Coventry Group Limited · ASX:CYG
Coventry — H1 FY24 Earnings Presentation
29 slides from Coventry's earnings presentation, Feb 23, 2024
Slide 1: Coventry Group H1 FY24 Investor Presentation
Coventry Group H1 FY24 Investor Presentation Delivering specialised industrial products, services and customised solutions ASX: CYG
Slide 2: Agenda
Agenda 01 HY22 summary 02 03 About Markets + Our strategy Coventry industries 04 05 06 H1 FY24 Business update and Summary performance outlook
Slide 3: About Coventry
Ni i : ‘IM 1 About Coventry
Slide 4: About Coventry
About Coventry QLD 86 locations across Fluid Systems: 5 KAA: 14 Australia and New Zealand 1929 18 Coventry Group founded 12 NSW Fluid Systems: 1 4 10 WA KAA: 9 SA Fluid Systems: 4 Fluid Systems: 1 KAA: 7 1 ACT KAA: 3 11 DC: 1 KAA: 1 970 VIC Fluid Systems: 3 KAA: 7 10 TAS Fluid Systems: 1 Nubco: 7 18
Slide 5: Business overview Fluid Systems
Business overview Fluid Systems Fluid Systems is an innovative service provider to the Mining and Resources, Renewable Energy, Agriculture and 84 Aquaculture, Defence and Food & Beverage Manufacturing and allied industries Fluid Systems specialises in hydraulics, lubrication, fire suppression, refue
Slide 6: Business overview Trade Distribution
Business overview Trade Distribution Trade Distribution comprises Konnect and Artia Australia (KAA), Konnect and Artia New Zealand (KANZ), and Nubco 84 supplying a range of fastening systems, cabinet hardware systems, industrial and construction products through a network of 48 branches in Australia
Slide 7: Specialisation is how we win
Specialisation is how we win We provide specialised industrial products, services and customised solutions to our wide network of customers through two business segments Our operating business units provide specialised industrial products, services and customised solutions to a wide range of custome
Slide 8: Markets + industries
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Slide 9: The market and environment
The market and environment Our markets are Initiatives to grow Labour and skills Macroeconomic largely EBITDA1 to sales shortages remain volatility continuing performing well to 10% are challenging delivering Demand remains robust in our primary end markets in Australia (mining and resources, infras
Slide 10: The growth opportunity
The growth opportunity We operate in Coventry has We operate in growth markets Opportunities exist <5% share in fragmented that generally to improve trading both our business markets ripe for perform better than and gross margins segments consolidation GDP Both our Fluid Systems and Trade Distributi
Slide 11: Coventry operates in high growth markets
Coventry operates in high growth markets Coventry has a small market share in large high growth markets with significant opportunity for organic and acquisition growth Mining and resources Infrastructure Building and Industrial and Other markets construction manufacturing Continued strong $100b comm
Slide 12: Our Strategy
03 Our Strategy
Slide 13: Our Strategy
Our Strategy Our Purpose Our Values Our Vision Strategic priorities Customer promise The right people for growth Safety first Zero harm Accelerate profitable To provide Do the right thing Profitable sales organic growth to Exceptional specialised (Fairness, Integrity growth achieve 10%+ specialist s
Slide 14: Our organic growth opportunities
Our organic growth opportunities Expand Improving the Improve value Service and Digitalisation network network proposition product extensions Improving our value Expanding product proposition to retain ranges Greenfield Konnect Trade store customers, increase Australia and New makeovers and share of
Slide 15: H1 FY24 performance
04 H1 FY24 performance
Slide 16: H1FY24 financial performance snapshot
