Ama Group Limited · ASX:AMA
Ama — FY2022 Earnings Presentation
47 slides from Ama's earnings presentation, Aug 23, 2022
Slide 1: 2022 Full Year Results Presentation
2022 FULL YEAR RESULTS PRESENTATION For the Full Year Ended 30 June 2022 23 August 2022
Slide 2: Webcast
Webcast AMA Group 2022 Full Year Results Tuesday, 23 August 2022 11:00am, AEST Register at: https://services.choruscall.com/mediaframe/webcast.html?webcastid=NMmj1vhz 2
Slide 3: Disclaimer
Disclaimer This presentation contains summary information about AMA Group Limited (ABN 50 113 883 560) (“AMA Group”) and its activities current as at the date of this presentation. The information in this presentation is of general background and does not purport to be complete. It should be read in
Slide 4: Contents
Contents Overview Slide 5 FY22 Financial Results Slide 11 Segment Performance Slide 16 Strategy and Priorities Slide 23 Outlook Slide 36 Other Information Slide 40 4
Slide 5: Overview
AMA GROUP AS
Slide 6: FY22 Business Environment Recap
FY22 Business Environment Recap Business challenges evolved through the year from volume scarcity to AMA Group Total Repair Volumes labour scarcity '000 vehicles 120 ‐ 1H22 characterised by AMA Group repair volumes at their lowest levels since the start of the pandemic due to COVID-19 related move
Slide 7: Navigated the impact of COVID-19
EBITDA (normalised, post-AASB 16) Cash on hand LTIFR $21.8m $52.2m 4.27 exceeded guidance exceeded guidance 17% decrease on FY21 Navigated the impact of COVID-19 Completed $150m capital raising Record apprentice intake Commenced group procurement strategy – annualised savings of $10 million Signific
Slide 8: FY22 Key Metrics
FY22 Key Metrics Drive Non-Drive Heavy Motor Supply Group Metric FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 Safety – LTIFR 1.34 2.15 5.16 5.76 11.84 6.41 8.45 17.151 4.27 5.14 Average Repair Days 4.02 3.62 10.0 9.3 11.3 12.5 n/a n/a n/a n/a Repair Quality 2.2% 2.5% 3.3% 2.9% 0.3% 0.2% n/a n/a
Slide 9: FY22 Financial Results Summary
FY22 Financial Results Summary Total Group revenue and other income of $845.1 million (FY21: $919.9 million) Normalised post-AASB 16 EBITDA of $21.8 million (FY21: $116.4 million from continuing operations), above $12 million - $17 million guidance provided at May 2022 investor day $105.5 mill
Slide 10: Key FY22 People Activities
Key FY22 People Activities Launch of Take the LEAD Health and safety a cultural HSE program Record low LTIFR of 4.27 Retention and A great place to work Engagement Inaugural gift of shares to Employee share plan employees 9.22 million shares issued Increased commitment to Apprenticeships training th
Slide 11: FY22 Financial Results
FY22 Financial Results
Slide 12: Summary Financial Performance
Summary Financial Performance Summary financial performance ($M) FY22 FY21 Change Change % 1H22 2H22 Decreased revenue due to 14% decrease in Revenue 845.1 919.9 (74.8) -8% 418.1 427.0 Operating expenses (inc. rent, exc. normalisations) (874.1) (855.3) (18.8) 2% (439.8) (434.3) repair volumes Norm
Slide 13: Summary Financial Position
Summary Financial Position Summary financial position ($M) FY22 FY21 Change Change % 30 June 2022 cash position of $52.2 million with a Cash and cash equivalents 52.2 64.2 (12.0) -19% Other current assets 132.3 112.8 19.5 17% further $5.5 million of credit availability in the form of Intangible as
Slide 14: Net Senior Debt
Net Senior Debt Net Debt ($M) 30-Jun-22 30-Jun-21 Change Change % Significant reduction in debt balances over time, Financial liabilities - drawn cash facilities 165.0 237.5 (72.5) -31% Cash and cash equivalents (52.2) (64.2) 12.0 -19% reducing from $340.0 million gross debt in June 2020 Net senio
Slide 15: Cash Flows
Cash Flows Statement of Cash Flows ($M) FY22 FY21 Change Change % 2H22 Operating cash flow of ($5.4) million Receipts from customers, inclusive of GST 946.8 1,042.3 (95.5) -9% substantially improved from ($22.8) million in 1H22 Payments to suppliers and employees, inclusive of GST (947.7) (956.3)
Slide 16: Segment Performance
Segment Performance
Slide 17: Summary
Summary Vehicle Collision Repair Heavy Motor Supply Corporate/Eliminations Total Group Summary financial performance ($M) FY22 FY21 Change FY22 FY21 Change FY22 FY21 Change FY22 FY21 Change FY22 FY21 Change Revenue 734.0 799.7 (65.7) 54.0 54.1 (0.1) 96.8 87.1 9.8 (39.7) (21.0) (18.6) 845.1 919.8 (74
