COVENTRY GROUP LIMITED — AGM Information 2023

Oct 19, 2023

FY23 Annual General Meeting 20 October 2023

Delivering specialised Industrial products, services and customised solutions

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Agenda

01 HY22 summary About Coventry

04 FY23 performance

02 Markets + industries

05 Business update and outlook

03 Our strategy

06

Summary

01 About Coventry

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About Coventry

1929

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Coventry Group founded
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972 people employed at Coventry Group

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41 Konnect and Artia branches (AUS)

15 Fluid Systems branches (AUS)

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85
QLD locations across
Fluid Systems: 5
Australia and New
KAA: 13
Zealand
18
12 NSW
4 Fluid Systems: 1
WA 10 KAA: 9
SA
Fluid Systems: 4
Fluid Systems: 1
KAA: 7DC: 1 KAA: 3 11 1 ACT KAA: 1
18
VIC TAS
Fluid Systems: 3 10 Fluid Systems: 1
KAA: 7 Nubco: 7 NZ
DC: 1 KAA: 1 KANZ: 18
DC:1 DC: 1
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4 Distribution Centres (AUS & NZ)

7 Nubco branches (AUS)

18 Konnect and Artia branches (NZ)

What we do

We provide specialised industrial products, services and customised solutions to our wide network of customers through two business segments

Fluid Systems

• Fluid Systems designs, manufactures and sells hydraulic, lubrication, fluid transfer, refuelling, fire suppression, automation systems and products. Fluid Systems has the capability to design, manufacture, install, maintain and supply full turn-key customised solutions and components through a network of 15 branches in Australia.

• Key markets are Mining and Resources, Renewable Energy, Agriculture and Aquaculture, Defence and Food & Beverage Manufacturing and allied industries.

Trade Distribution

• Trade Distribution comprises Konnect and Artia Australia (KAA), Konnect and Artia New Zealand (KANZ), and Nubco supplying a range of fastening systems, cabinet hardware systems, industrial and construction products through a network of 48 branches in Australia and 18 branches in New Zealand.

• Key markets are Industrial, Manufacturing, Infrastructure, Building and Construction, Roofing and Cladding, Mining and Mining Services, Resources/Oil and Gas and Agriculture and Aquaculture.

Specialisation is how we win

Our operating business units provide specialised industrial products, services and customised solutions to a wide range of customers from blue chips to tradespeople We operate across a wide range of growing markets where we have small market share Specialisation differentiates us from our competitors

02 Markets + industries

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The market + our industries

Our markets are performing well

Supply Labour and skills chain and other shortages remain issues have eased challenging

Macroeconomic volatility continuing

Demand remains robust from our primary end markets (mining and resources, infrastructure, commercial construction and industrial). The Group has very modest exposure to segments of the economy that are slowing, namely household discretionary expenditure and residential construction.

Coventry operates in high growth markets

Coventry has a small market share in large high growth markets with significant opportunity for organic and acquisition growth

Mining and resources	Infrastructure	Building and	Industrial and	Other markets
		construction	manufacturing
Continued strong	$100b committed	Commercial construction	Markets are driven by	Our secondary markets
demand for products and	government spend over	markets have continued	activity in the Mining and	are all performing well:
services from mining and energy sectors	the next ten years We continue to build our capability and value proposition to support the infrastructure market	to perform well despite cost inflation and labour shortages Coventry has limited exposure to residential construction – housing	Resources, Infrastructure, Building and Construction and other markets serviced by Coventry	Agriculture and aquaculture Renewable energy Oil and gas
		shortage and		Defence
		immigration to drive future demand		Recycling

Our value proposition

Quality products, stock availability, expertise, agility, geographic coverage

03 Our Strategy

Our Strategy

Our Purpose

To provide specialised industrial products, services and solutions to our customers

People

Our Values

Safety first

Do the right thing (Fairness, Integrity and Respect) Work as a team Be the best at everything we do

Our Vision

Zero harm

Profitable sales growth

10.0% EBITDA (Pre AASB16) Strong cash conversion

Strategic priorities

The right people for growth Accelerate profitable organic growth Cash conversion

Digitize core systems – deliver the ERP project

Customer promise

Exceptional specialist services and solutions to help our customers be successful

Customers

How we run our business. What we want to achieve. The standards and behaviours that guide how we work together to achieve it. How we do things.

