Maggie Beer Holdings Ltd. · ASX:MBH
Maggie Beer — Merger or Acquisition (March 2021)
44 slides from Maggie Beer's merger presentation, Mar 30, 2021
Slide 1: Maggie Beer Holdings Limited Acquisition and Equity Raise
STRICTLY PRIVATE & CONFIDENTIAL MAGGIE BEER HOLDINGS LIMITED ACQUISITION AND EQUITY RAISE ASX: MBH 30 MARCH 2021
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation has been prepared by Maggie Beer Holdings Ltd ACN 092 817 171 (“MBH”). This presentation has been prepared in relation to MBH’s proposed acquisition of Hampers and Gifts Australia Pty Ltd ACN 648 399 222 (“Hampers and Gifts”) and a proposed placement
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Not investment advice This presentation is not financial advice, financial product advice or a recommendation to acquire MBH securities (nor does i t or will it form part of any contract to acquire MBH securities). It has been prepared without taking into account the
Slide 4: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer To the maximum extent permitted by law, MBH, its directors, officers, consultants, employees and agents and the Other Persons (together, the “Persons”) expressly exclude and disclaim all liability, for any expenses, losses, damages or costs suffered or incu
Slide 5: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer (continued) The underwriter and/or their affiliates are acting as lead manager, underwriter and bookrunner to the Offer. The underwriter is acting for and providing services to MBH in relation to the Offer. The underwriter has been engaged solely as an inde
Slide 6: Important Notice and Disclaimer
Important Notice and Disclaimer Effect of rounding A number of figures, amounts, percentages, estimates, calculations of value and fractions in this presentation are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this pr
Slide 7: Overview of Maggie Beer Holdings
Overview of Maggie Beer Holdings • Maggie Beer Holdings Limited (ASX: MBH) represents three premium brands, all following the principle of making Business description Australian premium food and beverage products using Australian ingredients produced by local dairy farmers, fruit and vegetable growe
Slide 8: Transaction summary
Transaction summary • HGA operates two e-commerce businesses: • The Hamper Emporium (www.thehamperemporium.com.au) • Seeks to provide premium quality at an affordable price, utilising a blend of own-brand and high margin third party brands and products • Management forecast FY21 revenue of $30.7m Tr
Slide 9: Capital raise summary
Capital raise summary • A capital raise to raise gross proceeds of $30 million at $0.35 per share through: • A Placement of $10.9 million (under MBH LR 7.1 capacity less any Director participation) • A 1 for 3.8 pro-rata, accelerated, non-renounceable entitlement offer (ANREO) to raise up to approxi
Slide 10: Acquisition rationale
Acquisition rationale Well established high growth, high margin business with strong cash generation Market leading DTC platform with combined active customers >100k Creates a large scale premium branded DTC business that leverages and strengthens the core Maggie Beer Products business Highl
Slide 11: Maggie Beer Overview
PHEASANT / FARM MAGGIE QUINCE \ TRIPLE CREAM BRIE BS = PASTE 200 ~< g)
Slide 12: Key highlights from H1 FY21
Key highlights from H1 FY21 Group continues to thrive with strong net sales and trading EBITDA growth H1 FY21 NET SALES H1 FY21 OPERATING TRADING EBITDA IMPROVED FURTHER HEAD OFFICE COST +19.7% CASHFLOW IMPROVED BY $2.1M in H1 FY21 vs PCP TO SAVINGS IN H1 FY21 FROM on H1 FY20 + $3.7m BE HEAD OFFICE
Slide 13: E-commerce & digital transformation strategy
E-commerce & digital transformation strategy • Consumer purchasing habits have shifted strongly to online shopping and it is expected that this trend will continue MBH e-commerce strategy • Putting strategic initiatives in place to grow to its online sales to be > 20% of its total net sales • Create
Slide 14: M&A Opportunity and Target Asset
M&A Opportunity and Target Asset
Slide 15: The Gifts / Hamper Emporium
THE gifts HAMPER S australia EMPORIUM Debiscsing h
Slide 16: Hampers & Gifts Australia (HGA)
