IBDROOT\PROJECTS\IBD-HK\PEKAN2018\614988_1\Process documents\Investor presentation\180320 Kathmandu - Investor Presentation vFF.pptx ACQUISITION OF OBOZ FOOTWEAR LLC AND EQUITY RAISING 20 MARCH 2018 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
IBDROOT\PROJECTS\IBD-HK\PEKAN2018\614988_1\Process documents\Investor presentation\180320 Kathmandu - Investor Presentation vFF.pptx IMPORTANT NOTICE AND DISCLAIMER Disclaimer This presentation has been prepared by Kathmandu Holdings Limited (NZ company number 2334209, ABN 139 836 918, ticker KMD (NZX a nd ASX)) (the “Company”). This presentation has been prepared in relation to: (i) the proposed acquisition by the Company of all the shares in US-based Oboz Footwear LLC; and (ii) the proposed placement and share purchase plan offer of fully paid ordinary shares (the “New Shares”) in the Company under clause 19 of Schedule 1 of the Financial Markets Conduct Act 2013 (FMCA) and section 708 of the Corporations Act 2001 (Cth) and ASIC Class Order 09/425 respectively. Information This presentation contains summary information about the Company and its activities which is current as at the date of this presentation. The information in this presentation is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor may require in evaluating a possible investment in the Company or that would be required in a product disclosure statement under the FMCA or a prospectus under the Corporations Act 2001 (Cth). The historical information in this presentation is, or is based upon, information that has been released to NZX Limited (“NZX”) and/or ASX Limited (“ASX”). This presentation should be read in conjunction with the Company’s annual report , market releases and other periodic and continuous disclosure announcements, which are available at www.nzx.com and www.asx.com.au or https://www.kathmanduholdings.com. Quotation The New Shares will be quoted on the NZX Main Board and on the Australian Securities Exchange upon completion of allotment procedures. The NZX Main Board is a licensed market under the FMCA. The Australian Securities Exchange is a licensed market under the Corporations Act 2001 (Cth). Neither NZX nor ASX accepts any responsibility for any statement in this presentation. Not financial product advice This presentation is for information purposes only and is not financial or investment advice or a recommendation to acquire the Company’s securities, and has been prepared without taking into account the objectives, financial situation or needs of prospective investors. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and consult an NZX Participant or solicitor, accountant or other professional adviser if necessary. Past performance Any 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. No representations or warranties are made as to the accuracy or completeness of such information. Future performance This presentation includes certain “forward - looking statements” about the Company and the environment in which the Company opera tes, such as indications of, and guidance on, future earnings and financial position and performance. Forward-looking information is inherently uncertain and subject to contingencies outside of the Company’s control, and no assurance can be given that actual outcomes or performance will not materially differ from the forward-looking statements. Currency All currency amounts in this presentation are in NZ dollars unless stated otherwise. Disclaimer: To the maximum extent permitted by law, we will not be liable (whether in tort (including negligence) or otherwise) to you or any other person in relation to this presentation. 2
IBDROOT\PROJECTS\IBD-HK\PEKAN2018\614988_1\Process documents\Investor presentation\180320 Kathmandu - Investor Presentation vFF.pptx Contents 1. Oboz Overview 2. Equity Raising Overview A. Trading Update B. Key Risks C. Foreign Selling Restrictions 3
