Codan LimitedInvestor Presentation - Half Year Results to 31 December 2004

28th February & 1st March 2005

Mike HeardManaging Director

David HughesChief Finance & Information Officer

25.1%24.3%% of Revenue

(3.5)(2.7)Tax

4.82*5.06Earnings per Share (cents)

(*Note: Based on closing number of shares)

12.4%13.3%% of Revenue

Half Year ended 31 December

Growth %20032004

5.0%7.88.2Net profit after tax

-3.5%11.310.9Net profit before tax

-2.2%

-5.1%

63.0

15.8

61.6

15.0

Total Revenue

EBITDA

Key Financial Information

Key Financial Information (continued)

61.6

58.01.52.1

2004

-2.2

-2.7+15.4

Growth %

63.0Total Revenue

59.61.32.1

Communications ProductsBroadcast ProductsPrinted Circuit Boards

2003 Revenue

Half Year ended 31 December

Note: Exchange rate impact on revenue negative $4m

Statement of Financial Position (Balance Sheet)

31 Dec 2004

$m

31 Dec 2004

$m Current Assets Current Liabilities Cash 5.3 Accounts Payable 15.3 Receivables 16.6 Other 3.0 Inventories 11.2 Borrowings 0.4 Other 4.8 Provisions 5.3 37.9 24.0 Non-Current Assets Non-Current Liabilities Investments 0.2 Borrowings 0.1 Property, Plant & Equipment 19.4 Provisions 6.8 Product Development 16.1 6.9 Goodwill 18.6 Other 3.4 Total Liabilities 30.9 57.7 Net Assets 64.7 Total Assets 95.6 Shareholders Equity Share Capital 23.0 Reserves 0.1 Retained Profits

Total Shareholders Equity

41.6

64.7

Key Financial Information (continued)

Dividend

Half Year Ended 31 Dec2004 2003

Earnings per ordinary share (cents) 5.06 4.82 (on issued capital at 31 December 2004 fully diluted)

Interim dividend (cents) per ordinary share 2.5 2.5(paid April, fully franked)

Franking 100% 100%

Record date 18 March 2005

Payment date 1 April 2005

Modest real growth in sales volume (approximately 4%) and NPAT (4.9%) after exceptional growth last year

Real sales growth offset by significant impact of exchange rate on revenue (approx $4m) and EBITDA (approx $2m)

EBITDA margins maintained against exchange rate pressure through product cost reductions and expense control

Continuing environment of world insecurity influencing sales

Strong cash position after major capital expenditure (approx $6m); continued control of working capital

Improved earnings per share and maintained fully franked dividend level

Hedge profile extended to December 2005 at an average rate of US$0.75

Good progress with factory expansion and business systems upgrade

Completion of development of two new products / product families; all to be released in the second half; outcome of targeted product development

Asset and technology acquisitions to extend product range for digital microwave radio and TV broadcast products

Half-Year Results to 31 December 2004Commentary

Codan New Manpack HF Radio

Lightweight

Excellent Radio Performance

Waterproof

Codan New Release Satcom Product Family

Codan Ku-Band Transceiver

Codan Ku-Band BUC

The New Codan Digital Microwave Radio Product Family

Codan 8800 - Outdoor Unit

Codan 8800 – Indoor Unit

PROVIDEO modular interface products

TALIA routers, control panels and audio monitoring bridges

Total Planned Budget = $4.7M

Expenditure to date = $1.8M

Codan Factory Expansion Project

Acc Testing

CommonKANBAN

LockUp Tool Cab

CONS.

CONS.

PA & Filter Test

RF IF and NGT PCB Assembly

NGT Module PA & Filter Assembly

PA Assy Bench

RF/IF Assy

Handload (N

ew)

