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Overview Of Service

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  1. 1. Motorczar Ltd- overview of servicesContact: Sid HopperTel: +44 77887 822348Email: 1
  2. 2. Automotive ServicesOur dedicated automotive service offeringMotorczar is dedicated to the Automotive sector – this covers theentire supply chain from component and sub assembly producersthrough to franchised garages, independent garage operations,fleet, vehicle repair, and the aftermarket.Our industry knowledge means we have a full understanding ofyour business and we are better placed to assist you.We offer a range of services including:• Strategic planning and implementing change• Sales, acquisitions and due diligence• Management due diligence• Post transaction support• Dealer health checks• Dealer performance improvement• Restructuring, operational and financial• Contingency planning• Working capital improvement• Accelerated M&A• Turnaround• Interim management• Non-executive appointments. © Motorczar
  3. 3. Overview Of Motorczar Core Services Performance Improvement Transaction Services Restructuring Services Other Advisory Services Services • Sell side advisory work • Strategic support to dealers • Interim management. • Post transaction support. including the management of and dealer groups plus • Preparation and sale of • Non-executive appointments. disposal of businesses. implementation of action insolvent Companies using plans. • Independent business • Buy side advisory work UK Insolvency law. reviews. including assisting with • One day reviews to identify • Advice on foreign Management Buy Outs, third issues to be addressed and • External stakeholder restructuring regimes. party acquisitions and review options. stabilisation and company mergers. • Implications of insolvency management. • Automotive health check of law on directors, • Vendor and/or purchaser dealer operations. • Debt advisory work including manufacturers, customers financial due diligence. balance sheet restructuring, • Management due diligence and suppliers. solvency and security • High level commercial due and improvement. • Advice to creditors of reviews. diligence. • Operational and financial insolvent companies, • Contingency planning to • Cash and stakeholder turnaround. including asset recovery. ensure continuity of stabilisation of distressed • Third party assurance • Orderly wind downs, solvent operations. businesses. reviews to validate business and insolvent. • Independent thought • Accelerated M&A, solvent projects for stakeholders. • Debt collection services of a leadership and research. and insolvent. • Working capital management Company’s receivables • Organisational and strategic • Supporting CF transactions and improvement. ledger. change both company and through commercial and creditor side. sector knowledge. • Refinancing of operations and/or vehicle stocks. © Motorczar
  4. 4. Where Have We Done It Before?Colebrook &Barons BMW Berry BMW Newtown UK OEM Tom Richard Rees Caddick £ undisclosedBurgess M&A of aAccelerated Vehicle Rentals Restructuring advisor to Walkinshaw Alexander Garages Systems Acquisition of manufacturer looking to Group Limitedcirca £140m t/o dealerBank exposure c£ based in SE Advisor to the MBI team on Restructuring advisor to consolidate its downwards Racing Distressed M&A of £168m Distressed M&A of VW their acquisition of certain VWFS. t/o dealer group following dealer group with t/o ofRestructuring andEngland. of the West London BMW supply chain. Restructuring advisor to vehicle stock fraud of £20m £50m.turnaround advisor to Other syndicate lenders management team facingBusinesses and assets operations of HR Owen Identified critical issue in c£4m.AM100 dealer group with Plc. had cumulative exposure restructuring plan thus issues resulting from: Bank exposure Garic Ltd Acquisition of c£2m, bankwere sold to Group 1 of c£96m.t/o of £90m following Bank exposure £8m+, fully repaid.generating sufficient mitigating a potential • failure of Arrows Formulaunexpected losses of Deal size undisclosed bank fully repaid.proceeds to pay all Recommended support to £26m liability. 1 team; and£1.4m.Turned around tocreditors in full and mitigate potential lossesprofits of £0.4m within 12 • a downturn in itsprovide for a return to to all vehicle lenders.months. engineering business.shareholders.Dixons Motors Derek Woodman TRW John Fox £ undisclosed Audi SW £ undisclosed Prestige Dealer £ undisclosed Risk advisor to European Bank exposure Systems Acquisition of c£3m CF and turnaround advisor Acquisition of Systems Review of newly opened Acquisition of Systems purchasing team Group Limited to two Limited loss making Group heavily operation in a statement Group LimitedBank exposure of c£24m. Solvent sale of an Turnaround advisor with controlling a budget of VW/Audi dealer groups, site. Bank exposure £3m. underperforming specific remit to improveLead member of team BMW/Mini business $8bn per year. £20m short term cash flow £20m both banked by RBS. £20m As a result of the reviewresponsible for pre- Exposure c£6m. resulting in full Project involved traning forecasting of Garic Ltd Acquisition and working Acquisition of Garic Ltd we negotiated Garic Ltd Acquisition of additionalreceivership planning, repayment to the Bank, in risk management and capital management. Project involved merger financial and operationalliaison with OEMs & stock exposure c£4m. implementation of Improvement of £2.5m in of both businesses and support from thefunders, plus advising on procedures within the eight weeks. acquisition of another to sale. business form a market area, plus We also worked with the refinancing. Bank fully dealer to identify cost repaid. savings and efficiencies. © Motorczar
