Slide 1: Robust, innovative technology – FY17 Results
For personal use only Robust, innovative technology DONALD McGURK FY17 Results Managing Director & CEO MICHAEL BARTON Chief Financial Officer 6 September 2017 SARAH EMMS Manager, Investor Relations
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer For personal use only 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 pres
Slide 3: Portfolio of technology solutions
CODAN For personal use only Portfolio of technology solutions Superior performance in the harshest A global leader in conditions developing robust, Customers in 150 countries innovative technology for Global distribution network security, humanitarian, 58-year history of innovation consumer and reso
Slide 4: Selling to customers in countries and operations across the globe
SELLING TO CUSTOMERS IN 150 COUNTRIES AND OPERATIONS ACROSS THE GLOBE For personal use only $49m $33m $19m $93m $1m $31m $31m $31m 4
Slide 5: FY17 Results: Strong growth, paid special dividend
FY17 RESULTS For personal use only Strong growth, paid special dividend Sales EBITDA Growth driven by gold detector sales and large $226M $76M HF radio contracts 33% 80% Profit margins up – high end products and cost control NPAT* EPS* Debt free Returned $23 million to shareholders through $45M 24.9
Slide 6: Dividend: Ordinary dividend up 17% + special dividend
DIVIDEND ORDINARY DIVIDEND UP 17% + SPECIAL DIVIDEND For personal use only 4 cent final ordinary dividend (3 cent interim) Special dividend reflects outperformance due to strong gold detector sales – 3 cent final (3 cent interim) Board maintaining 50% dividend payout ratio Final ordinary and special
Slide 7: Base Business: Revenue $160-180 million / NPAT $20-25 million
BASE BUSINESS REVENUE $160-180 MILLION / NPAT $20-25 MILLION only Revenue Base level sales exceeded due to 250 use strong demand for gold detectors $226m 200 $170m For personal Base level sales $144m $160 million - $180 million 150 $ millions 100 50 - FY15 FY16 FY17 7
Slide 8: Building the base business
BUILDING THE BASE BUSINESS For personal use only Grow Radio business Transition to Scale Tracking solutions provider Win Australian defence Invest in Radio and contracts Stabilised and Tracking built baseline Acquisition business Broaden Metal Detection range Develop Defence Electronics Acquisition
Slide 9: Business Units
9 For personal use only BUSINESS UNITS
Slide 10: Radio Communications
RADIO COMMUNICATIONS KEEPING YOU CONNECTED WHEN LIVES ARE ON THE LINE For personal use only Infrastructure free, long range radio Robust, dependable wireless systems Purpose-built radios for maximum communications for voice and low-speed data reliability and ruggedness communications Key markets – A
Slide 11: Radio Communications
RADIO COMMUNICATIONS For personal use only FY17 FY18 Goals Best result in eight years Deliver Cascade™ and transition to a full communications Increased sales by 9% and profit by 14% solutions provider with a more expansive customer offering Expanded military offering Build military sales pipelines
Slide 12: Radio Communications: Long Range Digital Radio (HF)
RADIO COMMUNICATIONS LONG RANGE DIGITAL RADIO (HF) For personal use only Solutions for long distance communications without infrastructure Global HF market Target markets: Global markets with estimated annual sales of US$500 million Used extensively in Africa, Middle East and Asia Diversified custom
Slide 13: Radio Communications: Land Mobile Radio (VHF, UHF)
RADIO COMMUNICATIONS LAND MOBILE RADIO (VHF, UHF) For personal use only Solutions for first responder communications Target market: North American LMR solutions US$1B market, growing at 12% per annum* Customers transitioning from analogue to digital systems Homeland Security Firefighter Police Emerg
Slide 14: Metal Detection: World's best metal detecting technology
METAL DETECTION WORLD’S BEST METAL DETECTING TECHNOLOGY For personal use only Coin & Treasure, Gold Detectors Hand-held Gold Detectors Land Mine Detectors Key markets - Australia, USA, Key markets – Africa / AsiaPac / LATAM Key market – countries impacted by Europe, Russia war – past and present Use
