EBOS GROUP LIMITED — AGM Information 2019

Oct 14, 2019

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97[TH] ANNUAL MEETING

15 October 2019

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DISCLAIMER

The information in this presentation was prepared by EBOS Group Ltd with due care and attention. However, the information is supplied in summary form and is therefore not necessarily complete, and no representation is made as to the accuracy, completeness or reliability of the information. In addition, neither the EBOS Group nor any of its subsidiaries, directors, employees, shareholders nor any other person shall have liability whatsoever to any person for any loss (including, without limitation, arising from any fault or negligence) arising from this presentation or any information supplied in connection with it.

This presentation may contain forward-looking statements and projections. These reflect EBOS’ current expectations, based on what it thinks are reasonable assumptions. EBOS gives no warranty or representation as to its future financial performance or any future matter. Except as required by law or NZX or ASX listing rules, EBOS is not obliged to update this presentation after its release, even if things change materially. This presentation does not constitute financial advice. Further, this presentation is not and should not be construed as an offer to sell or a solicitation of an offer to buy EBOS Group securities and may not be relied upon in connection with any purchase of EBOS Group securities.

This presentation contains a number of non-GAAP financial measures, including Gross Profit, Gross Operating Revenue, EBIT, EBITDA, Underlying EBITDA, NPAT, Underlying NPAT, Underlying Earnings per Share and Free Cash Flow. Because they are not defined by GAAP or IFRS, EBOS’ 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 GAAP. Although EBOS believes they provide useful information in measuring the financial performance and condition of EBOS' business, readers are cautioned not to place undue reliance on these non-GAAP financial measures.

The information contained in this presentation should be considered in conjunction with the consolidated financial statements for the period ended 30 June 2019.

All currency amounts are in Australian dollars unless stated otherwise.

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2019 Annual Meeting Chairman – Mr Mark Waller

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AGENDA

• Welcome

• Introducing members of the Board

• Presentations

• Mark Waller, Chairman

• John Cullity, Chief Executive Officer

• Business of meeting

• Conclusion

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BOARD OF DIRECTORS

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Mark Waller Independent Chair of Directors Appointed 1987 Appointed Chair 2015 Retiring October 2019

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Stuart McGregor Sarah Ottrey Non-executive Independent Director Director Joined 2013 Joined 2006

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Elizabeth Coutts Independent Chair Elect of Directors Joined 2003

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Peter Williams Non-executive Director Joined 2013

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Stuart McLauchlan Independent Director

Joined 2019

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RETIREMENT OF MARK WALLER APPOINTMENT OF LIZ COUTTS AS NEW CHAIR

• Mr Mark Waller will retire as a Director and Chairman of EBOS Group Limited, effective from 15 October 2019.

• The Board has elected Liz Coutts as Chair with effect from Mr Waller’s retirement. Ms Coutts has been a Director of EBOS Group Limited since 2003 and is currently the Chair of the Audit & Risk Management Committee and a member of the Remuneration Committee. Ms Coutts is also Chair of Ports of Auckland Ltd, Oceania Healthcare Ltd and Skellerup Holdings Limited, Director of Tennis Auckland Region Incorporated and Member, Marsh New Zealand Advisory Board.

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FY19 SUMMARY RESULTS

A$m Statutory Underlying2 FY18 Var Var% FY19 Underlying	A$m Statutory Underlying2 FY18 Var Var% FY19 Underlying
Revenue 6,930.4 6,930.4 6,986.7 EBITDA 250.4 261.6 250.1 NPAT1 137.7 144.4 137.3 Earnings per Share (cents) 89.8c 94.2c 90.4c Total Dividends (cents) 71.5c 71.5c 68.5c	(56.4) (0.8%) 11.6 4.6% 7.2 5.2% 3.8 4.3% 3.0 4.4%

Note 1: Net profit after tax and non-controlling interests. Note 2: Excludes one-off items for transaction costs incurred on M&A, warehouse transition and restructuring costs, net of the gain on sale from disposal of a surplus property.

