Rpm Automotive Group Ltd. · ASX:RPM
Rpm Automotive — Investor Presentation (April 2024)
35 slides from Rpm Automotive's investor presentation, Apr 18, 2024
Slide 1: Capital Raise Investor Presentation April 2024
CAPITAL RAISE INVESTOR PRESENTATION | APRIL 2024 RPM AUTOMOTIVE GROUP LTD (ASX: RPM) RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 1
Slide 2: Agenda
AGENDA RPM Business Overview 6 Tyre Recycling Initiative 14 Execution Plan 13 Financial Overview 19 Equity Raising Overview 25 RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 2
Slide 3: Experienced Board of Directors & Managers
EXPERIENCED BOARD OF DIRECTORS & MANAGERS LAWRENCE JAFFE GUY NICHOLLS GRANT CARMAN CLIVE FINKELSTEIN REBECCA PAYNE NON-EXECUTIVE CHAIRMAN CHIEF EXECUTIVE OFFICER NON-EXECUTIVE DIRECTOR CCO/EXECUTIVE DIRECTOR CHIEF FINANCIAL OFFICER Co-founder of RPM Over 30 years’ experience in Chartered accountant
Slide 4: Executive Summary
EXECUTIVE SUMMARY • Leading Australian Automotive company offering wheel, tyre, accessories and apparel to both wholesale (B2B commercial and industrial) and retail (consumer) customers Introduction • National footprint with over 26 locations and 11 distribution centres • Track record of growth FY20
Slide 5: Executive Summary
EXECUTIVE SUMMARY • H1 FY24 operating cash generation increased to $2.4m (from an outflow of $2.8m in H1 FY23) • Key drivers included renewed focus on working capital management and implementing robust systems and Positive cashflow processes, with continued focus on receivables and inventory convers
Slide 6: RPM Business Overview
RPM BUSINESS OVERVIEW 6 RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 6
Slide 7: Tyre Division Overview
TYRE DIVISION OVERVIEW WHEELS REPAIRS & TYRES & ROADSIDE Distribution of wheels and tyres Commercial/Industrial Wholesale – B2B B2C • 11 warehouses nationally • Retail wheel and tyre repairs, mechanical repairs and • Large fleet of delivery trucks and vehicles routine maintenance • 13 exclusive in-h
Slide 8: Other Business Units
OTHER BUSINESS UNITS PERFORMANCE & ACCESSORIES MOTORSPORT Bolt on vehicle parts and accessories Certified race safety wear, suits and helmets Specialist Wholesale Specialist Retail • Consists of 4 businesses • Market leader for over 30 years • 4WD, Caravan and Passenger vehicle channels • Company, f
Slide 9: The RPM Advantage
THE RPM ADVANTAGE • Reputation • Importer, wholesaler and specialist retailer • Industry experts in each business • Strong customer relationships • National footprint • Large fleet of delivery vehicles • Business Development Managers • Access to leading and exclusive brands Now driving opportunities
Slide 10: Three Core Strategies to Drive Shareholder Value
THREE CORE STRATEGIES TO DRIVE SHAREHOLDER VALUE Operating leverage Strategic initiatives Vertical integration • Latent capacity in network • Tyre recycling initiative to • End-to-end ownership of to increase throughput at leverage existing wholesale the supply chain low incremental cost platform –
Slide 11: Strategic & Accretive Yokohama Partnership
STRATEGIC & ACCRETIVE YOKOHAMA PARTNERSHIP • RPM have entered a multi-year agreement with Yokohama Tyre Overview Australia (ASX Announcement 26 March 2024) • RPM is now the only national Yokohama wholesaler • Additional volume through existing fixed infrastructure RPM Benefits • Preferred supplier o
Slide 12: Strategic Technology Partnership with WHG
STRATEGIC TECHNOLOGY PARTNERSHIP WITH WHG • WHG is Australia's largest automotive telematics provider. • Provides RPM with entry into SaaS ecosystem targeting heavy fleet customers. Overview • Legislation changes driving requirement for higher commercial vehicle safety and accountability. • Broaden
Slide 13: WHG Ecosystem
WHG ECOSYSTEM RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 13
Slide 14: Tyre Recycling
TYRE RECYCLING 14 RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 14
Slide 15: Tyre Recycling Background
TYRE RECYCLING BACKGROUND • Tyres take ~2,000 years to decompose naturally • 56 million tyres are scrapped in Australia on an annual basis • Only 10% go through a tyre recycling processes globally • Australia banned the export of waste or scrap tyres in December 2021 • The growing implementation of
Slide 16: Recycled Tyre Applications – The Opportunity
RECYCLED TYRE APPLICATIONS – THE OPPORTUNITY • Rubberized asphalt for the construction of roads and pavements • Plastic recycled moulded products (e.g. pallets) • Sports, recreation and outdoor facilities • Playground surfacing • Stable and paddock ground cover RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 16
Slide 17: RPM Tyre Recycling – Stage Melbourne
RPM TYRE RECYCLING – STAGE 1 MELBOURNE • Utilising existing leased location in Campbellfield, Melbourne VIC • Advanced stages of permit applications • Site alterations commencing • Placed order with globally renown machine manufacturer with proven technology • Simple mechanical process to shred tyre
Slide 18: Strategic Benefits & Financial Metrics