  5. 5. Where Have We Done It Before?Sandicliffe Georg von Opel £ undisclosed MG Rover £ undisclosed Volume Multi Donovan MotorhouseMulti-franchise dealer Restructuring advisor to Acquisition of Systems CF and restructuring Acquisition of Systems Franchise Restructuring advisor togroup t/o £175m. IBR and Adam Opel AG. Exposed Group Limited advisorLimited Group to SAIC. UK prestige dealer group. Review of the business for Restructuring advisor torestructuring advice with to German dealer group. Project involved Bank, exposure £4m+, Project involved independent used carspecific emphasis on cash £20m Project involved cash £20m reviewing and operations in Basingstoke, stakeholder management, operator.forecasting and management and Ltd Acquisition of Garic commenting on the MG Acquisition of Garic Ltd Loughborough and facilitated sessions withmanagement. As part of the project reviewing the German Rover restructuring plans Coalville. director/managers of used stock funding wasBank working capital restructuring plan as part of a negotiation of business, creation and Key challenges were reduced from £12m toforecast exposure of £8m submitted by accountants a potential joint venture. implementation of under utilisation of sites £7m.reduced to £4m. to support an insolvency. turnaround plan. and uncertainty regarding As a result of our work future of GM Europe. insolvency was avoided.Richard Pontiac Coil Aston Green £ undisclosed Project Burger £ undisclosed Project Team £ undisclosedAlexander Restructuring advisor to 24 month project Investment by Fresca Acquisition of Maven Advisor to global Acquisition of Systems Advisor to global Acquisition of Systems US parent and PNC Bank including post acquisition Capital Partners in John Limited automotive company on Group Limited automotive company on Group LimitedDistressed M&A of £168m based in Detroit. Parent support, IBRs, cash flow McGavigan Limited to its potential distribution future changes to thet/o dealer group followingvehicle stock fraud of was guarantor to bank of +$1.2m of UK liabilities. f’csting and management, finance setting up of £20m strategies within the EU £20m management assessment negotiating OEM support, Chinese production programmes for futurec£4m. Worked to create and recruitment, turnaround facility Acquisition of Garic Ltd dealer candidates Ltd Acquisition of GaricBank exposure £8m+, and eventual sale of implement closure planbank fully repaid. business. Bank exposure which reduced actual liability of parent to c£3m, fully repaid. under $100k. © Motorczar
  6. 6. Appendices- AutoLite and Business Change © Motorczar
  7. 7. Our approach – AutoLite Stakeholder Desktop Site Visit Options & Next Briefing Steps  High level review of historic  Meet with dealer to obtain Obtain background from OEM results including this year’s background and understand their  Set out summary of key findings, Understand key observations, management figures issues and agenda conclusions, options andissues and OEM agenda  High level review of forecasts  Demonstrate our industry implications in agreed format Identify other key stakeholders knowledge and track record  High level review of cash  Agree with management the keyand potential agendas generation/ absorption  Discuss other key stakeholders facts and conclusions Agree basis of communication and understand their agendas  Send out automotive healthcheck  Recommendations to OEM andwith management and other for completion by dealer prior to  Discuss key facts and conclusions next stepsstakeholders visit from desktop review  Follow up with dealer, where Agree objectives and  Identify any potential influential  Review findings of automotive agreeddeliverables stakeholders healthcheck Agree scope, price and timing  Review in the light of industry  Discuss management/ shareholder knowledge of the sector in terms of agenda performance, location and brands  Discuss options to be considered  Identify potential next steps 8 © Motorczar
