Scott Technology Full Year Announcement

Scott Technology Limited 
630 Kaikorai Valley Road 
Private Bag 1960 
Dunedin 9054 
New Zealand 
 +64 3 478 8110 
               www.scottautomation.com 
 
©Scott Technology Limited  
 
24 October 2019 
 
Listed Company Relations 
New Zealand Exchange Limited 
PO Box 2959 
Wellington 
 
 
Dear Sir/Madam 
 
R
E: SCOTT TECHNOLOGY LIMITED 2019 FULL YEAR ANNOUNCEMENT 
 
Highlights  
 
2019  2018 
Revenue $225.1m +24% $181.8m 
EBITDA $20.0m +4% $19.3m 
    
Shareholder equity $111.8m +6% $105.7m (restated) 
Final dividend  4.0 cps  6.0 cps 
Full year dividend 8.0 cps  10.0 cps 
 
 Substantial growth in revenues across a range of sectors and geographies. 
 Exciting Research and Development activities and outcomes. 
 Continued growth in shareholder equity. 
 Strategic acquisitions integrated. 
 Substantial growth in North America and Europe. 
 
 
The Directors of Scott Technology Limited (‘Scott’) report total revenues of $225m up 24%, on the $182m 
revenues achieved in the prior year.  Revenue growth this year has primarily come from a full 12 months result 
from the two acquisitions completed in 2018.  
 
The bottom line performance for the current 
year was impacted by a number of challenging projects. These 
projects were discussed in our market update released to the NZX on 9 July.   The company is pleased to report 
that we are nearing completion of these projects, noted in our market updated dated 9 July, and do not expect 
the
 projects to greatly impact on profitability in the year ahead. A positive outcome from these projects is a suite 
of new technologies and products which we are already taking to market. 
 
Through the year, Scott maintained a strong commitment to Research and Development (‘R&D’). The Board 
made a conscious decision
 to accelerate R&D spend to make the most of Australian tax credits and the NZ 
Government’s expiring R&D growth grant which is being replaced by the new tax credit scheme. Scott’s total 
gross Research and Development exceeded $14.0m in the current year, representing 6% of our total revenues 
(2018: $11m).  
The Board has taken a conservative, but prudent, approach by expensing R&D.  Significant 
progress has been made during the year toward expanding technologies and developing new solutions that will 
deliver results in the years ahead.  Examples of technology developed during the year include: 
 
 3KG sample mill ‐ the “Gryst” Mill 
 Poultry trussing system developed in conjunction with Pilgrims Pride in the USA 
 Bladestop connect software for Industry 4.0 application 
 Automated fire assay system for Gold analysis 
 Automated sample preparation systems for coal, aggregates and iron ore 
 Cobotic (Collaborative Robot) solutions for welding and palletising 
 Warehouse
 management software to enable complete turnkey systems for logistics and warehouse 

    
 
 Customised and specialised heavy lift and natural navigation Automated Guided Vehicle (AGV) solutions   
 Industry 4.0 enabled high level, high speed palletiser 
 Beef scribing system 
 Lamb loin deboner 
 X‐Ray enabled Pork Primal processing system 
 
Our total IP portfolio has grown to over 200 patents 
covering 40 core product families and over 80 trademarks. 
 
Earnings before interest tax depreciation and amortisation (EBITDA) of $20.0m increased 4% from $19.3m in the 
prior year.  EBITDA in 2019 includes the impact of accounting changes required by the adoption of three new NZ 
International Financial Reporting Standards (NZ IFRS). 
The major impact of the adoption of new standards arises 
from the revised treatment of leases previously treated as operating expenses which are now recorded as a 
right‐of‐use asset and lease liabilities on the balance sheet with the lease expense replaced by a depreciation 
and interest expense.  The net
 impact is an increase of assets by $17.0m and an increase in Liabilities of $17.4m 
with a $0.4m decrease in the net surplus before tax and an increase in EBITDA of $4.0m.  
 
Sales into our Appliances, Industrial Automation and Materials Handling & Logistics sectors achieved double 
digit growth. The acquisition 
of Alvey in 2018 provided a major boost to the Materials Handling & Logistics sector 
where revenues increased 126% and the acquisition of Transbotics (AGV’s) driving a 52% increase in revenues 
from the Industrial Automation sector.  
 
Steps have been taken to improve our operational performance. Our German facility has been 
moved under the 
wider European management team with manufacturing consolidated into our Czech operations. We have 
narrowed our focus in Auckland to concentrate on standard products and increased our capacity in Melbourne, 
Sydney, Christchurch and Dunedin to provide the necessary skills and experience to ensure large projects are 
appropriately resourced.   
 
At balance date the company had total bank debt of $16.4m against total shareholder’s funds of $111.8m, 
compared to $105.7m (restated) in 2018.  During the year cash was used to settle the deferred portion of the 
Alvey acquisition completed in 2018 and to acquire the bolt on business of Normaclass, which
 provides beef 
grading technology with extensive installations in Europe and Uruguay. Cash was also applied to the building 
extension in Dunedin which is nearing completion. Management’s focus is firmly on delivering the operational 
benefits and efficiencies expected from our expanded business.  The Scott Group is well positioned to deliver 
significant 
profitable growth supported and driven by our strategy. 
 
