Upson International Corp. · PSE:UPSON
Upson International — IPO Roadshow (March 2023)
44 slides from Upson International's IPO roadshow presentation, March 2023
Slide 1: Upson International Corp. Investor Presentation
Upson International Corp. Investor Presentation | March 2023
Slide 2: Disclaimer
Disclaimer This presentation does not constitute a prospectus or any kind of offering memorandum in whole or in part. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company. There shall be no sale of these securities in any state o
Slide 3: Contents
01 Company Overview 02 Industry Overview Contents 03 Investment Highlights 04 Key Strategies 05 Financial Highlights 06 Indicative Offer Terms
Slide 4: Company Overview
01 COMPANY OVERVIEW
Slide 5: Overview
Overview Largest retailer of IT- Widest range of IT- Strongest nationwide related products from related products in the presence (200 stores) well-recognized brands Philippines (13,000 SKUs) Upson International Corp. Close to 30 years of Features only Certified track record and Untampered and strong
Slide 6: Key milestones
Key milestones The growth of our company from a simple distributor to the nation’s leading retailer of IT-related merchandise Merged with Columbia Computer International Proton Microsystems, Corporation Inc. was founded on April 19, 1995 Opened 60 new stores Launched our Partnered with third party w
Slide 7: Store Network
Store Network We have 200 stores* strategically located in major markets and in fast-growing cities nationwide Retail Format North Luzon 34 branches 9 5 14 National Capital Region South Luzon 21 37 branches 64 branches 151 Visayas 24 branches Octagon Micro Valley Gadget King Concept Store Mindanao O
Slide 8: Our store formats
Our store formats We offer our products through multiple retail formats to provide our customers flexibility when purchasing their preferred products Prime Store Concept Store Mobile Store • Offers a complete • Carries a broad • Focuses on product portfolio range and exclusive communication and • Av
Slide 9: Prime Store
Prime Store UIC’s flagship brand which offers Focused on DIY components for PC Offers IT accessories and our most extensive and complete customization as well as gaming- peripherals product line specific PCs and peripherals 151 stores 21 stores 14 stores UPSON INTERNATIONAL CORP | 9
Slide 10: Concept Store Mobile Store
Concept Store Mobile Store Stores that carry exclusive and full product suite of a single brand. Specialty stores focusing on communication and 9 stores connectivity devices. 5 stores Brother Concept Store Silvertec Concept Store Octagon Mobile Store SM North EDSA SM North EDSA Sta. Mesa HP Concept
Slide 11: Our product segments
Our product segments We are a leading retailer of IT-related products, which includes a wide range of hardware and software products Personal Computers Printing Communication Storage Components Networking Accessories Peripherals Software UPSON INTERNATIONAL CORP | 11
Slide 12: The Only One Certified for Untampered Product Lines
The Only One Certified for Untampered Product Lines 4/20/2023 UPSON INTERNATIONAL CORP | 12
Slide 13: Industry Overview
02 INDUSTRY OVERVIEW
Slide 14: Consumer electronics industry – Overview
Consumer electronics industry – Overview Php 157 billion is the estimated value of the PC and PC-related peripherals and components in PH consumer electronics retail industry (excluding mobile communications) in 2020. UIC leads the market followed by far second and third players, controlling 5.43% m
Slide 15: Consumer electronics industry – Outlook (1/2)
Consumer electronics industry – Outlook (1/2) Health and safety protocols due to the pandemic encouraged businesses and schools to adopt a hybrid arrangement, which then increased demand for online tools Import Growth (%) Data of Select Electronic Product Categories Year Office Equipment Consumer El
Slide 16: Consumer electronics industry – Outlook (2/2)
Consumer electronics industry – Outlook (2/2) Demand for consumer electronics will continue the uptrend until 2025, with estimated sales of Php 486.5 Billion by year 2025. Key industry trends Consumer Electronics Industry Sales (in Php millions) 500,000 Digital ecosystem (brand-centric compatibility
Slide 17: Investment Highlights
03 INVESTMENT HIGHLIGHTS
Slide 18: Investment Highlights
Investment Highlights We have relied on the following competitive strengths in order to become one of the country’s leading retailer of IT-related merchandise 1. Leading IT retailer 2. Strong nationwide presence in terms of store network 3. Widest portfolio of the latest products from world-renowned
Slide 19: 1. Leading IT retailer
1. Leading IT retailer Sales (2021) vs. competitors Number of branches vs. competitors (As of end-2021) Company C, Company D, 829 1,115 Company B, Company E, 592 Company G 69 1,575 Company F 27 Company F, 138 Company A, Company E 32 2,772 Company G, 116 Company D 29 Company C 53 Company B 20 Company
Slide 20: 2. Strongest nationwide presence in terms of store network
2. Strongest nationwide presence in terms of store network As of September 30, 2022, we have 200 branches Other Distribution Channels North Luzon Our products are available on our proprietary website: https://www.octagon.com.ph/ 34 branches National Our products are available on popular e-commerce C
Slide 21: 3. Widest portfolio of the latest products from world-renowned brands
3. Widest portfolio of the latest products from world-renowned brands We have an active portfolio of more than 13,000 SKUs, spanning across different product categories Computers Communication Components Accessories Peripherals Products offered: Printers Storage Networking Software Carried Brands Ex
Slide 22: 4. Highly-Effective Supply Chain
4. Highly-Effective Supply Chain: Operational Excellence and Competitive Pricing • Backed by 27 solid years of experience in the industry • Gained valuable insights in store and warehouse operations In-depth know how • Resulted to access of available mall spaces, on-time opening of new stores, and o
Slide 23: 5. Rising profitability and cash-generation despite the COVID pandemic
5. Rising profitability and cash-generation despite the COVID pandemic Net Income (In Php Millions) 700 Net Income CAGR of 78% from 2018 7.0% Key Performance Indicators 2019 2020 2021 3Q 2022 Millions 600 6.0% Gross Profit Margin 20.9% 20.5% 22.0% 22.7% 5.7% 4.7% EBITDA Margin 9.6% 10.1% 11.2% 11.1%
Slide 24: 6. Proven and founder-led leadership team
6. Proven and founder-led leadership team Lawrence O. Lee Arlene Louisa T. Sy Rolando O. Raval Jr. • Chairman • President, CEO, and • Chief Operations Director Officer and Director • President from 2012 to 2021 • Has been with the • Has been with Company since 1995, Company since 2002 • Over 35 year
Slide 25: Key Strategies
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Slide 26: Key Strategies
Key Strategies We promote technological advancement, alongside achieving profitable and sustainable growth. We plan to use our key competitive strengths through the following long-term strategies: 1. Further expand store network and penetrate markets with high potential 2. Develop more warehouses an
Slide 27: 1. Further expand store network and penetrate markets with high potential
1. Further expand store network and penetrate markets with high potential With 200 stores nationwide, we intend to cement our market leading position by adding 250 stores (25,000 sqm) in the next 3 to 5 years North Luzon 34 branches ✓ Nationwide reach, Nationwide service National Capital Region Sout
Slide 28: 2. Develop more warehouses and quickly respond to changing consumer demands
2. Develop more warehouses and quickly respond to changing consumer demands Key Developments Add a total of Warehouses will be located nine (9) warehouses and nationwide in cities such as distribution facilities Manila, Naga, Cabanatuan, and Dagupan. Work closely with Implement suppliers and vendors
