Simonds Group 1H2016 Results Presentation

Simonds Group 1H2016 Results Presentation Robert Stubbs Acting Chief Executive Officer & Chief Financial Officer Gerard Healy CEO Builders Academy Australia Chris Troman CEO Simonds Homes Australia 25 th February 2016

Contents 1H16 Headlines Financial Performance Simonds Homes Australia Builders Academy Australia Discover Developments Madisson Projects Group Outlook Appendix: Financial Statements We re building futures. Together. 2

1H16 Group Headlines Challenging half-year significant investment in east coast expansion continues Revenue growth of 6.7% pcp for Group Simonds Homes Australia (SHA) up 9.1% to $281.7m Builders Academy Australia (BAA) up 6.2% to $11.6m New Group CEO Matthew Chun commences 1 Apr 16 Simonds Homes east coast expansion continues with solid revenue growth in Qld, NSW and SA Land development division, Discover Developments Land Syndicate #1 fully subscribed ($6m) Continued investment in IT systems & capability 25 Jan 16 Announcement of orderly closure of lossmaking Madisson Projects business (focussed on B2B, medium-density including apartments) We re building futures. Together. 3

Statutory to Pro Forma Reconciliation Statutory reconciliation ($m) 1H16 Revenue 1H16 EBITDA 1H16 NPAT 1H15 Revenue 1H15 EBITDA Statutory result (1) 318.2 (0.4) (2.2) 299.2 (17.1) (22.3) IPO Share-based Payments (non-cash) (2) - - - - 28.2 28.2 IPO Restructure / Non-recurring costs - 0.1 0.1-4.7 3.2 Madisson Projects division (3) (23.9) 9.2 6.5 (23.4) 0.8 0.7 Pro forma result 294.3 8.9 4.4 275.8 16.6 9.9 1H15 NPAT 1. Statutory result for 1H15 has been restated to reflect adjustment to IPO share based payments. Net impact of $1.4m to statutory profit with nil impact to pro forma result. 2. Non-cash IPO share-based payments. No cash impact on Group. 3. ASX Announcement 21 Jan 16 confirming orderly closure of Madisson Projects division. We re building futures. Together. 4

Pro-Forma Financials Revenue growth in regions offset by reduced margins & overheads investment Revenue growth in both Simonds Homes and BAA: Simonds Homes Qld, NSW & SA: +66.5% pcp Simonds Homes Vic up 3.7% pcp BAA revenue up 6.2% pcp Softening in gross margin in both SHA and BAA through: Increased competition & promotional discounts in Vic impacted SHA s 1H16 margins Increased revenue from SHA s lower margin expansion states of Qld & NSW Further investment in student engagement, on-going compliance controls and course expansion reduced BAA gross margin No interim dividend will be paid for 1H16 Pro forma * 1H16 1H15 Revenue 294.3 275.8 +6.7% Gross Profit 65.3 65.3 +0% 22.2% 23.7% (1.5)pts EBITDA 8.9 16.6 (46.4)% NPAT 4.4 9.9 NPAT (55.6)% EPS (cents) 3.0 6.4 Change * Refer to Statutory to Pro forma Reconciliation removing Madisson Projects (Page 4) We re building futures. Together. 5

Pro-Forma Financials Committed to investing in expansion regions, improving systems & on-going compliance Invested in new Qld and NSW sales galleries and colour selection centres to deliver increased margins Significant investment in display homes in Qld, NSW & SA growing from 10 homes to 26 homes in past 18 months This increased investment in retail presence will drive sales growth & revenue in FY17 and beyond On-going costs embedded in upgrading existing systems & processes for both SHA and BAA to underpin quality building outcomes and training Display Home Investment in expanding regions of Qld, NSW & SA 26 7 14 5 10 5 5 5 NPAT 9 14 1H15 FY15 1H16 QLD NSW SA We re building futures. Together. 6

Simonds Homes Australia (SHA)

Simonds Homes Australia Building a strong platform on the East Coast Revenue of $281.7m up 9.1% pcp Site starts of 1,252 homes, up 2.9% on pcp All states profitable Simonds Homes Site Starts Significant investment in interstate growth impacted overall margins (displays, pre-site staffing, office / gallery) Increased display home footprint to 112 display homes across 59 locations as at Dec 16. 1,113 1,217 1,252 Option to acquire W.A. homebuilder Gemmill Homes will not be exercised 1H14 1H15 1H16 We re building futures. Together. 8

Simonds Homes Australia Revenue growth and diversification of geographical earnings and risk 1H12 1H14 1H16 Site starts: 961 Site starts: 1,113 Site starts: 1,252 We re building futures. Together. 9

Simonds Homes - Victoria Sustained success as Victoria s No.1 builder Site starts of 980 down (4.4%) pcp Delays in land titling caused lower starts in first half majority of which have been resolved leading to increased site starts in 2H16 Increase in sales accepts by 13.8% pcp Very strong pipeline of work in second half Stable and mature display home program with 91 display homes across 49 locations Metropolitan region knock down & rebuild business continues to progress We re building futures. Together. 10