Hampers & Gifts Australia (HGA) • HGA was founded and is wholly owned by Emily McWaters and David Morgan who have built the business since 2014 to become a leading online hamper, gifts and experience retailer and consists of: Company history • The Hamper Emporium • Gifts Australia • Hampers are pric
Slide 17: Industry overview
Industry overview • Australian online retail market achieved c.$33bn sales in CY2020, a 59% increase YoY¹ • Total online sales have averaged an annual rise of 65.5% from March 2020 to January 2021 from the shift to online purchasing at the outset of the COVID-19 pandemic¹ • Total online sales were 9
Slide 18: Hamper Emporium
HAMPER R, EMPORIUM
Slide 19: The Hamper Emporium
The Hamper Emporium • Providing premium quality at an affordable price, utilising a combination of own-brand and high margin third party brands and products Overview • Customers include corporates and consumers, who typically arrive at the website with the intent of purchasing a hamper (high convers
Slide 20: Gifts Australia
cifts australia
Slide 21: Gifts Australia
Gifts Australia • Currently warehouses and sells over 1,300 products and experiences, and developing white label partnership with Viator (TripAdvisor) to expand SKUs by up to 12,000 • Ability to provide personalisation to gifts Overview • Consistent (less seasonal) level of sales • Primarily individ
Slide 22: Management team
Management team ▪ Joined HGA as COO in September Amy McWaters (CEO) Emily McWaters (Creative Director) ▪ Established HGA in 2014 2014, and was promoted to CEO in ▪ Currently works part time, focusing June 2020 on product development and brand ▪ Oversees all elements of the strategy business operatio
Slide 23: Levers for growth beyond FY21 – combined business
Levers for growth beyond FY21 – combined business • Leveraging the HGA e-commerce capabilities to drive group e-commerce sales growth so that it forms a material revenue component of the Group E-commerce capability • Creates a true Group omni-channel, decreasing reliance on supermarket retail, which
Slide 24: Financial summary
Financial summary • HGA has delivered sustained revenue growth and EBITDA Revenue trend $m margin expansion CAGR 43% 36.4 • High revenue CAGR driven by The Hamper Emporium 19.1 • EBITDA acceleration ahead of revenue as the 12.4 14.4 business experiences significant operating leverage • Management fo
Slide 25: Historical consolidated P&L
Historical consolidated P&L Consolidated P&L (A$m) FY18A FY19A FY20A Gifts Australia 3.0 3.0 3.2 The Hamper Emporium 9.0 11.4 15.8 Other 0.4 0.0 0.0 Total Revenue 12.4 14.4 19.1 % Growth 16.2% 32.1% Cost of Sales (5.3) (5.9) (7.5) Gross Profit 7.1 8.6 11.5 Gross Profit Margin (%) 57.1% 59.3% 60.4% S
Slide 26: Transaction and capital raise
Transaction and capital raise
Slide 27: Transaction and capital raise summary
Transaction and capital raise summary • The share purchase agreement will result in MBH acquiring HGA, comprising of the following: • Assets including equipment, inventory and intellectual property • Contracts Transaction structure • Employees • Key full-time management remain committed to the busin
Slide 28: Equity offering structure
Equity offering structure • A capital raising of $30 million which comprises of: • Placement to raise up to approximately $10.9 million under the Company’s ASX Listing Rule 7.1 capacity (Placement) Offer structure • A 1 for 3.8 pro-rata accelerated non-renounceable entitlement offer to raise up to a
Slide 29: Equity offering structure
Equity offering structure • The bookbuild process for the placement and institutional entitlement offer will be conducted over Tuesday, 30 Placement and March 2021 and Wednesday, 31 March 2021 institutional • Entitlements not taken up by institutional shareholders cannot be traded on market or trans
Slide 30: Pro-forma Balance Sheet
Pro-forma Balance Sheet Balance Sheet ($'000) Dec-20 Pro-forma1 Notes Assets Cash 6,282 16,282 Additional $10M from capital raise - $7.5m working capital and $2.5m transaction costs Trade receivables 9,606 9,913 HGA's corporate debtors Inventory 3,217 6,566 HGAs inventory Right of Use Asset 3,358 3,
Slide 31: Capital structure
