Ama Group Limited · ASX:AMA
Ama — Investor Presentation (July 2024)
71 slides from Ama's investor presentation, Jul 18, 2024
Slide 1: Debt Extension and $125 million Equity Raising
Debt Extension and $125 million Equity Raising 18 July 2024 Not for release to US wire services or distribution in the United States
Slide 2: Webcast
Webcast AMA Group Debt Extension and $125 million Equity Raising Webcast Thursday, 18 July 2024 11:30am, AEST To join the webinar online register here: https://ccmediaframe.com/?id=QEimJJ0p To join the webinar via phone register here: https://s1.c-conf.com/diamondpass/10040723-s12ldy.html Due to US
Slide 3: Contents
Contents Summary Slide 4 Introduction to AMA Group Slide 5 Business Update and Outlook Slide 11 Portfolio Businesses Slide 16 Capitalisation and Equity Raising Slide 31 Other Information Slide 65 3
Slide 4: Summary
Summary Positive growth trajectory continues with strong operating performance in FY24 Capital SMART ahead of expectations, AMA Collision building on foundations and Wales outperformed Portfolio structure adopted to drive greater cost discipline Unaudited normalised1 FY24 pre-AASB 16 EBITDA of
Slide 5: Introduction to AMA Group
Introduction to AMA Group
Slide 6: AMA Group at a glance
Drivable passenger vehicle collision repairs $464.5m FY24 revenue 1,540 team members Number of sites 149k repairs # Drivable and non-drivable passenger vehicle collision repairs $355.2m FY24 revenue 30 1,292 team members 89k repairs 13 5 Heavy vehicle collision repairs $73.8m FY24 revenue 27 261 tea
Slide 7: Investment Thesis
Investment Thesis Strong Industry Benefits Profitable Disciplined Fundamentals of Scale Growth Plans Capital Allocation Strong demand factors1 Insurer customer value Organic growth Network optimisation ‐ Growing population proposition Vertical expansion largely completed in ‐ Growing car p
Slide 8: Key Metrics Over Time
Key Metrics Over Time Historical rapid acquisitive expansion without integration, underinvestment and COVID effects impacted operations – recent network rationalisation, commercial and customer focus has stabilised and is now improving performance Number of Collision Repair Sites1 EBITDA and EBITDA
Slide 9: Collision Repair Marketplace
Collision Repair Marketplace With an estimated ~3000 repairers across Australia, the collision repair market is highly fragmented. AMA Group has a leading position, with substantially more sites than any other Multi-Site Operator and an estimated ~14% market share1 Number of Collision Repair Sites b
Slide 10: Industry Fundamentals (Australia)
Industry Fundamentals (Australia) Attractive market dynamics across key metrics support long-term growth – vehicle numbers expected to increase, with kilometres travelled returning to pre-COVID levels, claim frequency stabilizing and claim size growing Historical and Forecast Number Vehicles1 Vehicl
Slide 11: Business Update and Outlook
Business Up nd Outlook AMA GROUP
Slide 12: FY24 Highlights
FY24 Highlights Continued focus on people through FY24 ‐ Increased the team by 146 to 3,4401, including 450 apprentices2, and reduced turnover by 8.4 percentage points to 30.0%3 ‐ Grown technical and leadership expertise through I-CAR and Frontline leaders training Capital SMART ahead of expecta
Slide 13: Unaudited FY24 Results
Unaudited FY24 Results1,2 Improvement in operating position of all business segments on prior year (excluding ACM Parts) Vehicle Collision Repairs Wales ACM Corporate/Eliminations Total Group Summary financial performance ($M) FY24 FY23 Change FY24 FY23 Change FY24 FY23 Change FY24 FY23 Change FY24
Slide 14: Growth Pillars
Growth Pillars Stabilised platform provides AMA Group with the ability to focus on future growth opportunities Exceptional We Care Customer About Profitable Even Better Experience Each Other Growth Tomorrow Clear and open Safe workplaces Grow our team Ongoing technical communication training
Slide 15: Outlook
Outlook Repositioning of the balance sheet allows AMA Group to focus on achieving core growth initiatives, with FY25 normalised pre-AASB 16 EBITDA expected to be above FY24 and a five-year pre-AASB 16 EBITDA margin target of ~9%1 Capacity utilisation can be improved by reducing vacancy count from
Slide 16: Portfolio Businesses
Portfolio Busi AMA GROUP
Slide 17: AMA Collision Overview
AMA Collision Overview Network rationalisation, commercial and customer focus is improving performance Sites1 Repairs AMA Collision most impacted by cash constraints in 1H244, with loss of volume and 62 89k team members Customer relationships impacted by repricing activities in FY23 Investing
Slide 18: AMA Collision: Business Rebased
AMA Collision Business Rebased Number of Sites1 Broad network reset including site reduction was 120 115 113 106 109 required (2022 – 2023) 100 89 ‐ Response to IAG investment into RepairHub 80 Number of sites 80 69 ‐ Post-COVID rationalisation to remove unprofitable capacity 62 60 ‐ Weeding out i
