Dialight Plc · LSE:DIA
Dialight — FY2024 Earnings Presentation
26 slides from Dialight's earnings presentation, July 2024
Slide 1: Full Period Results 2024 Investor Presentation
DIALIGHT F U L L P E R I O D R E S U LT S 2 0 2 4 I N V E S T O R P R E S E N TAT I O N J U LY 2 0 2 4
Slide 2: Executive Summary
EXECUTIVE SUMMARY K E Y P R O G R E S S S O FA R • We are 5 months in role • Lots of positive change has happened already – details follow. • We have a willing team who welcome positive change and want to learn and grow FINANCIAL PERFORMANCE • Total group net revenue of $226.0m for 15-months to 31/3
Slide 3: The Group's Core Strengths Remain Valid
THE GROUP’S CORE STRENGTHS REMAIN VALID • Premium product with strong brand awareness in our core markets • Our industry leading 10-year warranty is based on our low maintenance mechanical design • Our in-house designed power supplies offer protection against environmental contaminants and vibration
Slide 4: Business Components
BUSINESS COMPONENTS LIGHTING • Remains the core of our business • Focused on harsh and hazardous industrial applications • A mix of maintenance (MRO) and capital projects COMPONENTS • Diverse customer base with high degree of order visibility • Consistently profitable and cash generative • Sub-scale
Slide 5: Transformation Update
T R A N S F O R M AT I O N U P D AT E 5 FULL PERIOD RESULTS 2024
Slide 6: A Good Business with Potential to Unlock Greater Value
A GOOD BUSINESS WITH POTENTIAL TO U N L O C K G R E AT E R V A L U E • Strategy execution and Transformation in progress for c.5 months focused around 4 key pillars: transformation 1. WINNING 2. SALES 3. OPERATIONS 4. MARGIN programme are making HEARTS & MINDS TRANSFORMATION TRANSFORMATION IMPROVEME
Slide 7: 1. Winning Hearts and Minds
1. WINNING HEARTS AND MINDS • Transparent and frequent communications with entire Dialight team • In person meetings (Town Hall, Roundtable, 1:1, Skip level) • Email information updates • Blog progress updates • Team feedback sought, with submitted ideas evaluated and implementation plans agreed • E
Slide 8: 2. Sales Transformation Approach
2 . S A L E S T R A N S F O R M AT I O N A P R O A C H • A lot of change already – we are recruiting a VP Global Sales and Sales Operations Leader, whilst also creating a Sales Operations team to improve the efficiency of our sales operation • Top line growth is the key to our future success, partic
Slide 9: 3. Operations Transformation Approach
3 . O P E R AT I O N S T R A N S F O R M AT I O N APPROACH • Appointed a new COO – Rizwan Ahmad • Full end to end process review underway to streamline working practices, reduce costs and increase efficiency: • Strong team engagement • Specialist external support • Consolidation of sites deferred, g
Slide 10: 4. Margin Improvement and Cash Generation
4. MARGIN IMPROVEMENT AND CASH G E N E R AT I O N • Reduce financial leverage and improve working capital KPIs • Reviewing all OPEX costs to reduce expenditure • Strong CAPEX scope and cost review and control • Relentless focus on inventory reduction and control: • In lock step with the Operations a
Slide 11: Conclusions
CONCLUSIONS • Good progress in a short period of time • Excellent engagement from teams across the business • Global markets remain tough, focus is on self-help and “getting the basics” right • Change is hard but understood and supported: • Team realises it is necessary • It creates opportunities fo
Slide 12: Financial Review
FINANCIAL REVIEW CAROLYN ZHANG 1 2
Slide 13: Overview
OVERVIEW • Group revenues in the 15-month period were $226.0m. Underlying operating loss was $4.6m, with non-underlying costs of $25.6m • Net debt at the period end was $16.4m, following the $12.0m equity raise in October • 80% of company revenue is USD, reporting currency now USD • Year-end changed
Slide 14: Income Statement