Slide 29: 3. Ensure availability of a complete line of authentic IT-related products
3. Ensure availability of a complete line of authentic IT-related products Offer a complete, high-quality, and up-to-date suite of IT-related products Sell authentic and untampered products Launch more SKUs in each product category Timely adjust merchandise mix Utilize strong relationship with suppl
Slide 30: 4. Excel in omni-channel experience and raise brand recognition
4. Excel in omni-channel experience and raise brand recognition 1 Physical 3 Store Increase sales on Seamless customer experience Online Retail Web OCTAGON Mobile 2 4 Integrate offline to online store Increase brand awareness Social UPSON INTERNATIONAL CORP | 30
Slide 31: 5. Launch new store formats
5. Launch new store formats NEW IN-STORE EXPERIENCE DIFFERENT PRODUCT MIX MATCH MARKET DEMAND SELECTIVE UPSON INTERNATIONAL CORP | 31
Slide 32: 6. Explore opportunistic acquisitions
6. Explore opportunistic acquisitions Deepen market- leading position Opportunistic Enhance Acquisitions competitiveness Promote synergy and improve financial performance UPSON INTERNATIONAL CORP | 32
Slide 33: Financial Highlights
05 . FINANCIAL vA S| HIGHLIGHTS GPAOO Stealth Gin. OE
Slide 34: Financial Performance – Net Income
Financial Performance We have consistently improved our financial performance, despite the COVID-19 pandemic. NET INCOME 700 7.0% Millions 600 6.0% 5.7% 4.7% 500 5.0% 400 4.0% 300 2.5% 403 3.0% Net Income, 200 3Q 2022 400 2.0% 1.1% Net Income, 3Q 2021 237 100 207 1.0% 85 0 0.0% 2019 2020 2021 2022 N
Slide 35: Financial Performance – Sales
Financial Performance We have consistently improved our financial performance, despite the COVID-19 pandemic. SALES 12,000 25.0% Millions 22.7% 22.0% 20.9% 20.5% 10,000 20.0% 8,000 8,568 15.0% 6,000 10.0% 4,000 7,570 8,152 Sales, Sales, 3Q 2022 7,034 3Q 2021 6,384 5.0% 2,000 0 0.0% 2019 2020 2021 20
Slide 36: Financial Performance – EBITDA
Financial Performance We have consistently improved our financial performance, despite the COVID-19 pandemic. EBITDA 1,400 14.0% Millions 1,200 11.2% 12.0% 11.1% 9.6% 10.1% 1,000 10.0% 800 957 8.0% 600 6.0% 400 EBITDA, 4.0% 725 824 EBITDA, 3Q 2022 778 3Q 2021 628 200 2.0% 0 0.0% 2019 2020 2021 2022
Slide 37: Financial Position
Financial Position Below is a summary of our financial position during the last three years: Key Balance Sheet Items 2019 2020 2021 3Q 2022 Current Assets 4,403 3,491 3,311 3,797 Total Assets 5,471 4,410 4,164 4,674 Current Liabilities 3,822 3,622 3,194 3,292 Total Liabilities 5,102 3,838 3,266 3,37
Slide 38: Key Performance Indicators
Key Performance Indicators 2019 2020 2021 Q3 2022 Gross Profit Margin 20.9% 20.5% 22.0% 22.7% Net Income Margin 1.1% 2.5% 4.7% 5.7% EBITDA ( thousands) 725,293 824,428 957,149 778,119 EBITDA Margin 9.6% 10.1% 11.2% 11.06% Return on Average Assets 1.6% 4.2% 9.4% 8.3% Return on Average Equity 26.2% 44
Slide 39: Offer Terms & Conditions
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Slide 40: Offer Terms
Offer Terms Issuer Upson International Corp. Firm Offer 625,001,000 primary common shares Overallotment Option Up to 62,500,000 secondary common shares Offer Price 2.40 per share Offer Size PHP 1.50 Bn PHP 1.65 Bn, assuming full exercise of overallotment Market Capitalization (Post-IPO) PHP 7.50 Bn
Slide 41: Use of Proceeds
Use of Proceeds ESTIMATED AMOUNT ESTIMATED TIMING OF USE OF NET PROCEEDS % (in Php Mn) DISBURSEMENT Store Network Expansion ₱ 1,421.8Mn 100% 2023-2027 *Based on Filing Price of ₱2.40 per share UPSON INTERNATIONAL CORP | 41
Slide 42: Timetable
Timetable Regulatory Date Activity January 11, 2023 Filing with SEC and PSE January 12, 2023 SEC Pre-effective Clearance January 27, 2023 PSE Board Approval March 20, 2023 SEC Permit to Sell Marketing Date Activity February 03 – March 15, 2023 Bookbuilding March 16, 2023 Pricing Date March 21 – 27,
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Slide 44: Upson International Corp.
Upson International Corp. Investor Presentation | March 2023