Capital structure Pre- Placement Post- Shareholding Acquisition Shareholding Issued Share Capital transaction and ANREO transaction % shares issued % shares shares issued shares Board and Management Chantale Millard (CEO) 0 0.0% TBC* 0 TBC* TBC%* Reg Weine (Chairman) 0 0.0% TBC* 0 TBC* TBC%* Tom Kii
Slide 32: Sources and uses of funds
Sources and uses of funds Sources of funds $m Equity raising – Placement 10.9 Equity raising – Entitlement Offer 19.1 Total $30.0 Use of funds $m Cash consideration for acquisition of the HGA 20.0 Working capital, research and development, sales and marketing initiatives 7.5 Costs of the Offer 2.5 T
Slide 33: Proposed capital raise timeline
Proposed capital raise timeline Item Timetable Transaction announced Tuesday, 30 March 2021 Announcement of ANREO Tuesday, 30 March 2021 Institutional entitlement offer opens Tuesday, 30 March 2021 Trading halt lifted Thursday, 1 April 2021 Record date Thursday, 1 April 2021 Dispatch of retail entit
Slide 34: Key risks
Key risks This section discusses some of the key risks with an investment in shares in MBH. Each of the risks set out below could, in i solation or in combination, if they eventuate, have a material adverse impact on MBH’s business, financial condition, results of operations and prospects. The risks
Slide 35: A. Acquisition risks
A. Acquisition risks Historical liabilities If the Acquisition completes, MBH will become directly or indirectly liable for any liabilities that Hampers and Gifts has in curred in the past, including liabilities which were not identified by MBH during its due diligence or which are greater than expe
Slide 36: A. Acquisition risks
A. Acquisition risks Pre-conditions to Acquisition Completion of the Acquisition is conditional on a number of customary conditions being satisfied or waived. A party may waive any or all conditions of which it is a benefiting party, at its sole and absolute discretion. If any of the conditions are
Slide 37: B. Business risks
B. Business risks The Company is committed to the effective management of risk to reduce uncertainty in the Group’s business outcomes and to protect and enhance shareholder value. There are various risks that could have a material impact on the achievement of the Group’s strategic objectives and fut
Slide 38: B. Business risks
B. Business risks Environmentally Given that MBH is a food processor and manufacturer, environmental issues relating to noise, air, waste water emissions and contamination arise sustainable from time to time. MBH is subject to environmental laws and regulations in each of the states in which it has
Slide 39: B. Business risks
B. Business risks Increased competition MBH participates in a highly competitive fast moving consumer goods global business against materially larger global competitors who have significantly more access to capital and resources. MBH is subject to competition for the supply of milk and other ingredi
Slide 40: B. Business risks
B. Business risks Ability to attract and retain key A critical component of our success is the ongoing retention of key management personnel. There is a risk we may not be able to attract and personnel retain key personnel or be able to find effective replacements for those key personnel in a timely
Slide 41: C. Offer risks
C. Offer risks Underwriting risk MBH intends to enter into an underwriting agreement under which Bell Potter Securities Limited (the Underwriter) fully underwrites the Entitlement Offer, subject to the terms and conditions of the underwriting agreement between the parties (the Underwriting Agreement
Slide 42: C. Offer risks
C. Offer risks Risks associated with an There are general risks associated with investments in equity capital such as MBH shares. The trading price of MBH shares may fluctuate with investment in shares movements in equity capital markets in Australia and internationally. This may result in the marke
Slide 43: International offer restrictions
International offer restrictions International offer restrictions This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may
Slide 44: Thank you
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