Slide 1: Investor Presentation: Codan Limited Business Performance 1st half FY10
For personal use only Investor Presentation Codan Limited Business Performance 1st half FY10 March 2010 Mike Heard Michael Barton Donald McGurk Peter Charlesworth Managing Director Chief Financial Officer General Manager, General Manager, HF Radio Communications Minelab Metal Detectors
Slide 2: Contents
Contents For personal use only What is Codan’s Core Business...................................................................... 2 Business segments / product groups.............................................................. 3 Highlights..........................................................
Slide 3: What is Codan's Core Business?
What is Codan’s Core Business? For personal use only “Clever Products for Global Niche Markets” Clever Products Innovative products of our own design High intellectual property content, high value add Exceptional performance, reliability and support Electronics products preferably Global Nic
Slide 4: Current Business Segments and Product Groups
What are Codan’s Current Business Segments and Product Groups? For personal use only Codan Communications Products High Frequency (HF) Radio Satellite Communications Products Minelab Metal Detectors Consumer Mine Clearance Artisanal Gold Mining Other Printed Circuit Boards TV Broadcast
Slide 5: Satellite Communications Products
What are Codan’s Current Business Segments and Product Groups? For personal use only Satellite Communications Products RF Subsystem portion of satellite communications earth stations Used in networks for telecommunications over satellite; for public infrastructure and private networks for govern
Slide 6: Other Business Segments and Product Groups
What are Codan’s Current Business Segments and Product Groups? For personal use only Other Codan Broadcast – Signal routers and signal management products for TV broadcast studios IMP Printed Circuits – Manufacture and importing of bare printed circuit boards for Australian and NZ electronics ma
Slide 7: Financial highlights 1st half FY10
Financial highlights 1st half FY10 For personal use only Record sales and profit for a half year Net profit after tax was $13.6 million for the half-year ended 31 December 2009, an increase of 102% compared to the previous corresponding period The profit arose from revenue of $89.4m, compared wi
Slide 8: Financial Overview — sales
Financial Overview — sales For personal use only Half year results 1st half FY10 1st half FY09 $m % $m % Revenue Communication Products $38.2 43% $41.2 58% Metal Detectors $45.0 50% $22.0 31% Other $6.3 7% $8.0 11% Total revenue $89.4 100% $71.1 100% Key highlights: Strong sales of HF radio commun
Slide 9: Financial Overview — P&L
Financial Overview — P&L For personal use only Half year results 1st half FY10 1st half FY09 $m % $m % Total revenue $89.4 100% $71.1 100% Underlying business performance EBITDA $26.6 30% $16.8 24% EBIT $22.3 25% $12.9 18% Interest ($1.6) ($3.0) Net profit before tax $20.7 23% $9.9 14% Underlying ne
Slide 10: Financial Overview — Balance Sheet
Financial Overview — Balance Sheet For personal use only December '09 June '09 $m Working Capital $14.1m decrease in net debt Receivables $17.3 $15.3 from excellent operating cash Inventories $16.5 $14.2 Accounts Payable ($25.5) ($17.5) flows. Total Working Capital $8.3 $12.1 Property, Plant & Equ
Slide 11: Integration and Restructuring
Integration and Restructuring For personal use only Continued with consolidation and outsourcing of manufacturing activities across the group, with attendant savings. Most notably, manufacturing of Minelab metal detectors in Ireland ceased during the period and was relocated to Codan Limited’s o
Slide 12: HF Radio Communications
For personal use only HF Radio Communications Donald McGurk General Manager, HF Radio Communications March 2010 Page 11
Slide 13: High Frequency (HF) Radio
High Frequency (HF) Radio For personal use only Products and systems for remote area long distance radio communications Used for: rapid network deployment communications without the need for transmission infrastructure back-up and emergency communications This is sometimes the only viabl
Slide 14: Products
For personal use only Page 13 Products
Slide 15: Traditional Codan HF Markets
Traditional Codan HF Markets For personal use only Codan is the global market leader in our traditional HF markets – Aid / Humanitarian – Other Government (developing world) This market segment no longer meets our growth requirements – Encroachment of other technologies such as satellite communi
Slide 16: Aggressive Push into New Market