Slide 19: AMA Collision Priorities
AMA Collision Priorities AMA Collision priorities start with Project Wallaby - targeted annualised pre-AASB 16 EBITDA benefits >$20 million in next three years Repair Build Customer Exceptional Refresh & the Base Relationships Consumer Experience Grow Estimating Dedicated Business Renewed cons
Slide 20: Capital SMART Overview
Capital SMART Overview Delivering ahead of expectations with operational improvements delivered early Sites1 Repairs2 Pricing reset 1 July 2023 after three-year pricing standstill 59 149k ‐ ‐ Clear annual repricing mechanism FY24 transitional support for operational initiatives Project SHIFT to
Slide 21: Capital SMART: Project SHIFT
Capital SMART Project SHIFT Project SHIFT completed ahead of plan – annualised pre-AASB 16 EBITDA benefits >$20 million, more than offsetting FY24 transitional support New contract pricing and criteria definitions since 1 July 2023 Number of Sites (Australia and New Zealand) 70 59 SHIFT business
Slide 22: Capital SMART Priorities
Capital SMART Priorities Optimise More People, Refresh & Customer Operations More Effective Grow Satisfaction Non-OEM parts usage Attracting people Improve customer Convenience to 40% Technical, customer experience and team Speed Repair vs replace service and estimating amenity Commu
Slide 23: Specialist Businesses Overview
Specialist Businesses Overview Newly formed Specialist Businesses unit will bring focus on key opportunities 5 Prestige 2 TrackRight Repairs2 Separation into Specialist Business unit due to unique nature of these operations Sites 5 TechRight 7.6k ‐ Insurer customers view these businesses different
Slide 24: AMA Prestige
Specialist Businesses AMA Prestige Specialised service, with prestige marque certifications Highly specialised training using OEM specified tools and processes Specialised service offering by marque Prestige repair facilities operate with higher charge out labour rates given investment and t
Slide 25: TechRight ADAS Solutions
Specialist Businesses TechRight ADAS Solutions ~10-15% vehicles in accident repair require calibration – expected to grow to 30%+ as the car parc changes over time1 Initial investment of ~$0.5 million ‐ Five locations operational 30 June 2024 with additional locations planned ‐ Capacity for 30 –
Slide 26: TrackRight
Specialist Businesses TrackRight Mechanical offering operating out of two sites in Victoria Current offering in demand and operating well Dandenong site transition underway to increase capacity Mechanical repairs from the broader Capital SMART and AMA Collision networks can be channelled to
Slide 27: Wales Heavy Vehicle Overview
Wales Heavy Vehicle Overview Wales has grown pre-AASB 16 EBITDA 22.5% year on year4 with further upside Sites1 Repairs Stable revenue profile, less impacted by COVID-19 than other business units 8 6.9k Greater customer choice than passenger vehicle repair ‐ Reputation and service critical Stro
Slide 28: Wales Heavy Vehicle Priorities
Wales Heavy Vehicle Priorities Bottleneck reduction activities targeted to deliver $1.5 million annualised pre-AASB 16 EBITDA uplift over next two years Strengthen Reduce Refresh & Client Relations Bottlenecks Grow Insurers Western Australia site Rebrand sites upgrade underway Vehicle owners
Slide 29: ACM Parts Overview
ACM Parts Overview Business reset over past two years, strong core growth and poised for profitability Sites1 Parts sold2 Continued strong underlying sales growth 6 220k ‐ ‐ Parallel import daily parts sales up 36.0% in 4Q245 vs 4Q236 Record external daily parts sales of $177k in 4Q245 with dedica
Slide 30: ACM Parts Priorities
ACM Parts Priorities Sales Compelling Recycling Consumables Growth Offer Productivity Optimisation Internal and external Range based on car parc Improve operational Increase sourcing of core customers and forecast data efficiency Consumables range Field sales team with Key supplier of Pa
Slide 31: Capitalisation and Equity Raising
Capitalisation and Equity Raising
Slide 32: Funding and Liquidity
Funding and Liquidity Extension on the senior debt facilities for a new maturity date of 31 December 2025 (were due to mature in 30 Jun 24 $ million 30 Jun 24 October 2024) agreed with banking syndicate Pro-Forma2 ‐ $50 million of principal plus accrued PIK interest of ~$3.8 million to be repaid f
Slide 33: FY25 Capex Plans
FY25 Capex Plans Sufficient funding available after Equity Raising to support maintenance and growth in FY25 Capex FY24 ($m) FY251 ($m) Maintenance Booth / site / equipment maintenance 4.3 11.9 Growth Relocations 3.8 3.9 Expanded capacity 3.3 6.5 Brand alignment / site improvement 2.7 2.7 Total 14.0
Slide 34: Equity Raising
Equity Raising AMA Group has launched a capital raising, to raise approximately $125.0 million (“Equity Sources $m Raising”) Institutional Placement $32.5m Equity Raising is comprised of: ‐ $32.5 million fully underwritten Institutional Placement (“Institutional Placement”) to Entitlement Offer
