EXCELSIOR CAPITAL LTD — AGM Information 2016

Nov 22, 2016

Annual General Meeting Presentation

23 November 2016 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.

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CMI Limited Overview

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

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

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FY16 Earnings Summary

$m	FY16	FY15	Change
Revenue(a)	40.8	64.9(b)	(37%)
EBITDA	5.3	8.5	(38%)
EBITDA Margin	13%	13%
Depreciation & Amortisation	(0.5)	(1.3)	63%
Tax	(1.4)	(1.7)
Interest expense	(0.0)	(0.1)	63%
NPAT	3.4	5.4	(37%)
NPAT Margin	8%	8%
EPS (cents)	9.90	15.77	(37%)

• (a) FY15 includes TJM revenues to 2 March 2015

• Electrical earnings lower due to a 6% revenue reduction and a change in sales mix impacting margins

• Prior year includes “one‐off” contributions to NPAT of $1.3m −$869k CMI Industrial loan recovery;

  • −$467k gain on sale of TJM

• EBIT $4.8m

  • −1H16 $2.5m;

  • −2H16 $2.3m

• NPAT – down 37% to $3.4m from $5.4m

• (b) Revenue has been updated to be net of discounts and rebates

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FY16 Divisional & Half on Half Summary

	Electrical	Corp	FY16
	$m	$m	$m
Revenue	40.0	0.8	40.8
EBITDA	5.9	(0.6)	5.3
EBITDA margin %	15%		13%
EBIT	5.4	(0.6)	4.8
Operating PBT	5.4	(0.6)	4.8
Tax			(1.4)
Reported NPAT			3.4

Electrical Revenue*

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Electrical EBIT*

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• Excludes corporate and discontinued operations

Balance Sheet & Dividend Policy

• Strong balance sheet and capacity to generate cash

• Net cash $26.7m

• Net Tangible Assets $1.18 per share

• Capital Return $10.5m paid in December 2015

• Dividends

• Payout ratio policy allows up to 60% of profits to be paid out

• 3 cent fully franked dividend paid March 2016 and 3 cent fully franked dividend paid September 2016

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	Page 6 Balance Sheet Summary $m FY16 FY15 Total Assets 55.9 66.8 Total Shareholder Funds 50.3 60.6 Net Cash/(Debt) 26.7 34.2 Operating cashflows 6.3 9.6

Quarterly Update & Outlook

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September 2016 Quarter

• Revenue is down on the September quarter of the prior year by approximately 12%

• Performance for the September quarter is above last year slightly due to improved product margins and overhead reductions

• Continued challenging trading conditions are expected for the electrical division including the mining, resources, construction and infrastructure sectors, with margins continuing to be under pressure

• Mr. Jim Johnson appointed General Manager Electrical effective 18 January 2017

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Market Analysis ‐ Electrical

•

Mining and Resources sector

• Challenges expected to continue in the medium term

• CMI mining product is a market leading safety related product with an overhaul life cycle of 4 years which often leads to sales

• 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 at an annualised rate of 3.5% over the 5 years through 2021-2022 (IBIS, Black Coal Mining in Australia Industry Report 2016)

• Construction and infrastructure

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• Competitive pricing

Capital Management

• A Capital Return of $0.30 per share, approximately $10.5m in total was paid to shareholders in December 2015

• Fully franked dividends of 6 cents paid in equal instalments of 3 cents in March and September 2016

• Off-market Buy-back proposal announced 18 November 2016 of up to 10% of issued capital

– Record date 25 November 2016

• Closing date for acceptance 4 January 2017

• Price 5-day VWAP prior to announcement (approximately $1.16) adjusted by S&P/ASX 200 Index movement

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Change of Nature

• Shareholder approval sought to

• change the nature of the company’s activities to an Investment Entity

• change the company name to Excelsior Capital Limited

• Prospectus and EGM Notice announced on 18 November 2016

• EGM to be held on 21 December 2016

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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 2016.

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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 2016 is approved.’

Proxies Received	Voted	%
For	1,125,248	47.86
Against	648,747	27.60
Open	576,973	24.54
Abstain	10,125	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 Steven Miotti, 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	1,177,290	50.04
Against	598,205	25.43
Open	576,973	24.53
Abstain	8,625	N/A

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Formal Business

Election of Director

Resolution 3.

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

‘That Mr Craig Green, 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	1,176,546	50.01
Against	597,949	25.42
Open	577,973	24.57
Abstain	8,625	N/A

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Thank you for your attendance.

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