Vistry Group Plc · LSE:VTY
Vistry — Merger or Acquisition (September 2022)
23 slides from Vistry's merger presentation, Sep 5, 2022
Slide 1: Recommended Combination of Vistry and Countryside
Recommended Combination of Vistry and Countryside A transformational transaction creating one of the country’s leading homebuilders 5 September 2022
Slide 2: Agenda
Agenda Transaction Highlights Land Assets, Countryside’s Issues and Integration Plan Current Trading, Gearing and Capital Allocation Policies Concluding Remarks 1
Slide 3: Transaction Highlights
Transaction Highlights 2
Slide 4: Transaction overview
Transaction overview • Recommended cash and share offer comprising 60 pence in cash and 0.255 of a new Vistry share for each Countryside share Terms of • Implied value of 249 pence per Countryside share1, representing a premium of 9.1%2 Recommended • Mix and Match Facility allowing Countryside share
Slide 5: A transformational transaction
A transformational transaction 1 Strengthens Vistry’s position to deliver sector-leading returns Capital-light, high ROCE (40%+) Partnerships business becomes a 2 significantly larger part of the Vistry Group Increased Partnerships exposure offers greater resilience 3 to cyclicality of housing marke
Slide 6: Strengthens Vistry's position to deliver sector-leading returns
1 Strengthens Vistry’s position to deliver sector-leading returns One Vistry model is already demonstrating the clear and significant benefits of a combined Housebuilding and Partnerships business operating leading brands across all housing tenures Combination accelerates Vistry’s growth strateg
Slide 7: Capital-light, high ROCE (40%+) Partnerships business becomes a significantly larger part of the Vistry Group
2 Capital-light, high ROCE (40%+) Partnerships business becomes a significantly larger part of the Vistry Group Partnerships represents 45%1 of combined adjusted revenue2, and is expected to increase to more than 50% in the short term, up from 32% for Vistry on a standalone basis Increased share
Slide 8: Increased Partnerships exposure offers greater resilience to cyclicality of housing market
3 Increased Partnerships exposure offers greater resilience to cyclicality of housing market Partnerships business model provides increased earnings visibility with a consistently strong forward order book Very high, sustained level of demand for affordable housing across England Significant c
Slide 9: Significant benefits from increased scale, synergies of at least £50m
4 Significant benefits from increased scale, synergies of at least £50m and potentially from Countryside’s timber frame capability Sources of synergies2 £50.0m Combination creates one of the country’s leading homebuilders with a strong capability across all housing tenures Procurement-related savi
Slide 10: Brand strength enhanced with addition of highly regarded Countryside Partnerships
5 Brand strength enhanced with addition of highly regarded Countryside Partnerships The Combination brings together industry leading brands – Bovis Homes, Linden Homes and Countryside Partnerships A multiple branded, mixed tenure strategy enhances land acquisition opportunities while driving hig
Slide 11: Extensive management capability with strong and proven track record
6 Extensive management capability with strong and proven track record, supplemented by senior executives from Countryside Combined Group executive leadership team Tim Lawlor to join as CFO, providing continuity and knowledge of Countryside’s business as well as significant CFO plc experience both
Slide 12: Aligned with One Vistry strategy – positioned for sector-leading returns
Aligned with One Vistry strategy – positioned for sector-leading returns Maximising strengths and opportunities from our combination of Housebuilding and Partnerships assets Strong market position and capability across all housing tenures A leading provider of high demand, high growth affordable
Slide 13: Land Assets, Countryside's Issues and Integration Plan
Land Assets, Countryside’s Issues and Integration Plan 12
Slide 14: Enlarged and enhanced land bank
Enlarged and enhanced land bank The Combined Group will be supported by a strong land bank across both Housebuilding and Partnerships totalling over 80,000 plots A further in-house strategic land capability will deliver land for both businesses, with nearly 70,000 combined plots Land Bank1 Vistr
Slide 15: Countryside – issues and remedies
Countryside – issues and remedies Countryside’s assessment of the issues it has faced and its priorities for resolving these are set out below From our due diligence, we believe that aligning Countryside’s cladding provision methodology with Vistry’s own will lead the former to increase, alongsi
Slide 16: Integration plan shaped by due diligence
Integration plan shaped by due diligence The Vistry management team have undertaken due diligence, which has informed our view of the prospects for the Combined Group, synergies and our initial plans for the integration of Countryside Ongoing development of a detailed integration plan will conti
Slide 17: Current Trading, Gearing and Capital Allocation Policies
Current Trading, Gearing and Capital Allocation Policies 16
Slide 18: Current trading and outlook
Current trading and outlook Update on period from 1 January – 4 September 2022 21 July Q3 trading statement Average private weekly sales rate YTD remains ahead of last year at Q3 22 Partnerships completions broadly unchanged from prior year at 0.78 (2021: 0.75) with demand in the second half ref
Slide 19: Gearing and capital allocation policies
Gearing and capital allocation policies Combined Facility Total commitments Margin Maturity Group Revolving credit facility £500m SONIA + 160-250bps 20254 expected third Existing Vistry USPP Loan £100m 403bps 2027 party debt facilities1 summary Term Loan £50m SONIA + spread3 + 265bps 2023 New facili
Slide 20: Concluding Remarks
Concluding Remarks 19
Slide 21: Summary of financial targets
Summary of financial targets We are expecting to achieve annual pre-tax synergies of at least £50 million With increased scale, we are seeking to achieve adjusted operating profit for each of the two divisions in excess of £400m We are confident that the rebalancing of our business, creating a
Slide 22: A transformational transaction
A transformational transaction 1 Strengthens Vistry’s position to deliver sector-leading returns Capital-light, high ROCE (40%+) Partnerships business becomes a 2 significantly larger part of the Vistry Group Increased Partnerships exposure offers greater resilience 3 to cyclicality of housing marke
Slide 23: Disclaimer
Disclaimer NOT FOR RELEASE, PRESENTATION, PUBLICATION, OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION This presentation has been prepared by Vistry Group PLC (“Vistry”) solely
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