Cog Financial Services Limited · ASX:COG
Cog Financial Services — Consolidated Operations Group — Shareholder Meeting (November 2019)
17 slides from Cog Financial Services's shareholder meeting presentation, Nov 15, 2019
Slide 1: Annual General Meeting CEO Presentation
For personal use only ANNUAL GENERAL MEETING CEO PRESENTATION CONSOLIDATED OPERATIONS GROUP: YEAR ENDED 30 JUNE 2019 15 November 2019
Slide 2: FY19 Highlights
FY19 HIGHLIGHTS Page 2 For personal use only CONSOLIDATED OPERATIONS GROUP LIMITED (COG) Solid financial performance in softer market • Revenue up $52.7m on pcp – $35.7m organic growth Revenue* 32% • Organic EBITDA growth is up $3.0m $217.2m • Underlying NPATA attributable to shareholders up 32% • S
Slide 3: Strategic Objectives
STRATEGIC OBJECTIVES Page 3 For personal use only Building the leading Australian SME business equipment finance advisor Grow origination of ✓ Current Position company owned products and shareholder returns Value Critical mass Expand in-house leasing established Leveraging company’s products capabil
Slide 4: SME Finance Advisor
SME FINANCE ADVISOR Page 4 For personal use only Leading SME finance advisor Estimated 16% market share1 of broker intermediated finance for SMEs Finance Broker Synergies Finance Product • Aggregation platforms • Prime equipment • IT • Prime auto • Compliance Owned Finance Product • Non-prime equipm
Slide 5: Finance Broking & Aggregation
FINANCE BROKING & AGGREGATION Page 5 For personal use only Australia’s largest equipment finance broking and aggregation group Group NAF $'m COG provides aggregation services to: 4,500 4,000 • independent network member finance brokers 3,500 • COG equity owned finance brokers 2,199 3,000 2,500 1,722
Slide 6: Commercial Equipment Leasing
COMMERCIAL EQUIPMENT LEASING Page 6 For personal use only Lease Origination Lease referrals from COG Broker network Original Equipment Cost (OEC) OEC Written COG Broker Referrals FY16 $33.4m $1.3m FY17 $42.5m $5.6m FY18 $58.7m $9.9m FY19 $51.8m $6.9m New leases written in FY19 of $51.8m (down 11.8%
Slide 7: Executive Summary – CML Merger
EXECUTIVE SUMMARY – CML MERGER Page 7 For personal use only CML & COG have agreed to a merger of equals with the merged entity leveraged to the rapidly expanding SME finance market • Consolidated Operations Group (ASX:COG) (“COG”) and CML Group (ASX:CGR) (“CML”) have agreed to implement a merger of
Slide 8: Summary of Key Merger Details
SUMMARY OF KEY MERGER DETAILS Page 8 For personal use only CML & COG have entered into a Scheme Implementation Agreement (“SIA”) to effect the merger • CML shareholders will have the option to elect to receive 100% of the Scheme consideration in COG shares or to receive a mixture of cash and COG sha
Slide 9: Side by Side Comparison
SIDE BY SIDE COMPARISON Page 9 For personal use only The merger will deliver a vertically integrated SME finance platform with both distribution (COG) & product (CML) underpinned by a low-cost funding structure • Combined historical FY’19 audited revenue of $264.9m, EBITDA of $50.3m and NPATA of $17
Slide 10: Strategic Rationale for Merger
STRATEGIC RATIONALE FOR MERGER Page 10 For personal use only 1 Leverages key strengths of both groups (broking distribution & finance products) driving revenue synergies • COG is Australia’s largest asset finance broker and an aggregator with ~17% market share of the intermediated asset finance mark
Slide 11: Overview of Merged Group
OVERVIEW OF MERGED GROUP Page 11 For personal use only A fully integrated broking and finance platform, targeted at the rapidly expanding Australian SME market FY’19 Combined Statutory EBITDA (Underlying)¹ COG Entities CML 41% $50.3m COG 59% Distribution Lending • Australia’s largest broking and • S
Slide 12: Capital Raise Terms & Overview
CAPITAL RAISE TERMS & OVERVIEW Page 12 For personal use only Both COG and CML to undertake simultaneous equity raisings via respective non-renounceable rights issue offers COG CML • Offer price of $0.09 per share • Offer price of $0.48 per share + $0.03 special dividend Offer Pricing • 2.2% discount
Slide 13: Capital Management
CAPITAL MANAGEMENT Page 13 For personal use only Investments Surplus funds now largely invested with the following investments during the year: • Westlawn Finance $14.3m • Heritage Group $4.9m • CFG (20%) $4.2m • Centrepoint Finance $8.3m • Geelong Financial Group $0.3m • Sovereign Tasmania $2.2m Th
Slide 14: FY20 Priorities
FY20 PRIORITIES Page 14 For personal use only 1. Complete CML ‘merger of equals’ transaction 2. Enhance underlying performance of businesses 3. Expand COG’s in-house financial product portfolio 4. Establish external funding sources (bank senior warehouse facilities and subordinated mezzanine debt) 5
Slide 15: Summary
SUMMARY Page 15 For personal use only Solid financial performance • Revenue up $52.7m on pcp - $35.7m organic growth • Underlying NPATA attributable to shareholders up 32% • Earnings guidance for FY20 is not being provided Completed investment of surplus funds into establishing Australia’s largest c
Slide 16: Questions
For personal use only QUESTIONS
Slide 17: Disclaimer
DISCLAIMER Page 17 For personal use only Consolidated Operations Group Limited ('COG’) has not considered COG will not undertake any obligation to release publicly any the financial position or needs of the recipient in providing this revisions or updates to these forward-looking statements to prese
Consolidated Operations Group — Shareholder Meeting (November 2019) on 6ix