Maxiparts Limited · ASX:MXI
Maxiparts — Investor Presentation (February 2022)
39 slides from Maxiparts's investor presentation, Feb 1, 2022
Slide 1: Acquisition and Capital Raising Presentation
Acquisition and Capital Raising Presentation February 2022
Slide 2: Disclaimer and Important Notice
Disclaimer and Important Notice Overview This investor presentation (“Presentation”) has been prepared by MaxiPARTS Limited (ACN 006 797 173) (“MaxiPARTS” or the “Company”) and is dated 1 February 2022. This Presentation has been prepared in relation to a proposed capital raising ("Capital Raising")
Slide 3: Disclaimer and Important Notice (cont.)
Disclaimer and Important Notice (cont.) Past Performance Past performance and pro-forma historical information in this Presentation is given for illustrative purposes only and should not be relied upon (and is not) an indication of future performance including future share price information. Future
Slide 4: Table of Contents
Table of Contents Executive Summary 5 About MaxiPARTS 7 Acquisition Overview 13 Strategic Rationale 16 Financial Overview 22 Equity Raising Overview 24 Offer Jurisdictions 28 Key Risks 30 4
Slide 5: Executive Summary
EXECUTIVE SUMMARY 5
Slide 6: Executive Summary
Executive Summary Acquisition of • MaxiPARTS has entered into a binding agreement to acquire the inventory and assets of Truckzone Group (“Truckzone”) for an estimated $18 Truckzone Group million in cash subject to normal working capital adjustments • Truckzone is one of Australia’s largest independ
Slide 7: About MaxiPARTS
ABOUT MAXIPARTS
Slide 8: Company Snapshot
Company Snapshot • One of Australia’s largest independent commercial trucking and trailer parts companies with stores nationwide • Approximately 6,500 truck and trailer parts for sale online, and over 30,000 different parts stocked across 19 stores nationwide • Core product range that covers lights,
Slide 9: Operating Performance
Operating Performance Pro Forma Revenue1 Key Highlights 6.6% CAGR2 • Completed sale of Trailer Business in September 2021 $129m $134m $123m $127m $100m • Special Dividend of 62.5 cents per share paid in December 2021 $97m $72m • 18% EBITDA growth from FY20 – FY21 and 29% EBITDA CAGR from FY16 – FY21
Slide 10: Board of Directors
Board of Directors Robert Wylie Peter Loimaranta Mary Verschuer Greg Sedgwick Gino Butera Chairman, Non-Executive Managing Director and CEO Non-Executive Director & Chair Non-Executive Director & Chair Non-Executive Director Director of Audit & Risk Committee of Remuneration and Human Resources Comm
Slide 11: Key Management
Key Management Name Title Background Chief Executive Officer and Peter Loimaranta • 16+ years at MXI, including 10 years running MaxiPARTS Managing Director • 2.5 years at MXI as Group Financial Controller Liz Blockley Chief Financial Officer • Previously, 20 years of experience in variety of financ
Slide 12: 1H FY22 Update and Outlook
1H FY22 Update and Outlook 1H FY22 Highlights (unaudited) • The underlying MaxiPARTS business (excluding sold Trailer business and corporate / admin support) has reported improved 1H FY22 sales and EBIT over prior corresponding period ‒ Sales revenue up 6.7% from $67.8m in 1H FY21 to $72.3m in 1H FY
Slide 13: Acquisition Overview
ACQUISITION OVERVIEW 13
Slide 14: Truckzone Overview
Truckzone Overview Key Product Categories Airconditioning, heating Steering & engine cooling • Truckzone is a leading retailer and distributor of aftermarket and Brakes & clutches Engine & transmission original equipment parts and accessories for trucks and trailers parts • 10 company owned stores a
Slide 15: Acquisition Terms
Acquisition Terms Acquisition Key Acquisition Terms • MaxiPARTS has agreed to acquire the inventory and fixed assets of the Truckzone Group for an estimated $18m in cash • $0.6m in employee liabilities will be funded by vendors through • Estimated to be $18 million cash subject to Purchase price a r
Slide 16: Strategic Rationale
STRATEGIC RATIONALE 16
Slide 17: Strategic Rationale
Strategic Rationale • Positions MaxiPARTS as one of the largest independent multi-site parts only businesses in Australia with a strong geographic footprint Immediate • Significantly expands existing geographic footprint and provides further scale in existing markets geographic expansion ‒ Additiona
Slide 18: Geographic Expansion
Geographic Expansion Total of 27 MaxiPARTS owned sites • Acquisition immediately expands MaxiPARTS geographical footprint • Increases network by 8 sites • Ability to consolidate sites in Pakenham (Vic) and Darra (QLD) to immediately post acquisition increase scale and capabilities in the area • Enha
Slide 19: Expansion of Core Product Range
Expansion of Core Product Range Product Mix Diversification Product Range Enhancement • Combination provides product diversification with Truckzone focus skewed more towards trucks than trailers • Mature Japanese Parts program with overseas supply chain and product catalogue support Truckzone produc
Slide 20: Aligns with Core M&A Strategy
