Scott Technology Limited, Annual Meeting 2025

25 November 2025

Scott Technology Limited (SCT)

The company will hold its Annual Shareholders Meeting at 3.00pm Tuesday 2 December 2025.

The location is MUFG Pension & Market Services, Level 30, PwC Tower, 15 Customs Street West, Auckland.

You can also join the meeting online at this link.

Company Overview

The company is a designer and manufacturer of automated production robotic and process machinery for the mining, material handling and logistics, meat processing, appliances, and industrial automation industries. It has operations in 10 countries and is represented in over 30 countries. It employs 630 people.

JBS, the second largest food company in the world, holds a 53% stake in the company and appoints three Directors to the Board.

Current Strategy

The company recently announced its Destination 2030 strategy. The presentation of the strategy is at this link. The presentation also provides a great overview of Scott’s business and the key strategic narratives underpinning the company’s longer-term future.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. Macroeconomic challenges remained in each of Scott’s markets as well as negative geopolitical impacts.
2. Scott’s offerings still had relevance in its key markets of North America, Europe, and China.
3. The company is well positioned for further growth with offerings into a diversified range of industries and a stable ongoing level of EBITDA over the last couple of years.

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

Forward looking statements are inherently fallible.

Information on www.nzshareholders.co.nz and in this document may contain forward-looking statements and projections. For any number of reasons, the future could be different – potentially materially different. For example, assumptions may be wrong, risks may crystallise, unexpected things may happen. We give no warranty or representation as to any future financial performance or any other future matter. We may not update our website and related materials for changes.

There is no offer or financial advice in our documents/website.

Information included on www.nzshareholders.co.nz and in this document is for information purposes only. It is not an offer of financial products, or a proposal or invitation to make any such offer. It is not financial advice and does not take into account any person’s individual circumstances or objectives. Prior to making any investment decision, NZSA recommends that you seek professional advice from a licensed financial advice provider.

There are no representations as to accuracy or completeness.

The information, calculations and any opinions on www.nzshareholders.co.nz and in this document are based upon sources believed reliable. The NZSA, its officers and directors make no representations as to their accuracy or completeness. All opinions reflect our judgement on the date of communication and are subject to change without notice.

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  Disclosure is generally clear. Scott’s Constitution (25.6) allows the payment of “special remuneration” although there is no disclosure in the Annual Report as to whether any was paid. There is no disclosure as to whether other benefits (such as superannuation or share options) are paid, although NZSA considers this unlikely.

Director Share Ownership:  It is not disclosed if Directors are required to own shares. NZSA policy is for this to be left to individual Directors to decide based on their personal circumstances.

CEO Remuneration:  We are pleased to note that disclosure has improved significantly over the past two years. The company discloses its remuneration policy in the Annual Report and on its website, which includes an overview of the remuneration philosophy applicable to the company. The Governance Remuneration and Nominations Committee are responsible for implementing the policy.

Incentives: The CEO is paid a short-term incentive in cash and a long-term incentive by way of a cash settled shadow equity programme.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the new NZX Remuneration Reporting Template.

The STI is awarded at a target of 50% of base salary. The measures, weightings, and level of achievement against each component are well-disclosed, with the overall STI award being made at 98% of target.

The relationship of the LTI to the base salary is determined by the share price at the time of payment. The measure is the company share price meeting or exceeding the average growth of the NZX Portfolio Index over a 3-year term.

The company does not disclose the gender pay gap and CEO/employee remuneration ratio.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

The notice period for both the CEO and the company is 6 months with the CEO having a 6-month restraint of trade. We note the CEO received a $160,000 sign-on payment. NZSA does not favour such payments as history has demonstrated they provide no value for shareholders.

Director Independence:  We note that JBS, a 53% shareholder of SCT, have appointed three Directors (out of 6). NZSA policy, reinforced by the NZX Code of Governance, is that there should be a majority of independent Directors to protect the interests of minority shareholders. Partly in mitigation, we do note the existence of an Independent Directors Committee.

While Scott Technology may feel that the Board majority reflects its shareholding, NZSA contends that as Directors are bound to act in the best interests of the company, the appointment of independent Directors that are unfettered by shareholding relationships creates no loss for major shareholders.

