NUPLEX INDUSTRIES LIMITED RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2012 17 AUGUST 2012 Emery Severin, Chief Executive Officer Ian Davis, Chief Financial Officer PRESENTATION AGENDA 1. Group Overview 2. Financial Results 3. Segment Results 4. Strategy Update & Outlook 2
1. GROUP OVERVIEW NUPLEX OVERVIEW Leading, trusted global resins manufacturer and agency & distribution business in ANZ 1,800 employees, 26 manufacturing sites in 11 countries Sales in over 80 countries Trusted supplier status achieved through consistently delivering to customers Innovative products that meet their challenges Post sales R&D support High quality, on specification products Security of supply Cost competitive offering Leading positions ANZ: leading decorative and composite resins producer Asia: most extensive independent manufacturing network in the region EMEA: top 4 resins producer and leading solvent borne producer Americas: leading resins producer in niche high performance metal markets, such as vehicle refinish 2 years into 3 year strategy to strengthen Nuplex and position it for future growth through improving operational efficiency, consolidating leading market positions and expanding in emerging markets 4
FY12 FINANCIAL HIGHLIGHTS SAFETY Lost Time Injury Frequency Rate 2.5 1 Total Reportable Injury Rate 9.0 1 SALES REVENUE up down $1, 615.9m up 3% EBITDA 2 $131.0m flat EARNINGS PER SHARE 31.8 cents down 7.0% DIVIDEND PER SHARE 11 cents unchanged RETURN ON FUNDS EMPLOYED 4 13.0% down from 15.8% NET PROFIT AFTER TAX 3 Reported $62.5m down 6% WORKING CAPITAL TO SALES RATIO 16.5% up from 15.1% 1. Per million hours worked 2. Earnings before interest, tax, depreciation and amortisation 3. Net profit after tax attributable to equity holders of the parent company 4. As defined by earnings before interest, tax and unusual items divided by average funds All figures are in NZD unless otherwise stated 5 FY12 RESULTS OVERVIEW SOLID PERFORMANCE Resilient FROM underlying UNDERLYING EBITDA in OPERATIONS challenging market IN CHALLENGING conditions CONDITIONS EBITDA inline with December 11 guidance Sales up 2.6% due to contribution of acquisitions EBITDA $131.0m in line with prior year $130.9m (up 5% constant currency 1 ) Includes six months of EBITDA from acquired Viverso 2 operations Resilient EBITDA from underlying operations EBITDA ex Viverso $120.6m, down 8% year on year (down 4% constant currency) Volumes down 5% year on year largely due to lower ANZ Resin segment volumes (down 12%) Mitigated by: (1) Increase in unit margins (2) NuLEAP benefits (3) Cost control (4) Existing EMEA operations EBITDA flat (up 8% constant currency), Americas up 11% (up 18% constant currency ) Constant currency NPAT inline with previous year NPAT $62.5m, down 6% year on year (down 1% constant currency) Includes share of Fibrelogic losses of $3.7m $3.6m in unusual items largely due to Viverso acquisition costs Strong balance sheet Dividend maintained Gearing increased to 28%, due to acquisitions of Viverso ( 69.3m 3 ) and Acquos s masterbatch operations (A$20.9m 3 ) Raised US$105m in US Private Placement market Full year dividend maintained inline with prior year at 21 cents per share DRP reinstated 66% payout ratio inline with Board s Dividend Policy 1. Calculated by translating results into New Zealand dollars at the exchange rate applicable during the prior corresponding period 2. German based resins manufacturer acquired from Bayer MaterialScience, acquired 31 December 2011 3. Final acquisition price paid All figures are in NZD unless otherwise stated 6
