Slide 1: Full Year Results Presentation: Jun-07
For personal use only Schaffer Corporation Full Year Results Presentation: Jun-07
Slide 2: SFC Performance Highlights
SFC Performance Highlights For personal use only Operations Acquisitions • 2007 NPAT $10.3m (+26%) • Building Products: $26m by Jun-08 • 2007 EBIT $19.1 (+21%) – Limestone Resources: $7.5m • Building Products EBIT $8.7m (+32%) – First UrbanStone Central site: $3.9m • Delta activity at all time high
Slide 3: A focus on creating long term shareholder value
A focus on creating long term shareholder value For personal use only • Consistently earned a return on capital in excess of our target of 15% return on capital • Payout the majority of earnings as dividends • Schaffer provides access to capital and leadership across all businesses Success driven by
Slide 4: SFC's businesses service a range of market segments
SFC’s businesses services a range of markets segments - Performance is not dependent on one industry sector. For personal use only Business Market Customers Competitors Value proposition • Market leader • Premium product Building Products – $300m - $400m paving Fragmented • Strong brand Commercial /
Slide 5: Building Products underpins SFC Profit Rise
Building Products underpins SFC Profit Rise For personal use only % Full Year Ending 30 Jun (A$m) to Jun-06 to Jun-07 change Revenue 145.3 147.7 + 2% EBITDA 21.1 23.9 + 13% EBIT (net interest basis) 15.9 19.1 + 21% Net profit 8.1 10.3 + 26% EPS 0.58 0.73 ROCE 17% 17% Cash flow from operating activit
Slide 6: EBIT improvement driven by Building Products
EBIT improvement driven by Building Products For personal use only Operating EBIT (by Segment) 20 18.7 18 2.1 Other Investments 15.3 16 1.9 Investment Property 14 2.0 12 1.9 Leather (+24%) 6.0 $m 10 4.8 8 Building Products (+32%) 6 4 8.7 6.6 2 0 Jun'06 Jun'07 6
Slide 7: Jun-07 Debt Position
Jun-07 Debt Position For personal use only Non- $M Recourse Total Recourse Building Products 1.1 0.0 1.1 Leather 0 38.7* 38.7 Property Freehold 3.6 0.0 3.6 Property JV’s 1.7 20.2 21.9 Total Debt 6.4 58.9 65.3 Cash Reserves 9.5 Net Debt 55.8 • 30-Jun-07 undrawn debt facilities: $20m; (Increased to $3
Slide 8: Actual gearing is significantly less than it appears
Actual gearing is significantly less than it appears For personal use only • Group gearing (Net Debt /Equity) per balance sheet @ 105%. - properties are recorded at depreciated cost; not market value. • Substituting Market Value for Book Value reduces Group gearing to 74%. Balance Sheet Properties B
Slide 9: Cash flow
Cash flow For personal use only Full Year Ending 30 Jun (A$m) Jun-06 Jun-07 EBITDA 21.1 23.9 Net interest paid (3.4) (4.4) Tax paid (2.9) (4.2) Howe change in trade working capital 3.9 (1.1) Other changes in working capital (2.1) 0.4 Other (0.4) (0.7) Total cash generated 16.1 13.9 Debt reduction/(i
Slide 10: Profitable niche focus: Building Products
For personal use only Profitable niche focus Building Products
Slide 11: Urbanstone, innovative national market leader commanding a brand premium
Urbanstone, innovative national market leader commanding a brand premium For personal use only • Unmatched plant & design flexibility to satisfy residential & commercial sectors • Embedded cost control culture • Owned national distribution network established since 1993 11
Slide 12: Delta, the market leader in technically engineered concrete products in WA
Delta, the market leader in technically engineered concrete products in WA For personal use only • Low cost, profitable product • Strong order book • Current projects include 100 St Georges Tce, Bishops See & Perth/Bunbury highway bridges 12
Slide 13: Building Products leverages off buoyant WA economy
Building Products leverages off buoyant WA economy For personal use only Building Products A$M Jun-06 Jun-07 % change Sales 39.0 55.1 +41% EBIT 6.6 8.7 +32% EBIT Margin 17% 16% • Sales grew with the first-time inclusion of Limestone Resources (+$14m) • Division benefited from strong leverage to buoy
