Dialight plc · LSE:DIA
Dialight — FY2006 Earnings Presentation
39 slides from Dialight's earnings presentation, Mar 5, 2007
Slide 1: Dialight plc 2006 Preliminary Results
Dialight plc 2006 Preliminary Results 5th March 2007 p r e l i m i n a r y r e s u l t s 2006
Slide 2: Financial Review 2006
Financial Review 2006 p r e l i m i n a r y r e s u l t s 2006
Slide 3: Financial Highlights
Financial Highlights Turnover increased by 11% to £62.3m (2005: £56.1m) Operating profit increased by 34.9% to £5.3m (2005: £3.9m) Basic EPS up by 16.8% to 11.8p (2005: 10.1p) p r e l i m i n a r y r e s u l t s 2006
Slide 4: Group profit and loss account
Group profit and loss account £m 2006 2005 Movement Turnover 62.3 56.1 11.0% Contribution 25.4 23.2 9.3% Unallocated expenses (20.1) (19.3) 4.1% Operating profit 5.3 3.9 34.9% Profit before tax 5.8 3.1 30.5% Earnings per share 11.8p 10.1p 16.8% p r e l i m i n a r y r e s u l t s 2006
Slide 5: Contribution Margin
Contribution Margin 2006 2005 Components 46.2% 50.1% Signals/Illumination 35.0% 33.5% p r e l i m i n a r y r e s u l t s 2006
Slide 6: Sales and Contribution (£m)
Sales and Contribution (£m) 2006 2005 % Movement Sales Contribution Sales Contribution Sales Contribution Components 32.0 14.8 26.6 13.3 20.5% 11.0% Signals/Illumination 30.3 10.6 29.5 9.9 2.4% 7.1% 62.3 25.4 56.1 23.2 11.0% 9.3% p r e l i m i n a r y r e s u l t s 2006
Slide 7: Sales and Contribution (£m) by half
Sales and Contribution (£m) First Half Second Half % Movement Sales Contribution Sales Contribution Sales Contribution Components 15.8 7.6 16.2 7.2 2.5% (9.5)% Signals/Illumination 14.2 5.1 16.1 5.5 13.4% 7.8% 30.0 12.7 32.3 12.7 7.7% - p r e l i m i n a r y r e s u l t s 2006
Slide 8: Unallocated Overheads
Unallocated Overheads £m 2005 19.3 Lumidrives acquisition 1.2 Exchange (0.2) Corporate cost saving (1.0) Investment in sales and engineering 0.8 2006 20.1 p r e l i m i n a r y r e s u l t s 2006
Slide 9: Taxation
Taxation 2006 2005 Actual Rate 36.9% 31.5% 2005 benefit of deduction for share option gain 4% p r e l i m i n a r y r e s u l t s 2006
Slide 10: Significant Cashflow Items
Significant Cashflow Items £2.5m acquisition of Lumidrives £0.8m ongoing cash contribution to DB pension schemes £0.3m funding of Employee Share Plan Working capital absorption £4.1m Dividend payment of £1.5m p r e l i m i n a r y r e s u l t s 2006
Slide 11: Summarised Cashflow
Summarised Cashflow £m Operating profit 5.3 Depreciation and amortisation 1.8 Working capital (4.1) Pension payment (0.8) Operating cashflow 2.2 Capital expenditure (1.2) Development spend (1.0) Taxation (1.6) Free cash flow (1.6) p r e l i m i n a r y r e s u l t s 2006
Slide 12: Movement in Cash
Movement in Cash £m Free cash flow (1.6) Dividends (1.5) Shares acquired (0.3) Acquisitions (2.5) Interest 0.5 Net cash outflow (5.4) Opening net cash 9.8 Translation (0.1) Closing net cash 4.3 p r e l i m i n a r y r e s u l t s 2006
Slide 13: Dividends and Earnings Per Share
Dividends and Earnings Per Share 2006 2005 Dividends per share (pence) 5.25 6.4 Basic EPS – continuing operation 11.8p 10.1p Dividend cover 2.2 times p r e l i m i n a r y r e s u l t s 2006
Slide 14: IAS19 Pensions
IAS19 Pensions 2 closed defined benefit schemes in UK and 1 closed defined benefit scheme in US Total liabilities at 31 December 2006 are £31.7m Total assets at 31 December 2006 are £30.1m In 2006 the following mortality tables were used: UK: PA92 medium cohort US: RP2000 Generational Table (2005: 1
Slide 15: Business Review
Dialight plc March 5th 2007 Business Review p r e l i m i n a r y r e s u l t s 2006
Slide 16: Components
