Acquisition of trans-o-flex
Acquisition of trans-o-flex
Acquisition of trans-o-flex
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<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
30-October-2006
Disclaimer<br />
This presentation contains forward-looking statements, based on the currently held<br />
beliefs and assumptions <strong>of</strong> the management <strong>of</strong> Austrian Post, which are expressed in<br />
good faith and, in their opinion, reasonable. These statements may be identified by<br />
words such as “expectation” or “target” and similar expressions, or by their context.<br />
Forward-looking statements involve known and unknown risks, uncertainties and other<br />
factors, which may cause the actual results, financial condition, performance, or<br />
achievements <strong>of</strong> Austrian Post, or results <strong>of</strong> the postal industry generally, to differ<br />
materially from the results, financial condition, performance or achievements expressed<br />
or implied by such forward-looking statements. Given these risks, uncertainties and<br />
other factors, recipients <strong>of</strong> this document are cautioned not to place undue reliance on<br />
these forward-looking statements. Austrian Post disclaims any obligation to update<br />
these forward-looking statements to reflect future events or developments.<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
2
Overview <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
Strategic Aspects <strong>of</strong> Transaction<br />
Transaction Structure and Timeline<br />
Financial Impact<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
3
<strong>trans</strong>-o-<strong>flex</strong> is one <strong>of</strong> the leading specialized logistics<br />
service providers within the B2B segment in Germany<br />
Logistics network with 39 delivery centers covering the entire<br />
German market<br />
Attractive business model with combined freight (parcels and<br />
pallets) and recipient-oriented aggregation <strong>of</strong> shipments<br />
Successful niche focus on selective industries<br />
– Life Sciences<br />
– Consumer Electronics/Home Entertainment<br />
– Lifestyle/Cosmetics<br />
Leading market position in the Life Sciences industry<br />
Additional special services such as temperature-controlled<br />
delivery and <strong>trans</strong>portation <strong>of</strong> hazardous goods<br />
Lean corporate structure with high degree <strong>of</strong> outsourcing<br />
Long-lasting relationships with blue-chip customers<br />
Sales <strong>of</strong> approx. €460 million and EBITDA <strong>of</strong> approx. €27<br />
million in the twelve months up to and including June 2006<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
4
<strong>trans</strong>-o-<strong>flex</strong> operates a Germany-wide logistics<br />
network<br />
Clearly defined and highly <strong>flex</strong>ible network structure<br />
with multi-functional locations<br />
30 October 2006<br />
<strong>trans</strong>-o-<strong>flex</strong> network<br />
39 delivery centers (delivery)<br />
there<strong>of</strong><br />
19 „full-service centers“ (delivery, collection)<br />
there<strong>of</strong><br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
6 HUBs (delivery, collection, crossdock)<br />
• Center operations are fully outsourced to<br />
separate legal entities (Distribution-GmbHs)<br />
• <strong>trans</strong>-o-<strong>flex</strong> manages the customer<br />
relationships – particularly the key account<br />
management<br />
• Operations are executed by the centers through<br />
optimised processes with coordinated<br />
procedures<br />
• <strong>trans</strong>-o-<strong>flex</strong> is in full control <strong>of</strong> the business<br />
through IT, quality-audit, etc.<br />
► Delivery centers work under own<br />
responsibilities which results in<br />
increased efficiency and pr<strong>of</strong>itability<br />
Dortmund<br />
Duisburg<br />
Kerpen<br />
Meinerzhagen<br />
Köln<br />
Koblenz<br />
St. Ingbert<br />
Osnabrück<br />
Münster<br />
Wiesbaden<br />
Offenburg<br />
Bremen<br />
Herford<br />
Gießen<br />
Frankfurt<br />
Weinheim<br />
Donaueschingen<br />
Neumünster<br />
Kassel<br />
Bruchsal<br />
Stuttgart<br />
Hamburg<br />
Hannover<br />
Braunschweig<br />
Würzburg<br />
Ulm<br />
Augsburg<br />
Kaufbeuren<br />
Magdeburg<br />
Erfurt<br />
Jena<br />
Bayreuth<br />
Nürnberg<br />
Rostock<br />
Leipzig<br />
München<br />
Straubing<br />
Rosenheim<br />
Berlin<br />
Dresden<br />
5
Unique competitive positioning <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
<strong>trans</strong>-o-<strong>flex</strong> <strong>of</strong>fers individual solutions in its core segments and thereby differentiates<br />
itself from its competitors. Recently acquired thermomed supplements <strong>trans</strong>-o-<strong>flex</strong>’<br />
special services<br />
30 October 2006<br />
Specialists<br />
Generalists<br />
Courier Express<br />
Parcel<br />
Weight per shipment:<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
UPS /<br />
UNIDATA<br />
FedEx<br />
DPD<br />
GLS<br />
DHL<br />
TNT<br />
<strong>trans</strong>med<br />
