Adore Beauty Group Ltd. · ASX:ABY
Adore Beauty — H1 FY24 Earnings Presentation
23 slides from Adore Beauty's earnings presentation, Feb 26, 2024
Slide 1: H1 FY24 Results Presentation
H1 FY24 Results Presentation 26 February 2024 1
Slide 2: Momentum builds with growth across key metrics
Momentum builds with growth across key metrics H1 FY24 FINANCIAL SUMMARY $100.7M 33.5% $2.4M Revenue1 Gross profit margin Reported EBITDA2 +7% on PCP +1.1 ppts on PCP EBITDA margin 2.3% 804K 507K $32.3M Active customers 3 Returning customers4 Cash5 +0.5% on PCP +5% on PCP +7% on PCP Australia’s lead
Slide 3: Loyal returning customers represent 81% of all sales
Loyal returning customers represent 81% of all sales H1 FY24 REVENUE INSIGHTS Revenue1 Returning customer revenue ($A Million) ($A Million) 7% 9% 113 101 96 94 33 19 20 34 2 0.7 80 80 73 62 80 80 73 62 H1 FY21 H1 FY22 HY FY23 H1 FY24 H1 FY21 H1 FY22 H1 FY23 H1 FY24 Returning customers Other 3 New cu
Slide 4: Record basket sizes & annual spend per customer
Record basket sizes & annual spend per customer H1 FY24 CUSTOMER INSIGHTS Active customers1 Annual revenue per active customer2 (‘000) ($) 0.5% 3% 876 801 804 777 439 320 298 590 497 231 224 225 481 507 436 213 280 CY20 CY21 CY22 CY23 CY20 CY21 CY22 CY23 Returning customers New customers Continued r
Slide 5: Growing brand awareness to drive new customer growth
Growing brand awareness to drive new customer growth INVESTING FOR GROWTH ▪ Brand awareness in the 25-45 female demographic increased to 66% 1 in January 2024, up from 62% in August 2023 ▪ Launched targeted above-the-line brand campaign focused on core audience in November and December 2023 ▪ Brand
Slide 6: H1 FY24 Financial Results
H1 FY24 Financial Results 6
Slide 7: Refined strategy & operational efficiency drive revenue, profitability
Refined strategy & operational efficiency drive revenue, profitability BENEFITTING FROM MARGIN & COST OPTIMISATION PROGRAMS Revenue1 Gross profit margin EBITDA ($A Million) (%) ($A Million) 7% 1.1 PPTS 467% 113.1 96.2 100.7 33.5 94.2 5.2 33.1 3.8 32.5 32.4 2.4 0.4 H1 FY21 H1 FY22 H1 FY23 H1 FY24 H1
Slide 8: Operating leverage & cost optimisation
Operating leverage & cost optimisation H1 FY24 PROFIT & LOSS A$M H1 FY23 H1 FY24 CHANGE Returning customers underpin resilience, revenue growth Revenue 94.2 100.7 6.8% ▪ Revenue 1 increased 7% on the PCP with returning customers contributing 81% of all sales Cost of sales (63.7) (66.9) 5.1% ▪ Averag
Slide 9: Cash flow positive, strong cash position
Cash flow positive, strong cash position BALANCE SHEET A$M as at 30 Jun 23 31 Dec 23 ▪ Healthy closing cash balance of $32.3 million, up 16% on the previous Cash and cash equivalents 27.8 32.3 half-year and up 7% on the PCP, available to support strategic initiatives Inventory 21.1 22.9 Other curren
Slide 10: Strategy
Strategy Beauty Done Better 10
Slide 11: Customer focus, brand awareness & operational efficiency
Customer focus, brand awareness & operational efficiency THREE PILLAR STRATEGY TO DRIVE LONG-TERM GROWTH 1. CUSTOMER CENTRICITY 3. OPERATIONAL OPTIMISATION ▪ Data insights ▪ Marketing efficiency and effectiveness ▪ Enhance loyalty program ▪ Retail media ▪ Optimise customer/user experience ▪ Scaling
Slide 12: Updating loyalty proposition to improve experience, frequency
1. CUSTOMER CENTRICITY Updating loyalty proposition to improve experience, frequency SUPPORTING CUSTOMER RETENTION & LIFETIME VALUE Average LTV/CAC1 by calendar year2 ▪ Retention3 continues to improve, now at 63.3%, up 8.4 ppts on PCP ▪ Launched subscription service to further reduce friction for cu
Slide 13: App customers have larger baskets; shop more often
1. CUSTOMER CENTRICITY App customers have larger baskets; shop more often MORE THAN 26% OF SALES NOW COMING VIA MOBILE APP ▪ App represented 26.3% of sales 2 in H1 FY24, up 8.1 ppts on PCP ▪ Effective owned marketing channel creating higher-value customers ▪ App AOV and AOF significantly outperformi
Slide 14: Building out owned brand product & category offering
2. FURTHER BUILDING THE BRAND Building out owned brand product & category offering NEW PRODUCTS SCHEDULED TO LAUNCH IN H2 ▪ Adore has three private label brands; ‘Adore Beauty’, ‘AB LAB’ and ‘Viviology’ ▪ 41 SKUs across the three brands, up from 11 SKUs the same period last year ▪ Sales of owned bra
Slide 15: Enhanced brand portfolio & growing adjacencies
2. FURTHER BUILDING THE BRAND Enhanced brand portfolio & growing adjacencies 15 NEW BRANDS ONBOARDED DURING H1 FY24 ▪ 15 new brands added during the half and a further three brands onboarded in January ▪ Building brand portfolio ▪ Five new luxury brands onboarded including Valentino, Prada and Mugle
Slide 16: Operational optimisation
3. OPERATIONAL OPTIMISATION Operational optimisation MARKETING IMPROVEMENTS, COST SAVINGS & EFFICIENCY GAINS ▪ Marketing optimisation and cost savings deliver improved operational efficiency ▪ Benefitting from margin and cost optimisation program, including changes to customer fulfilment centre shif
Slide 17: Commercialising owned marketing assets
3. OPERATIONAL OPTIMISATION Commercialising owned marketing assets CONTENT COST-EFFECTIVELY SUPPORTING ORGANIC TRAFFIC & CHANNELS Content driven impressions1 (million) ▪ Content-driven impressions continue to grow, up 35% on the 35% same period last year1, cost-effectively supporting owned Content c
Slide 18: Outlook
BOHEMIAN LIME sy Te ai SS 18
Slide 19: Key margin expansion levers
Key margin expansion levers AREAS OF FOCUS Revenue growth Improve gross profit margin Reduce expenses Pricing and promotional Increase scale Cost optimisation program review Improved marketing Improved brand awareness Partner support effectiveness, growing owned media channels Attractive adjacency R
Slide 20: Executing on clear growth strategy
Executing on clear growth strategy OUTLOOK ▪ Sales momentum continues into H2 FY24 with year-to- date1 revenue up 8.1% on PCP ▪ On track to achieve EBITDA margin of 2-4% in FY24 ▪ Challenging trading conditions expected to continue given cost of living pressures and subdued consumer sentiment ▪ Leve
Slide 21: Questions
Questions 21
Slide 22: Disclaimer
Disclaimer Thi s presentation has been prepared by Adore Beauty Group Li mited ACN 636 138 988 (Compa ny). This An i nvestor must not a ct on the basis of any ma tter contained i n this presentation but must make i ts own pres entation contains s ummary i nformation about the Company a nd its subsid
Slide 23: Australia's online beauty store
AUSTRALIA’S ONLINE BEAUTY STORE WWW.ADOREBEAUTY.COM.AU 23