Adore Beauty Group Ltd. · ASX:ABY
Adore Beauty — H1 FY23 Earnings Presentation
26 slides from Adore Beauty's earnings presentation, Feb 27, 2023
Slide 1: H1 FY23 Results Presentation
H1 FY23 RESULTS PRESENTATION 27 February 2023
Slide 2: H1 FY23 Summary
H1 FY23 SUMMARY RETURNING CUSTOMER GROWTH; CASH FLOW POSITIVE $93.6M 32.6% REVENUE GROSS PROFIT -17% ON PCP MARGIN +22% 3-YEAR CAGR -0.5 PPTs ON PCP $0.4M $30.1M EBITDA1 CASH2 ADJ EBITDA -$0.5M +20% ON PCP 801K 481K ACTIVE RETURNING CUSTOMERS3 CUSTOMERS4 -9% ON PCP +10% ON PCP +23% 3-YEAR CAGR +40%
Slide 3: H1 FY23 Overview: Challenges and Highlights
H1 FY23 OVERVIEW CHALLENGES AND HIGHLIGHTS CHALLENGES ▪ Post lockdown environment, cycling periods of significant growth with revenue up 80% on H1 FY20 ▪ Normalised environment has seen consumers returning to bricks and mortar, impacting online retail sales1 ─ ABS non food online sales 16.3% (H1FY23
Slide 4: H1 FY23 Customer Insights
H1 FY23 CUSTOMER INSIGHTS RECORD NUMBER OF RETURNING1 CUSTOMERS ANNUAL REVENUE PER ACTIVE CUSTOMERS2 (‘000) ACTIVE CUSTOMER2 23% CAGR $15 9% $1 876 801 777 439 320 427 497 224 225 252 481 436 213 280 210 176 CY19 CY20 CY21 CY22 CY19 CY20 CY21 CY22 Returning customers New customers Record number of r
Slide 5: H1 FY23 Revenue Insights
H1 FY23 REVENUE INSIGHTS REVENUE FROM RETURNING1 CUSTOMERS GROWING 30% ON A 3YR CAGR REVENUE RETURNING CUSTOMER REVENUE ($A MILLION) ($A MILLION) 22% CAGR 30% CAGR 17% 9% 113 96 94 33 20 35 52 80 73 62 19 80 73 62 33 33 H1 FY20 H1 FY21 H1 FY22 H1 FY23 H1 FY20 H1 FY21 H1 FY22 H1 FY23 Returning custom
Slide 6: H1 FY23 Financial Results
H1 FY23 FINANCIAL RESULTS 5
Slide 7: HY Performance Reflects Post-Lockdown Period
HY PERFORMANCE REFLECTS POST-LOCKDOWN PERIOD LOWER OPERATING LEVERAGE & INFLATIONARY PRESSURES REVENUE ($A MILLION) GROSS PROFIT MARGIN (%) EBITDA1 ($A MILLION) 22% CAGR 1.4 PPTS -39% CAGR 17% 0.5 PPTS -89% 113.1 96.2 93.6 33.1 5.2 32.5 32.6 3.8 52.0 31.2 1.8 0.4 H1 FY20 H1 FY21 H1 FY22 H1 FY23 H1 F
Slide 8: Business Resilience & Cost Management
BUSINESS RESILIENCE & COST MANAGEMENT H1 FY23 PROFIT & LOSS A$M H1 FY20 H1 FY21 H1 FY22 H1 FY23 REVENUE DRIVEN BY MORE RETURNING CUSTOMERS Revenue 52.0 96.2 113.1 93.6 ■ Revenue declined 17% on PCP (a period of significant growth), 3-year Cost of Sales (35.8) (64.9) (75.7) (63.1) CAGR of 22% Gross P
Slide 9: Generating Free Cash Flow; Strong Cash Position
GENERATING FREE CASH FLOW; STRONG CASH POSITION BALANCE SHEET A$M as at 30 Jun 22 31 Dec 22 ■ Capital efficient business model, generating free cash flow of $0.3 million Cash and cash equivalents 29.8 30.1 ■ Strong closing cash balance of $30.1 million and debt-free Inventory 17.5 18.5 ■ Disciplined
Slide 10: Strategy
BEAUTY DONE BETTER STRATEGY 9
Slide 11: Strategic Initiatives Update
STRATEGIC INITIATIVES UPDATE H1 FY23 PROGRESS MOBILE APP OWNED MEDIA INCREASED OWNED LOYALTY AND BRAND PRODUCT BRANDS AWARENESS OFFERING H1 FY23 OUTCOMES DELIVERED ■ Loyalty members now ■ Contributed 18% of ■ Brand awareness ■ Onboarded 13 ■ Launched sunscreen account for 63% of all revenue in H1 FY
Slide 12: Loyalty to Drive Retention & LTV
