Big River Industries Ltd. · ASX:BRI
Big River Industries — Investor Presentation (December 2020)
37 slides from Big River Industries's investor presentation, Dec 7, 2020
Slide 1: Strategic acquisition of Timberwood and $20.4m institutional placement
Strategic acquisition of Timberwood and $20.4m institutional placement 7 December 2020 Big River Industries / Page 0
Slide 2: Important notice and disclaimer
Important notice and disclaimer NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES The following notice and disclaimer applies to this investor presentation (“Presentation”) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any info
Slide 3: Important notice and disclaimer (continued)
Important notice and disclaimer (continued) NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Future performance This Presentation contains certain ‘forward looking statements’, including but not limited to projections, guidance on future revenues, earnings, margin improvement, other potential sy
Slide 4: Table of Contents
Table of Contents I. Transaction summary 4 II. Overview of Big River Industries 5 III. Acquisition of Timberwood 13 IV. Placement 19 Appendices A. Risks 22 B. International Offer Restrictions 29 C. Big River FY20 results 31 Big River Industries / Page 3
Slide 5: Transaction summary
Transaction summary Acquisition of Timberwood and business update • Big River has entered into an agreement to acquire Timberwood for an Enterprise Value of $24.0m (consideration of $22.5m with $1.5m of additional working capital contribution) • The agreement to acquire Timberwood is subject to cert
Slide 6: Overview of Big River Industries
Overview of Big River Industries Big River Industries / Page 5
Slide 7: Big River Today
Big River Today Big River is one of Australia’s leading manufacturers and distributors of specialty timber and building products. Big River is diversified by geography, industry segment, construction type and customers with >6,500 active trading accounts 18 Sales and distribution sites 2 Plywood man
Slide 8: Targeted and highly relevant product offering for trade customers
Targeted and highly relevant product offering for trade customers % FY20 pro Formwork Plywood & Specialty Building Products forma revenue 24% 21% 55% • Frame & truss • Formply • Decorative flooring • Fibre cement sheeting • LVL beams • Structural plywood • Pine framing Product • Structural LVL categ
Slide 9: Financial snapshot
Financial snapshot Consistent earnings growth and strong cash conversion with further uplift expected from a full year of earnings contributions from acquisitions and multiple strategic initiatives being implemented across the business. Revenue EBITDA (pre-acquisition costs) ($m) ($m) Distribution M
Slide 10: Group strategy – FY21 priorities
Group strategy – FY21 priorities Big River’s vision is to be Australia’s leading diversified building products distribution business to trade customers Market Position Fragmented market, with ~700+ un-bannered privately owned building materials outlets Trade Not affiliated Total Focus attributable t
Slide 11: Group strategy – FY21 priorities
Group strategy – FY21 priorities Big River expects to benefit from the construction cycle recovery through growth initiatives including acquisitions and geographic expansion Market conditions Growth strategy • General slowdown in building and construction activity • Organic sales/growth initiatives
Slide 12: Trading update and outlook
Trading update and outlook Big River expects a strong trading period for FY21, with further upside expected from its site consolidation (funded by the Bushfire Recovery Grant) Improved FY21 earnings outlook Planned Wagga Wagga site consolidation • Market performing better than original forecast, • T
Slide 13: Big River's key strengths
Big River’s key strengths 1 Strong brand with 100 years of operation and >6,500 individual customer accounts Vertically integrated business model with both manufacturing capability and a national distribution network, supported 2 by a global supply chain, procuring product out of Europe, North Ameri
Slide 14: Acquisition of Timberwood
Acquisition of Timberwood Big River Industries / Page 13
Slide 15: Investment highlights and strategic rationale
Investment highlights and strategic rationale Opportunity to acquire a quality player with niche manufacturing knowledge in 1 architectural veneered panels, a strong customer network of >1,500 customers and a solid distribution network and supply chain 2 Acquisition in line with Big River’s strategy
Slide 16: Overview of Timberwood Panels
Overview of Timberwood Panels Timberwood Panels fits well within Big River’s geographical and segment growth strategy, continuing to develop Plywood & Specialty manufacturing capability on the Australian East Coast Overview Locations • Timberwood has been in operation since 2008 • Panel manufacturin
Slide 17: Big River + Timberwood combined
Big River + Timberwood combined The acquisition of Timberwood not only adds to Big River’s existing capability but also sets a very strong platform for further geographical growth and a rollout of existing products to new distribution centres Big River1 Timberwood Combined Sites 18 3 21 Geographic 1
