Bubs Australia Ltd. · ASX:BUB
Bubs Australia — FY2024 Earnings Presentation
41 slides from Bubs Australia's earnings presentation, Sep 24, 2024
Slide 1: FY24 Results Presentation & Investor Day
FY24 Results For personal use only Presentation & Investor Day 24 September 2024 Slide 1
Slide 2: Disclaimer
DISCLAIMER This presentation is in summary form and is not necessarily complete. It should be read together with the For personal use only Company’s other announcements lodged with the Australian Securities Exchange. This presentation contains information that is based on projected and/or estimated
Slide 3: Bubs leadership team members on today's call
Bubs leadership team members on today’s call Reg Weine – CEO & Managing Director For personal use only Richard Paine – Chief Operating Officer Chris Lotsaris – General Manager USA Jackie Lin – General Manager China Slide 3
Slide 4: Agenda
Agenda The Bubs investment For personal use only proposition FY24 highlights & strategy update FY24 financial overview FY25 outlook & pathway to profitability Appendix Slide 4
Slide 5: The Bubs Investment Proposition
The Bubs Investment Proposition US $100B+ global Differentiated premium goat- For personal use only addressable market with a 5- based product offering 10% CAGR supported by growing bovine range in both IMF and Adult Nutrition Bubs has a capital light asset Bubs is growing rapidly in the base with s
Slide 6: FY24 highlights & strategy update
FY24 highlights & For personal use only strategy update Slide 6
Slide 7: FY24 Highlights
FY24 Highlights Successfully executing on our strategy • Achieved net revenue of $80m in line with guidance For personal use only • Exceeded gross margin > 40% in line with guidance • US growth engine delivering, which provides a sustainable runway for growth • Meaningful progress on US FDA clinical
Slide 8: Portfolio Optimisation
Portfolio Optimisation For personal use only New variants, new tin sizes and updated and refreshed packaging Slide 8
Slide 9: USA Update
For personal use only USA Update Slide 9
Slide 10: USA
USA US Quarterly Revenue & Tins Sold1 Continued strong momentum $12 300,000 Tins Sold USA revenue grew 46% to $35.0m. US$'m For personal use only $11 275,000 $10 250,000 Record Q4 scan revenue of US$11.2m with over $9 225,000 280,000 tins sold1. $8 200,000 Record weekly scan revenue in Jun-24 over >
Slide 11: US Penetration
US Penetration Bubs products are ranged in approximately 5,500 physical stores1 across 42 states, in addition to e-commerce channels For personal use only P © GeoNames, Mic 1 Circana Weekly To W/E 18/08/2024 Value Sales $'s Total US Multi-Outlet (Nb Excludes Online) Powder, RTD's, Electrolytes & Liq
Slide 12: USA IMF Performance & Opportunity
USA IMF Performance & Opportunity • Total IMF market +12% vs FY23 For personal use only • Goat IMF segment +515% vs FY23 • Premium IMF segment +44% vs FY23 • + 143% in total Bubs units sold vs FY23 • Goat IMF share 1.1% of total IMF market, up by 0.9% • Valued at $52.4M in FY24 • Bubs share of Goat
Slide 13: USA Market Attractiveness
USA Market Attractiveness For personal use only Total First Mover Attractive Profit Addressable Omni-channel Advantage Pool Market (TAM) $8.1B market with forecast Bubs was the first Goat Having successfully FY25 forecast gross margin CAGR growth of 3.9% IMF to enter the USA penetrated e-commerce, >
Slide 14: Regulatory Update
Regulatory For personal use only Update Slide 14
Slide 15: USA Infant Formula Crisis 2022
USA INFANT FORMULA CRISIS 2022 For personal use only Slide 15
Slide 16: Regulatory Pathway
Regulatory Pathway Bubs is on track for permanent FDA approval by Oct-25, providing access to the worlds 2nd largest IMF market and is For personal use only poised to deliver a long runway of sustainable growth May 2022: FDA exercised July 2022: FDA announces Dec 2022: FDA issues Bubs a Enforcement
Slide 17: Canada
US$340m Canada Canada IMF market size1 On 16 August 2024, Bubs was granted authorisation to sell both Bubs Goat and Bubs Essential infant formula For personal use only under Health Canada’s Interim Policy and Transition Strategy via discretionary enforcement. The Interim Policy remains in effect unt
Slide 18: China Update
For personal use only China Update Slide 18
Slide 19: China
China Strategic reset gathers pace demonstrated by significant improvement in key financial metrics For personal use only $’m FY24 FY23 % change Revenue 17 14 27% Gross profit 7 5 47% Gross margin (%) 39% 34% 5% Marketing expense 2 6 57% Marketing expense as a % of 14% 41% 27% revenue • Premium pric
Slide 20: Demand and confidence from customers has recovered and grown
Demand and confidence from customers has recovered and grown Continous O2O channel penetration Brand confidence restored in CBEC For personal use only • O2O June monthly GMV increased by 24.05% compared to March in 2024 • Tmall Flagship Stores (Bubs and CapriLac): FY24 GMV +60.21% YoY • Established
Slide 21: China update
China update Bubs is forecast to grow strongly and profitably in China within its premium niche product offering For personal use only • A strong brand portfolio to build on: Goat, Supreme & Caprilac • Premium price architecture restored >15% increase in average RRP • A healthy portfolio gross profi
