Ama Group Limited · ASX:AMA
Ama — FY2023 Earnings Presentation
76 slides from Ama's earnings presentation, Sep 7, 2023
Slide 1: FY23 Annual Results Presentation and Equity Capital Raising
FY23 ANNUAL RESULTS PRESENTATION AND EQUITY CAPITAL RAISING 7 September 2023
Slide 2: Webcast
Webcast AMA Group 2023 Annual Results Thursday, 7 September 2023 11:00am, AEST Register at: https://s1.c-conf.com/diamondpass/10033560-gh76t8.html Due to US legal restrictions, people in the United States are not permitted to participate in this webinar unless they are institutional accredited inves
Slide 3: Contents
Contents Overview Slide 4 FY23 Financial Results Slide 11 Segment Performance Slide 16 Strategy and Priorities Slide 22 Outlook Slide 36 Capitalisation and Equity Raising Slide 39 Other Information Slide 69 3
Slide 4: FY23 Overview
FY23 Overvie AMA GROUP
Slide 5: Summary
Summary FY23 Transition year with significant year on year earnings improvement $64.6 million normalised post-AASB 16 EBITDA1, a $43.0 million increase on prior year $28.9 million cash on hand at 30 June 2023, after positive operating cash flow in 2H23 Several operational achievements positi
Slide 6: FY23 Business Environment Recap
FY23 Business Environment Recap Strong demand for repair services across most geographic markets and repair types Continued increase in severity (complexity of parts and components and labour hours per job) driving higher repair cost Labour scarcity limited throughput ‐ Elevated lateral hiring
Slide 7: FY23 highlights: EBITDA, cash and safety
EBITDA (normalised, post-AASB 16) Cash on hand LTIFR $65m $29m 2.07 $43m increase on FY22 Positive 2H23 operating cash flow 48% improvement on FY22 Interim pricing for Capital S.M.A.R.T from October 2022 Achieved pricing uplifts across portfolio and ceased some unprofitable work Heavy Motor margins
Slide 8: FY23 Key Metrics
FY23 Key Metrics Capital S.M.A.R.T AMA Collision Heavy Motor ACM Parts Group Metric FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 Safety – LTIFR1 2.11 1.35 1.53 5.16 7.50 11.84 0.00 3.10 2.07 3.96 Average Repair Days2 6.1 5.7 12.8 10.0 15.3 11.3 n/a n/a n/a n/a Repair Quality 1.9% 2.2% 1.7% 3.3%
Slide 9: FY23 Financial Results Summary
FY23 Financial Results Summary Total Group revenue and other income of $869.6 million (FY22: $844.9 million) Normalised post-AASB 16 EBITDA of $64.6 million (FY22: $21.6 million) ‐ Within updated guidance provided in April 2023 ‐ $43.0 million increase year on year Reset of Vehicle Collision R
Slide 10: Key FY23 People Activities
Key FY23 People Activities Take the LEAD HSE program Health and safety First aid training for home and work Record low LTIFR of 2.07 Retention Leaders forum town halls and A great place to work AMA Group awards Engagement Mental health training and new EAP Our Voice 72% response rate to employee sur
Slide 11: FY23 Financial Results
FY23 Financial Results
Slide 12: Summary Financial Performance
Summary Financial Performance Summary financial performance ($M) FY23 FY22 Change Change % $43.0 million improvement in normalised post-AASB 16 Revenue 869.6 844.9 24.7 3% EBITDA Operating expenses (inc. rent, exc. normalisations) (850.0) (874.1) 24.1 (3%) Normalised EBITDA (pre- AASB 16) 19.6 (29
Slide 13: Summary Financial Position
Summary Financial Position Summary financial position ($M) Jun-23 Jun-22 Change Change % 30 June cash position of $28.9 million Cash and cash equivalents 28.9 52.2 (23.3) (45%) Other current assets 126.2 132.3 (6.1) (5%) Working capital is consistent with FY22, with improved Intangible assets 32
Slide 14: Net Debt
Net Debt Net Debt ($M) 30-Jun-23 30-Jun-22 Change Change % No significant changes to debt and capitalisation during Financial liabilities - drawn cash facilities 165.0 165.0 0.0 0% PIK interest capitalised 1.0 0.0 1.0 100% the period Cash and cash equivalents (28.9) (52.2) 23.3 (45%) PIK interes