 
Dividend 
 
The Directors have declared a final dividend of 4.0 cents per share for the year ended 31 August 2019, payable 
on 26 November 2019.  
 
With strong growth and an associated increase in working capital requirements, your Directors have held the 
dividend to a 70% payment ratio in order to fund these requirements. 
 
With the interim dividend of 4.0 cents per share paid in May 2019, the total dividend for the year is 8.0 cents 
per share.  The final dividend will not be fully imputed due to a greater portion of earnings
 being generated 
offshore.  The Dividend Reinvestment Plan will apply. 
 
 
Outlook 
 
We are in a good position to continue to grow but we will be cautious in our approach in order to protect cash 
flow and grow the bottom line. The learnings and challenges from the past year will strengthen 
the business and 
fine tune the skills and experience of our people. 
 
  

    
 
Our forward order book and opportunities continue to grow at a steady rate, despite the fact of global economic 
uncertainty in our markets slowing the conversion of enquiries to orders. We have sufficient confidence in our 
sales prospects and operational developments to target further growth and a lift in performance in th
e year 
ahead.  
 
 
Yours faithfully 
 



Stuart J McLauchlan        Chris C Hopkins 
Chairman      Managing Director 
027 433 5481      021 815 975 
 
 
 
 
 
About Scott 
At Scott we automate the future. The production line machinery we design and build deliver productivity gains 
and exceptional reliability to many of the world’s leading manufacturers. We also go a step beyond engineering 
production solutions to actually revolutionising entire industries – using robotics to automate manual processes 
and cre
ate genuine competitive advantage.  
 
For over 100 years Scott has looked to tomorrow and rapidly responded to shifting needs. Today, we have 
production bases in the United States, Belgium, Czech Republic, France, Germany, China, Australia and New 
Zealand, customers in 88 countries, and a real commitment to developing new technology and br
inging it to 
market. Across everything we do you will discover true quality, advanced engineering and a renowned design 
aesthetic.  
 
Scott. Quality that lasts. Quality that inspires.

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Independent Auditor’s Report
To the Shareholders of Scott Technology Limited
Opinion We have audited the consolidated financial statements of Scott Technology Limited and its
subsidiaries (the ‘Group’), which comprise the consolidated balance sheet as at 31 August
2019, and the consolidated statement of comprehensive income, statement of changes in
equity and statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 3 to 54,
present fairly, in all material respects, the consolidated financial position of the Group as
at 31 August 2019, and its consolidated financial performance and cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (‘ISAs’)
and International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing
and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
Our firm carries out other assignments for the Group in the area of taxation advice and
other assurance services. These services have not impaired our independence as auditor of
the Company and Group. In addition to this, partners and employees of our firm deal with
the Company and its subsidiaries on normal terms within the ordinary course of trading
activities of the business of the Company and its subsidiaries. The firm has no other
relationship with, or interest in, the Company or any of its subsidiaries.
Audit materiality


We consider materiality primarily in terms of the magnitude of misstatement in the
financial statements of the Group that in our judgement would make it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced
(the ‘quantitative’ materiality). In addition, we also assess whether other matters that
come to our attention during the audit would in our judgement change or influence the
decisions of such a person (the ‘qualitative’ materiality). We use materiality both in
planning the scope of our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $850,000.
Key audit matters Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter
Recognition of Profit on Long Term Projects
The Group’s most significant revenue stream relates to long
term projects for customers in various industries. Revenue
and profit on long term projects are accounted for based on
management’s estimate of the percentage of completion of
the individual contracts as detailed in note A1.
There is a significant level of judgement involved in the
recognition of revenue and profit on long term projects
driven by factors which arise throughout the life of the
project requiring estimation, and contract conditions
differing between projects. For these reasons, we have
identified this area as a key audit matter.
Our procedures included, among others:
 Assessment of controls – Assessing the group’s
processes and controls around preparation/calculation
of the percentage of completion.

 Hindsight consideration – For a sample of projects
in place at the end of the prior year, we compared the
current year actual results to prior year forecasts to
assess the reliability of management estimates
relating to the cost of completion.

 Testing of revenue on long term projects – For a
sample of contracts, we performed the following
procedures:
- Assessed whether the key estimates made by
management reflect the terms and conditions of the
contract;
- Evaluated cost to complete forecasts by challenging
management’s key assumptions and comparing
revenue recognition calculations to project cost
forecasts prepared by project managers;
- Obtained evidence of scope variations and claims
and verified that these have not been included in
management’s determination of revenue recognition
until agreed with the customer; and
- Tested the costs incurred on long term projects
during the year to validate the costs and assess
whether they have been applied to contracts
appropriately.
Goodwill Impairment Assessment
As at 31 August 2019, there is $58.0 million (2018: $56.6
million) of goodwill included on the balance sheet of the
Group as detailed in note B5. The balance is held across
three cash generating units.
NZ IAS 36: Impairment of Assets require the Group to
complete an impairment test related to goodwill annually.
The assessment of value in use is performed using a
discounted cash flow calculation.
This calculation is subjective, and requires the use of
judgement, primarily in respect of:
 Forecast cash flows, particularly in relation to future
project wins and market conditions; and
 Discount rates.
We have assessed a key audit matter in relation to the
significant judgements and estimates required in preparing
the value in use model.
We considered whether the Group’s methodology for
assessing impairment is compliant with NZ IAS 36. We
focused on testing and challenging the suitability of the
models and reasonableness of the assumptions used by the
Group in conducting their impairment reviews.
Our procedures included, among others:
 Assessment of controls – Assessing the group’s
processes and controls around the value in use
calculation.

