Altitude Group Plc · LSE:ALT
Altitude — Investor Presentation (January 2019)
27 slides from Altitude's investor presentation, January 2019
Slide 1: Project Nevada
PROJECT NEVADA JANUARY 2019
Slide 2: Disclaimer
DISCLAIMER The information contained in these slides and any accompanying verbal presentation, any who is not a Qualified Investor, should not rely on the Presentation nor take any action risks and uncertainties, potential investors should not place any reliance on forward-looking question and answe
Slide 3: Why We Are Here Today
WHY WE ARE HERE TODAY 01 02 03 Seeking to raise £7 million to The acquisition would enable: Altitude’s AIMpro Tech Suite acquire AI Mastermind (AIM), is already changing the • Altitude to control and the largest Promotional Products marketplace and we have seen monetise AIM’s $1.7bn distributor grou
Slide 4: Introduction and Market Overview
INTRODUCTION AND MARKET OVERVIEW 4 | ALTITUDE Nevada Presentation
Slide 5: Presentation Team
PRESENTATION TEAM CEO CFO Non-Executive Chairman Nichole Stella Graeme Couturier Peter Hallett • Experienced career US Promo industry • Previously CFO at Sorted Group, • Experienced public company director professional a PE backed business in the delivery • Former CFO of Redstone plc (now • 13 years
Slide 6: Promotional Products - Supply Chain Overview
PROMOTIONAL PRODUCTS - SUPPLY CHAIN OVERVIEW Where we add value Altitude Group plc provides a patented technology platform (ChannlPro) to distributors which has a supply chain already built in and combines an e-commerce trading platform with a cloud based CRM and order management system Manufacturer
Slide 7: US Promotional Products Market
US PROMOTIONAL PRODUCTS MARKET Gaining traction in niche US Market A highly fragmented market • Perceived largest player 4Imprint - less than 3% market share USA • 42% of market (~$9.8bn) conducted by 22,700 distributors with revenues <$2.5m pa* Current market size $23bn* And an inefficient market s
Slide 8: Altitude Technology Platform - ChannlPro
ALTITUDE TECHNOLOGY PLATFORM - CHANNLPRO 8 | ALTITUDE Nevada Presentation
Slide 9: ChannlPro - A White-Labelled Distributor Reseller Channel
CHANNL | PRO - A WHITE-LABELLED DISTRIBUTOR RESELLER CHANNEL Combines Altitude’s CRM & order management system with ecommerce solution AIMPro launched in January 2018 Significant traction achieved Proof of concept KPI’s in place & growing fast Revenue model • Revenue model based on securing the tran
Slide 10: Competitive Landscape
COMPETITIVE LANDSCAPE AIM is by far the largest PPD member group by gross revenue in the USA (c.7.4% MarketShare) AIM members love AIM because… • “Free” Technology AIMpro Tech Suite $608m $592m No membership model No membership model • End Quantity Pricing from AIM Preferred Suppliers • Discounts on
Slide 11: AIM Member On-Boarding Progress
AIM MEMBER ON-BOARDING PROGRESS Consistent usership growth on AIMPro platform Since January 2018 Sales Orders $19.9m ON-BOARDING 31 DEC 18 30 SEP 18 CHANGE STATUS Average Order Value $830 No % No % % Number of orders 23,994 Placed multiple orders 207 11% 120 6% 73% • Permanent US engagement team now
Slide 12: AIM Member On-Boarding Progress
AIM MEMBER ON-BOARDING PROGRESS Active management of AIM members increasing engagement with platform 78% of active users have currently placed multiple orders 80% Current adoption rate of Proven that active management: • Increases speed of adoption • Increases order volume • Directly influences orde
Slide 13: Suppliers On-Boarding Progress
SUPPLIERS ON-BOARDING PROGRESS • Current supplier penetration as a percentage of Sales Order value of 37%* and growing ON-BOARDING STATUS 31 DEC 30 SEP • AIM preferred supplier list increased to 280 No. No. • High supplier enthusiasm – aware of growth in AIM and access/exposure Total Contracted to d
Slide 14: Focus in 2018
FOCUS IN 2018 Accelerate AIMPro onboarding and member engagement to our platform Regular interaction between AIM members and Altitude’s dedicated engagement team proven to lead to increased order throughout Since the addition of the CSA Team our Ordering Member Stats have moved to a 35% monthly incr
Slide 15: Opportunity – Acquire AI Mastermind
OPPORTUNITY – ACQUIRE AI MASTERMIND 15 | ALTITUDE Nevada Presentation
Slide 16: AIM Overview
AIM OVERVIEW AIM is the largest and fastest growing distributor group in the U.S. AIM MEMBERS AVERAGE MEMBER REVENUE MEMBERSHIP SALES Reach across all US states & territories and Canada on average 30+ new members joining $1.66 Billion YTD per month (2017: $1.3bn) Sales 2017 2018 $870K 1500 Members /
Slide 17: AIM Membership Growth
AIM MEMBERSHIP GROWTH 1,800 2,000 1,904 Millions Combined AIM MemberRevenues 1,800 1,600 AIM Member 1,600 1,400 1,455 AIM MEMBERS CAGR 1,400 1,200 74% Combined AIM Member Revenues 1,200 1,093 AIM Members 1,000 AIM MEMBER REVENUES $1,663 1,000 CAGR 800 87% 758 800 $1,270 600 600 424 400 $897 400 $542
Slide 18: Why Acquire AIM?
