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Dialight
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Dialight plc2013 Interim Results
July 2013
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• Highlights and Financials• Business review and outlook• Q&A
Agenda
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•Lighting Revenue up over 70% to £29.3m•Lighting Profit up 180% to £4.4m•Lighting sales force expanded to 86 (59 at 31/12/12)•Underlying Operating profit £5.5m (H1 2012: £8.2m) due to repositioning of obstruction signals business
•Trial orders received for cloud based obstruction signals control and monitoring service
•Underlying earnings per share 11.6p (H1 2012: 17.3p)•Closing net cash £11.2m (H1 2012: £8.1m)•Interim dividend increased 22.5% to 4.9p (2011: 4.0p)
Highlights of First Half 2013
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Group Summary Profit and Loss
2013 £M 2012 £M
Revenue 59.9 53.1Gross Profit 18.0 18.2
Gross Profit % 30.0 34.3Overhead costs (12.5) (10.0)Underlying operating profit 5.5 8.2
Net financing cost (0.1) 0.1
Underlying Profit before tax 5.4 8.3Discontinued and Non‐Underlying 0.2 ‐Tax (1.5) (2.8)
Profit for the period 4.1 5.5
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Interim Financial Result Bridge
£M
2012 H1 EBIT 8.2
Lighting Increased Contribution 5.7
Additional Sales Cost (2.7)
Signals Lower Sales (4.3)
Residual Switch overhead allocation (0.6)
Additional development cost (0.5)
Other (0.3)
2013 H1 EBIT 5.5
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Balance Sheet
June 2013 £M
June 2012 £M
Dec 2012 £M
Non current assets 33.3 29.2 30.7
Cash 11.2 8.1 15.0
Other current assets 46.7 44.5 46.6
Current liabilities (21.3) (21.7) (25.0)
Non current liabilities (4.8) (2.9) (4.3)
Net Assets 65.1 57.2 63.0
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Cashflow
2013 H1 £M
2012 H1 £M
Operating cash 6.6 9.8
Working capital (3.6) (7.6)
Cash from operations 3.0 2.2
Tax/financing (1.4) (1.2)
Investing activities (2.4) (4.3)
Dividend Paid (3.1) (2.1)Change in net cash (3.9) (5.4)
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Half Year Revenues
2013 2012
Total Revenue £59.9m £53.1m
Lighting £29.3m £17.2m
Signals £20.2m £25.5m
Components £10.4m £10.4m
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Contribution Margin
2013H1
2012H1
Lighting 44.0% 41.7%
Signals 39.6% 48.6%
Components 51.0% 50.0%
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Business Overview
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Signals / Lighting
2013H1
2012H2
2012H1
Total Revenue £59.9m £62.0m £53.1m
Transportation £4.3m £4.0m £4.3m
Traffic £10.0m £10.6m £11.0m
Obstruction £5.7m £8.0m £10.2m
Lighting £29.3m £28.4m £17.2m
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•Americas business being reinvented•Transition from Lighting Business to Monitoring and Control•Total reengineered product line rolled out•Addresses both towers up to 350 feet and those over 350 feet•Expansion into Latin America•Addressable market well over $400m for Medium and around $200m for High Intensity systems
•Low point in H1 2013 with recovery dependent on the timing of major system sale awards
•European business growing and growth expected to continue
Obstruction Signals
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DialightSystem Overview ‐ E1 System Installation
Ethernet (RJ45)TCP/IPSNMP
GSM/CDMA3G/4G/LTETCP/IPSNMP
Wi‐FiTCP/IPSNMP
USB/RS232
Kentrox
Modbus
Display
Relay BoardAlarms
CurrentSense Board
Photocell
Power Supply
Translator Board
Battery Backup
GPS
Controller
Modbus
Dialight OpenWay Gateway Dialight Integrated Controller
Dialight Hosting(Optional)
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DialightObstruction Signals
Progress to date Americas:‐•Customer A – 6,000+ Towers outside the USA expected to commence soon
•Customer B – 7,000+ Towers in North America, Purchasing document signed, systems for Medium and High Intensity in test. Significant Potential subject to final sign offs
•Customer C – 10,000+ Towers, existing customer, new systems in test
•Customer D – 2,000+ Towers, systems in test, want Dialight to install cloud based Network Operating Centre
•Customer E – 2,000+ Towers wants to buy Dialight Gateway and Cloud solution
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Lighting – The Engine for Growth
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Lighting Five Year History
2013 H1£m
2012£m
2011£m
2010£m
2009£m
Sales 29.3 45.5 26.4 11.6 5.5
% of Group Sales 48.9 39.5 25.7 13.7 8.6
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DialightUS DOE Roadmap: Technology Maturing
Market wants LED benefits…at little to no premium 18
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DialightDialight benefits from the price decline in LEDs
Rapid evolution enables lighting; few LED players surviving19
DialightLED Systems
LEDs becoming smaller part of BOM’s20
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What market are we addressing?Why LEDs?
Why Dialight?How do we go to market?
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DialightWhat is our market focus?
