Frontier Digital Ventures Ltd. · ASX:FDV
Frontier Digital Ventures — Investor Presentation (December 2021)
43 slides from Frontier Digital Ventures's investor presentation, Dec 17, 2021
Slide 1: Increase to 100% Ownership of E24 and Capital Raising
rsonal use only INCREASE TO 100% OWNERSHIP OF E24 AND CAPITAL RAISING 17 DECEMBER 2021 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Important Notices and Disclaimer
IMPORTANT NOTICES AND DISCLAIMER Important notices and disclaimer This investor presentation (Presentation) is dated 17 December 2021 and has been prepared by Frontier Digital Ventures Ltd (ABN 25 609 183 959) (Frontier). By attending an investor presentation or briefing, or accepting, accessing or
Slide 3: Important Notices and Disclaimer (cont.)
IMPORTANT NOTICES AND DISCLAIMER (CONT.) Financial information All financial information in this Presentation is in Australian dollars ($ or AUD) unless otherwise stated. This Presentation includes certain pro forma financial information. Any such pro forma historical financial information provided
Slide 4: Important Notices and Disclaimer (cont.)
IMPORTANT NOTICES AND DISCLAIMER (CONT.) Disclaimer Bell Potter Securities Limited (ABN 25 006 390 772) and Morgans Corporate Limited (ABN 32 010 539 607) are acting as joint lead managers (Joint Lead Managers) to the Offer. rsonal use only To the maximum extent permitted by law, Frontier, the Joint
Slide 5: Table of Contents
TABLE OF CONTENTS rsonal use only 6 FDV overview 11 Acquisition details and capital raising 14 Encuentra24 overview 20 FDV LATAM at full potential 28 Additional information NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 5
Slide 6: FDV Overview
rsonal use only FDV OVERVIEW NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 7: Global Opportunity
GLOBAL OPPORTUNITY Our mission is to become the leading global operator of online marketplaces in emerging markets rsonal use only A$0.5B A$23B A$236B Market capitalisation Market capitalisation Market capitalisation (ASX:FDV) (OL:ADE) (AEX:PRX) Global portfolio of online Global portfolio of online
Slide 8: Market Leading Businesses
MARKET LEADING BUSINESSES FDV Group structured across three key geographic regions to support FDV at full potential FDV Group rsonal use only FDV LATAM FDV Asia FDV MENA #1 property portal #1 auto portal Pakistan Pakistan #1 general marketplace #1 general marketplace Morocco Tunisia #1 property port
Slide 9: FDV Group Quarterly Highlights – 3Q 2021
FDV GROUP QUARTERLY HIGHLIGHTS – 3Q 2021 Milestone quarter as FDV approaches cash flow breakeven rsonal use only 244% A$1.2m A$17.3m A$4.3m A$17.2m Increase in Group Record portfolio Record quarterly Standout quarterly Group cash position cash receipts on prior EBITDA¹ portfolio revenue¹ revenue¹ fr
Slide 10: Rapid Growth Trajectory
RAPID GROWTH TRAJECTORY Continued strong performance underpinned by organic growth and strategic acquisitions Operating company revenue since IPO Operating company revenue since IPO rsonal use only (A$m, 100% basis) (A$m, FDV % share basis) 62.6¹ 34.6¹ 50.3 Illustrative Illustrative 4Q 2021 Onset of
Slide 11: Acquisition Details and Capital Raising
rsonal use only ACQUISITION DETAILS AND CAPITAL RAISING NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 12: Acquisition Details and Capital Raising
ACQUISITION DETAILS AND CAPITAL RAISING • Frontier Digital Ventures (“FDV”) is acquiring all outstanding issued capital of Encuentra24 (“E24”), a leading general classifieds marketplace in Panama, Costa Rica, Acquisition Guatemala, El Salvador and Nicaragua rsonal use only details — FDV to acquire f
Slide 13: Indicative Timetable
INDICATIVE TIMETABLE rsonal use only Record date for share purchase plan (SPP) 7pm AEDT, Thursday, 16 December 2021 Announcement of acquisition and capital raising and outcome of Placement – trading halt lifted (shares recommence trading Friday, 17 December 2021 on ASX) Settlement of institutional p
Slide 14: Encuentra24 Overview
rsonal use only ENCUENTRA24 OVERVIEW NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 15: Overview of Encuentra24
OVERVIEW OF ENCUENTRA24 A leading online marketplace platform across 5 key LATAM markets rsonal use only ENCUENTRA24 OVERVIEW: Annualised revenue1: • Market leading general classifieds portal in Panama, Costa Rica, Guatemala, Nicaragua and El Salvador2 A$8.8m • • Strong presence across key property
Slide 16: Significant Growth Potential