Slide 15: Cash Flows
Cash Flows Statement of Cash Flows ($M) FY23 FY22 Change Change % FY23 Operating Cash inflow of $17.6 million substantially Receipts from customers, inclusive of GST 995.7 946.8 48.9 5% Payments to suppliers and employees, inc. of GST (969.0) (947.7) (21.3) 2% improved from $28.2 million outflow i
Slide 16: Segment Performance
Segment Performance
Slide 17: Summary
Summary Improvement in operating position of all business units on prior year Vehicle Collision Repairs Heavy Motor Supply Corporate/Eliminations Total Group Summary financial performance ($M) FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change Revenue and other inco
Slide 18: Vehicle Collision Repairs
Vehicle Collision Repairs Improvement in operating performance Summary financial performance ($M) FY23 FY22 Change Revenue 764.5 725.3 39.2 Ongoing insurer engagement Operating expenses (including rent) (743.8) (750.3) 6.5 ‐ Interim pricing for Capital S.M.A.R.T (from October 2022) EBITDA (pre-
Slide 19: Heavy Motor
Heavy Motor Summary financial performance ($M) FY23 FY22 Change Revenue up 21% pcp Revenue 65.4 54.0 11.4 Post-AASB 16 EBITDA grew 17% although adversely impacted Operating expenses (including rent) (57.8) (47.4) (10.4) EBITDA (pre- AASB 16) 7.6 6.6 1.0 by general and occupancy cost increases Oc
Slide 20: Supply
Supply Summary financial performance ($M) FY23 FY22 Change Supply base business reset largely complete1 Revenue 79.6 96.8 (17.2) Parallel import parts sales up 51% in FY23 vs pcp Operating expenses (including rent) (81.8) (100.0) 18.2 EBITDA (pre- AASB 16) (2.2) (3.2) 1.0 ‐ Improved stocking lev
Slide 21: Corporate
Corporate Summary financial performance ($M) FY23 FY22 Change Organisational optimisation to ensure fit-for-purpose Revenue 0.0 0.0 0.0 structure and reduced indirect expenses as well as Operating expenses (including rent) (7.4) (10.3) 2.9 increased corporate rebates EBITDA (pre- AASB 16) (7.4) (1
Slide 22: Strategy & Priorities
Strategy & Priorities
Slide 23: Five Year Strategic Targets
Five Year Strategic Targets Australia & New Zealand Vehicle 170 $1.2b Collision Locations Revenue2 132 currently FY23 $765m 14 $100m Heavy Locations Revenue2 8 currently FY23 $65m 70,000m2 $200m Supply Capacity Revenue2 ~50,000m2 currently FY23 $80m 3.0x <2.25x Group Group Cost Net Leverage Leverage
Slide 24: Five Year Strategy Overview
Five Year Strategy Overview Strategic Objectives Great Place to Organic Acquisition Cash Flow Margin Work Growth Growth Generation Expansion Strategic Pillars – The Three Ps Partnerships Production Procurement Focus Areas Reset the Base Business Grow Minimise Disruption 1 2 3 24
Slide 25: FY23 Review
FY23 Review 1 2 3 Reset the Base Business Grow Minimise Disruption Adjustments to Contract pricing Embed organisational structure Optimise network Groupwide procurement to Accelerate third-party parts and Disintermediation of parts leverage benefits of scale consumables business Priority ADAS opport
Slide 26: Contract Pricing
Contract pricing Contract Pricing Pricing reviews forming part of business-as-usual insurer engagement to manage cost inflation and recovery ‐ Inflation slowing but expected to continue in the medium term, particularly as AUD weakness is ongoing ‐ Efficiency measures will not be sufficient to offs
Slide 27: Network & Organisational Optimisation
Adjustments to organisational structure Optimise network Network & Organisational Optimisation Major network optimisation activities completed, moving to business-as- AMA Collision Arundel, QLD usual network evolution and focus on network expansion opportunities ‐ Expansion of existing workforce i
Slide 28: Site Profitability Analysis (Excluding Capital S.M.A.R.T)
