Scott Technology Limited · NZX:SCT
Scott Technology — Shareholder Meeting (November 2019)
42 slides from Scott Technology's shareholder meeting presentation, November 2019
Slide 1: Welcome – Annual Meeting 2019
WELCOME – Annual Meeting 2019
Slide 2: Company Business Review
Company Business Review Chris Hopkins November 2019
Slide 3: Outline
Scott Annual Meeting 2019 • Outline Results – year ended 31 August 2019 Scott Business Review Research & Development Outlook
Slide 4: Shareholder Value: Sharecapital vs Market Cap
Shareholder Value 200,000 Sharecapital vrs Market Cap Market Cap $175m 180,000 160,000 Economic Value Added = $62m 140,000 (= the amount by which Market Cap exceeds shareholder capital + reserves) 120,000 100,000 80,000 60,000 40,000 20,000 ‐ 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20
Slide 5: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income 2019 2018 (restated) Change $000 $000 $000 Revenue 225,093 181,779 Other operating income 2,441 2,064 Share of joint ventures' net surplus 444 510 Raw materials, consumables used & other expenses (134,792) (109,381) Employee benefits expense (73,176) (5
Slide 6: Consolidated Balance Sheet
Consolidated Balance Sheet 2019 2018 (Restated) $000 $000 Change Cash (4,737) 12,473 Current portion loans (4,217) (3,321) Deferred settlement (2,385) (6,275) Net Cash (11,339) 2,877 (14,216) Trade debtors 38,993 37,064 Inventories 22,559 22,825 Contract WIP (Net) 16,334 3,077 Trade creditors (31,05
Slide 7: Revenue Growth Profile
Revenue Growth Profile 10 year rev CAGR 19% 5 year rev CAGR 33% 3 year rev CAGR 30% Revenue EBITDA 240,000 25,000 Alvey: Apr 18 220,000 Transbotics: Jun 18 200,000 20,000 Bladestop Oct 16 180,000 Somako May 16 160,000 15,000 140,000 MAR Jan 15 120,000 10,000 RobotWorx May 14 100,000 80,000 5,000 60,
Slide 8: Our Industry Overview
Our Industry Overview Materials handling Appliances Metal Industrial Mining & logistics Forming Automation & Meat Processing Automation Robotics Turnkey: Design – Turnkey: Design – Smart automation Advanced carcass Automation technology for Manufacture – Service Manufacture – Service solutions by vi
Slide 9: Sector Revenue Breakdown
Sector Revenue Breakdown Sector Revenue April 2016 JBS acquires 50.1% at $1.39 per share Accum Aug balance date 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 growth $m $m $m $m $m $m $m $m $m $m $m Meat processing 5 6 6 8 8 11 39 40 45 35 30 Industrial 1 3 8 7 9 31 31 40 36 54 53 Mining 19 28 34
Slide 10: Revenue Analysis
Revenue Analysis Revenue matrix for 2019 Financial Year By Industry and location of Customer Geographical location of the customer North South New Zealand Australia America America Asia Europe Russia Africa Total Appliances 1 24 10 9 1 45 Materials handling 61 61 Meat processing 5 15 10 5 35 Mining
Slide 11: Revenue Bridge FY18 to FY19
Revenue Bridge FY18 to FY19($000’s) 250,000 2,268 6,489 200,000 34,557 150,000 225,093 100,000 181,779 50,000 ‐ FY18 rev Asia/Europe Americas Australasia FY19 rev
Slide 12: Revenue by Customer Geography
Revenue by Customer Geography ($000’s) 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 New Zealand Australia North South Asia Europe Russia and Africa and America America former Middle East states 2018 2019
Slide 13: Revenue by Industry Sector
Revenue by Industry Sector ($000’s) Industrial Auto Mining Meat MHL Appliances 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2019 2018
Slide 14: Segment Results
Segment Results Revenue Surplus after Tax 2018 2019 change 2018 2019 change Australasia 100,492 102,760 2,268 11,899 9,218 (2,681) Americas 29,141 35,630 6,489 2,490 4,091 1,601 Asia & Europe 52,146 86,703 34,557 441 1,703 1,262 181,779 225,093 43,314 14,830 15,012 182 Unallocated (4,058) (6,408) 10
Slide 15: Accounting impact on 2019 and beyond
Accounting impact 0n 2019 and beyond Factors affecting 2019 compared to 2018 • Lease accounting • R&D • Revenue recognition • Goodwill restatement? Changes to occur in 2020 • In NZ, R & D tax credits (Tax Paid) replace grants (top line other revenue)
Slide 16: Outline: Scott Business Review
Scott Annual Meeting 2019 • Outline Results – year ended 31 August 2019 Scott Business Review Research & Development Outlook
Slide 17: Key Product Drivers / Market Opportunities
Key Product Drivers / Market Opportunities key drivers in the short to medium term – market opportunities for : • Industrial automation demand continues to intensify • Shortage of labour, declining unemployment rates, aging population • Manufacturing work forces are struggling to keep up with consum
Slide 18: Our Global Presence
OUR GLOBAL PRESENCE NORTHAMERICA Marion, Ohio EUROPE UK Vancouver, Canada Deerlijk, Belgium Kürnbach, Germany ASIA Ploemeur, France Czech Republic Qingdao, China Marseille, France Charlotte, North Carolina Shanghai, China SOUTHAMERICA AUSTRALIA Santiago, Chile Brisbane, Australia NEW ZEALAND Sydney,
Slide 19: Operations – Health & Safety
Operations – Health & Safety Commitment by all to safety at work Systems and Processes Monitoring effectiveness Results matter
Slide 20: Total Injury Frequency Rate – 12 months
Total Injury Frequency Rate – 12 months **As at 20 November Continued efforts in communication, employee participation and leadership, we see the injury rate tracking downwards.
