Ooh Media Ltd · ASX:OML
Ooh Media — Merger or Acquisition (June 2018)
50 slides from Ooh Media's merger presentation, Jun 25, 2018
Slide 1: For personal use only
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER The following notice and disclaimer applies to this investor presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in this Presentation. By For personal
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Not an offer For personal use only This Presentation is for information purposes only and is not a prospectus, disclosure document, product disclosure statement or other offering document under Australian law or any other law (and will not be lodged with the Australia
Slide 4: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Financial data For personal use only All dollar values are in Australian dollars (A$ or AUD) unless otherwise stated. This Presentation includes certain historical financial information extracted from the Company's audited consolidated financial statements and pro for
Slide 5: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Forward-looking statements and forecasts For personal use only This Presentation contains certain "forward-looking statements" that are based on management's beliefs, assumptions and expectations and on information currently available to management. Forward-looking st
Slide 6: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Disclaimer For personal use only Neither Macquarie Capital (Australia) Limited (Underwriter), nor any of its or OML's respective advisers or any of their respective affiliates, related bodies corporate, directors, officers, partners, employees and agents, have authori
Slide 7: Executive Summary
EXECUTIVE SUMMARY For personal use only Acquisition of • oOh! has entered into a binding agreement to acquire 100% of Adshel for $570 million1 (the Acquisition) Adshel – Implied EV/EBITDA multiple of 11.6x pre-synergies2, or 8.7x post-synergies2 • Adshel3 is a major provider of poster and digital ad
Slide 8: Executive Summary
EXECUTIVE SUMMARY For personal use only • The Acquisition is expected to be low double digit EPSA accretive on a pro forma CY2018F basis for oOh!1,2 – Includes expected cost synergies, but excludes one off integration costs and costs associated with undertaking the Acquisition and Offer • Cost syner
Slide 9: Executive Summary
EXECUTIVE SUMMARY For personal use only • Acquisition is subject to ACCC approval and is expected to complete in 2018 Approvals – Approval is expected to be achieved given the complementary nature of the OML and Adshel businesses in different Out Of Home segments • oOh! reconfirms full year standalo
Slide 10: Overview of Acquisition
For personal use only OVERVIEW OF ACQUISITION
Slide 11: Compelling Strategic Rationale for the Acquisition
COMPELLING STRATEGIC RATIONALE FOR THE ACQUISITION For personal use only • Adshel complements oOh!'s existing portfolio of products, assets and audiences Complementary offering • Addition of Sydney and Melbourne rail network offering, along with the street furniture is expected to complement oOh!'s
Slide 12: Complementary Offering
COMPLEMENTARY OFFERING For personal use only • The Acquisition is expected to improve oOh!’s network reach and frequency in key metropolitan and some regional areas • oOh!’s investment in its scalable ERP (OTP) can leverage its Quantium and other unique data sets into Street Furniture and Rail • Ads
Slide 13: Digital Strategy
DIGITAL STRATEGY For personal use only • oOh! is a leader in digital out of home with 60% of CY2017 portfolio digitisation as a percentage of existing sites its CY2017 revenue coming from digital, and is excited by the opportunity presented by the Adshel Acquisition • As at May 2018, Adshel has 887
Slide 14: Expected Acquisition Synergies
EXPECTED ACQUISITION SYNERGIES For personal use only Significant opportunities for cost synergies Achievement of synergies and integration costs • The acquisition of Adshel is expected to generate significant • oOh! estimates integration costs of approximately $6 – 7 million opportunities for cost s
Slide 15: Expected Acquisition Synergies
EXPECTED ACQUISITION SYNERGIES For personal use only Labour Back office and facilities synergies Operational efficiency synergies • oOh! management anticipates headcount related • The Acquisition is expected to generate back • oOh! management anticipates additional synergies between $10 – 12 million
Slide 16: Financial Impact
