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INVESTORS PRESENTATIONAn introduction to GYG plcM A Y 2 0 1 9
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CONTENTS
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· INTRODUCTION
· MARKET OUTLOOK
· FINANCIAL REVIEW
· DELIVERING GROWTH
· APPENDICES
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INTRODUCTION
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GYG - What we do
• Market leader in superyacht painting, supply and maintenance
• International footprint with operations in the Mediterranean, Northern Europe and the United States
• Group brands include Pinmar, Rolling Stock, Technocraft and ACA Marine
• Listed on AIM in July 2017
• GYG’s operations can be divided into three key markets:
New Build – the fairing and painting of new superyachts as part of the construction process
Supply - offering marine products to the trade, retail customers and direct to superyachts worldwide
Refit - the repainting and finishing of superyachts normally as part of a refitting programme including scaffold & fittings
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The superyacht service model
Every 5 years superyachts need a mandatory service….
…to look their best …to assist clients in chartering their yachts
• A large number of superyachts over 40m are chartered:
50m – from €206k per week 72m – from €595k per week 85m – from €840k per week
…to comply with certain class, maritime law and insurance requirements
• Superyachts need a major survey and service every 5 years
• Annual maintenance is also typical
…to address issues arising from the marine environment
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2018
Average GYG client superyacht length
2006
Average superyacht length: 54mAverage exterior painted surface: c.1,800sqm
Average superyacht length: 78mAverage exterior painted surface: c.3,500sqm
54 meters 620 gross tonnes
Largest Industry Superyachts 180 meters length (Azzam) 16,000 gross tonnes (Dilbar)
is up c.44% in the last 12 years and continues to increase
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77m
Important Refit Projects in 2019
P A L M A D E M A L L O R C A N A V A N T I A G R E E C E
F O R T L A U D E R D A L E B A R C E L O N A S A V A N N A H
85m 133m
61m 70m 75m
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GYG’s global operations
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Major bases
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MARKET OUTLOOK
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Market Overview - UHNWI Population Growth
1125793
10111210 1226
14261645
1826 18102043
22082463
2761
3110
3518
3998
11951281
13831471
15561636
1718 1784 1848 19141986
20772171
22652366
2467
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
G R O W T H I N T H E N U M B E R O F B I L L I O N A I R E S C O R R E L AT E D W I T H 4 0 m + F L E E T G R O W T H
No. Billionaires Fleet size 40m+
UHNWI population is forecast to grow by 1,790 - from 2,208 to 3,998 - in the next 5 years1
1. Source: Superyacht Group March 2019
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Market Overview – New Build Orderbook
The addressable paint market of the 40m+ New Build segment 2019-2023 is estimated to be in the region of €1.2Bn1
1. Source: Superyacht Group March 2019
23
1420
28 27
3729
43
5348 49
5349 52
47 49
3632
3831
7
47
4
9
10
12 13
14
16
22
19 2932
34
29 22
2222
1821
15
20
9
21
2
1
0
4 2
7
2
4
5
85
10
99
9 4
6 7 716
1
11
2
3
0
1 2
1
5
1
0
60
5
12
2 5
6 4 6
7
7
2
3127
30
45 44
59
52
70
77
91
86
102
8885
80 80
6664
66
74
9194
9699
101
0
20
40
60
80
100
120
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
G L O B A L S U P E R YA C H T D E L I V E R I E S & F O R W A R D O R D E R B O O K (with estimates 2019-2023)
90m+ In Build
90m+ Deliveries
70-90m In Build
70-90m Deliveries
50-70m In Build
50-70m Deliveries
40-50m In Build
40-50m Deliveries
Deliveries (Actual) & ForecastDeliveries (Confirmed projects &Market Estimate)
Forecast DeliveriesConfirmed projects and market estimate
Market Intelligence
New Build Paint Market
• New Build Order Book of 228 projects over 40m+
• Growth in 40m+ yachts linked to the continuing growth in UHNWI’s
• German & Dutch yards continue to dominate the 70m+ segment
• Addressable paint market value of the 40m+ New Build segment 2019-2023 is estimated to be c.€1.2Bn1
Refit Paint Market
• Due to the fragmented nature of the Refit paint market there is no accurate industry data on the actual annual performance
• Market intelligence1 reported under-performance in the Refit market during 2017 & 2018 with activity measured by painted surface areas down c.30% 2016-2018