Simonds Homes - Queensland Well positioned in a rising market Significant expansion in South East Queensland Site starts of 105 up 26.5% pcp Increase in sales accepts by 54.5% pcp Expanding display home program with 20 display homes to be open by June 2016 across 12 locations New state-of-the-art Gallery opened in November 2015 Queensland Head Office and Gallery, Loganholme Opened November 2015 We re building futures. Together. 11

Simonds Homes South Australia Continued solid results in a steady market Site starts of 94 up 27.0% pcp Increase in sales accepts by 5.6% pcp Expanding display home program with 7 homes across 3 centres Further 3 homes across 2 centres under construction in St Clair and Gawler We re building futures. Together. 12

Simonds Homes New South Wales Retail segment the key to second phase of growth Site starts of 73 up 108.6% pcp Increase in sales accepts by 17.9% pcp Evolution of business as we migrate to a mix of retail and investor sales Display home program now established with 9 homes currently open across 3 locations House and Land centres opened in Wagga, Kellyville and Hunter Valley to support growth Retail sales will contribute to FY17 site starts & revenue NSW Marsden Park Display opened 20 February 2016 We re building futures. Together. 13

Builders Academy Australia (BAA)

BAA s market environment Building a sustainable business Investment in student experience and retention Investment in management system to streamline and automate systems and processes Industry correction currently underway is welcomed Speculated Federal Takeover of VET sector is welcomed will facilitate efficiencies across jurisdictions Rationalisation of providers is welcomed reduces competition provides opportunities BAA is building a sustainable business that will withstand potential future reforms and provide operating margins sufficient to reinvest in quality outcomes and ongoing compliance 1H16 1H15 Change We re building futures. Together. 15

BAA highlights Quality training, compliance & growth in a changing environment $11.6m revenue up from $10.9m in 1H15 EBITDA of $4.0m (down 20.6% pcp), which reflects investment in operating platform VET FEE-HELP provider approval in Dec 15 will contribute towards FY17 revenue growth Regulatory changes and reforms will benefit quality training providers such as BAA 1H16 1H15 Change Revenue 11.6 10.9 +6.2% EBITDA 4.0 5.1 (20.6)% We re building futures. Together. 16

BAA highlights Delivering quality training outcomes in Skills Shortage sector Average course registrations increased to 697 per month, against 544 pcp Course enrolments for 1H16 of 1,855, against 1,968 pcp Student Completion Rates for BAA primary courses Average registrations 51% in-house (i.e. nonbroker) 1,966 graduates during 1H16 VIC completion rates: 78% Cert IV B&C (Building) (State av.: 50%) 70% Diploma B&C (Building) (State av.: 30%) 61% Cert IV WHS (State av.: 53%) 78% 70% 61% 50% 53% 30% Cert IV B&C Diploma B&C Cert IV WHS BAA Vic State Average Skills Victoria Training System report 8 Feb 2016 We re building futures. Together. 17

Discover Developments

Discover Developments New profitable division to support SHA Small lot sub-divisions providing alternate land sources for SHA without competing with major land developers Land fund established to reduce capital requirements to ~25% with first syndicate fully subscribed ($6m) Portland, Vic 30 lots with construction complete in March 16 / Titles issue in April 16. Mernda, Vic 35 lots with planning approve. Construction commences July 16 / Titles issue July 16. Officer, Vic 41 lots with approval expected by June 16. We re building futures. Together. 19

Madisson Projects

Madisson Projects Mixed profitability, increased margin pressures led to independent review Acquired in 2002, focused on medium-density apartments and townhouses Predominantly building developers own concepts, designs and specifications Mixed profitability over the past few years Increased competitive margin pressures in heated industry with high demand on trades people Estimating and contract letting deficiencies identified Strategy and investment in this business assessed Nov 15 independent strategic review announced We re building futures. Together. 21

Madisson Projects Orderly closure with existing five projects to be completed by Oct 2016 During Sep Dec 15, completed and handed over six projects totalling $42.1m. Unsuccessful in winning a number of tenders at appropriate margins Announcement of orderly closure on 21 Jan 16 $6.5m after tax loss for 1H16 Full after tax closure costs expected to be $8.5m all brought to account in FY16 Independent report reviewed and identified full costs to complete for each remaining project Pro-forma results remove impact from Madisson We re building futures. Together. 22

