Scott Announces FY23 Results
18 October 2023
Company announcement
SCOTT TECHNOLOGY ANNOUNCES FY23 FULL YEAR RESULTS: CORE SECTOR
PRODUCTISATION & MARKET EXPANSION DELIVERS RECORD GROWTH
• Strong growth and progress under the Engineering Scott to High Performance 2025 (Scott 2025)
strategy after several years of stabilising and focusing the business
• Group revenue up 21% to $268m, margins grew from 24% to 27% driven by improved mix, and
mix of repeatable core products and services
• Operating EBITDA increased 27% to $30.4m while net profit after tax was up 21% to $15.4m
• Sales and services in three core sectors delivered 79% of group revenue and 89% of margin
• Forward work remains strong heading in to FY24, $195m, particularly across protein and MHL,
combined with ongoing demand for the higher margin mineral sample preparation products,
BladeStop products and service businesses
• Dividend of 4.0 cents per share declared to take full year total to 8.0 cents
Automation and robotics solutions provider, Scott Technology Limited (NZX: SCT), has today released its
results for the year ended 31 August 2023 (FY23).
The Scott 2025 strategy has continued to underpin the business’ investment in the growth of its three core
sectors protein, materials handling and logistics (MHL) and minerals. The focus has generated growth
across core revenue ($211m, +26%), core margin percentage (30%), leading to a group operating EBITDA
of 30.4m (+27%).
The business’ sales pipeline remains ahead of expectation, with $195m in forward work comprising many
MHL projects, continued strong minerals and protein product orders, as well as progress in securing
additional service contracts.
Scott Technology CEO, John Kippenberger, says the business has delivered a strong financial performance.
“At the end of our previous financial year, the world was opening post-COVID, and we had some good
tailwinds. Our new ways of working, strategic priorities and core sectors were well entrenched across our
global business. We were positioned to fly, and we have really seen that acceleration of growth take hold
in FY23. Our record growth is as a direct result of our deliberate strategic focus on core sectors, repeatable
core product sales and aftermarket service.”
ESG update
Scott’s commitment to sustainable growth extends beyond financial success, to its responsibility to society
and the environment. The momentum behind Scott’s ESG strategy has continued in FY23, with strong
engagement at every level of the organisation and deep support at a Board and Executive level as Scott
lives its commitment to playing a role in leading a sustainable future. In the past year, Scott has made
positive steps in its sustainability journey, with the measurement and verification of its global carbon
footprint for the first time, increased employee benefits and the development of deeper partnerships in
education.
Employee safety and wellbeing continues to be the highest priority for Scott. The ‘BeScott’ Health and
Safety programme continues to drive Scott's safety culture and more importantly a significant
improvement across all safety metrics in FY23. Increases in lead indicators such as hazard reporting, have
led to a decrease in Lost Time Injury’s (LTI), Medical Treatment Injury’s (MTI) and first aid injuries
contributing to a 30% reduction in Lost time injury frequency rate (LTIFR) over the last 12 months
The increased investment in people-led initiatives has resulted in an outstanding eNPS engagement score
of 83% across the group, alongside the highest-ever level of employee engagement survey participation
(78%).
Finally, in March, as part of its commitment to encouraging women into engineering, Scott was proud to
announce a partnership with the University of Canterbury Engineering School, including the launch of the
Scott Technology Women in Engineering Scholarship. Scott has now awarded the first scholarship and
looks forward to continuing to support these programs in FY24 and beyond.
Results overview
Results Snapshot
$M
FY23 FY22
1
var %
Revenue 267.5 221.8 21%
Operating EBITDA
2
30.4 23.9 27%
Net Profit After Tax 15.4 12.7 21%
Dividend per share (cents, declared) 8.0 8.0 -
Net Cash / (Debt) (0.1) (8.0) +99%
Operating Cash Flow 20.2 6.3 221%
1
Continuing Operations (excludes the Robotworx business divested in F22),
2
Excludes non-trading adjustments
Revenue for the year increased 21% on the prior year to $268m, as Scott’s strategy of generating more
revenue from repeatable core products and services continued to deliver sales growth.
Net margin grew from 24% to 27% due to the improved mix, and blend of repeatable core products and
services, despite the still present inflation, supply chain pressures and talent availability challenges.
This strategically driven revenue and margin approach has resulted in EBITDA growth of 27% and to
generate $30m of operating EBITDA for the period.
Net profit after tax (NPAT) for the period was $15.4m, +21% on a like-for-like basis versus the prior year.
Operating cash flow of $20.2m was higher than the prior year due to the strong underlying performance
of the business but also the timing of significant cash deposits relating to large projects won, which in turn
boosted the group’s cash position to be debt free.
In recognition of the progress made by the company, the Directors declared an (unimputed) dividend of
4.0 cents per share, payable on 21 November 2023, to take the full year dividend to 8.0 cents. The
Directors have determined that, in light of the ongoing strategic review process, the Dividend
Reinvestment Plan will not apply and will be suspended for this dividend.
Core sectors
The Scott 2025 strategy emphasises the imperative of growing sales through product areas where Scott
has established world-leading technology and away from the more bespoke design projects which are
unproven and present higher risk to Scott.
This focus has seen core sector revenue grow by 27% in the year and move from 75% to 79% of total
group revenue.
Protein
• This sector largely comprises BladeStop safety bandsaws, lamb processing systems and products
and poultry trussing. Customers include industry leaders such as Walmart, Silver Fern Farms and
Costco Wholesale.
• Sales revenue up 23% from poultry trussing and continued strong sales of the BladeStop safety
bandsaw.
• The protein service business grew strongly, up over 60% on prior year, whilst delivering higher
margin from 30% to 33%, mainly due to BladeStop parts and service.
• The second poultry trusser site installation is on track with two machines on the water to Costco
Wholesale in North America and due to be installed late 2023. The next eight are in production to
be installed throughout 2024. There is significant interest in seeing this product in action after
winning the IPPE best new processing product of 2023.
• The BladeStop range expansion is underway with the development of a smaller T300 saw which
will service large supermarkets and independent butcheries. Testing is well progressed with
anticipated release early 2024.
Materials handling and logistics (MHL)
• MHL has delivered impressive growth of 35% on prior year. The growth is coming from both of
Scott’s key markets for MHL, Europe and the US.
• In particular, Europe sales revenue grew 59% during the year, converting last year’s record order
book including the design and production of Clarebout’s new French facility and Incom Leone’s
Slovenian ice cream facility.
• Growth in MHL revenue in US and Europe follows the successful change in management structure
to bring the US business under the leadership of Scott Europe. This enables greater expansion into
the US market as global processor relationships from Europe are extended into the US.
• This strategy has produced its first result with McCain Foods ordering a $12m palletisation system
for one of its North American sites.
• The forward order book for MHL globally at $127m is very healthy, with other new orders,
including A-ware Food Group and Colruyt.
Minerals
• Anchored off strong and reliable Rocklabs sample preparation sales, the minerals business
continues to be a core part of the Scott group. These products are well proven in the large global
minerals sector.
• After a great prior year of 39% growth, minerals revenue consolidated with growth of 4% as the
Energizer charging project with Caterpillar started the design phase.
• The Ukraine war forced a withdrawal from sales to a well-established dealer in Russia in 2022
resulting in a significant loss of revenue. This was offset by its newly designed Automated Modular
Solution (AMS) into Mineral Resources Limited (MRL) and 16% growth in Rocklabs service parts
business.
• A focus on price, product mix, aftermarket growth and operational efficiency, has dollars increase
by 5% to be 40% of the consolidated revenue.
• As noted above, production is underway on MRL’s $11m contract for the Rocklabs AMS Solution.
This AMS solution is generating interest with many mining and laboratory customers in Australia,
Africa and the Americas.
Service and aftermarket business
The service business across core sectors also experienced significant revenue growth, up 28% on the prior
year. This is due to the continued focus on core sales growth over the last few years which is translating
into aftermarket demand from customers.
The service business also includes a significant portion of high-margin consumables, accounting for over
50% of total service revenue providing a steady revenue stream from consumables that customers
regularly require.
Overall service revenue grew across the total group (including non-core business) by 25% and continued
to deliver strong margins of 35%. This demonstrates the importance of the service / aftermarket business
to the overall performance and profitability of Scott.
Regional update
Results Snapshot FY23 FY22
$M Revenue Margin % Revenue Margin %
New Zealand 49.9 16.8 34% 51.0 14.3 28%
Australia 41.5 7.8 19% 56.7 12.0 21%
Europe 88.9 22.1 25% 57.9 11.7 22%
North America 82.2 24.2 29% 52.5 14.7 25%
China (+RoW) 4.9 0.6 13% 3.7 0.4 12%
Group 267.5 71.5 27% 221.8 53.4 24%
Scott New Zealand – Strong core performance as global hub for protein and Rocklabs
• A key focus of the New Zealand business has been production execution, resulting in revenue
growth in a lamb boning room at Silver Fern Farms Finegand plant and continued growth in lamb
modular products for many Australian customers.
• Poultry Trussers are being produced to meet Costco Wholesale’s orders plus expected further
demand out of North America.
• Despite Russia sanctions weighing on sales volumes, New Zealand as the global hub for Rocklabs
has managed price, mix and aftersales to maintain margin dollars. It is also moving to a larger site
in Auckland to increase capacity for the AMS and standard product growth.
Scott Australia – Revenue drops but margin percentage increases with move out of complex mining
systems
• The most significant contributor to the revenue fall is the tail of the strategic withdrawal from the
last of the large complex legacy mining systems projects.
• Investment in the capacity and capability of service has seen revenue increase by close to 50% in
the year, especially in BladeStop and protein service.
Scott Europe – Continued strong BladeStop and MHL converts large forward work to revenue
• Revenue stepped up delivering elevated growth of 53% as the COVID and supply chain pressures
began to ease, allowing faster conversion of the large forward order book.
• With confidence in the continued forward order book, Scott expanded its assembly facilities in the
Czech Republic by another 3,000 sqm.
• MHL service revenue grew at 16% as the installed base continued to grow in Europe, increasing
demand for parts. Service margin grew by 8%.
• Protein revenue grew 36% to $13m on the back of continued growth in BladeStop saw sales. This
included aftermarket sales of $3.2m, which was up 63% on the back of a growing install base.
• Europe also enjoyed growth from the sale of two appliance line projects which were
manufactured by Scott China, delivering good margins for the group.
Scott North America – Leadership change brings stability and focussed growth
• With the change in structure to bring North America underneath the leadership of Scott Europe,
revenue grew by over 50%.
• North America is a key sales and aftermarket growth region within Scott with core protein and
MHL solutions expanding into this market.
• Growth has come in the form of a second significant customer for our proprietary poultry trussing
product, Costco Wholesale, and a long time European customer, McCain Foods, ordering Scott’s
MHL palletisation solution.
• BladeStop sales remained strong in what is the largest installed market by unit, with sales revenue
being up 51% on prior year. New customers including Walmart have purchased the saws this year.
• Automated Guided Vehicles (AGVs) secured new business centred around core capabilities and
with blue chip organisations including Microsoft and Gulfstream.
Scott China – Provided manufacturing capacity and procurement services to Scott group
• Strong demand driving record contract wins of $20m in FY23
• China is becoming more important to the wider Scott group using its procurement abilities to
source raw materials, components and sub-assemblies for the wider group including into Rocklabs
this year. Further work is being done in the protein space looking for cost saving opportunities for
the group.
ENDS
For more information, visit www.scottautomation.com or contact:
John Kippenberger Media and investor contact:
Chief Executive Officer, Scott Technology Amber McEwen
T: +64 21 964 045 T: +64 21 194 0429
E: j.kippenberger@scottautomation.com E: amber.mcewen@grcpn.nz
About Scott
Scott delivers smart automation and robotic solutions that transform industries by making businesses
safer, more productive and more efficient. Our diverse capability makes us the first choice for hundreds of
the world’s leading brands. With design and build operations across Australasia, China, Europe and
America and 110 years of engineering excellence, Scott is the global expert in automation.
Scottautomation.com
---
110 Y E A R S
of
ENGINEERING
EXCELLENCE
ANNUAL
REPORT
2023
110 Y E A R S
of
ENGINEERING
EXCELLENCE
Scott Technology Limited
Page 2
DIVIDEND
Final dividend: 4.0 cents per share (unimputed)
Record date: 7 November 2023
Payment date: 21 November 2023
ANNUAL MEETING
Wednesday 22 November 2023, 3:00pm
www.virtualmeeting.co.nz/sct23
Proxies close 3:00pm,
Monday 20 November 2023
The Board of Directors (Board) of Scott
Technology Limited is pleased to present the
Annual Report for the year ended 31 August
2023. This provides a review of our progress
in FY23 and our focus for the financial year
ahead. Strong progress has been made in the
third year of the Scott 2025 strategy, including
the second full year of our Environmental,
Social and Governance (ESG) strategy.
On behalf of the Board, 18 October 2023.
Stuart McLauchlan
Chairman and Independent Director
John Kippenberger
Chief Executive Officer
CONTENTS
01 Letter from the Chairman
02 FY23 at a glance
04 Chief Executive Officer's commentary
08 Global presence
11 Accelerating growth
14 Tried and trusted - The benefits of building
authentic customer partnerships
17 New China facility enabling manufacturing and
procurement gains across the globe
18 Market leadership through core business innovation
- Innovation in mineral sector opens up new market
opportunities for Scott
23 Sustainability, a catalyst for growth
and responsibility
- Scott's carbon emissions-management journey
- Be safe, be well, be Scott continues to
go from strength to strength
- Investing in our future
30 Our Board
31 Financial report
83 Independent auditor’s report
87 Statement of corporate governance
94 Statutory information
98 Remuneration
100 Directors' responsibility statement
101 Directory
Dividend reinvestment plan does not apply
to this payment for shareholders who have
elected to receive shares in lieu of a cash
dividend. Instead, those shareholders will
receive a cash dividend.
Stuart McLauchlan
Chairman and Independent Director
On behalf of the Board of Directors, I am pleased to
present Scott Technology’s 2023 Annual Report.
The success we have achieved as a business across the
2023 financial year is thanks to the combined efforts of
our 656 employees across our worldwide facilities.
The diversified nature of our portfolio of businesses
has provided us stability in the current dynamic macro
economic environment. Demand for our products and
services continues to demonstrate resilience to economic
conditions. However, with the current inflationary
environment, we have experienced increases in key cost
items, including labour, material costs and freight to
varying degrees across our businesses. Importantly, each
business has had an increased focus on various strategies
to mitigate these increases and preserve margins.
"The FY23 result was
underpinned by sales
growth with revenues of
$267.5m, along with strong
EBITDA growth of 27%."
The Board has recently signed off on a number of important
capex investments that will assist our talented staff to
continue their market-leading developments.
DIVIDEND
The directors are recommending a final dividend of 4.0
cents to be paid, on top of the interim 4.0 cents dividend
paid earlier this year. The dividend reinvestment plan does
not apply to this payment, see page 3 for more details.
GOVERNANCE
In mid-June 2023 Scott announced its intention to
undertake a strategic review and that the review would
take several months. The strategic review is ongoing.
Scott will update shareholders on any developments when
the strategic review is completed or otherwise as needed.
There is no certainty that any transaction will result,
and no decisions will be made regarding any potential
outcome until the completion of the process.
Our Annual Shareholder Meeting is planned to be in
Dunedin and online on Wednesday 22nd November 2023 at
3pm. In accordance with the company’s Constitution and the
NZX Listing Rules, Stuart McLauchlan, John Kippenberger and
Alan Byers will retire and are eligible for re-election.
I would like to acknowledge the guidance, support and
wisdom of the Board.
The Board is committed to, and continues to invest
in, the development of our Environmental, Social and
Governance (ESG) programme. Some of the key projects
include safety and wellbeing, carbon scoping and
sustainable procurement.
OUTLOOK
The Board is pleased with the strong earnings growth in
FY23 driven by organic growth. Our team is still receiving a
high level of enquiry, with our order book showing a high
level of forward work, which bodes well for the coming year.
On behalf of the Board, I would like to thank shareholders
for your continued interest in, and support of, our
company, the Board and Management.
The FY23 result was underpinned by sales growth with
revenues of $267.5m, along with strong earnings before
interest, taxes, depreciation and amortization (EBITDA)
growth of 27%. This continues to reflect the focus on
driving customer outcomes and the further delivery of the
Scott 2025 strategy. The focus on the next phase of the
strategy is for accelerated growth in our key markets due
to the successful development of new products, which
brings scale to our offerings.
Annual Report 2023
Page 1
LETTER FROM THE CHAIRMAN
POULTRY TRUSSER
WINS BEST
IN SHOW
Winner of the Best New
Processing Product at the
International Production & Processing
Expo in Atlanta, United States (US).
RECORD EBITDA
$30.4M
+27% ON FY22
Strategic focus on protein, minerals and
materials handling delivering 79% of total revenue
and achieving sales growth of 27% on FY22.
100%
GREENHOUSE
GAS EMISSIONS
MEASURED & VERIFIED
FIRST WOMEN
IN ENGINEERING
SCHOLARSHIP
AWARDED
Partnership with the University of Canterbury
supports greater investment in the talent pipeline.
28%
GROWTH FOR
SERVICE &
AFTERMARKET
Bolstered service business delivers
margin improvement (43%).
STRONG FORWARD
ORDER BOOK OF
$195M
Comprising several MHL projects,
continued strong minerals and protein product
orders, a securing additional service contracts.
WINNER OF BEST
BUSINESS GROWTH
STRATEGY AWARD
Winner of the 2022 Deloitte Top 200
Best Growth Strategy Award recognising
outstanding growth performance.
ACCELERATING GROWTH
CONTINUED FOCUS
ON PRODUCTISATION
& MARKET EXPANSION
Capitalising on addressable market opportunities for key products.
Understanding the scale of our carbon footprint proves
a strong start to our emissions-management strategy.
Employee net promoter score (ENPS) up 1.2% on FY22,
with a 78% response rate reveals positive team culture.
83%
ENPS
Scott Technology Limited
Page 2
FY23 AT A GLANCE
Revenue up 21%
to $267m, group margin
of 27%, EBITDA of $30.4m
and N PAT
of $15.4m,
up 22% on FY22.
* Financial information is from continuing operations and has been made consistent across previous periods.
Annual Report 2023
Page 3
20192020202120222023
FINANCIAL*$‘000s$‘000s$‘000s$‘000s$‘000s
Revenue211,585174,582206,030221,757267,526
Net surplus / (loss) after tax7,533(16,955)8,38212,65715,436
Operating cash flow72619,56313,426 6,30820,217
Net cash / (overdraft)(4,737)7,74512,242 3,93512,396
Bank loans11,66711,18510,920 11,97012,475
Total assets217,786193,110194,504 206,888253,054
Shareholders' equity112,73292,74098,195 100,406113,899
DIVIDENDS (CENTS PER SHARE)2019202020212022
2023
Interim4.0-2.04.04.0
Final
4.0-4.04.04.0
EMPLOYEES (NUMBER)20192020202120222023
New Zealand248188188198231
Australia10177869566
China3635454043
Americas8356736059
Europe316257230240257
Total784613622633656
deposits relating to large projects won, which in turn
boosted the Group’s net cash position to $12.4m.
In recognition of the ongoing progress made by the
company, the directors declared an (unimputed)
dividend of 4.0 cents per share, payable on 21 November
2023, to take the full year dividend to 8.0 cents. The
directors determined that, in light of the ongoing
strategic review process, the Dividend Reinvestment
Plan will be suspended for this dividend.
FIVE-YEAR TREND
FINANCIAL PERFORMANCE
FY23 revenue increased 21% on the prior year to
$267.5m, as Scott’s strategy of generating more
revenue from repeatable core products and services
continued to deliver sales growth.
Group margin grew from 24% to 27% due to the
improved mix of repeatable core products and
services, despite the still present inflation, supply chain
pressures and talent availability challenges.
This strategically driven revenue and margin approach
has resulted in EBITDA growth of 27% and $30.4m of
EBITDA for the period.
Net profit after tax (NPAT) for the period was $15.4m,
+22% on a like-for-like basis versus the prior year.
Operating cash flow of $20.2m was higher than the
prior year due to the strong underlying performance of
the business, along with the timing of significant cash
In a year defined by transformation and progress,
we stand at the threshold of exciting opportunities,
driven by our unwavering commitment to our Scott
2025 Strategy, focusing on accelerated growth
and productisation.
ACCELERATING GROWTH DELIVERS
RECORD REVENUE AND EBITDA
The past year has been a testament to the growth
of Scott’s three core sectors of protein, minerals
and materials handling, delivering record revenue
and EBITDA of $267m (+ 21%) and $30.4m (+27%)
respectively.
The business’ sales pipeline remains ahead of
expectation, with $195m in forward work
comprising several materials handling and logistics
(MHL) projects, continued strong minerals and protein
product orders, as well as continued progress in
secured service contracts.
These results reflect the collective efforts of our
talented people and the strong relationships we have
built with our valued customers.
PRODUCTISATION: THE HEART
OF INNOVATION
At Scott, innovation is at the core of our DNA, and
productisation is the vehicle through which we bring
transformative solutions to the market. We have intensified
our focus on converting innovation into market-ready
products that deliver tangible value to our customers. Our
commitment to productisation is evident in the successful
launch of our poultry trussing technology into the North
American market earlier in the year.
This product has already begun to transform the poultry
processing industry and has resulted in repeat sales to
global retail giant Costco.
REVENUE BY SECTOR
"These results reflect
the collective efforts of
our talented people and
the strong relationships
we have built with our
valued customers.”
CHIEF EXECUTIVE OFFICER'S
COMMENTARY
REVENUE BY GEOGRAPHY
35%21%15%29%
Materials Handling
and Logistics
MineralsProteinOther
AustraliaAmericas
EuropeNew ZealandChina
15%33%30%2%20%
Scott Technology Limited
Page 4
PROTEIN
Protein sales revenue is up 23% from our poultry trussing
product, along with continued strong sales of our
BladeStop safety bandsaw. The protein service business
again grew strongly, up 60% on the prior year, whilst
delivering further margin growth of 43% mainly due to
BladeStop parts and service.
The second poultry trusser site installation is on track, with
two on the water to Costco in North America and due to
be installed in late 2023. The next eight are in production
to be installed throughout 2024. There is significant
interest in seeing this product in action after winning the
IPPE US best new processing product of 2023.
The BladeStop range expansion is under way with the
smaller T300 retail saw well in development and ready
for testing at the first customer site. This follows the
success of BladeStop across large supermarkets, such
as, Foodstuffs, Woolworths and Walmart. A strong
lead into FY24 with an additional 10 saws sold recently
to major American retailer Walmart, taking their total
BladeStop saws to 44 and with strong opportunity still
ahead with this customer.
MATERIALS HANDLING
MHL has delivered impressive growth of 35% on prior
year coming from both of Scott’s key markets for MHL,
Europe and the US.
Europe sales revenue grew 46% during the year
converting last year's record order book into revenue
including the design and production of Clarebout’s
new French facility and Incom Leone’s Slovienian ice
cream facility.
Growth in MHL revenue and margins in US and Europe follows
the successful change in management structure to bring
the US business under the leadership of Scott Europe. This
enables greater focus on the US market as global processor
relationships from Europe are extended into the US.
This strategy has produced its first result, with McCain
Foods ordering a $12m palletisation system for one of its
North American sites. The forward order book for MHL
globally at $127m is very healthy, with other new orders,
including A-ware Food Group and Colruyt. We see the
industry pressures of labour supply and wage inflation
continuing to drive demand.
(Above) John Kippenberger, CEO, with some of the global team at our facility in Podivín, Czech Republic.
Annual Report 2023
Page 5
John Kippenberger
Chief Executive Officer
"I would like to extend
my gratitude to our
exceptional team, it is
your dedication and
unrivalled talent that
make our achievements
possible.”
Our increased investment in people-led initiatives has
resulted in an outstanding eNPS engagement score of
83% across the Group. Our ‘BeScott’ Health and Safety
programme continues to drive our high-performing safety
culture and, more importantly, a significant improvement
across all safety metrics.
We are dedicated to contributing to positive change in the
communities and industries we serve and look forward to
further building on our commitment in the year ahead.
LOOKING TO THE FUTURE
As we look to the future, our vision for Scott Technology
is clear. We will continue as global leaders in automation,
providing solutions that benefit organisations worldwide.
Whether it's enhancing manufacturing efficiency,
reducing environmental impact or improving workplace
safety, we will continue to make a positive difference in
the world through automation.
With the Scott 2025 Strategy as our roadmap, we are
well prepared to meet the challenges and opportunities
of the future, ensuring that our legacy of excellence
continues for many decades to come.
MINERALS
With an increased focus on business and product
development, Scott’s minerals business, Rocklabs,
continues to grow strongly contributing 33% of the
Group's EBITDA.
Our world-leading range of sample preparation
products underpin our minerals revenue, with our
high-margin aftermarket business contributing 36%. The
recent launch of our new automated modular solution
(AMS) has been received positively in the industry,
with our first contracts won and builds well under way.
This product will drive our future growth as global
mining companies and commercial laboratories look
to automation to increase productivity, improve health
and safety and address labour challenges.
SERVICE AND AFTERMARKET BUSINESS
Scott has recognised the significance of its service and
aftermarket business, not only for supporting customer
needs but also for its own.
The service business within the core business segments
experienced impressive growth, with a 30% increase
in the period. This growth indicates that customers
are increasingly relying on Scott for maintenance and
support services.
The service business also includes a significant
portion of high-margin consumables, accounting for
over 50% of total service revenue providing a steady
revenue stream from consumables that customers
regularly require.
Scott's focus on its service and aftermarket business
has led to strong growth, increased profitability and a
higher level of customer satisfaction.
This strategy has proven to be valuable not only for
customers but also for shareholders, as it provides
recurring revenue and attractive profit margins.
SUSTAINABLE GROWTH
AND RESPONSIBILITY
Our commitment to sustainable growth extends
beyond our financial success. We are acutely aware
of our responsibility to society and the environment.
In the past year, we have taken positive steps in our
sustainability journey, such as the launch of our carbon
reduction strategies, increased employee benefits and
deeper partnerships with education pathways.
I would like to extend my gratitude to our exceptional
team, it is your dedication and unrivalled talent that
make our achievements possible. And, to our louyal
shareholders and customers I thank you for your
ongoing commitment and support.
Scott Technology Limited
Page 6
John Kippenberger, CEO, at the official opening ceremony of our China facility in Qingdao.
Annual Report 2023
Page 7
TOTAL
GROUP
KEY
Minerals
Other
Material handling
and logis�cs
Protein
Manufacturing
facili�es
Sales and office
facili�es
28%
35%
15%
21%
US
NZ
AU
CN
42%
34%
30%
8%
38%30%
31%
30%
10%
2%
21%
2%
5%
93%
EU
69%
15%
16%
REVENUE BY SECTOR AND END CUSTOMER GEOGRAPHY
GLOBAL PRESENCE
Scott Technology Limited
Page 8
TOTAL
GROUP
KEY
Minerals
Other
Material handling
and logis�cs
Protein
Manufacturing
facili�es
Sales and office
facili�es
28%
35%
15%
21%
US
NZ
AU
CN
42%
34%
30%
8%
38%30%
31%
30%
10%
2%
21%
2%
5%
93%
EU
69%
15%
16%
* Includes Rocklabs product sales to international distributors.
*
Annual Report 2023
Page 9
End-of-line paletising solution featuring Scott Pal 4.0
Scott Technology Limited
Page 10
The 2023 financial year has seen a strong focus on
accelerating and delivering growth at Scott Technology.
Scott Technology CEO, John Kippenberger, says he’s
extremely proud of the progress that’s been made
against the Engineering Scott to High Performance 2025
(Scott 2025) strategy, after several years of stabilising
and focusing the business.
