EXCELSIOR CAPITAL LTD — AGM Information 2014

Oct 21, 2014

Annual General Meeting Presentation

22 October 2014

SYDNEY

Disclaimer

• This document, and any constituent or associated presentation, information or material (collectively, the Material ), is not (and does not form part of) an offer, solicitation, invitation or recommendation in respect of any securities and neither the Material nor any part of it will form the basis of, or be relied upon in connection with, any contract, commitment or investment decision.

• No representation or warranty is or will be made by any person (including CMI Limited and its officers, directors, employees, advisers and agents ( CMI )) in relation to the accuracy or completeness of all or part of the Material, or the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in, or implied by, the Material or any part of it. To the maximum extent permitted by law, CMI does not accept any responsibility, and disclaims any liability (including, without limitation any liability arising from fault or negligence), for any loss arising from any use of or reliance upon all or any part of the Material or otherwise arising in connection with it or for any action taken by the recipients of the Material on the basis of such Material.

• The Material contains certain forward-looking statements with respect to the financial condition, results of operations and business of CMI and certain plans and objectives of the management of CMI. All such forward-looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies and other factors, many of which are outside the control of CMI, which may cause the actual results or performance of CMI to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such forward-looking statements speak only as of the date of the Material. Factors that could cause actual results or performance to differ materially include without limitation the following: fluctuations in interest and currency exchange rates, basis risk and credit risk; levels of supply and demand and market prices; legislation or regulations throughout the world that affect CMI's business; legal defense costs, insurance expenses, settlement costs and the risk of an adverse decision or other outcome relating to governmental investigations, class actions or other claims; growth in costs and expenses; risk of adverse or unanticipated market, financial or political developments (including without limitation in relation to commodity markets).

• The Material is provided for informational purposes only and is subject to change without notice. Subject to any obligations under applicable laws, regulations or securities exchange listing rules, CMI disclaims any obligation or undertaking to release any updates or revisions to the Material to reflect any change in expectations or assumptions. Nothing in the Material should be interpreted to mean that future earnings per share of CMI will necessarily match or exceed its historical published earnings per share, or that there has been no change in the affairs of CMI since the date of the Material.

• Nothing contained in the Material constitutes investment, legal, tax or other advice. The information in the Material does not take into account the investment objectives, financial situation or particular needs of any recipient. Before making an investment decision, each recipient of the Material should make its own assessment and take independent professional advice in relation to the Material and any action taken on the basis of the Material.

Page 2

CMI Limited Overview

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CMI Electrical specialises in the design and manufacture of specialty plugs and couplers, electrical cables, sourcing and supply of niche electrical cables, high voltage cables, flexible cables and flameproof junction boxes.

This division specialises in designing, manufacturing, wholesaling and retailing of vehicle accessories for the 4WD, SUV & Trade vehicle markets.

This division services the mining sector, construction and infrastructure industries, electrical wholesalers and gas, petroleum and other hazardous industries.

Market penetration is achieved through 58 TJM branded Australian aftermarket retail distribution stores, supply to major original equipment manufacturers and direct export to a distribution network covering most continents.

World class products, strong balance sheet, long operating history, skilled people Page 3

