Slide 1: Codan Limited Business Performance FY10
For personal use only Investor Presentation Codan Limited Business Performance FY10 August 2010 Mike Heard Donald McGurk Michael Barton Managing Director Managing Director Elect Chief Financial Officer
Slide 2: Contents
Contents For personal use only What is Codan’s Core Business...................................................... 2 B i Business S Segments t / Product P d t Groups............................................. G 3 High Frequency (HF) Radio New Markets....……………......……… 4 Satellite Communications –
Slide 3: What is Codan's Core Business?
What is Codan’s Core Business? For personal use only “Clever Products for Global Niche Markets” Cl Clever Products P d Innovative products of our own design High intellectual property content, high value-add Exceptional performance, reliability and support Electronics products preferably Glo
Slide 4: Current Business Segments and Product Groups
What are Codan’s Current Business Segments and Product Groups? For personal use only Codan Communications Products High Frequency (HF) Radio Satellite Communications Products Minelab Metal Detectors Consumer Mine Mi Clearance Cl Artisanal Gold Mining Other Printed Circuit Boards Contra
Slide 5: High Frequency (HF) Radio
High g Frequency eque cy ((HF)) Radio ad o For personal use only Products and systems for remote area long distance radio communications Used for: − rapid id network t kddeployment l t − communications without the need for transmission infrastructure − back-up back up emergency communications
Slide 6: HF Radio - Strengthening Presence in New Market
HF Radio - Strengthening g g Presence in New Market For personal use only Codan C d has h successfully f ll entered t d a new market: k t − Security, Protection and Military (Focus is on behind behind-the-lines the lines communications) − Compelling Codan value proposition with target market ((Int
Slide 7: HF Radio - Products & Solutions
HF Radio - Products & Solutions For personal use only MANPORTABLE VEHICULAR TRANSPORTABLE HEADQUARTER 2110M 2110M / NGT 125W MRZ COMMANDER MRX HEADQUARTER Page 6
Slide 8: HF Radio - Focused Campaigning
HF Radio - Focused Campaigning p g g For personal use only Developing the right products: − Continued investment in product research and development − Partner with global technology suppliers Targeting the right markets: − Major global investment by governments in Homeland Security − T Targeting
Slide 9: HF Radio - Focused Campaigning
HF Radio - Focused Campaigning p g g For personal use only Fielding products into customers’ hands: – More high level sales engineers travelling to customers – Investment in global product demo pool A Aggressively i l selling lli value l proposition: iti – Selling customer solutions, not just pr
Slide 10: HF Radio - Recent Successes
HF Radio - Recent Successes For personal use only Specific success stories over past 4 years include: Afghanistan Af h i t N National ti lPPolice li (ANP) – $30m sales of Manpacks & Base Stations Angolan Army – $8m sales of Manpacks & Base Stations Indian Police – $9m sales of Mobiles & Base S
Slide 11: Satellite Communications
Satellite Communications For personal use only Telecommunications via satellite involve passing signals between earth stations and orbiting satellites Networks of earth stations and satellites exist as public communications i f t t infrastructure and d as private i t networks t k forf government
Slide 12: Satellite Communications - Locus Microwave
Satellite Communications – Locus Microwave For personal use only X-band frequencies have long been reserved for military applications Significant new X-band X band satellite capacity has been recently launched into orbit and demand is growing for X-Band services utilising this capacity - particu
Slide 13: Satellite Communications - Locus Microwave
Satellite Communications – Locus Microwave For personal use only Locus L h has products, d t ttechnology h l and d US market k t presence tto address dd X X-band b d opportunities Locus supplies X X-band band RF subsystems targeted at US government satellite communications users Locus has alre
Slide 14: Minelab Metal Detectors
Minelab Metal Detectors For personal use only Metal detectors and systems for Consumer, Mine Clearance and Artisanal Gold Mining markets Consumer: Detection of gold nuggets, coins, treasure and artefacts by serious hobbyists, hobbyists semi semi-professional professional prospectors and archaeolog
Slide 15: Minelab - Artisanal Gold Mining Market
