Dialight Plc · LSE:DIA
Dialight — FY2020 Earnings Presentation
26 slides from Dialight's earnings presentation, Mar 30, 2021
Slide 1: Dialight Full Year 2020 Results Presentation
30 MARCH 2021 DIALIGHT FULL YEAR 2020 RESULTS PRESENTATION
Slide 2: Introduction
INTRODUCTION DAVID BLOOD CHAIRMAN Private and confidential 2
Slide 3: Our COVID-19 Response
OUR COVID-19 RESPONSE PROTECTING OUR SUPPLYING OUR PROTECTING PEOPLE CUSTOMERS OUR BUSINESS Private and confidential 3
Slide 4: Financials
FINANCIALS WAI KUEN CHIANG CFO Private and confidential 4
Slide 5: Income Statement
INCOME STATEMENT FY-20 FY-19 Revenue £m £m • Reduction of 21% Revenue 119.0 151.0 Cost of sales (85.0) (107.1) Gross margin Gross profit 34.0 43.9 • Benefits of insourcing negated by COVID-19 impact Gross margin % 28.6% 29.1% SG&A (40.4) (48.9) SG&A Underlying EBIT (6.4) (5.0) • 17% reduction in ope
Slide 6: Underlying EBIT Bridge
UNDERLYING EBIT BRIDGE 2019 EBIT 2020 EBIT (£5.0)m (£6.4)m (£6.2)m £5.1 m (£6.0)m £5.7 m Revenue Operating reduction costs savings COVID-19 Benefits from margin in-sourcing impact Private and confidential 6
Slide 7: Net Debt
NET DEBT £m Working capital Net debt at 31 December 2019 (16.5) • Inventory reduced by £12.6m Inflows • Receivables reduced by £3m, quality of customer Underlying EBITDA 0.1 base Unwind of inventory 12.6 • Creditors increased due to enhanced credit terms Tax refunds 2.9 15.6 Outflows Borrowing capac
Slide 8: 2021 Planning Assumptions
2021 PLANNING ASSUMPTIONS Net Interest Broadly in line with FY20 INCOME STATEMENT Tax Rate c.25% c.£2m maintenance capex Capex c.£5m product development CASH FLOW Working capital Inventory level targeted at £30 - £32m H2 weighting as in previous years Private and confidential 8
Slide 9: Business Review
BUSINESS REVIEW FARIYAL KHANBABI CEO Private and confidential 9
Slide 10: We Remain Differentiated
WE REMAIN DIFFERENTIATED MARKET INNOVATION AND SALES EXPERIENCE TECHNOLOGY FOCUSED • 50 years of LED • Best in class • Global footprint experience designs • Large market • Only pure play LED • Reliability and opportunity company efficiency • Highly trained • Largest installed • Fast development sale
Slide 11: Product Strength
PRODUCT STRENGTH POWER SUPPLIES • Specifically designed for 10 year lifespan • Able to withstand intense shock and vibration OPTICS • Designed for highest light output to energy ratio consumption • Optimised lighting design to reduce the number of fixtures and improve light utilisation MATERIALS AND
Slide 12: Strategy
STRATEGY INVEST IN OUR CORE EXPAND MARKET REACH CONTINUED INNOVATION Strong focus on increasing Expanding our market reach Continue to lead the market in conversion to LED in our core by establishing a strategic innovation widening our heavy and harsh hazardous accounts team and developing market le
Slide 13: Product Strategy
PRODUCT STRATEGY BULKHEAD 60K HIGHBAY 30% lighter First upgrade in 10 years 60% smaller Efficiency upgrades New design features Reducing payback Value added Expanding operating Expanding serviceable period offering limits market Private and confidential 13
Slide 14: Lighting
LIGHTING Capex • Represented 60% prior to COVID-19 Contractors Distributors EPC/Engineers firms • Significantly reduced from Q2 • Customers conserved their cash • Orders deferred not cancelled END CUSTOMER PROJECTS MRO CAPEX MRO ORDERS BY TYPE • Significant number of customers deemed “essential busi
Slide 15: Lighting Orders Performance
LIGHTING ORDERS PERFORMANCE Strong market focus maintained • US Sales force were not furloughed AMERICAS (24% YoY) • Regaining MRO business • Leads followed up on virtual platforms • Capex projects deferred • Proactive targeting of MRO opportunities EMEA (24% YoY) Strengthening relationships 5 4 3 2
Slide 16: Signals and Components
SIGNALS AND COMPONENTS Essential business • Suppliers of opto-electronic components to many critical businesses during COVID-19 • As part of a critical business supply chain, we obtained “essential business” status Components used in ventilators Signals market • North America only • Buses, trucks an
Slide 17: Operations
OPERATIONS 80% Lighting On Time Delivery Disruption to operations • 3-6 weeks factory closures • Restrictions on staff numbers on-site 3 weeks Lead times • Productivity impact of social distancing measures • Re-training to replace 200 experienced staff in high risk category unable to work Essential
Slide 18: Sourcing Strategy
SOURCING STRATEGY Forecast process Refining process to drive targeted inventory reductions Enhanced terms Enabling greater purchasing power £45.7m £32.2m VMI/Consignment inventory Reducing inventory held, safeguarding against shortages 2019 2020 Localising supply Utilising local suppliers to reduce
Slide 19: ESG - Social
ESG - SOCIAL Engagement Wellbeing & development Community • Weekly/Monthly global calls • ‘Best practice’ workplace • Dialight Foundation created by CEO safety and legal support • Assist the communities • All staff Q&A sessions • Employee assistance and where we do business • Non-Exec designated as
Slide 20: Carbon Impact
CARBON IMPACT EPD for all main products Environmental Production Declaration (EPD) Re-design to Installed over 2m fixtures saving reduce footprint over 1m tonne of CO2 per annum Equivalent of removing 40,000 Localise supply cars from the road per year chains Our customers CO2 savings 10x the CO2 fro
Slide 21: Summary
SUMMARY • Utilising our existing sales team to drive growth in our core markets • Building a strategic accounts team focused on expanding our market reach, leveraging corporate ESG goals • Ensuring our product development is strategically relevant for our customers • Developing the next generation o
Slide 22: 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 23: Appendix
APPENDIX Private and confidential 23
Slide 24: Segments
SEGMENTS Lighting Reported currency Signals and Components Reported currency £m £m FY-20 FY-19 Variance FY-20 FY-19 Variance Revenue 81.7 111.5 (27%) Revenue 37.3 39.5 (6%) Gross profit 23.7 31.3 (24%) Gross profit 10.3 12.6 (18%) Gross margin 29% 28% +100bps Gross margin 27% 32% -500bps Overheads (
Slide 25: Lighting Vertical Markets
LIGHTING VERTICAL MARKETS Sales per vertical market FY-20 FY-19 Oil & Gas 22% 24% Heavy industrial 14% 17% Mining 12% 14% Power 12% 14% Pulp & Paper 10% 10% Food & Beverage 7% 5% Obstruction 4% 3% Other industrials 19% 13% 100% 100% Private and confidential 25
Slide 26: Sales Focus
SALES FOCUS Energy savings & maintenance Core sales team Safety Plant level Total cost of ownership Strategic accounts Corporate ESG targets and reducing carbon footprint Corporate level Private and confidential 26