[PPT] - FY20 Ha lf Ye a r Re sults Pre se nta tio n Fe b rua ry 2020 De PowerPoint Presentation

SLIDE 1

FY20 Ha lf Ye a r Re sults Pre se nta tio n

Fe b rua ry 2020 De live ring inno va tive industrial so lutio ns a nd se rvic e s

ASX: CYG

SLIDE 2

Co rpo ra te Sna psho t

SHARE PRIC E

20 Fe b rua ry 2020

$1.085

30.8% 9.5%

Substa ntia l Sha re holde rs

SHARES ON ISSUE

89.8M

MARKET C APIT AL ISAT IO N

$97.4M

NET DEBT

31 De c e mb e r 2019

$-5.9M

Ke y Ma rke t Me tric s

ASX: CYG

5.8% 5.1%

SLIDE 3

He a lth, Sa fe ty a nd We llb e ing

ASX: CYG

T he he a lth, sa fe ty a nd we llbe ing o f o ur pe o ple is o ur numbe r o ne prio rity

5 L
st T

ime Injurie s (L T I’ s) in FY20

All p e o p le re turne d to wo rk in a sho rt time fra me

C o mmitme nt to impro ving o ur he a lth, sa fe ty a nd we llbe ing syste ms

Inve stme nt in he a lth a nd sa fe ty re so urc e s
Imp ro ving inc id e nt a nd ne a r miss re p o rting a nd inve stig a tio ns
L

e a d e rship T e a m re vie w o f a ll L T I’ s a nd ma jo r ne a r misse s

G ro up -wid e sa fe ty a le rts
Co mmitme nt to we llb e ing p ro g ra ms a nd a wa re ne ss thro ug h initia tive s

suc h a s ‘ RUO K? ’ d a y, Sa fe Wo rk Mo nth a nd o ur EAP p ro g ra m

Co mmitme nt to le a d e rship tra ining a nd d e ve lo p me nt

We value the health, safety and wellbeing of our people first and foremost. Our aim is for zero lost time injuries.

SLIDE 4

Busine ss Ove rvie w

ASX: CYG

We sup p ly a ra ng e o f fa ste ning syste ms, industria l p ro duc ts a nd hydra ulic s, lub ric a tio n, fire sup p re ssio n a nd re fue ling syste ms, c a b ine t ha rdwa re syste ms a nd o the r p ro duc ts.

FS

Fluid Syste ms (FS)

Co mp rise s Co o p e r Fluid Syste ms (CFS) a nd T

rq ue Ind ustrie s. De sig ns,

ma nufa c ture s, se lls a nd ma inta ins hyd ra ulic s, lub ric a tio n, fire sup p re ssio n a nd re fue lling syste ms a nd p ro d uc ts thro ug h 12 b ra nc he s in Austra lia . Custo me rs a re in the mining , ma nufa c turing , d e fe nc e a nd a g ric ulture se c to rs.

TD

T ra de Distributio n (T D)

Co mp rise s Ko nne c t a nd Artia Austra lia (KAA), Ko nne c t a nd Artia Ne w Ze a la nd (KANZ), a nd Nub c o . Sup p lie s a ra ng e o f fa ste ning syste ms, c a b ine t ha rd wa re syste ms, ind ustria l a nd c o nstruc tio n p ro d uc ts thro ug h a ne two rk o f 49 b ra nc he s in Austra lia a nd 15 b ra nc he s in Ne w Ze a la nd . Custo me rs a re in the ma nufa c turing , c o nstruc tio n, a g ric ulture a nd mining se c to rs.

