Bradken Limited Annual Report 2015 - page 23

Structural cast node (Transbay Transit Terminal), Atchison USA
Year in Review
Overall sales for the Division were down 12% in FY15 on the previous year. This net change resulted from a continued slow-
down throughout FY15 in mining markets which began in the latter half of CY12, partially offset by a recent increase in the
locomotive rail market.
Annual sales for the Industrial Products business were impacted by the continued softening of demand in the mining sector,
showing a decline of 3% for FY15. This was driven by a 35% increase in first half sales from the comparable period in FY14
reflecting stronger volumes to the structural market, followed by a 31% decline in second half sales as the mining market
continued to weaken.
The Energy business’ annual sales declined 18%, spread evenly across both halves and the revenues for the Division’s
Europe business were also down 18%. General and Administrative expenses for the division were down 19% from the prior
year, driven by a number of cost reduction initiatives.
The Division responded to the reduction in demand in FY15 by focusing on the recuction of controllable inventory, managing
receivables, reducing workforce numbers and rationalising capacity. In January 2015, the closure of the Chehalis, WA foundry
was announced. Production was suspended in April and transitioned to our Tacoma, WA foundry. The closure was completed
with the sale of the property and equipment in June.
The Division remains focused on the diversification of its North American and European customer-base expanding into markets
in growth sectors such as commercial building construction, large and heavy energy castings and the dredge industry. This
strategic focus will assist in preventing undue reliance on our existing customer base, enable improved utilisation of available
plant capacity and further reduce dependence on the OEM markets in which we participate providing the Company with
a global footprint that allows competitive manufacturing alternatives based on changing markets and currency fluctuations.
With the decline in the mining market likely to continue to be soft in the coming financial year the Division remains well-
positioned to service the future needs of its customers when a rebound occurs.
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