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Blog: LED Sales Driving Electrical Growth

By Jack Keough

LED sales are continuing to grow sharply, according to the fourth quarter earnings report from Acuity Brands, one of the world’s largest providers of lighting solutions.

For the full year, Acuity more than doubled its sales of LEDs. And even more impressive was the fact that Acuity has doubled its sales of LED products on a quarterly comparative basis for more than ten consecutive quarters.

Acuity reported that its fiscal 2013 fourth quarter net sales of $579.8 million increased $65.5 million, or 13 percent, compared with the same year-ago period. Its fiscal 2013 net sales were $2,089.1 million compared with $1,933.7 million for the prior-year period, an increase of $155.4 million, or 8 percent.

Vernon J Nagel, chairman, CEO and president of Acuity Brands, told financial analysts in a telephone conference call that although fluorescent lighting remains strong, LED is doing very well.

“Fluorescent, for many applications, is still a very, very economical alternative to other light sources that are out there, “he said according to a transcript of the call as provided by www.seekingalpha.com

“If you go back to 2008, fluorescent made up 42% of the total light source¬† market. In 2012, fluorescent made up 43% of the market,” he said.”Most people would have thought that LED would have displaced that. LED is displacing other lesser efficient sources. Our view is that over the next 3 years, half of the market could be converted to LED,” he said.

He estimated that about half of Acuity’s revenues in fiscal 2013 were from renovation. “I think if you were to compare that back to 2008, probably 75% of the market was driven by more new construction and that other 25% or so driven by some type of renovation,” he said.

Nagel said he was “very pleased” with the company’s performance in 2013 particularly in the fourth quarter where Acuity achieved record results for net sales.

“Sales growth in our largest channel, commercial and industrial, was above this quarter’s overall percentage increase, primarily due to a continued focus on smaller medium-sized projects for both new construction and renovation, as well as a continued emphasis on selling higher value-added lighting solutions, especially LED luminaires,” Nagel said according to the transcript.

The company also recorded a special charge related to the closure of two small production facilities which account for less than two percent of the company’s sales. The closures and transfers of production to other facilities are expected to be completed by the end of the year.

Nagel pointed out that most estimates predict that the broad lighting market in North America will grow in the mid-single-digit range for fiscal 2014. He said those numbers are “modestly better” than the economic conditions experienced in 2013 and better than the expectations for the overall growth of the nonresidential construction market.

At the same time, Nagel said he expects the European economies to remain weak, particularly Spain.

The growth in LED lighting can also been seen overseas. Luxonic, one of England’s largest lighting manufacturers of light fittings, is expanding its production capabilities as it responds to the increasing demand for LED lighting. Luxonic is to expand its production facilities over the next six months.

More than 30% extra space is being created by putting in a mezzanine assembly area at one of its plants. This is where LED luminaires will be assembled and tested, and also where components stocks will be held at ‘point of use’.

 

The move coincides with virtually every Luxonic luminaires being re-designed around LED technology from high bays to ceiling and wall fittings.

Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at john.keough@comcast.net or keoughbiz@gmail.com

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