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Thursday 14 October, 2021

Rubix Group Holdings

Expected Intention to Float

RNS Number : 0665P
Rubix Group Holdings Limited
14 October 2021
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

 

This announcement is not a prospectus and not an offer of shares for sale in any jurisdiction, including in or into Australia, Canada, Japan or the United States.

 

Neither this announcement, nor anything contained herein, nor anything contained in the Registration Document referred to herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not subscribe for or purchase any shares referred to in this announcement or the Registration Document except solely on the basis of information contained in a prospectus in its final form (the "Prospectus"), including the risk factors set out therein, that may be published by a new company (the "Company") to be inserted as the ultimate holding company of Rubix Group Holdings Limited and its subsidiaries and subsidiary undertakings ("Rubix" or the "Group") in due course in connection with the possible admission of its ordinary shares to the premium listing segment of the Official List of the Financial Conduct Authority (the "FCA") and to trading on the main market of the London Stock Exchange plc (the "London Stock Exchange"). A copy of any Prospectus of the Company will, if published, be available for inspection from Rubix's website at www.rubix-group.com/investors .

 

14 October 2021

 

Rubix Group Holdings Limited

Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange

 

Rubix, the market leading pan-European distributor of industrial maintenance, repair and overhaul ("MRO") products and services [1] , announces that it is considering an initial public offering (the "IPO" or the "Offer") and that it intends to publish today a registration document (the "Registration Document"). Rubix is considering applying for admission of its ordinary shares to the premium listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange ("Admission").

 

Rubix Highlights:

· Rubix helps to keep the factories and plants of some of Europe's largest industrial companies up and running. Rubix supplies mission critical products and services for maintenance, repair and overhaul, which include mechanical power transmission components, flow technology and fluid power products, bearings, machining, cutting, tooling and general maintenance products while value-added services include both logistics and technical services.

· Rubix's operations span 22 European countries and a network of 900 locations[2], giving it greater European coverage than any of its competitors, in an industry where scale matters, providing it with the ability to serve its multi-national customers through its extensive omnichannel offering, optimise logistics and distribution operations on a European-wide scale, as well as benefit from geographical and end-market diversification.

· Rubix operates across three geographical segments, Western, Central and Northern Europe, and holds leading positions across a number of its countries or regions of operation, including France, Italy, Spain, CEE, Germany, the United Kingdom and Benelux.

· Rubix estimates the value of the highly resilient industrial MRO distribution market in its addressable geographies at approximately €91 billion in the year ending 31 December 2021. Rubix is the leading pan-European distributor of industrial MRO products and services, holding a market share in its addressable geographies of approximately 1.7 times that of the next competitor (as of 31 December 2020).

· Rubix acts as the critical link between its nearly 200,000 customers and thousands of suppliers.

-  Rubix's multi-specialist value proposition enables it to offer its customers in-depth technical advice across a comprehensive product and service offering, to help them increase uptime and efficiency, improve the sustainability of their operations, generate cost savings and ensure personnel safety.

-  For its suppliers, Rubix offers an attractive, cost-efficient solution that helps them serve an extensive, disparate customer base by reducing their go-to-market complexity.

· Rubix believes its omnichannel offering combines the best of the analogue and digital MRO distribution models, allowing it to meet the needs of customers of various sizes and establish sticky, long-term customer relationships.

· Rubix's organic growth strategy is further underpinned by a focus on the following, all of which have helped to deliver outperformance versus Rubix's underlying market[3].

-  Key Accounts: a core of highly visible recurring revenues with high growth potential

-  Network Development: highly accretive addition of existing branches

-  Digital: digital tools and virtual selling driving superior customer experience and incremental growth

-  Value-added Services: driving customer stickiness

-  Own Brand: private label offering a strong cost/performance ratio for customers

· Rubix is the natural consolidator of the highly fragmented and resilient European MRO distribution market, with a proven track record of consolidating the industry, supported by a dedicated and experienced M&A team, with a robust pipeline of opportunities in place to drive future inorganic growth.

· Rubix's scale, capabilities and long-lasting customer relationships are expected to continue to drive growth, enhance its competitive position and enable it to expand further and act as the consolidator of choice in the European market.

· Rubix has embedded sustainability throughout its business model, enabling it to reduce its own environmental footprint, and to help its customers on their sustainability journeys.

· Rubix's business model is asset-light and highly cash generative in nature, which results in strong cash conversion and continued funding for its attractive industry consolidation thesis. In the twelve months ended 30 June 2021, Rubix generated Revenue from Ongoing Operations of €2,498 million and Adjusted EBITDA from Ongoing Operations of €221 million (8.9% Adjusted EBITDA Margin from Ongoing Operations). In the six months ended 30 June 2021, Rubix generated Revenue from Ongoing Operations of €1,312 million and Adjusted EBITDA of €123 million (9.4% Adjusted EBITDA Margin from Ongoing Operations), an increase of 10.6% and 19.3% compared to the six months ended 30 June 2020, respectively. In the medium term, Rubix is targeting a net increase of approximately 300 basis points to Adjusted EBITDA Margin from Ongoing Operations compared to the year ending 31 December 2021, with a strong rebound already delivered in the six months ended 30 June 2021.

