INVESTOR PRESENTATION...INVESTOR PRESENTATION July 2016 5 Connectivity Smart metering, communication, industrial control, ‘Internet of Things’ Industrial semiconductors forecast

INVESTOR PRESENTATION July 2016

2 INVESTOR PRESENTATION│ July 2016

Introduction to Acal

Acal is a specialist electronics company

Designing, manufacturing & distributing customised electronic components

Supplying growth markets

Revenues of £290m, operating profit of £16.3m

Operating internationally – 23 countries

High margin, differentiated products

Niche products with limited competition

Acquisitive

12 acquisitions since December 2009

Generating significant shareholder returns

TSR growth of 62% in the 3 years (to e/March ‘16)

Group revenue & operating profit

-5

0

5

10

15

20

0

50

100

150

200

250

300

350

FY10 FY14 FY15 FY16

Revenue (£m)- LHS

Underlyingoperating profit(£m) - RHS


Brexit implications

Acal is not fundamentally affected by the EU referendum result

Very little cross border trading between Acal UK & EU, & vice versa

Existing currency hedging protects against stronger raw material purchase currencies (eg USD)

UK accounts for only 18% of sales

High proportion of our customers export internationally

Will benefit from weaker £ and €

Translation of reported results into weaker £

Will benefit our reported profits & earnings

Backdrop of improving global market conditions


Building a leader in custom electronics

Strategy that is transforming the Group

Clear priorities are building a high quality, international business

Increasing the proportion of own products designed & manufactured by Acal

Increased operating margins

Generating strong & stable cash flows

Supplying growth markets with excellent long term prospects

Acquiring high quality D&M businesses

‘Platforms’ – bigger & that establish a position (eg Noratel)

‘Bolt-ons’ – smaller & that integrate into existing businesses (eg Plitron)

Retain entrepreneurial culture

Internationalising

Building position in North America & Asia


Connectivity

Smart metering,

communication, industrial

control, ‘Internet of Things’

Industrial semiconductors

forecast to grow 10% CAGR

2014-19(6)

We supply essential technologies to growth markets

We focus on specialised markets with excellent fundamentals

where we have real expertise

Growing markets driven by long term fundamental needs

Increasing proliferation of and dependence on electronics

Estimated £12bn market worldwide

Medical

Control, monitoring &

diagnostic

Medical semiconductors


2012-18(5)

Renewable energy

Wind, solar, tidal

Wind turbine power

expected to account for 50%

of incremental power

generated 2014-30(3)

Transportation

Road, rail, air

Automotive electronics


2014-19(4)

Macro drivers

Population growth >30% by 2050(1)

GDP growth 3% globally 2016-30(2)

4.5% emerging, 2%

developed world

Key macro trends

Growing middle class

Growing affluent older population

Growing green energy

Reducing cost of technology

End market drivers

Growth in travel

Growth in medical spending

Shift to renewable energy

Growth in device connectivity

1. Source: United Nations 2015

2. Source: World Bank, IMF, IHS global insight

3. Source: International Energy Outlook 2015

4. Source: Gartner, PWC, Eden McCallum

5. Source: IC insights

6. Source; Gartner, PWC, Eden McCallum

Our technologies

Magnetics & Power

Communications & Microsystems

Electromechanical & Optical


Examples of our customers

Cable & housing unit

5 year revenue lifecycle

c. £200k revenue / year

Telematics unit to monitor & communicate

temperature throughout journey

5+ year revenue lifecycle

c. £3 - 4m revenue / year

Transformer and wireless communication for

smart meters

5 year revenue lifecycle

c. £3 - 4m revenue / year

Transformer for higher speed battery charging

5+ year revenue lifecycle

c. £2m revenue / year

Eye

(Glaucoma)

treatment

Smart

energy

meter

Electric

Vehicles

Refrigerated

transportation

Designed and manufactured by Acal


Building an international business

Common strategy

Local implementation

Stable revenues & margins

Largest customer <5% of Group revenue

Our products are a low proportion of total

customer spend

UK 30%

Eurozone 70%

FY 2010

UK 18%

Scandinavia 21%

International 17%

Eurozone 44%

FY 2016

Revenue – c.£120m* Revenue - £290m

* - Ongoing revenue excluding non core disposals

International +£61m

Scandinavia +£50m

Eurozone +£44m

UK +£16m


(1) Annualised for acquisitions

(2) As a proportion of group revenue.

(3) FY16 growth is ongoing sales.

(4) Return on trading capital employed excludes goodwill.

(5) Free cash is the net cash flow before payment of exceptional items, payment to the legacy defined benefit pension scheme, dividends, net proceeds from equity fund raising and costs of acquisitions.

(6) Growth in TSR over the last 3 years.

