Interim Results 10th September 2007 Financial Highlights 2007 H1 Movement on 2006* H1 z Revenue £28.9m 3% z Operating profit £1.0m (53%) z Profit before tax £1.3m (50%) z Earnings per share (basic) 2.5p (53%) z Strong cash generation z Dividend *Restated to 2007 currency Increased by 9% to1.9 pence per share Revenue Bridge £m 2006 H1 revenue Volume increase (3%) 30.0 0.9 Currency impact (2.0) 2007 H1 Revenue 28.9 Revenue Bridge Signals/Illumination 2006 H1 revenue Volume increase (12%) £14.2m £1.7m Components 2006 H1 revenue £15.8m Volume reduction (5%) £(0.8)m Currency impact £(1.1)m Currency impact £(0.9)m 2007 H1 Revenue £14.8m 2007 H1 Revenue £14.1m Contribution Margin 2007 First Half 2006 First Half Components 43.8% 47.9% Signals/Illumination 33.2% 36.3% Bridge – Operating Profit £m 2006 H1 operating profit Components Signals/Illumination 2.3 (0.9) 0.6 Slippage of Cost Reduction (S/I) (0.5) Currency/Other (0.5) 2007 H1 operating profit Note: USD rate movement – 18 cents Euro rate movement – 3 cents Effect of 1 cent movement p.a. - £30k (annualised) 1.0 Summarised Cashflow £m Operating profit 1.0 Depreciation and amortisation 1.1 Working capital 1.9 * Pension payment (0.5) Operating cashflow 3.5 Capital expenditure (0.7) Development spend (0.4) Taxation 1.1 Free cash flow 3.5 *Inventory reduced by £0.8m to £9.4m Movement in Cash £m Free cash flow Dividends Interest Net cash inflow Opening net cash Translation Closing net cash 3.5 (1.1) 0.3 2.7 4.3 (0.1) 6.9 Segment Revenues 2007 1H Sales (£M) 14.1 2006 1H Sales (£M) 14.8 14.2 15.8 Signals/Illumination Components Components z z z Orders stabilised End user demand flat to 2006 Outlook for Disconnects positive Signals/Illumination Revenues H1 '07 H1 '06 22% 23% 54% 15% 9% Traffic Obstruction Illumination Other 53% 14% 10% Traffic z z z z z z 14% Revenue growth year on year US “Large Bid” activity growing Awarded major contracts for New York State, Florida State Adoption of new ITE Specification stabilising Europe strategy continues Price movement to be offset by cost reduction Obstruction z z z Revenues flat year on year US Orders up by 33% Major new product introductions to drive revenue 1. 2. 3. 4. 5. US Wind Turbines - Synchronised Red Beacon European Wind Turbines - White LED Strobe US Telecommunications - White LED Strobe European Hazardous Market - “ATEX” Red Strobe General Obstruction Market- Low cost Obstruction Side Light Obstruction z z z Synchronised Red Beacon - US Wind Turbine installations to run at 1000 Turbines/ year - potential of 2000 Lights per year White Strobe 3 Layer (Europe) - 2000 Turbines/year potential of 4000 Lights per year White Strobe 4 Layer(North America) - over 50,000 lighted Cell Towers in North America on a 10 year replacement cycle potential 5000 Lights per year Transportation - Vehicle and Rail z z z Entering H2 2007 with $1m Order Book for Heavy Duty Vehicle Lights White Lights for Bus Interior Lighting - Fluorescent replacement - Potential $2000 per bus Booked New York Power Authority Order for 12,000 Wayside Signals - $2m approx. Lighting Lighting Architectural Lighting z In discussions with US OEMs for private label of Lumidrives Products z Won a “Best Product” Category at Lightfair z Light Engines launched through Distribution z High Power Colourdriver to be introduced in H2 for new LEDs How do LEDs compare to the competition ? (September 2007) Type Efficiency lm/W Life -hours x1000 Cost Per lumen $ Colour Rendering Ra High Pressure Sodium 60 -120 10 - 20 0.0004 30 Ceramic Metal Halide 60 -100 6 -12 0.0010 70 - 95 Fluorescent 40 -100 6 - 45 0.0005 60 - 90 Halogen & Tungsten 8 -22 2 - 10 0.0002 100 Cool white LED 6000k 60 -100 50 0.01 70 Warm white LED 3000k 20 - 50 50 0.04 75 -90 White Lighting z z z z z z z z z Introduced “Safesite” Hazardous Location Downlight Designed to replace 150 watt High Intensity Discharge Light Installed base $250m plus for Refinery Market First sales to beta sites August of this year Strong value proposition Over 40% Power Saving Longer life - 5 year warranty Sealed for life concept Similar price as conventional fixture Break the Paradigm! Efficiency Typical 150W HID HL Typical 100W HID HL Dialight SafeSite™ LED C1D2 16000 9440 4310 Lamp/LED Output (lumens) 7349 4336 3344 Fixture Output (lumens) 3707 2187 3217 Target Area Illumination (lumens) 167 110 39 39 35 Fixture Efficiency lumens/watt) 22 20 34 Target Area Efficiency (lumens/watt) 95 Power (watts) z Directional nature of LED’S mean more efficient light delivery to target area z Energy efficiency is influenced by LED selection and drive scheme Where can LEDs add value today? z By understanding applications in which we can exploit the unique properties of LEDs and engineer system level solutions which create a strong value proposition Robust No Mercury Precision optics Long Life Low operating temperature Compact No UV or IR New lighting applications Easily Controlled Strategy z z z z Select the application that drives value Engineer the fixture to capitalise on LED properties Register IP to protect the future Take to End Users/OEMs