• GYG Refit paint revenues for the period 2017-2018 were down 19.7%
• Postponed paint projects have led to a backlog of demand
• Industry forecasts1 predict strong growth in the Refit paint market driven by the 5-year Refit cycles & the growing fleet
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1. Source: Superyacht Group March 2019
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FINANCIAL REVIEW
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Abbreviated 5 Year Financial Performance
• GYG´s market share had been increasing steadily since2014
• 2018 trading was significantly weaker than expected
• Coating division suffered from general contraction in theRefit market, delays in anticipated contracts and fewerNew Build wins than expected
• Supply division reported growth of 6.7% following anincrease in new yacht accounts
• Q4 2018 showed a recovery in the market. Q1 2019 hasmarked a return to growth in revenue
• 2019* figures based on Zeus Capital research note dated4 April 2019
2014 2015 2016 2017 2018 2019*Coatings 40.947 39.173 46.023 53.715 35.688 44.500Supply 6.946 7.911 8.568 8.925 9.506 10.500Total turnover 47.893 47.084 54.591 62.640 45.194 55.000
Adjusted EBITDA 5.218 5.011 6.685 7.191 (915) 3.000
Depreciation/amortisation (769) (739) (2.243) (1.822) (1.886)Finance costs (220) (205) (882) (879) (737)Exceptionals (1.113) (2.068) (2.588) (3.899) (880)
Profit/(loss) before tax 3.116 1.999 972 524 (4.589)
(5)
(3)
(1)
1
3
5
7
9
0
10
20
30
40
50
60
70
2014 2015 2016 2017 2018 2019*
R E V E N U E & A D J U S T E D E B I T D A ( € M )
Coatings Supply Adj. EBITDA
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2018 Review
GYG saw a return to normal levels of demand in Q4 2018 finishing the year strongly and this has flowed through to a busy Q1 2019
Many factors made this a difficult year:
• Lower project wins in New Build and delays in getting new projects signed
• Continued turbulence in the Refit market causing a short-term softening of demand:
– Market intelligence1 reported reduction in total Refit activity based on paintable surface area: 2018 c.-7.5% vs 2017 & c.-30% vs 2016
– Downturn in French Refit yards due to fiscal uncertainties of a taxation policy – Barcelona going through a major facility upgrade causing disruptions in one of the Group’s main facilities in Spain– Delays at the new Refit facility in Savannah, USA– Geo-political uncertainty causing owners to postpone projects and cruise outside normal patterns– Disruption to cruising patterns also caused by extraordinary hurricanes during winter 2017/2018
• The Group’s Refit projects scheduled for 2018 were postponed rather than lost
• Market intelligence forecasts a significant upturn during 2019-20211 driven by the number of 40m+ yachts entering their 1st & 2nd Refit cycle
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1. Source: Superyacht Group March 2019
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2018 Summary Income Statement
• COGS could not be reduced in line with revenuesdue to the need to retain skilled labour
• Exceptionals decreased significantly from €3.9m to€0.9m. These were principally restructuring costs asthe business was downsized in line with revenue
• Impairment charge of €0.5m relates to write down ofACA brand as it will be replaced by Pinmar in LaCiotat
• Finance costs reduced by €0.2m following reduceduse of borrowing facilities
R E V E N U E € m2 0 1 8 2 0 1 7
Spain 27.2 34.0United Kingdom 1.4 0.4Rest of Europe 8.2 21.4Rest of World (mainly US) 8.1 6.9
45.0 62.6
€ million 2018 % Rev 2017 % Rev Growth
Revenue 45.0 100% 62.6 100% (28.1)%
COGS (36.9) (82.0)% (45.6) (72.9)% (19.1)%
Gross Profit 8.1 18.0% 17.0 27.1% 27.2%
Other OPEX & SG&A (9.0) (20.0)% (9.8) (15.6) (8.2)%
Adjusted EBITDA (0.9) (2.0)% 7.2 11.5% (112.5)%
Depreciation & Amortisation (1.9) (4.2)% (1.8) (2.9)% 5.6%
Performance Share Plan (0.1) (0.2)% (0.1) (0.2)% -
Impairment (0.5) (1.1)% - - 100.0%
Exceptional Items (0.9) (2.0)% (3.9) (6.2)% (76.9)%
Operating (Loss)/Profit (4.3) (9.5)% 1.4 2.2% (404.3)%
Gain on financial instruments 0.4 1.0% - - 100.0%
Finance Cost (0.7) (1.6)% (0.9) (1.4)% (22.2)%
Profit/(Loss) before tax (4.6) (10.2)% 0.5 0.8% (1,020)%
Tax 1.4 3.1% (0.9) (1.4)% (255.6)%
Loss for the period (3.2) (7.1)% (0.4) (0.6)% 700%
Adjusted PAT (2.3) (5.1)% 3.5 5.6% (165.7%)
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Summary Balance Sheet
• Net debt of €6.6m at 31 December 2018 (€6.7m at 31December 2017) reflecting lower cash and borrowings
