Presentation (February 2016 update)

Transcription

DARING TO ADAPT
General Presentation – March 2016 update
A HISTORY OF MORE THAN 2 CENTURIES
Jean-Joseph D'Ieteren,
a wheelwright and
wheel manufacturer
Listing on the
stock market
1805
1897
Launch of short-term car
rental service; becoming two
years later an Avis licensee
Entry into the car
assembly business
1929 1931 1935
Signature of import
contract with the
Volkswagen group
1948
Internationalisation through the
acquisition of a majority stake
in Avis Europe
Sale of Avis Europe to
the Avis Budget Group
1954
1956
1976
Exit of the car assembly
business
One of the first companies
involved in the production
of automobile bodywork
Import of US brands
Studebaker, PierceArrow and Auburn
General Presentation – March 2016
Inauguration of the
assembly factory in
Brussels (Forest)
1989
1999
2011
Acquisition of Belron,
world leader in vehicle
glass repair &
replacement
2
AN INTERNATIONAL GROUP…
D’Ieteren Auto
D’Ieteren Auto + Avis Europe
TODAY: D’Ieteren Auto + Belron
3
…FAMILY-CONTROLLED & LISTED ON EURONEXT
4
LEADER IN BOTH OUR ACTIVITIES
D’Ieteren Auto
Belron
Vehicle distribution in Belgium
Vehicle Glass Repair & Replacement worldwide
• #1 car distributor in Belgium
• World #1 Vehicle Glass Repair & Replacement specialist
• ~150 independent dealers
• 35 countries
• 22 corporately-owned car centres
• Around 2,400 branches
• Vehicle financing and long-term car rental through
Volkswagen D’Ieteren Finance
• Around 10,000 mobile units
5
CONTRIBUTION TO THE GROUP’S KEY METRICS (2015)
Current result before
tax, group’s share:
EUR 212.1 million
Revenues:
EUR 6.0 billion
35%
48%
52%
65%
Current operating
result:
EUR 248.5 million
6%
27%
73%
Belron
94%
Average
workforce:
27,970 FTE
D’Ieteren Auto
6
OUR ADDED VALUE
•
No defined investment term: we invest for the long haul with a view to
developing our leadership in our activities (we are not a private equity
company)
•
The group offers support and challenge to the businesses:

Management appointment

Alignment of management incentive programmes with group’s targets and
shareholders’ interests

Strategy definition and (re-)investment for profitable growth

Ad-hoc support on specific matters

‘Sparring partner’ for management through budgeting / reporting processes

Financial, tax and legal support
During recent years, the group’s strategy has evolved
towards increased implication in our businesses
7
AUTOMOBILE DISTRIBUTION
D’IETEREN AUTO, THE NATURAL CHOICE FOR MOTORISTS
ALL THE PRODUCTS
ALL THE SERVICES
FOR EVERY STAGE OF LIFE
9
D’IETEREN AUTO: WHAT WE DO
1
WHOLESALE
(IMPORT)
SPARE PARTS &
NEW VEHICLES
2
SERVICES
D’IETEREN
SPORT
RETAIL
FINANCING
3
Volkswagen D’Ieteren Finance (joint venture with Volkswagen Financial Services)
10
1
WHAT WE DO – WHOLESALE OF VW & YAMAHA
GROUP BRANDS
NEW VEHICLES
• Import, logistics,
marketing and
distribution of new
vehicles of 9
vehicle brands
• Management of
166 independent
dealers
SPARE PARTS &
SERVICES
• Import, logistics
and distribution of
spare parts and
accessories
• Management of
maintenance &
warranty contracts
D’IETEREN SPORT
• Import and
distribution of
Yamaha and MBK
products in
Belgium &
Luxembourg
• Technical support
to dealers
11
WHAT WE DO – RETAIL
2
Sale of new vehicles &
after-sales through:
•
9 D’Ieteren Car Centers
in the Brussels region
•
6 dealerships on the
Brussels-Antwerp axis*
•
6 Porsche Centers
Zoom on
Brussels
Belgium
Sale of used vehicles through
9 My Way centres
*
D’Ieteren Auto decided
to acquire these formerly
independent dealerships
in 2013 and 2014
because of their location
in a strategic region for
the fleet market.
12
WHAT WE DO – FINANCING
3
VOLKSWAGEN D’IETEREN FINANCE…
…SELLS

Joint venture
between D’Ieteren
and Volkswagen
Financial Services
since
February 2012

Board of Directors
equally made up of
representatives of
D’Ieteren and
VW Financial
Services

