Slide 1: Schaffer Corporation Limited Full Year Results — June 2005
Schaffer Corporation Limited je" iy He” I (|) Full Year Results — June 2005
Slide 2: Performance Summary
Performance Summary 2003/04 2004/05 Revenue (A$m) 192 149 Net Profit (A$m) 16.6 9.9 EPS $1.20 $0.70 ROCE 27% 16% EBITDA (A$m) 33 22 Operating Cash Flow 25.9 0.3 Ordinary Dividend $1.00 $0.75 Special Dividend $0.40 $0.45 Net Interest Cover (EBIT) 10.0 6.2 Net Debt/Equity 42% 81% be
Slide 3: Jun 2005 EBIT Contribution
Jun 2005 EBIT Contribution Non-Core Investment 17% Property 10% Leather 46% Building Products 27% x Return on Capital Employed -— 16%
Slide 4: Operations - Leather
| Operations - Leather ($m) 2003/04 2004/05 Automotive Revenue 128 98 Furniture Revenue 13 9 EBIT 16.1 8.0 » June 05 Automotive revenue is reduced primarily due to: w Suspension of China sales ($23m) w US aftermarket ($4m) and a lower selling price due to stronger $A strengthening ($2m) « FX Impact
Slide 5: Howe Sales by Region
Australia 13% | Howe Sales by Region USA Asia | 20% Europe 30% « North America — difficult trading conditions for GM and Ford s China - Inventory levels appear to be reducing prompting a partial recovery in orders. « South Africa - MIDP scheme (which provides its beneficiaries a 23% prohibited subsi
Slide 6: Competitive Advantages
| Competitive Advantages a Consistent supply of raw materials: » Australia has the 4" largest cattle herd globally » Secure supply of disease free hides « Range of hides to match product requirements u Modern, global scale finishing facility: » Commissioned 1998 « 50% operational overcapacity Low Co
Slide 7: Building Products
| Building Products = Urbanstone Premium range of paving products, Australian distribution network. = Delta Pre-cast and pre-stressed concrete floors, beams & wall products.
Slide 8: Building Products Performance
| Building Products Performance ($m) 2003/04 2004/05 Sales 34.7 28.9 EBIT 42 2.9 « Strong cash flow capability and satisfactory return on capital. m Stable sales outlook. m Some margin compression due to competition and input cost increases. « Investigating alternatives to increase sales by extendin
Slide 9: Building Products — Competitive Advantages
Building Products — Competitive Advantages = UrbanStone a Plant flexibility a Cost control a Distribution network a Product innovation a Premium branding = Delta im) a] a] Cost efficient product Pre-stressed niche Capacity Distribution 9
Slide 10: Investment Property
Investment Property « The investment property leasing operations provided $1.8m of EBIT and $0.9m of cash in 2004/05. « SFC has sold down its investment property portfolio over the past two years funding a large portion of special dividends paid. a At June 30, SFC had JV interests in 6 commercial an
Slide 11: Non-Core Investments
Non-Core Investments Development Property w SFC has 15% interest in Mindarie Keys Residential subdivision w Provided $1.7m of EBIT and 0.9m of cash in 2004/05 w Forecast $2.0m of EBIT and $3.0m cash to be generated over the next 2% years (after debt reduction of $0.4m). West Perth w The sale of surp
Slide 12: June Debt Position
| June 05 Debt Position Recourse | Non-Recourse Total Operating Businesses 0.3 41.6 41.9 Property 4.2 10.3 14.5 Group Debt 45 51.9 56.4 Cash on Deposit 12.7 Net Debt 43.7 m The ALH Subordinated Debt and the Investment Property Debt are effectively “structural” debt. a The $38.7m ALH subordinated non
Slide 13: Cash Flow
| Cash Flow (A$m) 2003/04 2004/05 EBITDA 33.5 22.4 Less Net Interest (2.9) (2.8) Less Tax Paid (8.8) (6.1) ALH Change in Working Capital 3.4 (8.5) Other Changes in Working Capital (0.4) (0.1) Changes in Provisions/Entitlements 0.0 (3.0) Share Issues 1.2 14 Total Cash Generated 26.3 3.0 Debt Reductio
Slide 14: Outlook — Earnings
Outlook — Earnings n Automotive Leather: wall al Challenging trading conditions are expected to persist in 2005/06 as high oil prices continue to impact upper-end vehicle sales. Higher steel prices, supplier overcapacity and aggressive cost cutting programs by OEM's will continue to put pressure on
Slide 15: Outlook — Earnings (continued)
Outlook — Earnings (continued) it it Building Products — Stable sales with some margin compression due to competitive pressures and input cost increases. Strong cash flow generating capacity with minimal capital requirements. Investment Property — Improved earnings are expected from the existing por
Slide 16: Outlook — Dividends
| Outlook — Dividends pu SFC has declared fully franked dividends totaling 60¢/share payable in Sep-05 (i.e. a 25¢/share ordinary final dividend plus a 35¢/share special dividend). Dividends for 2004/05 total $1.20/share fully franked (75¢ ordinary and 45¢ special) Including the special dividend to