STRATEGIC BENEFITS & FINANCIAL METRICS • Leverage existing resources, infrastructure & occupancy (RPM’s Wholesale Tyre Division is already set up to collect tyres) • Reverse logistics – trucks return with used tyres after delivering new, currently empty. STRATEGIC RATIONALE • Negative working capita
Slide 19: Financial Overview
FINANCIAL OVERVIEW 19 RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 19
Slide 20: Track Record of Revenue and Earnings Growth
TRACK RECORD OF REVENUE AND EARNINGS GROWTH H1 FY24 Key Highlights • Gross Margin up 16% pcp • EBITDA up 23% pcp • EPS up 48% pcp Repairs & roadside Wheels & tyres Performance & accessories Motorsport * includes revenue and EBITDA guidance RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 20
Slide 21: H1 FY24 Key Financial Drivers
H1 FY24 KEY FINANCIAL DRIVERS REVENUE Group Revenue increased to $57 million (+3.6% LFL on PY) +2.2% vs pcp GROSS MARGIN Group Gross Margin to 35% (+420 bps vs pcp) Improved procurement, mix and pricing discipline OPERATING COSTS Opex of $14.6 million, flat on the pcp EBITDA Group EBITDA $5.4 millio
Slide 22: Improvement in Cash Flow Conversion
IMPROVEMENT IN CASH FLOW CONVERSION Key Highlights Summary cashflow, $A millions 1H FY24 1H FY23 Variance to 1H FY23 Receipts from customers 57.0 55.4 1.6 Payments to suppliers and employees -51.6 -54.9 3.3 • H1 FY24 operating cash generation increased to $2.4m Interest and other income received 0.0
Slide 23: Net Debt Reduction
NET DEBT REDUCTION Key Highlights 1HFY24 FY23 1HFY24 (post- FY24F2 FY25F3 raise) • Significant reduction in Net Debt and leverage Total Borrowings 38.5 34.9 32.9 metrics over 1HFY24 – this is expected to Less: Cash & equivalents (4.4) (4.0) (5.7) continue into FY25 Less: Deferred Acquisition • FY24
Slide 24: FY24 & FY25 Outlook
Revenue FY24 & FY25 OUTLOOK Key Highlights • Growth driven by 1) New products; 2) New Relationships: OEM Contract, WHG & Yokohama; and 3) Geographical expansion • Additional sales of exclusive tyre brands to Tyres & More as preferred supplier. • Margin expansion via Yokohama deal and tyre EBITDA rec
Slide 25: Equity Raising Overview
EQUITY RAISING OVERVIEW 25 RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 25
Slide 26: Equity Raising Overview
EQUITY RAISING OVERVIEW • Equity Raising of $4.0 million comprising: o an unconditional institutional placement ("institutional placement") of new fully paid ordinary shares (“New Shares”) to raise up to $3.5 OFFER STRUCTURE million under RPM's existing LR 7.1 and 7.1A placement capacity; and AND SI
Slide 27: Sources & Uses - Indicative Timetable
SOURCES & USES - INDICATIVE TIMETABLE Indicative Timetable Event Date Sources (A$m) Trading Halt Tuesday, 16 April 2024 Institutional Placement $4.0m Total Sources $4.0m Announcement of completion of the Placement, Thursday, 18 April 2024 trading halt lifted and commence trading Settlement of the Pl
Slide 28: Capital Structure
CAPITAL STRUCTURE Convertible Note retired by raise and no other options outstanding except for listed options issued under the offer CAPITAL STRUCTURE - POST A$4.0m CAPITAL RAISING Ordinary Shares on issue 196,591,597 New shares issued under the offer 55,713,721 Ordinary Shares on completion of 252
Slide 29: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER Overview This document is issued by RPM Automotive Group Limited ACN 002 527 906 RPM (“RPM Automotive” or “RPM”) on 16 April 2024. Summary Information This document contains summary information about RPM Automotive and its associated and proposed associated entities and
Slide 30: Key Risks
KEY RISKS RISK FACTORS There are a number of factors, both specific to RPM and of a general nature, which may affect the future operating and financial performance of RPM, its products and services, the industry in which it operates and the outcome of an investment in RPM. There can be no guarantee
Slide 31: Key Risks
KEY RISKS Warranty risk, product liability exposure and reputational risk There is an inherent risk of system breakdown or a defect in the products or services sold by RPM and for exposure to product liability for damages suffered by parties attributable to the use of the product. Defective products
Slide 32: Key Risks
KEY RISKS Changes in technology Technology plays an increasingly important role in the delivery of services to RPM's customers. RPM's ability to compete in its industry sectors may be impacted by its ability to maintain or develop appropriate technology platforms in the efficient delivery of its ser
Slide 33: Key Risks
KEY RISKS Dependence on general economic conditions The operating and financial performance of RPM is influenced by a variety of general economic and business conditions, including levels of consumer spending, inflation, interest rates and exchange rates, access to debt and capital markets and gover
Slide 34: Foreign Selling Restrictions
FOREIGN SELLING RESTRICTIONS WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to t
Slide 35: Media & Investors
MEDIA & INVESTORS E: INVESTORS@RPMGROUP.NET.AU RPM AUTOMOTIVE GROUP LTD (ASX: RPM) www.rpmgroup.net.au RPM AUTOMOTIVE GROUP LTD (ASX: RPM) 35
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