Amotiv Limited · ASX:AOV
Amotiv — Investor Presentation (November 2021)
59 slides from Amotiv's investor presentation, Nov 30, 2021
Slide 1: Cover letter to ASX: Investor presentation for acquisition of AutoPacific Group
30 November 2021 Manager Company Announcements ASX Limited Level 4 20 Bridge Street SYDNEY NSW 2000 Dear Sir INVESTOR PRESENTATION FOR ACQUISITION OF AUTOPACIFIC GROUP Attached is a copy of an investor presentation in relation to the above acquisition. Approved for release by the Company Secretary.
Slide 2: Acquisition of AutoPacific Group and Equity Raising
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES GUD Holdings Limited Acquisition of AutoPacific Group and Equity Raising Graeme Whickman, CEO & MD Martin Fraser, CFO 30 November 2021 1
Slide 3: Important notices and disclaimer
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Important notices and disclaimer This investor presentation (Presentation) is dated 30 November 2021 and has been prepared by GUD Holdings Limited (ACN 004 400 891) (GUD, or the Company). By attending an investor presentation or briefing, or accep
Slide 4: Important notices and disclaimer (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Important notices and disclaimer (cont.) Restrictions on publication and distribution The distribution of this Presentation in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. Any failure to co
Slide 5: Important notices and disclaimer (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Important notices and disclaimer (cont.) Past performance Past performance, including past share price performance of GUD and pro forma financial information given in this Presentation is given for illustrative purposes only and should not be reli
Slide 6: Important notices and disclaimer (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Important notices and disclaimer (cont.) The Limited Parties have not independently verified such information and take no responsibility for any part of this presentation or the Offer. The Limited Parties make no recommendations as to whether you
Slide 7: Table of contents
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Table of contents Executive summary 7 1 GUD automotive portfolio vision 8 2 Overview of AutoPacific Group 10 3 Strategic outcomes for GUD and financial impacts 22 4 Trading update 28 5 Acquisition terms and funding 30 A Supplementary materials 34
Slide 8: Executive summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Executive summary • GUD has entered into a share purchase agreement to acquire AutoPacific Group (APG) for total consideration of approximately $744.6 million (Acquisition) from funds managed or advised by Pacific Equity Partners (PEP) and its oth
Slide 9: GUD automotive portfolio vision
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES GUD automotive portfolio vision 8
Slide 10: 4WD Accessories and Trailering is a cornerstone of GUD's automotive vision
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 4WD Accessories and Trailering is a cornerstone of GUD’s automotive vision 9
Slide 11: Overview of AutoPacific Group
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Overview of AutoPacific Group 10
Slide 12: APG is a clear leader in 4WD Accessories & Trailering in ANZ
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES APG is a clear leader in 4WD Accessories & Trailering in ANZ Undisputed market leader in towing with strong brands and market positions across a diverse range 1 of trailering, cargo and functional accessories that are 100% non-internal combustion
Slide 13: Highly attractive financial profile with strong earnings growth
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Highly attractive financial profile exhibiting strong earnings growth, resilient revenue and margins and a capital efficient operating model Strong earnings $313 - $327m $80-84m 17.0% growth at scale CY22F revenue1 CY22F EBITA1,2 revenue CAGR CY19
Slide 14: APG is the undisputed leader in the 4WD cornerstone towing category
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1. APG is the undisputed leader in the 4WD cornerstone towing category 1 Towing 2 Trailering ~85% Brands Selected products ~15% Brands Selected products market share1 market share1 Towbars X-bars Towballs Suspension systems Fifth wheel hitch Light
Slide 15: A large, attractive, and growing addressable market
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 2. A large, attractive, and growing addressable market 1 2 3 New vehicle sales are recovering to … with PU/SUV increasing their proportion … and caravan and trailering showing historical trends of sales … steady growth • More than 70% of APG reven
Slide 16: Longstanding 'sticky' relationships with Bluechip OEMs and national retailers
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 3. Longstanding ‘sticky’ relationships with Bluechip OEMs and national retailers APG is well positioned across all channels to market Longstanding and diverse relationships underpinned by brand, quality and trust Factory fitted • APG’s top 5 custo
