Dialight plc · LSE:DIA
Dialight — H1 2015 Earnings Presentation
19 slides from Dialight's earnings presentation, Jul 27, 2015
Slide 1: H1 Results 2015
Hi Results 2015 27 July 2015 Dyelela
Slide 2: Agenda
Agenda Introduction Bill Ronald Financial Review Fariyal Khanbabi Business Review Michael Sutsko Q&A 2
Slide 3: Financial review
On when it matters most. Products and solutions that protect your business Financial review
Slide 4: Summary
Summary Revenue grew…. …but profitability decreased… …and reduced cash flow 11% 14% 18% (59%) Lighting revenue grew by 24% to £53.4m Lighting contribution margins at 44% Identified negative EBIT impact of £7.6m Reduction in operating cash flow of £4.3m 4
Slide 5: Income Statement
Income Statement Variance 2014 H1 2015 H1 2014 Constant £m H1 2015 H1 2014 at constant Reported currency £m currency Basic EPS Underlying 5.4p 14.2p Revenue 80.6 70.9 74.0 14% 9% Basic EPS Statutory (0.1p) 10.5p Direct costs (46.3) (39.8) (41.6) Contribution 34.3 31.1 32.4 10% 6% Production overhead
Slide 6: Adverse Variances – H1 2015 vs. H1 2014
Adverse Variances – H1 2015 vs. H1 2014 Component / Traffic Q2 Lighting Slowdown Excess Overhead Costs Challenge Oil and Gas saw a cessation of Components -competitive market Increased indirect heads - £1.5m capital projects - £3.0m with low cost competition - £0.3m Tooling and maintenance - £0.5m £
Slide 7: Underlying EBIT Bridge
Underlying EBIT Bridge Revenue increase resulted in £3.2m 0.3 increase in contribution 4.0 (0.9) (0.2) (3.3) EBIT margin in H1 2015 vs H1 2014 reduced from 9% to 2%. As a result (1.3) of the following: (3.4) Production overheads - 3% 6.5 SG&A - 3% 1.7 Contribution margin - 1% R&D is a net charge to
Slide 8: Segment Results
Segment Results Lighting Signals Components Variance H1 2015 H1 2014Variance % H1 2015 H1 2014 Variance % H1 2015 H1 2014 £m % Revenue 53.4 43.0 24% 17.9 18.3 (2%) 9.3 9.6 (3%) Direct Costs (30.1) (23.7) (10.9) (10.7) (5.3) (5.4) Contribution 23.3 19.3 21% 7.0 7.6 (8%) 4.0 4.2 (5%) Contribution marg
Slide 9: Balance Sheet
Balance Sheet £m 30-Jun-15 31-Dec-14 Strong balance sheet with low gearing – 10% Fixed assets 15.4 15.2 £25m RCF with HSBC, plus £25m accordion Intangible assets 20.4 21.0 Net Working Capital 43.0 43.1 Term to June 2018 Net (debt)/cash (8.0) 0.6 Compliant with all covenants at end of June 2015 Pensi
Slide 10: Working Capital and Cash Flow
Working Capital and Cash Flow Cash flow bridge £m December 2014 Net cash 0.6 Operating cashflow 3.0 Tax (3.9) Dividends (3.2) Net working capital (0.6) Capital expenditure (3.3) Other (0.6) H1 2015 Net debt (8.0) Working capital absorption reduced to £0.6m £m Jun-15 Strong management of receivables
Slide 11: Business review
On when it matters most. Products and solutions that protect your business Business review
Slide 12: Initial View
Initial View What I See Critical Actions Huge market opportunity and early adoption Exercise strong leadership Strong brand built on differentiated technology Immediate corrective actions and controls Operational and process deficiencies Ensure profitable and scalable operations Business strategy to
Slide 13: Large Market Early Adoption Stage
Large Market Early Adoption Stage Industrial Market Study Market Size * Freedonia IMS 2010 £60b TAM McKinsey Lighting the Way 2012 £50b TAM US DOE LED Adoption Report 2013 £60b TAM IHS - The EMEA Market for Hazardous £90b TAM Area Equipment 2013 Dialight Consensus ~£70b TAM * Market size based on Di
Slide 14: Differentiated Position
Differentiated Position Market Positioning Unique Technology Niche and Differentiated Segments LED Systems Experts Small competition base Total systems, not components Full LED product portfolio required Heat management key to long life Global certifications Maximises light efficiency Power Supply a
Slide 15: New Products
New Products New Products New products Launched launched in H1 in H1 Most Efficient and Highest Lumen Systems Designed for Application Vigilant® 140 LPW LED High Bay SafeSite® LED Area Light w/ Stanchion & Wall Brackets Industry leading 140 Lumen per Watt efficiency Designed to significantly reduce
Slide 16: H1: What Happened, Why, and Actions
H1: What Happened, Why, and Actions Component / Traffic Q2 Lighting Slowdown Excess Overhead Costs Challenge • Upstream drilling • Market slowdown • Operations inefficiency business declined on • Asian competition • Hiring outpaced results crude oil price drop • Organisation complexity SALES RE-FOCU
Slide 17: Operations Improvement Plan
Operations Improvement Plan Action Taken • Overhead cost controls Sustainable Cost Control • Mexico ‘tiger team’; global footprint Demand and Supply • Demand forecast & supply reconciliation Consultants Planning External • Connected to shop floor scheduling • Factory layout Manufacturing Efficiency
Slide 18: Strategic Review
Strategic Review End to end strategic review is focused on delivering value Assessment and prioritization of market opportunities: Governance Market sectors Organisation & Global geographies Operations Leadership Product groups & Strategy Invest in best areas of growth Platform for global, scaleable
Slide 19: Outlook
Outlook • There is an increase in the number of new sales opportunities in our H2 2015 pipeline however there is uncertainty remaining on the timing of projects. • We are not anticipating any recovery from the oil and gas sector in the balance of the year. • The focus for the sales teams will be on