•We are not in the LED Light Bulb Business•We do not focus on Street Lights•We are not in Commercial, Retail or Domestic Lighting•We have chosen to be the market leader and innovator in Hazardous and Heavy Industrial Lighting applications
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Why Hazardous Locations?• Hazardous Lighting addressable market is estimated to be in excess of $10bn
• Significant barriers to entry‐ Rigorous and expensive global safety certifications
‐ Fragmented market – market knowledge, sales/distribution channels
‐ Requires full product portfolio – complete lighting solutions
‐ Lengthy selling cycles for new construction
‐ Quickly transforming market to SSL ‐ short product lifecycles
‐ Manufacturing capability – not a source and sell market
‐ Third party testing needs ‐ LM79, LM80, TM‐21, ISTMT, DLC, etc
‐ Scale requirement for servicing large multi‐national customers
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Vertically Focused – Hazardous & Industrial
Oil, Gas & Petrochem $3bn• Upstream (exploring &
drilling)• Downstream (refining)• Transportation (terminals
& pipelines)
Power Generation $3bn• Nuclear• Fossil (coal, natural
gas, petroleum)• Renewable (wind,
solar, geothermal)
Mining $1bn• Surface mining
Chemical & Pharma $1.8bn
Heavy Industrial $2.5bn• Steel processing• Pulp & paper• Auto plants• Aircraft plants
Food & Beverage $0.7bn• Food processing• Agricultural• Cold Storage• Food grains
DialightProspect Review – Drilling Rig Manufacturer
Linear Area Light
Installed Dialight Products:
Scale of opportunity168 land based rigs122 offshore rigs
• Total opportunity: ~$40M• Opportunity per land rig: $100K• Opportunity per offshore rig: $200K
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Dual Red/White StrobeHigh Bay
Traditional lighting suffers constant breakages causing production downtime
DialightProspect Review – Chemical Manufacturer
Typical Lighting Applications:
Scale of opportunity188 global plants
~ 1,200 fixtures per plant
• Total opportunity: $126M • Opportunity per plant: $675K
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Steam Rooms CatwalksProcess Areas
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New Construction and Retro‐fit MarketsNew Build Markets
•Capital projects handled by EPC firms, multiple, global decision points
•18‐36 month sales cycles
•Competing mostly against conventional lighting at this stage
•High volume projects
•‘Multinational Account’ approach
Retro‐fit Markets
• Handled by on‐site Maintenance teams, MRO budgets
• 3‐12 month sales cycles
•Limited legitimate LED competitors
•Many small volume, local projects
•Grass roots demand creation and brand building
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Why LED Lighting?
• Energy saving up to 60% against conventional efficient lighting
• Maintenance – lasts more than ten years in service• Safety – superior light with no failure• Reliability‐ no need to plan shutdowns to replace lights• Control – easy to turn on and off/down with no degradation or start up time
• Lifetime
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Why Dialight?• World’s leading LED hazardous lighting company
• LED only! We are THE SSL experts
• State of the art products – always a generation ahead (speed!)
• Superior performance, complete product portfolio
• Unprecedented ’No Quibble’ 10 year warranty
• Vertically integrated manufacturing, not a building‐block approach
• Exceptional in‐house power supply capability – superior efficiency, life
• Focus on hazardous‐ no consumer or big box products
• Global footprint ‐ we are where the customers are
AND…..
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Continuous product improvement…
...we are never satisfied!
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DialightArea Light
17 lbs (7.7 kg)5,000 Lumens
90 Watts55 LPW
10 lbs (4.5 kg)5,500 Lumens
70 Watts78 LPW
10 lbs (4.5 kg)7,000 Lumens
68 Watts103 LPW
Walkway / Wide Throw OpticsAdded Mounting Accessories
Retrofit AdaptersStanchion MountSafety CablesJunction Boxes
Battery Backup (Coming Soon)
2009
2011
2013
DialightLinear Light
17 lbs (7.71 kg)7,000 Lumens100 Watts70 LPW
11 lbs. (4.99 kg)7,000 Lumens
66 Watts106 LPW
Integrated Wiring CompartmentAdded Mounting Accessories:
Stanchion MountSafety Cables
Stainless Steel Fixture
17 lbs (7.71 kg)7,000 Lumens
70 Watts100 LPW
Battery Backup(Maintained and Non‐Maintained)
2011
2012
2013
DialightHigh Bay
2010
2011
Q1 2012
Q4 2012
8,000 Lumens150 Watts53 LPW
12,000 Lumens150 Watts80 LPW
14,500 Lumens161 Watts90 LPW
17,000 Lumens170 Watts100 LPW
25,000 Lumens250 Watts100 LPW
Q4 2009
DialightControls for High Bay
DialightDialight Cloud Services
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Competition
Dialight Competitor 1 Competitor 2 Competitor 3
Hazardous Focus √ √ √ √
Long term LED Experience √ X X X
LED Only √ X X X
5‐10 Year Warranty √ X X X
Full Product Portfolio √ √ X X
100 Lumens per Watt √ X √ X
In‐House Optics √ X X X
In‐House Power Supply √ X X X
Speed to Market √ √ X X
Temperature Rating (T5+) √ √ X X
Controls Offering √ X X X
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How do we address the market and sustain growth?
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DialightLighting Channel to Market
US, Canada, Mexico & Brazil
34 direct sales personnel
Europe / Middle East27 direct sales personnel
Asia Pacific25 direct sales personnel
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Direct Customer facing Sales Channels
Sales Force June 2013
Sales Force June 2012
Sales Force June 2011
Americas 34 18 6
Europe/ Middle East 27 11 6
Asia 25 10 5
Total 86 39 17
DialightThe way forward
More Sales peopleMore geographiesImproved product efficiencyImproved warrantyImproved return for our customers
Real Continuous Improvement!
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Dialight
Dialight…It’s all about Lighting!
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