I N C O M E S TAT E M E N T REVENUE • Against a strong comparative period GROSS MARGIN • 1.1% reduction compared to 2022 15-month period 12-month period ending 31 March ending 31 December • Largely due to lower fixed cost leverage owing to 2024 2022 production inefficiencies and minimum wage increas
Slide 15: Lighting Performance
LIGHTING PERFORMANCE 15-month 12-month period period ending ending 31 31 March 2024 December 2022 US $m US $m Net revenue 171.1 149.6 Underlying gross profit 57.6 50.2 Gross margin % 33.7% 33.6% Underlying overheads (50.8) (41.7) Underlying operating profit 6.8 8.5 REVENUE GROSS MARGIN • Customers c
Slide 16: Signals & Components Performance
SIGNALS & COMPONENTS PERFORMANCE 15-month 12-month period period ending ending 31 31 March 2024 December 2022 US $m US $m Net revenue 54.9 60.2 Underlying gross profit 12.5 17.2 Gross margin % 22.8% 28.6% Underlying overheads (12.3) (10.3) Underlying operating profit 0.2 6.9 REVENUE GROSS MARGIN • O
Slide 17: Non-Underlying Costs
N 0 N - U N D E R LY I N G C O S T S 15-month period ending 12-month period ending 31 March 2024 31 December 2022 US $m US $m Litigation costs (2.3) (1.7) Impairment of goodwill (11.2) - Transformation project (4.5) - Business disposal costs (3.5) - Impairment of capitalised development costs (4.1)
Slide 18: Cashflow
CASHFLOW Net Debt US $m US $m Opening balance 01 January 2023 (25.4) Inflows Operating cash flows before movements in working capital 3.0 Equity raise 12.0 Movements in inventory 15.7 30.7 Outflows Movements in working capital excluding inventory (5.4) Capital expenditure including intangible assets
Slide 19: Executive Summary
EXECUTIVE SUMMARY K E Y P R O G R E S S S O FA R • We are 5 months in role • Lots of positive change has happened already • We have a willing team who welcome positive change and want to learn and grow FINANCIAL PERFORMANCE • Total group net revenue of $226.0m for 15-months to 31/3/24 ($209.8m for 1
Slide 20: Appendices
APPENDICES 2 0 FULL PERIOD RESULTS 2024
Slide 21: LED Lighting Remains the Core of Our Business
LED LIGHTING REMAINS THE CORE OF OUR BUSINESS • 68% of group revenues • Focused on harsh & hazardous industrial applications • A mix of maintenance (MRO) and capital projects • Direct specification sale to end users through distributors • 74 sales heads with dedicated engineering teams • Key initiat
Slide 22: 1. Building a Strong Culture
1 . B U I L D I N G A S T R O N G C U LT U R E Customer Operational Continuous Financial People Focus Excellence Innovation Driving We Are Customer Delivering Value In Creating Empowerment and Transformational Centric Everything We Do Stakeholder Value Accountability Change Make it easy to work with
Slide 23: Executive Committee Structure
EXECUTIVE COMMITTEE STRUCTURE New Role CEO General Counsel Assistant VP Product VP Global Sales CFO VP HR COO VP S&C VP Obstruction Development New Hire VP Operations Americas Sales New Hire (Mexico) Head of Supply EMEA Sales Chain New Hire Head of Customer Asia Pacific Sales Services Head of Qualit
Slide 24: Sanmina Update
S A N M I N A U P D AT E • Mediation Meeting on 1 July 2024 in NY: • No progress • Pre-trial Hearing on 2 July 2024 in NY • Scene set for trial • Motions in Limine overall positive for Dialight • Judge suggest mediation rather than trial • No serious engagement from Sanmina • Trial began 15 July 202
Slide 25: Traffic Update
T R A F F I C U P D AT E • On 29th July 2024, Dialight entered into an agreement with Leotek Electronics USA LLC for the sale of the Traffic business • Gross proceeds have been agreed as $5.8m, with transaction and other costs of $0.3m resulting in a net receipt of $5.5m • The disposal is part of th
Slide 26: Disclaimer
DISCLAIMER This presentation has been prepared by Dialight plc (‘Dialight’ or ‘the Company’ or ‘the Group’) and has not been independently verified. Dialight is solely responsible for the contents of this document and has taken all reasonable care to ensure that the facts stated herein are true and