He explains: “Pre 2020 the business went through a
period of significant growth, largely through merger
and acquisition activity in Europe, North America, and
Australia. The development and rollout of Scott 2025
early in 2020 enabled us to take a step back and look
at the overall business. In each of our 13 markets, we
were trying to develop and deliver every technology
and service to every customer – which wasn’t achieving
the results we were looking for. This resulted in us
identifying growth markets and sectors, optimising
the size of our organisation and establishing regional
centres of excellence.”
The change and focus took time to bed in as COVID-19
unfolded across the world and the team worked through
some highly complex legacy projects that were no longer
part of the core business.
“At the end of our 2022 financial year the world was opening
up and we had some good tailwinds. The new ways of
working, strategic priorities and core sectors were well
entrenched across our global business. We were positioned
to fly and we have really seen that acceleration of growth
take hold in FY23.”
Cameron Mathewson, Chief Financial Officer suggests
there are many projects that have underpinned the growth,
BladeStop being one example. FY23 has seen growth of this
product both geographically and into new channels.
“We have been looking at where we don’t have a presence
and then putting people on the ground there or building
distributor partnerships. North America is a good example of
where there was an opportunity for BladeStop and we’ve
been targeting that region this year,” says Mathewson.
“We’re building relationships with big businesses that we
haven’t worked with before – Cargill, one of the biggest
beef processors in North America, for example. We’re also
moving into retail with BladeStop, where historically we’ve
only had the product used by large processors like JBS.”
Another strategic highlight for 2023 was the expansion of
ACCELERATING GROWTH
Our mission is to deliver
smart automation solutions
that transform industries.
Robust Global
Platforms
Authentic Customer
Partnerships
One Global
Team
Operational
Excellence
Leading-edge
Technology
"We were positioned
to fly and we have
really seen that
acceleration of growth
take hold in FY23."
Annual Report 2023
Page 11
the historically European-focused material’s handling and
logistics (MHL) business into America. Leveraging its
expertise and existing customer relationships, the
Scott Europe team has broken into one of the hottest
intra-logistics markets in the world. First cab off the
rank for an automated MHL system was a global french
fry manufacturer.
“We’ve got our MHL automation in its production sites in
France, Belgium, the Netherlands and Poland. This year
we’ve secured our first project in North America, as a
result of the successful customer partnership we’ve built in
Europe over several years,” says Kippenberger.
In poultry, Scott’s proprietary trussing technology has moved
into the commercialisation phase, passing factory acceptance
testing with Costco Wholesale. This represents an important
milestone in a strategic partnership, with the business poised
to roll the trussers out across the Costco network.
In the mineral sector, FY23 has seen a strategic reset,
moving away from highly complex one-off systems into
semi-automated modular laboratory solutions.
“FY23 has been a huge year of accelerated growth for the
business and we look forward to continuing this exponential
growth in FY24.”
"FY23 has been a huge
year of accelerated
growth for the business
and we look forward
to continuing this
exponential growth
in FY24."
FY21
FY22
CORE
79%
FY23
M H L
PRO TEIN
M INER AL S
REST O F
BUSINESS
+3%
$70m
+39%
$40m
-12%
$55M
+22%
$57m
+35%
$94m
+4%
$41m
+2%
$56m
+33%
$76m
$68m
$28m
$62m
$47m
REVENUE BY SECTOR YEAR ON YEAR GROWTH
(Below) Turntable redirects cases in preparation for palletising.
Scott Technology Limited
Page 12
Award-winning BladeStop reducing risk of injury at local supermarket butchery.
Annual Report 2023
Page 13
Building authentic customer partnerships has been a
priority for Scott over the last three years. The team
has invested in understanding customers' objectives,
strategies and growth plans, by collaborating to
identify opportunities for further partnerships. It’s
also improved its performance to ensure customers
experience world-class aftermarket service levels;
preventative servicing to make sure their technology
is up to date and well maintained, as well as quick
responses and fixes to any issues.
FY23 has seen the benefits of this investment in partnership,
with Scott focusing its efforts on repeat business, working
with existing customers to expand their use of Scott
solutions. This drive has resulted in 60% of FY23 sales
opportunities being generated from repeat business,
excluding aftercare service or parts.
goes further than this and the Scott team is currently
concluding the commissioning of a fully automated
materials handling system at the same site. This will result
in greater efficiencies and improved handling of cartons
and products, enhance the health and safety of staff and lift
the efficiency and competitiveness of the plant.
“We have had a long and positive relationship with Alliance
Group, having installed several of our Primal systems in
their sites across New Zealand. They know we deliver
world-class technology and great ongoing service and
so they came to us to expand their automation beyond
processing meat,” says Andrew Arnold, Scott Technology’s
New Zealand General Manager.
Demonstrating the benefits of its products to customers
with multiple facilities is another way Scott has secured
repeat business in FY23, with Costco Wholesale being a great
example. Costco sells a high quantity of rotisserie chickens in
multiple stores across America, presenting an opportunity
for Scott’s poultry trussing system to significantly improve
operating capacity amd safety for the retailer. Ten trussers
have already been sold to American Costco this year, and
the Scott team has been working closely with it to determine
what a wider rollout could look like.
“Costco sold 117 million rotisserie chickens globally in FY22.
It can already see the incredible efficiency and cost savings
that could be realised through expanding the automated
trussing technology right across its business,” says Arnold.
TRIED AND TRUSTED – THE BENEFITS
OF BUILDING AUTHENTIC CUSTOMER
PARTNERSHIPS
"I’m extremely proud of
the way our team has
delivered exceptional
technology and maintained
authentic business
relationships to help us
secure repeat business."
"There are a few ways we
look to generate repeat
business – selling more units
across multiple geographies,
selling solutions across
multiple facilities or even
cross selling between
Scott sectors."
“I’m extremely proud of the way our team has delivered
exceptional technology and maintained authentic
business relationships to help us secure repeat business.
We look forward to continuing this growth trajectory in
FY24,” says Kippenberger.
Scott Technology CEO, John Kippenberger, says this organic
growth relies on customers being satisfied with Scott’s
expertise and service. “There are a few ways we look
to generate repeat business – selling more units across
multiple geographies, selling solutions across multiple
facilities or even cross selling between Scott sectors. We
are proud that we now have over 170 customers with
more than one Scott solution installed in their business.”
Alliance Group, a global leader in procuring and processing
the world's best quality red meat products, is one such
customer. In the face of a challenging labour market,
New Zealand’s largest red meat processor sought out
efficiencies. In 2021 they installed the latest generation
of Scott’s Lamb Primal cutting technology in its Lorneville
plant, which became the country’s most advanced boning
room as a result Alliance’s desire for greater efficiency
Scott Technology Limited
Page 14
REST OF BUSINESS
MATERIALS HANDLING & LOGISTICS
AUTHENTIC CUSTOMER PARTNERSHIPS
PROTEIN
MINERALS
Annual Report 2023
Page 15
The manufacturing and assembly hall at our new 8,000sqm facility in Qingdao, China.
Scott Technology Limited
Page 16
and savings that we can deliver are significant. However, we
know that there are areas where domestic procurement
makes more sense, in markets like Europe for example,” says
Zhang. “We continue to find the right balance so we can
maintain our world-class outputs.”
In March 2023, Scott officially opened its new
workshop in Qingdao, China; an 8,000 square metre
facility employing 43 people. China is a Scott centre
of excellence for appliance manufacturing, alongside
Christchurch, focused on designing and building world-
class automated appliance lines for domestic white
goods manufacturers.
The new workshop enables the Scott China team to
continue growing the appliance business, as well as fulfilling
new roles around wider manufacturing and procurement
for the global business.
Cathy Zhang, Regional Director of Scott China, says that
the move brings her local team closer to the Scott global
team. “A key strategic pillar of the Scott 2025 strategy is One
Team. Simply put, this is about operating cohesively as a
global business – working across geographies and cultures
to deliver efficiencies, connection and direction. Here in
China, we now have the capacity and capability to support
the manufacturing of short blocks, or parts, for our centres
of excellence across the world.”
This ability will become increasingly useful as Scott
continues its growth acceleration trajectory, selling greater
volumes of its products.
“Our poultry trusser is a great example of this. We have
huge ambitions for this product, particularly in the North
American market, and as demand grows, we’ll need to
produce more. The trusser is designed and built out of our
New Zealand protein centre of excellence; however, we now
have the capacity to build discrete parts here in China with
speed and efficiency. This will support our ability to meet the
growing demand we anticipate,” says Zhang.
“It’s important that the technology component, its
development and any evolution remain within the
market it was developed. This is where the expertise sits
and will stay,” reiterates Zhang.
Procurement is another strength of the Scott China
business, having supported the Scott business in this
area for several years.
“With our new facility in China, we have a strategic
opportunity to expand our role in procurement for other
parts of the business across the globe. We have great
relationships and an eye for quality, and the efficiencies
NEW CHINA FACILITY ENABLING
MANUFACTURING AND PROCUREMENT
GAINS ACROSS THE GLOBE
"With our new facility in
China, we have a strategic
opportunity to expand our
role in procurement for other
parts of the business across
the globe."
Scott CEO, John Kippenberger, says the One Team approach
is about breaking down borders, embracing cultural nuances
and ensuring end-to-end ownership and accountability of
customer relationships and shareholder returns.
“The China team are now fully connected with the global
business and have already played a significant role in
delivering exceptional technology to our customers. We’re
proud of our China team and see a bright future for the key
role that it will play in Scott 2025 and our future growth,”
concludes Kippenberger.
(Below) Cathy Zhang and the team at the official opening
ceremony for the Qingdao facility.
Annual Report 2023
Page 17
Scott is the global leader in bandsaw safety, with the
fastest stop time on the market in its BladeStop product,
primarily used in the meat cutting industry. BladeStop
has over 1,600 units in market, across 30 countries and
received an ISSA Safety Award in 2023.
Even with the product’s immense success and market
leadership, it doesn’t mean the business won’t continue
to evolve and improve the technology. “The truth is,
we already are,” says Kippenberger. “We have a smaller
T300 retail saw in testing and anticipating release mid
2024, this saw is designed for large supermarkets and
independent butcheries”.
Early progress has also been made on the beef
automation project. Working with Meat & Livestock
Australia and JBS Foods Australia, the research and
development project takes x-ray and vision expertise
from Scott’s Lamb Primal technology and is evolving
the tech for the beef industry.
Scott’s automated poultry trussing technology is
another example of its commitment to innovation in
its protein sector. “Our trusser is in what we’d term
as early commercialisation, yet it has been incredibly
successful across the globe. The US poultry market
is a US$95b (NZ$148b) industry, with more than 900
million rotisserie chickens produced per year, so we are
already looking at what generation two and three of
this product looks like,” says Kippenberger.
The future of the mineral sector also lies in innovation
and the team has designed an automated modular
solution (AMS) to offer several improvements across
the sample preparation process. In the past, RoboPrep
systems have required a large laboratory space due to
their size. However, the AMS provides a linear solution
that has comparable capacity but requires a much
smaller footprint. Read more about this on page 20.
The business has been on a significant cultural journey
in the innovation space, ensuring that teams across
the globe understand that innovation and continuous
improvement remain at our heart. “We were a bespoke
design and build business, and now we’re really
harnessing a product mentality and accelerating it
through innovation-focused products and sectors. It’s
exciting,” adds Kippenberger.
Engineering is at the heart of Scott Technology’s
DNA and that by definition means a commitment to
continuous improvement.
The business has intensified its focus on productisation,
allowing the innovation of existing proven technology
to drive sales and enable Scott to provide stronger
aftermarket services.
MARKET LEADERSHIP THROUGH
CORE BUSINESS INNOVATION
John Kippenberger, says “We are consistently looking
for opportunities to go beyond with our technology.
Our time and creative energy are focused on developing
world-leading tech within our core sectors, as well
as designing and building the next generation of our
existing automation.”
"We are consistently
looking for opportunities
to go beyond with our
technology. Our time and
creative energy are
focused on developing
world-leading tech within
our core sectors."
(Above) BladeStop T300 retail saw prototype.
Scott Technology Limited
Page 18
Award-winning poultry trussing technology during factory acceptence testing at our Dunedin, New Zealand facility.
Annual Report 2023
Page 19
Rocklabs, Scott’s market-leading brand of automated
sample preparation equipment, has been on an
innovation journey in FY23.
Group GM – People, Marketing and Minerals, Casey Jenkins,
says the Scott 2025 strategy has supported a shift away
from building complex, bespoke systems, instead increasing
strategic product solution offerings, allowing the team to
focus on developing an automated modular solution (AMS).
“Historically, we have developed bespoke end-to-end
RoboPrep systems for our customers. These are large, highly
complex, costly systems to build and install and realistically
they require highly skilled technicians to be based on site for
ongoing maintenance and issues,” says Jenkins. “Minimising
down time is an important factor in sample preparation
and the pandemic taught us that flying in a technician isn’t
always an option.”
The Rocklabs AMS is being developed in its Auckland centre
of excellence and is a world first in linear automated lines
for sample preparation. It links three machine modules
to control and automate the crushing, pulverising and
dispensing stages.
Several improvements across the sample preparation
process will be seen in the development of the new AMS,
with each piece of equipment being modular and adaptable.
A full-scale end-to-end sample preparation system can be
created or a single piece of Rocklabs equipment can be
utilised within an existing system.
In the past, RoboPrep systems have required a large
laboratory space due to their size. In the AMS, the
Rocklabs R&D team has produced a linear solution that
has comparable production capacity but requires a much
smaller footprint.
General Manager of Rocklabs, Werner Conradie, says the
Rocklabs AMS is much easier to fit into existing labs due to
its smaller footprint.
“The modular nature of the product also
compartmentalises risk to prevent the entire system
failure that was common in the larger systems. This means
down time is significantly reduced.”
Standardisation of outputs is another important factor that
has been considered in the design phase. Pre-determined
INNOVATION IN THE MINERALS
SECTOR OPENS UP NEW MARKET
OPPORTUNITIES FOR SCOTT
algorithms ensure continuous flow of standardised samples
through preparation modules, improving quality and
consistency of output.
Skilled labour shortages across the globe have put pressure
on many industries and the minerals sector is no exception.
The Rocklabs AMS reduces the labour requirements for
sample preparation from six operators, down to one, in
some cases.
"Skilled labour shortages
across the globe have put
pressure on many industries
and the minerals sector is
no exception."
“The AMS can achieve the same output rates of the
bigger systems, for approximately a third of the cost,”
says Conradie.
A prototype of the AMS is available to trial at Scott’s Rocklabs
HQ in Auckland, where customers can test their samples on
the technology to see if the modular solution is right for them.
To give customers full confidence to adopt the AMS, Scott
offers customers the opportunity to try before they buy.
Australia and North America have been identified as the
initial priority markets for the AMS technology, with the
first contract for two lines signed with Mineral Resources
Limited (MRL) for its Onslow Iron project located in West
Pilbara, Australia.
“MRL is building the world’s lowest carbon footprint mine,
and they chose our automated modular solution because of
the small footprint and the safety credentials it offers. We’re
delighted to be working with them,” continues Casey Jenkins.
Large mining companies will be the primary target in 2024.
However, the technology is also suitable for commercial
labratories. “We’ve spent a lot of time identifying the
addressable market for this product and we see plenty of
growth potential,” concludes Jenkins.
The next phase of development for the AMS will be working
with customers to separate the crusher as a single module.
FY24 is looking to be a big year for Rocklabs!
Scott Technology Limited
Page 20
Rocklabs' Automated Modular Soloution (AMS) pulversing module during build and preliminary testing.
Annual Report 2023
Page 21
Service team perform complete health check on BladeStop saw at major New Zealand protein processor.
Scott Technology Limited
Page 22
SUSTAINABILITY, A CATALYST FOR
GROWTH AND RESPONSIBILITY
Scott has continued to make positive progress on its ESG
journey across the globe, with the business completing
the mapping of its full GHG emissions footprint in FY23.
Previously, the carbon footprint of its European, Australian
and New Zealand businesses had been measured, and this
year has seen its China and US regions completed. With
a full view of its total emissions the business is currently
developing reduction targets and strategies. Scott will
measure progress against these targets and report this
as part of its climate-related disclosure requirements,
commencing in late 2024.
To ensure engagement with the business’ desire to map
and reduce its carbon footprint, Scott extended educational
sessions to the China and US teams to provide local and
international context, focusing on climate science and
greenhouse gasses.
The business is committed to educating its partners on how
they too can play a role. In February, Scott hosted a climate
change and carbon emissions seminar for its ANZ suppliers.
This was well received with 100 suppliers in attendance and
generated extremely positive feedback.
8.1
Y E A R S AVE R AG E
LENGTH OF
TENURE
83%
ENPS
UP 1.2% ON
FY22, WITH 78%
RESPONSE RATE
4.3
LT I F R
1
30% REDUCTION
OVER LAST
12 MONTHS
One Team remains a core pillar for Scott, with employee
engagement continuing to thrive across the business. It’s
strong Employee Net Promoter Score (eNPS) of 83%, up
from 82% in FY22, reflects its increased investment and
focus on employee initiatives and engagement has been
well received.
This year the New Zealand business has introduced a
new employee benefits programme, featuring increased
employer contributions to KiwiSaver, enhanced medical
insurance offerings and celebrating employees through
monthly staff awards. Employee initiatives are also being
developed for its other markets across the globe, being
rolled out over the coming year.
Positive employee engagement is a key measure of success
for Scott and the business is committed to ensuring it
retains and attracts the top talent required to deliver smart
automation solutions to the world.
Scott is proud of its commitment to building a better world
and looks forward to continuing to build on this in FY24.
1
LTIFR - Lost Time Injury Frequency Rate
(Right) BeScott App and BeSafe, Be Well, Be Scott
2022 Awards.
Annual Report 2023
Page 23
FY19:
2,736
FY22:
2,490
FY19:
1,716*
FY22:
1,495
FY20:
2,310
FY21:
2,039
FY22 GHG EMISSIONS BY REGION
Absolutele total footprint (tonnes CO
2
e)
TOTAL
ANZ
CN
EU
US
4%
9%
33%
54%
FY22
TOTAL
4,579
tCO
2
e
For Scott, understanding the carbon footprint of its
operations was an important first step in developing a
low-impact, climate-resilient business.
In 2021, with support from sustainability expert Tadpole,
Scott measured the FY19 carbon emissions of its European
(EU), Australian and New Zealand (ANZ) business units. FY19
was chosen as the base year because it represented the
most recent typical year of operations, where the impacts of
COVID-19 could be avoided.
In the past year, Scott Technology further fortified its
commitment to sustainability by expanding its carbon
emissions understanding across all global operations.
Leveraging the insights from its collaboration, Scott
broadened its measurement boundary to encompass
business operations in China and the US, mapping its entire
global footprint for the first time.
President Scott Europe and North America, Aaron
Vanwalleghem, says the business is delighted to complete
this important step in its emissions-reduction journey.
*
This figure differs from that disclosed in last year’s Annual
Report. Presented last year as 1,801 tonnes CO
2
e, this was the
pre-audit figure. The figures above are final, verified numbers.
GHG EMISSIONS REDUCTION
Absolutele total footprint (tonnes CO
2
e)
EU
ANZ
SCOTT'S CARBON EMISSIONS
MANAGEMENT JOURNEY
“This year, our primary focus has been to complete
carbon footprints for all regions and have these audited by
independent third parties. Our global carbon footprint is just
over 4,500 tCO
2
e with materials, electricity and transport
fuel our three biggest measured emissions sources and
Europe our highest emitting market."
Scott ran educational sessions for its China and US teams,
focusing on climate science and greenhouse gasses, local
and international context and how Scott is approaching the
challenge of mapping its global business.
Scott has already made progress within its European,
Australian and New Zealand operations since the 2019
baseline was measured. The European division started at
2,736 tCO
2
e in 2019 and has reduced to 2,490 tCO
2
e
tonnes CO
2
e
Europe (EU)
2,490
Australia & New Zealand (ANZ)
1,495
China (CN)
402
United States (US)
192
Scott Technology Limited
Page 24
* Includes well-to-tank emissions.
** Includes well-to-tank emissions and line losses.
*** Other includes private car use (China only), working from home (US only), contractors (Europe), transfers in Europe and delivery of
parts and products (US only).
FY22 GLOBAL GHG EMISSIONS FOOTPRINT BY SOURCE
Together with Tadpole, Scott ran a series of carbon-
reduction sessions with teams in each region. Focus was
given to hotspots, the areas of the business that are
causing the largest emissions, and the ones that can be
influenced in the short term.
“In these sessions, our team was tasked with identifying
ambitious and realistic actions we can take to
decarbonise. Alongside these sessions, we engaged with
our large suppliers to share our progress in developing
our carbon-reduction plan and identified the actions
our suppliers are taking to reduce their emissions. We
are also working with our suppliers to improve the way
we measure emissions from the materials and parts we
use in manufacturing and to bring freight emissions into
the footprint measurement, which have to date been
omitted,” adds Vanwalleghem.
Scott is now in the process of modelling the emissions
reduction opportunities identified alongside projections
for business growth. This will enable the development
of a reduction target and set of strategies that will get
us there.
“We are committed to playing our role in decarbonising
and are looking forward to sharing our initiatives and
progress as part of our climate-related disclosures later
next year,” says Vanwalleghem.
"Understanding the
activities that produce
emissions within our
business, and their
magnitude, is only the
first step in our journey."
MATERIALS
31%
1,418 tCO
2
e
REFRIGERANT
GAS
1%
42 tCO
2
e
S TAT I O N A RY
FUEL
6%
266 tCO
2
e**
TRANSPORT FUEL
22%
995 tCO
2
e*
WASTE
1%
60 tCO
2
e
ELECTRICITY
22%
1,009 tCO
2
e**
PACKAGING
1%
29 tCO
2
e
BUSINESS
TR AVE L
15%
708 tCO
2
e*
OTHER***
1%
51 tCO
2
e*
in 2022, while Australia and New Zealand started at 1,716
tCO
2
e in 2019 and reduced to 1,495 tCO
2
e in 2022. Note
that the team in Europe measured its footprint through
the Covid-impacted years, the team in Australia and
New Zealand did not.
Scott’s carbon emissions are broken into three scopes.
Scope 1 and 2 are emissions that the business has control
over, while scope 3 emissions are those up and down
its supply chain that, to measure accurately and manage,
requires collaboration with suppliers and customers.
“Understanding the activities that produce emissions within
our business, and their magnitude, is only the first step in our
journey” says Vanwalleghem. “The critical piece of work is to
develop strategies to reduce these emissions and implement
the strategies within our teams.”
Annual Report 2023
Page 25
Fostering a work environment that prioritises safety
and wellbeing continues to be the highest priority for
Scott Technology in FY23, which is reflected both in the
organisation’s safety culture and key metrics.
“We are delighted with the progress we’ve made in the last
year,” says Group GM – People, Marketing and Minerals,
Casey Jenkins. “Be Safe, Be Well, Be Scott continues to go
from strength to strength and our teams remain committed
to continuously improving our safety culture.”
After its inaugural success, Scott held its second Stop for
Safety event in December 2022 where employees from
across the globe were recognised for exemplary safety
culture. The best performing site went to Dunedin, New
Zealand, whilst most improved went to Sydney, Australia.
These sites received these awards for their outstanding
achievements in safety improvements, including reporting
the highest number of hazards/observations across the
Group, led the successful BeScott app deployment, active
staff engagement and a deep understanding of health and
safety requirements, which was reflected in the scores
obtained during executive safety conversations.
“It was a fantastic opportunity for us to get together again
to celebrate the achievements from across the Group. Our
safety is a collective responsibility and we have really seen
the team work together to drive a high-performing safety
culture,” says Jenkins.
BE SAFE, BE WELL, BE SCOTT CONTINUES
TO GO FROM STRENGTH TO STRENGTH
The Safe Mate programme, a people-led initiative where
colleagues can nominate each other for safety awards,
continues to encourage staff to uphold the six core
expectations in the Be Safe, Be Well, Be Scott framework.
“Our employees continue to lead by example, and we receive
a high number of nominations each month, particularly in
the Speak Up and One Team categories,” continues Jenkins.
4.3
LTIFR 30%
REDUCTION
SINCE FY22
69%
OF SAFETY CONVERSATIONS
COMPLETED BY EXECUTIVE
TEAM DRIVING STRONG
LEADERSHIP
13%
MORE
REPORTS
ON FY22
251
SAFETY
CONVERSATIONS
68
SAFE MATE
AWARD
RECIPIENTS
"Our employees continue
to lead by example, and we
receive a high number of
nominations each month,
particularly in the Speak Up
and One Team categories."
Scott Technology Limited
Page 26
WORKING AT
HEIGHTS
DRIVING
MOBILE
PLANT
FALLING
OBJECTS
FIXED
PLANT
SUSPENDED
LOADS
POTENTIAL
ENERGY
HAZARDOUS
SUBSTANCES
CRITICAL RISKS
FRAMEWORK
The integration of the BeScott reporting app has also
played a significant role, and is now fully embedded across
the global business, with high levels of engagement. The
app, which simplifies safety reporting by making it easily
accessible on employees' phones, has played a significant
role in improving reporting metrics, with incident reporting
increasing over 100% since the launch.
“As a result of the increase in this, and other lead indicators
such as management conversations, our lost time injury
frequency rate has decreased significantly from 6.1 in August
last year, to 4.3 in 2023,” says Jenkins.
Continuous improvement in workplace health and
safety is a fundamental commitment for Scott and there
is always more that can be done. The team has been
working hard on developing a Critical Risk Management
Strategy, which has involved defining critical risk and
establishing eight risk categories.
The strategy is set to be launched in November this year
and will ensure that employees are aware of the business’
risk categories, with each category being championed by
an executive team member. The launch will include an
introduction video and posters, as well as post-launch
workshops to define mandatory controls and finalise the Risk
Management Framework.
“For each risk, we will develop mitigations and controls to
ensure they are managed effectively and risks are minimised
as much as possible,” adds Jenkins. “Allocating a risk category
to each member of the leadership team instils a collective
sense of accountability and allows for the health and safety
of the business to be everyone’s responsibility.”
(Left) Scott service team onsite commissioning a palletising
system for major New Zealand protein processor.
Annual Report 2023
Page 27
The UC students worked with Scott project mentors,
Paul Boyes and Glen Rose. The project explores the
design and engineering of a 400-tonne servo press to
incorporate into manufacturing lines.
Engaging the next generation of engineers is also a priority
for Scott and its long-term sponsorship of RoboCup Junior
New Zealand reflects this. RoboCup Junior NZ is the local
iteration of a global educational initiative designed to
introduce primary and secondary students to the field of
robotics by sparking their curiosity about, and increasing
their comfort with, technology.
Created in a true cooperative spirit, the RoboCup Junior
competition encompasses engineering and IT skills,
extending right across a school curriculum. Taught through
participating schools, students compete to solve challenges
using science, technology and performing arts.
“We believe that more needs to be done to encourage
and excite young people to pursue STEM (Science,
technology, engineering and maths) careers,” says
Jenkins. “RoboCup Junior is a fun way for kids to engage
with robotics. We’ve seen some incredible talent come
through the competition over the years and we have
even had the pleasure of hiring several great employees
through this pathway.”
Scott continues to grow its talent pipeline by providing
robust learning pathways through its graduate,
apprenticeship and internship programmes.
Building a strong team and future leaders continues
to be a key focus for Scott as it looks to expand its
diversity in the workplace.
Casey Jenkins, Scott Technology’s Group GM – People,
Marketing and Minerals, says the business knows its
teams are stronger and its products and technologies
are better, when they are developed with input from a
diverse range of people.
“We are a people-led business,” says Jenkins. “We have
an ongoing focus on growing and developing our teams
through partnerships that encourage a wider range of
people to work in the world of robotics and engineering.”
With this in mind, Scott engaged in a partnership with the
University of Canterbury (UC) late in 2022, an institution
known for producing high-quality engineering talent.
Together with UC, Scott developed the Scott Technology
Women in Engineering Scholarship; a compelling
opportunity for female engineering students, which covers
fees up to $5,000, a $1,000 stipend and a paid internship.
