Slide 1: Results for Full Year Ended 30 June 2005
& Coventry Group Ltd ABN 37 008 670 102 Results for Full Year Ended 30 June 2005 Chris Glenn Managing Director Stephen Cooper Chief Financial Officer
Slide 2: Results Summary
Results Summary Net profit before tax and significant items of $19.8M (2004: $21.9M) e EBITA before significant items down 4% to $23.6M 6 Final dividend of 18 cents fully franked e Special dividend of 30 cents fully franked paid on 5 July 2005
Slide 3: Financial Overview
| Financial Overview %e Change TOTAL 470.8 | 8.5T 23.6 451 fore significant items) 3.2 3.6 6.8 26 3.4 6.0 rofit After Tax 75 7.7 15.2 9.9 7.0 16.9 11.27 e outside equity 21.1 21.4 42.5 27.6 19.2 46.8 10.1 T
Slide 4: Financial Overview (continued)
Financial Overview (continued) FY05 H2* | TOTAL 4 % EBITA/sales 5.6 5.8 5.7 44 5.6 5.0 Return on Capital Employed (EBITA/equity + net debt) 13.0 | 13.7 13.6 10.1 14.5 13.4 Return on Equity (NPAT/equity) 9.0 8.9 8.9 7.0 9.4 8.3 * Ratios are annualised where appropriate and are before significant item
Slide 5: Cash Flow and Gearing
Cash Flow and Gearing FY05 $M H2 Operating Cash Flow 9.5 10.7 2.9 10.4 Closing Net Interest Bearing Debt 214 12.5 32.4 13.9 Closing Equity 166.1 169.9 176.0 165.6 Net Debt/Equity 12.9% 7.3% 18.4% 84% Interest Cover 17.3 26.5 16.2 14.5 dividend and acquisition of Am-Tech Fastenings and Components. Re
Slide 6: Dividends
Dividends FY04 FYO5 H1 H2 Hi H2 EPS — cents 21.1* 214 17.0° 22.0" Dividend per share ~ cents 16.0 18.0 18.0 18.0 Special dividend per share — - - - 30.0 cents Franking 100% 100% 100% 100% * Excluding significant items. distribute franking credits. Current policy is to distribute high proportion of p
Slide 7: Capital Employed
Capital Employed CAPITAL EMPLOYED - 30 JUNE 2005 RETURN ON CAPITAL EMPLOYED % ons Corporate” . ($16.6M) (lane 2004 (une 2004: $8.0M) $23.7M) Bitumen $5.0M (dune 2004; $6.4M) Ye industrial $78.30 Automotive : vec wee Autometive industrial Bitumen Gaskets $853.50) Jun-04 @ Jun-05 Capital Employed = Re
Slide 8: Capital Employed (continued)
Capital Employed (continued) FY04 FY05 Capital expenditure $7.2M $9.2M Annual stock turns 3.2 turns | 3.3 turns Days sales in trade debtors 53 days | 53 days @ Higher level of capital expenditure due to purchase of regional manager's residence ($0.5), “in-sourcing” of NSW auto parts delivery service
Slide 9: Automotive
Automotive % TOTAL | Change 12.77 5.8 5.4 11.2 44 6.7 10.8 3.61 (2.4) (1.7) (4.1) (2.9) | (3.0) | (6.9) | 43.01 34 3.7 7.4 1.2 3.7 49 2.9% 3.0% | 2.9% | 0.9% | 2.8% | 1.8% ® Before significant items. {) Includes first time allocation of corporate service costs of $0,6M, inventory write- down of $0.8
Slide 10: Automotive Restructure
Automotive Restructure CAP Restructure Closure of Blacktown DC Moved 3 branches in NSW Thompson's & Rad Smith move to Coventry IT system Significant disruption to business New management structure Reduced headcount _ Restructure Cost _@ Inventory write down - $0.8M _@ Restructuring and relocation co
Slide 11: Automotive Restructure
Automotive Restructure @ New regional management team: ~ Eastern (NSW/Qid) ~ Central (SA/NT) - Western (WA) e Don Beisley ~ Group General Manager Automotive (formerly Western Region General Manager, Bunnings)
Slide 12: Automotive Strategy
Automotive Strategy Short term profit improvement SA, NSW & Qld e Focus on trade and over the counter sales and reduce reseller sales e Leverage centralised purchasing e Leverage of centralised inventory management e House brand growth e Increase imported product e Branch upgrades — eg Rockingham (W
Slide 13: Industrial
industrial % $M Hi | H2 | TOTAL! Hi | H2 | TOTAL) Change Sales 884 | 83.3 | 171.7 | 905] 869 | 177.4 3.aT EBIT 8.1 78 15.9 8.7 8.3 17.0 74? EBIT/Sales 91% | 9.3% | 92% | 9.6%] 9.6% | 9.6% Margin
Slide 14: Industrial
industrial e Strong performance in WA and NZ e Higher levels of competition e Slowing of construction sector ARORA RARER TI
Slide 15: Industrial Strategy
industrial Strategy @ Supply Chain e House Branded product — ‘Konnect’ e Customer segmentation e Expansion of product range to aligned markets e Continual expansion of construction market focus via. ‘Infix’ and Hylton Parker Fasteners onda aneannaRReeE,
Slide 16: Bitumen
TOTAL % Change EBIT/Sales Margin | 6.2% | 13.3% 10.1% | 6.6% | 9.8% 8.5% 12.77 54d Emulsion spraying business continuing to achieve strong volurnes. Asphalt margins reduced due to aggressive competition.
