Gale Pacific Limited · ASX:GAP
Gale Pacific — Investor Presentation (May 2006)
31 slides from Gale Pacific's investor presentation, May 19, 2006
Slide 1: Slide 1
Slide 2: World Class Manufacturer of Advanced Polymer Fabrics
“2 Q) a Q) | World Class Manufacturer of Advanced Polymer Fabrics and Value Added Fabric Products Strong, growing sales and market position in selected world markets Low cost manufacturing strategy implemented during — FY06 A business with a sound underlying strategy and business platform Unique tec
Slide 3: 2006 Highlights
2006 HIGHLIGHTS 1Sales Growth UContinued Strong Growth in USA, Europe and the Middle East-Sales Increase 10% UManufacturing Strategy OChina Plant Commissioning Execution and cost savings delayed but nearing completion © - Cost benefits to be delivered throughout FYO7 ~
Slide 4: Sales growth and market share
Sales growth and market share maintained in Australian market Profitability to increase in FY07 “60! from lower manufacturing costs 50: * Australian knitting operation = 40] now closed a z 30 * Overhead expenses to reduce 20; in FYO7 * / * Additional costs absorbed in - e208 2006. FY06 due to delaye
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Slide 7: Europe & Middle East
AUDSM 685 66, 64, 58 “2005 UROPE & MIDDLE EAST Strong sales growth of Coolaroo product in both Europe and Middle East markets. Revenue up 14% Late start to Europe 2006 retail summer season due to cool weather Products now sold through > 1270... outlets compared with ~750 in 2005... . Significant exp
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Slide 9: Gale Middle East
GALE MIDDLE EAST
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Slide 11: USA
201 s 15, Seid a. 2.104 5 0 2005 2006 YEAR Revenue up 40% on prior year New window shade range successfully launched Store expansion at Lowe’s with window shade range — 416 stores in 2005 to 850 stores in 2006 Store expansion at Lowe’s with shade fabric range — 360 stores in 2005 to 448 stores in 20
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Slide 14: Integrated Manufacturing Plant
— * Integrated Manufacturing Plant — Knitted Fabric — PVC Coated Polyester | Fabrics — Aluminium Production & Extrusion — Powder Coating — Cut, Sew & Assembly
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Slide 18: Underlying NPAT and forecast NPAT
Underlying NPAT 4.8 48 One Off. 2.3 2.3 «Late European Summer 0.8 +Retirement Cost- G.Gale 0.4 *Other.Cost- 0.3 Forecast NPAT 2.5 1.0 The estimating process involves a significant element of subjective judgement and assumptions as to future events which may or may not be correct. There are usually d
Slide 19: 2006 Where We Fell Short
2006 WHERE WE FELL SHORT China move delayed Cilncreased cost (Melbourne plant open longer) and ~China savings / profit impact delayed UFirst season European start-up marketing costs LJLate European season due to poor weather UO Supply chain issues > increased inventories i Increased debt and interes
Slide 20: 2007 Priorities to Deliver Results
: 2007 PRIORITIES TO DELIVER RESULTS FOCUS ON ORGANIC GROWTH | AND OPERATIONAL EFFICIENCIES |
Slide 21: Organic Sales Growth
‘ORGANIC SALES GROWTH Continue to grow sales base and capitalise on further range expansion opportunities with blue chip customer base | warehouse Ha. WAL*MART’ CosTco ALWAYS LOMW PRICES. Aaa Pros ‘e bo UContinue to grow commercial and industrial fabric sales and distribution channels
Slide 22: Deliver Operational Efficiencies
ER OPERATIONAL EFFICIENCIES - [Focus on operational efficiencies L) Cost Down through China plant productivity CO) New Head of Manufacturing (Paul Ducray) appointed in GPST (China) operation .. L) New Head of Europe (Frank Albertsmeier) . C) Improved supply chain and working capital management QO) T
Slide 23: Deliver Operational Efficiencies
DELIVER OPERATIONAL EFFICIENCIES UFinalise launch of new product developments and tighten up R&D processes UPrice/Margin increases UDetailed product portfolio analysis to review all -under-performers freeing up ‘LAZY’ working capital LiFocus and accountability in all areas of the - business
Slide 24: 2007 Outlook
2007 OUTLOOK ‘Organic sales growth (10%+) Lilmproved cost and margin position LiReduce inventories (AUD$4M-$5M reduction targeted) Olmprove operational efficiencies through focus on production process management — G
Slide 25: 2007 Outlook
2007 OUTLOOK CiReduce debt and strengthen balance sheet position ‘QDeliver results as planned cost reductions and efficiencies flow through LIDramatically reduced capital expenditure —
Slide 26: 2008 Outlook
2008 OUTLOOK Continue to expand ranging through blue chip global customer base, particularly in Northern Hemisphere ~ Markets. Organic sales growth rates projected to continue at ~ approximately 10% O Continue to innovate with new fabric developments and low ~ cost value added product opportunities
Slide 27: Profit Outlook
PROFIT OUTLOOK Sales 164 180 200 2006 Underlying NPAT 4.8 NPAT -Guidance 1.0 7.2 10.3 The-estimating process involves a significant element of subjective judgement and assumptions as to future events which may or may not be correct. There are usually differences between estimated and actual results
Slide 28: Net Debt / Net Assets
Net Debt/ Net Assets Net Debt 93 97 63 55 Equity/Net 55 56 61 95 102 Assets — ; Net Debt to 1.4 1.7 1.6 0.7 0.54. Equity/Net Assets. Other Data. Receivables 33 25 36 36 - Inventory 51 58 55 55 . Fixed Assets 58 70 70 70 . The estimating process involves a significant element of subjective judgement
Slide 29: Proposed Capital Raising
PROPOSED CAPITAL RAISING ~ 1 To significantly strengthen the Company's balance sheet and put us in a much better position to implement our business strategy O Propose to raise AUD$20M via a combination of private placement ~-and share purchase plan QO) Propose to retire debt associated with AUD$15.5
Slide 30: This is an exciting Company that has taken some very bold steps
This is an exciting Company that has taken some ~ very bold steps QlExcellent technologies and technical development opportunities CiRecent capital expenditure programs providing us with ~-. significant capacity for future sales growth CJLow-cost manufacturing base nearing completion UO Tremendous ‘
Slide 31: Summary (cont)
“SUMMARY (cont) @Our reported results for FY06 are disappointing ~ but with the manufacturing restructure nearing completion, management changes and disciplines to deliver the necessary business efficiencies, we -expect to: C) deliver a solid profit performance in FY07 and beyond | C) create future