Gale Pacific Limited · ASX:GAP
Gale Pacific — Shareholder Meeting (October 2017)
28 slides from Gale Pacific's shareholder meeting presentation, Oct 27, 2017
Slide 1: 2017 Annual General Meeting
ASX: GAP For personal use only 2017 Annual General Meeting 27 October 2017
Slide 2: Chairman's address: David Allman
Chairman’s address: David Allman For personal use only
Slide 3: Chairman's address: Revenue and NPAT
Chairman’s address: David Allman For personal use only Revenue $A million NPAT $A million 200 20% 12 173.2 175.3 10.2 10.1* 10 150 148.0 15% 137.3 8.2 8 6.9* 100 10% 6 90.8 92.7 76.4 80.6 4 4.7 6.8 7.0 50 5% 2 5.8 0 60.9 67.4 82.4 82.6 0% 0 3.5 1.1 3.2 3.4 2014 2015 2016 2017 2014 2015 2016 2017 H1
Slide 4: Chairman's address: David Allman
Chairman’s address: David Allman For personal use only
Slide 5: Group Managing Director's presentation: Nick Pritchard
Group Managing Director’s presentation: Nick Pritchard For personal use only
Slide 6: GALE: A fabrics technology company
GALE: A fabrics technology company For personal use only A leader in the development, manufacture and marketing of shade solutions for the retail market and of high performance technical textiles for the commercial sector Retail shade products High performance technical textiles Gale Pacific 2017 An
Slide 7: Building a platform for growth: Exiting non-core categories
Building a platform for growth For personal use only Exiting non-core categories ½½ Exited most non-core categories over three Pool fencing Mirrors Balustrade Splashbacks years ½½ June 2017: exited unprofitable EVERTON glass business ½½ Product portfolio now more aligned with fabrics Towel racks Doo
Slide 8: Building a platform for growth: Rationalised brand portfolio
Building a platform for growth For personal use only Rationalised brand portfolio CHILAX ½½ Rationalised brand portfolio so can invest in smaller number of brands ½½ Upgraded marketing materials including packaging, merchandising and websites ½½ Aligned branding across all regions Retail products Co
Slide 9: Building a platform for growth: Rationalising distribution
Building a platform for growth For personal use only Rationalising distribution ½½ Rationalised distribution to improve efficiency and service ½½ Four warehouses closed; the remainder upgraded Dandenong South Distribution Centre, Melbourne, Australia Gale Pacific 2017 Annual General Meeting 9
Slide 10: Building a platform for growth: Upgrading China manufacturing
Building a platform for growth For personal use only Upgrading China manufacturing ½½ Upgraded facilities and invested in new plant and equipment ½½ Capacity increased; quality, service and cost improved Gale Pacific 2017 Annual General Meeting 10
Slide 11: Building a platform for growth: Strengthening balance sheet and infrastructure
Building a platform for growth For personal use only Strengthening balance Operating Cash Flow $A million 20 20.5 200 sheet and infrastructure 13.4 16.3 10 8.2 100 ½½ IT systems aligned and 1.5 0 0 strengthened (0.7) (4.0) -10 -100 ½½ Inventory reduced (9.0) -20 -200 ½½ Service improved 2014 2015 20
Slide 12: Delivering growth whilst transforming
Delivering growth whilst transforming For personal use only During the transformation process GALE has achieved: 10.0% ½½ compound annual revenue growth of 8.5% 8.5% ½½ compound underlying earnings growth of 10% Compound underlying earnings Compound growth annual revenue growth Gale Pacific 2017 Ann
Slide 13: Transforming our product mix
Transforming our product mix For personal use only ½½ Non-core products 19.6 13% created complexity, cost, a distraction from core categories and a drain 2015 on profitability Revenue ½½ Moving to fabric products and categories where 87% GALE has greater expertise and market strength 4% 2018 Revenue
Slide 14: Our core business
Our core business For personal use only ½½ Core business today is the development and manufacturing of high performance technical textiles ½½ GALE has world-leading coating adhesion technology ½½ Developing fabrics with the right combination of weight, strength, life, stretch, adhesion, porosity, fe
Slide 15: Where we are
Where we are For personal use only ½½ Developing a more global business, with an increasing percentage of revenue from outside Australia ½½ Focused on building a bigger business in North America ½½ In MENA and Eurasia, focusing on a smaller number of countries ½½ Have established strong infrastructu
Slide 16: Where we are
