Genusplus Group Ltd. · ASX:GNP
Genusplus — Merger or Acquisition (February 2022)
32 slides from Genusplus's merger presentation, Feb 21, 2022
Slide 1: Strategic Acquisition of Pole Foundations Australia (PFA) and Capital Raising
Strategic Acquisition of Pole Foundations Australia (PFA) = and Capital Raising February 2022 &
Slide 2: Important information and disclaimer
Strategy Important information and disclaimer 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 information contained in this Presentation. B
Slide 3: Investment risk and forward looking statements
Strategy Investment risk There are a number of risks specific to the Transaction, the Offer, PFA, Genus and of a general nature which may affect the future operating and financial performance of Genus and the value of an investment in Genus including and not limited to the Company’s ability to obtai
Slide 4: Disclaimer
Strategy Disclaimer Neither Euroz Hartleys Limited nor Bell Potter Securities Limited (together the Joint Lead Managers) nor any of their or the Company’s respective advisers or any of their respective affiliates, related bodies corporate, directors, officers, partners, employees and agents, have au
Slide 5: Contents
1 Transaction Overview p.6 2 Capital Raising Overview p.15 3 Appendix p.21 4 Key Risks and Offer Jurisdictions p.27
Slide 6: Transaction Overview
J GENUS Section 1 Transaction Overview
Slide 7: Genus to acquire 100% of Pole Foundations Australia (PFA) for an upfront consideration
Strategic and highly accretive acquisition adding recurring maintenance earnings from highly complementary services & Tier 1 customers • Genus to acquire 100% of Pole Foundations Australia (PFA) for an upfront consideration of A$22m (comprised of A$16.5m cash and A$5.5m in Genus shares to be escrowe
Slide 8: Upfront consideration of A$22m, payable in cash and Genus scrip
Upfront consideration of A$22m, payable A$16.5m in cash and remainder in Genus scrip to be subject to 24 month voluntary escrow Overview • GenusPlus Group Ltd (Genus) to enter into an agreement to acquire 100% of Pole Foundations Australia (PFA) for a mix of upfront cash, scrip and contingent consid
Slide 9: PFA provides maintenance services under multi-year framework agreements with Tier 1 customers
PFA provides maintenance services under multi-year framework agreements with Tier 1 customers, providing more predictable recurring revenue • Established in 1992, PFA is a QLD based leading provider of electrical pole inspection and reinforcement services and hardware supplier to Tier 1 customers, w
Slide 10: Highly complementary acquisition in terms of service offering and customer base
Highly complementary acquisition in terms of service offering and customer base, with no cannibalization Provides Genus the ability to become a full life-cycle service provider to utilities across pole inspection, maintenance and replacement Complementary • Very complementary to Genus’ services as a
Slide 11: PFA's pole reinforcement products extend the life of a wooden electrical pole
PFA’s pole reinforcement products is a cost effective method to extend the life of a wooden electrical pole and maintain safety standards • Wooden poles deteriorate as they age (eg rotting at the groundline, termites, etc), or can suffer damage which weakens the pole potentially leading to a pole co
Slide 12: PFA adds a highly complementary service with full lifecycle solution for pole assets
PFA adds a highly complementary service for Genus, with the ability to provide full lifecycle solution for Utilities’ pole assets Pole reinforcement If required, pole would be remediated / reinforced to extend life Pole inspection Pole replacement Electricity poles typically inspected no later than
Slide 13: Significant cross-selling opportunities across complementary Tier 1 customer base
Significant cross-selling opportunities across complementary Tier 1 customer base, supporting future growth potential State Distribution networks Length (km)1 PFA Customer Length (km) Genus Customer Length (km) QLD Energy Queensland 207,056 ✓ 207,056 ✓ 207,056 NSW Essential Energy 192,538 ✓ 192,538
Slide 14: High proportion of distribution poles reaching end of usable life
High proportion of distribution poles reaching end of usable life supports future growth for PFA • The average usable life of a wooden pole is ~40 years • A significant proportion of distribution poles in Australia are over 40 years old (see LHS figure below) • In the NEM, ~77% of its distribution p
Slide 15: Capital Raising Overview
J GENUS Section 2 Capital Raising Overview
Slide 16: Preliminary update on 1H22 results
