2025 Half Year Announcement

SCOTT TECHNOLOGY ANNOUNCES HY25 RESULTS

Scott Technology’s (NZX: SCT) result for the six months ending 28 February 2025 sees stable net profit despite the challenging market conditions across its product portfolio and lower order intake during last year. The company successfully strengthened group margins, reduced net debt, and improved cash flow. Strategic execution focused on securing higher-margin contracts and building a robust pipeline of forward work provides momentum into the second half of the year.

Business Highlights:
• The executive team, led by new CEO Mike Christman, recently met to review and align on long term strategy, targeting a new 2030 strategy, details to be presented at an upcoming Investor Day.
• Continued strong growth opportunities supported by innovative products and scalable solutions.
• Strong Q2 following recent key project wins provides momentum for the next six months.
• Forward work remains robust at $165 million, flat versus the prior period, with a strategic focus on higher margin contracts.
• Revenue mix is increasingly weighted towards service-based revenue, currently at 31%, up from 26%.
• A proactive safety culture drove substantial engagement, evidenced by an 83% increase in safety-related conversations.

Financial Highlights:
• Revenue of $122 million, down -14% from $141 million in the prior comparable period (pcp).
• Group margin performance improved to 29%, a 270bps increase from 26% in pcp.
• Operating EBITDA at $12.2 million, down -27% from $16.6 million in pcp.
• Net Profit After Tax (NPAT) of $4.3 million, stable compared to pcp.
• Operating cash flow of $14.5 million improved significantly from -$7.7 million in pcp.
• Net debt reduced to $13.2 million, down -35% from $20.2 million in pcp.
• Directors declared a dividend of 3 cents per share (unimputed), 5 cents per share in pcp.

Financial Performance Overview:
Revenue for HY25 declined -14% year-on-year to $122 million, driven by a challenging economic landscape and subdued order intake throughout FY24. Despite this environment, forward work remains robust at $165 million, supported by a targeted approach to high-margin opportunities and securing recent wins that provide momentum for the second half.

Group margin expanded to 29%, representing a notable +270bps improvement, driven by Scott Technology’s strategic focus on profitable projects and service mix. The decline in revenue, however, has led to operating EBITDA of $12.2 million, a decrease of -27% from pcp. Cost controls are in place to manage overheads while carefully investing in foundational elements like a new Enterprise Resource Planning (ERP) system in Europe to support future growth. Net profit after tax was at $4.3 million, remaining relatively flat compared to pcp as reduced EBITDA was offset by lower amortisation, interest and tax. The prior period also included non-recurring costs for the strategic review.

Operating cash flow rebounded positively to $14.5 million, driven by securing key new projects, effective working capital management and disciplined cost control, facilitating a -35% reduction in net debt to $13.2 million. Investments were directed towards regional plant upgrades and strategic asset developments.

Considering current market conditions, the Board has declared an unimputed interim dividend of 3 cents per share, payable on 21 May 2025, with shareholders able to participate in the Dividend Reinvestment Plan (DRP).

Impressions from the CEO:
Chief Executive Officer Mike Christman, who joined the company in October 2024, said
“I’ve had the opportunity to observe the business from a fresh perspective. Scott has real strengths with market-leading technology, highly skilled and passionate people and our focus on a modular approach has enabled margin improvement, this has provided positive momentum. Over the last five years there are many positives with improved margins, increased service revenue mix and improved cashflow which has allowed for strategic investment in the business and meaningful debt reduction.”
Scott is well-positioned for future growth, however, there are some key challenges we intend to focus on to unlock more opportunities for Scott:
• Research & Development has largely been reactive — project based rather than guided by a long-term, integrated roadmap – we must positively disrupt the market rather than follow.
• Sales have plateaued — an issue we need to structurally address – we need to create a stronger forward order book.
• Customer proximity must improve — deeper engagement, stronger key account management, which is essential for sustainable growth.
• We must increase detailed global market knowledge.
Mike said, “here at Scott, there are many things that we are doing well – improving the areas above will have a positive impact on shareholder value and will allow us to move into the next stage of our growth journey.”

2030 Strategy Refresh:
“We are not yet where we want to be, but we are in the final stages of completing our long-term strategy and a clear blueprint to get there. Once the strategy is finalized, I’m excited to share our vision with you”

The key pillars include:
• Customer First – deeply understanding and solving for our customers’ evolving needs.
• High Performing Team – aligned execution with long-term business goals.
• One Scott – a unified culture that empowers our global teams and drives scalable, sustainable growth.
• Leading Edge Technology – focused innovation, driven by market insights, delivering scalable, modular solutions.

More detail on the strategy refresh is to be provided at an upcoming Investor Day. This will mark a critical step in starting to address our challenges and unlocking our long-term shareholder value. Watch the results review and message from the CEO (https://vimeo.com/1075152839/53573a4bfe)

Outlook:
There is solid momentum heading into the next six months following a strong second quarter, recent large project wins and increasing standard product sales.

The recent announcements on tariffs are expected to have a limited direct impact on Scott for FY25. However, the more significant impact is the increasing uncertainty this will create and impact on businesses’ willingness to invest in capital equipment. While certain segments may experience headwinds, there is also potential opportunities, particularly where our European and Asian competitors face higher tariff rates than those applicable to our exports from New Zealand or Australia to the US.

The global shift towards nearshoring and regionalised supply chains is closely aligned with Scott’s strengths. We are well-positioned to help customers build resilient, secure, and efficient supply chains through automation, providing the capital remains available.

Additional specific sector detail is provided within the investor presentation.

ENDS

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Announcement PDF