Strategic rationale for the acquisitions
The Acquisitions are financially compelling
The Acquisitions are EPS accretive and are expected to deliver material combination benefits
EPS accretion
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EBIT margins2
Cashflow
Synergies
Pro forma leverage
and capital allocation
framework
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The Acquisitions are mid-single digit EPS accretive¹ including expected annualised synergies of $19.1m
Metcash expects there is potential further upside to EPS accretion over the medium term, through a combination of organic and
inorganic growth in the earnings from these Acquisitions
The Acquisitions are accretive to Metcash Group EBIT margins
Superior Food is accretive to Metcash Food EBIT margins
Bianco and Alpine Truss are together accretive to Metcash Hardware EBIT margins
Metcash expects that each Acquisition, by nature, will generate solid operating cashflows in a manner that is consistent with our
existing wholesale and retail businesses
Metcash plans to invest $30-40m in capital expenditure in Superior Food³ to upgrade and enhance warehouse, fleet and IT assets
over the three-year period after completion, which will be funded from operating cashflows.
Metcash expects to achieve combination benefits in the form of network, range, procurement and shared services
Metcash expects to achieve $14.0m of synergies for Superior Food and $5.1m synergies for Bianco and Alpine Truss (annualised run-
rates) at the end of year 2 post-completion, with potential for further upside4
The transaction results in DLR of 1.16-1.19x5, which remains within Metcash's target DLR range of 1.0x to 1.75x
Proceeds raised under the SPP will provide Metcash with additional capacity to support growth opportunities
Metcash is committed to maintaining a strong financial position and a disciplined approach to deploying capital in accordance with
its capital allocation framework
Metcash also expects to maintain its dividend in line with the Dividend Policy
The Acquisitions are margin accretive at three levels, each prior to synergies: in respect of the Food business (including Superior Foods), the IHG business (including Bianco and Alpine Truss) and also in relation to the Metcash Group (including all Acquisitions). Margin
represents EBIT (excluding synergies) divided by sales (including charge through sales) and is based on the Oct-23 LTM results per slide 40.
1.
On a pro forma Oct-23 LTM basis per slide 40.
2.
3.
4.
This expenditure is incremental to normal capex levels, which are estimated to be $11m p.a.
Refer slides 29, 32, 33 for further details.
5. Debt Leverage Ratio ('DLR', calculated as Net Debt/ Underlying EBITDA (post-AASB16) less depreciation of ROU assets). Refer slide 41.
Metcash
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