discoverIE Group (DSCV) Investor presentation summary

Business overview

• International specialist in electronic engineering, designing and manufacturing custom components for industrial OEMs across 21 countries with 41 manufacturing sites and sales in over 70 countries.

• Focuses on structural growth markets: renewable energy, transportation, medical, security, and industrial connectivity.

• Operates two main divisions: Magnetics & Controls and Sensing & Connectivity, with significant revenue and profit contributions from both.

• Growth strategy centers on acquisitions in a fragmented market, with 30 businesses acquired in the last 15 years.

• Low customer concentration, with top 10 customers accounting for 22% of sales.

Financial performance

• FY2026 sales reached £443m, with adjusted operating margin at 13.8% and a target of 17% by FY30.

• Adjusted operating profit CAGR of 15% and EPS CAGR of 12% from FY21 to FY26.

• Free cash flow CAGR of 5% since FY21, with average conversion of 101%.

• £350m free cash flow generated since FY18, with 78% reinvested in growth and 22% returned to shareholders.

• Rapid reduction in gearing, expected to reach 1.8x by March 2027.

Strategic priorities and growth drivers

• Pursues a compounding growth strategy through organic sales growth, margin-enhancing acquisitions, and operational efficiencies.

• Targets high-growth, long-term markets driven by megatrends such as electrification, digitalization, and urbanization.

• Focus on mission-critical, custom-designed products that are hard to replace and enable customer innovation.

• High quality, recurring revenues with low customer concentration and strong international production flexibility.

• Active pipeline of acquisition opportunities and recent acquisitions contributing well to growth.