Aggressive Push into New Market For personal use only Codan has successfully entered a new market: – Security, Protection and Military (But not products capable for front line use by major world powers) This market was selected on the basis of: – Large, growing, definable niche – Opportunity res
Slide 17: Codan's Penetration of the New Market
Codan’s Penetration of the New Market For personal use only Size of this new market low hundreds of millions of dollars per annum Harris has the lion’s share Approximately 10 competitors Codan growth – doubled sales over last 3 years Now have approximately 15% of total market & growing We
Slide 18: Codan's HF Sales Mix
Codan’s HF Sales Mix For personal use only Total Codan HF sales FY08 New Traditional market market FY10 Page 17
Slide 19: Why we have been Successful
Why we have been Successful For personal use only Compelling Value Proposition for our New Market – Our target customers can no longer afford to pay US$30k per radio – All the necessary features at a fraction of the cost – Credible alternative to competitor products – Interoperable with competitor
Slide 20: The Way Forward
The Way Forward For personal use only We have a clear and well defined strategy for the new market The market niche continues to grow Continue to build on our early successes A number of successful installed networks as reference sites Continued strong growth expected medium to long term Pag
Slide 21: World's Best Metal Detection Technologies
World’s Best Metal Detection Technologies For personal use only Minelab Metal Detectors Peter Charlesworth General Manager, Minelab Metal Detectors March 2010 Minelab is a member of the Codan group of companies. Page 20
Slide 22: Minelab Metal Detection
Minelab Metal Detection For personal use only Metal detection products and systems for Consumer, Mine Clearance and Artisanal Gold Mining markets Consumer: Detection of gold nuggets, coins, treasure and artefacts by serious hobbyists, semi-professional prospectors and archaeologists Mine Clearan
Slide 23: Overview of Minelab
Overview of Minelab For personal use only Minelab is the world’s leading designer and manufacturer of metal detectors and mine detecting solutions. The Minelab brand is very strong. Minelab has a focus on research and development and its world class intellectual property, which is secured by p
Slide 24: Minelab Products: Competitive Advantage
Minelab Products: Competitive Advantage For personal use only Minelab detectors incorporate the most advanced metal detection technology in the world. The best detection depth across all soil types (benign to highly mineralised). Minelab products have attractive product differentiation: unit s
Slide 25: Minelab Consumer: Coin & Treasure Market
Minelab Consumer: Coin & Treasure Market For personal use only Minelab competes in the mid to high end Coin and Treasure Market Minelab’s technology produces the world’s most advanced Coin and Treasure machines Minelab does not sell product into the Toy Market where price is the only discrimin
Slide 26: Minelab Consumer Gold Detector Market
Minelab Consumer Gold Detector Market For personal use only Customer profile — from professional and semi- professional prospectors to weekend hobbyists A hobby/leisure activity that holds the potential to pay you back! Growing market segment — “baby-boomers” favourable demographics Growing
Slide 27: Artisanal Gold Mining Market
Artisanal Gold Mining Market For personal use only Generally exists in the Developing World. Strong growth in 2009 and into 2010 aided by the high gold price. Examples: Mongolia, Tanzania, Sudan, Brazil. Page 26
Slide 28: Mine Clearance Products
Mine Clearance Products For personal use only Handheld Mine Detectors – UN & Humanitarian Agencies – Law Enforcement & Military – e.g. Indian Ministry of Home Affairs US$5.5M order a highlight in 09/10. System supplier for integrated solutions (e.g. for incorporation into the US Army HSTAMIDS pr
Slide 29: The Way Forward
The Way Forward For personal use only Very significant recent growth from the Artisanal Gold Mining market. – Very new market; we have a lot to learn – However, market fundamentals suggest significant growth opportunity Mine clearance market also strong. – Annual revenue depends on timing of lar
Slide 30: Outlook – Codan Limited
Outlook – Codan Limited For personal use only The second half has commenced strongly. Whilst demand for all Minelab products is good, it remains extremely strong for detectors for artisanal gold mining and Minelab has a very high level of orders on hand. Second half sales for Minelab products