TNPx4

TNPx4

HF Acc Materials

HF Acc Materials 5582 Materials

5582 Materials HF ACC Matl HF ACC Matl

HF Acc Assy 1

HF Acc Test

HF Acc Assy 2

HF Acc Assy 3

TestRack

Drying Rack

Pressure TestTest Bench

NVATW/Board

SchedularDocumentationCleaning Stuffs

RF/IF, App Proc, Audio Components

Test Rack

ACCESSORIES

Shared Processes

NVATW/Board

SchedularDocumentationCleaning Stuffs

MPM

Sur

face

Mou

nt L

ine

MicroscopeRework Station

Hot Plate & Solder Pot,

PCB Cleaning

Wire Strip

EMPLOYEE DEVELOPMENT

Non

Con

form

ance

NVATW/Board

SchedularDocumentationCleaning Stuffs

HF Acc Materials

HF Acc Materials 5582 Materials NGT Trx & X3 Assy

5582 Assy 1NVAT

W/Board Schedular

DocumentationCleaning Stuffs

File

s

Non

Con

form

ance

Training Materials

5582 Assy 2

HH Cont Assy

5582 Assy 3

SOLDERING TRAINING

Misc Assy 5582 Assy

CONSUMABLES

SOLDERING TRAINING

KANBAN

KANBAN

KANBAN

ERSA 330TF WAVE SOLDER

& OFFLOAD

Stake & Stand Offs

NVATW/Board

SchedularDocumentation

Cleaning Stuffs

Leed Cutter

NC

Wave

WIP

Equipment To fix

Preventative Maintenance

Bench

Meeting

Factory HUB

BRADY PRINTER

9350 Trolley

Final Assy

Test Rack

Test Rack

Test Rack

Cond.

Trolley

Cond.

Trolley

Base Mounting Stud Assy

9350 Trolley

9350 Trolley

Spill Tray

CoilWIP Coil &

Conductor Assy

PCB Material PCB 1

Shroud Assy

9350 T

rolley

9350 T

rolley

Test Cage 01

9350 Trolley

Team Leaders

Desk

Motor Assy Stage 1

Motor Assy Stage 2

9350

Kan

Ban

Consumables 9350

Kan

Ban

RF/IF S

MT

PC

B

RF/IF Assy RF/IF Assy RF/IF Assy

SM

T P

CB

sS

MT

PC

B a

nd J

igs

PA Assy Bench

9350

scr

ews

(2

Bin

)

Rivets PA Assy Bench

PA Assy Bench

Nitro Cell

Fly P

ressPCB 3PCB 2Wires & Cable

Assembly

9350 K

anb

an

Con

d.T

rolle

yC

on

d.

