Slide 1: Schaffer Corporation Full Year Results Presentation June 2011
For personal use only Schaffer Corporation p Full Year Results Presentation June 2011
Slide 2: Corporate Objective
Corporate p Objective j For personal use only “To create long-term shareholder value through the efficient operation and growth of our core businesses” 2
Slide 3: Organisation Chart (Business Segments)
Organisation g Chart (Business ( Segments) g ) For personal use only SCHAFFER CORPORATION LIMITED Building Materials Division Property Division Automotive Leather Division Delta Syndicated JV Property Howe Schaffer Building Products Group UrbanStone Company Owned Property Limestone Resources Lumeah
Slide 4: Tough trading conditions offset by profit on sale of investment property
Tough trading conditions for operating divisions offset by profit on sale of in investment estment propert property For personal use only % Full Year Endingg 30 Jun (A$m) ( ) Jun-11 Jun-10 change Revenue 137.8 136.8 1% EBITDA 17.1 15.1 13% EBIT (net interest basis) 12.2 10.2 19% N t profit Net fit a
Slide 5: Net Profit before Tax
Net Profit before Tax For personal use only 10.0 8.0 6.0 4.0 M's 2.0 $M 0.0 -2.0 Automotive Building Leather Property Materials Corp./Interest -4 0 -4.0 -6.0 -8.0 FY11 FY10 5
Slide 6: Cash flow
Cash flow For personal use only Year Ending 30 Jun (A$m) Jun-11 Jun-10 EBITDA 17.1 15.1 Other non-cash items (5.2) (0.9) Net interest paid (4.5) (4.1) T paid Tax id (2 1) (2.1) (4 6) (4.6) Automotive Leather change in trade working capital (7.1) 8.1 Other changes in working capital 1.4 2.2 Total ope
Slide 7: Jun-11 Debt Position
Jun-11 Debt Position For personal use only Direct Schaffer Net Debt reduced to $3.0m 3 distinct and separate All amounts in $m's Build. Mat. + JV Invest. Automotive Total Corporate Properties Leather 30 June 2011 “debt pools”. Type of Debt :- Bank Debt - recourse 3.3 3.9 - 7.2 Bank Debt - non-recour
Slide 8: Jun-11 Debt & Assets Summary
Jun-11 Debt & Assets Summary For personal use only Market value of Group Net Tangible Assets $5.81/share vs. Book Value of $3.50/share Build. Mat. + JV Invest. Automotive Total Corporate p Properties p Leather 30 June 2011 Net Debt ($m) $ 3.0 $ 22.7 $ 25.8 $ 51.5 % debt recourse to SFC 100% 17% 0% 1
Slide 9: SFC Dividend Yield History
SFC Dividend Yield History For personal use only Over $98 million in fully franked dividends paid in the last 10 years Average dividend yield of 8.5% over the past 10 years, fully franked. . 12 0% 12.0% 10.0% 8.0% Dividend Yielld* 6.0% 4.0% 2.0% 0.0% Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08
Slide 10: Automotive Leather
For personal use only 10 Automotive Leather
Slide 11: Automotive Leather Results
Automotive Leather Results For personal use only A$M $ Jun-11 Jun-10 % change g Revenue 79.2 81.5 -3% Segment EBIT 3.2 -0.1 6,112% Margin 4% 0% • Revenue down due to withdrawal from low margin (whole hide) market segment in Asia and withdrawal from the loss making market in North America. • Margins
Slide 12: Automotive Leather Sales
Automotive Leather Sales For personal use only $90.0 $80.0 $70.0 Asia Revenue ($M's)) Asia $60.0 $50.0 $40.0 Europe Europe $30.0 $20.0 N America NA i America $10.0 Australia Australia $- 2011 2010 Asia $24.8 $35.7 Europe $42.5 $26.8 N America $7.2 $15.0 Australia $4.7 $4.0 12
Slide 13: Automotive Leather Strategy
Automotive Leather Strategy R Repositioning iti i keeps k Howe H competitive titi ini a tough t h market k t For personal use only • Europe and Asia (Howe’s market focus) covers 75% of the global market. [Source CSM Worldwide] • Exit from loss making North American market due to current economic con
Slide 14: Automotive Leather - Global Footprint
