HalfYear Result 2003

1
Half-Year Result 2003 Investor Presentation
5 March 2003
2
Half Year Result Unacceptable

• This result is clearly not acceptable. It has
  primarily occurred as a result of the challenges
  facing the US economy, a cyclical down-turn in
  the American core skate market and a failure of
  some of Globe core brands to maintain their
  previously high level of sales growth. Decisive
  action is being taken immediately to restore
  shareholder value
• The focus over the remainder of this financial
  year is to remove costs but not to the detriment
  of product quality or demand creation. Whilst
  product development and demand creation costs are
  likely to increase, other costs will be
  significantly reduced to levels appropriate for
  Globe

3
Half Year Result Unacceptable
4
Divisional Review - Australasia

• Review
• Sales AUD45.9, down 18
• EBITA AUD4.3m, down 43
• EBITA margin 9, down from 13
• Weak skate hardware and footwear market
• Outlook
• Continued brand and channel opportunities
  rationalisation
• Invest in product design development
• Increase investment in demand creation (marketing
  spend)
• Cost reduction
• Encouraging start for second half of 2003

5
Divisional Review - North America

• Review
• Sales AUD48.2, up 129
• EBITA loss of AUD0.9m
• Globe footwear well below expectations
• Kubic performance unacceptable
• Provisioning of Mr Raggs receivable
• Outlook
• Invest in demand creation (marketing spend)
• Investment in product development
• Change cost structure
• Ensure cash flow positive short term
• January and February remain disappointing
• Volatility and uncertainty remain in short term

6
Divisional Review - International

• Review
• Sales AUD 21.2, up 9
• EBITA AUD 2.5m, down 56
• EBITA margin 12, down from 30
• Provisioning of Japanese and some European
  receivables significantly impacted profit
• Outlook
• Move to a regionally based business model
  (currently Australian based)
• Focus on the core business in Europe
• On the ground resources will drive the
  performance and risk management of distributors
  in Europe
• Significant change in receivables risk management

7
Balance Sheet Cashflow

• Balance sheet remains strong
• Net tangible assets of 18.5 cents per share
• First payment under deferred Kubic consideration
  due end June 2003 USD5.1m
• Net Operating cashflow of 6.2m in the first half
• Summary of key balance sheet items

8
Kubic

• Core USA skate market softened significantly over
  the period
• Significant reduction in hardware sales
• Shift towards lower priced products
• Core youth kids (6-13 year olds) oriented World
  Industries brand impacted by sharp purchasing
  declines
• Indications that market share has remained intact
• Significant rationalisation in the USA has
  commenced
• Kubics core brands are an important part of
  Globes longer term strategy

9
Earnings Guidance

• Pleasing start to second half from Australasian
  business
• Continued disappointment and uncertainty in US
  and European markets
• Significant internal change to result in
  potential one off costs
• Management do not expect an improvement in the
  second half relative to the first half
• Enhanced performance from proposed strategic
  changes anticipated from calendar 2004
• Definitive financial guidance would not be prudent

10
Key Strategies

• Ensure North America is immediately cash flow
  positive
• Invest in product design and development and
  demand creation (marketing spend)
• Continue brand channel optimisation
  rationalisation in Australia
• Re-establish a viable, maintainable International
  distribution system
• Immediate focus on strengthening core brand
  product momentum across the group