Aersale Corporation · NASDAQ:ASLE
Aersale — SPAC Merger (September 2020)
40 slides from Aersale's SPAC merger presentation, September 2020
Slide 1: Monocle Acquisition Corporation / AerSale Corp. Investor Presentation
Monocle Acquisition Corporation AerSale Corp. Investor Presentation September 2020
Slide 2: Important Notices and Disclaimers
Important Notices and Disclaimers No Offer or Solicitation This investor presentation (“Investor Presentation”) is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instrume
Slide 3: Important Notices and Disclaimers (Cont'd)
Important Notices and Disclaimers (Cont’d) Industry and Market Data In this Investor Presentation, we rely on and refer to information and statistics regarding market participants in the sectors in which AerSale competes and other industry data. We obtained this information and statistics from third
Slide 4: Table of Contents
Table of Contents I. Introduction & Situation Overview II. Business Overview & Growth Opportunities III. Financial Detail & Transaction Summary IV. Appendix 4
Slide 5: Section I: Introduction & Situation Overview
Section I Introduction & Situation Overview
Slide 6: Presenters and Senior Leadership
Presenters and Senior Leadership AerSale Corp. Monocle Acquisition Corporation Robert Nichols Nicolas Finazzo Eric Zahler Co-Founder, Executive Martin Garmendia Sai Devabhaktuni Richard Townsend Co-Founder, Chairman & Chief Executive Officer Vice Chairman & Chief Financial Officer Chairman Chief Fin
Slide 7: Overview of Monocle Acquisition Corporation and Leonard Green & Partners
Overview of Monocle Acquisition Corporation and Leonard Green & Partners Monocle Acquisition Corporation Leonard Green & Partners Background Background Monocle Acquisition Corporation ~100 years of collective Leonard Green & Partners (“LGP”) is a Invested in 90+ companies (“Monocle”) (NASDAQ:MNCL) c
Slide 8: Updated Transaction Overview
Updated Transaction Overview ▪ Monocle has entered into a revised definitive agreement to combine with AerSale, a leading integrated global Transaction Highlights provider of aviation aftermarket solutions, currently owned by LGP and AerSale’s founders Transaction ▪ Post-closing public company will
Slide 9: Global Leader in Aviation Aftermarket Products and Services
Global Leader in Aviation Aftermarket Products and Services Asset Management Solutions TechOps USM & Flight Equipment Sales Engine & Aircraft Management Aircraft & Components MRO Engineered Solutions Key Financials (PF2019A) Key Financials (PF2019A) $238.5mm 73% $74.3mm 31.1% $86.4mm 27% $23.0mm 26.
Slide 10: AerSale Investment Highlights
AerSale Investment Highlights 1 Well-positioned to capitalize on commercial aviation market dislocation with strong, debt-free balance sheet 2 Differentiated business model designed to maximize return on investment and sustain cash flow across cycles 3 Long-standing relationships across the value ch
Slide 11: Section II: Business Overview & Growth Opportunities
Section II Business Overview & Growth Opportunities
Slide 12: Two 'Purpose Built' Segments Maximizing the Value of Mid-Technology Flight Equipment
Two ‘Purpose Built’ Segments Maximizing the Value of Mid-Technology Flight Equipment Asset Management Solutions TechOps USM & Flight Equipment Sales Engine & Aircraft Management Aircraft & Components MRO Engineered Solutions ▪ High demand aftermarket for mid- ▪ Higher risk-adjusted returns ▪ Maturin
Slide 13: Commercial Passenger Traffic Has Troughed — Beginning to Rebound
Commercial Passenger Traffic Has Troughed — Beginning to Rebound Global RPKs are Expected to Slowly Recover After Hitting a Trough in April Global Aviation Capacity Expected to Rebound 800 14,000 700 12,000 Available Seat Kilometers (Billions) 600 Global RPK’s (Billions) 10,000 500 8,000 400 6,000 3
Slide 14: Increased Aircraft Retirements Generate Attractive Opportunities for AerSale
Increased Aircraft Retirements Generate Attractive Opportunities for AerSale Aircraft Retirements Expected to Increase in the Near-Term 10% 2020E Retirements: 8% 9% 1,400 7% 8% 6% 7% 6% 5% Retirements Deliveries 5% 4% 4% 3% 3% 2% 2% 2020E Deliveries: 1% 1% 989 0% 0% 1990 1994 1998 2002 2006 2010 201
Slide 15: AerSale is Purpose Built to Capitalize on Market Dislocation