 

Martin Thomsen, CEO of Rubix, said :

"I am delighted to announce our expectation to list Rubix on the London Stock Exchange. Over the past three years, we have grown rapidly to establish Rubix as Europe's leading distributor of industrial products and services, now present in 22 markets and working with many of the biggest names in European manufacturing. We are a trusted partner that helps ensure the smooth, safe and efficient running of their operations through our extensive product range, differentiated technical advice and value-added services.

We have built a very high-quality platform at Rubix as we focus on our mission to keep the wheels of industry turning, right across Europe. Becoming a public company is the natural next step for us as we continue our growth journey. We believe we are the consolidator of choice in a growing and fragmented market, which makes our opportunities more exciting than ever in a world where the security and integrity of supply chain are a priority.

My thanks go to all of my Rubix colleagues for everything they have done to bring us this far, and for their continued hard work and commitment."

 

David Tyler, current director and expected Chair of Rubix, said:

"Rubix has a highly compelling business model with all of the attributes that I believe are necessary to achieve great success. Led by a highly experienced management team, the business model was stress tested during the pandemic and demonstrated strong resilience, proving the indispensable role Rubix plays for its customers.

Looking forward, Rubix has long-term organic opportunities to continue to grow, take market share and reinvest in the business. In addition, it has inorganic opportunities for profitable growth through continued consolidation.

Integral to our growth strategy is Rubix's ability to help drive forward customers' sustainability objectives, based on our position at the heart of their supply chains.

A listing provides an excellent platform for the next stage of Rubix's development."

 

Shonnel Malani, Managing Director at Advent International and director of Rubix, said:

"Rubix provides a superb case study demonstrating the value that can be created by carefully bringing together great businesses to create a market leader, with a strong management team, a clear growth strategy, and a robust approach to corporate governance. Rubix has a well invested platform for future growth, with a differentiated value proposition that has made the company a critical partner to some of the leading manufacturers across Europe."

 

 

 

Potential Offer Highlights:  

Should Rubix proceed with an IPO, the current expectation is that:

 

· The Company's shares would be admitted to the premium listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange.

· The Offer will comprise new ordinary shares to be issued by the Company raising proceeds equivalent to approximately €850 million, and additionally may also include the sale of existing ordinary shares by current shareholders.

· The Offer would be a targeted offering to institutional investors outside the United States pursuant to Regulation S and to QIBs in the United States pursuant to Rule 144A under the United States Securities Act of 1933 (the "Securities Act").

· Immediately following Admission, the Company would have a free float of at least 25% of issued share capital and expects that it would be eligible for inclusion in the FTSE UK indices. In addition, it is expected that up to a further 15% of the Offer will be made available pursuant to an over-allotment option.

· Any additional details in relation to the Offer, together with any changes to corporate governance arrangements would be disclosed in a Confirmation of Intention to Float announcement and/or the Prospectus, if and when published.

· Rubix has engaged Goldman Sachs International ("Goldman Sachs"), Morgan Stanley & Co. International plc ("Morgan Stanley") and Barclays Bank PLC ("Barclays") as Joint Global Coordinators, and BNP Paribas ("BNPParibas") and Jefferies International Limited ("Jefferies") as Joint Bookrunners in the event the IPO proceeds. N.M. Rothschild & Sons Limited ("Rothschild&Co") is acting as Financial Adviser to Rubix. 

A copy of the Registration Document will be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism once approved by the FCA. A copy of the Registration Document will also be available online at  www.rubix-group.com/investors , subject to certain access restrictions.

 

Access to supplemental information for bona-fide, unconnected research analysts:  Information in relation to Rubix will be made available via a link to unconnected research analysts today. Please contact Mal Patel ( [email protected] ) at Rubix if you are a bona fide research analyst and would like to receive access to the information.

 

 

Investment Highlights:

· Highly attractive market

-  Rubix operates in the large and fragmented European MRO distribution market, with exposure to diversified, attractive and growing segments.

-  Rubix estimates the MRO distribution market value in its addressable geographies at approximately €91 billion in the year ending 31 December 2021, to subsequently grow at a CAGR of approximately 4.0% to 4.5% between 2020 and 2022 driven by recovery post Covid. Rubix expects that growth will eventually settle at approximately 2.0% to 2.5% per annum between 2023 and 2026.

-  Rubix believes that the MRO market benefits from high resilience given its mission criticality and small proportion of relative costs. MRO distributors address customers' recurring need to maintain and repair their industrial asset base, with more than 90% of MRO distributors' revenue generally driven by operating expenditure rather than capital expenditure. At the same time MRO expenses represent a small proportion of a customer's total spend, making MRO volumes and prices relatively insulated from the effects of a general economic downturn. Also, with an extensive product and service range, pan-European coverage and a diversified customer base, Rubix believes that its business model benefits from strong resilience and protection against competitive threats.

-  The European MRO distribution market is highly fragmented, with a large number of small players. Larger distributors, such as Rubix, benefit from significant economies of scale and are expected by Rubix to gain market share from smaller competitors, as customers and industrial parts producers consolidate their supplier base thereby decreasing the number of industrial MRO distributors with whom they interact.

· Differentiated and sustainable value proposition

-  Rubix believes that its scale and differentiating value proposition provides high resilience compared to many of its competitors, including both conventional distributors as well as online pure players. Compared to conventional distributors, Rubix's value proposition is differentiated through its multi-specialist offering of products and services, its scale and pan-European coverage, its digital offering and its strong customer relationships. Compared to online pure players, Rubix's value proposition is differentiated through its ability to provide technical advice and value-added services, as well as its strong delivery performance and ease of doing business.

