EBOS GROUP LIMITED — Investor Presentation 2015

Nov 16, 2015

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UBS Australasia Conference John Cullity – CFO EBOS Group Ltd 17 November 2015

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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’s 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.

All currency amounts are in New Zealand dollars unless stated otherwise.

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Introduction

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If you needed access to medicine in either Australia or New Zealand over the past year – whether through your local pharmacy, in a hospital, an aged care facility or even for your pet through a vet – it’s likely EBOS played a vital role in getting that medicine to you.

That’s because, every year, EBOS moves millions of healthcare products and is involved in hundreds of thousands of interactions throughout the healthcare system, playing our part in improving the wellbeing of communities right across the length and breadth of both countries.

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EBOS Group – Snapshot

EBOS Group is the largest and most diversified Australasian marketer, wholesaler and distributor of healthcare, medical and pharmaceutical products. It is also a leading Australasian animal care products marketer and distributor.

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# combined pharmacy and hospital # Hospital pharmaceutical wholesaler in pharmaceutical wholesaler in Australia New Zealand 1 and New Zealand 1

# Pharmacy wholesaler in New Zealand 1

# Hospital pharmaceutical wholesaler in 1 Australia

# Pharmacy wholesaler in Australia 2

Comprehensive distribution network in the animal care market, with pet brands and speciality retail outlets

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Rankings based on EBOS management estimates of market positions and share

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EBOS Group Overview Trans-Tasman Healthcare and Animal Care portfolio

~$2.0 billion

market capitalisation Dual listed on NZX and ASX

$6.1 billion

FY15 revenue Australia 78%, NZ 22%

$196.7 million

FY15 EBITDA Australia 81%, NZ 19%

$133.8 million

FY15 Operating Cash Flow

42 locations in Australia and New Zealand

2,400+ employees

38,000+ customers

122,000+ product SKUs

$316.9 million

Net debt at 30 June 2015

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All currency amounts are in New Zealand dollars unless stated otherwise

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EBOS Group Overview – Market channels

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HEALTHCARE ANIMAL CARE
Community Pharmacy Institutional Healthcare Contract Logistics Pet Care and Veterinary
Pharmacy Wholesale Product
Pharmacy Services
Pharmacy Retail
Retail
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Consumer Products Wholesale
EBOS is the trusted partner to
governments, businesses and consumers
across our wide range of operations in
healthcare and animal care
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Strong Financial Results in FY15

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$m $m
+7.2% +14.2%
constant constant
currency currency
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$m $m
+16.9% +17.2%
constant
currency
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Cash Flow and Net Debt

EBOS has an excellent portfolio of strong cash generating businesses

	NZ$m	FY15 FY14 Var$ Var%
	Cash from Operating activities	133.8 114.2 19.6 17.2%
	Capital expenditure(net)	(14.5) (30.5) 16.0 52.4% 119.3 83.7 35.6 42.5% Jun-15 Jun-14 47 45 35 35 58 55 24 25
	Free Cash Flow
	Cash conversion days Debtor days Inventory days Creditor days
	Cash conversion days

• Focus on tight working capital management led to record Operating cash flow of $133.8m being generated in FY15.

• Cash conversion cycle of 24 days remains industry leading.

• Net Debt of $316.9m at June 2015.

• Net Debt : EBITDA reduced to 1.6x at June 2015 (1.8x at June 2014).

• Net finance costs reduced by $5.2m or 17.7% (constant fx)

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M&A Update - Red Seal Acquisition – 16 Nov’2015

• EBOS has entered into an agreement to acquire Red Seal for NZD$80 million.

• Red Seal is a leading New Zealand natural health products business and has experienced significant growth in export markets, particularly in China. It is a leader in key segments including vitamins, minerals and supplements; herbal teas; non-fluoride toothpastes and functional foods including molasses and manuka honey.

• The business is also the New Zealand agent for brands including Floradix and Thursday Plantation.

• Acquisition will substantially bolster the Group’s existing position in the healthcare consumer products market.

• The acquisition will be immediately earnings per share (EPS) accretive and will be funded from the Group’s existing debt facilities and is expected to complete on 30 November 2015.

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Red Seal Product Categories

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Vitamins, minerals, Herbal, fruit and Non-fluoride supplements green teas toothpastes

Functional foods Agency and other

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M&A Update - Zest Acquisition – 30 October 2015

• EBOS has recently acquired Zest as part of the Company’s expanding presence in the delivery and administration of specialty pharmaceutical products.

• ZEST is a leading healthcare communications business with extensive experience in medical education, digital solutions, patient services, strategic consultancy, health service development, research and evaluation.

• Acquisition complements the range of services we currently offer pharmaceutical companies in our Institutional Healthcare segment.

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FY16 Trading Update – excluding recent acquisitions

• We have made a positive start to the new financial year with growth in profit in the first quarter consistent with the performance we delivered in the second half of FY15. This is driven in part by the contribution of the acquisitions made in FY15 which are just now reaching their first anniversary inside our company.

• We are confident of delivering another year of double digit, constant currency, profit growth for our shareholders in the financial year ending 30 June 2016.

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EBOS strategy

• Protect and grow our market leading positions in pharmacy in both New Zealand and Australia

• across wholesale, consumer products and pharmacy retail

• Pursue further growth in the institutional healthcare market

• Grow EBOS’s portfolio of ancillary healthcare businesses

• Increase our presence in the animal care sector through the development of our own brands - Masterpet, Vitapet, BlackHawk and our Lyppard veterinary distribution business and through strategic acquisitions

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Continue disciplined focus on appropriately priced, strategic acquisitions

Deliver superior financial returns to our shareholders

• Continued investment in operational and supply chain excellence

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Track record of delivering shareholder value

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Earnings Per Share (cents) Dividends Per Share (cents)
80.0 50.0 47.0
70.8
45.0
70.0 41.0
62.8
40.0
60.0 34.0
53.6 35.0 32.5
31.0 [31.5 ]
46.8
50.0 45.4
30.0
41.8
37.6 [41.1 ] [39.5 ]
40.0 25.0 21.5 [22.5 22.5 ] [23.0 25.0 ]
32.5 31.7
20.0
30.0
15.0
20.0
10.0
10.0
5.0
- -
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
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* Excludes special dividends paid

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Track record of delivering shareholder value

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14.00
Share Price (NZ$)
12.00
+189.4%
(excluding dividends)
10.00
8.00
+18.9%
6.00
10 year compound annual return
(including dividends)
4.00
2.00
31-Oct-05 31-Oct-06 31-Oct-07 31-Oct-08 31-Oct-09 31-Oct-10 31-Oct-11 31-Oct-12 31-Oct-13 31-Oct-14 31-Oct-15
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