In September, the scholarship was awarded to Lydia
Burnett. Studying a Bachelor of Engineering specialising in
Mechatronics, Lydia has a keen interest in engineering for
manufacturing and improving operator safety and usability.
“Lydia was one of several high-calibre applicants we
received, and we were really reassured to see so many
females engaging in an engineering qualification. Lydia
impressed us with her understanding of Scott and desire to
support student outreach programmes and we look forward
to supporting her over the next few years,” says Jenkins.
In addition to the scholarship, Scott sponsors the university’s
Women in Engineering committee and has worked with a
group of four UC students on their final year project.
INVESTING IN
OUR FUTURE
"We are excited to
continue to develop and
shape the next generation
of engineers."
(Below) Scholarship winner, Lydia Burnett, onsite in Christchurch
with Matt Flemmer, project engineer.
(Above) Harry Russell qualified fitter and turner, completed his
apprenticeship with Scott (Photo coutesy of Otago Daily Times).
“In FY23 we welcomed three graduates, four interns and
four apprentices to join our team of 22 second- and third-
year graduates and apprentices globally and we are excited
to continue to develop and shape the next generation of
engineers,” says Jenkins.
Scott Technology Limited
Page 28
Scott Australia delivers choreographed robots for Vivid Sydney festival in Australia.
Annual Report 2023
Page 29
Full profiles are available on the Scott website at scottautomation.com/en/investor-centre/governance
OUR BOARD
LEADERSHIP & GOVERNANCE
Al Byers
Director
Stuart McLauchlan
Chairman and Independent Director
John Kippenberger
Chief Executive Officer
Brent Eastwood
Director
John Berry
Director
Derek Charge
Independent Director
John Thorman
Independent Director
Penny Ford
Emerging Director
Scott Technology Limited
Page 30
K E Y
Accounting policy
Key judgements and
other judgements made
INDEX TO THE FINANCIAL STATEMENTS
C. Capital and funding
61
C1. Share capital61
C2. Earnings and net tangible assets per share61
C3. Borrowings62
C4. Trade creditors and accruals63
C5. Leases64
C6. Employee benefits66
C7. Provision for warranty66
C8. Performance-based compensation67
C9. Onerous contract provision67
D. Risk management68
D1. Financial instruments68
E. Group structure and subsidiaries75
E1. Subsidiaries75
E2. Investments accounted for using
the equity method
76
E3. Related party transactions77
E4. Discontinued operations78
E5. One off costs79
F. Other disclosures80
F1. Notes to the consolidated statement of
cash flows
80
F2. Contingent liabilities81
F3. Key management personnel compensation82
F4. Subsequent events82
Independent auditor’s report
83
Consolidated statement of comprehensive income32
Consolidated statement of changes in equity
33
Consolidated balance sheet
34
Consolidated statement of cash flows
35
Notes to the consolidated financial statements
36
Summary of accounting policies
36
A. Financial performance
39
A1. Revenue from contracts with
customers and operating expenses
39
A2. Income taxes45
A3. Segment information47
B. Assets
49
B1. Trade debtors49
B2. Inventories51
B3. Contract assets / liabilities52
B4. Property, plant and equipment53
B5. Goodwill54
B6. Intangible assets57
B7. Research and development costs59
B8. Development assets59
Annual Report 2023
Page 31
FINANCIAL REPORT
Scott Technology Limited
Page 32
20232022
Notes$'000s$'000s
RevenueA1
267,526 221,757
Other operating incomeA1
1,391 2,003
Share of joint ventures’ net surplusE2
127 329
Raw materials, consumables used and operating expensesA1
(158,967) (130,425)
Employee benefits expense
(79,703) (69,746)
OPERATING EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION, AND ONE OFF COSTS (OPERATING EBITDA)
30,374 23,918
One off costsE5
(683)-
OPERATING EARNINGS BEFORE INTEREST, TAX, DEPRECIATION
AND AMORTISATION (EBITDA)
29,691 23,918
Interest revenue
558 560
Depreciation and amortisationB4, B6, B8, C5
(8,809) (8,053)
Finance costs
(2,241) (1,508)
NET PROFIT BEFORE TAX
19,199 14,917
Taxation expenseA2
(3,763) (2,260)
NET PROFIT FOR THE YEAR AFTER TAX FROM CONTINUING OPERATIONS
15,436 12,657
Loss from discontinued operation (net of income tax)E4
- (12,567)
NET PROFIT FOR THE YEAR AFTER TAX
15,436 90
Other Comprehensive Income
Items that may be reclassified to profit or loss:
Translation of foreign operations
623 4,822
TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET OF TAX
16,059 4,912
Net profit / loss for the year after tax from continuing operations is attributable to:
Members of the parent entity (used in the calculations of earnings per share)
15,522 12,639
Non-controlling interests
(86) 18
15,436 12,657
Total comprehensive income / loss is attributable to:
Members of the parent entity
16,145 4,894
Non controlling interests
(86) 18
16,059 4,912
Total comprehensive income / loss attributable to members of the parent entity arises from:
Continuing operations
16,145 17,461
Discontinued operations
- (12,567)
16,145 4,894
Cents per shareCents per share
Earnings per share to shareholders from continuing operations (weighted average shares on issue):
BasicC2
19.3 15.9
DilutedC2
19.3 15.9
FOR THE YEAR ENDED 31 AUGUST 2023
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
Annual Report 2023
Page 33
Fully paid
ordinary
shares
Retained
earnings
Foreign
currency
translation
reserve
Non-
controlling
interestsTotal
Notes$’000s$’000s$’000s$’000s$’000s
Balance at 31 August 2021 82,701 19,559 (3,761) (304) 98,195
Net profit for the year after tax - 72 - 18 90
Other comprehensive (loss) for the year net of tax - - 4,822 - 4,822
Dividends paid (8.0 cents per share) - (6,315) - - (6,315)
Issue of shares under dividend reinvestment planC1 3,614 - - - 3,614
Balance at 31 August 2022 86,315 13,316 1,061 (286) 100,406
Net profit for the year after tax
- 15,522 - (86) 15,436
Other comprehensive income for the year net of tax
- 623 - 623
Dividends paid (8.0 cents per share)
- (6,413) - - (6,413)
Issue of shares under dividend reinvestment planC1
3,847 - - - 3,847
Balance at 31 August 2023
90,162 22,425 1,684 (372) 113,899
FOR THE YEAR ENDED 31 AUGUST 2023
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
AS AT 31 AUGUST 2023
CONSOLIDATED BALANCE SHEET
Scott Technology Limited
Page 34
20232022
Notes$’000s$’000s
Current assets
Cash and cash equivalents 21,432 8,478
Trade debtors
B1
43,639 40,003
Other financial assets
D1
1,277 938
Sundry debtors 10,776 5,251
Inventories
B2
38,251 31,328
Contract assets
B3
34,241 18,073
Receivable from joint ventures
E3
431 431
Tax receivable - 881
TOTAL CURRENT ASSETS
150,047 105,383
Non-current assets
Property, plant and equipmentB4
18,366 17,112
Investment in joint venturesE2
804 677
Other financial assetsD1
142 99
Sundry debtors
2,901 4,608
GoodwillB5
52,016 50,117
Deferred taxA2
2,912 3,365
Intangible assetsB6
5,586 7,158
Development assetsB8
7,807 8,837
Right-of-use assetsC5
12,473 9,532
TOTAL NON-CURRENT ASSETS
103,007 101,505
TOTAL ASSETS
253,054 206,888
Current liabilities
Bank overdraft
9,036 4,543
Trade creditors and accruals
C4 39,300 35,102
Lease liabilities
C5 3,773 3,290
Other financial liabilities
D1 1,682 1,291
Contract liabilities
B3 45,454 26,307
Employee entitlements
C6, C8 12,943 9,369
Provision for warranty
C7 1,374 1,323
Taxation payable
1,646 -
Current portion of borrowings
C3 1,151 945
Onerous contracts provision
C9 1,061 5,241
TOTAL CURRENT LIABILITIES
117,420 87,411
Non-current
liabilities
Other financial liabilitiesD1
142 182
Employee entitlementsC6, C8
667 719
Lease liabilitiesC5
9,602 7,145
BorrowingsC3
11,324 11,025
TOTAL NON-CURRENT LIABILITIES
21,735 19,071
Equity
Share capitalC1
90,162 86,315
Retained earnings
22,425 13,316
Foreign currency translation reserve
1,684 1,061
Equity attributable to equity holders of the parent
114,271 100,692
Non-controlling interests
(372) (286)
TOTAL EQUITY
113,899 100,406
TOTAL LIABILITIES AND EQUITY
253,054 206,888
2023
2022
Notes
$’000s
$’000s
Cash flows from
operating activities
Cash was provided from / (applied to):
Receipts from operations
267,110
224,625
Interest received
558
560
COVID-19 wage subsidies received
-
436
Payments to suppliers and employees
(246,887)
(217,713)
Taxation paid
(564)
(1,600)
Net cash inflow from operating activitiesF1
20,217
6,308
Cash flows to
investing activities
Cash was provided from / (applied to):
Purchase of property, plant, equipment and intangible assets
(4,324)
(2,312)
Sale of property, plant and equipment
2,370
877
Purchase of development assetB8
(1,229)
(6,574)
Purchase of business
-
(705)
Proceeds from discontinued operations
-
896
Net cash (outflow) from investing activities
(3,183)
(7,818)
Cash flows to
financing activities
Cash was provided from / (applied to):
Repayment of borrowings
(1,904)
(1,599)
Dividends paid (less amount reinvested the dividend
reinvestment scheme)
(2,566)
(2,686)
Proceeds from borrowings
2,203
2,396
Lease payments
(4,040)
(3,392)
Interest paid
(2,266)
(1,516)
Net cash (outflow) from financing activities
(8,573)
(6,797)
Net increase / (decrease) in cash held
8,461
(8,307)
Add cash and cash equivalents at start of year
3,935
12,242
Balance at end of year
12,396
3,935
Comprised of:
Cash and cash equivalents
21,432
8,478
Bank overdraft
(9,036)
(4,543)
12,396
3,935
FOR THE YEAR ENDED 31 AUGUST 2023
CONSOLIDATED STATEMENT
OF CASH FLOWS
Annual Report 2023
Page 35
presented in these financial statements for the year
ended 31 August 2022.
There have been no changes in accounting policy during
the year.
The information is presented in thousands of New
Zealand dollars, which is the functional currency of the
company and the presentation currency of the Group.
CRITICAL JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS
In the application of NZ IFRS the directors are required
to make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not
readily apparent from other sources. The estimates
and associated assumptions are based on historical
experience and various other factors that are believed
to be reasonable under the circumstances, the results of
which form the basis of making the judgements. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised
if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both
current and future periods.
Judgements made by the directors in the application
of NZ IFRS that have significant effects on the financial
statements and estimates with a significant risk of
material adjustments in the next year include:
• Estimating the percentage of completion for systems
contracts (note A1)
• Provisions for losses relating to contract assets (note B3)
• Goodwill impairment (note B5)
• Capitalisation and useful lives of development assets
(note B8).
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the
preparation of the financial report are set out within the
particular note to which they relate. These policies have
been consistently applied unless otherwise stated.
SUMMARY OF
ACCOUNTING POLICIES
STATEMENT OF COMPLIANCE
The consolidated financial statements presented are
those of Scott Technology Limited (“Company”) and its
subsidiaries (“Group”).
The company is a profit oriented entity, registered in New
Zealand under the Companies Act 1993. The company is
an FMC reporting entity for the purposes of the Financial
Markets Conduct Act 2013 and its annual financial
statements comply with these Acts.
The Group’s principal activities are the design,
manufacture, sales and servicing of automated and
robotic production lines and processes for a wide variety
of industries in New Zealand and abroad.
The financial statements have been prepared in
accordance with New Zealand Generally Accepted
Accounting Practice (“NZ GAAP”) and, for the purposes of
complying with GAAP, it is a for-profit entity. They comply
with New Zealand equivalents to International Financial
Reporting Standards (“NZ IFRS”) and other applicable
financial reporting standards as appropriate for profit
oriented entities. The financial statements also comply
with International Financial Reporting Standards (“IFRS”).
The financial statements were authorised for issue by the
Board of Directors on 18 October 2023.
BASIS OF PREPARATION
The financial statements have been prepared on the basis
of historical cost except for the revaluation of certain
financial instruments.
Cost is based on the fair value of the consideration given
in exchange for assets.
Accounting policies are selected and applied in a manner
which ensures that the resulting financial information
satisfies the concepts of relevance and reliability,
thereby ensuring that the substance of the underlying
transactions or other events is reported.
The accounting policies set out below have been applied
in preparing the financial statements for the year ended
31 August 2023 and the comparative information
FOR THE YEAR ENDED 31 AUGUST 2023
NOTES TO AND FORMING PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS
Scott Technology Limited
Page 36
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
CONSOLIDATION OF SUBSIDIARIES
The consolidated financial statements incorporate
the financial statements of the company and entities
controlled by the company and its subsidiaries. Control is
achieved when the company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its
involvement with the investee; and
• has the ability to use its power to affect its returns.
The Group financial statements are prepared by
combining the financial statements of all the entities
that comprise the Group, being the company and its
subsidiaries as defined by NZ IFRS 10 Consolidated
Financial Statements. Consistent accounting policies are
employed in the preparation and presentation of the
Group financial statements.
All intra-group transactions, balances, income and
expenses are eliminated on consolidation.
On acquisition, the assets, liabilities and contingent
liabilities of a subsidiary are measured at their fair
values at the date of acquisition. Any excess of the cost
of acquisition over the fair values of the identifiable
net assets acquired is recognised as goodwill. Any
deficiency of the cost of acquisition below the fair values
of the identifiable net assets acquired (i.e. discount on
acquisition) is credited to profit and loss in the period
of acquisition.
The results of subsidiaries acquired or disposed of
during the year, are included in the Consolidated
Statement of Comprehensive Income from the effective
date of acquisition, or up to the effective date of disposal,
as appropriate.
STANDARDS AND INTERPRETATIONS
EFFECTIVE IN THE CURRENT PERIOD
The Group has adopted all mandatory new and amended
standards and interpretations. None had a material
impact on these financial statements.
STANDARDS AND INTERPRETATIONS IN
ISSUE NOT YET ADOPTED
At the date of authorisation of the consolidated financial
statements certain new standards and interpretations to
existing standards have been published but are not yet
effective, and have not been adopted early by the Group.
Of these, the followings are assessed as relevant to
the Group:
• NZ IAS 1 (Classification of Liabilities as Current and Non
Current) - clarifies the classification on liabilities as current
or non current based on rights in existence rather than
expectations at the end of the reporting period;
• Amendments to NZ IAS 1 and IFRS PS 2 (Disclosure of
Accounting Policies) - requires the disclosure of material
instead of significant accounting policies; and
• Amendments to NZ IAS8 (Definition of accounting
Estimates) - replaces the definition of change in
accounting estimates with a definition of accounting
estimates.
The amendments will have no material impact on the Group.
CLIMATE-RELATED DISCLOSURES
In 2021 legislation on mandatory reporting on climate
risks was introduced. Reporting entities captured by the
legislation are required to provide a climate report for
accounting period beginning on or after 1 January 2023.
In December 2022, the External Reporting Board (XRB)
issued its first climate disclosure standards to give effect
to the legislation. The standards are effective for annual
reporting periods beginning on or after 1 January 2023.
The new Climate Standards issued are:
Aotearoa New Zealand Climate Standard 1: Climate-
related Disclosures (NZ CS 1)
This standard provides a framework for considering
climate-related risks and opportunities. It requires
disclosures explaining how the entity manages its
climate-related risks and opportunities. The disclosure
requirements cover four key areas (Governance,
Strategy, Risk Management and Metrics and Targets).
Entities must obtain assurance over the greenhouse gas
emissions disclosures.
Aotearoa New Zealand Climate Standard 2: First-time
Adoption of Aotearoa New Zealand Climate Standards
(NZ CS 2)
This standard includes a limited number of adoption
provisions and provides optional disclosure exemptions
that entities may apply during the first few periods of
climate reporting.
Summary of accounting policies continued
Annual Report 2023
Page 37
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Aotearoa New Zealand Climate Standard 3: General
Requirements for Climate-related Disclosures (NZ CS 3)
This standard includes:
• the principles for climate-related disclosures (such as
relevance, accuracy, and verifiability),
• general requirements for how the information is
disclosed, and
• guidance on topics such as materiality and estimation
uncertainty.
Scott Technology Limited qualifies as a climate reporting
entity and is required to comply with these reporting
standards. These requirements include:
• Preparation of an annual climate statement that
discloses information about the effects of climate
change on the Group's business;
• Preparation of climate statements in accordance with
climate standards issued by the XRB;
• Obtaining independent assurance about the part of
the climate statement that relates to the disclosure of
GHG emissions from 2025;
• Making the climate statements available to the
public; and
• Complying with record-keeping requirements.
The Group has established a task force on climate-
related financial disclosures reporting and, in 2021,
with the support from New Zealand based sustainability
experts, Tadpole, embarked on a project to measure
and understand its carbon emissions across the global
business. The FY19 GHG verified measurements were
reported in the FY22 annual report.
The task force is also focused on ensuring compliance
with the reporting standards and legislation by
establishing the Group's climate-related risks and
opportunities, how these affect the Group, and in turn,
how the Group's business operations affect climate
change. This includes scenario analysis, the processes
to identify risks and how these integrate into the overall
risk management framework while also identifying and
determining how it reports key metrics associated with its
most material climate impacts.
RECLASSIFICATIONS
Disaggregation of revenue - Sources of Revenue by
Industry
The Group has redefined its categories of revenue from
contracts with customers from Systems, Products and
Services to revenue from customers by industry, namely
Protein, Minerals, Materials Handling, and Rest of Business,
which better reflect the specific nature and application of
Group's systems technology, products and services across
its geographic manufacturing segments and CGUs. The
sources of revenue are also allocated between sales and
service revenues across these industries.
Comparative figures for the year ended 31 August
2022 included under Note A1 Revenue from Contracts
With Customers have been restated in order to report
comparative figures under the new categories.
GOODS AND SERVICES TAX AND VALUE
ADDED TAX ('GST')
All items in the consolidated balance sheet are stated
exclusive of GST, with the exception of receivables and
payables, which include GST. All items in the consolidated
statement of comprehensive income are stated exclusive
of GST.
Cash flows are included in the consolidated statement
of cash flows on a net basis. The GST component of cash
flows arising from investing and financing activities that is
recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
FOREIGN CURRENCIES
The individual financial statements of each group entity
are presented in the currency of the primary economic
environment in which the entity operates, which is its
functional currency. For the purpose of the consolidated
financial statements, the results and position of each Group
entity are expressed in New Zealand dollars, which is the
functional currency of the company and the presentation
currency for the consolidated financial statements.
In preparing the financial statements of each individual
Group entity, transactions in currencies other than the
entity's functional currency are recognised at the rates
of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at
the rates prevailing at that date.
Summary of accounting policies continued
Scott Technology Limited
Page 38
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Summary of accounting policies continued
For the purposes of presenting these consolidated
financial statements, the assets and liabilities of the
Group's foreign operations are translated into New
Zealand dollars using exchange rates prevailing at the end
of each reporting period. Income and expense items are
translated at the average exchange rates for the period,
unless exchange rates fluctuate significantly during that
period, in which case the exchange rates at the dates of
the transactions are used. Exchange differences arising, if
any, are recognised in other comprehensive income and
accumulated in equity, and attributed to non-controlling
interests as appropriate.
NON-GAAP FINANCIAL INFORMATION
The Group uses earnings / (loss) before interest, tax,
depreciation and amortisation, and one-off costs (Operating
EBITDA), earnings / (loss) before interest, tax, depreciation
and amortisation (EBITDA), and Net Tangible Assets per
ordinary shares, to describe financial performance as it
considers these line items provide a better measure of
underlying business performance.
These non-GAAP measures do not have a standard meaning
prescribed by GAAP and therefore may not be compatible to
similarly titled amounts reported by other entities.
Policy
Revenue on fixed-price contracts is recognised over
the term of the contract period using the input
method based on percentage of completion. At
balance date an assessment is made of the percentage
of completion based on the costs associated with the
work done to date relative to the total forecast cost to
complete. Included in revenue is the value attributed
to work completed, which includes direct costs,
overhead and profit, where this is allowable under the
contract. Scope variations that may potentially lead to
additional revenue are only recognised when certain.
The customer is obligated to pay a fixed amount
when a contractual milestone is met. At this time, a
recei vable is recognised as the invoice is raised. If the
revenue recognised by the Group exceeds the amounts
invoiced, a contract asset is recognised. If the amounts
invoiced exceed the revenue recognised, a contract
liability is recognised. The transaction price is the fixed-
price per the contract.
The incremental costs to obtain a contract where the
contract period is less than 12 months is expensed
to the profit and loss under the practical expedient
provisions of IFRS 15.
The Group’s obligation to repair or replace faulty
products under the standard warranty terms is
recognised as a provision (see note C7).
(A) ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS
The Group derives revenue from the following sources:
• Sales
• Services
Revenue recognition – sales
The Group designs, manufactures and sells customised automation and robotic systems for use in a wide range of industries
under fixed-price contracts. The contracts are often for periods in excess of twelve months, although shorter periods can
also apply. These contracts are specific to each customer and the Group is restricted by these contracts in its ability to
redirect the products to another customer. The Group, through these contracts, has an enforceable right to payment when
agreed milestones are met for performance completed up to a point in time.
SECTION A: FINANCIAL PERFORMANCE
A1. REVENUE FROM
CONTRACTS WITH CUSTOMERS
AND OPERATING EXPENSES
Annual Report 2023
Page 39
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Judgement
The estimation of percentage of completion relies on
the directors estimating costs to complete systems
contracts. If the costs incurred to complete the
systems contracts differ from the estimates completed
by management, the directors could be over or under
estimating the percentage of completion on the
project, and consequently revenue and profit to date
may also be over or under estimated.
The Group manufactures and sells a range of standalone automation and robotic equipment for use in a wide range of
industries, including:
• Rock crushers, pulverisers, ringmills and reference materials under the 'Rocklabs' brand for use by mining companies
and laboratories
• Bandsaw safety equipment under the 'BladeStop' brand, primarily for use by protein processors.
Policy
Revenue is recognised in full at a point in time when
control of the products has transferred, being either
when the products are shipped to, or received by, the
customer, or installed at the customer’s premises,
depending on the terms of the contract.
A receivable is recognised when either a deposit
is due on receipt of a customer’s order or when
Policy
Revenue under service contracts is recognised
at a point in time when the service is delivered
or performed, depending on the terms of the
contract.
the products are shipped to the customer, as
this is the point in time that the consideration is
unconditional because only the passage of time is
required before the payment is due.
The Group’s obligation to repair or replace faulty
products under the standard warranty terms is
recognised as a provision (see note C7).
Revenue recognition – services
The Group earns revenue from after sales service activities associated with the equipment manufactured and sold by the
Group, including spare parts, repairs, routine or scheduled maintenance, upgrades, remote monitoring and the operation
of a 24/7 helpline. Most of these activities are on an ad hoc, as required basis, while some of these activities are covered
by an agreement for services to be provided over a specified period of time.
The Group’s obligation to repair or replace faulty
products under the standard warranty terms is
recognised as a provision (see note C7).
Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at a point in time and reports these by
industry in the following major geographic manufacturing regions (segments) and revenue streams. This is consistent with
the revenue information disclosed for each reportable segment under NZ IFRS 8 Operating Segments, (see note A3).
A1. Revenue from contracts with customers and operating expenses continued
Scott Technology Limited
Page 40
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Year Ended 31 August 2023
ProteinMinerals
Materials
Handling
Rest of
Business Total
$’000s$’000s $’000s $’000s
$’000s
New Zealand
manufacturing
Sales10,77211,893 3,633 2,256 28,554
Service4,06514,087 1,192 1,966 21,310
Revenue from external customers 14,837 25,980 4,825 4,222
49,864
Timing of revenue recognition
- Over time 9,955 - 3,633 2,257
15,845
- At a point in time 4,882 25,980 1,192 1,965
34,019
14,837 25,980 4,825 4,222
49,864
Australia
manufacturing
Sales5,02812,720- 13,088 30,836
Service7,627 276 - 2,794 10,697
Revenue from external customers 12,655 12,996 - 15,882
41,533
Timing of revenue recognition
- Over time 7,376 3,329 - 13,088
23,793
- At a point in time 5,279 9,667 - 2,794
17,740
12,655 12,996 - 15,882
41,533
Americas
manufacturing
Sales25,051 1,159 21,868 16,974 65,052
Service9,874 754 6,519 57 17,204
Revenue from external customers 34,925 1,913 28,387 17,031
82,256
Timing of revenue recognition
- Over time7,7141,157 21,868 16,636
47,375
- At a point in time27,211756 6,519 395
34,881
34,9251,91328,38717,031
82,256
Europe
manufacturing
Sales9,823 - 42,368 13,741 65,932
Service3,627 - 18,793 645 23,065
Revenue from external customers 13,450 - 61,161 14,386 88,997
Timing of revenue recognition
- Over time - - 42,368 13,741 56,109
- At a point in time 13,450 - 18,793 645 32,888
13,450 - 61,16114,386 88,997
China
manufacturing
Sales - 234 - 4,526 4,760
Service 83 33 - - 116
Revenue from external customers 83 267 - 4,526 4,876
Timing of revenue recognition
- Over time - - - 4,526 4,526
- At a point in time 83 267 - - 350
83 267 - 4,526 4,876
Total
manufacturing
Sales50,67426,00667,86950,585195,134
Service25,27615,15026,5045,46272,392
Revenue from external customers 75,950 41,156 94,373 56,047
267,526
Timing of revenue recognition
- Over time25,0454,48667,86950,248
147,648
- At a point in time50,90536,67026,5045,799
119,878
75,95041,15694,37356,047
267,526
A1. Revenue from contracts with customers and operating expenses continued
Annual Report 2023
Page 41
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
A1. Revenue from contracts with customers and operating expenses continued
Year Ended 31 August 2022
(Restated)
ProteinMinerals
Materials
Handling
Rest of
Business Total
$’000s$’000s $’000s $’000s
$’000s
New Zealand
manufacturing
Sales 4,427 21,261 5,448 1,662 32,798
Service4,77912,024 465 882 18,150
Revenue from external customers 9,206 33,285 5,913 2,544
50,948
Timing of revenue recognition
- Over time 2,070 454 5,449 1,053
9,026
- At a point in time 7,136 32,831 464 1,491
41,922
9,206 33,285 5,913 2,544
50,948
Australia
manufacturing
Sales21,7385,536 - 21,363 48,637
Service3,983 - - 4,050 8,033
Revenue from external customers 25,721 5,536 - 25,413
56,670
Timing of revenue recognition
- Over time 14,547 27 - 21,331
35,905
- At a point in time 11,174 5,509 - 4,082
20,765
25,721 5,536 - 25,413
56,670
Americas
manufacturing
Sales7,502 998 11,314 20,563 40,377
Service5,077 - 7,010 - 12,087
Revenue from external customers 12,579 998 18,324 20,563
52,464
Timing of revenue recognition
- Over time173 - 11,314 19,518
31,005
- At a point in time12,406998 7,010 1,045
21,459
12,57999818,32420,563
52,464
Europe
manufacturing
Sales7,623 - 29,706 1,781 39,110
Service1,978 - 16,100 697 18,775
Revenue from external customers 9,601 - 45,806 2,478 57,885
Timing of revenue recognition
- Over time - - 29,706 1,782 31,488
- At a point in time 9,601 - 16,100 696 26,397
9,601 - 45,8062,478 57,885
China
manufacturing
Sales - - - 3,790 3,790
Service - - - - -
Revenue from external customers - - - 3,790 3,790
Timing of revenue recognition
- Over time - - - 3,222 3,222
- At a point in time - - - 568 568
- - - 3,790 3,790
Total
manufacturing
Sales41,29127,79546,46849,159164,712
Service15,81712,02423,5745,62957,044
Revenue from external customers 57,107 39,819 70,042 54,788
221,757
Timing of revenue recognition
- Over time16,79048146,46946,906
110,646
- At a point in time40,31739,33823,5747,882
111,111
57,10739,81970,04354,788
221,757
Scott Technology Limited
Page 42
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Revenue recognised in relation to contract liabilities
The following table shows how much of the revenue recognised in the current reporting period relates to carried
forward contract liabilities and how much relates to performance obligations that were satisfied in a prior year.
