EXCELSIOR CAPITAL LTD — AGM Information 2020

Oct 14, 2020

ANNUAL GENERAL MEETING 2020

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Excelsior Capital Limited

Thursday 15 October

Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Agenda

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1 Chairman’s Comments
2 Introductions and Formalities
3 Items of Business
4 Presentation
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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Chairman – Danny Herceg

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Danny joined the Board in October 2019 and previously served as a Director of the company from 2007 to 2014. Danny is a senior corporate and commercial lawyer. Danny’s practice is focused on initial public offerings, secondary market capital raisings, capital market divestments, public and private M&A, strategic divestments and restructures, demergers / spin-offs, takeover defences and commercial negotiations. He has been advising Australian and international enterprises for almost 30 years.

Danny has been a partner in several major Australian law firms, as well as working as a foreign lawyer in the head office of an international law firm in Chicago, gaining experience in US capital markets. He now leads his own boutique firm. Danny has been on the board of several ASX listed companies.

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Annual General Meeting Items Of Business

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Financial Statements and Reports

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To receive and consider the Directors’ Report, Independent Auditor’s Report and Financial Statements for the Company for the year ended 30 June 2020.

Reports were audited by Hall Chadwick (NSW).

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Resolution 1: Election of Oliver Schweizer as a Director

The total of valid proxies received for Resolution 1 is 20,935,499 being:

18,062,692 FOR the resolution 1,842,081 AGAINST the resolution 1,030,726 OPEN to proxy ABSTAIN

31,511

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Resolution 2: Appointment of Auditor – Hall Chadwick (Special Resolution)

The total of valid proxies received for Resolution 2 is 20,896,082 being:

18,871,734 FOR the resolution 955,166 AGAINST the resolution 1,069,182 OPEN to proxy 70,928 ABSTAIN

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Resolution 3: Remuneration Report

The total of valid proxies received for Resolution 3 is 6,336,171 being:

1,220,849

4,084,596 1,030,726 71,902

FOR the resolution AGAINST the resolution OPEN to proxy ABSTAIN

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Resolution 4: Election of Mr Warwick Sauer as a Director

The total of valid proxies received for Resolution 4 is 20,963,664 being:

4,233,890 FOR the resolution

15,699,048

AGAINST the resolution

1,030,726

5,511

OPEN to proxy ABSTAIN

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Resolution 5: Voluntary Winding-up (Special Resolution)

The total of valid proxies received for Resolution 5 is 20,963,675 being:

4,187,835 FOR the resolution 15,745,114 AGAINST the resolution 1,030,726 OPEN to proxy 5,500 ABSTAIN

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SHAREHOLDER PRESENTATION

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ANNUAL GENERAL MEETING 2020

THURSDAY 15 OCTOBER (VIRTUAL MEETING)

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Company Profile

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2020 ANNUAL GENERAL MEETING

Excelsior Capital Limited

Company Profile

Excelsior Capital Limited (ASX:ECL) is a listed investment company made up of two major business units, a Listed Investment Fund and CMI Electrical Operations.

The Listed Investment Fund at 30 June had a majority of its investments held in cash and a small holding of listed and unlisted equities. Total funds under management (FUM) totalled $18.7m at year end.

The company announced it had commenced an internal review of the company’s investments since the third quarter of FY20 which also included the appointment of external advisors for both divestment and growth opportunities. This review shall cover both the Listed Investment Fund as well as CMI Electrical Operations.

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

Major Product Brands

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MINTO COUPLE AFLEX CABLE

XLPE CABLE

HARTLAND CABLE

Excelsior Capital Limited Group Summary

Servicing Industries

At 30 June 2020

Employees	67
Cash	$19.2m
Net Assets	$49.3m

At 8 October 2020

Market Capitalisation	$47.6m
Number of Issued Shares	28.994m

MINING

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CONSTRUCTION INFRASTRUCTURE

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DISTRIBUTION

CUSTOMERS 280+

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INDUSTRIAL

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Direct to wholesales – 80% Direct to customers – 20%

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FY 20 Financial Performance

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Financial Performance (Group)

PERIOD ENDED 30 JUNE

		FY20	FY19	CHANGE	CHANGE
Revenue*	$m	60.0	59.3	1%
EBITDA	$m	6.7	6.7	-
EBITDA Margin	%	11.0	11.0	-
NPAT	$m	3.6^	4.1	(12.2%)
NPAT Margin	%	6.1	7.0	(0.9pp)
EPS	cps	13.0	14.0	(7.1%)
ROE	%	7.4	8.6	(1.2pp)
Cost to Income Ratio	%	20.7	20.6	(0.1pp)

• Revenue net of rebates

• ^ On 1 July 2019, the Company adopted AASB16 Accounting for Leases resulting in a net reduction to NPAT of $0.16m

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

CMI Electrical Operations results

PERIOD ENDED 30 JUNE

		FY20	FY19	CHANGE
Revenue (Gross)	$m	65.0	64.3	1%
Revenue (Net)	$m	60.0	59.3	1%
EBITDA	$m	7.3	7.7	(5.2%)
EBITDA Margin	%	12.0	14.0	(2.0pp)
Profit Before Tax	$m	6.5*	7.7	(15.6%)
Gross Margin Ratio	%	29.0%	30.4	(1.4pp)
Cost to Income Ratio	%	18.1%	17.4%	(0.7pp)

* On 1 July 2019, the Company adopted AASB16 Accounting for Leases resulting in a net reduction to Profit Before Tax of $0.16m

FY20 results were robust despite Covid-19 impacts in 2H FY20.

