Malibu Boats Inc (MBUU) Case Study

Please complete the below project by: [August 29th, 2023] at 11:59pm ET, sourced exclusively
to publicly available information.

If this is a name where you have a relationship or access to any information on the company
which would make you conflicted, please let us know and we will choose another name for you.

Objectives:
1. Complete an investment write-up and recommendation for MBUU
1. Your submission should not exceed 4 pages.
2. Use your judgement to provide something that best represents your work,
understanding of the company, and a thorough investment recommendation.
3. While we would like you to show your understanding of the company, we do not
need a detailed background of the company. The focus of your written
submission should be on your differentiated prospective view.
2. Create your own financial model for the company.
1. Include at least 1 year of quarterly history and 1 year of quarterly forward
estimates.
2. Provide any other supporting analysis or relevant work used in your research and
conclusions.
3. Note: This should be your own working 3 statement flowing model built
from a blank sheet. Do not use a model template, sell-side model, or
example from any other source, even if you are just using this for
formatting purposes. Any submissions with models that appear to be
taken from a third party will immediately be rejected.

Deliverables:
1. MBUU Write-Up & Recommendation
2. MBUU Financial Model & Analysis
3. Evaluation will be based on quality of analysis and insight
Further Instructions:
MODEL

Take the time to organize your thoughts on what matters and how to simply present the model.
The goal is to make the model detailed enough that it captures the variables in the business, but
not too detailed that one gets lost in the minutia. Structure your model in a way that
demonstrates that you understand components that drive revenue, costs, and profitability and
allows you to make projections of future revenue/profits in a logical manner consistent with how
management of a company in this industry might look at the business.
Please include the following in your model:
1. Include a price target and risk/reward supported by valuation analysis at target price and
risk price.
2. Capture the main drivers of revenue & costs
3. What are the most sensitive variables/drivers in the profitability of the company?
4. Choose the most important driver of profitability and project EPS sensitivity
5. Build a DCF
6. Calculate ROIC and use as many valuation metrics as you feel are relevant to your
specific investment recommendation
7. Base/Upside/Downside scenarios
8. Clearly state your assumptions throughout the spreadsheet – you can write comments in
the model to explain your rational for key assumptions
9. Color code figures in the model to identify sources of your information:
1. Black font = numbers reported by the company (either in a press release,
presentation, filing or a conference call) and calculations
 2. Blue font = your own assumptions
3. Green font = street/sell side assumptions
10. You can use plots/graphs in a separate worksheet to illustrate trends or rationale for your
assumptions. Again, only use this if you think it will help to get the point across in an
efficient manner and focuses on key points; do not overuse plots and graphs.

WRITE-UP

Please include the following in your FOUR PAGE MAXIMUM write up:
1. Detailed Investment Thesis & Recommendation (long or short)
1. What are the key drivers of your investment thesis (lí do chính để support
sell/buy)
2. Risks to your thesis
2. Event Path & Catalysts: How will you track your thesis? Please explain/preview
significant upcoming events.
3. Bull/Bear & Valuation
1. Explanation of bull and bear view
2. Determine a price target; explain how you get to your price target and what the
period is to reach your target
3. Risk/Reward (probability weights for different scenarios that tie to the bull/bear
views)
4. Business/Industry Overview
1. How does the company/industry make money?
2. Industry level dynamics and review of the competitive landscape
3. Benchmark vs. peers (tìm các tài liệu về các cty leading khác 3-4 rồi lấy revenue,
selling volumes, financial ratios: ROI, Sales, ROE,...)
5. Outstanding Diligence
1. Address how you could gain further conviction in your thesis Trải nghiệm khách
hàng,
OTHER
1. Confirm your name is on all pages
2. Include page numbers
3. Model must be in a format that is easy to print
4. Remember to include the below disclaimer in the body of the email, not on the actual
project

Submission Instructions:
As a reminder, this must be sent from a personal email address; projects cannot be sent from a
work address. Please be sure to number the pages and include your name on each page.
Email the project to [email protected] and DO NOT cc any of us; the project needs
to be reviewed by compliance before we see it. Your subject line should read: Upcoming
Graduates Case Due August 29th. We ask that your documents be titled using the same name
you used to apply to the position. Example: Colleen Howe_Case Study Write Up.pdf
Please include the following statement, if accurate, within the body of the email:

This project does not contain material non-public information and does not breach
confidentiality restrictions from a current or previous employer. This project was created
exclusively by me, and no other individuals contributed.
Also include in the body of the email that this should be forwarded to the attention
[email protected] AND [email protected]
This project is intended to be passive; please do not reach out to any individuals or companies
while conducting your work on this project.

