Slide 1: ASX cover letter: FY20 full-year investor presentation
20 August 2020 For personal use only Company Announcements Office Australian Securities Exchange Level 4 20 Bridge Street SYDNEY NSW 2000 Dear Sir or Madam FY20 full-year investor presentation Please find attached a copy of Codan Limited’s investor presentation dated 20 August 2020 for release to th
Slide 2: FY20 Full-Year Results and Update
For personal use only FY20 FULL-YEAR RESULTS AND UPDATE Donald McGurk 20 AUGUST Managing Director & CEO 2020 Michael Barton Chief Financial Officer Kayi Li Investor Relations 1
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER For personal use only Disclaimer This presentation has been prepared by Codan Limited (ABN 77 007 590 605) (Codan). The information contained in this presentation is for information purposes only and is not investment, financial product, legal or tax advice. This pres
Slide 4: FY20 Summary
FY20 SUMMARY For personal use only • Highest full-year profit in the company’s history. • Record Metal Detection and Communications sales • Annual dividend of 18.5 cents, fully franked • Strong balance sheet continues - $93 million net cash • Invested in excess of $30 million in product development
Slide 5: Growing Dividends
GROWING DIVIDENDS FY20 annual dividend of 18.5 cents For personal use only • Final dividend 11 cents per share • Increasing dividends reflect strength of business • Final dividend will be paid: • Record date 28 August 2020 • Payment date 11 September 2020 “The board expects to continue its policy of
Slide 6: Growth in Group Sales
GROWTH IN GROUP SALES Diversified portfolio For personal use only +34% • 29% increase in sales over FY19 • Metal Detection sales growth 30%: • Growth in both Recreational (11%) and Gold Mining (42%) • Increased product diversification and geographic expansion Group Sales • Communications sales growt
Slide 7: Four Point Strategy
FOUR POINT STRATEGY History of IP creation, innovation & success For personal use only Strengthen the Core Business Invest in the Core Business • Transition to full solutions provider • Strong pipeline of projects • Communications focus • In excess of $30 million in • Increase geographic footprint e
Slide 8: FY20 Global Footprint
FY20 GLOBAL FOOTPRINT Customers in 150 countries, exporting around 90% of sales For personal use only $46m $82m $23m CODAN OFFICES MANUFACTURING $161m ENGINEERING TEAMS $3m $33m ITAJAI 7
Slide 9: Business Units
For personal use only BUSINESS UNITS 8
Slide 10: Metal Detection: Products & Markets
METAL DETECTION Products & markets For personal use only RECREATIONAL GOLD MINING COUNTERMINE Coin & Treasure, Gold Detectors Handheld Gold Detectors Landmine Detectors Key markets — Australia, USA, Key markets — Africa, Asia Pacific, Market — countries impacted by Europe, Russia Latin America war —
Slide 11: Metal Detection Sales
METAL DETECTION For personal use only Metal Detection Sales Record performance – 30% growth in sales Strong diversification of sales across multiple products Gold Mining: • Continuing strong demand for gold detectors in Africa, across an expanded range of gold detector products • Gold Monster® is no
Slide 12: Continual Innovation and Geographic Expansion
METAL DETECTION Continual innovation and geographic expansion For personal use only Europe New Zealand Gold detector Warehouse Warehouse Coin & treasure detector New GPX detector Countermine FY15 FY16 FY17 FY18 FY19 FY20 FY21 5 key products Brazil Office currently Gold detector under development Coi
Slide 13: Gold Products
GOLD PRODUCTS Products to service all types of prospectors For personal use only GOLD DETECTOR RANGE USD RRP ex tax/shipping $799 $3750 $7999 ENTRY - MID RANGE - PROFESSIONAL 12
Slide 14: Recreational Products