Slide 18: Creating a leading provider of specialty panels
Creating a leading provider of specialty panels Big River Industries / Page 17
Slide 19: Key acquisition terms and financial impact of acquisition and equity raising
Key acquisition terms and financial impact of acquisition and equity raising Big River Pro Forma • Big River has entered an agreement to acquire all of the $m Unless otherwise Acquisition underlying underlying assets of the Timberwood Group, for consideration of stated impact Acquisition FY20A1 FY20
Slide 20: Placement
Placement Big River Industries / Page 19
Slide 21: Sources & uses of proceeds
Sources & uses of proceeds Transaction funding will provide Big River with financial flexibility to continue to pursue its strategic growth objectives Sources $m Placement1 $20.4m M&A Strategy Debt funding $0.8m Big River is in discussions and varying stages of due diligence with other parties in re
Slide 22: Placement timetable
Placement timetable Event Date Trading halt (pre market open) announcement of Acquisition and Placement Monday, 7 December 2020 Institutional bookbuild opens 10.00am Monday, 7 December 2020 Institutional bookbuild ends 4.00pm Tuesday, 8 December 2020 Announcement of results of Placement, normal trad
Slide 23: Appendices: Risks
Appendices: Risks Big River Industries / Page 22
Slide 24: Risks specific to Big River
Risks specific to Big River • Big River is currently monitoring the actual and potential impact of COVID-19 on the overall business and the broader economy. Given the high degree of uncertainty surrounding the extent and duration of COVID-19, it is not currently possible to assess the full impact of
Slide 25: Risks specific to Big River
Risks specific to Big River Loss of • Big River must maintain and support its existing customer relationships to ensure they continue into the future. A loss of customers or contracts customers or could lead to a decline in revenue and resulting deterioration in the financial performance of Big Rive
Slide 26: Risks specific to Big River
Risks specific to Big River • Due to the high fixed-cost nature of the building materials industry, interruptions in production capabilities at Big River's sites or in its logistics supply chain may have a material adverse effect on the productivity and results of Big River's operations during the a
Slide 27: Risks specific to Big River
Risks specific to Big River • While the Company believes it will have sufficient funds to meet all of its growth and capital requirements for the near term, the Company may seek to exploit opportunities of a kind that will require It to raise further additional capital from equity or debt sources in
Slide 28: General Risks
General Risks • Changes in general economic factors such as economic growth, interest rates, exchange rates, inflation and business and consumer confidence and general market factors may have an adverse impact on Big River’s (references to Big River includes Big River as standalone entity as well as
Slide 29: General Risks
General Risks • Operational risk relates to the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events which impact on Big River’s business. Big River is exposed to operational risks including risks arising from process error, fraud, system f
Slide 30: Appendices: International Offer Restrictions
Appendices: International Offer Restrictions Big River Industries / Page 29
Slide 31: Offer restrictions
Offer restrictions This document does not constitute an offer of new ordinary shares in Big River Industries Limited (New Shares) in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in an
Slide 32: Offer restrictions (cont'd)
Offer restrictions (cont’d) This document does not constitute an offer of new ordinary shares in Big River Industries Limited (New Shares) in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or so
Slide 33: Appendices: Big River FY20 results
Appendices: Big River FY20 results Big River Industries / Page 32
Slide 34: Big River FY20 financial results summary
Big River FY20 financial results summary Key Financial Measures FY2020 FY2020 Key Financial Measures FY2019 Revenue $248.9m 14.3% Pre AASB16 Statutory 1 EBITDA (Statutory) $17.7m 79.9% Profitability EBITDA (Pre AASB16) 1 $12.3m 25.7% Revenue $217.8m $248.9m $248.9m NPAT (Statutory) $4.4m 22.
Slide 35: Big River historical financial results summary
Big River historical financial results summary FY2020 FY2020F FY2020 FY2020 Key Financial Measures FY2017 FY2018 FY2019 PROFIT & LOSS ($m's) FY2017 FY2018 FY2019 Pre AASB16 Statutory Pre AASB16 Statutory Profitability Revenue 177.1 210.9 217.8 248.9 248.9 Revenue $177.1m $210.9m $217.8m $248.9m $248
Slide 36: Reconciliation – Pre-AASB16 / Post-AASB16 earnings
Reconciliation – Pre-AASB16 / Post-AASB16 earnings AASB16 Post- Acquisition Pre-AASB16 AASB16 AASB16 Pre-AASB16 Acquisitions Depreciatio AASB16 Tax AASB16 costs Pro forma Rent Interest n Pro forma Big River FY20A EBITDA $11.6 $0.7 $0.4 $12.8 $5.6 $18.4 Big River FY20A EBIT $8.3 $0.7 $0.3 $9.3 $5.6 (
Slide 37: Big River Industries / Page 36
Big River Industries / Page 36
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