AerSale is Purpose Built to Capitalize on Market Dislocation ▪ AerSale has the demonstrated ability to identify and acquire the right aircraft and engines to generate outsized returns in a recovering market − Other industry participants (i.e. pure-play MRO’s, leasing organizations, and financial buy
Slide 16: Strong Cargo Market Has Created Upside for AerSale
Strong Cargo Market Has Created Upside for AerSale Daily International Cargo Capacity(1) Thousand tonnes Peak decline (Mar 30 – Apr 6) 120 Cargo Capacity Growth vs. Last Year(3) 100 80 Airline 19% Freighter 60 40 Express 23% 20 Freighter 0 Feb-09 Feb-23 Mar-08 Mar-22 Apr-05 Apr-19 May-03 May-17 May-
Slide 17: Significant Opportunity to Capitalize on Current Market Conditions
Significant Opportunity to Capitalize on Current Market Conditions 1 ▪ As an attractive alternative to expensive “new” replacement parts, USM is well positioned to rapidly expand as air travel normalizes USM Ripe for Recovery ▪ Required inspections to bring thousands of mid-life aircraft / engines o
Slide 18: Select Near-Term Acquisition Opportunities
Select Near-Term Acquisition Opportunities AerSale is Tooled to Address Counter-Cyclical Market Near-Term Acquisition Opportunities ▪ AerSale has a proven history acquiring assets amidst broader market uncertainty Opportunity #1 Opportunity #2 Opportunity #3 − The Company’s significant asset pipelin
Slide 19: Mid-Technology Flight Equipment Aircraft & Engine Platform Focus
Mid-Technology Flight Equipment Aircraft & Engine Platform Focus Focuses on Mid-Technology Sector ▪ Maintenance intensive, mid-life Flight Equipment aircraft & engine platforms Aircraft / Engine Life Cycle − Largest and fastest growing group New Technology (19% of Installed Base) Mid-Technology (76%
Slide 20: Integrated Business Segments Identify Highest Demand and Markets
Integrated Business Segments Identify Highest Demand and Markets Business Segment Alternatives TechOps Asset Management Solutions AerSale Goodyear / Monetizing Aircraft Roswell (MRO) Business Unit Overhaul / Aircraft Management Realizes the highest value of Cargo Conv. mid-technology flight equipmen
Slide 21: Significant Market Opportunity for Proprietary Engineered Solutions
Significant Market Opportunity for Proprietary Engineered Solutions Natural Vision AerAware™ ▪ Fuel Tank Ignition Mitigation System to meet ▪ Advanced means to meet FAA mandated ▪ Enhanced Flight Vision System (EFVS) FAA mandated Fuel Tank Flammability Automatic Dependent Surveillance Broadcast desi
Slide 22: Nose-to-Tail MRO Facilities Augment Inter-Business Unit Performance and Profits
Nose-to-Tail MRO Facilities Augment Inter -Business Unit Performance and Profits Comprehensive MRO Capabilities Reduce Cost of Parts for Internal Utilization, While Providing Profitable End User Revenue Stream ▪ Goodyear & Roswell aircraft disassembly operations generate engines and MRO Service Offe
Slide 23: Deep Customer Relationships Supported by Diversified Service Offering
Deep Customer Relationships Supported by Diversified Service Offering Fully Integrated Mid-Technology Flight Equipment Offerings Asset Management Solutions TechOps Customers Airlines Aircraft Storage & Dismantling Aircraft & Engine Acquisition Aircraft Transition Checks Lessors & Lessees Aircraft He
Slide 24: Executive Management Team Features Unrivaled Aftermarket Expertise
Executive Management Team Features Unrivaled Aftermarket Expertise ▪ Highly qualified executive leadership team with an average of 25 years of relevant industry experience, through multiple industry cycles, and wide-ranging business conditions ▪ Deep industry relationships through years of business
Slide 25: Attractive Global Opportunities For Scalable Business Platform
Attractive Global Opportunities For Scalable Business Platform 1 2 3 Aviation Aftermarket Development & Innovation Development of New Trough Poised to Rebound of New Engineered High-Margin MRO • Unprecedented opportunity to acquire aircraft / feedstock Solutions Offerings Capabilities at discounted
Slide 26: Section III: Financial Detail & Transaction Summary
Section III Financial Detail & Transaction Summary
Slide 27: AerSale Historical and Projected Financial Performance
AerSale Historical and Projected Financial Performance Pro Forma Adjusted Revenue ($ in millions) $562 $513 $432 $325 $307 $280 $219 $197 PF2017A PF2018A PF2019A 2020F 2021F 2022F 2023F 2024F Pro Forma Adjusted EBITDA ($ in millions) $135 $122 $101 $54 $60 $54 $42 $29 PF2017A PF2018A PF2019A 2020F 2