Strategic and performance targets

Targets established in Nov 14 with ‘mid-term’ defined as 3-5 years

Operating margin target increased from 6% to 7%

Key Strategic Indicators Mid term

target

1. Increase share of group revenue from D&M c. 5% 18% 37% 51%(1)

65%

2. Increase cross-selling sales(2)

0% 3% 4% 5% 4-5%

3. Build sales beyond Europe(2)

0% 5% 12% 17% 20%

Key Performance Indicators 3 yr 3 yr target

average (H1 18)

1. Organic sales growth -16% 2% 3% 3%(3)

2.7%

2. Increase underlying operating margin -0.3% 3.4% 4.9% 5.7% n/a 7%

3. Attractive ROTCE(4)

- 24% 24% 23% 23.3% >25%

4 Generate strong free cash flow (FCF)(5)

- 86% 76% 70% 77% >75% PBT

5 Generate long term value for shareholders -

- 3 year TSR(6) +5% +101% +62% n/a

- percentile v FTSE small cap index - 71st percentile 20th percentile 22nd percentile

FY16FY14

FY14 FY16

Well ahead

of GDP

Upper

quartile

FY15

FY15

FY10

FY10


1.69p 1.69p 1.82p 1.82p 1.82p 2.20p 2.33p

3.40p 3.74p 3.99p 4.36p4.98p

5.40p5.72p

5.09p5.43p

5.81p6.18p

6.80p

7.60p8.05p

FY10 FY11 FY12 FY13 FY14 FY15 FY16

Dividends and future growth

Dividend

58% dividend increase in 6 years

Progressive dividend policy

Outlook

Earnings growth expected to continue

*Consensus of analysts as of May 2016

Dividend history

Analysis Reported

Consensus Growth

FY 17* FY 16 %

Operating profit 19.6 16.3 20%

Operating margin 6.2% 5.7% 0.5ppts

Profit before tax 16.7 14.5 15%

Fully diluted EPS 18.4p 17.0p 8%

Actual

Market expectations vs last year’s

results

Latest recommendation Previous

Peel Hunt Jun-16 Buy 315p Unchanged

FinnCap Jun-16 Buy 339p Unchanged

Stiefel Jun-16 Buy 290p From Hold 265p


Summary

We are building a global specialist in custom electronics

Compelling market opportunity

Structural trends in target markets

Attractive business model, unique market position

High quality, recurring revenues with rising operating margins

Long term growth prospects

Growth markets that are dependent on electronics

Fragmented market ideal for acquisitions

Track record of delivery

Successful turnaround

12 successful acquisitions and integrations

APPENDIX


Power &

Magnetics

Electro-

mechanical

Microsystems &

Displays

Communications

& Sensors

Imaging &

Photonics

20,000 customers

Acal today

Design & Manufacturing

Own products, highly differentiated, c.5000 customers

c.75% customised

Higher margins

Custom distribution

Market reach – 20,000 customers, 12 geographies

Sales & engineering capability – 560 employees

Web platform – lead generation

Operating companies

Share customer opportunities

Achieve synergies

Retain an entrepreneurial culture

Head Office

Custom Distribution


Key:

Revenue Profit


48%

Custom Distribution

52% Design &

Manufacturing78%

Custom Distribution

22%


Technology capabilities

Medical

Power & Magnetics

Communications & Sensors

Photonics & Imaging

Electromechanical & Shielding

Shielding

Microsystems

Keyboards


1994

History since incorporation

Acquisition of

Myrra (£8m)

Acquisitions of

Compotron,

Hectronic, MTC

(total £9m)

Acquisition of

BFi Optilas

SAS (£13m)

Admission to the

official list of the

London Stock

Exchange

1986 2009 2011

Jan

2013

Aug

2013

Sale of ATM

Parts

Incorporation

New management:

NJ joins as CEO

SG joins as CFO

(July 10)

Jan

2009 2010

Sale of UK

Parts

Apr

2013

Acquisition of

YEG (£2m)

Acquisition of

RSG (£3m)

Nov

2013

Sale of EAF

Parts

Acquisition of

Noratel

(£71m)

Acquisition of

Foss (£8m)

Acquisition of

Flux (£3m)

Acquisition of

Contour

(£17m) and

Plitron (£2m)

£6m placing £55m rights

issue

Sale of AES

(completes

exit from IT

Supply Chain

£12m total)

Jun

2014

Jul

2014

Jan

2015

Nov

2015

Jan/Feb

2016


7.1

13.9

16.3

100%

104%

100%

FY14 FY15 FY16

Free operating cash flow % op profit

Operating cash flow (£m)

FY 16 Performance Metrics

EPS (p)

Gross Profit (£m) Sales (£m) & GM% Operating profit / margin%

189

253

288+34%

+14%

29.8%

31.1%

32.2%

FY14 FY15 FY16

189

253

288

29.8%

31.1%

32.2%

FY14 FY15 FY16

Revenue Gross Margin

56.5

78.6

92.6+39%

+18%

FY14 FY15 FY162.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

0.0

3.0

6.0

9.0

12.0

15.0

18.0

FY 14 FY 15 FY 16

Operating profit (CER) Operating margin (CER)

11.8p

15.4p

17.0p

FY14 FY15 FY16


Board of Directors

R J Moon - Non-Executive Chairman

Richard joined the Board in September 2004 and became

Chairman in April 2005. Formerly a Director of Racal Electronics

plc and Chief Executive of Thales plc, he is Non-Executive

Chairman of Seven Technologies Holdings Limited, Ketech

Enterprises Limited and PixelPin Limited and is Chairman of

Synergie Global Limited and Advetec Holdings Limited.

