Onespaworld Holdings Limited · NASDAQ:OSW
Onespaworld — SPAC Merger (November 2018)
39 slides from Onespaworld's SPAC merger presentation, Nov 15, 2018
Slide 1: Investor Presentation November 2018
Investor Presentation November 2018
Slide 2: Disclaimer
DISCLAIMER 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 instruments of Haymaker Acquisition Corp. (“Haymaker”) o
Slide 3: Disclaimer (cont'd): Forward-Looking Statements
DISCLAIMER (CONT’D) Forward-Looking Statements This Investor Presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements such as projected financial information
Slide 4: Disclaimer (cont'd): Use of Non-GAAP Financial Measures
DISCLAIMER (CONT’D) Use of Non-GAAP Financial Measures This Investor Presentation includes non-GAAP financial measures for OSW which do not conform to SEC Regulation S-X in that it includes financial information (EBITDA, Adjusted EBITDA, Adj. Net Income and FCF Conversion) not derived in accordance
Slide 5: Today's Participants
TODAY’S PARTICIPANTS ONESPAWORLD HAYMAKER Leonard Fluxman Glenn Fusfield Stephen Lazarus Steven J. Heyer Andrew R. Heyer Executive Chairman President & CEO CFO & COO CEO & Executive Chairman President & Director ? Served as President and ? Served in President and ? Served as CFO and COO of ? Former
Slide 6: Compelling Shareholder Proposition: Highly Visible and Predictable Growth
COMPELLING SHAREHOLDER PROPOSITION: HIGHLY VISIBLE AND PREDICTABLE GROWTH OPERATES AT THE INTERSECTION OF THE HIGHLY ATTRACTIVE HEALTH AND WELLNESS AND TRAVEL LEISURE INDUSTRIES Secular Growth Un- Dominant “Amazon-able” Market Share Asset Light Differentiated & Tax Business Advantaged Model Variable
Slide 7: Preeminent Global Health & Wellness Services Company
PREEMINENT GLOBAL HEALTH & WELLNESS SERVICES COMPANY UNDISPUTED LEADER IN A HIGHLY ATTRACTIVE INDUSTRY GLOBAL MEGATRENDS DRIVING ROBUST SECTOR GROWTH COMPLEX BUSINESS MODEL WHICH CANNOT BE REPLICATED HIGHLY VISIBLE, UNIQUELY PREDICTABLE GROWTH EARLY INNINGS OF GENERATIONAL GROWTH IN ASIA UNPRECEDENT
Slide 8: Consecutive Years of Global Cruise Passenger Growth
OVER 20 CONSECUTIVE YEARS OF GLOBAL PASSENGER GROWTH The global cruise industry has proven resilient through recessions, with passenger counts growing consistently for more than 20 years Global Cruise Ship Passengers (M) Recession Recession 28.0 26.7 25.2 23.1 22.3 20.9 21.3 20.5 19.1 17.8 17.2 16.6
Slide 9: OneSpaWorld Is a "Category of One"
ONESPAWORLD IS A “CATEGORY OF ONE” OneSpaWorld is the undisputed leader in maritime health & wellness services with 84% market share and unmatched global capabilities Others #2 Player 7% 9%? Undisputed Global Leader for Over 50 Years? ~10x Next Largest Competitor? Contracts with Almost Every Major C
Slide 10: Long-Term Partnerships with the Largest Cruise Lines
LONG-TERM PARTNERSHIPS WITH THE LARGEST AND MOST REPUTABLE CRUISE LINES 20+ ~95% 5 Long-Term C-Level Relationships Across OSW’s Entire Fleet Cruise Line YEARS AVERAGE HISTORICAL YEAR AVERAGE Relationship Total Ships OSW Ships CRUISE LINE CONTRACT CONTRACT Banner RELATIONSHIP HISTORY RENEWAL RATE LIF