SLIDE 5

Visio n / Stra te g ic Dire c tio n

ASX: CYG

A c le a r o p p o rtunity e xists to b uild a hig hly fo c use d sc a le d Ind ustria l Sup p ly a nd Se rvic e s b usine ss with le a d ing ma rke t p o sitio ns a c ro ss multip le g e o g ra p hie s, se c to rs a nd p ro d uc ts. All o ur ma rke ts a re fra g me nte d a nd ripe fo r c o nso lida tio n a nd a c q uisitio ns. T he Bo a rd a nd Exe c utive L e a d e rship T e a m ha ve sig nific a nt e xp e rie nc e in B2B tra d e / ind ustria l sup p ly a nd se rvic e d istrib utio n ma rke ts a nd kno w wha t the b lue p rint fo r suc c e ss lo o ks like . T he Exe c utive L e a d e rship T e a m a lso ha s sub sta ntia l e xp e rie nc e id e ntifying , c o mp le ting a nd inte g ra ting a c q uisitio ns. T he G ro up ha s sta b ilize d p e rfo rma nc e a nd ha s a c le a r p a thwa y b a c k to susta ina b le p ro fita b le g ro wth. T he Bo a rd a nd Exe c utive L e a d e rship T e a m ha ve d e ve lo p e d the visio n a nd stra te g y fo r the b usine ss o ve r the ne xt five ye a rs. G ro wth c a n b e a c hie ve d thro ug h a c o mb ina tio n o f: O rg a nic g ro wth (ma rke t sha re g a ins, ne w b ra nc he s, ne w p ro d uc ts a nd ne w g e o g ra p hie s); Se nsib le stra te g ic a c q uisitio ns.

EXC IT ING O PPO RT UNIT Y T O BUIL D A L EADING SC AL ED INDUST RIAL SUPPL Y G RO UP

Our visio n is to c re a te a le a ding Industria l Sup p ly a nd Se rvic e s Gro up a c hie ving susta ina b le p ro fita b le g ro wth thro ug h se nsib le o rg a nic de ve lo p me nt a nd a c q uisitio ns.

SLIDE 6

Ke y Pe o p le

RO BERTBUL L USS

CE O & Ma na g ing Dire c to r

Ap p o inte d C EO in Ma y 2017 a fte r ho ld ing the ro le o f C FO a nd C o mp a ny Se c re ta ry sinc e O c to b e r 2016. 15 ye a rs a s C FO within the Austra lia n d ivisio n o f Bunzl p lc .

NEILC AT HIE

I nde pe nde nt No n- E xe c utive Cha irma n

27 ye a r c a re e r a t Austra lia ’ s la rg e st a nd mo st suc c e ssful p lumb ing a nd b a thro o m d istrib uto r, Re e c e L imite d , in fina nc e a nd g o ve rna nc e ro le s. No n-e xe c utive d ire c to r o f ASX liste d Exp e rie nc e C o L imite d . Dire c to r a t a nd a d viso r to a numb e r o f p riva te c o mp a nie s inc lud ing Bo we ns T imb e r & Ha rd wa re a nd Mid d e nd o rp Ele c tric .

ANDREW NISBET

I nde pe nde nt No n- E xe c utive Dire c to r

Ap p o inte d in Se p te mb e r 2017. Exte nsive c a re e r in se nio r ma na g e me nt ro le s a t Re e c e L imite d .

JAMES T O DD

I nde pe nde nt No n- E xe c utive Dire c to r

Ap p o inte d in Se p te mb e r 2018. Fo rme r Ma na g ing Dire c to r

f Wo lse le y Priva te Eq uity,

a n ind e p e nd e nt p riva te e q uity firm whic h he c o - fo und e d in 1999. No n-e xe c utive d ire c to r o f ASX liste d c o mp a nie s IVE G ro up Ltd a nd HRL Ho ld ing s L td .

RO D JAC KSO N

CF O

ASX: CYG

Ap p o inte d C FO in Se p te mb e r 2017. Sp e nt fo ur ye a rs a s the Fina nc e Dire c to r a t Bunzl O utso urc ing Se rvic e s L td p rio r to jo ining the C o ve ntry G ro up . Be fo re this he wa s the C FO a t L info x.

SLIDE 7

Our Sto ry

ASX: CYG

1929

Mr Ro na ld Ja me s K yle a c q uire s a c a r d e a le rship fro m a liq uid a to r a nd Co ve ntry Mo to r Re p la c e me nts is b o rn. T he b usine ss p ro sp e rs. Ap p o inte d b o th Fo rd a nd Ho ld e n p ro d uc ts distrib uto r. Ac q uire s Ra p ha e ls Pty L td in 1958. G ro ws to six b ra nc he s in WA with 450 p e o p le . L iste d o n the ASX. Ac q uire s a numb e ro f b usine sse s: 1972 – Ind ustria l Sa le s Ho lding s. 1975 – We st Co a st Auto ma tic s. 1977 – Mo to r T ra d e rs in SA (first inte rsta te e xp a nsio n). Nume ro us a c q uisitio ns inc luding d ive rsific a tio n into a numb e r o f Fa ste ne rs b usine sse s a nd Co o p e r Fluid Syste ms. Esta b lishme nt o f Co ve ntry Auto Pa rts (CAP) in 1998. By 1999 the G ro up ha s 1,900 p e o p le . G ro up re ve nue re a c he s $500m. L

