Slide 1: Continuing Profit Growth - Annual General Meeting
For personal use only CONTINUING PROFIT GROWTH 2012 Donald McGurk Managing Director & CEO ANNUAL Michael Barton Chief Financial Officer GENERAL Sarah Emms Manager, Investor Relations MEETING 15 February 2016
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 Limited: Technology Solutions for Global Markets
CODAN LIMITED: TECHNOLOGY SOLUTIONS FOR GLOBAL MARKETS For personal use only Codan is a technology company that provides robust technology solutions to solve customers’ communications, safety, security and productivity problems in some of the harshest environments around the world We own a portfolio
Slide 4: Half Year Profit and Dividend Lifted
FY16 1H HALF YEAR PROFIT AND DIVIDEND LIFTED For personal use only Half-year results Net profit after tax $6.1 million - up 8% on the prior first half Earnings per share of 3.4 cents Increased interim fully franked dividend to 2.0 cents, up 33% Minelab revenue increased 24% on the prior first half T
Slide 5: Strategic Framework: Growth initiatives by business unit
STRATEGIC FRAMEWORK FY16 - Growth initiatives by business unit For personal use only Radio Communications New LMR product roadmap – first releases in FY17 LMR poised to compete in higher value projects Leveraging Envoy® radio IP into adjacent markets Developing new routes to market, alliances and pa
Slide 6: Business Unit Update
BUSINESS UNIT UPDATE A diversified portfolio of robust technology solutions For personal use only FY15 Revenue High Frequency (HF) and Land Mobile Radio (LMR) systems that provide reliable ~$65m communications in harsh environments World’s-best metal detecting technology for finding ~$70m gold, trea
Slide 7: Radio Communications: Growth initiatives undertaken
RADIO COMMUNICATIONS Growth initiatives undertaken For personal use only Radio Communications revenue Strong LMR sales in the half On track for full-year contribution similar to FY15 LMR business gaining traction in the US Global instability driving demand for HF Envoy® radios New product offerings
Slide 8: LMR - Addressable Market Opportunity
RADIO COMMUNICATIONS LMR – addressable market opportunity For personal use only Future market ~USD1B Current market ~USD100M 2016 2018 Target markets growing at 10% – 12% CAGR Expanding from ~USD100M low-power, remote infrastructure market into ~USD1B systems market 8
Slide 9: LMR - Expanding our Addressable Market
RADIO COMMUNICATIONS LMR - expanding our addressable market For personal use only (released March 2015) P25 (planned release March 2016) Platform (planned release 2017/18) New product releases will broaden the offering Codan focuses on P25 market opportunities between $3M-$10M Cascade, a software-de
Slide 10: New LMR Product - Cyclone LMR Repeater
NEW LMR PRODUCT – CYCLONE LMR REPEATER Broadening our reach into US Homeland Security, Public Service and State Departments For personal use only Leverages core LMR technology Widely applicable across the LMR market Can directly replace any repeater or base station on any network Planned release Mar
Slide 11: HF - Addressable Market Opportunity
RADIO COMMUNICATIONS HF – addressable market opportunity For personal use only Future market ~USD500 million Current market ~USD200 million Predominantly NGO/Security market 2016 2017 HF Addressable market segments: Military 2 – developing world armed forces HF products being ruggedised to better me
Slide 12: HF - Expanding our Addressable Market
RADIO COMMUNICATIONS HF – expanding our addressable market For personal use only (NGO/Security SDR, first release 2012) SDR Platform (Military 2 manpack, released Jan 2016) (Military 2 SDR, planned release 2016) Variants of the Envoy® and Manpack platforms will expand Codan’s reach into Military 2 s
Slide 13: New HF Product - Military Manpack
NEW HF PRODUCT – MILITARY MANPACK Broadening our reach into NGO/Security & Military 2 markets For personal use only Rugged smart handset Unsurpassed voice clarity Released January 2016 13
Slide 14: New HF Product - Sentry Software-Defined Radio
NEW HF PRODUCT – SENTRY SOFTWARE-DEFINED RADIO Broadens our reach into NGO/Security & Military 2 markets For personal use only Rugged tactical HF radio Superior voice clarity Strong encryption Planned release April 2016
Slide 15: Metal Detection: Strong contributor to earnings
METAL DETECTION Strong contributor to earnings For personal use only Metal Detection revenue Sales up 24% and segment contribution up 56% on prior first half Major new distributors signed for GO-FIND® in US Chinese distributor appointed, focusing on GPX® and GPZ ® gold detectors Countermine division
Slide 16: Metal Detection: African business development initiative
METAL DETECTION African business development initiative For personal use only COMESA Member States Supported in-country partner to establish manufacturing facility to produce GPX® Series and X-TERRA ® gold detectors in Ethiopia Improved market access to a number of countries in the Common Market for
Slide 17: Mining Technology: Technology development complete
MINING TECHNOLOGY Technology development complete For personal use only Significant achievements in the half System capability proven, tested and successfully deployed in mining environments 5 operational pilot projects spanning safety, tracking and productivity Minetec RSA providing a direct route
Slide 18: Continuing Profit Growth: Continued EBITDA growth
CONTINUING PROFIT GROWTH For personal use only Continued EBITDA growth Statutory net profit after tax $6.1 million, up 8% over same period last year Interim dividend 2.0 cents - record date 15 March 2016, payment date 1 April 2016 Revenue EBITDA $ millions $ millions All profitability measures refer
Slide 19: Underlying NPAT
UNDERLYING NPAT Continuing to improve profit margins For personal use only Underlying NPAT $7.0 million, up 16% over same period last year NPAT to Sales % 7% 9% 11% 19
Slide 20: Continuing Profit Growth
CONTINUING PROFIT GROWTH For personal use only Administrative expenses ($ millions) Underlying business performance Half Year Dec 15 Half Year Dec 14 $m % to sales $m % to sales Revenue $65.0 100% $66.3* 100% Underlying business performance EBITDA $14.7 23% $13.7 20% EBIT $9.0 14% $9.2 13% Net inter
Slide 21: Engineering Investment
ENGINEERING INVESTMENT Product development spend normalising For personal use only Engineering spend ($m) Engineering spend (% sales) Investment in new product development reduced after GPZ ® and GO-FIND® releases Expect to continue the trend toward ~8% of sales over the medium term Major investment
Slide 22: Balance Sheet
BALANCE SHEET For personal use only Continuing strong balance sheet provides flexibility Inventory increase relates to GPZ® and GO-FIND® products Net debt increased $5.4 million to $40.8 million; well within $85 million debt facility Stronger cash flow expected in second half Gearing ratio increased
Slide 23: Key Ratios
KEY RATIOS For personal use only Underlying earnings per share (cents) Free cash flow ($m)2 Return on equity (%)1 Gearing (%)3 1Return on equity calculated as net profit after tax divided by total equity 2 Free cash flow = operating cash flow + interest – cash outflow for product development, IP acq
Slide 24: Building Shareholder Value
BUILDING SHAREHOLDER VALUE For personal use only Positioned for growth Agile engineering programmes broadening product portfolios Extending reach into new market segments Exposure to global markets Extensive routes to market in ~150 countries >80% of revenue earned outside Australia Operating global
Slide 25: Outlook
OUTLOOK For personal use only Building sustainable growth over the long term Off to a strong start in January Radio Communications expected to deliver FY16 result in line with previous year Minelab expected to deliver a better result than the first half Improved underlying net profit expected in FY1