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Skellerup Holdings Limited

Year ended 30 June 2011

Results briefing

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Presentation agenda

� Corporate overview

� Key results

� 2011 financials

� Divisional highlights

�Outlook for 2011 - 2012

�Q&A

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Corporate overview

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Skellerup corporate overview

� Global technical polymer products

� Customer solutions

� Representation globally – 77% offshore/export revenue

� Product development supporting organic growth

� Acquisitions opportunities will be considered

� Canterbury earthquakes – minimal interruption to operations

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Performance� Market capitalisation - $235.2m ($139.5m at June 2010)

� Issued shares – 192.8m (191.1m at June 2010)

� Current share price – $1.22

� Share 52 week trading range – 68 cents to $1.36

� Shares traded in last 12 months – 41.96 million shares – 21.8% of register (17.1 % at June 2010)

� Net tangible asset backing 30.96 cents per share (28.8 cents at June 2010)

� Earnings per share 10.50 cents (6.81 cents at June 2010)

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Key results

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Key results

� Continuing operations:

– Revenue at $193.6m up 7.1% on the previous year

– EBIT up 48.6% from $21.7m to $32.2m

– NPAT up 68.9% from $12.0m to $20.2m

– Operating cashflow up 37.9% from $23.9m to $33.0m

– Net debt reduced by $17.8m from $26.9m to $9.1m

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Market conditions improving

� First half year EBIT was 110% above previous year first half (still in recession).

� Second half EBIT was 17% above previous year second half.

� Previous year second half recorded very buoyant trading as supply lines were replenished following the recession.

� Industrial profitability up on global expansion of technical polymer products and significant growth from USA vacuum pumps.

� Agri profitability up on increased volumes driven from global expansion on the back of improved commodity prices.

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Canterbury Earthquakes� Business interruptions.

� Quick recovery once power/water restored – minimal plant damage – distribution operational within days of each event.

� Staff coping well despite disruption and personal loss.

� Buildings damaged – major damage limited to tenanted areas

– main manufacturing building strengthened to enable business continuity

� Full assessment being undertaken by engineers, to determine repair/replacement options.

� Working with insurers and claims specialist.

� Impact on June 11 results $000

– Impairment to buildings – book value now zero 1,420

– Increased expenses maintaining distribution and manufacturing operations 2,712

Total expenses – subject to insurance claims 4,132

Less provisional cash settlement from insurers 1,414

Balance recoverable under replacement insurance policies 2,718

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2011 financials

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FY2011 financial resultsCONTINUING OPERATIONS Variance

$000’s 2011 2010 $ %

Revenue 193,597 180,719 12,878 7.1%

EBITDA 39,518 28,596 10,922 38.2%

Depreciation and amortisation(excluding accelerated depreciation on impaired buildings)

7,291 6,906 385 5.6%

EBIT 32,227 21,690 10,537 48.6%

InterestTax expense

2,6679,360

4,7854,947

2,118(4,413)

44.3%89.2%

NPAT 20,200 11,958 8,242 68.9%

Abnormal expenses (after tax) - 2,505 2,505 -

NPAT - trading 20,200 14,463 5,737 39.7%

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Balance sheet as at 30 June 2011

$000’s 2011 2010 Variance

Current assets 70,872 68,075 (2,797)

Current liabilities 39,008 32,010 6,998

Working capital 31,864 36,065 4,201

Non current assets/liabilities 87,541 91,753 4,212

Net bank borrowings 9,080 26,928 (17,848)

Total equity 110,325 100,890 9,435

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Statement of cash flows as at 30 June 2011$000’s 2011 2010 Variance

Net trading cash flow 42,079 32,444 9,635

Income tax (paid)/refunded

Net interest paid

(5,695)

(3,362)

(3,660)

(4,832)

(2,035)

1,470

Net operating cash flow 33,022 23,952 9,070

Net purchase of fixed assets (7,657) (4,098) (3,559)

Net funds generated 25,365 19,854 5,511

Issue of equity shares

Dividends paid

Repayment of term debt

Change in cash held

-(7,095)(14,649)(3,621)

20,735(2,325)(35,637)(2,627)

(20,735)(4,770)20,988(994)

Net financing cash flow (25,365) (19,854) (5,511)

