November 2011 Presentation_011211094000

Dialight plc
November 2011
1
Five Year History
2011
H1
£m
Turnover
2010
£m
2009
£m
2008
£m
2007
£m
2006
£m
51.7
99.2
77.3
77.9
63.4
52.3
Profit before
tax
6.2
11.3
5.3
5.6
4.5
5.8
Operating
Cash flow
7.0
15.1
11.0
6.0
5.8
2.2
Net Cash
6.2
10.4
9.1
4.1
4.4
2.2
Shareholders
Funds
47.7
46.2
40.1
37.5
30.8
29.7
Return on
Sales %
12.0
11.4
6.9
7.2
7.1
11.1
Return on
Capital %
(Exc Cash)
n/a
31.6
17.1
17.7
17.0
21.1
2
Half Year Revenues
2011
2010
Total Revenue
£51.7m
£46.1m
Signals/Illumination
£34.1m
£26.1m
£6.4m
£7.5m
£11.2m
£12.5m
Electromagnetic Components
LED Indication Components
3
Niche
% LED
Penetration
DIA
Speed to
Market
% Growth
Expectation
DIA Share
Indication
H
H
Flat
H
Transportation
H
H
GDP
H
Traffic US
H
H
Flat
H
Traffic Europe
L
H
5-10%
H
Obstruction
L
H
30-50%
H
Industrial Lighting
L
H
100%
H
Signals/Illumination Five Year History
2011 H1
£m
2010
£m
2009
£m
2008
£m
2007
£m
2006
£m
Turnover
34.1
61.1
46.4
43.3
33.4
28.6
Operating
Profit
5.4
8.7
3.3
1.7
0.1
(0.5)
Return on
Sales %
15.8
14.2
7.1
3.9
0.3
n/a
% of Group
Profit
87.1
77.7
62.2
30.4
2.2
n/a
5
Signals/Transportation
Sales £m
●
●
●
●
2009
2010
2011/H1
10.2
9.8
4.2
Niche business in US Transit Bus market
Large market share
Lights are specified by Transit Authorities
Sales will be flat for the foreseeable future
6
Signals/Traffic
Sales £m
2009
2010
2011/H1
23.6
27.4
12.2
●
Dialight is the world’s largest manufacturer of LED Traffic Lights
●
US market mature shows little growth almost 80% adoption of LED Traffic
Lights
●
European market only 20% adopted
●
Europe sales 33% of total
●
Europe should grow to equal US business
●
Expect high single digit growth over the next 3- 4 years
●
Interest building for LED street lights from customers in both US and Europe
7
Signals/Obstruction
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
8
Signals/Obstruction
Sales £m
2009
2010
2011/H1
7.0
12.3
7.3
●
Dialight is the world leader in LED based Obstruction Lighting
●
Strong margins driven by new Beacon and Strobe designs
●
More than 5,000 White Strobes supplied to US Cell Tower market since
launch– 75,000 to go worth over $200m!
●
Dialight still the only FAA Approved supplier of this light
●
Danish operation performing to plan amid signs of improving European
wind market
●
Expect 30-50% annual growth over the next 3-4 years
9
Signals/Illumination
Sales £m
2009
2010
2011/H1
5.5m
11.6m
10.4
●
Dialight is first to market with LED based lighting for Hazardous and
Industrial applications
●
Over 20,000 Industrial White Lights shipped in H1 –equivalent to whole of
2010!
●
High Bay Light major success –over 30,000 installed in 18 months
●
Winner of multiple awards
●
Pipeline of new/improved products
●
Customer base grown from 300 in 2010 to 460 at end of H1/11
10
Evolution of Energy Efficient Lighting
Industrial Lighting
●
Highest customer base segment – Oil, Gas, Petrochem
●
Worldwide presence expanded with investment in Sales personnel in
Europe/Middle East and acquisitions in Australia and Japan
●
Largest LED lighting portfolio for hazardous locations
●
H1/11 released one new product per month
●
Product sells on payback to customer generated by energy saving,
maintenance, difficulty of access, 24/7 operations, high electricity cost.
●
LED improved performance and price improving payback to customers.
