Catcha Digital Bhd · MYX:CATCHA
Catcha Digital Bhd — Investor Day (June 2024)
43 slides from Catcha Digital Bhd's investor day presentation, Jun 27, 2024
Slide 1: Catcha Digital Berhad Jun-2024 Investor Day
Catcha Digital Berhad Jun-2024 Investor Day Date: 27th June 2024 Time: 3:00 p.m. – 5:00 p.m * Venue: The Lab, Co-labs Coworking The Starling, Level 4, The Starling Mall. *5pm-7pm Networking Drinks at The Barn, The Starling Mall.
Slide 2: Agenda
Agenda Items 1 Catcha Digital Berhad’s Vision & Mission 2 Digital Media Business - Deeper Dive 3 Innovating with AI in Digital Media 4 Q&A 2
Slide 3: Speakers
Speakers Patrick Grove Eric Tan Voon Tze Khay Tan Guan Sheng CEO & Founder of Ittify Chairman, Catcha CEO, Catcha Digital CEO of iMedia Asia Head of Innovation, iMedia Digital Berhad Berhad Asia ▪ 6 digital businesses from startup to ▪ Former CEO & Co-founder of ▪ Led the acquisition of 6 brands ▪ C
Slide 4: Catcha Digital Berhad's Vision & Mission
Catcha Digital Berhad’s Vision & Mission
Slide 5: Building the #1 Digital Group in Southeast Asia
Building the #1 Digital Group in Southeast Asia The global digital economy is growing rapidly and Southeast Asia is picking up steam Digital economy of Digital economy of Digital advertising to Southeast Asia is Southeast Asia is Enterprise software contribute spending to grow HUGE GROWING FAST 67%
Slide 6: We do it by building, growing and scaling leading digital companies in SEA
We do it by building, growing and scaling leading digital companies in SEA Digital Media We are here now… PHASE 1 PHASE 2 PHASE 3 We build and grow digital We invest in, acquire and scale To go regional once Malaysian companies great entrepreneur-led digital and market is dominated, replicating soft
Slide 7: We build and acquire great entrepreneurial digital companies with sustainable profits and cashflow
We build and acquire great entrepreneurial digital companies with sustainable profits and cashflow WE BUILD AND ACQUIRE GREAT ENTREPRENEURIAL PROFITABLE DIGITAL COMPANIES WE ENABLE EARNINGS GROWTH WE CREATE SUSTAINABLE BY SUPPORTING & COACHING SHAREHOLDER VALUE IN THE OUR COMPANIES & PEOPLE LONG-TER
Slide 8: A proven & balanced approach to create long-term shareholder value
With a proven & balanced approach to create long-term shareholder value Core Revenue Growth via better monetization & effective cross-selling + Margin Expansion driven by operating efficiency and cost synergies post-acquisition EPS Growth & + = Compounding Highly Accretive Acquisitions Shareholder o
Slide 9: Programmatic M&A
Programmatic M&A CATCHA DIGITAL
Slide 10: Programmatic M&A starts with objective-driven acquisitions
Programmatic M&A starts with objective-driven acquisitions Platform Acquisitions Add-on Acquisitions Geographical or product No integration to offering expansion existing companies Vertical or horizontal expansion in the value- Sufficient scale either at chain acquisition or through focused buy-and-
Slide 11: Acquisition Criteria
We assign criteria specific based on the objective of our acquisitions Platform Acquisitions Add-on Acquisitions Qualitative Qualitative Market Leaders Strategic Value-Add Market Leaders Digital Focus Acquisition Criteria Established Financial Entrepreneurial High Profit Potential Entrepreneurial Tr
Slide 12: Deal structure guided by 20%+ IRR
Deal structure is guided by 20%+ IRR to create EPS-accretive investment structure that aligns incentives for all parties involved Valuation of 4x - 9x Price-to-Earnings (“PE”) Multiple Free Cash Flow Growth of 5-20% >20% Payment tranched over 24-48 months IRR Payment tied to Profit and Performance G
Slide 13: Valuation informed by business characteristics
Valuation of target companies is informed by a set of business characteristics that determines the quality of the business P/E MULTIPLE Company Growth Profit Revenue Churn Rate Customer Profit Balance Legal & Technical Reliance on Size Rate Margin Predictability (Logo & Concentration Guarantee Sheet
Slide 14: Structured 8-step investment process
Our investment team follows a structured 8-step process to maximise effectiveness and efficiency 1 Prospect Formulate Thesis → Build List of target companies via online databases and offline network 2 Qualify Qualify targets based on financials via public sources and market intelligence 3 Contact Re
Slide 15: A robust and active Dating funnel
A robust and active Dating funnel Dating Funnel “Swiped Right” on Dating Apps + Intro from Uncle and Aunties 118 Had Coffee, Lunch and Dinner Date(s) With 38 Assess the potential of the dates 18 Life & Marriage Expectation Calibration 8 Presented to parents 3 Engagement 1 15
