New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>EBOS Group<br>FY21 Preview&nbsp;— Keep on Keeping on</h2>
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<p><strong>OUTPERFORM</strong></p>
<p>We expect a strong FY21 result when EBOS Group (EBO) reports on Wednesday, 18 August. While we expect it to be largely business as usual at a headline level, COVID-19 has materially influenced a number of EBO’s businesses both negatively and positively; with a modest net benefit overall. Industry developments, our channel checks and recent newsflow has also been positively skewed — hence, we expect to see a continuation of healthy growth across the portfolio. ​​​​​Key focus areas are (1) outlook/trading insights, (2) industry discussion — with a number of recent small positives (including Pfizer returning to the wholesale channel), and (3) balance sheet and M&amp;A update.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/334/original/image_77204582731628727416386.png?1628727415" class="editor-image img-responsive" data-smartkarma-image-id="223334"></figure>
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<h3>Key points of interest</h3>
</div>
<div id="m_4487673314110807303i1l7z">
<ul>
<li>Outlook/trading insights:&nbsp;Positive&nbsp;recent industry anecdotes and developments&nbsp;reinforce&nbsp;the resilience of&nbsp;EBO's&nbsp;core business and its important role&nbsp;in the supply chain.&nbsp;However, we expect some continued monthly trading volatility — with strength in prescription medicines, while over-the-counter products are likely more volatile given COVID-19 related restrictions and reduced cold/flu demand.&nbsp;We look for insights into recent trading, outlook and any potential enduring&nbsp;longer-term benefits from COVID-19</li>
<li>Divisional detail:&nbsp;Strong growth in both&nbsp;Healthcare&nbsp;and Animal Care, outpacing a material step-up in corporate costs
<ul>
<li>​​​​We expect Animal Care to be the standout, with industry growth attractive (boosted by COVID-19) and market share gains</li>
<li>Within&nbsp;Healthcare&nbsp;we expect strong growth from Contract Logistics &amp; Institutional&nbsp;Healthcare&nbsp;and a solid result for Community Pharmacy to outpace cost inflation in NZ and pressure in Consumer Products (daigou&nbsp;related&nbsp;headwinds)</li>
</ul>
</li>
<li>Balance sheet,&nbsp;cashflow&nbsp;and M&amp;A:&nbsp;EBO has a well signalled and consistent bolt-on acquisitive strategy (a key area of added value historically), albeit has been relatively quiet over the past 12 months. Cash conversion is strong and gearing increasingly conservative. We estimate EBO has balance sheet headroom of c. A$550m.</li>
</ul>
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<h3>Investor briefing&nbsp;— 11:30am NZT / 9:30am AEST on 18 August</h3>
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<div id="m_4487673314110807303iasuf">
<p>Requires pre-registration;&nbsp;<a href="https://apac.directeventreg.com/registration/event/2097644" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://apac.directeventreg.com/registration/event/2097644&amp;source=gmail&amp;ust=1628812787944000&amp;usg=AFQjCNG7gqnFVybfJIPLHbhB9v4QI9-D3w" rel="noopener">https://<wbr>apac.directeventreg.com/<wbr>registration/event/2097644</a></p>
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<div><strong>Chelsea Leadbetter, CFA</strong></div>
<div><a href="mailto:chelsea.leadbetter@forsythbarr.co.nz" target="_blank" rel="noopener">chelsea.leadbetter@<wbr>forsythbarr.co.nz</a></div>
<div>+64 4 495 5262</div>
<div></div>
</div>
</div>
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<div><strong>Matt Montgomerie</strong></div>
<div><a href="mailto:matt.montgomerie@forsythbarr.co.nz" target="_blank" rel="noopener">matt.montgomerie@forsythbarr.<wbr>co.nz</a></div>
<div>+64 9 368 0124</div>
</div>
</div>

EBOS Group FY21 Preview&nbsp;— Keep on Keeping on

OUTPERFORM
We expect a strong FY21 result when EBOS Group (EBO) reports on Wednesday, 18 August. While we expect it to be largely business as usual at a headline level, COVID-19 has materially influenced a number of EBO’s businesses both negatively and positively; with a modest net benefit overall. Industry developments, our channel checks and recent newsflow has also been positively skewed — hence, we expect to see a continuation of healthy growth across the portfolio. ​​​​​Key focus areas are (1) outlook/trading insights, (2) industry discussion — with a number of recent small positives (including Pfizer returning to the wholesale channel), and (3) balance sheet and M&amp;A update.


Key points of interest



Outlook/trading insights:&nbsp;Positive&nbsp;recent industry anecdotes and developments&nbsp;reinforce&nbsp;the resilience of&nbsp;EBO's&nbsp;core business and its important role&nbsp;in the supply chain.&nbsp;However, we expect some continued monthly trading volatility — with strength in prescription medicines, while over-the-counter products are likely more volatile given COVID-19 related restrictions and reduced cold/flu demand.&nbsp;We look for insights into recent trading, outlook and any potential enduring&nbsp;longer-term benefits from COVID-19
Divisional detail:&nbsp;Strong growth in both&nbsp;Healthcare&nbsp;and Animal Care, outpacing a material step-up in corporate costs

​​​​We expect Animal Care to be the standout, with industry growth attractive (boosted by COVID-19) and market share gains
Within&nbsp;Healthcare&nbsp;we expect strong growth from Contract Logistics &amp; Institutional&nbsp;Healthcare&nbsp;and a solid result for Community Pharmacy to outpace cost inflation in NZ and pressure in Consumer Products (daigou&nbsp;related&nbsp;headwinds)


Balance sheet,&nbsp;cashflow&nbsp;and M&amp;A:&nbsp;EBO has a well signalled and consistent bolt-on acquisitive strategy (a key area of added value historically), albeit has been relatively quiet over the past 12 months. Cash conversion is strong and gearing increasingly conservative. We estimate EBO has balance sheet headroom of c. A$550m.



Investor briefing&nbsp;— 11:30am NZT / 9:30am AEST on 18 August


Requires pre-registration;&nbsp;https://apac.directeventreg.com/registration/event/2097644



Chelsea Leadbetter, CFA
chelsea.leadbetter@forsythbarr.co.nz
+64 4 495 5262





Matt Montgomerie
matt.montgomerie@forsythbarr.co.nz
+64 9 368 0124



EBOS Group: FY21 Preview — Keep on Keeping On

Ebos Group Ltd

EBOS Group: FY21 Preview — Keep on Keeping On