Adore Beauty Group Ltd. · ASX:ABY
Adore Beauty — FY2022 Earnings Presentation
30 slides from Adore Beauty's earnings presentation, Aug 29, 2022
Slide 1: FY22 Results Presentation
FY22 wee FRESULTS B PRESENTATION ADOREBEAUTY
Slide 2: Beauty Done Better
BEAUTY DONE BETTER. LOOKING TO THE FUTURE BY BUILDING ON OUR PAST 1
Slide 3: Sustainable Revenue Growth
SUSTAINABLE REVENUE GROWTH VALUABLE RETURNING CUSTOMERS GROWING STRONGLY FY22 RESULTS $200M 33.3% MARKET LEADER IN REVENUE GROSS PROFIT GROWING $1.5B ONLINE +11% ON PCP MARGIN BEAUTY & PERSONAL CARE +28% 2-YEAR CAGR +0.3 PPTs ON PCP MARKET $5.3M $29.8M INVESTMENTS IN STRATEGIC EBITDA1 CASH2 PRIORITI
Slide 4: Strategy Driving Topline Growth
STRATEGY DRIVING TOPLINE GROWTH INITIATIVES TO SUPPORT GROWTH ACROSS ALL KEY CUSTOMER METRICS STRATEGIC PRIORITY MOBILE APP LOYALTY OWNED MEDIA INCREASE OWNED AND BRAND PRODUCT BRANDS AWARENESS OFFERING FY22 OUTCOMES DELIVERED ■ Contributed 11.3% of ■ Member sign-ups ■ Industry-leading organic ■ Onb
Slide 5: Record Revenue From Higher-Value Customers
RECORD REVENUE FROM HIGHER-VALUE CUSTOMERS MORE RETURNING CUSTOMERS DELIVERING HIGHER ANNUAL SPEND REVENUE ANNUAL REVENUE ($A MILLION) ACTIVE CUSTOMERS1 (‘000) PER ACTIVE CUSTOMER1 ($A) 28% CAGR 22% CAGR 6% CAGR 11% 7% 4% 872 818 200 179 59 399 590 68 458 121 219 229 371 205 53 140 111 472 360 68 21
Slide 6: Returning Customers Contribute 70% Of Revenue
RETURNING CUSTOMERS CONTRIBUTE 70% OF REVENUE AND SHOP 3X A YEAR CONTENT & OWNED CHANNELS COST-EFFECTIVELY RETAINING CUSTOMERS NUMBER OF CUSTOMERS SUPERIOR LOYALTY METRICS OVER TIME1 70% of revenue from returning customers who shop ~3x per year 350 300 ■ Normalised operating environment seeing retur
Slide 7: Lifetime Value Grows To 8x Acquisition Cost
LIFETIME VALUE GROWS TO 8X ACQUISITION COST PERSONALISATION, LOYALTY & EXPERIENCE SUPPORTING LTV GROWTH AVERAGE LTV/CAC BY YEAR2 ■ Strong unit economics ─ FY22 LTV/CAC 1 was 0.7x, meaning investment in customer 7.8x acquisition is recovered in just over one year ─ Year-1 average LTV/CAC is tracking
Slide 8: Strategy To Drive Long-Term Margin Expansion
STRATEGY TO DRIVE LONG-TERM MARGIN EXPANSION SCALE OWNED BRANDS, OWNED MEDIA CHANNELS TO DRIVE IMPROVEMENTS REVENUE IMPROVE GROSS REDUCE MARKETING GROWTH PROFIT MARGIN EXPENSE Growing owned media Increased scale, Owned brands with channels: app, loyalty, new products higher margins media platform In
Slide 9: Targeting Margin Expansion Over The Long Term
TARGETING MARGIN EXPANSION OVER THE LONG TERM A CLEAR PATH TO MARGIN EXPANSION TARGETS DRIVING MARGIN EXPANSION1 ■ Owned brands to LONG ■ Owned brands to contribute 10% of revenue at gross TERM contribute 15%+ of revenue ■ Investment in FY27 margin target of 80%+ TARGET ■ New geographic FY22 develop