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STRATEGIC INVESTMENTS ARE DRIVING SHAREHOLDER RETURNS

$600m invested over the last five years

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188.7
30.8 93.6
56.8 84.1
58.0
35.5
26.6
13.7 11.5
FY15 FY16 FY17 FY18 FY19
Capital expenditure Acquisitions and investments
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NZ$175M SUCESSFUL CAPITAL RAISING TO CONTINUE OUR GROWTH STRATEGY

For over 34 years the Group has delivered long term sustainable returns for all Shareholders through our strategy of investing for growth and productivity. This has delivered Total Shareholder annualised Returns of 18.1% over 34 years and a share price increase of 1,016% since 2001.

Today we also announce our entry into the medical devices sector with the purchase of LMT / National Surgical for $34m. An important foundation step in building another significant platform to our Healthcare portfolio.

Disciplined approach to deploying capital through:

• Investing for growth through both external acquisitions

• 1 and capital expenditure to lift productivity, manage costs and deliver better customer service.

2 Protecting, building or acquiring market leading positions in a range of healthcare and animal care sectors to maximise growth opportunities.

• Focusing on generating strong operating cash flow to allow

• 3 for further investment and improved returns to shareholders.

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30
EBOS +1016% Growth¹
NZ50 +149% Growth¹ 25
ASX200 +107% Growth¹
20
15
10
5
-
2001 2004 2007 2010 2013 2016 2019
¹ Share price in NZD (rebased to EBO)
Share Price (NZD)
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2019 Annual Meeting CEO – Mr John Cullity

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CORPORATE VIDEO

 The corporate video that will be shown at the Annual Meeting can be viewed on the EBOS Group website at www.ebosgroup.com

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OUR INVESTMENT STRATEGY HAS DELIVERED STRONG GROWTH IN EBITDA AND EPS OVER THE LAST 5 YEARS

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Underlying EBITDA – FY15 to FY19 (A$m) Underlying EPS – FY15 to FY19 (A$m)
FY19 261.6 FY19 94.2
FY18 250.1 FY18 90.4
5 Year 5 Year
FY17 CAGR 228.2 FY17 CAGR 86.3
+9.4% +9.5%
FY16 207.7 FY16 77.4
FY15 182.3 FY15 65.6
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FY19 STRATEGIC HIGHLIGHTS

Acquisitions of $93.6m

Two major facilities opened in Australia

• Acquisition of all the minority shares in TerryWhite Group Ltd for $46.7m in December 2018.

• Expansion of EBOS Healthcare’s Australian business via the acquisition of Warner & Webster (“W&W”) for $32.0m.

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• Expansion of Animal Care’s Australian vet wholesaling business via the acquisition of Therapon for $6.5m.

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• Expansion of our Endeavour Consumer products business via the acquisition of the Quitnits head lice brand in December 2018.

Chemist Warehouse

• Preparations successfully completed ahead of servicing 450+ Chemist Warehouse stores on 1 July 2019.

• Brisbane - new highly automated wholesale distribution centre commenced operations in October 2018.

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• Sydney - new 25,000m[2] Contract Logistics facility.

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FY20 ACQUISITION INTO MEDICAL DEVICES MARKET CREATES NEW GROWTH PLATFORM

• We are pleased to announce the Group’s entry into the A$8 billion Australian and New Zealand medical device sector, with the strategic acquisition of established distribution business LMT and National Surgical (“LMT/NS”) for a purchase price of $34 million.

• LMT/NS have over the last 24 years built a strong presence in providing product and services to the Orthopaedic, Spine, Neuro, ENT, Plastics and most recently the sports medicine community.

• The acquisition represents an important development in the Group’s growth trajectory as a foundation step in building another significant platform to our Healthcare portfolio.

• Consistent with our proven strategy, we will continue to pursue growth in this sector through further bolt-on acquisitions. As a truly independent partner we can provide long term growth opportunities to both existing and new Original Equipment Manufacturers (OEM) as we bring experienced management, capital resources and strong hospital relationships to the Australian and NZ markets.

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FY19 SEGMENT PERFORMANCE

HEALTHCARE

A$m		FY19	FY18	Var$	Var%
Revenue		6,548.3	6,608.6	(60.3)	(0.9%)
Underlying	EBITDA	226.6	216.6	10.0	4.6%
EBITDA%		3.46%	3.28%

• Australia revenue down 3.5% (or up 5.2% excluding hepatitis C medicine sales and PBS price reforms[1] ). Underlying EBITDA up 5.7% primarily from growth in Institutional Healthcare and Contract Logistics, partially offset by a subdued Wholesale Pharmacy result.