Site Profitability Analysis (Excluding Capital S.M.A.R.T) +10% EBITDA 0-5% EBITDA Ongoing price management will 5-10% EBITDA Unprofitable be required to maintain 127 profitability in the current high 125 119 inflation environment 105 58 52 54 25 85 27 23 21 31 18 20 25 16 17 23 18 36 37 30 15 15 F
Slide 29: Capacity Utilisation
Capacity Utilisation Capacity utilisation improving following network optimisation activity, however continues to be impacted by labour scarcity 450 100 % ‘000 vehicles 419 392 398 90 400 Utilisation % 56 373 21 80 Unutilised Capacity 350 94 321 Volume 104 70 300 60 60 250 50 200 371 363 40 150 304
Slide 30: FY24 Priorities
FY24 Priorities 1 2 3 Reset the Base Business Grow Minimise Disruption Groupwide procurement to Grow workforce Disintermediation of parts Priority leverage benefits of scale Operational improvements Revenue diversification & growth Workforce of the future Retention and engagement Organic and acquisi
Slide 31: Parts & Procurement
Groupwide procurement to leverage benefits of scale Disintermediation of parts Parts & Procurement Accelerate third-party parts and consumables business Procurement Parts Disintermediation Parallel import parts Distribution ‐ Record Parallel import parts sales continued to build through FY23 ‐ V
Slide 32: Capital S.M.A.R.T
Operational improvements Capital S.M.A.R.T Negotiations for new pricing for Capital S.M.A.R.T. under the Motor Repair Services Agreement (MRSA) with Suncorp concluded (announced 18 August 2023) Whilst the details of the new pricing and surrounding terms are commercially sensitive, AMA Group can
Slide 33: Direct Revenue
Revenue diversification Direct Revenue Promotion of AMA Group capability to raise awareness and consideration of AMA Group’s network and capability with target market segments via industry media and key trade shows Ongoing engagement with accident management companies and fleet management organi
Slide 34: Revenue and Service Growth Opportunities
Revenue diversification Revenue and Service Growth Opportunities The Group sees opportunity to continue to improve its service offering within existing physical infrastructure In identifying opportunities, the Group will explore global trends and operating models which may provide insight into a
Slide 35: Board and Management Changes
Board and Management Changes Following an incredibly challenging few years for both the collision repair industry and AMA Group, in which the Group has undertaken huge transformation, the timing is right for new leadership to realise the potential of the group and capitalise on the strong foundati
Slide 36: Outlook
Outlook AMA GROUP
Slide 37: FY24 Outlook
FY24 Outlook Having reset commercial and operational fundamentals, AMA Group is preparing for profitable growth in line with the company's strategic objectives. Improvement through FY23 transition year, with momentum leading into FY24 Growing our workforce in this continued labour constrained en
Slide 38: Aspiring to be industry benchmark
Aspiring to be Industry benchmark for safety Preferred employer within the industry Training “more than our share” 200+ sites $1.5b+ revenue 12%+ post-AASB 16 margins Supporting environmental sustainability through collision repair and parts sourcing 38
Slide 39: Capitalisation and Equity Raising
Capitalisation and Equity Raising
Slide 40: Funding, Liquidity and Growth Optionality
Funding, Liquidity and Growth Optionality Senior debt facilities in place until October 2024 $ million 30 Jun 23 30 Jun 23 30 Jun 22 Pro-Forma ‐ Agreement with lenders to repay $35 million of principal by 31 December 2023 as a condition to waiver Borrowings – drawn including PIK 166.0 166.0 165.0
Slide 41: Equity Raising
