Focusrite plc

Good morning ladies and gentlemen and welcome to the Focusrite PLC analyst meeting. Throughout this recorded presentation, analysts will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q&A tab that's just situated on the right hand corner of your screen. Please simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all of the questions submitted today and publish responses where it's appropriate to do so. These will be available via your InvestorMeet company dashboard and we will notify you by email when these are ready for your review. I'd now like to hand you over to CEO Tim Carroll and CFO Sally McCone. Good morning.

Good morning, everyone. Thank you for joining us. So jumping right in here, we'll get past all this stuff. You can read that later. So in case if there's anybody, we can't see you, so I'm sure you can see us. If we haven't met us, here's what we look like. You can see us on video as well. We're going to take you through a half year, which we're very proud. It's been a great half year for us. I think in summary, the punchline is when we talked about how we thought this year was going to shape out at the end of last year, it's pretty much materialized how we thought. We've done quite well in terms of just both parts of our business on the content creation side and the live sound business. I know many of you know us and have been following us for a while. I think there may be a few people that are new to the company on here. We're going to try to strike a balance to make sure we're not boring the people that know us well, but make sure the people that are new are not sort of lost, if you will. So to kind of dive right in, here's our sort of opening slide that continues to grow. We're up to nine brands now. The newest edition is the one at the bottom, Linea, which we just acquired this past March. You know, the brands basically fall into two very specific categories on here. And I'll kind of put this slide in here just to give everybody a bit of a reminder. If you're ever in the elevator talking to somebody about Focusrite, the easiest way to actually kind of categorize our business is we have two basic parts of our business. There's the content creation side and the sound reproduction. The content creation side is all really about the creation of audio for different types of media. So that could be music. It could be podcasting. It's the audio that you hear in a TV show or a movie. It's any kind of streaming service. That could be games. It could be your artists doing things like Facebook Live, those type of things. The sound reproduction side is a very holistic way to describe anywhere that people go and hear audio played back, either live or prerecorded. So that could be live events like a big tour or festival, if you will. It could be a nightclub that you go to. It could be auditoria. So it could be, for example, a lecture hall for a school. Hospitality, lots of restaurants and smaller clubs, cafes and stuff. They're all looking for immersive audio experiences for their customers. Houses of worship are another big one as well for us on there. Anywhere that you're going to go and have installed sound, So a very, very simple level, that's a really great way to understand it. And if I go back to this slide here, you can see that our different brands pretty much play in different parts of this. So at a very high level, Focusrite, Focusrite Pro, Novation, Amplify, Atom Audio, Sequential, all are in majority in the content creation side, whereas Martin, Optimal, and Linea are all in the install part of the market on here. We are in over 240 territories. I think we're over about 505 employees now worldwide as we continue to grow both organically and by acquiring companies here. I'm going to hand it over to Sally and let her take you through the highlights on this. And she and I are going to trade off and go through a bunch of the detail.

Thank you, Tim. So as Tim's outlined, revenue and EBIT are very much in line with our expectations. And you can see from the charts here, that big step up we saw during the pandemic, we have maintained largely. So we're down 2.5% reported, 8.7% organic and adjusted for currency versus a record year last year, but still maintaining that growth against the pre-pandemic levels, beginning of FY20, up 86%. And actually, as you're going to come to see later, we're actually up on the second half of last year where we had some supply issues, so up 18% against that. If we look down at EBITDA, it's a slightly different picture. We are further down, and that's a reflection of a slightly lower gross margin and also a step up in costs to support a bigger, more international group, both of which we'll cover in more detail later. What else have we done during the half year? Well, we've talked about, we've invested in people and technology, seven new products. We've managed to rebuild stock, thanks to our operations teams working hard to guarantee that supply chain so we can finally rebuild a bit of our stock levels. And pleasingly, we've got a step change in the carbon footprint of our most popular products, and Tim's going to talk about that later. We ended the year with 18 million of net cash, and we've since gone on to spend some of that by acquiring Linear, as Tim mentioned, just after the half year. I'll come back to you in a minute.