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Industrial products, global
procurement & supply chain servicesfor the resources and energy sectors
29 August 2011
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29 August 2011
ADG declares a $1.5m EBIT on the back of improvedrevenue and margins
Continued strong organic growth expected from existing customers in FY2012
Benefits from recent business improvements to continue into the current year
New sales anticipated in drilling products and logistics services into remote mine sites
About ADG Global Supply
ADG Global Supply (ASX:ADQ) is a provider of industrial products, global procurement and supply chain services. ADGworks with clients in the exploration, mining and energy markets through our single contact global reach model.Headquartered in Perth, Western Australia, ADG services clients in over 40 countries around the world.
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Revenue up 45%
EBIT results of $1.5m
Recapitalisation of Company
Operating* costs 14.7%
Employee* costs 9.3%
Gross margin 17.6%
Turnaround completed, ADG positioned for growth
$52.2m revenue
$2.5m EBIT turnaround
Bank debt $4.1m down from $5.3m
Cash $4.8m up from $0.6m
Capital raising of $5.7m after costs
down from 17.7%
down from 11.4%
Up from 14.8%3*As a percentage of revenue
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Stronger revenue streams
New Project Logistics service
Signed up 1st Global Procurement & Supply Chain contract
48% increase in sales with current customers
Focus on reducing operational costs, increased efficiencies
26 different freight carriers consolidated to 5
Established global consolidation hubs in key industrialised areas
Closed non-core warehouses (removing fixed costs)
Investment in IT systems with daily dashboard capability withglobal functionality
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Over the past 12 months ADG has shifted from its search & deliver
origins to offer resource and energy clients a single point of contact toaccess end-to-end global supply & logistics solutions.
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ADG services clients in over 44 countries utilising consolidation hubsin key sourcing regions.
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SALES BY REGION
Sales growth has seen the emergence of a more balanced geographicalspread of sales
Diverse range of active clients in over 44 countries
FY 2010 ($35.9m) FY 2011 ($52.2m)
*Data excludes Pumps customers which sit outside resources sector
Africagrew 106%
Asia grew16%
Australiagrew 10%
AUSTRALIA
AFRICA
ASIA
Rest Of World
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Africa FY11 Sales Asia / Australia FY11 Sales
*Industrial products includes sales of tyres and drilling products. Data excludes Pumps which sit outside resources sector
Strong demand in Africa for procurement & supply chain services tosupport remote sites
Industrial products, drilling products & earthmover tyres, experiencingstrong demand in all regions
COMPARED TO 2010:
Industrial Products 294%
Global Procurement 51%
COMPARED TO 2010:
Industrial Products 112%
Global Procurement -23%8
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Sales by customer type*(Top 100 -$47.3m)
Solid sales across key commodities and sectors Good balance between mining and exploration clients Top 20 clients deliver 70% of revenue Exposure to growth mining commodities
*Data excludes pumps customers which sit outside resources sector 9
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Growing customer numbers in key regions of emerging Africa andcompetitive Asia-Pacific
Increasing sales with existing clients as they tap into new globalinfrastructure and capabilities
FY2012 focus on rolling out services to new customers and increased
market share with industrial products
*Data excludes Pumps customers which are outside the resources sector
Sales growth withinexisting customers
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Sourcing from over 3000 suppliers in 21+ countries and growing Focus on adding to ADGs industrial products range and purchasing direct
from OEMs (Original Equipment Manufacturers)
Position as a preferred distribution channel to market
Key Supply Points
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Strong pipeline of contract revenue opportunities particularly inarea of Project Logistics
Introduction of new ADG product lines to Industrial Productsrange
Expansions plans into Europe to support increasing business inAfrica
Continued focus on growing sales in African regions & plans toopen new branch in South Africa
Expected gains in margin with flow on operational improvementsintroduced during FY11
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David SchwartzChairman 28 years of experience managing
successful companies Director of Schaffer Corp,
Primewest Group & Betts Group
John ManciniManaging Director Appointed MD 2010 Ex Ernst & Young (strategic growth) 15 years commercial banking Treasurer of Variety WA
Mike ArnoldExecutive Director Chief Operating Officer 20 years of logistics & supply chain
experience
Executive Management Team
Paul RobertsCFO
Joined ADG Nov 2010 20 years finance background
Marc SchailleeGlobal Business Development
Established international ADGbusiness 8 years ago
Specialist remote locations
Chris BattenGlobal Tyre Manager
18 years resource industry Specialist OTR tyre
management
ADG Board Members
Ross SpanbroekDrilling Sales Manager
Joined ADG March 2011 18 years in drilling industry
Nigel BurrGroup Manager Procurement &
Supply Chain
Industrial products & engineerbackground
Ashley ChaplynNational Manager Universal Pumps
10 years management Coles background