Equity Raising AMA Group today announces it has launched a capital raising, to raise Sources $m approximately $55.0 million (“Capital Raising”) Share Placement $17.6m Capital Raising is comprised of two concurrent offerings: Entitlement Offer $37.4m ‐ $17.6 million fully underwritten Institution
Slide 42: Proforma Capitalisation
Proforma Capitalisation PROFORMA BALANCE SHEET Jun-231 Impact of Jun-23 Improved Liquidity Position3 Cash on balance sheet ($millions) A$ millions Capital Raising2 Pro-Forma Cash and cash equivalents 28.9 52.3 81.1 81.1 Other current assets 126.2 - 126.2 Intangible assets 325.8 - 325.8 28.9 Other no
Slide 43: Offer Details
Offer Details Fully underwritten institutional placement (“Institutional Placement”) and 1-for-2.15 accelerated non-renounceable entitlement offer to raise gross Offer structure and size1 proceeds of $55.0m (“Entitlement Offer,” together with the Institutional Placement, the “Capital Raising”) A
Slide 44: Key Dates
Key Dates Event Date Equity Raising announced and investor presentation lodged to the ASX Thursday, 7 September 2023 Institutional Entitlement Offer and Placement opens Results of Institutional Entitlement Offer and Placement announced and trading resumes on an ex-entitlement basis Friday, 8 Septemb
Slide 45: Key Risks
Capitalisation and Equity Raising Key Risks
Slide 46: Key risks
Key risks (a) Key risks – Business risks Risk Summary Inflationary pressures AMA Group's operating and financial performance is affected by general economic conditions. This risk is heightened in the context of the high inflation and interest rate and general economic environment. A prolonged dete
Slide 47: Key risks
Key risks Risk Summary Unknown liabilities in AMA Group has in the past disposed of or divested, and may in the future dispose of or divest, certain business lines for strategic reasons (for example the disposal of the connection with FluidDrive Business as announced on 28 September 2022). Under t
Slide 48: Key risks
Key risks Risk Summary Customer / insurer AMA Group’s business model relies on the relationships it has with key insurance customers for vehicle repair volumes and the terms of agreement between AMA Group and relationship risks the insurers, including pricing per repair and preferred repairer stat
Slide 49: Key risks
Key risks Risk Summary Maintenance of Some of the operating companies of AMA Group are required to renew quality assurance accreditations important or essential for the maintenance of certain customer standards and quality supply arrangements. Failure to maintain or to gain re-accreditation may ha
Slide 50: Key risks
Key risks Risk Summary Asset impairment Consistent with accounting standards, AMA Group is periodically required to assess the carrying value of its assets (such as the impairments disclosed at Note B3(C) of the FY2023 Annual Report). Where the value of asset is assessed to be less than its carryi
Slide 51: Key risks
Key risks (b) Key risks – General risks Risk Summary Investment in equity There are general risks associated with investments in equity capital. The trading price of AMA Group’s ordinary shares on ASX may fluctuate with movements and limited capital liquidity in equity capital markets in Australia
Slide 52: Key risks
Key risks Risk Summary Major shareholder risk AMA Group currently has a number of substantial shareholders on its share register. There is a risk that these shareholders, future substantial shareholders, or other large shareholders may sell their shares at a future date. This could cause the price
Slide 53: Key risks
Key risks (c) Key risks – Transaction and offer risks Risk Summary Equity raising risk The Underwriter will be acting as underwriter, lead manager and bookrunner to the Offer. AMA Group entered into an underwriting agreement with the Underwriter in respect of the Offer (“Underwriting Agreement”).
