Ian Davis

Nuplex Industries Limited

Nuplex

–

an industrial resins & specialties business

37

ASX Small to Mid Caps Conference Hong Kong, 29 October 2009

John Hirst

–

Managing Director

Nuplex is an industrial resins & specialties company75% of sales from manufactured products25% of sales from distribution of 3rd party products

Operates in two business groups, Resins and SpecialtiesOne of the world’s top 10 Resin manufacturersOne of Australasia’s top 4 Specialties distributors

Manufactures in 10 countries and sells to more than 80 countries

1,650 employees

Sales of around A$1.3 billionUS$1.1 billionNZ$1.5 billion

Target EBITDA to Sales Ratio is 9%Range over the cycle of 7 – 10%

Net debt to debt + equity is less than 20%

38

Who we are

Stock exchange listings ticker code: NPXQuoted on ASX since 1999Quoted on NZX since 1956

Market capitalisationAUD $380 millionNZ$460 million

53 years as a profitable listed company

190 million shares on issue

Approaching 11,000 shareholders

Share ownershipInstitutional 37%New Zealand total  87%

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From the investor viewpoint

Performance development1998 ‐

2009

Sales

Dividend

Specialties

Resins

• Nuplex resins and specialties –

essential ingredients for things we all use

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Coating ResinsInputs for production of industrial and decorative paints

Composite ResinsInputs for manufacture of glass-reinforced composite products

Paper ResinsFunctional resins and process control inputs for paper manufacture

Agency & DistributionSpecialty products for chemicals, plastics and life sciences industries

MasterbatchColour and process additives for plastic moulding and fabrication

Construction ProductsFunctional flooring, cladding and waterproofing for construction

What we do

Operations Australasia Asia Europe Americas

Resins

Specialties

Water‐based, solvent based and powder 

resins for the coating market; composite 

resins and paper resins

Agency and distribution including specialty 

products for the chemicals, plastics and life 

sciences industries; Masterbatch; and 

construction products

Water‐based, solvent based and 

powder resins for the coating 

market; composite resins 

Masterbatch

Water‐based, solvent 

based and powder resins 

for the coating market

Water‐based, solvent 

based and powder resins 

for the coating market

Nuplex’s global operations

41

Nuplex’s manufacturing locations

• Commonality between segmentsRaw materials

Plant & equipment

Process & technology

Compliance

• DifferencesEnd markets

Application technology

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Resins business

Resins for coatings

• A global business with varying regional characteristics• Australasia

Decorative 70%

Specialty 30%• Asia

Decorative 50%

Specialty 50%• Europe & Americas

Decorative 20%

Specialty 80%

• Principal end markets• Automotive

Marine• Furniture

Electronics• Protective coating

Industrial• Decorative

Construction

• Principal products• Water based, solvent based, powder resins

• Coating industry growth rate• Global 4%

• Market dynamics• Manufacturing is shifting to Asia• Increasing demand for specialty coatings and high quality• Market demanding low environmental impact products

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≈80% of Resins business

Resins for composites

• A regional business with varying sophistication• Australia

Specialty 65%

General 35%• New Zealand

Specialty 70%

General 30%• South East Asia

Specialty 85%

General 15%

• Principal end markets• Marine & leisure

Swimming pools

Tanks• Transportation

Infrastructure

Mining

• Principal products• Polyester, epoxy & vinyl ester resins, gelcoats & flowcoats• Reinforcements, catalysts, auxiliaries, engineering services

• Composites industry growth rate• Global 5 ‐

6%• The most volatile resin segment

– Highly reflective of economic conditions

• Market dynamics• New applications continually being found for growth• Asia moving towards higher quality requirements

44

≈15% of Resins business

Resins for paper

• A regional business• Australia• New Zealand

• Principal end markets• Tissue

Fine paper• Newsprint

Packaging board

• Principal products• Functional resins for

sizingcoatingwet strength

• Process aids for paper making

• Industry sector growth rate• GDP

• Market dynamics• Stable business sector• Firm currency creates export difficulties

