GUD : Wilsons Rapid Insights Conference

For personal use only

25 November 2021

Manager, Company Announcements

ASX Limited

Level 4

20 Bridge Street

SYDNEY NSW 2000

Dear Sir

Wilsons Rapid Insights Conference Presentation - 25 November 2021

Attached is a copy of a presentation to be given by Graeme Whickman, Managing Director and CEO and Martin Fraser, Chief Financial Officer of GUD Holdings Limited at the Wilsons Rapid Insights Conference to be held today.

Approved for release by the Company Secretary.

Yours faithfully

Malcolm G Tyler

Company Secretary

Direct: [phone]

Email: [e-mail]

Enc

GUD Holdings Limited

onlyWilsons Rapid Insights Conference

useGraeme Whickman, CEO & MD Martin Fraser, CFO

nal25 November 2021

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VISION X ACQUISITION

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GUD Holdings Limited

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Vision X (VX) Acquisition - Executive Summary

GUD HOLDINGS LIMITED 3

GUD has entered into an agreement to acquire Vision X Group, a global niche lighting business

onlyVision X Overview

• Established in 1997, Vision X's specialist lighting products have built customer loyalty and brand equity by consistently performing in harsh environments and producing leading light output

• Strong brands supported by over 1,200 products and 500 trademarks, design and utility patents

• Established product development and manufacturing facilities based in Korea and China

use• Marketing, sales, product development, warehouse, and limited manufacturing facilities based in the USA

• Distribution extends to all continents with an emphasis on products used in Industrial, Commercial, and Off-road vehicle applications to both original equipment and after-market customers

• Vision X leadership team will remain in place and be part of the BWI Group, led by George Davies (BWI CEO)

Financial Overview

• Upfront payment of US$52.8 million(1), subject to customary cash and working capital adjustments, representing circa 6x FY20 EBITA (pre synergies)
• With this upfront payment, and subsequent earn out payments up to a maximum of US$18.6m based on achievement of EBITA milestones (2), the total potential consideration is US$71.4 million
• Vision X delivered US$8.8m in EBITA in CY20 and is expected to deliver double-digit EBITA growth in CY21
• Vision X's EBITA margins are broadly in line with the average of GUD's legacy automotive businesses
• GUD expects the acquisition to be high single digit pro forma FY22F EPSA accretive (3)
• Funded from debt drawn from the company's existing lenders (predominantly US and Korean) and a 1-year promissory note (4)

nal	• Solid balance sheet metrics with FY21 pro forma leverage of 1.7x (5)
(1) Completion payment is subject to customary cash and working capital adjustments and an earn-out mechanism outlined in note (2).

(2) An earnout mechanism will be in place for 3 years (ending November 2024) whereby an additional US$8.8 million to US$18.6 million could be paid to the vendors based on achievement of a three-year compound annual growth rate in underlying EBITA of between 0 and 25%

(3) As if the Vision X business had been acquired on 1 July 2021 and excludes the amortisation of identifiable intangibles recognised as a result of the acquisition

(4) Circa $37.8 million in debt from existing lenders (predominantly in the USA and Korea), with the balance funded by way of a 1-year promissory note

(5) Leverage is proforma FY21 net debt / proforma EBITDA. Proforma EBITDA = FY21 GUD underlying EBITDA + CY20 VX EBITDA.

Vision X (VX) Acquisition - Executive Summary

GUD HOLDINGS LIMITED	4

Strategic Rationale

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Aligned with longer term aspirations for the Lighting category

• Vision X is an important pillar in one of GUD's longer term portfolio aspirations to establish a global niche leadership position in automotive lighting

Diversification - Product, customer and geography

• Portfolio of powertrain-agnostic and EV-ready products reduces GUD's reliance on internal combustion engine (ICE) revenue
• Geographic diversification by establishing a beachhead in the USA and a distribution foothold in Europe; the two largest lighting markets globally
• Top 18 customers represents circa 80% of revenue and 80% of VX customers are new to BWI/GUD
• Revenue is diversified across the Americas 53%; Australia 25%; Europe and Central Asia 21%; Africa and Middle East 1%
• Over 1,200 products in Automotive, Off Road, Mining, Maritime, Fire, Motorcycle, Structural, Machine Vision and various other growing segments

Addition of offshore lighting manufacturing capability

• Korean and Chinese facilities bring state of the art equipment and product development capabilities with minimal short-term capex requirements
• Manufacturing capabilities adds diversity and supplier surety and complements existing supply partners
• Provides support for BWI's geographic expansion

Compelling financial impact with potential longer term synergies

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• Attractive valuation and accretion metrics
• Provides a platform to sell BWI products to VX's customer base in the US and Europe
• Potential to expand VX's Australian revenue by leveraging BWI's marketing and distribution capabilities
• Opportunity to utilise VX's manufacturing to produce BWI lighting products with potential to improve margins over time