Half Year Results Presentation

EBOS Group Limited

Interim Financial Results presentation for the
Half Year ended 31 December 2016

Patrick Davies Chief Executive Officer
John Cullity Chief Financial Officer

22 February 2017

2
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, EBITA, EBITDA,
Underlying EBITDA, NPAT, Underlying NPAT, Underlying Earnings per Share, Free Cash Flow, Interest cover, Net Debt and Return on Capital Employed.
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
31 December 2016.

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

3
Group Financial Results
1
A-Frame automatic picking system,
Symbion Keysborough facility,
Melbourne, Australia

4
H1 FY17 Summary Results¹
Revenue
$4.0b
17.2% (+20.6% Constant FX)
Group Financial Results
EBITDA
$119.9m
N PAT
$68.8m
5.4% (+9.0% Constant FX) 7.2% (+10.9% Constant FX)
ROCE
16.0%
Earnings per share
45.4c
Dividend per share
30.0c
170 basis points 6.7% (+10.4% Constant FX)
15.4%
¹ EBITDA, NPAT and Earnings per share include $2.4m of transaction costs ($1.4m after tax and after
non-controlling interests) incurred on the Terry White Chemmart merger completed 31 October 2016.

5
12.9%
14.3%
16.0%
H1 FY15 H1 FY16 H1 FY17
Return on Capital Employed
3,120
3,380
3,960
H1 FY15 H1 FY16 H1 FY17
Revenue
NZ$m
54
64
69
H1 FY15 H1 FY16 H1 FY17
N PAT
NZ$m
36.2
42.5
45.4
H1 FY15 H1 FY16 H1 FY17
Earnings Per Share
Cents per share
Strong growth continues
Group Financial Results
31
47
48
H1 FY15 H1 FY16 H1 FY17
Operating Cash Flow
NZ$m

6
H1H1Constant FX
NZ$m
FY17FY16
VarVar
Statutory Results
Revenue3,960.2 3,379.7 17.2%20.6%
Gross Operating Revenue364.1 333.7 9.1%12.4%
EBI TDA119.9 113.7 5.4%9.0%
EBI T107.5 101.4 6.0%9.6%
Net Finance Costs8.9 9.7 7.7%5.0%
Profit Before Tax98.6 91.7 7.5%11.3%
Net Profit After Tax
1
68.8 64.2 7.2%10.9%
Statutory EPS - cps45.4 42.5 6.7%10.4%
Underlying EBITDA
2
122.3 113.7 7.5%11.1%
Underlying NPAT
2
70.2 64.2 9.5%13.2%
Underlying EPS - cps
2
46.3 42.5 9.0%12.7%
Net Debt288.1 379.3
Net Debt : EBI TDA1.25x1.80x
Strong first half financial performance
Group Financial Results
•First Half Group Revenue increase of $580m or
20.6% (constant FX):
–Healthcare up 21.5%.
–Animal Care up 5.9%.

•EBITDA increase of $6.1m or 9.0% (constant
FX):
–Healthcare up 10.6%.
–Animal Care up 10.7%.

•NPAT increase of $4.6m or 10.9% (constant FX).

•Increased NZD:AUD cross rate negatively
impacted NPAT by $2.1m for H1 FY17.

•Underlying EPS growth of 12.7% (constant FX).

•Solid cash flow performance with Net Debt /
EBITDA ratio now at 1.25x.
Note 1: Net profit after tax and after non-controlling interests.

Note 2: Underlying EBITDA, NPAT and EPS exclude $2.4m of transaction costs ($1.4m after tax and after non-controlling
interests) incurred on the Terry White Chemmart merger completed 31 October 2016.

7
Segment earnings and GOR mix
EBITDA by segment Gross Operating Revenue (GOR) H1 FY17
H1 FY17 GOR mix
Group Financial Results
•Included in the H1 FY17 Corporate segment result is
$2.4m of transaction costs incurred on the Terry White
Chemmart merger.
H1
H1Constant FX
NZ$m
FY17FY16VarVar
Healthcare106.799.86.9%10.6%
Animal Care21.119.67.8%10.7%
Corporate(7.9)(5.6)(40.7%)(42.9%)
Group119.9113.75.4%9.0%

8
Healthcare Results
2




Top left: TerryWhite Chemmart pharmacy in Melbourne.
Top right: Selection of Red Seal toothpaste and tea products.
Bottom left: EBOS Healthcare, Auckland.
Bottom right: ProPharma, Auckland

9
89
100
107
H1 FY15 H1 FY16 H1 FY17
EBITDA
NZ$m
Healthcare segment
Strong trading performances across Australia and New Zealand
•Revenue increase of $575m or 21.5% (constant FX):
–Australia up 26.8%.
–New Zealand up 3.4%.