Slide 18: Vehicle Collision Repairs
Vehicle Collision Repairs Summary financial performance ($M) FY22 FY21 Change Comprehensive repair contract review completed Revenue 734.0 799.7 (65.7) ‐ Each average price contract’s current cost to repair determined Operating expenses (including rent) (751.8) (748.9) (8.1) ‐ Line by line contrac
Slide 19: Heavy Motor
Heavy Motor Summary financial performance ($M) FY22 FY21 Change Maintained consistent revenue Revenue 54.0 54.1 (0.1) Increased labour rates commenced late FY22 — Operating expenses (including rent) (47.4) (44.8) (2.6) EBITDA (pre- AASB 16) 6.6 9.3 (2.7) expected to expand margins Occupancy cost
Slide 20: Supply
Supply Summary financial performance ($M) FY22 FY21 Change New Victorian warehouse officially opened in June 2022 Revenue 96.8 87.1 9.8 supporting expansion of national distribution network Operating expenses (including rent) (100.0) (88.6) (11.5) EBITDA (pre- AASB 16) (3.2) (1.5) (1.7) Service
Slide 21: Corporate
Corporate Summary financial performance ($M) FY22 FY21 Change Increased corporate costs in FY22 were driven by Revenue 0.0 0.0 0.0 several one-off items Operating expenses (including rent) (17.4) (4.2) (13.2) ‐ FY21 employee options write-back EBITDA (pre- AASB 16) (17.4) (4.2) (13.2) ‐ New employ
Slide 22: COVID-19 Disruption / Absenteeism
COVID-19 Disruption / Absenteeism Unplanned absenteeism for direct roles in AMA Group collision sites reducing, although remains elevated Average Sick/Personal Leave Hours 13 12 11 10 9 Absenteeism / Headcount 8 7 6 Pre-COVID run rate 5 4 3 2 1 0 Jun-21 Mar-21 Sep-21 Dec-21 Sep-20 Mar-20 Sep-19 Dec-
Slide 23: Strategy & Priorities
Strategy & Priorities
Slide 24: FY27 Strategic Targets
FY27 Strategic Targets Australia & New Zealand Vehicle 200+ $1.0b Collision Locations Revenue 147 currently FY22 $734m 16+ $100m Heavy Locations Revenue 9 currently FY22 $54m 70,000 m2 $150m Supply Capacity Revenue ~40,000 m2 currently FY21 $97m 3.0x Group Group Cost Leverage 2.0x currently 24
Slide 25: Five Year Strategy Overview
Five Year Strategy Overview Strategic Objectives Great Place to Organic Acquisition Cash Flow Margin Work Growth Growth Generation Expansion Strategic Pillars – The Three Ps Partnerships Production Procurement Focus Areas Reset the Base Business Grow Minimise Disruption 1 2 3 25
Slide 26: Update: Short to Medium Term Focus Areas
Update: Short to Medium Term Focus Areas 1 2 3 Reset the Base Business Grow Minimise Disruption Adjustments to complete Reset contract pricing Phase 1 organisational structure Optimise network Groupwide procurement to Accelerate third-party parts and Workforce of the future leverage benefits of scal
Slide 27: Contract Pricing
Contract Pricing Phase 1 Complete AMA Group is committed to ensure fair payment for the value of work delivered All insurer partners approached since May 2022 and AMA Group chose to exit some contracts (representing advised of updated labour rates, average cost models, <10% of revenues) where in
Slide 28: Network Optimisation
Network Optimisation Phase 1 Complete In this labour constrained environment, a network of fewer, highly productive sites will expand operating margins AMA Group is no longer willing to accept profitless repair volume and revenue at any cost to build scale – this change of philosophy has resulted
Slide 29: Site Profitability Analysis (Excluding Capital S.M.A.R.T)
Site Profitability Analysis (Excluding Capital S.M.A.R.T) +10% EBITDA 5-10% EBITDA 0-5% EBITDA Unprofitable Under Assessment Expect improvement in margins, toward mid- to high-single digit full run rate EBITDA1 margins by end of FY24, driven by 58 52 25 ‐ Commercial discussions 54 22 25 ‐ Redeploy
Slide 30: Capacity Utilisation
Capacity Utilisation Capacity utilisation expected to improve as direct labour is relocated to productive sites 450 100 % ‘000 vehicles 419 392 398 90 400 56 373 Utilisation % 21 367 367 28 80 Unutilised Capacity 350 94 104 Under Assessment 98 70 300 Post-Optimisation Capacity 60 Volume 250 50 200 3
Slide 31: Adjustments to Organisational Structure