sse s o c c urin

CAP b usine ss. Sa le o f a uto mo tive d ivisio ns. Pe rio d o f d e c lining sa le s in re ma ining b usine sse s. Ne w se nio r ma na g e me nt te a m. Bo a rd re struc ture . Sa le o f AA G a ske ts. K

nne c t a nd Artia

Austra lia stra te g y re se t. Ac q uisitio n o f T

rq ue a nd

c a p ita l ra ising . Ac q uisitio n o f Nub c o a nd c a p ita l ra ise . Hig hly fo c use d b o a rd a nd ma na g e me nt te a m. Busine ss is fo c use d o n two ve rtic a ls with ke y c o mp e titive a d va nta g e s. Imp le me nt turna ro und in K

nne c t a nd Artia

Austra lia a nd d rive susta ina b le p ro fita b le g ro wth.

1966 2017

2018 - 2019

1929 1965 _ 1967 1983 _ 1984 2000 _ 2000 2006 _ 2007 2016 _ 2020

BEYOND &

SLIDE 8

FY20 T ra d ing Up d a te

ASX: CYG Stro ng H1 FY20 sa le s g ro wth +36.8% inc luding a c q uisitio ns

E

xc luding a c q uisitio ns H1 F Y20 sa le s g ro wth +7.7% whic h re pre se nts so lid o rg a nic g ro wth – mo me ntum is b uilding a s o ur va lue pro po sitio n impro ve s.

All b usine ss units ha ve inc re me nta l sa le s pro je c ts fo r de live ry in H2 F

Y20 a nd a stro ng pipe line

f pro spe c ts.
K
nne c t Austra lia sa le s g ro wth H1 F

Y20 +5.8%, whic h is a sig nific a nt impro ve me nt o ve r F Y19 re sults.

G ro up pro fita b ility im pro ving

F

Y20 E BI T DA fo re c a st $10m+ a ssuming c o ntinua tio n o f c urre nt tre nds, the suc c e ssful e xe c utio n

f ke y initia tive s a nd no a dve rse b ro a de r ma rke t de ve lo pme nts.

Ba la nc e she e t in a stro ng po sitio n

Ne t a sse ts o f $103.6m.
Ne t de b t o f -$5.9m.
T

e nde r pro c e ss unde rwa y to se c ure a fle xib le , lo w c o st c o rpo ra te de b t fa c ility.

Ac q uisitio ns

T

he T

rq ue a nd Nub c o a c q uisitio ns a re de live ring po sitive re sults fo r the ir re spe c tive se g me nts.

C o ro na virus im pa c t

I

t is to o e a rly to pre dic t the impa c t o f the Co ro na virus o n o ur supply c ha in. T he Gro up c o ntinue s to mo nito r the impa c t o n o ur supplie rs in China a nd o the r Asia n re g io ns a nd o ur ma rine fre ig ht c a rrie rs. We e xpe c t so me impa c t in the ne a r te rm. 39.8% 7.5% 39.2% 7.1%

Co ve ntry Gro up ’ s tra ding p e rfo rma nc e c o ntinue s to imp ro ve in FY20.

39.3% 34.3%

Q1 Q2

H1 sale s gr

wth inc . ac quisitio ns

7.5% 8.3%

Q1 Q2

H1 sale s gr

wth e xc . ac quisitio ns

SLIDE 9

F Y20 Ha lf Ye a r F ina nc ia l Re sults

ASX: CYG

($m) H1 F Y20 H1 F Y19

Revenue from sale of goods 122.6 89.6 Underlying EBITDA 4.0

0.8

Underlying EBIT 2.6

1.5

Statutory profit/(loss) after tax 2.0

2.4

Net debt

5.9

Net Tangible Assets 54.4

Sa le s +36.8% (inc luding a c q uisitio ns)

c o mpa re d to prio r c o rre spo nding pe rio d (PCP)

