Fgi Industries Ltd. · NASDAQ:FGI
Fgi Industries — NobleCon18 Investor Conference (April 2022)
31 slides from Fgi Industries's conference presentation, Apr 20, 2022
Slide 1: Slide 1
Slide 2: Disclaimer
DISCLAIMER Certain matters discussed in this presentation contains forward-looking statements concerning our business, operations and financial performance and conditions, as well as our plans, objectives and expectations for our business operations and financial performance and condi tion. These st
Slide 3: Company Overview
COMPANY OVERVIEW FGI is a leading “B-to-B” global supplier of Kitchen & Bath products with a reputation for Innovation, Quality & Service developed over 30 years in conjunction with our parent company, Foremost Groups Ltd. SANITARYWARE - 61% REPAI R/REMODEL - ~80% (T O IL E T S & S E A T S, S IN KS
Slide 4: Well-Positioned in the $100B+ Global Kitchen & Bath Market
WELL-POSITIONED IN THE $ 100B+ GLOBAL KITCHEN & BATH MARKET HIGH HIGHER QUALITY MI D -TO-HIGHER PRICE POINTS BETTER SUPPLY CHAIN BETTER OPERATIONS FRAGMENTED SUPPLIERS 60%+ OF INDUSTRY LOW HIGH MORE P O TENTIA L PRODUCT-CATEGORY O FFERI NGS HIGHER GROWTH P O TENTIA L 4
Slide 5: Executive Management Team
EXECUTIVE MANAGEMENT TEAM JOHN S. CHEN John Chen is the Executive Chairman of FGI Industries. Prior to his election, Mr. Chen spent the past 2 years serving as Executive Vice President of Corporate Development for Foremost Groups, Ltd. Prior to that he spent 11 years in the investment management ind
Slide 6: Key Investment Highlights
BPP OOK KEY INVESTMENT HIGHLIGHTS
Slide 7: Durable Competitive Advantages
DURABLE COMPETITIVE ADVANTAGES | A DIVERSIFIED MIX OF PRODUCTS, MARKET SEGMENTS AND SALES CHANNELS • Wide range of price points with a focus on “mid plus” segment • Numerous selling channels, 000’s of different SKU sets | TRADITION OF STRONG INNOVATION • Leading ‘on-trend’ products developed through
Slide 8: Diversified Product and Market Segments
DIVERSIFIED PRODUCT AND MARKET SEGMENTS FGI BR AN DS C O MP E TITO R S BEST BE TTE R By By By GOOD By 8
Slide 9: Global Business Footprint
GLOBAL BUSINESS FOOTPRINT U N I T E D STATES & C A N A D A | EAST HANO V ER, NEW JERSEY US Operations & Warehouse | HOBART, I ND I ANA Showerdoor Production Center Warehouse & Distribution | W O O D LAND , CALI FO RNI A Warehouse | TORONTO, CANADA Canada Operations & Warehouse EUROPE | D USSELD O RF
Slide 10: Large & Global Customer Base
LARGE & GLOBAL CUSTOMER BASE USA & C A NA DA EU E-COMMERCE 10
Slide 11: Key Drivers of Long-Term Shareholder Value
KEY DRIVERS OF LONG-TERM SHAREHOLDER VALUE • Re-invest in core businesses with evergreen expansion • Grow Brands, Product opportunities categories and sales Channels • Selective bolt-on acquisitions • Focus on higher incremental margin • Excess free cashflow for sales opportunities LONG-TERM VALUE d
Slide 12: BPC Strategy: Brands
BPC STRATEGY: BRANDS BATH KITCHEN O W NED B RAND S HAV E GO NE FRO M 0 % TO O V ER 3 9% O F SALES I N 1 1 Y EARS | Brands have higher gross margins (better pricing) B ETTER GRO SS MARGI N | Improving the quality, not just volume of brands | Multi-year brand development plan across multiple product s
Slide 13: BPC Strategy: New Product Categories
BPC STRATEGY: NEW PRODUCT CATEGORIES 2021 REVENUE CONTRAC: CALI TOUCHLESS THERMOSTATIC SHOWER VALVES AVENUE: MADISON E X I S T I N G P R O D U C T S - ~ 75% N E W P R O D U C T S - ~ 25 % JETCOAT: SHOWER WALL CRAFT & MAIN: BRANTLEY CONTRAC: HYGIENIC SINK 13
Slide 14: BPC Strategy: E-Commerce Sales & Analytics Strategy
BPC STRATEGY: E-COMMERCE SALES & ANALYTICS STRATEGY | 21% of current Group sales. Double-digit organic growth rates for years to come | Establishing “key vendor” reputation with leading HOM E P R O D U C T CATEGORY ONLINE - P E N E T R A TIO N RATES new-age customers including Wayfair.com, Build.com
Slide 15: BPC Strategy: Commercial & Geographic Sales Channels
BPC STRATEGY: COMMERCIAL & GEOGRAPHIC SALES CHANNELS CO M M E R CIAL GE O GR APHY | Traditionally a mass-retail B-to-B business, FGI started to invest in growing | Look for trusted international partners local commercial channel partners in 2005 (catering to hospitality, | Combine core competencies
Slide 16: Enhanced Financial Performance: Margin Accretion, Capital Efficient
ENHANCED FINANCIAL PERFORMANCE: MARGIN ACCRETION, CAPITAL EFFICIENT | MARGIN IMPROVEMENT Our growth and e f f i c i en c y plans expect to generate continuous improvement in operating margins (ERP implementation shortly after IPO) | LOW-CAPEX NEEDS FGI operates as a relatively capital-lite business
Slide 17: Efficient Capital Deployment: Bolt-On Strategy
EFFICIENT CAPITAL DEPLOYMENT “BOLT-ON” STRATEGY 1 . MARKET EXAMPLE: SHOWER B US INESSES | Thousands of small suppliers | Hired shower-door team from competitor | Evergreen product lines, categories and geographies | Grew the business to a $3.4mm Gross Profit business in short time | Look for good te
Slide 18: Favorable End Market Trends
FAVORABLE END MARKET TRENDS 18
Slide 19: Large Addressable Market with GDP+ Growth
LARGE ADDRESSABLE MARKET WITH GDP+ GROWTH SUMMARY EST. 2021 RETAIL MARKET VALUE FOR THE KITCHEN AND BATH MARKETS | The addressable market of FGI’s current product portfolio represents less than 50% of the global Kitchen & Bath product market TOTAL KITCHEN (with over $150 billion of TAM) & BATH $158.