SIGNIFICANT GROWTH POTENTIAL Established marketplace with significant opportunity to accelerate transaction model across large markets REVENUE BY VERTICAL REVENUE BY COUNTRY REVENUE BY SOURCE rsonal use only (YTD 2021, 100% share) (YTD 2021, 100% share) (YTD 2021, 100% share) Transactions Other1 9%
Slide 17: Revenue Opportunities
REVENUE OPPORTUNITIES Early traction with transaction model shows potential for future revenue opportunities rsonal use only Strengthen core Expand C2C Property and auto classifieds transaction transactions business offering Further monetisation of classifieds Two Consumer-to-Consumer (C2C) Strong b
Slide 18: Value Inflection Point
VALUE INFLECTION POINT Encuentra24’s sustained trend towards positive EBITDA provides the opportune time to increase ownership Encuentra24 EBITDA margin rsonal use only (EBITDA as a % of revenue, 100% share basis) Half year Quarter 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 3Q21 Onset of
Slide 19: Material Financial Contribution
MATERIAL FINANCIAL CONTRIBUTION Encuentra24 increase in ownership boosts FDV Group’s 2021 pro forma revenue by 11% FDV Group revenue growth FDV LATAM revenue growth rsonal use only (A$m, pro forma unaudited, FDV % share basis) (A$m, pro forma unaudited, FDV % share basis) 11% increase in FDV Group 2
Slide 20: FDV LATAM at Full Potential
rsonal use only FDV LATAM AT FULL POTENTIAL NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 21: Transaction Rationale: Full Ownership of FDV LATAM
TRANSACTION RATIONALE: FULL OWNERSHIP OF FDV LATAM Highly strategic position across the region with 100% ownership to unlock the value of FDV LATAM Benefits of full control of the region FDV ownership (%) rsonal use only 100% ownership across FDV LATAM to facilitate greater #1 100% sharing of FDV LA
Slide 22: Evolution Towards Transactions
EVOLUTION TOWARDS TRANSACTIONS Observed increase in change in consumer behaviour towards purchasing higher value items online rsonal use only Low cost Mid cost High cost Largest consumer purchase High frequency Regular frequency Low frequency E.g. Streaming services, rideshare, E.g. Travel and accom
Slide 23: Significant Upside Potential
SIGNIFICANT UPSIDE POTENTIAL Augmenting traditional classifieds revenue with transaction revenue underpins anticipated long-term growth Traditional online classifieds Transaction-based marketplaces rsonal use only $ $ Advertising Advertising Buyer Seller Buyer Seller Facilitate and participate in th
Slide 24: Case Study – InfoCasas
CASE STUDY – InfoCasas Proprietary technology powering each step of the transaction journey rsonal use only AI-powered digital sales engine Proprietary lead Optimised marketing Big data 24/7 sales assistant Digital open days Transaction event segmentation outreach Intelligent Proprietary models Mach
Slide 25: Transaction Revenue Opportunity
TRANSACTION REVENUE OPPORTUNITY Encuentra24 expected to follow in the footsteps of InfoCasas and its successful transaction revenue model InfoCasas revenue rsonal use only Value catalysts Market intermediary (A$m, unaudited 100% share basis) facilitating transactions <5% transaction Approx. 5 – 20%
Slide 26: Realising FDV LATAM's Full Potential
REALISING FDV LATAM’S FULL POTENTIAL Demonstrated ability to transform classifieds businesses into high growth transactional marketplaces Transactions are a >5x revenue InfoCasas - proven success with Technology for transactions being rsonal use only opportunity¹ technology-led transaction model sha
Slide 27: Focus on Shareholder Value
FOCUS ON SHAREHOLDER VALUE “ We are excited to be increasing our ownership in Encuentra24, a market rsonal use only leading general classifieds marketplace across 5 LATAM markets. This transaction unlocks the value of FDV LATAM with 100% ownership and control, enabling the sharing of our transaction
Slide 28: Additional Information
rsonal use only ADDITIONAL INFORMATION NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 29: FDV's Capital Raising History
FDV’S CAPITAL RAISING HISTORY Track record of raising capital efficiently, with shareholder value front of mind Share price at last close FDV’s primary and secondary capital raising history rsonal use only (14-Dec-21) Offer price (A$) 1.58 1.25 0.98 0.78 0.65 0.50 Aug-16 May-18 Dec-19 Jul-20 Oct-20
Slide 30: Corporate Overview
CORPORATE OVERVIEW FDV has a strong balance sheet, and its shares are tightly held Share price performance since IPO Substantial shareholders rsonal use only $1.90 Catcha Group (Patrick Grove and Luke Elliott) 13.1% $1.70 Shaun Di Gregorio (Founder and CEO) 10.9% Barca Global Master Fund 7.4% $1.50
