Slide 1: Capral Ltd 2008 Half Year Results Presentation
For personal use only Capral Ltd 2008 Half Year Results Presentation August 2008 1
Slide 2: Key Stats
Key Stats For personal use only $M H1 2008 H1 2007 Variance Sales Volume 33.7 32.5 1.2 Sales Revenue 271.1 274.1 (2.9) Trading EBITDA 3.2 (4.1) 7.3 EBITDA 7.0 (5.2) 12.2 EBIT (3.1) (13.3) 10.2 NPAT (12.1) (19.4) 7.3 Cash Flow from operations 1.2 (15.0) 16.2 Debt (net of cash) 115.9 123.1 7.2 Gearing
Slide 3: Headlines
Headlines For personal use only • Sales growth objectives not achieved as market weakened – particularly for residential building. – Sales volume 4% higher than H1 2007 • Improvement in operating result. Trading EBITDA $3m compared to Trading EBITDA loss of $4m in H1 2007. • Campbellfield property s
Slide 4: Refinancing
For personal use only 4 Refinancing
Slide 5: Funding Requirements
Funding Requirements For personal use only • In H1 2008 Capral completed a review of funding requirements – Objective has been to provide Capral with sufficient working capital to operate whilst maintaining acceptable levels of debt through to September 2011 • Outcome of the review is that Capral wi
Slide 6: Refinancing
Refinancing For personal use only • Capral has negotiated a commitment to the re- financing of its existing senior debt facilities • New secured borrowing facilities of up to $116 million (committed by GE Commercial Finance) – 3 year term – Will replace the existing secured senior debt facilities of
Slide 7: Rights Issue
Rights Issue For personal use only • An offer of fully paid ordinary shares will be made to all eligible shareholders: – Renounceable rights – Issue price of 15 cents per share – 1 new share for each 1 existing ordinary share held at the relevant record date – Shares issued will rank equally with ex
Slide 8: Results Overview
For personal use only 8 Results Overview
Slide 9: Income Statement
Income Statement For personal use only $M H1 2008 H1 2007 Variance Sales Volume 33.7 32.5 1.2 Sales Revenue 271.1 274.1 (2.9) Trading EBITDA 3.2 (4.1) 7.3 EBITDA 7.0 (5.2) 12.2 D&A (10.1) (8.2) (1.9) EBIT (3.1) (13.3) 10.2 Interest Expense (9.0) (6.0) (3.0) (Loss) before Taxation (12.1) (19.3) 7.2 T
Slide 10: Underlying Performance
Underlying Performance For personal use only $M H1 2008 H1 2007 Variance Headline EBITDA 7.0 (5.2) 12.2 Non-operating items Net Profit on sale of Campbellfield property (5.4) (5.4) Revauation of Angaston property (triennial requirement) 0.7 0.7 Restructuring costs 0.7 2.6 (1.9) Revaluation of Conver
Slide 11: EBITDA Comparison
EBITDA Comparison For personal use only #039;000 Trading EBITDA H1 2007 (4.1) Trading EBITDA H1 2008 3.2 Variance 7.3 Drivers Price Increases 5.1 Sales Volume 1.8 Freight (0.8) Overheads reduction 1.2 Total 7.3 11
Slide 12: Sales Volume, Margin and Operating Costs
Sales Volume, Margin and Operating Costs For personal use only • Sales volume 4% higher than H1 2007. – Market conditions more difficult • Price increases delivered 2%pts margin improvement – Manufacturing price increase implemented in late 2007 effective 1 January 2008. – Increases in ex-stock pric
Slide 13: Cash Flow
Cash Flow For personal use only $M 30 June 2008 30 June 2007 Variance Net Cash Inflow / (Outflow) from Operating Activities 1.2 (15.0) 16.2 Cash Flows from Investing Activities Capital Expenditure (3.3) (11.9) 8.6 Proceeds from Sale of PP&E 13.0 0.1 13.0 Other Items 0.0 0.1 (0.1) Net Cash Inflow / (
Slide 14: Cash
Cash For personal use only • Working capital : sales 10.1% at 30 June 2008 (14.3% at 30 June 2007) • Debtors days for H1 2008 averaged 55.0 days which was in line with plan. 2007 average was 56.3 days • Inventory levels finished lower and were in line with plan – Further reduction in finished goods
Slide 15: Financial Position