• Genus is pleased to provide the following preliminary update on its 1H22 results (subject to final audit): • 1H22 Revenue of A$210-220 million • 1H22 EBITDA of A$18-19 million • Net cash balance of A$5.5 million as at 31 December 2021 (Cash of A$27.1m and Debt of A$21.6m) • Dividend paid of ~A$2.8
Slide 17: Single tranche Placement to raise A$20m at A$1.21 per share
Single tranche Placement to raise A$20m at an offer price of A$1.21 per share • Genus to raise A$20m via a single tranche placement to institutional and sophisticated investors Offer structure & size • Issue of ~16.5m new shares under existing LR7.1 placement capacity • Offer price of A$1.21 per New
Slide 18: Pro-forma ownership after the raising
Existing Genus shareholders to own ~88% on a pro-forma basis, with founder David Riches holding ~52%. PFA Principals to hold ~2.6% of Genus on a pro-forma basis. Pro-forma Market Cap @ Capital Structure Shares % ownership raising price (A$m) Existing ordinary shares 155.6 88.0% 188.3 Scrip Considera
Slide 19: Pro-forma balance sheet after A$20m capital raising
A$m (30 June 2021) Genus PFA Acquisition & Capital Pro-forma Genus 1. A$20m capital raising net of upfront A$16.5m Raising cash consideration Cash and cash equiv 34.2 3.51 37.7 Receivables 57.7 - 57.7 Inventories 2.0 0.2 2.2 2. Indicative intangible assets such as customer PPE 15.8 0.9 16.7 contract
Slide 20: Indicative timetable
Event Indicative Date1 Transaction announced and Genus resumes trading on ASX Monday, 21 February 2022 Settlement of Placement Friday, 25 February 2022 Allotment and normal trading of New Shares Monday, 28 February 2022 Estimated Completion of Acquisition ~Early-Mid March 2022 Notes: 1. The above ti
Slide 21: Appendices
JiGENUS soilméc z Appendices
Slide 22: Corporate
Corporate Share Price (as at 16 February 2022) A$/sh $1.3425 Number of Shares M 155.6 Market Cap A$M $209 Cash (30 June 2021) A$M $34.2 Debt (30 June 2021) A$M $15.5 Dividend FY21 Cents/share 1.8c Simon High Non-Executive Chairman David Riches Managing Director / Founder José Martins Non-Executive D
Slide 23: About Genus
@ © @ HEAD OFFICE REPRESENTATIVE OFFICES/DEPOTS MAJOR PROJECTS J)GENUS . National Footprint. Regional Expertise. GenusPlus Group (ASX:GNP) is an end-to-end services provider for essential power and telecommunications infrastructure. We provide an integrated service delivered through key complementar
Slide 24: Capabilities
jj From the generating source to 7 WD GENUS connection, we tick every box. Capabilities oA Power infrastructure capabilities sion infrastructure - Distribution infrastructure - overhead 4 “4
Slide 25: Capabilities
Capabilities • • • • • • • • • • • • • • • •
Slide 26: Market Drivers
Market Drivers • • • • 1 2 3 4 5 Surge of investment Rising population and Ageing distribution Telco – roll out of 5G into Renewables which electricity demand network infrastructure Upcoming large State and continuous NBN & require connection to driving growth in requiring continuous interconnectors
Slide 27: Key Risks and Offer Jurisdictions
J GENUS Key Risks and Offer Jurisdictions
Slide 28: Completion risk and key risks
Completion under the agreement to acquire 100% of Pole Foundations Australia (PFA) (the Business Purchase Agreement) is conditional on several conditions: completion of Genus’ equity raising to raise $20 million, no material adverse change in the PFA business, change of control consents on Material
Slide 29: Dilution and control risk
Upon completion of the Offer, the number of Shares in the Company will increase from ~155.6m to up to approximately 176.8m (including the scrip consideration to PFA). This equates to approximately 12% of all the issued Shares in the Company immediately following completion of the Offer This means Sh
Slide 30: Competition and contract risks
The Company operates in markets that are competitive (including in relation to the pole inspection and reinforcement sector) and in which a number of companies compete. Competition in these markets is expected to continue, Increased competition from new and presenting the Company with numerous chall
Slide 31: COVID-19 and other risks
The global and Australian economic outlook is facing continued uncertainty due to the current COVID-19 pandemic. To date, the COVID-19 pandemic has not had a material impact on the Company’s operations. There is a risk that the recent Omicron variant outbreak in Western Australia may have a disrupti
Slide 32: Offer jurisdictions and 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 distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except
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