Slide 1: FY18 Results and Strategy Presentation
For personal use only ROBUST INNOVATIVE TECHNOLOGY FY18 Results and Strategy Presentation 4 September 2018 DONALD McGURK Managing Director & CEO MICHAEL BARTON Chief Financial Officer PETER CHARLESWORTH EGM, Minelab and Codan Defence RORY LINEHAN EGM, Minetec
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER For personal use only 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 pres
Slide 3: Codan: Portfolio of technology solutions
CODAN For personal use only Portfolio of technology solutions Unique, protected intellectual property Robust, innovative Superior performance in harsh environments technology for global 59-year history of innovation markets Customers in 150 countries Global distribution network 3
Slide 4: Business Units: A Portfolio of Technology Solutions
BUSINESS UNITS A PORTFOLIO OF TECHNOLOGY SOLUTIONS For personal use only METAL RADIO TRACKING DEFENCE DETECTION High Frequency Proximity Product design Recreation (HF) detection and development Advanced Land Mobile Radio Gold mining Tracking manufacturing (LMR) Through life Countermine Task manageme
Slide 5: Customers in Countries: Operations Across the Globe
CUSTOMERS IN 150 COUNTRIES OPERATIONS ACROSS THE GLOBE For personal use only $35m $37m $44m $17m $31m $91m $6m $37m 5
Slide 6: FY18 Summary
FY18 SUMMARY For personal use only Another strong year with a special dividend Increased base business sales and profit Grew sales across metal detector range, less reliant on GPZ 7000® Returned $22 million to shareholders through ordinary and special dividends, 54% payout ratio Strong balance sheet
Slide 7: Base Business Increased 20%
BASE BUSINESS INCREASED 20% SALES $180-200 MILLION / NPAT $25-30 MILLION only Sales 250 $226m $230m use 200 $170m Base business sales Increased to $180 million - $200 million, For personal up from $160 million - $180 million 150 $ millions 100 Outperformance occurs when: Strong demand for gold detec
Slide 8: Dividend
DIVIDEND ORDINARY DIVIDEND UP 21% + SPECIAL DIVIDEND For personal use only 4.5 cent final ordinary dividend (4 cent interim) 4 cent special dividend reflects outperformance due to continuing strong gold detector sales Maintaining 50% dividend payout ratio Earlier dividend payment Final ordinary and
Slide 9: Increasing the Base Business
INCREASING THE BASE BUSINESS DELIVERED IN FY18 For personal use only Diversified gold detector sales in Africa –Gold Monster , SDC 2300 ® ® Grew recreational detector business - released Equinox® Key marketing and development contract with Caterpillar Awarded milestone BHP contract for Olympic Dam E
Slide 10: Strategy: Diversify Revenues, Build the Base Business
STRATEGY DIVERSIFY REVENUES, BUILD THE BASE BUSINESS For personal use only Leverage our IP advantage Deliver CAT Minestar™ for underground mines Broadened the earnings base Double Tracking revenues Wider metal detection product range Grow LMR business through Cascade Win Australian defence contr
Slide 11: Broadening the Earnings Base: New Products
BROADENING THE EARNINGS BASE 8 NEW PRODUCTS, 3 MINETEC SOFTWARE UPGRADES For personal use only Military base and mobile World’s best gold detector radio Released in Africa Sept 2016 Military handheld Nov 2015 tactical VHF radio May 2017 Large coil for GPZ Revolutionary coin Major Nov 2016 & treasure
Slide 12: Business Units
12 For personal use only BUSINESS UNITS
Slide 13: Metal Detection: Performance is Everything
METAL DETECTION PERFORMANCE IS EVERYTHING For personal use only Coin & Treasure, Gold Detectors Hand-held Gold Detectors Land Mine Detectors Key markets - Australia, USA, Europe, Key markets – Africa, AsiaPac, LATAM Key market – countries impacted by Russia war – past and present Users: Users: Users
Slide 14: Metal Detection
METAL DETECTION For personal use only FY18 FY19 Goals Increased base business by 20% Complete Countermine dual-sensor machine Released Equinox® coin & treasure detector Maximise gold detector sales and profit Reduced dependence on GPZ 7000® Expand geographic footprint Strong African gold detector sa
Slide 15: Gold Mining: Diversified Product Range
GOLD MINING DIVERSIFIED PRODUCT RANGE For personal use only GOLD DETECTORS RRP $799 USD $3750 USD $2699 - $3999 USD $7999 USD ex TAX/shipping ENTRY - MID RANGE - PROFESSIONAL 15
Slide 16: Recreation: World's Best Coin & Treasure Technology
RECREATION WORLD’S BEST COIN & TREASURE TECHNOLOGY For personal use only RECREATIONAL DETECTORS RRP $149 - $249 USD $259 - $499 USD $649 - $899 USD $999 USD $1549 USD $1450 USD $2499 USD ex TAX/shipping HOBBYIST - ENTHUSIAST - SPECIALIST - EXPERT 16
Slide 17: Equinox Release