-  Rubix's operations span 22 European countries, a greater European coverage than any of its competitors, providing it with the ability to serve its multi-national customers, optimise logistics and distribution operations on a European-wide scale, as well as benefit from geographical diversification. Across the countries in which it operates, Rubix has a network of 900 locations, including 389 branches, 390 Insites, 29 distribution centres and 92 service centres (in each case as of 30 June 2021). This dense network enables regular customer engagement, driving customer intimacy and deep customer relationships, while Rubix's digital offering complements its physical footprint, providing for a true omnichannel sales model.

-  Rubix's multi-specialist value proposition enables it to offer its customers in-depth technical advice across a comprehensive product offering. Rubix offers a wide variety of products across its four product categories, comprising some of the world's major manufacturing parts, tools and engineering components brands. Rubix provides strong technical advice during the sales process with a technical sales team comprising approximately 2,200 members (as of 30 June 2021). In addition, Rubix provides value-added services with a team of approximately 880 service experts (as of 30 June 2021), to help customers increase uptime and efficiency, drive operational improvements, generate cost savings and ensure personnel safety, among other benefits.

-  Rubix has embedded sustainability throughout its business model, as well as its continuous improvement programme. As the market leading pan-European distributor of industrial MRO products and services, Rubix believes it has both the opportunity and the responsibility to reduce the environmental impact of European manufacturing. Rubix's focus on environmental initiatives includes reducing both its and its customers' greenhouse gas emissions, by reducing the use of energy, packaging, water and other resources, as well as reducing the waste that is produced. Rubix provides a strong service offering helping its customers reduce their environmental footprint.

 

· Organic growth and returns

-  Rubix has six defined levers that it believes will drive organic growth and returns over the years to come.

Key accounts: Rubix has a strong focus on key account customers, which represent selected large customers with whom it has strategic relationships, a framework contract in place, a total annual revenue potential generally in excess of €2 million, and sufficiently centralised procurement to implement the contract across multiple sites and countries. These accounts offer a strong core of visible, recurring revenues with high growth potential. Given Rubix's pan-European scale with dedicated key account teams, as well as its multi-category expertise and technical services, advanced digital offering and a long-standing track record of delivering cost savings and high-quality products at competitive prices, Rubix believes that its business structure and value proposition are well aligned to the needs of key account customers compared to competitors. Driven by its strong focus on key accounts, Rubix has continued to grow its key account customer base, winning 10 new European key account contracts in the six months ended 30 June 2021 and 11 in the year ended 31 December 2020 (despite the adverse impact of Covid) while achieving a nearly 100% retention rate for existing European key accounts over the period.

Network Development: Faced with the option of buying or building new branch capacity, Rubix captures incremental organic growth share via Network Development, which represents the purchase of one or multiple branches with annualised revenue of less than approximately €10 million. Rubix has a consistent track record of Network Development activity, with a long-standing track record in France and Benelux, and a more recent series of successful additions in other countries of operation, including the United Kingdom and Italy. As of 30 June 2021, Rubix's list of potential targets for Network Development in the medium term comprised more than 500 opportunities in key European geographies, which Rubix estimates have a combined revenue opportunity of approximately €2.7 billion per annum.

Omnichannel: Rubix believes it has a scalable, highly defensible omnichannel sales model that combines the best of the analogue and digital MRO distribution models. The density of Rubix's branch network enables it to retain close proximity to its customer sites, such that it can deliver technical advice and expertise on site, while its digital offering enables it to offer customers a seamless experience, resulting in reduced complexity, greater convenience, more efficient order placing and, consequently, higher customer satisfaction. In addition, Rubix's digital offering helps increase customer stickiness and make it costlier for customers to switch to a different supplier, reducing churn rates whilst increasing customers' average number of orders per annum, as well as the average number of SKUs ordered. For Rubix, strong digital capabilities allow for integration with customer processes, increase efficiency in order-taking and tracking, and generate cost and operational efficiencies. A key part of Rubix's strategy is to build a €1.5 billion digital business in the medium term, which not only drives cost efficiencies, but also strengthens the omnichannel offering, in turn driving further organic growth.

Own brand: In addition to third-party brands, Rubix also supplies a variety of products under its own-brand range, offering mid-range and premium solutions across Rubix's four product categories. Own brand sales grew from approximately 3% in 2017[4] to nearly 6% in the twelve months ended 30 June 2021, representing a CAGR of 22% . Own brands aid margin upside as they provide higher gross margin compared to similar third-party branded products.

Services: Rubix's commitment to providing a comprehensive range of high-quality value-added services has enabled it to deliver strong growth in revenue from services, which has in recent periods grown faster than Rubix's overall growth, a trend which Rubix expects will continue over the medium term. Rubix estimates that, in the years ended 31 December 2018 and 2020 and the six months ended 30 June 2021, approximately 20%, 22% and 24% of Rubix's total revenue was Service-enabled Revenue. Additionally, value-added services typically generate higher gross margins than product sales alone.

Continuous improvement: Rubix has had a relentless focus on optimising operations, which has provided a clear margin opportunity through consolidation of branches and the logistics footprint, increase in own brand penetration, and increase in sales productivity through virtual sales and automation of back-office processes. In the medium term, Rubix is targeting an increase of approximately 300 basis points to Adjusted EBITDA Margin from Ongoing Operations (net of potential headwinds) compared to the year ending 31 December 2021, with a strong rebound already delivered in the six months ended 30 June 2021. Rubix intends to drive this margin expansion through continuous improvement initiatives and operational leverage, as well as further synergy generation and margin accretion from acquired businesses.

