Maxiparts Limited · ASX:MXI
Maxiparts — MaxiTRANS Industries — H1 FY2019 Earnings Presentation
32 slides from Maxiparts's earnings presentation, Mar 6, 2019
Slide 1: MaxiTRANS Industries Limited – H1 FY19 Investor Presentation
For personal use only MaxiTRANS Industries Limited – H1 FY19 Investor Presentation
Slide 2: H1 FY19 Highlights
For personal use only H1 FY19 HIGHLIGHTS 2
Slide 3: H1 FY19 Results
H1 FY19 RESULTS For personal use only • External sales of $190.68m, down 11% on PCP. • Underlying net profit after tax (NPAT) of $3.66m. • Underlying EBITDA of $8.47m. • Capital reallocation • Sale of MTC – underperforming venture due to increased competition, product commoditization, and input cost
Slide 4: Leading our industry to become safer and more efficient
At MaxiTRANS, we are leading our industry to become safer and more efficient, so that our customers can For personal use only better deliver the needs of a nation • One of the largest suppliers of truck and trailer parts to the road transport industry in Australia through the MaxiPARTS wholesale and
Slide 5: Two complementary and well positioned businesses
TWO COMPLEMENTARY AND WELL POSITIONED BUSINESSES For personal use only HY19 Segment Revenue Contribution* MaxiPARTS Differentiators Trailers Differentiators A national store footprint in Parts 30% Strong brand heritage the right locations and reputation Trailers 70% Broadest range of products, Uniqu
Slide 6: MaxiPARTS: extensive range of parts/consumables and expertise
MAXIPARTS EXTENSIVE RANGE OF PARTS/CONSUMABLES AND EXPERTISE H1 FY19 Revenue by State For personal use only • 20 locations nationally 31% 23% • Portfolio includes trailer parts, after-market 2% truck and engine parts / consumables 5% 29% 10% • In excess of 180,000 products in the portfolio, includin
Slide 7: Trailers: a diverse portfolio of brands exposed to multiple segments
TRAILERS A DIVERSE PORTFOLIO OF BRANDS EXPOSED TO MULTIPLE SEGMENTS OF THE ECONOMY For personal use only PRODUCT REVENUE CONTRIBUTION FROM NEW TRAILER SALES (3 YEAR AVE) Bulk Transport • Infrastructure • Housing Starts • Agriculture • Waste • Mining 28% • Population Growth 37% General Freight • Popu
Slide 8: Financial Overview
FINANCIAL OVERVIEW • Results A$M 1H18 1H19 % Change For personal use only • Australian Trailers revenue of $121.9m, down by 16.5% from first half FY18. External Revenue* 214.1 190.7 (11.0) • Revenue growth in the first half of FY2018 was EBITDA 13.5 5.6 (58.5) principally driven from the Coles contr
Slide 9: Earnings Bridge
EARNINGS BRIDGE For personal use only 8 7.8 7.2 • Decline in sales volume partially offset 7 by gross margin improvements, with a 6 net gross profit decrease on H1 FY18 of $1.5m 5 3.9 2.3 4 1.8 3.7 • Overhead increase due to higher depreciation and amortisation costs, as 3 0.3 well as IT licence fee
Slide 10: FY18 H2 and FY19 H1 Performance Comparison
FY18 H2 AND FY19 H1 PERFORMANCE COMPARISON For personal use only 4.0 0.5 0.1 3.7 3.5 • Lower sales with gross 1.7 3.0 margin improvements on 2.8 1.4 H2 FY18 2.5 • Lower warranty costs in 2.0 FY19 compared to 1.5 abnormal warranty costs in New Zealand in FY18 1.0 0.5 0.0 2.8 H2 FY18 Sales volume Gros
Slide 11: Cashflow
CASHFLOW For personal use only A$M 1H18 1H19 % Change • Significant CAPEX in H1 on ERP EBITDA 13.5 5.6 (58.5) system – to slow in H2 FY19 Change in Working Capital (4.8) (2.4) 50.0 • Operating cash outflow due to Other (1.8) (2.9) (61.1) higher inventories held on hand in MaxiPARTS Operating Cashflo
Slide 12: Balance Sheet
BALANCE SHEET For personal use only A$M Dec 2017 June 2018 Dec 2018 • Increase in inventories held in H1 FY19, set to unwind in H2. Receivables 40.2 39.1 36.7 Inventories 65.0 57.7 62.7 • Increase in intangible assets due to Total Current Assets 118.1 130.1 126.3 reclassification of ERP system from
Slide 13: CAPEX
CAPEX For personal use only • Significant investment in new IT systems (ERP Rental and associated systems) over past 5 years CAPEX due to wind down in H2 FY19 15 14.5 ERP (TRANSform) • ERP go-live in Manufacturing (Q2 FY19) and 3.7 rest of business to follow in FY20 10 9.2 • Increased depreciation f
Slide 14: Business Unit Performance
For personal use only BUSINESS UNIT PERFORMANCE 14
Slide 15: Segment Earnings – MaxiPARTS
SEGMENT EARNINGS – MaxiPARTS For personal use only A$M 1H18* 1H19 % Change MaxiPARTS continues to become a larger share of the MaxiTRANS business. Total Revenue 60.8 69.0 13.5 • As a high quality distribution asset, External Revenue 47.8 55.1 15.3 MaxiPARTS now represents 38% of total EBITDA^ 4.5 5.
