QMS Sport Holdings Limited
Investor Presentation August 2019 Disclaimer
This document is issued by QMS Media Limited, (“QMS”) to provide summary information about QMS and its associated entities and their activities current as at the date of this document. The information contained in this document is of general background and does not purport to be complete. It is intended only for those persons to whom it is delivered personally by or on behalf of QMS. By accepting this document and/or attending this presentation, you represent and warrant that you are a person to whom an offer of securities may be made without a disclosure document (as defined in the Corporations Act 2001 (Cth) (“Corporations Act”)) on the basis that you are exempt from the disclosure requirements of Part 6D.2 in accordance with Section 708(8) or 708(11) of the Corporations Act. If you are not such a person, you are not entitled to attend this presentation. Please return this document and any copies and do not provide this document to any other person. This document is not, and should not be considered as, an offer or an invitation to acquire securities in QMS or any other financial products and neither this document nor any of its contents will form the basis of any contract or commitment. This document is not a prospectus and does not contain all of the information which would be required to be disclosed in a prospectus. In particular, this document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Securities may not be offered or sold in the United States unless the securities have been registered under the US Securities Act of 1933 or an exemption from registration is available. Neither QMS nor any of its officers, employees, related bodies corporate, affiliates, agents or advisers guarantees or makes any representations or warranties, express or implied, as to, or takes responsibility for, the accuracy or reliability of the information contained in this document. QMS does not represent or warrant that this document is complete or that it contains all material information about QMS or which a prospective investor or purchaser may require in evaluating a possible investment in QMS or any of its associated entities or acquisition of QMS shares or any of its associated entities. Nothing contained in this document nor any information made available to you is, or shall be relied upon as, a promise, representation, warranty or guarantee, whether as to the past, present or the future. QMS has not carried out due diligence investigations in connection with the preparation of this document. You must conduct your own independent investigations and enquiries as you deem fit. The information set out in this document does not constitute or purport to be a recommendation by QMS, its officers, employees, agents or advisers and has been prepared without taking into account the objectives, financial situation or needs of individuals. The information in this document does not constitute financial product advice (nor investment, taxation or legal advice). To the maximum extent permitted by law, QMS and its related bodies corporate and each of their respective directors, employees, officers, affiliates, agents and advisers expressly disclaim any and all liability (including without limitation for negligence) for representations or warranties or in relation to the accuracy or completeness of the information, statements, opinions or matters, express or implied, contained in, arising out of or derived from, or for omissions from, this document including, without limitation, any historical financial information, any estimates or projections and any other financial information derived therefrom. In particular, this document does not constitute, and shall not be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of QMS. This document contains certain forward-looking statements and opinion which are provided as a general guide only and should not be relied on as an indication or guarantee of future performance and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of QMS. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward looking statements or other forecast. Information in this document (“Confidential Information”) is confidential and by accepting this document and/or attending this presentation you agree to keep this information confidential and not to disclose it to anyone within your organisation except on a need-to-know basis and subject to these restrictions, or to anyone outside your organisation. You must not copy, use, publish, record or reproduce the Confidential Information or directly or indirectly disclose it to any person without the prior written consent of QMS, which may be withheld in its absolute discretion. All figures in this document are in Australian dollars (AUD) unless stated otherwise. All information is pre-IFRS 16 Leases. QMS Media Business Divisions
NEW ZEALAND
AUSTRALIA
LARGEST MULTI-MEDIA GROUP IN NEW AUSTRALIA’S FASTEST GROWING LEADING GLOBAL SPORTS MARKETING, ZEALAND OUTDOOR ADVERTISING COMPANY INFRASTRUCTURE AND TECHNOLOGY PENDING MERGE WITH MEDIAWORKS PLATFORM (QMS MEDIA WILL OWN 40% STAKE)
3 Executive Summary
• QMS Sport, a business division of QMS Media Limited (ASX: QMS) is a global sports technology, infrastructure and digital media platform established to capture the superior advertising audience appeal in sport
• QMS Sport manages ~3,000 individual global sporting events annually and aims to become a global leader of Sport in key international markets
• Sport is one of the largest and highest growth market segments providing significant opportunity for QMS Sport to expand its core solutions
• QMS Sport expects to deliver ~$11.0m-11.5m EBITDA for 1HCY2019 which is significantly ahead of $9.0m EBITDA forecast previously provided.
