The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

7 April 2025

Volex plc

("Volex", the "Company" or the "Group")

Full Year Trading Update

Full year growth and profit ahead of market expectations

Volex (AIM: VLX), the specialist integrated manufacturer of critical power and data transmission products, today releases a trading update for the financial year ended 30 March 2025 ("FY2025").

Revenue growth and improved profitability driven by strong Q4 momentum

Following a strong fourth quarter, revenue for FY2025 is now expected to be at least $1,060 million, representing a year-on-year increase of at least 16%, and organic constant currency growth of at least 8%. Underlying operating margins are anticipated to be at the upper end of the target corridor of 9% to 10%, with operating profit of at least $100 million, well ahead of the top end of market estimates¹.

This robust financial performance highlights Volex's ongoing success in securing new projects through delivering cost-competitive and technically advanced manufacturing services. 

Improved underlying operating profit margins in the second half were driven by a favourable product mix, including increased demand for data centre products, as well as a focus on incremental operational improvements.

Harnessing manufacturing technology to deliver organic growth

The significant organic growth achieved this year reflects the Group's strong market positions across a diverse range of specialist sectors, where Volex leverages deep technical expertise to meet complex customer requirements.

Our embedded presence in global technology supply chains continues to generate exciting opportunities and deliver consistent, high-quality solutions for customers, while the Group's focus on specialist markets with high customer lock-in and limited competition means that we are an essential and trusted partner to the global technology companies we work with.

Electric Vehicles (EV) and Consumer Electricals continued their strong momentum, securing several new key customer relationships, positioning the Group well for FY2026.

Complex Industrial Technology experienced notable strength, delivering low double-digit organic growth, supported by increased data centre product demand, particularly driven by accelerated infrastructure investments from a major customer in the last quarter of the year.

Medical sector revenues declined against a prior-year comparative period that benefitted from one-time customer catch-up orders.

Integration activity continues in the Group's Off-Highway business, delivering planned productivity improvements and efficiencies. Growth in this segment normalised during the year, with softer macroeconomic conditions in some end-markets offset by several strategic customer wins in North America and Europe, resulting in flat year-on-year organic revenue.

Strategic investment driven by customer demand

The Group continued to invest strategically in capacity expansion, automation, and vertical integration initiatives during the year, all closely aligned with servicing ever evolving customer needs. Additional capacity in key locations positions Volex for site consolidation opportunities in FY2026, supporting long-term operational efficiencies.

After targeted capex investment to support growth of approximately $45 million, covenant leverage³ at 30 March 2025 was approximately 1.1x, consistent with the prior-year.

Embedded customer relationships mitigate trade volatility

The breadth and rapid evolution of recent changes in international trade policies and market dynamics are unprecedented, making precise quantification of direct and indirect impacts challenging and increasing operational complexity.

However, Volex's strategic investments in geographic diversification and global manufacturing flexibility have created a highly resilient platform that is well-positioned to support customers navigating these dynamic market conditions.

Leveraging deep expertise and an agile global footprint, Volex proactively engages with customers to adapt production locations and mitigate potential disruptions effectively. Given the evolving tariff landscape, customers are cautious about making short-term supply chain decisions, further enhancing the value of Volex's embedded and critical roles supporting their procurement activities.

The majority of Volex's products represent essential components within complex supply chains. In many instances, Volex is either the sole provider or one of very few qualified manufacturers capable of meeting demanding technical and operational requirements, fostering strong customer reliance. Incremental costs arising from tariff changes are expected to be passed through to customers, underscoring the robustness of Volex's competitive positioning.

Nat Rothschild, Executive Chairman, said:

"We are delighted with another year of very significant progress at Volex, delivering a performance that has comfortably exceeded market expectations, clearly demonstrating the effectiveness of our strategy.

"For the first time in Volex's history, revenue and profits have exceeded $1 billion and $100 million respectively. This is a direct result of our continued investment in advanced manufacturing capabilities, coupled with our strategic focus on key growth sectors, whilst simultaneously maintaining strong returns on capital employed.

"Although wider market uncertainty has increased in recent days, particularly around tariffs, Volex's current market valuation fails to adequately reflect our embedded presence in global technology supply chains, alongside the unique geographic and end-market diversification that has become such a feature of the Volex that our team has built in recent years.

"I am very confident that these elements mean we are well placed to navigate prevailing market conditions and continue to deliver on the significant growth opportunities that lie ahead."

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About Volex plc

Volex plc (AIM:VLX) is a driving force in integrated manufacturing for mission-critical applications and a global leader in power and data connectivity solutions. Our diverse operations support international blue-chip customers in five key sectors: Electric Vehicles, Consumer Electricals, Medical, Complex Industrial Technology and Off-Highway. Headquartered in the UK, we orchestrate operations across 27 advanced manufacturing facilities, uniting 14,000 dynamic individuals from 25 different nations. Our extraordinary products find their way to market through our localised sales teams and authorised distributor partners, supporting Original Equipment Manufacturers and Electronic Manufacturing Services companies across the globe. In a world that grows more digitally complex by the day, customers trust us to deliver power and connectivity that drives everything from household essentials to life-saving medical equipment. Learn more at www.volex.com.

Notes

1.  As at 2 April 2025, the average of company compiled analysts' forecasts for the 52 weeks ending 30 March 2025 for revenue is $1,032.6 million with a range of $1,027.7million to $1,040.0 million, the average for underlying operating profit is $96.7 million, with a range of $95.8 million to $97.6 million.

2.  Underlying operating profit is before adjusting items which are one-off in nature and significant (such as restructuring costs, impairment charges or acquisition-related costs), the amortisation and impairment of acquired intangible assets and share-based payment charges. This trading update is based upon unaudited management accounts information. Forward-looking statements have been made by the Directors in good faith using information available up until the date that they approved this statement. Forward-looking statements should be regarded with caution because of the inherent uncertainties in economic trends and business risks.

3.  Covenant leverage is net debt (before operating lease liabilities) divided by underlying EBITDA adjusted for depreciation of right-of-use assets and pro-rated for acquisitions.