Bubs Australia Ltd. · ASX:BUB
Bubs Australia — Shareholder Meeting (November 2024)
62 slides from Bubs Australia's shareholder meeting presentation, Nov 21, 2024
Slide 1: Bubs Australia Limited Annual General Meeting
For personal use only Bubs Australia Limited Annual General Meeting 21 November 2024 Slide 1
Slide 2: Agenda
Agenda CHAIR For personal use only Opening & Introduction Procedural Matters Chair’s Address CEO & MANAGING DIRECTOR FY24 Results & Highlights Bubs Performance By Region FY25 Outlook & Path To Profitability CHAIR Business of the Meeting Slide 2
Slide 3: Chair Address
For personal use only Chair Address Slide 3
Slide 4: CEO Presentation
For personal use only CEO Presentation Slide 4
Slide 5: 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 6: FY24 Results & Highlights
FY24 Results & For personal use only Highlights Slide 6
Slide 7: Bubs Strategy
Bubs Strategy Bubs’ 5-point plan to responsibly manage capital and maximise shareholder value For personal use only 1 2 3 4 5 USA PORTFOLIO CHINA SWEAT THE WORKING GROWTH OPTIMISATION RESET ASSETS CAPITAL ENGINE GROW & MAXIMISE SHAREHOLDER VALUE Slide 7
Slide 8: 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, with YOY revenue growth of +46% • Meaningful progress on US FDA clinical trial and on tr
Slide 9: Financial highlights
Financial highlights Revenue EBITDA1 Gross Margin2 FY24 $80m FY24 $(20)m FY24 41% For personal use only 33% 81% 11% FY23 $60m FY23 $(105)m FY23 30% USA Revenue China Revenue Australia Revenue FY24 $35m 46% FY24 $17m 27% FY24 $22m 24% FY23 $24m FY23 $14m FY23 $17m ROW Revenue Deloraine Utilisation Mo
Slide 10: Income statement
Income statement $’m FY24 FY23 % change Revenue Income statement For personal use only 80 60 34% 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 11: 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 12: 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 13: Working Capital
Working Capital Quarterly Cash Burn Working capital Bubs demonstrated improved For personal use only - (2) working capital management (4) in FY24, with average (6) quarterly cash burn reduced to $6.8m ($2.3m per month), $'m (8) (10) down from $11.6m in FY23 (12) ($4.3m per month). (14) The improveme
Slide 14: Bubs Performance By Region
Bubs Performance By Region For personal use only Slide 14
Slide 15: USA Update
For personal use only USA Update Slide 15
Slide 16: USA Year Revenue Performance
3 Year Revenue Performance USA For personal use only 40 $'m 35 30 25 20 15 10 5 - FY22 FY23 FY24 Slide 16
Slide 17: Portfolio Optimisation
Portfolio Optimisation For personal use only New variants, new tin sizes and updated and refreshed packaging Slide 17
Slide 18: USA New Product, New Tin Size and New Labels
USA New Product, New Tin Size and New Labels For personal use only New products, tins and labels launched in Q4 FY24 which impacted Q1 FY25 ex-factory sales as Bubs transitioned out of the old tins and into the new tins Sales of new tins to continue to accelerate in Q2 FY25 as Bubs old packs sel
Slide 19: USA New Product, New Tin Size and New Labels
USA New Product, New Tin Size and New Labels For personal use only Slide 19
Slide 20: USA New Product, New Tin Size and New Labels
USA New Product, New Tin Size and New Labels For personal use only Slide 20
Slide 21: Launch Of Essential
Launch Of Essential For personal use only Slide 21
Slide 22: Launch Of Essential
Launch Of Essential For personal use only Slide 22
Slide 23: Good House Keeping Award
Good House Keeping Award Earlier this year, Bubs US introduced Bubs For personal use only Essential infant formula; the most affordable Clean Label Project Purity Award winning infant formula available on the US market, recognised for its high-quality whole-milk base, enriched with prebiotics and pr
Slide 24: For personal use only
For personal use only Slide 24
Slide 25: Health Care Professional Sampling Program
Health Care Professional Sampling Program For personal use only 2,929 5,700 Program Sample Kits Distributed Participants Feedback from Health Care Professionals: o “Highly recommend this formula to patients.” o "This formula is my new go-to for babies having any issues" o “Very informative materials