45

≈5% of Resins business

• Commonality with Resins businessMarkets with resins

Vertical supply

Available laboratories

Industrial selling skills

Compliance management

• Commonality within SpecialtiesMasterbatch & plastics sales

• DifferencesMinimal manufacture

Some unique markets

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Specialties business

Specialty products

• A regional business• Specialty Products are Nuplex’s growth focus in Australasia

• Principal end markets• Manufacturing industry• Food & pharma processing• Mining

• Principal products• Chemicals• Plastics• Life Science products

• Growth rates• Low in Chemicals & Plastics• Moderate in Life Sciences

• Market dynamics• Consolidation of global supply

– Creates risk & opportunity

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≈75% of Specialties business

Masterbatch

• A regional business• New investment and growing in Asia

• Principal end markets• Packaging plastics• General plastic articles• Textile fibres

• Principal products• Colour concentrates in plastic• Colour concentrates in aqueous media• Additive packages in plastic

• Growth rates• Low in mature markets• 10+% in growing markets

• Market dynamics• Smaller batch sizes• Quicker service

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≈15% of Specialties business

Construction products 

• The heritage Nuplex business – NZ dominated• Differentiated through relationship with linked Contractors

• Principal end markets• Flooring systems

industrialcommercial

• Commercial waterproofing• Industrial & commercial hygienic surface finishing • Residential cladding

• Principal products• Resin & resilient flooring, adhesives, tools

• Lightweight plasters & polystyrene cladding

• Sheet & liquid membranes

• Growth rates• GDP

• Market dynamics• Agriculture, horticulture & residential markets important

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≈10% of Specialties business

Our markets

• Australasia• Soft in NZ with no signs yet of recovery – down 15% over 2008• Australia has recovered from its low point• Still down 15% but gaining real ground particularly in composites

• Americas• No signs of recovery with continuing weakness• Shifted emphasis to higher margin specialties

• Europe• Uplift from late in May with good demand post summer holidays• Still down 20% from 2008 –

but this is a good recovery

• Asia• China showing continuing growth

– Moved market focus to high end products as capacity becoming constrained• Vietnam returned to strong demand• Good signs throughout rest of SE Asia that demand is returning

– High end, high margin market remains strong

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Indicative 2010 v 2009

Our margins and costs

• Raw material costs• Costs have come off 4 year highs to provide margin uplift across

all regions• Upwards pressure now which will be largely recovered through pricing

• Discretionary spending• Complete ban has reduced operating costs significantly

• Restructuring• All operations have matched production to market requirements• Fixed cost reduced by $5 – 7 million annually

– Australasia– USA

• Further $5 – 7 million annual reduction targeted for the current year 51

Raw material cost indexUS$ through Sept 09

2009 highlights

o Sales $1.5 billion with demand generally stabilised

o Remained profitable while demand fell by 20‐30% ‐

$16.7 million

o Asian earnings up 120%o China and Vietnam especially strong 

o Operating cash flow up 61% to $123 million – a record

o Total dividends of 8.5 cents per shareo 68% of net operating profit

o Gearing 20% at 30 June 2009o Headroom in borrowings around $200 million

o New capacity for composite resins commissioned in Australia and Indonesiao Improved efficiency and ability to produce broader product range

o Raw material costs eased on low demando Generally beneficial to margins

*All figures NZ$ (NZ$1 = US$0.75 at 22 October) 5

2

Seek preferred supplier position in key markets throughSuperior technical serviceExceptional operational efficiency and serviceSensitivity to customer profit and sustainability

ResinsGrow global coatings business

o Greenfield investment in specialty segments and growth economieso Consolidation of mature markets in both specialty and general product segments

Grow composites business by transitioning into adjoining marketso South‐east Asia is primary focus

Invest in sustainable technologieso Environmentally‐friendly low and zero emission products and processeso Raw materials from renewable resourceso Low cost options with near comparable performance

