Emeco Holdings Limited · ASX:EHL
Emeco — Investor Presentation (March 2017)
40 slides from Emeco's investor presentation, Mar 22, 2017
Slide 1: Pro rata renounceable entitlement offer
For personal use only Pro rata renounceable entitlement offer Replacement document due to revised Offer Price 21 March 2017
Slide 2: Important Notices and Disclaimer
IMPORTANT NOTICES AND DISCLAIMER This investor presentation (“Presentation”) has been prepared by Emeco Holdings Limited (ACN 112 188 815) (“Emeco” or “Company”). This Presentation has been prepared in connection with the pro rata renounceable entitlement offer (“Offer”) of new Emeco ordinary shares
Slide 3: Important Notices and Disclaimer Cont.
IMPORTANT NOTICES AND DISCLAIMER CONT. Future performance This Presentation contains certain “forward looking statements”. Forward looking statements can generally be identified by the use of forward looking words such as, “expect”, “anticipate”, “likely”, “intend”, “should”, “could”, “may”, “predic
Slide 4: 1. Entitlement Offer Overview
For personal use only 1. Entitlement Offer Overview
Slide 5: Summary
SUMMARY Entitlement Use of funds Entitlement Entitlement Underwriting Key dates Offer size and Offer price1 Offer rationale For personal use only structure Emeco Holdings Limited Net proceeds from the The Entitlement Offer will Assists in minimising The Entitlement Offer is 24 March 2017 (“Emeco") w
Slide 6: Update on Restructure and Acquisitions
UPDATE ON RESTRUCTURE AND ACQUISITIONS For personal use only The Restructure and Acquisitions have been approved by shareholders and creditors 1 Emeco shareholders approved the Restructure and Acquisitions at the Extraordinary General Meeting on 13 March 2017 2 Noteholders of Emeco approved the Not
Slide 7: Rationale for the Entitlement Offer
RATIONALE FOR THE ENTITLEMENT OFFER For personal use only The Entitlement Offer enables shareholders to further participate in Emeco’s growth Minimises dilution for existing Participation in the Entitlement Offer assists in minimising the shareholder dilution arising as a result of the Emeco share
Slide 8: Sources and Uses of Funds
SOURCES AND USES OF FUNDS For personal use only Net proceeds from the Entitlement Offer will be used to fund the Restructure and Acquisitions and general working capital, providing Emeco with enhanced financial flexibility through the integration period Sources of funds A$ million Gross proceeds fro
Slide 9: Rights Issue Timetable
RIGHTS ISSUE TIMETABLE For personal use only Event Date Announcement of the Entitlement Offer Tuesday, 21 March 2017 Ex-date for the Entitlement Offer Friday, 24 March 2017 Entitlement trading commences on ASX Friday, 24 March 2017 Record Date for eligibility for the Entitlement Offer Monday, 27 Mar
Slide 10: Pro Forma Ownership
PRO FORMA OWNERSHIP For personal use only Emeco’s shareholders will hold 36% of the combined group post completion of the Restructure and Acquisitions, prior to the Management Incentive Plan % of shares outstanding Existing Emeco shareholders will own 36% of the Existing Emeco shareholders 27% com
Slide 11: Company Highlights
COMPANY HIGHLIGHTS For personal use only A strengthened balance sheet and greater fleet scale and capability, together with Emeco’s ongoing focus on business improvement and operational excellence, provide a platform for long term growth 1 Strategically compelling mergers providing Emeco with a sig
Slide 12: 2. Overview of Restructure and Acquisitions
For personal use only 2. Overview of Restructure and Acquisitions
Slide 13: Overview of the Restructure and Acquisitions
OVERVIEW OF THE RESTRUCTURE AND ACQUISITIONS On 3 January 2017, Emeco announced that it had signed an amended and restated restructuring support agreement (‘RSA’) with its financiers and the major creditors and shareholders of Orionstone and Andy’s For personal use only The RSA sets out the key term
Slide 14: Profile of the Combined Group
PROFILE OF THE COMBINED GROUP The combined group will be a stronger, lower cost and more competitive rental company focused on reliably serving customers For personal use only and developing innovative solutions Benefits of the combined group FY16 Pro Forma Revenue1 Increased fleet capabilities an
Slide 15: Overview of Orionstone
OVERVIEW OF ORIONSTONE Orionstone brings a high quality fleet, innovative systems, strong maintenance capability and a track record of developing projects For personal use only to the combined group Strategic rationale Fleet profile 96 machines Complementary fleet composition provides greater scop
Slide 16: Overview of Andy's
OVERVIEW OF ANDY’S Merger with Andy's enhances Emeco’s customer offering and provides additional fleet diversity For personal use only Strategic rationale Fleet profile 62 machines Merging with Andy's provides Emeco with a more diverse rental fleet, TRUCK 35 tonne 300 tonne customer base and capab
Slide 17: Improved Fleet Capability
IMPROVED FLEET CAPABILITY The Restructure and Acquisition results in a 23% reduction in Emeco’s average fleet age – 18,003 hours post-Transaction, down For personal use only from the Company’s pre-Transaction average of 23,353 hours1 Enhanced fleet capability better placed to serve customers Sig
Slide 18: Meaningful Synergy Benefits
MEANINGFUL SYNERGY BENEFITS The Restructure and Acquisitions provides an opportunity to unlock substantial synergies including incremental revenue opportunities, cost efficiencies and capital expenditure savings For personal use only The combined group is expected to generate gross cost synergies of
Slide 19: 3. Financial Impact
For personal use only 3. Financial Impact
Slide 20: Significantly Enhanced Financial Metrics