●
50 of 50 States offering rebates
●
LED Lighting can be the “low hanging fruit” of energy saving/carbon
reduction whilst saving money
12
Market Size
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
13
Customer Base by Market Segments
Customer Base by Market Segments
25%
34%
Oil & Gas, Petrochemical,
Chemical &
Pharmaceutical
Mining & Power
Generation
Water, Waste Water,
Processing & Food Plants
18%
23%
Industrial ‐ Warehouse,
Manufacturing & Cold
Storage
14
Progress to date – Customers / Segments
Oil & Gas, Petrochemical, Chemical & Pharmaceutical
AES
Alyeska Pipeline Services Co. (2 locations)
Anadarko Petroleum
Apache
Arkema Chemicals
Atwood Oceanics
BASF Petronas (5 locations)
Baxter
Baxter Caribe Inc.
Bayer CropScience
Berquist & Knobelsdorff
BP Offshore
BP Refineries (6 locations)
Bristol Myers
Caltex
Cenex
Citgo
Chevron (3 locations)
Chevron (Gorgon Gas)
CPC Corporation
Coffeyville Resources ConocoPhillips (6 locations)
Degussa Engineered Carb
Dow Chemical (5 locations)
Dow Corning (2 locations)
Dubai Petroleum
DuPont (3 locations)
ENI Blacktip Gas
Exxon Mobile (4 locations)
Flexsys Chemicals
FMC Alcoy
Formosa Plastic
GlaxoSmithKline
Great Salk Lake Minerals
GPN Total
HB Rentals
Hess (2 locations)
Holcim‐Apasco
Huntsman Tioxide
Indolex Chemical Co.
Ineos (3 locations)
Innoveox
ISP Chemicals
Kaneka Malaysia Sdn Bhd
Lubrizol Painseville
Lyondell Bassell (6 locations)
Marathon Gas (2 locations)
Marathon Oil (4 locations)
Merck & Co.
Molet
Nexen Gas National Oilwell Shanghai
Oil Tanking
Optimal Chemicals
Oxbow (2 locations)
Oxy Chemical
Pfizer (2 locations)
Pioneer Drilling Co.
Philips Chevron
Polyolefin Company
Polyplastics Asia Pacific (2 locations)
Pride International
Proctor & Gamble (2 locations)
Questar Gas
Pride International (ENCSO)
Propisol
PT Badak NGL
Rain CII Carbon LLC
Red Cedar Gathering (6 locations)
Reichart Chemicals (2 locations)
Roquette
Rohm Haas
Sabic
Saint Gobain Plastics
Sanofi Pasteur
Sartomer
Sasol North America
Schering Plough
Shell Eastern Petroleum
Singapore Refining Company
Shell Oil (2 locations)
Solvay Chemicals (2 locations)
Sun Products
Sunoco (3 locations)
Synthomer Sdn Bhd
Talisman Energy Tameco
Taminco
Technip
Tesoro
Thatcher Chemical
Trans Canada Natural Gas
Total Gas
Valero (2 locations)
Viking Pipeline
Vopak
Westlake Chemical
Wesvaco
Williams Energy Gas Plant
2011 New Business
15
Progress to date – Customers / Segments
Mining & Power Generation
3M
Accelor Mittal
Arch Black Thunder Coal Mine
Barrick Gold
BHP Billiton (2 locations)
Chamming Electric
Chesapeake Energy (3 Locations)
Climax Molybdenum Coal Peers
Colstrip PP&L
Consumers Energy Corteau Mines
Colorado Springs Utilities
Connectiz
Coteau
Covanta Energy (2 locations)
Delta Electricity
DTE Energy
Eco Electrica Power Plant
Elite Energy
Enogex
Entergy Nuclear (3 locations)
Envirolight Excel Energy
Eraring Energy (2 locations)
Fairmont Minerals
Freeport McMoRan Copper & Gold
(3 locations)
GE Power & Water
Genting Sanyen Power
Gerdau Steel
Great Basin Gold
Great River Energy
Hibbing Taconite
Idaho Power Corporation
IES Utilities, Inc OGS
Iluka Resources
Integra Coal
La Mancha Gold
Intrepid Potash Mining
Jacobs Ranch Mine
Kaneka Eperan
Kansai Power Electric
Kapar EnergyLine Power
Merrit Energy
Midwest Generation
Mississippi Phosphates Corp.
