Dialight plc · LSE:DIA
Dialight — The Roxboro Group — H1 2003 Earnings Presentation
57 slides from Dialight's earnings presentation, 2003
Slide 1: Interim Results 6 Months to 30th June 2003
The Roxboro Group PLC Interim Results 6 Months to 30th June 2003 interim results 2003
Slide 2: H1 2003 Key Points
the roxboro group plc H1 2003 k e y p o i n t s y Weston sold to Esterline for £55 million y £39.8 million returned to shareholders y First half results in line with expectations y Solartron steady y Dialight suffered supplier disruption y Order book stronger y Worst is behind us y Difficult six mon
Slide 3: Financial Review
Financial Review interim results 2003
Slide 4: Group Profit and Loss Account
the roxboro group plc group profit and loss account £m 2003 2002 y Turnover 73.3 79.2 Continuing Operations 58.7 62.8 Discontinued operations 14.6 16.4 y Operating Profit 4.8 4.9 Continuing operations 2.0 2.8 Discontinued operations 2.8 2.1 y Interest (0.3) (0.5) y Profit before goodwill & exception
Slide 5: Group Profit and Loss Account - continued
the roxboro group plc group profit and loss account-continued £m 2003 2002 y Profit before taxation 19.5 3.9 Tax (1.6) (1.4) 17.9 2.5 Dividends (0.9) (1.8) y Retained Profit 17.0 0.7 y Operating Margin* 6.5% 6.2% y Trading Margin ** 6.1% 5.6% * before profit on disposal, goodwill, amortisation and i
Slide 6: Taxation
the roxboro group plc taxation 2003 2002 y Actual rate including disposal 8.0% 36.5% y Actual rate excluding disposal 35.7% 36.5% y Underlying rate excluding goodwill 30.7% 32.1% y Continuing operations rate 30.9% - excluding goodwill interim results 2003
Slide 7: Dividends and Earnings per Share
the roxboro group plc dividends and earnings per share 2003 2002 y Dividends per share 3.1p 3.1p y EPS Basic 31.6p 4.4p Adjusted 5.5p 5.3p y Dividend Cover half year Basic 19.0x 1.4x Adjusted for profit on disposal 2.7x 1.4x Adjusted for profit on disposal and goodwill 3.4x 1.7x y Continuing Operati
Slide 8: Summarised Cashflows
the roxboro group plc summarised cashflows £m 2003 2002 y Operating Profit (after goodwill) 4.2 4.3 – Depreciation / Goodwill 2.8 3.1 – Working capital 0.1 (2.6) – Other non-cash items - (0.1) y Operating Cash Flow 7.1 4.7 – Capital Expenditure (1.0) (1.3) – Interest (0.3) (0.5) – Taxation (1.2) (0.
Slide 9: Movement in Debt
the roxboro group plc movement in debt £m 2003 2002 y Free Cash Flow 4.6 2.0 – Dividends (3.9) (3.9) – Acquisitions (0.1) (4.4) – Disposals 53.6 - – Issue of shares 0.1 - y Net Cash Inflow / (Outflow) 54.3 (6.3) – Opening Net Debt (11.7) (8.6) – Translation (0.6) (0.1) y Closing Net Cash / (Debt) 42
Slide 10: Continuing Operations Proforma Cashflow
the roxboro group plc continuing operations proforma cashflow £m 2003 2002 y Operating Profit (after goodwill) 1.4 2.4 – Depreciation and amortisation 2.1 2.2 – Working capital 1.1 (3.5) 4. 6 1.1 – Capital Expenditure (0.7) (1.0) – Interest (0.3) (0.5) – Taxation (0.9) (0.5) y Free Cash Flow 2.7 (0.
