Agenda. Full year overview. Strategy update. Group financial performance. Business unit update. Market outlook

Transcription

1 FY12 Results

2 Agenda Full year overview Strategy update Group financial performance Business unit update Market outlook

3 Full Year Overview Graham Twartz

4 Headlines Full year profit attributable to owners of $26.0M in line with guidance Fully franked final dividend of five cents per share Strong cash flows from operations Gearing (measured as debt equity) remains low at 23% Extension of on market buy back Sold results from a number of businesses in the Lifestyle & Sustainability and Electronics & Communications divisions Acquisition of LAN1 to bolster expertise in the growing information technology market Further acquisitions under review focused on high growth markets Further improvement in safety performance

5 Strategy Update Graham Twartz

6 Strategy Update Initiative Progress 1. Focus acquisition activity in Electronics & Communications Completion of Herma acquisition. LAN1 announced and other opportunities under review 2. New market opportunities Exploring distribution opportunities for E&C into India and Europe More focused approach to mining services opportunity 3. Grow market share in Hills SVL Increased share of the tertiary education markets Acquisition of Herma and selected agencies

7 Strategy Update Initiative Progress 4. Opticomm to reach critical mass Increasing number of Greenfield estates signed. Will deliver long term recurring revenue 5. Stabilise results from Hardware business Growth in clotheslines market share Listings at Masters Home Improvements Reduced ladder listings 6. Improved Team Poly results Further contraction in market size Plans on track but profit delayed New product launch in March Growth in Smartbar sales

8 Strategy Update Initiative Progress 7. Restructure Orrcon to stem losses Large pipe mill closed Reduced losses Increased sales of imported product 8. Seek partners for Hills Steel assets 9. On market buy back A number of enquiries and discussion with industry players No transaction imminent 2.9 million shares bought to date Extended for a further 12 months

9 Strategy Update Initiative 10. Introduction of new ERP systems 11. Strengthening the Board Progress On budget and on time First go live 2013 Continued evolution, with appointment of Matt Campbell

10 Group Financial Performance Grant Logan

11 Summary of Financial Results (A$m) Sales and other revenue 1, ,095.8 EBIT 44.7 (74.5) NPAT attributable to members 26.0 (75.0) Cash Flow from operating activities Dividends per share (cents) Gearing (D/E) (%) 23.0% 22.7%

12 Financial Overview (A$m) Sales and other revenue 1, ,095.8 EBIT before CGU impairment and closures costs NPAT attributable to owners before CGU impairment and closures costs 2 Cash Flow from operating activities Earnings per share (cents) Dividends per share (cents) Gearing (D/E) (%) 23.0% 22.7% 1. EBIT before CGU impairment and closure costs for the year ended 30 June 2011 of $40.4M is a non-ifrs measure calculated as: EBIT loss for the year of ($74.5M) adjusted for Orrcon and Team Poly impairment and Orrcon closure costs of $114.8M. 2. Net profit after tax (NPAT) attributable to owners before CGU impairment and closure costs for the year ended 30 June 2011 of $25.3M is a non-ifrs measure calculated as: NPAT loss attributable to owners of ($75.0M) adjusted for Orrcon and Team Poly impairment and Orrcon closure costs of $100.2M. 3. Before CGU impairment and closure costs (as disclosed in note 10 of the 30 June 2012 Appendix 4E). The non-ifrs measures used by the Company are relevant because they are consistent with measures used internally by management to assess the operating performance of the business. The non-ifrs measures have not been subject to audit or review.

13 Trading Result by Segment Sales (A$m) % Electronics & Communications % Lifestyle & Sustainability % Building & Industrial (including Korvest) % Other TOTAL 1, , % EBIT (A$m) % Electronics & Communications % Lifestyle & Sustainability % Building & Industrial (including Korvest) % Other (0.3) (0.5) - TOTAL * % * The prior year amounts are before CGU impairment and closure costs (as reconciled on the Financial Overview slide)

14 Balance Sheet As at (A$m) 30 Jun Jun 2011 Receivables and other assets Inventory Net Current Assets (excluding cash) Net Non Current Assets (excluding loans) Total Assets (excluding cash) Payables and provisions Net Debt Total Equity Net debt/equity 23.0% 22.7% Net debt/(net debt + equity) 18.7% 18.5%

15 Trading Working Capital As at (A$m) 30 Jun Jun 2011 Trade Debtors Inventory Trade Creditors (51.1) (54.2) Sundry Other Trading Working Capital

16 Cashflow Half year ended 30 June (A$m) Profit / (loss) before tax 38.9 (78.5) Add back: Depreciation and amortisation Impairment of goodwill and plant and equipment Other non-cash items (1.5) (7.5) Profit / (loss) before tax adjusted for non-cash items (Increase) / decrease in working capital (0.2) (22.5) Tax paid (5.6) (16.4) Net cash from operating activities Dividends paid (23.5) (27.3) Payment on share buy-back (3.1) 0.0 Proceeds from sale of property, plant and equipment Acquisitions of businesses (2.0) (1.1) Acquisition of property, plant and equipment & intangibles (13.9) (27.1) CAPEX Primus (15.0) - Proceeds/ (Repayment) of borrowings 23.9 (13.0) Other non operating cash flow (0.9) (0.3) Net cash (reduction) / increase 22.7 (55.0)