· M&A platform

-  Rubix believes it is the natural consolidator of the highly fragmented MRO distribution market, with a proven track record and a dedicated and experienced M&A team in place.

-  Strategic Acquisitions have been an integral part of Rubix's strategy and business model for many years, and it has a long history of consolidating them. Rubix's strategy for Strategic Acquisitions is primarily executed by its dedicated merger and acquisition team, which, as of 30 June 2021, comprised eight central and two in-country members, supported by 16 members from dedicated local and regional teams, as well as Rubix's legal and finance teams and its senior management.

 

-  Rubix seeks to generate both revenue and cost synergies post acquisition. Revenue synergies include cross-selling opportunities, as well as an improvement of service capability for key accounts through a wider product offering, service offering and/or local presence in new geographies. Cost synergies include operational efficiencies, driven primarily by scale, as well as purchasing synergies, driven primarily by stronger purchasing power, by branch and distribution centre consolidation and/or back-office optimisation.

 

As of 30 June 2021, Rubix's Strategic Acquisition pipeline comprised 346 potential Strategic Acquisition opportunities, which Rubix estimates have a combined revenue opportunity of approximately €16.3 billion per annum. Rubix's pipeline for the six months ending 31 December 2021 includes six potential Strategic Acquisitions, which Rubix estimates have a combined revenue opportunity of approximately €160 million per annum.

· Strong financial profile

-  Rubix has exhibited a highly-attractive financial profile over the historic period. In the twelve months ended 30 June 2021, Rubix generated Revenue from Ongoing Operations of €2,498 million and Adjusted EBITDA from Ongoing Operations of €221 million. In the six months ended 30 June 2021, Rubix generated Revenue from Ongoing Operations of €1,312 million and Adjusted EBITDA from Ongoing Operations of €123 million, an increase of 10.6% and 19.3% compared to the six months ended 30 June 2020, respectively.

-  Rubix believes that its business model, in particular the value generated for customers through technical advice and value-added services, coupled with efficient operations and economies of scale, support its attractive margin profile and provide further profitability upside. This is supported by a strong track record of improving margins through a number of operational improvement initiatives, as well as strategic initiatives, that Rubix has implemented. For instance, Rubix's Adjusted EBITDA Margin from Ongoing Operations increased from 7.1% in the year ended 31 December 2017[5], to 8.6% in the year ended 31 December 2018 (representing an increase of 151 basis points), to 9.4% in the year ended 31 December 2019 (representing an increase of 79 basis points). In the year ended 31 December 2020, Adjusted EBITDA Margin from Ongoing Operations decreased to 8.5% (representing a decrease of 90 basis points), impacted by Covid. In the six months ended 30 June 2021, Adjusted EBITDA Margin from Ongoing Operations increased to 9.4%, compared to 8.7% in the six months ended 30 June 2020 (representing an increase of 68 basis points).

-  Rubix believes that another key strength of its business model is its asset-light and cash generative nature, which result in strong cash conversion (supporting the attractive consolidation thesis) and which strengthen resilience. Resilience in Rubix's cash flow profile is further driven by a flexible cost base and anti-cyclical working capital requirements, which release cash during a downturn, primarily through de-stocking.

· Experienced management team with relevant experience and proven track record

-  Since the IPH-Brammer merger in September 2017, a new leadership team has been introduced that has successfully driven the integration of the two companies and delivered strong operational improvements.

-  The CEO, Martin Gaarn Thomsen, has 25 years of industry experience at ISS (most recently as chief operating officer), Coca-Cola Nordic and PA Consulting. He has a strong track record of delivering customer-driven organisational transformation and building scalable organisations through expansion into new markets and geographies and driving growth through mergers and acquisitions.

-  The CFO, Andrew Silverbeck, has more than 30 years of experience in various finance roles at ERM (previously chief financial officer for 12 years), Lendlease, P&O and Arthur Andersen and a strong track record of driving significant profitable growth and shareholder value.

-  The COO, Gatien Gillon, has more than 15 years of experience in various roles at McKinsey, Bain Capital and Securitas Direct. He has significant experience in driving operational efficiencies and has successfully driven the IPH-Brammer integration which formed the foundation of the Rubix business.

 

 

 

Financial Information

 

Key performance indicators

The table below sets out certain of the key metrics monitored by the Group to assess the financial and operating performance of its business:

 

Year ended

31 December

Six months ended

30 June

 

(€ million, unless otherwise indicated)

(unaudited)

 

 

2018

2019

2020

2020

2021

Revenue from Ongoing Operations...........................................

2,276.2

2,399.5

2,372.1

1,186.5

1,312.1

 

Gross Profit from Ongoing Operations.....................................

708.5

751.5

727.6

362.7

408.1

 

Gross Profit Margin from Ongoing Operations.........................

31.1%

31.3%

30.7%

30.6%

31.1%

 

Adjusted EBITDA from Ongoing Operations...........................

195.7

225.4

201.5

103.3

123.2

 

Adjusted EBITDA Margin from Ongoing Operations...............

8.6%

9.4%

8.5%

8.7%

9.4%

 

            

 

Consolidated income statement

The tables below set out the Group's summary financial information for the periods indicated, as reported in accordance with UK adopted international accounting standards ("IFRS").