• QMS Sport is restructuring its assets to be held by QMS Sport Holdings Limited (QMS Sport) and pursuing a two stage growth approach:
• Stage 1: QMS Sport has executed a conditional heads of agreement to acquire TLA Australia:
• TLA Australia is a leading talent management and sports marketing agency in Australia & UK
• Combined QMS Sport (including TLA) CY2020 forecast revenue of ~$133.6m and EBITDA of ~$22.0m, pre-synergies – expected annual revenue and cost synergies of between $1.0 – 2.0m to be secured by CY2020
• Total consideration of ~$32.7m representing ~5.3 times CY2019 EBITDA, pre-synergies
• Acquisition will be funded by $20m of QMS Media Limited debt finance and $12m unlisted equity raising
• Stage 2: International expansion and possible demerger:
• EPS accretive acquisition opportunities exist to expand QMS Sport’s global capabilities in sport via technology enablers and growth of sports media rights
• A possible demerger of QMS Sport from QMS Media is being considered as part of a number of capital structuring options in CY2020.
4 Agenda
1. The Sports Opportunity
2. QMS Sport
3. TLA Australia
4. Corporate Structure and Key Management
5. Financial Summary
6. Future Growth Strategy
7. Capital Raising details
5 1. The Sports Opportunity
6 A Great Time To Invest In Sports Media
Global Value Of Sports Media & Events Is >US$200bn
CAGR
'14-'18 '18-'22 ($US Billions, by Business Line) • Sport offers one of the few remaining ways to reach a broad $252.0 6.4% 5.9% $222.9 $224.0 audience (versus audience fragmentation across networks $200.6 $205.2 5.0% 5.5% $177.1 $178.4 and platforms) $156.5 $161.7 4.8% 3.8%
7.4% 6.6% • The Global Sports Media market is defined by media rights 7.8% 7.5% (including advertising rights), sponsorships, gate takings and 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E merchandise
Media Rights Market ing / Sponsorship Gat e Revenue Merchandising • North America is the largest market and accounts for ~38% CAGR of Global Sports Media market '14-'18 '18-'22 ($US Billions, by Geography) $252.0 6.4% 5.9% $222.9 $224.0 $200.6 $205.2 6.7% 7.0% $177.1 $178.4 $156.5 $161.7 • Football (aka Soccer) accounts for ~50% of global sport media market 5.9% 5.1%
6.5% 5.3% • Australian Sports Media Rights is ~US$860m per year 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E
North America Europe RoW
Source: SportBusiness Consulting Global Media Report 2018; Public filings 7 Fans Respond To Brand Advertising In Sport
Sponsorship Statements
Recommendation Consideration Purchase +23% Higher +23% Higher +42% Higher
Source: Nielsen SportsLink Q2 2018, avg. across all QMS Sport codes 8 Live Sport Advertising Is More Effective Than TV Ad Breaks
Eye-tracking Proves Fans See Advertising In Peripheral Vision While Watching Sport
Long Term Memory Neurological Long Term Global Vs Detailed Emotional Intensity Encoding Avg # Of Peak Memory Encoding Processing Responses Per 30sec
FANS ‘LEAN IN’ 12% MORE EFFECTIVE THAN A TO SPORT TV AD-BREAK ALONE Average # of Peak responses increases to 7 while watching sport A UNIQUE NEEDSTATE
Ad-break alone has a global Fans are more attentive to Effectiveness is directly linked processing bias. Uniquely, messages delivered in sport. Make a stronger impact on long to recall. sport viewers use both sides of term memory in sports the brain. Sports broadcast makes brand broadcast. Greater propensity to impact messages stickier. future buying behaviour. Opportunities to tailor ads with brand and tactical messaging.