Slide 22: Australia Update
Australia For personal use only Update Slide 22
Slide 23: Australia
Australia Growth MAT1 15.0% 12.1% 10.7% For personal use only 10.0% 5.0% 6.2% #1 goat formula in Australia 2.2% 1.9% 0.0% Bubs remains the clear market leader -5.0% in the domestic goat formula IMF, -10.0% -8.4% holding a record 52% market share1. -15.0% -16.4% -20.0% Market Company Company Company
Slide 24: Bubs e-commerce success
Bubs e-commerce success For personal use only Slide 24
Slide 25: Rest of World Update
Rest of World For personal use only Update Slide 25
Slide 26: Goal to be market leader in Goat IMF in 7 of world's 10 largest IMF markets by 2030
Bubs’ goal to be the market leader in Goat IMF in 7 of the world’s 10 largest IMF markets by 2030 $8.1b1 $40.4b2 For personal use only Total U.S. infant Total China infant formula market formula market $0.3b3 Top 10 Global IMF Markets4 Total AU infant 1. China formula market 2. USA 3. Mexico 4. Indo
Slide 27: Rest of World (ROW)
Rest of World (ROW) ROW continues to grow strongly YOY ROW Revenue Revenue has grown by 20% CAGR from FY20 For personal use only $7 ($2.5m) to FY24 ($5.9m). $’m Growth in Bubs’ ROW operating segment has $6 been driven by Japan and Vietnam. Bubs is exploring strategic opportunities in North $5 Americ
Slide 28: New market entry model and success in Japan
Bubs new market entry model and success as demonstrated by Japan, can be replicated in other markets For personal use only Japan Revenue 78% Revenue $4 CAGR in Japan $’m Japan revenue has grown at a CAGR of $3 78% from FY20 ($0.2m) to FY24 ($3.1m). Japan contributed 51% $2 of ROW revenue in FY24, wi
Slide 29: FY24 financial overview
FY24 financial For personal use only overview Slide 29
Slide 30: Income statement
Income statement $’m FY24 FY23 % change Revenue 80 60 34% Income statement For personal use only Gross margin 39 (9) 414% Underlying gross margin1 (%) 41% 30% 11% 34% increase in revenue driven by strong USA Other income / (expense) - - (33)% performance and growth across all regions. Operating expe
Slide 31: FY24 gross revenue bridge
FY24 gross revenue1 bridge Growth across all regions For personal use only 120.0 110.0 100.0 17.3 0.8 98.6 90.0 $'m 2.8 80.0 4.0 73.8 70.0 60.0 50.0 FY23 Australia China USA ROW FY24 1 Gross revenue is a non-IFRS measure and refers to revenue before trade spend. Non-IFRS measures have not been subje
Slide 32: FY24 revenue by region
FY24 revenue by region USA Australia For personal use only 40 25 $'m $'m 35 20 30 25 15 20 15 10 10 5 5 - - FY22 FY23 FY24 FY22 FY23 FY24 China ROW 60 7 $'m $'m 50 6 5 40 4 30 3 20 2 10 1 - - FY22 FY23 FY24 FY22 FY23 FY24 Slide 32
Slide 33: Revenue growth driven by USA
Revenue growth driven by USA USA contributed 44% of Bubs’ revenue For personal use only Revenue ($’m) 33% increase YOY in revenue. 6 USA contributed 44% of total FY24 revenue (up from 40% in FY23). 17 China reset strategy underway with H2 35 revenue up 38% over H1 and YOY growth of $80m 27%. Foundat
Slide 34: Underlying gross margin
Underlying gross margin1 FY24 underlying Underlying gross margin %1 gross margin was For personal use only 60% 41%1 50% 41%1 40% 30% 30% 30% Exceeded gross margin > 40% in line with 20% guidance. 14% 10% Reported gross margin for FY24 is 49%, 0% excluding inventory provisions for sale of SLOB FY21 F
Slide 35: Balance sheet
Balance sheet $’m Jun-24 Jun-23 Cash and cash equivalents 18 26 Balance sheet For personal use only Trade and other receivables 9 8 Inventories 28 21 Other current assets 5 3 Current assets 60 57 Slight increase in trade receivables given higher sales volume and Plant and equipment 4 4 consisted pri
Slide 36: Cash flow
Cash flow $’m 2024 2023 Cash flow Cash flows from operating activities Bubs raised $17.4m in Dec-23 via a For personal use only Receipts from customers 78 77 Placement and share purchase plan to Payments to suppliers and employees (104) (124) fund future strategic growth. The proceeds Net interest -
Slide 37: FY25 outlook & pathway to profitability
FY25 outlook & pathway to For personal use only profitability Slide 38
Slide 38: FY25 Outlook
FY25 Outlook What to expect in FY25 Revenue of $102m / gross revenue1 of $130m (up ~28% YOY) For personal use only USA and China expected to grow by at least 50% YOY Gross margin of >40% Clinical study (GMS) patient enrollment completed by end of September 2024, FDA approval anticipated in O
Slide 39: Bridge to FY25 EBITDA positive
Bridge to FY25 EBITDA1 positive 5.0 For personal use only 11.0 0.2 - (5.0) $'m (10.0) 8.9 (15.0) (20.0) -19.7 (25.0) FY24 EBITDA Gross profit Opex & non-recurring cost savings FY25 EBITDA Additional $22m of revenue forecast in FY25 to provide $9m of gross profit at 40% gross margin $7m of FDA re
Slide 40: Outlook: Pathway to profitability
Outlook Pathway to For personal use only profitability Short term Medium term Long term • $102m revenue / $130m gross • Increase in debt – trade • Established in 7 of the world’s revenue1 in FY25 finance facility to support top 10 IMF markets growth • Gross margin >40% • Consider domestic / overseas
Slide 41: Thank you
For personal use only Thank you Slide 42