AB Dynamics plc (ABDDF) Q4 2025 Earnings Call Prepared Remarks Transcript

2025-11-11 19:51:38 ET

AB Dynamics plc (ABDDF) Q4 2025 Earnings Call November 11, 2025 2:00 AM EST

Company Participants

Sarah Matthews-DeMers - CFO & Executive Director
Ed Haycock

Presentation

Sarah Matthews-DeMers
CFO & Executive Director ...

Welcome to the AB Dynamics 2025 Full Year Results Presentation. Thanks for joining us. I'm Sarah Matthews-DeMers, currently CFO; and from 1st of December, CEO. And I'm joined by Ed Haycock, our Director of Financial Reporting. I'll take you through the highlights before Ed takes you through the financial performance. I'll then provide an update on progress against our medium-term growth strategy. and the outlook for next year.

During the year, we made a strong start to delivering our medium-term growth plan, delivering operating profit and earnings per share growth of 15%, slightly ahead of upgraded expectations despite macroeconomic challenges in the second half of the year. Revenue increased by 3% with double-digit revenue growth in half 1, followed by a more challenging half 2 as timing of order intake was impacted by macroeconomic disruption.

Encouragingly, customer activity improved towards the end of the year, and the group carries forward GBP 32 million of orders into FY '26, providing good trading momentum into the first half of the year. New product development continues at pace and in line with the technology road map for testing products and simulation markets. We received an order just prior to the year-end for the recently launched S3 Spin simulator, which has advanced capability for the growing road car market.

Operating profit grew by 15%. Operating margin grew by 210 basis points to 20.3%, achieved through operational improvements and a richer mix of revenue, largely resulting from the timing of order intake and delivery. The operational improvements implemented in recent years have contributed to building a strong platform to support further growth. The benefit of the revenue mix is not expected to be repeated in FY '26, However, in the medium term, the Board is confident of achieving its sustainable margin target of greater than 20%.

The group acquired Bolab, a niche supplier of electronics testing equipment in half 1. The integration is progressing as planned and performance is in line with expectations. Net cash at year-end was GBP 41.4 million after GBP 8.1 million of investment in acquisitions and other capital projects. Our strong operating cash generation and cash conversion of 106% supports further organic and inorganic investment.

I'll now hand over to Ed to take you through our financial performance.

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