Slide 1: Preliminary Results Presentation
Altitude Group plc Preliminary Results Presentation June 2018
Slide 2: 2017 Operational Highlights
2017 Operational Highlights • Rapid expansion in US through AIMPro rollout is our strategic priority – AIM partnership enhanced/extended – On-boarding of AIM members began Jan 2018 – encouraging progress being achieved – 51 preferred suppliers on-boarded • Two year partnership signed with Napco medi
Slide 3: 2017 Full Year Earnings
2017 Full Year Earnings Increased Profitability / Further cost reduction / First time Ad Products Contribution FINANCIAL HIGHLIGHTS REVENUE • Up 41% to £6.1m • +£2.1m first time revenue from Ad Products • Technology revenues maintained at £2.5m incl £0.1m ecommerce • UK Exhibitions & Publications do
Slide 4: 2017 Full Year Cash Flow
2017 Full Year Cash Flow Increased Profitability / Further cost reduction / First time ADP Contribution CASHFLOW HIGHLIGHTS • PBT after charging £0.3m exceptional costs (employment termination costs) • ADP (£0.6m) net working capital build up arising from net asset purchase • Intangible capex compri
Slide 5: US Promotional Products Market
US Promotional Products Market Very Large, Highly Fragmented, Low Online Penetration • Highly fragmented market USA • Perceived largest player 4Imprint c.2.7% market share Current market size $23bn* • Distributors see threat of large online retailers entering the market Online share (lead generation
Slide 6: CHANNL | PRO Bringing efficiency to US Promotional Products Market
CHANNL | PRO Bringing efficiency to US Promotional Products Market Compelling reasons to use CHANNL|PRO Suppliers Distributors/Resellers End-User • Increased business through • Free access to leading tech • Easier to design access to aggregated orders • True ecommerce platform • Easier to buy • Sing
Slide 7: CHANNL | PRO - AIMpro Revenue Model
CHANNL | PRO - AIMpro Revenue Model • Revenue model based on capture of the Suppliers Distributors transactional pipeline onto AIMPro Transaction Fee Transaction Fee Transaction % of PO value As % of SO Fee/Commission • Supplier fee % currently blended rate based on value current offline dominance O
Slide 8: CHANNL | PRO - US rollout through AIMpro
CHANNL | PRO - US rollout through AIMpro • AIM is a fast-growing buying group of distributors in the US. • Members now total 1,704 – an increase of 125 (+8%) since February. • Combined revenue is c$1.5bn – c.6.5% market share • Average revenue per member c.$880k pa • Altitude’s partnership with AIM
Slide 9: AIM Members On-Boarding Progress
AIM Members On-Boarding Progress • Total sales orders placed to date $2.8m On-Boarding Status 28 May 28 Feb • AOV $1,258 No. % No. % • No.of orders 2,245 Placed multiple orders 37 2.2% 12 0.4% • Full time US based engagement team now in place Placed first order 20 1.1% 12 0.0% Ordering Members 57 3.
Slide 10: AIMpro User Progression Map
AIMpro User Progression Map 10
Slide 11: AIM Suppliers On-Boarding Status
AIM Suppliers On-Boarding Status • Total Purchase Orders placed to date $1.7m On-Boarding Status 28 May • AOV $751 • No. of orders 2,291 No. % AIM Preferred Suppliers (“APS”) Receiving Orders 33 17.7% • Supplier penetration building APS sign ups 18 9.7% • High enthusiasm – Suppliers do not want to m
Slide 12: AIM Member Case Study #1
AIM Member Case Study #1 AIM Member, Texas, USA • AIM Member on-boarded 2 May 2018 • First order placed 14 May 2018 • AIMPro Customer Success Team helped to build 1st ecommerce Channl site • Launched 2nd store later in May with no assistance • 6 orders placed to date • Never traded online before AIM
Slide 13: AIM Member Case Study #2
AIM Member Case Study #2 AIM member, Illinois, USA • AIM Member on-boarded 9 March 2018 • First order placed 13 March 2018 • $1,022 AOV • $15.3K total order value to date • 12 Orders 13
Slide 14: Other Developments: Second White Label Opportunity
Other Developments Second White Label Opportunity • New 2 year partnership agreement with Printing Packaging & Publishing division of NAPCO Media (North American Publishing Company), based in Philadelphia US NAPCO Publications • Altitude will provide a “White Labelled” ChannlPro platform mirroring t
Slide 15: Other Developments: Development of Online Marketplace
Other Developments Development of Online Marketplace • Soft/test launched in UK mid-January, US launch scheduled later this year • andeverything.com (“AE”) is an aggregating marketplace for promotional products with full Channl personalisation technology • Distributors subscribe for products to be l
Slide 16: Other businesses: Complementary & Profitable
Other businesses: Complementary & Profitable • Acquired June 2017 for net asset value £0.8m, to supply Channl in UK • UK promotional products supplier/printer: 2017 Revenue £2.1m, EBITDA £0.3m • 2017 post-acquisition trading in line with expectations • New product range to support Channl UK Technolo
Slide 17: Summary
Summary • 2017 results broadly in line with expectations • AiMpro roll out progressing and accelerating - 57 members currently ordering • Strong supplier interest and demand – 51 suppliers signed up • Permanent US team recruited and driving engagement • NAPCO launch planned for Q3 2018 • Board confi
Slide 18: Appendix
A ALTITUDE GROUP PLC Appendix
Slide 19: Senior Management
Senior Management Nichole Stella – CEO • Experienced career US Promo industry professional • 12 years in US with Promo Media Marketing Group; last 6 years as President and Chief Revenue Officer • Promo media Marketing Group is a division of Napco Media Graeme Couturier – CFO • Previously CFO at Sort
Slide 20: Current Group Structure
Current Group Structure Legacy Core Route to Market US 1st “White Label” Solution PUBLICATIONS EXHIBITIONS Trade Catalogues PPD Live Trade Mag PPD Roadshows 2nd “White Label” Solution • aaaaaaaa • Legacy ERP / CRM and Order Management platform • Cloud / web-based promo products UK 20
Slide 21: CHANNL | PRO - Overview
CHANNL | PRO - Overview “White Label” solution for distributor and supplier platforms • ChannlPro combines Channl’s e-commerce trading solutions with Altitude’s existing CRM and order management system, to allow both online and offline transactions to execute through Channl • The ChannlPro solution
Slide 22: Competitive Positioning
Competitive Positioning • We believe we have a good head start on our competitors with regard to our proprietary technology • Artworktool design application protected by extended US patent • Requirement for a multimillion dollar investment and time constraints significant barrier to entry, makes Cha
Slide 23: Gross Transactional Revenue (GTR)
Gross Transactional Revenue “GTR” GTR fee potential from $1.3bn of throughput revenue AiMPro GTR Potential at 90% of Member Offline Orders Adoption Contractual commission from suppliers Up to 6% 120 10.0% as a % of End User retail value Up to 3.9% 9.0% 100 BLENDED RATE (% THROUGHPUT) 8.0% 7.0% 80 On
Slide 24: Illustrative CAC/LTV per AiM Member
Illustrative CAC/LTV per AiM Member • Customer Acquisition Cost $3,100 (“CAC”) Including cost of prospecting and on-boarding + • Cost to Serve (“CTS”) $5,700* Total Cost of Acquisition $8,800 • Lifetime Value (“LTV”) $44,000** • CAC / LTV 5.0 X * Costs to service AiM member over 3 year estimated lif