Annual General Meeting Presentation

22 October 2014SYDNEY

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This document, and any constituent or associated presentation, information or material (collectively, the Material), is not (and does not form part of) an offer, solicitation, invitation or recommendation in respect of any securities and neither the Material nor any part of it will form the basis of, or be relied upon in connection with, any contract, commitment or investment decision.

No representation or warranty is or will be made by any person (including CMI Limited and its officers, directors, employees,advisers and agents (CMI)) in relation to the accuracy or completeness of all or part of the Material, or the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in, or implied by, the Material or any part of it. To the maximum extent permitted by law, CMI does not accept any responsibility, and disclaims any liability (including, without limitation any liability arising from fault or negligence), for any loss arising from any use of or reliance upon all or any part of the Material or otherwise arising in connection with it or for any action taken by the recipients of the Material on the basis of such Material.

The Material contains certain forward-looking statements with respect to the financial condition, results of operations and business of CMI and certain plans and objectives of the management of CMI. All such forward-looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies and other factors, many of which are outside the controlof CMI, which may cause the actual results or performance of CMI to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such forward-looking statements speak only as of the date of the Material. Factors that could cause actual results or performance to differ materially include without limitation the following: fluctuations in interest and currency exchange rates, basis risk and credit risk; levels of supply and demand and market prices; legislation or regulations throughout the world that affect CMI's business; legal defense costs, insurance expenses, settlement costs and the risk of an adverse decision or other outcome relating to governmental investigations, class actions or other claims; growth in costs and expenses; risk of adverse or unanticipated market, financial or political developments (including without limitation in relation to commodity markets).

The Material is provided for informational purposes only and is subject to change without notice. Subject to any obligations under applicable laws, regulations or securities exchange listing rules, CMI disclaims any obligation or undertaking to release anyupdates or revisions to the Material to reflect any change in expectations or assumptions. Nothing in the Material should beinterpreted to mean that future earnings per share of CMI will necessarily match or exceed its historical published earnings per share, or that there has been no change in the affairs of CMI since the date of the Material.

Nothing contained in the Material constitutes investment, legal, tax or other advice. The information in the Material does not take into account the investment objectives, financial situation or particular needs of any recipient. Before making an investment decision, each recipient of the Material should make its own assessment and take independent professional advice in relation to the Material and any action taken on the basis of the Material.

DisclaimerDisclaimer

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CMI Limited OverviewCMI Limited Overview

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CMI Electrical specialises in the design and manufacture of specialty plugs and couplers, electrical cables, sourcing and supply of niche electrical cables, high voltage cables, flexible cables and flameproof junction boxes.

This division services the mining sector, construction and infrastructure industries, electrical wholesalers and gas, petroleum and other hazardous industries. 

CMI Electrical

This division specialises in designing, manufacturing, wholesaling and retailing of vehicle accessories for the 4WD, SUV & Trade vehicle markets.

Market penetration is achieved through 58 TJM branded Australian aftermarket retail distribution stores, supply to major original equipment manufacturers and direct export to a distribution network covering most continents.

TJM Products

World class products, strong balance sheet, long operating history, skilled people

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FY14 Earnings SummaryFY14 Earnings Summary

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$m FY14 FY13 Change

Operating Revenue 92.3 111.7 (17%)

EBITDA 6.8 15.4 (56%)

EBITDA Margin 7% 14%

Depreciation & Amortisation

(1.8) (1.7) (4%)

Tax (1.3) (3.5) 63%

Interest expense (0.2) (0.4) 57%

NPAT 3.5 9.8 (64%)

NPAT Margin 4% 9%

EPS (cents) 10.29 29.05 (65%)

• Electrical ‐ performance was down largely due to poor market conditions in the coal mining sector and reduced infrastructure and  construction activity resulting in 28% decrease in revenues

• TJM – Domestic store revenues increased 23%, export revenues in line with prior year, original equipment (OE) revenue decreased as expected.

• EBITDA margin was lower mainly due to impacts of the reduction in Electrical revenues and TJM increased loss.