Source: Effectiveness of Advertising in Live Sports Broadcast | Neuro-Insight Study 2019 9 Premium For Live Sports Advertising Continues To Grow
• Advertisers place a scarcity premium on the live nature of sports events, as these are one of the few remaining forms of entertainment that people feel compelled to watch in real-time
• Top-tier sponsors are not only paying up for exclusive rights to $3.0 premier events, but also locking up those rights for longer periods of time
$2.0 Olympic Games’ Revenue From Top-tier Sponsors ($US Billions)
$1.0 $1.0 $0.9 $0.7 $0.6
$0.3
1993-1996 1997-2000 2001-2004 2005-2008 2009-2012 2013-2016 2017-2020 2021-2024
Source: WSJ June 2019 – International Olympic Committee and sponsor industry professionals 10 2. QMS Sport
11 Overview of QMS Sport
• QMS Sport is a leading digital sports media and infrastructure business with operations across Australia and key global sporting markets • QMS Sport annually manages ~3,000 individual global sporting events
Infrastructure Media Rights Virtual Fan Engagement
• LED signage, high impact bolster and stadium signage • Coordinating media rights across • Wi-fi mobile engagement from in- infrastructure • Virtual technology for time shifted stadium advertising extending to Core services • On field digital media viewing to resell into multiple pre and post match experience • Content creation / game day • IPTV network jurisdictions (digital advertising via Instagram, operations Twitter, Facebook feeds) • Mobile LED screens
• Management fee for coordinating • Pay per game / event / broadcast • Licence fee Revenue model media rights across events • Pay per game / event / broadcast • Contract lengths 2-7 years • Pay per event / view • Contract lengths 1-5 years
• Access to ~3,000 sporting events • Chemist Warehouse through: • TAB • V8 Super Cars Clients • Global sporting bodies • Ladbrokes • Jacksonville Jaguars • NRL Rugby League • Sporting clubs • Harvey Norman • Stadia • McDonalds
12 QMS Sport’s Global Footprint
• QMS Sport is one of the largest on-field media rights holders and infrastructure providers in Australia and continues to expand internationally
Senden
13 QMS Sport Serves The Most Valuable Rights Holders
TOP 10 SPORTS’ SHARE OF GLOBAL MEDIA RIGHTS VALUE TOP 20 PROPERTIES BY GLOBAL MEDIA RIGHTS VALUE ($US Billions)
NFL (American Football) Multi-Sport Events, 2.2% $7.7 Other English Premier League $4.5 Golf, 2.5% 7.4% NBA $3.9 MLB $3.5 Ice Hockey, 2.9% Olym pics $3.0 Cricket, 3.0% UEFA Champions & Europa League $2.8 Spanish La Liga $1.9 It alian Serie A $1.5 Motorsports, 3.4% Soccer Germ an Bundesliga $1.3 40.6% NHL $1.2 US College Sports, 6.3% French Ligue 1 $1.1 US$50B Nascar $0.9 Baseball UEFA National Team Events $0.8 7.4% NCAA Men's Basketball $0.8 FIFA World Cup $0.8 Basketball American PGA Tour 8.6% $0.7 Football Form ula 1 $0.6 15.6% Big Ten $0.6 Brazilian Serie A $0.6 Indian Premier League $0.5
Represents QMS Sport stadium / code / club penetration
Source: SportBusiness Consulting Global Media Report 2018 14 360º Go-To-Market Approach
Leverage Network Across Brands To Deliver Integrated Advertising Opportunities Worldwide
✓ Perimeter LED ✓ Analysis ✓ Virtual Perimeter Technology ✓ Strategy Development IN- CONSULTANCY BROADCAST ✓ Digital 3D Carpets ✓ Event Production SOLUTIONS ✓ Real-time Reporting Tools ✓ Content Creation RIGHTS HOLDERS ✓ Video Assistant Referee (VAR)
✓ Software Management ✓ LED Video Screens, Ribbon ✓ Implementation of Digital IN- Boards, Crowd Facing ROI Transformation Strategy STADIUM STRATEGY ✓ IPTV Networks ✓ Project Management SOLUTIONS ✓ Game Day Operations ✓ Pageantry, Décor and Branding BRANDS FANS
✓ Stadium Apps ✓ Fan Engagement Tools and Loyalty Mobile Apps MOBILE BEYOND ✓ Out-of-Stadium Activations TECHNOLOGY STADIUM ✓ Fan Data Management SOLUTIONS SOLUTIONS ✓ Direct-to-fan Communications ✓ Contactless Passes and Payments ✓ Location Services Platform
15 #1 In-stadium Presence In Australia = Unparalleled Distribution
Australian Rules Football Rugby Super Rugby Motor racing Netball Soccer
Stadium / Event Stadium Event Stadium Event Event Event • GMHBA Stadium • Finals series • Suncorp • 12 races including • Pre-Season • A-League competition • Metricon Stadium • State of Origin • Melbourne Bathurst competitions • The Gabba Rectangular (AAMI • Finals Series Stadium • Sydney Cricket Ground Park) • International Series • AAMI Park • Uni of Tas • Brookvale • Blundstone Arena • Sydney Cricket • Giants Stadium Ground • Canberra Oval • McDonald Jones • Melbourne Cricket Ground • Western Sydney (MKTG) • Marvel Stadium (MKTG)
Clubs & Codes • Brisbane • All 16 teams • Queensland Reds • All 8 teams • Melbourne Victory • North Melbourne* • Sanzaar • NSW Waratahs • Sydney FC • Hawthorn* • Melbourne Rebels • Brisbane Roar • Geelong Cats • 12 other teams • Central Coast • Sydney Swans Mariners • GC Suns • Newcastle Jets • GWS • Adelaide Utd • 11 other teams • 6 other teams
