Half Year 2025 discoverIE Group plc Earnings Call Transcript
Key Points
- Operating profit (EBIT) increased by 4% despite a 4% decline in sales, with operating margins reaching a record high of 13.8%.
- Orders in the Sensing & Connectivity division rose by 20% organically, indicating strong demand in this segment.
- Cash flow performance was excellent, with a conversion rate of 126%, significantly above the 10-year average.
- The company completed a bolt-on acquisition of Hi-Volt, enhancing its product offerings in high-voltage capacitors for medical applications.
- Design wins increased by 8% in the period and 33% over two years, providing a strong foundation for future growth.
- Sales were down 4% overall and 10% organically, reflecting a challenging sales environment.
- Earnings per share decreased by 4%, primarily due to higher interest costs.
- The Magnetics & Controls division experienced a 12% decline in sales, largely due to industrial destocking.
- Interest costs increased by nearly 50%, impacting profitability, although this is expected to improve as rates decrease.
- The order book is down 20% year-on-year, attributed to the normalization of lead times.
Good morning, everybody. Thank you very much for attending to hear the talk through the half year results for discoverIE to the end of September. So let's just take you through the highlights. So here today are Bruce Thompson, our Chairman; Simon, our Finance Director; and obviously, me.
So we'll start with a few highlights, and then I'll hand over to Simon to take you through the details. So this has been a tricky period from a sales perspective. Sales were down 4%, organically down 10%, but we're very pleased to say that despite that, our operating profit EBIT up 4% with operating margins up to a record high of 13.8%. That's up 1 percentage point on a CER basis. So notwithstanding a softer sales environment, which is all about the destocking that we'll talk about later, the cost management, the efficiencies program, the pricing policies, et cetera, have all enabled us to build or continue a decent operating result.
In addition to that, orders were up 1%
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