Kelsian Group Limited · ASX:KLS
Kelsian — Investor Presentation (March 2023)
50 slides from Kelsian's investor presentation, Mar 15, 2023
Slide 1: All Aboard America! Acquisition and equity raising
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES All Aboard America! Acquisition and equity raising 15 March 2023 © Kelsian Group Limited
Slide 2: Importance notices and disclaimer
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Importance notices and disclaimer Important Notices and Disclaimer This presentation (including the appendices, any ancillary documents relating to it, any oral presentation and any question or answer session) is dated 15 March
Slide 3: Importance notices and disclaimer (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Importance notices and disclaimer (cont) Financial information Unless otherwise stated, all dollar values in this Presentation are in Australian dollars. Certain figures may be subject to rounding differences. Investors should
Slide 4: Disclaimer
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Importance notices and disclaimer (cont) Disclaimer Macquarie Capital (Australia) Limited (ABN 79 123 199 548) is acting as lead manager, underwriter and bookrunner in respect of the Offer (‘Lead Manager’). To the maximum exten
Slide 5: Agenda
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Agenda 1 Executive summary 2 Overview of AAAHI 3 Investment highlights 4 Transaction funding A Pro forma financials B Additional information C Key risks D International offer restrictions E Underwriting agreement summary © Kels
Slide 6: Executive summary
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Executive summary © Kelsian Group Limited
Slide 7: Transaction overview
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Transaction overview Transaction ● Kelsian has entered into a binding agreement to acquire 100% of All Aboard America! Holdings Inc. (AAAHI)1, a leading provider of passenger overview motorcoach services to corporate, governmen
Slide 8: Transaction overview (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Transaction overview (cont) Financial impacts ● AAAHI has achieved strong growth in recent years and is well positioned to continue growing, particularly in end-markets such as LNG ● AAAHI achieves higher EBITDA margins in comp
Slide 9: Kelsian's recent achievements
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Kelsian’s recent achievements Solid base creates optionality to pursue growth strategy Solid 1H23 result reflecting benefits of long-term, low-risk government-backed ✓ service contracts, providing consistent predictable earning
Slide 10: Overview of AAAHI
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Overview of AAAHI © Kelsian Group Limited
Slide 11: AAAHI overview
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES AAAHI overview AAAHI is the 4th largest motorcoach operator in the USA1, with a decentralised operating model servicing corporate, government, education, LNG, and tourism sector customers Key statistics 6 2,000+ 728 / 335 US$20
Slide 12: Overview of AAAHI brands
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Overview of AAAHI brands Comprehensive platform of six geographically diversified, highly regarded brands with strong cultural alignment operating in seven states Multi-jurisdictional, diversified footprint across high populati
Slide 13: Strong financial profile
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Strong financial profile AAAHI has a diversified revenue mix and a track record of earnings growth Revenue (US$m, LTM)1 EBITDA (US$m, LTM) and margin profile (%)1 Growth has continued Impacted by COVID-19 $208m Impacted by COVI
Slide 14: Investment highlights
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Investment highlights © Kelsian Group Limited
Slide 15: Investment highlights
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Investment highlights Entry into the large and attractive USA market, through an established, highly regarded, customer centric operator with a multi- state footprint Further diversifies Kelsian’s multi-modal operations across
Slide 16: Entry into large and attractive USA market
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Entry into large and attractive USA market AAAHI provides an established platform in the USA to pursue growth in existing high population growth states and expand into the US$30 billion+ broader bus transportation market Operat
Slide 17: Favourable themes and tailwinds of the USA market
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Favourable themes and tailwinds of the USA market Prevailing investment and growth in AAAHI’s key end-markets support positive outlook Global reset in energy supply focused on security Substantial committed government investmen
Slide 18: AAAHI is a highly regarded, customer centric operator
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES AAAHI is a highly regarded, customer centric operator Strong alignment of Kelsian and AAAHI culture and values across a range of operating performance metrics Focus on essential and non-discretionary end-markets with government
Slide 19: Further diversifies Kelsian's international operations
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Further diversifies Kelsian’s international operations The acquisition of AAAHI further diversifies Kelsian’s end-market exposure and meaningfully increases the International Bus Segment’s contribution to the combined group 1 C
Slide 20: Diverse and loyal blue-chip customer base
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Diverse and loyal blue-chip customer base AAAHI has a diverse and loyal base of over 2,000 customers with high levels of contract renewals and recurring revenue Corporate (inc. LNG) Government Education Other CY22 revenue1 US$1
Slide 21: Scalable platform to leverage Kelsian's competencies
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Scalable platform to leverage Kelsian’s competencies Market tailwinds and introduction of Kelsian’s core competencies can be leveraged to drive performance optimisation and growth in the AAAHI business Kelsian will support AAAH
Slide 22: Attractive financial outcomes of the combination
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Attractive financial outcomes of the combination AAAHI contributes an attractive financial profile with track record of earnings growth and strong margins and cash flow conversion Expected financial outcomes CY22 EBITDA margin
Slide 23: High quality management team
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES High quality management team AAAHI’s committed local management team will be retained and transitioned to an incentive plan to support the ongoing growth of AAAHI Management and integration Dedicated local management and Board
