Slide 1: FY23 Full-year investor presentation
28 August 2023 Company Announcements Office Australian Securities Exchange Level 4 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam FY23 Full-year investor presentation Please find attached a copy of Codan Limited’s investor presentation dated 28 August 2023 for release to the market. Yours faithfull
Slide 2: FY23 Full Year Results
FY23 FULL YEAR RULTS Codan Limited 28th August 2023
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER ‐ 2
Slide 4: Contents
CONTENTS RESULT HIGHLIGHTS BUSINESS UNITS • Tactical Communications | DTC • Zetron • Minelab STRATEGY OVERVIEW SUMMARY AND OUTLOOK APPENDIX 3
Slide 5: FY23 Highlights
FY23 HIGHLIGHTS • Strong results amidst unprecedented challenges and uncertain geopolitical and macroeconomic factors Revenue EBITDA • Group revenue of $456.5 million, delivering statutory net profit after tax of $67.7 million and underlying net $456.5m $116.8m profit after tax of $65.5 million -10%
Slide 6: FY23 Performance
FY23 PERFORMANCE PROFIT & LOSS FY23 FY22 $m $m Revenue Communications $274.5 $241.7 • H2 FY23 NPAT of $34.7 million (+13% vs H1 FY23) Metal Detection $176.1 $262.3 • FY23 Communications revenues exceed Metal Other $5.9 $2.1 Total Revenue $456.5 $506.1 Detection revenues EBITDA $116.8 $162.0 EBIT $88
Slide 7: Financial Position
FINANCIAL POSITION Strengthened balance sheet – working capital normalisation ongoing Balance Sheet Jun-23 Jun-22 Change • Both receivables and payables remain well-managed $m $m $m Receivables 71.0 59.8 11.2 • Net debt reduced from $61.0 in Dec-22 to $51.7 million¹, a direct result of improved fina
Slide 8: Business Units & Outlook
Business Units & Outlook
Slide 9: Communications
COMMUNICATIONS • FY23 Communications revenue of $274.5 million (FY22: $241.7 million) • Increased by 14% versus pcp (vs 10-15% guided range) • Both Tactical Communications and Zetron achieved strong growth • Strong segment profit margin of 25%, in line with FY23 target (FY22: 21%) • 9% growth in ord
Slide 10: Tactical Communications
TACTICAL COMMUNICATIONS • Tactical Communications achieved double-digit revenue growth in FY23, driven by: • Strength in unmanned systems and law enforcement • Dominant presence in the growing European wireless broadcast market • $20 million in FY23 revenue on single large military Communications pr
Slide 11: Zetron
ZETRON • Zetron also achieved double-digit revenue growth in FY23, given: • Continued expansion of U.S. public safety market • Ongoing recognition of inherent value of Zetron’s integrated command and control solutions • Successfully awarded business – both new and renewal – across expanding mix of h
Slide 12: Acquisition of Eagle – August 2023
ACQUISITION OF EAGLE – AUGUST 2023 Strong strategic fit, acquiring technology and capability to accelerate growth STRATEGIC FIT GEOGRAPHIC EXPANSION RECURRING REVENUE • Consistent with Codan’s inorganic • Once integrated, Eagle will • ~45% of Eagle’s existing revenues growth strategy to acquire sign
Slide 13: UK Command & Control Acquisition
UK COMMAND & CONTROL ACQUISITION Expanding Zetron into the United Kingdom, Europe and the Middle East • Completed acquisition of 100% of Eagle NewCo Limited (Eagle), a UK command and control solutions business (to trade as Zetron UK) • UK Government forced sale by NEC Software Solutions UK Limited •
Slide 14: Eagle's Technology Offering
EAGLE’S TECHNOLOGY OFFERING Highly complementary technology, aligning to Zetron’s core command and control portfolio • Leading software supplier to the emergency services, public safety and control room markets • Provides mission critical control room communication and workforce management solutions
Slide 15: Metal Detection
METAL DETECTION • FY23 Minelab revenue of $176.1 million (FY22: $262.3 million), decline due to post-Covid reduction and continued disruption of Northeast African market • All key markets – Rest of World (RoW)¹ recreation, African market and Countermine – delivered stronger H2 • H2 Minelab revenues
Slide 16: Performance / Everything
PERFORMANCE /\s EVERYTHING ® @Qanricore EQUJNOX 7001900 CTERRA = POWEREDBY Miulti-I@~ POWERED ot cl NZ World's Best Metal Detection Technologies MINELAB 5
Slide 17: Strategy Overview
Strategy Overview
Slide 18: Strategy Overview