What we promise our customers. What they experience. What it looks and feels like for them. How and what we communicate.

Our organic growth opportunities

Expand network

Greenfield Konnect Australia and New Zealand Trade stores (2 new stores in progress) Fluid Systems branches in new geographical regions

Nubco expansion into regional Australia

Improving the Improve value Service and Digitalisation network proposition product extensions Expanding product Trade store Improving our value ranges makeovers and proposition to retain relocations in customers, increase Enhance stud bolt ERP upgrade capability Konnect Australia, share of wallet, E-commerce Konnect New acquire new Increasing Zealand and Nubco customers and engineering Digitalisation and to improve in store improve margins continuous capability in Fluid customer experience Systems improvement Marketing and programs to improve Site expansion in promotion programs Establishing customer service and Fluid Systems to automation and increase productivity deliver growth Alignment with key electrification opportunities suppliers capabilities in Fluid Systems

Improving people management systems to build skills and expertise for future business growth

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04 FY23 performance

FY23 financial performance snapshot

Financial performance

Solid revenue and profit growth

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Revenue EBITDA [1]
$358.5m $17.0m
+11.2% on FY22 +9.7% on FY22
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Cash conversion[4] Net Assets 112.5% $113.3m 45.8% FY22 $113.6m FY22

EBIT[2] $15.6m

+9.9% on FY22

Net Debt $33.5m $33.1m as at 30 June 2022

Statutory net profit $2.5m $4.8m FY22

Net Debt impacted by

• ERP upgrade project ($5.5m)

• • Dividend payment ($3.0m)

• • Capital expenditure ($3.7m)

Note 1: EBITDA is before significant items and excludes the impact of AASB 16 – Leases and significant items Note 2: EBIT is before significant items

Note 3: EBITDA before significant items is a non-IFRS measure and reflects how management measures performance of the Group Note 4: Cash conversion = Gross operating cash flow less cash lease payments, addback significant items, divided by EBITDA[1]

Historical results

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Group Revenue up 11.2% to $358.5m ($322.3m FY22) Group EBITDA[1] up 9.7% to $17.0m ($15.5m FY22)

• Note 1: EBITDA is earnings before interest, tax, depreciation, amortisation before significant items and has been adjusted to exclude the impact of AASB 16 Leases.

Note 2: EBITDA before significant items is a non-IFRS measure and reflects how management measures performance of the Group.

Balance sheet and cash flow

Solid balance sheet position

alance sheet and ca Solid balance sheet position	sh flo		84
$m	As at 30 June 2023	As at 30 June 2022	• The Group has a solid balance sheet with Net Tangible Assets of $36.8m and
Net Assets	113.0	113.6	Net Assets of $113.0m as at 30 June
			2023
			• The Group has a solid working capital
Net Tangible Assets	36.8	36.2	position with Current Assets exceeding
			Current Liabilities by $25.4m at 30 June
Current assets less current liabilities	25.4	27.7	2023
			• Net debt as at 30 June 2023 of $33.5m
$m	FY23	FY22	(30 June 2022 of $33.1m)
Adjusted gross operating cash flow	19.1	6.9	• Net Debt was impacted by the ERP upgrade project ($5.5m), FY22 dividend
			payment ($3.0m) and capital expenditure
			($3.7m)
EBITDA1	17.0	15.5	• NAB debt financing facility of $55.0m
			undrawn by $17.6m as at 30 June 2023
Cash conversion %2	112.5%	45.8%	• Significant improvement in cash conversion in FY23

