Dialight plc AGM 20th April 2011 Highlights of 2010 ● Profit before tax of £11.3m (2009: £5.3m) ● Full year Revenues grew 28.3% to £99.2m (2009: £77.3m) ● Signals/Illumination segment revenues increased to £61.1m (2009: £46.4m) ● Lighting sales more than doubled to £11.6m (2009: £5.5m) ● Two international initiatives completed ● Strong operating cash flow leading to net cash of £10.4m (2009: £9.1m) ● Final dividend of 5.2 pence (2009 Second Interim: 4.3 pence) Five Year History 2010 £m 2009 £m 2008 £m 2007 £m 2006 £m Turnover 99.2 77.3 77.9 63.4 52.3 Profit before tax 11.3 5.3 5.6 4.5 5.8 Operating Cash flow 15.1 11.0 6.0 5.8 2.2 Net Cash 10.4 9.1 4.1 4.4 2.2 Shareholders Funds 46.2 40.1 37.5 30.8 29.7 Return on Sales 11.4 % 6.9 7.2 7.1 11.1 Return on Capital % (Exc Cash) 17.1 17.7 17.0 21.1 31.6 Revenues 2010 2009 Revenue £99.2m £77.3m Signals/Illumination £61.1m £46.4m Electromagnetic Components £14.6m £13.3m LED Indication Components £23.5m £17.6m Contribution Margins 2010 2009 Signals/Illumination 42.2% 38.8% Electromagnetic Components 17.2% 23.8% LED Indication Components 52.9% 52.7% LED Indication Components ● Niche with over 15,000 customers – strong profit and cash generator ● Revenues increase over 33% versus 2009 ● Strong growth in H1 with consequent inventory build up ● Slower H2 as predicted ● Fundamentals of the business unchanged ● Margins good ● Expect flat performance in 2011 with sales to rise or fall with the general market Electromagnetic Components ● Revenues up £1.3m versus 2009 with growth coming from US smart meter manufacturers selling to US utilities ● New contract win expected to drive higher future growth with 100m US homes still to adopt smart meters ● Rest of the world is also moving towards mass conversion to smart metering ● Prospects for Disconnect still promising but on thin margins and lumpy by nature Signals/Illumination ● ● ● ● Traffic Obstruction Transportation Lighting Signals / Illumination Five Year History 2010 £m 2009 £m 2008 £m 2007 £m 2006 £m Turnover 61.1 46.4 43.3 33.4 28.6 Operating Profit 8.7 3.3 1.7 0.1 (0.5) Return on Sales % 14.2 7.1 3.9 0.3 n/a % of Group Profit 77.7 62.2 30.4 2.2 n/a Signals/Illumination Revenue 2010 2009 £61.1m £46.4m Traffic £27.4m £23.6m Obstruction £12.3m £7.0m £9.8m £10.2m £11.6m £5.5m Revenue: Transportation Lighting Signals - Traffic ● Dialight is the world’s largest manufacturer of LED Traffic Lights ● European traffic up 34% with strong performance both in the UK and the rest of Western Europe ● US Traffic up 9% in spite of no large projects ● Margins improved ● Some interest in street lights from customers in both US and Europe Obstruction Lighting Global Markets Served Telecom Markets • Cellular • Private Microwave networks • Private Pager networks Utilities • Stacks, Chimneys & Cooling Towers • Catenary Systems Wind Markets • Onshore • Offshore Marine • Offshore Platforms • Fixed & Seasonal Aids Broadcast Market • 500‐2,200 Ft. Towers Tall Structures • Buildings • Bridges • Cranes Signals - Obstruction ● Dialight is the world leader in LED based Obstruction Lighting ● 76% year on year growth – 50% excluding BTI acquisition ● Margin improvement driven by new Beacon and Strobe designs ● More than 2400 White Strobes supplied to US Cell Tower market in 2010 – 76000 to go! ● Sales to 8 of the top 10 tower operators in 2010 ● Acquisition of BTI to address European Offshore Wind Market Illumination ● Dialight is first to market with LED based lighting for Hazardous and Industrial applications ● Revenues up over 100% ● 20,000 Industrial White Lights shipped ● High Bay Light major success ● Winner of Techmark and Elektra awards ● Sales to over 300 customers in 2010 ● Pipeline of new/improved products ● 2011 starting strongly LED Performance ● Cree, Philips and Nichia all supplying high performance devices ● Typical lumens/watt 135 ● Device output possible to 235 lumens ● LED cost per fixture reduced by 50% in the year ● More LED suppliers entering the market Evolution of Energy Efficient Lighting Lumens per watt 200+ LPW 200 186 LPW 180 XM Lumens / Watt 161 LPW 160 LED T8 Fluorescent T5 HO Fluorescent High Pressure Sodium XPG 140 130 LPW 120 Metal Halide Pulse Start XPE Metal Halide 114 LPW REBEL 100 100 LPW 0 2009 2010 2011 2012 What that means for Dialight ● More lumens/watt means 1. 2. 3. 4. 5. 6. 7. Less LEDs Less power Less heat Smaller power supply Less thermal management More applications for our products…. Constant development –constant change! …lots of new opportunities! Solid State Lighting Lighting Market Sizing 2010 Global Projection: $75 billion Parts & Accessories 18% Industrial 7% Residential 23% Portable 18% Commercial 21% Outdoor 17% 2010 Global Industrial Sales: $5.25 billion Source: Freedonia / IMS Market Sizing: Hazardous Lighting Utilities 4% Textile Machinery 0% Automotive 2% Other Industries 16% Rubber & Plastics 7% Pulp & Paper 3% Building Automation 2% Chemical & Pharmaceutical 21% Defence 3% Food & Beverage 7% Oil & Gas 32% Machine Tools Metals 2% 1% 2010 Estimated Global Sales: $900+ Million Growth projections 7%+ CAGR 2011 ‐ 2015 Source: Freedonia Americas – Markets Currently Served Industrial Hazardous Markets ● Oil & Gas ● Pipelines ● Petrochemical & Chemical ● Pharmaceuticals ● Mining (Surface) ● Waste Treatment ● Pulp & Paper ● Food Processing Industrial Markets ● Water Treatment ● Power Plants & Utilities ● Manufacturing ● Automotive Facilities ● Freezers, Cold Storage ● Food Processing ● Specialty – Nuclear Public Infrastructure ● Military ● Government–Federal/Municipal ● Prisons Other Markets ● Warehousing Market Size World Lighting Demand by Region Source: Freedonia Worldwide Expansion ● Majority of Industrial Lighting sales in 2010 were in North America ● H2 2010 invested in R & D Centre in UK to address IEC Specifications ● Sales Managers now in UK, Germany, France, Dubai, Singapore, Australia ● Recruitment planned for Korea, Japan ,Eastern Europe Primary Oil & Gas Activity London Paris Houston Seoul Singapore UAE Perth Saudi Arabia Primary Oil & Gas Engineering Centres 2011 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 ● Executive confident in further Revenue Growth and Profitability Challenging the status quo in the Lighting Industry!