Fgi Industries Ltd. · NASDAQ:FGI
Fgi Industries — IPO Roadshow (January 2022)
27 slides from Fgi Industries's IPO roadshow presentation, Jan 3, 2022
Slide 1: Free Writing Prospectus
FREE WRITING PROSPECTUS Filed Pursuant to Rule 433 Registration No. 333 - 259457 January 3, 2022
Slide 2: Disclaimer
DISCLAIMER FGI Industries Ltd. (the “Company” or the “Issuer” ) has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents t he Iss
Slide 3: Disclaimer: Market, Industry and Other Data
DISCLAIMER MARKET, INDUSTRY AND OTHER DATA This presentation includes market and industry data and forecasts that the Company has developed from independent research reports, publicly available information, various industry publications, other published industry sources or the Company’s internal dat
Slide 4: The Offering
THE OFFERING 4 Issuer FGI Industries Ltd. Transaction Type Initial Public Offering Anticipated NASDAQ Symbol: FGI Shares Offered: 2,500,000 (100% Primary) IPO Price Range: $6.00 – $8.00 Overallotment Option: 15% (100% Primary) Pre - Offering, Fully diluted Shares Outstanding: 7,000,000 Use of Procee
Slide 5: About Us
ABOUT US FGI is a leading “B - to - B” global supplier of Kitchen & Bath products with an industry - leading reputation for Innovation, Quality & Service developed over 30 years in conjunction with our parent company, Foremost Groups Ltd. SANITARYWARE - 64% (TOILETS & SEATS, SINKS & PEDESTALS) BATH
Slide 6: Executive Management Team
EXECUTIVE MANAGEMENT TEAM John Chen is the Executive Chairman of FGI Industries. Prior to his election, Mr. Chen spent the past 2 years serving as Executive Vice President of Corporate Development for Foremost Groups, Ltd. Prior to that he spent 11 years in the investment management industry as an e
Slide 7: Financial Milestones
FINANCIAL MILESTONES | $130MM+ REVENUE BUSINESS Revenue growth in 2020 despite intense macro - economic pressures | 2 1 % GROSS MARGINS Continued margin improvement strategy | CASH CONVERSION $5.9mm in 2020 net cash provided by operating activities and $4.7mm in 2020 net income with 121% of 2020 net
Slide 8: Global Business Footprint
GLOBAL BUSINESS FOOTPRINT UNITED STATES & CANADA | EAST HANOVER, NEW JERSEY US Operations & Warehouse | HOBART, INDIANA Showerdoor Production Center Warehouse & Distribution | WOODLAND, CALIFORNIA Warehouse | TORONTO, CANADA Canada Operations & Warehouse EUROPE | DUSSELDORF, GERMANY European Operati
Slide 9: Large & Global Customer Base
LARGE & GLOBAL CUSTOMER BASE USA & CANADA EU E - COMMERCE 9
Slide 10: Diversified Product and Market Segments
DIVERSIFIED PRODUCT AND MARKET SEGMENTS BEST FGI BRANDS COMPETITORS BETTER GOOD By B y By By 10
Slide 11: Well-Positioned in the $100B+ Global Kitchen & Bath Market
HIGH L O W HIGH WELL - POSITIONED IN THE $ 100B+ GLOBAL KITCHEN & BATH MARKET HIGHER QUALITY MID - TO - HIGHER PRICE POINTS BETTER SUPPLY CHAIN BETTER OPERATIONS MORE POTENTIAL PRODUCT - CATEGORY OFFERINGS HIGHER GROWTH POTENTIAL FRAGMENTED SUPPLIERS 60%+ OF INDUSTRY 11
Slide 12: Durable Competitive Advantages
DURABLE COMPETITIVE ADVANTAGES | A DIVERSIFIED MIX OF PRODUCTS, MARKET SEGMENTS AND SALES CHANNELS • Wide range of price points with a focus on “mid plus” segment • Numerous selling channels, 000’s of different SKU sets | TRADITION OF STRONG INNOVATION • Leading ‘on - trend’ products developed throu
Slide 13: Large Addressable Market with GDP+ Growth
LARGE ADDRESSABLE MARKET WITH GDP+ GROWTH | The addressable market of FGI’s current product portfolio represents less than 50% of the global Kitchen & Bath product market (with over $150 billion of TAM) | The Repair & Remodel US market segment has generally experienced consistent and above - GDP gro
Slide 14: Repair and Remodel Markets Provide Stable Growth
REPAIR AND REMODEL MARKETS PROVIDE STABLE GROWTH SOURCE: HIRI, US CENSUS AND FORTUNE BRANDS (TABLE 1); JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY (TABLE 2) CONSISTENT YEAR - OVER - YEAR GROWTH IN R&R OUTSIDE OF EXTREME RECESSIONS YEARS HISTORICAL R&R GROWTH 15% 10% 5% 0% - 5% - 10% - 15%