• Decrease in Net Assets reflects the lower workingcapital position driven by reduced trade receivables.€5m of Customer Deposits are included in 2018 Trade,deferred income and other payables
• Banking update: Additional revolving facilities (€1.5m)and factoring facilities (€4.4m) signed in 2018. Totalworking cap facilities now €15.3m. Banks have provideda waiver for one of the June 2019 covenant tests anddiscussions have commenced around refinancing theGroup’s existing facilities
€ million 2018 2017 Change
Goodwill 9.3 9.3 -Other intangible assets 11.3 12.7 (11.0)%Property, plant & equipment 8.2 8.4 (2.4)%Other financial assets 1.6 1.6 -Deferred tax assets 0.3 0.6 (50)%
Non-current assets 30.7 32.6 (5.8)%
Inventories 2.5 3.1 (19.4)%Trade and other receivables 6.9 10.9 (36.7)%Cash and cash equivalents 5.1 6.2 (17.7)%
Current assets 14.5 20.2 (28.2)%
Total assets 45.2 52.8 (14.4)%
Trade, deferred income and other payables 16.8 16.4 2.4%Borrowings 4.0 3.3 22.7%Provisions 0.3 0.3 -Derivative financial instruments 0.0 0.0 -
Current liabilities 21.2 20.0 6.0%
Borrowings 7.6 9.6 (20.8)%Deferred tax liabilities 2.2 4.0 (45.0)%Long-term provisions 0.8 0.8 6.2%Other financial liabilities 0.9 1.0 (5.0)%
Non-current liabilities 11.6 15.4 (24.7)%
Total liabilities 32.7 35.4 (7.6)%
NET ASSETS 12.5 17.4 (28.2)%
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DELIVERING GROWTH
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2018 - 2019 Recovering momentum
F O C U S E D S A L E S
S T R U C T U R E
Restructured sales & marketing functions • New Build marketing
campaign focused on northern Europe
• Greater emphasis on new business development in Supply
• Intelligence driven prospecting of yachts due for major Refits utilising CRM yacht database, repeat customer cycles and 5 year survey data
N E W R E F I T H U BL A C I O T A T ,
F R A N C E
Targeting growth in Mediterranean Refit• Expanded commercial
agreement with Refit partner MB92 Group
• Pinmar brand established in France supported by Pinmar Supply and Technocraft
• 3rd Pinmar Refit hub offering turnkey refit solutions to large superyachts
O P E R A T I O N S
Focus on gross margin, efficiencies & cost savings• Raúl Galán, COO,
experienced industrial engineer, appointed to drive operational improvement programme
• Focus on production efficiencies through improved processes & cost controls
• Weekly control of KPI’s
O R G A N I S A T I O N
Developments to improve business performance, drive growth and reduce risk• Senior management
restructure• Re-engineered our
forecasting model• Upgrade of IT
infrastructure and systems in progress
• Centralised purchasing and Group warehousing
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2019 – Order Book
• Major New Build contracts won in 2019 extending Order Book through 2021
• Several other New Build contracts in an advanced negotiation stage
• Rigorous cleansing has produced a sales pipeline value of €212m at 31 March 2019, of which €54m is Refit projects above 50% win probability
Strong Order Book visibility:
ORDER BOOK AT TOTAL Current Year
Current Year +1
Current Year +2
31 Mar 2017 €14.1m €13.2m €0.9m €0m
31 Mar 2018 €10.3m €5.8m €4.5m €0m
31 Mar 2019 €38.8m €16.7m €17.0m €5.1m
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Future Projects
• Record New Build Order Book with 6 major projects:
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Project Length Location Status Start date
NB 94m HOLLAND IN PROGRESS Q4 2018
NB 145m GERMANY ORDERBOOK Q2 2019
NB 71m HOLLAND ORDERBOOK Q4 2019
NB 109m HOLLAND ORDERBOOK Q1 2020
PROJECT REV 182m GERMANY ORDERBOOK Q2 2020
NB 100m+ HOLLAND ORDERBOOK Q3 2020
• Entered 2018 with weak New Build order book
• Launched New Build marketing campaign targeting major Northern European shipyards
• Starting Q2 2019 with a record New Build order book & strategic relationships established
• Several additional New Build projects in an advanced stage of negotiation
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GYG Outlook: Gearing for Growth
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The Board remains confident about the future and is focused on delivering long-term shareholder value
Fleet numbers & size of yachts continues to grow
New Build strategy delivering market share growth in target segments
Expanding Refit capacity & partnerships in key locations
Restructured management team to ensure focus, deliver performance and accountability
Gross Margin Improvement programme & new IT development programme
2019 started strongly with record Order Book
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APPENDICES
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Executive team
