Slide 1: Schaffer Corporation Limited
Schaffer Corporation Limited je" iy He” (NY iting ng )) Beil Potter Small Cap Conference (29-Nov-06)
Slide 2: SFC Corporate Directory Summary
ISFC Corporate Directory Summary Free Float 64% Ordinary Shares on Issue: Top 20: Holder Spread: < 10,000 shares 10,007 — 100,000 > 100,000 14.1 million 7.3 million 2,337 116 14 be
Slide 3: SFC Operational Structure
SEC Operational Structure [ Schaffer Corporation Limited | [ Building Products | [ Auto Leather | [ Property
Slide 4: Performance Summary Review
Performance Summary Review 2004/05 | 2005/06 Revenue (A$m) 145 145 Net Profit (Am): Headline 9.4 8.1 Net Profit (ASm): Exctuding investment property disposals 8.7 8.1 EPS: excluding investment property disposals $0.62 $0.58 ROCE: Exctuding investment property disposals 16% 16% EBITDA (A$m) 21.6 21.1
Slide 5: EBIT Contribution by Division
120061 E BIT Contribution by Division Building Products ¢| Investment Property 13% 31% Other Investments 13%
Slide 6: 2006 Capital Employed by Division
12006 Capital Employed by Division Building Products 18% Leather 60% Investment Property 16% Other Investments 6% w Return on Capital Employed — 16%
Slide 7: SFC — Building Products Division
| SFC — Building Products Division [ Schaffer Corporation Limited ] 100% L_{ Building Products UrbanStone ] Limestone Resources | Delta Corporation ]
Slide 8: Building Products
| Building Products w UrbanStone a Premium paving products a national distribution network - DELTA w D e I ta ‘CORPORATION LIMITED a pre-cast and pre-stressed products a W.A. construction market
Slide 9: Building Products (continued)
| Building Products (continued) a Limestone Resources (since Jui-06) Largest WA producer of limestone products; Large limestone reserves; Complementary to UrbanStone; Distribution potential through UrbanStone’s national sales network Services the i Commercial market w Residential market wm Land Subd
Slide 10: Building Products Performance Review
Building Products Performance Review (A$m) 2004/05 2005/06 Sales 28.8 39.0 EBIT 2.9 6.6 « Significantly improved performance but at lower margin than UrbanStone/Delta. Limestone Resources display). Driven by WA commercial and infrastructure projects Acquisition expected to add $12m to $14m per annum
Slide 11: Building Products — Competitive Advantages
Building Products — Competitive Advantages « UrbanStone en Delta a plant design and flexibility a Cost efficient product « cost control culture a Available capacity; « National distribution a Strong industry network relationships and premium brand distribution a Market leading product innovation il
Slide 12: Building Products — Competitive Advantages
Building Products — Competitive Advantages = Limestone Resources «a Brand recognition (WA) «a Unique product range a Working quarries - vast reserves and longstanding (EPA/CALM) approvals a Quarries are conveniently and well located; and a Leverage off the UrbanStone national distribution network
Slide 13: SFC — Automotive Leather Division
| SFC — Automotive Leather Division [ Schaffer Corporation Limited | 83% aa Australian Leather Holdings Limited r Rosedale (Preliminary Processing) \ Howe & Co Melbourne (Finishing) Howe Slovakia (Cutting) Howe Shanghai (Cutting) Howe Mexico (Cutting) 13
Slide 14: Operations — Leather (ALH)
| Operations — Leather (ALH) (A$m) 2004/05 2005/06 Automotive Revenue 98 91 Furniture Revenue 9 7 Automotive EBIT 8.3 6.2 ALH EBIT 8.3 48 = ALH’s EBIT lower than FY2005 — impacted by: a Redundancy expenses of $1.3m; « Gosh closure expenses of $1.0m; « Further margin compression — cost cutting progra
Slide 15: Howe's Repositioning
Howe’s Repositioning it ae Ae Structural change in global automotive industry a Growth markets shifting away from North American market towards Europe and Asia. Howe’s labour content is most intensive at the cutting stage. a Relocation of cutting operations to lower labour cost zones and closer to k
Slide 16: Howe Sales by Region
| Howe Sales by Region Australia USA 12% Asia 27% - Europe 33% « Asian OEM’s impact on North America market « Europe and Asia grew as % of total sales m New cutting plants have strengthened Howe’s position in the Europe and Asian markets m Howe’s sales focus is on growth opportunities in the Europea
Slide 17: Competitive Advantages
| Competitive Advantages w Access to a consistent supply of raw materials: w Modern, global scale facilities: « New cutting plants in low cost zones « Quality Culture and accreditation: w Established Global Customer Base: » Supplying GM, Ford, Audi, Land Rover, Mazda & Toyota 17
Slide 18: SFC — Property Division
| SFC — Property Division Up to 25% Schaffer Corporation Limited Investment Property Subdivisions IBM Centre - W Perth (1995) Mindarie Keys Metro Perth (1996) 616 St Kilda Rd ~ Melb (1997) Neerabup - Metro Perth (2006) +—{ Home Town - Metro Perth (1998) 89 St George’s Tce — Perth (1999) Crosslands —
Slide 19: Property
| Property Investment Property Market Value Debt Gearing (Range) Gearing (Portfolio Average) Balance of cash invested: EBITDA: Cash Remittances: Property Subdivision « Mindarie a EBIT 2005/06 a EBIT to come a Cash to come a Debt Outstanding « Neerabup (recent acquisition) Balance Sheet Value (Deprec
Slide 20: Jun Debt Position
Jun 06 Debt Position Recourse | Non-Recourse Total Building Products 0.0 0.4 Leather 40.0 40.0 Property 16.0 17.6 Group Debt 56.1 58.0 Cash on Deposit 13.6 Net Debt 44.4 m The ALH Subordinated Debt and the Investment Property Debt are effectively “structural” debt. # ALH subordinated non-recourse Go
Slide 21: Cash Flow
| Cash Flow ASm) 2004/05 2005/06 EBITDA 21.6 2i1 Net Interest Paid (2.8) (3.4) Tax Paid (6.1) (2.9) ALH Change in Trade Working Capital (8.5) 3.7 Other Changes in Working Capital (2.1) (2.3) Other 0.9 (0.1) Total Cash Generated 3.0 16.1 Debt Reduction (1.7) (1.6) Capital Expenditure 4.8 4.5 Divestme
Slide 22: Outlook — Earnings
Outlook — Earnings um At Group Level — uw First Half profit guidance: $4.7m NPAT a Previous corresponding period (pcp): $3.6m NPAT « Building Products a Revenue: higher than pcp’s $20.8m a First time inclusion of Limestone Resources revenue. w EBIT: in line wit the pcp’s record $3.5m » reflecting th
Slide 23: Outlook — Earnings (continued)
Outlook — Earnings (continued) » Automotive Leather: a Focus on growth opportunities in the European and Asian markets a Further contraction of the N.American market expected a $2.1m EBIT reported for pcp was adversely impacted by: « $1.3min redundancy expenses; = Cost duplications: the Australian c
Slide 24: Outlook — Dividends
| Outlook — Dividends « SFC has advised earlier this month it will pay a 25¢/share fully franked interim dividend in March 2007. a SFC intends to maintain a relatively high ordinary dividend payout ratio of at least 75%. 24
Slide 25: Summary
| Summary The repositioning of the Howe business has it well placed for medium term growth; The new Limestone Resources acquisition will drive Building Products revenue, and with additional CapEx will improve efficiency and capacity; We expect our first half performance to be a significant improveme