Thor Industries, Inc. · NYSE:THO
Thor Industries — Merger or Acquisition (February 2019)
35 slides from Thor Industries's merger presentation, Feb 1, 2019
Slide 1: Closing – February 2019
www.thorindustries.com Closing – February 2019 +
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation includes certain statements that are “forward looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934
Slide 3: Table of Contents
Table of Contents » Combining the Premier North American & European RV Companies…………………………………………………………. 4 » EHG – An Unprecedented Opportunity…………………………….. 12 » Strategic Path Forward to Maximizing Shareholder Value………. 21 » Appendix……………………………………………………………… 26 3
Slide 4: Combining the Premier North American & European RV Companies
Combining the Premier North American & European RV Companies 4
Slide 5: Transaction Overview
Transaction Overview 5 Transaction Highlights » Purchase price funded with cash and equity » Accretive to earnings per share (before synergies, purchase accounting adjustments, transaction - related expenses and deal - related interest expense) Financing » The purchase price was funded through a com
Slide 6: Snapshot of Combined Company
Snapshot of Combined Company 6 Broadens Global Footprint Balances Product Mix Notes: 4Q CY2018 average exchange rate of USD / EUR: 1.14; Revenue based on FYE 7/31/2018 for Thor (audited) and FYE 8/31/201 8 f or EHG, unaudited Revenue ($ billions) Revenue (%) Revenue (%) $8.3 $10.9 $2.6 North America
Slide 7: *Before anticipated synergies, purchase accounting adjustments, transaction - related expenses and deal - related
7 *Before anticipated synergies, purchase accounting adjustments, transaction - related expenses and deal - related interest expense Aligned with Thor’s strategic plan to enhance shareholder value – transaction to be accretive to earnings in first full year* Creates the #1 global RV manufacturer wit
Slide 8: Synergies Expected to Create Meaningful Additional Value
Synergies Expected to Create Meaningful Additional Value 8 Sharing of Best Practices » Engineering & Design » R&D and Technology » Marketing » Human Resources Strategies » Dealer Network / Dealer Development » Aftermarket Support Strategies Thor and EHG to Mutually Benefit from Leveraging Manufactur
Slide 9: Near-term synergy opportunities
» Near - term synergy opportunities: ◦ Productivity and best practices – Thor has a history of product speed to market while EHG has strength in engineering and technology such that each side will benefit ◦ Engineering and product development – EHG has considerable strength in technology, which can
Slide 10: Shared Commitment to Innovation
Shared Commitment to Innovation » EHG has a history of innovation ◦ Technological innovations within and around coaches, including applying technology to address coach operation ◦ Interior innovation to maximize usable living space – (Urban Camper) ◦ Increased focus on mobility and ease of use for o
Slide 11: Financial Impact of Closing
Financial Impact of Closing » Costs relating to the acquisition will be included in Thor’s 2019 quarterly financial results. Specific estimates of the dollar values of these costs are not yet available for the second quarter, however these costs will be comprised of the following categories, among o
Slide 12: EHG – An Unprecedented Opportunity
EHG – An Unprecedented Opportunity 12
Slide 13: Leading position in a growing RV market
» Leading position in a growing RV market ◦ European RV market recovery is 2 - 3 years behind the North American recovery ◦ European RV market has not yet reached pre - recession levels » EHG management has embarked on a performance enhancement plan over the past 12 months that is just starting to b
Slide 14: Solid anticipated cash flow generation
» Solid anticipated cash flow generation ◦ Cash priorities will be to reduce leverage, reinvest in the business and return cash to shareholders » Expected to be accretive within the first full year: ◦ Excluding synergies, purchase accounting adjustments, transaction - related expenses and incrementa
Slide 15: Erwin Hymer Group Overview
Erwin Hymer Group Overview 15 Motor Caravans 72 % Campervans 1 3 % Caravans 1 5 % By t y pe 3 €2.1 bn 1 As of EHG FYE 08/31/18 (unaudited); 2 Total revenues; 3 Vehicle revenues only, excludes revenues from accessories, services, rental, and others; 4 4Q CY2018 average exchange rate of USD / EUR:1.14
Slide 16: Erwin Hymer Group Key Statistics
Erwin Hymer Group Key Statistics 16 1957 HYMER FAMILY BEGAN RECREATIONAL VEHICLE PRODUCTION ~58K UNITS SOLD IN FY 2018 20 RENOWNED BRANDS €2.3B REVENUE FY18* ~6,400 DEDICATED EUROPEAN TEAM MEMBERS IN 2018 9 RV PRODUCTION FACILITIES IN GERMANY, UK, ITALY AND CHINA ~1,000 DEALERS ACROSS 33 COUNTRIES ~
Slide 17: EHG European Distribution Network
Confidential / preliminary 42 71 110 250 39 51 7 2 ² 163 141 RoW Bad Waldsee » Distributes vehicle brands through approximately 1,0 00 retail dealerships worldwide, across 3 3 countries Number of active vehicle dealerships¹ by country (FY2016/17) Notes: ¹ Number may vary within a small range due to
Slide 18: Leading European RV manufacturer Strong management team with proven ability to grow the business
18 Leading European RV manufacturer Strong management team with proven ability to grow the business and deliver innovative products Diversified geographic exposure to fast - growing European RV market Well - recognized brands with a highly complementary product portfolio History of industry - leadin