•EBITDA increase of $6.9m or 10.6% (constant FX):
–Australia up 11.0%.
–New Zealand up 6.3%.
Healthcare Results
H1
H1Constant FX
NZ$m
FY17FY16VarVar
Healthcare segment
Revenue3,744.1
3,169.318.1%21.5%
EBITDA106.799.8
6.9%10.6%
EBIT
96.1
89.37.6%11.3%
EBITDA%2.85%3.15%
-30pts-30pts
Australia
Revenue3,013.8
2,463.322.3%26.8%
EBITDA85.2
79.57.1%11.0%
EBIT
75.770.27.8%11.7%
EBITDA%2.83%3.23%-40pts-40pts
New Zealand
Revenue730.2706.03.4%
EBITDA21.520.26.3%
EBIT20.419.16.9%
EBITDA%2.94%2.86%8pts

10
COMMUNITY PHARMACY
Healthcare segment – First Half Highlights
Healthcare Results
CONSUMER PRODUCTS
Note: Revenue includes Net Sales and Other Income. Gross Operating Revenue (GOR) includes Gross
Profit and Other Income and excludes operating expenses.
•Pharmacy revenue in Australia grew by 15.8% (constant
FX), attributable to new Hepatitis C medicine sales, albeit
at lower gross profit margins, and the inclusion of Terry
White Group revenue from November 2016.

•Prescription medicine sales growth in Australia (excluding
Hepatitis C medicines) was flat due to the impact of PBS
reforms.

•First half OTC sales declined marginally due to a decline in
export demand.

•Continued focus on our cost base resulted in cost savings
and improved productivity across our operations.

•The merger of Chemmart with Terry White Group was
completed in October 2016 to create one of Australia’s
largest retail pharmacy networks with approximately 500
stores.
•Consumer Products (excluding Red Seal) recorded
revenue growth of 9.0%, mainly from a number of new
agency agreements in New Zealand.

•Red Seal is performing in-line with expectations with
like-for-like revenue growth of 8.4%. Strong revenue
growth was recorded in teas, toothpaste and
supplements in both domestic and international
markets.
–Sales to China increased by 24% on a like-for-like basis.
–We are encouraged with revenue growth recorded in
other Asian markets, such as South Korea which
recorded first half revenue growth of 98% to last year.
NZ$m
H1 FY17H1 FY16Var%
Revenue2,144.21,902.612.7%
GOR180.4164.79.5%
GOR%8.4%8.7%
Constant FX
NZ$m
H1 FY17H1 FY16Var%
Revenue54.534.558.1%
GOR22.014.650.3%
GOR%40.3%42.4%
Constant FX

11
•Symbion Hospital Services business maintained its
market leading position and recorded strong revenue
growth driven by Hepatitis C drug sales.

•Included in last year’s results was a strong contribution
from the International division (additional $2.5m GOR)
primarily from capital equipment sales to PNG that did
not repeat this year.
INSTITUTIONAL HEALTHCARE
Healthcare segment – First Half Highlights
Healthcare Results
CONTRACT LOGISTICS
Note: Revenue includes Net Sales and Other Income. Gross Operating Revenue (GOR) includes Gross Profit and
Other Income and excludes operating expenses.
•Healthcare Logistics (NZ) maintained its leading market
position and combined with cost management, delivered
another period of increased GOR and earnings.

•The Group is expanding its Contract Logistics business in
Australia with the development of a new facility in
Sydney (NSW).
Note: GOR % not relevant as sales activity is predominantly done on consignment.
NZ$m
H1 FY17H1 FY16Var%
Revenue1,322.8920.543.7%
GOR74.862.020.5%
GOR%5.7%6.7%
Constant FX
NZ$m FY17H1 FY16Var%
Revenue242.1242.6(0.2%)
GOR30.429.43.4%
Constant FX

12
Animal Care Results
3
Selection of our Animal Care brands of
BlackHawk and Vitapet and an
Animates store in Auckland.

13
16.8
19.6
21.1
H1 FY15 H1 FY16 H1 FY17
EBITDA
NZ$m
•Revenue increase of $5.7m or 5.9% (Constant FX),
primarily from growth of branded products
(including BlackHawk and Vitapet).

•EBITDA increase of $1.5m or 10.7% (constant FX)
attributable to:
–Revenue growth from our key branded products;
–Improved Animates joint venture performance
with EBOS’ share of NPAT increasing $0.4m (39%)
to last year.
Animal Care Results
Animal Care segment
BlackHawk and Vitapet revenue growth key to H1 earnings performance
H1
H1Constant FX
NZ$m
FY17FY16VarVar
Animal Care segment
Revenue216.1210.5
2.7%5.9%
EBITDA21.119.6
7.8%10.7%
EBIT
19.317.79.1%12.0%
EBITDA%9.77%9.31%46pts42pts

14




PRODUCTS
& BRANDS




•BlackHawk, our premium pet food brand, continues to receive very strong
support and is outperforming the market. Revenue grew 48% in H1 FY17 on
last year, driven by an investment in marketing, additional ranging in pet
specialty stores and new product launches.