Sa le s +7.7% e xc luding a c q uisitio ns

c o mpa re d to PCP

Sa le s o f $122.6m (F

Y19: $89.6m)

So lid g ro wth in F

luid Syste ms (F S) a nd T ra de Distrib utio n

K

AA sa le s +4.8% c o mpa re d to PCP

Unde rlying E

BI T DA o f +$4.0m (inc luding a c q uisitio ns)

Unde rlying E

BI T

f +$2.6m (inc luding

a c q uisitio ns)

Sta tuto ry pro fit a fte r ta x +$2.0m
Ne t pro fit inc re a se o f +$4.4m o n PCP
No inte rim divide nd de c la re d

Note : Unde rlying E BIT a nd E BIT DA e xc lude the impa c t of AASB 16 - L e a se s

SLIDE 10

Ba la nc e She e t a nd Ca sh F lo w

ASX: CYG

Ne t de b t po sitio n a t 31 De c e mb e r 2019 o f -$5.9m
T

he inc re a se in de b t is due to ra ising inve nto ry le ve ls to ma na g e g ro wth in the F luid Syste ms b usine ss, pro vide c o ve ra g e o ve r Chine se Ne w Ye a r, impro ve se rvic e le ve ls a nd la unc h ne w pro duc ts in K AA

Sc o tPa c fa c ility in pla c e fo r $25.0m
T

e nde r pro c e ss unde rwa y to se c ure a fle xib le , lo w c o st c o rpo ra te de b t fa c ility

T

he Gro up ha s a stro ng wo rking c a pita l po sitio n with Curre nt Asse ts e xc e e ding Curre nt L ia b ilitie s b y $51.2m (e xc luding impa c t o f AASB 16 – L e a se s) a s a t 31 De c e mb e r 2019

T

a x lo sse s o f $71.9m a va ila b le fo r use in Austra lia

F

ra nking c re dits a va ila b le $10.8m

($m) Jun-18 Jun-19 Dec-19 Cash & cash equivalents 5.0 5.3 3.0 Trade and other receivables 30.5 39.5 35.4 Inventories 46.4 59.9 66.1 Total current assets 81.9 104.7 104.5 Property, Plant & Equipment 4.6 5.9 6.7 Right of use assets

53.4

Intangible assets 6.1 46.5 46.9 Deferred tax assets 6.1 1.2 2.3 Other non-current assets

1.9

Non-current assets 16.8 53.6 111.2 Total assets 98.7 158.3 215.7 Trade and other payables 30.5 38.2 38.2 Current lease liability

11.0

Debtor finance facility

9.4

8.9 Other non-current liabilities 4.2 6.3 6.2 Non-current liabilities 34.7 53.9 64.3 Non-current lease liabilities

44.5

Other non current liabilities 3.4 3.4 3.3 Non current liabilities 3.4 3.4 47.8 Total Liabilities 38.1 57.3 112.1 Net Assets 60.6 101.0 103.6 Issued capital 107.8 149.6 149.6 Retained earnings & reserves

47.2
48.6
46.0

Total equity 60.6 101.0 103.6 NTA per share (cents) 1.30 0.59 0.61

SLIDE 11

Co rpo ra te c o sts

ASX: CYG

($m) H1 F Y20 H1 F Y19

Net corporate costs 5.0 4.4 Net corporate costs as a % of revenue 4.1% 5.0% C o rpo ra te c o sts a re hig he r tha n PC P

Hig he r insura nc e c o sts (pa rtic ula rly D&O lia b ility insura nc e )
I

T c o sts re q uire d to re c tify le g a c y issue s a nd re lo c a te syste ms to the c lo ud

Co sts in re la tio n to o ur Dig ita l Custo me r E

ng a g e me nt pro je c t

Amo rtiza tio n o f the a c q uisitio n c usto me r lists

C o rpo ra te c o sts re duc ing a s a % o f sa le s

Co rpo ra te c o sts to Gro up sa le s o f 4.1% c o mpa re d to 5.0% PCP

Re dc liffe , WA fa c ility

We a re a c tive ly se e king re pla c e me nt te na nts

SLIDE 12

F luid Syste ms – F ina nc ia l Ove rvie w

ASX: CYG

($m) H1 F Y20 H1 F Y19

Revenue from sale of goods 46.0 37.0 EBITDA 5.1 3.9 Fluid Syste ms sa le s g ro wth +24.1%