EBITDA and EBITDA %

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• New Zealand revenue up 8.7%, with solid growth from all business units. Earnings were impacted by cost increases in labour and freight in our wholesale businesses.

Note 1: Total hepatits C medicine sales were $257m lower than last year and the impact of PBS reforms was -$168m.

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FY19 SEGMENT PERFORMANCE

ANIMAL CARE

A$m	FY19	FY18	Var$	Var%
Revenue	382.0	378.2	3.9	1.0%
EBITDA	48.3	45.7	2.6	5.7%
EBITDA%	12.6%	12.1%

Underlying EBITDA and EBITDA %

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12.6%
12.1%
10.6%
10.2%
9.9%
48.3
45.7
42.2
39.0
34.6
FY15 FY16 FY17 FY18 FY19
EBITDA EBITDA %
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EBITDA increase of $2.6m or 5.7%:

• Earnings improvement is primarily from Black Hawk sales revenue growth of 11.4%.

• Total EBITDA margin improvement again reflects a growing proportion of earnings from our branded products portfolio.

Revenue increase of $3.9m or 1.0%:

• Total revenue growth was impacted by a decline in Lyppard sales due to one manufacturer bypassing the wholesale channel and supplying direct into veterinary clinics. Total Animal Care Revenue growth excluding this impact ($21m) was +7.2%.

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EMPLOYEE AND SOCIAL RESPONSIBILITY

EBOS Group is committed to employee and social responsibility across Australia and New Zealand.

 Employee  Health, safety  Employee  ECHO Program EMPLOYEES engagement and Assistance (Environment, survey. wellbeing. Program Community, (EAP). Helping Others).    11,000 tonnes 41,000 trees 2,344m[2] of ENVIRONMENT of carbon planted through solar panels offset. Greenfleet. installed.  $1.4 million  EBOS Group  LandSAR – NZ COMMUNITY raised for Reconciliation Search + Ovarian Cancer. Action Plan. Rescue.

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FY20 TRADING UPDATE

• Trading for the first quarter of FY20 is in line with our internal expectations and we reconfirm the Group is confident of a significant increase in earnings in the current financial year.

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2019 Annual Meeting Business of Meeting

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ITEM 1

Amendment of Constitution

• It is hereby resolved to amend the constitution of the Company in the manner described in the explanatory notes with effect from the time the resolution is passed.

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ITEM 2

Annual Report and Financial Statements

• To consider and receive the Annual Report and the Financial Statements for the year ended 30 June 2019 and the audit report thereon.

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ITEM 3

Election of Director

• It is hereby resolved that Mr Stuart McLauchlan be elected as a Director of the Company.

Stuart was appointed to the EBOS Group Limited Board in July 2019. Stuart is a Chartered Fellow of the Institute of Directors and a Past President. He is a chartered accountant, partner of GS McLauchlan & Co, and a Fellow of the New Zealand Institute of Chartered Accountants.

He is currently chairman of Scott Technology Ltd, UDC Finance Ltd, and ADInstruments Limited. He is a Director of Ngai Tahu Tourism Ltd (until December 2019) and Argosy Properties Ltd as well as a number of private companies. He is also a governor of the New Zealand Sports Hall of Fame.

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ITEM 4

Non-executive directors’ remuneration

 It is hereby resolved that, pursuant to NZX Listing Rule 2.11.1 and ASX Listing Rule 10.17, total annual remuneration for Non-Executive Directors be increased by $310,000 from $1,100,000 to $1,410,000 with effect from 1 July 2019.

The table below sets out the director and committee fees expressed on a per annum basis as at 30 June 2019 and the expected fees should the increase in the fee pool be approved:

Officer	30 June 2019	Proposed Fees
Chairman	$300,000	$320,000
Director (other than Chairman)	$150,000	$160,000
Chair of Audit & Risk Committee	$20,000	$37,500
Chair of Remuneration Committee	$5,000	$20,000
Member of Audit & Risk	$12,500	$17,500
Committee
Member of Remuneration	$3,000	$10,000
Committee

All amounts expressed in New Zealand dollars.

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ITEM 5

Auditor’s Remuneration

• It is hereby resolved that the Directors of the Company be authorised to fix the fees and expenses of Deloitte as auditor of the Company.

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Thank you for attending Please join us for refreshments

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www.ebosgroup.com

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