Zigup Plc · LSE:ZIG
Zigup — Redde Northgate — Investor Presentation (January 2024)
45 slides from Zigup's investor presentation, January 2024
Slide 1: Redde Overview
redd N@RTHGATE Redde Overview January 2024
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Redde Northgate Plc (the “Company” and, together with its subsidiaries, the “Group”). For the purposes of this notice, “Presentation” means this document, its contents or any part of it, any oral presentation, any question or ans
Slide 3: The presenting team
The presenting team Martin Ward Harvey Stead Claire Owens Group CEO Managing Director Managing Director Redde businesses FMG & FMG Repair Services Worked in FMG 2001-2008 Joined FMG in 2017 as Finance Director Rejoined FMG in 2013 and as Managing Director from 2018 Appointed Managing Director in 202
Slide 4: Content & Speakers
Content & Speakers Group 1. overview Group overview Martin Ward 2. Business profile Harvey Stead 3. Market characteristics 4. Spotlight on FMG Repair Services Claire Owens 5. Contract management Harvey Stead 6. Building a significant capability 7. Financial considerations Richard Clay 8. Conclusions
Slide 5: Delivering services across the vehicle lifecycle
Delivering services across the vehicle lifecycle Redde businesses highlighted Vehicle Fleet mgmt. & EV transition Service & Insurance Accident provision services maintenance mobility management Insurance mobility Vehicle sales Specialist vehicle Refrigerated Specialist traffic Legal services Vehicle
Slide 6: Differentiated mobility provider: with scale & national footprint
Differentiated mobility provider: with scale & national footprint Group Operational Scale – UK&I locations Group Financial Strength • Liquid asset pool - vehicles • Low cost of borrowing • Prudent leverage • Significant facilities • Strong credit rating • Light covenants 6
Slide 7: The Group is well placed: to benefit from key mobility trends
The Group is well placed: to benefit from key mobility trends FY23 EBIT £m Trends: Increasing industry Outsourcing understanding of ‘mobility’ Supplier £47.0 consolidation (23%) £93.4 £60.4 Differentiated Growing tech-enabled complexity of integrated vehicles platform Rental UK&I Rental Spain Claims
Slide 8: Content
Content 1. Group overview 2. Business profile 3. Market characteristics 4. Spotlight on FMG Repair Services 5. Contract management 6. Building a significant capability 7. Financial considerations 8. Conclusions 8
Slide 9: Market dynamic: large but fragmented marketplaces
Market dynamic: large but fragmented marketplaces UK insurance market profile UK Segment Participants* UK Bodyshop market UK licensed vehicles >40m Replacement vehicle Auxillis, Enterprise, Industry worth Road Traffic Accidents Accident Exchange, Winns, (RTA) 4.2m Europcar, Thrifty £6.5bn (2023) RTA
Slide 10: Leading brands: recognised in their specialist service areas
Leading brands: recognised in their specialist service areas Services Services Services Services Credit hire Claims & incident mgmt. Repair services: Personal injury support Credit repair Repair management Full body shop capability Loss recovery at litigation stage Direct and 3rd party hire Vehicle
Slide 11: Redde: Growing a powerful mobility platform and services offering
Redde: Growing a powerful mobility platform and services offering Since merger: 2019 - 2023 FMG RS Acquisition (Sep 2020) Internal/external FMG RS +7 +14 +40% activity split - FMG RS 45% Repair volumes Increase in …taking individual Replacement - Network 55% >85k major Partners... service lines flee
Slide 12: Partners & Customers: a diverse and growing client base
Partners & Customers: a diverse and growing client base Insurance and leasing Public Sector Working with many of the UK’s leading insurers and insurance brokers We are an accredited Public Sector provider through a number of Framework Agreements Supporting fleets of many of the largest contract hire
Slide 13: Track record: of establishing long term, growing services relationships
Track record: of establishing long term, growing services relationships • Relationship since 2016 • Relationship since 2009 • 2016: credit hire • Strategic road network support • Traffic officer support & • 2021: mobility & repair major incidents % Revenue from relationships with durations: • 2023:
Slide 14: Auxillis replacement fleet: supported by dynamic fleet management
Auxillis replacement fleet: supported by dynamic fleet management Replacement fleet size 2017-2023 (Av, High-Low) • Historic trend reflects Covid trough & then new contracts • Seasonal variation 25-30% 20,000 Average • Cross-hire supports peak demand 18,000 • Typically 50-50% contract hire 16,000 •
Slide 15: Content
Content 1. Group overview 2. Business profile 3. Market characteristics 4. Spotlight on FMG Repair Services 5. Contract management 6. Building a significant capability 7. Financial considerations 8. Conclusions