The former CEO was also a Director. We are pleased to observe that the new CEO, Mike Christman, has not been appointed to the Board, supporting a separation of management and governance roles.

Board Composition: The company is one of few NZX companies that does not have a female Director (although it has a strong female cohort within its Executive team). We would encourage more social diversity on the Board and recognise this is an ongoing focus for the company. The Annual Report includes a ‘collective’ skills matrix but does not attribute skill sets to individual Directors to demonstrate how they contribute to the governance of the company.

Nonetheless, NZSA believes the Board comprises appropriate levels of functional and experiential diversity.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

We note the Chair, Stuart McLauchlan, was appointed in 2007 with the other Directors appointed between 2016-2020, indicating an ongoing focus on governance sustainability. Now that a transition to a new CEO has been completed, together with a clear strategic direction for the company over t7he next five years, we believe that the extended tenure of Stuart McLauchlan’s should be the next focus for the company, continuing a measured succession process. We look forward to further transparency.

ASM Format: Scott Technology Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look to see Boards are across their risk management responsibilities.

There is some disclosure in the Annual Report and Board Charter that Board members are able to seek external or internal advice to support decision-making, but there is less clarity as to the extent to which internal assurance staff have unfettered access to the Board. In mitigation, we note the implied regular interaction between the Board and members of the senior leadership team.

The company offers some disclosure of financial risks, climate change and health and safety but there is little disclosure of other business or operational risks and their mitigations. The company does highlight ‘cybersecurity risk’ within the Corporate Governance Statement, but offers no further details. There is only limited disclosure of the processes by which these are governed.

We note that the FY23 Annual Report stated that the company was working on a Critical Risk Management Strategy covering eight risk categories and this would be launched in November 2023 and that this was likely to improve NZSA’s assessment against its policy criteria. There is only a brief mention of this in the FY24 Annual Report, and no mention in the FY25 Annual Report. This does not form a significant enough disclosure to meet NZSA risk management disclosure policy criteria. We note that disclosure of risk management practices has improved markedly across other NZX listed companies over the last five years.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules and that the last Lead Audit Partner rotation was 2021. There is no disclosure as to the tenure of the current audit firm.

Environmental Sustainability

Overall approach: Scott Technology has made progress aligning with the New Zealand Climate Standards (NZ CS 1–3) and improving climate-related disclosures. Its FY2025 reporting reflects transparency in governance and emissions accounting for Scope 1 and 2. However, a number of material gaps remain. Several disclosures are still partly met, particularly in relation to the lack of an adaptation roadmap and incomplete Scope 3 treatment. While the company reports early progress against its 2030 decarbonisation target, its reporting remains at an early stage of maturity. NZSA expects more robust transition planning and clearer disclosure of Scope 3 intentions, metrics, and targets in future statements.

Sustainability Governance: Scott’s board retains ultimate oversight of climate-related risk and opportunity. This responsibility is operationalised via the Audit & Risk Committee (which oversees climate disclosure) and a dedicated Sustainability Committee, established to guide ESG strategy execution. Each executive leader oversees regional ESG workstreams, with the CFO accountable for climate reporting. The Board has completed a formal skills matrix that includes sustainability expertise.

Strategy and Impact: Scott embeds climate into its long-term corporate strategy. Its 2030 vision includes a transition pathway to 30% emissions reduction (Scope 1 and 2), with capital investments directed at energy efficiency, solar upgrades, and fleet electrification. Scenario analysis was completed in FY2024 and has been integrated into FY2025 strategic and transition planning. Although the company has not published a detailed adaptation roadmap, the climate section outlines mitigation themes and scenario-based insights that influence planning.

Risk and Opportunity: Climate-related risks and opportunities are fully disclosed, including physical (e.g. extreme weather) and transition (e.g. regulatory) risks. These are evaluated across short-, medium-, and long-term horizons and monitored through Scott’s enterprise risk management system, which includes quarterly board review. Risk management processes are clearly documented and show integration with business operations and governance reviews.

