Codan Limited · ASX:CDA
Codan — H1 FY2012 Earnings Presentation
21 slides from Codan's earnings presentation, Feb 23, 2012
Slide 1: Investor Presentation Business Performance Half Year 2012
Investor Presentation Business Performance Half Year 2012 Donald McGurk Managing Director and CEO Michael Barton Chief Financial Officer Steve Hannah General Manager, Minetec 23 February 2012
Slide 2: Financial Highlights
Financial Highlights Underlying profit maintained at $10.4 million Interim dividend maintained at 44.00 cents Well placed to deliver another good year in FY12 Acquisition of Minetec brings diversification into mining sector Strong profit growth achieved in Radio Communications Metal dete
Slide 3: Divisional Overview
Divisional Overview Communications Metal Detection Mining Technology Radio Communications Satellite Communications Page 3
Slide 4: Strategic Options
Strategic Options Codan Radio Mining Satcom Metal Detection Communications Technology Strategic g Invest in Ourselves considerations Expand our Businesses core Page 4
Slide 5: Strategic Options
Strategic Options - Diversification: - Acquisition Time forr return n Expand our businesses: Ris - Adjacent markets / sk technologies ___ - Acquire competitors T Invest in ourselves: - Organic growth gro th - Fast track product development - Market a e e expansion pa s o + Page 5
Slide 6: Communications - highlights
Communications - highlights Radio Communications: − Continued market position improvement in the targeted global security, security military and peacekeeping segments − Significant investment to fast track new product development continues; progressing to plan − Initiatives to broaden market prese
Slide 7: Minelab Metal Detectors
Minelab Metal Detectors Metal Detection Products Minelab Mi l b supplies li metal t l detection d t ti products d t and d systems t for f consumer, mine clearance and artisanal gold mining markets Premium Coin & Treasure Consumer: Detection of gold nuggets, coins, treasure and artefacts by serious
Slide 8: Minelab Metal Detectors - highlights
Minelab Metal Detectors Metal Detection Products --highlights highlights Lower sales into North East Africa due to Chinese manufactured counterfeit product entering this market Implementing a comprehensive action plan to address this counterfeit issue Sales in all other markets and regions hav
Slide 9: Minetec Acquisition
Mi t Acquisition Minetec A i iti Page 9
Slide 10: Why the Mining Technology Industry?
Why the Mining Technology Industry? Mining boom is projected to continue for at least 10 years New technologies are required to improve mine safety and productivity Australia is considered to be the world’s most innovative mining technology community Opportunity to consolidate numerous small
Slide 11: Minetec Overview
Minetec Overview Founded in 2000 Employs approximately 50 staff Perth-based Perth based provider of communication solutions to the mining sector Minetec has grown significantly over the past few years Core business Technology gy Communications systems expertise Technology investment sinc
Slide 12: Vertical Growth Map
Vertical Growth Map Enterprise Solutions Remote Collision Traffic Situational Autonomous Integrated Operations Avoidance Control Awareness Security Vehicles Solutions Process SMARTS SCADA Planning Messaging Automation Traffic Applications Tracking Tags Control Simulation Video Automation Enabling Fi
Slide 13: Technologies and Branding
Technologies and Branding Hard rock underground mining: Delivering a value ELF Technology proposition utilising: Wi-Fi Networks Core communications systems expertise Tagging-Tracking gg g g In-house technology and Collision Detection product development Traffic Management Third party technolog
Slide 14: Competitive Landscape
Competitive Landscape Market leading technology, providing Enterprise-Wide Solutions Hi Higher-spec h t h l technology “ELF” th than allll competitors tit ffor underground d dddata t and voice communications Collision detection technology outperforms competitors Proprietary productivity soft
Slide 15: Markets
Markets Markets Existing Markets Global mining operators with Australian operations Leverage off already established market positions in Australia and Southern Africa G Growth th Strategies St t i Follow our globally active customers as they expand their mining operations Continue to invest
Slide 16: Financials
Financials Acquisition price: Up front cost Up-front $6m Earn out App. $4m If certain earn-out targets are achieved over the next two and a half years 2nd Half Year Financial Forecast: Sales $9m EBITDA $1m Project sales leave a trail of product sales and site services revenue Anticipated to be earni
Slide 17: Key Synergies
Key Synergies Minetec is at a point where it requires additional funding, funding improved processes and assistance to maintain its significant growth rate: Sales and Marketing Leverage Codan’s core competence to develop the business internationally: ─ Developing world countries Engineering Leve
Slide 18: Financial Overview — P&L
Financial Overview — P&L Half year results Half Year Half Year Half Year Profitability maintained Dec 11 Dec 10 Dec 09 despite lower $m % $m % $m % revenues R Revenue Communication products 36.6 49% 33.0 39% 38.1 43% Improved profitability Metal detectors 35.2 48% 46.6 56% 45.0 50% as a result o
Slide 19: Financial Overview — Balance Sheet
Financial Overview — Balance Sheet December June December '11 ‘11 '10 Increase I in i bborrowings i primarily i il $m due to working capital movements Working capital $m $m $m due to changes in business activity ti it and d operations ti Receivables 16.0 14.6 15.2 Inventories 24.2 23.3 22.4 Move
Slide 20: Financial Overview — Dividends
Financial Overview — Dividends FY12 FY11 FY10 FY09 Interim dividend per ordinary share 4.0 cents 4.0 cents 3.5 cents 3.0 cents Final dividend per ordinary share 5.0 cents 4.5 cents 3.5 cents Total dividend per ordinary share 9.0 cents 8.0 cents 6.5 cents Franking 100% 100% 100% 100% Record date 16 M
Slide 21: Outlook
Outlook Codan operates in global markets, short-term outlook for world economy is uncertain The core Minelab business remains strongg The sales pipeline for Radio Communications continues to strengthen Evaluating our strategic options for Satellite Communications and expect to act on plan du