Dialight plc · LSE:DIA
Dialight — H1 2014 Earnings Presentation
36 slides from Dialight's earnings presentation, Jul 21, 2014
Slide 1: Dialight plc 2014 Interim Results
Dialight Dialight plc 2014 Interim Results 21 July 2014 1
Slide 2: Highlights of six months to 30 June 2014
Highlights of six months to 30 June 2014 Dialight • Lighting revenues increased by 46% to £43.0m (Constant currency +53%) • Lighting operating profit increased 60% to £7.1m (Constant currency + 73%) • Group underlying operating profit increased 18% to £6.5m (Constant currency + 26%) • Underlying EPS
Slide 3: Summary Profit and Loss
Summary Profit and Loss Dialight Continuing Operations H1 2014 H1 2013 FY 2013 £'m % £'m % £'m Revenue 70.9 59.9 131.2 Gross Profit 20.9 29% 18.0 30% 41.6 32% Distribution and Administration costs (14.4) (12.5) (27.1) Underlying Operating Profit 6.5 9% 5.5 9% 14.5 11% Non underlying items (1.1) (0.4
Slide 4: Summary Profit and Loss continued
Summary Profit and Loss continued Dialight H1 2014 H1 2013 FY 2013 Underlying Tax Rate 33.7% 31.0% 31.3% Underlying EPS Basic 14.2p 11.6p 30.8p Statutory EPS Basic 10.5p 12.8p 26.2p • Underlying tax rate increased from 2013 due to non recurrence of prior year tax loss recognition in Germany. 4
Slide 5: Revenue
Revenue Dialight 2014 2013 2013 As Reported At 2014 % Growth At FX Rates Constant FX £'m £'m £'m % Lighting 43.0 29.3 27.8 53% Signals 18.3 20.2 19.1 (4%) Components 9.6 10.4 9.8 (2%) 70.9 59.9 56.8 25% • Continued strong growth in Lighting with constant currency revenue up 53% • Signals: Obstructio
Slide 6: Revenue By Territory
Revenue By Territory Dialight Americas EMEA Asia Total H1 2014 £'m 47.4 16.1 7.4 70.9 H1 2013 £'m 39.3 14.9 5.7 59.9 Lighting growth % 59% 29% 17% 47% • Strong growth in each Lighting market 6
Slide 7: Underlying Operating Profit Bridge
Underlying Operating Profit Bridge Dialight £'m H1 2013 EBIT 5.5 Lighting - contribution 6.4 - sales force cost increases (1.7) 2.7 - other production and overhead (2.0) Signal & Components Contribution (1.5) Other (0.2) H1 2014 EBIT 6.5 • Increase in Lighting contribution to 45% • Lighting sales fo
Slide 8: Segmental Summary
Segmental Summary Dialight H1 2014 H1 2013 FY 2013 Revenue Contribution Revenue Contribution Revenue Contribution £'m % £'m % £'m % Lighting 43.0 45% 29.3 44% 68.5 46% Signals 18.3 41% 20.2 40% 41.8 42% Components 9.6 44% 10.4 51% 20.9 47% 70.9 59.9 131.2 • Continued growth in Lighting contribution
Slide 9: Lighting
Lighting Dialight H1 2014 H1 2013 £'m £'m Revenue 43.0 29.3 Contribution 19.3 12.9 Overhead costs (12.2) (8.5) Operating Profit 7.1 4.4 Contribution Margin 44.9% 44.0% Operating Margin 16.5% 15.0% • Continued growth in revenue and contribution margin 9
Slide 10: Signals
Signals Dialight • Challenging conditions in Traffic but offset by encouraging growth in Obstruction, particularly in the US 10
Slide 11: Components
Components Dialight • Impacted by one off costs securing efficient channel access 11
Slide 12: 2014 Non-Underlying Items
2014 Non-Underlying Items Dialight H1 2014 H1 2013 £'m £'m Restructuring costs 1.1 0.4 1.1 0.4 • Cash impact in H1 2014 of £1.2m. Anticipated cash impact in H2 of c. £0.5m • No further significant non-underlying costs expected in 2014 12
Slide 13: Summary Cashflow
Summary Cashflow Dialight H1 2014 H1 2013 FY 2013 £'m £'m Underlying EBIT 6.5 5.5 14.5 Depreciation & Amortisation 1.9 1.7 3.0 Other non cash 0.2 0.2 0.4 8.6 7.4 17.9 Non underlying items paid (1.2) (0.4) (0.7) Capex (3.3) (3.7) (9.2) Underlying Working Capital (3.2) (3.6) (9.7) Tax and interest (1.
