Slide 1: FY17 Results Presentation
For personal use only FY17 RESULTS PRESENTATION 18 AUGUST 2017
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. For personal use only Important notice and disclaimer: This presentation contains a general summary of the activities of Kog
Slide 3: Contents
CONTENTS For personal use only CEO Update Page 4 - 14 Financial Update Page 15 - 25 Outlook Page 26 - 31 Q&A 3
Slide 4: CEO Update
For personal use only CEO Update Ruslan Kogan Founder & CEO 4
Slide 5: FY17 Highlights
FY17 HIGHLIGHTS FY17 was a landmark year for Kogan.com For personal use only • Beat prospectus forecast FINANCIAL OUTPERFORMANCE • Three separate earnings upgrades GROWING BRAND • 955,000 Active Customers - 36% increase from FY16 • Kogan Mobile going from strength-to-strength STRONG GROWTH FROM • Pr
Slide 6: FY17 Results
FY17 RESULTS Pro Forma EBITDA of $13.2 million exceeded Prospectus forecast by 91.3%. For personal use only FY17 Prospectus forecast vs Pro Forma 1 forecast Pro Forma 1 FY17 vs FY16 FY17 actual actual FY16 FY17 actual FY17 Variance Variance Revenue $m 211.2 241.2 289.5 37.1% 20.0% Gross Margin 15.5%
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS Kogan.com outperformed on all key financial metrics in comparison to FY16 and the FY17 Prospectus forecast. For personal use only REVENUE GROSS MARGIN PRO FORMA EBITDA1 $289.5m 290.0 18.5% 14.0 $13.2m 18.0% 17.9% 270.0 12.0 17.5% 250.0 17.0% 10.0 $241.2m 16.5% 230.0 8.0 $6.9m 16
Slide 8: Strategy
STRATEGY How we deliver value to our customers: For personal use only INDUSTRY LEADING IT PLATFORM & DATA DRIVEN CULTURE The Kogan brand is renowned for price leadership through digital efficiency. We believe ‘There is always a better way’ and our vision is to harness the power of technology and per
Slide 9: Who We Are
WHO WE ARE We have created a business model that allows us to be agile, bold and innovative. For personal use only 955,000 Active Customers 6.5 million Active Subscribers 9
Slide 10: Some Recent Awards
SOME RECENT AWARDS Kogan has received various awards and recognition in FY17. For personal use only Kogan won the People’s Choice Award at the Startrack Online Kogan TVs won the Canstar Value for Money Award Retail Industry Awards (ORIAS) “As a consumer brand, there is no better vote than the vote o
Slide 11: Building the Kogan Brand
BUILDING THE KOGAN BRAND In the twelve months to June 2017, the business achieved 36.0% growth in Active Customers. For personal use only Jun-16 vs Jun-17 Jun-16 Dec-16 Jun-17 Variance Active Customers 702,000 830,000 955,000 36.0% LTM ACTIVE CUSTOMERS NET PROMOTER SCORE1 1,000 Average 60.05 950 900
Slide 12: Building the Kogan Brand
BUILDING THE KOGAN BRAND Annual revenue per customer and gross profit per active customer are increasing. For personal use only ANNUAL REVENUE PER CUSTOMER1 CONVERSION RATE3 ANNUAL RETURN ON INVESTMENT IN MARKETING2 TRAFFIC - FREE (BRAND DRIVERS) VS PAID MARKETING 22% FREE SOURCES • Direct website t
Slide 13: Private Label Strategy
PRIVATE LABEL STRATEGY Private Label is a pillar of the business and remains a focus area for FY18 and beyond. In FY17 we invested IPO proceeds in replenishing inventory of best sellers. In FY18 our focus is on new products and range expansion. For personal use only STRONG YOY GROWTH IN PRIVATE LABE
Slide 14: Kogan Marketplace
KOGAN MARKETPLACE Partnering with select brands and distributors, giving them access to our 955,000 Active Customers, in addition to our marketing and online distribution capability. For personal use only Over 50,000 products from over 50 brands and distributors already listed. Our curated marketpla
Slide 15: Financial Update
For personal use only Financial Update David Shafer CFO/COO 15
Slide 16: Pro Forma Actual & Forecast Results
PRO FORMA ACTUAL & FORECAST RESULTS Higher than forecast revenue and gross margin drove an outperformance against FY17 Prospectus forecast Pro Forma EBITDA of 91.3%. For personal use only Prospectus Pro Forma $m forecast FY17 actual FY17 % Variance Gross Sales 254.8 308.8 21.2% OVERVIEW Revenue 241.
