9 Mar 2022 07:00
9 March 2022, 7.00am
Electrocomponents plc today issues a trading update for the nine weeks to 4 March 2022 and financial year to date
TRADING PERFORMANCE IS AHEAD OF EXPECTATIONS
LINDSLEY RUTH, CHIEF EXECUTIVE OFFICER, COMMENTED: "Despite a slightly slower start to the calendar year, our momentum has built leading to a strong performance over the last nine weeks. Consequently, our revenue and adjusted operating profit margin are tracking ahead of expectations. This has been achieved despite the challenging environment and toughening comparatives, a testament to the hard work and dedication of our people. Our continued investment in inventory has offset industry supply chain shortages while the strength of our model has enabled us to manage the challenges caused by the pandemic better than expected. Our strong solutions-led and omni-channel proposition is resonating with our customers and we are generating operating leverage to help offset rising costs. We are mindful of the increasing geopolitical uncertainties and, although we do not have operations in Ukraine or Russia, our thoughts are with everyone whose lives have been affected by these events. Despite these evolving external challenges, our ability to operate against headwinds and outperform our markets reinforces our confidence in our growth opportunities."
Like-for-like revenue growth(1) | ||||||
Region | Q1 toJun 2021 | Q2 toSep 2021 | Q3 toDec 2021 | 9 weeks to4 Mar 2022 | Year to date | |
EMEA | 37% | 22% | 14% | 17% | 21% | |
Americas | 40% | 35% | 37% | 32% | 34% | |
Asia Pacific | 31% | 31% | 25% | 24% | 28% | |
Group | 37% | 26% | 21% | 22% | 25% | |
Trading over the nine weeks to 4 March 2022 has been strong, delivering further market share growth
· Like-for-like revenue growth of 22%, despite tougher comparatives.
· Overall Group revenue grew 23% as acquisitions added 1% and trading days 2% offset by foreign exchange.
· Our industrial product ranges, which are c. 75% of Group revenue, also grew like-for-like revenue by 22%.
· EMEA's growth reflects growing customer numbers, deeper product offer and stronger sales focus. Italy and Germany were the strongest performers. The latter is mainly due to our investment in product range and digital customer experience, with minimal benefit to date from our distribution centre expansion.
· Americas' strength reflects our investment over recent years which is leading to a higher digital share, greater product depth and availability and a stronger collaboration between our sales and marketing teams.
· Asia Pacific's sharper sales focus is driving strong share growth within the industrial components market.
· Our own-brand, RS PRO, grew like-for-like revenue by 14%, due to a regional mix effect.
· Web like-for-like revenue increased by 27%, with like-for-like digital participation of 64%.
We are delivering sustainable improvements in adjusted operating profit margin despite ongoing investment
· Slightly stronger than expected gross margin is resulting from tighter pricing and discount approach.
· Operating leverage on our growing average order value is offsetting inflationary cost pressures, especially in labour.
· Inventory investment helped manage supply constraints which remain challenging and show no signs of easing.
· We continue to invest in operational capabilities to support our future growth plans and remain committed to our ESG goals and related business opportunities.
Our full year profit performance (to 31 March 2022) is anticipated to be ahead of consensus2 estimates
We are actively monitoring the potential impact of the increasing economic and political uncertainties on our markets, which may increase trading volatility. However, given our progress year to date we expect our full year revenue and adjusted operating profit margin to be ahead of the top end of the current consensus range.
Investor Event
We will be hosting an Investor Event for analysts and investors during the afternoon of 30 March 2022, commencing at 1.30pm UK time at East Wintergarden, 43 Bank Street, Canary Wharf, London E14 5NX. There will also be a live webcast for attendees who wish to join the event virtually. Given today's trading statement we are unlikely to provide a trading update with the Investor Event. For more details about the event or to attend, please contact InvestorRelations@electrocomponents.com.
LEI: 549300KVXDURRKVWR37
Enquiries: | ||
David Egan | Chief Financial Officer | 020 7239 8400 |
Lucy Sharma | VP Investor Relations | 020 7239 8427 |
Martin Robinson / Olivia Peters | Tulchan Communications | 020 7353 4200 |
Notes:
1. Like-for-like revenue growth is growth in revenue adjusted to eliminate the impact of acquisitions and the effects of changes in exchange rates and trading days year on year. Acquisitions are only included once they have been owned for a year, at which point they start to be included in both the current and comparative periods for the same number of months. 2020/21 is converted at 2021/22 average exchange rates for the period.
2. Consensus for the year ending 31 March 2022 is adjusted profit before tax of £285.0 million within a range of £275.4 million to £290.9 million (source: Electrocomponents.com/investors/analyst-coverage).
3. Our profit remains sensitive to movements in exchange rates on translation of overseas profits. Average exchange rates for the year ended 31 March 2021 for euro and US dollar respectively were €1.121 and $1.308 respectively. Every 1 cent movement in the euro has a c. £1.5 million impact on annual adjusted profit before tax. Every 1 cent movement in the US dollar has a c. £0.4 million impact on annual adjusted profit before tax.
4. We expect to see a positive impact of around £9 million on revenue from additional trading days in 2021/22 compared to 2020/21.
Conference call details
There will be a conference call for analysts and investors today at 8.00am GMT via an audio conference call. A replay of the conference call will be provided shortly after the event via the investor relations page of the Electrocomponents website: www.electrocomponents.com/investors
Pre-registration link
If possible, please pre-register for this call to join digitally (without an operator), via the following link: www.incommglobalevents.com/registration/client/10278/electrocomponents%E2%80%99-conference-call/
Conference call timing
Date: Wednesday, 9 March 2022
Time: 8.00am GMT
Participant dial-in via operator
United Kingdom (local): 020 3936 2999
All other locations: +44 20 3936 2999
Access code: 589175 - Participants will be greeted by an operator who will register their details.
Replay details
A recording will be available until Wednesday 16 March 2022
UK: 020 3936 3001
USA: 1 845 709 8569
All other locations: +44 20 3936 3001
Or access online: www.incommglobalevents.com/replay/7631/electrocomponents-conference-call/
Access Code: 914897