Slide 1: Company Announcements cover letter to ASX
11 March 2008 For personal use only Company Announ cements Australian Securities Exchange Limited Dear Sir/Madam We attach a series of slides, for presentation to investors and analysts, for immediate release to the market. Yours Sincerely Rick Moody Company Secretary
Slide 2: Codan Limited Investor Presentations invitation
Codan Limited Investor Presentations For personal use only You are invited to attend a presentation by Mike Heard, CEO & MD of Codan Limited regarding the acquisition of Minelab and Codan Limited's (CDA) Half-Year Results. Also present will be Rick Moody, Chief Financial Officer & Company Secretary,
Slide 3: Half Year Results to December 2007
Codan Limited Investor Presentation For personal use only Half Year Results to 31 December 2007 11th March 2008 Mike Heard Managing Director & Chief Executive Officer Rick Moody Company Secretary & Chief Financial Officer
Slide 4: Contents
Contents For personal use only Company and Business Overview Operations Products Customers Financial Results Outlook Questions ß à
Slide 5: Company and Business Overview
Company and Business Overview For personal use only Australian electronics design and manufacturing company serving global markets for communications and TV broadcast products Niche products for international niche markets; products for government, military, business and aid organisations Exports 90
Slide 6: Operations
Operations For personal use only Head office in Adelaide 350 staff Design and manufacture in Adelaide and Melbourne Sales and customer service offices or staff in Adelaide, UK, USA, China, India, Singapore and Germany 500 communications and broadcast customers worldwide ß à
Slide 7: Products
Products For personal use only Codan offers high value-added electronic hardware products for: Communications HF Radio Satellite Communications Digital Microwave Radio Television broadcasting (Codan Broadcast) Codan also manufactures and imports printed circuit boards (PCBs) for its own use and sale
Slide 8: Customers
Customers For personal use only Law enforcement and security agencies Emergency service agencies Military forces Several other government agencies UN and NGO aid and humanitarian organisations Businesses Telecommunications service providers and systems integrators TV and video broadcasters and produ
Slide 9: Financial Results First Half FY08 - Profit and Loss
Financial Results First Half FY08 For personal use only Profit and Loss Six months ended Dec-07 Jun-07 Dec-06 $m % $m % $m % Revenue Total Communications Products $44.7 $54.3 $56.7 Total Other $5.0 $5.1 $5.5 Total Revenue $49.7 100% $59.4 100% $62.2 100% EBITDA $10.0 20.1% $10.7 18.0% $13.5 21.7% De
Slide 10: Key Issues – Profit and Loss
Financial Results First Half FY08 For personal use only Key Issues – Profit and Loss Maintained the same NPAT as the previous half despite a significant revenue decline Very substantial improvements in productivity and reduc tion of expenses. Achieved more than doubl e the targeted annual EBITDA imp
Slide 11: Balance Sheet
Financial Results First Half FY08 For personal use only Balance Sheet Dec 2007 June 2007 Dec 2007 June 2007 $m $m $m $m CURRENT ASSETS CURRENT LIABILITIES Cash 4.7 5.9 Accounts Payable 11.5 12.7 Receivables 16.4 15.7 Borrowings 2.3 2.4 Inventories 12.7 14.1 Provisions 4.5 5.3 Other 3.1 1.9 18.3 20.4
Slide 12: Dividend
Financial Results First Half FY08 For personal use only Dividend Actual Actual Dec 2007 Dec 2006 Earnings per ordinary share (cents) 2.9 4.0 Interim dividend (cents) per ordinary share 3.0 3.0 Franking 100% 100% Record date 18 March 2008 Payment date 1 April 2008 ß à
Slide 13: Outlook: Business Environment in Calendar Year 2008
Outlook For personal use only Business Environment in Calendar Year 2008 Focus on new military HF markets given the contraction of existing markets Sound market for satellite communications products; new product releases An even stronger Australian dollar but with hedge protection Second half of FY0
Slide 14: Key Initiatives in Second Half FY08
Outlook For personal use only Key Initiatives in Second Half FY08 Implement the plan to outsource manufacturing off- shore Further substantial reduction in direct product costs Conclude the major market launches to stimulate growth HF radio to military market TV broadcast router products in Europe a
Slide 15: Guidance
Outlook For personal use only Guidance Many variables could affect second half performance Too early to forecast second half performance Guidance remains that NPAT could decline in FY08 compared to FY07 Policy, in the absence of unforseen circumstances, for annual dividend to be maintained or increa
Slide 16: Corporate Growth Objective
Outlook For personal use only Corporate Growth Objective Major market launches will stimulate organic growth in FY09 Organic growth to be supplemented by Minelab acquisition Activity will continue on further acquisition opportunities FY08 to be a new base for significant medium to long term growth ß
Slide 17: Questions?