Financing provided
by VW Financial
Services
Financing products
Retail finance
Operating lease
Financial lease
~59,000 contracts
~24,000 contracts
~9,000 contracts
After-sales loyalty products (Wecare) & insurances (Actel)
Additional services
(vehicle servicing/repairs, tyres, fuel cards,…)
…FINANCES
…GENERATES
Dealer inventories
Positive impact on import and dealer activities
Customer loyalty (repurchase & after-sales)
13
D’IETEREN AUTO: SALES CAGR 3.0% AND AVG REBIT MARGIN 2.5%
Sales* 2005-2015 (EUR million)
CAGR
+3.0%
2,142
2005
2,385
2006
2,550
3,048
2,787
2,580
2,564
2,627
2,660
2013
2014
2,874
2,281
2007
2008
2009
2010
2011
2012
2015
Current operating result (EUR million) & margin (%)* (D’Ieteren Auto + Corporate)
3.0
3.4
2.7
2.2
73
86
2.2
68
2.9
89
68
2006
2007
2008
REBIT margin excluding D’Ieteren Lease activities
REBIT excluding D’Ieteren Lease activities
2009
2010
1.9
54
51
46
2005
2.6
2011
2012
1.8
2.0
2.3
67
47
2013
53
2014
2015
Sales & current operating result have been restated to enable comparison between 2005 and 2014.
It consists in deconsolidating the leasing activities from 2005 to 2011.
*
14
SWOT: D’IETEREN AUTO
1.
2.
3.
Strengths:
o
The natural choice for Belgian motorists (full range of products and
services)
o
Long-standing relationship with VW group (since 1948)
o
Outstanding management team
Room for positive evolution…
o
Market share
o
Profitability (current projects for dealer network & retail)
… but there are constraints:
o
Mature markets & limited growth prospects (leadership position, change
in consumer behavior, increased quality of our products, safety
regulations,…)
o
Importer level
15
VEHICLE GLASS REPAIR & REPLACEMENT
BELRON, THE NATURAL CHOICE IN VGRR
•
World’s #1 VGRR business
•
Operating in 35 countries
•
Serving 11 million customers
annually
•
Owner of the world’s leading VGRR
brands
•
3rd largest automobile glass buyer
•
Available to customers when and
where they want – relentless focus on
service
•
Long-term partnerships with most of
the world’s leading insurance, fleet
and lease companies
17
OUR HISTORY DATES BACK TO 1897
Jacobs and Dandor
founded in South Africa
International expansion
begins with the acquisition
of O’Brien in Australia
Contract with General
Motors and Ford to supply
glass for vehicle assembly
1897 1899
1929 1930
Company purchased and
name changed to
Plate Glass Bevelling and
Silvering Company
1952 1953
1971
D’Ieteren group acquires
a majority stake in Belron
1983
1990’s
Further international expansion
through the acquisition of
Autoglass in the UK
Plate Glass begins
selling safety glass for
vehicles
Company wins the
rights to manufacture
curved vehicle glass
Belron acquires
Safelite, the US
market leader
International acquisitions grouped
together under the Belron name,
with Ronnie Lubner as CEO
Ronnie Lubner joins
Plate Glass
Glass Medic acquired in the
US, allowing the group to
offer a chip repair solution
1999 2000
2007
2013
Gary Lubner
becomes CEO
D’Ieteren raises its stake
in Belron to 94.85%
18
24 CORPORATE AND 11 FRANCHISED COUNTRIES
Corporate country
Franchise
19
PILLARS OF BELRON’S STRATEGY
20
TRUST AND BRAND LOYALTY ARE KEY
Exceptional
Brands
OUR PHILOSOPHY
88
Focus on brand strength and financial
return for marketing campaigns
77
76
61
Leverage international learnings and
scale to increase marketing efficiency
Spain
Netherlands
Belgium
Australia
Leverage the quality of our service
through amplification of reviews
Italy
•
47
27
Canada
Ensure accessibility of our service
