Presentation By Graham Twartz Group Managing DirectorPresentation By Graham Twartz For personal use...

Hills Industries LimitedPresentation ByGraham Twartz

Group Managing Director

For

per

sona

l use

onl

y

Overview• Flat half year result mainly due to

underperformance of Orrcon.

• Forecast a modest improvement for the full year.

• Dividend policy remains unchanged.

• Strong focus on OH&S improvements.

• Management changes.

• Share Purchase Plan.

For

per

sona

l use

onl

y

Group StrategyHills is a Diversified Company developingcompetitive businesses in three industry segments

• Electronic Security & Entertainment• Home, Hardware & Eco Products• Building & Industrial Products

For

per

sona

l use

onl

y

Financial Highlights – Half Year2007$’000

2006$’000 % Change

Revenue 557,613

42,665

26,729

24,120

13.9

13.5

Cash Flow from Operations 12,661 23,187

511,073

- 47.3

EBIT 41,196

+ 9.1

+ 3.6

+ 2.2

+ 0.7

- 1.4

Profit after Tax 26,150

NPAT (After Minorities) 23,942

EPS (Cents) 14.1

DPS (Cents) 13.5 -

Excludes individually significant items

For

per

sona

l use

onl

y

Electronic Security & Entertainment - The Numbers

2007$’000

2006$’000

% Change

Revenue 151,849 140,545 + 8.0

+ 25.4EBIT 20,956 16,708

EBIT/Revenue 13.8% 11.9%

For

per

sona

l use

onl

y

Electronic Security - Products

Electronic Security & Surveillance

EquipmentCode Pad CCTV Camera

Digital Video Recorder

www.das.com.auwww.pacom.com.au

IP Camera Video Intercom

Hills Home Hub

Dome

For

per

sona

l use

onl

y

• Trend towards IP based solutions.• Federal Government expenditure increasing.• Many large projects available.• New product introduction continues.• AUD strength positive for margins.WAY TO MARKET:System integrators and installation companies

Electronic Security - Situation Analysis

For

per

sona

l use

onl

y

Antenna & TV Systems - Products

• Domestic and commercial audio, video, data communication and entertainment products and services

Optimax 600 Digital Antenna

DGTEC Digital TerrestrialTelevision Receiver

Satellite Dishand LNB V-Sat Dishes

www.hillsantenna.com.auwww.hillssignalmaster.co.nzwww.stepelectronics.com.au

www.accesstv.com.au

www.opticomm.net.au

For

per

sona

l use

onl

y

Antenna & TV Systems - Situation Analysis

• Steady subscriber growth for Foxtel and AUSTAR.• FTTN & FTTH – Opticomm acquisition (tiny but has

potential) • DGTEC - introduces a range of consumer electronic

devicesWAY TO MARKET:Electrical wholesalers, major installation companies, major system integrators and subscription TVoperators.

For

per

sona

l use

onl

y

Turbosound Speakers

Hills SVL - Products

DigiPage

Crestron Control

Ampetronic Hearing

Assistance

www.audiotelex.com.auwww.crestron.com.auwww.lighthousedistribution.com.au

For

per

sona

l use

onl

y

Alpha Spot Arc Colour Changer

Effects Projector

Ultra Brite LED Pipe

Hills SVL - ProductsF

or p

erso

nal u

se o

nly

• Focussed on consistent new product introduction and product upgrades (to digital).

• Actively pursing further acquisitions.

• Reviewing geographic expansion opportunities.

WAY TO MARKET:

System integrators and installation companies.

Hills SVL – Situation Analysis

For

per

sona

l use

onl

y

Home, Hardware & Eco Products - The Numbers

2007$’000

2006$’000

% Change

Revenue 111,180 96,693 + 15.0

- 3.6EBIT 8,514 8,835

EBIT/Revenue 7.7% 9.1%

For

per

sona

l use

onl

y

Home & Hardware - ProductsAluminium, Timber, Fibreglass and Plastic Ladders, Wheelbarrows and Materials Handling EquipmentMobile Scaffolding, Fall Arrest Systems

Single Sided Step Ladders

Scaffolding

Narra BarraFall Arrest Systems

Stairway Access Scaffolding

Trestle Ladderswww.hills.com.auwww.ladders.com.auwww.alquip.com

For

per

sona

l use

onl

y

Home & Hardware - Products

PLAYTIME Trampolines, Playgyms &

Slides

Clotheslines, Airers, Ironing Boards, Trolleys, Sprayers &

Screen Doors

Trampoline Playing Mantis Clotheslines Sprayers

www.hills.com.au

For

per

sona

l use

onl

y

• Specialised Enclosures, Food Service Equipment, Stainless Steel Products, Flush Vales, Backflow Valves, Waterless Urinals, Tap Ware

UrinalRangehood

www.woodroffe.com.auwww.lwgemmell.com.au

Refrigeration Check Valve Soap Dispenser

For

per

sona

l use

onl

y

Home & Hardware Products - Situation Analysis

• Driving operational improvement and cost reductions (particularly the supply chain).

