Slide 1: Results for Full Year Ended 30 June 2009
For personal use only COVENTRY GROUP LTD ABN 37 008 670 102 Results for Full Year Ended 30 June 2009 Roger Flynn Tony Hockley Executive Chairman Chief Financial Officer SEPTEMBER 2009
Slide 2: Key Messages
For personal use only KEY MESSAGES • By end F’09 Company in best operational shape for years, but • F’09 market conditions worst for years • F10/H1 still tough – expect H2 improvement and well placed to benefit • Conservative balance sheet and low CAPEX needs • Restarted dividends • Trading at 60% d
Slide 3: F'09 Summary – A Watershed Year
F’09 Summary – A Watershed Year For personal use only Delivered on internal improvements • IT rollout completed • Attacked cost base • Net debt reduced 67% to $15m • Stock & debtors greatly reduced • Profitable sale of properties • Extended bank facility to July 2010 • Lost time injuries halved over
Slide 4: Some Metrics
Some Metrics For personal use only • Trading 80 years • 116 branches, Australia & NZ • 1,600 employees (2,200 in 2007) • 31,000 shareholders • Market cap - $56m (@ $1.45/share) • Simple Group structure – only 3 subsidiary companies
Slide 5: Business Profile
BUSINESS PROFILE For personal use only LEADING DISTRIBUTOR OF: • Automotive aftermarket parts • (including manufactured gaskets) • Fluid system products • Cabinet & furniture hardware CHARACTERISED BY: • Large range (>100,000 SKU’s) • Large number of world leading suppliers • Large number of custome
Slide 6: Group Business Units
GROUP BUSINESS UNITS For personal use only Automotive Division Industrial Division Manufacturing Coventrys Coventry Fasteners AA Gaskets Pty Ltd WA, SA, NSW, VIC, QLD, TAS, NT Drivetrain Hylton Parker Fasteners/Am-Tech NZ Gaskets Ltd NZ Motor Traders Cooper Fluid Systems QLD, WA, SA Artia WA, SA, VI
Slide 7: Group Network
GROUP NETWORK For personal use only Northern Territory Western Australia 1 Queensland 11 7 9 4 13 11 8 3 5 5 7 Number of South Australia New South Wales 8 4 Metropolitan Branches Number of 1 9 52 Industrial Regional Branches Victoria 5 4 1 21 Automotive 49 27 Industrial Tasmania New Zealand 2 Gasket
Slide 8: Revenue F'09 (Continuing Operations)
For personal use only Revenue F’09 (Continuing Operations) Automotive $163.3M Industrial $247.1M Manufacturing $11.8M Total $422.8M
Slide 9: EBIT F'09
EBIT F’09 (from continuing operations – pre individually significant items) For personal use only $M H1 H2 Year Industrial 9.9 1.2 11.1 Automotive (3.3) 0.5 (2.8) Gaskets 0.9 1.2 2.1 Corporate (1.2) (1.2) (2.4) 6.3 1.7 8.0
Slide 10: Five Year Financial Summary
For personal use only FIVE YEAR FINANCIAL SUMMARY (1) (1) (1) (2) (2) Year Ended 30 June 2009 2008 2007 2006 2005 Revenue from sale of goods $M 419.1 448.8 468.3 502.0 470.8 Profit before tax $M 1.0 8.4 1.9 14.7 24.1 (before minority interest) (Loss)/profit after tax $M (1.0) 6.9 (1.2) 9.6 17.7 (aft
Slide 11: F'09 A 'Watershed Year' Continuing Debt Reduction
F’09 A ‘Watershed Year’ Continuing Debt Reduction For personal use only Net debt reduced from peak of $83m to $15m by: Net Debt Reduction • Halting dividends (recommencing September 100.0 ’09) 80.0 • Minimising CAPEX • Sale of businesses 60.0 $M without potential 40.0 • Sale of freehold properties 2
Slide 12: F'09 A 'Watershed Year' Continuing Debt Reduction
F’09 A ‘Watershed Year’ Continuing Debt Reduction For personal use only • Net debt 31.12.08 - $37m, net debt 30.06.09 - $15m. Reduction $22m. • Real estate sales - 8 in F’09, 1 in second half, yielding $11m • Net debtors at 30.06.09 - $64m down $10m from Dec ’08 (as foreshadowed at Dec ’08 - $10m ex
Slide 13: New leadership matched to tasks
PAST F’09 – A ‘Watershed Year’ New leadership matched to tasks and For personal use only creating a stable team WA New to Company CFO Manager Promoted from within SA GGM Manager Auto GM Commercial Artia CEO Manager GM Co Product Fasteners Sec Manager GM HR Fluids CIO Manager Commercial Manager Logis
Slide 14: IT Roll Out Complete
F’09 – A ‘Watershed Year’ IT Roll Out Complete For personal use only •Initial budget $13.7m •Commenced January 2005 – planned implementation ~ 3 years •Completed June 2009 •Total expenditure ~ $25m (F’09 expenditure $3.2m) BUT Now giving operational data to enable business processes/costs and workin