Slide 54: Key risks
Key risks Risk Summary Convertible Notes The Convertible Notes may be converted into ordinary shares under certain circumstances. The ordinary shares held by a Noteholder as a result of any conversion will, following conversion, rank equally with existing ordinary shares held by existing sharehold
Slide 55: Important Notices and Disclaimer
Capitalisation and Equity Raising Important Notices and Disclaimer
Slide 56: Important Notices and Disclaimer
Important Notices and Disclaimer The following notice and disclaimer applies to this investor presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in this Presentation. By accepting,
Slide 57: Important Notices and Disclaimer
Important Notices and Disclaimer Not for release to US wire services or distribution in the United States This Presentation may not be distributed or released to US wire services in the United States. This Presentation and the information contained herein does not constitute an offer to sell, or the
Slide 58: Important Notices and Disclaimer
Important Notices and Disclaimer New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the “FMC Act”). The New Shares are not being offered to the public within New Zealand other than to existin
Slide 59: Important Notices and Disclaimer
Important Notices and Disclaimer Canada (British Columbia, Ontario and Quebec provinces) This document constitutes an offering of New Shares only in the Provinces of British Columbia, Ontario and Quebec (the “Provinces”), only to persons to whom New Shares may be lawfully distributed in the Province
Slide 60: Important Notices and Disclaimer
Important Notices and Disclaimer United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 20
Slide 61: Important Notices and Disclaimer
Important Notices and Disclaimer Financial data All dollar values are in Australian dollars (A$ or AUD) unless stated otherwise. This Presentation includes certain financial information as at 30 June 2023 and FY24 guidance (Financial Information). The Financial Information is presented in an abbrevi
Slide 62: Important Notices and Disclaimer
Important Notices and Disclaimer Investors are strongly cautioned not to place undue reliance on forward-looking statements, particularly in light of the current economic climate and significant volatility, uncertainty and disruption caused by certain geopolitical tensions and the ongoing impact of
Slide 63: Important Notices and Disclaimer
Important Notices and Disclaimer Disclaimer No party other than AMA Group has authorised, permitted or caused the issue, submission, dispatch or provision of this Presentation or makes or purports to make any statement in this Presentation. Canaccord Genuity (Australia) Limited (ACN 075 071 466) (Un
Slide 64: Underwriting Agreement
Capitalisation and Equity Raising Underwriting Agreement
Slide 65: Underwriting Agreement
Underwriting Agreement Summary of Underwriting Agreement AMA Group has appointed Canaccord Genuity (Australia) Limited (ACN 075 071 466) (Underwriter) to act as the sole lead manager, underwriter and bookrunner in relation to the Capital Raising, subject to the terms and conditions of the underwriti
Slide 66: Underwriting Agreement
Underwriting Agreement j) (fraud) AMA Group or any of its directors or officers engage or have engaged in any fraudulent conduct or activity whether or not in connection with the Capital Raising; k) (prospectus required) it becomes necessary for AMA Group to issue a prospectus under Chapter 6D of th
Slide 67: Underwriting Agreement
Underwriting Agreement i. trading in all securities quoted or listed on ASX, the Hong Kong Stock Exchange, the London Stock Exchange, the Singapore Stock Exchange or the New York Stock Exchange is suspended or limited in a material respect for one day (or a substantial part of one day) on which that
Slide 68: Underwriting Agreement
Underwriting Agreement Representations, warranties and undertakings AMA Group gives customary representations and warranties in connection with (among other things) the Capital Raising. AMA Group gives customary undertakings to the Underwriter, including that (subject to certain exceptions) it will
Slide 69: Other Information
Other Inform AMA GROUP
Slide 70: Normalisations
Normalisations Vehicle Collision Repairs Heavy Motor Supply Corporate/Eliminations Total Group Normalisation (post AASB 16) ($M) FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change FY23 FY22 Change EBITDA (post- AASB 16) 56.6 17.1 39.5 12.7 10.8 1.9 1.6 1.2 0.4 (7.2) (10.2) 3.0 63.7
Slide 71: The leader in the Australian and New Zealand collision repair industry
SUPPLY HE AV Y MOTOR The leader in the ~3,300 ~220k Australian and Team members Recycled & new $870m parts supplied New Zealand collision FY23 revenue & other per year repair industry ~260k ~6.3k income Vehicles Vehicles We have the biggest collision repair network repaired reclaimed across Australi
Slide 72: Structure
Structure Partnerships Production Procurement Build commercial relationships for the long- Leverage the technical skills and industry expertise in the business Secure the quality term, based on trust and products needed to delivering industry- execute operations on leading value to all Deliver opera
Slide 73: Executive Team
Executive Team Carl Bizon CEO & Executive Director Alexandra Holston Mathew Cooper Geoff Trumbull Andrew Mair Alison Laing Scott Lancaster Director Investor Group Chief Group Chief Group Chief Interim Group Chief Group Chief Relations Operating Officer Financial Officer Commercial Officer People Off
Slide 74: AMA Group Board
AMA Group Board Caroline Waldron Carl Bizon Chair CEO and Executive Director Talbot Babineau Simon Moore Kyle Loades Non-Executive Director Non-Executive Director Non-Executive Director 74
Slide 75: AMA Group
AMA GROUP
Slide 76: amagroupltd.com
AMA Group Limited ABN 50 113 883 560 Level 13, 484 St Kilda Road Melbourne, VIC 3004 amagroupltd.com