Slide 17: Bitumen Strategy
Bitumen Strategy Focus as a cashflow business e Lift the performance of the Hot Mix asphalt laying operation @ Focus on core products: ~ Asphalt ~ Emulsions ~ Profiling e Focus on broad customer segments: ~ Councils — Corporate ~ Construction ~ Private works e Leverage the ‘Eco Grade’ product offeri
Slide 18: Gaskets
% $M Hi | H2 |TOTAL) H1 | H2 | TOTAL | Change Sales 6.4 6.0 12.4 6.7 5.6 12.3 134 EBIT 0.9 0.9 18 10 | 09 1.9 6.97 EBIT/Sales Margin | 13.3% | 16.1% | 14.6% | 14.3% | 17.8% | 15.9% @ Continued focus on production efficiency has resulted in margin improvement.
Slide 19: Gaskets Strategy
Gaskets Strategy e Leverage market position by supporting and expanding key distributors e Operational efficiencies with manufacturing e Expansion of industrial product range e Further develop the sales & marketing operation sone.
Slide 20: Information Technology Platform
Information Technology Platform @ 5 year strategy e Project Compass - Oracle E Business Suite implementation ~ Number 1 project @ Use of scanning technology e E Business opportunities ~ Cataloguing soe
Slide 21: Information Technology
Information Technology Project Compass Existing system is aged and not supporting current and future business requirements, especially with the Industrial business unit Detailed and rigorous selection and negotiation process @ Oracle E Business Suite selected (Oracle implementation partner) e Vanill
Slide 22: Project Benefits: Information Technology - Oracle System
o® @ ¢ ¢ Project Benefits: Information Technology — Oracle System Stay in business requirement, especially Industrial Business process improvement ie centralised inventory management Improved inventory performance improved customer service Simpler user training and operation E Business opportunities
Slide 23: Sale of Morley Site & Move to Redcliffe
Sale of Morley Site & Move to Redcliffe New site — Great Eastern Highway, Redcliffe ~ Central location near transport hub « Located at new site: ~ WA Automotive & Mining Supplies (Coventrys) operations ~ Automotive support ~ industrial support — Group IT support ~ Company Head Office e 20 year lease
Slide 24: People Development
People Development e Occupational Health & Safety ~ ‘Safety First’ Programme e Performance management e Training & development: ~ Frontline training ~ Customer service ~ Management development @ Succession planning
Slide 25: Coventry Group Strategy
Coventry Group Strategy Key Drivers: @ 12% return on shareholders equity e Number 1 or 2 in market sector e Build strong brand equity, based on product and service e Leverage core competencies of the Group
Slide 26: Coventry Group Strategy
Coventry Group Strategy Business Performance improvement Organic Sales Growth New Business Bolt-on Opportunities Acquisitions Sales & Plath Peaple Markeling or Development Supply Process Chain Improvernent
Slide 27: Coventry Group Strategy
Coventry Group Strategy Sales & Marketing: e Service & price positioning e House branded products 6 E Commerce samteniiectign inthe,
Slide 28: Coventry Group Strategy
Coventry Group Strategy sesseseas Supply Chain: @ Warehousing ~ Location, size & number ~ Configuration ~ Cross docking e@ Product Sourcing ~ Supplier rationalisation ~ Centralised purchasing - Direct imported products
Slide 29: Coventry Group Strategy
Coventry Group Strategy Supply Chain: @ Delivery - Transport review - Service levels ~ Insource vs outsourced services
Slide 30: Impact of Adopting Australian Equivalents to IFRS
Impact of Adopting Australian Equivalents to International Financial Reporting Standards (AIFRS) @ Full details included in notes to financial statements for FYO05 @ Minimal impact on equity from transition to AIFRS
Slide 31: Impact of Adopting Australian Equivalents to IFRS
Impact of Adopting Australian Equivalents to International Financial Reporting Standards (AIFRS) The table below outlines the more significant AIFRS impacts on future reported profits. Nature of AIFRS impact Impact on FYOS Profit After Tax $M Goodwill no longer amortised + 2.0 Annual impairment test
Slide 32: Outlook
Coventry Group Ltd Outlook - Price competition to remain strong ~ Expecting a significant improvernent in Automotive following last year’s restructuring ~ Industrial expected to continue its improvement - Bitumen expected to lift performance ~ Gaskets to continue its solid performance