interim results - sept 2006 · 2010 £m. 2009 £m. 2008 £m. 2007 £m. 2006 £m. turnover; 51.7
TRANSCRIPT
1
Dialight plc November 2011
2
Five Year History
2011 H1£m
2010£m
2009£m
2008£m
2007£m
2006£m
Turnover 51.7 99.2 77.3 77.9 63.4 52.3Profit 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 2.2Shareholders 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
3
2011
2010
Total Revenue £51.7m
£46.1m
Signals/Illumination
£34.1m
£26.1m
Electromagnetic Components
£6.4m
£7.5m
LED Indication Components
£11.2m
£12.5m
Half Year Revenues
Niche % LED Penetration
DIASpeed toMarket
% 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
5
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 28.6Operating 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
Signals/Transportation
●
Niche business in US Transit Bus market●
Large market share●
Lights are specified by Transit Authorities●
Sales will be flat for the foreseeable future
2009 2010 2011/H1
Sales £m 10.2 9.8 4.2
6
7
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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
Signals/Traffic
2009 2010 2011/H1
Sales £m 23.6 27.4 12.2
8
Telecom Markets•
Cellular•
Private Microwave networks
•
Private Pager networks
Wind Markets •
Onshore•
Offshore
Broadcast Market •
500‐2,200 Ft. Towers
Utilities •
Stacks, Chimneys &Cooling Towers
•
Catenary Systems
Marine •
Offshore Platforms•
Fixed & Seasonal Aids
Tall Structures•
Buildings•
Bridges•
Cranes
Signals/Obstruction Global Markets Served
9
Signals/Obstruction
●
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
2009 2010 2011/H1
Sales £m 7.0 12.3 7.3
10
Signals/Illumination
●
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
2009 2010 2011/H1
Sales £m 5.5m 11.6m 10.4
Evolution of Energy Efficient Lighting
12
●
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
Industrial Lighting
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Market SizeHazardous Lighting
Automotive 2%
Building Automation
2%Chemical &
Pharmaceutical 21%
Defence 3%
Food & Beverage
7%
Machine Tools 2%Metals
1%
Oil & Gas 32%Pulp &
Paper 3%
Rubber &
Plastics 7%
Textile Machinery
0%
Utilities 4%
Other Industries
16%
2010 Estimated Global Sales: $900+ Million
Growth projections 7%+ CAGR 2011 ‐ 2015Source: Freedonia
14
Customer Base by Market Segments
Customer Base by Market Segments
34%
23%
18%
25%
Oil & Gas, Petrochemical,Chemical &Pharmaceutical
Mining & PowerGeneration
Water, Waste Water,Processing & Food Plants
Industrial ‐ Warehouse,Manufacturing & ColdStorage
15
Progress to date – Customers / Segments
AESAlyeska Pipeline Services Co. (2 locations)Anadarko PetroleumApacheArkema ChemicalsAtwood OceanicsBASF Petronas (5 locations)BaxterBaxter Caribe Inc.Bayer CropScienceBerquist & KnobelsdorffBP OffshoreBP Refineries (6 locations)Bristol MyersCaltexCenexCitgoChevron (3 locations)Chevron (Gorgon Gas)CPC CorporationCoffeyville Resources
ConocoPhillips
(6 locations)Degussa Engineered CarbDow Chemical
(5 locations)Dow Corning (2 locations)Dubai Petroleum
Shell Eastern PetroleumSingapore Refining CompanyShell Oil (2 locations)Solvay Chemicals (2 locations)Sun ProductsSunoco (3 locations)Synthomer Sdn BhdTalisman Energy TamecoTamincoTechnipTesoroThatcher ChemicalTrans Canada Natural GasTotal GasValero (2 locations)Viking PipelineVopakWestlake ChemicalWesvacoWilliams Energy Gas Plant
Oxbow (2 locations)Oxy ChemicalPfizer (2 locations)Pioneer Drilling Co.Philips ChevronPolyolefin CompanyPolyplastics Asia Pacific (2 locations)Pride InternationalProctor & Gamble (2 locations)Questar GasPride International (ENCSO)PropisolPT Badak NGLRain CII Carbon LLCRed Cedar Gathering (6 locations)Reichart Chemicals (2 locations)RoquetteRohm HaasSabicSaint Gobain PlasticsSanofi PasteurSartomerSasol North AmericaSchering Plough
Oil & Gas, Petrochemical, Chemical & Pharmaceutical