Tip 4: Business Model

At the heart of a successful company is a sound business model and while addressing
this in detail during a short presentation is tricky, it is undoubtedly the
most essential aspect of your pitch. Think of it as the hitter batting cleanup (4th in the
lineup)--there is an expectation that he will be the offensive catalyst for a winning team.
The following talking points are useful to mention and can be applied to both succinctly reiterate
prior points and branch off into other key metrics:
 Vision
 Value Proposition
 Addressable Market Projections
 Differentiation
 Marketing & Distribution
 Growth Strategy
 Recurring Revenue
 Capital Requirements
 Exit Strategy
Tip 5: Pricing and Revenue Model
Now is the chance to harp on important points of your business model that require more
detailed explanations, such as how you will monetize your product. Pricing is a delicate
balancing act which pits your desire for making money against the fundamental market
forces of supply and demand.
 Understanding the economics behind proper pricing and demand elasticity is essential to
growing sales volume without ostracizing price-sensitive customers.
 If you’re already generating revenue, focus on gross margins: are they industry leading?
How will you keep them relatively stable as you scale?
 How is your revenue being earned: is it based on a one-time sale or a recurring revenue
stream? Is it subscription based? Recurring licensing fees? Are customers making
multiple purchases across your product line or do you expect cannibalization to erode
existing sales as you introduce new products?

The company
- designer, manufacturer & marketer of recreational powerboats, sport boats,…
- no 1 market share position, consistent innovation (patent)
- wide ranges for different customer segment
Malibu – premium
Axis – affordable
Pursuits – salt water outboard
Cobalt – large size luxury cruisers
Raw material: fiberglass, hull design, propulsion systems
- distribution = network of dealer (strongest in recreational powerboat industry)
- covid-19 effect the invesntory + demand -> full recovery depand on the ability off supply chain
to provide maeterials timely and the level of retail demand
Q: are they focused only in retail selling or wholesalr
- opportunity: currently serving top 3 categories -> addressable market of 13.1 billion

Strength
- leading market share positions a several recreational boating catergories
Q: what is the market segment like, do comps analysis
- industry-leading product design and innovation: key to success, increase market share ,
Q: name some patented products (surf gate), new boat models
- focus on vertical integration: integrating their own manufacturing process (engine, trailers) ->
reduce reliance on previous suppliers -> reduce the risk of production delays -> key components
to increase ability for incremental margin = reducing cost base and efficiency, have greater
control over design/tailor
- intellectual property
Q: this is the main economic moat
- strong dealer network
Q: who are the dealer, market share of the dealer? How is the dealer doing?

Strategy:
Continue to develop new and innovate products in our categories: broader range of consumers
and new features to deliver better performance, functionality -> diversification strategy of
products and features for growth -> maintain attractive margins
1. new boat models to tegret unaddressed/underserved segments of
the powerboat industry
2.
3. Selectively Pursue Strategic Acquisitions. One of our growth
strategies is to drive growth in our business through targeted
acquisitions that add value while considering our existing brands
and product portfolio. We acquired Maverick Boat Group in
December 2020, Pursuit in October 2018, and Cobalt in July
2017. In February 2022, we acquired a facility to begin
manufacturing our own wiring harnesses. The primary objectives
of our acquisitions are to expand our presence in new or adjacent
categories, to expand into other product lines that may benefit
from our operating strengths, and to increase the size of our
addressable market
Market has
Operating in only US market: theo economic, political, esg in us -> fed rate cao, very high
interest rate environment, lower demand

- thị phần ở trong 3 sản phẩm:

+ outboard: kphai là chính (malibu) du lịch toursim, vacation
+ sterndrive: leading (saltwater fishing)=q
+ performance sport boat: leading
-> forecast cho các quý của từng thị phần

Revenue 1.2bn thị trường 15bn -> khoảng 15%

Fragmented

Market size, potentailgrowth là gì (growth theo ecônomic grơth, income vì sap điều gì khiến
boating industry), competitive advantaeg vì sao có thị phần đầu trong 2 ngành và số 1 trong
ngành outboard (chi phí, design, lâu đời)
Thị truờng khá fragmented, expect tăng nữa do economic growth
Fed rate giảm trong các năm sau (sau khi tạo đỉnh vào cuối năm, properly peak in 2H then
neutralise or aveliated in 2023
- competitive landscape (fragmented), cty nào đang là leader, tìm thị phần
- market growth, size
- Growth drivers (tại sao lại tăng dc nthe)
-

Company
-competitive advantage
- capacity (đọc báo cáo xem có định tăng sản lượng) expansion plan
-

Financials:
- ROE, ROI, Revenue growhth, earnings,
- xoá hết cty k liên quan, formula

Valuation:
- Điền hết theo anh bảo
Risk: (ít nhất lad 2)
- economic
- market
- prolonged rík, political risk

CONCLUSION: buy/sell
- dêcnt mảket size growth
- strong pròitability
- cheap valution

Sxuat gi -> market share trên từng sp tự đưa ra đánh giá khá lead
Boating market: 15.1bn doanh du thì cty bnh market share in terms of revenue, tăng revenue
nhanh trong 10 năm

- risk (nói sau cùng)

- phỏng theo bình minh plastic