Formats • LED • LED • LED • LED • LED • LED • Big Screen TVC • Big Screen TVC • Big Screen TVC • Static • Decals • IPTV / WIFI • Virtuals • Virtuals • TVC • IPTV / WIFI
Infrastructure Advertising Rights Secured: Non-QMS Sport Customer QMS Sport Customer * Tasmanian games only 16 3. TLA Australia
17 TLA Australia & UK Company Overview
Leading Full-service Sports Talent & PR Agency
At A Glance • Offices: Melbourne, Sydney, Adelaide, Perth, London • 2019E Revenues: $41.2m (4% yoy growth)
• Founded: 2011 (ESP was 1996) • 2019E EBITDA: $6.2m
• ~ 120 Employees
Investment Highlights • QMS Sport will extend its access to the Australia Football League (AFL) and other clubs/leagues/sports through TLA’s leading talent relationships: / Acquisition Rationale • TLA Australia represents over 30% of AFL athletes/coaches/talent, 25% of professional Australia and UK cricket talent contracts, the largest numbers of sport media presenters and a growing roster of UK Olympians; and
• Notable talent represented includes Aaron Finch, Cameron Bancroft, Matthew Wade (Cricket), Marcus Bontempelli, Patrick Cripps, Trent Cotchin, Nathan Buckley (AFL), Garry Lyon, Mark Howard, Jonathan Brown, Susie O’Neill (Media), Cate Campbell, Bronte Campbell, Becky James, Adam Peaty, Mack Horton (Olympics).
• PR and Activation agency of choice for AFL, Cricket Australia, Australian Grand Prix, Supercars, Netball Australia, Adelaide 500
• Most Awarded Agency at Australian Sports Industry awards for the last 3 years along with best sports licensed property activation for RWC London 2015.
• Global Merchandise business, delivering fan apparel and teamwear across Australia, and activating and managing 2015 RWC license, 2018 Invictus Games Licensing programs. Best-In-Class Services • Full-service talent management
• Sports PR, Communications, Creative, Content & Digital, Sponsorships
• Event creation, management and implementation
• Fan merchandise production and marketing
Blue Chip Customers
18 TLA Australia & UK Key Management Team
CEO Craig Kelly
OPERATIONS EVENTS & CONSULTANCY TALENT MERCHANDISE SALES UK
Head of Operations Head of Events & Consultancy Head of Talent Head of Merchandise Head of Sales Head of UK Susan Harper James Ward Tony Box Scott Davidson Ben Stewart Paul Roberts
• Australian & UK staff ~120 staff • Long term tenure – average staff tenure of greater than 7 years
19 TLA Australia Operating Divisions
Talent Management • Representing over 30% of athletes, head coach and media talent within the AFL and over 25% of the professional cricket contracts within Australia
• Growing representation of athletes in the United Kingdom, including a mix of current Olympians, Olympic legends and Cricketers
• Management fee commission represents the largest income stream and is underpinned by fixed term agreements
Events & Consulting • Working with the major Australian sporting bodies to manage fan engagement, marketing, partner servicing and PR • Delivering the AFL’s portfolio of major Grand Final Events including Grand Final Eve Lunch, September Club, Footy Festival and Live Site
• Creative, Content and Digital team developing new opportunities targeting new media and new audiences for our leading sports and corporate clients – fastest growing area of our business
• Fan engagement and Event agency of choice for Cricket Australia
• PR agency of choice for AFL, Cricket Australia, Australian Grand Prix Commission , Supercars, Netball Australia, Adelaide 500
• Portsea Polo, the largest Polo event in Australia Sponsorship & Activation • Specialise in sponsorship procurement, management, leveraging and activation for brands spending across Australia’s leading sports
• Sponsorship agency of choice for well known organisations:
Merchandise • Creation and execution of branded, fan focused merchandise, services and advice • Awarded best sports licensed property activation for RWC London 2015
• Operating across four categories:
1. Clubhouse Community Uniforms (on and off field Puma Branded Merchandise): $200m+ market in Australia, currently servicing 5% with a target of 25% of AFL and Soccer Community Sports
2. Event Merchandise: Holding the licence for VRC and Invictus Games
3. Membership: Currently supplying 29 professional teams across AFL, NRL, FFA, BBL
4. Wholesale: Producing under League License Trading Cards, Coins & Collectibles 20 Acquisition Rationale for TLA Australia
Creates integrated • Combination of QMS Sport and TLA Australia creates an integrated sports platform providing a complete sport offering across technology, sports platform across infrastructure and digital media: sport ecosystem − Stadium LED signage − Real time analytics − Events management − Media rights access − Talent representation − Client activation − Fan engagement tools − Merchandising fulfilment − Sports PR and Broadcast Integration