  8. 8. Our approach – Business Change Phase 1: Initial meetings to planning: £1k per day Phase 2: Business change OEM Briefing Management Diagnostics & Options & Implementation Meeting analysis Action Plans Meet with OEM to  Meet with businesses  Industry and service  Management Project management,obtain background to obtain background line expertise meeting(s) and/or support and assistance, and understand their workshop as required Understand key  Benchmarking analysis issues and agendaobservations, issues and  Agree facts,  Management initiatives  Automotive health-OEM agenda  Demonstrate our conclusions, options and and implementation of check tool industry knowledge and implications plans Identify other key track record  Funds generationstakeholders and  Current state/ future  Measurement andpotential agendas  Discuss value to  High level manage- state analysis regular review business of our co- ment analysis Agree basis of  Discuss proposed  External stakeholder operative approachcommunication with  Identify action and actions, solutions, and support and assistancemanagement and other  Discuss other key measures that matter recommendations with  Engage and managestakeholders stakeholders and OEM  Options to be external consultants understand their Agree objectives and considered  Engage with other agendas  Rolling process fordeliverables stakeholders as needed  High level manage- improvement  Agree timetable and Agree scope, price and ment debrief  Agree action plan and access to key people  Non-exectiming of Phase 1 responsibilities and sites  Verbal update to OEM appointment, if required Agree process and  Identify any externalfrequency of regular input, as requiredfeedback © Motorczar
  9. 9. Appendices- Example outputs and tools © Motorczar
  10. 10. Outputs - summary of key facts, conclusions, options and implicationsKey Features Focuses on the key issues and drawsconclusions Looks at all the relevant options availableand the implications Can be co-developed with management tobuild consensus or used as a summary at keypoints in the project Leads to consensus and the formulation ofrobust decisionsBenefits Focusing on the key issues reducesincreasing clarity of decision making Management consider all the relevantoptions and not just those in their comfortzone Reduces the risk of disagreement betweenmanagement and/or key stakeholders Demonstrates thought processes Assists with developing the best solutionsfor the business Defines the next steps © Motorczar
  11. 11. Diagnostic tools- Automotive healthchecksKey Features Automotive Retail Healthcheck Developed from over 12 years experience of advising automotivebusinesses Electronic input, objective Yes or No answers Captures non-financial warning sign as well as financial risks Management can complete questions as well as Motorczar orstakeholder staff Can be modified to provide a be-spoke risk tool for stakeholdersand stock funders Effective graphical outputBenefits Quick to complete, circa 1 hour. Management can complete andreturn prior to commencement of work Comparison of Motorczar and management results enables a quickdiscussion of key risks and challenges to the business Underlying analysis provides quick identification of key areasrequiring further focus and investigation Risk A No apparent cause for concern. Risk B Some limited areas need improvement. Quick identification of key issues provides for early consideration Risk C There are serious areas of concern that need to be addressed.of the options to be addressed Risk D Unacceptable level of risk. © Motorczar
  12. 12. Outputs- Funds generation Sources & Uses Of Funds £000 £000Key Features Profit before tax 365 Analysis of the ability of a business to generate sufficient funds Add: Depreciation 200from operations to finance: 565 Less:  actual or future capital expenditure CAPEX 120  loan and HP capital; and Loan Capital Repayments 600 HP Capital Repayments 86  tax on previous year profits; and Tax Paid 165 971  movements in working capital Funds Generated / Absorbed (406) In the example opposite the business generate insufficient funds Financed by:depending on working capital movements for finance which are notsustainable in the short to medium term (Increase)/Decrease inBenefits Debtors 100 Vehicle Stocks 350 Objective; based on an analysis of management information and Other Assets (59)forecasts 391 Increase/(Decrease) in Stresses the importance to management of cash and working Trade Creditors (31)capital performance Crown Creditors 367 Readily identifies undercapitalised businesses which potentially Net Stocking Finance (280)require an injection of cash Other Liabilities (41) 15 Provides a tool whereby management can readily identify how 406profitable a business needs to be to be viable © Motorczar
