SCHOOLBLAZER LIMITED — AGM Information 2018

Feb 20, 2018

HGL Limited

Annual General Meeting 21 February 2018

Computershare Offices 60 Carrington Street, Sydney

CEO Presentation

Henrik Thorup 21 February 2018

AGENDA

CORPORATE HIGHLIGHTS

GPS STRATEGY PLAN

OPERATIONAL REVIEW

RECENT ACQUISITIONS

FY18 TRADING UPDATE AND OUTLOOK

CORPORATE HIGHLIGHTS

Commencing the repositioning and consolidation of the HGL company portfolio

• Investing in growth opportunities in core business
• Develop and harness operational strengths in our continuing business units.
• HGL deploys an active management approach driving portfolio development activities.
• Board and management team aligned to the Growth, Profit and Sustainability (GPS) Strategy.
• Solid balance sheet to pursue further strategic acquisitions.
• Shareholder returns driven by earnings growth.

OPERATIONAL HIGHLIGHTS

A challenging 2017, followed by successful completion of key projects in recent months.

• Third consecutive year of Group organic sales growth, despite decline in some business units
• Continued investment in additional sales executives and business development activities
• Launch of 4 new brands across several business units
• Expansion of Mountcastle production capacity in Vietnam
• Further consolidation of MacPark warehouse operation servicing 5 business units
• Acquisition of Intralux (Sep17), POSM (Nov17) and Pegasus Healthcare (Feb18 remains conditional)
• Sale of Biante (Nov17) and Leutenegger (Feb18)
• Fast growing exclusive supply partnership between Mountcastle and The School Locker

20% p.a.

	REBUILD FOUNDATIONS	GROW AND DEVELOP	EXPAND & SUSTAIN
pamdaoR	▪Arrest Sales Decline▪Create Operational Efficiency▪Reduce Working Capital Levels▪Build Employee Capability	▪Expand Product Portfolio▪Superior Sales Execution▪Reduce Operational Complexity▪Develop Intellectual Property▪Integrate Business Technology▪Increase Employee Engagement	▪Elevate Organic Growth▪Invest in Growth Industries▪Acquire Larger Businesses with IP▪Sustain Performance Levels
	Organic Revenue Growth	Underlying EBIT Ratio	ROCE

Organic Revenue Growth 10% CAGR

Underlying EBIT Ratio 10% p.a.

HGL ACQUISITION STRATEGY

Acquisition Strategy

HGL must participate in attractive industries with long-term growth characteristics executing our GPS strategy.

Invest in growth industries and leverage our industry experience:

Building Products (Commercial Lighting)

Medical Equipment (Medical equipment and consumables) Personal Care (Health, Beauty & Wellness) Home Improvement (Soft furnishings & homewares) Retail Marketing (Point of Sales products and technology) School Wear (Public & Private School Uniforms)

Criteria for Industry participation:

Industry Size Growth Prospects Competitive Parameters Strong industry profit margins Import and wholesale a vital part of competitive landscape

Page 7 HGL Limited (ASX: HNG)

HGL INDUSTRY FOOTPRINT 2018

Market Growth Per Annum

HGL ACQUISITION STRATEGY

Acquisition Criteria

Size

Standalone acquisitions: Revenue $20m+, ROI above 15% Bolt-on acquisitions: Revenue $2m+, profitable

Type

Importing and distributing branded products for specialist markets. Own IP is preferred.

Geography

Majority of revenue from Australia and New Zealand. International markets could be serviced.

Customer Base

Businesses can supply commercial, retail, or industrial customers.

FINANCIAL PERFORMANCE TREND FY14-FY17 (Continuing Businesses*)

Gross Margin ($m)

Expenses ($m)

Underlying EBIT ($m)

NOTE: * Continuing businesses are JSB Lighting, BLC Cosmetics, SPOS Group, Nido Interiors and 100% of Mountcastle.

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OPERATIONAL PRIORITIES (Continuing Businesses*)

NOTE: * Continuing businesses are JSB Lighting, BLC Cosmetics, SPOS Group, Nido Interiors and 100% of Mountcastle.

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HGL Limited (ASX: HNG)

ACQUISITION OF INTRALUX BY JSB LIGHTING

About:

Founded in 1986 Intralux Australia has extensive international presence in more than 20 countries via strategic alliances with local distributors and re-sellers.