Slide 28: PF2019A – 2021F Adjusted EBITDA Bridge
PF2019A – 2021F Adjusted EBITDA Bridge PF2019A – 2021F Adjusted EBITDA Bridge ($ in millions) $8.8 $60.2 $22.3 $53.9 ($15.4) ($11.2) $12.7 $41.7 ($3.6) $6.8 ($26.8) PF 2019A Aircraft and Engine USM TechOps SG&A and Other 2020F Aircraft and Engine USM TechOps SG&A and Other 2021F Adj. EBITDA Manageme
Slide 29: Projected Liquidity to Support Attractive Growth Opportunities
Projected Liquidity to Support Attractive Growth Opportunities Total Liquidity Available for Feedstock, Acquisitions & Other ($ in millions) $737 $545 $391 $262 $282 2020F 2021F 2022F 2023F 2024F Cumulative Feedstock Purchases (Net) from 2020F to 2024F is ~$400 million ($ in millions) 2020F 2021F 20
Slide 30: Monocle and AerSale Joining Forces to Accelerate Growth and Profitability
Monocle and AerSale Joining Forces to Accelerate Growth and Profitability Shareholder Value Creation Pre-Transaction Near / Medium - Term Plan Long-Term Goal Revenue: $1bn+ Adj. EBITDA: $250mm+ Targets: 25% - 28% Adj. EBITDA Margin 2020F Financials: Adj. Revenue: $197mm Adj. EBITDA: $42mm 5% - 7% Or
Slide 31: AerSale Initial Valuation at Discount to Public Aerospace Peers
AerSale Initial Valuation at Discount to Public Aerospace Peers TEV / 2021F Adj. EBITDA ~100% value uplift should AerSale’s TEV / 14.5x 2021F Adj. EBITDA multiple rerate to the median of the peer group 13.2x 12.4x (2) 11.3x 11.3x Median 11.3x (2) Mean 11.0x 9.5x 8.3x 7.6x 5.5x (1) Illustrative Initi
Slide 32: AerSale Will Be Debt-Free at Transaction Close
AerSale Will Be Debt-Free at Transaction Close Net Debt / 2020F Adj. EBITDA 5.2x 3.5x 3.5x (2) 2.5x Mean 2.6x 2.0x Median 2.2x(2) 1.5x 1.4x 1.3x -- (1) Illustrative Optimized Capital Structure and Strong Liquidity Provides Strong Foundation to Accelerate Growth Strategy Source: Wall Street research,
Slide 33: Operational Benchmarking
Operational Benchmarking 2018A - 2021F Revenue Growth CAGR 5.2% 3.5% 3.2% (3) Median 0.9% 1.0% 0.9% 0.9% (0.8%) (2.7%) (1) (13.6%) (2) 2021F EBITDA Margin 18.4% 17.6% 17.4% 15.2% (3) 13.8% Median 13.3% 12.8% 11.1% 7.4% 6.5% (1) (2) Source: Wall Street research, Company filings, Capital IQ, Bloomberg
Slide 34: Compelling Valuation Relative to Peers
Compelling Valuation Relative to Peers Enterprise Value / 2020F EBITDA Multiple AerSale Multiple at Various Prices 12.3x 9.4x 8.2x 7.2x (1) (2) $10.00 $11.00 $12.00 Peer Median Enterprise Value / 2021F EBITDA Multiple 11.3x AerSale Multiple at Various Prices 7.3x 6.3x 5.5x (1) (2) $10.00 $11.00 $12.
Slide 35: Transaction Capitalization and Ownership
Transaction Capitalization and Ownership Illustrative Sources and Uses Pro Forma Valuation ($ in millions, except per share data) Illustrative Monocle Share Price $10.00 Sources Pro Forma Shares Outstanding(5) 42.7 (1) Cash Held in Monocle Trust Account $177.0 Implied Equity Value $427.1 (6) New Equ
Slide 36: Section IV: Appendix
Section IV Appendix
Slide 37: Non-GAAP Consolidated Financial Reconciliation
Non-GAAP Consolidated Financial Reconciliation FY Ending December 31st, Commentary ($ in millions) 2018A 2019A A Reflects discontinued operations of charter airline business sold in 2018 Revenue, Net $290.7 $304.2 B Includes pre-acquisition Avborne historical revenue as if acquired in Jan A AerLine
Slide 38: Non-GAAP Consolidated Financial Reconciliation (Cont.)
Non-GAAP Consolidated Financial Reconciliation (Cont.) ($ in millions) Q1 2019A Q2 2019A YTD Q2 2019A Q1 2020A Q2 2020A YTD Q2 2020A Commentary Revenue, Net $52.2 $63.0 $115.2 $55.9 $46.6 $102.5 A Reflects discontinued operations of charter airline business sold in 2018 A AerLine Divestiture Adjustm
Slide 39: Disciplined Acquisition of Targeted Flight Equipment Feedstock
Disciplined Acquisition of Targeted Flight Equipment Feedstock AerSale’s Formal Feedstock Procurement Process Efficiently Manages Capital AerSale assimilates proprietary real-time and historical data from its specialized sales, leasing, air field storage, USM, and MRO business units, including marke
Slide 40: Disciplined, Accretive Acquisitions
Disciplined, Accretive Acquisitions Headquarters Memphis, TN Miami, FL Date of Acquisition May 2019 January 2020 Established supplier of USM to Commercial Operators & Government MRO operation focused on: composite flight control surfaces, nacelle & Business Description Agencies fan / thrust reverser