Baby Bunting Group Ltd. · ASX:BBN
Baby Bunting — H1 FY2022 Earnings Presentation
22 slides from Baby Bunting's earnings presentation, Feb 11, 2022
Slide 1: Half year ended 26 December 2021 Results Presentation
Half year ended 26 December 2021 Results Presentation Matt Spencer CEO & Managing Director Darin Hoekman CFO 11 February 2022
Slide 2: Important notice and disclaimer
Important notice and disclaimer This document is a presentation of general background information about the activities of Baby Bunting Group Limited (Baby Bunting) current at the date of the presentation (11 February 2022). The information contained in this presentation is for general background inf
Slide 3: Supporting new & expectant parents in the early years of parenthood
Supporting new & expectant parents in the early years of parenthood 3
Slide 4: Executive Summary
Executive Summary Record first half sales and earnings • A great first half driven by market share growth, expanded 6.8% gross margin & well controlled costs comparable sales growth • 1H FY22 headline sales growth of 10.0% vs pcp • 28.3% total sales growth over a two-year period • 1H FY22 comparable
Slide 5: 1H FY22 financial summary
1H FY22 financial summary Strong financial performance 1H FY22 1H FY21 Growth % $m $m Total Sales Growth 239.1 217.3 10.0% - Comparable store sales growth (1) 6.8% 15.0% - Online (incl. Click & Collect) 56.8 42.8 32.6% - Online % of sales 23.8% 19.7% Gross Profit Improvement 93.9 81.2 15.6% - Gross
Slide 6: 1H FY22 operating highlights
1H FY22 operating highlights Keeping our Team & customers safe All stores remained open Strong sales performance post lockdowns Private Label & Exclusive Products now 44.5% of sales Transition of direct to store suppliers to National DC delivering benefits 4 new stores (plus 2 relocation
Slide 7: Leads the industry in a fragmented market
leads the industry in a fragmented market Baby Bunting $2.5bn estimated addressable market (1) Baby Bunting current store numbers by state (breakdown by category) Other $0.2 billion AU target Cots, mattresses +100 Food, Nappies, and nursery furniture stores Clothing $0.6 billion $0.3 billion 13 Car
Slide 8: The strongest nursery brand in the country
the strongest nursery brand in the country BrandAwareness Brand Awareness(1) Loyalty Brand Program (1) Preference Net Promoter Score Unaided brand recall is 88%, significantly 1.3m loyalty members Providing exceptional customer higher than any retailer • ~700,000 active members up ~17% service & adv
Slide 9: Market share growth continues in 1H FY22
Market share growth continues in 1H FY22 Sales Sales Gross Profit CODB(1) % PF NPAT(2) 260.0 Total Sales ($m) $239.1 25.00% 240.0 $239.1m $93.9m 30.2% $12.5m 220.0 Comp % $217.3 20.00% $186.4 up 10.0% up 15.6% investing for up 16.4% 200.0 $172.5 15.0% future growth 180.0 15.00% 160.0 $151.7 140.0 9.
Slide 10: Supply Chain
Supply Chain Sourcing and availability – product flow remains strong • Investments in transformational replenishment systems and the new National DC have enabled a healthy stock position • Working with our +180 suppliers on maintaining strong product flow • Any product shortages offset by substitute
Slide 11: Transformation program delivering benefits
Transformation program delivering benefits Acquisition of Services Merchandise Financial Point of Sale Business Planning & ERP Acquisition of some car seat Implementation of a robust tool to Review of POS & ERP installation businesses assist in forward planning activities systems Demand Planning Dat
Slide 12: Transformation program for FY22
Transformation program for FY22 Headless e-commerce architecture Now live Loyalty Program Implemented across all channels People systems Partially complete Including HR, payroll and time & attendance Advanced Order Management & Fulfilment Improving online fulfilment efficiency and offering greater d
Slide 13: Summary Pro Forma Income Statement
Summary Pro Forma Income Statement Total sales of $239.1m, up 10.0% vs pcp $ million Pro Forma Pro Forma • Comparable store sales growth of 6.8% Change 1H FY22 1H FY21 Sales 239.1 217.3 10.0% Comp growth % 6.8% 15.0% Gross margin of 39.3%, up 192 bps vs pcp Cost of sales (145.2) (136.1) Gross Profit
Slide 14: Statement of Financial Position
Statement of Financial Position Statutory Statutory Statutory 26-Dec-21 27-Jun-21 27-Dec-20 $ million Restated Restated Highlights Cash & cash equivalents 15.0 10.9 14.7 Inventories 92.9 80.0 92.8 • Inventory increased to finish with an in-stock Plant and equipment 28.9 27.2 28.0 position of 94% ahe
Slide 15: Cash Flow
1H FY22 1H FY21 $ million Restated Cash Flow EBITDA (1) 21.8 18.4 Movement in working capital (1) (7.7) (21.3) • Short-term increase in working capital (inventory Tax Paid (2.8) (5.4) investment) for post Christmas sales and Chinese New Net cash flow from operating activities 11.3 (8.4) Year impacts
Slide 16: Trading update
Trading update As at 9 February 2022, comparable store sales growth: • 6.1% year-to-date, cycling 15.7% • 3.6% for the previous 6 weeks, cycling 18.4% • Online sales (incl. Click & Collect) up 30.0% for the previous 6 weeks, cycling 71.0% • On a two-year basis, comparable store sales up 22.0%, for t
Slide 17: Growth into the future
Growth into the future We remain focused on executing our strategy of growing market share: • Assessing the broader $5.1bn baby goods market for future long term growth opportunities • Delivering a seamless omni-channel retail customer experience • Enhancing the online experience and expanding our o
Slide 18: Appendices
Appendices ——— ll si‘<iC*SQQ
Slide 19: Appendix 1: Statutory - Pro Forma Income Statement Reconciliation
Appendix 1: Statutory - Pro Forma Income Statement Reconciliation 1H FY2022 1H FY2021 Statutory Add Pro Forma Statutory Add Pro Forma 1H FY22 Pro Forma Adj (1) 1H FY22 1H FY21 Pro Forma Adj (1) 1H FY21 $ million Sales 239.1 239.1 217.3 217.3 Cost of sales (145.2) (145.2) (136.1) (136.1) Gross Profit
Slide 20: Appendix 2: AASB Transition Impact - Pro Forma Income Statement
Appendix 2: AASB 16 Transition Impact - Pro Forma Income Statement 1H FY2022 1H FY2021 Reversal of AASB Reversal of AASB 16 Pro Forma 16 Depreciation Add Operating Pre-AASB Pro Forma Depreciation and Add OperatingPre-AASB 16 1H FY22 and Interest Lease Expenses 16 1H FY22 1H FY21 Interest Lease Expen
Slide 21: Appendix 3: Store Economics
Appendix 3: Store Economics Stores deliver great returns • Mature store FY21 ROIC on average exceeding 100%, up from >80% pcp • Mature store FY21 EBITDA margin 19%, up 200 bps from FY20 driven by gross margin improvements and operational efficiency initiatives • New stores opened – Alexandria (NSW),
Slide 22: Glossary
Glossary Comparable Store Sales Growth • Calculated as a percentage change of the total sales generated from stores (including the online store) in a relevant period, compared to the total sales from the same set of stores in the prior financial year, provided the stores were open at the beginning o