Slide 11: Continuing Operations Proforma Cash Flow
the roxboro group plc continuing operations proforma cash flow £m 2003 2002 y Free Cash Flow 2.7 (0.9) – Dividends (3.9) (3.9) – Acquisitions (0.1) (4.4) – Disposals 53.6 - – Issue of Shares 0.1 - – Cash drawn from Weston 1.9 2.9 Net Cash Inflow / (Outflow) 54.3 (6.3) – Opening Net Debt (11.7) (8.6)
Slide 12: Profit on Disposal of Weston
the roxboro group plc profit on disposal of Weston £m Initial Sales Proceeds 55.0 Cash adjustment net of assumed tax 0.7 55.7 Expenses (2.4) 53.3 Less cost of investment – net assets (16.0) – goodwill previously written off (21.7) (37.7) Profit on disposal 15.6 Tax due on disposal (0.2) Exit P/E (20
Slide 13: Capital Reorganisation
the roxboro group plc capital reorganisation Ordinary shares split 30 June 2003 – 1 new ordinary share for every 1.89 old ordinary share – 1 new B redeemable share for every old ordinary share Old share capital : 56,800,170 New share capital : 30,053,000 ordinary shares of 1.89p 56,800,170 B 75p red
Slide 14: Capital Reorganisation - Redeemable B Shares
the roxboro group plc capital reorganisation Redeemable B shares Redeemed on 7th July 51,612,199 Redeemed on 23rd July 1,492,366 Future redemption dates: 31st December and 30th June each year up to 31st December 2008 Dividend equal to 70% LIBOR based on 6 month LIBOR (Period to 31.12.03 : 2.48%) B s
Slide 15: Proforma Balance Sheet post 30 June
the roxboro group plc proforma balance sheet-post 30June 2003 £m half year adjustments proforma Fixed assets (incl goodwill) 30.1 - 30.1 Current assets less creditors 23.1 - 23.1 Cash less borrowings 42.0 (39.8)* 2.2 Provisions (1.6) - (1.6) 93.6 (39.8) 53.8 Capital and Reserves Share capital 43.2 (
Slide 16: Operational Review
Operational Review interim results 2003
Slide 17: Operational Review: Group Divisions
Operational Review Group now reduced to 2 divisions sensors & instruments for oil & gas industries applied LED technology in lighting and indication interim results 2003
Slide 18: Markets
Operational Review markets ● Oil & Gas : early uncertainty but signs of improvement ● Process : generally weak particularly in USA ● Telecoms : steady but no immediate sign of recovery ● Signals : USA – slower activity in H1 Europe – developing well ● Transportation : slow with bus manufacturers in
Slide 19: Solartron Group First Half Highlights
Solartron Group First Half Highlights y Market uncertainty marked first half y Signs of market improvement y Underlying performance flat y Good progress in Asia/E. Europe offset by USA/Europe weakness y Business growth in China checked temporarily A Roxboro Group Company
Slide 20: Solartron Group First Half Highlights
Solartron Group First Half Highlights y Market uncertainty marked first half y Signs of market improvement y Underlying performance flat y Good progress in Asia/E. Europe offset by USA/Europe weakness y Business growth in China checked temporarily A Roxboro Group Company
Slide 21: Solartron Metrology First Half Highlights
Solartron Metrology First Half Highlights y Very slow US market - better in Asia y Excellent progress with digital gauging y Very steady result y Continuing good cash generation A Roxboro Group Company
Slide 22: Solartron Mobrey First Half Highlights
Solartron Mobrey (including ISA and Analytical) First Half Highlights y US/Europe weak - Asia/E. Europe stronger y Good contract secured in Iran y ISA wins Sakalin project with Dualstream II y Analytical business in China temporarily slowed y H1 underlying performance flat A Roxboro Group Company
Slide 23: Solartron Mobrey/ISA Product Segmentation
Solartron Mobrey/ISA Product Segmentation Other 8% Viscosity 3% Density 9% Level 48% Flow 26% Pressure 6% A Roxboro Group Company
Slide 24: Solartron Mobrey/ISA Market Segmentation
Solartron Mobrey/ISA Market Segmentation Other 8% Marine 8% Oil & Gas 36% Water & Waste 12% Power 16% Process 20% A Roxboro Group Company
Slide 25: Solartron Mobrey/ISA Geographic Segmentation
