Bubs Australia Ltd. · ASX:BUB
Bubs Australia — H1 FY2023 Earnings Presentation
27 slides from Bubs Australia's earnings presentation, Feb 28, 2023
Slide 1: Interim Results
For personal use only Interim Results 28 February 2023
Slide 2: Disclaimer
DISCLAIMER DISCLAIMER For personal use only This presentation (Presentation) is dated 28 February 2023 and has been prepared by Bubs Australia Limited (ACN 060 094 742) (Bubs or the Company). The material in this Presentation is general background information about Bubs and its subsidiaries and thei
Slide 3: Agenda
For personal use only Strategic Highlights 04 1HFY23 Financial Review 08 Key Markets Performance 17 Operational Focus & Outlook 21 3
Slide 4: Bubs Winning Formula
STRATEGIC HIGHLIGHTS BUBS WINNING FORMULA Bubs brand-led vertically integrated model is uniquely positioned to deliver margin accretive global growth. For personal use only ONE BRAND ONE FAMILY ONE WORLD Trust in Bubs® Focused on Diversification in Scale increases People and culture brand as clean h
Slide 5: Diversification Through Global Expansion
STRATEGIC HIGHLIGHTS DIVERSIFICATION THROUGH GLOBAL EXPANSION Bubs is entering a new phase of growth runway and maturity as a global infant nutrition specialist. The accelerated entry into the United States provides an important diversification of our key markets, For personal use only reducing the
Slide 6: No.1 Goat Formula in Australia & USA
STRATEGIC HIGHLIGHTS NO.1 GOAT FORMULA IN AUSTRALIA & USA Bubs is the clear market leader in its hero product segment, overtaking long-time market leader in Australia and pioneering the category in the USA. For personal use only AUSTRALIA MARKET SHARE % USA MARKET SHARE % TOTAL GOAT FORMULA1 TOTAL G
Slide 7: Regulatory Milestones in Both Key Markets
STRATEGIC HIGHLIGHTS REGULATORY MILESTONES IN BOTH KEY MARKETS Bubs made significant advances with regulatory pathways in both the USA and China during 1HFY23. For personal use only US FDA Transition Plan May 2022: FDA Dec 2022: FDA issues Bubs a Oct 2024: Deadline to exercised Enforcement Letter of
Slide 8: Financial Review
For personal use only REVIEW FINANCIAL
Slide 9: 1H FY23 Financial Results
1H FY23 FINANCIAL REVIEW 1HFY23 FINANCIAL RESULTS FINANCIAL PERFORMANCE 1HFY23 1HFY22 % vs pcp • Group revenue $31.5m, down 6%. Group branded products revenue⁴ ($m) ($m) $30.1m, up 12% pcp driven by contribution from the US market which was For personal use only offset by soft performance in China.
Slide 10: Financial Highlights
1H FY23 FINANCIAL REVIEW FINANCIAL HIGHLIGHTS Product margin² improvements driven by optimisation in product mix and entry into the USA were underpinned by double-digit growth in infant formula. $30.1m For personal use only +12% pcp Revenue for branded products1 35% Group Product Margin² 39% Infant
Slide 11: Double Digit Growth in Branded Products Revenue
1H FY23 FINANCIAL REVIEW DOUBLE DIGIT GROWTH IN BRANDED PRODUCTS¹ REVENUE Group revenue growth was constrained by the soft performance in China and $5.3 million in low margin bulk ingredient sales in the same period last year was not replicated. However, the Group Revenue of branded For personal use
Slide 12: Diversified Market Mix
1H FY23 FINANCIAL REVIEW DIVERSIFIED MARKET MIX Market diversification with comparable revenue contribution from all 3 key markets, providing multiple growth leavers to mitigate concentration risk and to allow for response time to volatile macro forces. For personal use only 1H FY23 REGIONAL KEY MAR
Slide 13: Optimised Product Mix
1H FY23 FINANCIAL REVIEW OPTIMISED PRODUCT MIX Bubs® Infant Formula is the Group’s most profitable product segment, accounting for 88% revenue contribution and delivering 44% revenue growth pcp. For personal use only 1H FY23 PRODUCT INFANT FORMULA REVENUE REVENUE CONTRIBUTION ($million) B2B +44% Adu
