Af Legal Group Limited · ASX:AFL
Af Legal — Investor Presentation (September 2021)
31 slides from Af Legal's investor presentation, Sep 30, 2021
Slide 1: Investor Presentation Market Update
For personal use only INVESTOR PRESENTATION MARKET UPDATE September 2021 www.australianfamilylawyers.com.au
Slide 2: Table of contents
For personal use only Table of contents 01 About Us 02 Market Update 03 FY21 Results (Update) 04 Growth Update 05 Strategy Update 1
Slide 3: About Us
For personal use only 01 ABOUT US
Slide 4: Australia's largest specialised family law firm
Australia’s largest specialised family law firm We help our customers get superior outcomes by providing counsel and resolution on complex family matters For personal use only +15 offices Sunshine Coast (2) +80 employees Brisbane Gold Coast +50% Perth (2) Adelaide Sydney (3) Canberra (2) revenue gro
Slide 5: Family law is a very large, highly fragmented market
Family law is a very large, highly fragmented market Long-term stable volumes, an increase in defacto relationships and rising net household wealth = attractive market For personal use only In contrast to personal injury law, $1.1bn market size No national players there is no dominant or national pl
Slide 6: We have disrupted the way law firms find customers
We have disrupted the way law firms find customers… We utilize digital marketing techniques used in other online industries to attract customers in the family law industry For personal use only Mobile first An optimised experience for small screens Performance An architecture built for fast page loa
Slide 7: Timeline since inception
Timeline since inception AFL was founded in 2015 and has rapidly expanded to 15 offices since its IPO in June 2019 For personal use only 2017: FEBRUARY 2019: AUGUST 2019: FEBRUARY 2020: JUNE 2020: NOVEMBER 2020: MARCH 2021: JUNE 2021: Sydney office Opening of Mornington Roll out of new service Openi
Slide 8: What have we achieved since IPO?
What have we achieved since IPO? Strategic acquisitions completed in FY21 provides the scale to build out the platform in FY22 and beyond For personal use only FINANCIAL PERFORMANCE NEW OFFICES AND LATERAL HIRES AND BEST IN CLASS MARKETING ADDITIONAL SERVICE GEOGRAPHIES ACQUISTIONS PLATFORM LINES FY
Slide 9: Historical revenue and EBITDA
Historical revenue and EBITDA Strong historical CAGR3 growth in both revenue and EBITDA since FY2017 (listed in June 2019) For personal use only Revenue1 $m Underlying EBITDA2 $m 16.4 4.7 11.1 2.7 6.9 1.7 4.3 5.0 1.2 2.1 0.7 0.1 FY17 FY18 FY19 FY20 FY21 Pro forma FY17 FY18 FY19 FY20 FY21 Pro forma 1
Slide 10: AFL ASX share price since IPO
For personal use only 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 Jun-19 Jul-19 Jul-19 Aug-19 Sep-19 Sep-19 Low 26c High 67c Low $19M High $50M Oct-19 Nov-19 Nov-19 12 Month Market Cap 12 Month Share Price Dec-19 Jan-20 Jan-20 AFL. ASX (IPO to Present) Feb-20 Mar-20 Mar-20 Apr-20 May-20 Jun-20 $1 invested in AFL
Slide 11: Investment Highlights
Investment Highlights For personal use only The largest specialised family law firm in Australia in less than 5 years $1.1bn+ potential market opportunity +125% Disrupting the way law firms acquire clients with its proprietary client acquisition engine EBITDA CAGR (FY17-FY21) First mover advantage i
Slide 12: Market Update
For personal use only 02 MARKET UPDATE
Slide 13: Market Update – YTD August, FY22
Market Update – YTD August, FY22 Strong start to FY22 driven by accelerated organic growth via a record pipeline of file openings and full contributions from acquisitions For personal use only HIGHLIGHTS – Year to Date August, FY22 (YTD) YTD revenue was $3.2m which equates to an annual run rate of $
Slide 14: Year to Date v Pro Forma Profit & Loss
Year to Date v Pro Forma Profit & Loss Year to date revenue run rate is up 18% on the FY21 Pro Forma reported numbers For personal use only Commentary A$’000s YTD4 Pro Forma1 • Pro Forma Profit & Loss includes the full year contribution from Strong Law, Watts McCray and Revenue 3,214 16,363 Kordos L
Slide 15: FY21 Results (Update)
For personal use only 03 FY21 RESULTS (UPDATE)
Slide 16: FY21 Income Statement with Profit reconciliation
FY21 Income Statement with Profit reconciliation Underlying EBITDA is the best measure to determine actual performance due to the acquisitions completed during the period For personal use only Income Statement Summary ($m) FY20 FY21 Change % FY21 Pro Forma3 • Due to the acquisitions completed during