E

BI T DA impro ve me nt o f 32.7% H1 F Y20

Sa le s g ro wth is c o ntinuing to b e drive n b y o ur stro ng va lue pro po sitio n a nd inc re a se in se rvic e ,

ma inte na nc e , upg ra de a nd ne w e q uipme nt a c tivity in the mining a nd re so urc e s se c to r

T

he inte g ra tio n o f T

rq ue is pro g re ssing to pla n

SLIDE 13

F luid Syste ms – Gro wth Stra te g y Upda te

ASX: CYG

Fluid Syste ms ha s substa ntia l ro o m to g ro w bo th o rg a nic a lly a nd thro ug h a c quisitio ns

We a re the ma rke t le a d e r with le ss tha n 10% ma rke t sha re in a fra g me nte d ma rke t
O ur vie w is the mining a nd re so urc e s se c to r will re ma in stro ng fo r the ne xt fe w ye a rs (sub je c t to wo rld

e c o no mic fa c to rs)

We c a n c o ntinue to g ro w thro ug h:
G e o g ra p hic b ra nc h e xp a nsio n in a re a s suc h a s Vic to ria , NSW, T

a sma nia a nd Ne w Ze a la nd

Exp a nd ing in the hyd ra ulic c ylind e r ma rke t sha re – inve stme nt a lre a d y ma d e into re q uire d e q uip me nt
Exp a nd ing hyd ra ulic s, fluid d isp e nsing a nd re fue lling syste ms c a p a b ilitie s a c ro ss o ur c usto me r b a se
Inc re a sing e xp o sure to o the r se c to rs o utsid e o f mining a nd re so urc e s suc h a s a g ric ulture , o il & g a s,

d e fe nc e a nd ma nufa c turing

A ke y c ha lle ng e is re c ruiting q ua lifie d tra d e sp e o p le a nd we a re inc re a sing o ur in ho use tra ining e ffo rts to

c o unte r this

We ha ve a p o sitive o utlo o k fo r o ur Fluid Syste ms d ivisio n

SLIDE 14

F luid Syste ms – Bra nc h Ne two rk

ASX: CYG

Re lo c a ting a nd inte g ra ting

T

rq ue a nd Co o pe r F

luid Syste ms Ade la ide

pe ra tio ns into a b e tte r

q ua lity c usto mize d fa c ility in the se c o nd ha lf o f 2020

Re lo c a te d Hunte r Va lle y

b ra nc h to a la rg e r c usto m b uilt fa c ility

T

a ke n a dditio na l spa c e in Ma c ka y to c a te r fo r g ro wth

T

r

que 1 br a nc h Coope r s F luid Syste ms 12 br a nc he s T

r

que 1 br a nc h Coope r s F luid Syste ms 12 br a nc he s

SLIDE 15

T ra de Distrib utio n – F ina nc ia l Ove rvie w

ASX: CYG

T ra de Distributio n sa le s g ro wth +46.3%

E

BI T DA impro ve me nt o f $4.1m H1 F Y20 Austra lia sa le s g ro wth +65.2%

E

BI T DA impro ve me nt o f $3.8m c o mpa re d to PCP

I

n K AA o ur impro ve d se rvic e a nd b usine ss de ve lo pme nt c a pa b ility in is sta rting to de live r re sults.

T

he Nub c o b ra nc h ne two rk is e xpe rie nc ing mo de st ma rg in pre ssure fro m inc re a se d c o mpe titio n. Ne w Ze a la nd sa le s g ro wth +6.7%

Sa le s g ro wth slo we d a s e c o no mic a c tivity so fte ne d pa rtic ula rly in the Christc hurc h re g io n. De spite this, the

b usine ss c o ntinue s to g a in ma rke t sha re

E

BI T DA impro ve me nt o f 19.6% H1 F Y20

($m) H1 F Y20 H1 F Y19

Revenue from sale of goods 76.6 52.3 EBITDA 3.9

0.3

SLIDE 16

T ra de Distrib utio n – Gro wth Stra te g y Upda te

ASX: CYG

T ra de Distributio n Austra lia (KAA a nd Nubc o )

KAA re ma ins o ur b ig g e st o p p o rtunity fo r sa le s a nd c o ntrib utio n g ro wth. K
nne c t is o ne o f o nly thre e fa ste ne r supplie rs

with true na tio na l supply c a pa b ility. Fa ste ning syste ms sp e c ia lisa tio n is b e ing ma inta ine d with tria ls o f se le c te d p ro d uc t ra ng e s b a se d o n the Nub c o e xp e rie nc e .