Slide 24: Transaction funding
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Transaction funding © Kelsian Group Limited
Slide 25: Sources and uses
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Sources and uses Acquisition to be funded via a A$278 million2 Placement and Entitlement Offer, A$226 million3 drawdown of debt and A$3 million Vendor Conditional Share Issue Sources and uses of funding Liquidity and balance sh
Slide 26: Details of the Offer
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Details of the Offer Offer structure ● A fully underwritten institutional placement to eligible investors of A$135 million (Placement) ● A fully underwritten 1 for 8.5 pro rata, accelerated, non-renounceable entitlement offer t
Slide 27: Equity raising offer timetable
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Equity raising offer timetable Event Date Announcement of the Acquisition, Placement and Entitlement Offer Wednesday, 15 March 2023 Institutional Entitlement Offer and Placement opens Kelsian to obtain a further 1-day trading h
Slide 28: A. Pro forma financials
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES A. Pro forma financials Appendix © Kelsian Group Limited
Slide 29: Pro forma balance sheet
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Pro forma balance sheet Placement, Vendor Kelsian Conditional Share Estimated Pro forma as at 31 Issue and AAAHI transaction as at 31 A$m December 2022 Entitlement Offer1 Debt funding2 acquisition3 costs December 20224 Assets C
Slide 30: B. Additional information
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES B. Additional information Appendix © Kelsian Group Limited
Slide 31: Summary of key acquisition terms
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Summary of key acquisition terms Purchase price ● The initial purchase price is US$325 million1 (A$487 million1,2), to be paid in cash at closing ● The initial purchase price is subject to typical post-closing purchase price ad
Slide 32: C. Key risks
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES C. Key risks Appendix © Kelsian Group Limited
Slide 33: Key risks
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks This section discusses some of the key risks associated with any investment in Kelsian (including matters in relation to the Acquisition), which may affect the value of Kelsian shares. The risks set out below are not
Slide 34: Key risks (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks (cont) ACQUISITION SPECIFIC RISKS Due diligence Kelsian undertook a due diligence process in respect of AAAHI which relied in part on discussions with AAAHI management and other AAAHI-related personnel and the provisi
Slide 35: Key risks (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks (cont) ACQUISITION SPECIFIC RISKS Integration risk The Acquisition will increase Kelsian’s business, operational profile, capital structure and size compared to that of Kelsian on a standalone basis. There is a risk t
Slide 36: Key risks (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks (cont) BUSINESS RISKS (RELATING TO KELSIAN BOTH STANDALONE AND ON A POST-ACQUISITION BASIS) Business Kelsian has a diverse and expansive supply chain footprint. However, financial losses stemming from a natural disast
Slide 37: Key risks (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks (cont) BUSINESS RISKS (RELATING TO KELSIAN BOTH STANDALONE AND ON A POST-ACQUISITION BASIS) Failure to meet Kelsian’s operational vehicles, including ferries, buses and coaches currently operate, and will in future op
Slide 38: Key risks (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks (cont) BUSINESS RISKS (RELATING TO KELSIAN BOTH STANDALONE AND ON A POST-ACQUISITION BASIS) IT systems Reservations, ticketing or scheduling systems Kelsian’s reservations, ticketing or scheduling systems may be negat
Slide 39: Key risks (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks (cont) BUSINESS RISKS (RELATING TO KELSIAN BOTH STANDALONE AND ON A POST-ACQUISITION BASIS) Insurance risk Kelsian maintains insurance coverage as determined appropriate by its Board and management, but no assurance c
Slide 40: Key risks (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks (cont) BUSINESS RISKS (RELATING TO KELSIAN BOTH STANDALONE AND ON A POST-ACQUISITION BASIS) Legal claims Kelsian is exposed to, and may be involved in, potential legal and other claims or disputes from time to time in
Slide 41: Key risks (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks (cont) EQUITY RAISING RISKS Underwriting risk Kelsian has entered into an Underwriting Agreement under which the Lead Manager has agreed to fully underwrite the Offer, subject to the terms and conditions of the Underw
Slide 42: D. International offer restrictions
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES D. International offer restrictions Appendix © Kelsian Group Limited
Slide 43: International offer restrictions
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES International offer restrictions This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distrib
Slide 44: International offer restrictions (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES International offer restrictions (cont) Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong,
Slide 45: International offer restrictions (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES International offer restrictions (cont) Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange or on any other stock exchange or regulated trading facility in Swit
Slide 46: E. Underwriting agreement summary
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES E. Underwriting agreement summary Appendix © Kelsian Group Limited
Slide 47: Underwriting agreement summary
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Underwriting agreement summary Macquarie Capital (Australia) Limited (the ‘Underwriter’) is acting as lead manager, bookrunner and underwriter for the Offer. Kelsian has entered into an underwriting agreement with the Underwrit
Slide 48: Underwriting agreement summary (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Underwriting agreement summary (cont) 12. * (market disruption) either of the following occurs: a) a general moratorium on commercial banking activities in Australia, the United States of America, Hong Kong, the United Kingdom
Slide 49: Underwriting agreement summary (cont)
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Underwriting agreement summary (cont) 25. (Acquisition Agreement): a) * there is an amendment to the agreement giving effect to the Acquisition between Kelsian and the vendors of AAAHI (‘Acquisition Agreement’) other than with
Slide 50: NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES © Kelsian Group Limited