Slide 15: Attacking the Cost Base
F’09 – A ‘Watershed Year’ Attacking the Cost Base For personal use only Industrial Auto Branches closed 11 Headcount reduction 112 = $5m+ $5m+ in savings in savings
Slide 16: F'09 Cashflows
For personal use only F’09 Cashflows
Slide 17: F'10 – Continuing to Make the Assets Work
F’10 – Continuing to Make the Assets Work For personal use only • Net Debt June ‘09 = $15m • Real Estate Owned June ‘09 = $14m at Book = $30m at March‘08 appraisal - Willing buyers but unwilling property lenders slowing sales - Rental yield expectations yet to moderate relative to interest rates • D
Slide 18: F'10 – Continuing Operational Improvements
F’10 – Continuing Operational Improvements For personal use only • Service Levels → Market Share • Better Sourcing – COGS our dominant cost (70% of Sales $) • Rationalise Costs - People (59% of expenses) (Our No. 2 Cost) - Sites (7% of expenses) • Optimise Pricing Structure ANNUAL EBIT SENSITIVITIES
Slide 19: F'10 – Even More Outward Looking
For personal use only F’10- Even More Outward Looking • Facing our customers & suppliers for mutual benefit • Improving after being too internalised • Reviewing each of our locations to align network to real customer needs
Slide 20: F'10 – Being Countered by Economic Slowdown
F’10 - Being Countered by Economic Slowdown For personal use only • Sales are customer “need” driven AND • hesitancy by all particularly felt from November ’08 • Actual & potential deferment of infrastructure projects (particularly WA/Qld resource base) BUT • New car “bubble” from 3-4 years ago brin
Slide 21: F'10 – Growth Path
F’10 - Growth Path For personal use only • Organic - Customers - Products - Locations • Complimentary acquisitions matched to our: - Knowledge/skills - Capacity to fund • Active capital management • Current Bank facilities next due for renewal July 2010. (They were renewed during F’09) • $20m headro
Slide 22: F'10 Trading Outlook – Auto & Gaskets
For personal use only F’10 - Trading Outlook Auto & Gaskets SNAKES & LADDERS External Internal External Internal •Depressed •Slower than •New car bubble •Lower cost resource sector desired inventory of early 2000’s base re mining supply reduction requiring service •Recovering •Vehicle service •Lower
Slide 23: F'10 Trading Outlook – Fasteners
For personal use only F’10 - Trading Outlook Fasteners SNAKES & LADDERS External Internal External Internal •GFC impacting •Debtor exposure •Government •Lower cost resource related •Slower than announced base infrastructure / desired inventory support for •Project manufacturers reduction infrastruct
Slide 24: Future Trading Outlook – Fluids
FUTURE For personal use only - Trading Outlook Fluids SNAKES & LADDERS External Internal External Internal •GFC impacting •Lower sales •Certain market •Oracle system key markets, drives need to sectors still will give control especially restructure buoyant benefits Kalgoorlie •Large market •Complime
Slide 25: Future Trading Outlook – Cabinet & Furniture Hardware (Artia)
FUTURE For personal use only - Trading Outlook Cabinet & Furniture Hardware (Artia) SNAKES & LADDERS External Internal External Internal •GFC adversely •Debtor exposure •New housing •New General impacting •Slower than boost Manager brings discretionary desired inventory •Great market greater spend r
Slide 26: Future Trading Outlook – New Zealand
FUTURE For personal use only - Trading Outlook New Zealand SNAKES & LADDERS External Internal External Internal •Economy in •Debtor exposure •New •Standardised recession Government systems with •Declining brings consumer Australia manufacturing confidence •Oracle will segments •Closer economic bring
Slide 27: Disclaimer
Disclaimer For personal use only Statements contained in this presentation, particularly those regarding possible or assumed future performance, estimated company earnings, potential growth of the company, industry growth or other trend projections are or may be forward looking statements. Such stat