Slide 21: Strategy & Focus
Strategy & Focus Strategy ‐ to build a global company that has a sufficient presence, scale and technology to produce profitable growth. • Core technologies have largely been developed • Focus for 2020: • Repeat, profitable, sales of developed and proven technology • Taking Pork, Poultry and Beef de
Slide 22: Opportunities for Meat Processing Sector
Opportunities for Meat Processing Sector Lamb – Proven with small addressable market Beef – development underway will be prototypes over next few years. Market size large (10x Lamb) Pork – started with Primal cutting based on lamb Xray – primal knowhow. First system in 2020. Addressable market $200
Slide 23: Technology Readiness
Scott systems for meat processors Scott Position in Market few competitors Technology Readiness developing developed Many competitors
Slide 24: Opportunities for Mining Sector
Opportunities for Mining Sector Robo Prep (robotic sample preparation systems for Laboratories) – System technology (Hardware and Software) now proven with multiple installs planned for 2020. Addressable market $20m ‐ $50m per annum. Automated Fire Assay – first commercial system delivered to Gold m
Slide 25: Opportunities for Other Sectors
Opportunities for Other Sectors Automated Guided Vehicles (“AGVs”) – Growing footprint for specialised vehicle technology. (Hardware and Software) well established with repeat bluechip customers. Demand for AGV’s growing at rapid rate particularly for Scott in North America. Target growth 30% plus.
Slide 26: Chrysos
Chrysos Roboprep system, for installation in Kalgoorlie in Q2 2020. Our highest capacity prep system ever (150 samples / hour). Our facility is preparing samples for two Chrysos PhotonAssay units, which offer gold analysis that are comparable to Fire Assay, but with a much safer, quicker, simpler pr
Slide 27: Pork Primal System
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Slide 28: Pork Primal System
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Slide 29: Focus Areas
Focus Areas To deliver on Scott’s Strategy, the focus will be on: • Consolidation and further integration of recent acquisitions into Scott – rollout of best practice systems and processes. • Cross Selling Opportunities • Service and Spare Parts • Research & Development – sharper focus • Meat proces
Slide 30: Bladestop Bandsaws
Bladestop Bandsaws Expanded Bladestop product range: – Development of Scott 600 saw completed – CE certification and specification sorted – European saw now shipping – Opportunities beyond “protein”
Slide 31: Strategy – Digital Direction
Strategy – Digital Direction 1. Vision and image analysis 2. Package Software ‐ Maestro (ex Alvey) ‐ TMO (ex Transbotics) 3. IIOT and connectivity ‐ Equipment reporting ‐ Diagnostics ‐ Maintenance ‐ OEE 4. Machine Learning ‐ AI / convolutional neural networks 5. Augmented Reality 6. Virtual Reality
Slide 32: Outline: Research & Development
Scott Annual Meeting 2019 • Outline Results – year ended 31 August 2019 Scott Business Review Research & Development Outlook
Slide 33: Research & Development
Research & Development Our commitment to developing and bringing new technology to market is real. We invest a significant portion of our revenue into searching for better ways of doing things • R&D expenditure of between 5% and 10% of total revenues – $14m spend in FY19 (6% of revenue) • Sizeable I
Slide 34: Outline: Outlook
Scott Annual Meeting 2019 • Outline Results – year ended 31 August 2019 Scott Business Review Research & Development Outlook
Slide 35: Outlook
Outlook Forward project work –approx. 7 months Significant project work underway Service activity expanding Growth will be : Organic from existing technologies Bottom line focused
Slide 36: Management Changes
Management Changes • Fantastic journey so far over 25 years • 3 Phases to date 1994 – 2001 CFO and business driver 2001 – 2006 Executive Director leading diversification 2006 – 2019 Delivering on diversification, new technologies and acquisitions • Into a Sales Director role to see the Company into
Slide 37: Resolutions
Resolutions
Slide 38: Resolutions 1–3: Election of Directors
Resolutions 1 – 3: Election of Directors Resolutions 1 – 3 are ordinary resolutions and are therefore required to be passed by a simple majority of the votes of those shareholders entitled to vote and voting on the resolutions. NZX Listing Rules require that no director may hold office (without‐re‐e
Slide 39: Resolution 1: Andre Nogueira re-election
Resolution 1: Andre Nogueira ‐ That Andre Nogueira be re‐elected as a Director • Andre Nogueira is President and Chief Executive Officer of JBS USA, the North American and Australian subsidiary of JBS SA. Assumed the role of CEO on Jan. 1, 2013. • Began with JBS in 2007, serving as Chief Financial O
Slide 40: Resolution 2: Derek Charge election
Resolution 2: Derek Charge ‐ That Derek Charge be elected as a Director • Derek Charge is an experienced executive with a background in textiles manufacturing, heavy manufacturing, mining & minerals processing, and logistics & port operations. • Derek has extensive experience in establishing supply
Slide 41: Resolution 3: Auditor
Resolution 3: Auditor To record the reappointment of Deloitte as auditor of the Company and to authorise the Directors to fix the auditor’s remuneration. Please mark your voting cards in the way you wish to vote by ticking “FOR”, “AGAINST” or "ABSTAIN" in the appropriate place on the voting card.
Slide 42: Resolution 4: Special Resolution – Constitution
Resolution 4: Special Resolution ‐ Constitution Resolution 4 is a special resolution and is therefore required to be passed by a majority of 75% of the votes of those shareholders entitled to vote and voting on the resolution The former NZX Main Board & Debt Market Listing Rules (dated 1 October 201
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