Adjustments to Organisational Structure Phase 1 Complete Current year reset prepares the Group for a transitional FY23 and for future growth As the Group corrects historical commercial legacies, the support structure of the business will be adjusted ‐ Active focus on cost reduction strategies to a
Slide 32: FY23 Update
FY23 Update Short to Medium Term Focus Areas 1 2 3 Reset the Base Business Grow Minimise Disruption Adjustments to Contract pricing Embed organisational structure Optimise network Groupwide procurement to Accelerate third-party parts and Disintermediation of parts leverage benefits of scale consumab
Slide 33: Parts & Procurement Strategy
Parts & Procurement Strategy FY23 Priority Procurement Parts Disintermediation Initial dealer tender program completed with benefits in Distribution place – regular review to ensure benefits realised ‐ Victorian market – New Somerton, Victoria warehouse fully operational with trade launch comple
Slide 34: Revenue Diversification
Revenue Diversification FY23 Priority Appointment of General Manager - Direct Sales Range of short- and longer-term opportunities identified Attendance at key trade shows and appropriate peak body memberships now confirmed Early stage engagement with a number of potential new customers Wor
Slide 35: ADAS Opportunities
ADAS Opportunities FY23 Priority Active investigation into options to introduce a supplier partnership solution for ADAS calibration to the network Trial commencing with a potential solution in the near-term Opportunities to expand the service delivery outside the AMA Group network 35
Slide 36: Outlook
Outlook AMA GROUP
Slide 37: FY23 Outlook
FY23 Outlook FY23 expected to be a transition year: ‐ Pricing negotiations continue but meaningful improvements for non-Capital S.M.A.R.T. operations ‐ Capital S.M.A.R.T repricing to be concluded in FY23 but benefits will be realised in FY24 Site network and labour optimisation to maximise produ
Slide 38: Funding and Liquidity
Funding and Liquidity Senior debt facilities in place until October 2024 $ million 30 Jun 22 30 Jun 21 Borrowings – cash drawn 165.0 237.5 Amendment to FY23 financial covenant package Cash and cash equivalents (52.2) (64.2) ‐ Bank group remains supportive of the business and operational strategy
Slide 39: Aspiring to be Industry benchmark for safety
Aspiring to be Industry benchmark for safety Preferred employer within the industry Training “more than our share” 250+ sites $1.5b+ revenue 12%+ post-AASB 16 margins Supporting environmental sustainability through collision repair and parts sourcing 39
Slide 40: Other Information
Other Inform AMA GROUP
Slide 41: Normalisations
Normalisations Normalisation (post AASB 16) ($M) FY22 FY21 Change Change % 1H22 2H22 EBITDA (post- AASB 16) 19.1 106.3 (87.3) -82% 2.8 16.3 Normalisations Occupancy costs and obsolete inventory at hibernated sites 1.9 0.0 1.9 100% 0.9 1.0 Professional services costs on investigations and earn outs 0
Slide 42: The leader in the Australian and New Zealand collision repair industry
SUPPLY HE AV Y MOTOR The leader in the ~3,500 ~220k Team members Recycled & new Australian and $845m parts supplied per year New Zealandcollision Revenue repair industry 12 months to June 2022 ~280k ~7.5k Vehicles Vehicles repaired reclaimed We have the biggest collision repair network per year per
Slide 43: Structure
Structure Partnerships Production Procurement Build commercial relationships for the long- Leverage the technical skills and industry expertise in the business Secure the quality term, based on trust and products needed to delivering industry- execute operations on leading value to all Deliver opera
Slide 44: Executive Team
Executive Team Carl Bizon CEO & Executive Director Alexandra Holston Mathew Cooper Geoff Trumbull Andrew Mair Janelle Leonard Scott Lancaster Director Investor Group Chief Group Chief Group Chief Group Chief Group Chief Relations Operating Officer Financial Officer Commercial Officer People Officer
Slide 45: AMA Group Board
AMA Group Board Anthony Day Carl Bizon Nicole Cook Chair CEO and Executive Director Non-Executive Director Simon Moore Paul Ruiz Kyle Loades Caroline Waldron Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director 45
Slide 46: AMA Group
AMA GROUP AS
Slide 47: amagroupltd.com
AMA Group Limited ABN 50 113 883 560 Level 13, 484 St Kilda Road Melbourne, VIC 3004 amagroupltd.com