TT Electronics (TTG) Trading Update summary

Strategic initiatives and restructuring

• Completed sale of three business units under Project Albert and reorganized management structure.

• Launched Project Dynamo, identifying £17 million in potential cost savings and incremental margin, with £4 million already actioned.

• Workforce reduced by nearly 400, mainly in North America, for annualized savings of £9 million; further headcount reductions underway.

• Eight work streams initiated to drive efficiency, growth, and innovation, including logistics, energy, and inventory management.

• Focus on insourcing, process improvements, and leveraging engineering assets to boost productivity and profit.

Financial performance and outlook

• Group revenue declined 1% year-on-year organically, with Europe up 10–17% and Asia up 10–11%, but North America down 14–16%.

• Adjusted operating margin unchanged at 8.1% constant currency; run rate margin at 9.3% after adjustments.

• FY24 adjusted operating profit expected at the lower end of £37m–£42m, with market consensus at £38.2m.

• Earnings per share declined 12% due to lower operating profit and higher interest expense.

• Dividend increased by 5% to £2.25 per share.

Regional and market trends

• Strong revenue and profit growth in Europe and Asia, with North America facing significant headwinds and operational challenges.

• Aerospace and defense up 40%, automation and electrification up 4% (7% ex pass-through), healthcare down 17%.

• Distribution channel in North America remains challenged by prolonged destocking, though order intake is improving.

• The company focuses on high-growth markets such as healthcare, aerospace, defence, electrification, and automation.

• The end of the destocking cycle and timing of recovery in components remain uncertain, with a slow recovery assumed through 2025.