For personal use only ß à Questions?
Slide 18: Thank you for your support of Codan
For personal use only Thank you for your support of Codan ß à
Slide 19: HF Radio Products
For personal use only HF Radio ß Products à
Slide 20: Products: HF Radio
Products For personal use only HF Radio Radio transceivers, modems and accessories for land vehicle installed, base station and backpack applications. ß à
Slide 21: Manpack HF Radio
Products For personal use only Manpack HF Radio ß à
Slide 22: Products: Satellite Communications
Products For personal use only Satellite Communications C and Ku Band Transceivers, Block Up Converters and solid state high power amplifiers for satellite communications earth stations. ß à
Slide 23: Satellite Communications Transceivers and BUCs
Products For personal use only Satellite Communications Transceivers and BUCs ß à
Slide 24: Products: Digital Microwave Radio
Products For personal use only Digital Microwave Radio Digital Microwave Radio (DMR) links for terrestrial communications including cellular telephone networks ß à
Slide 25: Digital Microwave Radio
Products For personal use only Digital Microwave Radio ß à
Slide 26: Products: Broadcast
Products For personal use only Broadcast Interface Equipment Signal Routers Monitoring Equipment Equipment for the management, conversion, distribution and monitoring of digital and analogue, video and audio signals in a TV broadcast studio. ß à
Slide 27: Broadcast: PROVIDEO and TALIA products
Products For personal use only Broadcast PROVIDEO modular interface products TALIA routers, control panels and audio monitoring bridges ß à
Slide 28: Minelab & Parketronics Acquisition
For personal use only Codan Limit ed ABN 77 07 590 605 Minelab & Parketronics Acquisition Investor Presentation 11th March 2008
Slide 29: Contents
Contents For personal use only Page Overview of Minelab 2 Summary of Acquisition 3 Consumer 4 Countermine 7 Minelab Detecting Techonolgy 9 Business Similarities 10 Parketronics 11 Operating Structure 12 Minelab Performance 13 Synergies 15 1
Slide 30: Overview of Minelab
Overview of Minelab For personal use only v Minelab is the world’s leading designer and manufacturer of metal detectors and mine detecting solutions. v Minelab’s business is underpinned by the Minelab brand in the metal detection market. v Its focus on research and development and its world class in
Slide 31: Summary of Acquisition
Summary of Acquisition For personal use only Minelab Electronics Pty Ltd METAL DETECTION PARKETRONICS Consumer Countermi ne Manufactures specialist electronic components and Hand-held Metal detectors sub-assemblies metal detectors for humanitarian for a broad range for the organisations and of appli
Slide 32: Consumer
Consumer For personal use only v Design, manufacture, market and distribute hand-held metal detectors v Sales offices in key regions of Australia, Europe and the United States v All key products - Coin & treasure, relics - Gold - Underwater - Hand-held security devices 30% 37% Consumer Revenues by R
Slide 33: Consumer (cont'd)
Consumer (cont’d) For personal use only USA •Moderate growth Developing World •Predominantly coin, treasure •High growth and relic market •Mixture of products Western Europe •Moderate growth •Predominantly coin, treasure Australia and relic market •Moderate growth •Predominantly Gold detectors Moder
Slide 34: Consumer (cont'd)
Consumer (cont’d) For personal use only v Total market size ~ US$100m v Linked to consumer disposable income - growth rate per capita 6-7% v The market is substantially composed of retirees with disposable income. - a potentially self-funding hobby - the “excitement of discovery” v Minelab growth ra
Slide 35: Countermine