EQUINOX® RELEASE For personal use only Major technology upgrade Released February 2018 to strong demand NEW Multi-IQ technology Simultaneous multi-frequency Adaptable for all target types and ground conditions Obsoletes all single frequency VLF detectors Mid-range recreational detector Waterproof Wi
Slide 18: Tracking Solutions: Highly Accurate Underground Tracking
TRACKING SOLUTIONS HIGHLY ACCURATE UNDERGROUND TRACKING For personal use only Tracking people and Eliminating bottlenecks to Highly accurate awareness assets in real time increase output and alerts TRACKING + DATA COMMUNICATIONS + SOFTWARE One system for real time tracking and communications in: Und
Slide 19: Tracking Solutions: Critical Milestones Achieved
TRACKING SOLUTIONS CRITICAL MILESTONES ACHIEVED For personal use only FY18 FY19 Goals Signed collaboration agreement with Caterpillar Complete initial integration of CAT Minestar™ for Underground Won global tender to supply BHP Olympic Dam and launch through CAT dealer network Delivered SafeDetect™
Slide 20: CAT Minestar for Underground
CAT MINESTAR™ FOR UNDERGROUND For personal use only Integrated solution for mine operations and equipment management – fleet management, material tracking, autonomous mining Existing CAT Solution Existing Minetec Solution Combined offering: for Underground 20
Slide 21: Integrating Minetec into CAT Minestar
INTEGRATING MINETEC INTO CAT MINESTAR™ For personal use only Minestar™ for Underground: Scalable and incremental, works across all OEM brands (not Caterpillar centric) The most complete integrated solution for every size, type and complexity of underground hard rock mine What Minetec brings Benefits
Slide 22: Milestone Contract with BHP
MILESTONE CONTRACT WITH BHP For personal use only Supplying BHP’s Olympic Dam mine in South Australia Underground Fleet Management – proximity detection + tracking + task management Total contract value $9.5 million, 50% delivered in FY18 Olympic Dam 4th largest copper mine in the world Largest sing
Slide 23: Radio Communications
RADIO COMMUNICATIONS For personal use only Infrastructure free, long range radio Robust, dependable wireless systems for Purpose-built radios for maximum communications voice and low-speed data reliability and ruggedness communications Key markets – Africa, Asia Key markets – North America, Australi
Slide 24: Radio Communications
RADIO COMMUNICATIONS For personal use only FY18 FY19 Goals Expanded product offering in Tactical VHF Broaden HF Military offering First major sale of Sentry-H™ radio Increase HF Military market share Built HF Military sales pipeline, focus on US FMS* Continue focus on US FMS* programs programs Progr
Slide 25: Defence Electronics
DEFENCE ELECTRONICS For personal use only The opportunity: $200 billion of Australian defence equipment procurement planned over the next ten years Leveraging Codan’s RF defence capability and South Australian location Prime Contractors Qualified Australian partner for Defence Primes Approved suppli
Slide 26: Financial results
26 For personal use only Financial results
Slide 27: Another Strong Year
ANOTHER STRONG YEAR For personal use only Underlying business performance FY16 FY17 FY18 $m $m $m Revenue $169.5 $226.1 $229.9 Underlying business performance EBITDA $41.9 $75.6 $70.4 EBIT $29.2 $61.5 $53.7 Net interest ($1.7) ($0.8) ($0.5) Net profit before tax $27.5 $60.7 $53.2 Underlying net prof
Slide 28: Engineering Investment
ENGINEERING INVESTMENT CONTINUING TO INVEST IN OURSELVES For personal use only Engineering spend ($m) Engineering spend (% sales) Engineering investment will drive future growth Fundamental to our strategy of growing the base business Significant pipeline of future projects 28
Slide 29: Balance Sheet
BALANCE SHEET For personal use only Strong balance sheet $48 million cash generated from operations, strong cash conversion Debt-free, $28 million net cash position Debt facility reduced from $55 million to $40 million Receivables increase driven by timing of sales Payables increased due to increase
Slide 30: Key Ratios
KEY RATIOS DEBT FREE, STRONG CASH GENERATION For personal use only Underlying earnings per share (cents) Free cash flow ($m)2 Return on equity (%)1 Net cash (debt) ($m) 1Return on equity = underlying net profit after tax divided by total equity 2Free cash flow = operating cash flow + interest – cash
Slide 31: Outlook FY19
OUTLOOK FY19 For personal use only Base business has increased 20%: Sales range: $180 million to $200 million NPAT range: $25 million to $30 million Initiatives continue to grow the base business Potential to again exceed base business sales and profit Business update at AGM on October 31st 31