The manufacturing facilities encompass modern semi-automated production techniques and an in-house research and development department that utilises sophisticated 3D modelling technology to take advantage of rapid prototyping processes.

Operation and Integration plan:

• Maintain location in Brisbane
• Sales of Intralux products done by JSB sales team
• Core market is commercial applications
• Well known brand in Australia and overseas
• Protected IP with patent registrations
• Product range with modularity, easy to install

ACQUISITION OF POSM BY SPOS GROUP

About

32 year old business located in Bomaderry NSW.

Long standing customer and supply base with very little cross-over with major SPOS customers.

Similar product range to SPOS. Shelf management (Datastrip, dividers, pushers), Signage and display units.

Largest customers are Caltex, Mitre-10 and other wellknown retailers.

Integration Plan

• Retain warehouse at Bomaderry for c. 4 months. Move to Sydney
• The POSM CEO will remain involved for 6 months minimum.
• Handover of key accounts to SPOS sales team is progressing well.
• Certain operational POSM staff will be retained for 4-6 month

Growth and Synergy Opportunities

• Caltex new store concept "The Foodary" is now being rolled out.
• SPOS products can drive growth in POSM customer base.
• POSM are developing a new 'gravity slide mat' product
• Opportunity for economies of sourcing.

ACQUISITION OF PEGASUS HEALTHCARE

Pegasus Healthcare Group operate two trading divisions: Pegasus® Healthcare and Hospital-at-Home®

Pegasus Healthcare was established in 1991 to import, sale and rent alternating pressure devices (pressure relieving beds and mattresses) to hospitals and aged care facilities .

• A trusted and leading supplier of clinically proven products
• Over 30 years of experience
• Pioneers in alternating pressure mattresses
• ISO 9001
• Our customers include:
  • Government hospitals and bodies (Inc. NDIS etc.)
  • Private hospitals (Inc. Ramsay, Healthscope)
  • Aged care facilities and the public

ACQUISITION OF PEGASUS HEALTHCARE

Hospital-at-Home was established in 1998 and specializes in supplying durable medical equipment (crutches, wheelchairs, electric beds, lifters, commodes) and consumables (compression stockings, bandages, splints, incontinence pads) for sale and rent to patients being nursed at home.

Pegasus Healthcare and Hospital-at-Home are based in Moorebank (NSW) with sales, reprocessing, distribution, showroom and service centres in Gosford, Newcastle and Wagga Wagga.

EXPANDED PARTNERSHIP OPPORTUNITY (Mountcastle and The School Locker)

About:

The School Locker (TSL) is a retailer of school uniforms including footwear, technology products, sporting equipment, musical instruments and stationery specifically targeting parents of school-aged children as well as catering for musicians and sporting enthusiasts.

Expanded Distribution Partnership:

TSL to be the exclusive distributor of the Mountcastle school product range to schools in Australia.

Longer term agreement.

Set annual purchase targets of Mountcastle products.

Mountcastle sales team to transition to TSL.

FY18 TRADING UPDATE AND OUTLOOK

Projected revenue and earnings growth in FY18 from improved performance in continuing businesses, while leveraging new acquisitions.

• Market conditions expected to remain challenging.
• Integration of Intralux and POSM is progressing well and both acquisitions will be earnings accretive in FY18
• Acquisition of Pegasus Healthcare will be earnings accretive in FY18
• Uplift in Mountcastle school wear sales from new distribution partnership with The School Locker
• New CEO and his leadership team in JSB Lighting are focused on continuing its positive performance trend
• Solid order pipeline in Nido Interiors and SPOS Group.
• Continued stringent control of operating expense and working capital
• Focus on generating positive operating cash flow despite growth investments
• HGL management is pursuing additional strategic acquisitions

THANK YOU

DISCLAIMER:

This presentation is provided for information purposes only.

The information contained in this presentation is not intended to be relied upon as advice to investors and does not take into account investment objectives, financial situation or needs of any particular investor.

Statements contained in this presentation, particularly those regarding possible or assumed future performance and outcomes, projected growth of the company, industry growth or other trend projections are or may be forward looking statements.

Such statements relate to future events and expectations and therefore involve risks and uncertainties. Actual results may differ materially from those expressed or implied by these forward looking statements.