• Impact of subdued economic conditions was more pronounced in second half.⁻ EBIT $5.0m – 1H14 $3.2m; 2H14 

$1.8m• NPAT ‐ down 64% to $3.5m from $9.8mF

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FY14 Divisional & Half on Half SummaryFY14 Divisional & Half on Half Summary

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Electrical TJM Corp FY14$m $m $m $m

Operating Revenue 50.9 41.5 - 92.4EBITDA 11.2 (2.2) (2.2) 6.8EBITDA margin % 22% (5%) 7%EBIT 11.0 (3.8) (2.2) 5.0Operating PBT 11.0 (3.8) (2.4) 4.8Tax (1.3)Reported NPAT 3.5

Revenue EBIT*

* Before Net Interest, Impairment & Discontinued Operations

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• Strong balance sheet and capacity to generate cash

– Net cash $6.6m– Net Tangible Assets $1.31 per share

• Dividends– Payout ratio adjusted to allow up to 60%– 3 cent fully franked dividend paid March and

September 2014– Maintained prior year 6 cent dividend payment

Balance Sheet & Dividend PolicyBalance Sheet & Dividend Policy

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Balance Sheet Summary$m FY14 FY13

Total Assets 68.4 72.0

Total Shareholder Funds 56.9 56.4

Net Cash/(Debt) 6.6 6.4

Operating cashflows 6.0 10.7

Net Assets by Division

Electrical

TJM

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Quarterly Update & Outlook

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• Group revenue is down for the September quarter compared to the prior year, due to lower electrical division revenues and reduction in low margin OE revenues for TJM.

• Group margin overall is now improving compared to 2nd half FY14 partially offsetting lower revenues.

• Continued difficult trading conditions for the electrical division including the construction sector.

• TJM performance is improving as a result of changes already implemented and further planned changes going forward.

• We are currently assessing opportunities to diversify the CMI Electrical markets and products.

• While we are strongly focused on delivering consistent improved performance in the TJM business, we also continue to review all strategic options to deliver value to shareholders.

• Overall performance for September quarter is down on last year but expectation of improved overall performance for FY15 is unchanged.

September 2014 QuarterSeptember 2014 Quarter

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• Mining sector – Challenges expected to continue in the

medium term– CMI mining product is a market leader and a

safety related product that has a replacement life cycle of 5 years

– Continued product development of flameproof products for resources industry

– Maintaining capacity for recovery of coal sector whilst controlling costs

– Australian black coal revenues are forecast to grow approximately 19% over the next 5 years so recovery is expected (IBIS, Black Coal Mining in Australia Industry Report 2014)

• Construction and infrastructure– Sector showing continued weakness– Aggressive pricing– Potential for some improvement in 2nd half

FY15

• Flameproof– Currently in integration phase with product

to market expected next quarter

• Other potential acquisitions being explored

Market Analysis ‐ ElectricalMarket Analysis ‐ Electrical

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• Domestic retail sales:– Operating in growth market of new 4WD & light

commercial vehicles– Sales continue to increase, a result of

broadening product range and improved pricing– Margin has also improved through cost

reductions both from suppliers and overheads

• Original Equipment sales:– Sales are significantly lower than FY14 as a

result of a major contract not being renewed– Higher margins will be a strong focus for all

future sales– Loss of very low margin OE sales has further

added to improvement in TJM margin

• Export markets:– Main focus on Africa, Middle East and USA– Sales slow in first quarter but expected to pick-

up through the course of FY15

Market Analysis ‐ TJMMarket Analysis ‐ TJM

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AGM Formal Business

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Financial Report

To receive and consider the financial report of the Company and the reports of the Directors and Auditors for the year ended 30 June 2014.

Formal BusinessFormal Business

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Formal BusinessFormal Business

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Remuneration ReportResolution 1.To consider and, if thought fit, pass the following as a non-binding ordinary resolution:

‘That the Company’s Remuneration Report for the financial year ended 30 June 2014 is approved.’

Proxies Received Voted %For 7,087,267 95.63Against 122,144 1.65Open 201,454 2.72Abstain 16,953 N/A

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Election of DirectorResolution 2.To consider and, if thought fit, pass the following as an ordinary resolution:

‘That Mr Jeffrey Forbes, having been appointed a Director since the last annual general meeting of the Company, in accordance with the Constitution, ceases to hold office and, being eligible, is elected as a Director.’

Proxies Received Voted %For 20,379,994 98.60Against 72,381 0.35Open 216,582 1.05Abstain 439 N/A

Formal BusinessFormal Business

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Issue of Performance RightsResolution 3.To consider and, if thought fit, pass the following as an ordinary resolution:

‘That for the purpose of ASX Listing Rule 10.14 and for all other purposes, the issue of 900,000 Performance Rights to Mr Andrew Buckley under the Company's Performance Rights Plan on the terms as described in the Explanatory Memorandum is approved for a period of 3 years from the date of this approval.’

Proxies Received Voted %For 20,177,584 98.04Against 204,663 0.99Open 199,454 0.97Abstain 5,440 N/A

Formal BusinessFormal Business

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Thank you for your attendance.

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