Slide 35: Proforma Capitalisation
Proforma Capitalisation PROFORMA BALANCE SHEET Jun-241 Impact of Impact of Jun-24 Improved liquidity position4 2 3 Cash on balance sheet ($millions) A$ millions Equity Raising Debt extension Pro-Forma Cash and cash equivalents 39.9 63.3 - 103.2 Other current assets 140.4 - - 140.4 103.2 Intangible a
Slide 36: Equity Raising Details
Equity Raising Details Fully underwritten institutional placement (“Institutional Placement”) and 1-for-0.82 accelerated renounceable entitlement offer to raise gross proceeds of $125.0 million Offer structure and (“Entitlement Offer,” together with the Institutional Placement, the “Equity Raising
Slide 37: Key Dates
Key Dates Event Date Equity Raising announced and investor presentation lodged to the ASX and Institutional Entitlement Offer and Placement opens Thursday, 18 July 2024 Institutional Shortfall Bookbuild opens Friday, 19 July 2024 Trading halt lifted Monday, 22 July 2024 Record Date for Retail Entitl
Slide 38: Key Risks
Capitalisation and Equity Raising Key Risks
Slide 39: Key risks
Key risks (a) Key risks – Business risks Risk Summary Impact of general AMA Group's operating and financial performance is affected by general economic conditions, including inflation, interest rates, unemployment rates, population economic conditions movements and government fiscal, monetary and
Slide 40: Key risks
Key risks Risk Summary People risk and labour AMA Group is a highly focused customer service business and its team members and senior management are key to maintaining the level of operational service to its constraints customers, as well as executing AMA Group’s strategy and growing its business.
Slide 41: Key risks
Key risks Risk Summary Business relationships AMA Group’s business model depends on having access to a wide range of automotive parts. An increase in pricing pressure from suppliers, a damaged relationship with a with suppliers supplier on AMA Group’s supply chain may increase the prices and/or de
Slide 42: Key risks
Key risks Risk Summary Information All of AMA Group’s business operations rely on information technology platforms. Although AMA Group’s business units operate with a number of different operating technology systems, making it less likely that any unplanned downtime will occur across the entire bu
Slide 43: Key risks
Key risks Risk Summary Technology risks AMA Group operates in the automobile space providing collision repair for vehicles involved in accidents. With continued technological advancements in the automobile industry including the evolution and successful adoption of Advanced Driver Assistance Syste
Slide 44: Key risks: General risks
Key risks (b) Key risks – General risks Risk Summary Investment in equity There are general risks associated with investments in equity capital. The trading price of AMA Group’s ordinary shares on ASX may fluctuate with movements and limited capital liquidity in equity capital markets in Australia
Slide 45: Key risks
Key risks Risk Summary Major shareholder risk AMA Group currently has a number of substantial shareholders on its share register. There is a risk that these shareholders, future substantial shareholders, or other large shareholders may sell their shares at a future date. This could cause the price
Slide 46: Key risks: Transaction and Equity Raising risks
Key risks (c) Key risks – Transaction and Equity Raising risks Risk Summary Underwriting risk The Underwriters will be acting as underwriters, joint lead managers and bookrunners to the Equity Raising. AMA Group entered into an underwriting agreement with the Underwriters in respect of the Equity
Slide 47: Key risks
Key risks Risk Summary Convertible Notes The Convertible Notes may be converted into ordinary shares under certain circumstances. The ordinary shares held by a Noteholder as a result of any conversion will, following conversion, rank equally with existing ordinary shares held by existing sharehold
Slide 48: Important Notice and Disclaimer
Capitalisation and Equity Raising Important Notice and Disclaimer
Slide 49: Important Notices and Disclaimer
Important Notices 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. By accepting,
Slide 50: Important Notices and Disclaimer
Important Notices and Disclaimer New Zealand This Presentation has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the FMC Act). The entitlements and the New Shares are not being offered to the public within New Zealan
Slide 51: Important Notices and Disclaimer
Important Notices and Disclaimer Not for release or distribution in the United States This Presentation may not be distributed or released to US wire services in the United States. This Presentation and the information contained herein does not constitute an offer to sell, or the solicitation of an
Slide 52: Important Notices and Disclaimer