Mitsui Copper Foil
Montana Power (PPL) Colstrip
Mountain Coal
Newmont Gold
Nucor Steel
Oxbow Carbon and Minerals
PCS Phosphate
Peabody (2 locations)
Pilbara Iron
Portland General Electric
Public Service New Mexico
Red Path Mining
Rio Tinto (6 locations)
Rocky Mountain Power (2 locations)
Rohr
Rytway
Scottish & Southern Energy
Sembawang
Sebago
Segari Energy Venture
Snowey Hydro
Southwest Generation
Spectra Energy (2 locations)
Steel Dynamics
Tata
Teck‐Cominko
Tenaga Nasional Berhad
Toledo Edison
Tucson Electric Power
TVA (3 locations)
Unico Mining
US Steel (2 Locations)
Vectron Energy
Verve Energy
Western Energy Westmore Coal
WI Industrial Sand & Gravel
Wisconsin Power & Light
Xcel Energy
Xstrata Coal
2011 New Business
16
Progress to date – Customers / Segments
Water, Waste Water, Processing & Food Plants
ADM Corn Processing
ADM Wallhalla AG Processing Allen Can
American Crystal Sugar
Appert’s Food
Arbiti Bowater
Bar‐S Foods (2 locations)
Baxter Soups
BNS Fererro
British Sugar
Cavendish
Carmel Clay Township
Cargill
City of Philadelphia
City of Reno, NV
Clearbrook Rice
Cook Hams
Darigold
Del Monte
Diageo
Diamond Crystal
Dip Abitibi Bowater
Drayton Foods
Driscoll’s Berries
Galvin
Gary Waste Water
Gilbertson & Page
Goderich Elevator
Golden Plump Chickens
GS Dunn
Hatfield Quality Meats
Hayes Lemmerz
Henry’s Food
Heinz
Henkel
Henry Bell
Huntington Alloys
Idaho Power
IFFCO Al Ain
Interbrew
Jennie O Turkeys
Kapstone Kraft Paper Co
Kellogg's
Kenko Mayonnaise Gotenba
LA Water & Power
Martisa
McDonalds
McCain Foods
Michigan Sugar
Mermaid Marine
Monterey Gourmet Foods
Nabisco
Nestle‐Stouffer Noranda Alumina
North Dakota Mill
Noyon
Passaic Valley Sewage
Paulaner Brauerei GmbH & Co KG
Patrick Cudahy
Pepsi
Port Stevens Council
Primo Foods (2 locations)
PUB
Quantum Foods
Riverview Dairy Farm
Seneca Foods
Sherwin Alumina
Simplot Potatoes
SSAB Steel Alabama Inc.
Sugar Beet Plant
Tecnologia Intercontinental
Temple Island
Tyson Foods
Twin Lakes Regional Waste District
United Farms
Valassis Foods
Vion Foods
Wallhalla Bean Plant
WhiteWave
Wild Flavors
Wispak
2011 New Business
17
Progress to date – Customers / Segments
Industrial ‐ Warehouse, Manufacturing & Cold Storage
3E ‐ Electrical Eng & Equipment Co.
Aisin AW
Alcoa
Allsteel Panel
Al Tayer Motors Anderson
Anderson Auto
Archer Daniels Midland Corp.
Automation & Electronics
BMW
Brikmakers
Buckman Labs
Bunge
CDS Hackner GmbH
Charter Freightlines
Chris Hayter
City of Kalgoorlie Boulder
City of Phoenix
City of Toronto
City of Wichita
Concord Phillips
Conectiv Edgemoor
Dalmore
Danisco
Davisco Int’l
Daiwan Kasei
Delta Clothes
DHL/Danzas
DMI Industries
DOT Warehouse
DTE Energy‐St. Clair PP
E‐Leather
Eco Lighting Services & Tech
Emerson Compressor
ExCeL Conference Centre
FedEx
Flexicon Inc
Firestone Building Products
Frontline Int.
Galavan Industries
Galores Logistica
General Machinery
General Motors (2 locations)
Glenadale Complex
Graphic Packaging Int’l
Hamlet
Healthstore
Henrico County Holcium USA
Honda (2 locations)
*Honeywell
Huhtamaki
Huntsmann
I/O Solutions & Controls
Indiana Department of Assets
Indiana Department of Corrections
Industrial Automation Controls
Jesco
John Deere (2 Locations)
KEW Incorporated C/O Gerrie
Kimberly Clark
Klockner Pentaplast
Kuehne + Nagel
Lafarge
Letts Diaries
Logix London Underground
McDermott Internatonal Inc.
Medsafe
Meng Xue Song
Metal Container
Miller/Coors
Mozel Inc.
