Dialight Plc · LSE:DIA
Dialight — Investor Presentation (May 2017)
29 slides from Dialight's investor presentation, May 2017
Slide 1: Company Presentation May 2017
MAY 2017 COMPANY PRESENTATION
Slide 2: Overview
1 OVERVIEW MICHAEL SUTSKO
Slide 3: Overview
OVERVIEW The world’s largest installed base in heavy industrial LED lighting. Over 750,000 LED fixtures worldwide … … 97% OF THE MARKET OPPORTUNITY REMAINS Scalable operations The right products Highly cash generative Dialight fixtures have contributed to the reduction of 1.1 billion kWh of energy c
Slide 4: Sectors We Serve
SECTORS WE SERVE Energy, Utilities & Industrial Processing & Infrastructure Mining Manufacturing • Oil and Gas • Heavy Industry • Telecom & Broadcast • Mining • Pharmaceutical & • Water treatment • Petrochemical Biotech • Wind Power • Chemical • Food and Beverage • Military • Power Generation • Wood
Slide 5: Typical Customers
TYPICAL CUSTOMERS Private & Confidential 5
Slide 6: Market Share
MARKET SHARE Dialight’s Market Share 50% 21% Competitor 3, The Americas 5% EMEA Competitor 4, 4% Other, 36% Competitor 2, 11% Competitor 1, Dialight, 13% 32% Dialight’s market segments Industry 2016 2015 Industrial processing & manufacturing 41% 40% Energy, utilities & mining 35% 42% Infrastructure
Slide 7: Products
PRODUCTS Our premium fixtures are designed and built to withstand the harshest heavy industrial and hazardous environments High Bay Linear Area Obstruction Low Bay Flood Accessories, Sensors & Controls Private & Confidential 7
Slide 8: Manufacturing Footprint
MANUFACTURING FOOTPRINT Dialight owned manufacturing plant Sanmina manufacturing plant Private & Confidential 8
Slide 9: Financial Review
1 FINANCIAL REVIEW FARIYAL KHANBABI
Slide 10: EBIT Bridge
EBIT BRIDGE £1.6m £13.1m Material cost savings £1.7m £1.0m Freight costs reductions £2.7m £6.1m Production efficiencies Headcount reductions 2015 EBIT 2016 EBIT Private & Confidential 10
Slide 11: Segmental Results
SEGMENTAL RESULTS Lighting Signals & Components Revenue Revenue £120.6m £136.6m £40.8m £45.6m 2015 2016 2015 2016 Operating profit Operating profit £13.5m £6.8m £4.9m £2.7m 2015 2016 2015 2016 Private & Confidential 11
Slide 12: Non-Underlying Costs
NON-UNDERLYING COSTS £m 2016 2015 Employee severance and restructuring costs 5.3 1.8 Intangible asset impairment 5.1 1.0 Inventory costs 3.7 6.0 Production transfer costs 2.4 - Other (0.1) 0.7 Non-underlying costs 16.4 9.5 Total cash impact 4.9 2.4 Private & Confidential 12
Slide 13: Currency
CURRENCY Strengthened currency US$ 11% € 12% £1.5m £17.9m positive positive impact on impact on underlying revenue EBIT Impact on 2017 US$/£ 2016 rates Revenue EBIT US$/£ $0.01 movement £1m £80k Average 1.36 Euros 0.01 movement £64k £5k Closing 1.23 Private & Confidential 13
Slide 14: Cash Bridge
CASH BRIDGE £6.0m £2.9m £0.5m £20.2m £8.0m £(3.8)m Net debt @ Non- Net cash @ Capital 31 December EBITDA underlying Other 31 December expenditure 35.5 2015 costs 2016 43.0 Cash conversion: 104% 35.5 Private & Confidential 14
Slide 15: Full Year 2017 Planning Assumptions
FULL YEAR 2017 PLANNING ASSUMPTIONS Net interest Broadly in line with 2016 Income statement Tax rate 35% Capex c.£4m for plant upgrades, IT & product development Cash flow Working capital Broadly in line with 2016 Restructuring savings £9.0m Final restructuring costs of £2.4m £2- £3m in 2017 £0.6m 2
Slide 16: Business Review
2 BUSINESS REVIEW MICHAEL SUTSKO