RECREATIONAL PRODUCTS Expanding MULTI-IQ® technology across the range For personal use only RECREATIONAL DETECTOR RANGE All Targets, All Soils, All the Time. USD RRP ex tax/shipping $99 - $249 $199 - $499 $649 - $899 $1499 $1549 $2499 HOBBYIST - ENTHUSIAST - SPECIALIST - EXPERT 13
Slide 15: Communications
COMMUNICATIONS For personal use only Tactical Communications Markets Purpose-built communications solutions for maximum reliability and ruggedness Land Mobile Radio Markets • Customers: developing world militaries in Africa, Middle East, Asia, Eastern Robust, interoperable, dependable wireless syste
Slide 16: Communications: Record Sales for Tactical and LMR
COMMUNICATIONS For personal use only Record sales for both Tactical and LMR - sales up 34% over prior year Tactical Communications: Communications Sales • Delivered three major contracts (East Africa, Central Asia & Asia Pacific) • 24% increase in sales to military customers over prior year • Sentry
Slide 17: Tactical Communications Strategy for Growth
TACTICAL COMMUNICATIONS For personal use only Expand into military market MESH / MIMO TACTICAL VHF Short Range Short Range High Band Width STRATEGY (Voice /Data) INTEROPERABILITY (Video / Data) Form strategic FOR partnerships GROWTH TACTICAL HF SATCOM INTEGRATION Transition to a full Long Range (Voi
Slide 18: Tactical Communications Addressable Market
TACTICAL COMMUNICATIONS Addressable market For personal use only Total Addressable Market1: $10.5 Bn Military Market SATCOM Integration $4.3 Bn MIMO/MESH $1.3 Bn Strategic Partnerships Interoperability $1.3 Bn Tactical VHF $3.1 Bn Full Systems Solutions Tactical HF $0.5 Bn 1Source: Janes Defence, MI
Slide 19: Critical Communications (LMR): Cascade
CRITICAL COMMUNICATIONS (LMR) Cascade™ – The gateway to VHF Public Safety Radio Systems For personal use only Fully Interoperable first responder communications solution with leading-edge performance and reliability. NO GAPS IN PURE Initial Release: COVERAGE SIMPLICITY •$48m Analog and digital$21m (
Slide 20: Tracking Solutions
TRACKING SOLUTIONS For personal use only Caterpillar Collaboration: • Awarded purchase order to supply hardware associated with the implementation of the MineStar® system into Newmont’s Tanami mine • Completed final product validation and commenced commissioning of MineStar® system into a large bloc
Slide 21: Financial Results
For personal use only Results Financial 20
Slide 22: Record FY20 Performance
RECORD FY20 PERFORMANCE For personal use only NPAT ($m) Increased Minelab sales in H2: • Higher gold detector sales in Africa • Equinox® demand remained strong • Vanquish® release 1New lease standard FY20 impact: EBITDA increased $3.7 million, EBIT increased $0.5 million 21
Slide 23: Engineering Investment
ENGINEERING INVESTMENT Significant investment in product development For personal use only Engineering spend ($m) Engineering by Business Unit Return on Equity1 9% of Sales 1Return on equity = net profit after tax divided by average equity 22
Slide 24: Cash Generation
CASH GENERATION For personal use only Historical Net (Debt)/Cash ($m) Free Cash Flow($m) 1 • Excellent cash generation, driven by strong sales and African cash-upfront terms • FY21 to replenish inventory levels that were depleted in FY20 • Large FY20 tax bill to be paid in FY21 H1 1Free cash flow =
Slide 25: FY21 Objectives
FY21 OBJECTIVES For personal use only • Launch new GPX® series gold • Continue the transition to a full • Grow revenue by leveraging detector and Countermine metal military system solutions Caterpillar’s global dealer detector business network • Maximise Vanquish® sales by • Focus on growing in-coun
Slide 26: FY21 Outlook
FY21 OUTLOOK For personal use only Well positioned for FY21: • Strong start to the year and in line with FY20 • Demand for our metal detection products remains strong • Minelab will benefit from a full year of Vanquish® sales and the release of a new gold detector • Current travel restrictions may i