GROWING GLOBALLY FY – 2018 INTERIM RESULTS PRESENTATION: 22 FEBRUARY 2018
Disclaimer This presentation contains forward-looking statements and projections. These reflect thl ’s current expectations, based on what it thinks are reasonable assumptions. The statements are based on information available to thl at the date of this presentation and are not guarantees or predictions of future performance. For any number of reasons, the future could be different and the assumptions on which the forward-looking statements and projections are based could be wrong. thl gives no warranty or representation as to its future financial performance or any future matter. Except as required by law or NZX listing rules, thl is not obliged to update this presentation after its release, even if things change materially. This presentation has been prepared for publication in New Zealand and may not be released or distributed in the United States. This presentation is for information purposes only and does not constitute financial advice. It is not an offer of securities, or a proposal or invitation to make any such offer, in the United States or any other jurisdiction, and may not be relied upon in connection with any purchase of thl securities. thl securities have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States, except in transactions exempt from, or not subject to, the registration of the US Securities Act and applicable US State securities laws. Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as an indication of future performance. This presentation may contain a number of non-GAAP financial measures. Because they are not defined by NZ GAAP or IFRS, thl ’s calculation of these measures may differ from similarly titled measures presented by other companies and they should not be considered in isolation from, or construed as an alternative to, other financial measures determined in accordance with NZ GAAP. This presentation does not take into account any specific investors objectives and does not constitute financial or investment advice. Investors are encouraged to make an independent assessment of thl . The information contained in this presentation should be read in conjunction with thl ’s latest financial statements, which are available at: www.thlonline.com FY18: Interim Results Presentation 2
Important Points to Note El Monte RV Acquisition • The purchase of the El Monte RV Rental and Sales business in the USA was effective from 1 January 2017, so there is no comparative result for the year ended 31 December 2016. • Throughout this presentation we have shown the impact of the El Monte RV acquisition, where appropriate, to aid the understanding of the results. TH2 Joint Venture • On 16 February 2018, thl entered into an agreement to form a joint venture with Thor Industries, to be called TH2. Further information on this transaction is included later in this presentation, and in a separate presentation released to the NZX on 16 February 2018 and available at www.thlonline.com. • The financial impact of TH2 on the full-year financial result for FY18 is subject to finalisation of fair value accounting and the exchange rates at the date of settlement. US Federal Taxation • In December 2017, a new federal corporate tax rate was enacted in the USA. Consequently, as at 1 January 2018, the corporate tax rate was reduced from 35% to 21%. This change has resulted in a non-recurring gain of NZD$1.8M related to the re-measurement of deferred tax assets and liabi lities of the Group’s US subsidiaries being recognised in the six month period ended 31 December 2017. • Due to changes in the depreciation allowable for capital purchases under the new legislation, it is not expected that the Group will be required to pay income tax in the United States in the current year. As a result of this, the reduced corporate tax rate is effective for the Group’s calculat ion of income tax expense in the current financial year. General • All financials in NZ dollars unless stated otherwise (throughout presentation). • All comparisons are against prior corresponding period. • The average NZD:AUD cross-rate (average of the six month rates) for H1 FY18 was 0.9395 (FY17 0.9767). • The average NZD:USD cross-rate (average of the six month rates) for H1 FY18 was 0.7335 (FY17 0.7365). FY18: Interim Results Presentation 3
Financial Highlights H1 FY18 Earnings before Net profit after tax* Revenue interest and tax $22.8M $209M $33.3M Up by 43% Up by 102% Up by 78% Interim dividend Earnings per share* 13cps 18.9c (50% imputed) Up by 95% Up from 10cps (50% imputed) * Including $1.8M non-recurring benefit of re-measurement of deferred tax balances FY18: Interim Results Presentation 4