Where we are For personal use only Los Angeles Orlando Dubai Ningbo Australia and New Zealand Revenue: A$92.4m Underlying EBITDA: A$2.9m Americas Revenue: A$62.0m EBITDA: A$6.5m Eurasia Revenue: A$8.2m MENA Revenue: A$12.8m EBITDA: A$2.5m China EBITDA: A$11.5m (includes Eurasia) Manufacturing Perth
Slide 17: Australia and New Zealand: Retail business
Australia and New Zealand For personal use only Retail business Our retail brands ½½ Distribution through leading home improvement retailers ½½ Product range more focused following exit of Distributed through leading retailers non‑core products ½½ Coolaroo – market leader in DIY shade and screening
Slide 18: Australia and New Zealand: Commercial business
Australia and New Zealand For personal use only Commercial business ½½ Distribution through specialised wholesalers and fabricators which manufacture products from GALE fabrics Wholesalers ½½ Focus on agricultural, architectural and horticultural sectors where there is strong demand and the cost of
Slide 19: Australia and New Zealand: Outlook for FY2018
Australia and New Zealand For personal use only Outlook for FY2018 ½½ Core product categories expected to grow, although coated commercial fabric sales likely to be lower due to weaker grain harvest ½½ Confident of opportunities in the commercial sector and new coating line to be commissioned in lat
Slide 20: Americas: Retail business
Americas For personal use only Retail business ½½ Very pleased with progress and foresee tremendous opportunities ½½ Customers include some of the world’s largest retailers ½½ Great potential to accelerate growth in the retail shade category through existing customers ½½ Have secured additional prod
Slide 21: Americas: Commercial business
Americas For personal use only Commercial business ½½ Commercial business currently small and focused on architectural shade fabric ½½ Significant opportunities for growth ½½ Planning expansion based on new architectural shade products and coated fabrics which have competitive advantage Architectura
Slide 22: Americas: Outlook for 2018
Americas For personal use only Outlook for 2018 ½½ Strong growth expected in FY2018, driven by retail and online sales, despite impact of hurricanes in Texas and Florida ½½ Focus on servicing new ranging wins effectively ½½ Pursuing further ranging with existing and new customers ½½ New, larger ware
Slide 23: Middle East/North Africa: Business and outlook for FY2018
Middle East/North Africa For personal use only Business and outlook for FY2018 ½½ Small signs of market improvement ½½ Continuing to invest in new sales resources, while adopting a conservative approach to credit New Commercial Heavy 430 architectural shade fabric Gale Pacific 2017 Annual General Me
Slide 24: Eurasia: Business and outlook for FY2018
Eurasia For personal use only Business and outlook for FY2018 ½½ Pivoting business from low value, low margin retail products towards higher value, higher margin commercial products ½½ Opportunity for growth through targeted approach to customers and categories ½½ Bunnings’ UK/Ireland pilot stores s
Slide 25: China manufacturing
China manufacturing For personal use only ½½ Substantial improvements to plant, equipment and amenities in FY2017 to support growth and improve service, quality and safety ½½ Strong performance across most key metrics, and further improvement expected in FY2018 ½½ Investment continuing in FY2018: tr
Slide 26: Increasing investment in research & development
Increasing investment in research & development For personal use only ½½ Investment increasing to develop innovative technical fabrics and shade products ½½ In addition to internal R&D resources, building technical alliances with universities, etc to secure additional expertise and technologies ½½ A
Slide 27: Our growth objective
Our growth objective For personal use only Goal to be recognised as a global developer, manufacturer and marketer of shade solutions for the retail market and high performance technical textiles for the commercial sector Melbourne research and testing facility adjoining Manufacturing operations Gale
Slide 28: Our growth strategy
Our growth strategy For personal use only Key elements of the strategy: ½½ Accelerate growth of the Americas business, focusing on shade and screening products, while expanding the commercial products business ½½ In Australia and New Zealand, extend market- leading shading and screening business in