STRATEGY OVERVIEW Codan’s renewed growth strategy focused on three core pillars that drive long-term value GETTING QUALITY OF ACQUISITIONS THAT EVERYTHING RIGHT TOPLINE CREATE VALUE • Continued focus across people, • Global opportunity - Ongoing • Seek strategically-aligned opportunities, STRATEGY p
Slide 19: Leadership Team
LEADERSHIP TEAM Alf Ianniello Michael Barton Marjolijn Woods Peter Charlesworth Managing Director Chief Financial Officer Chief Human Chief Technology Officer and CEO and Company Secretary Resources Officer Ben Harvey Paul Sangster Scott French Daniel Hutchinson Executive General Executive General M
Slide 20: Near Term Strategy
NEAR TERM STRATEGY Successful execution will see a more-balanced, integrated and sustainable Codan Enhanced offering as full Expansion and growth of systems Promote new products & expand solutions provider and support contracts channels to market • Increasing awareness and capabilities of DTC • Incr
Slide 21: Engineering Investment
ENGINEERING INVESTMENT Invest in ourselves - strong pipeline of projects • FY23 engineering spend of $45 million, equating to 10% of Engineering spend Engineering Spend by revenues ($m) Business Unit • Sustained engineering investment across segments ensures H1 competitive position maintained H2 Met
Slide 22: ESG Initiatives
ESG INITIATIVES • Alignment with TCFD and making first (partial) disclosures within ESG Report. • Stakeholder engagement and internal capacity building to identify climate related risks and opportunities. • Terms of reference developed for Sustainability Council. Environment • First full organisatio
Slide 23: Building a Stronger Codan
BUILDING A STRONGER CODAN GLOBAL OPPORTUNITY DIVERSIFIED EARNINGS Large, globally addressable market, notably A more-balanced, stable and within developed market economies predictable revenue base PROFITABLE GROWTH INNOVATIVE PRODUCT DEVELOPMENT Targeting sustainable revenue and profitability growth
Slide 24: Summary & Outlook
Summary & Outlook
Slide 25: Group Outlook
GROUP OUTLOOK There are a number of key considerations regarding the Company’s outlook for FY24: • After normalising for the impact of the large Communications project delivered in FY23 (~$20 million), the Communications business (excluding Eagle) is targeting to deliver 10-15% revenue growth in FY2
Slide 26: Appendix
Appendix
Slide 27: Globally Diversified Technology Company
GLOBALLY DIVERSIFIED TECHNOLOGY COMPANY Codan develops and manufactures innovative lifesaving, mission critical communications and detection technology for individuals, communities and governments. 150+ Countries where Codan products & solutions sold 800+ Global employees, >30% engineering Codan’s c
Slide 28: Recent History / Evolution
RECENT HISTORY / EVOLUTION Codan’s recent history is marked by three distinct periods Revenue ($m) 506 Metal Detection 437 457 Communications 348 52% 39% 271 77% 69% 70% 48% 61% 30% 31% 23% FY19 FY20 FY21 FY22 FY23 FY24+ Pre-COVID COVID era A Stronger Codan Reliance on metal detection Unprecedented
Slide 29: Tactical Communications Primary Markets
TACTICAL COMMUNICATIONS COMMUNICATIONS SOLUTIONS THAT ENABLE OUR CUSTOMERS TO BE CONNECTED Favourable market fundamentals: • Increasing global military and defence spend in the Five PRIMARY MARKETS MILITARY Eyes Intelligence community1 • Smart and safe city initiatives, growing adoption of Internet
Slide 30: Zetron Primary Market
ZETRON True end-to-end mission critical solutions provider Favourable market fundamentals: PRIMARY MARKET • Government funding environment ~US$10-15 billion Next PUBLIC SAFETY Generation 911 funding, upgrading emergency response communications • Long term contracts – recurring revenue stream • Techn
Slide 31: Public Safety Communications
PUBLIC SAFETY COMMUNICATIONS THE ALERT COMMAND AND CONTROL THE DELIVERY THE RESPONSE The Public Mission Critical Wireless First Responders Communications and Field Personnel DATA LOCATION AUTOMATED REPORTING MAPPING ALTERING & ANALYTICS Voice/Text/Messaging Voice CALL COMPUTER DISPATCH TALKING & AID
Slide 32: Minelab Primary Markets
MINELAB Delivering market-leading, innovative detectors Favourable market fundamentals: RECREATION / • Emerging awareness of recreational metal detection PROFESSIONAL • Shift in consumer preference towards direct-to- consumer and eCommerce channels PRIMARY MARKETS • Continued geographic expansion –