Slide 1: FY23 Results Presentation
FY23 Results Presentation 22 August 2023
Slide 2: Important notice
Important notice. This disclaimer applies to this Presentation and the information contained in it (the “Presentation”). By reading this disclaimer you agree to be bound by it. Important notice and disclaimer: This Presentation contains a general summary of the activities of Kogan.com Ltd (the Compa
Slide 3: CEO update
CEO update. Ruslan Kogan Founder, CEO and Executive Director 3
Slide 4: FY23 Kogan Group highlights
FY23 Kogan Group highlights. Kogan.com completes recalibration with sustained and improving profiability. Evolution in ● For Kogan.com (excluding Mighty Ape), FY23 marks the first year that Gross Sales and Gross Profit business model contribution from our Platform-based Sales1 outperformed our Produ
Slide 5: FY23 Kogan Group highlights
FY23 Kogan Group highlights. Kogan.com complete recalibration with sustained and improving profitability Cost of doing ● Cost reduction initiatives continued throughout FY23, with Group Variable and Marketing costs as a business percentage of Gross Sales reducing to 8.0% in FY23, compared to 8.8% in
Slide 6: FY23 Kogan Group highlights
FY23 Kogan Group highlights. Kogan.com completes recalibration with sustained and improving profitability Mighty Ape ● The year marked the successful transition of Gracie MacKinlay to CEO of Mighty Ape, and the welcoming of Daniel Balasoglou, its new CFO. ● While Gross Sales and Revenue declined yea
Slide 7: 2HFY23 Kogan Group results
2HFY23 Kogan Group results. $m 2HFY22 2HFY23 YoY Var (%) In the second half of the year our Gross Gross Sales 482.0 373.7 (22.5%) Margin recovered, operating efficiency increased and we returned the Business to Revenue 299.0 213.9 (28.4%) profitability. Gross Profit 76.3 73.6 (3.6%) Gross Margin 25.
Slide 8: Kogan.com Platform-based Sales
Kogan.com Platform-based Sales . 1 FY23 marks the first year that Gross Sales and Gross Profit from our Platform-based Sales1 has outperformed our Product Division. Platform-based Gross Sales contribution2 Platform-based Gross Profit contribution2 57.3% 71.2% 48.1% 38.0% 36.3% 45.7% 26.7% 28.9% 27.5
Slide 9: Delighting our customers
Delighting our customers. Our customer base consists of millions of shoppers and we have a dedicated and loyal group of customers. Kogan.com active customers1 Proportion of Repeat Customers1,2,3 8.0% CAGR (pre-COVID-19) Kogan.com active customers (000's) 3,314 Kogan.com repeat customers (%) 2,945,00
Slide 10: Marketing proficiency
Marketing proficiency. We have achieved improving efficiency in our marketing and increased proportion of direct traffic flow. Group Marketing1,2 ROI Kogan.com traffic - owned & earned vs paid3 Owned & Earned $46 $46 FY22 Paid 29% FY23 Owned & earned sources: • Direct website traffic 71% • Direct Ap
Slide 11: AI leadership & efficiency
AI leadership & efficiency. Our in-house built propriety systems enable us to utilise AI where it counts, enhancing our operation and customer experience. Now New Next ● State of the art ● Leveraging Vector Space ● Experimenting with image recommendation engines to embeddings to improve search gener
Slide 12: Kogan Marketplace
Kogan Marketplace. The long-term growth of Kogan Marketplace continued with improved economics in FY23. Marketplace Gross Sales Marketplace profitability 18.0% CAGR since FY20 (pre-COVID) 9.2% YoY Top-line performance of the Kogan Marketplace declined from COVID-period highs in the prior years, in l
Slide 13: Exclusive brands
Exclusive brands. Following the correction to inventory levels, Gross Margin rapidly recovered. Recovering profitability in 2HFY23 Soft trading conditions impacted Revenue in FY23 In FY23, our Exclusive Brands team reduced the 12.6pp HoH (41.3%) YoY number of unique SKUs we invest in by over 38%, in
Slide 14: Kogan FIRST
Kogan FIRST. Over 401,000 Subscribers enjoyed the many benefits of our loyalty program in FY23. Free Exclusive Kogan Everyday Priority shipping specials rewards discounts service ● The Kogan First loyalty program included over Kogan FIRST subscribers1 New initiatives to 401,000 Subscribers at the en
Slide 15: Kogan Verticals
Kogan Verticals. Our key Verticals all grew in FY23. Kogan Mobile AU Kogan Mobile NZ Kogan Money Kogan Energy 3.1% YoY 71.5% YoY 22.0% YoY 46.9% YoY 0.4 10.7 3.4 0.9 10.4 2.8 0.3 Revenue ($m) Revenue ($m) Revenue ($m) Revenue ($m) 0.5 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 ● Revenue for our larger
Slide 16: Financial update
Financial update. David Shafer CFO, COO and Executive Director
Slide 17: Kogan Group 2HFY23 P&L
Kogan Group 2HFY23 P&L. $m 2HFY22 2HFY23 YoY Var % A return to profitability in 2HFY23 Gross Sales 482.0 373.7 (22.5%) Revenue 299.0 213.9 (28.4%) demonstrates the impact of the Cost of Sales (222.6) (140.3) (37.0%) recalibration and evolution of the business. Gross Profit 76.3 73.6 (3.6%) Gross Mar
Slide 18: Kogan Group FY23 P&L
Kogan Group FY23 P&L. $m FY22 FY23 YoY Var % FY23 was significantly impacted in Gross Sales 1,180.0 844.8 (28.4%) 1HFY23 by the need to right-size Revenue 718.5 489.5 (31.9%) Cost of Sales (534.1) (352.9) (33.9%) inventory in the Business. 184.4 Gross Profit 136.6 (26.0%) Gross Margin 25.7% 27.9% 2.
