Bubs Australia Ltd. · ASX:BUB
Bubs Australia — Investor Presentation (July 2022)
48 slides from Bubs Australia's investor presentation, Jul 5, 2022
Slide 1: Capital Raise Investor Presentation
Capital Raise Investor Presentation 5 July 2022
Slide 2: Slide 2
Slide 3: Vision & Values
VISION & VALUES Creating new generations of happy & healthy GOODNESS VERY BEST We believe in wholesome, We believe in being thorough and healthy food and a positive uncompromising, sticking to our approach to life. ethics no matter what. HONESTY PLAYFULNESS We believe in 100% transparency, We believ
Slide 4: Disclaimer
INVESTOR PRESENTATION 5 July 2022 DISCLAIMER This investor presentation (Presentation) is dated 5 July 2022 and has been prepared by Bubs Australia Limited (ACN 060 094 742) (Bubs or the Company). By attending an investor presentation or briefing, or accepting, accessing or reviewing this Presentati
Slide 5: Disclaimer
INVESTOR PRESENTATION 5 July 2022 DISCLAIMER Investment risk An investment in Bubs shares is subject to known and unknown risks, some of which are beyond the control of Bubs and its directors. Bubs does not guarantee any particular rate of return or the performance of Bubs nor does it guarantee any
Slide 6: Disclaimer
INVESTOR PRESENTATION 5 July 2022 DISCLAIMER Disclaimer To the maximum extent permitted by law, Citigroup Global Markets Australia Pty Ltd and Bell Potter Securities Limited (together, the "Joint Lead Managers“), PAC Partners Securities Pty Ltd (“PAC Partners”) and Bubs and each of its respective re
Slide 7: Disclaimer
INVESTOR PRESENTATION 5 July 2022 DISCLAIMER No person is authorised to give any information or make any representation in connection with the Placement and Entitlement Offer which is not contained in this Presentation. Any information or representation not contained in this Presentation may not be
Slide 8: Contents
CONTENTS Executive Summary 9 Growth Strategy 10 Key Markets 14 - Australia 16 - China 17 - USA 20 Trading Update 28 Use of Proceeds 30 Timeline and Capital Structure 32 - Equity Raising Overview 33 - Indicative Timeline 35 Appendices 36 - Key Risks 37 - Underwriting Agreement 41 - International Offe
Slide 9: Executive Summary
INVESTOR PRESENTATION 30 June 2022 EXECUTIVE SUMMARY Bubs’ innovation and new market agility are key enablers for continued market share growth. An underwritten1 equity raising of approximately $63.0 million (the “Equity Raising”) at an offer price of $0.52 per New Share, comprising: – an institut
Slide 10: Growth Strategy
GROWTH STRATEGY
Slide 11: Strategic Overview
INVESTOR PRESENTATION 5 July 2022 STRATEGIC OVERVIEW Against an unfavourable macro setting, Bubs has returned the business to high growth with record revenues and strong momentum across all key business segments, delivering gross margin improvement and profitability. FINANCIAL ACHIEVEMENTS Record Re
Slide 12: Margin Accretive High Growth Pace to Continue
INVESTOR PRESENTATION 5 July 2022 MARGIN ACCRETIVE HIGH GROWTH PACE TO CONTINUE Now that a position of scale has been met with over $100M gross revenue as a base, the next phase of growth will be margin accretive, driving Underlying EBITDA improvement whilst maintaining a high growth rate. GROUP GRO
Slide 13: Business Diversification in the Face of Adversity
INVESTOR PRESENTATION 5 July 2022 BUSINESS DIVERSIFICATION IN THE FACE OF ADVERSITY Bubs is no longer reliant on Goat IMF¹ China sales as key revenue and margin driver. All 3 IMF products and 3 key markets are in high growth. By FY23, revenue and margin contribution is expected to be relatively even
Slide 14: Key Markets: Australia, China, USA
Australia China USA KEY MARKETS
Slide 15: Target Markets
INVESTOR PRESENTATION 5 July 2022 TARGET MARKETS Leveraging growth opportunities requires strategic local collaborations, innovation and team agility to convert market share in 3 major infant formula markets. AUSTRALIA CHINA USA NUMBER OF 294,000¹ 10,000,000¹ 3,605,000¹ BIRTHS / YEAR MARKET SIZE $30
Slide 16: Australia: Lead Challenger Brand
INVESTOR PRESENTATION 5 July 2022 AUSTRALIA: LEAD CHALLENGER BRAND Bubs remains fastest growing manufacturer1 in Australia outperforming the category, with +41.4% scan sales growth and a record 4.5% market share of the total infant formula category¹. Bubs® is the #1 Goat IMF brand in Australia² Reta
Slide 17: China: New Daigou Model Drives Profitable Growth
INVESTOR PRESENTATION 5 July 2022 CHINA: NEW DAIGOU MODEL DRIVES PROFITABLE GROWTH Alpha equity-linked strategic partnership, and the successful China launch of Bubs SupremeTM A2 Protein, has proven to be highly lucrative achieving five-fold growth YOY, whilst remaining our most profitable channel.