Slide 16: A robust and active M&A funnel
A robust and active M&A funnel in the last 12 months M&A Funnel Prospected, Tracked in Proprietary Database 3033 Had Meetings With 585 Performed Preliminary Assessment 287 Entered Negotiation 87 Presented to IC 11 Notes: • • Metrics since June 2023 IC means Investment Committee LOI Signed 4 • LOI me
Slide 17: Progressive approach empowering portfolio companies
A progressive approach to empower companies to stay nimble and grow unencumbered with check-and-balance We provide (‘Toolkit’) We support • A stable long-term owner • Strategic Planning • Support in M&A Independent • Investments • Support in Financing CDB Companies • Business Development • Treasury
Slide 18: Creating a win-win proposition to sellers and CDB's shareholders
Creating a win-win proposition to both sellers and CDB’s shareholders Seller’s Win CDB’s Win ▪ Organic and stable ▪ Crystallise investment growth ▪ Profitable, strong cash- ▪ Continuity of life’s work flow businesses & legacy preservation ▪ Employee and customer ▪ Accretive acquisitions certainty fo
Slide 19: We have been there, done that…
We have been there, done that…
Slide 20: Dedicated Board and Management Team with Significant Ownership of 65%+
Dedicated Board and Management Team with Significant Ownership of 65%+ Board of Directors | 52.6% Ownership Patrick Grove Luke Elliott Dato’ Justin Leong Chairman Director Director Management Team | 12.5% Ownership Eric Tan Voon Tze Khay Jacky Tee CFO, Catcha Digital Media Group CEO CEO, Catcha Digi
Slide 21: Operating case study: leading online automotive group in SEA
Operating case study: Creating the leading online automotive group in SEA 10,000% Carsome completes the increase from Mkt. acquisition of iCar Asia for a Cap at IPO purchase price of RM890m • Acquired Live Life Drive (leading auto content site in • 7.5m monthly Catcha founded MY) iCar Asia unique vi
Slide 22: Operating case study: leading online real estate group in SEA
Operating case study: Creating the leading online real estate group in SEA SEA’s Tech Scene is exploding, and this is just the start…… 30,000% REA Group acquires increase in Mkt. Cap iProperty at a from IPO valuation of RM2.3bn • Acquired property expo business in • 1.6m monthly • 3.5m monthly Hong
Slide 23: We do it by building, growing and scaling leading digital companies in SEA
We do it by building, growing and scaling leading digital companies in SEA Digital Media We are here now… PHASE 1 PHASE 2 PHASE 3 We build and grow digital We invest in, acquire and scale To go regional once Malaysian companies great entrepreneur-led digital and market is dominated, replicating soft
Slide 24: Programmatic M&A starts with objective-driven acquisitions
Programmatic M&A starts with objective-driven acquisitions Platform Acquisitions Add-on Acquisitions Geographical or product No integration to offering expansion existing companies Vertical or horizontal expansion in the value- Sufficient scale either at chain acquisition or through focused buy-and-
Slide 25: Programmatic M&A starts with objective-driven acquisitions
Programmatic M&A starts with objective-driven acquisitions Platform Acquisitions Add-on Acquisitions 25
Slide 26: Case Study: iMedia as the Platform acquisition
Case Study: iMedia as the Platform acquisition, upon which more accretive add-on acquisitions are added At Acquisition Implied based 38% 2021[1] on latest reduction in financials effective valuation 12.0x 7.5x after 2 years shows P/E ratio[2] P/E ratio[2] significant Driven by value creation We acqu
Slide 27: Validated by value creation for add-on acquisitions
Validated by tremendous value creation for add-on acquisitions ✓ Profit After Tax (PAT) saw significant uplift after acquisition, some experienced complete turnaround ✓ Evidence of successful value creation and synergy extraction Ownership stake% FY20 FY23 RM1500k RM868k 1.6x RM803k RM710k 17.0x 6.1
Slide 28: Summary of Add-on Acquisitions
Summary of Add-on Acquisitions Total Blended P/E Current Transaction(s) P/E at Initial Company Brands Acquisition Year Consideration based on FY23 Shareholding (%) Involved Acquisition (x)[1] Paid (RM) PAT[2] Acquired initial stake of 80% and Oh Media Sdn 2020 100% 2,800,000 exercised call 4.4x 3.9x
Slide 29: Summary of Add-on Acquisitions (Cont'd)
Summary of Add-on Acquisitions (Cont’d) Total Blended P/E Current Transaction(s) P/E at Initial Company Brands Acquisition Year Consideration based on FY23 Shareholding (%) Involved Acquisition (x)[1] Paid (RM) PAT[2] Acquired initial stake of 60%; still Moretify Sdn 2021 60% 1,950,000 holding call
Slide 30: Looking Ahead...
Looking Ahead... CATCHA DIGITAL
Slide 31: Digital Media
D I G I TAL MEDIA
Slide 32: Digital media advertising growing rapidly while traditional media struggles
Digital media advertising has been growing rapidly while traditional media companies struggle to perform in the fast-changing media landscape Malaysia Digital ADEX 2018-2028E1 (RM m) Traditional media players are seeing massive shrink in Yet more than half of ad spend goes to Meta & Google, while th
Slide 33: Catcha Digital Media to be the largest digital media group by consolidating
Catcha Digital Media to be the LARGEST digital media group by consolidating the highly fragmented sector Highly Fragmented Sector To benefit significantly from consolidation Independent Online News Portal 2 Independent Online News Portal 1 Experiential Independent marketing firm 1 Online News Prefer
Slide 34: Catcha Digital Media Overview Today
Catcha Digital Media Overview Today Brand Owners Digital Media Publishers (Customers) Acquired these 14 digital media brands To enjoy a Customer comprehensive Sales representation for leading news and lifestyle sites deals with and integrated only one suite of digital party media solutions Influence
Slide 35: One-stop online-to-offline digital media solutions
Doubling down to offer a one-stop online-to-offline digital media solutions offers better value and convenience to customers Brand Owners Digital Media Publishers (Customers) Acquired these 14 horizontal lifestyle digital media brands Expanding into … (1) Industry verticals • LOI Stage - New Online
Slide 36: Digital Media M&A Approach
Digital Media M&A Approach: Accretive M&As and partnerships to broaden our advantage as the leading one-stop digital media solutions provider Combo of Build, Acquire, Expand via M&A and Expand via M&A Expand via M&A Convert & Partner Partnerships Digital Media Publishers Digital Media Publisher Digi
Slide 37: We do it by building, growing and scaling leading digital companies in SEA
We do it by building, growing and scaling leading digital companies in SEA Digital Media We are here now… PHASE 1 PHASE 2 PHASE 3 We build and grow digital We invest in, acquire and scale To go regional once Malaysian companies great entrepreneur-led digital and market is dominated, replicating soft
Slide 38: Software
SOFTWARE
Slide 39: Software: Asset-light B2B software businesses
Software: Asset-light B2B software businesses with proven financial track record and a management fit Organisational Business Characteristic Financial Characteristic Investment Characteristic Characteristic ▪ Business-to-Business offering ▪ High cash conversion ▪ Solid margins ▪ Strong management ▪
Slide 40: In talks to acquire a controlling stake in banking loan software
In talks to acquire a controlling stake banking loan software • Provides end-to-end loan origination software on a single integrated platform to financial institutions across the world • Clients use its software to power its day-to-day loan operations and automate their workflow from prospecting, KY
Slide 41: We do it by building, growing and scaling leading digital companies in SEA
We do it by building, growing and scaling leading digital companies in SEA Digital Media We are here now… PHASE 1 PHASE 2 PHASE 3 We build and grow digital We invest in, acquire and scale To go regional once Malaysian companies great entrepreneur-led digital and market is dominated, replicating soft
Slide 42: We're just getting started.
‘e ms 4 We're jus® getting started.
Slide 43: Thank You
Thank You