Dialight plc · LSE:DIA
Dialight — FY2005 Earnings Presentation
42 slides from Dialight's earnings presentation, Mar 13, 2006
Slide 1: Dialight plc 2005 Preliminary Results
Dialight plc 2005 Preliminary Results 13th March 2006 p r e l i m i n a r y r e s u l t s 2005
Slide 2: Highlights
Highlights Divested Solartron Businesses for gross proceeds of £72.1m Returned £46.5M to Shareholders (£90m since 2003) Renamed and Refocussed company : Dialight plc Appointed new Executive Management Team Year end cash position £9.8m Early 2006 acquisition of Lumidrives p r e l i m i n a r y r e s
Slide 3: Group profit and loss account
Group profit and loss account £m 2005 2004 Turnover 95.2 118.9 Continuing Operations 56.1 55.3 Discontinued operations 39.1 63.6 Operating Profit 8.3 12.7 Continuing operations 3.9 4.4 Discontinued operations 4.4 8.3 Interest 0.4 (0.2) Profit before tax & exceptionals 8.7 12.5 Operating Margin * 8.7
Slide 4: Group profit and loss account continued
Group profit and loss account continued £m 2005 2004 Profit before tax and exceptionals 8.7 12.5 Tax (2.7) (4.3) Profit on disposal of Solartron (net of tax) 22.0 - Retained Profit 28.0 8.2 Dividends per share 6.4p 11.0p EPS Basic 92.2p 27.4p Adjusted (for profit on disposal) 19.7p 27.4p Continuing
Slide 5: Movement in net debt
Movement in net debt £m 2005 2004 Free Cash Flow 1.5 8.2 Disposals 65.7 - Tax paid on disposals (5.2) - Issue of ordinary shares 2.1 0.1 Return to shareholders (46.5) - Pension liabilities (7.4) - B shares redeemed (0.1) (0.2) Dividends (3.3) (3.1) Transfer to restricted cash (4.0) - Net Cash Inflow
Slide 6: Dialight Plc
Dialight Plc p r e l i m i n a r y r e s u l t s 2005
Slide 7: Highlights - Continuing Businesses
Highlights - Continuing Businesses Strong increase in sales and profit in H2 over H1 Profit before tax £4.5m versus £4.3m in 2004 Operating Cash Flow £5.3m for Continuing Group before Capex and Pension Payment Strong year-end balance sheet Increased order intake in 2006 p r e l i m i n a r y r e s u
Slide 8: Segments
Segments Components- Traditional Indicator Business + Electromagnetic Based Products Signals/Illumination – High Brightness LED Business comprising Traffic Lights, Rail Signals, Obstruction Lights and Solid State Lighting p r e l i m i n a r y r e s u l t s 2005
Slide 9: Components
Components Orders up 4% on year and 18% on H2 Sales down 2% on year H2 Sales up 5% on H2/04 Contribution down on year Electromagnetic Components responsible for adverse swing in contribution year on year p r e l i m i n a r y r e s u l t s 2005
Slide 10: Components
Components North American Distributor Point of Sales 5% growth in 2005 Continued strong Preferred Vendor Status at OEMs Awarded Wing Mirror Contract for major Japanese Auto Manufacturer- will ship in 2006 Booked £1.5m+ orders for Meter Disconnects in January/February 2006 2006 to date Order Input up
Slide 11: Signals /Illumination
Signals /Illumination Orders up 4.6% on year Orders in H2/05 up 10% on H2/04 Sales up 5.5% on year Sales in H2/05 up13% on H2/04 Contribution up 7.3% on year Obstruction showing good growth Traffic flat in 2005 p r e l i m i n a r y r e s u l t s 2005
Slide 12: Financial Review 2005
Financial Review 2005 p r e l i m i n a r y r e s u l t s 2005
Slide 13: Proforma 2005 group profit and loss account
Proforma 2005 group profit and loss account £m Turnover 56.1 Operating profit 5.0 Interest 0.4 Profit before tax 5.4 Taxation (1.9) 3.5 Dividend – say 4.5 pence full year 1.4 EPS 11p Dividend Cover 2.46x p r e l i m i n a r y r e s u l t s 2005
