Skellerup Annual Shareholders Meeting 2020

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Skellerup Holdings Limited
Annual Shareholders Meeting 29 October 2020
Chair’s Address
Welcome to Skellerup’s 2020 Annual Meeting and thank you for joining us this afternoon.
‘Unprecedented’ has become such an overused word – but it is hard to find another that is more
appropriate for the year we have all endured. It is a year that has tested and proven the resilience of
our business model and strategy. We are very pleased with our net profit after tax of $29.1 million in
FY20 which equalled the prior year record result, and the strong foundation we have to deliver
further growth.
The FY20 result was a testament to the diversity and durability of our business – supplying many
essential products to a range of customers, across the world. This year we also achieved a record
operating cash flow of $48.0 million, 66% per cent above the prior year. These outcomes enabled
our shareholders to receive a payment of a final dividend of 7.5 cents per share on 16 October 2020,
which brought the total FY20 dividend to 13 cents per share in line with FY19.
Our strong cash flow management is a good differentiator, particularly in this environment. Our cash
flow has funded not only your dividends, but also capital expenditure, the acquisition of Silclear in
November 2019, and a reduction in net debt to $28.5 million. Our balance sheet remains strong with
net debt just 10 percent of total assets employed in our business at the end of FY20. This is a good
place to be, ensuring we can continue to support prudent growth across the business and also take
quick action as opportunities arise.
We will continue to take a disciplined approach to capital management, so that we can fund
investments and projects that we believe will deliver excellent commercial returns. We carefully
assess acquisitions to ensure they fit with our organic growth strategy. We then work to acquire and
realise the opportunities they present. Last year’s Silclear acquisition is a great example, where we
acted quickly and are realising the benefits. Silclear is performing well, complements our existing
businesses and provides new growth opportunities for the Group.

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No-one needs any reminding of the impact of Covid-19 on our lives and businesses. The Board are
particularly grateful for the skill, adaptability and commitment of our leaders and teams around the
world which ensures we continue to meet the needs of customers around the world and deliver
strong returns for our shareholders.
As a global business, the COVID disruption first hit us in China and Italy. Our immediate priority was
and continues to be a safe working environment for our people across the world. Our teams worked
well together, sharing and adopting new ways of working quickly and efficiently. We also stayed
close to our customers as we worked with them to understand the disruption they were facing and
how we could support them.
Skellerup has a strong customer base across a range of sectors. Skellerup products underpin many of
the world’s essential needs – including water, milk and milk products, critical medical devices and
safety equipment. The essential nature of many of these products mean we have continued to
operate most of our facilities throughout the lockdown periods. This focus on critical products has
been a core part of our business for many years – and certainly has held us in good stead during
2020.
Our Directors have a wealth of commercial and governance experience well matched to our business
needs across the diverse geographic and market segments in which we operate. Through the past
year we have continued to stay close to our team, business partners and customers, working
relentlessly to ensure thorough oversight, visibility and strong governance.
Our Board meetings moved to being virtual as Covid-19 restricted travel. This allowed us to connect
frequently and align with the rapidly evolving changes happening around the globe. We were
fortunate that in recent years the Board has visited many of our sites, both in New Zealand and
abroad. This meant we have a good understanding of the local environments we are operating in.
This helped a great deal as we made changes to protect our people, partners and customers. We
intend to continue these visits, when it becomes safe and practical to undertake travel again.
A topic that is periodically raised with Skellerup most notably by Proxy Advisers is the Independence
status of your Board. As required by the NZX Listing Rules and the NZX Corporate Governance Code,
our Board periodically reviews the independence status of each director. The Code requires the
Board to consider a range of factors in determining the status of each director including employment
as an executive, provision of professional services, material business or contractual business
relationships, shares held, family ties and tenure of directorship. Importantly the Code requires the
Board to assess the materiality of these factors and if they might interfere with the capacity of a