Slide 15: Current Global Supply Chain Pressures
CURRENT GLOBAL SUPPLY CHAIN PRESSURES | Global transit times have faced unprecedented pressures in 2021 (COVID - 19 in factories, shipping delays, etc ) | Container shipping prices along with raw materials have skyrocketed over the past year | Discussions with freight forwarders and logistics firms
Slide 16: Key Drivers of Long-Term Shareholder Value
KEY DRIVERS OF LONG - TERM SHAREHOLDER VALUE VALUE CREATION FORMULA: Well - a bove industry organic growth Material operating margin expansion Strong balance sheet + cashflow conversion Smart capital deployment Double - digit earnings growth “BPC” S TR A T E G Y 16 CAPITAL DEP L O YMENT STRATEGY ENH
Slide 17: BPC Strategy: Brands
B PC STRATEGY: BRANDS STRONG PRODUCT DEVELOPMENT FUTURE STRATEGY | 100% self - designed products | Product design teams in US, Asia and Europe | Recent investment into “3D” capabilities | Continue to focus on developing branded product categories | Will look for “bolt - on” opportunities to compleme
Slide 18: BPC Strategy: New Product Categories
B P C STRATEGY: NEW PRODUCT CATEGORIES 2020 REVENUE EXISTING PRODUCTS - 75% NEW PRODUCTS - 25% FREE - STANDING TUBS AVENUE: MADISON JETCOAT: SHOWER WALL 18 FOREMOST: BRANTLEY CONTRAC: HYGIENIC SINK INTELLIGENT TOILETS
Slide 19: BPC Strategy: E-Commerce
BP C STRATEGY: E - COMMERCE SALES & ANALYTICS STRATEGY | 21% of g roup sales in 2020 , we expect to continue increasing organically the share of e - commerce as a percentage of total sales in future fiscal years. | Establishing “key vendor” reputation with leading new - age customers including Wayfa
Slide 20: BPC Strategy: Commercial & Geographic Sales Channels
BP C STRATEGY: COMMERCIAL & GEOGRAPHIC SALES CHANNELS FGI COMMERCIAL SALES CHANNEL EXAMPLE: GERMANY COMMERCIAL GEOGRAPHY 2010 2020 OTHER - 97% COMMERCIAL - 3% OTHER - 79% COMMERCIAL - 21% | Traditionally a mass - retail B - to - B business, FGI started to invest in growing local commercial channel p
Slide 21: Enhanced Financial Performance
ENHANCED FINANCIAL PERFORMANCE | LOW - CAPEX NEEDS FGI operates as a relatively capital - lite business model | EFFICIENT WORKING CAPITAL PLANNING We have a lean inventory management system that has seen through recent challenges (tariffs, COVID - 19) | CONSERVATIVE BALANCE SHEET We focus on liquidi
Slide 22: Bolt-On Strategy
“BOLT - ON” STRATEGY 1 . MARKE T | Thousands of small suppliers | Evergreen product lines, categories and geographies | Look for good teams and product lines, not turnarounds EXAMPLE: SHOWER BUSINESSES EXAMPLE: CUSTOM KITCHENS | Built world - class cabinet production capability in Asia | Recruited t
Slide 23: Financial Summary (USD)
FINANCIAL SUMMARY 23 (USD) 2019 2020 9mos 2020 9mos 2021 REVENUES 126,282,212 134,827,701 99,319,193 129,752,437 GROSS PROFIT 25,439,069 28,404,640 21,300,641 24,634,970 GROSS MARGINS 20.1% 21.2% 21.4% 19.0% SELLING AND DISTRIBUTION 14,917.601 15,487,306 11,352,436 12,635,857 GENERAL AND ADMINISTRAT
Slide 24: Financial Summary (continued)
FINANCIAL SUMMARY (continued) 24 USE OF NON - GAAP FINANCIAL MEASURES In assessing the performance of our business, management utilizes a variety of financial and performance measures to assess o ur business performance, including to evaluate our ability to convert earnings from our operational perf
Slide 25: Recent Developments
RECENT DEVELOPMENTS For the quarter ending December 31, 2021, FGI expects the following based on currently available information: | Revenues between $44 million and $48 million Compared to $35.5 million in Q4 2020 Continued strong demand despite Q4 and Q1 being traditionally weaker than Q2 and Q3 (h
Slide 26: Key Investment Characteristics
V A L U E - A C CRETIVE BOLT - ONS We will engage in selective “bolt - ons” and large, strategic M&A, should such opportunities clear our return - on - capital hurdles. ENHANCED “SPIN - OFF” PROFITABILITY As a carve - out division from a parent company, we will leverage our independence and our prio
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