Slide 26: Bubs USA Product & Pack Transition By Week
Bubs USA Product & Pack Transition By Week (scan sales) Total USA Scan Revenue1 $1.4 US$'m PACK TRANSITION For personal use only $1.2 26 Weekly Growth Rate of +1.4% US PORT STRIKE 52 Weekly Growth Rate of 1.5% $1.0 $0.8 $0.6 $0.4 $0.2 $0.0 Amazon Bricks & Mortar Sales Contribution from New 20oz Tins
Slide 27: Regulatory Update
Regulatory For personal use only Update Slide 27
Slide 28: 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 29: China Update
For personal use only China Update Slide 29
Slide 30: China Year Revenue Performance
3 Year Revenue Performance China For personal use only 60 $'m 50 40 30 20 10 - FY22 FY23 FY24 Slide 30
Slide 31: Demand and confidence from customers has improved
Demand and confidence from customers has improved over FY23 and continues to grow Brand confidence restored in CBEC Continous O2O channel penetration For personal use only • Tmall Flagship Stores (Bubs and CapriLac): FY24 GMV +60.21% YoY • O2O June monthly GMV increased by 24.05% compared to March i
Slide 32: China Channel Strategy
China Channel Strategy New channel expansion – China O2O business overview In July 2024, Bubs refocused its efforts on China’s O2O channel. Store numbers have grown from 500 (September) to 705 by the For personal use only end of October 2024. Goat IMF monthly sales increased by 148% over pcp, while
Slide 33: China marketing activation & events
China marketing activation & events to support significant retail and distribution growth BUBS X CBME (CHILDREN BABY MATERNITY EXPO) For personal use only Bubs China team joined CBME (Children Baby Maternity Expo) China in July 2024, the most influential mother and 20,000+ total traffic baby expo in
Slide 34: Social media engagement on Chinese digital platforms
Significant social media engagement and conversion on Chinese digital platforms For personal use only Bubs Obtained 32.7M Views with 63% Boost in Customer Active Hashtag Engagement Acquisition: Bubs Drives Goat IMF These hashtags are driving significant engagement and enhancing our brand influence o
Slide 35: Singles' Day Promotion Update
Singles’ Day Promotion Update Bubs & CapriLac achieved strong growth rates during Singles’ Day Promotion vs pcp1 Bubs: For personal use only • Goat infant formula range volume +34% vs. pcp1. • Average selling price +24% vs. pcp1. • GMV 41% higher vs. pcp driven by launch of higher margin pack format
Slide 36: China update
China update Bubs is forecast to continue to grow strongly and profitably in China within its premium niche 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 profit mar
Slide 37: Australia Update
Australia For personal use only Update Slide 37
Slide 38: Australia Year Revenue Performance
3 Year Revenue Performance Australia For personal use only 25 $'m 20 15 10 5 - FY22 FY23 FY24 Slide 38
Slide 39: Australia
Australia Growth MAT1 20% 15.1% For personal use only #1 goat formula in Australia 15% 13.5% 10% 5% 2.4% 3.1% 3.2% Bubs remains the clear market leader 0% in the domestic goat formula IMF, -5% holding a record 55% market share1. -10% -9.3% -9.2% -15% Market Company Company Company Company Company Bu
Slide 40: Sweat the Assets
SWEAT THE ASSETS For personal use only Deloraine Utilisation %1 90% 84% 80% 70% 65% 60% 50% 41% 40% 30% 20% 10% 0% FY22 FY23 FY24 YTD 1 Based on 2 shifts, Monday to Friday Slide 40
Slide 41: Rest of World Update
Rest of World For personal use only Update Slide 41
Slide 42: ROW Year Revenue Performance
3 Year Revenue Performance ROW1 For personal use only 7 $'m 20% CAGR 6 5 4 3 2 1 - FY22 FY23 FY24 1 Excluding sale of raw materials in FY22 Slide 42
Slide 43: Bubs 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 44: Vietnam
Vietnam For personal use only >100% revenue growth in Vietnam in FY24 Slide 44
Slide 45: 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 46: FY25 Outlook & Pathway To Profitability
FY25 Outlook & Pathway To Profitability For personal use only Slide 46
Slide 47: FY25 Outlook