A t Automotive ti Leather L th -Global Gl b l Footprint F t i t For personal use only Aachen, Germany y Tokyo, Kosice, Japan Slovakia Shanghai, China Melbourne , Offices Australia Factories 14
Slide 15: Schaffer Building Materials Building Products
Schaffer Buildingg Materials For personal use only Building Products 15
Slide 16: Building Materials Results
Buildingg Materials Results For personal use only Buildingg Materials A$M Jun-11 Jun-10 % change R Revenue 51 8 51.8 47 2 47.2 10% Segment EBIT 3.9 7.3 -47% Margin 8% 15% • Increase in revenue primarily due to increase in Delta turnover. turnover Major contributing contracts during the year include
Slide 17: Building Products Strategy
Building Products Strategy (paving, walling & imported products) d t) For personal use only Focus on operational efficiency and sales maximisation during tough times • Cost cutting exercises and efficiency improvements have been implemented across the various production sites. This follows the previ
Slide 18: Building Products Brands and Distribution
Buildingg Products Brands and Distribution For personal use only • Market leaders • Focus on premium products • Full range of complimentary products Perth • Innovative 1993 Jandakot • National network of 14 Urbanstone Central Brisbane 1994 Nedlands 2007 Osborne Park stores/display centres 1998 Hemma
Slide 19: Delta Corporation (pre-cast & pre-stressed concrete)
Delta Corporation (pre-cast & pre-stressed concrete) For personal use only • Revenue increased in FY11 due to the following major contributing contracts . Fiona Stanley Hospital, Reid Alexander Interchange, Reid/Mirrabooka Bridges, Sino Iron Barge Conveyor, Austrak Turnout Sleepers and Gorgon Projec
Slide 20: Delta Corporation Strategy
Delta Corporation Strategy (pre-cast & pre-stressed concrete) t ) For personal use only Focus on prestressed and high end architectural to maintain margins • Delta is the market leader in technically engineered, engineered innovative precast and prestressed concrete products in Western Australia. •
Slide 21: Property
Property p y For personal use only IBM Building, Hay St, West Perth 616 St Kilda Rd, Melbourne Hometown, Cannington 21
Slide 22: Property Result
Property p y Result For personal use only A$M $ Jun-11 Ju Jun-100 Ju % change c a ge Revenue 6.8 7.8 -13% Segment EBIT 3.1 3.9 -19% (excluding disposals) Net Rental Margin 46% 50% Profit on disposals 4.1 0.9 Segment EBIT 72 7.2 48 4.8 +51% • Revenue and net rental margin decreased due to sale of pro
Slide 23: Valuable portfolio of assets with recurring income and unrealised gains
Valuable portfolio of assets with recurring income & substantial b t ti l unrealised li d capital it l gains i For personal use only Total estimate of $46.5 million of unrealised property value before tax $27.2 m from JV Portfolio $19.3 m from company owned properties JV investment portfolio
Slide 24: Syndicated JV investment properties
Syndicated y JV investment pproperties p For personal use only P th Perth SFC Interest IBM Centre, West Perth (1995) 22% Hometown Cannington (1998) 25% Vulcan Rd, Canning Vale (2006) 20% M lb Melbourne SFC Interest 616 St Kilda Rd (1997) 20% Bunbury SFC Interest Parks S/Centre (1999) 16 16.7% 7% 24
Slide 25: Outlook – H1 2011/12
Outlook – H1 2011/12 For personal use only • Building Materials – Production levels and margins at Delta are expected to improve compared to H2 2010/11 th f therefore EBIT iis also l lik likely l to t be b higher. hi h – Similarly Building Products is expected to have a better first half for 2011/12
Slide 26: Outlook – H1 2011/12 (continued)
Outlook – H1 2011/12 (continued) ( ) For personal use only • Property – Net rental income from investment properties is expected to be less than corresponding period i d last l t year due d tot reduced d d rentt as a result lt off property t sales l ini prior i year andd vacancies i ini two properti