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director to bring independent judgement on issues before them and to act in the best interests of
Skellerup.
We most recently completed this review at our Board Meeting in June 2020. At that time, we
concluded David Mair as the current CEO was not independent and that Alan Isaac, John Strowger,
David Cushing and myself were independent. I note that this determination is different to that
judgement applied by at least one proxy adviser who assert that David Cushing, John Strowger and
myself are not independent based on their methodology. We disagree with this conclusion and
confirm that our Board Meeting earlier today we affirmed the independence status of David
Cushing, John Strowger, Alan Isaac, Paul Shearer and myself.”
In August, the Board were pleased to appoint Paul Shearer to the Board who we recommend to you
for election today. Paul has proven expertise over a long and successful career leading the Fisher &
Paykel Healthcare global sales and marketing team. His skills and insight will be invaluable to
Skellerup with our continued strategic focus on international market growth, particularly in the US.
In closing, I want to stress that I am extremely proud of our team’s achievements around the world.
On behalf of the Board, I thank them for their contribution to delivering another successful result.
Their knowledge of our customers and global supply chain partners have been second to none. They
have adapted quickly to changing circumstances and have managed all parts of the business well.
While we have uncertain global conditions ahead, Skellerup is in robust shape and well placed to
invest and grow sustainable earnings and shareholder returns. Earlier today we reported that we
expect FY21 NPAT to be within the range of $30 to $35 million, which would represent a new record
for Skellerup.
Finally, I want to thank you, our shareholders, for your ongoing encouragement and support.

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Skellerup Holdings Limited
Annual Shareholders Meeting 29 October 2020
CEO Address
Thank you, Liz.
2020 has certainly brought a challenging environment! I am proud that Skellerup has managed to
perform well despite disruptions and delivered a credible result in FY20.
Our result highlighted the diversity and durability of our business mainly due to the many essential
products we supply to customers across the world. That result highlighted not only the strength of
our strategy and business plans; it also highlighted the strength and resilience of our customer base.
It also helped our customers recognise what a great business partner we are.
The hard work, commitment, and ability of our people to take fast and decisive action in this rapidly
changing environment means we expect the FY21 result to be better than FY20 and a new record.
Covid-19
Skellerup’s response to the Covid-19 pandemic began first in China in January 2020 and quickly
reached all our sites around the world. We prioritised the health and safety of our people by doing
many things. We changed our operational layouts and shift patterns where we manufacture
products. We arranged contactless distribution of our products for our distribution centres. We
tested and used technology to enable working from home arrangements where practicable. Our
businesses learned from each other, adopting best ideas. These changes did negatively impact
capacity and increased costs initially, but we have worked quickly to achieve productivity levels close
to our previous ones.
I am proud of our leaders who stepped up in very challenging circumstances. I am also extremely
grateful to all our teams for their resilience, adaptability and commitment over the past 12 months.
Many of the changes implemented remain as the new norm for how we are working today and into
the future. The permanent changes we have made to layout and shift patterns means we will

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continue to operate smoothly even if alert levels go back up. The contactless pick-up and delivery of
goods is permanent, and we have fully tested working from home and team communication
ensuring that meetings happen seamlessly.
Despite Covid-19 and other business interruptions, Skellerup remains focused on providing excellent
service and technical solutions to our customers. That is what and who we are.
Skellerup is a Great Business
“If we are delighting customers, eliminating unnecessary costs and improving our
products and services, we gain strength. On a daily basis, the effects are imperceptible;
cumulatively though their consequences are enormous. When our long-term
competitive position improves as a result of these almost imperceptible actions, we
describe the phenomenon as ‘widening the moat’.’’ – Warren Buffet
I have explained our business model before but for new investors, I will provide the salient points.
A large part of our customer base is Original Equipment Manufacturers. We design and develop
essential components and products that form part of a customer’s final product. Our components
may only comprise one part of the final product, but they are usually critical to its overall function
and performance.
We remain committed to staying close to our customers. In person visits are more difficult because
of Covid-19, but technology means we stay strongly engaged. Staying close to our customers enables
us to understand their challenges so that we can respond with new approaches and innovative
products that make a difference.
This understanding starts with our technical salespeople. They work with our customers to identify
the underlying requirements for new products. Our people have the technical skills and
understanding to communicate those requirements to our engineers and chemists, ensuring they
develop reliable products which meet the customers’ needs.
Our approach allows us to rapidly develop and deliver prototype samples in a very short timeframe.
The speed we do this is a key differentiator for us. We then work closely with our customers to
ensure we can make modifications quickly and confirm our ‘proof of concept’. We are a truly
integrated, global business – and this also plays a part here. While our salespeople are close to our
customers, our engineers and chemists are based around the world – including here in New Zealand.

