Europris Asa · OSL:EPR
Europris Asa — Merger or Acquisition (June 2018)
24 slides from Europris Asa's merger presentation, Jun 18, 2018
Slide 1: Creating a pan-Nordic platform
Creating a pan-Nordic platform June 2018 Norway’s leading discount variety retailer
Slide 2: Important notice
Important notice ABOUT THIS PRESENTATION • By reading this company presentation (the “Presentation”), or attending any meeting or oral presentation held in relation thereto, you (the “Recipient”) agree to be bound by the following terms, conditions and limitations. The Presentation has been produced
Slide 3: Important notice (cont'd)
Important notice (cont’d) Any forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company, or cited from third party sources, are solely • opinions and forecasts and are subject to risks, uncertainties and other factors that may cause actual re
Slide 4: Achieving international competitiveness with a solid Nordic footprint
Achieving international competitiveness with a solid Nordic footprint “Bringing the segment’s two strong players in Norway and Sweden together, leveraging a significantly overlapping assortment, deep retail know-how and a common strategic agenda to create a robust Nordic constellation in discount va
Slide 5: Creating a pan-Nordic platform in discount variety retail
Creating a pan-Nordic platform in discount variety retail …with sourcing power to reflect an even larger grouping (through Shanghai JV with Tokmanni) Representing sales of NOK 17.1bn NOK 3.6bn NOK 5.9bn NOK 7.6bn 349 stores across Norway & Sweden Note: Numbers based on each company’s 2017A revenue n
Slide 6: Partners with strategic potential on a European scale
Partners with strategic potential on a European scale… The Europris & ÖoB partnership emerges among the top three major European structures in the fast growing discount variety retail sector Not PF for Hong Kong Estimated combined partnership numbers • Chain sales: • Chain sales: • Chain sales: • Ch
Slide 7: A retail segment with solid growth across all Western geographies
…in a retail segment that experiences solid growth across all Western geographies 18% 22% 10% Average ‘12-’17 Average ‘12-’17 Average ‘12-’17 Sales CAGR Sales CAGR Sales CAGR Source: 3i Capital Markets Day presentation 2018, 9th March 2018; OC&C research; company information; and Europris estimates
Slide 8: A low-risk synergistic partnership today – potential for true European scale tomorrow
A low-risk synergistic partnership today – potential for true European scale tomorrow 2018 2019 2020 2021 2022 Strategic Initiatives Turnaround of Potential ÖoB exercise of option to Store initiatives acquire (incl. ÖoB 2.0) remaining 80% stake Best practice sharing Purchasing cooperation Continued
Slide 9: Transaction highlights
Transaction highlights • Based on EV using fixed multiple of 7.7x actual EBITDA 2018 20% initial • Expected price of c. NOK 200m, assuming budgeted EBITDA of SEK 164m stake in • Share for share transaction Runsven- • Vendor note issued at closing – conversion to Europris shares post agreement on gru
Slide 10: ÖoB is a household name, well established across Sweden
ÖoB is a household name, well established across Sweden Overview Store estate and central warehouse • Swedish discount variety retailer founded by Rune Svensson in 1948 ‒ Started as wholesale operation in Linköping ‒ Several acquisitions until early nineties ‒ Överskottsbolaget acquired in 1992 – 9
Slide 11: The strategic turnaround has improved financial performance
The strategic turnaround has improved financial performance Revenue Comment SEKm • ÖoB emerging from strategic turnaround 4 163 4 026 3 935 4 078 process ‒ New management team 1 518 1 525 ‒ Clearly defined strategy of store modernisation and assortment rebalancing ‒ Path to margin improvement establ
Slide 12: Highly competent management team
Highly competent management team Fredrik Söderberg • Chief Executive Officer (since 2017) • 25 years of experience in Swedish retail and pharmacy business, latest at ICA as Director of Sales & Operations Kent Sandin • CFO (since 2015) • 30 years of executive management positions in retail and FMCG M
Slide 13: Working together as two independent retailers with a common strategic agenda
Working together as two independent retailers with a common strategic agenda • Joint purchasing to commence immediately • Sharing of best practice and experience • Companies to be run independently and by separate management teams • Board participation Laying the foundation for a potential combined
Slide 14: Significant assortment and supplier overlap presents opportunity for realising synergies
Significant assortment and supplier overlap presents opportunity for realising synergies NOK: 5.9bn NOK 3.6bn 25 % 18 % 47 % 64 % 18 % 28 % General merchandise Speciality retail Groceries Source: Based on Europris and Runsvengruppen 2017 revenue • Note: Numbers for Runsvengruppen converted to NOK us
Slide 15: Overlapping concepts catering for upside in exploiting best practice
Overlapping concepts catering for upside in exploiting best practice Europris version 5.1 ÖoB New concept store 15
Slide 16: Investing together to develop exciting innovations for the future
Investing together to develop exciting innovations for the future 16
Slide 17: Why it makes commercial sense
Why it makes commercial sense • Significant overall synergy potential in sourcing from wide assortment overlap Sourcing – in the range of NOK 60-80m combined synergies • Generally long lead times on sourcing – initial synergies expected late 2019, with full effect in the years thereafter Concept • E
Slide 18: Creating a pan-Nordic stronghold and platform for further growth
Creating a pan-Nordic stronghold and platform for further growth 18
Slide 19: Appendix – additional transaction details
Appendix – additional transaction details 19
Slide 20: Additional key transaction details
Additional key transaction details • Share for share transaction – shares to be transferred to the Svensson family’s holding company RuNor AS ‒ Closing expected end June 2018 ‒ Vendor note issued at closing to be converted to Europris shares following agreement on 2018 actual EBITDA for ÖoB ‒ Number
Slide 21: Procurement synergy overview
Procurement synergy overview • Extensive analysis of product and supplier overlap conducted in close cooperation between the two companies’ respective procurement teams • Estimation of synergy potential from a representative selection of categories and products • Shared prioritisation of supplier an
Slide 22: ÖoB historic reported financials
ÖoB historic reported financials Consolidated income statement Consolidated balance sheet SEKm 2017 2016 SEKm 2017 2016 Revenue 3 924,1 4 014,1 Goodwill 4,3 4,3 Other income 10,9 12,3 Other intangible assets 34,4 31,7 Land and buildings 15,0 18,2 Total operating income 3 935,0 4 026,4 Fixtures and f
Slide 23: ÖoB current ownership structure
ÖoB current ownership structure Ownership structure Comment • Svensson family in control since inception, some 70 years ago 100% owned by the • Ownership today divided between seven Svensson family individuals from the 2nd and 3rd generations • Board representation only – no currently active managem
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