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Well-positioned financially

� Strong cash flows

� Substantially reduced net debt down to $9.1m

� Banking facilities through to September 2012

� Banking covenants comfortably met

� Gearing ratio improved from 21.1% to 7.6%

Key banking covenants 2011 2010

Net debt to EBITDA < 3.00 : 1 0.22 0.93

EBITDA to net interest > 4.00 : 1 18.83 6.67

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Debt reduction

Net Debt

0

20

40

60

80

100

120

2007 2008 2009 2010 2011

mill

ions

� Net debt reduced to $9.1m

� Improvements generated from trading cash flows

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Divisional highlights

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Corporate structure

SKELLERUP HOLDINGS

INDUSTRIAL AGRI

Gulf GroupGulf Rubber (Australia)

Tumedei (Italy)Skellerup Rubber Services (NZ)

Thorndon Rubber (NZ)

Deks(Australia)

Ultralon(NZ)

VacuumMasport (USA)Jiangsu (China)

Flomax (NZ)

Footwear(NZ)

FootwearInternational

DairyDairy International (NZ)

Dairy NZ (NZ)Stevens Filterite (NZ)

Conewango (USA)Ambic (UK)

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Divisional trading resultREVENUE EBIT

$000’s 2011 2010 Variance 2011 2010 Variance

Agri 68,990 64,847 4,143 17,106 15,284 1,822

% of total 35.6% 35.9% 53.1% 70.5%

Industrial 124,453 115,623 8,830 20,040 13,768 6,272

% of total 64.3% 64.0% 62.2% 63.5%

Corporate 150 249 (99) (4,919) (4,129) (790)

% of total 0.1% 0.1% (15.3%) (19.0%)

Abnormals - - - - (3,233) 3,233

% of total - - - - (14.9%)

TOTAL 193,593 180,719 12,874 32,227 21,690 10,537

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Agri division highlights

� Revenue up 6.4% reflecting:

– Trading up from improvements in global commodity prices

– On-farm cash flows improved allowing spend on consumables

– Milk quality message being reinforced to farmers which has resulted in higher liner volumes

– Improved on farm cash flows also being invested in some capital equipment, resulting in solid trading from Ambic and Vacuum Pumps

� EBIT up 11.9% to $17.1m:

– Margin % on sales equivalent to previous year

– Overheads reduced as a % of sales.

Agri division highlights

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Agri division highlights cont’d

� Outlook is positive:

– Dairy liner volumes up on previous year, and is planned to increase further during FY12

– Currently developing a 37% increased capacity for liner manufacturing which will progressively come on stream during FY12

– Increasing volumes from existing OEM’s

– Technical footwear distribution in USA and Europe

– Global milk prices have progressively improved

– Capital type products improvement was evident by solid performances from Ambic and Dairy Vacuum Pumps

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Industrial division highlights

� Revenue up 7.6% on previous year:– First half revenue up 15.6% on previous year first half

– Second half recorded a continuing improvement being 5.2% above first half

– New products having positive impact in Australia and USA

– Europe reported revenue growth despite financial market turmoil

� EBIT up 45.6% to $20.0m :– Reflecting influence of successful product development

– European market growth from technical sales support from Tumedei

– Improved margins despite significant polymer price increases

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Industrial division highlights cont’d

� Outlook is positive:– Ongoing product development

– Expansion into USA markets via own distribution

– Tumedei technical sales team have success in European markets

– Cautious optimism despite financial markets being volatile

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Outlook for 2011 - 2012

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Dividends

� Final dividend of 4 cents per share (fully imputed) payable 21 October 2011

� With the March 11 Interim Dividend, total dividend 6 cents for the FY11 year

� Distribution to shareholders being 57.3% of NPAT for the FY11 year

� Dividend Policy remains 40% to 60% of NPAT

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Outlook for 2011 - 2012

� Cautious optimism – building on gains from 2010 - 2011

� Key assumptions:

– Dairy commodity prices maintained at a level which provides confidence to invest in new farm developments and technology

– Ability to retain and attract new technical people

– Fiscal stability in key markets, particularly in USA and Europe

– Polymer sources available without significant price volatility

� NPAT guidance 2011-2012 - $22m to $23m

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Q&A