Revenue recognised included in the contract liability balance at the beginning of the period.
20232022
$’000s$’000s
Fixed-price contracts for long-term projects 14,404 13,068
There was no revenue recognised from performance obligations satisfied in previous periods on long-term projects.
Unsatisfied long-term fixed-price project contracts
The following table shows unsatisfied performance obligations resulting from fixed-price long-term project contracts.
20232022
$’000s$’000s
Aggregate amount of the transaction price allocated to long-term fixed-price project
contracts that are partially or fully unsatisfied as at 31 August
113,153 71,580
Management expects that 90% of the transaction price allocated to the unsatisfied contracts as of 31 August 2023 will
be recognised as revenue during the next reporting period ($102 million) (2022: 89% of the transaction price allocated
to the unsatisfied contracts as of 31 August 2022 will be recognised as revenue during the next reporting period
($64 million)). The remaining 10% ($11 million) (2022: 11% ($8 million)) will be recognised in the following financial year.
(B) OTHER OPERATING INCOME
Government grants
Policy
Government grants are not recognised until
there is reasonable assurance that the Group will
comply with the conditions attaching to them and
that the grants will be received.
Government grants are recognised as other
income over the periods necessary to match
them with the costs for which they are
intended to compensate, on a systematic basis.
Government grants that are receivable as
compensation for expenses or losses already
incurred, or for the purpose of giving immediate
financial support to the Group with no future
related costs, are recognised in profit or loss in
the period in which they become receivable.
The Group receives grant revenue related to research and development through its Australian subsidiary Scott
Automation and Robotics Pty Ltd. Any tax credits claimed are offset against any tax expense.
A1. Revenue from contracts with customers and operating expenses continued
20232022
$’000s$’000s
Rental income
157 230
Government grants related to research and development
631 1,156
COVID-19 wage subsidies
- 426
Other Government grants
144 142
Gain on sale of property, plant and equipment
459 49
1,391 2,003
Annual Report 2023
Page 43
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Government wage subsidies and wage support were claimed in New Zealand by Scott Technology NZ Limited, as a result
of COVID-19 and the impact on the New Zealand business. The total of the subsidies recognised as revenue in 2023 was
nil (2022: $0.4m).
(C) INCLUDED IN RAW MATERIALS, CONSUMABLES AND
OPERATING EXPENSES
20232022
$’000s$’000s
Audit services:
Deloitte Limited
Group audit
537 484
Other assurance services
- -
Total remuneration for audit services
537 484
Non-audit services:
Deloitte Limited
Taxation services
145 249
Total remuneration for non-audit services
145 249
The auditor of the Group is Deloitte Limited.
20232022
$’000s$’000s
Other separately
disclosed expenses:
Directors’ fees
280 279
Superannuation scheme contributions
7,352 6,284
Raw materials and consumables used (cost of sales)
137,249 117,935
Foreign exchange loss
1,159 1,529
Unrealised fair value losses on foreign exchange derivatives
455 639
and after crediting:
Foreign exchange gains
845 -
Unrealised fair value gains on foreign exchange derivatives
362 339
Unrealised fair value gains on interest rate swap contracts
83 576
A1. Revenue from contracts with customers and operating expenses continued
Scott Technology Limited
Page 44
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Income tax recognised in net surplus
Policy
Current tax is calculated by reference to the
amount of income taxes payable or receivable
in respect of the taxable profit or tax loss for the
period. It is calculated using tax rates and tax laws
that have been enacted or substantively enacted
by reporting date. Current tax for current and
prior periods is recognised as a liability (or asset)
to the extent it is unpaid (or refundable).
20232022
$’000s$’000s
Net profit before tax
19,199 14,917
Income tax expense calculated at 28% (2022: 28%)
5,376 4,177
Non-deductible expenses / (non-assessable income)
(1,212) (1,629)
Under / (over) provision of income tax in previous year
(401) (288)
Taxation expense
3,763 2,260
Represented by:
Current tax
3,310 197
Deferred tax
453 2,063
3,763 2,260
The prima facie income tax expense on pre-tax accounting profit from operations
reconciles to the income tax expense in the financial statements as follows:
Policy
Deferred tax is accounted for using the
comprehensive balance sheet liability method
in respect of temporary differences arising from
differences between the carrying amount of
assets and liabilities in the financial statements
and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for
all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that
sufficient taxable amounts will be available against
which deductible temporary differences or unused
tax losses and tax offsets can be utilised. However,
deferred tax assets and liabilities are not recognised
if the temporary differences giving rise to them arise
from the initial recognition of assets and liabilities
(other than as a result of a business combination)
which affects neither taxable income nor
accounting profit.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
period when the liability is settled or the asset is
realised based on tax rates that have been enacted
or substantively enacted at reporting date. Deferred
tax is charged or credited to profit or loss, except
when it relates to items charged or credited to other
comprehensive income or directly to equity, in which
case the deferred tax is also dealt with in other
comprehensive income or in equity.
Deferred tax balances
Prima facie tax rate
The prima facie tax rate used in the above reconciliation is the corporate tax rate of 28% payable by New Zealand
corporate entities on taxable profits under New Zealand tax law for the 2023 income tax year.
SECTION A: FINANCIAL PERFORMANCE
A2. INCOME TAXES
Annual Report 2023
Page 45
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Imputation credit account balances
2023
Opening
balance
Charged
to income
Closing
balance
$’000s $’000s $’000s
Gross deferred
tax assets:
Trade debtors
204 42 246
Other financial assets
9 (4) 5
Employee entitlements
1,711 (391) 1,320
Provisions
501 497 998
Tax losses
2,140 (769) 1,371
Leases
275 184 459
Inventories
1,151 (480) 671
5,991 (921) 5,070
Gross deferred
tax liabilities:
Other financial assets
- (313) (313)
Property, plant and equipment
(1,170) 907 (263)
Intangible assets
(1,456) (126) (1,582)
(2,626) 468 (2,158)
3,365 (453) 2,912
At the reporting date, the Group has unused gross tax losses of $6.79m (2022: $7.83m) available to offset against future profits. A
deferred tax asset has been recognised in respect of $1.4m (2022: $2.1m) of such losses.
It is considered probable that there will be future taxable profits available in the relevant jurisdictions to allow the Group to
utilise these losses.
2022
Opening
Balance
Charged to
Income
Closing
Balance
$’000s $’000s $’000s
Gross deferred
tax assets:
Trade debtors 163 41 204
Other financial assets 37 (28) 9
Employee entitlements 1,422 289 1,711
Provisions 1,535 (1,034) 501
Tax losses 4,629 (2,489) 2,140
Leases 262 13 275
Inventories 692 459 1,151
8,740 (2,749) 5,991
Gross deferred
tax liabilities:
Property, plant and equipment (1,584) 414 (1,170)
Intangible assets (1,728) 272 (1,456)
(3,312) 686 (2,626)
5,428 (2,063) 3,365
20232022
$’000s$’000s
Imputation credits available to shareholders - -
The above amounts represent the balance of the imputation credit account at the end of the reporting
period adjusted for:
• Imputation credits that will arise from the payment of the amount of the provision for income tax
• Imputation debits that will arise from the payment of dividends.
Availability of these credits is subject to continuity of ownership requirements.
A2. Income taxes continued
Scott Technology Limited
Page 46
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
NZ IFRS 8 Operating Segments requires operating
segments to be identified on the basis of internal
reports about components of the Group that are
regularly reviewed by the chief operating decision-
maker (the Board) in order to allocate resources to
the segments and to assess its performance.
The Group’s Board allocates resources and assesses
performance of the Group by manufacturing base,
therefore under NZ IFRS 8 the Group’s reportable
segments are:
• New Zealand manufacturing
• Australia manufacturing
• Americas manufacturing
• Europe manufacturing
• China manufacturing.
New Zealand is reported as a single segment due to
the integrated nature of customers, management,
manufacturing and sales activities across New Zealand.
Australia is reported as a single segment due to
the integrated nature of customers, management,
manufacturing and sales activities across Australia.
Americas is reported as a single segment due to
the integrated nature of customers, management,
manufacturing, sales and financing activities across
North and South America.
Europe is reported as a single segment due to the
integrated nature of customers, management,
manufacturing, sales and financing activities
across Europe.
China is reported as a single segment due to the
integrated nature of customers, management,
manufacturing, sales and financing activities
across China.
Segment revenues and results
The following is an analysis of the Group’s revenue and results by reportable segment. For the purposes of NZ IFRS 8,
allocations are based on the operating results by segment. The Group does not allocate certain resources (such as senior
executive management time) and central administration costs by segment for internal reporting purposes as these allocations
would not result in a meaningful and comparable measure of profitability by segment.
Manufacturing
New Zealand AustraliaAmericas Europe China Unallocated Elimination Total
2023
$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s
Revenue from contracts with customers
Total revenue from contracts
with customers
49,864 41,533 82,256 88,997 4,876 - - 267,526
Inter-segment revenue
6,738 9,276 701 3,643 6,043 - (26,401) -
Segment Revenue
56,602 50,809 82,957 92,640 10,919 - (26,401) 267,526
Segment profit
23,650 5,087 4,024 8,514 2,017 - - 43,292
Depreciation and amortisation
(1,611) (2,986) (599) (3,221) (154) (238) - (8,809)
Share of net surplus in joint ventures
127 - - - - - - 127
Interest revenue
176 280 - 42 38 22 - 558
Central administration costs
- - - - - (13,728) - (13,728)
Finance costs
(708) (60) (228) (354) - (891) - (2,241)
Net profit/(loss) before taxation
21,634 2,321 3,197 4,981 1,901 (14,835) - 19,199
Taxation (expense)/benefit
(1,360) (409) (856) (1,116) (22) - - (3,763)
Net profit/(loss) after taxation
20,274 1,912 2,341 3,865 1,879 (14,835) - 15,436
SECTION A: FINANCIAL PERFORMANCE
A3. SEGMENT INFORMATION
Annual Report 2023
Page 47
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Revenue reported above represents revenue generated from external customers. Inter-segment sales, which are eliminated
on consolidation, were $26.4 million for the year ended 31 August 2023 (2022: $40.8 million).
The accounting policies of the reportable segments are the same as the Group’s accounting policies. Segment profit
represents the profit earned by each segment without allocation of central administration costs and investment revenue.
Geographical information
The Group sells into eight principal geographical areas. The Group’s revenue from external customers by geographical
location (of the customer) is detailed below:
Manufacturing
New Zealand AustraliaAmericas Europe China Unallocated Elimination Total
2022
$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s
Revenue from contracts with customers
Total revenue from contracts
with customers
50,948 56,670 52,464 57,885 3,790 - - 221,757
Inter-segment revenue
19,955 7,665 - 5,263 7,917 - (40,800) -
Segment Revenue
70,903 64,335 52,464 63,148 11,707 - (40,800) 221,757
Segment profit
22,962 2,512 (1,334) 8,002 309 - - 32,451
Depreciation and amortisation
(1,171) (2,886) (575) (2,950) (137) (334) - (8,053)
Share of net surplus in joint ventures
329 - - - - - - 329
Interest revenue
- 486 - 1 73 - - 560
Central administration costs
- - - - - (8,862) - (8,862)
Finance costs
(153) (107) (164) (321) - (763) - (1,508)
Net profit/(loss) before taxation
21,967 5 (2,073) 4,732 245 (9,959) - 14,917
Taxation (expense)/benefit
(3,282) 667 1,068 (736) 23 - - (2,260)
Net profit/(loss) after taxation
18,685 672 (1,005) 3,996 268 (9,959) - 12,657
A3. Segment information continued
20232022
$’000s$’000s
New Zealand (country of domicile)
17,862 9,735
Australia and Pacific Islands
45,611 60,885
North America, including Mexico
105,814 61,703
South America
1,881 9,816
Asia
22,003 12,784
Europe
70,758 59,258
Russia and former states
492 4,996
Africa and Middle East
3,105 2,580
267,526 221,757
Scott Technology Limited
Page 48
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
20232022
$’000s$’000s
Australia 24,836 32,248
US 10,907 10,066
Europe 32,344 25,819
China 1,077 955
69,164 69,088
Information about major customers
In 2023 there was no single customer accounting for more than 10.0% of total Group sales (2022: none).
Policy
Trade debtors are initially recognised at fair value
and are subsequently measured at amortised cost
using the effective interest rate method, less any
provision for expected credit losses. The Group
applies the simplified approach to measuring
expected credit losses, which uses a lifetime
expected credit loss allowance. The measurement
of expected credit losses is a function of the
probability of default, loss given default and the
exposure of default.
The expected credit losses on trade receivables are
estimated using a provision matrix by reference to past
default experience of the debtor’s current financial
position, adjusted for factors that are specific to the
conditions of the industry in which the debtor operates
and an assessment of both the current, as well as the
forecast direction of conditions at the reporting date.
Provision for expected credit losses is recognised in profit
or loss.
20232022
$’000s$’000s
Trade debtors
44,744 40,759
Allowance for expected credit losses
(1,105) (756)
43,639 40,003
Credit losses in profit and loss
The allowance for expected credit losses recognised in the profit and loss during the year was $0.3 million (2022:
$0.2 million).
Credit period
The credit period on sales of goods ranges from 30 to 120 days depending on the terms negotiated by the customer
for large contracts. No interest is charged on trade debtors.
A3. Segment information continued
SECTION B: ASSETS
B1. TRADE DEBTORS
The Group holds non-current assets in geographical areas outside of New Zealand, the country of domicile. These
non-current assets are held in the following locations:
Annual Report 2023
Page 49
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Impairment of financial assets
In relation to the impairment of financial assets, NZ IFRS 9 requires an expected credit loss model to be used. The expected
credit loss model requires the Group to account for expected credit losses and changes in those expected credit losses at
each reporting date to reflect changes in credit risk since initial recognition of the financial assets. Under NZ IFRS 9 it is not
necessary for a credit event to have occurred before credit losses are recognised.
The calculation of impairment losses impacts the way the Group calculates the bad debts provision, now termed the allowance
for expected credit loss. The Group applies the NZ IFRS 9 simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance for trade debtors.
To measure the expected credit losses, trade debtors, other financial assets, sundry debtors and contract assets have been
grouped based on their shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in
progress and have substantially the same risk characteristics as the trade debtors for the same type of contracts.
A provision matrix is determined based on historic credit loss rates for each group of customers, adjusted for any material
expected changes to the customers’ future credit risk. In addition, the company has increased the credit loss allowance for
anticipated losses from specific customers. On that basis, the credit loss allowance as at 31 August was determined as follows;
Provision matrix
New ZealandAustraliaAmericasChinaEuropeGroup
202320222023202220232022202320222023202220232022
Debtors$’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s
Current-30 days 10,906 8,228 6,078 5,582 8,986 5,519 - 88 9,366 12,330 35,336 31,747
31-60 days 1,753 2,254 935 185 272 114 636 - 670 1,050 4,266 3,603
61-90 days 441 422 53 595 603 147 96 - 659 542 1,852 1,706
Over 91 days 2,022 1,751 232 478 195 619 14 295 827 560 3,290 3,703
Total debtors 15,122 12,655 7,298 6,840 10,056 6,399 746 383 11,522 14,482 44,744 40,759
Contract assets 10,808 3,895 625 1,049 1,613 1,843 7,278 3,101 13,917 8,185 34,241 18,073
Total assets 25,930 16,550 7,923 7,889 11,669 8,242 8,024 3,484 25,439 22,667 78,985 58,832
Allowance based on
expected credit loss
- - - - - - - - - - - -
Expected credit
loss on individually
assessed balances
(834) (694) - - (128) (41) - - (143) (21) (1,105) (756)
Credit loss
allowance
(834) (694) - - (128) (41) - - (143) (21) (1,105) (756)
Trade debtors and contract assets are written off when there is no reasonable expectation of recovery. Indicators that
there are no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment
plan with the Group.
B1. Trade debtors continued
Scott Technology Limited
Page 50
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
Inventorie s are valued at the lower of cost and net
realisable value. Costs, including an appropriate
portion of fixed and variable overhead expenses,
are assigned to inventories by the method most
appropriate to the particular class of inventory,
with the majority being valued on a first-in first-out
basis. Net realisable value represents the estimated
selling price for inventories, less all estimated costs of
completion and costs necessary to make the sale.
Provision for slow moving and obsolete inventories is
assessed by the Group as part of the ongoing financial
reporting. Obsolescence is assessed based on the
time the inventory has been held and the likelihood of
future sales of the inventory.
20232022
$’000s$’000s
Raw materials 18,168 14,393
Work in progress 9,047 9,329
Finished goods 11,737 8,926
Provision for obsolete inventory (701) (1,320)
38,251 31,328
Write downs
The cost of inventories recognised as an expense during the year includes $0.3 million (2022: $0.1 million) in
respect of write downs of inventory to net realisable value and write offs of obsolete inventory.
SECTION B: ASSETS
B2. INVENTORIES
Annual Report 2023
Page 51
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Assets and liabilities related to contracts with customers
The Group becomes entitled to invoice customers for long term projects when certain milestones are met. These
milestones and cashflows are agreed upfront with the customer when the contract is signed. When a particular
milestone is reached, the customer is sent an invoice and any revenue previously recognised as a contract asset is
reclassified to trade receivables at this time. If the invoice milestone payment exceeds the revenue recognised under
the percentage of completion method, the Group will recognise a contract liability for the difference.
The majority of fixed price contracts are not considered to have a significant financing component under the percentage
of completion method as the period between the recognition of revenue and the milestone payments is usually less
than one year.
20232022
$’000s$’000s
Contract assets
34,241 18,073
Contract liabilities
(27,498) (19,576)
Deferred revenue
(17,956) (6,731)
(11,213) (8,234)
Contract assets and contract liabilities include provisions where the likelihood of cost overruns are expected as a
result of factors such as the complexity of the projects and additional costs for commissioning and installation.
Policy
Contract assets are balances due from customers
under fixed-price project contracts that arise when
the Group receives payments from customers in line
with a series of performance-related milestones.
The Group will previously have recognised a
contract asset for any work performed. Any
amount previously recognised as a contract asset is
reclassified to a trade debtor at the point at which it
is invoiced to the customer. Contract liabilities
relating to fixed-price project contracts are balances
due to customers under fixed-price project contracts.
These arise if a particular milestone payment exceeds
the revenue recognised to date.
Deferred revenue arises from short-term projects
where the Group receives payments from customers
in advance of delivering the asset to the customer.
Judgement
Determining the level of provisions to include
against contract assets and liabilities requires an
estimation of the costs to complete for the fixed-
price contracts. If the costs incurred to complete
the contracts differ from the estimates completed
by management, the directors could be over or
under estimating the contract assets or contract
liabilities.
SECTION B: ASSETS
B3. CONTRACT ASSETS / LIABILITIES
Scott Technology Limited
Page 52
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
All items of property, plant and equipment are
stated at cost less accumulated depreciation and
impairment. Cost includes expenditure that is directly
attributable to the acquisition of the item. In the
event that settlement of all, or part, of a purchase
consideration is deferred, cost is determined by
discounting the amounts payable in the future to their
present value as at the date of acquisition.
Depreciation is calculated on a straight-line basis
so as to write off the net cost of the asset over its
expected useful life to its estimated residual value.
The following estimated useful lives are used in the
calculation of depreciation:
• Buildings 40 years
• Plant, equipment and vehicles 1-13 years
Freehold
land at cost
Freehold
buildings
at cost
Plant,
equipment and
vehicles at costTotal
$’000s $’000s $’000s $’000s
Gross carrying amount
As at 31 August 2021
2,432 13,011 25,920 41,363
Additions
- 266 1,796 2,063
Disposals
- (24) (2,084) (2,108)
Translation of amounts held in foreign currency
- (123) 483 360
As at 31 August 2022
2,432 13,130 26,115 41,677
Additions
2 469 3,565 4,036
Disposals
- (15) (2,080) (2,095)
Translation of amounts held in foreign currency
3 142 517 662
As at 31 August 2023
2,437 13,726 28,117 44,280
Accumulated depreciation & impairment
As at 31 August 2021
- 3,521 20,101 23,622
Disposals - (24) (1,599) (1,623)
Depreciation expense - 436 1,941 2,377
Translation of amounts held in foreign currency - (7) 196 189
As at 31 August 2022
- 3,926 20,639 24,565
Disposals - - (1,392) (1,392)
Depreciation expense - 431 1,793 2,224
Translation of amounts held in foreign currency
- 80 437 517
As at 31 August 2023
- 4,437 21,477 25,914
Net book value
As at 31 August 2022
2,432 9,204 5,476 17,112
As at 31 August 2023 2,437 9,289 6,640 18,366
B4. PROPERTY, PLANT
AND EQUIPMENT
SECTION B: ASSETS
Annual Report 2023
Page 53
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
SECTION B: ASSETS
Gross carrying amount
20232022
$’000s$’000s
Balance at beginning of financial year
50,117 55,171
Discontinued operation
- (7,656)
Translation of goodwill amounts held in foreign currency
1,899 2,602
Balance at end of financial year
52,016 50,117
Judgement
Determining whether goodwill is impaired
requires an estimation of the value in use of the
cash-generating units to which goodwill has been
allocated. The value-in-use calculation requires
the directors to estimate the future cash flows,
particularly in relation to future project wins and
market conditions, expected to arise from the
cash-generating unit and a suitable discount rate
in order to calculate present value.
Impairment testing summary
For the purposes of preparing these financial statements, the Board has reviewed the intangible assets and impairment model
and determined that there is no impairment of any intangible assets in the current year, or in prior periods based upon the
inputs and assumptions made for each Cash Generating Unit (CGU).
Sensitivity analysis has been performed on the impairment model to determine how sensitive the model is to any changes to
inputs, specifically around the cash flow forecasts. The sensitivity analysis showed no reasonably possible scenarios resulting in
impairment for New Zealand, Americas, Europe, or China manufacturing.
A heightened degree of focus has been given to the Australian CGU, as this CGU continues to recover from the effects of
COVID-19. The impairment model includes assumptions around post-COVID-19 recovery, resulting in an expectation that the
Australian CGU will improve its Earnings Before Interest and Tax (EBIT) by NZ$1.5m in 2024 and then adjusting for annualised
growth after that date. The Board consider this a conservative estimate of forecast growth given the changes made to the
Australia business in the prior year. Sensitivity analysis has showed that if the improvement in the net result from 2024 onwards
is NZ$0.2m rather than the NZ$1.5m assumed and no subsequent recovery in earnings is made, the model would result in nil
headroom. Sensitivity analysis also showed that if the upper limit of the discount rate range was used the model would result in
no indications of impairment. The Board is satisified that the assumptions included in the model are reasonable.
Policy
Goodwill represents the excess of the purchase
consideration over the fair value of the identifiable
tangible and identifiable intangible assets, liabilities
and contingent liabilities of the subsidiary recognised
at the time of acquisition of a business or subsidiary.
Goodwill is initially recognised as an asset at cost
and is subsequently measured at cost, less any
accumulated impairment losses.
For the purpose of impairment testing, goodwill is
allocated to each of the Group’s cash-generating
units expected to benefit from the synergies
of the combination. Cash-generating units to
which goodwill has been allocated are tested for
impairment annually or more frequently when
there is an indication that the unit may be impaired.
If the recoverable amount of the cash-generating
unit is less than the carrying amount of the unit,
the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro-rata on
the basis of the carrying amount of each asset in the
unit. An impairment loss recognised for goodwill is
not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount
of goodwill is included in the determination of the
profit or loss on disposal.
B5. GOODWILL
Scott Technology Limited
Page 54
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Allocation of goodwill to cash-generating units
The Group’s cash-generating units are:
• New Zealand manufacturing
• Australia manufacturing
• Americas manufacturing
New Zealand is reported as a single cash-generating unit due to the integrated nature of customers, management,
manufacturing, sales and financing activities across New Zealand.
Australia is reported as a single cash-generating unit due to the integrated nature of customers, management,
manufacturing, sales and financing activities across Australia.
Americas is reported as a single cash-generating unit due to the integrated nature of customers, management,
manufacturing, sales and financing activities across North and South America.
Europe is reported as a single cash-generating unit due to the integrated nature of customers, management, manufacturing,
sales and financing activities across Europe.
China is reported as a single cash-generating unit due to the integrated nature of customers, management, manufacturing,
sales and financing activities across China.
Goodwill has been allocated for impairment testing purposes
to the cash-generating units:
20232022
$’000s$’000s
New Zealand manufacturing
10,530 10,530
Australia manufacturing
13,780 14,166
Americas
8,303 8,079
Europe manufacturing
19,031 16,961
China manufacturing
372 381
52,01650,117
Impairment model inputs by region
The recoverable amount of each cash-generating unit is determined based on a value-in-use calculation, which uses cash flow
projections based on financial budgets and forecasts covering a five-year period. The inputs for each of the CGUs have been
listed below. Goodwill has been allocated for impairment testing purposes to the cash-generating units:
New Zealand
20232022
Annual growth rate
2.5%2.5%
Terminal growth rate
2.0%2.0%
Pre-tax discount rate
16.6%15.4%
New Zealand cashflow projections during the budget and forecast period are based on historical gross margins during the
budget and forecast period. The rate of revenue and materials price inflation during 2023 of 2.5% (2022: 2.5%) reflects the
effect of market expectations on global sales over the five year period. Cash flows beyond that five year period have been
extrapolated using a 2.0% p.a. growth rate (2022: 2.0%). The pre-tax discount rate calculated in 2023 is 16.6% (2022: 15.4%).
The New Zealand CGU has sufficient historical data to support the cash flow assumptions included in the impairment model
and management believes that any reasonably possible change in the key assumptions on which the recoverable amount
is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the New Zealand
cash-generating unit.
Australia
20232022
Annual growth rate
3.0%3.0%
Terminal growth rate
2.0%2.0%
Pre-tax discount rate
15.4%14.0%
• Europe manufacturing
• China manufacturing.
B5. Goodwill continued
Annual Report 2023
Page 55
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Australia cashflow projections during the budget and forecast period are based on historical gross margins during the
budget and forecast period. The rate of revenue and materials price inflation during 2023 of 3.0% (2022: 3.0%) reflects the
effect of market expectations on global sales over the five year period. Cash flows beyond that five year period have been
extrapolated using a 2.0% p.a. growth rate (2022: 2.0%). The pre-tax discount rate calculated in 2023 is 15.4% (2022: 14.0%).
As noted above, the Australian CGU has received a heightened degree of focus for the impairment testing. The key
assumptions in the impairment test relate to achieving forecast EBIT and the discount rate used.
Americas
20232022
Annual growth rate
2.5%2.4%
Terminal growth rate
2.5%2.4%
Pre-tax discount rate
14.8%13.5%
Americas - cashflow projections during the budget and forecast period are based on historical gross margins where available,
during the budget and forecast period. Where historical data is not easily comparable for recent acquisitions, recent sales,
forward work and sales pipelines have been used to assist with projections. There is sufficient headroom in the model to
support the carrying amount of the goodwill.
The rate of revenue and materials price inflation during 2023 of 2.5% (2022: 2.4%) reflects the effect of market expectations
on global sales over the five year period, albeit with a slight recovery in 2023. Cash flows beyond that five year period have
been extrapolated using a 2.5% p.a. growth rate (2022: 2.4%). The pre-tax discount rate calculated in 2023 is 14.8% (2022:
13.5%). Management believes that any reasonably possible change in the key assumptions on which the recoverable amount
is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the Americas cash-
generating unit.