Slide 14: Summary Cashflow continued
Summary Cashflow continued Dialight Capex • £1.8m spend mainly on manufacturing process improvements, principally in Mexico • £1.5m capitalised on new product development, predominantly in Lighting (H1 2013: £1.3m) Working Capital 30-Jun-14 £'m Inventory (0.7) • More efficient inventory management A
Slide 15: Banking Facilities
Banking Facilities Dialight • New £25m term loan in place with HSBC (including £1m overdraft facility) • Term: to 30 June 2018 • Very competitive terms • Principal covenants: 2.5 : 1 Net debt:EBITDA 4.0 : 1 Interest coverage • Outline accordion of additional £25m, if required 15
Slide 16: Summary Balance Sheet
Summary Balance Sheet Dialight 30-Jun-14 31-Dec-13 £'m £'m Fixed and Intangible Assets 34.9 34.5 Net Cash 2.8 7.1 Net Working Capital 33.2 31.1 Pension Provision (0.3) (0.4) Other Provisions (4.9) (5.6) Net assets 65.7 66.7 16
Slide 17: Business Overview
Dialight Business Overview 17
Slide 18: Three Key Business Segments
Business Segments Dialight Three Key Business Segments Lighting Signals Components 18
Slide 19: Components
Components Dialight •Small indicators for the professional electronics sector •Multiple customers with majority of sales through electronics distributors •Revenues down marginally in 2014 •Contribution margins broadly stable before one-offs •Ongoing revenues expected to be broadly in line with 2013
Slide 20: Signals – Traffic & Transportation
Signals – Traffic & Transportation Dialight •Transportation flat and expected to continue flat - Niche business with high share - Sales to US Transit bus market only - Sales expected to continue marginally above 2013 level •Traffic down 29% due to bad Winter and ending of Manchester contract in Euro
Slide 21: Signals – Obstruction
Signals – Obstruction Dialight •Revenue up 20% •Continued strong recovery in US •No major contracts let, significant day-to-day business with major operators •Expanded capability of monitoring and controls •Well positioned to compete for any major contracts •Continued expansion in Europe with wind t
Slide 22: Lighting – Driver for growth
Lighting – Driver for growth Dialight
Slide 23: Lighting Revenue History
Lighting Revenue History Dialight 23
Slide 24: Market Positioning (just to remind you)
Market Positioning (just to remind you) Dialight •Market focus is Heavy Industrial and Lighting for Hazardous Locations or where Lighting is seen as being mission critical This would be where Lighting is used 24x7 Where access is difficult Where energy is expensive/scarce Where the environment is ch
Slide 25: Markets Served- Hazardous & Industrial
Markets Served- Hazardous & Industrial Dialight Oil, Gas & Petrochem Heavy Industrial • Upstream (exploring & • Steel processing drilling) • Pulp & paper • Downstream (refining) • Auto plants • Transportation (terminals • Aircraft plants & pipelines) Power Generation Chemical & Pharma • Nuclear • Fo
Slide 26: Investing for Growth
Investing for Growth Dialight •Investing c. £6m this year in R&D •Recruited 19 additional sales people in Lighting •Continued spend on manufacturing capability and capacity •Lighting lab now NVLAP certified – faster to market •Significant strengthening of management team 26
Slide 27: New Products in H1 2014
New Products in H1 2014 Dialight Vigilant 125 LPW High Bay 55,000 Lumen Flood Light SafeSite Low Profile Linear - Hazardous & Non-Haz - Non-Hazardous - Hazardous & Non-Haz - Industry best 125 LPW - 55,000 Lumens - 3” Tall - Multiple optics - Replacement for 1,000W - Adaptable for non-US Vigilant Hig
Slide 28: Vigilant® 26K LED High Bay
Vigilant® 26K LED High Bay Dialight • 11,000 – 26,000 lumen models • 125 Lumens per Watt • Now available with controls • 10 Year Full Performance Warranty • 25% more efficient compared to DuroSite® and 70% less glare 28 28
Slide 29: H1 – DuroSite vs. Vigilant Split
H1 – DuroSite vs. Vigilant Split Dialight 29
Slide 30: LED Light Output Progression
LED Light Output Progression Dialight Here’s what we were able to accomplish with our High Bay 2014 – Q1 2012 26,000 lumens 2011 2010 25,000 lumens 14,000 lumens 2009 10,000 lumens 8,000 lumens 30
Slide 31: Vigilant® 60K LED High Bay
Vigilant® 60K LED High Bay Dialight True 1,000W HID Replacement • 60,000 lumens 18” • Single 475W power supply • 126 Lumens Per Watt • 10 Year Full Performance Warranty 31 24” 31
Slide 32: Market Size
Market Size Dialight •Market is installed base not just new build sales •Market is estimated to be tens of billions of dollars •Market penetration still limited •Longer term opportunity in new build with a need to design in with EPCs 32
Slide 33: Summary
Summary Dialight •Lighting growth continues strongly •Lighting margins maintained •Encouraging signs in Obstruction •Management team strengthened in anticipation of continued growth •Funding for growth in place •We remain on track for the year
Slide 34: Dialight plc 2014 Interim Results
Dialight Dialight plc 2014 Interim Results 34
Slide 35: Appendix I – FX Rates
Appendix I – FX Rates Dialight 2014 2013 USD Eur USD Eur Income Statement H1 1.669 1.217 1.545 1.176 FY - - 1.565 1.178 Balance Sheet H1 1.710 1.248 1.529 1.174 FY - - 1.658 1.248 35
Slide 36: Appendix II – Segment Reconciliation
Appendix II – Segment Reconciliation Dialight 36