Slide 11: Revenue Sharing Contracts Offer Compelling Value for OSW & Cruise Line Partners
REVENUE SHARING CONTRACTS OFFER COMPELLING VALUE FOR OSW & CRUISE LINE PARTNERS ALIKE ONBOARD SALE OF HEALTH $ AND WELLNESS PRODUCTS $ AND SERVICES Cruise Line Partners Responsibility Responsibility ? Design state-of-the-art facilities? Fund multi-million dollar buildout ? Recruit, train and manage
Slide 12: Comprehensive Services and Curated Brands Sold to a Captive Audience
COMPREHENSIVE SERVICES AND CURATED BRANDS SOLD TO AN ATTRACTIVE CAPTIVE AUDIENCE Unmatched Service and Product Broad Offering of Cruise Passengers are Breadth Onboard Leading Brands an Attractive Demographic * * SPA & BEAUTY SERVICES $114,000 MEDI-SPA AVERAGE INCOME * FITNESS 49 84% HEALTH YEARS OLD
Slide 13: Global Cruise Operations Are Highly Complex
GLOBAL CRUISE OPERATIONS ARE HIGHLY COMPLEX Global Passenger Cruise Routes WELCOMED 20M VISITED EMBARKED ON PASSENGERS AT OVER 1,175 7,875 161 GLOBAL PORTS PORTS OF VOYAGES In 2017, OF CALL EMBARKATION OneSpaWorld: MADE PLACED SENT STAFF ON OVER 2,165 16,408 7,800 MANAGEMENT VISITS PURCHASE ORDERS F
Slide 14: The Only Platform with Processes and Infrastructure to Manage the Complexity
THE ONLY PLATFORM WITH THE PROCESSES AND INFRASTRUCTURE NECESSARY TO MANAGE THE COMPLEXITY Back-End Platform & Know-How Front-End Platform & Know-How Global Recruiting, Training Yield and Revenue Management and Human Logistics Exceptional Pre- Through Product Supply Chain Post-Cruise Experience Excl
Slide 15: Industry-Leading Global Recruiting and Training Platform
INDUSTRY-LEADING GLOBAL RECRUITING AND TRAINING PLATFORM Program Overview 2-6 Training in Modality of Expertise ~$5M 56 WEEKS 3 Fitness Boot Camp Training ANNUAL PLATFORM WEEKS INVESTMENT STAFF 2 Management Training WEEKS 3,000 Professionals from All Over the World Global Training Platform 9 86 27 T
Slide 16: Internally Developed Senior Management Team
INTERNALLY DEVELOPED SENIOR MANAGEMENT TEAM WITH SIGNIFICANT INDUSTRY EXPERIENCE OSW Exp. Industry Exp. Experience Leonard Fluxman Executive Chairman? Served as President and CEO from 2001 to 2016 24 31? Served as President and COO from 1999 to 2000 and as COO and CFO from 1995 to 1998? Joined Stein
Slide 17: Industry Overview
INDUSTRY OVERVIEW
Slide 18: Global Mega Trends Drive Robust Cruise Sector Growth
GLOBAL MEGA TRENDS DRIVE ROBUST CRUISE SECTOR GROWTH Multiple Mega Trends Drive Positive Outlook Robust Growth in Cruising Across All Geographies Global Cruise Capacity Growth: 2015 – 2022P CAGR AGING GLOBAL POPULATIONS ’15 – ’22P 35M 6.7% RoW 6.0% 9 Asia 17.3% CAGR PERSISTENT HEALTH & WELLNESS TREN
Slide 19: Global Trends Drive Increasing Interest in Health & Wellness
GLOBAL TRENDS DRIVE INCREASING INTEREST IN HEALTH & WELLNESS Global Wellness Trends Continue to Drive Spa Interest Over Half of All Cruisers Are Interested in Spas Global Spa Industry Sales ($BN) % of Cruisers 45% to 60% of cruisers are $104 40%—55% 100% interested or have participated in $98 spa/we
Slide 20: Growth Plan
GROWTH PLAN
Slide 21: Uniquely Visible and Predictable Growth
UNIQUELY VISIBLE AND PREDICTABLE GROWTH ? Growth Strategy Built on the Following Key Drivers: 1. Capture Highly Visible New Ship Growth with Current Cruise Line Partners ? Cruise capacity growth is highly visible and predictable, with published global order books reflecting 5+ years of growth ? OSW’
Slide 22: Over $4BN of New Capital Invested in New Cruise Ships Each Year
OVER $4BN OF NEW CAPITAL INVESTED IN NEW CRUISE SHIPS EACH YEAR Global Capital Investment in Cruise Ships Since 20001 ($BN) $137 $133 $4 $126 $7 $11 $115 $106 $10 $96 $10 $86 $10 $77 $9 $71 $6 $65 $6 $61 $4 $57 $54 $4 $3 $49 $46 $4 $3 $39 $7 $34 $5 $29 $5 $24 $21 $5 $20 $3 $16 $1 $4 $13 $4 $9 $4 $4
Slide 23: Predictable New Ship Orderbook
PREDICTABLE NEW SHIP ORDERBOOK Public Global Cruise Orderbook Outlines Future New Ships History of On-Time Cruise Ship Builds 2,500+ Berth Ships Delivered On-Time as of 2-Year Forward Order Book Orderbook in Ships and Berths (000s) Berths 2018 5 <1,000 1,000 – 2,999 3,000+ Ordered Per Ship YTD 5 Del
Slide 24: Dependable, Captive Audience of Highly Attractive Consumers
DEPENDABLE, CAPTIVE AUDIENCE OF HIGHLY ATTRACTIVE CONSUMERS Cruise Lines Consistently Fill Ships with Passengers Small Percentage of Passengers Needed to Drive Revenue Occupancy by Operator OSW Cruise Passenger Spa Participation Rate 110% 105% OSW ONLY NEEDS ~10% OF CRUISE AVERAGE CRUISE PASSENGERS
Slide 25: Visible New Ship Growth Through Existing Cruise Line Partner Pipeline
VISIBLE NEW SHIP GROWTH THROUGH EXISTING CRUISE LINE PARTNER PIPELINE Cruise Line Berths Market Azamara 690 Premium Norwegian Cruise Line 4,200 Contemporary 2018 Royal Caribbean 5,400 Contemporary 7 SHIPS Seabourn 604 Luxury Carnival 4,000 Contemporary 20,454 BERTHS Celebrity Cruises 2,900 Premium H
Slide 26: Exclusive Access to a Highly Attractive Global Channel
EXCLUSIVE ACCESS TO A HIGHLY ATTRACTIVE GLOBAL CHANNEL SERVICE & PRODUCT FLEET ROLLOUT CATEGORY CREATION INNOVATION Pain Management ? Acupuncture ? Electro Acupuncture? Cupping? Posture & Gait Analysis ? Good Feet Arch Supports ~$50M Acupuncture 110 Vessels? Physical Therapy Annual 1st Vessel 2005 B
Slide 27: Cruise Lines Are Increasingly Aligned with Us to Drive Onboard Revenue
CRUISE LINES ARE INCREASINGLY ALIGNED WITH US TO DRIVE ONBOARD REVENUE Cruise Lines Focus More and More on Onboard Spend. …And Increasingly Collaborate With OSW to Grow Revenue Onboard Spend as % of Total Cruise Line Revenues1 HISTORICAL COLLABORATION 29.0%—SHORE SPA BRANDING & DESIGN >$2 BILLION EN
Slide 28: Under-Exploited Resort Spa Platform Supports Significant Global Growth
UNDER-EXPLOITED RESORT SPA PLATFORM SUPPORTS SIGNIFICANT GLOBAL GROWTH Attractive New Unit Economics Relationships to Leverage Traditional Investment Model Resort Partner # of OSW Total Resorts in Resort Spas* Portfolio (1) Revenue ~$2 million 5 646 (2) 4-Wall Margin ~25% 3 716 (3) 3 214 4-Wall EBIT
Slide 29: Financial Overview
FINANCIAL OVERVIEW
Slide 30: Strong, Visible and Consistent Revenue & EBITDA Growth
STRONG, VISIBLE AND CONSISTENT REVENUE & EBITDA GROWTH WITH EXCEPTIONAL FREE CASH FLOW CONVERSION Historical & Projected Revenue Historical & Projected EBITDA1 ($M, FYE Dec.) ($M, FYE Dec.) $ 78 $668 $ 62 $573 $ 54 $ 56 $507 $535 $ 50 $453 $476 $ 46 2015A 2016A 2017A 2018E 2019E 2020E 2015A 2016A 20
Slide 31: Strong Cash Flow Visibility + Growth = De-Leveraging Profile
STRONG CASH FLOW VISIBILITY + GROWTH = DE-LEVERAGING PROFILE Projected After-Tax Levered Free Cash Flow1 Projected Net Leverage 5.3x 4.4x $ 47.8 3.0x $ 27.3 $ 21.2 2018E 2019E 2020E Historical & Projected Capex 2018E 2019E 2020E ($M) 2015 2016 2017 2018E 2019E 2020E Maintenance Capex $1.3 $1.9 $1.1
Slide 32: Superior After-Tax Free Cash Flow
SUPERIOR AFTER-TAX FREE CASH FLOW Unlevered After-Tax Free Cash Flow Conversion1 ~90%2 MINIMAL NEW SPA CAPEX 72% ? Cruise lines fund nearly all 63% 62% 62% maritime spa buildout costs 51% ASSET-LITE MODEL ? OneSpaWorld does not own 9% any of its maritime spas – all major maintenance requirements fun
Slide 33: Long Term Targets
LONG TERM TARGETS 2018E – 2020E CAGR Long Term Targets REVENUE GROWTH 12% MSD+ EBIT GROWTH 20% HSD to LDD EPS GROWTH 38% Mid-Teens Free Cash Flow Profile Provides Flexibility To Enhance Total Shareholder Return 29
Slide 34: Transaction Details
TRANSACTION DETAILS
Slide 35: Transaction Overview
TRANSACTION OVERVIEW ? Enterprise value of $948M (19.6x 2019E P/E, 13.1x 2020E P/E) — Pro forma net debt of $300M (5.3x net leverage @ 2018E EBITDA of $56.3M) — Common stock private placement in the amount of $122M — Existing shareholder Steiner Leisure to be paid $717M in cash consideration and iss
Slide 36: Visible Growth with Differentiated Positioning
VISIBLE GROWTH WITH DIFFERENTIATED POSITIONING Favorable industry tailwinds, attractive competitive positioning, and strong financial characteristics Best-in-Class Consumer Highly Asset-Light Asset-Heavy Service Health & Franchised Cruise Leisure Leisure Operators Wellness Restaurants Secular Growth
Slide 37: Highly Attractive Financial Profile at Compelling Valuation
TRANSACTION OVERVIEW: HIGHLY ATTRACTIVE FINANCIAL PROFILE AT COMPELLING VALUATION Attractive Growth and Cash Flows Valuation is at an Attractive Discount 2018-20 Revenue CAGR 2019 P/E 11.8 % 11.2 % 34.4 x 31.9 x 6.1 % 5.7 % 19.6 x 20.9 x Best-in-Class Health & Wellness Asset-Light Leisure Service Op
Slide 38: OneSpaWorld Appendix
ONESPAWORLD AT SEA. ON LAND. APPENDIX
Slide 39: Reconciliation of Pro Forma Adjusted EBITDA
RECONCILIATION OF PRO FORMA ADJUSTED EBITDA OSW recently completed a financial audit in compliance with PCAOB standards – the table below reconciles Pro Forma Adjusted EBITDA ($ in Thousands) 2015A 2016A 2017A Income from Operations $23,526 $23,617 $38,298 (-) Noncontrolling Interest 1 ($2,490) ($3,