FY14 Earnings Summary

$m FY14 FY13 Change Operating Revenue 92.3 111.7 (17%) EBITDA 6.8 15.4 (56%) EBITDA Margin 7% 14% Depreciation & Amortisation (1.8) (1.7) (4%) Tax (1.3) (3.5) 63% Interest expense (0.2) (0.4) 57% NPAT 3.5 9.8 (64%) NPAT Margin 4% 9% EPS (cents) 10.29 29.05 (65%) • Electrical ‐ performance was down largely due to poor market conditions in the coal mining sector and reduced infrastructure and construction activity resulting in 28% decrease in revenues • TJM – Domestic store revenues increased 23%, export revenues in line with prior year, original equipment (OE) revenue decreased as expected. • EBITDA margin was lower mainly due to impacts of the reduction in Electrical revenues and TJM increased loss. • Impact of subdued economic conditions was more pronounced in second half. ⁻	$m FY14 FY13 Change Operating Revenue 92.3 111.7 (17%) EBITDA 6.8 15.4 (56%) EBITDA Margin 7% 14% Depreciation & Amortisation (1.8) (1.7) (4%) Tax (1.3) (3.5) 63% Interest expense (0.2) (0.4) 57% NPAT 3.5 9.8 (64%) NPAT Margin 4% 9% EPS (cents) 10.29 29.05 (65%) • Electrical ‐ performance was down largely due to poor market conditions in the coal mining sector and reduced infrastructure and construction activity resulting in 28% decrease in revenues • TJM – Domestic store revenues increased 23%, export revenues in line with prior year, original equipment (OE) revenue decreased as expected. • EBITDA margin was lower mainly due to impacts of the reduction in Electrical revenues and TJM increased loss. • Impact of subdued economic conditions was more pronounced in second half. ⁻	$m FY14 FY13 Change Operating Revenue 92.3 111.7 (17%) EBITDA 6.8 15.4 (56%) EBITDA Margin 7% 14% Depreciation & Amortisation (1.8) (1.7) (4%) Tax (1.3) (3.5) 63% Interest expense (0.2) (0.4) 57% NPAT 3.5 9.8 (64%) NPAT Margin 4% 9% EPS (cents) 10.29 29.05 (65%) • Electrical ‐ performance was down largely due to poor market conditions in the coal mining sector and reduced infrastructure and construction activity resulting in 28% decrease in revenues • TJM – Domestic store revenues increased 23%, export revenues in line with prior year, original equipment (OE) revenue decreased as expected. • EBITDA margin was lower mainly due to impacts of the reduction in Electrical revenues and TJM increased loss. • Impact of subdued economic conditions was more pronounced in second half. ⁻	$m FY14 FY13 Change Operating Revenue 92.3 111.7 (17%) EBITDA 6.8 15.4 (56%) EBITDA Margin 7% 14% Depreciation & Amortisation (1.8) (1.7) (4%) Tax (1.3) (3.5) 63% Interest expense (0.2) (0.4) 57% NPAT 3.5 9.8 (64%) NPAT Margin 4% 9% EPS (cents) 10.29 29.05 (65%) • Electrical ‐ performance was down largely due to poor market conditions in the coal mining sector and reduced infrastructure and construction activity resulting in 28% decrease in revenues • TJM – Domestic store revenues increased 23%, export revenues in line with prior year, original equipment (OE) revenue decreased as expected. • EBITDA margin was lower mainly due to impacts of the reduction in Electrical revenues and TJM increased loss. • Impact of subdued economic conditions was more pronounced in second half. ⁻
$m	FY14	FY13	Change
Operating Revenue	92.3	111.7	(17%)
EBITDA	6.8	15.4	(56%)
EBITDA Margin	7%	14%
Depreciation & Amortisation	(1.8)	(1.7)	(4%)
Tax	(1.3)	(3.5)	63%
Interest expense	(0.2)	(0.4)	57%
NPAT	3.5	9.8	(64%)
NPAT Margin	4%	9%
EPS (cents)	10.29	29.05	(65%)

• Impact of subdued economic conditions was more pronounced in second half. ⁻ EBIT $5.0m – 1H14 $3.2m; 2H14 $1.8m

• NPAT ‐ down 64% to $3.5m from $9.8m

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FY14 Divisional & Half on Half Summary

	Electrical	TJM	Corp	FY14
	$m	$m	$m	$m
Operating Revenue	50.9	41.5	-	92.4
EBITDA	11.2	(2.2)	(2.2)	6.8
EBITDA margin %	22%	(5%)		7%
EBIT	11.0	(3.8)	(2.2)	5.0
Operating PBT	11.0	(3.8)	(2.4)	4.8
Tax				(1.3)
Reported NPAT				3.5
Revenue	EBIT*

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• Before Net Interest, Impairment & Discontinued Operations

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Balance Sheet & Dividend Policy

• Strong balance sheet and capacity to generate cash

• Net cash $6.6m

• Net Tangible Assets $1.31 per share

• Dividends

• Payout ratio adjusted to allow up to 60%

• 3 cent fully franked dividend paid March and September 2014

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• Maintained prior year 6 cent dividend payment