Europe
20232022
Annual growth rate
2.0%2.0%
Terminal growth rate
2.0%2.0%
Pre-tax discount rate
15.5%12.6%
Europe cashflow projections during the budget and forecast period are based on historical gross margins during the
budget and forecast period. The rate of revenue and materials price inflation during 2023 of 2.0% (2022: 2.0%) reflects the
effect of market expectations on global sales over the five year period. Cash flows beyond that five year period have been
extrapolated using a 2.0% p.a. growth rate (2022: 2.0%). The pre-tax discount rate calculated in 2023 is 15.5% (2022: 12.6%).
The European CGU has sufficient historical data to support the cash flow assumptions included in the impairment model
and management believes that any reasonably possible change in the key assumptions on which the recoverable amount is
based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the European cash-
generating unit.
China
20232022
Annual growth rate
3.0%3.0%
Terminal growth rate
2.0%2.0%
Pre-tax discount rate
12.9%14.4%
China cashflow projections during the budget and forecast period are based on historical gross margins during the budget
and forecast period. The rate of revenue and materials price inflation during 2023 of 3.0% (2022: 3.0%) reflects the effect
of market expectations on global sales over the five year period. Cash flows beyond that five year period have been
extrapolated using a 2.0% p.a. growth rate (2022: 2.0%). The pre-tax discount rate calculated in 2023 is 12.9% (2022: 14.4%).
The Chinese CGU has sufficient historical data to support the assumptions included in the impairment model and
management believes that any reasonably possible change in the key assumptions on which the recoverable amount is
based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the Chinese cash-
generating unit.
B5. Goodwill continued
Scott Technology Limited
Page 56
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
Intangible assets with finite useful lives that
are acquired separately are carried at cost, less
accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a
straight-line basis over their estimated useful lives.
Intangible assets with indefinite useful lives that
are acquired separately are carried at cost, less
accumulated impairment losses.
Intangible assets that are acquired in a business
combination and recognised separately from
goodwill are initially recognised at fair value at the
acquisition date, which is regarded as their cost.
Subsequent to initial recognition, intangible assets
acquired in a business combination are recognised
on the same basis as intangible assets that are
acquired separately.
At each balance sheet date, the Group reviews
the carrying amounts of its non-financial tangible
and intangible assets to determine whether there
is any indication that those assets have suffered
an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss,
if any. Goodwill is tested for impairment annually.
Where the asset does not generate cash flows that are
independent from other assets, the Group estimates
the recoverable amount of the cash-generating unit to
which the asset belongs.
The recoverable amount is the higher of fair value,
less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to
their present value using a discount rate that reflects
current market assessments of the time value of
money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of a cash-generating unit,
(CGU), is estimated to be less than its carrying amount,
the carrying amount of the CGU is reduced to its
recoverable amount. An impairment loss is recognised
in profit or loss immediately, unless the asset is carried
at fair value, in which case the impairment loss is
treated as a revaluation decrease.
Conveyor
& palletiser
technology
at cost
BladeStop
technology
at cost
URLs
at cost
Non-
compete
at cost
Centrifuge
technology
at cost
Automated
grading
technology
at cost
Patents
& otherTotal
$000’s$’000s$’000s$’000s$’000s$’000s$’000s$’000s
Gross carrying amount
As at 31 August 2021
5,624 10,387 1,850 72 340 1,543 170 19,986
Additions
189 - - - - 41 19 249
Disposals
- - (2,120) (82) - - - (2,202)
Foreign translation difference
(192) 804 270 10 - (50) 9 851
As at 31 August 2022
5,621 11,191 - - 340 1,534 198 18,884
Additions
245 - - - - - 44 289
Disposals
(1) - - - - - (30) (31)
Foreign translation difference
846 (305) - - - 257 (5) 793
As at 31 August 2023
6,711 10,886 - - 340 1,791 207 19,935
B6. INTANGIBLE ASSETS
SECTION B: ASSETS
Annual Report 2023
Page 57
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Conveyor
& palletiser
technology
at cost
BladeStop
technology
at cost
URLs
at cost
Non-
compete
at cost
Centrifuge
technology
at cost
Automated
grading
technology
at cost
Patents
& otherTotal
$000’s$’000s$’000s$’000s$’000s$’000s$’000s$’000s
Accumulated amortisation
and impairment
As at 31 August 2021 2,082 6,384 - 44 112 451 39 9,112
Amortisation expense 685 1,350 - 31 26 138 35 2,265
Disposals - - - (82) - - - (82)
Foreign translation difference (101) 543 - 7 - (22) 4 431
As at 31 August 2022 2,666 8,277 - - 138 567 78 11,726
Amortisation expense
646 1,360 - - 26 146 42 2,220
Disposals
- - - - - - (4) (4)
Foreign translation difference
523 (224) - - - 112 (4) 407
As at 31 August 2023
3,835 9,413 - - 164 825 112 14,349
Net book value
As at 31 August 2022 2,955 2,914 - - 202 967 120 7,158
As at 31 August 2023 2,876 1,473 - - 176 966 95 5,586
Assets
Intangible assets comprise:
• Conveyor and palletiser technology used in the materials handling industry, purchased through the acquisition of the Alvey
business in April 2018, which is being amortised on a straight-line basis over an estimated remaining useful life at the time of
purchase of 10 years.
• BladeStop bandsaw safety technology purchased in October 2017, which is being amortised on a straight-line basis over an
estimated remaining useful life at the time of purchase of eight years.
• Centrifuge technology used in the honey and fish oil industry purchased through the acquisition of the other joint venture
partners’ interests in Scott Separation Technology Limited in May 2017, which is being amortised on a straight-line basis over
an estimated remaining useful life at the time of purchase of 13 years.
• Automated grading technology used in the protein industry purchased through the acquisition of Normaclass in May 2019,
which is being amortised on a straight-line basis over an estimated useful life at the time of purchase of 10 years.
B6. Intangible assets continued
Scott Technology Limited
Page 58
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
Development assets exist where the Group is
working on developments with the intention to
meet an end customer's needs, but no contract
exists with that end customer. Revenue is not
recognised on these projects until a contract with a
customer is formed and all the costs incurred will sit
on the balance sheet until a conclusion is reached.
These projects have a large portion of R&D and are
undertaken with the view that the Group will be
able to realise future sales on these products.
At the end of each reporting period, an assessment
is made of these development assets for indicators
of impairment using the mix of external and internal
indicators included in NZ IAS 36 and the criteria
for capitalisation under NZ IAS 38 outlined in B7.
Where there are indicators of impairment the
asset's recoverable amount is calculated and an
impairment recognised. If the criteria
for capitalisation are no longer met, the assets
are expensed.
Amortisation of the development assets is recorded
using the units of production method. Where units
are in production at the reporting date,
a percentage of completion is estimated.
Judgement
Determining when costs incurred on a project
are research, when costs are development, what
costs can be capitalised as a development asset,
the recoverability of development assets through
future sales and the number of future sales to
amortise the assets over relies on the directors
judgement.
B7. RESEARCH AND
DEVELOPMENT COSTS
B8. DEVELOPMENT ASSETS
SECTION B: ASSETS
SECTION B: ASSETS
Policy
Expenditure on research activities is recognised as an
expense in the period in which it is incurred.
An asset arising from development (or from the
development phase of an internal project) is
recognised if, and only if, all of the following are
demonstrated:
• the technical feasibility of completing the asset
so that it will be available for use or sale;
• the intention to complete the asset and use or
sell it;
• the ability to use or sell the asset;
• how the asset will generate probable future
economic benefits;
• the availability of adequate technical,
financial and other resources to complete the
development to use or sell the asset; and
• the ability to measure reliably the
expenditure attributable to the asset during
the development.
Annual Report 2023
Page 59
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Protein development assets relate to work being completed on producing systems to automated processing solutions
for poultry. Work has also been completed on updating design drawings for a lamb processing system. All protein
development assets relate to the New Zealand and Australian segments.
Mineral development assets relate to work completed on large projects to develop products that will be able to be sold
as future products. All mineral development assets relate to the Australian segment.
Protein
development
assets
Mineral
development
assetsTotal
$’000s $’000s $’000s
Gross carrying
amount
As at 31 August 2021 1,576 634 2,210
Additions 1,574 5,000 6,574
Disposals - - -
Foreign translation difference 4 49 53
As at 31 August 2022 3,154 5,683 8,837
Additions
10 1,219 1,229
Transfer to project
(473) - (473)
Disposals
(1,277) - (1,277)
Foreign Translation Difference
(1) (155) (156)
As at 31 August 2023 1,413 6,747 8,160
Accumulated
amortisation and
impairment
As at 31 August 2021
- - -
Amortisation expense - - -
Foreign Translation Difference - - -
As at 31 August 2022
- - -
Amortisation expense
(353) - (353)
Foreign Translation Difference - - -
As at 31 August 2023 (353) - (353)
Net book valueAs at 31 August 2022 3,154 5,683 8,837
As at 31 August 2023 1,060 6,747 7,807
B8. Development Assets continued
Scott Technology Limited
Page 60
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
Equity instruments issued by the Group are recorded as the proceeds are received, net of issue costs.
2023202220232022
NumberNumber$’000s$’000s
Fully paid ordinary shares at beginning of financial year 79,852,190 78,665,835 86,315 82,701
Issue of shares under dividend reinvestment plan 1,346,604 1,186,355 3,847 3,614
Balance at end of financial year 81,198,794 79,852,190 90,162 86,315
All shares have equal voting rights and participate equally in any dividend distribution or any surplus on the
winding up of the Group.
Earnings per share from continuing operations
20232022
Cents per shareCents per share
Basic
19.3 15.9
Diluted
19.3 15.9
20232022
$’000s$’000s
Net profit for the year used in the calculation of basic and diluted
earnings per share from continuing operations
15,522 12,639
Weighted average number of ordinary shares used in the calculation of basic
and diluted earnings per share from continuing operations
80,30279,320
Non-GAAP information
20232022
Net tangible assets per ordinary shareCents per shareCents per share
Basic
56.138.7
Diluted
56.138.7
20222022
Notes$’000s$’000s
Ordinary shares at year end used in the calculation of net tangible assets
per ordinary share
C1
81,19979,852
Net tangible assets (net assets excluding goodwill, intangible assets, development assets
and deferred tax)
45,57830,929
SECTION C: CAPITAL AND FUNDING
SECTION C: CAPITAL AND FUNDING
C1. SHARE CAPITAL
C2. EARNINGS AND NET
TANGIBLE ASSETS PER SHARE
Annual Report 2023
Page 61
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
Borrowings are recorded initially at fair value, net
of transaction costs.
Subsequent to initial recognition, borrowings are
measured at amortised cost with any difference
between the initial recognised amount and the
redemption value being recognised in the profit or
loss over the period of the borrowings using the
effective interest rate method.
20232022
NZD$’000sNZD$’000s
Current 1,151 945
Non-current 11,324 11,025
Total term loans 12,475 11,970
Maturity profile of non-current portion
1-2 years 11,072 65
2-3 years 86 10,934
3-5 years 166 26
11,324 11,025
Interest rates applicable to 31 August 2023 on the bank term loans ranged from 1.0% to 8.4% p.a. (2022: 1.0% to 5.5% p.a.)
The carrying amounts of the Group's borrowings
are denominated in the following currencies:
2023202320222022
FacilityUtilisedFacilityUtilised
NZD$’000sNZD$’000sNZD$’000sNZD$’000s
New Zealand dollar 8,000 8,000 8,000 8,000
United States dollar 3,692 2,969 2,900 2,889
European euros 2,179 1,218 2,324 950
Czech koruna 540 288 394 131
14,411 12,475 13,618 11,970
The Group also has access to the following
working capital facilities:
2023202320222022
FacilityUtilisedFacilityUtilised
NZD$’000sNZD$’000sNZD$’000sNZD$’000s
New Zealand dollar 20,000 9,036 20,000 4,543
United States dollar 1,676 - 408 -
European euros 2,747 - 2,451 -
Czech koruna 761 - 666 -
25,184 9,036 23,525 4,543
SECTION C: CAPITAL AND FUNDING
C3. BORROWINGS
Borrowing facilities
Borrowings shown above include bank debt and vehicle financing.
Borrowing facilities include bank overdraft, term loans and credit card facilities, which are included in trade creditors
and accruals.
Scott Technology Limited
Page 62
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
The main source of financing for the Group is through ANZ Bank in New Zealand. The total of the ANZ Bank New
Zealand Limited current facility agreement for borrowings and working capital is NZ$31.7m (2022: NZ$30.9m), of which
NZ$11.7m was unutilised at 31 August 2023 (2022: $15.5m).
The bank facilities of ANZ Bank New Zealand Limited are secured by general security agreements over all the present
and after acquired property of Scott Technology Limited and certain subsidiaries, and therefore associated property,
plant and equipment assests are pledged as security for these facilities. The bank facilities from ANZ Bank New Zealand
Limited are also secured by mortgages over the properties at 630 Kaikorai Valley Road Dunedin, 10 Maces Road
Christchurch and 1B Quadrant Drive Lower Hutt.
The Group also has borrowing facilities through KBC Bank in Belgium with a total facility for borrowings and working
capital of EUR 4.9m (2022: EUR 2.9m) of which EUR 3.7m was unutilised at 31 August 2023 (2022: EUR 2.3m).
The bank facilities from KBC Bank are secured by a registered pledge on the business assets of Scott Automation NV for a
total of EUR 4.9m (2022: EUR 3.8m) and a registered pledge on the bank guarantees line of 50% of any amount exceeding
EUR 3.5m (2022: EUR 3.5m).
Other borrowing facilities include a US$1.0m (2022 USD$0.3m), line of credit from BB&T Bank not untilised at 31 August 2023
or 31 August 2022, and a CZK 10m (2022: CZK 10m), overdraft facility not utilised at 31 August 2023 or 31 August 2022.
The group has fully complied with and operated within the debt facility financial covenants under arrangements with
its bankers.
Policy
Trade creditors are initially measured at fair value and subsequently measured at amortised cost using
the effective interest rate method.
20232022
$’000s$’000s
Trade creditors
20,011 20,755
Accruals
19,289 14,347
39,300 35,102
Terms
All trade creditors are current and paid within the terms agreed with individual suppliers.
C3. Borrowings continued
SECTION C: CAPITAL AND FUNDING
C4. TRADE CREDITORS
AND ACCRUALS
Annual Report 2023
Page 63
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
The Group assesses whether a contract is, or
contains a lease, at the inception of the contract.
The Group recognises a right-of-use asset and a
corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for
short-term leases, defined as leases with a lease
term of 12 months or less, and leases of low-value
assets. For these leases, the Group recognises
the lease payments as an operating expense on a
straight-line basis over the term of the lease unless
another systematic basis is more representative of
the time pattern in which economic benefits from
the leased assets are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at
the commencement date, discounted by using
the rate implicit in the lease. If the rate cannot be
readily determined, the Group uses its incremental
borrowing rate (IBR). The lease liability is subsequently
measured by increasing the carrying amount to
reflect interest on the liability, using the effective
interest method, and by reducing the carrying
amount to reflect the lease payments made.
The right-of-use assets comprise the initial
measurement of the corresponding lease
liability, lease payments made at, or before, the
commencement day and any initial direct costs. They
are subsequently measured at cost less accumulated
depreciation and impairment losses. Right-of-use
assets are depreciated over the shorter period of
lease term or useful life of the underlying asset.
The Group applies NZ IAS 36 to determine whether
a right-of-use asset is impaired and accounts for
any identified impairment loss as described in the
intangible assets policy in note B6.
Judgement
The estimation of the IBR relies on the directors
considering the credit risk of the Group. If the
credit risk faced by the Group differs from what is
estimated, the IBR may differ, and consequently
the future net present value of the lease cash
flows may be over or under stated.
The Group leases several assets including buildings, cars and machinery. The average lease term is 3.4 years (2022: 3.3 years).
The Group has options to purchase certain equipment at the conclusion of their current lease terms.
As management is undecided on the outcome of these transactions, the purchase price has not been included in
the lease liability calculations.
The determination of lease term relies on the
directors view of the likelihood of any lease renewal
options being renewed. If the lease renewal options
are included and then not taken up, or are not
included and are taken up, the net present value of
the lease cash flows may be over or under stated.
SECTION C: CAPITAL AND FUNDING
C5. LEASES
Scott Technology Limited
Page 64
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Lease liabilities
20232022
$’000s$’000s
Current liability 3,773 3,290
Non-current liability 9,602 7,145
Total 13,375 10,435
Maturity analysis
20232022
$’000s$’000s
Not later than 1 year 3,773 3,290
Later than 1 year and not later than 5 years 6,722 5,339
Later than 5 years 2,880 1,806
13,375 10,435
BuildingsPlantVehiclesGroup
$’000s$’000s$’000s$’000s
Cost
Balance at 31 August 2021 14,294 353 2,869 17,516
Additions 2,931 234 480 3,645
Disposals (1,548) (254) (1,455) (3,257)
Translation of leases held in foreign currency 850 5 (51) 804
As at 31 August 2022 16,527 338 1,843 18,708
Additions 4,360 9 1,762 6,131
Disposals (3,710) - (397) (4,107)
Translation of leases held in foreign currency 974 - 237 1,211
As at 31 August 2023 18,151 347 3,445 21,943
Depreciation
Balance at 31 August 2021 6,023 258 1,712 7,993
Depreciation expense 2,709 117 585 3,411
Disposals (1,012) (254) (1,455) (2,721)
Translation of leases held in foreign currency 527 (7) (27) 493
Balance at 31 August 2022 8,247 114 815 9,176
Depreciation expense 3,283 66 663 4,012
Disposals (3,710) - (382) (4,092)
Translation of leases held in foreign currency 260 1 113 374
As at 31 August 2023 8,080 181 1,209 9,470
As at 31 August 2022
8,280 224 1,028 9,532
As at 31 August 2023 10,071 166 2,236 12,473
20232022
$’000s$’000s
Total cash outflow for leases 4,040 3,392
Interest expense on lease liabilities 528 492
Expense relating to short-term liabilities 662 839
As at 31 August 2023, the Group is committed to $0.6 million (2022: $0.4 million) for short-term leases.
Right-of-use assets
C5. Leases continued
Amounts recognised in profit and loss and cash flows statement
Annual Report 2023
Page 65
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
Provision is made for benefits accruing to employees
in respect of wages and salaries, annual leave, long
service leave and sick leave, share-based payment
arrangements, and short-term incentives when it is
probable that settlement will be required and they
are capable of being measured reliably.
Provision made in respect of employee benefits
expected to be settled within twelve months
are measured at their nominal values using the
remuneration rate expected to apply at the time of
settlement.
Provisions made in respect of employee benefits that
are not expected to be settled within twelve months
are measured at the present value of the estimated
future cash outflows to be made by the Group in
respect of services provided by employees up to
reporting date.
Policy
The provision for warranty claims represents the
present value of the directors’ best estimate of the
future outflow of economic benefits that will be
required under the Group’s twelve-month warranty
programme for certain equipment. The estimate has
been made on the basis of historical warranty trends
and may vary as a result of new materials, altered
manufacturing processes or other events affecting
product quality.
20232022
$’000s$’000s
Balance at 1 September
1,323 1,230
Additional provisions (derecognised) / recognised
51 93
Balance at 31 August
1,374 1,323
Obligation
The provision for warranty reflects an obligation for after sales service work in relation to completed contracts and products
sold to customers. The provision is expected to be utilised within twelve months of balance date, however, this timing is
uncertain and dependent upon the actual level of after sales service work required.
SECTION C: CAPITAL AND FUNDING
C6. EMPLOYEE BENEFITS
SECTION C: CAPITAL AND FUNDING
C7. PROVISION FOR WARRANTY
Scott Technology Limited
Page 66
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
For cash-settled performance-based compensation,
a liability is recognised for the amount payable based
on on-target performance against set performance
measures. For long-term incentives (which include
the payment of a monetary amount after a period
of approximately three years of continuous full-time
employment), the payment amount is determined by
the differential between the company's share price
at the beginning of the scheme and at the end of the
reporting period, after adjusting for any events that
affect the share price, such as capital reconstruction,
bonus issues or dividends. Accordingly, at the end
of each reporting period, until the liability is settled,
and at the date of settlement, the fair value of the
liability is remeasured, with any changes in fair value
recognised in profit or loss for the year.
Details of arrangement
The Group has short term and long term incentives in place for certain executives and senior employees of the Group. Short term
incentives (STI) are annual performance based compensation linked directly to individual and company performance while long term
incentives (LTI) are payable to executives and senior employees who are members of the LTI and remain in employment with the
Group at the vesting dates (after 3 years). On the vesting date, those members of the LTI will be granted a cash incentive based on
the movement in Scott Technology Limited’s share price from the beginning of the scheme to the vesting date.
At balance date there is a liability of $2.7 million (2022: $1.1 million) included in employee entitlements in the balance sheet.
The impact of the movement in the liability on profit for the year was a $1.6 million increase (2022: $0.6 million increase) and is
included in the employee benefits expenses. Refer to note F3.
No shares, or share options, in Scott Technology Limited are issued under either incentive scheme.
Policy
Present obligations arising under onerous contracts
are recognised and measured as provisions. An
onerous contract is considered to exist where the
Group has a contract under which the unavoidable
costs of meeting the obligations under the contract
exceed the economic benefits expected to be
received under it.
20232022
$’000s$’000s
Balance at 1 September
5,241 7,962
Additional provisions expensed to the profit and loss during the year
615 1,028
Utilisation of provisions
(4,795) (3,749)
Balance at 31 August
1,061 5,241
The onerous contract provision relates to the
expected losses on certain long-term projects in
progress as at 31 August. The onerous contract
provisions are based on management's best
estimate to complete the projects in progress. The
completion of work required is typically expected in
the next 12 months.
SECTION C: CAPITAL AND FUNDING
SECTION C: CAPITAL AND FUNDING
C8. PERFORMANCE-BASED
COMPENSATION
C9. ONEROUS CONTRACT PROVISION
Annual Report 2023
Page 67
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
Derivatives are initially recognised at fair value on
the date the derivative contract is entered into and
are subsequently re-measured to their fair value
at each reporting date. The resulting gain or loss is
recognised in profit or loss unless the derivative is
designated and effective as a hedging instrument,
in which event, the timing of the recognition
depends on the nature of the hedge relationship.
The Group designates certain derivatives as
hedges of the fair value of firm commitments
(fair value hedge) or as hedges of forecast future
sales (cash flow hedge). Open firm commitments
reflect contractual agreements to provide goods
to customers at an agreed price denominated in a
foreign currency on specified future dates.
Changes in the fair value of derivatives that are
designated and qualify as fair value hedges are
recorded in profit or loss, together with any
changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk.
The gain or loss relating to the effective portion of
interest rate swaps hedging fixed rate borrowings
is recognised in profit or loss within finance
costs, together with changes in the fair value of
the hedged fixed rate borrowings attributable to
interest rate risk. The gain or loss relating to the
ineffective portion is recognised in profit or loss
within other gains / (losses).
If the hedge no longer meets the criteria for hedge
accounting, the adjustment to the carrying amount
of a hedged item for which the effective interest
method is used, is amortised to profit or loss over
the period to maturity using a recalculated effective
interest rate.
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash
flow hedges are recognised in other comprehensive
income and accumulated as a separate component
of equity in the hedging reserve. The gain or loss
relating to the ineffective portion is recognised
immediately in profit or loss and is included in the
other expenses line.
Amounts recognised in the hedging reserve are
reclassified from equity to profit or loss (as a
reclassification adjustment) in the periods when the
hedged item is recognised in profit or loss, in the
same line as the recognised hedged item.
Hedge accounting is discontinued when the
hedging instrument expires, or is sold, terminated,
or exercised, or no longer qualifies for hedge
accounting. Any cumulative gain or loss recognised
in the hedging reserve at that time remains in equity
and is recognised when the forecast transaction
is ultimately recognised in profit or loss. When a
forecast transaction is no longer expected to occur,
the cumulative gain or loss that was recognised in
the hedging reserve is recognised immediately in
profit or loss.
Financial risk management objectives
The Group’s finance function provides services to the business, coordinates access to domestic and international financial markets
and monitors and manages the financial risks relating to the operations of the Group through internal risk reports, which analyse
exposures by degree and magnitude of risks. These risks include market risks (including currency risks and fair value interest rate
risks), credit risks, liquidity risks and cash flow interest rate risks.
The Group seeks to minimise the effects of these risks by using derivative financial instruments to hedge these risk
exposures. The use of financial derivatives is governed by the Group’s policies approved by the Board of Directors, which
provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and
non-derivative financial instruments and the investment of excess liquidity. Compliance with policies and exposure limits
are reviewed on a continuous basis. The Group does not enter into, or trade financial instruments, including derivative
financial instruments, for speculative purposes.
SECTION D: RISK MANAGEMENT
D1. FINANCIAL INSTRUMENTS
Scott Technology Limited
Page 68
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and equity balance. The Group's overall strategy remains
unchanged from 2022.
The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital and
retained earnings.
The Group has sufficient liquid assets to fund the operations of the business. To the extent that additional working capital
funding is required the Group has bank facilities available as disclosed in note C3. Where the Group requires funding for a
significant capital acquisition, separate funding facilities are established, provided the directors consider that the Group has
adequate equity to support these facilities.
Market risk
The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Group enters into
a variety of derivative financial instruments to manage its exposure to foreign currency risk, including forward foreign exchange
contracts to hedge the exchange rate risk arising on the export of manufactured products.
There has been no change to the Group's exposure to market risks or the manner in which it manages and measures
the risks.
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations
arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
There were no open cash flow hedges at balance date. The carrying amounts in New Zealand dollars of the Group’s foreign
currency denominated monetary assets and monetary liabilities at the reporting date are as follows:
AssetsLiabilities
2023202220232022
$’000s$’000s$’000s$’000s
United States dollar 16,431 9,905 48,911 27,547
Euros 26,656 21,808 17,022 4,577
Australian dollar 14,224 8,154 7,766 8,429
Great Britain pound 347 240 193 23
Chinese yuan 3,776 1,490 - 720
Canadian dollar - 1 19 -
Czech koruna 343 155 817 1,772
Swedish krona - 35 - -
Singaporean dollar - - 662 326
61,777 41,788 75,390 43,394
Forward foreign exchange contracts
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign currency payments and
receipts. The Group also enters into forward foreign exchange contracts to manage the risk associated with anticipated sales
and purchase transactions. These are presented in other financial assets or other financial liabilities in the balance sheet.
D1. Financial instruments continued
Annual Report 2023
Page 69
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
D1. Financial instruments continued
Assets
20232022
$’000s$’000s
At fair value:
Fair value hedge of open firm commitments
1,339 1,037
Foreign currency forward contracts held as effective fair value hedges
61 -
Foreign exchange derivatives
19 -
1,419 1,037
Represented by:
Current financial assets 1,277 938
Non-current financial assets 142 99
1,419 1,037
Liabilities
At fair value:
Fair value hedge of open firm commitments 61 -
Foreign currency forward contracts held as effective fair value hedges 1,339 1,037
Foreign exchange derivatives 424 353
Interest rate swap contracts - 83
1,824 1,473
Represented by:
Current financial liabilities
1,682 1,291
Non-current financial liabilities
142 182
1,824 1,473
For hedges of firm commitments, as the critical terms (i.e. the notional amount, life and underlying) of the foreign exchange
forward contracts and their corresponding hedged items are the same, the Group performs a qualitative assessment of
effectiveness and it is expected that the value of the forward contracts and the value of the corresponding hedged items will
systematically change in opposite direction in response to movements in the underlying exchange rates.
The main source of hedge ineffectiveness in these hedging relationships is the effect of the counterparty and the Group’s own
credit risk on the fair value of the forward contracts, which is not reflected in the fair value of the hedged item attributable to
changes in foreign exchange rates. No other sources of ineffectiveness emerged from these hedging relationships.