R J Brooman MA FCA FCMI - Senior Non-Executive Director

Richard, a Chartered Accountant, became a Non-Executive

Director in January 2013. He is a Non-Executive Director, and

Chairman of the Audit Committees, at Hg Capital Trust plc and

Invesco Perpetual UK Smaller Companies Investment Trust plc.

He is also a Non-Executive Director of Camden & Islington NHS

Foundation Trust. During his executive career he was Group

Finance Director of Sherwood International Plc and VCI Plc.

H E Marsh MBA MA - Non-Executive Director

Henrietta (Het) was appointed a Non-Executive Director in May

2013. She is also a Non-Executive Director of Electric Word plc

and of Alternative Networks plc, and a member of the London

Stock Exchange's AIM Advisory Group. Previously, she was a

Fund Manager at Living Bridge EP LLP and a Director of 3i plc.

M M Diamond MBE - Non-Executive Director

Malcolm was appointed a Non-Executive Director in November

2015. He is also Executive Chairman of Trifast Plc and Non-

Executive Chairman of Flowtech Fluidpower PLC. Prior to being

appointed Executive Chairman, Malcolm was Managing Director of

Trifast Plc and, among other previous appointments, was Senior

Non-Executive Director of Dechra Pharmaceuticals Plc and a Non-

Executive Director of Unicorn AIM VCT plc.

T Graham - Non-Executive Director

Tracey joined the Board as a Non-Executive Director in

November 2015. She is also a Non-Executive Director at

Ibstock plc, Royal London Mutual Building Society and Link

Scheme Limited. Among other previous appointments, she

was a non-Executive Director at RPS Group PLC. During her

executive career, she was Chief Executive of Talaris Limited

and Managing Director of De La Rue Cash Systems.

N J Jefferies – Group Chief Executive

Nick joined Acal as Group Chief Executive in January 2009. His

experience of electronics and the components industry comes

from holding senior positions for over 15 years with leading

international distributors of electronic components and computer

products, such as Electrocomponents plc and Arrow Electronics.

Nick originally trained as an Electronics Design Engineer with

Racal Defence (now part of Thales plc)

S M Gibbins – Group Finance Director

Simon was appointed as Group Finance Director in July 2010. A

Chartered Accountant, he was previously Global Head of

Finance and Deputy CFO at Shire plc. Prior to joining Shire in

2000, he spent 6 years with ICI plc in various senior finance

roles, both in the UK and overseas. His earlier career was spent

with Coopers & Lybrand in London


Acal – Senior Management

N J Jefferies – Group Chief Executive*

Nick joined Acal as Group Chief Executive in January 2009. His

experience of electronics and the components industry comes

from holding senior positions for over 15 years with leading

international distributors of electronic components and computer

products, such as Electrocomponents plc and Arrow Electronics.

Nick originally trained as an Electronics Design Engineer with

Racal Defence (now part of Thales plc)

S M Gibbins – Group Finance Director*

Simon was appointed as Group Finance Director in July 2010. A

Chartered Accountant, he was previously Global Head of

Finance and Deputy CFO at Shire plc. Prior to joining Shire in

2000, he spent 6 years with ICI plc in various senior finance

roles, both in the UK and overseas. His earlier career was spent

with Coopers & Lybrand in London

P H Neville ACA - Group Commercial Director

Paul was appointed Group Commercial Director in March 2009. A

Chartered Accountant, he has over 15 years experience of

working in senior management positions for listed public

companies, including Wincanton plc and Uniq plc. Prior to joining

Acal, he was Group Chief Executive of an AIM listed software

development company.

M F Pangels - Group Strategy and Development Director

Martin is Group Strategy and Development Director. He joined Acal

in July 2010 after working as an advisor to the business. Prior to

joining Acal, Martin spent 9 years at Electrocomponents plc, where

he was Regional General Manager for Europe, and 6 years with

Bain & Company as a strategy consultant.

G P Shillinglaw FCIS - Group Company Secretary

Gary joined Acal as Group Company Secretary in August 2008.

A qualified Chartered Secretary, he has previously held that

position in a number of listed and non-listed public companies,

including Countryside Properties plc, B&Q plc and First Leisure

Corporation plc.

P G Webster - Group Product Management and Operations

Director

Paul joined Acal in June 2010 as Managing Director, Acal BFi

UK. He has many years experience in senior management roles,

including Head of Product Management for Electronics globally

at Electrocomponents plc. He began his career as a design

engineer for Plessey Avionics (now part of BAE Systems).

* Denotes membership of the Board

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INVESTOR PRESENTATION...INVESTOR PRESENTATION July 2016 5 Connectivity Smart metering, communication, industrial control, ‘Internet of Things’ Industrial semiconductors forecast