Key synergies
• Significant cross-sell opportunities by leveraging existing relationships with large global sporting clubs, agencies and right holders to expand existing services provided and grow revenue streams
• Utilise QMS Sport’s printing, out of home advertising, activation rights and mobile asset capabilities to support TLA Australia’s events and client activation growth
• Utilise TLA Australia’s merchandising and events / consulting capabilities to enhance QMS Sport’s existing suite of sports media and marketing services
• Stronger offering against QMS’ current major competitors for brand spend and for rights accrual and negotiations across venues and rights holders
• Expected annual revenue and cost synergies of between $1.0m – 2.0m to be secured by CY2020
EPS accretive • Acquisition is expected to be EPS / value accretive with a CY2019 EV/EBITDA multiple of 5.3x
21 4. QMS Sport Key Management & Global Corporate Structure
22 QMS Sport Pro Forma Corporate Structure
QMS Media Limited (ASX:QMS)
Equity Investors QMS Sport Holdings Limited
100% 100% 100% 100% 100%
World Sports & TLA Worldwide (Aust) QMS Sport (US) QMS Sport (Europe) Entertainment QMS Sport Pty Ltd Pty Ltd Holdings Pty Ltd Holdings Pty Ltd Holdings Pty Ltd
100% 100% 100% 100% 90% 90% 100%
Stride Sports World Sports & TLA Merchandise Sportsmate TGI Systems TGI Europe GmbH TLA-ESP Limited Management Entertainment Pty Ltd Technologies Pty Ltd Corporation (Illinois) (Germany) (UK) Holdings Pty Ltd Technologies Pty Ltd
100% 100%
TLA entities to be acquired Stella Vista TGI Media South America International Limited Corporation (Illinois) (UK)
Note: The above reflects the proposed corporate structure post-capital raising 23 QMS Sport Organisational Chart (Including TLA Australia)
Executive Chair Barclay Nettlefold
Global CFO – Sport Global Sport CEO Mark Lawrence
CEO, USA & South CEO, Australia CEO, Europe America Craig Kelly Rusty Lawrence Pat Vendrely
Talent / Events / Merchandise
Media Rights
Infrastructure
Virtual
Sports Tech
Staff # Global Media Infrastructure/ Sports Tech Talent / Events / Total Rights Virtual Merchandise Australia 26 7 9 113 155 UK/Europe 1 23 0 6 30 Americas 0 41 1 0 42 Total 27 71 10 119 227 24 QMS Sport Management Team
Barclay Nettlefold • Barclay has over 30 years’ experience as an advertising and media executive
Executive Chair • He is a leader in pioneering outdoor advertising development across APAC (including Indonesia, Thailand, Malaysia, Vietnam, Philippines, Singapore, China and Myanmar)
• Currently serves as Managing Director and CEO of QMS Media
Mark Lawrence • Mark is an accomplished senior executive with over 25 years’ experience CFO • Previously Mark held senior finance roles with reputable ASX-listed companies including Lend Lease Corporation, Programmed Group, Boom Logistics and SelfWealth
• Extensive track record of successful IPO and M&A execution
Craig Kelly • Craig is the Co-Founder and CEO of TLA Australia and has been its CEO for the last 10 years CEO, Australia • He has been involved in the Australia Football League (AFL) for over 30 years, having enjoyed a successful athletic career with the Collingwood Football Club from 1989 to 1996, playing 123 games including the 1990 Premiership
• Craig has worked in various sales and marketing roles including working for the marketing department of the Collingwood Football Club. With over 30 years in the AFL business he is often asked to talk and consult about AFL and sports marketing. Rusty Lawrence • Rusty has served as Managing Director and COO of TGI US and TGI EU for over 13 years and has been instrumental in the CEO, Europe successful execution of over 1,000 global events spanning 39 countries and over 140 cities
• He has over 30 years’ experience in event management, operations and sports marketing having previously founded Siteline Productions, Inc, a large scale global events business
Pat Vendrely • Patrick founded TGI systems in 1997 and runs TGI’s Americas business. Patrick has over 20 years experience in event CEO, USA & South management, operations and sports marketing. America • Previously Patrick was the commercial director for US Soccer and was an assistant to the Chairman in various operational capacities at the 1994 FIFA World Cup in the USA. 25 5. QMS Sport Financial Summary
26 Summary P&L Proforma Forecast (Combined)
• TLA adds substantial scale to the QMS Sport business model
• Significant cross sell opportunities exist via leveraging respective sporting relationships with global sporting clubs and costs savings will be created from utilising QMS Sport existing operating capabilities
• Revenue & cost synergies of $1-2m expected by end of CY2020
27 Acquisition Synergies
• Enhanced service offering - QMS Sport together with TLA creates a unique vertically integrated sports advertising offering.