Nub c o is the ma rke t le a de r in T

a sma nia . T he te a m is e ng a g e d a nd we ha ve ma de minima l c ha ng e s pe r o ur inte g ra tio n stra te g y. T he T a sma nia n e c o no my is in g o o d sha pe with infra struc ture a nd c o nstruc tio n spe nd c o nfirme d in the sta te . Drive pro fita ble sa le s g ro wth

Our impro ve d se rvic e a nd b usine ss de ve lo pme nt c a pa b ility in K

AA is de live ring re sults with H1 F Y20 sa le s g ro wth o f +4.8%

n PCP
We no w ha ve the ma na g e me nt a nd b usine ss de ve lo pme nt c a pa b ilitie s in pla c e to g ro w a nd inc re a se pro fita b ility

thro ug h:

T

a king ma rke t sha re

Ope ning ne w sto re s
E

xpa nding the pro duc t ra ng e – Pinke nb a QL D sto re ma ke o ve r is c lo se to c o mple tio n

E

xc lusive supply a rra ng e me nts

I

mpro ve d c a pa b ility is o pe ning o ppo rtunitie s in la rg e c o nstruc tio n, infra struc ture a nd mining a nd re so urc e s pro spe c ts.

I

mpro ving so lutio n se lling skills.

Ne w K

a lg o o rlie b ra nc h a nd Ma c ka y b ra nc h a re b o th pe rfo rming we ll. Pla nning two ne w sto re s in Q2 F Y20.

Re duc ing fre ig ht c o sts.
T

he Gro up ha s a sma ll ma rke t sha re (<10%) in the industria l tra de supply ma rke t with lo ts o f o ppo rtunitie s fo r g ro wth. O ptim ise supply c ha in a nd DC fo o tprint

Co ntinue d o ptimisa tio n o f DC fo o tprint – a ntic ipa te a furthe r $1.0m a nnua lise d sa ving s o ve r the ne xt two ye a rs.
Re vie w o f supply c ha in in pro g re ss to furthe r impro ve se rvic e le ve ls a nd re duc e c o st

SLIDE 17

T ra de Distrib utio n – Gro wth Stra te g y Upda te

ASX: CYG

T ra de Distributio n Ne w Ze a la nd (KANZ)

We a re the ma rke t le a de r in NZ.
We e xpe c t c o ntinuing so lid pe rfo rma nc e .
T

he NZ e c o no my is g o ing we ll in pa rtic ula r in the Auc kla nd c o nstruc tio n ma rke t.

We will g e t the b e ne fit o f the full ye a r impa c t o f ne w sto re s o pe ne d in F

Y19 – Ro to rua , Silve rda le a nd Auc kla nd CBD e xpa nsio n.

T

he re is po te ntia l fo r a dditio na l sto re o pe ning s in a numb e r o f lo c a tio ns.

Po te ntia l a c q uisitio ns e xist.

SLIDE 18

T ra de Distrib utio n – Bra nc h & DC Ne two rk

ASX: CYG

Ne w b ra nc he s o pe ne d in

Austra lia (Ma c ka y) Pla ns fo r two ne w b ra nc he s in H1 F Y20

Re -c o nfig uring Pinke nb a

b ra nc h a pplying Nub c o sto re me rc ha ndising , ma rke ting a nd pro mo tio n c o nc e pts

Po p-up sto re c o nc e pt

suc c e ssful in Mt Ga mb ie r.

Me rg e o f So uth Me lb o urne

a nd Da nde no ng b ra nc he s into a ne w fa c ility in K e ysb o ro ug h c o mple te d

Ne w Ze a la nd 16 br a nc he s Austr a lia 48 br a nc he s

SLIDE 19

Ac q uisitio ns

We a re a c tive ly a sse ssing a c quisitio n o ppo rtunitie s

ASX: CYG

Se nsible stra te g ic a c quisitio ns

T

he Gro up will ta ke a hig hly disc ipline d a ppro a c h to a c q uisitio ns with stric t c rite ria .

