Dialight plc · LSE:DIA
Dialight — FY2013 Earnings Presentation
39 slides from Dialight's earnings presentation, Feb 24, 2014
Slide 1: Dialight plc 2013 Preliminary Results
Dialight Dialight plc 2013 Preliminary Results 24 February 2014 1
Slide 2: Highlights of 2013
Highlights of 2013 Dialight • Group revenue increased to £131.2m from £115.1m • Lighting revenues increased by 51% to £68.5m • Lighting segment profit increased 34% to £11.5m • Group underlying profit from operating activities £14.5m (2012 £19.6m) • Group profit from operating activities £11.6m (201
Slide 3: Summary Profit and Loss
Summary Profit and Loss Dialight Continuing Operations 2013 2012 £'m % £'m % Revenue 131.2 115.1 Gross Profit 41.6 32% 41.2 36% Distribution and Administration costs (27.1) (21.6) Underlying EBIT 14.5 11% 19.6 17% Non underlying items (2.9) 0 Operating Profit 11.6 9% 19.6 17% • 14% growth in revenue
Slide 4: Summary Profit and Loss continued
Summary Profit and Loss continued Dialight 2013 2012 Underlying Tax Rate 31.6% 32.6% Tax Rate 30.9% 32.6% Underlying EPS Basic 30.8p 41.7p Statutory EPS Basic 26.2p 42.0p • Tax rate as expected 4
Slide 5: Revenue Bridge – Continuing Business
Revenue Bridge – Continuing Business Dialight 2013 2012 £'m £'m Lighting 68.5 45.5 Signals 41.8 48.1 Components 20.9 21.5 131.2 115.1 • Continued strong growth in Lighting business with revenue up 51% • Signals impacted by Obstruction transition 5
Slide 6: Underlying EBIT Bridge
Underlying EBIT Bridge Dialight £'m 2012 EBIT 19.6 Lighting Sales 10.5 11.1 Lighting Contribution 0.6 Signal Sales (2.6) (5.1) Signal Contribution (2.5) Components (0.4) Increased overhead (10.6) Other (0.1) 2013 EBIT 14.5 6
Slide 7: Analysis of Overhead Increase
Analysis of Overhead Increase Dialight £'m Lighting sales force costs 5.5 Lighting & Signals production and admin costs 4.4 Components 0.7 Total increase 10.6 • Lighting Salesforce increased from 55 to 103 today • Full year effect and further recruitment ongoing 7
Slide 8: 2013 Continuing Revenue By Territory
2013 Continuing Revenue By Territory Dialight £'m £'m £'m £'m Americas EMEA Asia Total Lighting 42.2 13.9 12.4 68.5 Signals 27.3 14.5 0.0 41.8 Components 15.3 3.0 2.6 20.9 2013 Total 84.8 31.4 15.0 131.2 2012 Total 80.3 24.0 10.8 115.1 • Strong growth in each principal territory 8
Slide 9: Segmental Summary – Underlying Business
Segmental Summary – Underlying Business Dialight 2013 2012 Revenue Contribution Revenue Contribution £'m % £'m % Lighting 68.5 46% 45.5 44% Signals 41.8 42% 48.1 47% Components 20.9 47% 21.5 48% 131.2 45% 115.1 46% • Continued growth in Lighting contribution • Signals impacted by transition within O
Slide 10: 2013 Non-Underlying Items
2013 Non-Underlying Items Dialight £'m Intellectual property past-use access fee 1.4 Goodwill and asset write down - Japan 0.8 Restructuring and other costs 0.7 2.9 • Cash impact in 2014 of £1.4m • Japanese market proving challenging • Restructuring cash costs all borne in 2013 10
Slide 11: Summary Cashflow
Summary Cashflow Dialight 2013 2012 £'m £'m Underlying EBIT 14.5 19.6 Depreciation & Amortisation 3.0 2.9 Other non cash 0.4 0.2 17.9 22.7 Non underlying items paid (0.7) - Capex (9.2) (7.0) Underlying Working Capital (9.7) (8.4) Tax and interest (2.3) (4.3) Dividends (4.6) (3.4) Disposals / Acquisi
Slide 12: Summary Cashflow continued
Summary Cashflow continued Dialight Working Capital Movements £'m Inventory (5.2) Accounts Receivable (1.5) Accounts Payable (3.0) Underlying Working capital (9.7) Non-underlying Working Capital 1.8 FX 1.0 Net working capital (6.9) • Impact of deferred sales on inventory • 2012 – Impact of creditor