DuPont (3 locations)ENI Blacktip GasExxon Mobile (4 locations)Flexsys ChemicalsFMC AlcoyFormosa PlasticGlaxoSmithKlineGreat Salk Lake MineralsGPN TotalHB RentalsHess (2 locations)Holcim‐ApascoHuntsman TioxideIndolex Chemical Co.Ineos (3 locations)InnoveoxISP ChemicalsKaneka Malaysia Sdn BhdLubrizol PainsevilleLyondell Bassell (6 locations)Marathon Gas (2 locations)Marathon Oil (4 locations)Merck & Co.MoletNexen Gas National Oilwell ShanghaiOil TankingOptimal Chemicals
2011 New Business
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Progress to date – Customers / SegmentsMining & Power Generation
3MAccelor MittalArch Black Thunder Coal MineBarrick GoldBHP Billiton (2 locations)Chamming ElectricChesapeake Energy (3 Locations)Climax Molybdenum Coal PeersColstrip PP&LConsumers Energy Corteau MinesColorado Springs UtilitiesConnectizCoteauCovanta Energy (2 locations)Delta ElectricityDTE EnergyEco Electrica Power PlantElite EnergyEnogexEntergy Nuclear (3 locations)Envirolight Excel EnergyEraring Energy (2 locations)Fairmont MineralsFreeport McMoRan Copper & Gold(3 locations)GE Power & WaterGenting Sanyen PowerGerdau Steel
Great Basin GoldGreat River EnergyHibbing TaconiteIdaho Power CorporationIES Utilities, Inc OGSIluka ResourcesIntegra CoalLa Mancha GoldIntrepid Potash MiningJacobs Ranch MineKaneka EperanKansai Power ElectricKapar EnergyLine PowerMerrit EnergyMidwest GenerationMississippi Phosphates Corp.Mitsui Copper FoilMontana Power (PPL) ColstripMountain CoalNewmont GoldNucor SteelOxbow Carbon and MineralsPCS PhosphatePeabody (2 locations)Pilbara IronPortland General ElectricPublic Service New MexicoRed Path MiningRio Tinto (6 locations)
Rocky Mountain Power (2 locations)RohrRytwayScottish & Southern EnergySembawangSebagoSegari Energy VentureSnowey HydroSouthwest GenerationSpectra Energy (2 locations)Steel DynamicsTataTeck‐CominkoTenaga Nasional BerhadToledo EdisonTucson Electric PowerTVA (3 locations)Unico MiningUS Steel (2 Locations)Vectron EnergyVerve EnergyWestern Energy Westmore CoalWI Industrial Sand & GravelWisconsin Power & LightXcel EnergyXstrata Coal
2011 New Business
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Progress to date – Customers / Segments
ADM Corn ProcessingADM Wallhalla AG Processing Allen CanAmerican Crystal SugarAppert’s FoodArbiti BowaterBar‐S Foods (2 locations)Baxter SoupsBNS FererroBritish SugarCavendishCarmel Clay TownshipCargillCity of PhiladelphiaCity of Reno, NVClearbrook RiceCook HamsDarigoldDel MonteDiageoDiamond CrystalDip Abitibi BowaterDrayton FoodsDriscoll’s BerriesGalvinGary Waste WaterGilbertson & Page
NoyonPassaic Valley SewagePaulaner Brauerei GmbH & Co KGPatrick CudahyPepsiPort Stevens CouncilPrimo Foods (2 locations)PUBQuantum FoodsRiverview Dairy FarmSeneca FoodsSherwin AluminaSimplot PotatoesSSAB Steel Alabama Inc.Sugar Beet PlantTecnologia IntercontinentalTemple IslandTyson FoodsTwin Lakes Regional Waste DistrictUnited FarmsValassis FoodsVion FoodsWallhalla Bean PlantWhiteWaveWild FlavorsWispak
Goderich ElevatorGolden Plump ChickensGS DunnHatfield Quality MeatsHayes LemmerzHenry’s FoodHeinzHenkelHenry BellHuntington AlloysIdaho PowerIFFCO Al AinInterbrewJennie O TurkeysKapstone Kraft Paper CoKellogg'sKenko Mayonnaise GotenbaLA Water & PowerMartisaMcDonaldsMcCain FoodsMichigan SugarMermaid MarineMonterey Gourmet FoodsNabiscoNestle‐Stouffer Noranda AluminaNorth Dakota Mill
Water, Waste Water, Processing & Food Plants
2011 New Business
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DMI IndustriesDOT WarehouseDTE Energy‐St. Clair PPE‐LeatherEco Lighting Services & TechEmerson CompressorExCeL Conference CentreFedExFlexicon IncFirestone Building ProductsFrontline Int.Galavan IndustriesGalores LogisticaGeneral MachineryGeneral Motors (2 locations)Glenadale ComplexGraphic Packaging Int’lHamletHealthstoreHenrico County Holcium USAHonda (2 locations)*HoneywellHuhtamakiHuntsmannI/O Solutions & ControlsIndiana Department of AssetsIndiana Department of CorrectionsIndustrial Automation ControlsJesco
Progress to date – Customers / SegmentsIndustrial ‐
Warehouse, Manufacturing & Cold Storage3E ‐
Electrical Eng &
Equipment Co.Aisin AWAlcoaAllsteel PanelAl Tayer Motors AndersonAnderson AutoArcher Daniels Midland