Solartron Mobrey/ISA Geographic Segmentation Europe & Middle East 33% UK 45% Asia Pacific 9% Americas 13% A Roxboro Group Company
Slide 26: Solartron Group Strategy
Solartron Group Strategy Objective: º To become a leading global supplier of specialised level, flow and fluid analysis measurement solutions By supplying: º Best-of-breed products º Exceptional service and delivery º Application knowledge In the following markets: º General process º Power ge
Slide 27: Measurement & Control for the Oil, Gas and Chemical Industries
Measurement & control for the Oil, Gas and Chemical industries ¢ Level measurement for safety, inventory and process control ¢ Density and viscosity systems for quality control, blending and process control ¢ Level control for safety systems, overspill prevention, machinery protection ¢ Subsea and t
Slide 28: Measurement & Control for the Power Industry
Measurement & control for the power industry * Level measurement - Fuel storage, steam drum, feedheaters, condensor, cooling water ¢ Level control - Boiler water, reactor coolant, turbine protection, turbine lube oil « Flow measurement - Steam flow, flue gas coolant water ¢ Viscosity measurement - F
Slide 29: Measurement & Control for the Water Industry
Measurement & control for the water industry Products and Applications * Flow Measurement - Open channel and closed pipe ultrasonic and DP flow meters * Level Measurement - Ultrasonic non-contact and submersible pressure transmitters. For both open and closed tanks monitoring + Level Control - Ultra
Slide 30: Solartron Group Key Points
Solartron Group Key Points y Name is a byword for Quality and Performance y Emerging products such as Dualstream II gaining ground y International presence y Leveraged to a recovery in process market A Roxboro Group Company
Slide 31: interim results
interim results 2003
Slide 32: First Half Highlights
First Half Highlights Losses at BLP impacted result Profit better but still poor Sales limited by production transfer to Mexico Supplier base slow to ramp up volumes Signals showed improved result Some Opto OEMs showing signs of life but no recovery yet New VP Operations appointed A Ro
Slide 33: Dialight Facilities
DIAIIGNT _ Fazilties Farmingdale, New Jersey Corporate Headquarters Roxboro, North Carolina Molding & manufacturing ISOQ9001 & FAA Certified Ensenada, Mexico 2 manufacturing facilities Wang, Germany Design and manufacturing seeeeeseeeee
Slide 34: Employee Analysis
Employee Analysis Farmingdale, NJ Wang, Germany Admin 23 Admin 5 Engineering 23 Engineering 8 Marketing & Sales 24 Marketing & Sales 10 Field Sales 13 Ops Direct 27 Ops Indirect 14 Ops Indirect 5 Total 97 Total 55 Roxboro, NC Ensenada, Mx Direct: 65 Direct: 333 Admin 15 Admin 43 Ops Indirect 18 Ops
Slide 35: Dialight Opto Products
Dialight wees ue Opto Circuit Board Indicators (CBI®) Panel Mount Indicators (PMI) Luxeon Design Center =
Slide 36: First Half Highlights
First Half Highlights All key metrics up on H2’02 Some OEMs showing increased demand Distribution channels remain flat Luxeon design centre shows good promise Dell design Dialight into range of new products Division has begun to recover A Roxboro Group Company
Slide 37: Dialight Signals Products
Dialight Soseeseeoooeooe S g n | | c Traffic Signals Rail Signals Obstruction Lights
Slide 38: First Half Highlights
First Half Highlights Orders secured exceeded sales by over 10% US traffic demand constrained by lower tax income Output limited by supplier ramp-up in Mexico All assembly now in Ensenada, Mexico Changes to FAA requirements slow aviation demand Vehicle OEM market slower Excellent Europ
Slide 39: Market Position on LED Signals
Market Position on LED Signals Traffic 1 2 3 4 5 Lights Rail Signals 1 2 3 Heavy Duty 2 1 3 Vehicle Air Field 1 2 Dialight 3 4 Product Lighting Obstruction 1 2 Dialight Dialight 3 Product Product Lighting A Roxboro Group Company
Slide 40: Luxeon Design Centre: The High Brightness LED Market
Dialight _ceeeeeeeeeees “| UXeon Design Centre The High Brightness LED Market
