Slide 1: FY23 Results Presentation
FY23 Results Presentation For personal use only 7 September 2023 Slide 1 of 34
Slide 2: Disclaimer
DISCLAIMER This presentation is in summary form and is not necessarily complete. It should be read together with the Company’s other For personal use only announcements lodged with the Australian Securities Exchange. This presentation contains information that is based on projected and/or estimated
Slide 3: Contents
FY23 Results Presentation | 7 September 2023 Contents For personal use only Section 1: Investment Highlights Section 2: Introduction Section 3: Financial Highlights Section 4: Strategic Imperatives Section 5: Outlook Slide 3 of 34
Slide 4: Section 1: Investment Highlights
For personal use only • FY23 Results Presentation | 7 September 2023 Section 1: Investment Highlights Slide 4 of 34
Slide 5: Investment Highlights
FY23 Results Presentation | 7 September 2023 Investment Highlights • No.1 Goat Formula brand in Australia (48.1% market share) 1 and USA (94% For personal use only market share)1 • USA market expansion is the medium-term strategic priority • US FDA permanent regulatory pathway remains on track • Res
Slide 6: Section 2: Introduction
For personal use only FY23 Results Presentation | 7 September 2023 Section 2: Introduction Slide 6 of 34
Slide 7: New CEO Appointed: Reg Weine
FY23 Results Presentation | 7 September 2023 NEW CEO APPOINTED: REG WEINE Bubs is excited to appoint Reg Weine as its new CEO bringing a wealth of experience and a pragmatic attitude For personal use only ✓ Reg is an executive with over 25 years’ experience in fast moving consumer goods (FMCG) and a
Slide 8: Strategic Review Update
FY23 Results Presentation | 7 September 2023 STRATEGIC REVIEW UPDATE Bubs is making significant progress towards achieving its priorities as laid out in the strategic review For personal use only Working USA growth Portfolio Sweat the China Reset capital and cost engine optimisation asset discipline
Slide 9: Key Infant Formula Markets Which Bubs Plays In
FY23 Results Presentation | 7 September 2023 KEY INFANT FORMULA MARKETS WHICH BUBS PLAYS IN Bubs is aiming to replicate its Australian position as the #1 player in goat infant formula products in the USA and China For personal use only $8.0b1 $40.4b2 Total U.S. infant Total China infant formula mark
Slide 10: Section 3: Financial Overview
For personal use only FY23 Results Presentation | 7 September 2023 Section 3: FINANCIAL OVERVIEW Slide 10 of 34
Slide 11: Summary
FY23 Results Presentation | 7 September 2023 FY23 SUMMARY Bubs incurred a one-off non-cash impairment of $70.8m, with a net loss after tax of $108.4m For personal use only • Group Revenue of $60.1m, down 32.7% on pcp (FY22: $89.3m) • Group Revenue for Infant Milk Formula (IMF): $48.6m, down 9.2% pcp
Slide 12: Financial Overview
FY23 Results Presentation | 7 September 2023 FINANCIAL OVERVIEW ▪ Revenue down 32.4% from prior comparative period $ million FY23 FY22 (“pcp”) due to a reduction in China revenue. Fall in China For personal use only Underlying revenue1 60.1 93.5 revenue partially offset by growth in USA and domestic
Slide 13: Adjusted Revenue Bridge
FY23 Results Presentation | 7 September 2023 FY23 ADJUSTED REVENUE BRIDGE1 Bubs’ strategic pivot to the USA has partially offset a decline in China revenue, with all other key markets experiencing growth from the core product range1 For personal use only 1 Non-IFRS measure, adjusted revenue calculat
Slide 14: Underlying Gross Margin of 30%
FY23 Results Presentation | 7 September 2023 UNDERLYING GROSS MARGIN OF 30% Focusing on the core product range enabled Bubs’ to deliver a 30% underlying gross margin1 For personal use only Gross Margin %1 Sales mix by product type % 35% 100% 8% 30% 30% 90% 18% 30% 11% 80% 25% 70% 22% 20% 60% 50% 15%
Slide 15: Balance Sheet
FY23 Results Presentation | 7 September 2023 BALANCE SHEET $’m Jun-23 Jun-22 ▪ Cash and cash equivalents balance of $26.1m at Cash and cash equivalents 26.1 16.3 Jun-23 For personal use only Trade and other receivables 7.9 24.9 Inventories 20.8 28.5 ▪ Trade and other receivables lower due to $6.8m O
Slide 16: Geographical Detail
FY23 Results Presentation | 7 September 2023 GEOGRAPHICAL DETAIL FY22 revenue was skewed by sales to AZ Global, previously Bubs’ primary distributor in China. Bubs has diversified its Chinese distribution channel and is driving sustainable For personal use only growth in multiple international marke
Slide 17: Saw Bubs Pivot Towards the USA
FY23 Results Presentation | 7 September 2023 FY23 SAW BUBS PIVOT TOWARDS THE USA Bubs strategically pivoted towards the US market after receiving temporary access from the FDA For personal use only FY22 FY23 9% 19% 16% 29% 9% $89.3m $60.1m 40% 23% 55% Australia China USA Rest of World ▪ Bubs is stra