Metrics and Targets: Scott reports Scope 1 and 2 emissions in detail, including source categories, historical comparisons (FY22–FY25), and an intensity metric (tCO₂e per NZD revenue). It has adopted a near-term target to reduce absolute emissions by 30% by FY30, relative to the FY22 baseline, and reports a 9.1% reduction to date. Scope 3 emissions were not reported in FY25; however, Scott states that it has taken the permitted one-year deferral on Scope 3 reporting (as allowed under NZ CS 2), and signals that Scope 3 will be addressed in its third-year disclosures, per its staged climate reporting plan. While this is policy-compliant, no quantified pathway or forecast for Scope 3 emissions is disclosed to date.

Assurance: Limited assurance was obtained from Deloitte over Scott’s Scope 1 and Scope 2 emissions for FY2025. Scope 3 emissions were not included in the assurance scope, in line with Scott’s deferral of reporting under the adoption provision. NZSA encourages Scott to extend assurance coverage to Scope 3 emissions and, over time, to consider assurance of broader environmental disclosures beyond emissions inventories.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing: Good disclosure.

Political Donations:  Not disclosed if political donations are made. NZSA expects explicit disclosure around this matter.

Financial & Performance

Scott Technology’s share price rose from $1.82 to $3.09 (as of 22^nd October 2025) over the last 12 months – a 70% increase. This compares favourably with the NZX 50 which rose 4% in the same period. The capitalisation of SCT is $257m placing it 61^st out of 115 companies on the NZX by size and makes it a mid-sized company.

¹ per share figures based off actual shares at balance date (not weighted average)

After a disappointing year in 2024, profits rebounded and are almost back at 2023 levels. Revenues were down 1% to $277m, but EBITDA was up 4% at $31.5m. This meant that a higher NPAT of $14.2m (up 84%) was provided, delivering EPS of $0.171.

The balance sheet is sound, with little long-term debt ($12.3m) and the debt-equity ratio is at 1.09. Last year we commented on bank overdraft of $19m, but this has fallen to $12.1m as at balance date. The current ratio which measures the ability to meet short term obligations is sound at 1.47. SCT has $12.2m in cash.

Operating cashflows rose substantially to $22.3m, up 273% on last years low levels, and some of this rise can be attributed to a large increase in Trade and Payables, although most notably Trade and Receivables was also up substantially.

SCT increased its NTA to $0.88 and the shares trade at a large 253% premium to NTA. The low NTA is a function of the high intangibles when compared to total equity.

After resuming the payment of dividends in 2021, SCT continued the payment of dividends and declared a steady $0.08 dividend. Dividends are not imputed. We note the company may wish to review alternative means or returning surplus cash to shareholders if imputation credits are not available to be utilised.

In conjunction with their annual results, the company provided shareholders with an investor presentation. As at time of writing SCT had not provided any quantifiable forward-looking statements but did provide some commentary on their forward thinking.

On the 14^th October the company announced they had secured $44m in Appliance Contracts Across the Americas.

JBS Australia Pty Limited has a controlling 53.44% stake in the company and subsequently other shareholders have no say in the governance of the company.

Resolutions

John Berry was appointed to the Board in September 2022. He is Head of Corporate and Regulatory at JBS Australia Pty Limited, Australia and New Zealand’s largest meat and food processor. John has been a senior executive within the Australian Meat and Food Industry for over 25 years, and in JBS Australia and New Zealand. He has a Bachelor of Business, a Master of Business Administration and is a Graduate and Fellow of the Australian Institute of Company Directors. John was also the previous Chair of the Australian Meat Processor Corporation.

We will vote undirected proxies IN FAVOUR of this resolution.

Derek Charge was appointed to the Board in March 2019. He is an experienced manufacturing and mining executive, and corporate lawyer. He has a background in beverage production, manufacturing, mining and minerals processing, and logistics and port operations. He has extensive experience in establishing supply chains and marketing throughout Asia, particularly China and Japan. Derek has recently been appointed Managing Director of Whisky Tasmania Limited, owner of Hellyer’s Road Distillery – one of the oldest and largest whisky producers in Australia. Prior to this role he was Managing Principal of SWS Lawyers, a boutique Australian corporate and commercial law firm, after holding a number of executive roles with Godfrey Hirst and BlueScope Steel in New Zealand and Australia. Before that was a partner of law firm Sparke Helmore, specialising in mineral resource.

We will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://nz.investorcentre.mpms.mufg.com/voting/SCT

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 3.00pm Sunday 30 November 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA