MAXIPARTS LIMITED — Investor Presentation 2021

Feb 18, 2021

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MaxiTRANS Industries Limited H1 FY21 Investor Presentation

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1H FY21 HIGHLIGHTS

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1H FY21 RESULTS

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• Strengthened Balance Sheet resulted in favourable net cash position of $2.8m improved by $14.9m from a $12.1m net debt position at the end of FY20

• Operating Cashflow of $21.6m generated

• External sales of $184.6m , up 12.9% from pcp

• Trailers revenue of $127m up 21.4% over pcp

• Parts revenue of $69m up 1.3% over pcp and 8.7% over 2H 2020

• Underlying EBITDA of $14.7m

• Underlying Net Profit before tax (NPBT) of $8.3m compared to an underlying net loss before tax of ($1.2m) in H1 FY20

• Reported Net Profit after tax (NPAT) of $5.7m

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FINANCIAL OVERVIEW

A$M	HY21	HY20	Change	Change %
External Revenue	184.6	163.5	21.1	12.9%
EBITDA (Underlying)	14.7	6.5	8.1	125.2%
Depreciation & Amortisation	(3.9)	(5.5)	1.6	(28.9%)
EBIT (Underlying)	10.8	1.0	9.7	973.0%
Interest Expense	(2.4)	(2.2)	(0.2)	9.0%
NPBT (Underlying)	8.3	(1.2)	9.5	794.4%
Tax	(2.3)	1.2	(3.5)	(290.2%)
NPAT (Underlying)	6.1	0.0	6.1	0.0%
Significant Items (after tax)	(0.4)	(14.4)	14.1	97.7%
Reported NPAT	5.7	(14.4)	20.1	139.8%
Net Debt	(2.8)	30.4	(33.2)	109.0%

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Results

• Revenue up 12.9% from pcp due to stronger volumes in H1 FY21 particularly for Trailers in Q2 FY21

• Trailer Solutions experienced revenue increase of 21.4% from pcp

• MaxiParts revenue increased 1.3% from pcp and 8.7% of the preceding 6 months in H2 2020

Results include $4.6m of Job Keeper support

• Profit improvement achieved through both volume and product mix, along with continued improvement in manufacturing efficiency and quality metrics

• The transition to the purpose-built Carole Park facility in QLD during the period incurred some one-off transition impact costs

Note:

HY20 significant items included impairment losses of $15.4m

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EARNINGS BRIDGE

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CASHFLOW

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A$M	HY21	HY20
EBITDA (Underlying)	14.7	6.5
Change in Working Capital	8.8	2.7
Other	(1.9)	(2.8)
Operating Cashflow	21.6	6.4
Dividends Received	1.5	1.1
CAPEX	(3.5)	(1.8)
Lease Payments	(4.8)	(4.1)
Free Cashflow	14.8	1.6
Net Debt	(2.8)	30.4

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Cashflow highlights:

• Continued improvement in working capital management for both Debtors and Inventory

• Nil Income taxes paid in H1 FY21 due to utilisation of carried forward tax losses

• Capex spend of $3.5m includes $2.2m for Carole Park in HY21, with a further $0.5m to spend in H2 FY21

• Free Cashflow was used to pay down $13.75m of Bank Debt during period

• The Board will review the payment of Dividends at full year. No interim dividend for H1 FY21 will be paid

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BALANCE SHEET

A$M	HY21	FY20	FY19
Cash	26.5	25.5	11.9
Receivables	21.7	26.5	42.4
Inventories	52.1	58.4	59.3
Total Current Assets	102.6	114.3	118.1
PP&E	31.3	29.5	41.7
Intangible assets	21.7	21.6	35.0
Investments	11.0	11.2	11.4
Right-to-use assets	52.6	25.2	-
DTA	19.0	19.8	10.8
Total Non-Current Assets	135.6	107.3	98.9
Payables	40.1	41.2	44.6
Provisions	12.7	12.1	11.7
Lease Liabilities	8.0	7.4	-
Total Current Liabilities	64.3	65.3	59.8
Interest Bearing Loans	23.8	37.6	43.9
Lease Liabilities	65.2	39.7	-
Total Non-Current Liabilities	90.0	78.2	44.7
Net Assets	84.0	78.1	112.5

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• A dedicated focus on cash generation has significantly strengthened MaxiTRANS Balance Sheet with a net cash position of $2.75m achieved at 1H FY21