through search engine optimisation
57
44
USA
•
77
67
UK
•
(2014 top of mind awareness; %)
Germany
•
Brand awareness
Be at the front of mind of the motorist
when glass damage is identified
France
•
21
LONG-TERM PARTNERSHIPS WITH THE LARGEST
INSURANCE COMPANIES
OUR PHILOSOPHY
•
•
•
Build strong partnerships with our key
account insurance and corporate
partners.
Help insurers and corporate customers
reduce their overall glass claims cost
by: moving away from high cost
dealers to specialists; using repair first
approach to reduce the average claim
cost; and reducing administration costs.
Delight the policyholder and increase
policy renewal propensity or improve
the corporate customers service to their
customers.
Higher insurer NPS leads to
higher value for the insurer through
better retention*
Outstanding
Partnerships
Glass repairer
(NPS 6 months after job; %)
Autoglass
Competitors
38.8
The higher Autoglass
customer satisfaction…
7.7
Insurer
(NPS; %)
…translates into
higher satisfaction
for the insurer…
Autoglass
Competitors
16.2
8.3
Insurer
(Historical retention; %)
Autoglass
Competitors
67.9
58.3
…resulting in 9.6%
points better customer
retention for the
insurer.
* Market
research conducted in the UK by Research Now, February 2011. Sample
size Autoglass® n=~900; Other providers n=~600
22
THIRD PARTY ADMINISTRATION (TPA)
•
We operate a developed TPA business
in the US and Canada
•
We handle and administer VGRR
claims for many of our largest North
American insurance partners
•
We are actively looking to develop
and expand this service offering with
other insurance partners
•
TPA deepens and enhances our
relationship with these partners and is
a key value add for them
Outstanding
Partnerships
•
In Europe, insurers typically view claims
management as a core competency
and the opportunity to provide TPA
services is accordingly lower
•
However, we are performing claims
handling and TPA services for certain
key European insurance partners
•
We continue to actively pursue
opportunities in this area in all our
major geographies
23
INNOVATIVE TECHNOLOGY – FITTING APPROACH &
INFORMATION
FITTING APPROACH
•
Glass: more complex and integral to vehicle structure
•
Forefront of technology to maintain global lead:
•
o
GLASS MEDIC® – World’s most popular glass repair
system
o
HPX3 ® - Proprietary resin with age resistant qualities
Continuously developing new technologies:
INFORMATION
•
Decentralised strategy to meet local
market conditions
•
IT underpinning Belron operational
excellence:
o
Multichannel booking
o
Automated scheduling
o
ADAS calibration
o
Virtual branches
o
Improved polyurethane to deliver faster drive away
times
o
Warehouse management
o
Route planning
o
Next generation resin (HPX4 ®)
o
Automatic repair tool
24
MARKET OVERVIEW
•
Consumer led, distressed purchase
•
Market size dependent on:
o
Vehicle parc x frequency of glass breakage x do something rate
o
Glass breakage drivers: KM driven; Speed; Vehicle type; Road conditions; Weather; Vehicle crime
o
Do something rate: dependent on legal, economic, political, technological, social factors and
advertising
•
Motorist ultimately chooses service provider but insurers and fleet/lease companies are
significant influencers
o
Motorists focus on speed, quality and convenience
o
Insurer and fleet/lease company relationships dependent on service quality,
geographic coverage, cost
•
Markets are therefore national in nature
25
OUR 3 CUSTOMER SEGMENTS
Insured
vehicles
Fleet/lease
vehicles
Uninsured
vehicles