T

e a m in pla c e who ha ve a ve ry suc c e ssful histo ry o f g ro wing b usine sse s thro ug h se nsib le a nd stra te g ic a c q uisitio ns.

We ha ve a pipe line o f inte re sting
ppo rtunitie s.
F

unding will b e thro ug h de b t a nd

pe ra ting c a sh flo ws.

F

c us on ne w ge ogr

aphie s and industr ie s Pr

fitable & c ash flow

positive E ar nings ac c r e tive L ike minde d c ultur e & c omple me nta ry skillse ts

Ca n he lp to a c c e le ra te o ur e ntry into ne w industrie s a nd g e o g ra phie s. Stro ng unde r- lying b usine ss funda me nta ls with g ro wth o ptio ns. Min $10M re ve nue . Industria l supply fo c use d ta rg e ts. Whe n a ppro pria te re ta in a nd a lig n ve ndo r / ke y ma na g e me nt with CYG sha re s.

SLIDE 20

Outlo o k

T he o utlo o k is po sitive - the G ro up e xpe c ts c o ntinuing impro ve me nt in fina nc ia l pe rfo rma nc e in H2 FY20.

T

he b usine ss ha s sub sta ntia l o p e ra ting le ve ra g e a s sa le s g ro w. T he re a re limite d a d d itio na l o p e ra ting c o sts re q uire d to sup p o rt sa le s g ro wth – the ma jo rity o f inc re me nta l g ro ss ma rg in sho uld d ro p to the EBIT DA line .

T

he re a re sig nific a nt g ro wth o p p o rtunitie s a c ro ss a ll a sp e c ts o f the b usine ss – ma rke t sha re g a ins, ne w b ra nc he s, p ro d uc t ra ng e e xte nsio n a nd a c q uisitio ns.

T

e a m in p la c e who ha ve a ve ry suc c e ssful histo ry o f g ro wing b usine sse s thro ug h se nsib le a nd stra te g ic a c q uisitio ns. Pip e line o f inte re sting o p p o rtunitie s.

T

he o utlo o k fo r o ur e nd ind ustry e xp o sure s (c o mme rc ia l c o nstruc tio n, infra struc ture a nd mining a nd re so urc e s) is p o sitive . T he G ro up ha s ne g lig ib le e xp o sure to re sid e ntia l c o nstruc tio n ma rke ts.

A sig nific a nt imp ro ve me nt in p ro fita b ility is fo re c a st fo r FY20 with the inc lusio n o f re c e nt a c q uisitio ns fo r a

full 12 mo nths, c o ntinue d sa le s g ro wth, p ro c ure me nt sa ving s a nd c o ntinue d o p timisa tio n o f the d istrib utio n fo o tp rint.

FY20 EBIT

DA fo re c a st $10m+ a ssuming c o ntinua tio n o f c urre nt tre nd s, the suc c e ssful e xe c utio n o f ke y initia tive s a nd no a d ve rse b ro a d e r ma rke t d e ve lo p me nts. We c o ntinue to mo nito r the p o te ntia l imp a c t o f the C o ro na virus o n o ur sup p ly c ha in. We e xp e c t so me imp a c t in the ne a r te rm.

Me d ium-te rm ta rg e t to a c hie ve 7.5% g ro up EBIT

DA ma rg ins.

Sig nific a nt ta x lo sse s a va ila b le to o ffse t a g a inst future p ro fits.

ASX: CYG

SLIDE 21

Disc la ime r

Re lia nc e on third pa rty informa tion

T he info rma tio n a nd vie ws e xp re sse d in this p re se nta tio n we re p re p a re d b y Co ve ntry G ro up L td (the Compa ny) a nd ma y c o nta in info rma tio n tha t ha s b e e n d e rive d fro m p ub lic ly a va ila b le so urc e s tha t ha ve no t b e e n ind e p e nd e ntly ve rifie d. No re p re se nta tio n o r wa rra nty is ma d e a s to the a c c ura c y, c o mp le te ne ss o r re lia b ility o f the info rma tio n. No re sp o nsib ility o r lia b ility is a c c e p te d b y the Co mp a ny, its o ffic e rs, e mp lo ye e s, a g e nts o r c o ntra c to rs fo r a ny e rro rs, missta te me nts in o r o missio ns fro m this p re se nta tio n.