Note 1: EBITDA is before significant items and excludes the impact of AASB 16 – Leases and significant items Note 2: Cash conversion = Gross operating cash flow less cash lease payments, addback significant items, divided by EBITDA[1]

FY23 Segment performance

Trading performance improved during FY23 with both business segments delivering Sales and profit year on year growth

Fluid Systems

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Revenue
$148.1m
+14.1% on FY22
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Trade Distribution

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Revenue
$210.1m
+8.8% on FY22
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EBITDA[1] $15.3m

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+19.0% on FY22
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EBITDA[1] $17.0m +5.4% on FY22

• Fluid Systems EBITDA[1] % to sales of 10.4%

• Trade Distribution EBITDA[1] % to sales of 8.1%

• Double digit sales growth achieved in Fluid Systems and Konnect and Artia Australia

• Trade Distribution impacted harder by wage, fuel and cost inflation

Note 1: EBITDA is before significant items and excludes the impact of AASB 16 – Leases and significant items

05 Business update and outlook

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Q1 FY24 performance

The Group delivered solid FY24 quarter one sales and unaudited EBITDA[1] growth

Group

Revenue $94.6m +6.1% on Q1 FY23

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EBITDA [1]
$5.4m
+10.8% on Q1 FY23
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• Initiatives to grow EBITDA[1] % to Sales to 10% in the medium term have delivered early positive improvements and our strategy based on specialisation and service excellence is continuing to be resilient

• These buy-side and sell-side initiatives were implemented early in the financial year and started to become evident in the month of September with EBITDA up 26.7% on the pcp. We expect the runrate from these initiatives to continue to improve over the December quarter.

Fluid Systems

Revenue

$38.2m

+10.8% on Q1 FY23

Trade Distribution

Revenue

$56.4m +3.1% on Q1 FY23

• There was some weakness in the Konnect and Artia New Zealand business due to the

recessionary environment in New Zealand and the businesses exposure to residential construction through roofing screws. Konnect is the dominant industrial fasteners business in New Zealand and we expect the business to become even stronger through this period as competitors withdraw from the market. There are already signs of green shoots in the economy driven by all-time record rates of immigration.

Note 1: EBITDA is before significant items and excludes the impact of AASB 16 – Leases and significant items

Business overview Fluid Systems

Fluid Systems is an innovative service provider to the Mining and Resources, Renewable Energy, Agriculture and Aquaculture, Defence and Food & Beverage Manufacturing and allied industries

Fluid Systems specialises in hydraulics, lubrication, fire suppression, refuelling and fluid transfer systems/products

Key strategic initiatives

• Focus on expanding sales in existing markets

Our markets are performing strongly

• Diversification into markets outside of mining and resources

• Expand or relocate Mackay and Gladstone facilities to accommodate growth opportunities

Our market share is less than 5%

• Increase engineering capability

• Develop capabilities for move from manual processes to automated and electric systems

The growth opportunity is significant

• Explore options for branches in new geographical regions

• Explore acquisition opportunities in a fragmented market

• Successful roll out of the ERP upgrade project

Business overview Trade Distribution

Trade Distribution comprises Konnect and Artia Australia (KAA), Konnect and Artia New Zealand (KANZ), and Nubco supplying a range of fastening systems, cabinet hardware systems, industrial and construction products through a network of 48 branches in Australia and 18 branches in New Zealand

Key markets are Industrial, Manufacturing, Infrastructure, Building and Construction, Roofing and Cladding, Mining and Mining Services, Resources/Oil and Gas and Agriculture and Aquaculture

Key strategic initiatives

Konnect and Artia Australia

Konnect and Artia New Zealand

Nubco

• Accelerate organic growth -

• Grow sales in our key markets focussed on our fastening systems specialisation

• Expand our branch network by 2 to 3 stores per annum

• Relocations and trade store upgrades – program in place for FY24

• Deliver inventory optimisation project

• • Maximise our Digital Capability

• Accelerate organic growth

• Expand branch network by 1 store per annum

• Win in our key markets through specialization and a clear differentiated service proposition