Slide 31: Strong Track Record of Long-Term Value Creation
STRONG TRACK RECORD OF LONG-TERM VALUE CREATION rsonal use only • One of the top global online marketplace executives with a strong track record of long-term value creation • Former CEO of iPropertyGroup (ASX: IPP) and General Manager at REA Group • Spearheaded the transformation of iProperty Group
Slide 32: S&P/ASX All Technology Index Inclusion
S&P/ASX ALL TECHNOLOGY INDEX INCLUSION All Tech index inclusion an important step on the anticipated pathway to the S&P/ASX 300 Index Significant benefits to index inclusion Interactive Media & Services constituents rsonal use only Ticker Market cap (A$) Provides access to the fastest growing sector
Slide 33: Financial Profiles – 100% basis
FINANCIAL PROFILES – 100% basis FDV to have 100% ownership of FDV LATAM post this acquisition rsonal use only Accounting FDV ownership 3Q 2021 Revenue A$ (100% 3Q 2020 Revenue A$ (100% treatment (%) basis) basis) Growth (% in A$) FDV LATAM 11,160,836 2,958,228 InfoCasas Consolidated 100% 4,326,118 1
Slide 34: Financial Profiles – FDV % share
FINANCIAL PROFILES – FDV % share FDV to have 100% ownership of FDV LATAM post this acquisition rsonal use only Accounting FDV ownership 3Q 2021 Revenue A$ (FDV % 3Q 2020 Revenue A$ (FDV % treatment (%) basis) basis) Growth (% in A$) FDV LATAM 9,543,800 1,189,999 InfoCasas Consolidated 100% 4,326,118
Slide 35: Key Risks and International Offer Restrictions
KEY RISKS AND INTERNATIONAL OFFER RESTRICTIONS 1. KEY RISKS rsonal use only COVID-19 Events related to the Coronavirus pandemic (COVID-19) and in particular new variants of COVID-19 have resulted in significant market volatility. There is continued uncertainty as to ongoing and future response of go
Slide 36: Key Risks and International Offer Restrictions (cont.)
KEY RISKS AND INTERNATIONAL OFFER RESTRICTIONS (CONT.) RELIANCE ON SYSTEM AND CONTENT INTEGRITY The performance of the websites of Frontier’s Operating Companies is very important to the reputation of those Operating Companies, their ability to attract customers and their ability to achieve overall
Slide 37: Key Risks and International Offer Restrictions (cont.)
KEY RISKS AND INTERNATIONAL OFFER RESTRICTIONS (CONT.) RISKS ASSOCIATED WITH INVESTMENT INTO OPERATING COMPANIES AND PROVISION OF INFORMATION Although Frontier performed due diligence on the Operating Company and assets and founders of the relevant business when acquiring an interest in the relevant
Slide 38: Key Risks and International Offer Restrictions (cont.)
KEY RISKS AND INTERNATIONAL OFFER RESTRICTIONS (CONT.) HACKING AND VANDALISM The businesses of the Operating Companies may be adversely affected by malicious third party applications that interfere with, or exploit, security flaws in their websites. If an Operating Company’s efforts to combat these
Slide 39: Key Risks and International Offer Restrictions (cont.)
KEY RISKS AND INTERNATIONAL OFFER RESTRICTIONS (CONT.) RISKS ASSOCIATED WITH AN INVESTMENT IN SHARES There are general risks associated with investments in equity capital. The trading price of Frontier shares may fluctuate with movements in equity capital markets in Australia and internationally. Th
Slide 40: Key Risks and International Offer Restrictions (cont.)
KEY RISKS AND INTERNATIONAL OFFER RESTRICTIONS (CONT.) E24 LIABILITIES Following completion of the Acquisition, Frontier may become 100% responsible for any outstanding liabilities that E24 has incurred prior to the Acquisition, including any liabilities that are not known to Frontier, for which ins
Slide 41: Key Risks and International Offer Restrictions (cont.)
KEY RISKS AND INTERNATIONAL OFFER RESTRICTIONS (CONT.) 3. INTERNATIONAL OFFER RESTRICTIONS rsonal use only This document does not constitute an offer of new ordinary shares ("New Shares") of Frontier in any jurisdiction in which it would be unlawful. In particular, this document may not be distribut
Slide 42: Key Risks and International Offer Restrictions (cont.)
KEY RISKS AND INTERNATIONAL OFFER RESTRICTIONS (CONT.) SINGAPORE This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other docum
Slide 43: Contact Us
CONTACT US COMPANY Shaun Di Gregorio rsonal use only Founder and CEO P: +60 3 2700 1591 E: shaundig@frontierdv.com INVESTORS Timothy Toner Vesparum Capital P: +61 3 8582 4800 E: frontierdv@vesparum.com PRINCIPAL OFFICE 39-8 The Boulevard Mid Valley City, Lingkaran Syed Putra Kuala Lumpur, Malaysia w
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