Altitude Group Plc · LSE:ALT
Altitude — H1 2017 Earnings Presentation
22 slides from Altitude's earnings presentation, 2017
Slide 1: Presentation of 2017 Interim Results
Presentation of 2017 Interim Results
Slide 2: Presentation Team
Presentation Team Peter J Hallett Executive Chairman • Experienced public company director • Turnaround specialist across technology, retail and manufacturing • Former CFO of Redstone plc (now Castleton Technology plc) • Previously Finance Director at Texas Homecare and First Quench Nichole Stella P
Slide 3: 2017 H1 Earnings
2017 H1 Earnings Increased Profitability / Further cost reduction / First time Ad Products Contribution REVENUE INCOME STATEMENT H1 H1 Variance Full Yr • +£0.3m first time revenue from Ad Products 2017 2016 2016 £000 £000 £000 % £000 • Overall SaaS Revenues flat Revenue 2,972 3,015 (43) (1.4%) 4,323
Slide 4: US Market & Opportunity
US Market & Opportunity Participants:- ~4,000* Suppliers: • Sources unbranded merchandise predominantly from Far East Market Size Total US spend on • Produce catalogues - either branded or unbranded - for the distributors $21 bn Promotional Products per annum* ~22,000* Distributors: • Distribute cat
Slide 5: Disrupting the Existing US Market Model
Disrupting the Existing US Market Model Current US Market Structure & Impact of Channl • Highly inefficient F2F/fax/phone based Existing US Market Model Altitude’s US Model using Channl eCommerce platform • Slow and costly process of proofing adds cost • Only ~9.7% of market currently online PPD PPD
Slide 6: US Channl Learnings H1 2017
US Channl Learnings H1 2017 Growing Awareness & Traffic to Channl Sites • TRAFFIC ACCELERATING ACROSSS ALL CHANNL SITES FROM ZERO BASE • STATS FOR AUGUST 2017: • Visits up 55.2% in August • Average duration 37.5 minutes • 25.5 pages per visit • Bounce rate very low at only 22.9% • EXPONENTIAL PROGRE
Slide 7: US Channl Learnings H1 2017
US Channl Learnings H1 2017 Identifying optimal route to engagement DISTRIBUTORS VIA APRINTA High Volume Pure Digital Marketing Campaign Step 1: Marketing to Distributors • Step 1 Email, DM, Webinars, Social, AIM/Aprinta Intranet and • High volume digital only blitz; 9 week progressive other tools p
Slide 8: US Channl Learnings H1 2017
US Channl Learnings H1 2017 Identifying optimal route to engagement AI MASTERMIND High Volume Pure Digital Marketing Campaign AIM Distributor Map • Step 1 • All 1,400 AI Mastermind (“AIM”) US distributors contacted progressively from March - July • Same programme followed as per Aprinta • All conduc
Slide 9: US Channl Learnings H1 2017
US Channl Learnings H1 2017 Expanded / Extended Partnership Agreement AI MASTERMIND Extended Partnership Agreement terms: • TERM • 3 year extension to 2020 • DIRECT ACCESS • Altitude will be given direct access to members • PROMOTION • Aim will actively market & promote Altitude’s Channl & order man
Slide 10: UK Market & Opportunity
UK Market & Opportunity Market Participants ~1,900 Suppliers: • Sources unbranded merchandise predominantly from Far East Market Size • Produce catalogues - either branded or unbranded - for the £966 m Total UK spend on Promotional distributors Products per annum ~2,700 Distributors: • Distribute ca
Slide 11: UK Channl Development H1 2017
UK Channl Development H1 2017 Identifying optimal route to engagement Distributors • Step 1 Step 1: Marketing to Distributors Email, DM, Webinars, Social, AIM/Aprinta Intranet and • Ad Products, Pen Warehouse & Snap Products other tools powering the supply side of Channl UK • Ad Products distributor
Slide 12: Sources of Enterprise Opportunity
Sources of Enterprise Opportunity High Street Big Box Retailers B2B Providers Aggregators Not For Profit Political 12
Slide 13: Roll out plan
Roll out plan Comparable Returns: Monthly Recurring Revenue vs Throughput Model Current MRR New Throughput • Typical “smaller” reseller business: Revenue Revenue • Revenue $50k pa Distributor Sells $500 $500 • Average order value $500 Distributor Buys $300 $300 • 100 orders pa Altitude Revenue $3.60
Slide 14: Summary
Summary • Established leadership team in largest addressable market • Legacy business profitable • Ad Products is performing to expectations • Channl is driving orders with distributor education, support & marketing • Average orders from zero to 48 pw over a 4 week period in US • 8x increase in dist
Slide 15: Appendix
Appendix
Slide 16: Other Board Members
Other Board Members Martin Varley President & Founder • Serial Entrepreneur • Founded and sold the company that became 4imprint • Unrivalled history and connections in the promotional products industry Shaun Parker Chief Operating Officer & MD Ad Products • Senior management positions in Specialist
Slide 17: Interim Results 6 Months Ended 30 June 2017
Interim Results 6 Months Ended 30 June 2017 INCOME STATEMENT H1 H1 Variance Full Yr CASHFLOW STATEMENT H1 Full Yr H1 2017 2016 2016 2017 2016 2016 £000 £000 £000 % £000 £000 £000 £000 Revenue 2,972 3,015 (43) (1.4%) 4,323 Profit/(Loss) before tax 495 73 410 Gross Profit 2,233 2,379 (146) (6.1%) 3,50
Slide 18: Interim Results 6 Months Ended 30 June 2017
Interim Results 6 Months Ended 30 June 2017 BALANCE SHEET June Dec June 2017 2016 2016 £000 £000 £000 Tangible assets 82 22 32 Intangible assets 802 818 990 Goodwill 564 564 564 Deferred tax 426 426 426 Inventory 976 - Tra de a nd other recei va bl es 847 407 503 Ca s h 2,093 741 415 Tra de a nd oth
Slide 19: Channl USPs
Channl USPs Channl Attractions to Participants The Distributor/Reseller • FREE Cloud Based state of art eCommerce trading platform • Ability to create bespoke FREE sites for every customer • No erosion of margin • This will accelerate the current migration online • Smaller resellers could never just
Slide 20: Channl Summary
Channl Summary Channl : • Distributors/Resellers are enabled with an online store in minutes • Ability to “spin” thousands of online stores for end customers • We build all sites for free • No loss of margin for Resellers • Production ready iincremental orders for Suppliers • Addresses ease of order
Slide 21: Table of Competitor Capabilities
Table of Competitor Capabilities Vistaprint 4Imprint MOO 10+ Channl Corporate Online X Customisation Custom Store X Offering No Artwork Needed X X X Automated Reseller X X X Set Up Automated End X X X Customer Set Up Ability to Create X X X 10,000 + site/day Barriers to Entry: •
Slide 22: Proven Technology
Proven Technology Gp <_ amazon =A LLOYD'S LLOYD ‘'S OF LONDON Allianz @) aa ©) tripadvisor