Remy Millott, Chief Executive Officer
• Joined Pinmar in 1996 and became MD in 2003 and grew the company extensively thereafter • Led several acquisitions and mergers at Pinmar, including in 2012 when GYG was formed• Over 35 years in the yachting industry, at the time having become one of the industry’s youngest yachting captains
Kevin McNair, Interim Chief Financial Officer
• Over 25 years experience in financial management and capital markets• Previously CFO of multiple AIM listed businesses, most recently interim CFO of Ebiquity plc• Heavy focus on operational improvements and systems integration
Rupert Savage, Group Commercial Director
• Joined Rolling Stock in 2006, where he was instrumental in the development and growth of the business• Has been responsible for the integration of the various Group companies, running the business on a day to day basis• Focused on the Group’s commercial development and continues to be influential in the strategic growth of the business
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Board and senior management
Stephen Murphy, Chairman• Previously Group CEO of Virgin Group Investments Ltd - the worldwide holding Company of the Virgin Group and Chairman of Virgin Atlantic Airways and Virgin Rail Group having
succeeded Sir Richard Branson. Strong financial and operational background with over 30 years’ experience in senior management positions and executive Director roles
• Currently Non-Executive Chairman of Ovo Energy Ltd, Chair of Audit Committee and Independent Director at The Business Growth Fund and Non-Executive Director of Get Living London Ltd. Previously Chairman of Wyevale Garden Centres Ltd, Byron Hamburgers Ltd and Jumeirah Group LLC
Richard King, Non-Executive Director• 35 years with Ernst and Young LLP becoming deputy Managing Partner of UK & Ireland and a member of both the Europe, Middle East, India and Africa (EMEIA) Board and Global
management group. Since leaving EY, Richard has been involved either as chairman or non-executive director on a variety of private and public companies and has been involved in company disposals in excess of £400 million.
• Richard currently serves as a non-executive director of Odyssean Investment Trust PLC, is a partner at Rockpool Investments LLP and is on the advisory board of Frogmore Property Group. He is also chair of trustees for the Willow Foundation.
Peter Brown, Managing Director USA• Joined Pinmar in 1998 to develop the Barcelona facility and expanded the Group into the new build sector in Germany in 2005, following which he took over Pinmar’s USA
operations. Peter had a successful career as a yacht captain for over 16 years
Andrew Clemence, Group Marketing Director• 30 year history of delivering strategic growth, including as Chief Operating Officer of Ibiza Rocks Group and a former Director of Airtours plc
Non-Executive Directors
Senior management
Raul Galan, Chief Operating Officer• A 25 year career developed strong experience in complex business environments and organization improvements in diverse industries for multinational companies in Spain and Italy
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• Pinmar - Pinmar is recognised as the market leading brand in the premiummotor yacht sector having completed the fairing and finishing on some ofthe world’s most prestigious superyachts for the past 40 years. Pinmar is amajor player in both the new build and refit sectors competing on a globalbasis.
Pinmar opened USA facilities in 2009 as an extension to their Europeanoperations. It is headquartered in West Palm Beach with bases in FortLauderdale and Savannah, Georgia.
• Rolling Stock - Rolling Stock has a 20 year heritage in the superyachtindustry and now represents the premium brand in the finishing andrefinishing of major sail superyachts. With its unrivalled reputation forquality and its expertise with high performance coatings, Rolling Stock isacknowledged as the leader in its field.
• ACA Marine - ACA Marine is the leading brand in the refinishing market inFrance as well as having an important presence in the northern Europenew build market.
• Pinmar Supply - Pinmar Supply is a major yacht chandlery and supplycompany servicing all routes to market be it through distributors, the tradeor directly to superyachts on a global basis.
• Technocraft - Technocraft is a pioneering company in yacht containmentsystems providing specialised scaffolding construction and tenting solutionsfor superyachts undergoing painting or other refit works. Technocraftprovides high quality services to all the leading shipyards in Europe.
