TT Electronics (TTG) H2 2025 earnings summary

Executive summary

• Delivered stable full-year 2025 results amid operational challenges and macro headwinds, with improved momentum in the second half and stronger operating profit and margins through disciplined execution and operational control.

• Focused on restoring operational control, strengthening the balance sheet, and building a platform for future growth, with significant operational improvements in Europe and North America, while Asia faced softer EMS demand.

• Ceased production and closed the loss-making Plano site, optimized Cleveland operations, and initiated a strategic review of the components business.

• Transitioned to a divisional structure (Power, EMS, Components) to align with customer needs and drive accountability.

Financial highlights

• Revenue for 2025 was GBP 481.4 million, down 2.7% organically year-over-year, with European A&D strength offset by macro uncertainty and softer EMS markets.

• Adjusted operating profit rose 2.2% to GBP 37.2 million; adjusted operating margin expanded by 30 bps to 7.7% due to cost control.

• Adjusted profit before tax increased 5.5% to GBP 28.7 million; adjusted EPS was 6.9p, down 37.3% due to a higher effective tax rate from non-recognition of US deferred tax assets.

• Free cash flow increased 7.9% to GBP 29.9 million; cash conversion reached 150%.

• Net debt reduced by 37.2% to GBP 50.3 million; leverage down to 1.1x from 1.8x.

Outlook and guidance

• 2026 revenue and adjusted operating profit expected to be in line with market consensus (£477.1m–£487.1m revenue, £31.9m–£37.6m profit).

• Focus on consolidating operational progress, maintaining margin discipline, and strong cash generation, with ongoing cost reduction programme targeting £3m benefit in 2026 and medium-term annualised savings of 2x that amount.

• Continued softness expected in EMS markets; cautious outlook due to macro and geopolitical uncertainties, with APAC revenue decline expected to reduce but not return to growth.

• Interest costs to reduce by ~£2m in 2026; effective tax rate to be in the mid-40s% due to US deferred tax asset non-recognition.