Slide 14: Continuing operations first and second half comparison
Continuing operations First and second half comparison £m H1 H2 % Movement Sales 25.8 30.3 17.4 Operating Profit 1.5 2.5 60.2 Interest (0.1) 0.6 Profit before tax 1.4 3.1 p r e l i m i n a r y r e s u l t s 2005
Slide 15: Continuing operations first and second half comparison
Continuing operations First and second half comparison £m First Half Second Half % Movement Sales Contribution Sales Contribution Sales Contribution Components 12.7 6.5 13.9 6.8 9.4% 4.3% Signals/Illumination 13.7 4.7 15.9 5.2 16.0% 9.6% 26.4 11.2 29.8 12.0 12.8% 6.5% Note: Using $1.82 = £1 for firs
Slide 16: Taxation
Taxation 2005 2004 Actual rate including disposal 37.8% 34.2% Actual rate excluding disposal 31.5% 34.2% Actual rate for continuing group 37.0% 33.4% (excluding prior year credit) 2006 tax rate expected to be broadly similar p r e l i m i n a r y r e s u l t s 2005
Slide 17: Dialight – continuing group cash flow
Dialight – continuing group cash flow £m 2005 2004 Operating profit 3.9 4.4 Depreciation / amortisation 1.8 1.7 Movement in working capital (0.4) (0.1) Cash from operations 5.3 6.0 Capital expenditure (1.1) (0.7) Tax (1.6) (1.5) 2.6 3.8 Before one-off pension contributions p r e l i m i n a r y r e
Slide 18: Dialight – group cash balance
Dialight – group cash balance £m Total cash at 31 December 2005 13.8 Less: Cash held in “Creditor Account” (4.0) Less: Cash for acquiring Lumidrives (2.5) 7.3 p r e l i m i n a r y r e s u l t s 2005
Slide 19: IFRS implemented as at 1 January 2005
IFRS implemented as at 01 January 2005 One year’s comparative date Overall impact limited to a few key areas: Pensions Development costs Discontinued operations Goodwill Employee share options (future periods) p r e l i m i n a r y r e s u l t s 2005
Slide 20: Impact on continuing group (IFRS v UK GAAP)
Impact on continuing group (IFRS V UK GAAP) Profit and Loss Net Assets 2005 2004 2005 2004 £m £m £m £m Capitalisation of development costs 0.3 0.4 1.0 0.7 Accounting for defined benefit schemes 0.1 0.6 (3.9) (7.4) Deferred tax on development costs and pension (0.1) (0.4) 0.9 2.7 Accounting for goodw
Slide 21: Acquisition of Lumidrives Ltd.
Acquisition of Lumidrives Ltd. Completed on 11 January 2006 for £3m £2.45m in cash £0.55m in Dialight shares (223,578 shares) 2005 draft results show sales of £3.2m with a double digit return Consistent growth in sales from 2002 to 2005 Net assets of approximately £0.5m at acquisition – fair value r
Slide 22: Dialight Plc
Dialight Plc p r e l i m i n a r y r e s u l t s 2005
Slide 23: Growth Objectives
Growth Objectives Dialight has set double digit growth plans Some of its markets are mature Important to focus on growth segments for investment p r e l i m i n a r y r e s u l t s 2005
Slide 24: Drivers for Growth-Traffic
Drivers for Growth-Traffic North America $80m annually 50% Adopted Dialight 35%+ share Competition Gelcore and Leotek plus numerous small Asian companies Share protected by dealer Channel and strong spec. position Europe <5% Adopted 10 million Signals to be converted Potential €60m market annually i
Slide 25: Drivers for Growth- Rail
Drivers for Growth- Rail Completed NYCT Contract in 2005 Europe little adoption Contract for Danish rail will ship early 2006 Working with SBB(CH), Railpro(NL), SNCB(B), AZD(CZ), Jerbaverket(N), Col(IT) In qualification for Russian Rail Authority Market just starting to open up Over 2 million signal
Slide 26: Drivers for Growth-Obstruction