Slide 18: Increase in Marketing Investment to Drive Growth
FY23 Results Presentation | 7 September 2023 INCREASE IN MARKETING INVESTMENT TO DRIVE GROWTH Investment in marketing and promotion spend has driven USA revenue growth in FY23 For personal use only #039;m Marketing and Promotion costs ▪ Marketing costs increased 57% in FY23 as Bubs sought to capitalise
Slide 19: Section 4: Strategic Imperatives
For personal use only FY23 Results Presentation | 7 September 2023 Section 4: STRATEGIC IMPERATIVES Slide 19 of 34
Slide 20: The Bubs Investment Proposition
FY23 Results Presentation | 7 September 2023 THE BUBS INVESTMENT PROPOSITION Market leading differentiated goat-based product offering, supported by growing bovine range in a market with limited competition For personal use only Significant addressable market in Differentiated goat-based product the
Slide 21: USA Growth Engine
FY23 Results Presentation | 7 September 2023 $23.9m c. 200% revenue USA GROWTH ENGINE increase USA Revenue and Tins Sold ✓ Total USA revenue of $23.9m in FY23, an increase of ~200% from FY22 For personal use only $700 16,000 $600 14,000 ✓ #1 goat milk in the U.S, with over 400,000 tins sold $500 12,
Slide 22: Regulatory Approvals
FY23 Results Presentation | 7 September 2023 REGULATORY APPROVALS Bubs is on track for permanent FDA approval by Oct-25, with the USA poised to deliver substantial growth via traditional retail, e-commerce and D2C channels For personal use only May 2022: FDA exercised July 2022: FDA announces Dec 20
Slide 23: China Reset
FY23 Results Presentation | 7 September 2023 CHINA RESET Bubs is resetting its China strategy, with the appointment of two new distributors in the Daigou channel and a new CBEC trade partner For personal use only • Jackie Lin who has extensive experience in Chinese FMCG and infant milk formula (IMF)
Slide 24: Portfolio Optimisation
FY23 Results Presentation | 7 September 2023 PORTFOLIO OPTIMISATION Bubs is the global leader in infant & adult goat nutrition, with an estimated market size of A$4.5bn1 For personal use only ▪ Hero Brands - Bubs & Caprilac ▪ Premiumisation opportunity ▪ SKU rationalisation is underway ▪ Reposition
Slide 25: Market Leader in Goat Formula in Australia
FY23 Results Presentation | 7 September 2023 MARKET LEADER IN GOAT FORMULA IN AUSTRALIA The domestic market has grown strongly for Bubs with 21% growth in FY23 For personal use only Bubs Quarterly Revenue & Market Share (%) 1 $5,000 $4,000 6.0% 5.0% 4.9% 48% 4.0% market market $3,000 share of AU sha
Slide 26: Sweat the Assets
FY23 Results Presentation | 7 September 2023 SWEAT THE ASSETS A key strategic priority for Bubs is to improve utilisation at the world class Deloraine facility For personal use only Deloraine utilisation % ✓ Bubs has identified various initiatives 100% to increase output at Deloraine 80% ✓ These ini
Slide 27: Section 5: Outlook
For personal use only • FY23 Results Presentation | 7 September 2023 Section 5: Outlook Slide 27 of 34
Slide 28: Outlook
FY23 Results Presentation | 7 September 2023 OUTLOOK FY24 will see Bubs continue to work towards its strategic priorities outlined in the 5-point strategic plan, and target cash flow breakeven in FY25 For personal use only GROUP STRATEGIC FOCUS With the business having reset after a disrupted FY23,
Slide 29: FY24 Outlook & What to Expect From Us
29 FY24 OUTLOOK & WHAT TO EXPECT FROM US ✓ Forecast revenue $80M (+25% YOY1) For personal use only ✓ Targeted gross margin @ 40% ✓ Continued FDA Progress ✓ Expected cash burn reduced from $5m per month to $2m per month from Q2’242 ✓ Maximise opportunities for whole of product portfolio ✓ Targeting c
Slide 30: Appendix
For personal use only Appendix Slide 30 of 34
Slide 31: Statutory Net Loss Reconciliation
FY23 Results Presentation | 7 September 2023 FY23 STATUTORY NET LOSS RECONCILIATION Per Financial Share-based Equity linked Underlying $’m Inventory Provision Credit Losses Impairment Statements payments transactions outcome Gross Revenue1 73.8 - - - - - 73.8 Trade Spend1 (13.6) - - - - - (13.6) For
Slide 32: FY22 Statutory Net Loss Reconciliation
FY23 Results Presentation | 7 September 2023 FY22 STATUTORY NET LOSS RECONCILIATION Per Financial Share-based Equity linked Underlying $’m Inventory Provision Credit Losses Impairment Statements payments transactions outcome Gross Revenue1 104.2 - - - - - 104.2 Trade Spend1 (14.9) - - - - - (14.9) F
Slide 33: Cash Flow Waterfall
FY23 Results Presentation | 7 September 2023 CASH FLOW WATERFALL For personal use only ▪ Bubs raised a total of $63.0m in Jul-22 to assist with working capital requirements, inventory build and USA market operating expenses ▪ $4m of deferred acquisition costs paid in July 2022 relating to the acquis
Slide 34: Thank you
For personal use only Thank you investors@bubsaustralia.com Slide 34 of 34