Slide 14: Growth driven by acquisition of Archistone and Limestone Resources
Growth driven by acquisition of Archistone and Limestone Resources plus UrbanStone Central roll-out For personal use only • Archistone projected revenue: $12m per annum approx • Archistone is the market leader in recon limestone block walling market • Opportunities for operational improvement in tan
Slide 15: Business repositioning locks in Howe's competitive future
Business repositioning locks in Howe’s For personal use only competitive future Leather – Howe Automotive Limited
Slide 16: Difficult conditions globally for the automotive leather industry
Difficult conditions globally for the automotive leather industry For personal use only • USA: In Jul-07, import badged vehicle brands outsold the ‘Detroit3’ for the first time ever (Imports: 52% / Detroit3: 48%;) • Hide price pressures • Production overcapacity within the industry • OEM’s squeeze a
Slide 17: The Howe business has been repositioned to remain globally competitive
The Howe business has been repositioned to remain globally competitive For personal use only • High labour intensive cutting operations all based in lower labour-cost countries (Slovakia, China and Mexico). • Major benefits: (i) lowers Howe’s cost base; (ii) provides local sales and service presence
Slide 18: Howe's 2007 growth focus - Europe and Asia
Howe’s 2007 growth focus - Europe and Asia For personal use only Howe sales by region $92m $83m 100% 12% 9% Australia 75% 27% 32% Asia 50% 33% Europe 39% 25% 28% North America 19% 0% Jun'06 Jun'07 18
Slide 19: The repositioning keeps Howe competitive in a tough market
The repositioning keeps Howe competitive in a tough market For personal use only Leather A$M Jun-06 Jun-07 % change Automotive revenue 91.4 82.9 -9% Furniture revenue (closed Aug-06) 6.7 1.5 Automotive EBIT 6.2 6.5 +5% Howe (Group) EBIT 4.8 6.0 +25% EBIT Margin 4.9% 7.1% • Howe’s reported $6.0m EBIT
Slide 20: Pursuing growth opportunities to build scale
Pursuing growth opportunities to build scale For personal use only • Repositioning locks in competitive future • Increased sales efforts across Europe, Asia and US • Building scale: Increase revenue will positively impact earnings 20
Slide 21: Solid investments generating shareholder returns: Property
Solid investments generating shareholder For personal use only returns Property
Slide 22: Valuable portfolio of assets with recurring income
Valuable portfolio of assets with recurring income For personal use only 22
Slide 23: JV partners are industry experts with track record of success
JV partners are industry experts with track record of success For personal use only 23
Slide 24: Strong earnings and cash flow contribution
Strong earnings and cash flow contribution For personal use only Investment Property A$M Jun-06 Jun-07 % change EBIT 1.9 1.9 +2% Cash 1.2 1.0 -17% Book value 15.0 16.0 +7% Debt 17.5 20.0 +14% Market value 31.8 38.2 +20% Loan to valuation (debt 55% 52% / market value) 24
Slide 25: Outlook - Earnings
Outlook - Earnings For personal use only • Building Products (Delta, UrbanStone, Limestone Resources, Archistone) – Delta: set to continue to leverage off WA’s robust economy – Building scale, range and distribution: • Limestone Resources & Archistone acquisitions • Launching of UrbanStone Central c
Slide 26: Outlook – Earnings (continued)
Outlook – Earnings (continued) For personal use only • Property – Sale of 71 Queens Rd Melbourne to add $1.3m to H1 EBIT – Steady returns are expected from balance of our Investment Property leasing activities – Mindarie: Staging issues to impact H1 earnings. Earning biased to H2. • At Group Level –
Slide 27: Outlook - Dividends
Outlook - Dividends For personal use only • Final Dividend – SFC will pay a 25¢/share fully franked ordinary dividend – Ex Dividend Date: 9-Sep-07; Payment Date: 18-Sep-07 • Dividend Outlook – SFC’s objective is to maintain dividends for 2007/08 at 50¢/share; balance of earnings to be used to fund g