STRATEGIC DISTRIBUTION ACQUISITION IN SOUTH AMERICA

Transcription

1 STRATEGIC DISTRIBUTION ACQUISITION IN SOUTH AMERICA IN NEW AND EXISTING GROWTH MARKETS 22 DECEMBER 2016

2 DELIVERING ON OUR IGNITE STRATEGY Become the OEM s partner of choice Lead in customer experience Deliver full potential on all our revenue streams Invest to accelerate growth SCALE SOUTH AMERICAN DISTRIBUTION ACQUISITION Meaningfully delivering on our Ignite strategy and consistent with our disciplined approach to capital allocation Leverage our global scale 2

3 LEVERAGING OUR UNIQUE POSITION IN A HIGHLY FRAGMENTED INDUSTRY # of companies 4 companies -Inchcape - 5companies 26 companies - Indumotora companies Presence > 20 markets > 10 markets > 3 markets 3 markets Fragmented across Distribution and Retail Over 850 independent Distributors in three markets or fewer 3

4 TRANSACTION HIGHLIGHTS COMPELLING STRATEGIC AND FINANCIAL RATIONALE Creation of a scale Distribution platform across South America with attractive growth prospects Investing in existing markets of Chile and Peru and new markets of Colombia and Argentina Inchcape becomes the leading South American Distribution partner for Subaru Attractive commercial vehicle operation focused on Hino, an existing brand partner Strong complementary brand partners to our existing BMW presence in Chile and Peru Accretive to earnings in Year 1, by mid to high single digit %, enhances Group operating margin Cash consideration of 234m represents 8.6x multiple of forecast adjusted EBITDA Cash generative Distribution business with low capital intensity Funded from cash & committed debt facilities, retain strong Group balance sheet Notes: 1 Forecast adjusted EBITDA of 27m for the 12 months to 31 December 2016 is stated on an unaudited basis that is best representative of the ongoing performance of the acquired assets under Inchcape ownership 4

5 STRUCTURAL GROWTH POTENTIAL GDP per capita against vehicle density by country USA New Automotive consumers as middle classes expand GDP / Capita $(000s) Chile Colombia China Peru Argentina Brazil Germany UK France Stabilising / improving commodity price environment Greater political stability - supportive of investment and growing consumption Pent up demand from weakness in recent years Total light vehicles per 1,000 people Source: IHS, EIU 5

6 BUYING AT THE RIGHT TIME GROWTH OUTLOOK FOR VEHICLES AND AFTERSALES CHILE PERU 2016E TIV 290k (+2.3% YoY) 2016E TIV 137k (-6.9% YoY) 2016E 2021E TIV CAGR +3.3% 2016E 2021E TIV CAGR +7.5% COLOMBIA ARGENTINA 2016E TIV 250k (-6.7% YoY) 2016E TIV 650k (+2.8% YoY) 2016E 2021E TIV CAGR +6.2% 2016E 2021E TIV CAGR +2.3% Source: IHS 6

7 ABOUT THE BUSINESS High-quality South American Automotive Distributor and Retailer operating primarily with Subaru and commercial vehicle brand Hino since 1977 Focused on Distribution of Vehicles and Parts, includes part of the Retail network for Subaru and Hino Revenue by Market Colombia 34% Peru 14% Argentina 3% Chile 49% Key metrics ( ) Revenue 382m EBIT Employees 1,400 25m (6.6% margin) Vehicle units by Brand Hino 28% Other 17% Subaru 55% Note: 1 Forecast financial metrics / data for the 12 months to 31 December 2016 are stated on an unaudited basis that is best representative of the ongoing performance of the acquired assets under Inchcape ownership 7

8 STRONG GEOGRAPHIC & BRAND PORTFOLIO MARKET SHARE GROWTH OPPORTUNITIES PERU Passenger Vehicles COLOMBIA Passenger Vehicles CHILE Commercial Vehicles Passenger Vehicles ARGENTINA Commercial Vehicles Passenger Vehicles 8

9 EXPANDING WITH STRONG PARTNERS WITH SUBARU IN PASSENGER VEHICLES & IN COMMERCIAL VEHICLES WITH HINO Length of partnerships: Inchcape Indumotora 48yrs 39yrs 24yrs 39yrs 9

10 SCALE & MARGIN ENHANCING ACQUISITION ( m) Inchcape 2016E 1 Acquired business % EBITDA % EBIT % EBIT Margin 4.6% 6.6% Important addition to the Group c10% of Distribution profit 3 Accretive to earnings in Year 1 by a mid to high single digit % Notes: 1 Company compiled consensus, as of 20 December 2016, this is not a profit forecast. 2 Forecast adjusted EBITDA and EBIT of 27m and 25m respectively for the 12 months to 31 December 2016 are stated on an unaudited basis that is best representative of the ongoing performance of the acquired assets under Inchcape ownership. 3 Based on 2015 reported numbers for Inchcape. 10

11 ACQUISITION SUMMARY Delivering against the Ignite strategic objective of invest to accelerate growth Attractive business, creating a scale Distribution presence in South America for long-standing partners Accretive to earnings in Year 1 and enhances Group operating margin Committed to ensuring a smooth transition process with a continued focus on operational success Compelling Strategic and Financial rationale 11

12 DISCLAIMER The information and opinions contained in this presentation are provided as at the date of the document. Certain statements in this presentation, particularly those regarding the future prospects of Inchcape plc ( Inchcape ), returns, pricing, acquisitions, divestments, industry growth or other trend projections are or may be forward-looking statements. These forward-looking statements are not historical facts, nor are they guarantees of future performance. Such statements are based on current expectations and belief and, by their nature, are subject to a number of known and unknown risks and uncertainties which may cause the actual results, prospects and developments of Inchcape to differ materially from those expressed or implied by these forward-looking statements. Except as required by any applicable law or regulation, Inchcape expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this presentation to reflect any change in Inchcape s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All information in the presentation is the property of Inchcape plc and may not be reproduced or recorded without the written permission of the company. Nothing contained in the presentation constitutes or shall be deemed to constitute an offer or invitation to invest in or otherwise deal in any shares or other securities of Inchcape plc. Inchcape All rights reserved. Proprietary and confidential information. No unauthorised copying or reproduction. Inchcape and the Inchcape logo are the registered trademarks of the Inchcape Group. The information contained in this presentation has been obtained from company sources and from sources which Inchcape believes to be reliable but it has not independently verified such information and does not guarantee that it is accurate or complete. 12