Minelab - Artisanal Gold Mining M k Market For personal use only An artisanal or small small-scale scale miner is is, in effect effect, a subsistence miner. They generally work independently, p y mining g or p panning g for ggold ggrains and nuggets found near the surface (“placer” gold) This ma
Slide 16: Minelab - Artisanal Gold Mining Characteristics
Minelab - Artisanal Gold Mining Characteristics For personal use only Artisanal mining typically consists of hard physical labour, used to extract bulk material that is then panned or crushed and processed for gold g scale It does not include large industrial mining activity. It is typically und
Slide 17: Minelab - Artisanal Gold Mining Growth potential
Minelab - Artisanal Gold Mining Growth potential… potential For personal use only Markets where there are significant artisanal miners currently active worldwide. Use of metal detectors is generally low Minelab is investing in market research and product marketing to introduce detectors into s
Slide 18: Minelab - Artisanal Gold Mining Growth potential
Minelab - Artisanal Gold Mining G Growth th potential t ti l For personal use only The market is prone to “rushes” of demand for metal detectors When the rush has subsided, typically a new residual market for detectors remains Below is a typical profile of the take-up of detectors into a new a
Slide 19: Minelab - Mine Clearance
Minelab - Mine Clearance For personal use only There is an increase in use of metal detecting products by military and security organisations as part of a defence against Improvised Explosive Devices (IED) Minelab has designed a variant of its successful F3 mine clearance metal detector for use
Slide 20: Financial highlights FY10
Financial highlights g g FY10 For personal use only Record Sales and Profit Underlying U d l i nett profit fit after ft ttax was $31.1m $31 1 ffor th the year ended 30 June 2010, an increase of 142% compared to the previous year The profit arose from revenue of $189.3m, compared with $132.4m in
Slide 21: Financial Overview — Sales
Financial Overview — Sales For personal use only Full year results FY10 FY09 $m % $m % Revenue Communication Products $70.1 $70 1 37% $77.3 $77 3 58% Metal Detectors $106.6 56% $41.7 32% Other $12.6 7% $13.4 10% Total revenue $189.3 100% $132.4 100% Communications products: − Sales of HF radio pro
Slide 22: Financial Overview — P&L
Financial Overview — P&L For personal use only Full year results FY10 FY09 $m % $m % Total revenue $189.3 100% $132.4 100% Underlying business performance EBITDA $56.1 30% $29.4 22% EBIT $45.8 24% $21.5 16% Interest ($3.1) ($4.6) Net profit before tax $42 7 $42.7 23% $16 9 $16.9 13% Underlying net p
Slide 23: Financial Overview - Integration and Restructuring
Financial Overview - Integration g and Restructuring g For personal use only Minelab (acquired March 2008): Closure of manufacturing facility in Ireland and transfer to outsourcing partner in Malaysia – to be completed in H1 FY11 Roll-out of Codan Limited’s enterprise resource planning system ri
Slide 24: Financial Overview — Ratios
Financial Overview — Ratios For personal use only FY10 FY09 p g assets ((average) Return on net operating g ) 39.5% 17.5% Return on equity (average) 42.5% 20.9% Underlying earnings per share 18 8 cents 18.8 7 9 cents 7.9 Earnings per share 8.8 cents 7.4 cents Definitions Return R t on nett operati
Slide 25: Financial Overview — Balance Sheet
Financial Overview — Balance Sheet For personal use only June '10 June '09 $m Working Capital Inventory movement to meet Receivables $12.5 $12 5 $16.1 $16 1 Inventories $25.1 $14.2 Minelab demand Payables ($28.4) ($17.5) Total Working Capital $9.1 $12.8 Very low debtor days due to Property, Plan
Slide 26: Financial Overview — Dividends
Financial Overview — Dividends For personal use only FY10 FY09 Interim dividend per ordinary share 3.5 cents 3.0 cents Final dividend per ordinary share 4.5 cents 3.5 cents Total dividend per ordinary share 8.0 cents 6.5 cents Franking 100% 100% Record date 15 September 2010 Payment date 1 October 2
Slide 27: Outlook – Codan Limited
Outlook – Codan Limited For personal use only Communications Products – Strong growth expected on FY10 HF Radio – strong sales opportunity pipeline for global peacekeeping, protection, security and military market Satellite Communications - recovery from the GFC, release of important new Codan A
Slide 28: Outlook – Codan Limited
Outlook – Codan Limited For personal use only 35 0 35.0 31.1 30.0 AUD AT M.A 25.0 20.0 20.0 Underrlying NPA 15.0 12.8 10.5 10 0 10.0 5.0 0.0 FY08 actual FY09 actual FY10 actual FY11 guidance Guidance provided “FY11 underlying NPAT will be in the region of $20m” Strong trend line growth of 24% fr