WHY ACQUIRE AIM? ALTITUDE CONTROLS & CAN MONETISE THE ENTIRE $1.7bn PIPELINE Access and enhance distributor membership fee revenue • Existing $59/mth AIM membership fee – enables monetisationof distributors and suppliers • Introduce tiered membership pricing model – material fee revenue uplift Suppl
Slide 19: Monetising the $1.7bn Pipeline
MONETISING THE $1.7BN PIPELINE Membership Fee Revenue AIM members already requesting tiered membership options with enhanced services and benefits No Total Fees pa Recruit Partner AIM REV $59 AIM membership Fee CURRENT Current members 1,917 $1.3m $0.8m $0.5m Current member benefits package AIM BASIC
Slide 20: Move to Tiered Membership
MOVE TO TIERED MEMBERSHIP Fees Captured from both Member & Supplier TIERED MEMBER BENEFITS & SERVICES Order AIM BASIC Tier 1 Tier 1 Supplier • Current member benefits package AIM Member 3%-6% of Cost to member = $59 per month supply order $59 per month Altitude value AIM MARKETERPRO Tier 2 Order All
Slide 21: Acquisition Summary
Acquisition Summary Simply stated the acquisition means: • We own & control the pipeline • The pipeline is $1.7 billion and growing • We have built a technology solution that can analyse all of the quotes, purchasing, pricing and supplier performance data. Providing even further monetisation opportu
Slide 22: Transaction Summary
TRANSACTION SUMMARY Acquire the business assets and undertakings of Advertising Industry Mastermind Group LLC (“AIM”) for US$ 5.0m (~ £4.0m) • $3.5m cash consideration • $0.75m paid in shares (lock-in) • $0.5m deferred purchase consideration • $0.25m retention • $5.0m Total AIM Consideration AIM fou
Slide 23: Fundraise & Timetable
FUNDRAISE & TIMETABLE 23 | ALTITUDE Nevada Presentation
Slide 24: Fundraise and Timetable
FUNDRAISE AND TIMETABLE Equity raise of £7.0 million: Timetable: • US$ 4.25m cash consideration from AIM (~ £3.4M) • US$ 3.75m working capital (~ £3.2M) Roadshow 7 Jan – 10 Jan • US$ 0.5m transaction fees (~ £0.4M) Bookbuild and close 11 Jan • Increase in US operational resource to: Announce and pos
Slide 25: Appendix
APPENDIX 25 | ALTITUDE Nevada Presentation
Slide 26: Altitude Financials
ALTITUDE FINANCIALS Currently unreflective of AIM potential REVENUE UNAUDITED AUDITED H1 H1 FULL YEAR Technology 2018 2017 2017 Saas revenues Monthly subscription fees / legacy model £m £m £m Throughput revenues AIM revenues materialising in H2 REVENUE AdProducts Sass 1.0 1.1 2.3 UK print business a
Slide 27: Thank You
THANK YOU 27 | ALTITUDE Nevada Presentation
Altitude Group — Investor Presentation (January 2019) on 6ix