Slide 17: Strategic Framework
STRATEGIC FRAMEWORK Strategy Scalable and efficient operations Rebuild Develop common product platforms Lead the market in products and technology Lead Advance our sales approach Grow in new sectors and geographies Grow Intelligent lighting for safety and productivity Private & Confidential 17
Slide 18: Rebuilt
REBUILT PLATFORM PRODUCT IMPROVED BUSINESS OUTSOURCING TALENTED AND DESIGN PROCESSES ASSEMBLY ENGAGED TEAM Completed Outstanding Private & Confidential 18
Slide 19: Lead
LEAD Embedded Integrated Easy to install Leading optical Advanced lighting Integrated resonant power mechanical & design controls with factory supply thermal design automation Technology roadmap driving to less than one-year payback New products provides access to customer spending 37 Private & Conf
Slide 20: Grow: Sales Efficiency and Capacity
GROW: SALES EFFICIENCY AND CAPACITY Expanding direct and distributor More productivity coverage in our markets from sales team Revenue per sales head £1.5m £1.3m £1.2m New distributors 2014 2015 2016 47 Private & Confidential 20
Slide 21: Grow: Early Signs
GROW: EARLY SIGNS Sales not overly H2 revenues grew reliant on a single by 11% sector Lighting order £71m £79m intake grew by 8% 2015 2016 Order rate growth – 2016 vs. 2015 at actual currency – 19% H2 revenue 2016 vs. 2015 at actual currency – 32% Private & Confidential 21
Slide 22: Grow: Access New Customers
GROW: ACCESS NEW CUSTOMERS Connecting to factory and facility automation Elevating our customer engagement model Connecting to factory and facility automation Elevating our customer engagement model Sales to strategic customers 30% INEM Controls Private & Confidential 22
Slide 23: Intelligent Lighting
INTELLIGENT LIGHTING Level 3: Connecting the Whole Platform for Control & Factory Monitoring Level 2: Enhancing Productivity & Maintenance Safety Asset Track Emergency Level 1: Lighting Control On/Off Dimming Occupancy Scheduling Private & Confidential 23
Slide 24: Investment Proposition
INVESTMENT PROPOSITION TRUSTED DIFFERENTIATED Deep expertise exclusively in LED and Best-in-class designs that offer superior decades of experience as a lighting partner performance, low maintenance, high to many of the world’s leading efficiency and long-life. That’s how we organizations has helped
Slide 25: Outlook
OUTLOOK 2016 was a year of change for Dialight. We are making good progress with our three-year plan to return to sustainable growth. Phase one of the plan to rebuild our operating model, is largely complete. The sustainability benefits of reduced energy usage, lower carbon emissions, reduced mainte
Slide 26: Questions
Questions Private & Confidential 26
Slide 27: 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 28: Income Statement
INCOME STATEMENT Variance Constant £m 2016 2015 Reported Currency Revenue 182.2 161.4 13% 2% Cost of goods sold (112.7) (105.2) Gross Profit 69.5 56.2 24% 11% Distribution costs (32.7) (30.7) Administrative expenses (23.7) (19.4) Underlying EBIT 13.1 6.1 115% 72% Non-underlying costs (16.4) (9.5) Fi
Slide 29: Segmental Results
SEGMENTAL RESULTS Lighting £m 2016 2015 Variance Revenue 136.6 120.6 13% Direct costs (79.2) (72.3) (10%) Gross Profit 57.4 48.3 19% Gross margin 42% 40% 2% Overheads (43.9) (41.5) (6%) EBIT 13.5 6.8 99% Signals & Components £m 2016 2015 Variance Revenue 45.6 40.8 12% Direct costs (33.5) (32.9) (2%)