• Bank Debt was reduced by $13.75m during the period

• Working capital improvements across the group have seen a reduction in both receivables and inventory. Though the H1 FY21 is also lower due to timing with customer payments received in advance and lower stock trailer levels throughout the dealership network that is expected to unwind in H2 FY21 (approx. $5m-$6m)

• Carole Park lease was bought to account under AASB16 during the period (Right-to-use asset / Lease Liabilities)

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BUSINESS UNIT PERFORMANCE

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TWO COMPLEMENTARY BUSINESSES

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MaxiPARTS Differentiators

A national store footprint in the right locations

Unique technology enabled customer solutions

Scale benefits from being associated with the largest trailer manufacturer Breadth of range and product expertise

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Trailers Differentiators

Strong brand heritage and reputation

Broadest range of products, national distribution and service capability

Innovation driving leadership in product safety and quality

Multiple manufacturing sites across two Australian states and NZ

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SEGMENT EARNINGS – MaxiPARTS

A$M	1HFY21	2HFY20	1HFY20
Total Revenue	68.6	63.1	67.7
External Revenue	58.8	55.4	59.0
EBITDA excl Corporate Costs	9.2	8.1	8.0
EBITDA Margin % excl Corp Costs	15.6%	14.5%	13.5%
EBITDA	7.7	6.8	6.3
EBITDA Margin %	13.1%	12.4%	10.7%
Underlying NPBT	5.3	4.3	3.6

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• 1H FY21 Revenue of $68.6m increased by 8.7% or $5.5m over H2 FY20 recovering from the COVID-19 revenue challenges quicker than expected,

• 1H FY21 Revenue of $68.6m increased by 1.3% or $0.9m over the pcp of H1 FY20 despite a $1.5m decline from a key account currently undergoing a range of structural changes

• EBITDA (excluding corporate costs) of $9.2m increased by $1.2m over the pcp due to:

• an improvement in underlying product margins

• a reduction in overhead costs through initiatives that were implemented in response to the COVID-19 impact in early H2 FY20. Most of the cost reductions implemented are sustainable on current revenue volumes

• MaxiPARTS to focus on revenue growth for the second half through ongoing organic initiatives

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TRAILERS

A DIVERSE PORTFOLIO OF BRANDS EXPOSED TO MULTIPLE SEGMENTS OF THE ECONOMY

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Bulk Transport
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• Infrastructure

• Housing Starts

• Agriculture

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• Waste

• Mining

• Population Growth

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pcp 21.4%
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Food & Grocery
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pcp 34.5%
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• Population Growth

• • Consumer Spending

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General Freight
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• Population Growth
• Consumer Spending
• Infrastructure
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• Mining
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• Import/Export
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• Manufacturing
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SEGMENT EARNINGS – TRAILERS (AUSTRALIA & NZ)

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A$M	1HFY21	2HFY20	1HFY20
Total Revenue	126.9	100.9	104.6
External Revenue	125.8	98.7	104.5
EBITDA excl Corporate Costs	15.2	7.8	6.8
EBITDA Margin % excl Corp Costs	12.1%	7.9%	6.5%
EBITDA	10.0	3.2	2.3
EBITDA Margin %	7.9%	3.2%	2.2%
Underlying NPBT	7.5	(0.5)	(0.8)
Underlying NPBT excluding Job Keeper	3.0	(5.6)	(0.8)

• Revenue increased by 21.4% over H1 FY20

• Sales volume was driven by an increase in food & grocery customers in some cases bringing forward annual buying plans due to COVID-19, a strong agricultural sector with a good grain season as well as an improvement in general freight

• Profit and margins benefited from both volume and product mix and with continued manufacturing operational & quality improvements. In comparison to H1 FY19 with similar revenue of $130.6m, the divisions profit margin is 0.5%-1.0% higher after normalisation of leases

• Job Keeper payments of $4.5m received in H1 FY20 ($5m in H2 FY20)

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Trailers Revenue H1 H2 FY
350.0
300.0 298.5
250.0
240.5
200.0 205.5
161.9
150.0 136.6 130.6 126.9
109.9 104.6 100.9
100.0
50.0
0.0
FY18 FY19 FY20 FY21
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RELOCATION TO CAROLE PARK (BRISBANE)

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• MaxiTRANS relocated its Queensland Manufacturing operations from Richlands to a purpose built facility at Carole Park (Brisbane) in Nov-20

• Relocation will generate manufacturing efficiencies of +$2.3m pa plus add product portfolio flexibility over 2-3 years

• Net CAPEX of $4m

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STRATEGY UPDATE

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STRATEGIC ACTIVITY TO FOCUS ON NEAR TERM

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Whilst maintaining consistent pathways of strategy the scope has been refined to ensure we underpin continued focus on balance sheet prudence:

• Safety - Continued focus on improving our safety performance to not only ensure we send our people home safely but that MaxiTRANS’ products design also sends our customer’s people home safely.

