Franchise Brands Plc · LSE:FRAN
Franchise Brands — Merger or Acquisition (April 2023)
35 slides from Franchise Brands's merger presentation, April 2023
Slide 1: Acquisition of Pirtek Europe, April 2023
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Slide 2: Disclaimer
The information contained in this document (“Presentation”) has been prepared by Franchise This Presentation may contain “forward-looking statements” that involve substantial risks and Brands plc (the “Company”). Franchise Brands plc is a UK company quoted on AIM, a market uncertainties, and actual
Slide 3: Our purpose and Contents
Our purpose If they grow, we grow 3 5 12 18 22 24 25 26 Contents Introduction & transaction overview Overview of Franchise Brands Overview of Pirtek Overview of the combined business Funding structure Summary Appendix Supplementary information on Pirtek Investor Presentation 2023
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Slide 5: Introduction & transaction overview
Introduction & transaction overview £200M ACQUISITION OF PIRTEK (EUROPE) ESTABLISHED EUROPEAN PROVIDER OF ON-SITE HYDRAULIC HOSE REPLACEMENT SERVICES Acquisition represents an EV/Adjusted EBITDA‘ multiple of 13.6x, forecast to fall to 12x in the first full year of ownership. Pirtek has a strong hist
Slide 6: Overview of Franchise Brands
Investor Presentation 2023 Overview of ~ Franchise Brands
Slide 7: Overview of Franchise Brands
Overview of Franchise Brands _(@ Q cto wis L WHO WE ARE FOCUS SCALE HOW * Multi-brand * Focused on building ° System sales of Enabling franchisees to international market-leading B2B £186m in 2022. grow their businesses. franchisor, focused businesses primarily * 586 franchisees Use DLOs on B2B, van
Slide 8: Franchise Brands' key strengths
Franchise Brands’ key strengths FOCUSED ON BUILDING MARKET LEADING BRANDS with a long trading history. We own all our brands. TECHNOLOGY ENABLED BUSINESS facilitating strong operational gearing. OPPORTUNITIES for organic growth and growth enhanced by accretive acquisitions. HIGHLY EXPERIENCED TEAM w
Slide 9: Track record of delivery
Investor Presentation 2023 8 Track record of delivery [BeRANDs Statutory revenue (£m) Adjusted EBITDA (£m) CAGR 29% £99.2 CAGR 40% 215.3 £57.7 £44.0 £49.3 £66 £8.5 £35.5 . soe o-oo 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Adjusted earnings per share (p) Dividend per share (p) CAGR 26% 2021
Slide 10: Track record of delivery
Investor Presentation 2023 9 Track record of delivery [BeRANDs Ze. <4 OS 2 OO metRd200 = © wurdWeues © filta October 2016 April 2017 October 2019 November 2021 March 2022 Consideration £0.9m £28.4m £7m £im £51m 20 +575,.8% 200 B 150 8 & 100 +9.9% 50 — — OF Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Feb-19 A
Slide 11: Acquisition track record
Acquisition track record Division Date Price paid Strategic rationale Transaction summary Value creation METR® ROD B2B 11 April 2017 £28.4m (£20m equity, £17m cash funded by new debt facilities) Expand into B2B franchise sector - Acquired from Private Equity - Neglected franchise business with signi
Slide 12: Levers for growth
Levers for growth Headroom for future revenue and profit growth Investor Presentation 2023 11 INCREASE MARKET SHARE We only have a smallshare of our chosen markets. INCREASE COVERAGE We do not have national coverage for most of our brands, limiting our ability to serve existing national customers. E
Slide 13: Overview of Pirtek
Overview of Pirtek
Slide 14: Established European provider of on-site hydraulic hose replacement services
Established European provider of on-site hydraulic hose replacement services Established in 1988 and has become a prominent European provider of on-site hydraulic hose replacement services. Operates in eight countries via 213 service centres and >800 mobile service vehicles. System sales are largely
Slide 15: Value-added service offering to diverse customers
Value-added service offering to diverse customers MISSION-CRITICAL, EMERGENCY SERVICE TARGETS ONE HOUR RESPONSE, 24/7/365. 5 , ne mergency on-site om Planned maintenance High level of resilience. Demand for time-sensitive service hydraulic service and servicing solutions of great importance in secto
Slide 16: Pirtek operating model
Pirtek operating model FRANCHISED MARKETS * Strong, proven franchise model * Management Service Fees (MSF) ranging from 15% in Germany to 19.5% in UK. * Product sales charged at cost plus handling fee. * Some costs recharged to franchisees, as follows: — IT & Systems — Marketing — Training (some cou
Slide 17: Pirtek key financials 2020-2022
Pirtek key financials 2020-2022 2020 to Prorated year ended 31 December 2020 2021 2022 2022 £m £m £m % Change System sales 122.9 139.1 164.1 33.5% Statutory revenue 34.8 40.1 49.2 41.6% Cost of sales (10.2) (11.6) (14.4) 40.4% Gross profit 24.5 28.5 34.8 40.2% GM% 70.5% 71.1% 70.8% Administrative ex
Slide 18: Pirtek levers for growth
Pirtek Levers for growth Investor Presentation 202317 GROW SYSTEM SALES Multiple levers from CRM, outbound sales capability, targeted marketing campaigns, Mobile Service Technician contact calls, incentives and measurement. Opportunity to drive local sales. EXPAND RANGE OF SERVICES Opportunity to gr
Slide 19: Overview of the combined business
Investor Presentation 2023 18.