Slide 10: Strategic Priorities
STRATEGIC PRIORITIES DRIVING IMPROVED CUSTOMER METRICS 9
Slide 11: Mobile App Doubled Revenue Share Over Year To 15.5% In Q4
MOBILE APP DOUBLED REVENUE SHARE OVER YEAR TO 15.5% IN Q4 DELIVERING HIGHER LEVELS OF ENGAGEMENT, CONVERSION & AOV AT SCALE ■ Contributed 11.3% of revenue in full year FY22 ■ Delivering higher levels of engagement, conversion and AOV 146k 4.8/5 as user base scales ■ Built in a content-first way, the
Slide 12: Launched Viviology – Adore Beauty's First Owned Brand
LAUNCHED VIVIOLOGY – ADORE BEAUTY’S FIRST OWNED BRAND TARGETING 80%+ GROSS MARGINS FROM OWNED BRANDS AT SCALE ■ Launched in June, Viviology sales are exceeding expectations, and receiving positive user feedback ■ Cosmeceutical skincare brand created in collaboration with dermal therapist James Vivia
Slide 13: Loyalty Members Contributing 60% Of Revenue
LOYALTY MEMBERS CONTRIBUTING 60% OF REVENUE MORE THAN 95% OF MOST VALUABLE CUSTOMER TIER SIGNED UP 60% OF SALES DRIVEN BY MEMBERS >95% 3 8 OF MOST VALUABLE AWARD COMPETITIONS CUSTOMER TIER NOMINATIONS SIGNED UP 16 TICKETED LOYALTY MASTERCLASSES 12
Slide 14: Industry-Leading Organic Traffic Share
INDUSTRY-LEADING ORGANIC TRAFFIC SHARE CONTENT MARKETING COST-EFFECTIVELY DRIVING TRAFFIC TO ORGANIC AND OWNED CHANNELS CONTENT DRIVEN IMPRESSIONS2 (MILLION) ■ Adore Beauty has industry-leading organic traffic share, ~2X more than the average competitor1 4% CONTENT ─ Underpinned by 4% growth in cont
Slide 15: Sustainable And Ethical Operations
SUSTAINABLE AND ETHICAL OPERATIONS AN INCLUSIVE EMPLOYER WITH DIVERSE REPRESENTATION ACROSS CONTENT REDUCING PACKAGING ■ New smaller box size, reducing cardboard and plastic tape usage ■ Partnering with brands to reduce/ eliminate non-recyclable packaging ■ 100% of packaging and void fill is recycle
Slide 16: FY22 Financial Results
FY22 FINANCIAL RESULTS 15
Slide 17: Track Record Of Delivering Long-Term YoY Growth
TRACK RECORD OF DELIVERING LONG-TERM YOY GROWTH RECORD REVENUE AND GROSS PROFIT MARGIN REVENUE ($A MILLION) GROSS PROFIT MARGIN (%) EBITDA1 ($A MILLION) 40% CAGR 3.3 PPTS 49% CAGR 11% 0.3 PPTS 4% CAGR 33.1 33.3 7.6 199.7 179.3 31.8 5.3 5.0 121.1 30.0 73.2 1.6 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22
Slide 18: Disciplined Re-Investment To Drive Sustainable Growth
DISCIPLINED RE-INVESTMENT TO DRIVE SUSTAINABLE GROWTH FY22 PROFIT & LOSS A$M FY20 FY21 FY22 RECORD REVENUE, HIGHER ORDERS Revenue 121.1 179.3 199.7 ■ Revenue up 11% vs FY21 and up 65% vs FY20; 2-year CAGR of 28% Cost of sales (82.6) (120.0) (133.1) ■ Average Order Value (AOV) increased 6% vs FY21 to
Slide 19: Cash Flow Positive & Strong Cash Balance
