Coventry Group Limited · ASX:CYG
Coventry — H1 FY2006 Earnings Presentation
25 slides from Coventry's earnings presentation, 2006
Slide 1: Coventry Group Ltd Results for Six Months Ended 31 December 2005
YD Coventry Group Ltd ABN 37 008 670 102 Results for Six Months Ended 31 December 2005 Chris Glenn Managing Director Stephen Cooper Chief Financial Officer
Slide 2: Results Summary
RESULTS SUMMARY >Net profit before tax and property sales up 15% to $10.6M. > Interim dividend of 18 cents fully franked. 2 g Coventry Group Ltd
Slide 3: Financial Overview
FINANCIAL OVERVIEW Six Months Ended 31 December 31 December % $M 2005 2004 Change Sales 243.4 238.4 2 t EBIT (before property sales) 11.6 9.9 17 t Tax 3.2 2.9 Net Profit After Tax (before minority interest) 7.3 10.0 27 | EPS - cents 20.1 27.9 284 ® Coventry Group Ltd
Slide 4: Financial Overview cont'd
FINANCIAL OVERVIEW cont'd Six Months Ended 31 December 31 December 2005 * 2004 * EBIT/Sales 4.8% 4.1% Return on Capital Employed (EBIT/equity + net debt) 10.1% 9.4% Return on Equity (NPAT/equity) 8.6% 74% * Ratios are annualised where appropriate and are before property sales. (4) Coventry Group Ltd
Slide 5: Cash Flow and Gearing
CASH FLOW AND GEARING Six Months Ended 31 December 31 December $M 2005 2004 | Operating Cash Flow 0.3 2.9 Closing Net Interest Bearing Debt 59.0 32.4 Closing Equity 171.2 178.2 | Net Debt/Equity 34.5% 18.2% Interest Cover 10.8 times 14.3 times ® Coventry Group Ltd
Slide 6: Cash Flow and Gearing cont'd
CASH FLOW AND GEARING cont’d > Operating cash flow impacted by higher stock holdings at automotive branches and greater level of industrial stock to avoid risk of supply shortages from Asia. > Increase in net debt due to payment of special dividend, acquisitions by the industrial segment, and capita
Slide 7: Dividends
DIVIDENDS | Six Months Ended 31 December 31 December 2005 2004 EPS — cents 20.1 17.3* Dividend per share - cents 18.0 18.0 Franking 100% 100% * Excluding property sales » Current policy is to distribute high proportion of profits. » Dividend reinvestment plan remains activated for the interim divide
Slide 8: Capital Employed
CAPITAL EMPLOYED Six Months Ended 31 December 31 December 2005 2004 Capital expenditure $11.1M $4.9M Stock turns 3.13 3.55 Days sales in trade debtors 54.2 51.8 (4) Coventry Group Lid
Slide 9: Capital Employed cont'd
CAPITAL EMPLOYED cont’d » Increase in capital expenditure due to $6.9M spent on new computer system. »Stock turns impacted by higher stock holdings at automotive branches, greater level of safety stock of industrial products, and December acquisition of Cornall Merchandise. (4) Coventry Group Ltd
Slide 10: Automotive
AUTOMOTIVE Six Months Ended 31 December 31 December $M 2005 2004 Sales 136.7 137.0 EBIT * 1.9 0.1 EBIT/Sales Margin * 1.4% 0.1% Capital Employed 86.0 79.6 Return on Capital Employed 4.5% 0.3% * Prior comparative period is after adjustment for allocation of information services and marketing support
Slide 11: Automotive cont'd
11 AUTOMOTIVE cont'd >» 19% increase in EBIT, excluding non-recurring items from prior comparative period. >» Negative contribution from NSW and QLD of $1.3M, down from $2.5M. > Improved profit result from SA (under new management), despite lower sales. Initiatives in place to recoup lost sales. >Mo
Slide 12: Industrial
INDUSTRIAL Six Months Ended 31 December 31 December % $M 2005 2004 Change Sales 93.7 90.5 3.5 f EBIT * 8.9 8.9 - EBIT/Sales Margin * 9.4% 9.9% Capital Employed 89.5 72.1 Return on Capital Employed 19.8% 24.8% * Prior comparative period is after adjustment for allocation of information services and m