SpecialtiesBroaden product range – ‘one‐stop shop’

o Focus on higher growth and sustainable segments

53

Strategy

Outlook

o Trading conditions generally stable to improvingo General optimism that there is no downside from hereo Supply chain now in line with underlying demand

o Recovery slow but will gain momentum in the mid term

o Business will be right sized

o Investment to continueo Innovative and sustainable technologyo Capacity in high growth regions

o Relatively low demand for capitalo Approximately $70m million capex over 3 yearso Major Items are

Suzhou expansionNew ERP systemVietnam expansionWacol warehouse

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Nuplex – a growth company

Forecast

Regional Influence on EBITDA growth

New Zealand

Australia

Global

Asia

THANK YOU

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Additional Material

• Regional EBITDA history – 8 x half year periods

• Board of directors

• Executive managers

• 5 year history of key financials

• Analysts forecast and consensus

57

Regional EBITDA history

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EBITDA  – NZ$ EBITDA  – NZ$

59

Directors

Rob AitkenIndependent chairmanLocation: Sydney, AustraliaSkills: Chemical engineering,

International business

David JacksonIndependent directorLocation: Auckland, New ZealandSkills: Accounting, audit

Bryan KensingtonIndependent directorLocation: Auckland, New ZealandSkills: Accounting, insolvency

Michael WynterIndependent directorLocation: Sydney, AustraliaSkills: Legal, Asian business

John HirstManaging directorLocation: Sydney, AustraliaSkills: Chemist, Coatings and

Resins broad experience

Barbara GibsonIndependent directorLocation: Melbourne, AustraliaSkills: Chemist, Chemical Industry

General Management

Peter SpringfordIndependent directorLocation: Auckland, New ZealandSkills: Industrial company senior 

management, Asian business

John Hirst – Group managing director

Management structure

Executive Management

General Management

General counsel & 

company secretary

James Williams

Regional operations 

managers–

Australasia– Asia– Americas– Europe

Chief Financial Officer

Ian Davis

Group General 

Manager Operations

Tony Cooke

Group General 

Manager Specialty 

ProductsCharles Northcote

Group General 

Manager Functional 

MaterialsSam Bastounas

Group General 

Manager Nuplex 

ResinsRob Harmsen

Group financial 

controller

Group general 

manager –

Communications and 

Business Systems

General managers– PML Group– APS (Australia)– APS NZ

General managers– Composites–

Construction–

Masterbatch– Paper

General managers– Americas– Asia–

Australasia– Europe Middle   East & Africa

Group purchasingManager

Group generalmanager –

Technology

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Nuplex 5 year history

2009 2008 2007 2006 2005

Sales 1,494m 1,532m 1452m 1301m 929m

EBITDA 92m 122m 104m 103m 82m

Operating profit 24m 53m 38m 35m 32m

Dividend per share $0.193* $0.43 $0.36 $0.335 $0.265

Net tangible assets 355m 205m 166m 195m 160m

Debt % funds employed 17% 46% 50% 46% 50%

61All amounts are in NZ$                                          

* Adjusted for share rights, placement and consolidation for guidance only

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Broker Date Recommendation Forward share priceABN Amro Craigs 27/08/09 Buy NZ$2.76

First NZ Capital 28/08/09 Outperform NZ$3.09

Forsyth Barr 27/08/09 Hold NZ$2.54

GSJBW (NZ) 27/09/09 Buy NZ$2.95

Macquarie (NZ) 28/08/09 Outperform NZ$2.70

UBS 27/08/09 Neutral NZ$2.30

Actual FY09 FY10 FY11 FY12Forecast: Revenue (NZ$) 1.49 billion 1.46 - 1.60 billion 1.53 - 1.67 billion 1.57 - 1.72 billion

Forecast: EBITDA (NZ$) 92 million 95 - 106 million 101 - 120 million 109 – 131 million

Consensus EBITDA 91.5 million 100.4 million 110.3 million 119.3 million

Analysts’

forecasts