DSCV - 2025财年业绩领先；积极基调，2026财年预期共识无变化

First View: DSCV - FY25 Results Ahead;Positive Tone, No Change to FY26F Cons Conclusion DSCV’s FY25 Prelims are a touch ahead of consensus, across the board,and the tone of the outlook commentary is positive. While sales growth wasstill -ve in 2H25 (-4%), it was much improved on 1H25 (-10%), margins weremuch improved yoy (+120bps to 14.3%) and we expect that the market willalso respond well to the +15% organic order growth in 4Q (both divisions).Book-to-bill, however, remains stubbornly anaemic. On the back of the goodmargin improvement in the last few years, mgmt has upped their EBITAmargin target (from 15% in FY27F/28F, to 17% in FY29F/30F) which is ina much healthier level. DSCV is a very well run business, there's plenty togo for over the medium/long-term, but we still question if this year will seethe levels of OCC and M&A growth that are needed to drive the valuationmaterially higher. We expect little change to FY26F consensus post theseresults (maybe nudge a touch higher), but we expect a positive response tothese results/mgmt's positive commentary Detail FY25 Results - Summary: discoverIE delivered -3% reported sales growth,with -7% OCC growth and -2% growth in CER terms, with growth improvingsequentially throughout the year. Divisionally,M&Csales growth was -11%in OCC terms due to industry destocking, andS&C+1%, with strong demandin data security applications and an increase in industrial and connectivityapplications. Orders for the group were +2% yoy in OCC terms, with +12%in S&C and -4% in M&C, and both divisions delivering 4Q24 order growth of+15%. The resulting order book of c4.5 months supports a normal seasonalweighting. EBITA was +6% yoy (+8% in CC terms), with EBITA margins of14.3% up by +120bps yoy. Normalised PBT/EPS were +4% and +5% yoy,respectively, and +1%/+3% ahead of consensus. Free cash conversion of106% was above the 85% target, and period-end Net Debt:EBITDA of 1.3x isbelow management's target range (1.5x - 2.0x). Outlook: Mgmt has given little by way of outlook commentary, but has todayupgraded the group's medium-term EBITA margin target to 17% by FY30F(prior 15% by FY28F), due to the group's potential to deliver manufacturingefficiencies and commercial synergies (M&A will also likely help). Andy Douglas * | Equity Analyst David Farrell * | Equity Analyst44 (0)20 7029 8407 | david.farrell@jefferies.com Vanessa Jeffriess * | Equity Analyst44 (0)20 7548 4123 | vjeffriess@jefferies.com Richard Hill * | Equity Associate+44 (0)20 7548 4540 | rhill1@jefferies.com Company Description discoverIE discoverIE Group PLC (previously known as ACAL PLC) designs, manufactures, and supplies components for electronic applications. TheCompany operates through two divisions: Magnetics & Control and Sensing & Connectivity. The Magnetics & Control division manufactures andsells: magnetic components for use in power conversion, signal conditioning and switching, and components used in remote control, monitoring,communication, and interface control. The Sensing & Connectivity division manufactures and sells: sensing components for sensing, measuring,and controlling temperature, movement, pressure, force, position, load, weight and incline, x-ray detection and imaging, and connectivitycomponents for switching, transmitting, and receiving wirelessly, fibre optic components, electromagnetic shielding, cable connection. Company Valuation/Risks discoverIE Valuation:Our 710p SOTP-driven PT is equivalent to an annualised FY26F EV/EBITA of 11.1x.Risks:Management of wide geographic and productfootprint; macro environment deterioration with reduced order visibility; underperformance of acquisitions; loss of major customers or suppliers;inventory obsolescence; and FX. Analyst Certification: I, Andy Douglas, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations orviews expressed in this research report. I, David Farrell, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or viewsexpressed in this research report. I, Vanessa Jeffriess, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations orviews expressed in this research report. I, Richard Hill, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subjectcompany(ie