AB Dynamics plc Annual Report 2024
Delivering performance and a platform for sustainable growth
Revenue growth and margin expansion
Having invested in our Group product range, capability, leadership and new product development and along with leveraging our existing core strategy and technologies, the Group has delivered a very strong set of results. It now has a solid and scalable platform from which to capitalise on an ambitious multi-year growth opportunity, supported by strong long-term structural and regulatory growth drivers.
Financial highlights
Revenue
£111.3m
+10%
(2023: £100.8m)
Adjusted* EBITDA
£24.2m
+18%
(2023: £20.5m)
Adjusted* operating profit
£20.3m
+22%
(2023: £16.6m)
Adjusted* operating margin
18.2%
+170 bps
(2023: 16.5%)
Cash conversion
115%
(2023: 114%)
Net cash
£28.6m
(2023: £32.0m)
Adjusted* diluted earnings per share (EPS)
70.6p
+16%
(2023: 60.8p)
Dividend per share
7.63p
+20%
(2023: 6.36p)
* Adjusted to exclude amortisation of acquired intangibles, acquisition related charges and exceptional items.
Chairman's statement
The Group delivered excellent financial results and now has a solid and scalable platform from which to deliver further revenue growth and margin expansion, with a strong balance sheet to support that growth.
Richard (Dick) Elsy CBE
Non-Executive Chairman
Market drivers support growth
Consumer ratings
Independent consumer safety organisations such as Euro NCAP provide car safety ratings determined from a series of vehicle tests. In order to obtain an NCAP safety rating when launching a new vehicle model, each variant of that model must be certified by an NCAP test laboratory. Many of our products and services are used in the development and certification of these vehicles.
The development of new technology means that certification requires an increasing number of increasingly complex tests.
Our solutions:
Testing products | Testing services
Regulation
In addition to consumer ratings, the market for ADAS and active safety is driven by regulation from bodies such as the United Nations Economic Commission for Europe and national regulators such as the US National Highway Traffic and Safety Administration.
With an estimated 1.35m road deaths per year, improving regulatory standards are leading to increases in the number and complexity of tests required.
Our solutions:
Testing products | Testing services | Simulation
New vehicle models
The emergence of electric vehicles and new entrants into the automotive market, as well as developments in autonomy, has led to significant increases in the number of new models launches. Over 150 new vehicle models were launched to the market during 2023.
The Group is well positioned to service the growing demand through the range of testing products, testing services and simulation hardware and software solutions.
Our solutions:
Testing products | Testing services | Simulation
New powertrains
Increasing environmental and scarcity concerns have led OEMs to develop electric vehicles and hybrid alternatives to internal combustion engines. Development of alternative fuel sources such as e-fuels and hydrogen, hybrid drive trains and new technology continues to drive the market for vehicle development toolchains.
New technology and innovation by the Group accelerate customers’ R&D development activities.
Our solutions:
Testing products | Testing services | Simulation
Consumer ratings
Consumer ratings
Independent consumer safety organisations such as Euro NCAP provide car safety ratings determined from a series of vehicle tests. In order to obtain an NCAP safety rating when launching a new vehicle model, each variant of that model must be certified by an NCAP test laboratory. Many of our products and services are used in the development and certification of these vehicles.
The development of new technology means that certification requires an increasing number of increasingly complex tests.
Our solutions:
Testing products | Testing services
Regulation
Regulation
In addition to consumer ratings, the market for ADAS and active safety is driven by regulation from bodies such as the United Nations Economic Commission for Europe and national regulators such as the US National Highway Traffic and Safety Administration.
With an estimated 1.35m road deaths per year, improving regulatory standards are leading to increases in the number and complexity of tests required.
Our solutions:
Testing products | Testing services | Simulation
New vehicle models
New vehicle models
The emergence of electric vehicles and new entrants into the automotive market, as well as developments in autonomy, has led to significant increases in the number of new models launches. Over 150 new vehicle models were launched to the market during 2023.
The Group is well positioned to service the growing demand through the range of testing products, testing services and simulation hardware and software solutions.
Our solutions:
Testing products | Testing services | Simulation
New powertrains
New powertrains
Increasing environmental and scarcity concerns have led OEMs to develop electric vehicles and hybrid alternatives to internal combustion engines. Development of alternative fuel sources such as e-fuels and hydrogen, hybrid drive trains and new technology continues to drive the market for vehicle development toolchains.
New technology and innovation by the Group accelerate customers’ R&D development activities.
Our solutions:
Testing products | Testing services | Simulation
Delivering our strategy
Strategic objectives:
1
Product and innovation
Market-led new product development with a focus on research and innovation.
2
Capability and capacity
Building a platform for long-term sustainable growth.
3
Acquisitive growth
Clear and defined acquisition criteria of value-enhancing companies that facilitate the Group’s strategic priorities.
4
Service and support
Transition towards a greater proportion of software as a source of higher margins and recurring revenues to meet the market’s needs as requirements become more complex.
5
International footprint
Increase the Group’s international footprint in customer-led locations to increase customer intimacy, customer support and market intelligence.
6
Diversification
Diversification into new adjacent markets utilising the Group’s core technology and capability.
Chief Executive Officer’s review
Our market-leading position is driven by our technical capabilities and our reputation. Our products must satisfy challenging and complex requirements meaning barriers to entry are high.
Dr James Routh
Chief Executive Officer
Chief Financial Officer’s review
Continuing our track record of growth, margin improvement and strong cash generation.
Sarah Matthews-DeMers
Chief Financial Officer
Embedding sustainbility
Sustainability roadmap
As a Group, it is our core purpose to accelerate our customers’ drive towards net zero emissions and to improve road safety and the automation of vehicle applications. We do this through leadership and innovation in engineering and technology and we are well placed to support the transition towards a more socially and environmentally sustainable economy.
Sustainability is an intrinsic part of our core purpose to accelerate our customers’ drive towards net zero emissions and to improve road safety and the automation of vehicle applications through leadership and innovation in engineering and technology.
Louise Evans
ESG Committee Chair
