Dialight Plc · LSE:DIA
Dialight — H1 FY2025 Earnings Presentation
25 slides from Dialight's earnings presentation, November 2024
Slide 1: Dialight Interim Results FY2025 Investor Presentation
DIALIG HT I N T E R I M R E S U LT S F Y 2 0 2 5 I N V E S T O R P R E S E N TAT I O N N O V E M B E R 2 0 2 4
Slide 2: Executive Summary
E X E C U T I V E S U M M A RY K E Y P R O G R E SS S O FA • H1R completed under new management regime • Positive change continues at pace • Chief Commercial Officer appointed – driving Sales Transformation • F Underlying I N A N C IProfitability AL steadily improving •PTotal ERF O Rnet group MA N C
Slide 3: Sanmina Update
S A N M I N A U P D AT E • Trial concluded 23rd September 2024 in New York • Jury found for Dialight on Breach of Contract • Jury found for Sanmina on Breach of Contract (AR & E&O) • Jury found for Sanmina on Fraudulent Misrepresentation and Wilful Misconduct • Final Judgement awaited – likely Q1 20
Slide 4: The Group's Core Strengths Remain Valid
THE GROUP’S CORE STRENGTHS REMAIN VA L I D • Premium product with strong brand awareness in our core markets – appreciated by our customer case • Our industry leading 10-year warranty is based on our low maintenance mechanical design • Our in-house designed power supplies offer protection against en
Slide 5: Transformation Update
T R A N S F O R M AT I O N U P D AT E 5 INTERIM R E S U LT S FY2025
Slide 6: A Good Business with Potential to Unlock Greater Value
A GOOD BUSINESS WITH P O T E N T I A L T O U N L O C K G R E AT E R VTransformation A L U E focused around 5 key pillars: • The 4 Business Performance Improvement Pillars AND • Introducing “Creating a Platform for Future Growth” Pillar 1. WINNING 2. SALES 3. 4. MARGIN 5. CREATING HEARTS & TRANSFORMA
Slide 7: 1. Winning Hearts and Minds
1 . W I N N I N G H E A RT S A N D M I N D S Bringing People Together at the Centre of the Transformation Great Examples of Success - especially the Operations Transformation Monthly Blog to be as informative and transparent as possible Treating People like adults and holding them to account Communi
Slide 8: 2. Sales Transformation
2 . S A L E S T R A N S F O R M AT I O N APROACH On w hen it STRONG TALENT PIPELINE RIGHT CUSTOMER PROFITABLE m MGMT INCENTIVE SATISFACTION GROWTH Onatters w henmitost. m atters m ost. Technical Sales Regular New Several Preparing Team Best in sharing of Commission Initiatives in new Price Class Pip
Slide 9: 3. Operations Transformation
3 . O P E R AT I O N S T R A N S F O R M AT I O N • Supporting ambition to deliver targeted GM improvement • Optimisation of end-to-end business process • Optimisation of S&OP (Sales & Operations Planning) process • Product simplification (e.g. 250W PSU reduced SKUs from 124 to 15) • Optimisation of
Slide 10: 4. Margin Improvement and Cash Generation
4. MARGIN IMPROVEMENT AND C A S H G E N E R AT I O N • Costing project to deep dive into layers of cost globally • Drive performance improvement in all areas • Improve Pricing power • Cost reduction • Margin Improvement • Material margin • Updating standard material costing • Realign product design
Slide 11: 5. Creating a Platform for Future Growth
5 . C R E AT I N G A P L AT F O R M F O R FTHU T U R E G R O W T H 5 PILLAR OF THE TRANSFORMATION STRATEGY Delivering our growth ambitions Appoint Head of Innovation and Strategy External strategy development • New markets identification, analysis and evaluation Q1 2025 • New products development st
Slide 12: Medium Term Ambitions
MEDIUM TERM AMBITIONS • Above Market Revenue Growth • Group ROS mid-teens • Cash Conversion >80% • Leverage between 1x and 1.5x EBITDA Timing Dependent Upon Accelerating Speed of Transformation and Underlying Market Conditions remaining favourable 1 2 INTERIM R E S U LT S FY2025
Slide 13: Financial Review
FINANCIAL REVIEW 1 3
Slide 14: Overview
O V E RV I E W • Group revenues in the 6 month period were $90.3m. • Underlying operating profit was $0.9m. • Gross Margin % improvement of 220bps • Non-underlying costs of $25.4m • Gain on Traffic disposal of $5.2m • Net debt at the period end was $15.4m 1 4 INTERIM R E S U LT S FY2025
Slide 15: Income Statement
I N C O M E S TAT E M E N TREVENUE • Adverse variance mainly in Lighting which continued to be impacted by challenging market conditions 6-month 6-month period ending period ending 30 September 30 September GROSS MARGIN 2024 2023 • 2.2% improvement compared to H1 FY24 US $m US $m • Improvements in m
Slide 16: Lighting Performance
LIGHTING PERFORMANCE 6-month 6-month period period ending 30 ending 30 September September 2024 2023 US $m US $m Net Revenue 66.7 68.1 Underlying gross 24.2 22.0 profit Gross margin % 36.3% 32.3% Underlying overheads (19.2) (20.7) Underlying operating GROSS MARGIN 5.0 1.3 profit 400bps / $2.2m incre
Slide 17: Signals & Components Performance
SIGNALS & COMPONENTS P E R F O R M6-month A N period C E6-month period ending 30 ending 30 September September 2024 2023 US $m US $m Net Revenue 23.6 22.9 Underlying gross 5.6 6.0 profit Gross margin % 23.7% 26.2% Underlying overheads (3.9) (5.2) Underlying operating profit 1.7 0.8 GROSS MARGIN REVE
Slide 18: Non-Underlying Costs
N 0 N - U N D E R LY I N G COSTS 6-month 6-month 15-month period period period ending 30 ending 30 ending 31 September September March 2024 2024 2023 US $m US $m US $m Transformation Project (3.1) (0.7) (4.5) Sanmina Litigation (22.3) (1.3) (2.3) Impairment of Goodwill - - (11.2) Impairment of Devel
Slide 19: Cashflow
CASHFLOW Net bank debt US $m US $m Opening balance at 1 April 2024 (16.4) Underlying cash generated by operations Underlying operating cash inflows before movements in 5.3 working capital Movements in inventory 2.0 Movements in working capital excluding inventory 1.0 Defined benefit pension contribu
Slide 20: Conclusions
C O N C LU S I O N S • Good progress in a short period of time • Cost reduction and control supporting underlying profit and cash generation • Excellent engagement from teams across the business • Market conditions remain tough, self-help is key and “getting the basics” right • Lots still to do but
Slide 21: Appendices
APPENDICES 2 1 INTERIM R E S U LT S FY2025
Slide 22: Principal and Emerging Risks
P R I N C I PA L A N D E M E R G I N G R I S K S Intellectual property infringement – by Dialight or against Dialight Growth (current offering, customer requirements and markets) Environmental and geological risks - disruption of raw material and finished goods movement Funding – liquidity and impac
Slide 23: 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 COMPONENT •S Diverse customer base with high degree of order visibility • Consistently profitable and cash generative • Sub-scale
Slide 24: Building a Strong Culture
B U I L D I N G A S T R O N G C U LT U R E Operatio Continuo Custome nal us People r Focus Excellen Financial Innovati ce on Delivering We Are Creating Empowerment Driving Value In Customer Stakeholder and Transformatio Everything We Centric Value Accountability nal Change Do Make it easy to work Be
Slide 25: 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