Altitude Group Plc · LSE:ALT
Altitude — H1 2018 Earnings Presentation
22 slides from Altitude's earnings presentation, September 2018
Slide 1: Altitude Group plc Interim Results Presentation
Altitude Group plc Interim Results Presentation September 2018
Slide 2: 2018 Operational Highlights
2018 Operational Highlights • Rapid expansion in US through AIMPro rollout is our strategic priority – AIM partnership enhanced/extended – On-boarding of AIM members began Jan 2018 – encouraging progress being achieved – 65 preferred suppliers on-boarded • Two year partnership signed with Napco medi
Slide 3: US Promotional Products Market
US Promotional Products Market Very Large, Highly Fragmented, Low Online Penetration • Highly fragmented market USA • Perceived largest player 4Imprint c.2.7% market share Current market size $23bn* • Distributors see threat of large online retailers entering the market Online share (lead generation
Slide 4: CHANNL | PRO Bringing efficiency to US Promotional Products Market
CHANNL | PRO Bringing efficiency to US Promotional Products Market Compelling reasons to use CHANNL|PRO Suppliers Distributors/Resellers End-User • Increased business through • Free access to leading tech • Easier to design access to aggregated orders • True ecommerce platform • Easier to buy • Sing
Slide 5: CHANNL | PRO - AIMPro Revenue Model
CHANNL | PRO - AIMPro Revenue Model • Revenue model based on capture of the Suppliers Distributors transactional pipeline onto AIMPro Transaction Fee Transaction Fee Transaction % of PO value As % of SO Fee/Commission • Supplier fee % currently blended rate based on value current offline dominance O
Slide 6: CHANNL | PRO - US rollout through AIMpro
CHANNL | PRO - US rollout through AIMpro • AIM is a fast-growing buying group of distributors in the US. • Members now total 1,857 – an increase of 280 (+18%) since February. • Combined revenue is c$1.6bn – c.6.9% market share • Average revenue per member c.$880k pa • Altitude’s partnership with AIM
Slide 7: AIM Members On-Boarding Progress
AIM Members On-Boarding Progress • Total sales orders placed to date $9.9m On-Boarding Status 16 Sep 28 May Change • AOV $889 No. No. % • No.of orders 11,123 Placed multiple orders 120 37 224% • Full time US based engagement team now in place Placed first order 44 20 120% Ordering Members 164 57 188
Slide 8: AIM Members Order Frequency
AIM Members Order Frequency • A summary of order frequency is shown in the table below. From this it can be seen that 73% of active users have placed at least two orders and 45% have placed six orders. • We are encouraged by the high level of repeat orders and have found that our engagement team are
Slide 9: AIM Suppliers On-Boarding Progress
AIM Suppliers On-Boarding Progress • Total Purchase Orders placed to date $5.1m On-Boarding Status 16 Sep 28 May • AOV $764 • No. of orders 6,680 No. No. AIM Preferred Suppliers (“APS”) • Supplier penetration building 63 33 Receiving Orders APS sign ups 2 18 • High enthusiasm – Suppliers do not want
Slide 10: AIM Member Case Study #1
AIM Member Case Study #1 AIM Member, Texas, USA • AIM Member on-boarded 2 May 2018 • First order placed 14 May 2018 • AIMPro Customer Success Team helped to build 1st ecommerce Channl site • Launched 2nd store later in May with no assistance • Never traded online before AIMpro • 165 orders placed to
Slide 11: AIM Member Case Study #2
AIM Member Case Study #2 AIM member, Illinois, USA • AIM Member on-boarded 9 March 2018 • First order placed 13 March 2018 • $400 AOV • $33.2K total order value to date • 83 orders placed to mid September 11
Slide 12: Other Developments: Second White Label Opportunity
Other Developments Second White Label Opportunity • Two year partnership agreement with Printing Packaging & Publishing division of NAPCO Media (North American Publishing Company), based in Philadelphia US NAPCO Publications • Altitude are providing a white label ChannlPro platform, mirroring the AI
Slide 13: Other Developments: Development of Online Marketplace
Other Developments Development of Online Marketplace • Soft/test launched in UK mid-January, US launch scheduled later this year • andeverything.com (“AE”) is an aggregating marketplace for promotional products with full Channl personalisation technology • Distributors subscribe for products to be l
Slide 14: Other businesses: Complementary & Profitable
Other businesses: Complementary & Profitable • Acquired June 2017 for net asset value £0.8m, to supply Channl in UK • UK promotional products supplier/printer: 2017 Revenue £2.1m, EBITDA £0.3m • 2018 trading in line with expectations • New product range to support Channl UK Technology • Overall 2017
Slide 15: Summary
Summary • 2018 interim results in line with expectations • AiMPro roll out progressing and accelerating – 164 members currently ordering • Strong supplier interest and demand – 65 suppliers signed up • Permanent US team recruited and driving engagement • NAPCO launched in Q3 2018, initial take up is
Slide 16: Appendix
A ALTITUDE GROUP PLC Appendix
Slide 17: Senior Management
Senior Management Nichole Stella – CEO • Experienced career US Promo industry professional • 12 years in US with Promo Media Marketing Group; last 6 years as President and Chief Revenue Officer • Promo media Marketing Group is a division of Napco Media Graeme Couturier – CFO • Previously CFO at Sort
Slide 18: Current Group Structure
Current Group Structure Legacy Core Route to Market US 1st “White Label” Solution PUBLICATIONS EXHIBITIONS Trade Catalogues PPD Live Trade Mag PPD Roadshows 2nd “White Label” Solution • aaaaaaaa • Legacy ERP / CRM and Order Management platform • Cloud / web-based promo products UK 18
Slide 19: CHANNL | PRO - Overview
CHANNL | PRO - Overview “White Label” solution for distributor and supplier platforms • ChannlPro combines Channl’s e-commerce trading solutions with Altitude’s existing CRM and order management system, to allow both online and offline transactions to execute through Channl • The ChannlPro solution
Slide 20: Competitive Positioning
Competitive Positioning • We believe we have a good head start on our competitors with regard to our proprietary technology • Artworktool design application protected by extended US patent • Requirement for a multimillion dollar investment and time constraints significant barrier to entry, makes Cha
Slide 21: Gross Transactional Revenue (GTR) potential
Gross Transactional Revenue “GTR” GTR fee potential from $1.3bn of throughput revenue AiMPro GTR Potential at 90% of Member Offline Orders Adoption Contractual commission from suppliers Up to 6% 120 10.0% as a % of End User retail value Up to 3.9% 9.0% 100 BLENDED RATE (% THROUGHPUT) 8.0% 7.0% 80 On
Slide 22: Illustrative CAC/LTV per AiM Member
Illustrative CAC/LTV per AiM Member • Customer Acquisition Cost $3,100 (“CAC”) Including cost of prospecting and on-boarding + • Cost to Serve (“CTS”) $5,700* Total Cost of Acquisition $8,800 • Lifetime Value (“LTV”) $44,000** • CAC / LTV 5.0 X * Costs to service AiM member over 3 year estimated lif