospace & Defence

37% - Automation & electrification

20% - Distribution sales channel

Automation and electrification Customers rely on us to help solve their toughest automation and electrification challenges, streamlining their supply chains, increasing their efficiency and helping them bring smart, new products to market.

Expected market growth rates

5-6%

Global breakdown

38% - North America

21% - United Kingdom

24% - Asia

Better market outlook 4-6% growth - TT set to continue outperformance

17% - Rest of Europe

OUR CUSTOMERS

1. Electronics | Investment proposition 2023

OUR DIVISIONS

Power and Connectivity

Designs and manufactures power application products for power efficiency and connectivity devices which enable the capture and wireless transfer of data to optimise electronic systems.

£154.2M - FY22	£7.9M - Underlying
Revenue	operating profits
5.1% - Underlying	Represents 25% of
operating profit margin	Group revenue

Global Manufacturing Solutions

Provides manufacturing services and engineering solutions for our product divisions and to customers that often require a lower volume and higher mix of products, including complex integrated product assemblies and engineering services such as value-engineering and designing testing solutions.

£323.0M - FY22	£25.2M - Underlying
Revenue	operating profits
7.8% - Underlying	Represents 52% of
operating profit margin	Group revenue

Sensors and Specialist Components

Works with customers to develop high- specification, standard and customised solutions including sensors and power management devices that improve the precision, speed and reliability of applications.

£139.8M - FY22	£21.8M - Underlying
Revenue	operating profits
15.6% - Underlying	Represents 23% of
operating profit margin	Group revenue

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2022

Adjusted resultsStatutory results

£million				Change
(unless otherwise stated)	2022	2021	Change constant FX	2022	2021
Revenue	617.0	476.2	30%	22%	617.0	476.2
Operating profit	47.1	34.8	35%	19%	(3.4)	19.3
Operating profit margin	7.6%	7.3%	30bps	20bps	(0.6)%	4.1%
Profit before taxation	40.5	31.5	28%	13%	(10.0)	16.0
Earnings per share	17.8p	14.5p	24%	9%	(4.5)p	7.3p
Dividend per share	6.3p	5.6p
Return on invested capital	10.4%	9.1%
Cash conversion	33%	65%
					2022	2021
Free cash flow					(13.1)	(1.3)
Net debt					138.4	102.5
Leverage					2.0x	1.7x

CAPITAL ALLOCATION POLICY

Free cash flow priorities

1. Technology and capital investment supporting R&D and growth
2. Maintain our progressive dividend policy
3. Continue to support our strategy with targeted, complementary M&A - disciplined hurdle rates
4. Return excess capital to shareholders
   Target leverage within the range of 1.0-2.0x Net debt/EBITDA

MEGATRENDS DRIVING SUSTAINABLE GROWTH

OUR SUSTAINABILITY SUCCESSES

Megatrends

CLEANER

Climate change and resource scarcity

SMARTER

Technological breakthrough and digital transformation

HEALTHIER

Demographics and social change

TT's solutions

Improve energy efficiency

• Aircraft electrification
• Electric and hybrid electric vehicles
• Smart energy infrastructure

Ensure accuracy, Drive automation

• Smart city infrastructure
• Remote patient monitoring
• Factory automation and productivity

Improve patient outcomes

• Laboratory analysis
• Minimally invasive procedures
• Medical diagnostics

ZERO HARM

Zero harm with year-on-year reduction in incidents

ENGAGEMENT

Achieved a 2* ranking by Best Companies

NET ZERO

Absolute & intensity ratio improvement vs. 2019. Net Zero Scopes 1 & 2 by 2035

WASTE TO LANDFILL

Significant reduction in waste sent to landfill

SINGLE-USE PLASTIC

Reduce consumption of single-use plastic

Contact details		Share information
TT Electronics plc	[phone]	Listing: London Stock Exchange
Fourth Floor	www.ttelectronics.com	Ticker: TTG
St Andrews House	[e-mail]	Sector: Electronic and Electrical Equipment
West Street Woking
Surrey GU21 6EB

Accreditation