• Highly competitive environment.• Improved results will flow from active new product

introduction programme.• Largely an importer rather than a manufacturer. (Focus

on design and speed to market)WAY TO MARKET:Hardware retailers, mass merchandisers, plumbing and electrical wholesalers, building contractors

For

per

sona

l use

onl

y

Hills Healthcare - ProductsHome Care, Rehabilitation, Hospital and Nursing Home Equipment

Shower Commodes

Toilet Aid Walker Vienna Bed

Patient Lifter Medication Cart

www.kcare.com.auwww.kerryequipment.com.auwww.aircomfort-oz.com

For

per

sona

l use

onl

y

Hills Healthcare - ProductsHome Care, Rehabilitation, Hospital and Nursing Home Equipment

www.aircomfort-oz.com

Deluxe seating reclined Deluxe seating upright Compact Lift ChairFor

per

sona

l use

onl

y

Hills Healthcare - Situation Analysis• 65+ population growing at 2%-3% annually.• Growth in nursing homes and aged care facilities.• Industry growth above GDP with the gap expected

to widen.• China sourcing initiatives.• Strong New Product Introduction Programme. WAY TO MARKET:Via specialised distributors in Australia, NewZealand and internationally.F

or p

erso

nal u

se o

nly

• Rotationally moulded water storage tanks, solar hot water, fresh water harvesting, underground tanks, grey water systems, sewerage treatment systems, pumping systems

Modular TanksWater Tanks

www.teampoly.com.auwww.hillssolar.com.au

Solar Hot Water

Hills Eco

For

per

sona

l use

onl

y

For

per

sona

l use

onl

y

Hills Eco – Building Sustainability• Focussing on water, energy and

thermal comfort.• Long term initiative with dedicated

resources.• Key target areas:

– Grey water treatment and recycling systems;

– Solar heating;– Photovoltaic solutions;– Water storage (steel, stainless and

underground).

For

per

sona

l use

onl

y

Team Poly – Situation Analysis

• Erratic demand – subsidies, rain.• Establishment of satellite production facilities at

Bathurst, Toowoomba and Ballarat.• Supply chain improvements.WAY TO MARKET: Through rural retailers, independent water retailers, direct to builders and to the automotiveafter market.F

or p

erso

nal u

se o

nly

Building & Industrial Products- The Numbers

2007$’000

2006$’000

% Change

Revenue 292,232 272,530 + 7.2

- 21.6EBIT * 12,401 15,813

EBIT/Revenue 4.2% 5.8%

* Excluding individually significant items

For

per

sona

l use

onl

y

• Precision, Structuraland Large Pipe & Tube

www.orrcon.com.au

For

per

sona

l use

onl

y

Building & Industrial - Situation Analysis - Orrcon

• Disappointing results.• Pressure on margins from imports – but hope is in

sight.• Lack of major projects, but 2nd half will improve.• OneSteel/Smorgon merger still playing out.• Bluescope distribution is now a customer• Rising steel prices.• Rising prices for imported tube.WAY TO MARKET:Direct to end users, via stockists and distributors and direct to oil, gas and water pipeline developers.

For

per

sona

l use

onl

y

• Rollformed Products (Roofing, Cladding, Flooring, Carports, Verandahs, Purlins, Door Frames and Sheds)

www.fielders.com.au 60% owned

Flooring Galvabond Roofing CarportsFor

per

sona

l use

onl

y

Building & Industrial - Situation Analysis - Fielders

• Solid result, lots of improvement left.• Strong new product introduction programme

(Angle Cut, new purlin range).• Market leading Flooring solutions.WAY TO MARKET: Direct to builders (domestic and commercial), direct to roofing, flooring andfencing contractors and direct to thepublic.

For

per

sona

l use

onl

y

47% owned

Grating

Cable and Pipe SupportSystems

Cable Support Systems

Hot Dip Galvanising

Galvanising

Grating

www.korvest.com.auwww.ezystrut.com.au

For

per

sona

l use

onl

y

Building & Industrial- Situation Analysis - Korvest• Steady results from EzyStrut.

• EzyStrut growth initiatives:

– Pipe Support Systems; and

– WA and QLD Mining & Infrastructure Projects.

For

per

sona

l use

onl

y

Hills GroupWhere to from here

• Focus on strategic “that makes sense”acquisitions.

• Driving the “Reshaping Initiatives”.• Working capital reduction (particularly

stock).• Deliver on the forecast.

For

per

sona

l use

onl

y

For

per

sona

l use

onl

y