Slide 16: Segment Earnings – Trailers (Australia & NZ)
SEGMENT EARNINGS – TRAILERS (AUSTRALIA & NZ) A$M 1H18 1H19 % Change • Revenue growth in H1 FY18 was principally driven from For personal use only Total Revenue 161.9 130.6 (19.3) the Coles contract. External Revenue 156.3 130.2 (16.7) • Adjusting for the Coles contract, the Australian trailer soluti
Slide 17: New Zealand
NEW ZEALAND For personal use only • New Zealand revenue was down 19.4% whilst EBITDA grew by 66.6% on PCP. • Regulation changes late FY17 drove revenue spike in FY18 • Revenue now normalised. • No adverse change in warranty assumptions since FY18 • 5% improvement in efficiency levels and on track to
Slide 18: Australian Trailers
AUSTRALIAN TRAILERS For personal use only • Market growth – New trailer registrations in 2018 3% higher than GENERAL FREIGHT FOOD & GROCERY BULK TRANSPORT 2017, though slower in second half of 2018 • Market share – MaxiTRANS lost some market share (≈ 1%) in 2018 due to: • Unit sales 33% higher • Uni
Slide 19: Capital Allocation
CAPITAL ALLOCATION For personal use only China • MTC sale finalised in November 2018. Sale resulted in a loss of $1.6m (inclusive of costs). • The funds released by this transaction subsequently allowed the Group to fund the acquisition of 80% of Trout River Australia Trout River Australia • Acquisi
Slide 20: Trout River Australia
TROUT RIVER AUSTRALIA For personal use only • Leading manufacturer and supplier of live bottom trailers in Australia. • $10m annual sales and $2m EBITDA in FY18. Returns in FY19 expected to exceed MaxiTRANS’ weighted average cost of capital in first year of ownership. • Acquisition is a key step in
Slide 21: Strategy Update – Building on Solid Foundations
For personal use only STRATEGY UPDATE – BUILDING ON SOLID FOUNDATIONS 21
Slide 22: Strategic Initiatives Driving Value
STRATEGIC INITIATIVES DRIVING VALUE For personal use only Our Strategy : Partner with operators in the freight transport business to improve VALUE CREATION efficiency and effectiveness. Add value by reducing customers’ operating risks. Industry Leader • Trusted business partner Our Values : Send all
Slide 23: Value Enablers: Organisational Development and Corporate Image
VALUE ENABLERS: ORGANISATIONAL DEVELOPMENT AND CORPORATE IMAGE For personal use only GOAL • An organisation empowered to grow in The MaxiTRANS Way • Build on industry leadership position focussing on safety & efficiency Key Launched tailored training programs designed to 1 Embed The MaxiTRANS Way
Slide 24: Value Generator: Operational Excellence
VALUE GENERATOR: OPERATIONAL EXCELLENCE For personal use only GOAL Drive efficiency and margin improvement ERP system went live in all 1 Implement ERP system and MaxiTRANS Australian continuous improvement initiatives manufacturing sites in October 2018 Realised warranty expense per Implement co
Slide 25: Value Generator: Growth in Existing Markets
VALUE GENERATOR: GROWTH IN EXISTING MARKETS For personal use only GOAL Revenue growth; improved asset utilisation Expand footprint: Trout River Key New products: Base model Drivers 1 Grow national market share in trailers now approximately 25% of General Freight sales Product additions outstri
Slide 26: Value Generator: Growth in New Markets
VALUE GENERATOR: GROWTH IN NEW MARKETS For personal use only Establish longer term growth drivers and geographic GOAL diversification Key Rental fleet meeting internal 1 Target opportunities in Fleet targets Drivers Management Decision to exit MTC based on ROIC analysis past and future 2 Value a
Slide 27: Outlook
For personal use only OUTLOOK 27
Slide 28: H2 FY19 Outlook
H2 FY19 OUTLOOK For personal use only • General economic conditions have become more challenging over recent months: • Drought conditions have substantially impacted capital purchasing in the agricultural market. • Expenditure on the east coast infrastructure projects has been at a slower rate than
Slide 29: H2 FY19 Outlook (continued)
H2 FY19 OUTLOOK (continued) For personal use only • However, the Australian trailer business is expected to benefit from the recovery of production deferred from Q2 and the retention of some margin accretion associated with price rises initiated in July 2018. • The initial gains from the ERP system
Slide 30: Our Values
OUR VALUES For personal use only SEND ALL OUR A BALANCED FOCUS ENABLE AND PEOPLE HOME ON CUSTOMERS EMPOWER PEOPLE SAFELY AND RESULTS TO ACHIEVE RESULTS BE HONEST, ENCOURAGE BECOME BETTER FORTHRIGHT AND COLLABORATION EVERY DAY IN ALL ETHICAL IN OUR AND DEEP SEATED THAT WE DO DEALINGS ACCOUNTABILITY 3
Slide 31: Important Information
IMPORTANT INFORMATION For personal use only This document should be read in conjunction with the periodic and continuous disclosure announcements of MaxiTRANS Industries Limited (MaxiTRANS) that have been lodged with the ASX, in particular the financial report for the half-year ended 31 December 201
Slide 32: MaxiTRANS Industries Limited
For personal use only MaxiTRANS Industries Limited ACN 006 797 173
MaxiTRANS Industries — H1 FY2019 Earnings Presentation on 6ix