Vulcan Steel Ltd. · ASX:VSL
Vulcan Steel — Merger or Acquisition (July 2022)
22 slides from Vulcan Steel's merger presentation, Jul 22, 2022
Slide 1: Ullrich Aluminium Acquisition
ULLRICH ALUMINIUM ACQUISITION 22 July 2022 1
Slide 2: Disclaimer
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Disclaimer The material contained in this document is They may also be based on factors which are subject a presentation of information about Vulcan Steel to significant uncertainties and contingencies which Limited’s (“Vulcan”) and Ullrich Aluminium Limited’s
Slide 3: Agenda
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Agenda Transaction Summary Rationale Industry and Ullrich Business Overview Integration, Synergies and Financial Impact Funding and Dividend Payout Policy 3
Slide 4: Transaction Summary
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Transaction Summary The acquisition of Ullrich significantly adds to the network reach and scale of Vulcan in its goal to become the leading steel and metal products distributor and value added processor in Australasia. Transaction Rationale Impact on Earnings
Slide 5: A compelling investment opportunity
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO A compelling investment opportunity Ullrich is an integrated distribution-centric operator with a large 23,000t 1 sales network, together with extrusion facilities and fabrication operations. Tonnes of aluminium products sold in FY22 • A well-established and a
Slide 6: Industry & Ullrich Business Overview
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Overview Vulcan is the only Australasian-wide, pure-play, value Industry & Ullrich Business 6
Slide 7: The aluminium industry value chain
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO The aluminium industry value chain Aluminium logs are a globally traded commodity. While both Australia and New Zealand ALU M INIU M R EFIING/S M ELTING There are no rolling mills in smelters mostly export their Australia or New Zealand production, domestic Al
Slide 8: Ullrich is well positioned in the aluminium supply chain as an integrated distributor
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Ullrich is well positioned in the aluminium supply chain as an integrated distributor Ullrich is a distributor with extrusion and fabrication operations. I N TE GRAT E D O P ER A T O R S FA BRICA T O RS / E ND - INDUS T RIA L Smelters RO L L I N G MI L L S / E
Slide 9: Overview of Ullrich's business
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Overview of Ullrich’s business $39m Ullrich is an integrated distribution-centric operator with a large sales network, together with extrusion facilities and fabrication operations. • Ullrich has a well-established and a strong industrial brand in aluminium wi
Slide 10: Ullrich has a diverse product range
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Ullrich has a diverse product range Scaffolding and Ladders Architectural Transport Fabrication • Ullrich fabricates its own scaffolding • Windows and doors are the largest • Truck and ute bodies, and marine • Fabricates for customers to order. and ladders in
Slide 11: Operational Overlap (Australia)
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Operational Overlap Vulcan and Ullrich location overlap in Australia • 7 out of 25 Ullrich locations are within 5 minutes drive of existing Vulcan sites CAIRNS DARWI N TOWNSVILLE ULLRICH ALUMINIUM VULCAN MACKAY ROCKHAMPTON CALOUNDRA x4 DUNDOWRAN BRISBANE x2 GO
Slide 12: Operational Overlap (New Zealand)
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Operational Overlap Vulcan and Ullrich location overlap in New Zealand • 6 out of 18 Ullrich locations are within 5 minutes drive of existing Vulcan sites WHANGAREI x3 x3 AUCKLAND SILVERDALE ULLRICH ALUMINIUM VULCAN HAMILTON TAURANGA NEW PLYMOUTH ROTORUA PALME
Slide 13: Ullrich has the widest aluminium distribution footprint in Australasia
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Ullrich has the widest aluminium distribution footprint in Australasia and is a meaningful extruder 70 AUSTRALIAN EXTRUDERS AND DISTRIBUTORS NEW ZEALAND EXTRUDERS AND DISTRIBUTORS 20 60 50 15 40 10 30 20 5 10 0 0 Capral G Jasmes EPA/APA INEX Almax Ullrich Extr
Slide 14: Aluminium - a new & complementary vertical to Vulcan's service offering
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Aluminium - a new & complementary vertical to Vulcan’s service offering Aluminium has been on Vulcan’s watchlist in our long term growth strategy. Vulcan is the only Australasian-wide, pure-play, value added steel distributor and processor. STEEL METALS Steel
Slide 15: Ullrich pre-COVID-19 earnings metric was the reference for our acquisition value
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Ullrich pre-COVID-19 earnings metric was the reference for our acquisition value ULLRICH REVENUE (NZ$m) ULLRICH EBITDA (NZ$m) 300 60.0 250 271 50.0 10.4 200 208 215 40.0 38.7 150 30.0 8.9 100 20.0 23.1 15 50 10.0 0 0 FY18-20 average FY21 FY22d* FY18-20 average
Slide 16: Ullrich return on capital was between 10-12% prior to COVID-19 period
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Ullrich return on capital was between 10-12% prior to COVID-19 period • Higher assets employed in ASSETS EMPLOYED (NZ$m) FUNDS EMPLOYED (NZ$m) 250 250 FY22 reflect higher aluminium 76 79 price and higher stock volume 200 200 • This was funded by higher 69 72 d
Slide 17: An agile integration strategy
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO An agile integration strategy • The Ullrich brand will be retained to become Vulcan Ullrich • Staff and customer communication is an immediate priority with an Aluminium action planning process commencing in parallel • Vulcan Ullrich Aluminium will be part of
Slide 18: Areas of synergy and improvement
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Areas of synergy and improvement Margin enhancement opportunity through sales force effectiveness Productivity gain programme in the aluminium business • Optimise duplications • Focus on service to deliver value, rather than the conventional cost-plus practice
Slide 19: Expect material upside from a successful integration
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Expect material upside from a successful integration • We are at the formative stage VULCAN STAINLESS STEEL EBITDA SINCE ACQN VULCAN ENGINEERING STEEL EBITDA SINCE ACQN 35 50 of our integration process and 45 intend to provide more details 30 40 on earnings an
Slide 20: The transaction will be fully debt-funded
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO The transaction will be fully debt-funded Funding • The effective NZ$145m acquisition price (including debt assumed but excluding the NZ$20m deferred settlement payment for working capital) will be fully debt-funded • On completion of the settlement (excluding
Slide 21: Q&A
ULLRICH ALUMINIUM ACQUISITION VULCAN.CO Q&A 21
Slide 22: Vulcan.co
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