Today’s Agenda

1. YTD performance and year-end

2. Capital structure, and how we will fund growth

3. Stakeholder relations

4. Hellaby interaction with subsidiaries

5. Inter-company opportunities, leveraging off the Hellaby value- chain

6. Growth opportunities – subsidiaries changing gear

7. Strategic/business planning timeline/process for subsidiaries

8. Hellaby strategy

9. Other things you would like to raise

YTD performance and year-end

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Hellaby Group Operating Result September 2010

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Actual Budget Last Year Forecast Budget Last Year

$'000 $'000 $'000 $'000 $'000 $'000

Subsidiaries (EBIT)

Brake & Transmission 3,576 3,760 3,560 14,918 14,832 15,021Diesel Distributors 127 157 180 605 620 610Diesel Distrib Australia (NZD) 326 280 148 1,495 1,145 973TRS Tyre & Wheel 451 550 385 1,956 2,100 1,625TRS Australia (NZD) 0 0 (13) 0 0 (23)AB Equipment 90 30 (982) 69 157 (2,346)Eurolift (36) 140 50 450 582 577TradedEquipment.com (29) (30) (56) (67) (69) (158)Elldex Packaging 610 774 788 5,541 5,529 5,058Number 1 Shoes 194 (677) (1,233) 4,116 3,103 2,006Hannahs (1,299) (1,143) (1,622) 2,650 2,650 1,242Retail Properties 2008 0 0 (7) 0 0 (16)

4,010 3,840 1,198 31,734 30,648 24,571

Year to date Full Year

YTD performance and Year-end

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2011 2012000's Year End Pro Rata $

Forecast 50,000$ Difference %BNT 15,767 20,182 4,415 28%DDL 633 810 177 28%DDAL 1,749 2,239 490 28%ABE 1,332 1,705 373 28%Eurolift 609 780 171 28%TRS 2,070 2,650 580 28%No 1 6,090 7,795 1,705 28%Hannahs 4,578 5,860 1,282 28%Elldex 6,235 7,981 1,746 28%

39,063 50,000 10,937 28%

EBITDA

Profit Comparison

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(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

2004 2005 2006 2007 2008 2009 2010 2011

$M

EBITDA

EBIT

Interest

NPAT

ROFE

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($000'S) Actual Actual Actual Actual Sept Forecast 2007 2008 2009 2010 2011

Inventory 126,685 132,590 107,124 100,452 98,253Debtors 53,984 56,817 33,963 34,031 35,081Creditors (51,496) (66,510) (46,527) (53,809) (56,228)Software 2,071 1,648 1,733 2,086 1,308Fixed Assets 36,932 34,482 28,320 26,153 26,349Funds Employed 168,176 159,027 124,613 108,914 104,763

Trading EBITDA 33,989 40,567 26,443 27,667 33,897Depreciation & amortisation (9,829) (10,608) (8,286) (7,351) (7,784)Trading EBIT 24,160 29,959 18,157 20,316 26,113

ROFE (Trading EBIT / Average Funds Employed) 14.7% 18.3% 12.8% 17.4% 24.4%

Capital structure, and how we will fund growth

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Westpac Debt

Hellaby – stated maximum gearing ratio 45% (Debt : Debt + Equity)

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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

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80,000

100,000

120,000

140,000

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180,000

Gea

rin

g %

To

tal N

et D

ebt

Core

Capital Notes

Gearing %

Westpac Banking Covenants

Jun-09

Sep-09

Dec-09

Mar-10

Jun-10

Sep-10

Dec-10

Mar-11

Jun-11

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

ICC

Debt Cover

ICC target > 2.5 (EBIT : Funding Costs)Debt cover target < 3.0 (Total Debt : EBITDA)

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Project Acorn

• 3 : 7 pro-rata renounceable rights issue

• $1.30 issue price

• Interest expense saving in FY2011 $950k

• Underwriting - Castle

- Forsyth Barr

- Sub-underwritersOutcome

• Raised $28.4 million (less costs)

• Rights traded at 50 cents

• Oversubscriptions facility

• 3,570 (46.4%) of 7,700 shareholders took up entitlement

• 19.1 million (87.3%) of 21.8 million rights were taken up (prior to oversubscriptions)

Capital Notes

• 5 year subordinated capital notes created 18 May 2006, maturing 15 June

2011

• 8.50% coupon rate, paid quarterly in arrears

• Funded BBQ Factory !

• 1,300 note holders

• Advised market did not intend converting to shares 7 July 2010

• Rationale for redeeming / options

• Interest expense saving in FY 2011 $950k

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Capital structure and how we will fund growth

• Working capital – still the cheapest option

• Bank debt – have significant headroom in existing facilities and covenants

• Equity raising - Project Acorn very successful

- could raise $20m -$25m any time in next 6-24 months

- Alternatives include placement, rights issue, SDP,

combination

• Senior bonds or other instrument – capital notes repaid on 15 December

2010

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Stakeholder relations

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Stakeholder relations

• Significant management focus

• Rebuilding investor confidence share price and funding flexibility

• More proactive communication of ‘Hellaby story’, performance and

strategy

• Total shareholder return (TSR) superior to NZX50

• TSR up 39.5% last year; up 40% YTD

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15

6,000

7,000

8,000

9,000

10,000

11,000

12,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Number of Hellaby Shareholders