Slide 17: Pro Forma FY17 Results Compared to FY16
PRO FORMA FY17 RESULTS COMPARED TO FY16 Pro Forma EBITDA increased by 230.0% ($9.2 million) year on year. For personal use only Pro Forma Pro Forma OVERVIEW $m actual FY16 actual FY17 % Variance GTV growth of 47.4% versus Revenue GTV 227.0 334.5 47.4% growth of 37.1% is driven by Kogan Mobile Gross
Slide 18: Key Drivers of Kogan.com FY17 Financial Performance
KEY DRIVERS OF KOGAN.COM FY17 FINANCIAL PERFORMANCE For personal use only The business is utilising IPO proceeds to deliver on growth strategies, with the benefits beginning to be realised in FY17. Following the IPO, cash constraints were released and the business was able to implement RELEASE OF CA
Slide 19: Key Drivers of Kogan.com FY17 Financial Performance
KEY DRIVERS OF KOGAN.COM FY17 FINANCIAL PERFORMANCE For personal use only Focus on efficiencies, automation initiatives, Private Label and Kogan Mobile resulting in improved gross margins. Improvements in efficiency, automation initiatives, continual improvements to our ERP, expansion GROSS MARGIN I
Slide 20: FY17 Gross Profit Product & Business Mix
FY17 GROSS PROFIT PRODUCT & BUSINESS MIX For personal use only Private Label exclusive brands represent over 50% of Gross Profit. Kogan Mobile increased from 4.2% of gross profit in 1H17 to 7.0% for the full year. GROSS PROFIT MIX IN FY17 Travel 1.3% Other Income 1.2% OVERVIEW Mobile 7.0% Private La
Slide 21: New Verticals
NEW VERTICALS Kogan Travel and Kogan Mobile exceeded Prospectus Forecast Gross Sales by 27.8% and 140.0%, respectively. For personal use only Prospectus Variance to Variance $m Actual FY16 forecast FY17 Actual FY17 forecast YoY Gross sales1 Kogan Travel 4.8 5.4 6.9 27.8% 43.8% Kogan Mobile 0.5 1.5 3
Slide 22: Kogan Mobile
KOGAN MOBILE FY17 commission of $3.6 million (FY16: $0.5 million) and strong growth in Active Customers. For personal use only KOGAN MOBILE ACTIVE CUSTOMERS Strong commercial relationship with Vodafone translating into growth for Kogan Mobile. The unique model means that Vodafone is responsible for
Slide 23: Pro Forma Operating Costs
PRO FORMA OPERATING COSTS Operating costs as a % of revenue were 1pp higher than Prospectus Forecast, primarily driven by Marketing and People costs. Investment in marketing has helped to drive the outperformance in revenue versus Prospectus Forecast of 20.0% For personal use only PRO FORMA1 OPERATI
Slide 24: Net Asset Summary
NET ASSET SUMMARY At 30 June 2017, cash was $32.0 million following the IPO and repayment of debt in July 2016. For personal use only $m 30 Jun 17 CURRENT ASSETS Cash & Cash Equivalents 32.0 Trade & Other Receivables 2.7 Inventories 39.7 Strong balance sheet at 30 June 2017 with $32.0 million in cas
Slide 25: FY17 Statutory Operating Cash Flow
FY17 STATUTORY OPERATING CASH FLOW The business achieved Pro Forma operating cash conversion of 81.8% in FY17. For personal use only Statutory $m FY17 Statutory EBITDA 9.5 OVERVIEW Non-cash items in EBITDA 0.7 Transaction costs of share issue in EBITDA 3.0 The business generated operating cash flow
Slide 26: Outlook
For personal use only Outlook 26
Slide 27: Delivering Growth in FY18 & Beyond