FY12 EBITDA $M Margin improvement, cost control, NuLEAP benefits and Viverso offset the impact of tough trading conditions and FX ANZ 130.9 131.0 Other FY11 (26) 18 (5) (14) 5 14 3 10 1 (6) Resins Unit Specialties Inflation Costs NuLEAP Non Viverso Masterbatch FX Volume Margin Sales @ 4% recurring FY12 All figures are in NZD unless otherwise stated 7` FY12 OPERATIONAL HIGHLIGHTS Focused SOLID on PERFORMANCE cost control, margin FROM management UNDERLYING and executing OPERATIONS our strategy IN CHALLENGING to strengthen CONDITIONS and grow Nuplex Disciplined cost control and margin management NuLEAP delivering Viverso integration on track, EBITDA ahead of forecast Growing in emerging markets ANZ review underway Resins segment Constant currency unit margins up 6% as recovered past period raw material costs Excluding Viverso, fixed costs up 1.2% on constant currency basis, up less than inflation $14m incremental benefits ahead of $10m target contributing to Better gross margins through procurement Benefits of sales initiatives Costs contained Strengthened Nuplex EMEA now a top 4 resins producer and the leading solvent borne resins producer Final acquisition price paid 69.3m, total acquisition cost 75m 6.3m EBITDA contribution ahead of forecast 5m Integration on track Asia: progressed plan to increase regional capacity by 50% by end FY14 Vietnam: Commissioned new capacity to underpin market leading position in decorative resin China: Permitting for Changshu site continued. Construction expected towards end 2012 Russia: Progressing low risk entry via agreement with local company to form a JV Review objective: Align ANZ operations to the variety of through the cycle demand conditions Update expected during December 2012 quarter All figures are in NZD unless otherwise stated 8
GEOGRAPHIC AND PRODUCT DIVERSITY FY12 SALES BY SEGMENT AND BUSINESS Specialties 15% Masterbatch 4% 3 FY12 SALES BY REGION Americas 9% New Zealand 10% FY12 EBITDA BY REGION New Americas Zealand 12% 5% Other 4% 2 Coating Resins 1 66% Europe, Middle East and Africa 31% Asia 16% Australia 34% Europe, Middle East and Africa 37% Asia 21% Australia 25% 1. Includes 6 months of Viverso 2. Includes ANZ based Pulp and Paper and Construction Products 3. Includes 9 months of Aquos masterbatch operations 9 SAFETY Total Reportable Injury Rate (TRIR) 30% improvement, declined to 9 per million hours worked Americas had no Reportable Injuries Lost Time Injury Frequency Rate (LTIFR) Increased to 2.5 per million hours worked No Lost Time Injuries At 21 of 26 sites In Asia or US LOST TIME INJURY FREQUENCY RATE PER MILLION HOURS WORKED 14 12 10 8 6 4 2.5 2 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Progress in building Zero Harm culture Additional SHE headcount DuPont Safety Management Systems for Leadership Training Safety observation program introduced More comprehensive Personal Protective Equipment Policy introduced TOTAL REPORTABLE INJURY FREQUENCY RATE PER MILLION HOURS WORKED 30 25 20 15 10 5 9 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 10
2. FINANCIAL RESULTS FINANCIAL HIGHLIGHTS $M FY12 FY11 CHANGE % Sales 1,615.9 1,575.0 2.6 EBITDA 131.0 130.9 flat Depreciation & amortisation (27.8) (22.4) 24.1 EBIT 103.2 108.5 (4.9) Interest (14.0) (16.6) (15.7) Tax on operating profits (19.3) (23.2) (16.8) Unusual items after tax (3.6) (1.4) 157.1 Share of associates (1.8) 1.9 (194.7) Minority interests (2.0) (2.7) (25.9) NPAT attributable to equity holders of parent company 62.5 66.5 (6.0) All figures are in NZD unless otherwise stated 12
WORKING CAPITAL & CAPITAL EXPENDITURE Working capital to sales ratio 16.5% includes 12 months of Viverso working capital, 6 months of sales 15.8% excluding Viverso Inline with target range of 15 to 17% 20% 18% 16% WORKING CAPITAL AS A PERCENTAGE OF 12 MONTH ROLLING SALES Target range 15 to 17% 16.5% 15.8% Invested during FY12 Acquisition expenditure $130.5m Stay in business capex $19.2m 84% of depreciation Organic growth capex $12.3m Vietnam expansion $6.1m China new site $2.4m Depreciation $22.8m 14% 12% 10% 8% 6% 4% 2% 0% Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 including Viverso Jun 12 existing operations All figures are in NZD unless otherwise stated 13 FUNDING & GEARING $220m net debt as at 30 June 2012, up from $74m Increase due to acquisition of Viverso and Acquos masterbatch operations NET DEBT TO NET DEBT PLUS EQUITY RATIO 50% Lowered funding costs via renegotiation of bank facilities in August 2011 Total facilities reduced to A$200m from A$300m Average cost in FY12 approximately 7%, down from 12% in FY11 Successfully raised US$105m in the US Private Placement market for the first time 7 year term, mature 2019 Coupon rate 6.125% Settled 31 July 2012 40% 30% 20% 10% 28% Target range 20 to 35% NZ$52.6m Capital Notes to be redeemed September 2012 0% Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 All figures are in NZD unless otherwise stated 14