Components Good overall growth in 2006 Major “one time” disconnect contracts Distributor POS growth 6% Continued strong position with key accounts Orders slowdown in December 2006 p r e l i m i n a r y r e s u l t s 2006
Slide 17: Components
Components Although slow start no indication of real market slowdown or share loss POS for January and February continues at 2006 run rate Contract Manufacturers slow approaching Chinese New Year expected to return to normal in Q2 Smart Meter Disconnect expected to take off in US Dialight BLP well p
Slide 18: Signals/Illumination
Signals/Illumination 2005 2006 25% 21% Traffic 1% Obstruction 54% Illumination 15% 11% 63% Other 10% p r e l i m i n a r y r e s u l t s 2006
Slide 19: Signals/Illumination
Signals/Illumination Disappointing revenue affected by:- Deferral of big city Traffic Light contracts in USA Non Repeat of Obstruction Light contracts in Poland Slow adoption of LEDs by major US Lighting OEMs Strategy for growth still valid with major expansion coming from European Traffic, Obstruct
Slide 20: Signals/Illumination/Traffic
Signals/Illumination/Traffic Introduction of new ITE range of signals in US Strong European growth Sales in over 24 European countries to over 53 OEMs New products for Siemens Germany New products for French Market Introducing new products for UK market Moved European manufacturing to UK Shipped ove
Slide 21: Signals/Illumination/Obstruction
Signals/Illumination/Obstruction Revenues flat in spite of non repeat of major Polish contracts Good underlying growth Introduction of synchronised Beacon for US Wind Market Introduction of Hazardous Location coloured lights for petrochemical industry Introduction of white products to this market p
Slide 22: Signals/Illumination/Obstruction: White Strobe
Signals/Illumination/Obstruction Introduction of White Strobe Product – why is this so important? North America has over 15,000 towers using Xenon strobe lights in the telecommunications market Europe will build over 2500 Wind Towers per year each using two Xenon strobe lights Value proposition stro
Slide 23: Signals/Illumination/Obstruction
Signals/Illumination/Obstruction In the Telecommunications Market Xenon Strobes generate high emissions resulting in dropped cellphone calls LEDs generate few emissions resulting in few dropped cellphone calls In all markets LEDs save power, maintenance (LED strobe lifetime is at least 10 years and
Slide 24: Signals/Illumination/Lighting
Signals/Illumination/Lighting Coloured Lighting Acquired Lumidrives January 2006 Signed Color Kinetics Licence June 2006 Introduced Lumidrives modules to Distribution Continued working with US OEMs on Spectramix Continued working with US OEMs on networking techniques using Power Line communication p
Slide 25: Signals/Illumination/Coloured Lighting
Signals/Illumination/Coloured Lighting Coloured LED technology maturing – LED Manufacturers main focus on white. Incremental efficiency improvements in coloured LED Higher power LED packages – e.g. K2 Emergence of Mulitchip packages – improved mixing performance Increasing number of manufacturers em
Slide 26: Product Portfolio: RGB
Product Portfolio: RGB “Standard” Colordriver 36 & Colordriver RF controls + standard “color engines” from Lumidrives Custom designed high end “Spectramix” systems to better ensure color stability from fixture to fixture and over time. Custom engineered RGB Light engines with optical & thermal manag
Slide 27: Improved Products
Improved Products p r e l i m i n a r y r e s u l t s 2006
Slide 28: Signals/Illumination/Lighting: White Lighting