SIGNIFICANTLY ENHANCED FINANCIAL METRICS The Restructure and Acquisitions reduces pro forma leverage to 4.4x PF FY16 EBITDA1 with cash generation expected to further For personal use only deleverage the balance sheet Significantly enhanced scale – FY16 PF EBITDA1 Improved interest coverage1,2 Pre-sy
Slide 21: Pro Forma Combined Profit & Loss Information
PRO FORMA COMBINED PROFIT & LOSS INFORMATION 1H17 pro forma profit and loss information (pre-synergies and including one-off costs associated with the transaction) For personal use only Swap Pro forma Emeco Orionstone Andy’s Total Closeout4 Refinancing3,5 Combined Group $’000 $’000 $’000 $’000 $’000
Slide 22: Pro Forma Combined Balance Sheet
PRO FORMA COMBINED BALANCE SHEET Pro forma balance sheet as at 31 December 2016 For personal use only Emeco Orionstone1 Andy’s1 Total Refinancing2 Entitlement Total $’000 $’000 $’000 $’000 S’000 $’000 Offer3 $’000 Current Assets 105,038 20,309 13,703 139,050 (34,622) 19,700 124,128 PP&E 283,081 151,
Slide 23: Basis of Preparation of Financial Information
BASIS OF PREPARATION OF FINANCIAL INFORMATION Basis of Preparation The basis of preparation in compiling the combined group’s profit and loss information post Restructure, Acquisition and Entitlement Offer and the combined group’s balance sheet post Restructure, For personal use only Acquisition and
Slide 24: 4. Strategy and Outlook
For personal use only 4. Strategy and Outlook
Slide 25: Strategy and Outlook
STRATEGY AND OUTLOOK Clear strategic focus For personal use only FY17 objectives Increase operating utilisation in response to improved commodity markets Execute and integrate merger with Orionstone and Andy’s Ongoing strategic goals Financial discipline Innovation Industry leadership Su
Slide 26: A. Risk Factors
For personal use only A. Risk Factors
Slide 27: Risk Factors
RISK FACTORS For personal use only Introduction Investors should be aware that there are risks associated with an investment in Emeco. Some of the principal factors which may, either individually or in combination, affect the future operating performance of Emeco are set out below. Some are specific
Slide 28: Risk Factors: Business Risks
RISK FACTORS For personal use only Business risks (cont.) Integration risk and The long term success of the Combined Group will depend, among other things, on the success of the Emeco Board and senior management team in integrating the respective businesses of Andy's and the realisation of Orionston
Slide 29: Risk Factors: Business Risks
RISK FACTORS For personal use only Business risks (cont.) Consolidation of Consolidation in the industries of the Company’s customers or suppliers may reduce its bargaining power with those customers or suppliers and lead to the Company transacting on less advantageous financial and customers and co
Slide 30: Risk Factors: Business Risks
RISK FACTORS For personal use only Business risks (cont.) Environmental risks Environmental management and compliance is an important part of the business of the Company’s customers. The Company works wi th its customers to ensure that its equipment and maintenance services operate in alignment with
Slide 31: Risk Factors: Business Risks
RISK FACTORS For personal use only Business risks (cont.) Contractual risks The Company’s revenue is dependent on winning new contracts and operates in an increasingly competitive market. It is difficult to predict whether and when new contracts will be awarded due to multiple factors influencing ho
Slide 32: Risk Factors: Business Risks
RISK FACTORS Business risks (cont.) For personal use only Foreign jurisdiction The Company currently has operations in Australia, Canada and Chile and may seek growth and expansion in additional markets, including in North and South America. risks The Company’s operations are subject to political, e
Slide 33: Risk Factors: Business Risks
RISK FACTORS For personal use only Business risks (cont.) Registration of Under Australian law, businesses that rent or lease equipment to customers, such as the Company does, can lose legal title to that equipment in certain circumstances where the customer who has rented that Security Interests eq
Slide 34: Risk Factors: Business Risks
RISK FACTORS For personal use only Business risks (cont.) Completion of the Completion of Proposed Transaction is expected to occur on or about 31 March 2017. Although approvals have now been received from shareholders, noteholders and the Federal Court, the Proposed Transaction Proposed is still su
Slide 35: Risk Factors: Entitlement Offer and Share Ownership
RISK FACTORS For personal use only Risks associated with the Entitlement Offer and Share ownership Risks associated with There are general risks associated with investments in equity capital such as Emeco shares. The trading price of Emeco shares may fluctuate with movements in equity capital market
Slide 36: Risk Factors: Entitlement Offer and Share Ownership
RISK FACTORS For personal use only Risks associated with the Entitlement Offer and Share ownership (cont.) Sell-down by There is a risk that Emeco’s substantial shareholders (including directors) may seek to sell down their shareholdings in Emeco. A significant sale of shares, or a perception that a
Slide 37: B. International Offer Restrictions
For personal use only B. International Offer Restrictions
Slide 38: International Offer Restrictions
INTERNATIONAL OFFER 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
Slide 39: International Offer Restrictions
INTERNATIONAL OFFER 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 For personal use only of Singapore. Accordingly, this documen
Slide 40: Thank you
For personal use only Thank you emecogroup.com