Codan Limited · ASX:CDA
Codan — Investor Presentation (February 2023)
28 slides from Codan's investor presentation, Feb 16, 2023
Slide 1: FY23 Half-year investor presentation
16 February 2023 Company Announcements Office Australian Securities Exchange Level 4 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam FY23 Half-year investor presentation Please find attached a copy of Codan Limited’s investor presentation dated 16 February 2023 for release to the market. Yours faith
Slide 2: H1 FY 2023 Codan Limited Half Year Results
H1 FY 2023 Codan Limited Half Year Results
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: H1 FY23 Summary
H1 FY23 SUMMARY • H1 FY23 Group revenue of $211.8 million, towards the upper end of guided range1 Revenue EBITDA • Reduction versus pcp ‐18% due to ongoing $211.8m $55.2m disruptions in Minelab’s African market -18% vs. pcp¹ -34% vs. pcp¹ • Communications exceeded revenue guidance, +16% versus pcp •
Slide 5: Recent History / Evolution
RECENT HISTORY / EVOLUTION Codan’s recent history is marked by three distinct periods Revenue ($m) 506 Metal Detection 437 Communications 348 52% 271 77% 212 69% 70% 35% 48% 31% 23% 65% 30% FY19 FY20 FY21 FY22 H1 FY23 FY24+ Pre-COVID COVID era A Stronger Codan Reliance on metal detection Unprecedent
Slide 6: Africa vs Rest of World
AFRICA VS REST OF WORLD Favorable geographic mix, enhanced group stability H1 FY22 Revenue H1 FY23 Revenue • RoW¹ revenue contribution continued to $256.8m $211.8m grow during H1 FY23, primarily in developed markets LATAM Africa 3% LATAM Africa 27% 2% 8% • Greater stability, predictability of revenu
Slide 7: H1 FY23 Performance
H1 FY23 PERFORMANCE PROFIT & LOSS Dec-22 Dec-21 $m $m Revenue • Reduction in Group revenue and profits due Communications $136.6 $117.7 to ongoing disruptions in Minelab’s African Metal Detection $73.8 $137.7 market Other $1.4 $1.4 Total Revenue $211.8 $256.8 • H1 net profit after tax (NPAT) of $30.
Slide 8: Financial Position
FINANCIAL POSITION Strong balance sheet – working capital normalisation in H2 FY23 and FY24 Balance Sheet Dec-22 Jun-22 Change • Growth in inventory of $11.8 million as at 31 $m $m $m December 2022, due to investment in new product Receivables 68.4 59.8 8.6 introductions and incoming commitments coi
Slide 9: Capital Management
CAPITAL CAPITALMANAGEMENT MANAGEMENT • Capital management under review by the board • Focused on a strong balance sheet • Investing in ourselves – strong pipeline of product development • Growth opportunities via acquisition • Share Buy‐Back remains under consideration • No change to dividend policy
Slide 10: Change in Net Debt Position
CHANGE IN NET DEBT POSITION Changes in Net Debt (Dec-22 vs Jun-22, $m) 9
Slide 11: Engineering Investment
ENGINEERING INVESTMENT Invest in ourselves - strong pipeline of projects • H1 FY23 engineering spend of $22.9 million, equating to ~11% of Engineering spend Engineering Spend by revenues ($m) Business Unit • Sustained engineering investment across segments ensures competitive position maintained H1
Slide 12: Business Units & Outlook
Business Units & Outlook 11
Slide 13: Near Term Strategy
NEAR TERM STRATEGY Promote new products & Enhanced offering as full Expansion and growth of expand channels to market solutions provider systems and support contracts • Continue to promote newly‐launched coin & • Expand presence via improved products and • Continue expansion and growth of systems, t
Slide 14: ESG Framework
ESG FRAMEWORK Ongoing review of environmental impact. Engagement of sustainability consultancy to guide Codan on climate journey on: • TCFD (Taskforce for Climate Related Financial Disclosure); and Environment • Calculation of carbon footprint. Encourage, promote and develop all students, regardless
Slide 15: Metal Detection
