Hills Industries LimitedPresentation ByGraham Twartz

Group Managing Director

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Overview• Flat half year result mainly due to

underperformance of Orrcon.

• Forecast a modest improvement for the full year.

• Dividend policy remains unchanged.

• Strong focus on OH&S improvements.

• Management changes.

• Share Purchase Plan.

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Group StrategyHills is a Diversified Company developingcompetitive businesses in three industry segments

• Electronic Security & Entertainment• Home, Hardware & Eco Products• Building & Industrial Products

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Financial Highlights – Half Year2007$’000

2006$’000 % Change

Revenue 557,613

42,665

26,729

24,120

13.9

13.5

Cash Flow from Operations 12,661 23,187

511,073

- 47.3

EBIT 41,196

+ 9.1

+ 3.6

+ 2.2

+ 0.7

- 1.4

Profit after Tax 26,150

NPAT (After Minorities) 23,942

EPS (Cents) 14.1

DPS (Cents) 13.5 -

Excludes individually significant items

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Electronic Security & Entertainment - The Numbers

2007$’000

2006$’000

% Change

Revenue 151,849 140,545 + 8.0

+ 25.4EBIT 20,956 16,708

EBIT/Revenue 13.8% 11.9%

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Electronic Security - Products

Electronic Security & Surveillance

EquipmentCode Pad CCTV Camera

Digital Video Recorder

www.das.com.auwww.pacom.com.au

IP Camera Video Intercom

Hills Home Hub

Dome

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• Trend towards IP based solutions.• Federal Government expenditure increasing.• Many large projects available.• New product introduction continues.• AUD strength positive for margins.WAY TO MARKET:System integrators and installation companies

Electronic Security - Situation Analysis

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Antenna & TV Systems - Products

• Domestic and commercial audio, video, data communication and entertainment products and services

Optimax 600 Digital Antenna

DGTEC Digital TerrestrialTelevision Receiver

Satellite Dishand LNB V-Sat Dishes

www.hillsantenna.com.auwww.hillssignalmaster.co.nzwww.stepelectronics.com.au

www.accesstv.com.au

www.opticomm.net.au

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Antenna & TV Systems - Situation Analysis

• Steady subscriber growth for Foxtel and AUSTAR.• FTTN & FTTH – Opticomm acquisition (tiny but has

potential) • DGTEC - introduces a range of consumer electronic

devicesWAY TO MARKET:Electrical wholesalers, major installation companies, major system integrators and subscription TVoperators.

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Turbosound Speakers

Hills SVL - Products

DigiPage

Crestron Control

Ampetronic Hearing

Assistance

www.audiotelex.com.auwww.crestron.com.auwww.lighthousedistribution.com.au

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Alpha Spot Arc Colour Changer

Effects Projector

Ultra Brite LED Pipe

Hills SVL - ProductsF

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• Focussed on consistent new product introduction and product upgrades (to digital).

• Actively pursing further acquisitions.

• Reviewing geographic expansion opportunities.

WAY TO MARKET:

System integrators and installation companies.

Hills SVL – Situation Analysis

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Home, Hardware & Eco Products - The Numbers

2007$’000

2006$’000

% Change

Revenue 111,180 96,693 + 15.0

- 3.6EBIT 8,514 8,835

EBIT/Revenue 7.7% 9.1%

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Home & Hardware - ProductsAluminium, Timber, Fibreglass and Plastic Ladders, Wheelbarrows and Materials Handling EquipmentMobile Scaffolding, Fall Arrest Systems

Single Sided Step Ladders

Scaffolding

Narra BarraFall Arrest Systems

Stairway Access Scaffolding

Trestle Ladderswww.hills.com.auwww.ladders.com.auwww.alquip.com

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Home & Hardware - Products

PLAYTIME Trampolines, Playgyms &

Slides

Clotheslines, Airers, Ironing Boards, Trolleys, Sprayers &

Screen Doors

Trampoline Playing Mantis Clotheslines Sprayers

www.hills.com.au

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• Specialised Enclosures, Food Service Equipment, Stainless Steel Products, Flush Vales, Backflow Valves, Waterless Urinals, Tap Ware

UrinalRangehood

www.woodroffe.com.auwww.lwgemmell.com.au

Refrigeration Check Valve Soap Dispenser

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Home & Hardware Products - Situation Analysis

• Driving operational improvement and cost reductions (particularly the supply chain).