Multi Packaging Solutions
National Starch
Noctur
Norbert Dentressangle
Norboard
NSK Bearings
Oakley
Olympus Keymed
Oregon Department of Corrections (2 locations)
PADOT Salt Sheds
Pilkington North America
Pip Shin Chubu Logistics
Phillip Morris
Powder Solution
PPG
Port Moresby Port Hedland
PT Holcim Cement
RAF Hendon
Rexam
Rittenhouse Electric
Rockline Industries
Saint Gobain
San Francisco Municipal Transit
Sea Chill
SEPTA
Sesco
Smurfit Kappa
Steffen Inc. Swann
TECOT Dover Branch Transfers
Tesco
The Baltimore Sun
Timken David SIPE
Toyota Steel
UNAM
Van Meter Industrial
Vektra Electric
Wilkinsons
Yahoo
2011 New Business
18
Case Study: Kuehne + Nagel
Before (High Pressure Sodium High Bay)
150W Dialight LED High Bay
400W HPS High Bay
After (Dialight LED High Bay)
Project Overview
• (136) 250W & (100) 400W HID vs (126) 150W LED
• £42,000 (>500,000 kWh) Energy Savings/yr
• 271 tons CO2 Reduced
Payback = 1.1 years
19
Case Study: Oregon Correctional Facility
Project Overview
• (464) 400W HID vs. (464) 150W LED • >£90,000 (1,340,000 kWh) Energy Savings / yr
• 1,150 tons CO2 Reduced
• 24/7 operation ‐ £0.05 energy rate
Payback = 1.25 years
20
Case Study: Top US Refinery
Current Project Overview
(5% conversion)
• (169) 150W High Bay replacing (169) up to 400W HID
• (176) 100W SafeSite Area Light replacing (176) up to 250W HID
• (30) 8W SafeSite Area light replacing (30) up to 150W Incandescent
• 500,000 kWh Energy Savings / yr
• 425 tons CO2 Reduced
Total Plant Opportunity (20,000+ fixtures)
• 19 TWh Energy Savings / yr
• 16,000 tons CO2 Reduced
• Equivalent savings of powering 2,000 households and removing 2,750 cars from the road
21
Case Study: Red Cedar Natural Gas
HPS
LED
Project Overview
• (44) 400W HID vs. (48) 150W LED • £2,000 (125,000 kWh) Energy Savings / yr
• £15,000 Lifetime Maintenance Savings • 105 tons CO2 Reduced
22
Case Study: Large Data Center in Asia
New Installation:
Singapore
Project Overview
• New Installation
• Minimal energy consumption
• Instant on allows for lights only on when required
• Zero maintenance
‐‐
• (200) 150W LED High Bays • $0.14 kWh rate
23
Dialight LED Lighting Product Portfolio
High Bay
Power Consumption: 150W
Replaces: 400W HID
Energy Savings: 65%
Low Bay
Power Consumption: 80W
Replaces: 150W HID
Energy Savings: 45%
Area Light
Power Consumption: 70W
Replaces: 250W HID
Energy Savings: 70%
Linear Fixture
Power Consumption: 50W / 100W
Replaces: up to 200W Fluor
Energy Savings: 50%
Area Light
Power Consumption: 9W
Replaces: 65W Incan
Energy Savings: 85%
Wallpack / Bulkhead
Power Consumption: 22W
Replaces: 70W HID
Energy Savings: 70%
General Purpose Fixture
Power Consumption: 50W
Replaces: 72W Fluor
Energy Savings: 30%
Roadway Sign Light
Power Consumption: 70W / 100W
Replaces: Up to 250W HID
Energy Savings: 70%
24
Outlook 2011 & Beyond
●
Signals/Illumination positioned for continued growth with stronger margins.
Potential growth :Transportation flat
Traffic high single digit
Obstruction 30-50%
Lighting 100%
●
LED efficiency and cost improvement supports customer value proposition
and Dialight margin growth
●
Strong pipeline of new and improved White Lighting products with
continuous reengineering and cost reduction
●
Executive confident in continued Revenue Growth and Profitability Guidance re-iterated for 2011 and 2012
25
Challenging the status quo in the
Lighting Industry!