Slide 20: Strategic rationale for acquisition
Strategic rationale for acquisition AIM TO CREATE A MARKET-LEADING INTERNATIONAL B2B MULTI-BRAND FRANCHISOR IN UK, EUROPE, NORTH AMERICA The size and diversification of the enlarged Group will provide greater resilience in the services provided, customer base, end markets, franchise networks and geo
Slide 21: Enlarged Group financials
Enlarged Group financials 2023 Year ended 31 December (£m) 7020: Fo 022 028 Forecast 2024 Forecast Prorated FRANCHISE FRANCHISE, FRANCHISE FRANCHISE 2 FRANCHISE2 FRANCHISE 2 BRANDS BRANDS BRANDS BRANDS BRANDS BRANDS =! 4 re aed filta filta filta filta ka Eo mo Statutory revenue 49.9 S77 99.2 155.0 1
Slide 22: New management structure
New management structure MANAGEMENT aim Stephen Hemsley Executive Chairman Stephen is Executive Chairman of Franchise Brands, which he co- founded with Nigel Wray in 2008. He joined Domino's Pizza as FD in 1998 progressing to CEO, Executive Chairman and Non-executive Chairman. He led Domino's from p
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Slide 24: Ma na gement estimates only using internal assumptions; not i ndependently verified or reported
• • Ma na gement estimates only using internal assumptions; not i ndependently verified or reported on; actual results may di ffer.
Slide 25: Summary
InvestorPresentation 2023 24 Compelling acquisition which will create an international B2B franchise group with diversified services, customer base and geographical reach. Expected to be immediately earnings accretive and forecast to generate single digit earnings accretion inthe first full year of
Slide 26: Appendix
Investor Presentation 2023 25 Appendix.
Slide 27: Supplementary information on Pirtek
Supplementary information ~ on Pirtek » _ RTE
Slide 28: *Ma na gement estimates only using internal assumptions; not i ndependently verified or reported
*Ma na gement estimates only using internal assumptions; not i ndependently verified or reported on; actual results may di ffer.
Slide 29: Resilient, diversified end markets
Resilient, diversified end markets & a ? o.| = Plant hire = Environmental service ™ Construction = Transport & logistics = Manufacturing = Civil engineering = MRO mRail ™ Material handling = Utilities ™ Marine = Mining & Quarrying Other Germany “a = Constructio m Logistics m Industrial ™ Recycling m
Slide 30: High value-added franchisor proposition
High value- added Franchisor proposition Strong support and development for Franchisees “Pirtek UK and Ireland provides lots of support, skills, knowle: and help from the entire network and are there ontribute to your success” ight Pirtek centres in the UK “From a credit controller 26 years ago to o
Slide 31: Pirtek's European service delivery capability
La Pirtek’s European service delivery capability FRANCHISEES VANS CENTRES UK & Ireland 37 334 86 Benelux 10 99 23 Germany 20 321 90 Austria 3 20 6 Sweden - 22 1 France - 42 7 Total 70 838 213 * As at 31 December 2022
Slide 32: Key purchasing criteria and customer feedback
Key purchasing criteria and customer feedback ZN NZ Pirtek has historically outscored their key competitorson key purchasing criteria, allowing them to charge premium rates KEY PURCHASING CRITERIA IMPORTANCE | RELATIVE PERFORMANCE CUSTOMER COMMENTS o—__+—_™ =e “_.Pirtek can't be beaten on speed. Whe
Slide 33: Key milestones
Key milestones Cologne Antwerp opens Returned 0 TO GROW WITH centre opens Centre in Acquisition of FRANCHISE in Germany Belgium Allo Flexs BRANDS Peter Duncan *) Rotterdam *) Pirtek Acquires *) Pirtek Acquires *) brings concept Slangakuten Flex Up and Centre opens in from Australia to Sweden centres
Slide 34: Franchise license agreement
Franchise license agreement Franchise Licence Agreement (the “Master Agreement”) is between Pirtek Fluid Systems Pty Ltd (“PFSPL’), an Australian company, and Pirtek Europe Limited (“PEL’). Trademark licence agreementalongside the Master Agreement Master Agreement provides that PFSPL grants to PEL a
Slide 35: Pirtek Corporate team
Pirtek Corporate team | pemereK. ALEX MCNUTT CEO ADRIAN RICHARDS CFO CHRIS RICHER HARALD SEBASTIEN PETER STUCKEY SaIEAOEE OVERWATE MAUQUE BRINGBY an d n France istria MD M
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