<strong>trans</strong>-o-<strong>flex</strong><br />
thermomed<br />
Dachser<br />
Hellmann<br />
Courier Services Others<br />
40 kg<br />
System<br />
Alliance<br />
IDS<br />
Freight<br />
Forwarder<br />
6
<strong>trans</strong>-o-<strong>flex</strong> has a successful industry niche focus<br />
Strong focus on Life Sciences, Consumer Electronics/Home Entertainment and<br />
Lifestyle/Cosmetics<br />
30 October 2006<br />
Life Sciences<br />
• Pharma<br />
• Dental<br />
• Radio pharmaceuticals<br />
• Diagnostics<br />
• Laboratory<br />
Consumer Electronics /<br />
Home Entertainment<br />
• Computer hardware<br />
• S<strong>of</strong>tware<br />
• Picture and sound storage<br />
mediums<br />
• Consumer electronics<br />
• Office and information technology<br />
Note: Sales split by national and international network in 2005<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
55%<br />
23%<br />
9%<br />
13%<br />
Lifestyle / Cosmetics<br />
• Pharmacy cosmetics<br />
• Perfumes<br />
• Skin care<br />
• Hair care products<br />
Other<br />
• Automotive<br />
• Print / publisher<br />
• Food<br />
• Chemical products<br />
• Gardening tools<br />
• Textiles<br />
• Tobacco<br />
7
Blue-chip customer base<br />
<strong>trans</strong>-o-<strong>flex</strong> has long-lasting relationships with blue-chip customers<br />
30 October 2006<br />
Life Sciences<br />
Sales by business area (2005)<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
Consumer Electronics/<br />
Home Entertainment<br />
Other<br />
Life Style/<br />
Cosmetics<br />
55% 23% 13% 9%<br />
8
Overview <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
Strategic Aspects <strong>of</strong> Transaction<br />
Transaction Structure and Timeline<br />
Financial Impact<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
9
Strategic aspects <strong>of</strong> <strong>trans</strong>action<br />
One <strong>of</strong> the leading logistics service providers for B2B express<br />
delivery in Germany<br />
Significant “know-how” in handling combined freight and one <strong>of</strong> the<br />
leading service provider for all companies whose products have<br />
special handling and requirements such as the pharma industry<br />
Strong market position in Germany, Austria’s most important trading<br />
partner and the largest logistics market in Europe<br />
Expanding European network EURODIS in Western Europe as well<br />
as CEE<br />
Focus on attractive industries such as Life Sciences, Consumer<br />
Electronics/Home Entertainment and Lifestyle/Cosmetics<br />
Special services such as temperature-controlled storage and<br />
<strong>trans</strong>portation <strong>of</strong> hazardous goods<br />
<strong>trans</strong>-o-<strong>flex</strong> acts as a system architect and process developer in an<br />
optimised process with blue-chip customers<br />
30 October 2006<br />
Strengths<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
=<br />
1.<br />
2.<br />
3.<br />
Benefits<br />
Strengthen positioning <strong>of</strong><br />
Parcel & Logistics Division<br />
in existing home markets<br />
and B2B growth<br />
Accelerate international<br />
expansion<br />
Enter attractive<br />
niche markets<br />
10
<strong>trans</strong>-o-<strong>flex</strong> will further strengthen Austrian Post’s<br />
Parcel & Logistics Division<br />
Letter<br />
Mail<br />
Direct mail<br />
Newspapers<br />
and periodicals<br />
July 2005 to June 2006 Sales: 1<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
Parcel & Logistics<br />
Parcels<br />
Express deliveries<br />
Branch Network<br />
Postal services<br />
Financial and insurance<br />
products<br />
Retail products<br />
Post: €1,303m Post: €222m Post: €197m<br />
+<br />
(1) Austrian Post external sales based on IFRS (incl. Others/Consolidation); <strong>trans</strong>-o-<strong>flex</strong> total sales based on German GAAP (management reporting).<br />
Pro-forma Group 1<br />
Sales Split<br />
Branch Network<br />
9%<br />
Parcel &<br />
Logistics<br />
31%<br />
Mail<br />
60%<br />
Post: €1,727m<br />
<strong>trans</strong>-o-<strong>flex</strong>: €460m Pro-forma: €2,187m<br />
11
Attractive business model characterized by combined<br />
freight and recipient-oriented consolidation <strong>of</strong> shipments<br />
Parcel<br />
Parcel<br />
Companies:<br />
DHL<br />
UPS<br />
DPD<br />
GLS<br />
TNT<br />
…<br />
Strong USP with respect to competitors<br />
30 October 2006<br />
Temperature-controlled<br />
„Easy-pickup“<br />
Combined<br />
Combined<br />
freight<br />
freight<br />
Flexible<br />
Flexible<br />
shipment<br />
shipment<br />
definition<br />
definition<br />
B2B<br />
B2B<br />
with<br />
with<br />
segment<br />
segment<br />
focus<br />
focus<br />
Recipient<br />
orientation<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
Hazardous goods &<br />
radio pharmaceuticals<br />
Groupage<br />
Freight<br />
Forwarders:<br />
Dachser<br />
Schenker<br />
DHL Solutions/<br />
Danzas<br />
IDS<br />
System<br />
Alliance<br />
…<br />
<strong>trans</strong>-o-<strong>flex</strong> as supplier <strong>of</strong> combined<br />
freight in Germany<br />
– Combined servicing <strong>of</strong> parcel (to 30 kg)<br />