26
Appendix
27
Highlights of First Half 2011
●
Operating Profit of £6.2m up 17% (2010: £5.2m)
●
Half year Revenues grew 12% to £51.7m (2009: £46.1m)
●
Signals/Illumination segment revenues increased by 30.7% to £34.1m
(2010: £26.1m)
●
Obstruction sales increased 52.1% to £7.3m (2010: £4.8m)
●
Lighting sales increase 161% to £10.4m (2010: £4.0m)
●
Two international initiatives completed - Dialight Japan and Dialight
Australia
●
US pension scheme successfully bought out
●
Dividend increased 17.9% to 3.3 pence (2010 2.8 pence)
28
Summary Profit and Loss
H1/2011
£M
H1/2010
£M
Revenue
51.7
46.2
Gross Profit
14.8
12.6
Gross Profit %
28.6
27.3
Overhead costs
(8.6)
(7.3)
Operating profit
6.2
5.3
(0.7)
(0.1)
5.5
5.2
(2.0)
(1.9)
3.5
3.4
Net financing cost
inc non-underlying
Profit before tax
Tax
Retained Profit
29
2011 Interim Financial Result Bridge
£m
2010 H1 EBIT
5.3
OE Volume – exceptional Q1 2010
(0.4)
Switch – Copper & Silver impact sales
(0.3)
Signals and Illumination – Volume Growth *
4.1
Signals and Illumination – Margin Growth *
1.0
Foreign Currency Translation
(0.5)
Recruitment
(0.5)
Investment in additional Development Costs
(0.7)
Investment in additional Sales and Marketing
(0.7)
Additional BTI overhead / amortization of intangibles
(0.6)
Increased Bonus Provision
(0.3)
Increased Share Option Charge (IFRS2)
(0.1)
2011 H1 EBIT
6.2
30
Cashflow
2011 H1
£M
2010 H1
£M
Operating cash
7.0
6.7
Working capital
(4.6)
(2.5)
Disposal of US
Pension Fund
(2.4)
-
0.0
4.2
Tax/financing
(0.2)
(1.6)
Investing activities
(2.0)
(3.7)
Dividend Paid
(1.6)
(1.4)
Change in net cash
(3.9)
(2.5)
Cash from operations
31
Balance Sheet
JUNE 2011
£M
JUNE 2010
£M
DEC 2010
£M
22.0
21.0
21.9
6.2
7.0
10.4
37.0
34.1
28.0
(16.9)
(15.7)
(12.2)
Non current
liabilities
(0.5)
(1.9)
(1.9)
Net Assets
47.8
44.5
46.2
Non current
assets
Cash
Other current
assets
Current
liabilities
32
Working Capital
●
Working capital requirements increased due to growth in business
●
Inventory – strategic purchasing to protect growth and from Japan risk
●
Small improvement in receivables days outstanding compared with H1
2010
●
Payables days outstanding consistent with H1 2010
●
Cash - Continuing operating cash flow despite pension buyout, inventory
build and acquisitions. Debt free balance sheet
33
Dividend and EPS
2011
2010
Interim dividend per share
3.3p
2.8p
Basic EPS
11.2p
10.8p
3.4x
3.9x
12.6p
10.8p
Dividend cover times
Adjusted EPS (before pension disposal)
34
Tax
●
●
●
●
●
Effective tax rate in FY 2008 was 38.5%
Effective tax rate in FY 2009 was 37.5%
Effective tax rate in FY 2010 was 34.0%
Effective tax rate in H1 2010 was 36.0%
Effective tax rate in H1 2011 is 36.0% which we hope to
marginally reduce by year-end
35
Contribution Margin
2011
2010
Signals/Illumination
44.9%
42.0%
Electromagnetic Components
17.4%
18.3%
Indication Components
55.6%
54.6%
36
LED Indication
●
Niche with over 15,000 customers – strong profit and cash
generator
●
H1/11 Revenues £11.2m compared with strong H1 2010 at
£12.5m.
●
Currency translation impact reduced 2011 sales by £0.7m
and EBIT by £0.3m.
●
Business up sequentially from H2 2010
●
Fundamentals of the business unchanged
●
Margins solid
●
Demand driven by Servers, Storage, Cellular Infrastructure
and Internet Access
37
Electromagnetic Components
●
H1 Revenues down £1.1m (15%) versus 2010
●
Copper and silver pricing has negatively impacted
●
Traditional business flat
●
Prospects for Disconnect still promising but on thin
margins and very lumpy
●
Smart Metering starting to proliferate throughout the
world
●
Qualified for UK market
38
Signals/Illumination
2011/H1
2010/H2
2010/H1
Revenue
£34.1m
£35.0m
£26.1m
Traffic
£12.2m
£15.1m
£12.3m
Obstruction
£7.3m
£7.5m
£4.8m
Transportation
£4.2m
£4.8m
£5.0m
£10.4m
£7.6m
£4.0m
Lighting
39