 

Year ended

31 December

Six months ended

30 June

 

(€million)

 

2018

2019

2020

2020

2021

 

 

 

 

(unaudited)

 

Revenue.....................................................................................

2,306.8

2,414.4

2,377.5

1,189.3

1,314.3

Cost of sales...............................................................................

(1,588.6)

(1,657.6)

(1,647.6)

(825.4)

(905.4)

Gross profit...............................................................................

718.2

756.8

729.9

363.9

408.9

Sales, distribution and administration costs................................

(716.8)

(708.6)

(722.2)

(350.7)

(387.2)

Operating profit........................................................................

1.4

48.2

7.7

13.2

21.7

 

 

 

 

 

 

Finance expense.........................................................................

(97.4)

(102.2)

(88.8)

(60.2)

(62.2)

Finance income..........................................................................

13.8

1.9

3.1

0.1

0.4

 

 

 

 

 

 

Loss before tax..........................................................................

(82.2)

(52.1)

(78.0)

(46.9)

(40.1)

 

 

 

 

 

 

Taxation.....................................................................................

(7.6)

(5.7)

11.6

2.7

7.6

Loss for the year / period attributable to equity shareholders.

(89.8)

(57.8)

(66.4)

(44.2)

(32.5)

 

 

Consolidated balance sheet

 

As at

31 December

As at 30 June

 

(€million)

 

2018

2019

2020

2021

Assets

 

 

 

 

Non-current assets

 

 

 

 

Goodwill..........................................................................................

912.8

1,023.0

1,067.3

1,154.4

Intangible assets..............................................................................

495.5

486.2

439.9

418.0

Other non-current assets..................................................................

12.6

16.1

11.0

15.0

Property, plant and equipment.........................................................

64.9

68.5

66.5

69.4

Right of use assets...........................................................................

119.7

140.4

119.1

112.2

Deferred tax assets..........................................................................

7.1

8.9

10.7

19.0

Total non-current assets.................................................................

1,612.6

1,743.1

1,714.5

1,788.0

 

Current assets

 

 

 

 

Inventories......................................................................................

316.6

358.4

343.5

368.3

Trade and other receivables.............................................................

265.9

279.3

278.6

363.5

Cash and cash equivalents...............................................................

101.5

120.1

186.5

80.9

Derivative financial instruments......................................................

7.4

6.8

26.2

17.8

Current tax assets............................................................................

6.0

19.5

9.7

10.8

Current assets.................................................................................

697.4

784.1

844.5

841.3

Total assets.....................................................................................

2,310.0

2,527.2

2,559.0

2,629.3

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Borrowings......................................................................................

(65.8)

(126.6)

(124.7)

(170.9)

Trade and other payables.................................................................

(405.9)

(479.5)

(464.1)

(528.6)

Derivative financial instruments......................................................

(2.2)

(1.4)

(3.9)

(1.4)

Provisions.......................................................................................

(5.6)

(5.2)

(9.1)

(6.0)

Deferred and contingent consideration

(2.6)

(13.2)

(8.0)

(10.3)

Current tax liabilities........................................................................

(5.2)

(23.2)

(17.4)

(21.7)

Lease obligations.............................................................................

(36.1)

(43.7)

(41.2)

(40.7)

Current liabilities............................................................................

(523.4)

(692.8)

(668.4)

(779.6)

Net current assets...........................................................................

174.0

91.3

176.1

61.7

 

 

 

 

 

Non-current liabilities

 

 

 

 

Borrowings......................................................................................

(1,009.7)

(1,068.3)

(1,220.5)

(1,211.7)

Deferred tax liabilities......................................................................

(71.0)

(69.0)

(45.6)

(40.4)

Provisions.......................................................................................

-

-

(4.3)

(4.1)

Deferred and contingent consideration.............................................

(1.1)

(10.5)

(9.9)

(7.2)

Retirement benefit obligations..........................................................

(54.6)

(66.7)

(62.5)

(36.3)

Lease obligations.............................................................................

(88.2)

(102.7)

(87.0)

(82.7)

Preference share liabilities...............................................................

(193.1)

(224.0)

(233.2)

(257.7)

Total non-current liabilities............................................................

(1,417.7)

(1,541.2)

(1,663.0)

(1,640.1)

Total liabilities................................................................................

(1,941.1)

(2,234.0)

(2,331.4)

(2,419.7)

Net assets........................................................................................

368.9

293.2

227.6

209.6

 

 

 

 

 

Capital and reserves

 

 

 

 

Issued capital...................................................................................

-

-

-

-

Share premium................................................................................

523.9

551.5

520.4

547.7

Cash flow hedging reserve...............................................................

(0.9)

(0.5)

0.2

-

Translation reserve..........................................................................

14.4

(21.5)

12.6

(19.5)

Accumulated losses.........................................................................

(169.0)

(236.3)

(305.6)

(318.6)

Equity attributable to owners of the parent

368.4

293.2

227.6

209.6

Non-controlling interest...................................................................

0.5

-

-

-

Total equity....................................................................................

368.9

293.2

227.6

209.6

Summary consolidated cash flow statement

 

Year ended

31 December

Six months ended

30 June

 

(€ million)

 

2018

2019

2020

2020

2021

 

 

 

 

(unaudited)

 

Net cash generated from/(used in) operating activities..............................................................

