Slide 1: Schaffer Corporation Limited Half Year Results — Dec 2004
Schaffer Corporation Limited y” Half Year Results — Dec 2004
Slide 2: Performance Summary
| Performance Summary 6 mths 6 mths Dec 03 Dec 04 Revenue (A$m) 104 77 Net Profit (A$m) 10.1 6.7 EPS $0.73 $0.48 ROCE 28% 22% EBITDA (A$m) 19.5 13.9 Ordinary Dividend $0.50 $0.50 Special Dividend $0.20 $0.10 Payout Ratio 96% 126% Interest Cover (EBIT) 8.0 5.8 Cash Reserves (A$m) 24.3 20.0 Net Debt/E
Slide 3: Dec 2004 EBIT Contribution
Dec 2004 EBIT Contribution Non-Core 11% Investment Property 17% Leather 43% Building Products 29% =» Return on Capital Employed — 22%
Slide 4: Operations - Leather
| Operations - Leather (A$m) 6 mths 6 mths Dec 03 Dec 04 Auto Revenue 66.0 48.1 Furn Revenue 8.3 5.0 EBIT 8.6 5.2 EBIT Margin 11.6% 9.9% = Dec 04 Automotive revenue is reduced due to: We We Lower volume ($16M) primarily due to suspension of China sales ($11M) and lower US aftermarket sales ($4m). Lo
Slide 5: Automotive Leather Market
| Automotive Leather Market World Leather Growth by Region & Total 10,000,000 9,000,000 + 8,000,000 7,000,000 6,000,000 6,000,000 4,000,000 3,000,000 2,000,000 |_-. 1,000,000 + 0 2002 2003 2004 2008 2006 2007 Source: CSM Worldwide (2008) A3$4 billion global automotive leather market growing at 7% p.
Slide 6: Howe Sales by Region
| Howe Sales by Region Australia 13% China 18% Europe 26% Sales growth is focussed on the European and Chinese markets. The Mexican cutting facility (established 1996) is operating efficiently supporting our North American sales. a Howe has negotiated a long term lease over premises in Eastern Slova
Slide 7: * BMW * Subaru SUBARU
* BMW * Subaru SUBARU ° Audi GBED ¢ Mitsubishi ae ¢ General Motors a * Toyota D. ¢ Ford ¢ Honda a. * Chrysler CHRYSLER ¢ Suzuki $ SUZUKI ¢Land Rover ¢ Mazda © wtaanvel «Nissan
Slide 8: Competitive Advantages
| Competitive Advantages « Consistent supply of raw materials: w Australia has the 4" largest cattle herd globally iw Secure supply of disease-free hides m Range of hides to match product requirements Modern, global scale finishing facility: iw Commissioned 1998 w 50% operational overcapacity « Qual
Slide 9: Building Products
| Building Products Urbanstone Premium paving products, Australian distribution network. Delta Pre-cast and pre-stressed concrete floors, beams & wall products.
Slide 10: Building Products Performance
| Building Products Performance 6 mths 6 mths Dec 03| Dec 04 Sales 19.5 15.6 EBIT 3.6 2.4 EBIT Margin 18.3% 15.5% = Solid outlook for existing businesses. » Growth opportunities in Building Materials both internally (product extensions) and externally (acquisitions) will be actively pursued.
Slide 11: Competitive Advantages
| Competitive Advantages = Urbanstone Q Q Q Plant flexibility Cost control Distribution network Product innovation Premium branding Delta a Cost efficient product a Pre-stressed niche a Capacity a Distribution ii
Slide 12: Investment Property
Investment Property « At December 31, SFC had JV interests in 6 commercial and retail properties valued at $23 M with $14.1 M of associated debt and generating an annual EBIT of approximately $1.8 M. m Investment Property results were impacted by the one- off sale of West Perth land which generated
Slide 13: Non-Core Investments — Realising the Value
Non-Core Investments — Realising the Value = Mindarie Land Sales =» SFC has a 15% interest in the Mindarie Development Project. = The Mindarie Project is forecast to be fully developed (sold) by Dec 2007. It is forecast to generate additional cash of $2.7m and EBIT of $2.4m to completion. =» Kurrajo
Slide 14: Dec Debt Position
| Dec 04 Debt Position Recourse | Non-Recourse Total Debt Operating Businesses 0.3 38.7 39.0 Property 4.2 10.5 14.7 Group Debt 4.5 49.2 53.7 Cash on Deposit 20.0 Net Debt 33.7 w The ALH Subordinated Debt and the Investment Property Debt is effectively “structural” debt. w The $38.7 M ALH subordinate
Slide 15: Cash Flow
| Cash Flow (A$ M) Dec 03) Dec 04 6 months | 6 months EBITDA 19.5 13.9 Less Net Interest (1.6) (1.4) Less Tax Paid (6.2) (3.9) ALH Change in Working Capital 1.6 (2.1) Other Change in Working Capital (3.3) (1.5) Other (Provisions, Entitlements) 2.0 (3.2) Share Issues (option exercise) 0.7 0.7 Net Pro
Slide 16: Outlook — Earnings
Outlook — Earnings x Automotive Leather — A suspension of China sales and ongoing program timing issues (Audi ramp-up and BMW sales) are impacting volume and margins. These factors will continue to adversely impact earnings in the short term. In the medium term there are significant opportunities to
Slide 17: Outlook — Dividends
| Outlook — Dividends » SFC will pay an ordinary dividend of $0.50 and a special dividend of $0.10 (both fully franked) in March 2005 and Sept 2005. Payment of these dividends reflects SFC’s cash position and franking credit surplus ($5.2m on tax paid basis at 31 Dec 04). « Due to current earnings u