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This means we can capitalise on the benefits of time zones and provide a 24-hour new product
operation.
At Skellerup, we are known for our in-depth knowledge of materials and tooling. This means having
a strong understanding of not only what the solution will be, but also how the final products can be
manufactured efficiently at scale. Our solutions must not only meet the requirements of our
customers – and their customers – but often also comply with food and water safety regulations that
differ from market to market.
Skellerup is well known for its focus on improving productivity and using our resources as efficiently
as possible. This means thinking about how we eliminate waste in all that we do. This approach
makes good business sense and is also good for the environment. We understand that looking after
the environment in which we operate is inextricably linked to generating sustainable earnings
growth for shareholders and opportunities for our people.
I’d like to finish this part of the presentation with an update on our approach to capital allocation.
First, we see capital allocation in two parts; get the best people onto the most promising projects
and then spend capital dollars wisely. I’d like to reflect on last year’s use of cash. We had operating
cashflow of $48.0 million; we spent $4.7 million on Lease Liabilities (previously this would have been
treated as operating cashflow but IFRS-16 changed that); $25.3m on dividends to shareholders; $6.2
million on the Silclear acquisition; $3.9 million on capital expenditure (net of proceeds from
disposals) and finally $8.1 million on repaying debt. We think we have managed your cash prudently.
Agri Update
The strength and resilience of our Agri business delivered a record Earnings Before Interest and Tax
in FY20 of $25.4 million.
This excellent result was largely driven by growth in sales of essential dairy rubberware products into
the USA and we continue to benefit from a strong operational focus at our largest Agri facility
Wigram in Christchurch. The process improvements still have a long way to go and I am excited
about the opportunities we see for improving the business further.
We also had a solid contribution from our newly acquired business - Silclear. Silclear designs and
manufactures innovative silicone products for international customers, principally in the dairy
industry. The business was acquired in November last year. We are very pleased with performance
so far.

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Industrial Division
Results from our Industrial business were more varied as a result of the diverse range of customers
and applications provided and how they were impacted by COVID-19. EBIT was $20.9 million in FY20.
With minor exceptions, our businesses continued to operate throughout the varying COVID-19
lockdowns across the world. This again reflects the essential nature of many of our products.
However, demand for infrastructure and oil and gas applications were reduced and pushed EBIT
below the record result of the prior year. Despite this, we are in a secure position for continued
growth into the future.
Our pipeline of new products in development has never been stronger and we have a good balance
of near time revenue generating projects and longer-term ones that will lead to significant growth
opportunities.
Closing
In closing, I would like to thank Liz and the Board for their ongoing support in such a challenging
year. I would again like to thank the wider Skellerup team for their dedication and hard work. We
have a diverse and talented team who have collaborated quickly and efficiently to keep the business
moving forward. I am very proud of what we have achieved.
2020 has been a year where our strategy has been tested; its strength confirmed. We are pleased
with the path Skellerup is on, reflected in our guidance for FY21 NPAT to be within the range of $30
to $35 million.
Finally, to all our shareholders, thank you for investing in Skellerup.

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A n n u a l
S h a r e h o l d e r s
M e e t i n g
29 October 2020

