discoverIE Group (DSCV) Trading Update summary

Financial performance and outlook

• Expects record underlying profits and earnings for FY2024/25, slightly ahead of Board expectations.

• Fourth quarter orders rose 11% sequentially and 15% organically year-on-year; sales up 19% sequentially but 4% lower organically year-on-year.

• Group sales for the year were 2% lower at constant exchange rates, with 5% net revenue growth from acquisitions offset by a 7% organic sales decline.

• Second half underlying operating margin expected to exceed first half (13.8%), progressing toward a 15% target by FY2027/28.

• Year-end gearing at 1.45x, below the target range of 1.5x to 2.0x, indicating strong funding position.

Operational highlights

• Maintains resilient gross margins, tight operational management, and strong free cash flow.

• Sensing & Connectivity division led recovery with 5% organic sales growth; Magnetics & Controls division down 10% organically, reflecting ongoing customer overstocking.

• Efficiency improvements and higher quality revenue streams contributed to margin gains.

• Flexible international manufacturing network with 38 sites in 20 countries, including significant US capacity.

• Plans to shift more production to the US to capture opportunities from tariff-affected competitors.

Strategic positioning and sustainability

• Focuses on niche, high-value, sole-sourced engineered products essential to customer designs.

• Passes on incremental costs from tariffs and optimizes production locations to mitigate impacts.

• Pursues both organic and inorganic growth opportunities while remaining cautious amid market volatility.

• Key markets include medical, electrification of transportation, renewable energy, security, and industrial automation.

• Holds an ESG “A” rating from MSCI and is Regional (Europe) Top Rated by Sustainalytics.