SDI LIMITED — AGM Information 2015

Nov 19, 2015

AGM 2015

Chairman’s address

• Sales revenue up 5.1% to $68.7m

• • Profit before tax up 16.5% to $8.7m

• • EBITDA up 15.2%

• • 100% increase in dividend payments

• • Borrowings down by $1.5 m

• • Cash up by 1.0m

• • Glass Ionomer sales increased by 35%

• Average rates:

USD / AUD EUR / AUD GBP / EUR CAD / USD BRL / AUD	2013 /14	2014 / 15	Movement
	0.91 0.67 0.83 0.93 2.09	0.83 0.69 0.75 0.85 2.22	10% ‐3% 11% 9% ‐6%

• 2014 / 15 Closing rates:

USD/AUD	0.77
EUR/AUD	0.69
GBP/EUR	0.71
CAD/USD	0.80
BRL/AUD	2.40

Currency effect on Results:

• Sales: + 3.3%

• Operating Expenses: +0.9%

• Realized Currency Gain (pre tax): 115k

• Capex: $2.8m

• Investment in new Manufacturing equipment $1.9m

• Upgrade of SDI US & European facilities $0.4m

• New Composite manufacturing facility $0.5m

• R & D:

• Development: $1.6m

• Technical Support / Improvements: $1.0m

• Other Intangibles: $0.4m

• Debt reduction: $1.5m

• NPAT Mix: 1[st] half 35% to 40% of full year

• Sales Growth Excluding Currency: 1.8%

• Operating Expenses Increase Excluding Currency: 0.9%

• NPAT down 4%

• Once off tax expense adjustment – R & D for prior year

• Dividend: 27% of NPAT

• Target for future years: Minimum 30% of NPAT

Questions

0% 2% 4% 6% 8% 10% 12%	0% 2% 4% 6% 8% 10% 12%		Sales growth by region Australia (AUD) North America (USD) Europe (EUR) Brazil (BRL)
	0% 2% 4% 6% 8% 10% 12%		Australia (AUD) North America (USD) Europe (EUR) Brazil (BRL)

Sales increase even with USD

==> picture [721 x 541] intentionally omitted <==

----- Start of picture text -----

Sales mix is changing
100%
10% 9% 9% 9%
90%
80%
22% 25% 25%
30%
70%
60%
21% 21% equipment
23%
50% 22% aesthetics
whitening
40% amalgam
30%
47%
45%
43%
20% 39%
10%
0%
2012 2013 2014 2015
----- End of picture text -----

Global sales team

• Global sales distribution in 110+ countries

• Distribution warehouses in Germany, USA, Brazil and Australia

• Sales team of 100+ people in key markets

R+D teams focused on innovation

• Highly skilled R+D teams focused on both chemistry innovation and delivery system leadership

• Strategically realigned for future growth

==> picture [721 x 541] intentionally omitted <==

----- Start of picture text -----

Organisational structure
Board of Directors Company Secretary
John Slaviero
Executive Chairman
Jeffery Cheetham
Joint Group CEO/MD
Jeffery Cheetham
Samantha Cheetham
North America Europe Brazil Chief Operating OfficerDirector of Finance Global Marketing Australian Sales Australian Export Sales
John Slaviero
Finance Information Technology Manufacturing Technical Compliance Research & Development Human Resources
----- End of picture text -----

• Developed markets: 20% of global population

• Aging population

• Natural teeth are maintained longer

• Growth of group practices/large corporates in Australia, USA, UK and many other countries

• Emerging markets – 80% of global population

• Increasing access to dental care

• Middle class population growing

• Increasing demand for cosmetic treatments

Global distribution

Distribution from Brazil

• SDI is not widely known in most markets

• Low market shares in all markets

• ~2% world wide market share

• Glass ionomers are taking over from traditional restoratives

• Growing investment in Key Opinion Leaders

• Growing investment in published research

• Regulatory barriers to entry in many markets  SDI is well established in all key markets

IDS - 2015

• Stronger R+D teams collaborating with outside experts

• Consistent rollout of new products

• Focus on innovation

• Improved delivery systems

• 1-2 new products per year

• New LED light

• New glass ionomer cement

• Organisational structural changes implemented

• Global teams realigned to corporate strategy

• Corporate image will be rebranded

• Constant rollout of innovative products

• Shorter delivery times to export customers from Germany and Brazil

• Manufacturing efficiencies for reduced costs

• Manufacturing in Australia and Brazil

• Brazil: lower landed cost to compete with local manufacturers

Questions