H1FY24 financial performance snapshot Financial performance Solid revenue and excellent profit growth Revenue EBITDA 1 EBIT 2 Statutory net loss $185.3m $9.8m $7.8m $-0.4m * +5.4% on H1 FY23 +18.1% on H1 FY23 +19.0% on H1 FY23 $1.5m H1 FY23 Cash conversion 4 Net Assets Net Debt Net Loss and Net Debt
Slide 17: Revenue
Half year historical results Group Revenue Revenue up 5.4% to $185.3m ($175.8m H1 FY23) EBITDA1 Group EBITDA1 up 18.1% to $9.8m ($8.3m H1 FY23) EBITDA1 % to sales Note 1: EBITDA is earnings before interest, tax, depreciation, amortisation before significant items and has been adjusted to exclude the
Slide 18: Profit and loss
Profit and loss Summary profit and loss 84 $m H1 FY24 H1 FY23 % change • EBITDA 1 up +$1.5m (+18.1%) on prior Revenue 185.3 175.8 +5.4% year Underlying EBITDA 1 9.8 8.3 +18.1% • EBIT 2 up +$1.3m (+19.0%) on prior year Depreciation and amortisation (2.0) (1.8) • Initiatives to grow EBITDA1 % to Sales
Slide 19: Balance sheet
Balance sheet Solid balance sheet position 84 $m As at 31 Dec As at 30 June • The Group has a solid balance sheet 2023 2023 with Net Tangible Assets of $35.8m Total current assets 139.5 137.2 and Net Assets of $112.0m as at 31 December 2023 Total non-current assets 148.2 145.6 • The Group has a soli
Slide 20: Cash flow
Cash flow Cash conversion of 93.8% H1 FY24 84 $m H1 FY24 H1 FY23 Gross operating cash flow 11.1 12.3 • The Group’s focus is on inventory management and improving cash Less Cash lease payments (7.3) (8.0) conversion Add back Significant Items 5.4 2.4 • Inventory increased by $5.9m due to sales growth
Slide 21: H1 FY24 Segment performance
H1 FY24 Segment performance Trading performance improved during H1 FY24 with improvements in sales and profit year on year growth in Fluid 84 Systems and Konnect and Artia Australia offset by a decline in Konnect and Artia New Zealand and Nubco Fluid Systems • Fluid Systems EBITDA1 % to sales of Rev
Slide 22: Strategic update and outlook
05 Strategic update and outlook
Slide 23: Strategic update
Strategic update 84 Key strategic initiatives Target 10%+ EBITDA1 Targeting • 14.0%+ EBITDA1 for each business unit Improving overall business profitability • 4.0% Corporate costs to Group sales through: • Organic sales growth • Margin improvements Delivering results • Buy side initiatives • Q1 EBIT
Slide 24: Strategic update
Strategic update 84 Key strategic initiatives KAA profitability improvements ERP upgrade project Accelerating delivery of our strategy by: ERP upgrade progressing well • Fixing underperforming branches • The ERP upgrade continues to progress broadly to • Improving capability to deliver store makeove
Slide 25: Strategic update
Strategic update 84 Key strategic initiatives Optimising financial health Develop marketing and digital capability Cash conversion project delivered positive Implementing e-commerce solutions results • Developing our marketing and promotion capability to • Inventory optimization project continuing i
Slide 26: Strategic Priorities FY24
Strategic Priorities FY24 • The right people for growth • Target 10% EBITDA1 • Accelerate profitable organic growth in Trade Distribution • Continue focus on rightsizing inventories and cash conversion • Deliver ERP upgrade project to schedule and on budget • Reinforce with customers our focus on sp
Slide 27: Summary
06 Summary
Slide 28: Summary
Solid H1 FY24 sales growth H1 FY24 EBITDA1 up +18.1% Positive January 2024 trading performance Summary with sales and underlying EBITDA1 ahead of pcp Operating in resilient markets and industries with the right strategy and the right people for profitable growth Specialisation will help us win
Slide 29: Disclaimer
Disclaimer Reliance on third party information Forward looking statements The information and views expressed in this presentation were prepared by Coventry This presentation may include forward-looking statements. Although the Company believes Group Ltd (the Company) and may contain information tha