Slide 17: Highly complementary non-ICE products backed by best-in-class R&D
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 4. Highly complementary non-ICE products backed by best-in-class R&D Complementary 100% powertrain-agnostic products >4,000 SKUs 171 182 • APG products are suitable for all powertrains, from combustion to electric (Unparalleled coverage of New SKU
Slide 18: Large scale, well-invested manufacturing and distribution capabilities
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 5. Large scale, well-invested manufacturing and distribution capabilities High volume, low cost manufacturing in Thailand and low volume, high variety manufacturing in Australia and New Zealand Creates flexibility and efficiencies in manufacturing
Slide 19: Strong financial performance: CY19A to CY21F
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 6. Strong financial performance: CY19A to CY21F Pro forma CY21F EBITA bridge (A$m) Volume – existing SKUs Volume - new SKUs M&A – volume growth6 Margin Management SG&A7, R&D and depreciation • Recovery in vehicle sales from • Functional accessorie
Slide 20: Future growth potential
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 6. Future growth potential Pro forma CY22F EBITA bridge (A$m) Volume – existing SKUs Volume - new SKUs M&A – volume and synergies6 Margin Management SG&A, R&D and depreciation • Pent up demand and easing of • 143 new SKUs released YTD • Market gro
Slide 21: Significant headroom for further product and geographic expansion
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 6. Significant headroom for further product and geographic expansion Future growth opportunities Multi-product platform with a renowned brand portfolio and Thailand manufacturing facilities Market leading towing Geographical business in ANZ expans
Slide 22: Summary financial profile
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Summary financial profile APG’s financial profile (A$m)1 CY21F cost base break down2,6 Pro forma (Pre AASB 16) Pro forma (Post AASB 16) Staff General costs admin Selling CY19A CY20A CY21F2 CY22F3,4,5 CY21F2 CY22F3,4,5 4% 2% expenses 5% R&D Revenue
Slide 23: Strategic outcomes for GUD and financial impacts
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Strategic outcomes for GUD and financial impacts 22
Slide 24: GUD portfolio journey to becoming an integrated leader in 4WD Accessories & Trailering
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES GUD portfolio journey to becoming an integrated leader in 4WD Accessories & Trailering GUD + G4CVA + GUD Automotive GUD + G4CVA (4WD Accessories only) (ACAD acquisition – Jan/21) AutoPacific Group (current acquisition – Jan/22) 4WD addressable c.$
Slide 25: Combination creates an 'end-to-end' 4WD Accessories & Trailering range
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Combination creates an ‘end-to-end’ 4WD Accessories & Trailering range Lighting Cargo Management Towing Trailering Driving Lights Fibreglass Canopies 4WD Spare Wheel Holders Towbars Coupling Systems Light Bars Aluminium Service Bodie
Slide 26: Acquiring APG creates a stronger, more diversified, and future facing GUD
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquiring APG creates a stronger, more diversified, and future facing GUD Greater Customer Diversification Higher non-ICE revenue Greater supply diversification 90% +13 GUD top 20 new %pts Non-ICE revenue (%) Supply country of origin (% of total p
Slide 27: Base case synergy target of c. $7 million p.a. realised over three years
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Base case synergy target of c. $7 million1 p.a. realised over three years Low integration risk Detailed due diligence 04 Upside potential Cross sell of BWI products through High confidence in base case estimates – internally and externally valid
Slide 28: Acquiring APG quickly creates a bigger, higher margin and faster growing business
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquiring APG quickly creates a bigger, higher margin and faster growing business Bigger business Higher margins Faster growth +70% +3 %pts ~21% 18% $192 million 19.0% APG EBITA GROWTH - 200 million (CY21F – CY22F)2 (excluding Vision X) $112 milli
Slide 29: Trading update
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Trading update 28
Slide 30: Trading update
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Trading update First quarter (Q1) trading update (3 months to September 2021) provided at the AGM • Demand was resilient throughout the first quarter of FY22 despite widespread and protracted lockdowns • COVID-19 lockdowns in Q1 were localised/reg
Slide 31: Acquisition terms and funding
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquisition terms and funding 30
Slide 32: Acquisition terms and funding
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquisition terms and funding Key acquisition terms • GUD has agreed to acquire APG for total consideration of approximately $744.6 million Purchase price • The Acquisition values APG at approximately 9.1x EV / CY22F EBITA1,2, pre synergies and 8.
