Eagers Automotive Limited · ASX:APE
Eagers Automotive — Investor Presentation (April 2019)
18 slides from Eagers Automotive's investor presentation, Apr 5, 2019
Slide 1: Creating Australia’s leading automotive group
Creating Australia’s leading automotive group Proposed merger of A.P. Eagers Limited and Automotive Holdings Group Limited 5 April 2019 1
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by A.P. Eagers Limited ACN 009 680 013 (APE) in relation to its proposed off-market takeover offer (Offer) to acquire all of the ordinary shares in Automotive Holdings Group Limited ACN 111 470 038 (AHG) not already owned by APE (AHG Shares) in accordan
Slide 3: Transaction summary
Transaction summary all-scrip offer by off-market bid for all of the shares in AHG not already owned by APE • All-scrip offer of 1 APE share for every 3.8 AHG shares owned proposed • No minimum acceptance threshold; subject to conditions, summarised in the Appendix transaction • Likelihood of compet
Slide 4: Transaction summary (cont.)
Transaction summary (cont.) all-scrip offer by off-market bid for all of the shares in AHG not already owned by APE • Greater geographical and brand portfolio diversification commercial • Anticipated pre-tax synergies estimated to be $13.5 million per annum, available if full ownership achieved rati
Slide 5: Rationale
Rationale compelling commercial rationale AP Eagers Limited (APE) is the largest shareholder in Automotive Holdings Group Limited (AHG). APE is a leader in the automotive retail industry with proven management expertise that has delivered a consistent record of profit, dividend and EPS growth. In th
Slide 6: Merger to create long term value
Merger to create long term value portfolio brands synergies 242 new car dealership locations in Australia and New Zealand. Anticipated pre-tax synergies of 68 new truck and bus dealership Exposure to motor vehicle retailing in $13.5m. Further corporate and locations in Australia. all Australian Stat
Slide 7: Combined portfolio
portfolio Combined portfolio greater geographical diversification NORTHERN TERRITORY Cars: 2 dealerships. 2 brands. QUEENSLAND Cars: 66 dealerships. 22 brands. WESTERN AUSTRALIA Trucks: 15 dealerships. 4 brands. Cars: 35 dealerships. 17 brands. Trucks: 10 dealerships. 5 brands. SOUTH AUSTRALIA NEW S
Slide 8: Brand diversification
brands Brand diversification top 10 brands presented below represent 74.8% of all new vehicle sales in Australia in 20188 15 DEALERSHIPS 18 DEALERSHIPS 14 DEALERSHIPS 8 DEALERSHIPS 13 DEALERSHIPS 20 DEALERSHIPS 22 DEALERSHIPS 8 DEALERSHIPS 24 DEALERSHIPS 13 DEALERSHIPS 8 FCAI, VFACTS National Report
Slide 9: Annual pre-tax cost synergies
synergies Annual pre-tax cost synergies subject to 100% acquisition and full operational review economies of scale anticipated input costs synergies ? $13.5M + synergies not yet quantified post operational review best practice systems and processes procurement, customer service, HR, property operati
Slide 10: Merged group financials
scale Merged group financials enhanced scale and financial strength to pursue growth $203.0M $2.42B pro forma FY18 profit pro forma before tax9 $1.84B enterprise value9 pro forma market cap9 242 new car dealerships in Australia and New Zealand $119.9M APE $1.69B $1.39B APE 68 APE truck and bus deale
Slide 11: APE’s experience
expertise APE’s experience Board have a combined 174 years of automotive retail expertise10 and a combined ownership interest in APE of 38.9% Timothy Crommelin Martin Ward Nicholas Politis Daniel Ryan David Cowper Marcus Birrell Sophie Moore BCom, FSIA, FSLE BSc (Hons), FAICD BCom BEc, MBus, FAICD B
Slide 12: APE’s proven track record
expertise APE’s proven track record consistent record of profit, dividend and EPS growth11 Net profit after tax ($M) Earnings per share (cents per share) 55.4 120 52.0 50.3 47.6 100 43.0 36.4 34.0 80 28.7 29.4 26.7 25.5 26.9 24.9 21.1 60 19.4 17.0 13.5 9.8 40 APE APE AHG AHG FY10 FY11 FY12 FY13 FY14
Slide 13: APE’s growth strategy
APE’s growth strategy APE’s future growth strategy includes: • significant investment in an omni-channel retail approach to satisfy changing customer preferences; • leveraging its large and flexible portfolio of owned and leased properties to bring rationalisation and expansion opportunities; • capi
Slide 14: Appendix
Appendix
Slide 15: Conditions
Conditions The offer is subject to the following conditions which are set out in full in the bidder’s statement13: • all regulatory approval being received; • no regulatory action occurring which may adversely affect the offer; • no prescribed occurrences (as listed in section 652C Corporations Act)
Slide 16: Risk areas
Risk areas The key risks are outlined in full in the bidder’s statement14 and include: • Evolving market and industry conditions - operations may be impacted by changes in the market for new and used automotive vehicles, related parts and servicing requirements and other ancillary products and servi
Slide 17: Definitions
Definitions • Dealerships means the number of new vehicle dealership locations in Australia and New Zealand. Dealerships for Toyota and Volkswagen have been calculated by reference to prime market areas (PMAs) rather than new vehicle sales locations within PMAs. • Earnings per share (EPS) means repo
Slide 18: Definitions
Definitions • Pro forma market capitalisation is based on the market capitalisation of APE as at 4 April 2019 of $1.39 billion and a valuation of AHG Shares not currently owned by APE of $452.1 million, being the number of AHG shares not owned by APE divided by 3.8 (which reflects the offer consider
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