Slide 20: Repair and Remodel Markets Provide Stable Growth
REPAIR AND REMODEL MARKETS PROVIDE STABLE GROWTH CONSISTENT YEAR-OVER-YEAR GROWTH IN THE KITCHEN AND BATHROOM RANK MORE IMPORTANT THAN OTHER R&R OUTSIDE OF EXTREME RECESSIONS YEARS AREAS OF THE HOME – THE PANDEMIC HAS REINFORCED THIS 70% SHARE OF HOMEOWNERS INDICATING AREA OF HISTORICAL R&R GROWTH 7
Slide 21: Financial Overview and Fourth Quarter Highlights
FINANCIAL OVERVIEW AND FOURTH QUARTER HIGHLIGHTS 21
Slide 22: Business Highlights – 4Q21
BUSINESS HIGHLIGHTS – 4Q21 • Fourth quarter revenues increased 47% to $52.2 million, driven by strength in both Sanitaryware and Bath Record Revenue Furniture, as well as contribution from our new products such as shower systems and kitchen cabinetry Operating • Operating income for the fourth quart
Slide 23: Current Global Supply Chain Pressures
CURRENT GLOBAL SUPPLY CHAIN PRESSURES SHIPPING TIMES LCL CHINA TO US 70 | Global transit times and container shipping prices have faced 65 unprecedented pressures in 2021 (COVID-19 in factories, shipping delays, 60 etc) 55 50 | Discussions with freight forwarders and logistics firms indicate these p
Slide 24: 4Q21 Consolidated Financial Results
4Q21 CONSOLIDATED FINANCIAL RESULTS Total Revenue Gross Profit $MM $MM • Total revenue increased 47% during $181.9 $32.2 the fourth quarter driven by 32% $28.4 volume growth and 15% benefit from $134.8 price/mix. • Gross profit increased 6.5% to $7.6 million, as strong revenue growth was $52.2 $7.6
Slide 25: 4Q21 Business Line Results
4Q21 BUSINESS LINE RESULTS Sanitaryware Revenue Bath Furniture Revenue Other Revenue $MM $MM $MM $111.3 $55.1 $15.5 $88.4 $38.2 $8.2 $36.1 $23.0 $10.4 $12.5 $3.6 $2.1 4Q20 4Q21 2020 2021 4Q20 4Q21 2020 2021 4Q20 4Q21 2020 2021 • Sanitaryware revenue was $36.1 • Bath Furniture revenue was • Other rev
Slide 26: Financial Outlook
FINANCIAL OUTLOOK 2022 Financial Outlook Revenue Operating Income Net Income $182 – 189 million $6.5 – 7.5 million $5 – 6 million 26
Slide 27: Key Investment Characteristics
KEY INVESTMENT CHARACTERISTI CS TRUSTED GLOBAL STRONG ORGANIC ENHANCED “SPIN-OFF” VALUE-ACCRETIVE STRONG SUPPLIER GROWTH PROFITABILITY BOLT-ONS SHAREHOLDER ALIGNMENT We are global, diversified, and We pursue a “BPC” strategy: As a carve-out division from a We will engage in selective High insider ow
Slide 28: Appendix
BPP OOK 28 APPENDIX
Slide 29: Financial Summary
FINANCIAL SUMMARY (USD) 2019 2020 2021 REVENUES 126,282,212 134,827,701 181,943,027 GROSS PROFIT 25,439,069 28,404,640 32,202,408 GROSS MARGINS 20.10% 21.07% 17.70% SELLING AND DISTRIBUTION 14,917.60 15,487,306 17,636,820 GENERAL AND ADMINISTRATIVE 7,355,632 5,820,967 6,194,789 RESEARCH & DEVELOPMEN
Slide 30: Financial Summary (continued)
FINANCIAL SUMMARY (continued) USE OF NON-GAAP FINANCIAL MEASURES In assessing the performance of our business, management utilizes a variety of financial and performance measures to assess our business performance, including to evaluate our ability to convert earnings from our operational performanc
Slide 31: Slide 31
FGI Industries — NobleCon18 Investor Conference (April 2022) on 6ix