Slide 19: EHG Management Team
EHG Management Team 19 » CEO since August 2015 » Prior experience with Zumtobel, Assa Abloy and Mercer Management Consultants » CFO since September 2017 » Prior experience with Bizerba, Spheros, Sennheiser and Kosta » CSO since December 2017 » Held EHG management positions since 2008 » Prior experie
Slide 20: EHG Has a Long Track Record of Industry-Leading Product Innovation
EHG Has a Long Track Record of Industry - Leading Product Innovation 20 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s 1968 Wheel housing refrigerator 1966 Crank handle skylights 1976 Pull - down double bed for motorcaravans 1975 - 76 Pop - top roof for campervans 1986 First OEM to guarantee 6 years wate
Slide 21: Strategic Path Forward to Maximizing Shareholder Value
Strategic Path Forward to Maximizing Shareholder Value 21
Slide 22: Our Strategic Path
Our Strategic Path Thor has a history of strong growth both organically and through acquisition Ultimately expanding globally maximizes potential returns relative to potential risk 22 With an industry leading position in North America, we faced a crossroads: Acquire suppliers and pursue vertical int
Slide 23: Strategic Growth Parameters
Strategic Growth Parameters 23 Thor and EHG make a solid strategic and cultural fit for long - term growth Once the decision was made to expand globally, we sought to identify the markets with the best long - term growth potential: Australia is an attractive market, the third largest globally, with
Slide 24: Thor Acquisition Criteria
Thor Acquisition Criteria 24 Strong leadership team Strong history of quality Focus on innovation Market leader Future growth opportunities
Slide 25: Thor Industries Capital Strategy FY19 & Beyond
Thor Industries Capital Strategy FY19 & Beyond 25 Anticipated strong cash flow to support a balanced approach to debt reduction, growth investments and returns to shareholders 1 2 3 4 Reduce Outstanding Debt Return Capital to Shareholders with Predictable Dividend Growth and Strategic Share Repurcha
Slide 26: Appendix
THIOR | INDUSTRIES
Slide 27: European RV Industry
European RV Industry 27 29% 28% 9% 6% Others 28% 2017 European RV market share (by sales) 2017 Europe RV market overview (€ bn) €6.1bn 65% 21% 14% Motorcaravan Caravan Campervan €2.9 €4.0 €6.0 2012A 2017A 2022E €1.1 €1.3 €1.6 2012A 2017A 2022E €0.2 €0.9 €1.5 2012A 2017A 2022E Source: Company informa
Slide 28: Comparison of North American & European Markets
Comparison of North American & European Markets Business North America Europe Dealer Network Independent, non - franchise dealer network with limited exclusive relationships. Dealer base consolidating. Independent, non - franchise dealer network with more exclusive relationships. Dealer base not yet
Slide 29: Comparison of North American & European Markets
Comparison of North American & European Markets Business North America Europe Cost Structure Variable cost structure: assembly vs. manufacturing. Largely v ariable cost structure: assembly vs. manufacturing. Labor Non - union workforce with focus on attracting and retaining workers. Stable labor mar
Slide 30: Comparison of North American & European Markets
Comparison of North American & European Markets Business North America Europe Number of Dealerships ~ 2,300 (Thor Only) ~ 1,000 (EHG Only) Manufacturing Facilities 192 RV production facilities in Indiana, Ohio, Oregon and Idaho (Thor Only) 9 RV production facilities in Germany, the UK, Italy and Chi
Slide 31: European RV Market Earlier in Recovery
European RV Market Earlier in Recovery New Vehicle Registrations by Continent (’000) 31 207 201 192 170 151 146 138 135 140 143 152 162 166 174 182 198 203 210 208 189 154 150 156 147 137 140 152 168 188 168 144 141 162 182 217 222 219 220 253 272 274 251 274 292 324 320 310 366 289 206 228 247 264
Slide 32: Product Line-up Spans Across Multiple Price Points & Categories
32 Product Line - up Spans Across Multiple Price Points & Categories » Motorized recreational vehicles » Price range 1 : » €32,000 – € 20 0,000 » $3 6 , 500 – $2 28 , 200 » Towable recreational vehicles » Price range 1 : » €8,700 – €45,000 » $ 9 , 900 – $5 1 , 300 » Motorized recreational vehicle on
Slide 33: Select EHG Brands
Select EHG Brands 33 Notes: Brands ordered alphabetically; CB – Class B campervan; M – Class A / C; T – Towable; 4Q CY2018 average exchange rate of U SD / EUR:1.14 Excludes UK brands (Elddis, Xplore, Compass, and Buccaneer) Segment Products Price (€k) Price ($k) Positioning Mainstream CB, M, T <10 –
Slide 34: EHG History
EHG History 34 0 1957 1990 1991 1996 1998 2000 2004 2005/6 2011 2018 1 CMC Founded by Erwin Hymer in 1980; 2 Manufacturer of recreational vehicles for Carado and Sunlight brands 2013 Successful delisting of Hymer AG and return to 100% Hymer family ownership as a prerequisite to merge CMC Caravan and
Slide 35: Helpful EHG Websites
Helpful EHG Websites » EHG RV Businesses: ◦ Hymer – hymer.com ◦ Carado – carado.de ◦ Sunlight – sunlight.de ◦ 3DOG – 3dogcamping.eu ◦ Elddis, Compass, Xplore and Buccaneer – elddis.co.uk ◦ Bürstner – buerstner.com ◦ Dethleffs – dethleffs.de ◦ Eriba – eriba.com ◦ Etrusco – etrusco.com ◦ Laika – laika
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