Slide 14: Significant Improvement in Product Margins
1H FY23 FINANCIAL REVIEW SIGNIFICANT IMPROVEMENT IN PRODUCT MARGINS¹ Product Margins¹ for all key portfolio segments were at record highs due to the increased contribution from the USA, controlled and consistent rates of trade spend, and optimisation of product mix. For personal use only GROUP PRODU
Slide 15: Product Margin Drivers
1H FY23 FINANCIAL REVIEW PRODUCT MARGIN¹ DRIVERS Optimised Product and Channel Mix offset increased costs in raw materials and inflationary pressure. For personal use only PRODUCT MIX REVENUE CONTRIBUTION CHANNEL MIX REVENUE CONTRIBUTION 100% 10% 100% 90% 21% 20% 11% 80% 0% 24% 20% 5% 9% 31% 80% 70%
Slide 16: Strong Balance Sheet Supports Growth Initiatives
1H FY23 FINANCIAL REVIEW STRONG BALANCE SHEET SUPPORTS GROWTH INITIATIVES Following a successful Capital Raising of $63m in July 2022, Bubs maintains a strong balance sheet with sufficient headroom to fund future growth trajectory. For personal use only 80.0 70.0 60.0 60.0 60.6 50.0 51.4 40.0 40.0 2
Slide 17: Key Markets Performance
For personal use only PERFORMANCE 17
Slide 18: Australia in Solid Growth
KEY MARKETS PERFORMANCE AUSTRALIA IN SOLID GROWTH Bubs domestic growth strategy is on track. OPERATIONAL HIGHLIGHTS For personal use only ● Bubs® is an authentic Australian made and owned brand, trusted for 17 years as an infant nutrition specialist. DOMESTIC REVENUE ($million) ● Growth driven by gr
Slide 19: Australia: 32% Increase in Scan Value Growth
KEY MARKETS PERFORMANCE AUSTRALIA: 32% INCREASE IN SCAN VALUE GROWTH¹ Domestic retail scan data shows Bubs remains the fastest growing infant formula company in the top six manufacturers, outpacing the infant formula category growth rate¹. For personal use only TOP 6 FORMULA MANUFACTURERS TOP 6 FORM
Slide 20: China Growth Disrupted
KEY MARKETS PERFORMANCE CHINA GROWTH DISRUPTED OPERATIONAL HEADWINDS Market and trading conditions were very challenging in China leading to an unexpected sharp downturn in sales, ● Lockdowns and COVID outbreaks caused For personal use only with adult milk powder impacted more than infant formula. w
Slide 21: China Innovation in Marketing Bubs' IP
KEY MARKETS PERFORMANCE CHINA INNOVATION IN MARKETING BUBS’ IP Metaverse campaign launch showcasing Bubs characters and branded asset play collectibles. For personal use only 150M+ 220K+ 21
Slide 22: USA Fast-Tracked Key Market
KEY MARKETS PERFORMANCE USA FAST-TRACKED KEY MARKET As the 2nd largest addressable market for infant formula, Bubs is committed to the USA as a strategic priority long-term. For personal use only OPERATIONAL HIGHLIGHTS ● First mover advantage provided Bubs with accelerated market access to a tightly
Slide 23: USA National Footprint in All Major Retailers
KEY MARKETS PERFORMANCE USA NATIONAL FOOTPRINT IN ALL MAJOR RETAILERS Bubs has quickly established an enviable retail footprint in 42 states, including the Top 4 retail giants: Walmart, Target, Kroger and Albertsons-Safeway + health food chains, drug stores and e-Commerce. For personal use only BUBS
Slide 24: Operational Focus & Outlook
For personal use only FOCUS & OUTLOOK 24
Slide 25: Focus on Operational Execution
OPERATIONAL FOCUS & OUTLOOK FOCUS ON OPERATIONAL EXECUTION 2HFY23 focus is on precision in operational execution to improve profitability and cash runway. For personal use only 1HFY23 2HFY23 FOCUS OPERATIONAL HIGHLIGHTS OPERATIONAL HEADWINDS Optimised Product and Channel Mix Revenue growth in Key Ma
Slide 26: Outlook
OPERATIONAL FOCUS & OUTLOOK OUTLOOK Bubs remains confident in its strategic growth strategies and pathway to sustained earnings growth. For personal use only Although the downturn in China’s first-half revenue was below expectation and offset the performance delivered in other key markets, the Compa
Slide 27: For personal use only
For personal use only 27