Aligns with Core M&A Strategy Criteria Acquisition Operating in the commercial vehicle parts Commercial trailer and trucking parts supplier market Adds significant geographical scale and Enhances product range and geographies enhances the core product range Clear post-acquisition integration and Det
Slide 21: Accretive Opportunity with Identified Synergies
Accretive Opportunity with Identified Synergies Expected benefits Cost synergies of $2.5m1 Further upside through ✓ Increased scale benefits revenue synergies ✓ Decreased costs ✓ Streamlined operations ✓ Strong revenue growth ✓ Access to higher margin products The acquisition is expected to deliver
Slide 22: Financial Overview
FINANCIAL OVERVIEW
Slide 23: Pro Forma Balance Sheet
Pro Forma Balance Sheet Commentary MaxiPARTS Adj for Truckzone Pro forma $mil Notes acquisition and MaxiPARTS Dec-21 capital raising Dec- 21 1 Cash increase represents cash remaining following capital raise less acquisition and Assets transaction costs of $2m Cash 1 6.6 5.0 11.6 Receivables 2 3 20.8
Slide 24: Equity Raising Overview
EQUITY RAISING OVERVIEW
Slide 25: Equity Raising Overview
Equity Raising Overview • A$25m capital raise comprising: ‒ A$15.4m institutional placement (“Placement”) Offer Size & structure ‒ A$9.6m 1 for 9.7 pro-rata accelerated non-renounceable entitlement offer (“Entitlement Offer”) (together with the Placement, the “Offer”) • Approximately 10.0 million ne
Slide 26: Source & Uses
Source & Uses Source of Funds $m Capital Raise $25m Total source of funds $25m Use of Funds $m Truckzone acquisition consideration $18m Funding to support working capital and capex $5m for further organic growth opportunities Transaction and integration costs $2m Total use of funds $25m 26
Slide 27: Timetable
Timetable Key Events Key Dates 2022 Trading Halt 1 February 2022 Announcement of Acquisition and Equity Raising 1 February 2022 Bookbuild for Placement and Institutional Entitlement Offer conducted 1 - 2 February 2022 Announcement of the completion of the Placement and Institutional Entitlement Offe
Slide 28: Offer Jurisdictions
OFFER JURISDICTIONS 28
Slide 29: Offer Jurisdictions
Offer Jurisdictions WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securi
Slide 30: Key Risks
KEY RISKS 30
Slide 31: Introduction
Introduction MaxiPARTS is subject to a variety of risk factors. Some of these are specific to its business activities, while others are of a more general nature. Individually, or in combination, these risk factors may affect the future operating and financial performance of MaxiPARTS, its investment
Slide 32: Key Risks - Specific
Key Risks - Specific The COVID-19 pandemic h a s impacted MaxiPARTS' business and its financial performance. To date, the main impacts have been in relation to constrained or volatile customer demand, retail closures, increased supply chain risks (including increased costs, delivery times and supply
Slide 33: Key Risks - Specific
Key Risks - Specific MaxiPARTS relies on numerous key suppliers in Australia, Japan, China and other Asian countries. Any loss of these key suppliers, incl uding as a result of geopolitical tensions, may have an adverse effect on MaxiPARTS' sales and/or terms of trade. In addition, any change in Max
Slide 34: Key Risks - Specific
Key Risks - Specific MaxiPARTS is exposed to the risk of disruptive technologies such as electric vehicles (EV), autonomous vehicles and digital disruption, leading to obsolescence of technologies and products (e.g. internal combustion engine (ICE)) which may impact portions of MaxiPARTS' market and
Slide 35: Completion risk
Key Risks - Specific Completion of the Acquisition is conditional on MaxiPARTS receiving certain key landlord consents, no material adverse change having occurred in respect of the TruckZone group and the Equity Raising being successfully completed. There is risk that the Acquisition does not comple
Slide 36: Key Risks - General: Investment risk
Key Risks - General Factors affecting the price at which MaxiPARTS shares are traded on the ASX could include domestic and international economic conditions. General movements in local and international stock markets, exchange rates, prevailing economic conditions, investor sentiment and interest ra
Slide 37: Key Risks - General: Interest rates
Key Risks - General While MaxiPARTS takes reasonable steps to protect itself through the use of hedges, rising interest rates may nonetheless adv ersely impact MaxiPARTS’ interest payments on its Interest rates floating rate borrowings, which may adversely impact the performance of MaxiPARTS’ busine
Slide 38: Equity Raising & Underwriting Risk
Equity Raising & Underwriting Risk MaxiPARTS entered into an offer management and underwriting agreement with the Underwriter in respect of the Equity Raising on 1 February 2022 (“Underwriting Agreement”). The Underwriter’s obligations under the Underwriting Agreement, including to manage the Equity
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