Signals/Illumination/Lighting White Lighting “LEDs offer energy saving against conventional lighting techniques” True or False? p r e l i m i n a r y r e s u l t s 2006
Slide 29: The Lamp Competition
The Lamp Competition Type Efficiency Life -hours Lamp Colour Rendering lm/W x1000 Watts Ra High Pressure 60 -120 10 - 20 35 - 400 30 Sodium Ceramic Metal 60 -100 6 -12 15 - 250 70 - 95 Halide Linear 60 -100 6 - 45 5 - 80 70 - 90 Fluorescent Compact 40 - 80 4 - 10 5 - 35 60 -80 Fluorescent Halogen 18
Slide 30: White Light Economics
White Light Economics Fluorescent Cost per Lumen is around $0.0005. Best LED Today is $0.02 – 40 times more expensive. By 2008 – Best White LED – 120 lumens / watt (CREE / Nichia ) Cost $0.01 – 20 times more expensive. p r e l i m i n a r y r e s u l t s 2006
Slide 31: $ / Million Lumen-Hours
Focus on Applications in which Total Cost of Ownership is high Cost of ISSL Cost of Light Incorporates: $ / Million Lumen-Hours • Lifetime Incandescent • Source efficiency • Energy cost Halogen • Replacement cost • Labor cost Fluorescent LED Source: Color Kinetics p r e l i m i n a r y r e s u l t s
Slide 32: Emerging Applications with today's LED technology
Emerging Applications with today's LED technology Retail, Display & Refrigeration Architectural Shelving, Cove & Cornice, Point of Purchase, Exterior features Refrigeration Hazardous Location Rough Service Mining, Oilfield Prisons, Marine Chemical, Flour Mills Underpass, Tunnels, Power Stations Wate
Slide 33: Traditional Hazloc fixture
Traditional Hazloc fixture Encapsulated Control Gear Front Cover Extruded Body Mechanical Interlock Lamp Caps Reflector Sealing Gasket p r e l i m i n a r y r e s u l t s 2006
Slide 34: LED Hazardous Location Product Drivers
LED Hazardous Location Product Drivers Assembly aligned more with electronics industry methods Sealed for life concept – reduced design complexity and easier assembly Improved Safety from total encapsulation – no need for annual maintenance inspections Lower operating temperatures – gas environments
Slide 35: White Light Hazardous Location – 6000 lumen
White Light Hazardous Location – 6000 lumen Traditional Cost of light - £1.50, Ballast - £22.00, Fixture - £18.00 = £41.50 ASP (end user) - £150 ASP (wholesale) - £100 LED Cost of light - £60 (07)- £30 (08), Driver - £15.00, Fixture - £15.00 ASP (end user 08) - £180 ASP (wholesale) - £120 LEDs can b
Slide 36: Product Portfolio: White Lighting
Product Portfolio: “White” Lighting Standard Lumidrives Drivers, Light engines & Optics. To be sold primarily through distribution partners Standard Lumidrives “Fixtures” for private label to OEMs To be sold either direct or through distribution partners but ONLY for private label. We do not want to
Slide 37: Research & Development
Research & Development Intellectual Property essential to protect innovation 25 Patents filed 32 Patents pending 10 Patents issued Covering Optics, Thermal management , Software, Communications, Packaging, Electronics. p r e l i m i n a r y r e s u l t s 2006
Slide 38: Operations
Operations Mexico transitioned to new site ISO 9000 for Mexico as well as Farmingdale, Roxboro and Newmarket Newmarket recommended for TS16949 Successful transition of Traffic Light Manufacturing from Germany to Newmarket Lumidrives moved to larger facility Over 60% of workforce in low cost labour a
Slide 39: Summary
Summary Components orders expected to recover to normal levels in first half Potential for Smart Meter Disconnect in US Market Continued growth in European Traffic in 2007 following good growth in 2006. Continued growth of Obstruction red lights White Strobe to drive Obstruction growth Continued gro