Countermine For personal use only v Design, manufac ture, market sales of mine detecting solutions v Products supplied to customers in more than 55 countries v Principle customers - Humanitarian organisations for demining - Militaries, in particular the US Army v Products and services include hand-h
Slide 36: Countermine (cont'd)
Countermine (cont’d) For personal use only v Total Humanitarian market size ~ US$30m - dependant upon aid & humanitarian funding - ~20 – 30% market share and rising v US and major Defence Force market - Significant development and supply contracts with US Army - Significant funding globally on R&D i
Slide 37: Minelab Metal Detecting Technology
Minelab Metal Detecting Technology For personal use only v Under the terms of the acquisition, all patents previously licensed are now owned by Minelab. v Minelab therefore has a strong and long dated patent portfolio. v Minelab has key consultancy relationships and its own strong R&D/product develo
Slide 38: Similarities between Codan and Minelab
Similarities between Codan and Minelab For personal use only v Both design, manufacture and market internationally high value added products into global niche markets. v Both have world leading technology and invest 6 – 8% of turn-over into R&D. v Strongly culturally aligned; both South Australian!
Slide 39: Parketronics
Parketronics For personal use only v Parketronics specialises in the manuf acturing and testing of specialist electronic components and sub-assemblies. v 66% of Parketronics revenue is external 11
Slide 40: Operating Structure
Operating Structure For personal use only Codan Group Product Development, Manufac turing and Marketing, Australia Existing Codan Minelab Adelaide Parketronics Group 86* Total 47* Manufac turing, Marketing and Distribution, Ireland Minelab Group Minelab Ireland Total 193*45* Marketing and Distributi
Slide 41: Minelab's Performance: Financial Year 2008 Forecast
Minelab’s Performance For personal use only Financial Year 2008 Forecast Financial Forecast FY08* ($M) Net Sales 47 - 50 EBITDA 9 – 10 * Full year forecast * Minelab Group prior to acquisition 13
Slide 42: Minelab's Performance: Financial Years 2009 / 2010 Forecast
Minelab’s Performance For personal use only Financial Years 2009 / 2010 Forecast EPS Accretion FY09 FY10 to Codan Minelab & Parketronics 0.5 – 1.0c* 1.0 – 1.5c* * Depends upon exchange rate, primarily AUD/USD rate * Progressive realisation of synergies, initially A$1.0M, rising to A$2.0M+ per annum.
Slide 43: Metal Detection Key synergies
Metal Detection For personal use only Key synergies v Manufacturing - The Codan Group now manufacture at 6 different sites - OPPORTUNITIES! v Management & Board - One Board - Head office functions serving a larger group v Finance / IT / Commercial - Leverage Codan’s investment in SAP to Minelab - Re
Slide 44: Metal Detection Key synergies
Metal Detection For personal use only Key synergies v Sales & Marketing - Leverage common marketing services across the larger group (eg Codan’s global presence – offices in India, China and Washington, DC) - Common aid/ humanitarian and military markets. Leverage knowledge and resources across Coun
Slide 45: Parketronics Key synergies
Parketronics For personal use only Key synergies v Parketronics supply loaded PCB assemblies to the broader Codan Group. v IMP supply of bare PCBs to Minelab and Parketronics . 17
Slide 46: Summary of opportunities
Summary of opportunities For personal use only Consumer Countermine Parketronics 0 - Humanitarian N/A Market Growth üü üüü - MIL üü ü- Humanitarian N/A Market Share üü - MIL Synergies üü ü ü 18
Slide 47: Conclusion
Conclusion For personal use only The acquisition of Minelab Electronics Pty Ltd will deliver enhanced value to Codan shareholders and benefit customers and staff of the enlarged Codan group. 19