From time to time the Group will enter into collar options to cover forecast sales and purchases. These are not hedge
accounted.
The fair value of foreign exchange contracts outstanding is recognised as other financial assets/liabilities.
Scott Technology Limited
Page 70
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Foreign currency sensitivity analysis
The Group is mainly exposed to the United States dollar, the euro, the Australian dollar and the Chinese yuan.
The following table details the Group’s sensitivity to a 10% increase and decrease in the New Zealand dollar against the relevant
foreign currencies. Ten percent represents management’s assessment of the reasonably possible change in foreign exchange rates.
The sensitivity analysis includes only outstanding foreign currency-denominated monetary items and adjusts their translation at
the period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit and equity
where the New Zealand dollar weakens 10% against the relevant currency.
Outstanding forward foreign currency contracts
Average Fx RateNominal valueFair value
202320222023202220232022
$’000s$’000s$’000s$’000s
Sell US dollars
0.62130.6515 40,613 17,856 1,681 (1,047)
Sell Australian dollars
0.91390.9280 3,970 228 22 (9)
Buy euro
0.55040.5636 2,095 2,046 (21) (153)
(AUD) Buy euro
- 0.6484 - 3,153 - (181)
46,678 23,283 1,682 (1,390)
Outstanding forward foreign currency contracts maturity profile
Nominal valueFair value
2023202220232022
$’000s$’000s$’000s$’000s
0-3 months 13,593 13,868 623 (794)
3-6 months 10,901 2,948 584 (32)
6-9 months 12,354 1,850 180 (204)
9-12 months 6,613 3,091 153 (262)
Greater than 12 months 3,216 1,526 142 (98)
46,677 23,283 1,682 (1,390)
10% increase in
New Zealand dollar
10% decrease in
New Zealand dollar
2023202220232022
$’000s$’000s$’000s$’000s
United States dollar
3,223 890 (3,939) (890)
Euro
(773) (3,764) 945 3,764
Australian dollar
(587) 328 718 (328)
Great Britain pound
(14) 1 17 (1)
Chinese yuan
(343) - 420 -
Canadian dollar
2 - (2) -
Czech koruna
69 1 (84) (1)
Singaporean dollar
60 - (74) -
D1. Financial instruments continued
Annual Report 2023
Page 71
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
These movements are mainly attributable to the exposure to outstanding foreign currency bank accounts, receivables, payables
and derivatives at year end in the Group.
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end
exposure does not reflect the exposure during the year.
Credit risk management
In the normal course of business, the Group incurs credit risk from trade receivables and transactions with financial institutions.
The Group has a credit policy, which is used to manage this exposure to credit risk, including requiring payment prior to shipping
to high credit risk countries and customers, and customer credit checks. The Group, as a result of the industries in which it
operates, can be exposed to significant concentrations of credit risk from trade receivables and counterparty risk with the bank
in relation to the outstanding forward exchange contracts. They do not require any collateral or security to support financial
instruments as these represent deposits with, or loans to, banks and other financial institutions with high credit ratings.
At year end the amount receivable from the five largest trade debtors is $13.3 million (2022: $10.6 million).
The maximum credit risk of on balance sheet financial instruments is their carrying amount.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the
Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
Liquidity and interest rate risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and
liabilities. Included in note C3 are details of additional undrawn facilities that the Group has at its disposal to further reduce
liquidity risk.
There is no reasonably possible movement in interest rates that could have a material impact on the financial statements.
Interest rate swap contracts
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest
amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing
interest rates on the fair value of issued fixed rate debt and the cash flow exposures on the issued floating rate debt.
The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves
at reporting date and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the
outstanding balances at 31 August.
The interest rate swap contract obligation was taken over through the acquisition of the Alvey business. This swap contract
was settled in FY23.
Outstanding receive floating pay fixed contracts
Average contracted
fixed interest rate
Notional
principal amountFair value
202320222023202220232022
%% $’000s$’000s$’000s$’000s
5 years + - 2.70% - 2,680 - (83)
D1. Financial instruments continued
Scott Technology Limited
Page 72
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
The following table details the Group’s remaining undiscounted contractual maturity for its non derivative financial
liabilities. The tables below have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the Group can be required to pay.
Weighted
average
effective
interest rate
On
demand
Less
than 1
year
1-2
years
2-3
years
3-5
years
5+
yearsTotal
% $’000s$’000s$’000s$’000s$’000s$’000s$’000s
2023 financial liabilities
Lease liabilities3.34% - 4,228 3,250 2,282 1,958 3,104 14,822
Borrowings7.41% - 1,236 11,892 93 98 81 13,400
Trade creditors and accruals 39,300 - - - - - 39,300
39,300 5,464 15,142 2,375 2,056 3,185 67,522
2022 financial liabilities
Lease liabilities3.34% - 3,691 2,123 1,894 1,972 1,977 11,657
Borrowings5.07% - 993 68 11,488 28 - 12,577
Trade creditors and accruals 35,102 - - - - - 35,102
35,102 4,684 2,191 13,382 2,000 1,977 59,336
The Group has access to financing facilities, of which the total unused amount is $18.1 million at the balance sheet
date, (2022: $20.6 million). The Group expects to meet its other obligations from operating cash flows and proceeds of
maturing financial assets.
Fair value measurements recognised in the balance sheet
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 on the degree to which fair value is observable.
The fair values of financial assets and financial liabilities are determined as follows:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical
assets and liabilities;
• Level 2 fair value measurements are those derived from inputs, other than quoted prices, included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that
are not based on observable market data (unobservable inputs).
The fair value of forward exchange contracts and options is based on their quoted market price, if available. If a quoted market
price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the
current forward price for the residual maturity and options of the contract using a market rate of interest.
D1. Financial instruments continued
Annual Report 2023
Page 73
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Fair value
The fair value of financial instruments not already measured at fair value approximates their carrying value.
Level 1Level 2Level 3Total
$’000s$’000s$’000s$’000s
2023
Financial assets at fair value through profit and loss
Fair value hedge of open firm commitments
- 1,339 - 1,339
Foreign currency forward contracts held as effective fair value hedges
- 61 - 61
Foreign exchange derivatives
- 19 - 19
Financial liabilities at fair value through profit and loss
Fair value hedge of open firm commitments
- (61) - (61)
Foreign currency forward contracts held as effective fair value hedges
- (1,339) - (1,339)
Foreign exchange derivatives
- (424) - (424)
Interest rate swap contracts
- - - -
- (405) - (405)
2022
Financial assets at fair value through profit and loss
Fair value hedge of open firm commitments
- 1,037 - 1,037
Foreign currency forward contracts held as effective fair value hedges
- - - -
Foreign exchange derivatives
- - - -
Financial liabilities at fair value through profit and loss
Fair value hedge of open firm commitments
- - - -
Foreign currency forward contracts held as effective fair value hedges
- (1,037) - (1,037)
Foreign exchange derivatives
- (353) - (353)
Interest rate swap contracts
- (83) - (83)
- (436) - (436)
D1. Financial instruments continued
Scott Technology Limited
Page 74
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
20232022
%%
Parent entity
Scott Technology Limited31 AugustNew Zealandn/an/a
New Zealand trading subsidiaries
Scott Technology NZ Limited 31 AugustNew Zealand100100
Scott Automation Limited 31 AugustNew Zealand100100
Scott Technology US Limited 31 AugustNew Zealand100100
QMT General Partner Limited 31 AugustNew Zealand9393
QMT New Zealand Limited Partnership31 AugustNew Zealand9292
Scott Technology Americas Limited 31 AugustNew Zealand100100
Scott Technology Europe Limited 31 AugustNew Zealand100100
New Zealand non-trading subsidiaries
Scott LED Limited31 AugustNew Zealand100100
Rocklabs Limited 31 AugustNew Zealand100100
Overseas subsidiaries
Scott Technology Australia Pty Ltd 31 AugustAustralia100100
Scott Automation & Robotics Pty Ltd 31 AugustAustralia100100
Scott Systems International Incorporated 31 AugustUS100100
Scott Systems (Qingdao) Co Limited 31 December (*)China9595
Scott Technology GmbH 31 AugustGermany100100
Scott Technology Belgium bvba 31 AugustBelgium100100
Scott Automation NV 31 AugustBelgium100100
FLS Systems NV 31 AugustBelgium100100
Alvey do Brazil Comercio de Maquinas de Automacao 31 December (*)Brazil - 100
Scott Automation a.s. 31 AugustCzech Republic100100
Scott Automation SAS 31 AugustFrance100100
Scott Automation Limited 31 AugustUnited Kingdom100100
Normaclass 31 AugustFrance100100
Rivercan S.A. 31 December (*)Uruguay100100
(*) Determined by local regulatory requirements.
SECTION E: GROUP STRUCTURE AND SUBSIDIARIES
E1. SUBSIDIARIES
Annual Report 2023
Page 75
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Interests in joint ventures
Policy
A joint venture is a joint arrangement whereby
the parties that have joint control of the
arrangement have rights to the net assets
of the joint arrangement. Joint control is the
contractually agreed sharing of control of an
arrangement, which exists only when decisions
about the relevant activities require unanimous
consent of the parties sharing control.
The results, assets and liabilities of joint
ventures are incorporated in these
consolidated financial statements using the
equity method of accounting. Under the equity
method a joint venture is initially recognised
in the consolidated statement of financial
position at cost and adjusted thereafter to
recognise the Group’s share of the profit or
loss and other comprehensive income of the
joint venture. In assessing the Group’s share
of the profit or loss, or other comprehensive
income of the joint venture, the Group’s
share of any unrealised profits or losses on
transactions between Group companies and
the joint venture is eliminated. Dividends or
distributions received from a joint venture
reduce the carrying amount of the investment in that
joint venture in the Group financial statements. When
the Group’s share of losses of a joint venture exceeds
the Group’s interest in that joint venture, the Group
discontinues its share of further losses. Additional
losses are recognised only to the extent that the
Group has incurred legal or constructive obligations
or made payments on behalf of the joint venture.
An investment in a joint venture is accounted for
using the equity method from the date on which
the investee becomes a joint venture until the date
it ceases to be a joint venture. On acquisition of the
investment in a joint venture, any excess of the cost
of the investment over the Group’s share of the net
fair value of the identifiable assets and liabilities
of the investee is recognised as goodwill, which is
included within the carrying value of the investment.
Any excess of the Group’s share of the net fair value
of the identifiable assets and liabilities over the cost
of the investment, after reassessment, is recognised
immediately in profit or loss in the period in which the
investment is acquired.
Joint ventures
Country of
incorporation
Ownership interestCarrying value
2023202220232022
%%$’000s$’000s
Robotic Technologies Limited (i)New Zealand5050
804 677
Balance at 31 August 804 677
(i) Scott Technology Limited’s joint venture with Silver Fern Farms Limited, Robotic Technologies Limited (RTL),
was formed in October 2003 and has a balance date of 31 August. RTL’s principal activity is the marketing and
development of (primarily) lamb meat processing equipment and the management of the intellectual property
associated with these developments. Scott Technology Limited’s share of RTL’s net profit was $127,000. (2022:
share of net profit $329,000).
SECTION E: GROUP STRUCTURE AND SUBSIDIARIES
E2. INVESTMENTS ACCOUNTED
FOR USING THE EQUITY METHOD
Scott Technology Limited
Page 76
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Carrying value of equity accounted investments:
20232022
$’000s$’000s
Balance at 1 September 677 348
Share of net surplus 127 329
Balance at 31 August 804 677
Summarised statement of comprehensive income of joint
ventures from continuing operations:
Joint ventures
20232022
$’000s$’000s
Income 463 2,080
Expenses (209) (1,422)
Net surplus and total comprehensive income 254 658
Group share of net surplus127329
Summarised balance sheets of joint ventures:
Joint ventures
20232022
$’000s$’000s
Current assets 2,398 3,397
Non-current assets 21 -
Current liabilities (812) (2,043)
Non-current liabilities - -
Net assets 1,607 1,354
Group share of net assets 804 677
RTL does not have any contingent assets, contingent liabilities or commitments for capital expenditure. The Group is not
jointly and severally liable for any of the joint ventures’ liabilities.
E2. Investments accounted for using the equity method continued
20232022
Joint ventures
$’000s$’000s
Project work undertaken by the Group for RTL
133229
Administration, sales and marketing fees charged by the Group to RTL
261 161
Sales revenue received by RTL from the Group
549
257
Advance from Scott Technology to RTL
431
431
Interest charged by RTL to Scott Technology on advance
-
14
Advances
Advances to / from joint ventures are unsecured, interest free and repayable on demand.
SECTION E: GROUP STRUCTURE AND SUBSIDIARIES
E3. RELATED PARTY TRANSACTIONS
Annual Report 2023
Page 77
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
E3. Related party transactions continued
SECTION E: GROUP STRUCTURE AND SUBSIDIARIES
E4. DISCONTINUED OPERATION
Substantial shareholders
JBS Australia Pty Ltd owns a 53.05% shareholding in Scott Technology Limited (2022: 52.54%). The Group has recognised sales
to JBS companies of $21.9 million (2022: $8.5 million) and has made purchases from JBS Companies of $Nil (2022: $Nil). As at
balance date the Group had $2.1 million receivable from JBS Companies (2022: $2.0 million).
Dividends paid to JBS amounted to $3.4 million (2022: $3.1 million). All dividends have been reinvested in Scott Technology
Limited under a dividend reinvestment plan.
Terms and conditions
Transactions relating to dividends, calls on shares and subscriptions for new shares are on the same terms and conditions
that applied to other shareholders.
Goods sold to related parties during the year are based on price lists in force and terms that would be available to third parties.
Outstanding balances are unsecured and repayable in cash.
On 16 June 2022, the Group discontinued its robotic solutions and integration operation in Marion, Ohio (RobotWorx).
The resolution by the Board to dispose of RobotWorx is consistent with the Group's long-term policy to focus on the
Group's other businesses.
The associated assets and liabilities of the discontinued operation have been written down to nil or absorbed by other
existing US business and its revenue and expenses reported as a discontinued operation (previously reported within the
Americas manufacturing segment). The revenue and segment information reported in notes A1 and A3 does not include any
amounts of the discontinued operation.
Financial information relating to the discontinued operation for the period to the date of closure is set out below.
Policy
A discontinued operation is a component of
the Group's business, the operations and cash
flows of which can be clearly distinguished
from the rest of the Group and which:
• represents a major line of business or
geographical area of operation;
• is part of a singularly coordinated plan to
dispose of a separate major line of business
or geographic area of operation; or
• is a subsidiary acquired exclusively with a view
to resale.
When an operation is classified as a discontinued
operation, the comparative consolidated statement
of comprehensive income is represented as if the
operation had been discontinued from the start of
the comparative year.
Scott Technology Limited
Page 78
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
20232022
$’000s$’000s
Revenue - 7,566
Expenses- (7,936)
(Loss) / Profit before tax- (370)
Attributable income tax expense- 375
Net profit / (loss) after tax- 5
Gain / (loss) on disposal of discontinued operation- (12,572)
Net profit / (loss) from discontinued operation- (12,567)
Net cash outflow from operating activities- (1,179)
Net cash outflow from investing activities- (290)
Net cash inflow / (outflow) from financing activities- 1,304
Net increase / (decrease) in cash generated by the discontinued operation-(165)
Current assets- -
Current liabilities- -
Net assets of discontinued operation- -
The net loss on disposal is calculated as follows:
Carrying amount of assets and liabilities as at date of disposal:
Property, plant and equipment - (425)
Inventory - (2,654)
Intangible assets - (1,877)
Goodwill - (7,656)
Net assets disposed of- (12,612)
Proceeds from disposal:
Cash and cash equivalents - 896
Less: Transaction costs - (856)
Net loss from discontinued operation after tax- (12,572)
Net cash inflow arising on disposal:
Consideration received in cash and cash equivalents - 896
Less: cash and cash equivalents disposed of - -
- 896
E4. Discontinued operation continued
Financial performance and cash flow information
SECTION E: GROUP STRUCTURE AND SUBSIDIARIES
E5. ONE OFF COSTS
Scott advised the share market on the 15th of June 2023 that after discussions with the majority shareholder JBS, it intends to
undertake a strategic review of its ownership structure, with the view to exploring options to maximise value for all shareholders.
Scott has engaged Macquarie Capital as financial advisor to assist with the strategic review.
The costs associated with the strategic review have been included on a separate line as they are one off in nature and do not
represent the trading position of the Group.
Annual Report 2023
Page 79
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
Policy
The statement of cash flows is prepared
exclusive of GST, which is consistent with the
method used in the statement of
comprehensive income.
Definition of terms used in the statement of
cash flows:
• Cash includes cash on hand, demand deposits,
and other short-term highly liquid investments
that are readily convertible to a known amount
of cash and are subject to an insignificant risk
of change in value, net of bank overdrafts.
• Operating activities include all transactions
and other events that are not investing or
financing activities.
• Investing activities are those activities relating
to the acquisition and disposal of current and
non-current investments and any other non-
current assets.
• Financing activities are those activities relating to
changes in the equity and debt capital structure of
the Group and those activities relating to the
cost of servicing the Group’s equity.
SECTION F: OTHER DISCLOSURES
F1. NOTES TO THE CONSOLIDATED
STATEMENT OF CASH FLOWS
20232022
$’000s$’000s
Net profit after tax for the year 15,436 90
Adjustments for non-cash items:
Depreciation and amortisation
8,809 8,053
Net gain on sale of property, plant and equipment
(459) (49)
Deferred tax
453 2,063
Share of net loss / (surplus) of joint ventures and associates
(127) (329)
Non cash loss on discontinued operation
- 12,612
Interest expense
2,266 1,508
10,942 23,858
Add / (less) movement in working capital:
Trade debtors
(3,636) (12,518)
Other financial assets – derivatives
(382) (337)
Sundry debtors
(3,818) (4,689)
Inventories
(6,923) (10,857)
Contract assets
(16,168) 6,414
Contract liabilities
19,147 3,568
Onerous contract provision
(4,180) (2,721)
Taxation payable
2,527 (2,117)
Trade creditors and accruals
4,198 5,004
Other financial liabilities – derivatives
351 63
Employee entitlements
3,522 1,089
Provision for warranty
51 93
(5,311) (17,008)
Movements in working capital disclosed in investing / financing activities:
Working capital relating to sale / (purchase) of business and non-controlling interest - (622)
Movement in foreign exchange translation reserve relating to working capital (850) (10)
Net cash inflow from operating activities 20,217 6,308
Scott Technology Limited
Page 80
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
20232022
$’000s$’000s
Net profit after tax for the year 15,436 90
Adjustments for non-cash items:
Depreciation and amortisation
8,809 8,053
Net gain on sale of property, plant and equipment
(459) (49)
Deferred tax
453 2,063
Share of net loss / (surplus) of joint ventures and associates
(127) (329)
Non cash loss on discontinued operation
- 12,612
Interest expense
2,266 1,508
10,942 23,858
Add / (less) movement in working capital:
Trade debtors
(3,636) (12,518)
Other financial assets – derivatives
(382) (337)
Sundry debtors
(3,818) (4,689)
Inventories
(6,923) (10,857)
Contract assets
(16,168) 6,414
Contract liabilities
19,147 3,568
Onerous contract provision
(4,180) (2,721)
Taxation payable
2,527 (2,117)
Trade creditors and accruals
4,198 5,004
Other financial liabilities – derivatives
351 63
Employee entitlements
3,522 1,089
Provision for warranty
51 93
(5,311) (17,008)
Movements in working capital disclosed in investing / financing activities:
Working capital relating to sale / (purchase) of business and non-controlling interest - (622)
Movement in foreign exchange translation reserve relating to working capital (850) (10)
Net cash inflow from operating activities 20,217 6,308
Reconciliation of movement in debt facilities
Balance at 1
SeptemberAdditionsDisposalsDrawingsRepayment
Translation
of foreign
exchange
Balance at
31 August
$’000s$’000s$’000s$’000s$’000s$’000s$’000s
2023
Borrowings 11,970 - - 2,203 (1,904) 206 12,475
Lease liabilities 10,435 6,120 (15) - (4,040) 875 13,375
22,405 6,120 (15) 2,203 (5,944) 1,081 25,850
2022
Borrowings 10,920 - - 2,396 (1,599) 253 11,970
Lease liabilities 10,288 3,671 (605) - (3,392) 473 10,435
21,208 3,671 (605) 2,396 (4,991) 726 22,405
F1. Notes to the consolidated statement of cash flows continued
Payment guarantees are provided to customers in respect of advance payments received by the Group for contract work in
progress, while performance bonds are provided to some customers for a period of up to one year from final acceptance
of the equipment.
Scott Technology Limited has a payment bond to the value of $75,000 (2022:$75,000) in place with ANZ Bank New Zealand
Limited in favour of the New Zealand Stock Exchange.
The Group has exposure to penalty clauses on its projects. These clauses relate to delivery criteria and are becoming
increasingly common in international contractual agreements. There is a clearly defined sequence of events that needs to
occur before penalty clauses are imposed.
20232022
$’000s$’000s
Payment guarantees and performance bonds
18,695
23,371
Stock Exchange bond 75 75
Maximum contract penalty clause exposure 7,419 8,950
SECTION F: OTHER DISCLOSURES
F2. CONTINGENT LIABILITIES
Annual Report 2023
Page 81
Notes to and forming part of the consolidated financial statements continued
For the year ended 31 August 2023
On 18 October 2023 the Board of Directors approved a final dividend of four cents per share to be paid for the 2023 year
(2022: four cents per share).
Key management personnel include the directors of the company, the Chief Executive (Executive Director) and his direct
reports. The compensation of the executives, is set out below:
Detailed remuneration disclosures are provided in the remuneration statement on pages 98 to 99
20232022
$’000s$’000s
Short-term benefits – employees
3,206 3,085
Short-term benefits – Executive Director
1,897 920
Long-term benefits – employees
1,392 466
Long-term benefits – Executive Director
390 145
6,885 4,616
Directors' remuneration
280279
SECTION F: OTHER DISCLOSURES
SECTION F: OTHER DISCLOSURES
F3. KEY MANAGEMENT
PERSONNEL COMPENSATION
F4. SUBSEQUENT EVENTS
Scott Technology Limited
Page 82
FOR THE YEAR ENDED 31 AUGUST 2023
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 2023, 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 32 to 82, present fairly, in all material
respects, the consolidated financial position of the Group
as at 31 August 2023, 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 Company in accordance with
Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (including International
Independence Standards) (New Zealand) issued by the
New Zealand Auditing and Assurance Standards Board and
the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants
(including International Independence Standards), and
we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor and the provision of
taxation advice, we have no relationship with or interests
in the Company or any of its subsidiaries. These services
have not impaired our independence as auditor of the
Company and Group.
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 $1,100,000 (2022:
$1,000,000).
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.
Annual Report 2023
Page 83
Independent Auditor’s Report continued
Key audit matter How our audit addressed the key audit matter
Recognition of Revenue and Profit on Systems Contracts
The Group’s most significant revenue stream relates to
contracts for designing and manufacturing customised
automation and robotic systems for customers in
various industries (“systems contracts”). Revenue
on systems contracts is recognised over the term of
the contract period using the input method based
on management’s estimate of the percentage of
completion of the individual contracts as detailed in
note A1. An estimate of the percentage of completion
is based on costs associated with the work done to
date relative to the total forecast costs to complete.
There is a significant level of judgement involved in the
recognition of revenue and profit on systems contracts
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.
We assessed the Group’s processes and design and
implementation of controls around preparation/calculation of
the percentage of completion.
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.
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 systems contracts during the
year to validate the costs and assess whether they have been
applied to contracts appropriately.
Goodwill Impairment Assessment - Australian cash generating unit
As at 31 August 2023, there is $52.0 million (2022: $50.1
million) of goodwill included on the balance sheet of the
Group as detailed in note B5. The balance is held across
five cash generating units (CGUs). $13.8 million (2022:
$14.2 million) of the goodwill balance is allocated to the
Australian CGU.
NZ IAS 36 Impairment of Assets requires the Group to
complete an impairment test related to goodwill annually.
The Group tests for impairment by determining the
recoverable amount of the cash generating units to which
the goodwill is allocated and comparing the recoverable
amounts of the CGUs to their carrying values.
The recoverable amount of each CGU is based on value
in use which is determined using a discounted cash flow
calculation. This calculation is subjective, and requires the
use of judgement, primarily in respect of:
• Annualised forecast cash flows for the 5 year forecast
period (using the budget for the first year of the
forecast period)
• Discount rates
• Annual growth rates
• Terminal growth rates
We have included the impairment assessment of goodwill
relating to the Australian CGU as key audit matter due to
the significance of the balance to the financial statements,
the lower level of headroom relative to the other cash
generating units and the level of judgements and
estimates required in preparing the value in use model.
We considered whether the Group’s methodology for assessing
impairment of the Australian cash generating unit is compliant
with NZ IAS 36. We focused on testing and challenging the
suitability of the model and reasonableness of the assumptions
used by the Group in conducting their impairment review.
Our procedures included, among others:
• Agreeing first year forecast cashflows to Board approved
budgets;
• Challenging the reliability of the Group’s revenue and expense
growth rates to historical forecasts and actual results;
• Assessing reasonabless of key assumptions and changes from
the previous years; and
• Assessing management’s determination of cash generating
units and our understanding of the Group’s business and
operating environment.
We used our internal valuation experts to assist with evaluating
the models and challenging the Group’s key assumptions. The
procedures of the specialist included:
• Evaluating the appropriateness of the model;
• Testing the mathematical integrity of the model; and,
• Comparing the Group’s annualised and terminal growth rates to
market data.
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. We note
that this analysis resulted in additional disclosure in the financial
statements relating to the Australian CGU. This is consistent with
the prior year.
Scott Technology Limited
Page 84
Independent Auditor’s Report continued
Other information
The directors are responsible on behalf of the Group for
the other information. The other information comprises
the information in the Annual Report that accompanies the
consolidated financial statements and 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.
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.
Andrew Dick,
Partner for Deloitte Limited
Auckland, New Zealand
18 October 2023
Annual Report 2023
Page 85
Members of the Scott team representing Scott at tradeshows around the world.
Scott Technology Limited
Page 86
mitigate the risk of insider trading by employees and
Directors. In addition to this Policy and Guidelines, more
specific and stringent rules also apply to trading in Scott
Technology Limited’s securities by Directors and certain
employees who are more likely to be exposed to material
information relating to Scott. A Director or senior manager
is obliged to advise the NZX promptly if they trade in the
company’s shares.
The Directors’ shareholdings and all trading of shares during
the year by the directors are disclosed under Directors’
Interests on page 94 to 95 of the Annual Report.
PRINCIPLE 2
BOARD COMPOSITION
AND PERFORMANCE
The Board of Directors operates under a written charter,
which outlines the roles and responsibilities of the Board.
The charter complies with the relevant recommendations
in the NZX Corporate Governance Code and is available on
the company website.
The primary responsibilities of the Board include:
• Ensure the company’s goals are clearly established
and that strategies are in place for achieving them.
• Establish policies for strengthening the performance
of the company and ensure that management is
proactively seeking to build the business.
• Monitor the performance of management.
• Appoint the CEO and set the terms of the CEO’s
employment agreement.
• Ensure the company’s financial statements are true
and fair and conform with the law.
• Ensure the company adheres to high standards of
ethics and corporate behaviour.
• Ensure the company has appropriate risk
management / regulatory compliance policies
in place.
CORPORATE GOVERNANCE
Scott Technology Limited (Scott) believes in the benefit
of strong corporate governance and the value it
provides for our shareholders, customers, staff and
other stakeholders. The Board is ultimately responsible
for ensuring that the company maintains high ethical
standards and corporate governance practices. The
company is striving to ensure its corporate governance
practices are in line with best practice and the NZX
Corporate Governance Code (NZX Code). Any exceptions
to this are identified where appropriate under Principles
1 to 8 below.