72.2

141.5

61.7

(8.7)

(0.9)

Net cash used in investing activities....................

(80.4)

(188.3)

(105.1)

(47.0)

(115.8)

Net cash generated from financing activities........

31.0

43.0

75.3

105.2

21.8

Net movement in cash and cash equivalents......

22.8

(3.8)

31.9

49.5

(94.9)

Exchange gain/(loss) on cash and cash equivalents..........................................................

(0.5)

0.7

(0.6)

-

0.4

Net cash at beginning of the year/period..............

58.7

81.0

77.9

77.9

109.2

Net cash at end of the year/period.....................

81.0

77.9

109.2

127.4

14.7

 

 

NON-IFRS MEASURES AND CERTAIN CAPITALISED TERMS

Revenue from Ongoing Operations: Rubix's revenue, less revenue attributable to the Exited Businesses.

 

Gross Profit from Ongoing Operations: Rubix's gross profit, less gross profit attributable to the Exited Businesses.

 

Gross Profit Margin from Ongoing Operations: the ratio of Gross Profit from Ongoing Operations to Revenue from Ongoing Operations, expressed as a percentage.

 

Adjusted EBITDA from Ongoing Operations:Rubix's profit or loss before depreciation and amortisation, finance income and finance expense, income tax, acquisition related costs, and exceptional items, excluding also Adjusted EBITDA of the Exited Businesses. In addition, Adjusted EBITDA from Ongoing Operations for the first half of each financial year excludes accruals for holiday pay, as these reverse at year end.

 

Adjusted EBITDA Margin from Ongoing Operations: the ratio of Adjusted EBITDA from Ongoing Operations to Revenue from Ongoing Operations, expressed as a percentage.

 

Service-enabled Revenue: Rubix's revenue that is enabled by: (i) products sold through a complementary service offering, such as products sold through Insites, vending machines and kiosk solutions, as well as replacement parts when repair is not feasible, (ii) services associated or provided in combination with product sales, such as product customisation and assembly activities covering both basic customisation and more advanced engineering solution, as well as vending fees and maintenance activities, and (iii) technical service activities that are distinct from product sales, such as air leakage surveys, condition monitoring, audits, trainings and repair services which Rubix provides to its customers. Service-enabled Revenue is measured by Rubix by identifying service business units and estimating the proportion of the identified business unit's total revenue that satisfies the foregoing criteria.

 

Exited Businesses: businesses or operations that Rubix disposed of, discontinued, or was in the process of disposing in the period from 1 January 2018 to 30 June 2021.

 

Network Development:the purchase of one or multiple branches with annualised revenue of less than approximately €10 million, which Rubix executes with the primary goals of gaining faster access to customers, new customer segments and experienced staff with local relationships.

 

Strategic Acquisitions: acquisitions of businesses with approximately €10 million or more of annualised revenue, which Rubix undertakes with the primary goal to drive growth, increase its market share and expand the scale and breadth of its products and services.

 

Enquiries:

Tulchan (Public Relations adviser to Rubix)

Martin Robinson / Harry Cameron

+44 (0)2073534200

 

Joint Global Coordinators

 

Goldman Sachs (Joint Sponsor)

Richard Cormack / John Wilkinson / Eduard van Wyk / Louise Courtney / Franziska Schulte

+44 (0)207 774 1000

 

Morgan Stanley (Joint Sponsor)

Martin Thorneycroft / Gwen Billon / Angus Millar / Duncan Williamson / Emma Whitehouse

+44 (0)207 425 8000

 

Barclays

Tom Johnson / Richard Probert / Lawrence Jamieson / Rob Mayhew / Anjaneya Shiroor

+44 (0)207 623 2323

 

FinancialAdviser

 

Rothschild & Co

Aadeesh Aggarwal / Peter Nicklin / Shannon Nicholls / Manasa Madhvan

+44 (0)207 280 5000

 

Joint Bookrunners

 

BNP PARIBAS

+44 (0)207 595 2000

 

Jefferies

+44 (0)207 029 8000

 

 

FURTHER INFORMATION ON THE GROUP

Board Information 

 

Should the Company proceed with an IPO, the following individuals are expected be the directors of the board of the Company at Admission.

 

The Company is also actively recruiting additional independent directors, including a senior independent director and chair of the audit committee, to ensure the composition of the board and its committees are compliant with the Governance Code in due course.

 

 

 

 

David Tyler (Chair)

 

David is expected to be appointed as Chair from Admission, having been a non-executive director of Rubix Group Holdings Limited since January 2021. David has over 45 years of experience in both executive and non-executive roles at a variety of businesses across the consumer, retail, business services and financial services sectors. David began his career at Unilever before progressing through a series of senior finance and general management roles at NatWest, Christie's and GUS (the owner of Experian, Burberry and Home Retail Group prior to their demerger). David is an experienced chair having served in this role at major UK public companies, including Sainsbury's, Hammerson and Logica. He has also been chair of a subsidiary of 3i and of Hampstead Theatre, and a non-executive director at Burberry, Experian and Reckitt Benckiser. David is also currently the non-executive chair of Domestic & General Ltd and the non-executive chair of The White Company Holding Co Limited. He has a Master of Arts Degree from the University of Cambridge in Economics. David is a Fellow of the Chartered Institute of Management Accountants and a Member of the Association of Corporate Treasurers.

