Chairman s Report It is with pleasure that at this second Annual General Meeting of Shriro Holdings Limited since its Listing in June 2015, I am able to report that your Company has again achieved profit growth. Shriro exceeded its Prospectus net profit after tax Forecast in its first year by 24%, and in CY16 increased this a further 6.5%. A fully franked dividend of 7 cents per share was paid to shareholders on the 9 th of March 2017, this resulted in total dividends paid of 10 cents per share for the calendar year ended 31 December 2016 and represented a payout ratio of approximately 72%. Mike Westrup will report on the year shortly but let me point out that EBITDA for the year increased 3.2% on the previous year and the gross margin was steady, despite the decline in the Australian Dollar. Operating expenses were well controlled for the second successive year, which assisted with the achievement of growth in net profit after tax. The result was however affected by the costs of the everdure by heston blumenthal project of $2.4 million, of which approximately $700K is expected to be non-reoccurring. Continuing product development remains a very important component of Shriro s strategy and this focus on product development continues into 2017. Mike will shortly give you a glimpse of the Company s current activities in this area. Corporate Governance continues to be a strong focus of the Board in the second year since listing on the ASX. For example, the Audit, Risk and Compliance Committee met four times during the year and the Remuneration and Nomination committee met six times. These Board committees comprise your non-executive directors only. Your Board operates with a relatively small number of Directors but is considered to have an appropriate range of skills and experience. We will continue to review the size of the Board and range of skills required as the Company grows, so as to ensure the right balance is maintained. The year ended 31 December 2016 has been another positive one for the Company and its people, and I take this opportunity to thank Mike Westrup and his team for the achievements in the 2016 year. Similarly I would like to thank all the staff for their efforts and committment. I also thank my fellow Directors for their input and support and finally, on behalf of the Board, I thank our shareholders for your continued support. I now invite Mike Westrup to address the meeting and give us an overview of the operations of the Company and a glimpse into the current trading and outlook for the year. SHRIRO HOLDINGS LIMITED 104 Vanessa Street, Kingsgrove NSW 2208 Australia Tel: +61(2) 9415 5000 Fax: +61(2) 9415 5001 Locked Bag 5002, Kingsgrove NSW 2208 Website: www.shriro.com.au ABN 28 002 386 129
SHRIRO HOLDINGS LIMITED Annual General Meeting Presentation Monday, 24 April 2017 by Mike Westrup
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 2 CY16 Highlights NPAT of $13.2M, up 6.5%, despite significant new BBQ launch costs Sales Revenue grew 2.1% excluding disruption to Appliance sales channel 6.5% 2.1% Everdure entered into a 10 year Global Agreement with Heston Blumenthal EBITDA up 3.2% to $22.8M assisted by disciplined expense control Strong cash flows well controlled working cap 10 year 3.2% Net Debt $5.5 million (0.2x EBITDA) Final fully franked dividend of 7 cents per share CY16 total of 10 cents per share Average NPBT growth of 22% per annum over the past three years $5.5m 10.0 cps 22%
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 3 Profit and Loss Statement CY16 showed NPAT grow 6.5% and EBITDA grow 3.2% as compared to CY15 Major contributors to this result were: continued disciplined expense control; and GP% holding steady despite significant foreign currency headwinds Lower interest expense due to lower debt Growth in CY16 NPAT, despite one-off Heston costs
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 4 Balance Sheet Net Debt reduced to $5.5M as at 31 Dec 16 (PY $9.4M) $5.5m Debt at the end of Jan 17 was zero Gearing low Debt to EBITDA of 0.2% Working capital now at expected level, still with potential for slight improvement for CY17 Solid net assets of $53.3M at 31 Dec 16 and very low debt puts Shriro in a good position 0.2% $53.3m Cash Flows Operating cash flows for CY16 were $15.9M (CY15 $24.9M). The operating cash flows have significantly exceeded NPAT since the IPO. $15.9m
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 5 BBQ s WINNER Red Dot Design Award Best of the Best 2017
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 6 BBQ Information Worldwide market is 10 11 billion, of which 6.3 billion is in the USA market (Source: IBIS) Strategy is to systematically launch the products throughout the world, after understanding each market through local distributors
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION Australian Launch 2016 Australian Launch September 2016 Key supporters: Harvey Norman, Bunnings and BBQ specialists 7
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 8 New Zealand Launch 2017 NZ Launch April 2016 Key supporters: Harvey Norman, Mitre 10, BBQ specialists and Bunnings
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 9 United Kingdom Launch 2017 United Kingdom Launch March 2017 Key supporters: John Lewis Group and Garden Centres
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 10 United Kingdom Launch 2017 continued Held at Heston s Crown Hotel in Bray see pictures of the set-up prior to the start below Rotating 16 chefs from Fat Duck (3 Michelin stars), Dinner (2 stars), The Crown (1 star) and Hinds Head (1 star) 40 of arguably the UK s most influential media, and 60 of the UK s top retailers attended
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 11 Scandinavian Launch March 2017 Scandinavian (Denmark, Norway, Iceland, Finland and Sweden) Launch March 2017 Key supporters: Magasun Department store; Illium Bolighus most prestigious housewares stores in the world, all famous designers; and Garden centres
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 12 International market future launches Future for BBQs 2017 Expand into Scandinavia/ United Kingdom/ New Zealand/ Belgium/ Holland/ Luxembourg/ Slovenia 2018 Expand into Germany 2019 Expand into USA/Spain/Portugal/Canada 2020 Expand into South Africa & South America Canada Scandinavia United States United Kingdom Holland Belgium Germany Luxembourg Slovenia Portugal Spain South America Current Future South Africa Australia New Zealand
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 13 Developments ROBINHOOD 2017 Development of laundry modules and flat packs for Australia/New Zealand and UK markets.
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 14 Developments continued OMEGA 2017/2018 Development of new range of cooking appliances incorporating proprietary software to enable the cook to make better decisions
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 15 Other Initiatives G-SHOCK 35th Anniversary Launch USA November 2017 and Australia December 2017 Opened G-factory stores @ Myer Westfield Warringah Mall Opened G-factory Premium @ Wallace & Bishop, Queens Street Mall, Brisbane Myer G-Factory Warringah Mall Casio Timepiece Melbourne Myer Store G-Factory Premium Wallace Bishop Brisbane
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 16 Dividends Dividends of 10 cents per share, fully franked for CY16 10.0 cps Represents a payout ratio of around 72% 72% A fully franked interim dividend is expected to be paid in September 2017 fully franked
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION 17 Outlook First Quarter The first QTR s results are encouraging and are ahead of Q1 CY16, with sales up 6.6% on PY, however caution, as Q1 is only a small part of total year. Watches are performing below expectations, however are expected to pick-up in Q4, the commercial business is performing very well and the BBQ sales are providing growth. Full Year The full year is difficult to forecast at this point due to annual results being mostly driven by the 2nd half s performance from seasonality, however the Heston costs will be lower than in CY16, so if the Northern Hemisphere s take-up of Heston products is as expected, then the NPAT will grow again.
SHRIRO HOLDINGS LIMITED ANNUAL GENERAL MEETING PRESENTATION Thank you 18