Slide 16: Non-fault vs Fault claims: understanding the differences
Non-fault vs Fault claims: understanding the differences Non-Fault Fault • Referral from own insurer who is not • Own insurer refers policy holder to its involved in claim repair partner • Cost of claim legally recoverable from • Cost of claim paid by own insurer liable 3rd party • Hire vehicle avai
Slide 17: Driver/policyholder engagement: helping navigate the claims journey
Driver/policyholder engagement: helping navigate the claims journey Direct Engagement • Multiple routes for initial engagement with driver/policyholder • Undertaken on behalf/ recommendation of insurer or leasing/corporate customer • First engagement when policyholder / driver referred by insurance
Slide 18: Incident & claims process: ensuring full claims recovery
Incident & claims process: ensuring full claims recovery Claims Management – simplifying the complexity for clients • Laser focus on identifying viable claims • Highly structured & regulated process • Strong focus on cost transparency • Full documentation trail for claims recovery 18
Slide 19: Claim management: understanding the differing models
Claim management: understanding the differing models Credit Hire/Repair Direct Hire/Repair Costs & charges incurred by Hire and repair fees at Revenue Revenue customer under credit agreement, contractual rates with Insurance recovered from at-fault party’s or corporate partner insurance policy Cost
Slide 20: Current industry trends: present significant opportunity for Redde
Current industry trends: present significant opportunity for Redde Market dynamics Customer response Challenges of parts availability, residual Insurers: focused on contracting restricted values & repair capacity repair capacity from multiple vendors Insurance market not back to pre-covid Insurance
Slide 21: Content
Content 1. Group overview 2. Business profile 3. Market characteristics 4. Spotlight on FMG Repair Services 5. Contract management Darren to insert Redde picture 6. Building a significant capability 7. Financial considerations 8. Conclusions
Slide 22: Overview: A capacity-constrained and fragmented bodyshop market
Overview: A capacity-constrained and fragmented bodyshop market Decline in bodyshops over 2010-2020 # bodyshops Total Independent Dealer Secondary Independent Group Sites 2020 3,450 2,330 420 700 £1,634m t/o 2015 3,860 2,490 510 860 571 Sites 2010 4,630 2,960 690 980 Independent Dealership Sites % c
Slide 23: FMG Repair Services: driving capacity & efficiency
FMG Repair Services: driving capacity & efficiency On acquisition, Sep 2020 Current • Originally took on 77 of the 102 • 64 body-shops throughout nationwide bodyshops England, Scotland and Wales • 2,300 colleagues • c.1,600 colleagues operating across our business today • Consideration price was c.£
Slide 24: FMG Repair Services: differentiated core capabilities
FMG Repair Services: differentiated core capabilities Size and Scale Fully Trained Technicians Quality & Value Group Integration BSI 10125 Accreditation Sustainable Solutions 24
Slide 25: Core capability: It's our people who make the difference
Core capability: It’s our people who make the difference “ Being part of a bigger group means more opportunities to progress my career as well as a more regular flow of work into the business. 25 Andrew Lines – Scunthorpe
Slide 26: Training: for an increasingly high-tech skills requirement
Training: for an increasingly high-tech skills requirement Significant training & apprenticeship programmes 117 on structured 2-year Apprentices programme Apprentice 157 mentors trained mentors All workshops equipped EV training & IMI trained “ Throughout my apprenticeship I had support from my ment
Slide 27: Lower carbon initiatives: increasingly key for our partners
Lower carbon initiatives: increasingly key for our partners New Paint Scheme Reuse rather than replace Waste Management • Introduced new paint scheme across • Supporting ambitious environment • Working with national waste FMG Repair Services targets across supply chain providers • 50% reduction in d
Slide 28: New larger facilities: delivering productivity and efficiency gains
New larger facilities: delivering productivity and efficiency gains FMG Repair Services Sites Optimising processes • Larger 25,000 sq. ft sites • Improved layout increases productivity Hoddesdon Bristol • Updated technology, supporting connected diagnostics Bristol • Better colleague facilities Hodd
Slide 29: Content
Content 1. Group overview 2. Business profile 3. Market characteristics 4. Spotlight on FMG Repair Services 5. Contract management Darren to insert Redde picture 6. Building a significant capability 7. Financial considerations 8. Conclusions
Slide 30: Broad product offering: delivers best alignment with Partner's needs