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Shares on issue * 221,849,400
Options on issue
Unlisted Options exercise price $0.10, expiry date 30/06/2013 5,000,000
Unlisted Options exercise price $0.15, expiry date 30/06/2014 5,000,000Unlisted Options exercise price $0.11, expiry date 30/06/2014 10,000,000
Market capitalisation @ $0.060 $13.3m
Top 30 shareholders holding (approx) 65.7%(16/08/2011)
* Includes 9.5 million Shares under Staff escrow accounts as per LTI program
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1 Seaspin Pty Ltd 12.78%
2 Bardi Holdings Pty Ltd 5.46%
3 Skye Alba Pty Ltd 3.20%
4 Picton Cove Pty Ltd 3.06%
5 Traverse Drilling International Pty Ltd 3.00%
6 Moutier Pty Ltd 2.50%
7 Rocky Reef Pty Ltd** 2.23%
8 Mr Michael & Mrs Linda Arnold*** 1.91%
9 Magna Group Bv 1.87%
10 Bell Potter Nominees Ltd 1.80%
11 Jasforce Pty Ltd 1.80%
12 M & M Schaillee Pty Ltd 1.80%
13 Fifty Second Celebration Pty Ltd 1.67%
14 Mr David & Mrs Melanie Schwartz* 1.66%*
15 Dixon Trust Pty Ltd 1.58%
16 Jasforce Pty Ltd 1.58%
17 Rubi Holdings Pty Ltd 1.58%
18 Mr David Schwartz* 1.50%
19 Mr Andrew & Mrs Denise Greathead 1.49%
20 Mr John Mancini** 1.43%
* Chairman (total number of ordinary shares 7,534,061)** Managing Director (total number of ordinary shares 9,532,968)
*** Executive Director (total number of ordinary shares 4,593,509)
As at 24 August 2011
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A fast growing exploration client operating across multiple sites in South East Asia & the Pacific region wasexperiencing challenges with their procurement & supply chain including:
Lack of product supply visibility and no real-time consignment tracking Multiple supplier management and logistics bottleneck causing delays and high costs Purchasing and logistics capability not geared for fast growth plans Too much Executive management time on reactive operational issues & margin erosion from inefficiency
The Client Profile & Challenges
ADG delivered a one stop global solution that delivered: Cost Improvement & Process Improvement Model Supply of all industrial consumables & reliable delivery to
site, with quality controls Milestone reporting & increase in delivery times by > 20% Inventory management with min./max. stock points Logistics planning & freight management
The ADG Engagement
To date, the ADG business model has assisted the client with significantoperational improvements. Key activities include:
Sourcing extended to supply base across 12 countries - 600suppliers
Delivered over 1700 product lines Central ordering point providing data reporting
Special airfreight from China & Chile for capital equipment Low cost country product sourcing
Achievements
CHILE:Air freight charter of
specialised capitalequipment
CHINA:Air freight charter of capitalequipment and industrialconsumables from OEM.
PERTH:ADG Industrial
Products, AccountManagement
BRISBANE:ADG IndustrialProducts, Sourcing& ConsolidationHub
HONG KONG:Low cost countrysourcing
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This presentation and these materials (together the Presentation) has been prepared by ADG Global Supply Limited ABN 16 082 341 197 (ASX:ADQ).By participating in this Presentation or retaining these materials, you acknowledge and represent that you have read, understood and accepted theterms of this Important Notice and Disclaimer.
This Presentation may contain forward looking statements concerning projected earnings, revenue, growth, outlook or other matters for the financialyear ending 30 June 2012 or beyond. Any such Projections are based on assumptions which may differ materially from the actual circumstances whichmay arise. ADG Global Supply Limited undertakes no obligation to update any guidance for events or circumstances that occur subsequent to the dateof this Presentation or to keep current any of the information provided. Past performance is no guarantee of future performance.
Recipients of this Presentation are advised that the information contained in this Presentation is not legal, tax, accounting, investment or financialproduct advice and should not be used as the basis for making investment decisions in relation to ADG Global Supply Limited securities.
The information contained in this Presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue,securities or other financial products. ADG Global Supply Limited has no obligation to tell recipients if it becomes aware of any inaccuracy in oromission from the information in this Presentation. This Presentation has been prepared without taking into account the investment objectives,financial situation or particular needs of any particular person. You should consult your own advisors as to legal, tax, financial and related mattersand conduct your own investigations, enquiries and analysis concerning any transaction or investment or other financial decision.
This Presentation, including opinions set out in it, is based on information compiled or prepared by ADG Global Supply Limited from sources believedto be reliable, although no attempt has been made to verify such information. No representation or warranty, express or implied, is made as to thefairness, accuracy, completeness or correctness of the information, opinions or conclusions contained in this Presentation. To the maximum extentpermitted by law, none of ADG Global Supply Limited, its directors, employees, advisors or agents, nor any other person, accepts any liability,including without limitation any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this
Presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness, likelihood of achievement orreasonableness of any forecasts or prospects referred to in this Presentation.
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