• Cables sales of $52m (FY19, $48.5m) as a result of new customers and industry expansion.

• Coupler/glands sales of $13.1m (FY19,$15.7m) started lower in 1H FY20 however picked up in 2H FY20 as a result of mines coming back online.

CMI Electrical is poised to take advantage of significant government stimulus commitments across the country on infrastructure, construction, industry and state and federal public infrastructure spending.

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State Government has also communicated the approval of several new large scale coal mine projects in Qld and NSW which are likely have a positive impact on CMI.

Growth opportunities for FY21:

• Two new hybrid couplers suited for open cut mining applications and infrastructure tunnelling.

• Domestic and export sales growth for Minto mining products.

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Chart above shows gross revenue over last 10 years

Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Investment Portfolio results

PERIOD ENDED 30 JUNE

Asset Classes

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Equities
$0.9m
4.9%
Cash &
Equiv.
$17.5m
95.1%
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Breakdown of Investments Categories

• At 30 June 2020 the Investment Portfolio held: Listed equities - 1 Unlisted equities- 1

• During Q2 and Q3 of FY20 the hybrid investments of the fund were liquidated as part of risk mitigation steps.

• The Company is currently completing a review of all of its investments which includes the investments within the Investment Portfolio.

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Australian
listed
equities
$0.6m
3.3%
Cash &
Equiv. Australian
$17.5m Non listed
95.1 % equities
$0.3m
1.6%
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PRIORITIES

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DANNY HERCEG

Outlook and Priorities

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Outlook and Priorities

CMI Electrical Operations

• Australian Government has committed large stimulus budget allocations to the infrastructure, mining and publics works programs all of which may have a positive impact on CMI.

• To take advantage of large government infrastructure spending and increased mining activity two new products KV11 and KV22 to be completed and ready for sale by Q2 FY21. These plugs have a broader customer base and used in multiple overground applications including rail and road tunnelling, industrial construction and open-pit mines.

• Minto sales have commenced FY21 strongly with new customers in Indonesia and mines in Mongolia being brought back online. Minto sales are expected to be stronger in FY21.

• The advent of Covid-19 effected some of CMI competitors resulting in an increase in our customer base as CMI was able to continue supply of product during periods where restrictions impacted CMI’s competitors.

Listed Investment Portfolio

• After a period of market volatility and uncertainty the investment fund is positioned well to take advantage of selective investments according to its mandate.

• Fund will continue to diversify across sectors and investments types in selective listed and unlisted investments as well as interest and dividend earning investments.

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Mining Sector Outlook

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The top miners both domestically and internationally have weathered Covid19 storm relatively unscathed and much better than most other sectors due to automation and technology.

A paper by PwC showed that mine operations and production had little or no material interruptions.

Excelsior sales of couplers and glands in particular are closely aligned to the mining and infrastructure sectors both of which are well positioned for growth. It’s mining customers are mostly thermal and metallurgical coal, copper and gold miners operating underground. However with the completion of its new hybrid couplers in Q2 FY21 the Company is positioned well to broaden its market into the open-cut miners.

Source –ABS 2020 Department of Industry, science, energy and resources

Chart above provided by Resource and Energy, September 2020 quarter shows Thermal, Metallurgical coal along with Base Metals to perform well into 2022.

Sources – Mine June 2020 by PwC, “resilient and resourceful”

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Australia’s thermal coal exports

Source –ABS 2020 Department of Industry, science, energy and resources

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Source - IBIS World

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Infrastructure Project Spending Outlook

Excelsior is positioned to benefit from the Australian Government’s recently announced commitment to large scale infrastructure and development projects in energy, roads, rail, tunnels and construction. Cable, couplers and components are used widely in large scale industrial projects.

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Australia’s thermal coal exports
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The Federal Government also announced in October 2020 a $14 billion infrastructure stimulus package under a accelerator program over 4 years.

A total in excess of $250 billion in federal infrastructure projects are in the pipeline over the next year four years which includes $110 billion in transport infrastructure projects.

Source – PwC September 20 “where next for infrastructure”

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Source – Australia and New Zealand Infrastructure Pipeline 2020

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Shareholder Questions

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Excelsior Capital Limited

2020 ANNUAL GENERAL MEETING

Important Notice

DISCLAIMER

Information, including forecast financial information, in this presentation, should not be considered as a recommendation in relation to holding, purchasing or selling shares, securities or other instruments in Excelsior Capital Limited (‘Excelsior’ or ‘the Company’) or any other company and is general background information about the activities of the Company and is current as at the date of the presentation, 15 October 2020. Due care and attention has been used in the preparation of forecast information, however, actual results may vary from forecast and any variation may be materially positive or negative.

Forecasts, by their very nature, are subject to uncertainty and contingencies may occur which are outside the control of Excelsior Capital Limited. Forward looking statements in this presentation are based on Excelsior Capital Limited’s current views and assumptions and involve known and unknown risks and uncertainties, many of which are beyond Excelsior’s control and could cause actual results or events to differ materially from those expressed or implied. Before making or varying any decision in relation to holding, purchasing or selling shares, securities or other instruments in Excelsior Capital Limited, investors should consider the appropriateness of that investment in light of their individual investment objectives and financial situation and should seek their own independent professional advice.

This presentation has not been subject to auditor review and all dollar values are in Australian dollars ($AUD).

This presentation should be read in conjunction with all information which Excelsior Capital Limited has lodged with the Australian Securities Exchange (ASX). Copies of those lodgements are available from either the ASX website, asx.com.au, or Excelsior’s website at cmilimited.com.au/investor-centre/.

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