FY25 Outlook What to expect in FY25 Revenue of $102m1 (up ~28% YOY) For personal use only Gross margin of >40%1 Clinical study (GMS) patient enrollment completed by end of December 2024, FDA approval anticipated in October 2025 New market launch in Canada in H2 FY25 Cash Flow Positive in Q
Slide 48: FY24 revenue by region
FY24 revenue by region USA Australia1 For personal use only 60 25 $'m $'m 50 20 40 15 30 10 20 10 5 - - FY22 FY23 FY24 FY25F FY22 FY23 FY24 FY25F China ROW2 60 9 $'m $'m 8 50 7 40 6 5 30 4 20 3 2 10 1 - - FY22 FY23 FY24 FY25F FY22 FY23 FY24 FY25F 1 Excluding sale of raw materials in FY24 2 Excluding
Slide 49: FY24 underlying gross margin
FY24 underlying gross margin1 41%1 underlying gross margin achieved in line with guidance For personal use only Targeting 45% gross margin by FY29 60% 41%1 50% 41% 40% 30% 30% 30% 20% 14% 10% 0% FY21 FY22 FY23 FY24 FY25F 1 Underlying gross margin is a non-IFRS measure and excludes net inventory
Slide 50: Operating Expenses
Operating Expenses Operating Expenses as % of Revenue1 For personal use only 70 100% 92% $’m 90% 60 80% 74% 50 70% 60% 40 50% 30 40% 20 30% 20% 10 10% - 0% FY23 FY24 Distribution and selling costs Marketing and promotion costs Admin and other expenses Operating expenses as a % of revenue 1 Excluding
Slide 51: 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 52: Business Of The Meeting
Business Of For personal use only The Meeting Slide 52
Slide 53: Item 1: Company Financial Statements
FORMAL BUSINESS ITEM 1: COMPANY FINANCIAL STATEMENTS To table the financial statements, directors’ report and auditors’ report for the Company for the year ended 30 June 2024. Shareholders are not required to vote or formally For personal use only approve or adopt the financial reports. Slide 53
Slide 54: Item 2: Adoption of Remuneration Report
FORMAL BUSINESS ITEM 2: ADOPTION OF REMUNERATION REPORT (NON-BINDING RESOLUTION) To consider and, if thought fit, to pass, the following resolution as an ordinary resolution. For personal use only “The vote on this resolution is advisory only, however, the Board will take into RESOLUTION account any
Slide 55: Item 3: Re-election of Director – Ms Katrina Rathie
FORMAL BUSINESS ITEM 3: RE-ELECTION OF DIRECTOR – MS KATRINA RATHIE To consider and, if thought fit, to pass, the following resolution as an ordinary resolution: For personal use only “That Ms Katrina Rathie, who retires as a director by rotation in accordance with the RESOLUTION constitution of the
Slide 56: Item 4: Approval of the Bubs Australia Ltd Rights Plan
FORMAL BUSINESS ITEM 4: APPROVAL OF THE BUBS AUSTRALIA LTD RIGHTS PLAN To consider and, if thought fit, to pass, the following resolution as an ordinary resolution: For personal use only “In accordance with ASX Listing Rule 7.2 exception 13, the Company is seeking to RESOLUTION preserve the 15% limi
Slide 57: Item 5: Granting of Rights to Director Reginald Weine
FORMAL BUSINESS ITEM 5: APPROVAL FOR THE GRANTING OF RIGHTS TO A DIRECTOR - MR REGINALD WEINE, CEO & MANAGING DIRECTOR For personal use only To consider and, if thought fit, to pass, the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 10.14 and for all oth
Slide 58: Item 6: Increase in Non-Executive Directors' Fee Pool
FORMAL BUSINESS ITEM 6: INCREASE IN NON-EXECUTIVE DIRECTORS’ FEE POOL For personal use only To consider and, if thought fit, to pass, the following resolution as an ordinary resolution: “The increase in the aggregate Director Fee pool in accordance with ASX Listing RESOLUTION Rule 10.17 and clauses
Slide 59: Item 7: Additional 10% Placement Capacity
FORMAL BUSINESS ITEM 7: APPROVAL OF ADDITIONAL 10% PLACEMENT CAPACITY For personal use only To consider and, if thought fit, to pass, the following resolution as an ordinary resolution: “The approval of an additional 10% placement capacity in accordance with ASX RESOLUTION Listing Rule 7.1 & 7.1A as
Slide 60: Shareholder Q&A
Shareholder For personal use only Q&A Slide 60
Slide 61: Poll Procedure
Poll Procedure For personal use only Slide 61
Slide 62: Thank you
For personal use only Thank you Slide 62