• Leverage - QMS Sport and TLA will leverage the strength of their respective strategic relationships they have with global clubs, agencies and rights holders to broaden client service offerings and grow collective revenue streams.
• Opportunity to broaden service offerings both domestically and internationally across QMS Sport’s global business footprint.
• TLA Australia will utilise QMS Sport’s print capabilities, OOH advertising, activation rights, and mobile assets to support events and client activation growth rather than using third parties.
• QMS Sport will refer TLA Australia’s merchandising capabilities and events activation/consultancy to its client base to provide a more holistic service and revenue flow.
• Annual revenue/cost synergies of A$1m to A$2m is estimated to be secured by the end of CY2020.
28 6. Future Growth Strategy
29 Value Proposition of QMS Sport
• QMS Sport, combined with TLA Australia, will create an ecosystem delivering a 360º multichannel strategy to capture the full value of the sport ecosystem in the lead up to, during in-stadia sports events and post events
Value to advertisers: Value to Codes and Rights Holders:
• Sports market consolidation across multiple • An assurance of experience in market segments – A dominant player that services multiple needs, reducing fragmentation • An understanding of their unique challenges, needs and expectations through years of • Ease of doing business – Eliminating the need service to deal with multiple agencies, providers, agents or suppliers • Ability to offer multi-disciplined services to drive value and efficiency • Ability to efficiently drive and deliver scale • Consistency of innovation and delivery to • In depth knowledge across the category – ensure their product is represented to a from Insights to Infrastructure to Rights and standard expected in market Technology
• Benchmark for delivery and accountability
30 Future Growth Drivers
• Sport remains one of the largest and highest growth market segments.
• Advertisers place a premium on the live nature of sports events, being one of the few remaining forms of entertainment viewers feel compelled to watch in real-time.
• Significant organic growth to expand core solutions via cross fertilisation of QMS Sport pillars.
• Delivery of a 360º multichannel strategy to capture the full value across the sport ecosystem.
• Technological advancement in core digital infrastructure services providing multi-broadcast advertising revenues.
31 7. Capital Raising
32 Capital Raising Terms
Summary Terms
Issuer • QMS Sport Holdings Limited (the Issuer) which is a 100% owned subsidiary of QMS Media Limited
Lead Manager • E.L. & C. Baillieu Limited (EL&C Baillieu)
• Private placement of unlisted new shares to sophisticated and professional investors within section 708(8) and s708(11) of the Corporations Act Transaction respectively
Amount • Approximately A$12.0m
Offer price • A$1.00 per share (12m shares) which represents a pre-money equity valuation of A$120.0m (post money A$132.0 million)
• New fully paid unlisted ordinary shares in the Issuer including additional conditions:
• Subsequent capital raising – make good provision: Investors under the Offer will be made good through additional QMS Sport shares issued pro-rata to shareholding if any subsequent capital raising within 12 months is conducted at price lower than $1.00 per share Securities offered (adjusted for any reorganisation of the Issuer’s capital structure)
• Trade Sale: In the event of a trade sale of the Issuer or QMS Media Limited, investors under the Offer will be redeemed at the higher of the trade sale price or a 25% premium to the Offer price being $1.25 per share (adjusted for any reorganisation of the Issuer’s capital structure)
• Proceeds from the Offer will be used to partially fund the acquisition of the Australian assets of TLA Worldwide Plc, which includes TLA Worldwide (Aust) Pty Ltd, TLA Merchandise Pty Ltd and TLA-ESP Limited (UK) (collectively, TLA Australia), the downstream acquisition of Stride Sports Use of funds Management Holdings Pty Ltd (Stride Sports) and for working capital. The balance of the acquisition will be funded by A$20m of debt finance by QMS Media Limited (ASX: QMS)
• The Issuer is targeting a demerger / liquidity event from the parent QMS Media Limited (ASX: QMS) to occur within the CY20 period as part of its Demerger / liquidity event broader growth strategy.
