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 28 October 2023 ("the Period").

Trading update

The Group continues to show good year over year improvement with year-to-date organic1 revenue growth of 4 per cent (5 per cent excluding the pass-through revenue in GMS). As previously guided, TT is returning to a more normal H1:H2 weighting of revenue2, with sales in the four months to October reducing by 8 per cent organically (5 per cent reduction excluding pass through) against a strong 2022 comparator.

The performance of our Power & Connectivity division continues to show good year over year improvement, and GMS is sustaining its strong margin performance. Trading in Sensors and Specialist Components has been in line with our expectations other than the one-off impact of the previously highlighted machinery breakdown experienced in one of our facilities, which continued for longer than anticipated, impacting profit in Q3 by circa £2m.

As anticipated, we have seen order intake normalisation during the second half as lead times have reduced, however, order visibility across the Group remains above historic levels.

Positive financial position

The Group remains on track to deliver much improved cash generation over last year and a further reduction in leverage.

Outlook

While the Board still expects good year on year improvement in revenue and profit, as a result of the machinery breakdown in S&SC we now expect to report Group adjusted profit before tax towards the lower end of current market expectations for 20233.

We are mindful of the wider macroeconomic backdrop, but see continued positive momentum in the business, with a robust order book providing good visibility of revenues for 2024.

Peter France, TT Chief Executive Officer commented:

"Having joined in October, I have now visited the majority of our sites, spent time with colleagues and met a number of our customers and other stakeholders. I have been greatly impressed by the quality of our people, the strength of our culture and the depth of our customer relationships.

I am excited about the potential for TT and can already see opportunities to unlock further value across the business, driving growth, efficiencies and performance through capitalising on our positions in the structural growth markets in which we operate. I look forward to sharing more detailed thoughts shortly after our FY23 results, as we plan the next phase of our disciplined growth strategy.

The business continues to show good year over year improvement and I look forward with confidence."

Peter France, Chief Executive Officer Mark Hoad, Chief Financial Officer Kate Moy, Head of Investor Relations and Communications

Tim Rowntree / Ollie Hoare

Notes:

• 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.
• H1:H2 revenue weighting in FY22 was 44:56, versus a historic norm of 49:51
• Analyst consensus expectations for 2023 adjusted profit before tax are in a range of £43.1m to £46.0m.
• TT will announce its full year results on 7 March 2024.

​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.