discoverIE Group (DSCV) Trading Update summary

Trading performance and outlook

• First half earnings aligned with board expectations, with no change to full-year guidance.

• Group sales declined 4% at constant exchange rates and 5% on a reported basis; organic sales fell 10% for the period.

• Margin development remains strong, with the group on track for a 13.5% underlying operating margin this year and a 15% medium-term target.

• Order levels stabilized and returned to growth, up 8% at constant exchange rates, with a book-to-bill ratio rising to 0.98.

• Design wins increased 8%, with an estimated lifetime value of £205m, 33% higher than two years ago.

Strategic initiatives and acquisitions

• Acquired HiVolt Limited for £3.8m in Q2; all recent acquisitions are performing well and integrating as planned.

• Disposal of Santon's solar business unit is progressing, with two-thirds of proceeds received.

• Acquisitions contributed 8% to sales, partially offset by a 2% reduction from the Santon disposal.

Financial position and cash flow

• Operating costs and working capital tightly managed, supporting robust cash flow.

• Gearing expected at 1.45x as of 30 September 2024, down from 1.5x at March 2024 and below the target range.