OUR VALUE PROPOSITION
OUR INVESTMENT PROPOSITION
The trusted technical partner for our customers
Quality compounding growth for our investors
Structural growth markets Increasing electronics content and the electrification of products and processes continue to drive long-term demand for electronic components. We focus on five structurally attractive end markets that are aligned to global megatrends and the UN Sustainable Development Goals. Further detail on these megatrends is set out on pages 18 to 23. High barriers to entry and substitution Our products are highly customised, application- specific and designed into customers’ systems at an early stage. These mission-critical components are technically complex and regulated, and whilst a small part of total system cost, replacing them would require costly redesign, re-testing and re- certification, which introduce cost, risk and delay. This is why we are often the single source for the majority of the products we provide. Combined with long product lifecycles, deep engineering expertise and long-standing customer relationships, this results in very low substitution risk and strong customer retention. Strong financials discoverIE has a proven track record of delivering sustainable, profitable growth and continuous margin improvement. A robust balance sheet, with gearing broadly in line with the Group’s stated range of 1.5x – 2.0x, together with excellent cash generation, underpins financial flexibility and supports further value-enhancing acquisitions. Learn more about our financial performance on pages 34 to 37. Proven strategy for growth Our strategy is to deliver organic growth well ahead of GDP through the economic cycle by focusing on structural growth markets and an expanding, differentiated product offering. This is complemented by earnings- and margin-enhancing acquisitions, underpinned by a disciplined capital allocation framework. We have a proven track record of delivering against our strategic and financial objectives. Learn more about our Strategy on pages 10 to 15. Disciplined capital allocation We apply a disciplined and consistent capital allocation framework focused on maximising long-term Shareholder value. Capital is allocated to support organic investment, complemented by value-enhancing acquisitions that strengthen our technical capabilities and market positions. A strong balance sheet underpins this approach, whilst progressive dividends reflect confidence in the Group’s cash generation and long-term outlook.
Projected growth of industrial electronics market 1 5.6% p.a. Target markets: Renewable energy, Transportation, Medical, Security and Industrial & Connectivity represent 79% of Group sales in FY 2025/26
An electronics compounder – why invest in discoverIE discoverIE is an electronics compounder, creating long-term shareholder value by owning and developing highly differentiated, engineering-led businesses with strong market positions and repeat revenues. Our customised, application- specific components are designed into customers’
discoverIE’s competitive advantage is rooted in deep engineering expertise, application knowledge and the ability to co-develop specialised solutions for highly demanding environments. We operate in the custom industrial electronics market, which is highly fragmented, with many small and subscale local operators focused on narrow technology niches. What differentiates discoverIE is our breadth and depth of engineering capability, which enables us to engage with customers at the earliest stages of their product development. By working closely with customers during the design phase, we develop critical components optimised for performance, reliability, regulatory requirements and specific operating environments.
Once designed in, our products become an integral part of customers’ systems. Replacing them would require redesign, re-testing and re-certification, introducing cost, delay and operational risk that customers seek to avoid. Just as importantly, customers operating in regulated and mission-critical markets particularly value our technical capability, compliance expertise, and long- term supply commitment. Combined with consistent quality and long product lifecycles, this reinforces discoverIE’s position as a trusted technical partner and supports high customer retention, repeat revenues and pricing resilience. Our business model benefits from several structural barriers that limit substitution and support long-term customer relationships.
Longest customer relationship
30+ years Long-standing customer relationships and stable, repeat revenue
systems, resulting in high barriers to entry,
1 Cognitive Market Research: Industrial Electronics Market Report 2025. 2 Continuing operations only, i.e. excluding the disposals of Acal BFi and Vertec SA in 2022 and the Santon solar business in 2024. 3 Compound Annual Growth Rate. 4 Free cash flow conversion is defined as net cash flow before dividend payments, net proceeds from equity fund raising, acquisition costs and business disposal proceeds divided by adjusted profit after tax. 5 Return on capital employed and return on tangible capital employed are defined in note 6 of the Group consolidated Financial Statements. low substitution risk and strong customer retention. Strong cash generation, disciplined capital allocation, and reinvestment in organic growth and value- enhancing acquisitions enable the Group to compound earnings and returns over time.
Niche, high-performance solutions: limited availability of equivalent alternatives
Adjusted operating profit growth 2 of 15% CAGR 3 from FY2021–FY2026 Free cash flow conversion 4 of 101% on average from FY2021-FY2026
High switching costs: redesign, re-testing, and re-certification introduce cost, risk and delay
Mission-critical applications: prioritising reliability and performance
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THE
Early design engagement: embedded in
Long-term supply assurance: products designed for long lifecycles and continuity
Revenue growth of 8% CAGR from FY2021–FY2026
MOAT
customers’ product development cycles
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Strong engineering relationships: technical support and application expertise
Application-led design: we engineer solutions around customer requirements
Return on capital employed 5 of 15.3% on average from FY2021–FY2026 Return on tangible capital employed 5 of 50.6% on average from FY2024–FY2026
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discoverIE Group plc Innovative Electronics
Annual Report and Accounts for the year ended 31 March 2026
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