Codan Limited · ASX:CDA
Codan — Investor Presentation (February 2022)
32 slides from Codan's investor presentation, Feb 17, 2022
Slide 1: FY22 Half-year investor presentation
17 February 2022 Company Announcements Office Australian Securities Exchange Level 4 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam FY22 Half-year investor presentation Please find attached a copy of Codan Limited’s investor presentation dated 17 February 2022 for release to the market. Yours faith
Slide 2: FY22 Half Year Results and Update
FY22 HALF YEAR RESULTS AND UPDATE
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER 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 presentation contains summ
Slide 4: Alf Iannello
ALF IANNIELLO Managing Director & CEO • 20 years of MD/CEO experience • Qualified electronics engineer • 12-year international career – who understands technology, manufacturing and defence • Aligned with Codan’s unique winning culture • Demonstrated CEO track record of growing businesses through le
Slide 5: FY22 Half Year Summary
FY22 HALF YEAR SUMMARY • Highest half-year profit in the company’s history • More balanced, diversified and stable sales across the Codan group • DTC secured Codan’s largest contract award in the company’s history • Recent acquisitions, DTC and Zetron both tracking ahead of first year profit targets
Slide 6: Increased Dividend
INCREASED DIVIDEND Interim dividend 13.0 cents Interim Dividend (Cents) • Interim dividend 13.0 cents per share, increased by 24% • Increasing dividends reflect strength of business • Interim dividend will be paid: • Record date 24 February 2022 • Payment date 10 March 2022 “The board expects to con
Slide 7: FY22 Half Year Group Sales
FY22 HALF YEAR GROUP SALES A strong year for Codan • Balanced sales portfolio across the Codan group +250% • Communications sales increased by $84 million: • DTC and Zetron both outperformed first half expectations • Forward orderbook of $163 million Group Sales • Metal Detection sales down 11% vs H
Slide 8: Codan Group Portfolio of Businesses
CODAN GROUP PORTFOLIO OF BUSINESSES “The business today is a much stronger and robust business than it was some 12 months ago” 2021 2022 Segment Sales Segment Sales Minelab: 80% Minelab 54% Communications: 17% Communications 46%. Tracking Solutions: 3%. “More balanced, Developing World Sales diversi
Slide 9: Historical Performance
HISTORICAL PERFORMANCE “The business has great foundations and is in a strong position to deliver sustainable growth” 9% 33% 20% Sales invested into product H1 NPAT CAGR FY22 NPAT Margin development H1 NPAT ($m) 8
Slide 10: Codan's Positive Response to Covid
CODAN’S POSITIVE RESPONSE TO COVID Initiatives Outcomes Target to increase Freight Savings finished goods inventory Mitigate against Increase Production electronic chip Capacity shortages – no production outages Engineering Projects – Successfully increased Design Changes inventory by $19 million du
Slide 11: Strategic Growth Plan
STRATEGIC GROWTH PLAN Transforming lives through innovation, wherever you are Expansion: Technology Council: • Geographic footprint • Communications • Products to solutions • Tracking/Sensing • Voice to Data to Video • Data analytics • Video Product Development: Acquisition Criteria: • Strong pipeli
Slide 12: Metal Detection
METAL DETECTION H1 Overview GPX 6000 vs GPZ 7000 Progress on significant new products Successful developing world take up 4 key new products to be released Artisanal Gold Miners starting to adopt in the near term Expansion of Geographies Profitability India Company established Sales price increases
Slide 13: Historical Minelab Sales
HISTORICAL MINELAB SALES 16% CAGR Sales Growth H1 Sales ($m) “New product introductions, geographic expansion and increased retail distribution drives Minelab growth.” 12
Slide 14: Strong Ongoing Growth in Metal Detection
STRONG ONGOING GROWTH IN METAL DETECTION Retain Leadership Market-leading Technology / World-class customer experience Technology New technology to customers/ Leverage retail distribution Geographic Expansion Awareness / Emerging Markets / Channels to Market 13
Slide 15: Domo Tactical Communications
DOMO TACTICAL COMMUNICATIONS H1 Overview Secured Largest Contract in Acquisition of Broadcast Wireless Codan’s History Systems Multi-year agreement – first Purchase price of $8 million, purchase order: $37.6 million December 2021 settlement Strong Order Book Exceed Year 1 EBITDA Target $78 million w