3. SEGMENT RESULTS RESINS COST AND MARGIN MANAGEMENT SPECIALTIES RESINS Unit margins 1 up 6% (constant currency) due to margin management Margin management, NuLEAP and cost control mitigated impact of lower volumes RESINS EBITDA TO SALES MARGIN (EX VIVERSO) 1.0% (1.2)% 0.7% (0.4)% NuLEAP Volume (0.1)% (0.1)% 0.2% 8.4% Raw material Compression SG&A cost recovery from constant Operating Non costs costs recurring dollar margin costs on higher sales 8.5% FY11 FY12 1. As measured by sales minus (raw material costs + inwards freight costs) divided by tonnage 2. Costs associated with Composites $3m restructuring charge in FY11 16
RESINS AUSTRALASIA SPECIALTIES RESINS Volumes down 12.0% A$ EBITDA down 23.3% Australian and New Zealand construction sectors at cyclical lows Approx. 50% of ANZ Resins end-use exposure Conditions deteriorated during the year Australian manufacturing and infrastructure activity subdued reflecting ongoing structural shift Approx. 50% of ANZ Resins end-use exposure COATING RESINS Pricing actions taken to recover raw material costs Market share maintained Reduced demand from residential and commercial construction and home renovation market COMPOSITES Ongoing weakness in marine & leisure, infrastructure and transport sectors impacted volumes Business restructured Realised A$3.6m in annualised cost savings A$M A$M 10% 5% ANZ SALES (A$) ANZ EBITDA (A$) ANZ EBITDA MARGIN 4.9% 0% FY08 FY09 FY10 FY11 FY12 17 RESINS ASIA SPECIALTIES RESINS Volumes up 4.2% due to Viverso Asian volumes Underlying volumes flat year on year US$M ASIAN SALES (US$) US$ EBITDA, down 0.4% Includes US$1m internal re-allocation R&D charge CHINA Volumes flat Suzhou: Reduced demand from automotive OEM Foshan: Increased sales due to focused sales initiatives US$M ASIAN EBITDA (US$) SOUTH EAST ASIA Vietnam: Capacity constrained until new plant commissioned May 2012. Additional capacity expected FY13 EBITDA contribution to be between US$0.5 to US$1m To be filled within 4 years Malaysia and Indonesia: Domestic demand held 20% 10% ASIAN EBITDA MARGIN 10.4% 0% FY08 FY09 FY10 FY11 FY12 18
RESINS EUROPE Volumes up 21.9% including Viverso Excluding Viverso down 5.1% EURO EBITDA up 24.3% including Viverso Excluding Viverso EURO EBITDA up 8.0% Steady demand from Northern European customers Weaker demand from Southern European customers Middle East and Asia M M SPECIALTIES EMEA SALES ( ) EMEA EBITDA ( ) RESINS In its first 6 months, Nuplex Germany (integrated Viverso operations) delivered Margins inline with expectations Volumes inline with expectations, except for construction related products which were weaker Costs below expectations due to lower integration expenses 12% 6% EMEA EBITDA MARGIN (EX VIVERSO) 9.5% 0% FY08 FY09 FY10 FY11 FY12 19 Existing operations Viverso RESINS AMERICAS SPECIALTIES RESINS Volumes down 2.3% US$M AMERICAS SALES (US$) US$ EBITDA up 18.2% Stronger second half volumes due to growth in automotive and manufacturing sectors Improved product mix and tight cost control US$M AMERICAS EBITDA (US$) 12% AMERICAS EBITDA MARGIN 10.9% 6% 0% FY08 FY09 FY10 FY11 FY12 20
SPECIALTIES SPECIALTIES RESINS AGENCY & DISTRIBUTION Sales New Zealand down 4.0% Australia down 12.1% Tough manufacturing and construction conditions in Australia reduced demand for Plastics Coatings Surfactants Steady demand from Food and Nutrition Healthcare Pharmaceuticals Formation of Nuplex Specialties complete 6 brands integrated into 1 brand Focused sector sales groups Making it easier for principals and customers to work with Nuplex MASTERBATCH Sales slower than expected due to weaker Australian trading conditions Acquired Acquos s masterbatch operations Final price paid was $20.9m FY12 EBITDA contribution approximately A$1m Nuplex Masterbatch restructuring to be completed Q1 FY13 Continued focus on cost base optimization and margin management In FY13, EBITDA from the combined business expected to be A$5m 21 4. STRATEGY UPDATE & OUTLOOK