Broad product offering: delivers best alignment with Partner’s needs Benefits of Integrated vs Best-in-silos What is in an RFI Detailed criteria to ensure alignment to partner’s service requirements Simplification of complex supply chains reduces operational friction Operational track record & abili
Slide 31: Illustrative timeline: of major contract wins & onboarding
Illustrative timeline: of major contract wins & onboarding Phase 1 (9-12 months): Tender process & contract award P Due diligence & RFI RFP Analysis & BAFO (circa 2 months) contract award (circa 2 months) (circa 4 months) (circa 3 months) Phase 2 (6-9 months): Technical preparation Go Live Technical
Slide 32: High contract renewal rate comes from ensuring service excellence
High contract renewal rate comes from ensuring service excellence Case Study: Growing services in-contract 3-5yrs Typical contract duration Contract management • Historic 10-year+ relationship through • Over 20-year relationship for credit teams JV partner for legal services provision hire & repair
Slide 33: Content
Content 1. Group overview 2. Business profile 3. Market characteristics 4. Spotlight on FMG Repair Services 5. Contract management Darren to insert Redde picture 6. Building a significant capability 7. Financial considerations 8. Conclusions
Slide 34: Delivering benefits: through a differentiated integrated offering
Delivering benefits: through a differentiated integrated offering Expert Agile Trusted, expert Minimises timing/ outsourced provider process friction Greater Seamless, transparent responsiveness claims reporting Integrated mobility platform Maximise cost Enhanced digital efficiencies integration 35
Slide 35: A tech-enabled platform: delivering significant competitive advantage
A tech-enabled platform: delivering significant competitive advantage Potential for enhanced digitisation Delivering competitive advantage Enhancing power of platform Offers market growth opportunity Digitisation • Simplified claims journey, single point of contact • Efficiency benefits of single-su
Slide 36: Digitisation: Award-winning customer portals
Digitisation: Award-winning customer portals Mobile 37
Slide 37: Market potential: still significant opportunities for Redde
Market potential: still significant opportunities for Redde Credit Credit Direct Direct Legal Selected current partners Hire Repair Hire Repair Services Major insurer Sole Sole Partial Partial Major insurer Sole Sole Partial UK Insurance market Retail broker Sole Sole Sole Sole Major insurer Sole So
Slide 38: Pipeline opportunities: available across our markets
Pipeline opportunities: available across our markets Existing Customer New Customer Capacity Product Individual Integrated extension addition products offering Provision of a fully Expanding product suite Winning a new customer Adding capacity integrated offering, as part or specialist customer who
Slide 39: Content
Content 1. Group overview 2. Business profile 3. Market characteristics 4. Spotlight on FMG Repair Services 5. Contract management Darren to insert Redde picture 6. Building a significant capability 7. Financial considerations 8. Conclusions
Slide 40: Financial profile: Historic dynamics
Financial profile: Historic dynamics Revenues & EBIT Activity 2021 2022 Reduced traffic Traffic volume reached pre volumes leading to pandemic levels although fewer RTAs as a result incidents reported were of Covid-19 lockdowns 10% lower due to changes in travel patterns 2023 2024 H1 2 new contracts
Slide 41: Redde Services: differing financial characteristics
Redde Services: differing financial characteristics Upfront Working Capital Service Brand Margin ROCE Investment Investment Credit Hire Fleet Claims Credit Repair n/a Claims Direct Hire Fleet Direct n/a Repair Roadside n/a Recovery 42
Slide 42: Redde Services: investment requirements & characteristics
Redde Services: investment requirements & characteristics Replacement Vehicle Fleet Working Capital IT/ People What we have Credit Hire & Repair Receivables IT • >14k vehicles on fleet • Protocol (70%) – Mechanism to settle on • In-house systems development • Broad mix of manufactures and models agr
Slide 43: Financial profile: Business cashflow factors
Financial profile: Business cashflow factors Fleet Investment Credit Hire & Repair Acquisition of fleet vehicles either from cash or Credit hire and repair is a legal claim not a through contract hire traditional invoice Funding route dependent on commercial Protocol agreements with insurers represe
Slide 44: Content
Content 1. Group overview 2. Business profile 3. Market characteristics 4. Spotlight on FMG Repair Services 5. Contract Management Darren to insert Redde picture 6. Building a significant capability 7. Financial considerations 8. Conclusions
Slide 45: CEO Wrap-Up
| CEO Wrap-Up reddé N@RTHGATE pic
Redde Northgate — Investor Presentation (January 2024) on 6ix