Tend to be higher value vehicles and therefore higher value glass and service
Insured motorists tend to look for service rather than pure price
Price negotiations generally happen at the contract level with the insurer
In some countries insurers are able to steer large volumes towards preferred suppliers
Insurers focus on average claim cost which lends itself to a repair first strategy
National nature of insurance lends itself to national service providers
 Price negotiations happen at the contract level with the fleet management company/vehicle
owners
 Tend to be sole provider arrangements
 More price sensitive to unit pricing than insurers
 Requirement for speed of service to avoid off-road time
 Prefer local relationships with service providers (more of a B2B relationship)







Tends to be lower value vehicles
Uninsured (for glass) motorists tend to be very price sensitive
Each contact is a potential negotiation
Customer tendency to shop around
Customer influenced by the brand
Influence of search engines (Google) or telephone directories is high
Repair is of interest in preventing future replacements
26
COMPETITION – BELRON HAS NO DIRECT PEER
VGRR SPECIALISTS
STRENGTHS
WEAKNESSES
•
•
•
•
•
•
•
•
Price
Accept lower returns
Local & responsive
Focused
National brand
Standards /
Compliance
Purchasing power
Technology
CAR DEALERS
•
•
•
•
•
•
•
•
•
•
•
Brand
Quality & technical
information
Relationship with
motorists
Price
Low repair
No effective glass
advertising
Service weakness
VGRR not prime focus
Uncoordinated
Relationship with insurers
Low/no stock held
INDEPENDENT GARAGES
•
•
•
•
•
•
•
•
•
Relationship with
motorists
Speed
Price perception
Service weakness
VGRR not prime focus
Uncoordinated
Relationship with
insurers
Lack of customer
appeal
No stock held
27
BELRON: SALES CAGR 9.7% AND AVG REBIT MARGIN 7.7%
Sales 2005-2015 (EUR million)
CAGR
+9.7%
1,254
1,507
2005
2006
2,000
2,156
2,423
2007
2008
2009
3,161
2,801
2,769
2,727
2,843
2,793
2010
2011
2012
2013
2014
6.1
5.9
5.8
174
165
182
2013
2014
*
2015
Current operating result (EUR million) & margin (%) 2005-2015
CAGR REBIT:
+6.2%
8.9
8.1
7.9
99
2005
7.9
120
2006
2007
9.5
7.2
256
7.8
157
9.1
262
216
196
174
2008
2009
2010
2011
2012
* Restated
*
2015
28
SWOT: BELRON
1.
Strengths:
o
The natural choice for VGRR – only global player
o
Customer delight, best techniques & products, strong partnerships
o
Outstanding management team
2.
Room for positive evolution…
o
Market share growth potential in most countries of operation
o
Profitability (fix UK, efficiency improvement, cost control,…)
o
3.
… but there are constraints:
o
Market declines
o
Reaching high segment share in some countries
o
Challenges linked to geographic expansion (ex.: exit China)
o
4.
Looking into potential service extensions
Focus on vehicle
Considerable value creation since acquisition
29
GROUP OVERVIEW
SHARE PRICE: MIXED TRACK RECORD
D’Ieteren’s share price vs MSCI Europe Small Cap Index
(2006-2016; rebased to 100 in 02/2006)
14.06.11 – Avis Europe: proposed disposal
01.08.11 – Approval by
AGM Avis Europe
21.12.12 – Profit warning
10-YEAR TRACK
RECORD
• TSR: EUR 14.01
or 57%, of
which
 Gross
dividends:
36%
 Share price
growth: 64%
• IRR: 4.9%
D’Ieteren
MSCI Europe Small Cap Index
31
GROSS DIVIDEND PER SHARE: 14.1% CAGR
Gross dividend per share & dividend payout ratio
(2005-2015; % & EUR)
CAGR gross DPS:
+14.1%
27.7
13.6
10.9
9.9
10.4
9.8
10.0
32.4
34.9
27.1
14.2
0.800
0.900
0.800
0.800
0.800
• Dividend policy:
absent major
unforeseen events, the
Board of Directors will
ensure a stable or,
results permitting, a
steadily growing
dividend.
0.425
0.264
0.300
0.300
0.325
0.240
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
• Average dividend
payout ratio (gross
DPS/current EPS):
18.2%
Dividend payout ratio (%)
Gross dividend per share (EUR)
32
SALES AND MARGIN EVOLUTION
Sales, REBITDA & REBIT margin
(2005-2015; EUR million & %)
14.6
5.4
14.0
5.6
13.8
6.1
5,967
4,757
1,276
1,254
5,254
5.8
6,501
1,666
13.1
12.7
6.1
6.5
6,270
1,507
12.2
7.5
7,054
7,139
1,520
1,161
1,393
1,255
2,000
2,156
2,423
2,801
2,769
6.6
6.2
6.3
6.2
4.5
4.0
4.0
4.1
5,514
5,471
5,453
2,727
2,843
2,793
6,035
2,874
2,227
2,491
2,642
2,679
2,454
2,733
3,208
2,787
2,627
2,660
3,161
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014*
2015
REBIT margin
*
1,325
13.1
REBITDA margin
Total sales Avis Europe
Total sales Belron
Total sales D’Ieteren Auto + Corporate
Restated figures.
33
CURRENT PBT, GROUP’S SHARE: RECOVERY IN 2015
Current PBT, group’s share
(2005-2015; EUR million)
CAGR
+6.0%