Drivers for Growth-Obstruction Market Potential over $300m Worldwide USA has 79,000 lighted towers using 311,000 Sidelights and 38,000 Red Beacons for a potential of $120 million Assume Europe and Asia to be similar size to give a further $120 million Wind Energy will install 30,000 units over the n
Slide 27: Drivers for Growth-Obstruction
Drivers for Growth-Obstruction Compelling Value Proposition Key supplier to FAA 6,000 Beacons sold so far –more than130,000 left to change 38,000 sidelights sold so far- almost 600,000 left to change Agreements with the two leading OEMs in North America Major Customers in Europe NTL, Centertel and P
Slide 28: Drivers for Growth-White Lighting
Drivers for Growth-White Lighting - White LEDs currently only viable for niche applications due to cost and efficiency Currently areas of high reliability, safety and durability are viable Examples are: Hazardous location lights for explosive environments Bridge and Tunnel Lights Road Sign Illuminat
Slide 29: Hazloc Applications in White
Hazloc Applications in White Mines Petrochem Pharmaceutical Chemical Long life and “inherent safety” allow use in hazardous locations where lights qualified to UL Class 1 Div 2 are required Dialight has qualified product p r e l i m i n a r y r e s u l t s 2005
Slide 30: Drivers for Growth - Coloured Lighting
Drivers for Growth - Coloured Lighting Available market worldwide in hundreds of millions of dollars. Technology opens up applications Colour Mixing for Architectural, Entertainment and Theatrical Markets LEDs can be dynamically controlled LEDs do not need to be maintained p r e l i m i n a r y r e
Slide 31: Drivers for Growth-Coloured Lighting
Drivers for Growth-Coloured Lighting Acquisition of Lumidrives in January 2006 Strong position in Architectural/Entertainment Market in Europe Revenues in 2005 more than £3m 30%+ Growth in 2005 OEM sales of complete fixtures Range of Lighting Modules Optics Drivers Light Engines p r e l i m i n a r
Slide 32: Architectural Lighting Products
Architectural Lighting Products p r e l i m i n a r y r e s u l t s 2005
Slide 33: White Lighting Products
White Lighting Products p r e l i m i n a r y r e s u l t s 2005
Slide 34: The Light – Leeds, UK
The Light – Leeds, UK p r e l i m i n a r y r e s u l t s 2005
Slide 35: Lacoste Retail Outlets – Nationwide UK
Lacoste Retail Outlets – Nationwide UK p r e l i m i n a r y r e s u l t s 2005
Slide 36: Modules
Modules Developing the essential components Enabling OEM’s in new markets Invigorating existing applications Faster routes to market p r e l i m i n a r y r e s u l t s 2005
Slide 37: Modules – Light Engines
Modules – Light Engines p r e l i m i n a r y r e s u l t s 2005
Slide 38: Modules - Drivers
Modules - Drivers p r e l i m i n a r y r e s u l t s 2005
Slide 39: Modules - Optics
Modules - Optics p r e l i m i n a r y r e s u l t s 2005
Slide 40: Drivers for Growth-Coloured Lighting
Drivers for Growth-Coloured Lighting Expect continued growth from Lumidrives Take Dialight Spectramix® Products to Europe Take Lumidrives Lighting Modules and Fixtures to USA and Asia Expand European Sales Network using Dialight channels p r e l i m i n a r y r e s u l t s 2005
Slide 41: Prospects for 2006
Prospects for 2006 European Traffic positioned to grow Obstruction continued growth with new products and more adoption White Light- hazardous location launched Coloured Light- exploitation of Lumidrives acquisition on a worldwide basis Promising signs in Components Segment p r e l i m i n a r y r e
Slide 42: DIALIGHT
DIALIGHT Uniquely Positioned to Exploit the Lighting Revolution p r e l i m i n a r y r e s u l t s 2005