Midwich Group Plc · LSE:MIDW
Midwich — Investor Day (October 2017)
59 slides from Midwich's investor day presentation, Oct 11, 2017
Slide 1: Welcome
Welcome Stephen Fenby Managing Director
Slide 2: Agenda
Agenda 13.00 Lunch Served 13.15 – 14.45 Presentations 14.45 – 15.45 Tour of show 15.45 Depart for train station
Slide 3: Speakers
Speakers Tom Sumner (European Director) Jenny Hicks (Group Head of Technology) Sean Tobin (ANZ Business Manager) Allan Leonhardsen (Managing Director, Holdan Limited)
Slide 4: Tom Sumner
Tom Sumner European Director
Slide 5: Agenda
Agenda • International AV Market Size and Growth Trend • European operational review • The European opportunity – Geographical – New technology market access from new acquisitions
Slide 6: International AV market overview
International AV market overview Global sales revenue forecast by region European market growth trends The global AV market expected to grow from European AV market expected to grow from $178bn to $230bn over 2016 to 2022 (CAGR 5 %) $45.3bn to $53.5bn over 2016 to 2022 (CAGR 4%) Source: InfoComm Int
Slide 7: What is driving AV market growth?
What is driving AV market growth? Examples • Digital adopting the AV screen advertising boards over print posters • Major rail stations adopting Large Format Displays for advertising and travel information 1 Increased adoption • Retail adoption of Large Displays to improve in-store experience to com
Slide 8: European operational review
European operational review Geographic revenue split (H1 17) France 8% Germany 17% Australasia 7% Spain UK & Ireland 2% 66% UK & Ireland Spain Australasia Germany France
Slide 9: European operational review
European operational review Revenue & GP Growth Key Growth Drivers • £18.9m (48.7%) revenue growth in H1 2017 versus • Market share growth in core markets; H1 2016; • Signing of new key vendors, including SMART in • Gradual gross margin improvement, led by Germany. continued focus on higher end tech
Slide 10: 1. Geographical development
1. Geographical development • Midwich Group businesses operate in territories accounting for around 70% of the total European Rank Country 2016 2020 2016 Group Cumulative 1 United Kingdom 21,11% market (in value terms); 2 Germany 21,11% 19,65% 22,61% 21,36% 40,76% 3 France 11,81% 11,07% 52,57% 4 Net
Slide 11: 2. New technology market access
2. New technology market access • Target companies can provide us access to new technology opportunities; • We have a successful track record of bringing in these sorts of businesses: ➢ This helps us address technology segments in the ‘AV’ market which can provide us with growth opportunities and wh
Slide 12: Summary
Summary • The global and European AV market is forecast to continue growing; • Our European businesses have performed well. We anticipate further growth through increasing our market share in core technologies; • We regard this region as a key pillar of future Group growth. We see opportunities: – G
Slide 13: Jenny Hicks
Jenny Hicks Group Head of Technology
Slide 14: AV market global share by product segment (revenue)
AV market global share by product segment (revenue)
Slide 15: Replacing projectors with displays
Replacing projectors with displays • The single largest technology evolution in our market is coming from the replacement of projectors with flat panel displays. • The global flat panel displays market is expected to exhibit a CAGR of 15 percent over 2017- 2022. • The Presentation/Collaboration syst
Slide 16: The huddle space
The huddle space Midwich Group Ple
Slide 17: LED display into Retail
LED display into Retail • Shipments of LED display modules grew over 50% year-on year and project continuous growth through 2022.
