Dialight plc 2009 Results - Investis...

Dialight plc 2009 Results3 March 2010

Agenda

� Business review and outlook

� Financial results

� Q&A

Highlights

� Turnover maintained at £77.3m (2008: £77.9m)

� Signals/Illumination showing good revenue growth in difficult market

� Record Operating profit £5.5m (2008: £5.3m)

� Strong Operating Cash Flow. Net cash £9.1m (2008:£4.1m)

� Second Interim Dividend 4.3 pence (2008:3.9 pence Final)

Revenues

2009 2008

� Revenue £77.3m £77.9m

� Signals/Illumination £46.4m £43.4m

� Electromagnetic components £13.3m £15.1m

� Indication business £17.6m £19.4m

Operating Profit

2009 2008

� Signals/Illumination £3.3m £1.7m

� Electromagnetic Components £0.7m £0.5m

� Indication Components £3.2m £4.9m

Indication Components

� Revenues down almost 25% (US$) versus 2008

� Some recovery in H2

� Fundamentals of the business unchanged

� Margins solid

� Recovery continues in 2010

Electromagnetic Components

� Revenues down £1.8m versus 2008

� 200 amp Disconnect still showing growth but slowed by design change with one customer

� Traditional business down with economy but showing some signs of recovery

� Prospects for Disconnect still promising but on thin margins

Signals/IlluminationRevenue

2009 2008

Revenue: £46.4m £43.4m

� Traffic £23.1m £24.4m

� Obstruction £7.2m £4.6m

� Transportation £10.4m £8.3m

� Lighting £5.7m £6.1m

Signals - Traffic

� US traffic down due to lack of big contracts in the year and tough comparison

� Strong European recovery in second half to maintain revenues at 2008 levels

� UK performance and prospects good

� Margins improved

� Interest in street lights from customers in both US and Europe

Signals - Obstruction

� 50% year on year growth (again!)

� Sales of Red Beacons helped by second half recovery of US Wind Turbine Market

� New Beacon introduced end of the year

� New White Strobe introduced end of the yearTwo major contracts announcedOver 1000 units soldInstalled cell tower base over 80,000 unitsOnly qualified product today

2000 2004 2006 2009

2006 2007 2008 2009

Obstruction Lighting

Illumination

� Revenues down overall

� Industrial White Lighting sales 300% of 2008

� Highly successful launch of Safesite High Bay

� Payback approaching tipping point

� Multiple street lighting trials

� Pipeline of new products

� 2010 starting strongly

White Light Strategy

Type Efficiency lm/W Life -hours x1000

Cost Per lumen $

Colour Rendering Ra

High Pressure

Sodium

60 -120 10 - 20 0.0004 30

Ceramic Metal Halide 60 -100 6 -12 0.0010 70 - 95

Fluorescent 40 -100 6 - 45 0.0005 60 - 90

Halogen & Tungsten 8 -22 2 - 10 0.0002 100

Cool white LED 6000k

90 -130 50 0.015 70

Warm white LED 3000k

20 - 50 50 0.04 75 -90

How do LEDs compare to the competition ?

White Light LED Lamp Price vs. Fluorescent Lamp (Projection)

World Lighting Fixture Market

Residential

23%Industrial

7%

Outdoor

17%Commercial

21%

Portable

18%

Parts &

Accessories

14%

Source: Freedonia

2010 Projection: $75 billion

Why LEDs?

Long Life

High Efficiency

Shock & Vibration

Extreme Climates

Zero Maintenance

Low Case Temperature

Precise Optical Control

Instant Light

Switching Cycles

Colour Performance

=Low Cost

Of

Ownership

250W HPS

60% Energy Saving

No Mercury or Hazardous material

10+ years expected life

100W SafeSite Downlight

Product: SafeSite HZC Downlight

Qty: 423 Units

Location: Midland, MI

Application – Silicon Plant

Dow Corning

250W HID

Dialight 150W LED High Bay

40% Energy Saving

50% less weight & 75% reduced size

No Mercury or Hazardous material

10+ years expected life

Product: LED High Bay

Qty: 59 units

Location: Frontline Manufacturing

Application – Warehouse

Frontline Manufacturing

Product: LED High Bay

Qty: 130 units

Location: Rockline Manufacturing

Application – Warehouse

Rockline Manufacturing

Freezer Installations

Extreme Climate

LED vs. Fluorescent

LED

• The light output of Fluorescent decreases with colder temperature

• The light output of LED light increases with colder temperature

US installed base of Street & Area Light Fixtures

2007 Total: 131 million units

131.4Total

3.1Parking Lot/Garage

34.7Street Lights

45.8Floodlights

47.8Area Lights

Millions of unitsType

US DOE Report: Energy Savings Estimates of Light Emitting Diodesin Niche Lighting Applications 2008

Pittsburgh Street Light Trial

Product: StreetSENSE LED Street Light

Qty: 3 units

Location: Pittsburgh, PA

Application: Residential road

St. Peters, MO - 4

Mobile, AL - 1

Longmont, CO - 1

Macob Co, MI - 1

VA Beach, VA - 3

O'Fallon, MO - 4

Riverside, CA - 2

Pittsburgh, PA - 3

Pocatella, ID - 1

Tacoma, WA - 5

Indio, CA - 4

Brea, CA - 1

Fargo, ND - 3

Pierre, SD – 1

Stevens Point, WI - 1

Dialight US Street Light Trials

Product: LED Street Light

Qty: 4 units

Location: Edinburgh, Scotland

Application: Princes Street

Outlook

� Signals/Illumination positioned for continued growth with stronger margins

� Improved LED efficiency and cost is moving the adoption point

� Pipeline of new and improved White Lighting products

� Continued reengineering and cost reduction

� LED Indication showing recovery and still a strong profit and cash generator

� Group shows excellent prospects for future Revenue Growth and Profitability

GEORGE RALPH

FINANCE DIRECTOR

Summary Profit & Loss

-2.1Exceptional profit

(2.2)(2.0)Tax

3.43.3Profit from cont. ops

0.3(0.2)Net financing cost

5.35.5Operating profit

3.45.4Retained profit

5.65.3Profit before tax

(11.0)(13.2)Overhead costs

20.924.2Gross Profit %

16.318.7Gross Profit

77.977.3Revenue

2008 £M2009 £M

Taxation

� Effective tax rate in 2009 was 37.7%

� Effective tax rate in 2008 was 38.5%

� Issues

� Profits in high tax locations

� Unrelievable UK losses

Dividends and Earnings Per Share

2009 2008

� Dividends per share 6.6p 6.0p

� Basic EPS 17.5p 11.2p

� Dividend cover 2.7 times 1.9 times

� Adjusted EPS 10.2p 11.2p

Summary Balance Sheet

4.19.1Cash

37.540.1Net Assets

(5.9)(2.0)Non current liabilities

(13.8)(12.1)Current liabilities

33.327.3Other current assets

19.817.8Non current assets

2008 £M2009 £M

Summarised Cash flow

3.15.0Net cash generated

(4.2)(1.9)Financing activities

(2.4)(2.5)Investing activities

(2.3)(1.6)Tax/financing

6.011.0Cash from operations

(2.1)2.7Working capital

8.18.3Operating cash

2008£M2009£M

Working capital / Cash flow

� Inventory – strong inventory performance significant reduction

� Working capital generated cash rather than consumed cash

� Cash - Continuing strong operating cash flow with debt free balance sheet

Summary

� Profitable business in difficult market conditions

� Cash generative

� Debt free balance sheet

� All above provides good platform to build on in 2010 and beyond