Equity Capital Raising Investor Presentation July 2011
INVESTOR PRESENTATION | JULY 2011 Disclaimer STOP! DO NOT OPEN OR READ THIS DOCUMENT UNTIL YOU HAVE READ THIS DISCLAIMER. This document has been prepared by Scott Technology Limited (the “Company”, or “SCT”) to provide the recipient (Recipient) with information and a preliminary understanding of the proposed rights issue of shares in the Company, and the Company’s business. Forsyth Barr Limited (Forsyth Barr) is acting as NZX Organising Participant and Lead Manager of the offer by the Company. This document is part of and to be read in conjunction with an oral briefing to be given by the Company. This document is provided to the Recipient on the conditions set out below. By opening and reading it you agree to those conditions. This document is not a recommendation, offer or invitation by any person or to any person to sell or apply for securities in the Company. This document is not a prospectus under New Zealand (“NZ) law or under any other law. It is for information purposes only. Accordingly, this document neither purports to be exhaustive nor contain all of the information which a prospective investor or the Recipient may require to make an investment decision and it does not contain all of the information which would otherwise be required by NZ law or any other law to be disclosed in a prospectus. The rights issue referred to in this document will be made pursuant to a Simplified Disclosure Prospectus that was registered on 24 June 2011. The only representations or warranties in relation to the preparation of this document and the information in it (such as its accuracy, fairness, reliability, completeness of any statements, estimates or opinions and the reasonableness of any assumptions) are those which are implied by law and which cannot be excluded by law. Otherwise, all such representations or warranties are excluded and the Recipient releases the Company, Forsyth Barr, their advisors and the officers of each of the aforementioned persons from any liability or responsibility for this document. Neither the Company, Forsyth Barr or their officers has any responsibility or obligation to inform Recipients of any matter arising or coming to their notice, after the date of this document, which may affect any matter referred to in this document. The document is provided to the Recipient on the basis that the Recipient must rely on their own inquiries and seek appropriate professional advice in relation to the information and statements in relation to the proposed prospects, business and operations of the Company. The data contained in this document is for illustrative purposes only. The Company reserves the right to alter any term of the rights issue. Past performance is not a guarantee of future performance and must not be relied on as such. This document is not to be sent or given to any person in circumstances in which the offer outlined herein or distribution of this document would be unlawful. The distribution of this document (including an electronic copy) outside New Zealand may be restricted by law. If you come into possession of this document, you should seek your own advice on any restrictions and observe them. Any failure to comply with such restrictions may contravene applicable securities laws. The Company disclaims all liability to such persons. This presentation may contain projections or forward looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks. Although management may indicate and believe that the assumptions underlying the forward looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realised. Furthermore, while all reasonable care has been taken in compiling this presentation, the Company accepts no responsibility for any errors or omissions. There is no guarantee by any party (including SCT, its directors and advisors, and the Lead Manager and Organising Participant) in respect of the New Shares or any potential return from the New Shares. There is no guarantee or warranty of any return or dividend on the New Shares, in respect of future performance of Scott Technology, or that the amount payable for the New Shares will be recovered by a subscriber. Application has been made to NZX for quotation of the rights and all the requirements of NZX relating thereto that can be complied with on or before the date of distribution of this document have been duly complied with. However, NZX accepts no responsibility for the contents or any statement in this document. NZX is a registered exchange, regulated under the Securities Markets Act 1988 A copy of the simplified disclosure prospectus dated 24 June 2011 can be obtained free of charge from the Company’s website, www.scott.co.nz 2
INVESTOR PRESENTATION | JULY 2011 Contents Page 1. Investment Highlights and Offer Summary 4 2. SCT Overview and Strategy 8 3. Key Financial Information 20 4. Terms of Offer and Timetable 22 3
INVESTOR PRESENTATION | JULY 2011 1.1 Investment Highlights SCT – a global innovator in automation Origins in the appliance industry with the design and building of appliance production systems Now, a leading provider of innovative engineered manufacturing solutions to a range of industries worldwide Diversified revenue streams in terms of markets and geography Five major business divisions: appliances, mining, meat processing automation, industrial automation and high temperature superconductors Revenue streams from North and South America, Europe, Australia, Asia and Russia Leading international blue-chip customer base, including Bosch and Siemens Home Appliances, Electrolux, GE, Haier and Whirlpool (appliances) BHP Billiton, Bureau Veritas, Newcrest Mining and SGS (mining/laboratory services) ALC Australia, Alliance Group, JBS Swift, Northern Co-operative Meat Company and Silver Fern Farms (meat processing) Hitachi, Pfizer and Seagate (high temperature superconductors) 4
INVESTOR PRESENTATION | JULY 2011 1.1 Investment Highlights (cont’d) New Zealand based with a global presence Approximately 220 NZ based staff operating from Dunedin, Christchurch, Wellington and Auckland International sales and service offices in four locations worldwide Diversification and Growth Ongoing strategy to diversify and grow the existing business into complementary high technology areas Aggressive programme of R&D creating new business initiatives and opportunities Growth by acquisition, having successfully acquired and integrated Rocklabs in 2008 and Malcolm Smith Reference Materials in 2010 Recently acquired a 50.65% shareholding in HTS-110, a designer and manufacturer of powerful electromagnets and other high temperature superconductor associated technology Sound financial performance and position Revenue has increased steadily from $25.0 million in the 2008 financial year to $46.6 million for the 2010 financial year, while pre-tax profits have improved from a loss of $1.2 million to a profit of $5.5 million over the corresponding period As at 31 May 2011 SCT had a net debt to net debt plus equity ratio of 24.9% 5
INVESTOR PRESENTATION | JULY 2011 1.2 Board of Directors Mr McLauchlan is the Managing Partner of GS McLauchlan & Co Business Advisors and Stuart J McLauchlan Accountants, a prominent businessman and company director (Chairman and Independent Director) He is a Director of Scenic Circle Hotels Ltd, Dunedin International Airport Ltd, Dunedin City Holdings Ltd, Dunedin Casinos Ltd, Aurora Energy Ltd and several other companies Mr Hopkins joined Donaghys Group in 1994 as Corporate Services Manager Chris C Hopkins In 1996 he assumed responsibility for the finance and administration of SCT and oversaw the BCom, CA transition to a public listed company (Managing Director) He was appointed a Director of SCT in 2001 and Managing Director for SCT in 2006 Mr Batts joined SCT in 1956 and was Managing Director from 1969 to 1999 Graham W Batts He spent a further 18 months in an executive role based in London assessing the European CEng., FIPENZ, NZCE market (Independent Director) Since retirement from his executive role in 2000, Mr Batts has remained a consultant to SCT Mr Waller is Chief Executive and Managing Director of EBOS Group Ltd, Health Support Ltd, Mark B Waller EBOS Group Pty Ltd, EBOS Health & Science Pty Ltd and Global Science & Technology Ltd BCom, ACA, FNZIM Mr Waller is based in Christchurch and was appointed a Director of SCT in 2004 (Independent Director) Mr Staynes commenced his career in in product design and production engineering in 1973 Christopher J Staynes He became engineering manager and lastly General Manager for a major NZ appliance BSc manufacturer from 1980 until his retirement in 2006 (Independent Director) Mr Staynes was appointed a Director of SCT in 2006 6
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