Codan Limited · ASX:CDA
Codan — H1 FY2015 Earnings Presentation
23 slides from Codan's earnings presentation, Mar 3, 2015
Slide 1: Investor & Analyst Presentation, Half Year to 31 December 2014
Codan Limited Investor & Analyst Presentation For the half year to 31 December 2014 Donald McGurk Managing Director & CEO Michael Barton Chief Financial Officer Sarah Emms Manager, Investor Relations 3 March 2015
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer This presentation has been prepared by Codan Limited (ABN 77 007 590 605) (Codan). The information contained in this presentation is for information purposes only and is not investment, financial product, legal or tax advice. This presentation contains summ
Slide 3: Delivering on Our Purpose
DELIVERING ON OUR PURPOSE Best-in-class electronics systems that outperform the competition in the toughest and most remote places on earth Codan designs and manufactures a range of high value-added electronics products for global markets Our core products are radio communications systems, metal det
Slide 4: Improved Performance
IMPROVED PERFORMANCE Half year results Reported profit of $5.6 million, up 17% over prior corresponding period Radio Communications had its best half in 3 years and is well placed for continued growth Completed development of GPZ 7000 gold detector – released Feb 2015 Progressed development of GO-FI
Slide 5: Strategic Framework
STRATEGIC FRAMEWORK Higher returns to be earned from internal investment During FY15: Capitalise on Taking SMARTSTM and SafeDetectTM to the world emerging opportunities Leveraging Minetec’s recent success in key reference mines Opened Minelab retail & distribution facility in Dubai Released new supe
Slide 6: Strengthened Risk Management
STRENGTHENED RISK MANAGEMENT Portfolio approach to technologies and markets Multiple customers and distribution channels Continual product innovation to maintain technological competitiveness Advancements in encryption Aggressive defence of IP 6
Slide 7: A Portfolio of Technically Advanced Global Businesses in Growing Market Segments
A PORTFOLIO OF TECHNICALLY ADVANCED GLOBAL BUSINESSES IN GROWING MARKET SEGMENTS Premium High Frequency (HF) and Land Mobile Radio (LMR) communications systems Patented world’s-best metal detecting technology Communications systems for mine productivity and safety 7
Slide 8: Radio Communications: Strong revenue growth in the half
RADIO COMMUNICATIONS Strong revenue growth in the half Codan Radio revenue1 55% increase in revenue over previous corresponding period Global instability driving increased United Nations, aid and humanitarian activity EnvoyTM product continues to gain traction in the market Positive customer feedbac
Slide 9: Radio Communications: New product releases drive growth
RADIO COMMUNICATIONS New product releases drive growth HF - Software defined radio, 2nd generation released June-14 voice, data, email, fax, chat, GPS the latest generation of long range digital radio from Codan LMR – Transportable repeater, upgrade released Aug-14 mobile, P25, cross band capability
Slide 10: Radio Communications: HF + LMR integrated solution
RADIO COMMUNICATIONS HF + LMR integrated solution Integrated EnvoyTM HF radio + LMR repeater Lightest 125w, high power HF base station over LMR repeater Enables long distance communications between two or more LMR P25 repeater sites via HF link Flexible communications solution without the need for i
Slide 11: Metal Detection: Diversified across multiple products and revenue streams
METAL DETECTION Diversified across multiple products and 3 distinct revenue streams Consumer – detecting gold nuggets, coins, treasure, artefacts in the developed world Gold Mining – detecting gold as a commercial enterprise in the emerging world Countermine – detecting land mines and unexploded ord
Slide 12: Metal Detection: New flagship GPZ 7000 Super Gold Detector
METAL DETECTION New flagship product - GPZ 7000 Super Gold Detector Ground-breaking Zero Voltage Transmission (ZVT) technology State-of-the-art features Up to 40% depth improvement Deepest ground penetration available The most significant advancement of gold detecting technology in years https://www
Slide 13: Metal Detection: Up to 40% greater depth than GPX 5000
METAL DETECTION Up to 40% greater depth than a GPX 50001 1 when compared to average GPX 5000 performance in the same environment 13
Slide 14: Metal Detection: Retail & distribution facility opened in Dubai
METAL DETECTION Retail & distribution facility opened in Dubai Allowing us to: get closer to our customers in Africa and the Middle East better support our dealer network transition communities and small-scale miners to gold detecting technology better educate customers to verify genuine product fur
Slide 15: Mining Technology: Value propositions
MINING TECHNOLOGY Value propositions Safety Security Productivity Personnel Protection Access Control In‐Shift: Plan to Actual Collision Awareness Blast Radius Data Acquisition Environmental Panic Button Real Time Situational Awareness for all Assets Universal interface: miners & machines WASP Techn
Slide 16: Mining Technology: Market position, crossing the chasm
MINING TECHNOLOGY Market position: crossing the CHASM Dominant standard & economies of scale Received product certification Minetec Scale acquisition Technology Development Product Approvals Replicate Proof-of-Concept Full Scale Certification Operational Pilot Deployment 16
Slide 17: FY15 1H Profit and Loss
FY15 1H PROFIT AND LOSS Total revenue of $68.2 million, compared to $61.1 million in the previous corresponding period (12% increase) Underlying net profit of $6.0 million, compared to $4.5 million in the previous corresponding period Interim dividend 1.5 cents – 47% payout ratio Revenue EBITDA* NPA
Slide 18: FY15 1H Profit and Loss: Underlying business performance
FY15 1H PROFIT AND LOSS Underlying business performance Half Year Dec 14 Half Year Dec 13 Administrative expenses Engineering expenses1 $m % to sales $m % to sales ($ millions) ($ millions) Revenue $68.2 100% $61.1 100% Underlying business performance EBITDA $13.7 20% $11.3 18% EBIT $9.2 13% $6.5 11
Slide 19: Engineering Investment
ENGINEERING INVESTMENT Continuing commitment to product development Engineering spend ($m) Engineering spend (% sales) Maintaining our investment in engineering to ensure a growing pipeline of new products and continuous improvement to current offering 19
Slide 20: Capital Position
CAPITAL POSITION Dec-14 Jun-14 Net debt has increased from $47 million to $54 million $m $m since June 2014 Receivables $26.5 $22.1 Inventories $33.0 $31.3 Increase in working capital relates to: Payables ($22.0) ($23.4) inventory for upcoming product releases Total working capital $37.5 $30.0 tradi
Slide 21: Key Ratios
KEY RATIOS Underlying earnings per share (cents) Free cash flow ($m)2 Return on equity (%)1 Gearing (%)3 1Return on equity calculated as annualised net profit after tax divided by average equity 2 Free cash flow = operating cash flow + interest – cash outflow for product development, IP acquisition
Slide 22: Outlook
OUTLOOK Confident of future growth Launching new products and extending global reach Continuing to invest in new product development Focused on achieving a stronger second half Difficult to provide profit guidance 22
Slide 23: Building Shareholder Value
BUILDING SHAREHOLDER VALUE Exposure to global markets Activity across all divisions in ~150 countries Operating globally for over 40 years Sustainable competitive advantage Patented world’s-best metal detection technology Exclusive IP partnering/licensing agreements in place for Codan Radio and Mine