DELIVERING GROWTH IN FY18 & BEYOND We expect continued brand growth and to continue to outperform underlying market growth in every portfolio business. For personal use only SELECTIVE & OPPORTUNISTIC M&A LAUNCH ADDITIONAL BUSINESS VERTICALS 27
Slide 28: Kogan NBN
KOGAN NBN • The expanded partnership with Vodafone Hutchison NBN FIXED-LINE MARKET (PREMISES, MILLIONS) Australia was announced in June 2017 to provide fixed-line For personal use only NBN plans and mobile broadband plans. 12.0 10.9 10.2 • Enhanced economics from the original Kogan Mobile 10.0 partn
Slide 29: Kogan Insurance
KOGAN INSURANCE • Kogan Insurance was launched in August 2017 in 2016 GROSS WRITTEN PREMIUMS - AUSTRALIA1 For personal use only partnership with Hollard Insurance Company. • The agreement, which is for an initial period of three years, allows Kogan Insurance to offer home, contents, landlord, car an
Slide 30: FY18 Outlook
FY18 OUTLOOK Positive outlook for FY18 due to trajectory in revenue, gross profit and strong growth in Kogan Mobile. For personal use only Following stronger than expected results in FY17, and the acceleration in growth in various parts of our portfolio, the Board will not be providing formal EBITDA
Slide 31: Dividend
DIVIDEND As a result of the significant outperformance in FY17, the Board has declared a fully franked final dividend of 3.80 cents per share, with a record date of 25 August 2017 and a payment date of 4 September 2017. For personal use only DPS (cents) Franking (%) Record date Payment date Final di
Slide 32: Q&A
For personal use only Q&A 32
Slide 33: Glossary
GLOSSARY 1Hxx: the six months ended 31 December 20xx 2Hxx: the six months ended 30 June 20xx For personal use only Active Customers: unique customers who have purchased in the last twelve months from X date, rounded to the nearest thousand. Active Subscribers: unique subscribers as at 30 June 2017,
Slide 34: Glossary
GLOSSARY NPATA: Net profit after tax and amortisation on the Dick Smith Assets. Private Label: products sold under brands owned by Kogan.com For personal use only Pro Forma EBITDA/results: represents the results of the business after Pro Forma adjustments, consistent with Prospectus Pro Forma, and r
Slide 35: FY17 Reconciliation of Gross Sales to Revenue
ANNEXURE 1 FY17 RECONCILIATION OF GROSS SALES TO REVENUE For personal use only At 30 June 2017, presales were $5.2 million, representing Gross Sales yet to be dispatched. $m FY17 Gross sales 308.8 Change in presales1 (1.4) Refunds and cancellations (17.9) Statutory revenue 289.5 Notes: 1. Change in
Slide 36: FY17 Gross Sales & Revenue by Portfolio Business
ANNEXURE 2 FY17 GROSS SALES & REVENUE BY PORTFOLIO BUSINESS For personal use only 96.4% of revenue was generated by the three Product Divisions. FY16 FY17 YoY revenue $m Gross Sales Revenue Gross Sales 1 Revenue growth % Private Label 80.3 77.1 97.5 93.1 20.8% Third Party International 87.9 83.7 126
Slide 37: Statutory Reconciliation to Pro Forma Results
ANNEXURE 3 STATUTORY RECONCILIATION TO PRO FORMA RESULTS For personal use only Pro Forma EBITDA of $13.2 million represents 191.3% of the full year Prospectus Forecast Pro Forma EBITDA of $6.9 million. Statutory Transaction Unrealised FX Pro Forma $m FY17 costs1 gain or loss2 actual FY17 Revenue 289