17 Key ratio movements (A$m) % change from prior comparable period * Revenue 1, ,095.8 (1.2%) EBIT # % NPAT # % EBIT/Revenue # 4.1% 3.7% NPAT/Revenue # 2.7% 2.5% Return on Assets # 6.0% 5.8% Return on Equity # 9.7% 9.0% * The prior year amounts are Change in Ratio calculated before CGU impairment and closure costs in the year ended 30 June # Before CGU impairment and closures costs as reconciled on the Financial Overview slide.

18 Project Primus Budget $32.9M Expenditure to date $15M Planned completion 1 st Quarter 2015 First go-live 2 nd Quarter 2013 Corporate and Lifestyle & Sustainability

19 Business Unit Update Graham Twartz

20 Electronics & Communications

21 Electronics & Communications (A$m) Change Revenue % EBIT % Funds Employed (0.6%) EBIT/Revenue 8.7% 8.8% - ROFE 28.2% 26.8% - Trends and Issues Transition from analogue to digital creates opportunities Acquisition activity focussed on this division Market leader in many segments Price deflation continues Subdued corporate capex

22 Electronics & Communications

23 Electronics & Communications Communications Patchy demand for Subscription TV Opportunities with switch to digital FTA Won Federal Government installation contracts Launch of new digital antenna Further Greenfields fibre contracts Slow growth in Cygnus, but improving

24 Electronics & Communications Hills Sound, Vision & Lighting Education market share growth Release of digital product Further new Crestron products Complementary agencies added Acquisition of Herma

25 Electronics & Communications Why Herma? Herma imports and customises a range of Audio Visual Products such as screens and projector mounts Small, but has great potential to leverage the distribution network of SVL Fills a product range gap Consistent with strategy to be a one-stop-shop

26 Electronics & Communications Hills Electronic Security Market leader Increased unit volumes, but price deflation continues Project work subdued New product road map continues, with some overseas market potential

27 Electronics & CommunicationsHills Ewhy Why LAN1? LAN1 is a value added distributor of a range of IT products involving IP networking IP storage IP security IP CCTV and Access Control Fills a gap in the E&C range arising from the digital transition

28 Lifestyle & Sustainability

29 Lifestyle & Sustainability (A$m) Change Revenue (14.1%) EBIT * % Funds Employed % EBIT/Revenue * 7.6% 6.0% - ROFE * 11.7% 11.0% - * Before CGU impairment and closure costs for the year ended 30 June 2011 as disclosed in the segment note within the 30 June 2012 Appendix 4E. Trends and Issues New entrant in Hardware market (Masters Home Improvement) Water tank industry remains under stress Domestic building activity slow and forecast to stay slow

30 Lifestyle & Sustainability

31 Lifestyle & Sustainability Hardware Products Growth in clothesline market share Ranging in Masters Home Improvement achieved Strategic review of ladder business, faced with import competition Focus on product range and supply chain

32 Lifestyle & Sustainability Hills Healthcare Leader in rehabilitation, mobility and aged care equipment Steady trading result Business review based on new Federal Government funding model

33 Building & Industrial (including Korvest)

34 Building & Industrial (including Korvest) (A$m) Change Revenue (1.7%) EBIT * % Funds Employed (4.7%) EBIT/Revenue * 0.8% 0.5% - ROFE * 2.1% 1.3% 61.5% * Before CGU impairment and closure costs for the year ended 30 June 2011 as disclosed in the segment note within the 30 June 2012 Appendix 4E. Trends and Issues Low commercial and domestic building activity Imported steel and tube growing in market share Infrastructure opportunities for Korvest Potential mining construction opportunities

35 Building & Industrial (including Korvest)

36 Fielders Restructured to reduce cost base as a result of subdued industry activity Focus on eastern states profitability Significant deterioration in result New products launched (Aramax)

37 Orrcon Steel Growth through imported adjacent products Restructure has reduced losses Continued volatility in steel prices Industry remains under pressure Dumping action provided no relief Closure of large pipe plant

38 Outlook Investing in adjacent markets and review of mining opportunities Further acquisitions under review Commercial building and steel sector to remain subdued Expect to provide guidance at AGM in November

39 Thank You Questions?

40 Disclaimer Statements contained in this presentation, particularly those regarding possible or assumed future performance, estimated company earnings, potential growth of the company, industry growth or other trend projections are or may be forward looking statements. Such statements relate to future events and expectations and therefore involve unknown risks and uncertainties. Actual results may differ materially from those expressed or implied by these forward looking statements.

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