FINANCIAL IMPACT For personal use only • The Acquisition is expected to be low double digit EPSA accretive on a pro Pro forma CY2017 revenue3 forma CY2018F basis1,2 • Expected post Acquisition net debt / CY2018F pro forma EBITDA ratio of approximately 2.5x (excluding synergies) Road 23% • Net debt /
Slide 17: Overview of Adshel
For personal use only ADSHEL OVERVIEW OF
Slide 18: Business Profile
BUSINESS PROFILE • Adshel is a major provider of poster and digital advertising faces on street furniture For personal use only across Australia and New Zealand – Coverage extends to 92% of the Australian population and 87% of the New Zealand population • Adshel is well positioned to leverage the Me
Slide 19: Adshel Solutions
ADSHEL SOLUTIONS For personal use only ADSHEL CLASSIC ADSHEL LIVE ADSHEL RAIL Encompasses key CBD and inner-city stations One of the most recognised names in street National digital street furniture network including across Australia’s two largest cities, Sydney and furniture1, reaching 92% of Austr
Slide 20: Adshel Financials
ADSHEL FINANCIALS For personal use only CY20161 CY20171 • Impact of loss of Yarra Trams (YT) contract has been less than originally anticipated, in part due to expected benefits from with digitisation of Revenue 205.8 221.3 assets and the reinvigoration of a 5-city national advertising offering foll
Slide 21: Funding
For personal use only FUNDING
Slide 22: Funding Overview
FUNDING OVERVIEW For personal use only • Total consideration payable for the Acquisition is $570 Acquisition Uses of funds A$ million million1, excluding Acquisition and Offer transaction costs of price ~$19.7 million • Fully underwritten 1 for 2.3 pro rata accelerated non- Acquisition of Adshel1 57
Slide 23: Equity Raising Summary
EQUITY RAISING SUMMARY For personal use only • Fully underwritten 1 for 2.3 accelerated non-renounceable entitlement offer to raise approximately $329.9 million Offer structure • Approximately 72 million new fully paid ordinary shares in oOh! (New Shares) to be issued under the Entitlement Offer (re
Slide 24: Equity Raising Indicative Timeline
EQUITY RAISING INDICATIVE TIMELINE For personal use only Event Date (2018) Announcement and trading halt Monday, 25 June Institutional Entitlement Offer Monday, 25 June to Tuesday 26 June OML shares re-commence trading on ex-entitlement basis Wednesday, 27 June Record Date for the Entitlement Offer
Slide 25: Appendix A: Pro Forma Combined Balance Sheet
For personal use only APPENDIX A: PRO FORMA COMBINED BALANCE SHEET
Slide 26: Pro Forma Combined Balance Sheet
PRO FORMA COMBINED BALANCE SHEET For personal use only Pro Forma Combined Balance Sheet1 OML FY17 Impact of the Impact of the Offer OML pro forma $m Dividend statutory Acquisition2 and new debt facility3 combined Cash and cash equivalents 15.9 - (570.0) 570.0 15.9 Other assets 13.6 - 9.2 2.0 24.9 Tr
Slide 27: Appendix B: Key Assumptions
For personal use only APPENDIX B: KEY ASSUMPTIONS
Slide 28: Key Assumptions
KEY ASSUMPTIONS For personal use only The expectation of Adshel standalone CY2018PF normalised EBITDA of $48–50 million including the full-year run rate of certain new contracts secured and associated digitisation, and the impact of renewals, is based on the following key assumptions: • Delivery of
Slide 29: Appendix C: Key Risks
For personal use only KEY RISKS APPENDIX C:
Slide 30: Key Risks: Introduction
KEY RISKS INTRODUCTION For personal use only • Investors should be aware that an investment in oOh!media is subject to a number of risks both specific to OML and its subsidiaries and of a general nature, which may either individually or in combination adversely affect the future operating and financ
Slide 31: Key Risks
KEY RISKS For personal use only 1.2 Investment in equity capital • There are general risks associated with investments in equity capital. The trading price of OML's ordinary shares on ASX may fluctuate with movements in equity capital markets in Australia and internationally. This may result in the
Slide 32: Key Risks
KEY RISKS For personal use only 1.4 Integration and realisation of synergies • It is possible that the operational or financial analysis as well as the forecasted estimates undertaken by OML regarding the Acquisition are inaccurate or are not realised in due course because of factors within or outsi
Slide 33: Key Risks