•Vitapet recorded revenue growth of 10.6% (constant FX) driven by new
product development, range expansion and marketing investment.



•Increased Animates profit due to revenue growth of 15%. During the half year,
Animates opened five new retail stores and two veterinary clinics. The
business now operates 37 retail stores and 10 veterinary clinics in New
Zealand.


•Lyppard recorded steady revenue growth from its major customers (vet groups
and pet stores). This market remains competitive and continues to consolidate
which is placing pressure on gross margins.

Animal Care Results
Animal Care segment
Half Year Performance Overview


RETAIL




VET
WHOLESALE

15
Group Financial Information
4
EBOS Healthcare warehouse,
Auckland, New Zealand

16
Cash Flow
Another strong Operating Cash Flow performance
•Operating cash flow of $47.9m assisted by
effective working capital management.

•Capex spend in H1 FY17 includes payments for
the new distribution centre in Brisbane of
$11.7m.

•Acquisition of subsidiaries in H1 FY17
represents the Group’s investment in the Terry
White Group.

•Hepatitis C sales are expected to moderate in
the second half which may impact the Group’s
net working capital and full year FY17 cashflow.
Group Financial Information
NZ$mH1 FY17H1 FY16Var$
EBITDA119.9 113.7 6.1
Net interest paid(8.9) (9.7) 0.7
Tax paid(37.2) (29.8) (7.4)
Net working capital and other movements(25.8) (27.7) 1.9
Cash from Operating activities47.9 46.6 1.4
Proceeds from disposal of assets- 5.0 (5.0)
Capital expenditure(16.0) (6.8) (9.1)
Free Cash Flow32.0 44.8 (12.8)
Acquisition of subsidiaries and investments(17.4) (90.6) 73.2
Dividends paid (net of DRP)(49.4) (29.8) (19.6)
Net Cash Flow(34.8) (75.6) 40.8
Net debt attributable to acquisitions(9.4) - (9.4)
FX impact on net debt3.6 13.2 (9.6)
Reduction/(Increase) in Net Debt(40.5) (62.3) 21.8

17
•Working capital management discipline is a key
focus of the Group.

•Cash conversion cycle of 17 days.

•Lower investment in Net Working Capital than
December 2015 is predominantly due to the
Group’s Hepatitis C medicine sales activity.

•Cash conversion days excludes the Group’s 3PL
Hepatitis C business as stock is held on
consignment.
Working Capital and Cash Conversion
Group Financial Information
Note 1: December 2016 and June 2016 cash conversion days are adjusted for the Group’s 3PL debtors and creditors
arising from its Hepatitis C business.

Note 2: June 2016 and December 2015 cash conversion days are adjusted for constant currency.
NZ$mDec 2016June 2016Dec 2015
Net Working Capital
Trade receivables
1,112.51,302.8853.9
Inventory596.2578.5548.8
Trade payables(1,318.2)(1,539.9)
(941.1)
Other(128.0)(98.9)
(109.2)
Total262.5
242.6352.3
Cash conversion days
1,2
Debtor days
41 43
47
Inventory days31
29 33
Creditor days55
59 58
Cash conversion days17
13 22

18
13.7%
16.3%
14.3%
16.0%
FY15FY16H1 FY16H1 FY17
ROCE %
•Net Debt of $288m at December 2016.

•Net Debt : EBITDA of 1.25x at December 2016 (1.1x
at June 2016, 1.8x at December 2015).

•Significant balance sheet capacity for further M&A.
Net Debt, Gearing and ROCE
Group Financial Information
Net Debt and Gearing
317
379
248
288
23.2%
26.2%
18.5%
20.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
50
100
150
200
250
300
350
400
Jun-15Dec-15Jun-16Dec-16
Gearing ratio
Net debt (NZ$m)
Net DebtGearing ratio (Net debt)
Return on Capital Employed
•Return on Capital Employed of 16.0% at December
2016, an increase of 170bps from December 2015.

•Decline in ROCE from June 2016 represents a
combination of seasonal factors (higher net working
capital) and capital expenditure on the Brisbane
distribution facility (under construction).

19
•Statutory EPS growth of 6.7% (10.4% constant FX) in H1 FY17 following a 18.7% increase in FY16.

•Interim dividend of 30.0 cents (imputed to 25%), an increase of 4.0 cents or 15.4% from last year.

•Dividend payout ratio of 66%.

•Interim dividend is 100% franked for Australian resident shareholders.

•DRP remains suspended and will not apply for this dividend.