• Enterprise value of the Issuer is expected to be priced based on CY20 EBITDA of ~A$22.0m (pre-synergies), targeting an EV/ EBITDA multiple of Proposed Valuation ~6.0x (post money)
33 Capital Raising Timetable
Event Date
QMS enters in to Share Sale Agreement with TLA: Thursday 8 August 2019
TLA Worldwide Plc (Parent Co) lodges AIM announcement: Thursday 8 August 2019
QMS lodges ASX announcement on exploring strategic alternatives Friday 9 August 2019 for QMS Sport and capital requirements:
Monday 12 August 2019 (Sydney) Management roadshow and investors access to data room: Tuesday 13 August 2019 (Melbourne)
Bids due: Wednesday 14 August 2019
Allocations advised: Wednesday 14 August 2019
ASX announcement (pre-market open): Friday 16 August 2019
TLA Worldwide Plc shareholder approval: Monday 26 August 2019
Settlement of equity (EL&C Baillieu): Tuesday 27 August 2019
Completion of TLA Australia acquisition (subject to Conditions Monday 2 September 2019 Precedent being delivered):
Issue shares and funds transferred to Company: Monday 2 September 2019
34 8. Appendix
35 QMS Sport - Customer Testimonials
TGI / StellaVista have been carefully installing The creative staff at TGI are absolutely terrific; TGI is an exceptional group that is very intuitive perimeter LED boarding into our venue for as we are now living in a digital advertising age and creative. Our Global Sports division rely on several years. The team are professional and we depend so much on their expertise! their expertise to manage our perimeter LED friendly and have the kit set up in swift order. soccer creative branding. Their attention to detail, ability to stay on The performance of TGI’s equipment is schedule and budget is second to none. We are extremely pleased with their work. incredibly high, appearing vibrant to spectators at the venue and on screen. They’ve never let us down.
Amber Steele Steve Elworthy Craig McCarthy Manager of Global Event Managing Director Sr. Director Partnership Marketing Operations & Worldwide Sports Cricket World Cup 2019 Major League Soccer
TGI are the world leaders with perimeter LED During the 12 yr relationship, they have Sportbet’s partnership with Sportsmate has technology but their 360 digital transformation provided perimeter signage systems for FIFA been one of the best decisions Sportsbet has platforms have enabled us to embark on an events in the form of static boards, rotational made as a business in the digital space. exciting new chapter in a challenging Golf boards and LED boards. With each medium of environment. advertising we have received an excellent level Sportsmate reaches literally millions of highly of quality and service. engaged Australian sports fans every month The efficient production technique presented via their network of dedicated sports apps… by DCM is ground-breaking and we are I would wholeheartedly recommend them to delighted to be working with TGI on bringing any company needing perimeter signage or We look forward to extending our partnership this innovation as a world first for sport and décor services. for the years to come. Golf.
Jay Neuhaus Head of Marketing Rights Michael Cole Delivery & Hospitality CTO European Tour
36 TLA – Customer Testimonials
TLA have an in-depth knowledge of the KFC Big The key with TLA is they have national NAB and TLA have had a relationship spanning Bash League and Women’s Big Bash League distribution… add that to the depth of TLA as almost two decades. We really see the that is second to none. an agency and the fact that they can do benefit of working with the cross functioning everything from player management to rights team at TLA, giving us access to fan They operate behind the scenes to bring the negotiation to digital content delivery to engagement, PR, events and content experts BBL and WBBL to life with the Australian media scripting, creative ideas, events and so on, they that understand our business, which and have delivered great are a multifaceted agency is unique in an agency environment. results from the very beginning. with national coverage.
Rebecca Gidley David Barham Gill Harris Manager of Sponsorship Head of Sport GM Commercial Partnerships National Australia Bank Network 10 FFA
TLA are extremely professional, highly There are very few agencies that genuinely TLA have this amazing ability to nail and collaborative and passionate about the have the female athlete as a priority. TLA is the address a brief, regardless of the budget we industry. They excel working to tight exception - and has been for some time. They are working to. They have a way of pushing our deadlines and can deliver events of any size are committed to building mutually own boundaries with a clear focus on results. and scale. advantageous relationships that benefit their clients.