Slide 41: Solid State Lighting: The Vision
Solid State Lighting The Vision The LED is to florescent lamps what transistors were to vacuum tubes, or what the automobile was to the horse and bug gy. It is a revolutionary technological innovation that promises to change the way we light our homes and businesses. Remarks by the US Secretary of E
Slide 42: Solid State Lighting: The Vision
Solid State Lighting The Vision z Cut the Global Lighting Energy by 50% by 2025 z Cumulative Energy Savings of $115 billion z Elimination of more than $50 billion in new power plants Source: US DOE, NGL (Next Generation Lighting Initiative) A Roxboro Group Company
Slide 43: High Bright LED Is the Fastest Growth Semiconductor Market
High Bright LED is the fastest growth Semiconductor Market 250 200 High Bright Opto Relative Scale Laser: Non Telecom 150 100 Semiconductors 50 Laser: Telecom 0 1999 2000 2001 2002 Source: Strategies Unlimited A Roxboro Group Company
Slide 44: Hi-Bright CAGR 2002 to 2007
Hi-Bright CAGR 2002 to 2007 Illumination: 58% Mobile: 15% Signals: 18% Automotive: 14% Signage: 20% Other: 15% A Roxboro Group Company
Slide 45: Seeing the Vision Is Not Difficult
Dialig ‘all Seeing the Vision is not difficult SOOSSCCCOSCO ¢ Ww ~ v > ~. a, w = na ™ ~. The art is in Selecting the right targets e Alignment with our core strengths e Market acceptance timing #0000006009:
Slide 46: Our Strategy
Our Strategy Establish Dialight as the global leader of value added solutions for specialty applications of Light Emitting Diodes (LEDs). Capitalizing on… z The market opportunity presented by the rapid advances in LED technology z The value proposition that LEDs offer over traditional light sources
Slide 47: Our Position in the Supply Chain
Our Position in the Supply Chain Dialight LED Component z Applications Expertise Suppliers z Optics Design z Develop & Produce Semiconductor z Thermal Ma nagement z First level z LED array Assembly (Binning Menus) encapsulation z Driver Design z Fixture Packaging Lighting Fixture OEMs Traffic Contro
Slide 48: The Schindler Elevator Example
THE SCHINDLER ELEVATOR EXAMPLE A Roxboro Group C om pa ny
Slide 49: Light Distribution on Elevator Floor
Dialight Light Distribution on Elevator Floor - w/ LL 6-up ring TIGHT DISTRIBUTLON ON ELEVATOR. FLOOR Y meters Anguler Intensity Distribution TOTAL FLUX = 590 1.27584 FLUX / STERADIAN mn pry 602. 4011 ebb: pid: 4 574.3340 “ 23 \ 4 518! 1998 : yo: | 42i065 : yo: i 405, 9313 4+ 49707 } \ | 293.6628 ‘
Slide 50: Light Distribution on Elevator Floor
Dialight Light Distribution on Elevator Floor - w/ LL 6-up ring LIGHT ON ELEVATOR.FLOOR 601 Y meters FLUX /.sq-M 39.6
Slide 51: Light Distribution on Elevator Floor
Dialight Light Distribution on Elevator Floor - W/ Dialight Reflector -| 127.3094 4 105.8600 91.5604 84.4106 77.2608 70.1110 27° of total light on floor 98.7102 138.0341 | 134.4592: 120.1996 : 113.0098 : ; B direction
Slide 52: Light Distribution on Elevator Floor
Dialight Light Distribution on Elevator Floor - W/ Dialight Reflector UGHT ON ELEVATOR.FLOOR 141 X meters’;
Slide 53: interim results
interim results 2003
Slide 54: Luxeon Design Centre
Luxeon Design Centre Dialight is global leader in applied LED technology Dialight has a unique skills set Dialight does not compete with OEM customers Dialight well positioned to grow sector strongly A Roxboro Group C om pa ny
Slide 55: Summary
Summary Well positioned to grow through the Luxeon Design Centre Investment being maintained to retain No. 1 spot at Signals The worst is behind us Highly leveraged to a telecom recovery A Roxboro Group C om pa ny
Slide 56: Summary
the roxboro group plc summary y Weston deal completed - capital returned to shareholders y Central costs reduced y Group now more focussed y Lower cost base in place at Dialight y Strong balance sheet and cash position y Significant leverage to industrial recovery interim results 2003
Slide 57: The Roxboro Group PLC Interim Results
The Roxboro Group PLC Interim Results 6 Months to 30th June 2003 interim results 2003