LOYALTY TO DRIVE RETENTION & LTV ADORE SOCIETY MEMBERS CONTRIBUTED 63% OF REVENUE ■ Higher AOV and LTV for loyalty members ■ Building a community of engaged customers ■ 10% growth in returning customers offsetting competitive paid marketing channels ■ Unit economics remain strong with average Year-1
Slide 13: App Revenue Doubles to 18% Share of Revenue
APP REVENUE DOUBLES TO 18% SHARE OF REVENUE DELIVERING HIGHER LEVELS OF CONVERSION & AOV AT SCALE ■ Contributed 18% of revenue in H1 FY23 258k 4.8/5 ■ App AOV and AOF is 16% and 24% respectively higher than the website ■ Content-driven app is an effective owned marketing channel to attract, engage a
Slide 14: Content Supporting Organic Traffic Share
CONTENT SUPPORTING ORGANIC TRAFFIC SHARE COST-EFFECTIVELY DRIVING TRAFFIC TO ORGANIC, OWNED CHANNELS CONTENT DRIVEN IMPRESSIONS1 (MILLION) ■ Content is cost effectively driving traffic 15% ─ 15% growth in content-driven impressions1 CONTENT ─ Podcast downloads grew to ~5.1m2 across eight podcasts Be
Slide 15: Increased Product Offering
INCREASED PRODUCT OFFERING 13 NEW BRANDS LAUNCHED 14
Slide 16: Building Owned Brand Portfolio
BUILDING OWNED BRAND PORTFOLIO LAUNCHED AB LAB BRAND, SALES OF VIVIOLOGY CONTINUE TO GROW ■ Launched in October, AB Lab has now launched ─ Two initial sunscreen SKUs priced from $39.95 ─ Third SKU to launch in early H2 FY23 ─ Additional categories to launch in 2023 ■ ABY’s first owned brand, Viviolo
Slide 17: Outlook
OUTLOOK
Slide 18: Online Market Leader in Resilient Category
ONLINE MARKET LEADER IN RESILIENT CATEGORY LONG-TERM STRUCTURAL SHIFT TO ECOMMERCE LARGE ADDRESSABLE MARKET A RESILIENT CATEGORY ONLINE CATEGORY SALES IN MATURE MARKETS AT 41% AUSTRALIAN BEAUTY AND PERSONAL BEAUTY AND PERSONAL CARE MARKET BEAUTY AND PERSONAL CARE CARE (BPC) MARKET 20211 GROWTH (2006
Slide 19: Looking Ahead
LOOKING AHEAD INITIATIVES TO DRIVE EARNINGS ACCRETION 1 LOYALTY, MOBILE APP & 2 CONTENT & OWNED MEDIA PERSONALISATION ■ Grow brand awareness ■ Scale mobile app 3 4 ■ Expand content and owned ■ Expand loyalty programs media channels GROW PRODUCT OWNED BRANDS ■ Improve user experience, ■ Increase bran
Slide 20: Key Margin Expansion Pillars
KEY MARGIN EXPANSION PILLARS AREAS OF FOCUS REVENUE IMPROVE GROSS REDUCE EXPENSES GROWTH PROFIT MARGIN Cost optimisation program Increase scale Pricing and promotional launching review New products Reduce marketing expenses Partner support by growing owned media channels: app, loyalty, media platfor
Slide 21: Outlook
OUTLOOK STRONG FOCUS ON COSTS & PHASED INVESTMENT ■ Trading conditions remain challenging with high levels of inflation, subdued consumer sentiment and current shift to bricks and mortar ■ Growth comparisons for the first seven weeks are volatile with the PCP impacted by mandated isolation for Omicr
Slide 22: Questions
QUESTIONS 21
Slide 23: Appendix
APPENDIX 22
Slide 24: Proforma Adjustments to Statutory Income Statement
PROFORMA ADJUSTMENTS TO STATUTORY INCOME STATEMENT Statutory Actual Pro-forma Actual A$M H1 FY20 H1 FY21 H1 FY22 H1 FY23 A$M H1 FY20 H1 FY21 H1 FY22 H1 FY23 H1 FY20 H1 FY21 H1 FY22 H1 FY23 Statutory NPAT -3.2 2.5 2.0 (0.1) Revenue 52.0 96.2 113.1 93.6 52.0 96.2 113.1 93.6 Cost of sales (35.8) (64.9)
Slide 25: 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 26: Australia's Online Beauty Store
AUSTRALIA’S ONLINE BEAUTY STORE WWW.ADOREBEAUTY.COM.AU