Slide 13: Industrial cont'd
13 INDUSTRIAL cont’d »Strong results achieved from WA and QLD, and improved results recorded in SA and NSW. > Disappointing results recorded in VIC due to increased competition, and in NZ due to a weaker economy which particularly affected construction demand. State distribution centres were relocat
Slide 14: Bitumen
14 BITUMEN Six Months Ended 31 December 31 December % $M 2005 2004 Change Sales 7.6 6.3 20.6 t EBIT 0.7 0.4 75.0 t EBIT/Sales Margin 8.7% 6.6% Capital Employed 47 5.0 Return on Capital Employed 28.1% 16.7% | (4) Coventry Group Ltd
Slide 15: Bitumen cont'd
BITUMEN cont’d >Increased asphalt volumes through successful local council tendering underpinned the improved result. » Higher oil prices and mild weather reduced demand for emulsion. 18 & Coventry Group Ltd
Slide 16: Gaskets
16 GASKETS Six Months Ended 31 December 31 December % $M 2005 2004 Change Sales 6.0 6.7 10.4 4 EBIT 0.8 1.0 20.0 t EBIT/Sales Margin 12.8% 14.3% Capital Employed 10.5 8.2 Return on Capital Employed 14.8% 23.2% >» Weaker demand from distributors due to softer trade market led to reduced sales. (4) Co
Slide 17: Automotive Strategy
7 AUTOMOTIVE STRATEGY > Major restructuring: *One Automotive business *Streamlining structures *Centralised management *Control *Consistency *Cost > Build trade and expand retail. > Merchandising and marketing. > Inventory management. >Logistics and warehousing. > Project Essex — new WA warehouse an
Slide 18: Industrial Strategy
INDUSTRIAL STRATEGY > Build cabinet and furniture hardware market. > Supply chain. »DC and branch network improvement programme. > New products. 18 (4) Coventry Group Ltd
Slide 19: Industrial Strategy cont'd
INDUSTRIAL STRATEGY cont'd Cornall / Howard Silvers Cabinet & Furniture Hardware >Integration on track. » Businesses operating as planned. » Howard Silvers move to Oracle in April 06 and Cornall in 1% half of 07. > Scope for further growth. 19 (4) Coventry Group Ltd
Slide 20: Bitumen Strategy
Mie BITUMEN STRATEGY >» Streamline operations. > Build organic sales. > Expand customer segments. co (4) Coventry Group Ltd
Slide 21: Gasket Strategy
GASKET STRATEGY >» Grow market share in the automotive market. »Expand non-automotive applications. >» Continue to improve production efficiencies. at (4) Coventry Group Ltd
Slide 22: Project Compass - Oracle ERP
PROJECT COMPASS - ORACLE ERP > Finance on line in November 2005: *No major issues >» Fasteners Western Australia - December 2005: *Oracle technical issues *All major issues resolved > System roll out over the next 15 months. 22 C4.) Coventry Group Ltd
Slide 23: Company Strategy
COMPANY STRATEGY » Focused distribution company. »Leadership in key market segments — 1 or 2"¢, » Australia and New Zealand focus. » Leverage core competencies and infrastructure of the Company. > Strength in branding. 23 ® Coventry Group Ltd
Slide 24: Company Strategy Platform
24 COMPANY STRATEGY PLATFORM » Core information technology platform. >» Key competencies are developing. > Coventry Group Team development. > Supply chain: *Sourcing and inventory management >Continuous improvement culture. (4) Coventry Group Ltd
Slide 25: Outlook
35 OUTLOOK > Expect similar trading conditions. >» Automotive to continue to improve. > Industrial is expected to be steady. >Bitumen to continue to improve. >» Gaskets is expected to be steady. (4 Coventry Group Ltd