Solocal Group · EURONEXT:LOCAL
Solocal — Investor Presentation (July 2020)
17 slides from Solocal's investor presentation, Jul 3, 2020
Slide 1: Agreement on the financial structure strengthening plan
Agreement on the financial structure strengthening plan 3rd July 2020 JULY 2020
Slide 2: Positive transformation and path prior to the health crisis
Positive transformation and path prior to the health crisis 2019 operational successes ✓ A well advanced transformation plan: subscription mode, new digital service range, sales organisation revamp > 100,000 Presence / ✓ A promising operational path Priority Ranking customers ✓ Digital order intake
Slide 3: Valuation key points in 2019YE
Valuation key points in 2019YE 2019A Share price €0.55 Number of shares 620 millions Equity Value €342 m Net debt2 €422 m Enterprise value €764 m EBITDA1 €175 m EV / EBITDA 4.4x Note 1 : recurring EBITDA pre-IFRS 16 p.3 Note 2 : Pre-IFRS 16
Slide 4: Impact of Covid-19 crisis on the Group's business
Impact of Covid-19 crisis on the Group’s business • A very significant impact on the Group’s sales activity • Decrease of c. -55% of order intake during the lockdown period • Estimated order intake decrease of c. €100m in 2020 vs. 2019 • Since the end of the lockdown, a gradual upturn of business ac
Slide 5: An unbalanced debt/equity ratio
An unbalanced debt/equity ratio 2019A 2020E EBITDA1 €175 m €122 m EV / EBITDA 2019 4.4x < 4.4x With regards to the current liquidity situation, the Enterprise Value €764 m < €533 m multiple cannot be above the 31/12/2019 multiple Gross Debt €463 m €500 m3 Cash €41 m € -30 m Net Debt €422 m €530 m3 E
Slide 6: A difficult search for liquidity with the risk of Court resolution
A difficult search for liquidity with the risk of Court resolution ✓ In bonis solution : avoids a Court resolution (« règlement judiciaire ») • A structural priority in favor of the debtholders : any additionnal indebtedness which would not be affected to the Bond repayment, according to the Bond do
Slide 7: Only one possible solution
Only one possible solution ✓ « Amend & extend » -type solutions were not implementable : they require a liquidity injection through a PGE and/or a rights issue • PGE / FDES of a significant amount : hardly executable because • No historical relationships with banks • Already high debt level • Need t
Slide 8: Debtholders: critical stakeholders providing crucial support
Debtholders : critical stakeholders providing crucial support ✓ Only executable offer at this date, and unanimously recommended by the Board of Solocal ✓ In the contemplated transaction, debtholders commit sufficient ressources in order to secure the long-term existence of the Group • Full backstop
Slide 9: The agreement with the debtholders will support the development of the Group
The agreement with the debtholders will support the development of the Group ✓ The agreement with the debtholders aims at securing the company’s interests. ✓ It helps pursue the development strategy initiated in 2018 • Debtholders committed to support the development strategy (fully digital, in subs
Slide 10: A large capital increase with shareholders' preferential subscription rights
A large capital increase with shareholders’ preferential subscription rights Solocal 2020 : 9.8% ✓ If no existing shareholder participates in the transaction, % of owned capital they will own 9.8% of the total capital for existing Solocal 2017 : [6.3% - 11.1%] shareholders who ✓ This is a similar fi
Slide 11: Key transaction principles
Key transaction principles Gross debt evolution as of 30/09/2020 • c. €347m capital increase R.I. 2 take-up 0% R.I. 2 take-up 100% • Between €10.5 and €17m reserved capital increase to € 485m bondholders by way of debt-to-equity conversion • Between €329.5m and €336m rights issue backstopped by bond
Slide 12: Implementation – transactions description and key terms
Implementation – transactions description and key terms Size Price Description Between €10.5m Reserved and €17m • Reserved capital increase to bondholders by way of debt-to-equity conversion €0.08 capital increase through debt to • GoldenTree AM to participate to the reserved capital increase for €1
Slide 13: Pro forma shareholding
Pro forma shareholding • Shareholding will depend on the take-up in cash by existing shareholders on the rights issue and on the size of the reserved capital increase €17m RCI €10.5m RCI •1 €6.5m backstop (%) Subscription in cash to the Rights Issue 0% 100% 0% 100% fees + €6.5m Subscription in cash
Slide 14: Considerations on existing bond
Considerations on existing bond Amended bond Existing bond Amount • €[168-185]m depending on rights issue take-up • c. €429m as of Amount 30/09/2020 Maturity / • Mar 2025 i.e. 36 month extension / bullet repayment Amortization Maturity • March 2022 • Until end-2021: Euribor (1% floor) + 7%, half cas
Slide 15: Considerations on other debts
Considerations on other debts Amendments to the existing Revolving Credit Facility Amount • €50m • €35-50m depending on take-up on the rights issue and the subsequent prepayment of the RCF • RCF: Euribor + 4.5% • Ancillary: Euribor + • No change in current remuneration until September 2021 Pricing 5
Slide 16: Available possibilities given to the Shareholders
Available possibilities given to the Shareholders ✓ Shareholders will be given the possibility to reinvest in the interest of the Company : • For every share owned : Steps Investment Number of additional shares2 No investment - 1 existing share + 1 new share Investment to cover the €85 m cash €0.12
Slide 17: Solocal's future
Solocal’s future ✓ The contemplated transaction serves the Company’s interests and ensures the long-term existence of Solocal : ✓ Strong debt reduction (1.5x post-closing leverage) ✓ Financial costs significantly reduced : €19 m par annum (vs. €44 m in 2019) ✓ Transformation largely accomplished ✓ S