Slide 13: Summary Balance Sheet
Summary Balance Sheet Dialight 2013 2012 £'m £'m Fixed and Intangible Assets 34.5 29.1 Net Cash 7.1 15.0 Net Working Capital 31.1 24.2 Pension Provision (0.4) (1.2) Other Provisions (5.6) (4.1) Net assets 66.7 63.0 • Valuation of principal pension scheme (closed to future accrual), at 31 Mar 2013, f
Slide 14: Business Overview
Dialight Business Overview 14
Slide 15: Business Segments: Three Key Business Segments
Business Segments Dialight Three Key Business Revenue 2013 £'m By Segment Segments £41.8 Lighting £68.5 £20.9 Signals Components Lighting Signals Components 15
Slide 16: Components
Components Dialight •Small indicators for the professional electronics sector •Multiple customers with majority of sales through electronics distributors •Revenues down marginally in 2013 •Contribution margins stable •Ongoing revenues expected to be broadly in line with 2013 •No customer concentrati
Slide 17: 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 at 2013 level •Traffic down 13% due to soft US market Adoption of LED technology well advanced in US European s
Slide 18: Signals - Obstruction
Signals -Obstruction Dialight •Americas business down 44% versus 2012 H2 2013 showing solid recovery Sales to top 4 US Tower Operators Good acceptance of “Dialight Cloud” solution Sales for both Medium and High Intensity systems Business stabilised Well positioned to compete for any major contracts
Slide 19: Industrial Lighting – The Engine for Growth
Industrial Lighting – The Engine for Growth Dialight 19
Slide 20: Lighting Five Year History
Lighting Five Year History Dialight REVENUE BY YEAR £'M Lighting Revenue Total continuing revenue (excluding Electromagnetic Components) 140 120 131.2 115.1 100 102.5 80 84.5 68.5 £'M 60 64.0 52% 45.5 40 26.4 40% 20 11.6 26% 5.5 14% 9% 0 2009 2010 2011 2012 2013 YEAR 20
Slide 21: Market Positioning
Market Positioning 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 challenging Where flamm
Slide 22: 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 23: Market Size
Market Size Dialight •Market is installed base not new build sales •We are replacing existing lights •Hazardous only is estimated to be $1bn in new sales annually •Installed base at least 10 times that •Non Hazardous estimated order of magnitude larger •Market penetration low single digit •Longer te
Slide 24: Energy Efficiency Lighting Trends – LED High Bays
Energy Efficiency Lighting Trends – LED High Bays Dialight High Bay: Dialight’s largest target market • 67M high bay fixtures in US alone • 300K LED units installed by the end of ’12 (US) • Dialight has sold 175K units globally to date • Dialight sold 110K units by end of ‘12 in US (37% share) Sourc
Slide 25: Dialight Difference
Dialight Difference Dialight • LED only. We are THE Solid State Lighting experts • State of the art products – driven to improve • Complete product portfolio • Unprecedented ’No Quibble’ 10 year warranty • Vertically integrated manufacturing, not a building-block approach • Exceptional in-house powe
Slide 26: Dialight LED Lighting – Broad Portfolio
Dialight LED Lighting – Broad Portfolio Dialight Lumen Range Max Mounting Heights Typ. Replacement 26,500 – 17,500 > 50’ >400W 25,000 17,000 - 8,000 10,000 8,750 - 4,000 7,250 - 3,500 7,000 - 4,000 2,250 - 800 800 - 470 6’ 70W 26
Slide 27: LED Progression
LED Progression Dialight Here’s what we were able to accomplish with our high bay Q1 2014 2012 2011 26,500 lumens 2010 125 lm/W 17,000 lumens 100 lm/W 14,000 lumens 2009 90 lm/W 12,000 lumens 80 lm/W 8,000 lumens 53 lm/W 27