Slide 17: Balance Sheet
Balance Sheet Robust balance sheet, record cash balance and excess debt capacity For personal use only A$’000s 30 June 2020 30 June 2021 Commentary Cash and cash equivalents 1,555 4,658 • Consolidated balance sheet includes the Accounts receivable 1,802 2,814 acquisitions of Strong Law, Watts McCray
Slide 18: Financial Highlights since FY17
Financial Highlights since FY17 Strong double digit growth in underlying financial metrics for the last 5 years For personal use only AF Legal & Controlled Entities (“Group”) FY17 FY18 FY19 FY20 FY21 FY21 PF1 Revenue ($000s) 2,071 4,325 4,950 6,893 11,123 16,363 Growth % 109% 14% 39% 61% CAGR % 52%
Slide 19: Growth Update
For personal use only 04 GROWTH UPDATE
Slide 20: Personal Legal Services Market is ripe for consolidation
Personal Legal Services Market is ripe for consolidation For personal use only Personal Legal Services Market (2018-19) • We primarily operate in the Other Wills, probate Personal Legal Services market 5% and estate worth an estimated $7bn 9% • Comprises ~20,000 law firms employing over 50,000 lawye
Slide 21: Family Law Firms – Time for Disruption and Consolidation
Family Law Firms – Time for Disruption and Consolidation For personal use only Highly Fragmented +18,000 private law firms in Australia, 2 lawyers per firm on average Traditional Suburban offices, no capital, old systems and process, antiquated IT software Word of Mouth Limited or no digital marketi
Slide 22: Our Partnership Model - the 'non negotiables'
Our Partnership Model - the ‘non negotiables’ For personal use only STRUCTURE CULTURE STRATEGY EXECUTION • Valuation • People considerations and • Market positioning • Full integration plan from fit are key Day 1 • Income Accretive • Unique attributes that • Mix of experience and youth compliment ex
Slide 23: Our Value Accretion Model
Our Value Accretion Model AFL applies its model to acquisitions to transform firms from antiquated businesses to new age efficient law firms For personal use only TOP LINE EFFICIENCY GOVERNANCE • Turbo charge with AFL 2.0 Digital • Remove “low hanging fruit” e.g. duplication • Deal structure partner
Slide 24: FY21 Acquisitions Update – new acquisitions
FY21 Acquisitions Update – 3 new acquisitions AFL is currently assessing a number of acquisitions and is conducting due diligence as appropriate For personal use only NEW SOUTH WALES MELBOURNE CANBERRA REVENUE ~$6m ~$2m ~$1m PURCHASE PRICE • $1.5m cash upfront • $125k cash upfront • $200k upfront ca
Slide 25: FY21 Network Expansion Update – new offices / lateral hires
FY21 Network Expansion Update – 4 new offices / lateral hires AFL is targeting a minimum of 5 new lateral hires or office expansions for FY22 For personal use only MELBOURNE’S WESTERN SOUTH AUSTRALIA NORTH AUSTRALIA SUNSHINE COAST LATERAL HIRE/ Lateral Hire Greenfield Lateral Hire Lateral Hire EXPAN
Slide 26: Case Study: Greenfield Expansion – Canberra
Case Study: Greenfield Expansion – Canberra AFL has successfully launched 10 greenfield operating sites since IPO in June 2019 For personal use only • Greenfield analysis on the Canberra family law market completed in June September 2021: 2019 Opened North Canberra- Belconnen • Extensive lateral hir
Slide 27: Strategy Update
For personal use only 05 STRATEGY UPDATE
Slide 28: Who are we?
Who are we? We want to be the largest global family law firm in the world For personal use only CORE PURPOSE To be Australia’s largest National Family Law Firm CORE VALUES Think Different; Fanatical customer focus; Under promise, over deliver; Act like an owner; Have fun, always BHAG To be Australia
Slide 29: Where are we going?
Where are we going? Strategic acquisitions completed in FY21 provides the scale to build out the platform in FY22 and beyond For personal use only FY20 FY21 FY22 • Launch AFL 2.0 - #1 Priority • Presence in all state and territories • Continue organic growth and in Australia - #1 Priority integrate
Slide 30: Whats Next? FY23 and beyond
Whats Next? FY23 and beyond… Strong organic growth platform will be the focus with an expanded sandbox for future acquisitions to enter new markets For personal use only • Target 10-20% growth p.a. • Roll out AFL 3.0 – The next stage of digital client acquisition • Launch above the line Advertising
Slide 31: Thank you
For personal use only THANK YOU
AF Legal Group — Investor Presentation (September 2021) on 6ix