Financial Highlights H1 FY18 • Strong growth, including first peak season NZD $M FY18 H1 FY17 H1 VAR VAR % El Monte RV result, which contributed EBIT of $9.5M. Operating revenue 209.1 146.0 63.1 43% • Rentals NZ has, again, been a standout performer, with EBIT Earnings before 33.3 18.7 14.6 78% growth of 78%. interest and tax • Continued growth in Rentals Australia in a competitive Operating profit before 29.9 17.7 12.2 69% environment. tax Profit after tax 22.8 11.3 11.5 102% • Tourism results mixed, with Waitomo growing but Kiwi Experience down on prior year. • Group Services and Other EBIT loss reduced OPERATING PROFIT BEFORE TAX (NZD$M) by $1.6M. • JV & associates – strong growth in Action Manufacturing, 1.6 0.4 1.9 offset by Roadtrippers losses. 0.4 9.2 29.9 • Interest expense increase mainly due to the El Monte RV 0.5 acquisition. 2.9 17.7 Profit Before Rentals Rentals Rentals Tourism Group JV & Interest Profit Before Tax FY17 NZ AU USA Group Services & Associates Tax FY18 H1 Other H1 FY18: Interim Results Presentation 5
Key Achievements H1 FY18 Strategic Imperatives Continue to build the base business • Positive growth in the base business: • EBIT, excluding El Monte RV, up 25%. • El Monte RV ahead of expectations. Leverage the RV eco-system • TH2 global joint venture with Thor announced 16 February. JV will use digital technology to leverage the RV ecosystem. Innovate with technology • Sustainability initiatives progressing, including electric vehicle (EV) trials. EECA grant awarded to develop EV and holiday parks’ charging infrastructure. Do so sustainably FY18: Interim Results Presentation 6
TH2 Key Highlights 1 On 16 February 2018, thl entered into an agreement to establish a 50:50 joint ● venture with Thor Industries, the leading RV manufacturer globally 2 , to create a digital platform for RV owners to improve every aspect of RV ownership, including trip planning and booking, remote monitoring systems, roadside assistance, and peer-to-peer RV and campsite rental. 50% 50% The joint venture, TH2, has entered into an agreement to acquire 100% of ● Roadtrippers (“RT”), the US -based travel planning and travel data company (including RT’s interest in the RT Australasia business, the 50:50 joint venture between thl and RT). thl will contribute approximately USD $2.5M cash in addition to its Mighway ● business, Cosmos ( thl ’s rental and RV industry platform), thl ’s shares in RT, thl ’s interest in the RT Australasia joint venture and other IP and ‘know - how’. The cash contribution from Thor will be approximately USD $47M. ● The transactions are all expected to close around the end of February 2018, ● once Roadtrippers’ shareholder approval has been obtained. thl Cosmos system, IP and other assets 1 For further detail, refer to the TH2 investor presentation released 16 February 2018, - available on the thl website and NZX. 2 Based on volume, including Jayco USA. 7
Balance Sheet • Net debt, at 31 December 2017, of $178M, is level with June 2017 Net Debt Debt : EBITDA 1 and below previous guidance of $200M. It is $75M higher than December 2016 due to the acquisition of El Monte RV. $178M 1.7X • We continue to remain comfortable with debt levels and the debt:EBITDA ratio, which we aim to maintain at around 2.0x. last year last year • The forecast of Net Debt at 30 June 2018 is ~$190M and Debt:EBITDA of ~1.7x. $103M 1.4X Net Debt 10 1.9 1.7 1.4 1.4 1.3 178 176 17 103 90 79 Note 1: Debt:EBITDA is calculated using a 12 month EBITDA. The June 2017 calculation used a proforma EBITDA for El Monte RV of $13M for the first six months of FY17. Debt used for the calculation includes the LoC outstanding and derivatives balance. Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Net Debt LoC Debt:EBITDA FY18: Interim Results Presentation 8
Dividend • Interim dividend is 50% imputed. • Dividend will be eligible for the Dividend Reinvestment Plan, with an issue price at a 2% discount from the five day volume weighted share price after the record date. • Record date and DRP election date: 4 April 2018. • Payment date: 16 April 2018. Dividends Interim Final Interim Dividend 11 13 cents 10 8 per share 50% imputed 6 13 +30% 10 9 7 5 FY14 FY15 FY16 FY17 FY18 FY18: Interim Results Presentation 9
DIVISIONAL REVIEW FY18: Interim Results Presentation 10
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