Financial Position For personal use only 30 June 30 June Variance 31 Dec Variance 2008 2007 2007 $M $M $M #039;000 #039;000 Current assets (excl. Cash) 173.1 194.1 (21.1) 184.7 (11.6) Current liabilities (118.5) (118.9) 0.3 (112.5) (6.0) 54.6 75.3 (20.7) 72.1 (17.6) Non-current assets 255.2 265.0 (9.8) 25
Slide 16: Working Capital
Working Capital For personal use only $M 31 30 June 30 June Variance December 2008 2007 2007 Current Assets Receivables 91.8 101.0 9.2 94.2 Inventories 77.2 88.7 11.6 79.3 Other Current Assets 4.1 1.5 (2.6) 3.5 Current Liabilities Payables (106.8) (101.2) 5.6 (100.6) Other Provisions (11.7) (11.8) (
Slide 17: 2010 Plan Key Initiatives
For personal use only 2010 plan Key Initiatives 17
Slide 18: Capral 2010 Plan
Capral 2010 Plan For personal use only • Capral’s recovery is built on its 2010 Plan. • The objectives of the 2010 plan are: – Embed core capabilities of safety, quality, service delivery – Reduce manufacturing costs to be import competitive – Run manufacturing plants at, or close to, capacity – Str
Slide 19: Increase sales through import replacement
Increase sales through import replacement For personal use only • Key areas for growth: • Key initiatives – Major customers: – Utilise full supply chain for • Window & Door Fabricators best offer to customer • Aligned independent – Mill -> Warehouse -> distributors Trade Centre – Industrial Middle M
Slide 20: Improved productivity at Bremer
Improved productivity at Bremer For personal use only • Improvement plans in place • Key initiatives for: – Increase labour productivity – Sales – Lower scrap rates – Extrusion – Reduce customer returns – Finishing (Painting and – Improve fabrication Anodising) profitability – Fabrication – Increase
Slide 21: Reduced distribution and overhead costs
Reduced distribution and overhead costs For personal use only • Main areas of opportunity • Key initiatives – Warehouse footprint – Closure and consolidation – Warehouse productivity of warehouses – Freight costs – Inventory optimisation – Overheads – Warehouse productivity – New fleet arrangement a
Slide 22: Market Dynamics
For personal use only 22 Market Dynamics
Slide 23: Building market expected to be flat
Building market expected to be flat For personal use only Aluminium Market Projections (Capral projections based on externally sourced statistics and forecasts) 250,000 80 70 200,000 60 Building Activity ($B) 50 Aluminium Tonnes 150,000 40 100,000 30 20 50,000 10 0 0 1997 1998 1999 2000 2001 2002 20
Slide 24: Imports
Imports For personal use only Import Trend (Tonnes) 90,000 • Imports of 80,000 aluminium 70,000 extrusions have 60,000 increased rapidly since 50,000 the mid 90’s China 40,000 Others 30,000 20,000 10,000 - 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 H1 2007 H1 2008 Ton
Slide 25: Exchange Rate and Import Competitiveness
Exchange Rate and Import Competitiveness For personal use only • Import competitiveness is influenced by relative strength of AUD 8.0000 1.0000 0.9500 7.5000 0.9000 0.8500 7.0000 0.8000 6.5000 0.7500 0.7000 6.0000 0.6500 0.6000 5.5000 0.5500 5.0000 0.5000 1-Jan-07 1-Mar-07 1-May-07 1-Jul-07 1-Sep-07
Slide 26: LME Aluminium Price
For personal use only 2 16/01 30/01/20 1500.00 2000.00 2500.00 3000.00 3500.00 4000.00 13/01/2007 27/02/2007 13/02/2007 27/03/2007 10/03/2007 24/04/2007 / / 0 8 04 20 7 changes 22/05/2007 / / 0 5 05 20 7 19/06/2007 / / 0 3 06 20 7 17/07/2007 31/07/2007 14/07/2007 28/08/2007 by approx. $2m 11/08/2007
Slide 27: Outlook
For personal use only 27 Outlook
Slide 28: H2 2008 Outlook
H2 2008 Outlook For personal use only • Continuing weakness in key markets • Second half of year traditionally stronger with seasonal lift in building activity • Continued tight management of cash • 2010 plan initiatives will deliver benefits • H2 result (Trading EBITDA) expected to be better than H