and part-load (from 30 kg up to several<br />
pallets)<br />
High penetration <strong>of</strong> pharma market<br />
enables the consolidation <strong>of</strong> deliveries<br />
at the recipient<br />
– Consolidation <strong>of</strong> shipments at the recipient<br />
which results in higher stop factor<br />
compensates for potential cost<br />
disadvantage<br />
12
The <strong>trans</strong>action enlarges Austrian Post’s economic<br />
footprint<br />
Austrian Post will operate in a combined market with a total population <strong>of</strong> approx. 110m<br />
people<br />
30 October 2006<br />
Germany<br />
Leading market position<br />
in combined freight and<br />
B2B express delivery for<br />
Life Sciences<br />
Austria<br />
#1 in letter mail<br />
#1 in addressed direct mailings<br />
#1 in unaddressed direct mailings<br />
#1 in X2C parcels<br />
#1 in Media Post<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
#2 in parcels<br />
#2 in unaddressed direct mail<br />
Slovakia<br />
Hungary<br />
#1 in unaddressed direct mail<br />
Croatia<br />
#2 in parcels<br />
#1 unaddressed direct mailings<br />
13
<strong>trans</strong>-o-<strong>flex</strong> is establishing the European network<br />
EURODIS<br />
EURODIS is a European network <strong>of</strong> independent<br />
logistics companies which jointly provide distribution<br />
services within Europe<br />
EURODIS was founded by <strong>trans</strong>-o-<strong>flex</strong><br />
The main tasks <strong>of</strong> EURODIS are clearing, track and<br />
trace, managing European tenders, customer<br />
relationships, IT and marketing<br />
EURODIS <strong>of</strong>fers a comprehensive pick-up and<br />
delivery <strong>of</strong> shipments in Europe on a daily basis<br />
Austrian Post intends to further strengthen the<br />
successful establishment <strong>of</strong> EURODIS<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
14
Overview <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
Strategic Aspects <strong>of</strong> Transaction<br />
Transaction Structure and Timeline<br />
Financial Impact<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
15
Transaction structure<br />
Enterprise Value <strong>of</strong> €225m as <strong>of</strong> 30-June-2006 (purchase price equals<br />
enterprise value less net financial debt)<br />
Two-step <strong>trans</strong>action:<br />
– 1 st Tranche: 74.9% stake acquired with closing expected in Dec-2006<br />
– 2 nd Tranche: Option to acquire remaining 25.1% at the latest in 2009<br />
Transaction subject to approval by the relevant antitrust authority<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
16
Expected timeline for the <strong>trans</strong>action<br />
Until Dec-2006 In Dec-2006 2008/2009<br />
30 October 2006<br />
Announcement <strong>of</strong> the<br />
<strong>trans</strong>action (30-Oct-2006)<br />
Application for approval by<br />
antitrust authorities<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
Closing:<br />
Transfer <strong>of</strong> 74.9%<br />
stake<br />
Payment <strong>of</strong> purchase<br />
price (74.9%)<br />
Consolidation <strong>of</strong><br />
<strong>trans</strong>-o-<strong>flex</strong><br />
Potential Execution <strong>of</strong><br />
options:<br />
Put option for seller<br />
in June 2008<br />
Call option for<br />
Austrian Post in May<br />
2009<br />
17
Overview <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
Strategic Aspects <strong>of</strong> Transaction<br />
Transaction Structure and Timeline<br />
Financial Impact<br />
30 October 2006<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
18
Positive financial impact<br />
July 2005 to June 2006 1<br />
Sales<br />
EBITDA<br />
(1) Austrian Post figures based on IFRS; <strong>trans</strong>-o-<strong>flex</strong> figures based on German GAAP (management reporting).<br />
30 October 2006<br />
Margin<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
1,727<br />
239<br />
460<br />
27<br />
Pro-forma<br />
2,187<br />
13.8% 5.9%<br />
12.2%<br />
Austrian Post does not expect any changes to its stated dividend policy as a consequence <strong>of</strong> the<br />
<strong>trans</strong>action.<br />
267<br />
19
<strong>trans</strong>-o-<strong>flex</strong> matches all <strong>of</strong> Austrian Post’s stringent<br />
acquisition criteria<br />
Strategic<br />
Business<br />
Financial<br />
30 October 2006<br />
Geographic expansion in European countries with a focus on neighbouring<br />
CEE markets or<br />
Functional expansion into related service areas to expand existing postal<br />
services platform<br />
Private company<br />
Top market position<br />
Existing know-how about markets and customers – management remains<br />
Customers, service and IT standards to be integrated within 12 months<br />
Last mile service all over the country<br />
ROIC post-tax <strong>of</strong> more than 7%, which is above Austrian Post’s internal<br />
hurdle rate for cost <strong>of</strong> capital<br />
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
20
<strong>Acquisition</strong> <strong>of</strong> <strong>trans</strong>-o-<strong>flex</strong><br />
30-October-2006
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