 

Martin Gaarn Thomsen (Chief Executive Officer)

 

Martin was appointed as Chief Executive Officer of the Group in April 2018. Before joining the Group, Martin served as chief operating officer for ISS A/S, one of the world's leading facilities services companies with more than 480,000 employees and activities in over 70 countries. Before that, Martin was chief executive officer of ISS in Denmark. In this role, Martin led a major transformation of the home market of ISS, delivering significant improvements in employee engagement, customer satisfaction, sales growth and profitability. He also held positions in ISS as regional chief executive officer of western Europe and regional chief executive officer of Asia and Pacific, expanding the business into five new markets and turning the region into high growth and high profitability across 13 countries. Before joining ISS in 1999, Martin worked with Coca-Cola and PA Consulting Group. Martin holds a Master's degree in Economics from the Copenhagen Business School.

 

Andrew Silverbeck (Chief Financial Officer)

 

Andrew was appointed as Chief Financial Officer of the Group in March 2019. Before joining the Group, Andrew was the chief financial officer of Environmental Resources Management, the world's leading environmental and sustainability consulting firm, for 12 years. Andrew qualified as a chartered accountant with Arthur Andersen, working in both the United Kingdom and the United States, and went on to hold senior finance roles at P&O before joining Lendlease, where he held a number of positions, including global chief financial officer of its construction business, Bovis Lend Lease (now Lendlease Project Management & Construction). Andrew holds a Master's degree in Mathematics from Oxford University and a post-graduate degree in Mathematical Statistics from Cambridge University.

 

Jennifer Ward (Independent Non-Executive Director)

 

Jennifer is expected to be appointed as Independent Non-Executive Director from Admission. Jennifer is chief talent, culture and communications director of Halma plc, where she has global responsibility for talent and culture as well as internal and external communications and brand across Halma. She joined Halma in April 2014, becoming an executive director of Halma plc in October 2016. Prior to joining Halma, Jennifer spent over 15 years leading human resources, talent and organisational development for divisions of PayPal, Bank of America and Honeywell. Jennifer holds a Master's degree in in Human Resources and Labour Relations from Michigan State University and a Bachelor of Science degree in Business Management, minor in Psychology, from Oregon State University.

 

 

 

 

 

Johan Sleebus (Non-Executive Director)

 

Johan is expected to be appointed as Non-Executive Director from Admission, having been chair of Rubix Group Holdings Limited since September 2017. Johan also served as interim chief executive officer of the Group until April 2018. Before that, he was chair and interim chief executive officer of Brammer Limited. Johan has significant experience in the industrial parts market, having started working for Baudoin NV as a sales and marketing manager in 1993. Following its acquisition by Eriks in 2004, he was appointed managing director of Baudoin. At the beginning of 2010, Johan was appointed as member of the executive board of Eriks NV and in July 2011 he became chief executive officer and chair of its executive board, a position he held until 2014, when he left Eriks. Johan co-owns and is a director of Belgian interior design firm Schevenels Project Interieurs. Johan holds a Master's degree in Applied Economics from the University of Antwerp.

 

Shonnel Malani (Non-Executive Director)

 

Shonnel is expected to be appointed as a Non-Executive Director from Admission, having been a non-executive director of Rubix Group Holdings Limited since September 2017. Shonnel joined Advent in 2011 focusing on buyouts in the industrial sector. He has been a private equity investor since 2004, working primarily on large and mid-cap buyouts at Bain Capital and Centerbridge Partners, prior to joining Advent. Shonnel began his career as an investment banker with Morgan Stanley. Shonnel is currently also chairman of Cobham Limited and a non-executive director of AI Ladder Limited (Laird). Shonnel holds a Bachelor of Commerce from McGill University, a Master of Business Administration from the Wharton School and a Master of Public Administration from the Fels Institute of Government at the University of Pennsylvania.

 

 

 

 

 

 

IMPORTANT LEGAL INFORMATION

 

The contents of this announcement, which have been prepared by and are the sole responsibility of Rubix, have been jointly approved by Goldman Sachs International ("Goldman Sachs") and Morgan Stanley & Co. International plc ("Morgan Stanley") solely for the purposes of Section 21(2)(b) of the Financial Services and Markets Act 2000, as amended.

 

The Registration Document, which will be made available to the public in accordance with the Prospectus Regulation Rules of the FCA, has been prepared for the purpose of providing information on the Company and the Group and may be combined with a securities note and summary to form a prospectus in accordance with the Prospectus Regulation Rules of the FCA. However, the Registration Document, where not combined with the securities note and summary to form a prospectus does not constitute a prospectus, nor an offer or invitation to sell or issue, or a solicitation of an offer or invitation to purchase or subscribe for, any securities in the Company, in any jurisdiction, including in the United States, Australia, Canada, Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

 

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. Each of Goldman Sachs, Morgan Stanley and Barclays Bank PLC ("Barclays") are authorised by the Prudential Regulation Authority (the "PRA") and regulated by the FCA and the PRA in the United Kingdom. BNP PARIBAS ("BNP PARIBAS"), is supervised by the European Central Bank (the "ECB") and the Autorité de Contrôle Prudentiel et de Résolution (the "ACPR") (and BNP Paribas' London Branch is authorised by the ECB, the ACPR and the PRA and subject to limited regulation by the FCA and the PRA). Jefferies International Limited ("Jefferies" and together with BNP Paribas, Goldman Sachs, Morgan Stanley and Barclays, the "Banks") and N.M.Rothschild & Sons Limited (the "Financial Adviser") are authorised and regulated by the FCA in the United Kingdom. The Banks and the Financial Adviser are acting exclusively for the Company and no one else in connection with the Offer and will not regard any other person(s) (whether or not a recipient of this announcement) as their respective clients in relation to the Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offer or any transaction, matter, or arrangement referred to in this announcement or the Registration Document to be published in connection with the Offer.