SUSTAINABLE GROWTH STRATEGY OUR AMBITION To be the leading, trusted resins manufacturer globally and leading agency & distribution business in ANZ OUR STRATEGY To deliver sustainable growth and high quality products for our customers through pursuing operational excellence and building market leading positions Pursuing operational excellence to improve margins Safety People NuLEAP Building market leading positions to grow earnings Emerging markets R&D Strategic acquisitions Build a culture of Zero Harm Engage and leverage One Global Team Improve the way we work through rigorous improvement programs Profitably expand capacity and presence in emerging markets Grow market share through innovative products Pursue market development opportunities Leverage technologies across global platform Consider acquisitions that Strengthen leading market & technology positions Leverage capabilities Meet disciplined criteria 23 DELIVERING ON OUR STRATEGY Jan 11 New strategy implemented ON TRACK TO DELIVER Viverso NULEAP program target - $30m acquired At least 12m EBITDA from Viverso Dec 10 CHINA, and $A5m EBITDA from Nuplex Masterbatch Strategic Changshu: integration US$0.5m to US$1m EBITDA review Secured land for started completed new 3rd site June 2010 January 2011 June 2011 January 2012 June 2012 January 2013 June 2013 VIETNAM: Commenced capacity expansion project NuLEAP NuLEAP delivered delivered $14m $3m benefits benefits VIETNAM: Commissioned new plant on time & on budget Acquos masterbatch operations acquired, integration into Nuplex Masterbatch started CHINA, Changshu: Construction expected to commence NuLEAP Emerging market growth Financial targets Strategic acquisitions 24
NULEAP ON TRACK TO DELIVER $30m TOTAL BENEFITS TARGETS Delivered June 2011 $3m in Quick Wins Exceeded target - delivered $14m in incremental benefits June 2012 $10m in incremental benefits On track to reach program target June 2013 Program target $30m Lay the foundations for continuous improvement culture Ongoing - review of Australian and New Zealand operations 25 GROWING IN EMERGING MARKETS Customer value proposition underpins Nuplex s ability to successfully grow in emerging markets Cost Competitive Consistent Quality Security of Supply Innovative products and R&D support Ongoing delivery of our customer value proposition is why Multi nationals support Nuplex to expand into emerging markets alongside them Local producers choose Nuplex products RUSSIA Agreement to form a JV Local partner, Kvil Group ASIA Two years into expansion program to increase regional capacity by 50% by end FY14 Will make a 2.5m initial investment Working towards starting construction of greenfield site in 2014 Belgorod Changshu CHINA Construction expected to commence by end 2012 VIETNAM Vietnam capacity commissioned May 2012 Mumbai Ho Chi Minh City INDIA Full time sales representative employed in early 2012 26
MARKET DEVELOPMENT and INNOVATIVE R&D We are building a global and product focused approach to R&D R&D is a core component of our customer value proposition via Innovative new products and customised solutions Post sales technical support July 2011, as part of management restructure created overlay teams to drive global R&D in 4 key product areas 1 June 2012, each overlay team Has identified and prioritised global R&D and market development projects Is working towards commercialisation Approximately 25% of R&D budget now spent on globally focused projects Innovative R&D commercialised in FY12 include SETAQUA ECO 5000 A waterborne binder used in enamel trim paint with similar performance qualities as the traditionally higher performing solventborne alternatives SETALUX 17 2319 A Vehicle Refinish top coat that does not need a primer layer 1. Performance, waterborne and powder coatings and composite resins 27 PRIORITIES and OUTLOOK