Spread of Hellaby Shareholders

Number of Shareholders

% Shareholders Number of Shares held

% of Shares held

Less 2,000 4,557 59.1 2,892,057 4.0

2,000 - 5,000 1,511 19.6 4,666,911 6.4

5,000 - 10,000 834 10.8 5,703,820 7.8

10,000 - 50,000 714 9.3 13,104,740 17.8

50,000 - 100,000 50 0.7 3,437,949 4.7

Greater 100,000 49 0.6 43,036,086 59.1

Total 7,715 100.00 72,841,563 100.00

• Average shareholding 9,441 (excluding Castle average is 6,566)

• Minimum holding per NZX is 200 shares

• 279 shareholders holding 30,660 shares - minimum holding

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Top 20 Hellaby Shareholders

Rank Name Units % of Units

1. Castle Investments Limited 22,184,136 30.46

2. Superlife Trustee Limited 2,414,929 3.323. Accident Compensation Corporation 2,143,272 2.94

4. Custody and Investment Nominees Limited 1,529,925 2.10

5. NZ Guardian Trust Investment Nominees 1,053,641 1.45

6. Custodial Services Limited 967,436 1.33

7. Citibank Nominees (New Zealand) Limited 807,793 1.11

8. Leveraged Equities Finance Limited 767,174 1.05

9. Haynes Investment 746,555 1.0210. Forsyth Barr Custodians Limited 659,049 0.90

11. Generator Investments No 1 Limited 637,472 0.88

12. Paul Anthony Byrnes 529,481 0.7313. Highbury Holdings Limited 500,000 0.69

14. Custodial Services Limited 473,494 0.65

15. ASB Nominees Limited 450,000 0.6216. William John Falconer 450,000 0.6217. J & D Sands Limited 400,000 0.5518. Forsyth Barr Custodians Limited 396,142 0.54

19. Paddock Holdings Limited 368,698 0.51

20. Robert & Irene Carter 363,938 0.50

Dividends• Previous approach to paying dividends

• Current policy to pay 50% of NPAT, imputed where able

• 5 cps dividend payable 12 November 2010

• Interim dividends

Dividend History

Year Interim Final Total

2010 3 5 8

2009 - - -

2008 5 6 11

2007 10 - 10

2006 15 16 31

2005 19 20 39

2004 16 19 35

2003 11 15 26

2002 8 10 18

2001 7 8 15

2000 7 7 14

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Dividend Reinvestment Plan

• Introduced March 2006

• Strike price = VWAP – dividend – 5% discount

• 30 – 35% uptake

• Castle pro-rata participation

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Hellaby interaction with subsidiaries

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Hellaby interaction with subsidiaries

• Statement of Intent good reference point

• Respective Hellaby roles

• Effectiveness of monthly reviews

• Growth now a key agenda item

• What can Hellaby do better or differently with subsidiaries?

• Talent development programme

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Intercompany opportunities, leveraging off the Hellaby value-chain

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Intercompany opportunities

• How do I organically grow my business? - Customer clusters

• How do I grow Hellaby business ? - Opportunities identified

• Think services as well as customers !

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Growth opportunities – subsidiaries changing gear

Executing profitable growth – ‘changing gear’

• Hellaby very serious about profitable growth

• Arguably bigger challenge for CEOs than turnaround

• Subsidiaries must compete for capital, justify projects and expenditures,

obtain buy-in for strategy and direction

• Is your business committed to driving profitable growth?

will revenues therefore exceed budget?

• Do you each have a clear plan?

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Strategic / business planning timeline / process for subsidiaries

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Business Planning Review

• New process in Hellaby – moving from “panel beating” to “growth”– Part of strategic framework agreed with Board

• Timing– Info request / topics for discussion to CEO’s by mid December– Workshop with each CEO and relevant senior team members first half of

February

– Market assessment in put into early budgeting process

– Strategic options (as relevant) into budgeting process by late April

• Resourcing– Lead by Greg – Support from John, Neil and Richard

• Looking for growth Subsidiary EBITDA $50m in FY2012

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Business Planning Review

• Overview of process

– Start with assessment of market environment– Build assessment of each subsidiary’s:

• Environment• Competitive forces• Industry structure • Opportunities and threats• Capability

Strategic position– Identify and evaluate options – Implementation– Review and repeat update 12 monthly

• Deliberate strategy and superb execution = superior returns

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Hellaby strategy

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Hellaby strategy – ‘buy build harvest’

• Strategic framework development – two distinct investment portfolios

• Core investment portfolio

specialised ‘core’ sectors / divisions

sectors may migrate over time

ultimately trans-Tasman

• Generator Fund

Expansion capital portfolio

Co-investor partnerships in strong SMEs

Agnostic about investment sectors

• Portfolio will change over next 3-5 years

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Other things you would like to raise

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Risk Framework

Stage 1 D Lucas Exercise (Complete 2009/10)– Identify risks – Assess the risk value– Matrix

Stage 2 Quantate (Start Oct 10)– Set up Quantate from the D Lucas exercise– Handover with basic definitions and training given (Nov & Dec 10)– Subsidiaries to complete their set up and to review risks uploaded into Quantate– Board report limited to matrix and a description of the top risks (with the first report due 14th

February 2011 & the second on the 13th May 2011)

 

Stage 3 Expand Risk Management (Start at the Finance Workshop)– Add mitigating controls– New Board report developed (due with July 10th day reporting, and quarterly thereafter)

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