Slide 33: Equity Raising summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Equity Raising summary • Fully underwritten Equity Raising of approximately $405 million comprising: - $120 million Placement; and Equity Raising size and - $285 million 1-for-3.46 accelerated non-renounceable entitlement offer structure • Approxi
Slide 34: Equity Raising timetable
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Equity Raising timetable Event Date1 Trading halt and announcement of Acquisition and Equity Raising, Placement and Institutional Entitlement Offer opens 30 November 2021 Placement and Institutional Entitlement Offer closes 1 December 2021 Announc
Slide 35: Supplementary materials
NOT NOTFOR FORDISTRIBUTION DISTRIBUTION OR RELEASE IN IN THE THE UNITED UNITEDSTATES STATES Supplementary materials Appendix A 34
Slide 36: More OEMs looking to enter the PU truck segment with new model launches
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES More OEMs looking to enter the PU truck segment with new model launches Significant recent market entries to be followed by deep pipeline of new OEM models, US model launches in Australia, and EV models Full-size US models Future opportunity Recen
Slide 37: Pro forma balance sheet
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Pro forma balance sheet Appendix B 36
Slide 38: Strong cash flow allows deleveraging, dividend flexibility and future growth
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Strong cash flow allows deleveraging, dividend flexibility and future growth Solid balance sheet with strong deleveraging profile Pro forma net debt / EBITDA1 (x) • Estimated pro forma 31 December 2021 net debt / EBITDA1 of 2.5x (i.e., after the i
Slide 39: Pro forma balance sheet
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Pro forma balance sheet1 GUD FY21 APG 30 Jun-21 year end Vision X Acquisition Equity Acquisition Transaction 30 Jun-21 $m Actual dividend2 Acquisition3,4 and scrip4 Raising debt costs Pro Forma4 Current assets Cash and cash equivalents 42.6 (23.2)
Slide 40: Key risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Key risks Appendix C 39
Slide 41: Introduction and operational risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Introduction and operational risks Introduction Operational risks GUD is subject to a variety of risk factors. Some of these are specific to its business activities, COVID-19 while others are of a more general nature. Individually, or in combinati
Slide 42: Operational risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Operational risks Operational risks (cont.) Supply chain risks Brand names may diminish in reputation and value As a distributor of products, GUD is particularly dependent on the continuing operation of its supply chain, and is dependent on suppli
Slide 43: Operational risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Operational risks Operational risks (cont.) Climate change and environment Major customer or direct sourcing and ‘home brand’ risk Some of GUD's product and market segments may be adversely impacted by climate change. Changes to government regulat
Slide 44: Operational risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Operational risks (cont.) Operational risks (cont.) Reliance on key personnel GUD’s growth and profitability may be limited by the loss of key senior management personnel, the inability to attract new suitably qualified personnel or by increased c
Slide 45: Acquisition risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquisition risks Acquisition risks Recourse to the warranty and indemnity insurance Completion risk A warranty and indemnity insurance policy has been purchased for GUD for the Acquisition. If the Acquisition completes and if a warranty or other
Slide 46: Acquisition risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquisition risks (cont.) Acquisition risks (cont.) Underwriting risks Integration risk GUD has entered into an underwriting agreement with the Joint Lead Managers pursuant to which the Joint Lead Managers have agreed to underwrite the Equity Rais
Slide 47: Acquisition risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquisition risks (cont.) Acquisition risks (cont.) Historical liability Debt funding and refinance risk If the Acquisition of APG completes, GUD may become directly or indirectly liable for any liabilities that APG has incurred in the past, inclu
Slide 48: General risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES General risks General risks Market prices Economic factors The market price of GUD shares will fluctuate due to various factors, many of which are non- specific to GUD, including recommendations by brokers and analysts, general movements in Change
Slide 49: General risks (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES General risks (cont.) General risks (cont.) Dividends Changes to government, monetary or fiscal policy or regulatory regimes The payment of dividends on GUD shares is dependent on a range of factors including its profitability, the availability of
Slide 50: International offer restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES International offer restrictions Appendix D 49
Slide 51: International offer restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES International offer restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Hong Kong Company in any jurisdiction in which it would be unlawful. In particular, this document may not WARNING: This docume
Slide 52: International offer restrictions (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES International offer restrictions (cont.) New Zealand Singapore This document has not been registered, filed with or approved by any New Zealand regulatory This document and any other materials relating to the New Shares have not been, and will not
Slide 53: International offer restrictions (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES International offer restrictions (cont.) Switzerland United Kingdom The offering of the New Shares in Switzerland is exempt from requirement to prepare and publish Neither the information in this document nor any other document relating to the off
Slide 54: International offer restrictions (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES International offer restrictions (cont.) United States This document and the information contained herein does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. The New Shares have not be
Slide 55: Underwriting agreement summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Underwriting agreement summary Appendix E 54
Slide 56: Underwriting agreement summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Underwriting agreement summary GUD has entered into an underwriting agreement with the Joint Lead Managers in respect of the Offer (Underwriting Agreement), under which the Joint Lead Managers have agreed to jointly manage and underwrite the Offer
Slide 57: Underwriting agreement summary (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Underwriting agreement summary (cont.) • ASX withdraws, revokes or amends any waivers of the ASX listing rules which are necessary in relation to the Offer Materials or to enable GUD to make the Offer; • approval for any ASX waivers or ASIC modifi
Slide 58: Underwriting agreement summary (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Underwriting agreement summary (cont.) In addition, a Joint Lead Manager may terminate their obligations under the Underwriting Agreement if any of the following termination events occurs and, in the reasonable opinion of the Joint Lead Manager, t
Slide 59: Underwriting agreement summary (cont.)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Underwriting agreement summary (cont.) • there is introduced or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any State or Territory of Australia a new law, or the Reserve Bank of Australia, or any