The key corporate governance documents referred to in
this report are available on Scott’s website:
www.scottautomation.com/en/investor-centre/governance
PRINCIPLE 1
CODE OF ETHICAL BEHAVIOUR
The Board is committed to maintaining the highest
standards of behaviour and accountability. Scott’s Code
of Conduct is the framework of standards by which
the directors, senior management and employees are
expected to conduct their professional lives. It is intended
to support decision-making that is consistent with Scott's
values, business goals and legal and policy obligations,
rather than to prescribe an exhaustive list of acceptable
and non-acceptable behaviour.
As part of the induction process, new employees receive
a copy of the Code of Conduct, which is accessible to all
staff on the Scott intranet and the company website. The
Code was most recently reviewed in 2021.
The company also has an Ethics Line Policy which
provides a confidential online reporting system that
allows employees to report suspected breaches of law
or company policies as well as other serious concerns
they may have. The purpose of the Policy is to protect an
employee who wishes to raise concerns from reprisals or
victimisation for reporting their concerns.
Scott supports the integrity of New Zealand’s financial
markets and has a Financial Product Trading Policy to
AS AT 31 AUGUST 2023
STATEMENT OF
CORPORATE GOVERNANCE
Annual Report 2023
Page 87
BOARD COMPOSITION
AS AT 31 AUGUST 2023
The Board composition reflects the majority shareholding
of the company, with 53% held by JBS Australia Pty
Limited. As at 31 August 2023, the Board comprises three
Independent Directors, three Directors representing JBS
Australia Pty Limited and one Executive Director. The
Chair of the Board is an Independent Director.
Stuart McLauchlan
Independent Chair
Derek Charge
Independent Director
John Thorman
Independent Director
Brent Eastwood
Non-executive Director representing JBS
Australia Pty Limited
John Berry
Non-executive Director representing
JBS Australia Pty Limited
Alan Byers
Non-executive Director representing
JBS Australia Pty Limited
John Kippenberger
Executive Director/CEO
In order for a Director to be deemed Independent,
the Board has determined that he/she must not be
an executive of Scott Technology nor an executive or
director of JBS Australia Pty Limited and must have
no disqualifying relationships. Independence will be
determined by reference to the NZX Listing Rules and the
NZX Corporate Governance Code.
Further details on each Director, including their interests,
qualifications and shareholdings, is provided in the Annual
Report and on the company’s website.
DIRECTOR APPOINTMENT
Membership, rotation and retirement of Directors
is determined in accordance with the company
Constitution and NZX Listing Rules.
Directors will retire and may stand for re-election by
shareholders every three years. A Director appointed
since the previous annual meeting holds office only until
the next annual meeting but is eligible for re-election at
that meeting. The Board asks for Director nominations
each year prior to the Annual Shareholders Meeting, in
accordance with the constitution of the company and
the NZX Listing Rules.
The Governance, Remuneration and Nominations
Committee undertakes the process for nominating
and appointing Directors on behalf of the Board and
makes appropriate recommendations to the Board, in
line with the Committee’s Terms of Reference. New
Board members enter into written agreements with the
company, setting out the terms of their appointment.
The Board has a skills matrix and Directors are selected
on individual skills, qualifications, experience and
contribution to the company. The Board believes that
all current Directors offer valuable and complementary
skill sets.
CORE SKILLS
Governance
Finance and accoun�ng
Risk management
Capital markets and M&A
Health and safety
Regulatory knowledge and experience
Human Resources
GROWTH
Growth execu�on
Strategy
Opera�ons and supply chain excellence
Industry experience
Customer / brand / marke�ng
Interna�onal experience
RELATIONSHIPS
Govt / regulatory rela�onships
Investor rela�onships
Skills matrix and Director strength
Number of Directors with strength in this area
The Board is satisfied that each Director has the necessary
time available to devote to the position, broadens the
Board’s expertise and has a personality that is compatible
with the other Directors.
The company encourages all Directors to undertake
appropriate training and education to ensure they remain
up to date on how to best perform their duties
as Directors.
Day-to-day management of Scott is delegated to the
CEO and the senior management team, in line with the
company’s Delegated Authority framework.
Management is responsible for providing information of
sufficient content, quality and timeliness as the Board
considers necessary to allow the Board to effectively
discharge its duties. In addition, all Directors have access
to management to discuss issues or obtain information
on specific areas in relation to matters to be discussed
at Board meetings, or other areas as they consider
appropriate. With the prior approval of the Chair,
Statement of corporate governance continued
Scott Technology Limited
Page 88
each Director also has the right to seek independent
legal and other professional advice at the company’s
expense about any aspect of the company’s operations
or undertakings to assist in fulfilling their duties and
responsibilities as Directors.
The Board regularly evaluates its own collective and
individual performance, processes and procedures,
including those of sub committees. Through this process,
the Board identifies any training opportunities for the
individual Directors to ensure they have relevant and up-
to-date skills for performing their role.
DIVERSITY
The Board has a Diversity Policy which outlines Scott’s
commitment to providing an inclusive and diverse
working environment.
Diversity initiatives are applicable, but not limited, to
our practices and policies on recruitment and selection;
compensation and benefits; professional development
and training; promotions; transfers; social and
recreational programs; restructures; and terminations.
The Board believes the principles of the Diversity Policy
were upheld in FY23, and is working towards setting
measurable objectives to support its focus on diversity
and inclusion. The following initiatives are in place to
support Scott’s diversity plan:
• Anti-bullying & Harassment policy
• Ethics hotline where employees can anonymously
report anything they believe to be unethical or
discriminatory
• Wellbeing plan that focuses on the long-term
wellbeing and engagement of our people
• Employee surveys
As at 31 August 2023, Scott had 656 employees of which
15% were female and 85% were male (31 August 2022:
627 Scott employees, 16% female, 84% male).
PRINCIPLE 3
BOARD COMMITTEES
The Board has delegated a number of responsibilities
to Committees to assist in the execution of the Board’s
duties. However, any recommendations made by
Committees are recommendations to the Board and the
Board retains ultimate responsibility for the functions of
its Committees. Each Committee operates under specific
terms of reference, which are reviewed regularly and
approved by the Board.
The Board has four standing committees. A separate
Independent Directors’ Committee meets if needed.
Responsibilities of each Committee are detailed in
Committee charters which are available on the company
website. Management attends Committee meetings only
at the invitation of the Committee.
Audit and Financial Risk
Committee
John Thorman (Chair)
Stuart McLauchlan
John Kippenberger
John Berry
Health and Safety
Committee
Stuart McLauchlan (Chair)
Full Board
Governance, Remuneration
and Nominations
Committee
Stuart McLauchlan (Chair)
Derek Charge
John Thorman
Treasury CommitteeStuart McLauchlan (Chair)
John Kippenberger
John Berry
AUDIT AND FINANCIAL RISK COMMITTEE
(AFRC)
The objective of the Audit and Financial Risk Committee
(AFRC) is to assist the Board in discharging its
responsibilities for financial reporting and risk and
financial/secretarial compliance.
The AFRC must consist of at least three Directors and a
majority of Independent Directors. The chair of the AFRC is
John Thorman, who is an Independent Director and is not
the Board Chair. Stuart McLauchlan is a Fellow and John
Thorman a Member of Chartered Accountants Australia &
New Zealand.
The Committee generally invites the Chief Executive Officer,
Chief Financial Officer and the external auditors to attend
AFRC meetings as appropriate. The Committee also meets
and receives regular reports from the external auditors
without management present, concerning any matters which
arise in connection with the performance of their role.
* Officers include all members of the executive team who
report to the CEO.
20222023
As at 31 AugustFemaleMale FemaleMale
Directors,
including the CEO
0 8 0 7
Officers* 2 6 2 4
Statement of corporate governance continued
Annual Report 2023
Page 89
HEALTH AND SAFETY COMMITTEE
The Board recognises the critical role health and safety forms
as part of Scott’s day-to-day operations and its focus is on
ensuring a safety-first culture across all business operations.
Health and Safety is deemed an ‘all of Board’ responsibility
and all Directors are members of the Health and Safety
Committee. The Committee assists the Board in discharging
its responsibilities in overseeing and reviewing health and
safety matters arising out of Scott’s activities and the impact
of these activities on staff, contractors and visitors to Scott.
GOVERNANCE, REMUNERATION AND
NOMINATIONS COMMITTEE
The Governance, Remuneration and Nominations
Committee assists the Board in establishing remuneration
policies and practices for the company, and to also assist
in discharging the Board’s responsibilities relative to
remuneration-setting and review of, the company’s Chief
Executive Officer and Directors. The Committee also
undertakes the process for nominating and appointing
Directors on behalf of the Board and makes appropriate
recommendations to the Board.
Due to a conflict of interest in being the majority
shareholder, JBS Australia Pty Ltd and their Board
representatives abstain from voting on the appointment of
Independent Directors.
TREASURY COMMITTEE
The role of the Treasury Committee is to oversee the
treasury management processes to ensure the integrity,
transparency and adequacy of the Group’s investments,
borrowings, hedging, balance sheet management and
treasury risk management in accordance with Group
Treasury policies.
INDEPENDENT DIRECTORS’ COMMITTEE
The Independent Directors’ Committee is convened
as needed and consists of Independent Directors who
address significant conflicts of interest and any other
matters referred by the Board. Scott has protocols that set
out the procedures to be followed if there is a takeover
offer. These procedures are set out in the Takeover
Response Protocols that have been adopted by the Board.
BOARD MEETINGS AND ATTENDANCE
Director attendance at Board and Committee meetings
during FY23 was as follows:
BoardAudit and Financial
Risk CommitteeHealth and Safety
CommitteeGovernance,
Remuneration and Nominations Committee
Total number of meetings6462
Stuart McLauchlan6 4 62
Brent Eastwood5 - 5-
Alan Byers 6 - 6-
John Berry 5 3 5-
John Thorman6 4 62
Derek Charge6 - 62
John Kippenberger 6 4 6-
PRINCIPLE 4
REPORTING AND DISCLOSURE
The Board is committed to providing accurate, adequate
and timely information both to existing shareholders and
to the market generally. This enables all investors to make
informed decisions about the company.
Scott, as a company listed on the NZX Main Board, has an
obligation to comply with the disclosure requirements under
the NZX Main Board Listing Rules. Scott recognises that these
requirements aim to provide equal access for all investors
or potential investors to material price-sensitive information
concerning issuers or their financial products. This, in turn,
promotes confidence in the market.
Scott’s Continuous Disclosure Policy outlines the obligations
of Scott and relevant Scott personnel in satisfying the
disclosure requirements. It also covers other related matters
including external communications by Scott.
Scott publishes its key governance and other relevant
documents in the investor centre of the company’s
website at
www.scottautomation.com/en/investor-centre/governance
All significant announcements made to the NZX and
reports issued are also posted on the company’s website.
Statement of corporate governance continued
Scott Technology Limited
Page 90
FINANCIAL REPORTING
Scott’s management team is responsible for implementing
and maintaining appropriate accounting and financial
reporting principles, policies and internal controls. These
are designed to ensure compliance with accounting
standards, applicable laws and regulations.
The Audit & Financial Risk Committee oversees the quality
and integrity of external financial reporting, including
the accuracy, completeness, balance and timeliness of
financial statements. It reviews the full and half year
financial statements and makes recommendations to the
Board concerning accounting policies, areas of judgement,
compliance with accounting standards, stock exchange
and legal requirements, and the results of the external
audit. All matters required to be addressed, and for which
the Committee has responsibility, were addressed during
the reporting period.
For FY23, the directors believe that proper accounting
records have been kept which enable, with reasonable
accuracy, the determination of the financial position of
the company and facilitate compliance of the financial
statements with the Financial Markets Conduct Act 2013.
The CEO and CFO have confirmed in writing to the Board
that the company’s external financial reports present a
true and fair view in all material aspects.
Scott’s full and half year financial statements are available
on the company’s website.
NON-FINANCIAL REPORTING
In FY20, Scott introduced a new five-year strategy which
builds on five foundational pillars. Scott believes these pillars
enhance the long term sustainability of the company and
support the company’s licence to operate. The company
discusses its strategy and progress against objectives in
the Annual Report and other investor presentations and
communications.
The company has policies that support environmental,
social and governance concerns and is in the process of
formulating a formal ESG framework. Material matters that
may impact on or influence the long term sustainability of
the company are considered and managed as part of the risk
management process.
PRINCIPLE 5
REMUNERATION
Scott’s remuneration philosophy promotes the company’s
shared performance culture with the aim of achieving
sustained growth within the business, both in terms of
corporate size and the quality of equipment and services
provided to our customers. The philosophy also emphases
the fundamental value of all our employees and their role
in attaining sustained growth through fair and balanced
remuneration practice.
The Governance, Remuneration and Nominations
Committee makes recommendations to the Board on
remuneration matters, particularly remuneration of
Directors and senior executives, including the CEO.
DIRECTOR REMUNERATION
Details of individual Directors’ remuneration for the year
are on page 98 of the Annual Report.
The total Director remuneration pool of $400,000 was last
approved by shareholders at the 2021 annual meeting. The
Board is responsible for the setting of individual Directors’
fees in accordance with the permitted pool. Any proposed
increases in non-executive Director fees and remuneration
are put to shareholders for approval.
In FY23, the approved remuneration for each role was
as follows:
Fees
per annum
(NZ$)
Board Chair
$140,000
Independent Director
$65,000
Governance, Remuneration and Nominations
Committee Chair
$10,000
No fees were paid to Directors representing
JBS Australia Pty Ltd.
EXECUTIVE REMUNERATION
The remuneration of the CEO and the Executive Team is
determined by the significance of their role and industry
benchmarking. The total remuneration is made up of fixed
remuneration and short-term cash-based incentives, plus
long term incentives.
The short-term incentives are at-risk payments that
reward performance. They are designed to motivate and
incentivise senior staff in the delivery of performance. The
amount payable is determined annually. The payment of
Statement of corporate governance continued
Annual Report 2023
Page 91
the short-term incentive depends on achieving certain
results and outcomes. Performance over the financial year
is measured against ‘stretch’ performance targets. The
performance metrics differ with each role. The levels and
appropriateness of these incentives and weighting are
reviewed each year.
The senior management phantom share scheme is a long-
term incentive linked to the company’s share price which
aligns the long-term interests of both senior management
and shareholders, as well as acting as a retention
incentive to senior management.
Further details of the CEO and executive remuneration
can be viewed on page 98 of the Annual Report.
PRINCIPLE 6
RISK MANAGEMENT
The Board is responsible for overseeing the company’s
system of internal controls to manage key risks and have
overall responsibility for managing risk.
The company maintains a group risk register to identify
and manage risk. Specific health and safety risk registers
for each site are separately maintained given the
significance of this area to the business. The senior
executive team is responsible for maintaining the risk
registers.
Through the Audit and Financial Risk Committee, the
Board considers the recommendations and advice of
external auditors in relation to financial risk, and ensures
that those recommendations are investigated and,
where considered necessary, appropriate action is taken.
Financial statements are prepared monthly and are
reviewed by the Board progressively during the year to
monitor management’s performance against budget goals
and objectives.
A structured framework is in place for capital expenditure,
including appropriate authorisation and approval levels
which place a high emphasis on commercial logic for the
investment. The Board has set limits to management’s
ability to incur expenditure, enter contracts and acquire
or dispose of assets.
The Board requires managers to identify and respond
to risk exposures and key business risks are formally
reviewed by the Board.
Crisis plans are in place along with agreed protocols on
actions to be taken in crisis scenarios.
HEALTH AND SAFETY
The Board recognises that effective management of
health and safety is essential for the operation of a
successful business. Its intent is to prevent harm and
promote wellbeing for employees, contractors, customers
and suppliers. The Health and Safety Committee charter
outlines the Board’s responsibilities and approach in
regards to health and safety matters.
Specific protocols include:
• Well established Health and Safety management
systems and processes in the workplace, fully
supported by the Executive Team and Board.
• Processes and documents are reviewed and
audited on a regular basis as part of our continuous
improvement program through the HS Strategic
programme.
• Dedicated Health and safety coordinators on each site,
fully supported and well informed with the legislation
and law changes.
• In-house competency-based training program that
utilises both in-house expertise and external certified
trainers to ensure our staff are safe to operate in our
workshop and on customer sites.
• Health and safety measures which are monitored and
regularly reviewed.
There has been an improvement in overall health, safety,
and wellbeing performance, as reflected in the increased
number of reported hazards (1,035) in February 2023
compared to (872) in the previous financial year. The
increase in hazard reporting indicates that employees are
actively identifying hazards.
There is a downward trend in both the Lost Time Injury
Frequency Rate (LTIR 4.3) in FY23, compared to 6.08 in the
result of FY22. This reduction indicates a decrease in the
number of injuries resulting in lost time at work.
CYBER SECURITY
The Board recognises the critical role of Cyber Security
and the importance of having appropriate systems
and processes in place to protect the company’s data,
including financial, employee, engineering, supplier and
customer data.
Statement of corporate governance continued
Scott Technology Limited
Page 92
PRINCIPLE 7
AUDITOR
The Audit and Financial Risk Committee makes
recommendations to the Board on the appointment
of the external auditor as set out in the charter. The
Committee also monitors the independence and
effectiveness of the external auditor and reviews and
approves any non-audit services performed by the
external auditor.
The Committee regularly meets with the external
auditor to approve the terms of engagement, audit
partner rotation (at least every 5 years), the audit fee,
and to review and provide feedback on the annual audit
plan. Every year, a comprehensive review and formal
assessment of the independence and effectiveness of
the external auditor is undertaken. The assessment
uses an external auditors’ assessment tool, which
is internationally recognised and endorsed by the
Independent Directors Council. The Committee routinely
has time with Scott’s external auditor, Deloitte, without
management present.
For the financial year ended 31 August 2023, Deloitte
was the external auditor for Scott Technology Limited.
Deloitte was re-appointed under the Companies Act 1993
at the 2022 Annual Meeting.
All audit work is separated from non-audit services to
ensure that appropriate independence is maintained.
Other services provided by Deloitte were non-audit
related and involved the provision of advice rather than
recommendations. These were deemed to have no
effect on the independence or objectivity of the auditor
in relation to audit work. The amount of fees paid to
Deloitte for audit and non-audit work in FY23 are detailed
on page 44 of the Annual Report.
The last audit partner rotation was in 2021. Deloitte
attends the company’s Annual Meeting.
Scott has a number of internal controls, including controls
for computerised information systems, security, business
continuity management, insurance, health and safety,
conflicts of interest and prevention and identification of
fraud. Scott does not have an internal audit function.
PRINCIPLE 8
SHAREHOLDER RIGHTS
AND RELATIONS
The company seeks to ensure that investors understand
its activities by communicating effectively with them and
providing access to clear and balanced information.
The company website www.scottautomation.com
provides an overview of the business and information
about Scott. This information includes details of
operational sites, latest news, investor information,
key corporate governance information and copies of
significant NZX announcements. The website also
provides profiles of the directors and the senior
management team.
All shareholders are given the opportunity to elect to
receive electronic communications from the company.
Copies of previous annual reports, financial statements
and results presentations are available on the website.
Shareholders are encouraged to attend the Annual
Meeting and may raise matters for discussion at this
event, and vote on major decisions which affect the
company. The company aims to publish notices of Annual
Meetings on its website at least 20 business days before
the meeting each year. Voting is by poll.
In addition to shareholders, Scott has a wide range
of stakeholders and maintains open communication
channels for all audiences including brokers, the
investing community and the New Zealand Shareholders’
Association, as well as its staff, suppliers and customers.
In particular, Scott’s Chief Executive Officer and Chief
Financial Officer develop strong relationships with the
investor community and ensure shareholders are kept
informed. Scott has a number of policies which uphold
stakeholder interests.
Statement of corporate governance continued
Annual Report 2023
Page 93
AS AT 31 AUGUST 2023
STATUTORY INFORMATION
Scott Technology Limited
Page 94
DIRECTORS’ INTERESTS
The company maintains an Interests Register in accordance with the Companies Act 1993 and the Financial Markets
Conduct Act 2013. No interest disclosures for the purposes of section140(1) were given during the year ended 31
August 2023. The following are general disclosures of interest given by Directors of the company under section 140(2)
of the Companies Act 1993.
Stuart McLauchlan
ChairmanNew Zealand Sports Hall of Fame
Chairman
Analog Digital Instruments Ltd ("Group
Instruments")
ChairmanOtago Community Hospice
ChairmanWoodworks Southern Limited
ChairmanSkyline Healthcare Group Limited
ChairmanNZ Formulary Limited
Partner/DirectorGS McLauchlan & Co Limited
DirectorArgosy Property Limited
DirectorCargill Hotel 2002 Limited
DirectorDunedin Casinos Limited
DirectorEBOS Group Limited
DirectorScenic Hotel Group
DirectorOrari Street Properties Limited
DirectorRosebery Holdings Limited
DirectorB Pac NZ
DirectorSouth Link Education Trust
DirectorHillcrest Properties Limited
John Kippenberger
DirectorRobotic Technologies Limited
Derek Charge
DirectorCharge Advisory Pty Limited
DirectorLarooma Farm Holdings Pty Limited
DirectorWhisky Tasmania Limited
DirectorHellyers Road Distillery Pty Limited
DirectorAC DC Bond Store Pty Limited
John Thorman
DirectorMarken New Zealand Limited
DirectorEnergizer NZ Limited
DirectorCorporate Services New Zealand Limited
DirectorTNX Limited
DirectorStarnow GP LLC
DirectorPro-Invest NZ Property 3 GP Limited
DirectorPro-Invest NZ Hotel Operating 3 Limited
DirectorFRV NZ1 Limited
DirectorKitaki Nominees Limited
DirectorKitaki Ventures GP Limited
DirectorJuvare Asia Pacific Limited
DirectorDBGIS Limited
DirectorGOT Technologies NZ Limited
DirectorRVJK Kiwi GP Limited
DirectorE & P Foundation Trustee Limited
DirectorDeel New Zealand Limited
DirectorBig Wednesday New Zealand Limited
DirectorLiveops New Zealand Limited
DirectorGAP II NZ GP Limited
Director
Primer Technologies New Zealand
Limited
DirectorFairfield TIR New Zealand Limited
Director
International Paper (New Zealand)
Limited
DirectorBaby Bunting NZ Limited
DirectorCSNZ Trustees Limited
DirectorNextdc New Zealand Holdings Limited
DirectorNextdc New Zealand Limited
DirectorLauriston Solar Holdco Limited
DirectorLauriston Solar Projectco Limited
John Berry
ChairmanAustralian Meat Processor Corporation
Director
JBS Australia Pty Limited & Associated
Companies
DirectorAndrews Meat Industries Pty Limited
DirectorPremier Beehive NZ Director
DirectorDiamond Valley Pork Pty Limited
Alternate DirectorSalmon Tasmania.
Brent Eastwood
Chief Executive/
Director
JBS Australia Pty Limited and Associated
Companies
DirectorAfoofa Development Pty Limited
DirectorAndrews Meat Industries Pty Limited
DirectorEnunga Enterprises Pty Limited
DirectorPremier Beehive NZ
DirectorDiamond Valley Pork Pty Limited
MemberBusiness Council of Australia
Alan Byers
Nothing to declare
Statutory Information continued
Annual Report 2023
Page 95
Director 2023 2022
S McLauchlanIndirect / beneficial interest421,266413,453
J KippenbergerLegal and beneficial interest108,840106,821
J ThormanIndirect / beneficial interest5,1855,089
D ChargeIndirect / beneficial interest5,2355,112
H EastwoodNon-beneficial interest*43,016,69841,950,535
J BerryNon-beneficial interest*43,016,69841,950,535
* The non-beneficially held shares of H Eastwood and J Berry are in their capacity as Directors of JBS Australia Pty Ltd,
the majority shareholder of the Group.
SHARE DEALINGS OF DIRECTORS
The details of disclosures by Directors of acquisitions or disposals by Directors of relevant interests in ordinary
shares of the company during the financial year ended 31 August 2023, in accordance with section 148(2) of the
Companies Act 1993, are shown below.
DirectorNature of relevant interest
Number of
shares acquired
/ (disposed)Date
Consideration
paid /
received
($)
J Berry
Issue of ordinary shares pursuant to the company’s dividend
reinvestment plan to JBS Australia Pty Ltd, being a person that
acts in accordance with the directions and instructions of the
Director in relation to the company’s ordinary shares (jointly
with other Directors of JBS Australia Pty Ltd).
551,187*11 May 20231,615,969
574,976*22 November 20221,594,120
H Eastwood
Issue of ordinary shares pursuant to the company’s dividend
reinvestment plan to JBS Australia Pty Ltd, being a person that
acts in accordance with the directions and instructions of the
Director in relation to the company’s ordinary shares (jointly
with other Directors of JBS Australia Pty Ltd).
551,187*11 May 20231,615,969
574,976*
22 November 2022
1,594,120
S McLauchlan
Issue of ordinary shares pursuant to the company’s dividend
reinvestment plan to Rosebery Holdings Limited, being a
person over whom the Director has power and control.
3,81611 May 202311,187
3,997 22 November 202211,080
J Kippenberger
Issue of ordinary shares pursuant to the company’s dividend
reinvestment plan.
98611 May 20232,890
1,033
22 November 2022
2,862
J Thorman
Power to exercise, or control the exercise of, a right to vote
attached to ordinary shares issued pursuant to the company’s
dividend reinvestment plan to the registered holder with
whom the Director has a personal relationship.
4711 May 2023137
49 22 November 2022136
D Charge
Power to exercise, or control the exercise of, a right to vote
attached to ordinary shares issued pursuant to the company’s
dividend reinvestment plan to the registered holder with
whom the Director has a personal relationship.
6011 May 2023175
63 22 November 2022173
* The non-beneficially held shares of H Eastwood and J Berry are in their capacity as Directors of
JBS Australia Pty Ltd, the majority shareholder of the Group.
DIRECTORS’ RELEVANT INTERESTS IN SHARES AS AT 31 AUGUST 2023
In accordance with the NZX Listing Rules, as at 31 August 2023, ordinary shares in the company in which each Director
has a relevant interest are specified in the table below.
Statutory Information continued
Scott Technology Limited
Page 96
USE OF COMPANY INFORMATION
The company received no notices from Directors wishing to use Company information received in their capacity as Directors,
which would not have ordinarily been available.
DIRECTORS AND OFFICERS INSURANCE
In accordance with the Companies Act 1993 and the Constitution of the company, Scott Technology Limited indemnifies and
insures its Directors and Officers, including Directors and Officers of subsidiary companies within the Group, in respect of
liability incurred for any act or omission in their capacity as a Director or Officer of the company. This insurance includes
defence costs. If an act or omission was to occur that was covered by this insurance, the company would pay the liability of the
act or omission and be reimbursed by the insurer.
SUBSIDIARY COMPANY DIRECTORS
Section 211(2) of the Companies Act 1993 requires the company to disclose, in relation to its subsidiaries, the total
remuneration and value of other benefits received by Directors and former Directors and particulars of entries in the
interests registers made during the year ended 31 August 2023.
No subsidiary has Directors who are not Directors of Scott Technology Limited or employees of the Group.
The remuneration and other benefits of such Directors are included in the Director's remuneration section of this Annual
Report and the remuneration and other benefits of employees totalling NZ$100,000 or more during the year ended 31
August 2023 are included in the relevant bandings for remuneration on page 98 to 99.
No remuneration is paid to any Director of a subsidiary company for their position as Director of that subsidiary company.