 Cash generating units (CGU) – We assessed
management’s determination of cash generating units
and our understanding of the Group’s business and
operating environment.

 Past performance – We assessed the
reasonableness of forecast figures by looking at
historical performance against past forecasts.

 Use of specialists – We used our internal valuation
experts to assist in our evaluation of the
reasonableness of the discount rates applied by the
Group through consideration of the relevant risk
factors for each CGU or impairment model, the cost of
capital for the Group, and market data on comparable
businesses.

 Integrity check – We assessed the mathematical
accuracy of the models.

 Sensitivity analysis –We evaluated the sensitivity
analysis performed by management to consider the
extent to which a change in one or more of the key
assumptions could give rise to impairment in the
goodwill.

Other information

The directors are responsible on behalf of the Group for the other information. The other
information comprises the information in the Financial Report that accompanies the
consolidated financial statements and the audit report, and the Annual Report, which will
be made available to us after the date of the audit report.
Our opinion on the consolidated financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If so, we are required to report that
fact. We have nothing to report in this regard.
When we read the Annual Report, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the directors and consider further
appropriate actions.
Directors’ responsibilities for
the consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair
presentation of the consolidated financial statements in accordance with NZ IFRS and
IFRS, and for such internal control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf
of the Group for assessing the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for
the audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and
ISAs (NZ) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1
This description forms part of our auditor’s report.
Restriction on use

This report is made solely to the Company’s shareholders, as a body. Our audit has been
undertaken so that we might state to the Company’s shareholders those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the
Company’s shareholders as a body, for our audit work, for this report, or for the opinions we
have formed.


Michael Wilkes, Partner
for Deloitte Limited
Christchurch, New Zealand
24 October 2019

---

Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)



Results for announcement to the market
Name of issuer Scott Technology Ltd
Reporting Period 12 months to 31 August 2019
Previous Reporting Period 12 months to 31 August 2018
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$225,093 +23.83%
Total Revenue $225,093 +23.83%
Net profit/(loss) from
continuing operations
$8,604 -20.13%
Total net profit/(loss) $8,604 -20.13%
Interim/Final Dividend
Amount per Quoted Equity
Security
$ 0.04000000
Imputed amount per Quoted
Equity Security
$0.00902705
Record Date 15 November 2019
Dividend Payment Date 26 November 2019
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.504 $0.470
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to the attached financial statements and Directors’
commentary for Scott Technology Limited for the financial year
ended 31 August 2019
Authority for this announcement
Name of person

authorised
to make this announcement
Chris Hopkins
Contact person for this
announcement
Chris Hopkins
Contact phone number 021 815 975
Contact email address c.hopkins@scott.co.nz
Date of release through MAP

24 October 2019

Audited financial statements accompany this announcement.

---

Distribution Notice


Please note: all cash amounts in this form should be provided to 8 decimal places
Section 1: Issuer information
Name of issuer Scott Technology Ltd
Financial product name/description Ordinary Shares
NZX ticker code SCT
ISIN NZSCTE0001S3
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies X
Record date 15 November 2019
Ex-Date (one business day before the
Record Date)
14 November 2019
Payment date (and allotment date for
DRP)
26 November 2019
Total monies associated with the
distribution
1

$3,101,790
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.04902705
Total cash distribution
3
$0.04000000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.00705882
Section 3: Imputation credits and Resident Withholding Tax
4

Is the distribution imputed Partial Imputation
If fully or partially imputed, please
state imputation rate as % applied
58%
Imputation tax credits per financial
product
$0.00902705
Resident Withholding Tax per
financial product
$0.00715188

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
4
The imputation credits plus the RWT amount is 33% of the gross distribution for the purposes of this form. If the distribution is fully
imputed the imputation credits will be 28% of the gross distribution with remaining 5% being RWT. This does not constitute advice
as to whether or not RWT needs to be withheld.

Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
1.5%
Start date and end date for
determining market price for DRP
18 November 2019 20 November 2019
Date strike price to be announced (if
not available at this time)
22 November 2019
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
New Issue
DRP strike price per financial product
The Scott Board has approved a discount of 1.5% to the
volume weighted average sales price (“VWAP”) for the
shares to be issued under the DRP for the 2019 final
dividend. The VWAP shall be determined over the
period of 18 November 2019 to 20 November 2019
(both inclusive).
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
15 November 2019
Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Chris Hopkins
Contact person for this
announcement
Chris Hopkins
Contact phone number +64 21 815 975
Contact email address c.hopkins@scott.co.nz
Date of release through MAP

24 October 2019