• Trade store upgrades

• Deliver inventory optimisation project

• Digitise our core systems and deliver the ERP system upgrade

• Accelerate organic sales growth • Product range expansion

• • Trade store upgrades and relocations

• Expand steel handling capabilities

• Develop advanced Digital capability

• • Expansion in regional Australia

Business update

Key strategic initiatives

KAA profitability improvements

Accelerating delivery of our strategy

• Fixing underperforming branches

• Improving capability to deliver store makeovers, store relocations and new stores

• Improving margin management

• Improving supply chain and stock availability

• Close alignment with suppliers

• Operating cost reduction programs

ERP upgrade project

ERP upgrade progressing well

• The ERP upgrade continues to progress broadly to plan, schedule and budget

• Experienced project team and implementation support partners working closely together

• Requirements definition and design phases of the project completed

• Build phase well advanced

• Pilot in first branch and Finance to commence March 2024

• On target to compete project December 2024

Business update

Key strategic initiatives

Optimising financial health

Cash conversion project delivered positive results

• Inventory optimization project accelerating as supply chain and stock shortage issues reduce

• Implementing demand planning systems as part of ERP upgrade

Develop marketing and digital capability

Appointment of key experienced resources

• Developing our marketing and promotion capability to increase brand recognition and awareness

• Ensuring all business units deliver an enhanced omnichannel customer experience

• Improving our digital offering

• Cash conversion program delivering results – 112.5% in FY23

Strategic Priorities FY24

• The right people for growth

• Accelerate profitable organic growth in Trade Distribution

• Continue focus on rightsizing inventories and cash conversion

• Deliver ERP upgrade project to schedule and on budget

• Reinforce with customers our focus on specialist industrial products, services and customised solutions to build deeper partnerships and demonstrate our commitment to their success

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06 Summary

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Solid FY23 performance

Good start to Q1 with EBITDA[1] up +10.8%

Summary

Operating in resilient markets and industries with the right strategy and the right people for profitable growth Specialisation will help us win

Disclaimer

Reliance on third party information

The information and views expressed in this presentation were prepared by Coventry Group Ltd (the Company ) and may contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. No responsibility or liability is accepted by the Company, its officers, employees, agents or contractors for any errors, misstatements in or omissions from this presentation.

Presentation is a summary only

This presentation is information in a summary form only and does not purport to be complete. It should be read in conjunction with the Company’s 2023 full year financial report. Any information or opinions expressed in this Presentation are subject to change without notice and the Company is not under any obligation to update or keep current the information contained within this presentation.

Not investment advice

This presentation is not intended and should not be considered to be the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. The information provided in this presentation has been prepared without taking into account the recipient’s investment objectives, financial circumstances or particular needs. Each party to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary.

Forward looking statements

This presentation may include forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, these statements are not guarantees or predictions of future performance, and involve both known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control. As a result, actual results or developments may differ materially from those expressed in the statements contained in this presentation. Investors are cautioned that statements contained in the presentation are not guarantees or projections of future performance and actual results or developments may differ materially from those projected in forward-looking statements.

No liability

To the maximum extent permitted by law, neither the Company nor its related bodies corporate, directors, employees or agents, nor any other person, accepts any liability, including without limitation any liability arising from fault or negligence, for any direct, indirect or consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

For more information, please contact:

Robert Bulluss

CEO and Managing Director Coventry Group Ltd (03) 9205 8219

No offer of securities

Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell Company securities in any jurisdiction.

Non-lFRS Financial Information

Coventry uses certain measures to manage and report on its business that are not recognised under Australian Accounting Standards. These measures are collectively referred to as nonlFRS financial measures. Although Coventry believes that these measures provide useful information about the financial performance of Coventry, they should be considered as supplemental to the measures calculated in accordance with Australian Accounting Standards and not as a replacement for them.

Authorised for release by the Board of Directors of Coventry Group Limited.