PRIORITIES Improve safety performance Execute NuLEAP Lay foundations for NuLEAP II Announce ANZ Operational Review Complete integration of Nuplex Germany into existing European network Leverage its technology portfolio into Asia, ANZ and Asia Progress emerging market projects Commence construction at Changshu Form Russian JV Continue investing in market development and R&D Leverage benefits from global R&D overlay teams Build R&D Applications Centre in China OUTLOOK Markets remain challenging Assuming continuation of current market conditions, FY13 EBITDA to benefit from Full 12 months of Viverso (expected contribution at least 12m) and Nuplex Masterbatch (expected contribution A$5m) Volume growth in Vietnam capacity (US$0.5 to $1m) Additional NuLEAP benefits All figures are in NZD unless otherwise stated 28
FOR FURTHER DETAILS: EMERY SEVERIN Chief Executive Officer +61 2 9666 0300 emery.severin@nuplex.com JOSIE ASHTON Investor Relations +61 2 9666 0342 or +61 416 205 234 josie.ashton@nuplex.com SEGMENTS NZ$ million FY12 ACTUAL FX FY12 CONSTANT FX FY11 ACTUAL FX ACTUAL FX % CHANGE CONSTANT FX RESINS Sales Existing operations 1,193.5 1,249.2 1,272.8 (6.2) 1.9 Viverso 117.3 126.8 - - - TOTAL 1,310.8 1,376.0 1,272.8 3.0 8.1 EBITDA Existing operations 100.9 106.4 107.5 (6.1) (1.0) Viverso 9.4* 10.2 - - - TOTAL 110.3 116.6 107.5 (2.6) 8.5 SPECIALTIES Sales 305.1 308.4 302.2 1.0 2.1 EBITDA 20.7 20.9 23.4 (11.5) (10.7) *Excludes additional NZ$1 million EBITDA contribution embedded in other regions 30
RESINS SALES & EBITDA IN NZD NZ$ million SALES FY12 FY11 % CHANGE ACTUAL FX CONSTANT FX ACTUAL FX ACTUAL FX CONSTANT FX Australasia 402.7 407.6 462.3 (12.9) (11.8) Asia 255.8 267.1 256.3 (0.2) 4.2 Europe existing 387.2 417.4 411.2 (5.8) 1.5 Viverso 117.3 126.8 - - - Americas 147.8 157.1 143.0 3.3 9.9 TOTAL RESINS SALES EBITDA 1,310.8 1,376.0 1,272.8 3.0 8.1 Australasia 19.7 19.9 26.0 (24.5) (23.4) Asia 26.6 27.8 28.4 (6.3) (2.1) Europe existing 38.6 41.7 38.7 (0.1) 7.8 Viverso 9.4* 10.2 - - - Americas 16.0 16.9 14.4 11.1 17.4 TOTAL RESINS EBITDA 110.3 116.5 107.5 2.7 8.5 *Excludes additional NZ$1 million EBITDA contribution embedded in other regions 31 RESINS SALES AND EBITDA BY LOCAL CURRENCY FY12 (LOCAL CURRENCY) FY11 (LOCAL CURRENCY) % CHANGE SALES Australasia (A$ M) 313.8 354.8 (11.6) Asia ($US M) 205.5 193.8 6.0 Europe ( M) existing 232.5 228.5 1.8 Viverso 70.4 - - US ($US M) 118.7 108.2 9.8 EBITDA Australasia (A$ M) 15.3 20.0 (23.3) Asia ($US M) 21.4 21.5 (0.4) Europe ( M) existing 23.2 21.5 8.0 Viverso 6.3* - - US ($US M) 12.9 10.9 18.2 *Excludes additional 0.6 million EBITDA contribution embedded in other regions 32
FOREIGN EXCHANGE NEW ZEALAND DOLLAR VS AUD, EURO AND USD $1.00 $0.80 $0.60 $0.40 $0.20 NZD/AUD NZD/EUR NZD/USD $0.00 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 AVERAGE EXCHANGE RATE FY12 FY11 % CHANGE NZD: AUD 0.7791 0.7676 1.5% NZD: EUR 0.6006 0.5557 8.1% NZD: USD 0.8034 0.7562 6.2% 33 10 year summary SALES ($M) EBITDA ($M) 1,800 1,600 1,400 1,200 1,000 800 600 400 200-150 120 90 60 30 0 NET PROFIT TO SHAREHOLDERS ($M) 70 60 50 40 30 20 10 0 All figures are in NZD unless otherwise stated
DISCLAIMER This presentation has been prepared by Nuplex Industries Limited. The material that follows contains general background information about Nuplex s activities as at the date of the presentation 17 August, 2012. The information in this presentation is not an offer or recommendation to purchase or subscribe for securities in Nuplex or to retain any securities currently held. It does not take into account the potential and current individual investment objectives or the financial situation of investors. Actual results may vary materially either positively or negatively from any forecasts in this presentation. Before making or disposing of any investment in Nuplex securities, investors should consider the appropriateness of that investment in light of their individual investment objectives and financial situation, and seek their own professional advice. All currencies are in NZD unless stated otherwise. 35