  13. 13. Workshop tools - Current & future statesKey Features Completed with management during the changeprocess, can be in a facilitated session The Current and Future State of the Troy site Includes: Future state Barriers/Issues Brand/OEM  an assessment of the current state of the Current state • • Hyundai: As described. Citroen: Good product lines; supportive OEM; favourable business to include financial and non-financial Brand/OEM finance/stocking terms. Provides good throughput for size of • Hyundai: Seen as being brand for future; good product; • Two year termination site. supportive manufacturer. for Suzuki and costs of matters • Suzuki: Seen as being brand to terminate; bad product line; unfavourable finance/stocking terms; unstable exit • Need to move Property organisational structure. • Double Showroom: Hyundai into smaller  a strategic view of the business in the medium • Citroen in larger showroom part of showroom Property • Hyundai in smaller showroom • Need to estimate, • Both areas complying with manufacturers’ brand identity to long term • Double Showroom in good location: refurbishment, requirement. • Hyundai in larger showroom restructuring and • Suzuki in smaller showroom disruption costs. • Showroom requires investment to meet Manufacturer People  can include stakeholder needs and agendas standards • Need to work out financials for new site, • Clear leadership with agreed responsibilities and reward measures. plus operational plan, • Culture of not accepting underperformance People  enablers and barriers to success identified and negotiate with • Dedicated new car, used car and aftersales teams • Overall, site lacks leadership and direction Citroen • General sales manager ineffective leader and unable to motivate staff. Sales team un-focussed. Need used car • Need to exit Processes and Reporting people. underperformers • Management team focussed on driving through efficiency • After-sales manager developing within role, impact seen improvements in increasing financial performance. Technicians un- • This is a turnaround • Sales staff keeping DOC up to date and accurate to enable motivated and performing below par which takes focus andBenefits more efficient monitoring of KPI’s time, will make losses • More focus on using KPI’s to drive efficiency improvements Processes & reporting initially to be funded • Sufficient KPI’s produced • Monthly meetings to discuss KPI’s Financial • DOC system not always kept up to date by sales staff • Both brands and site profitable, well placed to whether Provides focus to management on strategic issues • Management currently suffering from a lack of direction downturns and take advantage of good trading periods • New, used and aftersales performing strongly compared to industry averagesaffecting or which will affect their business Financial • Producing a at least a 2% return in terms of PBT. • Both brands loss making. Total turnover £23.8m, loss £0.5m split equally between brands. Performance deteriorating in terms of losses Enablers Co-developed process assists with buy-in to the • Cars sales a key issue. Service absorption has improved from 40% to +60% recently but needs to be needed • Liquidity to invest in Troy following VAT refund • Manufacturers may give financial support for representation • Ability to transfer of senior management from Hill to focus on Troy • Citroen/ Hyundai acceptance to multi-franchise, Citroen have confirmed that • Need to change is recognised • Service is improving following senior changes last year. Identification of enablers and blockers allows location is open but with existing car parc • Can move good Citroen people from Hill to replace underperformers • Could create temporary facility for Suzuki if necessarymanagement both to identify strengths and removepotential obstacles to change Business position and direction fully challenged © Motorczar
  14. 14. Motorczar Ltd - Sid Hopper Sid is a global automotive components and retail specialist based in the Midlands. He spends 100% of his The following is an example of some of the time servicing automotive clients and has over 16 years automotive manufacturers, banks and stock funders experience acting as a business advisor. Sid has worked with: He acts as an advisor to Manufacturers, Component  Adam Opel AG Suppliers, Dealers, Banks, Specialist Banks and  Audi Shareholders. His work includes:  Barclays Bank  Bentley  Working with buyers and sellers of automotive operations  BMW and businesses, including distressed M&A  BMW Financial Services  Capital Bank  Assisting Banks and stock funders in identifying and  Ford and Ford Bank supporting at risk dealer operations  General Motors (Global)  General Motors (Europe)  Financial, operational and working capital turnaround of  HondaSid Hopper dealer sites  LombardAutomotive Specialist  Lloyds Bank  Working with manufacturers to set up and support new  Lloyds BlackhorseMobile: +44 (0)7887 822348 dealers, usually as part of a manufacturer sponsored dealer  Mazda programme  Mercedes BenzEmail:  MBFS  Working with dealers to improve the financial  RBS performance of their operations  Renault  Santander  Working capital improvement and refinancing of  Shanghai Automotive Industry Corporation SAIC automotive operations  Skoda  Seat  Providing strategic advice on real estate strategy  Volkswagen  Volkswagen Financial Services © Motorczar
  15. 15. ConfidentialNot to be produced in whole or part without prior written consent.Copyright ©2010Copyright ©2011 Motorczar Ltd t/a MotorczarMotorczar LtdContact: Sid HopperTel: +44 77887 822348Email: 16