IBDROOT\PROJECTS\IBD-HK\PEKAN2018\614988_1\Process documents\Investor presentation\180320 Kathmandu - Investor Presentation vFF.pptx TRANSACTION SUMMARY Unconditional binding agreement to acquire US- based Oboz Footwear LLC (“ Oboz ”) for a base consideration of US$60m and “ Des esig ign » n grea eat, t, inno nova vativ ive, e, disti tinc ncti tive e and d sust stai aina nabl ble e earn-out of up to US$15m qual alit ity y prod oduc ucts ts ” Oboz designs, sources, and sells footwear for backpacking, hiking, travel, winter and general outdoor wear Overview » Wholesale only model with distribution through leading retailers primarily in North America » Anticipated closing in April-18, subject to customary closing requirements » International growth » Complementary markets » Complementary product category » Strategic rationale Diversification “ Be e cust stom omer er-ce cent ntri ric c in ever eryt ythi hing ng we do ” » Low cost integration » Brand affinity and cultural alignment » $40m fully underwritten institutional placement (“ Placement ”) » Funding and equity Up to $10m 1 in proceeds to be raised via a non-underwritten Share Purchase Plan (“ SPP ”) » raising Balance to be funded from a new acquisition debt facility and expansion to existing debt facilities » Transaction expected to be mid-single digit EPS accretive in FY19 2 , being the first full financial year following the acquisition Expected financial » impacts Post transaction pro forma net debt / EBITDA of 1.1x 3 » 1 The SPP will not be underwritten and Kathmandu reserves the right (in its absolute discretion) to accept applications beyond a target aggregate value of $8m up to a maximum of $10m 2 Excluding transaction & integration costs and synergies; Based on Oboz financial performance in line with the earn-out target 4 3 Based on Kathmandu pro forma net debt of $87.2m as at Jan-18 and combined Oboz and Kathmandu LTM EBITDA of $80.8m to Jan-18; Based on NZ$ / US$ of 0.700
IBDROOT\PROJECTS\IBD-HK\PEKAN2018\614988_1\Process documents\Investor presentation\180320 Kathmandu - Investor Presentation vFF.pptx STRATEGIC RATIONALE » Consistent with stated international growth strategy to pursue lower risk wholesale model » Advances Kathmandu’s transformation from an Australasian retailer to a global outdoor apparel and equipment brand International growth » A combination of Kathmandu and Oboz will increase the credibility of Kathmandu’s international offer, particularly for under - developed markets e.g. Europe and Asia Complementary » Oboz key customers in the US are authentic outdoor retailers and are Kathmandu’s primary wholesale customer targets markets » Oboz has significant footwear product development experience, sourcing and R&D capabilities Complementary » Strengthens Kathmandu’s product offering in footwear, a less seasonal product category that drives frequent customer product category “ Be customer-centric in everything we do ” visitation » Increases Kathmandu’s wholesale business Diversifica tion » Reduces Kathmandu’s reliance on Australasia » Reduces Kathmandu’s reliance on apparel Low cost integration » The Oboz business will continue to operate independently with minimal integration costs » Opportunity to expand Oboz representation within Kathmandu’s store footprint Brand affinity and » Kathmandu has sold Oboz footwear since the Oboz brand was created, and is the largest Oboz wholesale customer outside of cultural alignment North America » Genuine alignment of core values. Both companies focus on innovation, quality, customer service and sustainability 5
IBDROOT\PROJECTS\IBD-HK\PEKAN2018\614988_1\Process documents\Investor presentation\180320 Kathmandu - Investor Presentation vFF.pptx PRO-FORMA COMBINATION ANALYSIS CY17 Kathmandu Standalone CY17 Pro Forma 1 International International 0.7% North America 0.8% 8.3% Geographical Provides geographic diversification and Segmentation reduces seasonality of earnings ANZ ANZ 90.9% 99.2% Equipment & Accessories Equipment & Accessories 22.0% 20.1% Increases contribution from footwear, an Product attractive, high growth segment within the Footwear Segmentation outdoor market which acts as a feeder Footwear 7.8% 15.8% Apparel Apparel category into the Kathmandu ecosystem 64.1% 70.2% Wholesale Wholesale 0.2% 8.9% Provides commercial channel diversification, Distribution accelerates expansion into wholesale channel Segmentation and reduces reliance on pure retail trading Retail Retail 99.8% 91.1% 6 1 Based on Kathmandu management accounts and Dec-17 management accounts for Oboz, note Oboz adopts US GAAP accounting, some differences may occur if presented under IFRS
IBDROOT\PROJECTS\IBD-HK\PEKAN2018\614988_1\Process documents\Investor presentation\180320 Kathmandu - Investor Presentation vFF.pptx 1. OBOZ OVERVIEW 7
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