Dialight Plc · LSE:DIA
Dialight — H1 2021 Earnings Presentation
21 slides from Dialight's earnings presentation, Aug 2, 2021
Slide 1: Dialight 2021 Half Year Results Presentation
2 AUGUST 2021 DIALIGHT 2021 HALF YEAR RESULTS PRESENTATION
Slide 2: Introduction
INTRODUCTION FARIYAL KHANBABI CEO Private and confidential 2
Slide 3: Results Introduction
RESULTS INTRODUCTION • Returned to underlying operating profit, £1.5m in H1-21 - last underlying operating profit H1-19 (£0.9m) • Gross margin improved to 35% from 27% in 2020 • Benefits from decisive actions in 2020 - streamline cost base - increased liquidity - developing stronger sales and supply
Slide 4: Financial Review
FINANCIAL REVIEW CLIVE JENNINGS INTERIM CFO Private and confidential 4
Slide 5: Income Statement
INCOME STATEMENT Actual Constant currency Revenue H1-21 H1-20 H1-20 • Increase of 17% at constant currency (9% at £m £m £m actual) with Signals & Components up 37% and Revenue 60.2 55.2 51.3 Cost of sales (39.0) (40.1) (37.4) Lighting up 10% Gross profit 21.2 15.1 13.9 Gross Margin Gross margin % 35
Slide 6: Underlying EBIT Bridge
UNDERLYING EBIT BRIDGE H1 -20 H1 -21 £2.6m £1.5m (£0.1m) £2.3m £2.4m (£5.7m) Production Volume Net SG&A Gross Margin Change Improvement Revenue Increase Private and confidential 6
Slide 7: Net Debt
NET DEBT £m Working capital Net debt at 31 December 2020 (11.4) • Short term increase in inventory of £4m Inflows • Quality of customer base - Receivables down £0.8m Underlying EBITDA 4.5 Net working capital (excl. inventory) 2.7 • Enhanced credit terms – increase in Creditors FX 0.1 7.3 Outflows Bo
Slide 8: H2-21 Planning Assumptions
H2 -21 PLANNING ASSUMPTIONS Net Interest Broadly in line with FY20 INCOME STATEMENT Tax Rate Effective tax rate c.25% c.£3m maintenance capex Capex c.£2m product development CASH FLOW Working capital Inventory level targeted at £32 - £34m* * Subject to supply chain constraints easing H2 weighting as
Slide 9: Business Review
BUSINESS REVIEW FARIYAL KHANBABI CEO Private and confidential 9
Slide 10: Summary
SUMMARY COVID-19 RETURN TO FOCUS ON CHALLENGES PROFITABILITY GROWTH Private and confidential 10
Slide 11: Orders by Type
AMERICAS 18% YoY • Regaining MRO business • Capex projects deferred ORDERS BY TYPE* £8.2m £8.0m 5 4 EMEA 9% YoY 3 2 7 1 • Continued impact of £37.4m Yemen repeated lockdowns Togo £31.9m H1 2020 H1 2021 MRO Capex APAC 3% YoY • Strong mining sector • Asia lockdowns impacted performance * Constant curr
Slide 12: Operations
OPERATIONS Robust sales and operation 80% planning (S&OP) process On Time Delivery Management of critical components 3 week Lead times Supply chain Supplier relationship management focus Local sourcing to mitigate Strong H&S record freight disruptions Reversal of H1-20 impacts Gross margin Factory c
Slide 13: Signals & Components
SIGNALS & COMPONENTS Orders Sales Supply Chain • 41% increase over • 37% increase over • Raw material H1-20 H1-20 shortages • Significant demand • Increase in • Supply chain in component backlog delays market • Margin recovery • Constraining • Traffic light due to increased revenue replacement volum
Slide 14: Strategy
STRATEGY INVEST IN OUR CORE EXPAND MARKET REACH CONTINUED INNOVATION Strong focus on increasing Expanding our market reach by Continue to lead the market in conversion to LED in our core establishing a strategic accounts innovation, widening our market heavy and harsh hazardous team and developing n
Slide 15: Product Strategy
PRODUCT STRATEGY Filling Portfolio Next Generation Next Generation Protecting Our Gaps High Bay Power Supply Core DESIGNED WITH SUSTAINABILITY IN MIND Replaceable Superior parts & field Lower cost Smaller size Easier to install performance customisation Private and confidential 15
Slide 16: ESG
ESG Environmental Social Governance • Carbon footprint for 2020 • Partnership with Women’s • Established a CEO led ESG verified Earth Alliance in Tijuana, Committee to oversee all • Continued EPD program Mexico aspects of ESG Roadmap and (now 3 published) • Dialight Foundation the transition to Net
Slide 17: Summary
SUMMARY The first half of 2021 has been encouraging with a significant improvement in order intake, revenue and a return to profit combined with ongoing cash flow discipline. We expect our markets to continue to recover, albeit at varying rates, while acknowledging that there are potential ongoing h
Slide 18: Disclaimer
DISCLAIMER Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” in respect of the Group’s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of risks, unc
Slide 19: Appendix
APPENDIX Private and confidential 19
Slide 20: Segments
SEGMENTS Lighting Actual currency Constant currency £m H1-2021 H1-2020 Variance H1-2020 Variance Revenue 40.8 39.6 +3.0% 37.1 +10.0% Gross Profit 15.1 11.3 +33.6% 10.6 +42.5% Gross margin 37% 28.5% +850bps 28.6% +840bps Overheads (12.8) (14.2) +9.9% (13.3) +3.7% EBIT 2.3 (2.9) +179% (2.5) +185% Sign
Slide 21: Lighting Vertical Markets
LIGHTING VERTICAL MARKETS Sales per vertical market H1-21 H1-20 Oil & Gas 26% 23% Heavy industrial 14% 18% Mining 24% 12% Power 5% 12% Pulp & Paper 4% 11% Food & Beverage 9% 6% Obstruction 4% 4% Other industrials 14% 14% 100% 100% Private and confidential 21