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DISCLAIMER The information contained in this document reflects, as - PowerPoint PPT Presentation

DISCLAIMER The information contained in this document reflects, as of the date of publication, the views of Munro Partners and sources believed by Munro Partners to be reliable. There can be no guarantee that any projection, forecast or opinion in


  1. DISCLAIMER The information contained in this document reflects, as of the date of publication, the views of Munro Partners and sources believed by Munro Partners to be reliable. There can be no guarantee that any projection, forecast or opinion in these materials will be realised. The views expressed in this document may change at any time subsequent to the date of issue. Grant Samuel Fund Services Limited ABN 48 129 256 104 AFSL 321517 (Grant Samuel Fund Services) is the responsible entity of the Munro Global Growth Fund ARSN 612 854 547 (Fund) and is the issuer of this information. This information has been prepared without taking account of the objectives, financial situation or needs of individuals. Before making an investment decision in relation to the Fund, investors should consider the appropriateness of this information, having regard to their own objectives, financial situation and needs and read and consider the product disclosure statement for the Fund dated 1 March 2018 (PDS) which may be obtained from www.gsfm.com.au, www.munropartners.com.au/access or by calling (02) 8188 1510. Past performance information given in this document is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. None of Grant Samuel Fund Services, Munro Partners, its related bodies or associates nor any other person guarantees the repayment of capital or the performance of the Fund or any particular returns from the Fund. No representation or warranty is made concerning the accuracy of any data contained in this document. This document is issued on 19 November 2018. You should consider the PDS in its entirety before making a decision to acquire or continue to hold an interest in the Munro Global Growth Fund. 2

  2. AMAZON ‐ $800BN MARKET CAP BUT STILL GROWING Amazon – Dominant in E‐Commerce and Cloud Computing Munro Partners – 5 Qualitative tests for a great growth company E‐commerce Cloud Computing 3

  3. FRAMING THE GROWTH RUNWAY… THE LESSONS FROM APPLE Global Mobile Phone Unit Shipments (LHS) and Smartphone Market Share (RHS) 2500 90% 80% 2000 70% 60% 1500 Market Share 50% (units m) 40% 1000 30% 20% 500 10% 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Global Mobile Phone Market Global Smartphones Smartphone Market Share Source: Bloomberg 4

  4. GROWTH ‐ AMAZON IS AT THE START OF TWO GROWTH RUNWAYS… E‐Commerce Cloud Computing US Retail Sales and US E‐commerce Spend (LHS), US E‐ Infrastructure as a Service (IaaS) Spending as a portion of commerce share of Retail (RHS) total Enterprise Infrastructure spending (LHS), and IaaS share (RHS) 250,000 40% 6,000,000 40% 35% 35% 5,000,000 200,000 30% 30% 4,000,000 25% 25% Market Share Market Share 150,000 (USD m) (USD m) 3,000,000 20% 20% 100,000 15% 15% 2,000,000 10% 10% 50,000 1,000,000 5% 5% 0 0% 0 0% Infrastructure as a Service Infrastructure Market IaaS Share of Infrastructure US E‐commerce Spend Total US Retail Sales US E‐commerce Share of Retail Source: Statista 5

  5. LEVERAGE ‐ IN ECOMMERCE IS AMAZON PRIME… Ontario Distribution Centre Prime Members 140 120 100 46% CAGR 80 (m) 60 40 20 0 2013 2014 2015 2016 2017 2018E Amazon Distribution Centres Globally In Q3 2018 prime members spent 2.7x more than non‐prime members 1,600 1,471 1,400 1,200 (USD spent) 1,000 800 547 600 400 200 0 Prime Non‐Prime Source: MS & Munro Partners Estimates 6

  6. LEVERAGE – IN THE CLOUD AMAZON IS ALSO TAKING SHARE Amazon Distribution Centres – 109 globally Public Cloud Market Share 80 70 6% 11% 60 8% 21% 50 24% (USD bn) 9% 40 6% 36% 18% 30 5% 4% 50% 14% 20 51% 3% 2% 46% 6% 10 42% 39% 0 2016 2017 2018 2019 AWS Azure Alibaba Google Others Source: Goldman Sachs 7