METAL DETECTION • H1 FY23 Minelab revenue of $74 million, just below the range provided at the AGM¹ (H1 FY22: $138 million) • Decline versus pcp due to ongoing disruptions in Minelab Africa • RoW revenue declined $8 million vs H1 FY22² , relating to the timing of project wins in Countermine • H1 FY2
Slide 16: Powered by Multi-IQ
PowereDBY Multi-IQ POWERED BY oe Multi I@~ World’s Best Metal Detection Technologies MINELAB
Slide 17: Communications
COMMUNICATIONS • H1 FY23 Communications revenue of $137 million, exceeding the guided range provided at the AGM¹ as well as internal expectations (H1 FY22: $118 million) • Achieved 16% revenue growth versus pcp • Large Communications project only partially delivered • Segment profit margin of 25%, a
Slide 18: Tactical Communications
TACTICAL COMMUNICATIONS • Tactical Communications had a very strong half driven by growth in revenue, orders and opportunities across: • Military • Law Enforcement & Intelligence • Unmanned Systems • Broadcast • Strategy to diversify revenues and penetrate adjacent markets: • Size, weight and power
Slide 19: Zetron
ZETRON • Zetron achieved a very strong first half: • On‐going realisation of advantages and synergies of the integrated Zetron business • Increased demand for complete solutions • Annuity‐style support contracts represented ~30% of H1 revenues • Acquisition of 100% of GeoConex 1: • Leading integrato
Slide 20: Public Safety Communications
PUBLIC SAFETY COMMUNICATIONS THE ALERT COMMAND AND CONTROL THE DELIVERY THE RESPONSE The Public Mission Critical Wireless First Responders Communications and Field Personnel DATA LOCATION AUTOMATED REPORTING MAPPING ALTERING & ANALYTICS Voice/Text/Messaging Voice CALL COMPUTER DISPATCH TALKING & AID
Slide 21: Group Outlook
GROUP OUTLOOK There are a number of factors that are relevant when considering the outlook for the balance of FY23: • Minelab’s RoW H2 revenues expected to exceed H1; • The African gold detector market is likely to remain soft; • The Company expects full year Communications sales to grow between 10
Slide 22: Building a Stronger Codan
BUILDING A STRONGER CODAN GLOBAL OPPORTUNITY DIVERSIFIED EARNINGS Large, globally addressable market, notably within A more‐balanced, stable and predicable revenue developed market economies base PROFITABLE GROWTH INNOVATIVE PRODUCT DEVELOPMENT Targeting sustainable revenue and profitability growth
Slide 23: Appendix
Appendix 22
Slide 24: Globally Diversified Technology Company
GLOBALLY DIVERSIFIED TECHNOLOGY COMPANY Codan develops and manufactures innovative lifesaving, mission critical communications and detection technology for individuals, communities and governments. 150+ Countries where Codan products & solutions sold 700+ Global employees, >30% engineering Codan’s c
Slide 25: Board of Directors
BOARD OF DIRECTORS Ensuring appropriate expertise maintained Recently announced changes to Codan’s Board of Directors 1, includes: • Retirement of David Simmons as Director and Chairman (effective 31 January 2023) • Appointment of Graeme Barclay – previously Non‐Executive Director – as Graeme Sarah
Slide 26: 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, Europe, Key markets — Africa, Asia Pacific, Latin Market — countries impacted by war — Russia America past and present Users:
Slide 27: Tactical Communications: Markets
TACTICAL COMMUNICATIONS Markets • MILITARY LAW ENFORCEMENT & UNMANNED BROADCAST COMMERCIAL/NGO INTELLIGENCE Market Segment Market Segment Market Segment Market Segment Market Segment • Army • Air • Wireless Camera • NGO • Safe Cities • Navy • Ground • Remote • Commercial • Domestic • Airforce • Mari
Slide 28: Zetron: Products & Markets
ZETRON Products & Markets First Utilities Land Federal Transportation Management Responders Computer Location Automated Mobility & LMR Solutions Dispatch Call Taking Aided Dispatch Mapping Alerting CommandIQ The Emergency Response Continuum 27