Strategic rationale for the acquisitions
Compelling combination benefits and synergy potential
Expect to continue Metcash's proven track record of extracting synergies and successfully integrating earnings
accretive acquisitions - annualised (run-rate) synergies of $14m expected at the end of Year 2 post completion
Commentary
Key areas of expected synergies
Expected annualised
synergies ($m)
Phased and careful approach to
synergy realisation:
Initially maintain BAU focus and
momentum while extracting
limited synergies
Balance synergy realisation with
establishing the right
foundation for integration
·
Expect ~20% of the ~$14m
expected annualised synergies to
be delivered into Food EBIT in Year
1 post completion and ~60%
(cumulative) delivered into Food
EBIT in Year 2 post completion
High confidence in delivery of
synergy estimates with strong
potential for material upside
Metcash
1. Network
optimisation and
shared services
•
•
Reduce Superior Food offsite storage and transition to Metcash network
Leverage shared services to reduce costs
~$1m
•
2. Procurement
benefits
Create supplier efficiencies through economies of scale across direct &
indirect spend
~$7m+
•
Indirect procurement benefits from centralising spend across overlapping
categories (i.e., energy, fuel, repairs and maintenance etc.)
3. Cross promotions
×
to increase share of
customer wallet
•
Enhanced product catalogue through cross-sell of existing categories (e.g.
liquor, beverages, protein, confectionery) to increase share of wallet
~$1m+
•
Opportunity to increase Metcash Food teamwork score
4. Ranging, brands &
private label
expansion
•
Optimised ranging and brands to reflect consumer preferences
Leverage combined product development capability to expand share of wallet
in private/exclusive label across B2C and B2B networks
~$6m+
5. Dis-synergies
Incremental head office support costs (i.e. safety and finance) plus capability
to pursue strategic inorganic growth opportunities
~($1m)
Total
~$14m+
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
29View entire presentation