  7. SUSTAINABILITY ‐ THE SHIFT TO E‐COMMERCE AND THE CLOUD SHOULD CONTINUE E‐Commerce Cloud Computing US Retail Sales and US E‐Commerce Spend (LHS) and US E‐ IaaS Spending as a portion of total Infrastructure (LHS) and commerce Share of Retail Sales IaaS Share (RHS) 7,000,000 50% 500,000 50% 45% 450,000 45% 6,000,000 40% 400,000 40% 5,000,000 35% 350,000 35% 30% Market Share 300,000 30% Market Share 4,000,000 (USD m) (USD m) 25% 250,000 25% 3,000,000 20% 200,000 20% 15% 150,000 15% 2,000,000 10% 100,000 10% 1,000,000 5% 50,000 5% 0 0% 0 0% US E‐commerce Spend Total US Retail Sales US E‐commerce Share of Retail Infrastructure as a Service Infrastructure Market IaaS Share of Infrastructure Source: MS, Bloomberg & Munro Partners Estimates 8

  8. CONTROL AND CUSTOMER PERCEPTION 20 years in the making but still looking long term ‘To be Earths most consumer centric company’ 1998 Net worth = $1.6bn Age: 34 2018 Net worth = $147bn Age: 54 9

  9. IS AMAZON A GOOD INVESTMENT? ‐ FOCUSING ON THE P/E RATIO HAS NOT HELPED INVESTORS Munro Partners – 5 Qualitative tests for a great growth company Amazon Share Price (LHS) and Blended Forward P/E (RHS) 2500 120 100 2000 80 Forward P/E Multiple 1500 Share Price 60 1000 40 500 20 0 0 Share Price BF P/E Ratio Source: Bloomberg 10

  10. IS AMAZON A GOOD INVESTMENT? – FOCUSING ON CASH FLOW HAS Amazon Share Price (LHS) and Forward EBITDA (RHS) Amazon Share Price (LHS) and Forward EBITDA Multiple (RHS) 2500 35 2500 45,000 40,000 30 2000 2000 35,000 Forward EBITDA Multiple 25 30,000 1500 1500 Share Price 25,000 20 (EBITDA, m) Share Price 20,000 1000 1000 15 15,000 10,000 500 500 10 5,000 0 5 0 0 Share Price Forward Ebitda Share Price Forward EV/Ebitda Source: Bloomberg 11

  11. IS AMAZON A GOOD INVESTMENT? – RUNNING THROUGH THE MATHS E‐Commerce Cloud Computing Amazon Retail Revenue (LHS) and Adj. EBIT Margin (RHS) AWS Revenue (LHS) and Adj. EBIT Margin (RHS) 2025 Retail 600,000 100% 120,000 100% 2025 AWS Revenue Revenue 100bn 554bn 90% 90% 500,000 100,000 80% 80% 70% 400,000 80,000 70% Adj. EBIT Margin Adj. EBIT Margin 60% (USD m) 60% (USD m) 2018 Retail 300,000 50% 60,000 Revenue 2018 AWS 50% 209bn 40% Revenue 25bn 200,000 40,000 40% 30% 2025 Retail Adj. EBIT Margin 9% 30% 20% 2018 Retail Adj. 100,000 2025 AWS Adj. 20,000 EBIT Margin 5% EBIT Margin 42% 10% 20% 2018 AWS Adj. EBIT Margin 36% 0 0% 0 10% Amazon Revenue (USD m) Adj. EBIT Margin AWS Revenue (m) AWS Adj. EBIT Margin Source: Bloomberg & Munro Partners Estimates 12 Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

  12. IS AMAZON A GOOD INVESTMENT – PRICE TARGET Amazon EBITDA Projection Price Target 300,000 Today: ? 2019 Consensus EBITDA 42bn * 250,000 20x multiple = 840bn EV 200,000 Price Target: Revenue = $554bn (USD bn) 150,000 EBITDA Margin = 20% 2025 EBITDA 131bn * 17.5x multiple = 2,300bn EV 100,000 Revenue = $209bn Time Horizon: 6 years EBITDA Margin = 16% 50,000 CAGR: 21% p.a. 0 2018 2025E 2030E Source: Bloomberg & Munro Partners estimates Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of 13 future performance. There can be no guarantee that any projection, forecast or opinion in these materials will be realised.

  13. THANK‐YOU “We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model.” Jeff Bezos, Shareholder Letter 1997 Munro Partners Level 19 80 Collins Street Melbourne VIC 3000 + 61 3 9290 0900 www.munropartners.com.au contact@munropartners.com.au

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