• Operational excellence - ensure the group’s systems and processes deliver high quality, cost effective products and services, with a focus on margin over chasing market share

• Growth - Leverage market leading position to optimise opportunities in MaxiPARTS through both organic initiatives and through an M&A strategy

• People – Continue investing in Inclusion and Diversity programs, supported by continuation of our front line and senior leaders’ development program

• Return on Assets - Actively review the most efficient use of the group’s assets to deliver the best return on our shareholders’ investment

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OUTLOOK

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FY21 OUTLOOK

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• The group remains cautious about the economic outlook in calendar year 2021, though has seen many positives in both the resilience and consistency in the MaxiPARTS trading performance and a strong order bank at end of calendar year 2020 for the Trailers CGU, which is nearly 300% higher than the order bank in the pcp and this has continued to increase in the first 6 weeks of HY FY21.

• Expectations are for MaxiPARTS to focus on revenue growth for the second half of the year, whilst still maintaining margin and cost control across the operations.

• Organic growth initiatives are expected to provide continued momentum in H2 FY21, including the accelerated plans to add a second outlet in Sydney as a ‘click and collect’ outlet to go operational late in the year and a new ecommerce platform set for delivery in late H2 FY21 to drive more online sales in FY22 and beyond.

• MaxiPARTS remains the focus of the group’s strategic growth platform and based on the strengthening Balance Sheet the group has re-initiated the M&A strategy for MaxiPARTS.

• The Trailers business strong order bank is currently constrained by the ability to recruit and train the appropriate trades and labour to fulfil the current orders.

• Management’s immediate focus is on recruiting appropriately skilled labour to increase production at all key manufacturing sites and balancing this with maintaining profitability through production efficiency and quality metrics.

• The Queensland Carole Park facility is expected to deliver greater capacity to support our Queensland and NSW customers as we head into FY22.

• The Group does not expect the federal government stimulus incentives, such as the temporary full expensing incentive, to accelerate any end customer purchasing during H2 FY21, although this may be a factor in FY22 as the program comes to an end.

• The stress on the global supply chain due to the COVID-19 pandemic, particularly Europe and North America, will continue to see challenges in Australian ports becoming more pronounced. Substantial cost inflation in freight and steel is very likely to see the group process market price increases through both the Trailers and MaxiPARTS business sometime in the second half of this year.

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VALUES

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SEND ALL OUR PEOPLE HOME SAFELY

BE HONEST, FORTHRIGHT AND ETHICAL IN OUR DEALINGS

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A BALANCED FOCUS ON CUSTOMERS AND RESULTS

ENCOURAGE COLLABORATION AND DEEP SEATED ACCOUNTABILITY

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ENABLE AND EMPOWER PEOPLE TO ACHIEVE RESULTS

BECOME BETTER EVERY DAY IN ALL THAT WE DO

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IMPORTANT INFORMATION

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This document should be read in conjunction with the periodic and continuous disclosure announcements of MaxiTRANS Industries Limited (MaxiTRANS) that have been lodged with the ASX, in particular the financial report for the full-year ended 30 June 2019 (available at www.asx.com.au).

This document contains forward looking statements. Forward looking statements, opinions and estimates contained in this document involve a number of risks, assumptions and contingencies, many of which are beyond the control of MaxiTRANS and its related bodies corporate (MaxiTRANS Group) and which are subject to change without notice. It is believed that the expectations reflected in these forward looking statements, opinions and estimates are reasonable but there can be no assurance that actual outcomes will not differ materially from these statements. You are cautioned not to place undue reliance on any forward looking statements regarding our belief, intent or expectations with respect to MaxiTRANS’ businesses, market conditions or results of operations, as actual results may vary in a material manner.

Information in this document should not be considered advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities.

No member of the MaxiTRANS Group gives any warranties in relation to the statements or information contained in this document, or warrants or guarantees the future performance of MaxiTRANS securities nor any return on investment made in MaxiTRANS shares.

This presentation contains non-IFRS financial information including EBITDA (earnings before interest, tax, depreciation and amortisation) and EBIT (earnings before interest and tax). EBITDA and EBIT are reported to provide improved clarity of the group’s underlying business performance. Non-IFRS financial information contained in this document has not been subject to audit or review.

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