Balance Sheet Summary

Balance Sheet Summary $m FY14 FY13 Total Assets 68.4 72.0 Total Shareholder Funds 56.9 56.4 Net Cash/(Debt) 6.6 6.4 Operating cashflows 6.0 10.7 Net Assets by Division Electrical TJM Corp
$m	FY14	FY13
Total Assets	68.4	72.0
Total Shareholder Funds	56.9	56.4
Net Cash/(Debt)	6.6	6.4
Operating cashflows	6.0	10.7

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Quarterly Update & Outlook
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September 2014 Quarter

• Group revenue is down for the September quarter compared to the prior year, due to lower electrical division revenues and reduction in low margin OE revenues for TJM.

• Group margin overall is now improving compared to 2[nd] half FY14 partially offsetting lower revenues.

• Continued difficult trading conditions for the electrical division including the construction sector.

• TJM performance is improving as a result of changes already implemented and further planned changes going forward.

• We are currently assessing opportunities to diversify the CMI Electrical markets and products.

• While we are strongly focused on delivering consistent improved performance in the TJM business, we also continue to review all strategic options to deliver value to shareholders.

• Overall performance for September quarter is down on last year but expectation of improved overall performance for FY15 is unchanged.

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Market Analysis ‐ Electrical • Mining sector
–
Challenges expected to continue in the
medium term
–
CMI mining product is a market leader and a
safety related product that has a
replacement life cycle of 5 years
–
Continued product development of
flameproof products for resources industry
–
Maintaining capacity for recovery of coal
sector whilst controlling costs
–
Australian black coal revenues are forecast
to grow approximately 19% over the next 5
years so recovery is expected (IBIS, Black
Coal Mining in Australia Industry Report
2014)
•
Construction and infrastructure
–
Sector showing continued weakness
–
Aggressive pricing
–
Potential for some improvement in 2 [nd] half
FY15
•
Flameproof
–
Currently in integration phase with product
to market expected next quarter
•
Other potential acquisitions being explored
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Market Analysis ‐ TJM
•
Domestic retail sales:
–
Operating in growth market of new 4WD & light
commercial vehicles
–
Sales continue to increase, a result of
broadening product range and improved pricing
–
Margin has also improved through cost
reductions both from suppliers and overheads
•
Original Equipment sales:
–
Sales are significantly lower than FY14 as a
result of a major contract not being renewed
–
Higher margins will be a strong focus for all
future sales
–
Loss of very low margin OE sales has further
added to improvement in TJM margin
•
Export markets:
–
Main focus on Africa, Middle East and USA
–
Sales slow in first quarter but expected to pick-
up through the course of FY15
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AGM Formal Business
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Formal Business

Financial Report

To receive and consider the financial report of the Company and the reports of the Directors and Auditors for the year ended 30 June 2014.

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Formal Business

Remuneration Report

Resolution 1.

To consider and, if thought fit, pass the following as a non-binding ordinary resolution:

‘That the Company’s Remuneration Report for the financial year ended 30 June 2014 is approved.’

Proxies Received	Voted	%
For	7,087,267	95.63
Against	122,144	1.65
Open	201,454	2.72
Abstain	16,953	N/A

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Formal Business

Election of Director

Resolution 2.

To consider and, if thought fit, pass the following as an ordinary resolution:

‘That Mr Jeffrey Forbes, having been appointed a Director since the last annual general meeting of the Company, in accordance with the Constitution, ceases to hold office and, being eligible, is elected as a Director.’

Proxies Received	Voted	%
For	20,379,994	98.60
Against	72,381	0.35
Open	216,582	1.05
Abstain	439	N/A

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Formal Business

Issue of Performance Rights

Resolution 3.

To consider and, if thought fit, pass the following as an ordinary resolution:

‘That for the purpose of ASX Listing Rule 10.14 and for all other purposes, the issue of 900,000 Performance Rights to Mr Andrew Buckley under the Company's Performance Rights Plan on the terms as described in the Explanatory Memorandum is approved for a period of 3 years from the date of this approval.’

Proxies Received	Voted	%
For	20,177,584	98.04
Against	204,663	0.99
Open	199,454	0.97
Abstain	5,440	N/A

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Thank you for your attendance.

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