Altitude Group Plc · LSE:ALT
Altitude — H1 2019 Earnings Presentation
27 slides from Altitude's earnings presentation, September 2019
Slide 1: 2019 Interim Results
2 019 IN T ER I M R ESU L T S September 2019
Slide 2: Presentation Team
PRESENTATION TEAM CEO CFO Nichole Stella Graeme Couturier • Experienced career US Promo industry • Previously CFO at Sorted Group, professional a PE backed business in the delivery • 14 years in US Promo Industry with technology space Promo Marketing Media Group; 5 years • Board level finance positi
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS Graeme Couturier Chief Financial Officer 4 | ALTITUDE Nevada Presentation
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS Historic growth in the US Revenue up 43% to £5.4m (H1 2018: £3.8m) Gross profit up 78% to £3.7m (H1 2018: £2.1m) $870K Adjusted operating profit of £0.3m (H1 2018 loss: £0.3m) driven by Q2 – the first full quarter of new US AIM revenue streams US revenue up 6x to c. $2m for the
Slide 5: Overview – Business Update
OVERVIEW – BUSINESS UPDATE Nichole Stella Chief Executive Officer 4 | ALTITUDE Nevada Presentation
Slide 6: Operational Highlights
OPERATIONAL HIGHLIGHTS Successful and rapid integration of AIM Smarter US Business is Now Profitable and Self-Funding Despite rapid growth in post acquisition period, overall revenue did not accelerate as quickly as expected – Domino Effect $870K • Result of transition to the new business model / Su
Slide 7: Financial Review
FINANCIAL REVIEW Graeme Couturier Chief Financial Officer 4 | ALTITUDE Nevada Presentation
Slide 8: Altitude Financials (Unaudited): Income Statement
ALTITUDE FINANCIALS (UNAUDITED) INCOME STATEMENT H1 H1 VARIANCE Fav/(Adv) 2019 2018 £m £m £m % REVENUE 5.4 3.8 1.6 43% GROSS PROFIT 3.7 2.1 1.6 78% Adjusted Operating Costs (3.4) (2.4) (1.0) 45% • Significant revenue growth of 43% to £5.4m (H1 2018: £3.8m) ADJUSTED OPERATING (LOSS)/PROFIT 0.3 (0.3)
Slide 9: Altitude Financials (Unaudited): Balance Sheet
ALTITUDE FINANCIALS (UNAUDITED) BALANCE SHEET H1 H1 2019 2018 £m £m Tangible fixed assets 1.1 0.2 Intangible assets 2.7 1.1 • Fixed assets increase driven by investment in new machinery for Ad Products Goodwill 2.7 0.6 CURRENT ASSETS: • Increase in goodwill due to acquisition of AIM during 2019 Inve
Slide 10: Altitude Financials (Unaudited): Cashflow Statement
ALTITUDE FINANCIALS (UNAUDITED) CASHFLOW STATEMENT H1 H1 VARIANCE 2019 2018 £m £m £m LOSS AFTER TAX (0.9) (0.7) (0.2) Amortisation and depreciation 0.7 0.2 0.5 Share based payments 0.4 0.1 0.3 OPERATING CASH INFLOW 0.2 (0.4) 0.6 • Intangible capex increase reflects acquisition of AIM Movement in Wor
Slide 11: Strategy & Positioning
STRATEGY & POSITIONING 4 | ALTITUDE Nevada Presentation
Slide 12: AIM Smarter Overview
AIM SMARTER OVERVIEW AIM is the largest and fastest growing distributor group in the U.S. AIM MEMBERS AVERAGE MEMBER GROSS REVENUE MEMBERSHIP SALES Reach across all US states & territories and Canada on average 30+ new $2.1 Billion pa members joining per month (2018: $1.7bn) Sales $974K 2018 2019 1,
Slide 13: Business Model
BUSINESS MODEL Three routes to revenue growth Simplified Business Model with Strategic Routes to Revenue Growth: • Continue to grow in the AIM membership of high-quality promotional product distributors • Continue to grow the preferred supplier network $870K • Drive member purchases through the AIM
Slide 14: Building Our Business
BUILDING OUR BUSINESS We have been very active building our business in the US: Developed, Launched & Sold Preferred Supplier Program – 161 signed to date $870K Developed, Launched & Began Selling Enhanced Memberships – 92 signed to date Added additional 285 high quality AIM Members - 86 over $1mill
Slide 15: Membership Progress – What They Are Saying
MEMBERSHIP PROGRESS – WHAT THEY ARE SAYING “AIM is a special and unique family of distributors. The camaraderie is unlike any I’ve experienced in our industry. The meeting was a terrific experience, bringing so many members from almost every corner of the map. I truly enjoyed meeting such a wonderfu
Slide 16: Preferred Suppliers – What Suppliers Are Saying
PREFERRED SUPPLIERS – What Suppliers Are Saying “On a VERY positive note, got our “key “We are truly excited to be a part of this “I love this GROUP and we are the account” numbers on Friday, and through new program with AIM. I think that it will perfect supplier for them. And YES I want the first q
Slide 17: AIM Member Revenue
AIM MEMBER REVENUE Enhanced package sales sales in H1 were slower than expected • The addition and training of quality sales staff was required in Q2 • As training is complete, we anticipate acceleration in enhanced package sales Continued increased interest from members in enhanced member packages
Slide 18: Supplier Revenue
SUPPLIER REVENUE Identification process for preferred supplier network – now complete “I’m proud to be a vendor to the AIM • Supplier partners require time to identify AIM members in their systems - this Member Group. You know the value of a Set-up process delayed Q2 supplier reports partnership … I
Slide 19: Outlook & Summary
OUTLOOK & SUMMARY Nichole Stella Chief Executive Officer 4 | ALTITUDE Nevada Presentation
Slide 20: Outlook
OUTLOOK Focus on working collaboratively with network of Preferred Suppliers and AIM membership Preferred Suppliers • Continue to strategically sign Preferred Suppliers • Supplier Marketing and Technology being delivered • Many participating suppliers reporting double digit percentage growth • An ad
Slide 21: Q&A
Q&A 25 | ALTITUDE Nevada Presentation
Slide 22: Appendix
APPENDIX 25 | ALTITUDE Nevada Presentation
Slide 23: AIM Since Acquisition
AIM SINCE ACQUISITION In the 7 months since the acquisition of AIM we have: • Successfully integrated AIM, renamed AIM Smarter, with a focus on accelerating and growing the US business - Expanded the US team • Formalized agreements with 161 suppliers as part of the Preferred Supplier Programme • Add
Slide 24: Why We Acquired AIM
WHY WE ACQUIRED AIM Enable altitude to control & monetise the entire $2.13bn pipeline in perpetuity • Secures the $2.13bn pipeline for monetisation • Enables ALT to leverage the entire AIM order flow in partnership with selected contracted Preferred Suppliers, regardless of whether the order is plac
Slide 25: Competitive Landscape
COMPETITIVE LANDSCAPE AIM is by far the largest PPD member group by gross revenue in the USA (c. 8% Market Share) AIM members love AIM because… $608m $592m • “Free” Technology AIM Tech Suite No membership model No membership model • End Quantity Pricing from AIM Preferred Suppliers $416m $368m • Dis
Slide 26: Revenue Cycle
REVENUE CYCLE Fees Captured from both Member & Supplier Across All Orders Tiered member benefits & services & agreements with supplier partners 161 Key Supplier Partners Signed & Participating Standard AIM Membership $59 per month Agency Pro – Marketing & Creative Solution Tech Pro – Technology Solu
Slide 27: Thank You
THANK YOU 27 | ALTITUDE Nevada Presentation