Statutory Earnings per share Dividends per share
Group Financial Information
Earnings and Dividends per share
36.2
42.5
45.4
34.6
41.5
FY15FY16FY17
Cents per share
H1H2
22.0
26.0
30.0
25.0
32.5
FY15FY16FY17
Cents per share
H1H2

20
5
Summary and Outlook
Masterpet warehouse,
Wellington, New Zealand

21
Underlying market dynamics
remain positive across the
business
Diversified earnings streams
and customer base
Consistent EPS and dividend
growth performance
Underpinned by a strong
balance sheet, cash
generation and successful
history of M&A execution
Investing in infrastructure to
allow for sustainable future
growth
Increasing return on
capital employed
Summary
Summary and Outlook

22
Outlook
•EBOS Group has recorded a positive start for the first half of the financial year across both its
Healthcare and Animal Care divisions.

•In October 2016, we provided guidance of underlying, constant currency, net profit after tax
growth in FY17 of between 7% to 10% compared to the prior year.

•EBOS Group now expects full year FY17 earnings to be at the upper end of this range.
Summary and Outlook

23




Supporting Information
EBOS Group locations in
Australia and New Zealand

24
0.86
0.88
0.90
0.92
0.94
0.96
0.98
1.00
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
•80% of the Group’s earnings (EBITDA) are
generated in AUD.

•The average NZD:AUD FX rate for H1 FY17
increased by 3.3 cents from H1 FY16,
negatively impacting the Group’s H1 FY17
EBITDA by approximately $3.7m.

•EBITDA sensitivity to a 1 cent movement in
NZD:AUD exchange rate is approximately
$2.0m per annum.
Foreign exchange
Appreciation of the average NZD:AUD cross-rate by 3.3c to 0.951 negatively impacted EBITDA by
$3.7m in H1 FY17
Revenue and EBITDA by currency
H1 FY16 average: 0.918c
NZD:AUD exchange rate – July 2015 to December 2016
Dec
-16
FY16 average: 0.921c
H1 FY17 average: 0.951c
AUDAverageAUDNZGroup
OperationsNZD: AUDOperationsOperationsConsolidated
$mAUDtranslationNZDNZDNZD
FY17
Revenue3,046.2 0.95 3,199.0 761.2 3,960.2
EBITDA91.2 0.95 95.9 24.0 119.9
EBITDA%2.99%3.00%3.15%3.03%

25
NZ$m
EBITDANPATEBITDANPAT
Statutory result119.9
68.8 113.7 64.2

Add back
EBOS costs of the TWC/Chemmart merger1.8 1.2
- -
Terry White costs of the TWC/Chemmart merger0.6 0.2
- -
2.4
1.4 - -

Underlying result122.3 70.2 113.7
64.2
H1 FY17H1 FY16
Reconciliation of statutory and underlying results
1
¹ Underlying EBITDA and Net Profit After Tax (attributable to the owners of the company) are both Non-GAAP measures which adjust for the
effects of non-recurring items.

26
Glossary of terms and measures
Except where noted, common terms and measures used in this document are based upon the following definitions:
Term Definition
Actual results Results translated into NZ dollars at the applicable actual monthly exchange rates ruling in each period.
Debtor days Trade debtors at the end of period divided by Revenue for the period, multiplied by number of days in the period.
Inventory days Inventory at the end of period divided by Cost of Sales for the period, multiplied by number of days in the period.
Creditor days Trade creditors at the end of period divided by Cost of Sales for the period, multiplied by number of days in the period.
Constant
FX/currency

Calculated by translating the prior period results into NZ dollars at the actual monthly exchange rates applicable in the current period.
Revenue Revenue from the sale of goods and the rendering of services.
Gross Operating
Revenue (GOR)

Revenue less cost of sales and the write-down of inventory.
EBIT Earnings before interest and tax.
EBITDA Earnings before interest, tax, depreciation and amortisation.
Underlying EBITDA Earnings before interest, tax, depreciation, amortisation and transaction costs relating to the Terry White Chemmart merger.
NPAT Net Profit After Tax attributable to the owners of the company.
Underlying NPAT Net Profit After Tax attributable to the owners of the company and before transaction costs relating to the Terry White Chemmart merger.
Free Cash Flow Cash from operations less capital expenditure net of proceeds from disposals.
Earnings per share
(EPS)
Net Profit after tax divided by the weighted average number of shares on issue during the period.
Underlying EPS Underlying NPAT divided by the weighted average number of shares on issue during the period.
Net Debt : EBITDA Ratio of net debt at period end to the last 12 months EBITDA.
Return on Capital
Employed (ROCE)
Measured as underlying earnings before interest, tax and amortisation of finite life intangibles for 12 months divided by closing capital employed
(including a pro-rata adjustment for entities acquired).

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