Slide 15: Metal Detection: World's best metal detection technology
METAL DETECTION WORLD’S BEST METAL DETECTION TECHNOLOGY For personal use only Recreation Gold Mining hobbyist – enthusiast – specialist – expert entry – mid range – professional 15
Slide 16: Metal Detection
METAL DETECTION For personal use only FY17 FY18 Goals Second best year in Minelab history Launch new product for recreational market Strong African gold detector sales continued Establish Gold Monster® in Africa Sales increased 49% to $148 million Maximise GPZ 7000® sales Segment profit increased 10
Slide 17: Recreation
RECREATION For personal use only 20% sales growth in FY17 The largest part of Minelab’s base business Dealer network throughout Australia, USA, Europe, Russia Selling a complete range of Coin & Treasure and Gold detectors Continuing to expand our dealer network Treasure hunting with CTX Gold detecti
Slide 18: Gold Mining
GOLD MINING For personal use only Strong gold detector sales in African markets Existing customers upgrading to new products Minelab distribution centre in Dubai Dealer support and training on the ground Continuing to open new markets Gold Monster 1000® – designed specifically for African conditions
Slide 19: Tracking Solutions
TRACKING SOLUTIONS HIGHLY ACCURATE TRACKING TO IMPROVE MINE PRODUCTIVITY AND SAFETY For personal use only Tracking people and Eliminating bottlenecks Highly accurate assets in real time to increase output awareness and alerts World leading technology TRACKING + DATA COMMUNICATIONS + SOFTWARE for who
Slide 20: Tracking Solutions: Tangible productivity improvements delivered
TRACKING SOLUTIONS TANGIBLE PRODUCTIVITY IMPROVEMENTS DELIVERED For personal use only Saracen mine operated by RUC: Significant business win for Minetec Now a key reference site for other potential customers System commissioned February 2017 Increased output from 73,000 tonnes to 100,000 tonnes in t
Slide 21: Defence Electronics: Building our base business
DEFENCE ELECTRONICS BUILDING OUR BASE BUSINESS For personal use only Leveraging our extensive defence capability (complex system design and manufacture) Capitalising on upcoming large defence projects and South Australian location Supplying large defence contractors, bidding into large defence proje
Slide 22: Financial results
22 For personal use only Financial results
Slide 23: Strong growth
STRONG GROWTH For personal use only Underlying business performance FY15 FY16 FY17 $m $m $m Revenue $143.9 $169.5 $226.1 Underlying business performance EBITDA $29.9 $41.9 $75.6 EBIT $19.3 $29.2 $61.5 Net interest ($2.5) ($1.7) ($0.8) Net profit before tax $16.8 $27.5 $60.7 Underlying net profit aft
Slide 24: Engineering investment
ENGINEERING INVESTMENT CONTINUING TO INVEST IN OURSELVES For personal use only Engineering spend ($m) Engineering spend (% sales) High FY17 investment due to additional $5 million spend on LMR Cascade platform (facilitating the transition to a communications solutions provider) FY18 budget similar t
Slide 25: Balance sheet
BALANCE SHEET For personal use only Strong balance sheet $76 million cash generated from operations as increased profitability converted to cash Debt-free, $21 million net cash position Debt facility reduced from $85 million to $55 million Increased Other liabilities relates to FY17 tax liability to
Slide 26: Key ratios
KEY RATIOS For personal use only Underlying earnings per share (cents) Free cash flow ($m)2 Return on equity (%)1 Gearing (%)3 1Return on equity calculated as underlying net profit after tax divided by total equity 2 Free cash flow = operating cash flow + interest – cash outflow for product developm
Slide 27: Outlook FY18
OUTLOOK FY18 For personal use only Base business: Sales in range of $160 million to $180 million NPAT in range of $20 million to $25 million Performance above base level recognised by special dividends Initiatives underway to grow base business: New product releases Enter adjacent markets Partner an