Additional services:
• Pinmar Golf - Charity golf tournament & leading social event
• Pinmar Academy - Training courses for crew
• Pinmar Standard - Our unique industry quality standard
GYG brands overview
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Market leading technology – De-risking
• GYG has optimised Electrostatic applications for topcoats
• Electrostatic topcoat application reduces time and risk during the build program
• Impact on surrounding environment is reduced to new low levels
– Local and Regional regulators pushed back
– Finish standards uncompromised
• Technical features
– Higher DFTs & lower generation of overspray Dust
• Key Shipyard Benefits
– Reduced tertiary impact of overspray
– Scalable painting areas mean yard does not have to shut down shed, reducing impact on the construction program
• Schedule flexibility with lower unplanned expenses
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Market Overview - The Superyacht Fleet
63%
22%
11%
3%
1%
3 0 m + F L E E T – S E G M E N T E D B Y L O A *
30-40m 40-50m 50-70m 70-90m 90m+
2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8
7578
90 8679
4936
32 38
31
22 18 21 15
20
4 6 7 716
5 6 4 6 7
3 0 m + F L E E T G R O W T H B Y L O A *
30-40m 40-50m 50-70m 70-90m 90m+
40m+ fleet is forecast to grow at 4.2%1 for the period 2019-2023
* LOA = Length overall1. Source: Superyacht Group March 2019
TO TA L 3 0 m +
F L E E T
5,406
TO TA L 4 0 m +
F L E E T
1,986
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Disclaimer
The Slides are being supplied and directed only at persons in member states of the European Economic Area who are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC, as amended) and, additionally in
the United Kingdom, to those qualified investors who (a) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (investment
professionals) or (b) fall within Article 49(2)(a) to (d) of that Order (high net worth companies, unincorporated associations etc.) (all such persons being "Relevant Persons"). Any person who is not a Relevant Person may not attend the presentation of the
Slides and should not act or rely on this document or any of its contents. Any investment or investment activity to which the Slides relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.
The Company has not registered and does not intend to register its shares under the US Securities Act of 1933 or under any securities laws of any state or other jurisdiction of the United States and, subject to certain exceptions, its shares will not be offered,
sold, resold, taken up, exercised, renounced, transferred or delivered, directly or indirectly, in or into the United States. The relevant clearances have not been, and will not be, obtained from the Securities Commission of any provision or territory of Canada;
no document in relation to the Placing has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission; no registration statement has been, or will be, filed with the Japanese Ministry of Finance; and the relevant
clearances have not been, and will not be, obtained from the South African Reserve Bank and any other applicable body in the Republic of South Africa in relation to its shares. Accordingly, its shares will not, directly or indirectly, be offered or sold within the
United States Canada, Australia, Japan, the Republic of South Africa, the Republic of Ireland or offered or sold to any resident, national or citizen of the United States, Canada, Australia, Japan, the Republic of South Africa or the Republic of Ireland.
Zeus Capital has not authorised the contents of, or any part of, the Slides and no representation or warranty, express or implied, is made as to any of its contents.
By attending the presentation of the Slides and/or accepting this document you agree to be bound by the foregoing limitations and restrictions and, in particular, will be taken to have represented, warranted and undertaken that: (i) you have read and agree
to comply with the contents of this notice; (ii) you are a Relevant Person (as defined above) and you will observe the foregoing provisions, limitations and conditions; and (iii) you will not forward the Slides (including any information given in the verbal
presentation of the Slides) to any other person, or reproduce or publish this document, in whole or in part, for any purpose.
The content of this presentation has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on thispresentation for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.
Edificio Global,Espigón Exterior S/N,Muelle Viejo, 07012,Palma de Mallorca, Spain
T +34 971 213 305F +34 971 712 925
© GYG plc 2019. All rights reserved.
GYG plc (Registered in England and Wales No: 10001363)Registered office address: Cannon Place, 78 Cannon Street, London EC4N 6AF, United Kingdom
Cover & divider slide photography by Tom Van Oossanen - www.tomvano.com
www.pinmar-usa.com
Tel. +1 954 760 9626
Yacht fairing and painting.
www.rollingstock.es
Tel. +34 971 213 305
Yacht fairing and painting.
www.acamarine.com
Tel. +33 (0) 546 417 397
Yacht fairing and painting.
www.pinmar.com
Tel. +34 971 213 305
Yacht fairing and painting.
www.technocraftsl.com
Tel. +34 971 213 642
Scaffolding, containment & fittings removal.
www.pinmarsupply.com
Tel. +34 971 713 744
Retail & wholesale marine supply.