Trol

ley

Nitro

Bath

Com

p Bin

NVATW/Board

SchedularDocumentationCleaning Stuffs

Filter Components SMT PCBs

Ove

n

Com

p B

in

Empties & SMT PCB's

UDC 4UDC 4

UD

C 2

EN

VIR

O

TRO

LLE

Y

UD

C 2

EN

VIR

O

TRO

LLE

Y

REWORK RACKNVATW/Board

SchedularDocumentationCleaning Stuffs

F/G

T

rolle

y

F/G

T

rolle

y

F/G

T

rolle

y

F/G

T

rolle

y

PCB ASSY RACK PCB ASSY RACKRF AUTO TEST AND

TUNING RACKCP/FILTER ASSY

RACK TUNING RACK

VO

SC

HE

TEST GEAR

UDC 5UDC 5

PREP

UD

C

PR

EP

UD

C F

/A

S2

MA

TER

IAL

UDC FILTERUDC FILTER

UD

C A

TE

UD

C F

/A

STA

GE

2

Systems Bench

Rework

Consolidation Bench

HF

F/G

oods

T

rolle

y

CMR Materials

NVATW/Board

SchedularDocumentationCleaning Stuffs

Rework

CMR Rework

CM

R C

omponents

Test Rack

Test Rack

Systems MaterialsCMR Materials

HF F/Goods Trolley

HF F/A Bench

TUNING

SSPA MTO

BUC MTO

BUC Material

5700, 5900 CP/FILTER

ASSY

SPARE PARTS

5700, 5900 PCB ASSY

UDC MODULETest Jigs

5700, 5900 PCB ASSY

5700, 5900 PCB ASSY

SM PCBsSM PCBs

SSPA Matl

LP/MP PCB ASSY

SMPS Test TUNING

AW

AIT

. IN

SP

RF AUTO 1 RF AUTO 2 TUNING TUNINGTUNING

NVATW/Board

SchedularDocumentationCleaning Stuffs

NV

AT

W/B

oard

S

ched

ular

Doc

umen

tatio

nC

lean

ing

Stuf

fs

SSPA 1

SSPA 2

SSPA 3

SSPA 4

BUC ModuleGROWTH

BU

C M

ater

ial

SSPA MODULE

NVATW/Board Schedular

DocumentationCleaning Stuffs

BUC 5

BUC Convertor TuningGrowth

BUC Material

BU

C R

ewor

k

NV

AT

W/B

oard

S

ched

ular

Doc

umen

tatio

nC

lean

ing S

tuffs

BUC 6

BUC ModuleAssy BUC LO PSU

Assy TestC Half Test

BUC 3

BUC 2

BUC 1

BUC 4

UDC

LP/MP SSPA Tuning

HPSSPA Tuning

TUNINGPCB REWORK

F/A

RE

WO

RK

UDC 1

UDC 2

UDC3

UDC 2

UDC3

UDC 1

HPSSPA Tuning

SS

PA

SM

PS

3

SS

PA

SM

PS

2

SS

PA

SM

PS

1

LP/MP SSPA Tuning

Cha

mbe

r T

rolle

y

NVATW/Board

SchedularDocumentationCleaning Stuffs

HPSSPA Tuning

UD

C F

/A

ST

AG

E 1

HPSSPA Tuning

PRODUCT AWAITING OVEN

Che

st F

reez

erSSPA Material

LP/MP SSPA Tuning

LP/MP SSPA Tuning

Buc Tuning

Buc Tuning

BUC 5

BU

C A

ssyBUC 6

BU

C A

ssy

BU

C A

ssy

Buc Tuning

BUC MaterialBUC Material

Buc Tuning

LBU

C C

omm

on

Hal

fLB

UC

Com

mon

H

alf

Buc Tuning

MB

UC

C

omm

on H

alf

MB

UC

C

omm

on H

alf

MB

UC

C

omm

on H

alf

MB

UC

C

omm

on H

alf

Seal & Test

LBU

C C

omm

on

Hal

fLB

UC

Com

mon

H

alf

Buc Tuning

CMR Manual TestCMR Manual Test

NGT Module JB & Handset

DT Cons & Fan F/A

Test Rack

RF/IF Test Bench

NGT Rework

RF

/IF W

IP

RF/IF AssyRF/IF Test Bench RF/IF Test Bench

NGT Rework

NVATW/Board

SchedularDocumentationCleaning Stuffs

Filter PCBFilter PCB

PA Components

Was

te

Dis

posa

l

Re

wo

rk

CMR Front Panel Assy

CMR PCB Assy Test

Rack

CMR Module

Hset pcb Assy

SMT PCB

NVATW/Board

SchedularDocumentationCleaning Stuffs

Handset P

CB

s

Hset Assy Test Rack

PA & Filter TestPA & Filter Test WIP

SMT PCB

Empty BinsSMT PCB & Components

JBox

PC

BsJBox

PCBsJBox, PCB &

Fan

CMR MTO

Test R

ackT

est R

ack

HF F/A Bench

NGT SR App Proc NGT SR App Proc

NGT Voice Audio

NGT Voice App Proc

NGT SRX App Proc

NGT SR Audio

Handset

Was

te

Dis

posa

l

HF

F/G

oods

T

rolle

y

HF

F/G

oods

T

rolle

y

NVATW/Board

SchedularDocumentationCleaning Stuffs

HF F/Goods Trolley

Cus

tom

isin

gC

usto

mis

ing

CMR Rework

HF

F/G

oods

T

rolle

y

Partial Builds & Special Order

WIP

HF F/Goods Trolley

Cus

tom

isin

g

Test R

ack

HF

F/G

oods

T

rolle

y

HF

F/G

oods

T

rolle

y

HF

F/G

oods

T

rolle

y

HF

F/G

oods

T

rolle

y

NGT MTOPA and Filter

Junction Box & Fan Assembly

Junction Box & Fan Assembly

Junction Box & Fan Assembly

JBox Bench

NGT SRX Audio

Handset Handset

HF F/A Bench

NG

T F/

A

Mat

eria

ls

Finished DT Cons & FansNVATW/Board

SchedularDocumentationCleaning Stuffs

HF

F/G

oods

T

rolle

y

Cus

tom