The persons who held office as Directors of subsidiary companies at 31 August 2023 were as follows:
Subsidiary companyDirectors
Scott Technology NZ Limited Stuart McLauchlan, John Kippenberger, Cameron Mathewson
Scott Automation Limited Stuart McLauchlan, Cameron Mathewson
Scott Technology US Limited Cameron Mathewson, Michael Crombie
QMT General Partner Limited Cameron Mathewson, Michael Crombie
QMT New Zealand Limited PartnershipQMT General Partner Limited
Scott Technology Americas Limited Cameron Mathewson, Michael Crombie
Scott Technology Europe LimitedCameron Mathewson, Michael Crombie
Scott LED LimitedCameron Mathewson, Michael Crombie
Rocklabs Limited Cameron Mathewson, Michael Crombie
Scott Technology Australia Pty Ltd Cameron Mathewson, Kelish Gounder, Gerry Farnell*
Scott Automation and Robotics Pty Ltd Cameron Mathewson, Kelish Gounder Gerry Farnell*
Scott Systems International Incorporated Cameron Mathewson, Jerry McDonough, Tony Joyce*, Michael Crombie*
Scott Systems (Qingdao) Co Limited Cameron Mathewson, Cathy Zhang, Michael Crombie
Scott Automation GmbH Aaron Vanwalleghem BV
Scott Technology Belgium BVAaron Vanwalleghem BV, Cameron Mathewson, Jonas Vromant
Scott Automation NV Aaron Vanwalleghem BV, Cameron Mathewson, Jonas Vromant
FLS Group BV Aaron Vanwalleghem BV, Jonas Vromant, Michael Crombie
FLS Systems NV Aaron Vanwalleghem BV, Frederic Hermier, Michael Crombie
Scott Automation a.s. Aaron Vanwalleghem BV, Michael Crombie Pavel Cevela, Vladimir Stoklas
Scott Automation SAS Aaron Vanwalleghem BV, Jonas Vromant
Scott Automation Limited Aaron Vanwalleghem BV
Normaclass s.a.s.Aaron Vanwalleghem BV
Rivercan S.A. Eric Luis Zeballos Pérez
* Ceased to hold office during the period.
Other than as set out in the Director's Interest table above, no interest disclosures for the purposes of section140(1) were
given by any Director of a subsidiary during the year ended 31 August 2023.
Statutory Information continued
Annual Report 2023
Page 97
SPREAD OF SHAREHOLDERS AS AT 31 AUGUST 2023
As at 31 August 2023, there were 81,198,794 ordinary shares in the company on issue, which were held as follows:
RangeNumber of ordinary security holders% of issued capital
1-1,0007950.45
1,001-5,0001,1303.58
5,001-10,0003893.52
10,001-50,0003718.95
50,001-100,000242.03
Greater than 100,0003181.47
Total shareholders2,740100%
TWENTY LARGEST SHAREHOLDERS AS AT 31 AUGUST 2023
RankRegistered shareholderNumber of shares
% of total shares
in the company
1 JBS Australia Pty Limited 43,076,698 53.05
2 Oakwood Securities Limited 5,575,039 6.87
3 Accident Compensation Corporation 2,225,068 2.74
4 Leveraged Equities Finance Limited 1,915,172 2.36
5 Forsyth Barr Custodians Limited 1,384,648 1.71
6 Russell John Field & Anthony James Palmer 1,357,585 1.67
7 JBWERE (NZ) Nominees Limited 1,196,325 1.47
8 Custodial Services Limited 1,130,415 1.39
9 Citibank Nominees (NZ) Ltd 707,299 0.87
10 Jack William Allan & Helen Lynnette Allan 615,000 0.76
11 New Zealand Depository Nominee 572,573 0.71
12 Wairahi Investments Limited 500,000 0.62
13 Jarden Custodians Limited 479,982 0.59
14 New Zealand Permanent Trustees Limited 465,000 0.57
15 Public Trust Forte Nominees Limited 428,326 0.53
16 Rosebery Holdings Limited 421,266 0.52
17 Forsyth Barr Custodians Limited 402,183 0.50
18 HSBC Nominees (New Zealand) Limited 391,052 0.48
19 FNZ Custodians Limited 332,464 0.41
20 Turha Limited 325,000 0.40
SUBSTANTIAL PRODUCT HOLDERS
The following substantial product holder information is given pursuant to section 293 of the Financial Markets Conduct Act 2013.
These substantial product holders are shareholders who have a relevant interest of 5% or more of a class of quoted voting products
of the company according to the company’s records. As at 31 August 2023, details of the substantial product holders of the company
and their relevant interests in the company’s ordinary shares were as follows. As at the balance date (31 August 2023) there were
81,198,794 ordinary shares in the company on issue.
Name of substantial
product holder
Number of ordinary voting
securities as at 31 August 2023% of issued capital
JBS Australia Pty Limited 43,076,698 53.05
Oakwood Securities Limited 5,575,039 6.87
Statutory Information continued
Scott Technology Limited
Page 98
DONATIONS
The Group made no donations during the year (2022: $0).
CREDIT RATING
The company currently does not have a credit rating.
WAIVERS FROM NZX LISTING RULES
No waivers were granted by NZX or relied on by the company during the 12 month period ended 31 August 2023.
REMUNERATION
DIRECTORS’ REMUNERATION
Non-executive Directors received the following Directors’ fees from the company as follows:
Non-executive Director
Directors’ fees FY23
NZ$’000s
Directors’ fees FY22
NZ$’000s
S McLauchlan (Chair) 140 140
J Thorman 75 74
D Charge 65 65
Total 280 279
Non-executive Directors also receive reimbursement for reasonable travel, accommodation and other expenses incurred
in the course of performing their duties. Directors’ fees exclude GST, where applicable.
Remuneration and meeting costs of Directors representing JBS Australia Pty Ltd are paid directly by the JBS Group
of Companies.
CHIEF EXECUTIVE OFFICER REMUNERATION
The review and approval of the CEO’s remuneration is the responsibility of the Board.
The CEO’s remuneration comprises:
• a fixed base salary, including Kiwisaver contributions by the Group;
• an at-risk short-term incentive (STI) payable annually subject to agreed upon Company and individual key performance
indicators; and
• a long-term incentive (LTI) programme that includes the payment of a monetary amount after a period of approximately
three years of continuous full-time employment. The payment amount is determined by the differential between the
company’s share price at the beginning of the period and the end of the period, after adjusting for any event that affects
the share price, such as capital reconstructions, bonus issues or dividends.
The remuneration of the Chief Executive Officer (CEO) is shown below:
Salary and
benefits
Short-term
incentive
Long-term
incentive
Total
remuneration
Chief Executive Officer remunerationNZ$’000sNZ$’000sNZ$’000sNZ$’000s
John Kippenberger
FY23 805 1,092 390 2,287
FY22 751 169 145
1,065
AS AT 31 AUGUST 2023
Annual Report 2023
Page 99
Salary rangeNumber of employees
$100,000-$110,00035
$110,001-$120,00041
$120,001-$130,00036
$130,001-$140,00032
$140,001-$150,00021
$150,001-$160,00023
$160,001-$170,00024
$170,001-$180,00023
$180,001-$190,00014
$190,001-$200,0006
$200,001-$210,00012
$210,001-$220,000
9
$220,001-$230,000
6
Salary rangeNumber of employees
$230,001-$240,000
2
$240,001-$250,000
6
$250,001-$260,000
6
$260,001-$270,000
4
$270,001-$280,000
2
$280,001-$290,000
4
$290,001-$300,000
2
$300,001-$310,000
1
$310,001-$320,000
2
$320,001-$330,000
1
$340,001-$350,0001
$350,001-$360,000
2
$400,001+
5
EMPLOYEE REMUNERATION
Employee remuneration consists of a fixed salary and, on an employee-by-employee basis, may also include variable or
'at-risk' remuneration.
Fixed remuneration includes: an individual’s base salary, for core responsibilities, capability and performance, along
with any superannuation scheme contributions by the Group and any other health or disability benefits provided by the
Group. The base salary is benchmarked to the market.
Variable remuneration includes:
• short-term incentives (STIs) that are linked directly to individual and company performance; and
• a long-term incentive (LTI) programme that includes the payment of a monetary amount after a period of
approximately three years of continuous full-time employment. The payment amount is determined by the differential
between the company’s share price at the beginning of the period and the end of the period, after adjusting for any
event that affects the share price, such as capital reconstructions, bonus issues or dividends.
The table below shows the number of employees and former employees of the Group, not being Directors or CEO of
the Group, who, in their capacity as employees, received remuneration and other benefits during the year ended
31 August 2023 totalling at least NZ$100,000. This remuneration includes redundancy payments but excludes any
long-term incentives that have not been triggered.
The Group operates in Australasia, Europe, China and the United States where market remuneration levels differ.
Of the employees noted in the table above, 70% are employed by the Group outside of New Zealand. The offshore
remuneration amounts are converted into New Zealand dollars.
Remuneration continued
Scott Technology Limited
Page 100
The Directors are responsible for the preparation, in accordance with New Zealand law and generally accepted
accounting practice, of financial statements which present fairly, in all material respects, the consolidated financial
position of Scott Technology Limited and its subsidiaries (“the Group”) as at 31 August 2023 and the results of their
operations and cash flows for the year ended 31 August 2023.
The Directors consider that the financial statements of the Group have been prepared using accounting policies
appropriate to the Group’s circumstances, consistently applied, and are supported by reasonable and prudent
judgements and estimates, and that all applicable New Zealand equivalents to International Financial Reporting
Standards have been followed.
The Directors have responsibility for ensuring that proper accounting records have been kept which enable them to
ensure that the financial statements comply with the Companies Act 1993 and the Financial Markets Conduct Act 2013.
The Directors have responsibility for the maintenance of a system of internal control designed to provide reasonable
assurance as to the integrity and reliability of financial reporting. The Directors consider that adequate steps have
been taken to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
The Directors present the financial statements of Scott Technology Limited for the year ended 31 August 2023.
These financial statements are dated 18 October 2023 and are signed in accordance with a resolution of the directors
made pursuant to section 461(1)(b) of the Financial Markets Conduct Act 2013.
For and on behalf of the directors
Stuart McLauchlan
Chairman and Independent Director
John Kippenberger
Chief Executive Officer
AS AT 31 AUGUST 2023
DIRECTORS' RESPONSIBILITY
STATEMENT
PARENT COMPANY
Registered office
Scott Technology Limited
630 Kaikorai Valley Road
Dunedin 9011
New Zealand
+64 3 478 8110
Mailing address
Scott Technology Limited
Private Bag 1960
Dunedin 9054
New Zealand
Website
www.scottautomation.com
Chairman and Independent Director
Stuart McLauchlan
Independent Directors
John Thorman
Derek Charge
Directors representing JBS Australia Pty Ltd
(Non-independent Directors)
Brent Eastwood
John Berry
Alan Byers
Chief Executive Officer
John Kippenberger
REGIONAL CONTACTS
New Zealand
Andrew Arnold
+64 21 670 975
a.arnold@scottautomation.com
Australia
Rob Niggl
+61 438 920 486
r.niggl@scottautomation.com
China
Cathy Zhang (Smart)
+86 186 6168 1911
c.smart@scottautomation.com
Europe
Aaron Vanwalleghem
+32 473 477 590
a.vanwalleghem@scottautomation.be
Americas
Jerry McDonough
+1 980 475 9860
j.mcdonough@scottautomation.com
PROFESSIONAL SERVICES
Share registry
Link Market Services Ltd
PO Box 91976
Auckland 1142
+64 9 375 5998
+64 3 375 5990 (fax)
enquiries@linkmarketservices.co.nz
Bankers
ANZ Bank New Zealand Ltd
Solicitors
Gallaway Cook Allan
Auditor
Deloitte Limited
Annual Report 2023
Page 101
DIRECTORY
---
1
FY23
RESULTS
INVESTOR PRESENTATION
SCOTT TECHNOLOGY LIMITED
18 October 2023
Contents
PRESENTED BY
John Kippenberger
Chief Executive Officer
Cameron Mathewson
Chief Financial Officer
“In a year defined by transformation and progress, we stand at the threshold of
exciting opportunities, driven by our unwavering commitment to our Scott 2025
Strategy, focusing on accelerated growth and productisation.”
_
John Kippenberger
FY23 performance
Strong performance across the business at
revenue, margin and EBITDA
3-7
Scott 2025 Strategy update
Progression of strategy by focusing on
key areas of strength for the business
8-11
Core sector performance
Core sectors providing growth across the
business through sales and services
12-17
Sustainability, people & planet
People updates with focus on ESG projects
commenced in FY23
18-22
Key points summary23
Casey Jenkins
Group GM – People,
Marketing & Minerals
3
FY23
PERFORMANCE
FY23 performance snapshot
$268M
REVENUE
EBITDA
$30M
•Forward Work represents contracted activity. It is not
an indicator of revenue over a set period of time
DIVIDENDS PER SHARE (Cents)
EARNINGS PER SHARE (Cents)
FY23 8.0 | FY22 8.0 | FY21 6.0
FY23 19.3 | FY22 15.9 | FY21 10.8
•Information is Continuing Operations (excludes the
divestment of the non-core Robotworx business)
FORWARD WORK*
$179M
SALES
SERVICES
$16M
27%
GROUP MARGIN %
30%
CORE MARGIN %
FY22 $222M +21%
FY21 $206M +8%
FY22 29%
FY21 30%
FY22 24%
FY21 24%
FY22 $24M +27%
FY21 $21M +14%
FY22 $172M +4%
FY21 $119M +44%
FY22 $19M -16%
FY21 $9M +115%
FY23 results summary
Results Snapshot (NZ$m)
FY23FY22FY21
Revenue267.5221.8206.0
Operating EBITDA30.423.921.0
Non-trading adjustments*(0.7)--
EBITDA29.723.921.0
Net Profit After Tax (NPAT)**15.412.78.4
Net Cash / (Debt)(0.1)(8.0)1.3
Net Cash / (Overdraft)12.43.912.2
Bank Loans(12.5)(12.0)(10.9)
Operating Cash Flow20.26.313.4
* FY23 EBITDA includes $0.7m of expenses related to the strategic review announced in June 2023
** FY22 reported NPAT is $0.1m as it captures $12.6m of non-cash write offs from the discontinued Robotworx operation
SCOT T 2025
STRATEGY
UPDATE
2025 Strategy
Engineering Scott to high performance
34%
34%
16%
5%
11%
Scott have intensified focus on converting innovation into market-
ready products that deliver tangible value to our customers.
•Our Strategy of supplying repeatable products into large addressable markets continues
to gather momentum.
•Revenue from Core sectors grew by 27%. Core Margin in dollars rose by 33%, as margins
lifted from 29% to 30%.
•Our compelling product offerings were successful in attracting significant new
customers, such as our first BladeStop installs for Cargill and the Poultry Trusser for
Costco, both in our key US target market.
•MHL grew by a record 35% as the large order book in Europe was converted to revenue
and the US AGV business signed new orders with the likes of McCain Canada.
•Forward order book remains strong at $195m, with 86% from Core Sectors.
•Geographic contribution mix with expansion across Europe and US in line with
Scott 25 Strategy.
•US revenue contribution increases from 24% of group revenue in F22 to 34% in F23, as the
demand for Poultry Trussers grows
•Europe grows from 26% to 34% as a result of the MHL strong momentum
Core Sector Summary
Strategy delivering accelerated growth across core business & geographies
Meat
29%
MHL
35%
Mining
15%
ROB
21%
FY23
Revenue
$268m
Core business
Revenue
$211m
79%
China
+ RoW
NZ
AU
Europe
USA
FY23
Revenue
$268m
REVENUE BY GEOGRAPHY
REVENUE BY SECTOR
Continued leadership across core sectors
Revenue mix %
Revenue growth
% (vs pcp)
Margin %
21%29%
PROTEINREST OF BUSINESS
15%
MINERALS
35%
MHL
2%33%4%35%
14%33%40%23%
FY23
Customers
43.7
47.9
63.7
FY21FY22FY23
49.6
53.3
71.5
FY21FY22FY23
Core sectors driving strong growth
Scott’s strategy of more revenue
from proven systems, product
and service delivers another
period of growth
•Core Sectors contributed the
majority of growth during the
FY23 period at 30% margin
(+139bps).
•Core Sectors represent 79% of
Group Revenue (up from 75%).
•Rest of business operations
represented 21% of revenue and
11% of margin in FY23.
Margin (%)
CoreGroupCoreGroup
Revenue (NZ$m)Margin (NZ$m)
27%24%24%
30%31%29%
143
167
211
FY21FY22FY23
206
222
268
FY21FY22FY23
CAGR (%)
11
CORE SECTOR
PERFORMANCE
& OUTLOOK
Material Handling: Impressive growth fromkey
markets Europe and US
34%34%28%
26%
20%23%
Promising momentum in global markets
•MHL continues to grow strongly in Europe.
•With the recent leadership amalgamation, established
palletisationsolutions are being presented to the US market.
•Strong revenue growth from FY22 (+35%), higher than CAGR
from FY21 of 18%, due to conversion of forward work as
supply chain pressures ease.
•Strong forward order book of $127m:
-US Palletisationwith $66m confirmed for 2 projects
-Materials Handling EU: confirmed contracts with
Clarebout& new customer IncomLeone
-Transbotics US: confirmed contracts with major global
businesses, including Microsoft, Novelis, and Gulfstream.
•Sales growth driven by strong order books means that
service mix drops to 28%, despite the increase of service
revenue of $3m
Margin improving after period of disruption
•More than proportionate increase in margins (+56% growth)
as a focused business concentrates on lower risk more
profitable projects.
Revenue (NZ$m)
Margin (NZ$m)
Service
Sales
Total
Service
Sales
Total
Service
mix (%)
Margin
(%)
9.2
5.0
13.0
8.5
8.9
8.6
17.7
13.9
21.6
FY21FY22FY23
44.7
46.5
67.9
23.1
23.6
26.5
67.8
70.0
94.4
FY21FY22FY23
Protein: Strong demand continues for high margin
products and solutions
Revenue (NZ$m)
Margin (NZ$m)
Strong period for BladeStop and meat products
•Continued demand for Scott meat solutions as customers address
labour and skills shortages and rising health and safety
requirements.
•Strong demand for poultry trussers, with 10 units ordered in FY23
for Costco. Advanced completion resulting in 6 units recognised
in revenue.
•Key sales of Lamb Primal to Silver Fern Farms (NZ), a successful
BladeStop trial at Cargill (US) and additional BladeStop saws sold
to Walmart.
•33% revenue growth on FY22 underpinned by strong
performance from:
-Momentum in new Poultry Trusser solution, contributing 13%
of the growth
-BladeStopSaws in Europe (+36%) and Americas(+51%), which
is now the region with the most sales in FY23
-Global BladeStop service revenue (+59%).
Margin dollars up 40% vs FY22 (CAGR FY21: +38%)
•Strong margins of 33% in FY23, driven by higher proportion of
services revenue and product sales focus.
•Focus on efficiency remain high to keep growing Margin %.
23%
Service
mix (%)
28%33%
Margin
(%)
28%
32%
33%
Service
Sales
Total
Service
Sales
Total
36.1
41.3
50.7
10.9
15.8
25.3
47.0
57.1
76.0
FY21FY22FY23
9.5
13.4
17.1
3.9
4.7
8.3
13.4
18.2
25.4
FY21FY22FY23
Minerals: Reliable Rocklabs products deliver
improved margin
33%
30%
37%
44%
40%
40%
Strong global demand outlook for old and new
minerals from mining manufacturers and
distributors
•Positive launch of ‘modular’ Rocklabssolutions for
mining and laboratory customers, as evidenced by first
contract win to Mineral Resources Limited of $12m
($3.3m in FY23)
•An estimated $3msales from Russia missed in the
period due to the war in Ukraine.
•Partially offset by strong and high margin service
growth of 21% (+$1.1m)
High margin translates growth of service mix
•Overall margin increase by 5% shows strong revenue
from Rocklabsand good progress while AMS and
Energize are progressing well.
Revenue (NZ$m)
Margin (NZ$m)
Service
Sales
Total
Service
Sales
Total
Service
mix (%)
Margin
(%)
19.1
27.5
26.0
9.3
12.0
15.1
28.4
39.6
41.2
FY21FY22FY23
9
11
10
3.8
5.2
6.3
12.6
15.9
16.6
FY21FY22FY23
Rest of Business: Focus delivers margin
improvement
Revenue down in FY23 as legacy Mining
Systems projects near completion
•Strategic focus away from one off complex projects sees
loss-making mining systems revenue and associated low
margin taper off, resulting in margin growing by 44%/
+400bps despite revenue growth of 2%.
•Revenue growth from Appliances (+37% on FY22) due to
FY23 performance with the Sub Zero door line in the US,
Midea in China, Vaillant and Liebherr in Europe.
•Forward work on Appliance of $25m consisting mainly
of low risk repeat customers systems and upgrade
projects.
•Appliance business remains challenging with the overall
contribution to group profitability still being marginal.
Revenue (NZ$m)
Margin (NZ$m)
Mining
systems
Industrial
automation
Total ROB
Service
mix (%)
Margin
(%)
5%10%10%
9%10%14%
Appliances
19.8
29.0
39.8
13.1
8.9
8.1
29.9
17.2
8.1
62.9
55.0
56.0
FY21FY22FY23
5.9
5.4
7.8
FY21FY22FY23
16
SUSTAINABILITY
PEOPLE & PLANET
People, Purpose and Place
Leading a sustainable future
Safety & wellbeing culture continues to mature
LTI
MTI
First Aid
Injuries
EP&D
/ Near Miss
Hazards Reported
Management
Conversations
FY22
Fatality
FY23
0
5
0
38
28
1035
251
0
9
5
30
56
872
233
Strong engagement delivers positive
improvements proving mature safety culture
•Positive engagement with BeScott Safety App, with 1035 hazards reported
in FY23 compared to 872 hazards reported in the same period last financial
year.13% increase in identifying and reporting Hazards, Near Misses and
Early Pain & Discomfort.
•Lost time Injury Frequency rate (LTIFR) continued a downward trend;
LTIFR sitting at 4.3compared to 8.7 in August 2022, 30% reduction.
•Continuous improvement in workplace safety and wellbeing is a
fundamental commitment, the team is working hard on developing a
Critical Risk Management Strategy, being launched next month.
Positive engagement and momentum in ESG
100% GHG emissions
footprint measured
and verified.
Progress was made in
measuring GHG emissions in
China and the US. Data has
now been collected and
audited for the whole business.
Climate related
disclosures
Work under way to prepare
business for 2024 reporting
requirements, gap analysis
completed.
Expanded employee
benefits programme.
Featuring increased
employer contributions to
KiwiSaver, enhanced
medical insurance offerings
and celebrating employees
through staff awards.
Pathways support talent
development
33 young people globally in
an internship, apprenticeship
or graduate programme,
11 new this year.
Investing in
our future with
University of Canterbury
Final year project sponsorship
and the launch of the Scott
Technology woman in engineering
scholarship in 2023.
Engagement initiatives
bring positive results
to our eNPS score.
Highest overall score to date at
83%, FY22 82%. Highest return
rate so far at 78% across the
group, target 70%, FY22 63%.
Positive employee engagement
is a key measure of success and
the business is committed to
ensuring it retains and attracts
the top talent.
Carbon emissions-management journey
Understanding the scale of our carbon footprint and the
impact of our actions, allows us to identify opportunities
for reduction and improvement.
•100% of our global GHG Emissions footprint has been measured, audited
and verified. Additionally, we have made seen reductions across both ANZ
(13%) and Europe (9%) on FY19.
•Next steps for our carbon emissions management include:
•Expanding the boundary of the Scope 3 measurement especially for
Freight and Purchased Goods and Services
•Factor in group revenue growth to see the growth in emissions and
the impact on target setting
•Development of regionalised reduction strategies and finalise the
group reduction targets (absolute and intensity).
•Factor in group revenue growth to see the growth in emissions and the
impact on target setting.
•Finalise the group reduction targets (absolute and intensity).
ANZ
1,495 tCO
2
e
Unites States
192 tCO
2
e
China
402 tCO
2
e
Europe
2,490 tCO
2
e
Business
Travel 15%
708 tCO
2
e*
Transport
Fuel 22%
995 tCO
2
e*
Stationary
Fuel 6%
266 tCO
2
e**
Electricity
22%
1,009 tCO
2
e**
Materials
31%
1,418 tCO
2
e
Packaging
1%
29 tCO
2
e
Waste
1%
60 tCO
2
e
Refrigerant
gas 1%
42 tCO
2
e
Other
1%
51 tCO
2
e*
FY22 GLOBAL GHG EMISSIONS FOOTPRINT
21
KEY POINTS
SUMMARY
Key Points Summary
1
Scott continues to experience ongoing demand for automation as our customers invest
to drive productivity, safety, and toovercome ongoing globallabourshortages.
2
Success from the Scott 2025 strategy to focus on core areas of proven expertise and sell into large addressable
markets. This delivers core revenue growth of 22%, making up 79% of group revenue and 89% of group margin.
3
These proven and repeatable products delivered Sales margin of 24% and Services / Aftermarket margin of 35%
Which lifted group margin from 24% to 27%.
4
Continued track record of managing costs efficiently and taking revenue growth to the bottom line
As demonstrated by record growth of operatingEBITDA of 27% from FY22 to $30.4m.
5
Demand for automation combined with clear Strategy maintains a strong forward order book totaling $195m.
6
We continue to move efficiently though the various stages of ESG, Strategy and Culture.
7
Winner of the 2022 DeloitteBest Growth Strategy Award recognising outstanding growth performance.
8
In June, Scott announced its intention to undertake a strategic review, this review is still ongoing. Scott will
update on developments when the strategic review is completed.
23
THANK YOU
Q&A
4.0
---
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at June 2023
Please do not amend or delete individual rows. As this template relates to prescribed content, changes to content
should only be made where it is clearly indicated that this is permitted, otherwise, if an Issuer considers a particular
element does not apply, mark the row as N/A, Any other changes to this prescribed form must first be approved by
NZX as required under NZX Listing Rule 3.26.1.
Results for announcement to the market
Name of issuer Scott Technology Ltd
Reporting Period 12 months to 31 August 2023
Previous Reporting Period 12 months to 31 August 2022
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$267,526 21%
Total Revenue $269,044 16%
Net profit/(loss) from
continuing operations
$15,436 22%
Total net profit/(loss) $15,436 17,051%
Interim/Final Dividend
Amount per Quoted Equity
Security
$ 0.04
Imputed amount per Quoted
Equity Security
Nil
Record Date 7 November 2023
Dividend Payment Date 21 November 2023
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.561 $0.387
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
For commentary on the results please refer to the commentary
in the related NZX release. Further information is also set out in
the audited financial statements of the Company for the 12
months to 31 August 2023 which accompanies this information.
Authority for this announcement
Name of person
authorised
to make this announcement
Cameron Mathewson, Chief Financial Officer
Contact person for this
announcement
Cameron Mathewson
Contact phone number 03 478 8110
Contact email address c.mathewson@scottautomation.com
Date of release through MAP
18 October 2023
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 Limited
Financial product name/description Ordinary shares
NZX ticker code SCT
ISIN (If unknown, check on NZX
website)
NZSCTE0001S3
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 7 November 2023
Ex-Date (one business day before the
Record Date)
6 November 2023
Payment date (and allotment date for
DRP)
21 November 2023
Total monies associated with the
distribution
1
$3,247,951.76
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.0400000
Gross taxable amount
3
$0.0400000
Total cash distribution
4
$0.0400000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $0.00000000
Section 3: Imputation credits and Resident Withholding Tax
5
Is the distribution imputed Fully imputed
Partial imputation
No imputation
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
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“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.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.
If fully or partially imputed, please
state imputation rate as % applied
6
0%
Imputation tax credits per financial
product
$0.00000000
Resident Withholding Tax per
financial product
$0.01320000
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP
N/A N/A
Date strike price to be announced (if
not available at this time)
N/A
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
N/A
DRP strike price per financial product
N/A
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
N/A
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Cameron Mathewson, Chief Financial Officer
Contact person for this
announcement
Cameron Mathewson, Chief Financial Officer
Contact phone number 03 478 8110
Contact email address c.mathewson@scottautomation.com
Date of release through MAP
18 October 2023
6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.