378
73
305
29
119
23
149
18
194
22
192
23
214
21
178
176
211
98
109
60
75
61
43
2006
2007
2008
2009
72
213
212
200
148
150
138
131
123
53
47
53
2012
2013
2014*
60
36
2005
Avis Europe
*
Belron
65
2010
93
2011
75
2015
D’Ieteren Auto + Corporate
Restated figures.
34
CURRENT EPS: 6.5% CAGR
CAGR current EPS (EUR):
+6.5%
5.65
4.26
3.33
3.02
3.32
2.89
2.89
2.47
2.43
2.29
1.77
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
35
ROCE D’IETEREN AUTO + CORPORATE: CONSISTENTLY
ABOVE WACC
Capital employed (EUR million) & ROCE (pre-tax; %)*
(D’Ieteren Auto + Corporate)
20.9
18.8
17.4
13.6
12.9
12.4
12.4
526
414
415
363
39%
34%
28%
35%
491
364
39%
54%
53%
2005
2006
2007
ROCE
* Pro
**
Other
2008
JV and associates
10.7
10.0
606
33%
33%
49%
49%
2014
2015
497
477
30%
36%
50%
52%
2009
2010
Intangible assets & goodwill
59%
2011
33%
33%
50%
48%
2012
2013
Fixed assets
12.4
589
407
63%
55%
20.8
WCR
forma data: total capital employed includes the equity value of leasing activities at 100% from 2005 to 2011 and at 50% thereafter. Results include the share of the group in net results of leasing activities.
Restated figures.
36
ROCE BELRON: UNDER PRESSURE
Capital employed (EUR million) & ROCE (pre-tax; %)
44.4
46.8
44.0
34.3
27.6
12.8
13.0
1,047
763
751
220
208
543
2005
15.8
13.3
1,004
28.9
20.1
27.1
15.8
16.3
10.0
10.4
1,353
1,415
1,479
1,499
810
872
936
956
856
926
17.3
998
16.7
18.2
-1.6
-1.0
1,399
11.5
1,469
504
461
455
543
543
543
543
543
543
543
543
543
543
2006
2007
2008
2009
2010
2011
2012
2013
2014**
2015
ROCE after GW & value of brands pushed down*
Capital employed before GW & PPA pushed down*
ROCE before GW & value of brands pushed down*
GW & allocation to value of brands pushed down*
When D’Ieteren acquired a majority stake in Belron in 1999, the spread between the equity value and the acquisition price (goodwill) was recognised directly in Belron’s consolidated financial
statements. Part of this goodwill was allocated to the value of brands.
*
**
Figures are not restated to ensure comparability.
37
MANAGEMENT INCENTIVE PROGRAMMES ARE ALIGNED
WITH SHAREHOLDERS VALUE CREATION
D’IETEREN AUTO
* (ROCE
•
Basis: % of
Economic Value
Added*
•
Period: 3 years
•
Who: ~20
managers
BELRON
•
Basis: % of TSR
(changes in equity +
dividends) above a
hurdle rate
CORPORATE
•
Basis: stock option
plan linked to
D’Ieteren’s share price
•
Vesting period: 3 years
•
EBITDA multiple:
stable
•
Withholding taxes:
paid upfront
•
Period:
3 years rolling
•
Who: ~10 managers
•
Who:
~160 managers
– WACC) x CE
38
DARE TO ADAPT
Jean-Joseph D'Ieteren,
a wheelwright and
wheel manufacturer
Entry into the car
assembly business
Signature of import
contract with the
Volkswagen group
Listing on the
stock market
1805
1897
1929 1931
One of the first
companies involved in
the production of
automobile bodywork
Launch of short-term car
rental service; becoming
two years later an Avis
licensee
1935
1948
Internationalisation through
the acquisition of a majority
stake in Avis Europe
Sale of Avis Europe to
the Avis Budget Group
1954
1956
1976
1989
1999
2011
Exit of the car
assembly business
Import of US brands
Studebaker, PierceArrow and Auburn
Inauguration of the
assembly factory in
Brussels (Forest)
Acquisition of Belron,
world leader in vehicle
glass repair &
replacement
ADAPTABILITY – In its history, D’Ieteren has entered and exited many activities
ENTREPRENEURSHIP – Ability to develop different business models in different geographies
EVOLUTION – We must write the new chapter of our industrial evolution
39
SEARCH FOR NEW GROWTH DRIVERS
FIREPOWER
CRITERIA
1.
Solid fundamentals for
long-term growth
2.
World class management team
3.
(Access to) majority control
4.
Sector leader or opportunity
to be one
5.
Platform for international expansion
6.
Limited regulatory and
technological risks
7.
Fit with D’Ieteren’s culture
8.
Not necessarily automotive-related
1.
Net cash position (D’Ieteren Auto +
Corporate): EUR 113 million at H1
2015
2.
Net debt / EBITDA including target to
remain around 2.5x-3.5x (investment
grade)
3.
Potential size of the acquisition:
EUR 400-600 million (enterprise
value). Could be larger if
•
acquisition is made in partnership
•
progressive growth to full control
40
CONTACT
Financial Communication & Investor Relations – D’Ieteren group
Pascale Weber
[email protected]
+32 2 536 54 39
DOWNLOAD THE
D’IETEREN APP ON:
Thierry Dossogne
[email protected]
+32 2 536 55 65
or
[email protected]
www.dieteren.com
41

Presentation (February 2016 update)

Transcription

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