Corp.Automation & ElectronicsBMWBrikmakersBuckman LabsBungeCDS Hackner GmbHCharter FreightlinesChris HayterCity of Kalgoorlie BoulderCity of PhoenixCity of TorontoCity of WichitaConcord PhillipsConectiv EdgemoorDalmoreDaniscoDavisco Int’lDaiwan KaseiDelta ClothesDHL/Danzas
John Deere (2 Locations)KEW Incorporated C/O GerrieKimberly ClarkKlockner PentaplastKuehne + NagelLafargeLetts DiariesLogix London UndergroundMcDermott Internatonal Inc.MedsafeMeng Xue SongMetal ContainerMiller/CoorsMozel Inc.Multi Packaging SolutionsNational StarchNocturNorbert DentressangleNorboardNSK BearingsOakleyOlympus KeymedOregon Department of Corrections
(2 locations)PADOT Salt ShedsPilkington North AmericaPip Shin Chubu Logistics
Phillip MorrisPowder SolutionPPGPort Moresby Port HedlandPT Holcim CementRAF HendonRexamRittenhouse ElectricRockline IndustriesSaint GobainSan Francisco Municipal TransitSea ChillSEPTASescoSmurfit KappaSteffen Inc. SwannTECOT Dover Branch TransfersTescoThe Baltimore SunTimken David SIPEToyota SteelUNAMVan Meter IndustrialVektra ElectricWilkinsonsYahoo
2011 New Business
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Case Study: Kuehne + Nagel
Before (High Pressure Sodium 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
400W HPS High Bay
150W Dialight LED High Bay
Payback = 1.1 years
20
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
21
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
22
Case Study: Red Cedar Natural Gas
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
LEDHPS
23
Case Study: Large Data Center in Asia
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
New Installation:Singapore
Dialight LED Lighting Product Portfolio
Area LightPower Consumption:
70WReplaces: 250W HIDEnergy Savings: 70%
Wallpack / BulkheadPower Consumption: 22WReplaces: 70W HIDEnergy Savings: 70%
Area LightPower Consumption: 9WReplaces: 65W IncanEnergy Savings: 85%
Linear FixturePower Consumption:
50W / 100WReplaces: up to 200W FluorEnergy Savings: 50%
High BayPower Consumption:
150WReplaces: 400W HIDEnergy Savings: 65%
Roadway Sign LightPower Consumption:
70W / 100WReplaces: Up to 250W HIDEnergy Savings: 70%
Low BayPower Consumption:
80WReplaces: 150W HIDEnergy Savings: 45%
General Purpose FixturePower Consumption: 50WReplaces: 72W FluorEnergy Savings: 30%
24
25
Outlook 2011 & Beyond
●
Signals/Illumination positioned for continued growth with stronger margins. Potential growth :-Transportation flatTraffic high single digitObstruction 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
26
Challenging the status quo in the Lighting Industry!
27
Appendix
28
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)
29
H1/2011£M
H1/2010£M
Revenue 51.7 46.2Gross Profit 14.8 12.6Gross Profit % 28.6 27.3Overhead costs (8.6) (7.3)Operating profit 6.2 5.3Net financing cost inc non-underlying
(0.7) (0.1)
Profit before tax 5.5 5.2Tax (2.0) (1.9)Retained Profit 3.5 3.4
Summary Profit and Loss
30
£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
2011 Interim Financial Result Bridge
31
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) -
Cash from operations 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)
Cashflow
32
JUNE 2011 £M
JUNE 2010 £M
DEC 2010 £M
Non current assets
22.0 21.0 21.9
Cash 6.2 7.0 10.4
Other current assets
37.0 34.1 28.0
Current liabilities
(16.9) (15.7) (12.2)
Non current liabilities
(0.5) (1.9) (1.9)
Net Assets 47.8 44.5 46.2
Balance Sheet
33
●
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
Working Capital
34
2011 2010
Interim dividend per share 3.3p
2.8p
Basic EPS 11.2p
10.8p
Dividend cover times
3.4x
3.9x
Adjusted EPS (before pension disposal)
12.6p
10.8p
Dividend and EPS
35
●
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
Tax
36
2011
2010
Signals/Illumination
44.9%
42.0%
Electromagnetic Components
17.4%
18.3%
Indication Components
55.6%
54.6%
Contribution Margin
37
●
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
LED Indication
38
●
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
Electromagnetic Components
39
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
Lighting £10.4m £7.6m
£4.0m
Signals/Illumination