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

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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

• bjectives, 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

• r 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.

DISCLAIMER

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AMAZON ‐ $800BN MARKET CAP BUT STILL GROWING

E‐commerce Cloud Computing

Amazon – Dominant in E‐Commerce and Cloud Computing Munro Partners – 5 Qualitative tests for a great growth company

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Source: Bloomberg

FRAMING THE GROWTH RUNWAY… THE LESSONS FROM APPLE

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 500 1000 1500 2000 2500 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Market Share (units m) Global Mobile Phone Market Global Smartphones Smartphone Market Share

Global Mobile Phone Unit Shipments (LHS) and Smartphone Market Share (RHS)

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Source: Statista

GROWTH ‐ AMAZON IS AT THE START OF TWO GROWTH RUNWAYS…

0% 5% 10% 15% 20% 25% 30% 35% 40% 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Market Share (USD m)

US Retail Sales and US E‐commerce Spend (LHS), US E‐ commerce share of Retail (RHS)

US E‐commerce Spend Total US Retail Sales US E‐commerce Share of Retail 0% 5% 10% 15% 20% 25% 30% 35% 40% 50,000 100,000 150,000 200,000 250,000 Market Share (USD m)

Infrastructure as a Service (IaaS) Spending as a portion of total Enterprise Infrastructure spending (LHS), and IaaS share (RHS)

Infrastructure as a Service Infrastructure Market IaaS Share of Infrastructure

E‐Commerce Cloud Computing

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LEVERAGE ‐ IN ECOMMERCE IS AMAZON PRIME…

Source: MS & Munro Partners Estimates

20 40 60 80 100 120 140 2013 2014 2015 2016 2017 2018E (m) 46% CAGR 1,471 547 200 400 600 800 1,000 1,200 1,400 1,600 Prime Non‐Prime (USD spent)

Ontario Distribution Centre Prime Members Amazon Distribution Centres Globally In Q3 2018 prime members spent 2.7x more than non‐prime members

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Source: Goldman Sachs

LEVERAGE – IN THE CLOUD AMAZON IS ALSO TAKING SHARE

39% 42% 46% 51% 6% 14% 18% 24% 2% 4% 6% 8% 3% 5% 9% 11% 50% 36% 21% 6% 10 20 30 40 50 60 70 80 2016 2017 2018 2019 (USD bn) AWS Azure Alibaba Google Others

Amazon Distribution Centres – 109 globally Public Cloud Market Share

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SUSTAINABILITY ‐ THE SHIFT TO E‐COMMERCE AND THE CLOUD SHOULD CONTINUE

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 Market Share (USD m)

IaaS Spending as a portion of total Infrastructure (LHS) and IaaS Share (RHS)

Infrastructure as a Service Infrastructure Market IaaS Share of Infrastructure 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 Market Share (USD m)

US Retail Sales and US E‐Commerce Spend (LHS) and US E‐ commerce Share of Retail Sales

US E‐commerce Spend Total US Retail Sales US E‐commerce Share of Retail

Source: MS, Bloomberg & Munro Partners Estimates

E‐Commerce Cloud Computing

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CONTROL AND CUSTOMER PERCEPTION

2018 Net worth = $147bn Age: 54 1998 Net worth = $1.6bn Age: 34

20 years in the making but still looking long term ‘To be Earths most consumer centric company’

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IS AMAZON A GOOD INVESTMENT? ‐ FOCUSING ON THE P/E RATIO HAS NOT HELPED INVESTORS

20 40 60 80 100 120 500 1000 1500 2000 2500 Forward P/E Multiple Share Price Share Price BF P/E Ratio

Source: Bloomberg

Munro Partners – 5 Qualitative tests for a great growth company Amazon Share Price (LHS) and Blended Forward P/E (RHS)

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IS AMAZON A GOOD INVESTMENT? – FOCUSING ON CASH FLOW HAS

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 500 1000 1500 2000 2500 (EBITDA, m) Share Price Share Price Forward Ebitda 5 10 15 20 25 30 35 500 1000 1500 2000 2500 Forward EBITDA Multiple Share Price Share Price Forward EV/Ebitda

Source: Bloomberg

Amazon Share Price (LHS) and Forward EBITDA (RHS) Amazon Share Price (LHS) and Forward EBITDA Multiple (RHS)

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IS AMAZON A GOOD INVESTMENT? – RUNNING THROUGH THE MATHS

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 100,000 200,000 300,000 400,000 500,000 600,000

• Adj. EBIT Margin

(USD m)

Amazon Retail Revenue (LHS) and Adj. EBIT Margin (RHS)

Amazon Revenue (USD m)

• Adj. EBIT Margin

2025 Retail Revenue 554bn 2018 Retail Revenue 209bn 2018 Retail Adj. EBIT Margin 5% 2025 Retail Adj. EBIT Margin 9% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 20,000 40,000 60,000 80,000 100,000 120,000

• Adj. EBIT Margin

(USD m)

AWS Revenue (LHS) and Adj. EBIT Margin (RHS)

AWS Revenue (m) AWS Adj. EBIT Margin 2025 AWS Revenue 100bn 2018 AWS Revenue 25bn 2018 AWS Adj. EBIT Margin 36% 2025 AWS Adj. EBIT Margin 42%

Source: Bloomberg & Munro Partners Estimates

E‐Commerce Cloud Computing

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.

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IS AMAZON A GOOD INVESTMENT – PRICE TARGET

Today: 2019 Consensus EBITDA 42bn * 20x multiple = 840bn EV Price Target: 2025 EBITDA 131bn * 17.5x multiple = 2,300bn EV Time Horizon: 6 years CAGR: 21% p.a.

50,000 100,000 150,000 200,000 250,000 300,000 2018 2025E 2030E (USD bn) Revenue = $209bn EBITDA Margin = 16% Revenue = $554bn EBITDA Margin = 20%

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Source: Bloomberg & Munro Partners estimates

Amazon EBITDA Projection Price Target

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. There can be no guarantee that any projection, forecast or opinion in these materials will be realised.

“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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