A S M –O c t o b e r 2 0 2 0
Liz Coutts
Chair Address
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A S M –O c t o b e r 2 0 2 0
Earnings growth & low debt
0
5
10
15
20
25
30
35
FY16FY17FY18FY19FY20
NPAT (million)
Net Profit after Tax
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
FY16FY17FY18FY19FY20
Net Debt as % of Total Assets
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A S M –O c t o b e r 2 0 2 0
Strong shareholder returns
Growing and less cyclical earnings enabling increased dividends and giving a five year total shareholder return >150%
•Growth from products critical to the safe transportation of water and milk.
•Reduction from more cyclical applications such as oil, gas and mining.
Skellerup Share Price: Five Years to 22 October 2020
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A S M –O c t o b e r 2 0 2 0
David Mair
CEO Address
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A S M –O c t o b e r 2 0 2 0
Customer focused, diverse growth opportunities
•Long relationships based on solving real (OEM) customer problems.
•International markets, water, protein. Critical products for essential applications.
Materials, product design and process expertise
•This combination enables us to develop excellent solutions for customers.
•Resilient, talented and focused global team.
Enhanced and faster capability
•Investment in complimentary technologies including heat cured silicone rubber and liquid
silicone rubber.
•Investment to accelerate development of products and to optimise processing times in
production.
Improving operational execution
•Productivity gains and reduced waste at our sites across the world.
Earnings, cash flow and dividend growth, strong balance sheet
•FY20 NPAT repeated the record result achieved in pcp.
•FY20 Dividend (gross) up a cumulative 25% over past 5 years.
•FY20 operating cash flow a record $48.0 million
•Agility to make strategic acquisitions, recent successes.
•Can withstand shocks and sustain dividends.
Skellerup is a Great Business!
0
10
20
30
40
FY16FY17FY18FY19FY20FY21
NPAT (
millions)
Net Profit after Tax
5
Operating Cash Flow
48.0
Used as follows:
Repayment of Lease Liabilities
4.7
Shareholder Dividends
25.3
Silclear Acquisition
6.2
Capital Expenditure
3.9
Repayment of Debt
8.1
Other
-0.2
Cash FY20 (NZ$ Million)

A S M –O c t o b e r 2 0 2 0
Skellerup FY20 Agri Division
Revenue up 5% and EBIT up 11% against pcp
International Dairy sales growth
•Sales into US market up reflecting the strength of our
development and delivery.
•Operational process and efficiency gains (process, operating
levels, mechanisation, inventory) at Wigram continue.
•Silclear acquisition performed ahead of expectations. Growth
opportunities being pursued.
Footwear sales solid
•NZ sales up slightly on pcp despite the impact of COVID-19.
•US sales up helped by increased sales into specialist electrical
applications.
•European sales reduced due to reduced firefighting boot sales.
•Operational performance continues to be good.
NZ$ MillionFY17FY18FY19FY20
Revenue79.289.088.893.6
EBIT19.822.822.825.4
EBIT %24.925.625.727.1
6
0
5
10
15
20
25
30
FY16FY17FY18FY19FY20
NPAT (million)
EBIT NZ$ Million

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What we do Agri
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A S M –O c t o b e r 2 0 2 0
Skellerup FY20 Industrial Division
NZ$ MillionFY17FY18FY19FY20
Revenue131.2151.5157.1157.9
EBIT17.120.822.920.9
EBIT %13.113.714.613.2
Revenue flat, EBIT down 9% against pcp
Vacuum Systems sales and margin down
•US sales impacted by reduced oil and gas activity and US tariffs.
Sales into automotive applications down
•Reduced automotive coupling sales at lower margin –Australian market
now nil and European sales down.
Potable Water and Waste Water
•Sales were impacted by COVID-19 as infrastructure work was suspended
and delayed.
Growth from high performance foam applications
•Ultralon U-Dek sales up significantly in the US.
Growth from DEKS roof and sealing products
•New products and improved execution in Australian market in particular.
8
0
5
10
15
20
25
FY16FY17FY18FY19FY20
NPAT (million)
EBIT NZ$ Million

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What we do Industrial
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A S M -O c t o b e r 2 0 2 0
Liz Coutts
Resolutions
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A S M -O c t o b e r 2 0 2 0
Liz Coutts
Meeting Close
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A S M –O c t o b e r 2 0 2 0
This presentation contains some forward looking statements about Skellerup Holdings Limited and the
environment in which the company operates. Because these statements are forward looking, Skellerup Holdings
Limited's actual results could differ materially.
Although management and directors may indicate and believe that the assumptions underlying the forward
looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore,
there can be no assurance that the results contemplated in the forward looking statements will be realised.
Please read this presentation in the wider context of material previously published by Skellerup Holdings Limited.
Skellerup Disclaimer
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