Seline Steele Deputy Head of News Neysa Lubransky Danielle Bleazby Daily Telegraph Head of Marketing Head of Events, Match Day and Fan Puma Experience AFL
37 Global Tech-Enabled Sports Marketing Platform
IN-BROADCAST LED IN-BROADCAST LED IN-BROADCAST VIRTUAL CARPET BIG SCREEN
IN-BROADCAST LED WI-FI / STADIUM FAN ENGAGEMENT APP IPTV NETWORK
38 Global Tech-Enabled Sports Marketing Platform
2019 CRICKET WORLD CUP TOTTENHAM HOTSPUR STADIUM 2019 STATE OF ORIGIN
. . . AT THE BIGGEST SPORTING EVENTS IN THE WORLD
2019 CONCACAF GOLD CUP 2019 UEFA CHAMPIONS LEAGUE 2019 LA LIGA
39 Global Tech-Enabled Sports Marketing Platform
Advertising Formats: In-Broadcast, Parallel LED Perimeter Examples
IN-VENUE LED FEED IN-BROADCAST PARALLEL FEED 1 IN THAILAND
IN-BROADCAST PARALLEL FEED 2 IN EUROPE IN-BROADCAST PARALLEL FEED 3 IN USA
40 Global Tech-Enabled Sports Marketing Platform
Advertising Formats: Mobile Technology & Fan Engagement
• Australia’s leading sports app developer with over 10 years experience providing world-class apps across the AFL, NRL, Rugby Union, EPL, NBA, NFL, A-League and Cricket
• Provides fans all the tools and information they need to stay up to date and follow their favourite sports
2+ Million 69% 27 Sessions 3+ Hours 7% 50K+ Monthly Active of MAUs Return Per User Spent In-App of Male 16+ Demo in Users Weekly per Month per Month Australia App Reviews
41 Case Study #1: 2019 ICC Cricket World Cup
SCOPE
✓ Full 360-degree LED perimeter and LED sightscreen rental for 58 matches at 11 cricket grounds in England and Wales
58 11 2 2 MATCHES STADIA COUNTRIES MONTHS
SOLUTIONS & SERVICES DELIVERED
✓ Procurement and management of ~3,000 meters of LED panels with multiple installations of each venue ✓ Logistics ✓ Match day operations ✓ Technical support ✓ Content creation ✓ Management
42 42 42 Case Study #2: New Tottenham Hotspur Stadium
SCOPE
✓ Develop a custom LED perimeter + software platform that would allow the club to play synchronized content across other digital infrastructure in the venues to create an enhanced fan experience and new revenue opportunities
✓ Must be flexible to fit needs of both soccer and American football
SOLUTIONS & SERVICES DELIVERED
✓ 350 meters of custom LED cabinets ✓ 1 meter tall ✓ 10mm asymmetrical pixel pitch for broadcast optimized performance ✓ R&D for hardware and software ✓ Project management ✓ Install and delivery ✓ Training certification on hardware and software ✓ Ongoing technical support ✓ On going commercial development around various fan engagement tools
43 43 Case Study #3: 2019 UEFA Champions & EUROPA Leagues
SCOPE
✓ UEFA's contractual partner to manage and implement LED ad solutions since 2012
✓ Contract renewed through to 2021
SOLUTIONS & SERVICES DELIVERED
✓ Operational and Technical Consulting ✓ Project Management ✓ Game-Day Operations ✓ LED Development ✓ Animation (Content Management) ✓ Contracting ✓ Budgeting ✓ Logistics ✓ Site Surveys ✓ System Acceptance Tests to prove that LED systems are UEFA-compliant
44 44 Case Study #4: In-Broadcast Virtual Supponor Technology for LA LIGA
SCOPE
✓ Supplied two infrared (IR) LED systems to MediaPro for use in La Liga during 2018/2019 season for the broadcast of the FC Barcelona and Atletico Madrid away games
MediaPro was estimated to have generated over $40M for the 30 games broadcast using this technology
TGI brought the first UEFA-compliant, Supponor-compatible perimeter LED systems to market
These systems have since delivered brands the most virtual LED-enabled matches in the world
45 45 Case Study #5: Live Site and Fan Engagement for the AFL Grand Final
Estimated 278,022 fans visited the AFL Grand Final Live Site with 34 partner activations taking place in the site SCOPE ✓ Oversee and implement the AFL’s external events around the Grand Final ✓ Manage the Yarra Park Footy Festival for 4 consecutive days
TLA also managed all AFL owned Hospitality Events including September Club, Lawn 27 and the Medallion Club catering for over 5,000 guests Case Study #6: Caltex Socceroos and the FIFA World Cup
Multi-award winning campaign including – Best Major Sponsorship, Best PR Idea, and top 10 Global Sponsorship campaigns for the World Cup awarded by SCOPE Drum Media ✓ Leverage Caltex’s position as naming rights sponsor of the Socceroos for the 2018 FIFA World Cup
Developed a comprehensive campaign including re-branding of stores, creation of a unique content series in Russia and a personal partnership with Tim Cahill