Outlook

Operational outlook Simonds Homes well positioned to deliver sustainable growth into FY17 Simonds Homes Australia s solid sales pipeline provides support for 2H16 and FY17 Growth driven by: market share gains in Qld and SA continuing market leader in Vic rapidly expanding retail presence in NSW Qld and SA current display home footprint expansion on track providing good FY17 sales pipeline NSW grown from zero to 9 displays in 18 months as we evolve into a full retail operation in 2H16 - FY17 Victoria regional expansion and increased product range, including knock down & rebuild, continues 2,959 90 375 1,242 1,252 Simonds Sales Pipeline FY16 and FY17 2,700 1,020 229 424 367 As at 31 Dec '15 FY16 F'cst Site Starts FY17 Pipeline Already Site Started Contract signed Sales accepts Deposits We re building futures. Together. 24

Operational outlook BAA well positioned for the future Enrolments at 20 Feb 16 of 4,381 comprising students currently studying having commenced during: FY14: 127 FY 15: 1,675 1H16: 1,600 Jan-Feb 16: 979 4,381 current enrolments comprises 2,899 students (~ 41% undertaking double courses) NSW acquisition has taken longer than anticipated to contribute but is positioned well for FY17 Industry reforms are reducing competition and will present opportunities in FY17 and beyond Existing Simonds supply chain provides significant jobs potential Current Course Enrolments as at 20 Feb 16 4,381 979 1,600 1,675 127 Current Active Enrolments FY14 FY15 1H16 Jan/Feb '16 We re building futures. Together. 25

Thank you

Appendix Balance Sheet Movement in Net Assets Cash flows

Balance sheet Share buy-back and Madisson Projects loss has impacted net asset position Share buy-back of 5% of issued capital ($7.9m) completed in Dec 15 Goodwill increase relates to acquisition of BAA Qld/NSW completed July 15 ($3.5m) Payables reduction resulting from seasonal Christmas period (compares to $62.5m 1H15) Debt increase to fund buy-back, BAA acquisition and trade payables Available headroom of $18.6m as at 31 Dec 15 All banking financial covenants comfortably met Balance Sheet ($m) 31 Dec 15 30 Jun 15 Assets - Cash / Equivalents 0.4 5.5 - Receivables 41.3 45.0 - Inventories 61.3 71.7 - PP&E 9.2 7.4 - Intangibles 8.5 4.1 - Other 9.0 10.4 Total Assets 129.7 144.1 Liabilities - Trade / Payables 66.0 75.7 - Debt 17.8 2.8 - Provisions 18.4 18.2 - Other 18.8 20.7 Total Liabilities 121.0 117.4 Net Assets 8.7 26.7 We re building futures. Together. 28

Movement in net assets Acquired 7.6m ordinary shares in share buy-back for ~$7.9m Shares on issue post buy-back: 143,841,655 Dividend payment of 5.3 cents per share (fully franked) for 7 months trading since listing to 30 Jun 15 Movement in net assets ($m) 31 Dec 15 30 Jun 15 Opening net assets 26.7 14.9 Issue of shares - Executive issue - 3.5 Issue of shares - IPO - 9.2 Employee share plan 0.1 29.4 Dividends paid (8.0) (19.5) Profit for the period (2.2) (10.9) Share buy - back (7.9) - Closing net assets 8.7 26.7 We re building futures. Together. 29

Cash flows Cash flow from operations $7.4m (after tax payments of $12.2m) Net activity in Display Home investment of $6.3m for 6 month period On-market share buy-back of $7.9m FY15 Final dividend of $8.0m * Pro forma summary reflects proceeds (investment) in Display Homes separately Summary Cash Flows (pro-forma) ($m) 1H16 1H15 Cash flows from operating activities Receipts from customers 318.4 293.2 Payments to suppliers/employees * (298.2) (299.5) Interest paid (0.6) (0.5) Income taxes paid (12.2) (5.4) Net cash generated from operating activities 7.4 (12.2) Net cash from Display Homes activities * (6.3) (0.8) Net cash from investing activities (3.5) (1.2) Net cash from financing activities Proceeds from borrowings 14.1 (0.7) Issue of share capital/(buy-back) (7.9) 12.8 Dividends paid (8.0) (19.4) Other (0.9) 17.0 Net cash from financing activities (2.7) 9.7 Net increase (decrease) in cash (5.1) (3.7) Cash / Equivalents at end of the period 0.4 12.2 We re building futures. Together. 30

Disclaimer While every effort is made to provide accurate and complete information, Simonds Group does not warrant or represent that the information in this presentation is free from errors or omissions or is suitable for your intended use. The information provided in this presentation may not be suitable for your specific situation or needs and should not be relied upon by you in substitution of you obtaining independent advice. Subject to any terms implied by law and which cannot be excluded, Simonds Group accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as a result of any error, omission or misrepresentation in information in this presentation. All information in this presentation is subject to change without notice. The material contained in this presentation is for information purposes only and does not constitute financial product advice. The information contained in this presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making any investment decision, you should consider, with or without the assistance of a financial advisor, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Nothing in this presentation is a promise or a representation as to the future. Statements or assumptions in this presentation as to future matters may prove to be incorrect and the differences may be material. We re building futures. Together. 31