Pre se nta tion is a summa ry only

T his p re se nta tio n is info rma tio n in a summa ry fo rm o nly a nd d o e s no t p urp o rt to b e c o mp le te . It sho uld b e re a d in c o njunc tio n with the Co mp a ny’ s 2020 ha lf ye a r fina nc ia l re p o rt. Any info rma tio n o r o p inio ns e xp re sse d in this Pre se nta tio n a re sub je c t to c ha ng e witho ut no tic e a nd the Co mp a ny is no t und e r a ny

b lig a tio n to up d a te o r ke e p c urre nt the info rma tio n c o nta ine d within this

p re se nta tio n.

Not inve stme nt a dvic e

T his p re se nta tio n is no t inte nd e d a nd sho uld no t b e c o nsid e re d to b e the g iving

f inve stme nt a d vic e b y the Co mp a ny o r a ny o f its sha re ho ld e rs, d ire c to rs,
ffic e rs, a g e nts, e mp lo ye e s o r a d vise rs. T

he info rma tio n p ro vid e d in this p re se nta tio n ha s b e e n p re p a re d witho ut ta king into a c c o unt the re c ip ie nt’ s inve stme nt o b je c tive s, fina nc ia l c irc umsta nc e s o r p a rtic ula r ne e d s. Ea c h p a rty to who m this p re se nta tio n is ma d e a va ila b le must ma ke its o wn ind e p e nd e nt a sse ssme nt o f the Co mp a ny a fte r ma king suc h inve stig a tio ns a nd ta king suc h a d vic e a s ma y b e d e e me d ne c e ssa ry.

No offe r of se c uritie s

No thing in this p re se nta tio n sho uld b e c o nstrue d a s e ithe r a n o ffe r to se ll o r a so lic ita tio n o f a n o ffe r to b uy o r se ll Co mp a ny se c uritie s in a ny jurisd ic tio n.

F

rwa rd looking sta te me nts

T his p re se nta tio n ma y inc lud e fo rwa rd -lo o king sta te me nts. Altho ug h the Co mp a ny b e lie ve s the e xp e c ta tio ns e xp re sse d in suc h fo rwa rd -lo o king sta te me nts a re b a se d o n re a so na b le a ssump tio ns, the se sta te me nts a re no t g ua ra nte e s o r p re d ic tio ns o f future p e rfo rma nc e , a nd invo lve b o th kno wn a nd unkno wn risks, unc e rta intie s a nd o the r fa c to rs, ma ny o f whic h a re b e yo nd the Co mp a ny’ s c o ntro l. As a re sult, a c tua l re sults o r d e ve lo p me nts ma y d iffe r ma te ria lly fro m tho se e xp re sse d in the sta te me nts c o nta ine d in this p re se nta tio n. Inve sto rs a re c a utio ne d tha t sta te me nts c o nta ine d in the p re se nta tio n a re no t g ua ra nte e s o r p ro je c tio ns o f future p e rfo rma nc e a nd a c tua l re sults o r d e ve lo p me nts ma y d iffe r ma te ria lly fro m tho se p ro je c te d in fo rwa rd -lo o king sta te me nts.

No lia bility

T

the ma ximum e xte nt p e rmitte d b y la w, ne ithe r the Co mp a ny no r its re la te d

b o d ie s c o rp o ra te , d ire c to rs, e mp lo ye e s o r a g e nts, no r a ny o the r p e rso n, a c c e p ts a ny lia b ility, inc lud ing witho ut limita tio n a ny lia b ility a rising fro m fa ult o r ne g lig e nc e , fo r a ny d ire c t, ind ire c t o r c o nse q ue ntia l lo ss a rising fro m the use o f this p re se nta tio n o r its c o nte nts o r o the rwise a rising in c o nne c tio n with it. Fo r mo re info rma tio n, p le a se c o nta c t:

Robe rt Bulluss

CEO a nd Ma na g ing Dire c tor

Co ve ntry G ro up L td (03) 9205 8219

ASX: CYG

SLIDE 22

ASX: CYG