• Highly competitive environment.• Improved results will flow from active new product

introduction programme.• Largely an importer rather than a manufacturer. (Focus

on design and speed to market)WAY TO MARKET:Hardware retailers, mass merchandisers, plumbing and electrical wholesalers, building contractors

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Hills Healthcare - ProductsHome Care, Rehabilitation, Hospital and Nursing Home Equipment

Shower Commodes

Toilet Aid Walker Vienna Bed

Patient Lifter Medication Cart

www.kcare.com.auwww.kerryequipment.com.auwww.aircomfort-oz.com

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Hills Healthcare - ProductsHome Care, Rehabilitation, Hospital and Nursing Home Equipment

www.aircomfort-oz.com

Deluxe seating reclined Deluxe seating upright Compact Lift ChairFor

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Hills Healthcare - Situation Analysis• 65+ population growing at 2%-3% annually.• Growth in nursing homes and aged care facilities.• Industry growth above GDP with the gap expected

to widen.• China sourcing initiatives.• Strong New Product Introduction Programme. WAY TO MARKET:Via specialised distributors in Australia, NewZealand and internationally.F

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• Rotationally moulded water storage tanks, solar hot water, fresh water harvesting, underground tanks, grey water systems, sewerage treatment systems, pumping systems

Modular TanksWater Tanks

www.teampoly.com.auwww.hillssolar.com.au

Solar Hot Water

Hills Eco

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Hills Eco – Building Sustainability• Focussing on water, energy and

thermal comfort.• Long term initiative with dedicated

resources.• Key target areas:

– Grey water treatment and recycling systems;

– Solar heating;– Photovoltaic solutions;– Water storage (steel, stainless and

underground).

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Team Poly – Situation Analysis

• Erratic demand – subsidies, rain.• Establishment of satellite production facilities at

Bathurst, Toowoomba and Ballarat.• Supply chain improvements.WAY TO MARKET: Through rural retailers, independent water retailers, direct to builders and to the automotiveafter market.F

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Building & Industrial Products- The Numbers

2007$’000

2006$’000

% Change

Revenue 292,232 272,530 + 7.2

- 21.6EBIT * 12,401 15,813

EBIT/Revenue 4.2% 5.8%

* Excluding individually significant items

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• Precision, Structuraland Large Pipe & Tube

www.orrcon.com.au

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Building & Industrial - Situation Analysis - Orrcon

• Disappointing results.• Pressure on margins from imports – but hope is in

sight.• Lack of major projects, but 2nd half will improve.• OneSteel/Smorgon merger still playing out.• Bluescope distribution is now a customer• Rising steel prices.• Rising prices for imported tube.WAY TO MARKET:Direct to end users, via stockists and distributors and direct to oil, gas and water pipeline developers.

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• Rollformed Products (Roofing, Cladding, Flooring, Carports, Verandahs, Purlins, Door Frames and Sheds)

www.fielders.com.au 60% owned

Flooring Galvabond Roofing CarportsFor

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Building & Industrial - Situation Analysis - Fielders

• Solid result, lots of improvement left.• Strong new product introduction programme

(Angle Cut, new purlin range).• Market leading Flooring solutions.WAY TO MARKET: Direct to builders (domestic and commercial), direct to roofing, flooring andfencing contractors and direct to thepublic.

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47% owned

Grating

Cable and Pipe SupportSystems

Cable Support Systems

Hot Dip Galvanising

Galvanising

Grating

www.korvest.com.auwww.ezystrut.com.au

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Building & Industrial- Situation Analysis - Korvest• Steady results from EzyStrut.

• EzyStrut growth initiatives:

– Pipe Support Systems; and

– WA and QLD Mining & Infrastructure Projects.

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Hills GroupWhere to from here

• Focus on strategic “that makes sense”acquisitions.

• Driving the “Reshaping Initiatives”.• Working capital reduction (particularly

stock).• Deliver on the forecast.

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