 

In the European Economic Area (the "EEA"), this announcement is only addressed to and directed at persons in member states of the EEA who are "qualified investors" within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (as amended) ("Qualified Investors"). In the United Kingdom, this announcement and the Offer are only addressed to and directed at persons who are "qualified investors" within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (as amended), which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018, who are also: (A) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (B) high net worth entities falling within Article 49(2)(a) to (d) of the Order; or (C) are other persons to whom it may otherwise lawfully be communicated (all such persons referred to as "Relevant Persons"). This announcement must not be acted or relied on: (i) in the United Kingdom, by persons who are not Relevant Persons; and (ii) in any member state of the EEA by persons who are not Qualified Investors. Any investment activity to which this announcement relates: (i) in the United Kingdom is available only to, and may be engaged in only with, Relevant Persons; and (ii) in any member state of the EEA is available only to, and may be engaged only with, Qualified Investors.

 

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America, Australia, Canada, Japan or South Africa. This announcement is not an offer of securities for sale into the United States, Australia, Canada, Japan or South Africa. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States. The securities may not be offered or sold in the United States, except pursuant to an applicable exemption from the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. No public offering of the securities referred to herein is being made in the United States.

 

This announcement may include forward-looking statements, which are based on current expectations and projections about future events. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target", "believe", "expect", "aim", "intend", "may", "anticipate", "estimate", "plan", "project", "will", "can have", "likely", "should", "would", "could" and any other words and terms of similar meaning or the negative thereof. These forward-looking statements are subject to risks, uncertainties and assumptions about Rubix and its subsidiaries and its investments, including, among other things, the development of its business, trends in its operating environment, and future capital expenditures and acquisitions. The forward-looking statements in this announcement speak only as at the date of this announcement. These statements reflect the beliefs of Rubix's directors (including based on their expectations arising from pursuit of the Group's strategy) as well as assumptions made by Rubix's directors and information currently available to Rubix. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate and none of Rubix, the Banks, the Financial Adviser nor any member of the Group, nor any of their respective affiliates or their respective directors, officers, employees, agents and/or advisors, nor any other person(s) accepts any responsibility for the accuracy or fairness of the opinions expressed in this announcement or the underlying assumptions. Actual events or conditions are unlikely to be consistent with, and may differ significantly from, those assumed. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur. No representation or warranty is made by Rubix, the Banks and/or the Financial Adviser that any forward-looking statement will come to pass. No-one of Rubix, the Banks and/or the Financial Adviser undertake to update, supplement, amend or revise any forward-looking statements. You are therefore cautioned not to place any undue reliance on forward-looking statements.

 

Any subscription or purchase of Shares in the possible Offer should be made solely on the basis of information contained in the Prospectus which may be issued by the Company in connection with the Offer. The information in this announcement is subject to change. Before subscribing for or purchasing any shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus, if published. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Neither this announcement, nor anything contained in the Registration Document, shall constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to acquire, whether by subscription or purchase, any Shares or any other securities, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever.

 

The Company may decide not to go ahead with the possible Offer and there is therefore no guarantee that a Prospectus will be published, the Offer will be made or Admission will occur. Potential investors should not base their financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making investments should consult an authorised person specialising in advising on such investments. Neither this announcement, nor the Registration Document, constitutes a recommendation concerning a possible offer. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of a possible offer for the person concerned.

 

Nothing contained herein constitutes or should be construed as (i) investment, tax, financial, accounting or legal advice; or (ii) a representation that any investment or strategy is suitable or appropriate to your individual circumstances; or (iii) a personal recommendation to you.

 

Neither the Banks, the Financial Adviser nor any of their respective affiliates and/or any of their or their affiliates' respective directors, officers, employees, advisers and/or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to, the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from this announcement) and/or any other information relating to Group and/or its associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

 

In connection with the withdrawal of the United Kingdom from the European Union, the Banks and the Financial Adviser may, at their respective discretion, undertake their respective obligations in connection with the potential Offer through any of their respective affiliates based in the EEA.

 

Unless otherwise indicated, market, industry and competitive position data are estimates (and accordingly, approximate) and should be treated with caution. Such information has not been audited or independently verified, nor has the Company ascertained the underlying economic assumptions relied upon therein. Certain data in this announcement, including financial, statistical, and operating information has been rounded. As a result of the rounding, the totals of data presented in this announcement may vary slightly from the actual arithmetic totals of such data. Percentages in tables may have been rounded and accordingly may not add up to 100%.

 

For the avoidance of doubt, the contents of Rubix's website, including the websites of Rubix's business units, are not incorporated by reference into, and do not form part of, this announcement.

 

 

[1] By reference to Rubix's addressable geographies.

[2] Including co-location of different location types at one physical location, such as co-location of branches and service centres.

 

[3] Based on Rubix's estimates

[4] Assuming IPH had been part of the Group for the entire year.

[5] Assuming IPH had been part of the Group for the entire year

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