isin

g

Test

Rack

HF

F/G

oods

T

rolle

y

NGT Rework

HF

F/G

oods

T

rolle

y

HF

F/G

oods

T

rolle

y

Systems Bench

Electric H

oist

Leak Test

BOX

SSPA Accept/Sealing

UDC Finished Goods

Seal & Test

NGT SRx and CMR Finished oods

Warranty / Misc

BUC Finished Goods

HF Acc Finished Goods

Satcom Acc Finished Goods

SSPA Finished Goods

Display Unit

Product Line Sign Post

Consolidation Materials

HF

F/G

oods

T

rolle

y Dis

play

U

nit

Pro

duct

Lin

e S

ign

Pos

t

CMR Front Panel Assy

Test Rack

CMR PCB Assy

Con

solid

atio

n T

rolle

y

Waste

F/Goods Trolley

Con

solid

atio

n T

rolle

y

Sat

com

C

onso

lidat

ion

Tro

lley

WasteWaste

F/Goods Trolley

F/Goods Trolley

Whip Antenna

9350 Trolley

Hon

est

Wei

ght

Work Station Work Station File

s

LIB

RA

RY

, FO

RM

S &

M

SD

S S

HE

ET

S

Files

9350 T

rolley

9350 T

rolley

9350 T

rolley

9350 Trolley

9350 Trolley

9350 Trolley

9350 Trolley

9350 Trolley

9350 T

rolley

9350 T

rolley

9350 T

rolley

9350 T

rolley

9350 T

rolley

9350 T

rolley

9350 T

rolley

9350 T

rolley

9350 T

rolley

9350 T

rolley

HPSSPA ASSY

HPSSPA ASSY

HPSSPA ASSY

Inspection

HPSSPA ASSY

HPSSPA ASSY

AWAIT. TEST

BR

ICK

Mat

l

SS

PA

S2

Mat

l

PR

EP

SSPA S1 Matl

Graphite Extraction

DISPATCH & PRE-CONSOLIDATION

NGT SR Audio

RF/IF PCB RF/IF PCB RF/IF PCB

PA and FilterPA and FilterPA and FilterPA and Filter

HP SSPA

x2

HP SSPA

x2

HP SSPA

x2

Display Unit

Product Line Sign Post

HPPA OVEN

Satcom Acc Finished Goods

LIB

RA

RY

, F

OR

MS

&

MS

DS

SH

EE

TS

Anti Static StationAnti Static Station

HF

F/G

oods

T

rolle

y

HF

F/G

oods

T

rolle

y

HF

F/G

oods

T

rolle

y

Nibbler

BR

AD

Y

PR

INTE

R

BU

C R

ackx5 E

mpty S

torage

SSPAMatl

SSPAMatl

SSPA Sealing

Com

bine

r Tan

k

Sys/MainTest

BRICK TANK

HP F/A

HP

Ta

nk

HP

Ta

nk

HP

Ass

yT

rolle

y

SSPA Rework/Warranty

LP/MP SSPA Tuning

LP/MP SSPA Tuning

Rew

ork/Warranty

BOX

9350 Final Assembly

9350 Sub Assembly

9350 Tank

SSPA Matl

SSPA SMT PCBs

SSPA Matl

Cust Service Trolley

HP SSPA

x2

HP SSPA

x2

HP SSPA

x2

HP SSPA

x2

HP SSPA

x2

HPSSPA Sealing

UDC Accept/Sealing

BUC Accept/Sealing

BU

C R

ack

x5 E

mpt

y S

tora

ge

BUC Accept/Sealing

Satcom Post Oven & Parts Racks

Satcom Post Oven & Parts Racks

Satcom Post Oven & Parts Racks

Satcom Post Oven & Parts Racks BER

Testing

ENVIRO TEST

AC

CE

PT

AN

CE

HP

Ass

yT

rolle

y

HP

Ass

yT

rolle

y

HP

Ass

yT

rolle

y

LockersIndirect Staff

ESDTester

Desolder &Microscope

Handset

Fan Options

D-C

onsole PC

Bs

RF/IF PCB

SM

T PC

Bs

Rew

ork

PC

Bs

SM

T P

CB

s

Kits

Rework

ACC System Test

NVATW/Board

SchedularDocumentationCleaning Stuffs

Codan Factory Expansion Project

Codan Factory Expansion Project

Codan Factory Expansion Project

Codan Factory Expansion Project

Opportunities for growth

Communications Products

Little change in the market environmentMajor new product launches in all three product groups to stimulate growthExceptional capability to deliver on short lead timesStrengthened sales & marketing team

Opportunities for growth

Broadcast Products

Acquisition of Talia product rangeLaunch of Codan BroadcastAsian distribution network in placeExport sales growing

Outlook

Challenges

Appreciation of the Australian Dollar reduces AUD revenue and profit

Hedge rate 62 US cents in FY05 vs 54 US cents in FY04Additional hedging in place for first half FY06 at 75 US cents

Capital products business – demand can fluctuate from year to yearStrong business periods may be offset by weaker subsequent periods

Outlook

Second half performance will depend onthe strength of orders, March to May, aided by new product launches.

Codan’s objective is to maximise shareholder value by delivering 15% compound growth over the medium to long term.

Thank you for your support of Codan

Any Questions?