Slide 28: Introducing the Vigilant LED High Bay
Introducing the Vigilant® LED High Bay Dialight • 125 LPW • 26,500 lumens and lower • Dialight next generation Resonant Power Supply • Low glare • 10 year warranty Dialight game changer: 25% more efficient than the nearest competition! Medium Wide Lambertian Oval Narrow 28
Slide 29: Vigilant LED High Bay
Vigilant® LED High Bay Dialight • Chosen by Ford Motor Company as preferred Lighting for factory installation. • Ford has 75 factory locations • No volume guarantees • First orders in hand 29 29
Slide 30: Some successes in 2013
Dialight Some successes in 2013 30
Slide 31: Coal-fired Power Plant – Euharlee, Georgia
Coal-fired Power Plant – Euharlee, Georgia Dialight One of the largest coal power plants in the country Installed capacity of more than 3,000 MW The Challenge • Safety is a key concern for this facility • Existing lighting did not provide sufficient light levels The Solution • Needed the correct sol
Slide 32: Horizontal Well Drillers – Renovo, PA
Horizontal Well Drillers – Renovo, PA Dialight 92 ft., 250-ton drilling rig 17,000 foot drilling depth The Challenge • Traditional Fluorescent & HID failed constantly due to high vibration, shock • Looked to LED lighting fixtures to eliminate maintenance The Solution • Switched to Dialight’s SafeSit
Slide 33: Offshore Marine Liftboats – Louisiana
Offshore Marine Liftboats– Louisiana Dialight World’s largest fleet of modern liftboats 29 Vessels in Gulf of Mexico The Challenge • High cost of maintenance for existing HID and quartz systems • Replacing a fixture could cost up to $3,000 The Solution Replaced: • (10) 1,000W HID Floods with (10) 10
Slide 34: Koehler Paper Group – Kehl, Germany
Koehler Paper Group – Kehl, Germany Dialight Large Paper Mill The problem • Existing Metal Halide fixtures (440W) used an excessive amount of energy - 24/7 operation • Suffered from lens discoloration due to high content of cellulose fibre in the atmosphere • Impaired performance The Solution • (164
Slide 35: Vehicle Production Facility – Buenos Aires, Argentina
Vehicle Production Facility– Buenos Aires, Argentina Dialight Large German Automaker The Problem • Wasted energy with the existing metal halide fixtures • Needed a solution that would greatly reduce this energy load while also making financial sense The Solution • Dialight’s newly-released High Bays
Slide 36: How do we sell?
How do we sell? Dialight •Most sales are to replace existing lights •This is a project sale – once sold the customer does not need a visit for some years •Timing of project approval can be variable and therefore difficult to predict accurately •Dialight sells through its own sales force •Channels of
Slide 37: Lighting Channel to Market
Lighting Channel to Market Dialight Asia Pacific 24 direct sales personnel Europe / Middle East 29 direct sales personnel US, Canada, Mexico & Brazil 50 direct sales personnel 37
Slide 38: Competitive Landscape
Competitive Landscape Dialight •In many cases this is not a competitive sell •Competition exists – in Hazardous markets it is 3 principal competitors globally with both LED and conventional products •Dialight has superior product performance, comparable sales force and channel •Dialight offers a bet
Slide 39: Summary
Summary Dialight •Continued product development to stay ahead of competition •Continued expansion of sales force and channels •Reassessment of geographical coverage •Continued aggressive growth in Lighting •Broadly stable Component and Signals Segments •Return to profit growth through Lighting perfo