Slide 18: The lighting market
The lighting market • The global lighting fixtures market was worth $5.1 billion in 2016 and is projected to grow to around $19 billion by 2022. • Driven by the move to LED o 5 times more energy-efficient o More versatile o Lifespan of 15 years • Two areas of interest to the group: o Entertainment L
Slide 19: Why lighting is a good fit for the Group
Why lighting is a good fit for the Group • Consultant and design led market – opportunity to add value as a distributor • Margin rich • Synergies with the Midwich Group customer base and end user verticals • High growth expectations with the shift to LED • We now have expertise in the Group
Slide 20: Dutch Light Pro case study
Dutch Light Pro case study Midwich Group Ple
Slide 21: Summary
Summary • Replacement of projectors with displays continues to accelerate • Further growth for displays being driven by the ‘huddle space’ • LED display set for high growth particularly in retail • The lighting market presents a new opportunity • Later presentation about future technology before we
Slide 22: Sean Tobin
Sean Tobin ANZ Business Manager
Slide 23: Market overview
Market overview Geographical Overview ▪ Population 2017 estimates - Australia 24.7 million (51st) / New Zealand 4.9 million (120th) ▪ Australia is the world's twelfth largest economy and has the sixth highest per capita GDP (nominal) at US$56,291. (1) ▪ Australia has achieved 25 years of economic ex
Slide 24: AV market overview
AV market overview 80,000 70,000 APAC Growth Trends 60,000 50,000 The APAC AV market grew Sales Revenue (US$ Millions) by 10% in 2016 40,000 Australia represents 6% of APAC market 30,000 20,000 10,000 - 2017 2018 2019 2020 2021 Indian Subcontinent East Asia China Australasia Source: InFocomm 2017 AP
Slide 25: Australia's next boom has barely started
Australia's next boom has barely started Australia is on . the cusp of the biggest wave of public infrastructure spending in at least three decades. Research published in September 2017 shows almost $100 billion in government spending will hit the economy this year financial alone. According to a ch
Slide 26: Midwich ANZ - Operational review
Midwich ANZ - Operational review Revenue & GP Growth Vendor Portfolio Growth ▪ 44.2% revenue growth with impressive growth across all ▪ Introduction of new vendor partners via organic categories growth and acquisition ▪ Gross margin % continues to be boosted by recent additions to audio and technica
Slide 27: Key factors in growth
Key factors in growth Midwich Group Channel Value Vendor Portfolio Investment Add attachment Australia / New Zealand Large Format Display Panels 2011 - 2021 In combination with Office & Showrooms showrooms, with With 113% growth in large format panel 120 accessibility to Thousands presales/post sale
Slide 28: Global brand engagement
Global brand engagement Australian market used as beta before global deployment. Recent examples being; 1,400 units 65’ Display Panels. POS information. 3,900 Units 65’ Display Panels. Drive Through Menu Boards
Slide 29: Key value add to market
Key value add to market Showroom & Training Facilities Pre & Post Sale Technical Support Customer Loyalty Program Sydney & Melbourne Established team of Preferred partner sales incentive integrated AV solution technical support to programs. showrooms. enable both pre & post sale support functions. M
Slide 30: Showroom Video File
Showroom Video File
Slide 31: Midwich Australia / New Zealand
Midwich Australia / New Zealand Pipeline of Opportunities Substantial pipeline of opportunities Providing mixed balance of verticals from - Corporate offices - Hospitality / Aged Care Facilities - Education - Infrastructure projects. Examples: Sydney Airport / Auckland Airport Christchurch Conventio
Slide 32: APAC expansion opportunity
• APAC expansion opportunity The Asian-Pacific professional AV industry generated $62.9 billion in revenue in 2016. • The market is currently fragmented but showing signs of maturing and strong growth - CAGR of 5 percent expected over the next 5 years • Rising wealth and demographic trends will fuel
Slide 33: Outlook and Summary
Outlook and Summary ANZ business growth to date is from the Commercial AV System Integrator / reseller channel, partnered with a balanced vendor portfolio. Strong growth to date Share growth within Midwich Group, from 5% -2015 / 7% - 2016 Customer retention & new prospecting, expansion with geograph
Slide 34: Allan Leonhardsen
Allan Leonhardsen Managing Director – Holdan Ltd
Slide 35: Midwich and Holdan synergy
Midwich and Holdan synergy Midwich sells equipment to display content... …Holdan sells equipment to create content
Slide 36: Introduction and key facts
Introduction and key facts • Established in 1996 (trading for 21 years) • Trade-only technical value-add distributor • 41 staff • £ 26 million revenue in 2016 • Head office in Glossop, UK • Became part of the Midwich Group in September 2016 • 20 market leading brands
Slide 37: Introduction and key facts
Introduction and key facts • Vendor-focused strategy • One-stop, go-to supplier in a very fragmented market • Holdan has added significate value to market leading brands such as Panasonic Broadcast and others • Biggest and leading distribution company in our market • Successfully grown year on year
Slide 38: Integration one year on
Integration one year on • Cultural & business synergy • Maintain Holdan’s ethos • Saving in back office costs allow re-investment in frontline • Accelerated Holdan’s growth • Increase margins and profitability • Road ahead - UK and beyond with cross-selling opportunities
Slide 39: The perfect synergy
The perfect synergy • Holdan’s core market: Broadcast, Film, Production • Growing new market: Enterprise Video • Midwich as trusted supplier, is entry point to 10,000+ accounts • Accelerated video into AV accounts with > 50+% YoY growth • So far, UK only with new European opportunities in 2018
Slide 40: The enterprise video opportunity
The enterprise video opportunity • Broadcast becoming Enterprise Video, bringing many new opportunities for distribution • Marketing is changing • New broadcast platform is changing the landscape • So, why is Enterprise Video so interesting an opportunity?