Important Notices and Disclaimer This Presentation contains pro forma financial information. In particular, it includes AMA Group’s pro forma cash balance information for the unaudited position as at 30 June 2024 (and taking into account the impact of the Offer). The pro forma information has not be
Slide 53: Important Notices and Disclaimer
Important Notices and Disclaimer No representation, warranty or assurance (express or implied) is given or made in relation to any forward-looking statement by any person (including AMA Group or any of its advisers). In particular, no representation, warranty or assurance (express or implied) is giv
Slide 54: Important Notices and Disclaimer
Important Notices and Disclaimer Disclaimer No party other than AMA Group has authorised, permitted or caused the issue, submission, dispatch or provision of this Presentation or makes or purports to make any statement in this Presentation. Canaccord Genuity Australia Limited (ACN 075 071 466), Morg
Slide 55: Foreign Selling Restrictions
Capitalisation and Equity Raising Foreign Selling Restrictions
Slide 56: Foreign Selling Restrictions
Foreign Selling Restrictions This document does not constitute an offer of entitlements (“Entitlements”) or 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 Entitlements and
Slide 57: Foreign Selling Restrictions
Foreign Selling Restrictions European Union (Lithuania, Netherlands and Spain) This document has not been, and will not be, registered with or approved by any securities regulator in the European Union. Accordingly, this document may not be made available, nor may the Entitlements or the New Shares
Slide 58: Foreign Selling Restrictions
Foreign Selling Restrictions Singapore This document and any other materials relating to the Entitlements and the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document o
Slide 59: Foreign Selling Restrictions
Foreign Selling Restrictions United States This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The Entitlements and the New Shares have not been, and will not be, registered under the US Securities Act of 1933 or the securities l
Slide 60: Underwriting Agreement
Capitalisation and Equity Raising Underwriting Agreement
Slide 61: Underwriting Agreement
Underwriting Agreement AMA Group has appointed Canaccord Genuity Australia Limited (ACN 075 071 466), Bell Potter Securities Limited (ACN 006 390 772) and Morgans Corporate Limited (ACN 010 539 607) (together, the Underwriters) to act as the joint lead managers, underwriters and bookrunners in relat
Slide 62: Underwriting Agreement
Underwriting Agreement (h) *(compliance with regulatory requirements) a contravention by AMA Group or any of its related bodies of the Corporations Act 2001 (Cth) (Corporations Act), its respective constitution, the ASX Listing Rules or any other applicable law; (i) (regulatory approvals) a governme
Slide 63: Underwriting Agreement
Underwriting Agreement (u) (ASX approval) unconditional approval (or conditional approval, provided such condition would not have a material adverse effect on the success or settlement of the Equity Raising) by ASX for official quotation of securities is refused, or is not granted by the time requir
Slide 64: Underwriting Agreement
Underwriting Agreement The ability of an Underwriter to terminate the Underwriting Agreement in respect of the above termination events denoted with an asterisk (*) will depend on whether, in the reasonable opinion of the Underwriter, the event has, or is likely to have, a material adverse effect on
Slide 65: Other Information
Other Inform AMA GROUP
Slide 66: History
History 2005 Allomak Ltd established to acquire automotive aftercare businesses 2006 Acquired auto protection accessories company, ECB; Allomak listed on ASX 2007 Acquired auto parts distributor Alanco Australia and our first collision repair business Mr Gloss. 2009 Allomak Ltd changed name to AMA G
Slide 67: Board
Board Brian Austin Joanne (Jo) Dawson David Goldstein Ray Smith-Roberts Chair Non-Executive Director Non-Executive Director Non-Executive Director Brian is an experienced ASX Board Joanne (Jo) is a Chartered Accountant David brings a best-in-class experience Ray’s experience in the Australian Direct
Slide 68: Management
Management Mathew Cooper David Chin Stuart Faid Alexandra Holston Group Chief Executive Officer EGM Capital SMART EGM AMA Collision Director Investor Relations & Corporate Affairs Mathew is a strategically focused executive, who has held several senior roles at Amcor, General Motors, and Bapcor Ltd.
Slide 69: Unaudited Summary Financial Performance
Unaudited Summary Financial Performance FY24 FY24 Summary financial performance (unaudited) Post-AASB 16 Pre-AASB 16 Revenue and other income 933.0 933.0 Operating expenses (inc. rent, normalisations) (839.0) (887.7) Normalised EBITDA 94.0 45.3 Normalisations 0.7 0.7 EBITDA 94.7 46.0 Depreciation &
Slide 70: AMA GROUP
AMA GROUP
Slide 71: amagroupltd.com
AMA Group Limited ABN 50 113 883 560 Level 13, 484 St Kilda Road Melbourne, VIC 3004 amagroupltd.com