Codan Limited · ASX:CDA
Codan — Investor Presentation (February 2021)
27 slides from Codan's investor presentation, Feb 18, 2021
Slide 1: FY21 half-year investor presentation
18 February 2021 Company Announcements Office Australian Securities Exchange Level 4 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam FY21 half-year investor presentation Please find attached a copy of Codan Limited’s investor presentation dated 18 February 2021 for release to the market. Yours faith
Slide 2: FY21 Half-Year Results and Update
FY21 HALF-YEAR RESULTS AND UPDATE Donald McGurk 18 Managing Director & CEO FEBRUARY Michael Barton 2021 Chief Financial Officer Paul Sangster Executive General Manager - Tactical Communications 1
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: FY21 Half-Year Summary
FY21 HALF-YEAR SUMMARY • Highest half-year profit in the company’s history • Group sales of $194 million, a 14% increase against FY20 record first half • Interim dividend of 10.5 cents, fully franked Sales EBITDA NPAT EPS $194.5m $69.3m $41.3m 22.8 cents Increased by 14% Increased by 28% Increased b
Slide 5: Increased Dividend
INCREASED DIVIDEND Interim dividend 10.5 cents Interim Dividend (Cents) • Interim dividend 10.5 cents per share • Increasing dividends reflect strength of business • Interim dividend will be paid: • Record date 25 February 2021 • Payment date 11 March 2021 “The board expects to continue its policy o
Slide 6: FY21 Half-Year Group Sales
FY21 HALF-YEAR GROUP SALES A strong year for Codan • 14% increase in sales over FY20 • Metal Detection sales growth 55%: -50% • Growth in both Recreational (66%) and Gold Mining (49%) • Expanding geographical spread • Increased distribution into mass market retail channels • Investment to increase m
Slide 7: Strategic Growth Plan
STRATEGIC GROWTH PLAN Transforming lives through innovation, wherever you are Expansion: Technology Council: • Geographic footprint • Communications • Products to solutions • Data analytics • Voice to Data to Video • Tracking • Sensing Product Development: Acquisition Criteria: • Strong pipeline of
Slide 8: Tactical Communications: Strategy for Growth
TACTICAL COMMUNICATIONS Strategy for Growth Expanding our voice product offering to video and data driven solutions Military Market Strategic Partners Full Systems Solutions Adjacent Markets 7
Slide 9: Domo Tactical Communications (DTC) Overview
DOMO TACTICAL COMMUNICATIONS (DTC) OVERVIEW Premier Provider of Tactical Communications Technology Products and Solutions in support of Military, Intelligence and National Law Enforcement Markets Across the Globe 68+ countries of operations around the world ~US$ 70m ~45% 3 sites across the globe rev
Slide 10: MIMO Mesh Addressable Market
MIMO MESH ADDRESSABLE MARKET1 Estimated to grow by 15% p.a. US $m’s “Under Codan’s ownership, targeting EBITDA of AUD $14m in year 1” 9 1Source: Competitor annual reports, Janes Defence 2020 and Kenneth Research 2018
Slide 11: DTC Products, Solutions & Markets
DTC PRODUCTS, SOLUTIONS & MARKETS Diverse Portfolio to Address various Markets VIDEO MIMO/MESH COMMAND AND SURVEILLANCE Audio & Low Latency Video Addresses challenges of increased CONTROL Audio and video capabilities to C2 location & associated Meta-data Transmission/Receive, Broadcast & operations
Slide 12: Product Demonstration
PRODUCT DEMONSTRATION Video: https://vimeo.com/513229831/9330204523 11
Slide 13: Safe Cities: Large City Surveillance
SAFE CITIES Case Study: Large City Surveillance • DTC’s portfolio of products and solutions provide highly secure surveillance feed for law enforcement purposes: • High reliability communications for coverage denied surveillance areas • Independent networks perform outside of cellular infrastructure
Slide 14: Why Is Codan the Right Owner?
WHY IS CODAN THE RIGHT OWNER? Military & Complementary Adjacent Market Routes to Market Strategic Markets Fit Strong Cultural Fills Capability Alignment People Technology Gap 13
Slide 15: Critical Communications
CRITICAL COMMUNICATIONS Codan Powered Mission-Critical Communications NO GAPS IN PURE COVERAGE SIMPLICITY $48m $21m Assess opportunities Transition to expand from products customer to solutions value$102m INTEROPERABILITY RELIABILITY Complete CASCADE development FAST $35m DEPLOYMENT NON-PROPRIETARY
Slide 16: Metal Detection: Drivers for Growth
METAL DETECTION Driver’s for growth Product Innovation: Geographic Expansion: • 5 key products currently • Established in Brazil and Mexico under development • Other significant and under Brazil Mexico • New Gold Detector GPX6000 developed markets being Mexico • New Countermine detector assessed Ind
Slide 17: • High performance • RRP USD $5,999
• High performance • Easy to use • Lightweight • Collapsible • Waterproof • RRP USD $5,999
Slide 18: Minetec strategy with Caterpillar
“The strategy for Minetec is to work closely with Caterpillar to leverage their global distribution capability.” 17
Slide 19: Financial Results
FINANCIAL RESULTS s ii Ea CODAN
Slide 20: Record FY21 Performance
RECORD FY21 PERFORMANCE NPAT ($m) • Record sales and profits, despite strong AUD appreciation • Strong demand for Metal Detectors across all markets • Sales growth translated to NPAT, economies of scale • Investment in manufacturing capacity and inventory to reduce freight costs 19
Slide 21: Engineering Investment
ENGINEERING INVESTMENT Strong pipeline of projects Engineering spend ($m) Engineering by Business Unit Return on Equity1 7% of Sales 1Return on equity = rolling 12 month net profit after tax divided by average equity 20
Slide 22: Cash Generation
CASH GENERATION Net Cash Balance ($m) Free Cash Flow($m) 1 • Excellent cash generation, driven by strong sales and collections from customers • Expect further inventory investment in the second half of FY21 1Free cash flow = operating cash flow + interest – cash outflow for all product development a
Slide 23: FY21 Outlook
FY21 OUTLOOK Well positioned for FY21: • Record first half and well positioned for a strong H2 • Demand for our metal detection products remains strong, with January achieving $35 million in sales • Launch of our new GPX6000TM gold detector in Q4 • Communications expected to have a better second hal
Slide 24: Appendix
Appendix ) : t . r
Slide 25: 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 Pacific, Market — countries impacted by Europe, Russia Latin America war — past and present Users:
Slide 26: 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 25
Slide 27: 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 26