KEY RISKS For personal use only 1.7 Risks associated with not taking up your rights under the Entitlement Offer • If you do not take up all of your entitlements to acquire New Shares under the Entitlement Offer, your percentage shareholding in OML will be diluted to a greater extent by not participa
Slide 34: Key Risks
KEY RISKS 2. KEY BUSINESS RISKS For personal use only 2.1 Advertising markets • The performance of the Group will continue to be influenced by the overall condition of the advertising market in Australia and New Zealand, being those markets in which it operates. These advertising markets are influen
Slide 35: Key Risks
KEY RISKS For personal use only 2.6 Digital platform, IT risk, privacy and cyber-crime • The Group's core technologies and other systems and operations could be exposed to damage or interruption from system failures, computer viruses, cyber-attacks, power or telecommunication providers’ failure, fir
Slide 36: Key Risks
KEY RISKS For personal use only 2.11 Government and regulatory factors • Government or regulatory policies may change, including regulations relating to the content of advertising, or the ability to erect and maintain roadside billboards. This could have an impact on the economic environment, genera
Slide 37: Key Risks
KEY RISKS For personal use only 2.15 Seasonality of revenue • The Group's revenue cycles have historically demonstrated seasonality consistent with the advertising industry in general. Traditionally, peak revenue periods have been September through to December (coinciding with peak consumer trading
Slide 38: Key Risks
KEY RISKS For personal use only 2.20 Asset impairment • Under Australian accounting standards, intangible assets that have an indefinite useful life, are not subject to amortisation and are reviewed annually for impairment or whenever events or changes in circumstances indicate that the carrying amo
Slide 39: Appendix D: International Selling Restrictions
For personal use only APPENDIX D: INTERNATIONAL SELLING RESTRICTIONS
Slide 40: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS This document does not constitute an offer of entitlement (Entitlements) or new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to For personal use only any person, a
Slide 41: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS For personal use only Canada (British Columbia, Ontario and Quebec provinces) (continued) The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario. In Ontario, every purchaser of the New Shares purc
Slide 42: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS For personal use only France This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Artic le L.411-1of the French Monetary and Financial Code (Code mo
Slide 43: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS For personal use only New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the FMC Act). The New Shares are not being offered to the public within New Zealand
Slide 44: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS For personal use only Sweden This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available. nor may the Entitlements or the New Shar
Slide 45: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS For personal use only United Arab Emirates – Excluding the Dubai International Financial Centre Neither this document nor any securities relating to it have been approved, disapproved or passed on in any way by the Emirates Securities and Commodities Authority (ESC
Slide 46: Appendix E: Summary of Key Terms of Share Purchase Agreement and New Debt Facilities
For personal use only APPENDIX E: SUMMARY OF KEY TERMS OF SHARE PURCHASE AGREEMENT AND NEW DEBT FACILITIES
Slide 47: Summary of Key Terms of Share Purchase Agreement and New Debt Facilities
SUMMARY OF KEY TERMS OF SHARE PURCHASE AGREEMENT AND NEW DEBT FACILITIES For personal use only • OML has secured $450 million fully underwritten and committed debt facilities from its key relationship banks • The facilities are revolving in nature, for a 3 year tenor and are available to be used: –
Slide 48: Glossary
For personal use only GLOSSARY
Slide 49: Glossary
GLOSSARY For personal use only Term Definition The businesses in Australia and New Zealand operated by (or as the context requires, the ordinary shares in) Adshel Street Adshel Furniture Pty Ltd (ACN 000 081 872) and Adshel New Zealand Limited (Company number 902243) EBITDA Earnings before interest,
Slide 50: For personal use only
For personal use only oohmedia.com.au © oOh!media – your Out-of-Home media partner