Slide 16: Tactical & Domo Tactical Communications Products & Markets
TACTICAL & DOMO TACTICAL COMMUNICATIONS Products & Markets Law Unmanned Military Broadcast Commercial Enforcement Systems Voice Communications Video Products Surveillance Command & Control Markets 15
Slide 17: Broadcast Wireless Technologies
BROADCAST WIRELESS TECHNOLOGIES TRADITIONAL MODEL REMOTE BROADCAST MODEL Encoder Decoder REMOTE PRODUCTION Filming and production on site • Broadcast truck(s) Remote production • Large team onsite • Less onsite equipment • Multi-day setup and • Small team onsite teardown • Same-day setup and teardow
Slide 18: Zetron
ZETRON H1 Achievements Restructure and Integrate Growing Opportunity Pipeline Integration tracking ahead of plan Winning key opportunities as a systems provider Strong Order Book Exceed Year 1 EBITDA Target $66 million with $22 million to be On track to exceed Year 1 delivered in the balance of FY22
Slide 19: Zetron Products & Markets
ZETRON Products & Markets First Responders Transportation Utilities Land Management Federal Computer Automated Location Mobility & LMR Solutions Dispatch Call Taking Aided Dispatch Alerting Mapping CommandIQ End to End Critical Communications Solution 18
Slide 20: Financial Results
FINANCIAL RESULTS = a me * OS. ge re Ea CODAN
Slide 21: Record FY22 Half Year Performance
RECORD FY22 HALF YEAR PERFORMANCE Profit & Loss Dec-21 Sales Dec-20 Underlying NPAT ($m) $m % $m Revenue Metal Detection $137.7 53% $155.1 Communications $117.7 46% $33.6 Other $1.4 1% $5.8 Total Revenue $256.8 100% $194.5 EBITDA $83.1 33% $69.3 EBIT $69.9 27% $60.7 Net interest ($0.7) ($0.2) Net pr
Slide 22: Financial Position
FINANCIAL POSITION Strong balance sheet – planned investment in working capital • Increased debtors driven by higher Communications sales in November and December 2021 • Investment in inventory, reduced freight costs and mitigate supply chain risks • Payables high at June 2021 due to prepayments fro
Slide 23: Change in Net Debt Position
CHANGE IN NET DEBT POSITION ($ millions) Jun-21 Minetec FY21 Debtors Payables Inventory FY21 Tax Normalised Engineering Dec-21 Net Debt Sale Final Increase Decrease Investment Payment FY22 Investment Net Debt Dividend Operating Cashflow 22
Slide 24: Engineering Investment
ENGINEERING INVESTMENT Strong pipeline of projects Engineering spend ($m) Engineering Spend by Business Unit Return on Equity1 9% of Sales H1 H2 1Return on equity = rolling 12 month net profit after tax divided by average equity 23
Slide 25: FY22 Outlook
FY22 OUTLOOK Number of factors that are relevant when considering the outlook for FY22: • The successful uptake of GPX6000® gold detectors into the developing world; • Resolution of the on-going civil unrest in Sudan; • The extent to which, DTC and Zetron will exceed their initial full year profit t
Slide 26: Appendix
Appendix 25
Slide 27: Codan Limited Overview
CODAN LIMITED OVERVIEW Innovation wherever you are 150+ Sell to over 150 countries around the world 700+ employees around the world 10 sites across the globe: AUSTRALIA BRAZIL CANADA DENMARK IRELAND MEXICO SINGAPORE UAE UK USA The Codan group consists of the following brands: 26
Slide 28: FY21 Global Footprint
FY21 GLOBAL FOOTPRINT Customers in 150 countries, exporting around 85% of sales $107m $54m $11m CODAN OFFICE CODAN OFFICE (INC. ENGINEERING) MANUFACTURING/ $203m WAREHOUSES $8m $54m 27
Slide 29: Metal Detection Products & Markets
METAL DETECTION Products & Markets RECREATION GOLD MINING COUNTERMINE Coin & Treasure, Gold Detectors Handheld Gold Detectors Landmine Detectors Key markets — Australia, USA, Key markets — Africa, Asia Market — countries impacted by Europe, Russia Pacific, Latin America war — past and present Users:
Slide 30: Gold Products
GOLD PRODUCTS Products to service all types of prospectors GOLD DETECTOR RANGE $899 $3299 $3999 $5999 $7999 USD RRP ex tax/shipping ENTRY - MID RANGE - PROFESSIONAL 29
Slide 31: Recreational Products
RECREATIONAL PRODUCTS Expanding MULTI-IQ® technology across the range 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 30
Slide 32: Public Safety Communications
PUBLIC SAFETY COMMUNICATIONS Strategic fit of Zetron with LMR The Alert The Intake, Triage, and Coordination The Delivery The Response Command and Control Mission Critical Wireless First Responders The Public Communications and Field Personnel Voice LMR Data Broadband The Emergency Response Continuu