CASH FLOW POSITIVE & STRONG CASH BALANCE FY22 BALANCE SHEET ■ Strong closing cash balance of $29.8 million and no debt A$M as at 30 Jun 21 30 Jun 22 ─ Capital efficient business model was cashflow positive in FY22 Cash and cash equivalents 29.0 29.8 ■ Disciplined management of inventory and payables
Slide 20: Strategy And Outlook
STRATEGY AND OUTLOOK
Slide 21: Structural Tailwinds To Drive Future Growth
STRUCTURAL TAILWINDS TO DRIVE FUTURE GROWTH MARKET LEADER IN A GROWING & RESILIENT SEGMENT LARGE ADDRESSABLE MARKET A RESILIENT CATEGORY ONLINE ADOPTION SIGNIFICANTLY BEHIND MORE MATURE MARKETS AUSTRALIAN BEAUTY AND PERSONAL BEAUTY AND PERSONAL CARE MARKET BEAUTY AND PERSONAL CARE CARE (BPC) MARKET
Slide 22: Integrated Content And E-Commerce Platform
INTEGRATED CONTENT AND E-COMMERCE PLATFORM CONTENT, RANGE & EXCEPTIONAL CUSTOMER EXPERIENCE A SIGNIFICANT COMPETITIVE MOAT COMBINES MEDIA AND E-COMMERCE IN AN INTEGRATED PLATFORM ENGAGING CONTENT OWNING THE FULFILMENT THROUGH DESTINATION A SEAMLESS ECOMMERCE FOR BEAUTY EXPERIENCE DISCOVERY 21
Slide 23: Long-Term Strategy
LONG-TERM STRATEGY TO DRIVE EARNINGS ACCRETION 2 PERSONALISATION 3 4 1 & MOBILE APP GROW PRODUCT OFFERING ■ Scale mobile app CONTENT, LOYALTY OWNED BRANDS ■ Increase data-driven & OWNED MEDIA & INTERNATIONAL personalisation ■ Increase core skincare, ■ Improve user experience, haircare, makeup produc
Slide 24: Trading Update And FY23 Outlook
TRADING UPDATE AND FY23 OUTLOOK ■ Adore Beauty is cycling off a period of significant growth in H1 FY22 where most of Australia was in lockdown1; meaning growth comparisons as expected are volatile ─ Trading in the first seven weeks reflects this volatility, revenue down 28% on PCP2 ─ The Company ex
Slide 25: Strategic Outlook
STRATEGIC OUTLOOK INVESTING FOR GROWTH & MANAGING COSTS ■ Beauty is a resilient category even in times of economic downturn, often known as the ‘lipstick effect’. ■ Longer-term, Adore Beauty expects to continue to benefit from the structural shift to e-commerce, which combined with high levels of cu
Slide 26: Questions
QUESTIONS 25
Slide 27: Appendix
APPENDIX 26
Slide 28: Proforma Adjustments To Statutory Income Statement
PROFORMA ADJUSTMENTS TO STATUTORY INCOME STATEMENT Statutory Actual Pro-forma Actual A$M FY20 FY21 FY22 A$M FY20 FY21 FY22 FY20 FY21 FY22 Statutory NPAT (1.2) 0.8 2.4 Revenue 121.1 179.3 199.7 121.1 179.3 199.7 IPO and listing costs2 0.0 5.3 Cost of sales (82.6) (120.0) (133.1) (82.6) (120.0) (133.1
Slide 29: Disclaimer
DISCLAIMER This presentation has been prepared by Adore Beauty Group Limited ACN 636 138 988 An investor must not act on the basis of any matter contained in this presentation but (Company). This presentation contains summary information about the Company and must make its own assessment of the Grou
Slide 30: Australia's Online Beauty Store
AUSTRALIA’S ONLINE BEAUTY STORE WWW.ADOREBEAUTY.COM.AU