Investment Case

4imprint is a focused business with clear strategic priorities:
- Market leadership driving organic revenue growth
- Cash generation and profitability
- Effective capital structure
- Shareholder value

$1bn: Group revenue target by 2022

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We have been successful in delivering significant organic revenue growth by increasing market share in large, fragmented markets. Revenues more than doubled over the five year period from 2013 to 2018, with a CAGR of 17% over that timeframe. Although 4imprint is now the largest distributor of promotional products in its primary North American market, its percentage share of this $25bn industry is still only in the low-to-mid single digits.

$25bn: Estimated size of North American market

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We have developed a highly efficient direct marketing business model. Innovative print and internet-based marketing methods are used to acquire new customers, and targeted marketing techniques such as the popular Blue Box™ sample mailings, subscription emails and online advertising are used to retain existing customers. A successful new brand advertising element was added to the marketing portfolio in 2018, supporting both customer acquisition and retention efforts. All operations are underpinned by a commitment to deliver a remarkable customer experience, enabled by our proprietary order processing platform.

Orders are mostly ’drop-shipped’ to customers directly from our suppliers, meaning that inventory balances are minimal. In addition, a high proportion of orders are paid by credit card, resulting in low working capital requirements. In conjunction with typically low capital expenditure, this produces a highly cash generative business model.

$7m: Investment in new brand marketing initiative in 2018

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Our operational priority is to balance short-term profitability with marketing investment opportunities. Cash generated from operations is reinvested into organic growth initiatives based on multi-year revenue/return projections, subject to a target for underlying operating profit margin that will typically be between 6% and 7%.

The ultimate objective is to combine consistent, profitable revenue growth with the attractive cash conversion ratio of our model to produce sustainable long-term growth in free cash flow.

100%: Target cash conversion ratio

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4imprint aims to deliver attractive Total Shareholder Return through execution of the Group’s growth strategy producing both sustainable increases in EPS and associated progressive regular dividend increases. Clear capital allocation guidelines call for excess cash, over and above the investment requirements and other commitments of the business, to be distributed to Shareholders.

$16m (60c/share): Supplementary dividend paid in May 2018

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4imprint maintains a stable and secure balance sheet, retaining a target net cash balance at the end of each year. This facilitates:
- Flexibility to continue investing in the business through different economic cycles
- Ability for the Group to react swiftly to developing investment opportunities
- Commitment to maintaining regular dividend payments through an economic downturn

$27.5m: Cash balance at December 2018

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The 4imprint Board believes that a strong and principled approach to corporate responsibility is fundamentally important to our present and future success. Our values are firmly grounded in the broad principles set out in our statement of corporate purpose.

Our culture encourages responsible practice at all levels of the organisation and presents clear guiding principles that drive ethical interactions with, and outcomes for, our key stakeholders.

11: Consecutive years that 4imprint has been recognised as a ‘Great Place To Work’ in the US

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The Executive Directors are 4imprint veterans who work closely with the operational management teams. The Board is guided by independent and experienced Non-Executive Directors.

21: Average tenure (years) of 4imprint Executive Directors

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