Sgh Limited · ASX:SGH
Sgh — Investor Presentation (February 2024)
16 slides from Sgh's investor presentation, Feb 19, 2024
Slide 1: Seven Group Holdings Limited Offer for Boral - Investor Presentation
19 February 2024 Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street SYDNEY NSW 2000 SEVEN GROUP HOLDINGS LIMITED OFFER FOR BORAL - INVESTOR PRESENTATION Please see investor presentation attached in relation to Seven Group Holdings Limited (ASX: SVW) offer for Boral
Slide 2: Seven Group Holdings Boral Offer Presentation
Seven Group Holdings Boral Offer Presentation 19th February 2024 HY24 Results Presentation 1
Slide 3: Group Overview - Who We Are
Group Overview - Who We Are Seven Group Holdings (ASX:SVW) • Sole CAT dealer in WA & NSW/ACT • Leading ASX Industrial business • ~50k machines in territory • +22m parts sold annually ASX100, $14.8 billion market cap Industrial Services • • 15,000 employees over 5 core businesses • Australia’s larges
Slide 4: The Offer - Overview
The Offer - Overview Overview • SGH holds a 71.6% share in Boral1 and proposes to acquire the remaining shares it does not currently own Offer Consideration – Best and Final • Minimum consideration of 0.1116 SGH shares and $1.50 cash per Boral Share (aggregate value $6.05) at Announcement2 • Offer i
Slide 5: Transaction Rationale for SGH
Transaction Rationale for SGH Next step in SGH’s acquisition of Boral • Began in 2020 and has resulted in SGH currently holding an aggregate Logical Next interest of 71.6% in Boral1 Step • SGH has created significant value within Boral since acquiring control • We believe we can add greater value at
Slide 6: Transaction Rationale Continued
Transaction Rationale Continued Highly disciplined approach to capital allocation Consistent with • Offer is “Best and Final” and ratchets in line with increased acceptances Disciplined Approach • Strong balance sheet post transaction - pro forma LTM leverage 2.2x • SGH will not pay more than $6.25
Slide 7: Boral – A Natural Fit for SGH
Boral – A Natural Fit for SGH Aligned with SGH’s Core Demand Thematics • Boral is primarily exposed to infrastructure and construction (I&C) • $1.7t1 7-year I&C project pipeline Natural fit for Group expertise • Australian focused Industrial Services business • SGH has a proven ability to drive perf
Slide 8: SGH Relative Value Opportunity
SGH Relative Value Opportunity NTM1 Price to Earnings (PE) Ratio History (x) 2-Yr Avg NTM1 PE Ratio (x) 40 30 27x 35 24x 25 23x 30 20x 20 25 24.4x 17x 20.1x 15 20 12x 16.7x 15 10 10 5 5 0 0 SVW ASX200 Industrials BLD 02/22 05/22 08/22 11/22 02/23 05/23 08/23 11/23 SVW NTM PE BLD NTM PE ASX200 NTM PE
Slide 9: 10+ Years of Active Portfolio and Capital Management
10+ Years of Active Portfolio and Capital Management $45 SGH $410m USPP guidance 10yr ave upgrades 7.5% $40 Reopened Aus $533 equity Drove $3bn Boral CB market with raising @ $22.50 capital return $101m sale $350m issue of Sykes $35 Boral 69.6% 6 $496m TELYS stake via $250m EB issued / $30 $385m equ
Slide 10: Value Accretive Use of Equity to Drive Growth and Outperformance
Value Accretive Use of Equity to Drive Growth and Outperformance $45 Proposed Offer $385m equity raising @ $11.85 - Up to $2.3bn of scrip to be issued - Increase in free float from 26.4% to 34.6% - Greater influence and ability to optimise cash flow $40 - Support portfolio enhancements following - C
Slide 11: Continuing SGH Evolution
Continuing SGH Evolution • Customer activity linked to mining production, not commodity price • ~960/200Mtpa of Iron Ore and Thermal Coal exported annually to FY28 $148m market value of SWM $14.8bn • $1.7t seven-year project pipeline $2.8bn $1.4bn market • Renewables build-out to eclipse current val
Slide 12: Proven Track Record of Delivery
Proven Track Record of Delivery Group EBIT History and Initial Guidance EBIT Margin History by Business Unit 1,400 600 Underlying EBIT Initial Guidance YoY Delta (%) WesTrac CAGR 17% +20% WesTrac EBIT Coates EBIT Boral EBIT 1,200 Coates CAGR 18% 500 +25% 500 1,000 +7% 400 426 +1% +28% +46% 400 800 3
Slide 13: Unlocking Value - POV, Operating Model
Unlocking Value - POV, Operating Model Group Purpose, Objective and Values Accountable, Scalable Operating Model Purpose Recognising and serving exceptional businesses Strategic Maximise return to Objective stakeholders through long term sustainable value creation Values Owner’s Respect Courage Agil
Slide 14: SGH Intentions
SGH Intentions On completion of the Offer SGH: • Will continue to support Boral’s key management and Board approved “Good to Great” strategy • Is not intending to implement any major changes to the business or redeploy any of its fixed assets • Preferencing reinvestment of Boral’s free cash flow to
Slide 15: Appendix – Businesses & Markets
Appendix – Businesses & Markets Industrials Industrials Industrials Energy Media 100% 100% 72% Beach 30% SGHE 100% 40% WesTrac is one of the largest Coates is Australia’s largest Boral is Australia’s largest Beach Energy is a leading mid- Seven West Media is a leading CAT® dealers globally (by sales
Slide 16: Disclaimer
Disclaimer Basis of preparation of slides Included in this presentation is data prepared by the management of Seven Group Holdings Limited (“SGH”) and other associated entities and investments. This data is included for information purposes only and has not been subject to the same level of review b