Slide 19: Key drivers of the Kogan Group performance
Key drivers of the Kogan Group performance. 2HFY23 performance illustrates the significant turn around achieved. Gross sales & ● The Company recorded Gross Sales of $844.8 million and Revenue of $489.5 million. These results are revenue both down on the prior year as a result of soft trading conditi
Slide 20: Key drivers of the Kogan Group performance
Key drivers of the Kogan Group performance. 2HFY23 performance illustrates the significant turn around achieved. Product divisions ● During the year the Company corrected inventory levels, which involved unprecedented levels of discounting. This significantly impacted Gross Margins particularly in 1
Slide 21: Key drivers of the Kogan Group performance
Key drivers of the Kogan Group performance. 2HFY23 performance illustrates the significant turn around achieved. Variable costs ● As inventory levels progressively corrected, the Business focused on cost reduction initiatives to recalibrate the Cost of Doing Business (CODB). Group Variable & Marketi
Slide 22: Key drivers of the Kogan Group performance
Key drivers of the Kogan Group performance. 2HFY23 performance illustrates the significant turn around achieved. Adjusted EBITDA1, ● These adjusted metrics measure the underlying performance of the Business, removing non-cash items Adjusted EBIT1 & including unrealised gains/(losses), equity-based c
Slide 23: FY23 Gross Profit by business division
FY23 Gross Profit by business division. Gross Profit contribution of our Product Division has significantly recovered following the correction of inventory in 1HFY23. We expect further recovery in FY24. 1HFY23 Gross Profit contribution 2HFY23 Gross Profit contribution 34.5% 23.6% 20.3% 23.1% 17.2% 2
Slide 24: Kogan.com cost of doing business
Kogan.com cost of doing business. The reduction in inventory has allowed for operational efficiencies to be realised. Kogan.com1 in-warehouse inventory Kogan.com1 variable costs Kogan.com1 fixed costs 68.5% reduction 0.8pp reduction $2.3m cost reduction YoY Percentage of Gross Sales (%) Inventory in
Slide 25: Mighty Ape
Mighty Ape. Our Mighty Ape business continued to deliver resilient results for the Group in challenging trading conditions, and commenced projects with long-term benefits. Mighty Ape financial highlights A$m FY22 FY23 YoY Mvmt% Continuing cost-of-living pressures and interest rate rises in New Zeala
Slide 26: Kogan Group balance sheet
Kogan Group balance sheet. 30 June 2022 30 June 2023 The Group completed the year with a strong cash position Current assets and zero bank debt. Cash 66.2 65.4 Trade and other receivables 8.1 8.5 The Group has a strong capital position, with total cash of $65.4 million. Inventories 159.9 68.2 This i
Slide 27: Kogan group cashflow
Kogan group cashflow. Operating cash flows grew as the Business increased profitability. Cashflow from operating activities FY22 FY23 Receipts from customers 745.0 509.9 Our total net cash balance (after loans and borrowings) increased Payments to suppliers and employees (678.5) (432.3) by $34.2 mil
Slide 28: FY24 strategy & update
FY24 strategy & update. Ruslan Kogan Founder, CEO and Executive Director 28
Slide 29: FY23 Kogan Group trading update, outlook & dividend
FY23 Kogan Group trading update, outlook & dividend. Overview In FY24, we expect: ● Consistent with prior years, the Company will not be ● Accelerated growth in Kogan First Subscribers providing earnings guidance. However, it will provide regular business updates during the year. ● Continued growth
Slide 30: Thank you
Thank you. Questions? 30
Slide 31: Glossary
Glossary. 1HFY2x: the 6 months ended 31 December 20xx. 2HFY2x: the 6 months ended 30 June 20xx. Adjusted EBITDA: earnings before interest, tax, depreciation, amortisation, unrealised gain/(loss), equity-based compensation and one-off non-recurring items. Refer to Annexure 2 of this Presentation for
Slide 32: Glossary
Glossary. Kogan Mobile Australia: launched in 2QFY16, vertical offering pre-paid mobile phone plans available online using TPG’s mobile network in Australia. Kogan Mobile New Zealand: Vertical launched in 1HFY20 offering pre-paid mobile phone plans available online using Vodafone’s mobile network in
Slide 33: Annexure 1
Annexure 1. FY23 Revenue by Business Division FY22 FY23 YoY $m Revenue Revenue Revenue Var % Exclusive Brands 311.6 183.0 (41.3%) Third-Party Brands 176.6 82.2 (53.5%) Product Divisions 488.2 265.2 (45.7%) Mighty Ape 163.4 154.8 (5.3%) Kogan Marketplace 30.6 23.9 (22.2%) Kogan Mobile 10.9 11.6 6.4%
Slide 34: Annexure 2
Annexure 2. Reconciliation to Kogan Group FY23 Unrealised Realised loss on Equity-based Mighty Ape purchase Bitbuy.com Adjusted EBITDA and Adjusted NPAT Unadjusted (gain)/loss Wonderfi shares compensation - tranches 3 & 4 domain sale Adjusted Revenue 489.5 489.5 Adjusted EBITDA and Adjusted NPAT are