Slide 41: Key market trends and drivers
Key market trends and drivers In 2017 video will account for 69% of all consumer “The global Enterprise Video Market to internet traffic, according to Cisco grow from $13.01 billion in 2014 to $32.87 billion in 2019.” “Video-on-demand traffic alone will have almost trebled… I'm hard pressed to find
Slide 42: Key enterprise video market trends and drivers
Key enterprise video market trends and drivers • 1.3 billion users of YouTube • 300 hours of video are uploaded to YouTube every minute • Almost 5 billion videos are watched on YouTube every single day • In an average month, 8 out of 10 18-49 year-olds watch YouTube
Slide 43: Key enterprise video market trends and drivers
Key enterprise video market trends and drivers # Use Twitter to Promote & Educate “Sharing content other than your own is useful and fun for your audience. However, that doesn’t mean you can’t create promotional videos ….. As long as they’re done well.”
Slide 44: Key enterprise video market trends & drivers
Key enterprise video market trends & drivers “McDonald’s is a good example. The content they create is fun and engaging and includes their products as the centre of every story they tell. It’s smart, innovative and playful, and helps to significantly increase their shares and follows.” Social Media
Slide 45: Market landscape
Market landscape Traditional Broadcasters Corporate / Education Live & Event / Marketing Worship / Sport / Hospitality …. Consumer Electronics
Slide 46: Bring video in-house
Bring video in-house With the introduction of affordable computers and colour printers in the late 80s, companies brought DTP & printing in house In the late 90s it became obvious to most companies that a public web presence was no longer optional, and they brought web in house With the popularity o
Slide 47: Bring video in-house
Bring video in-house • Many businesses now see video as a critical medium to communicate internally and to engage with customers. They are starting to bring video… in house • If customers are creating video content regularly or want to ramp up video production, they will bring video in-house • With
Slide 48: Successful business development quotes
“Today, successful business development is contingent upon building trusted relationships and leveraging those relationships to grow new businesses” “We live in an age of start-ups taking the world by storm. As a result, many focus on new customers & new businesses… Even though it can cost 7x more t
Slide 49: The perfect synergy
The perfect synergy • Midwich is trusted by key players in the market • Jointly we will activate new business with existing customers • Provide customers with a unique one-stop solution, which our competitors cannot offer • Solve a problem for our customers and increase their business
Slide 50: Jenny Hicks: Future Technologies
Jenny Hicks Future Technologies
Slide 51: Future technology
Future technology • Track the hype cycle • Attach to early projects • Identify the first to market • Anticipate the super brand
Slide 52: Augmented reality: DOOH & Retail
Augmented reality: DOOH & Retail • Ikea Place App for IOS 11
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Slide 54: Augmented reality in broadcast studios
Augmented reality in broadcast studios • Leyard 0.9mm pixel pitch LED • High Contrast • 6m wide 8k resolution
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Slide 56: AI: How can we benefit?
AI: How can we benefit? • UMA find me a meeting room for a 10 o'clock VC call? • UMA where does Tom Sumner sit and is he currently available? • UMA what is the dress code at the Southern Office and can you give me directions? • UMA alert: Welcome to meeting room 2, would you like to present or make
Slide 57: VR: Is it relevant?
VR: Is it relevant? Yes, but not just yet Could this be the future of video conferencing? • 6 degrees of freedom • 8k x 8k resolution per eye • Motion sickness Right now we are a 5110
Slide 58: Today at the show
Today at the show • Chroma Key studio • Seamless LED touch wall • Curved LED Retail display • Heat mapping cameras for retail analysis • Bookable huddle spaces • Room to Room collaboration from Mersive • GDPR zone • Quant – collaborative software for network operation centres • OLED wall paper video
Slide 59: Questions?
Questions? Iain Campbell Jenny Hicks Scott Pollard Steve Fay