Slide 18: China: Channel Led Brand Conversion
INVESTOR PRESENTATION 5 July 2022 CHINA: CHANNEL LED BRAND CONVERSION Bubs ‘Daigou 2.0’ model brings brand and channel together, by incentivising the channel to recruit and switch their customers to Bubs products through C2C education and peer endorsement. VERTICALLY INTEGRATED BRAND POWER + CHANNEL
Slide 19: China: Mother and Baby Store Presence via O2O
INVESTOR PRESENTATION 5 July 2022 CHINA: MOTHER AND BABY STORE PRESENCE VIA O2O Penetration into Mother and Baby stores with Online-to-Offline (O2O) sales of English label products. Mother & Baby Stores Bubs Supreme A2 Protein range already in 400 Mother and Baby stores since May China launch, and
Slide 20: USA: Infant Formula Crisis and Category Disruption
INVESTOR PRESENTATION 5 July 2022 USA: INFANT FORMULA CRISIS AND CATEGORY DISRUPTION Unprecedented shock to infant formula supply chain has led to widespread shortage and consumer panic. The crisis is a top priority for the Biden Administration and the shortage is reported in daily headline news. In
Slide 21: USA: First Mover Advantage
INVESTOR PRESENTATION 5 July 2022 USA: FIRST MOVER ADVANTAGE VIDEO Given Bubs had launched Aussie Bubs Toddler Formula range in the USA in May 2020, the Company <<CLICK HERE>> was well placed to assist the U.S. Government in providing relief for American families in need. Agility in Action • 16 May:
Slide 22: USA: U.S. Government Engagement
INVESTOR PRESENTATION 5 July 2022 USA: U.S. GOVERNMENT ENGAGEMENT Bubs is privileged to work in collaboration with senior U.S. government officials to help alleviate the crisis. U.S. Government Engagement • Bubs management remain in frequent communication with the White House, Health and Human Servi
Slide 23: USA: Accelerated Distribution in Major Retailers
INVESTOR PRESENTATION 5 July 2022 USA: ACCELERATED DISTRIBUTION IN MAJOR RETAILERS Bubs® was able to fast track our route to market strategy, with products to be available in the four largest retailers of infant formula in the U.S. with 360,000 tins delivery to 5,000 stores across 34 States by mid-J
Slide 24: USA: Bubs Infant Formula Gets WIC Approval
INVESTOR PRESENTATION 5 July 2022 USA: BUBS INFANT FORMULA GETS WIC APPROVAL All six Bubs Infant Formula products are now eligible under USDA nationwide WIC waiver to participate in the Women Infants and Children (WIC) program to reach families most in need. Bubs WIC Participation “In California, 50
Slide 25: USA: Forecasted Volume
INVESTOR PRESENTATION 5 July 2022 USA: FORECASTED VOLUME Accelerated market access through a rapid build in demand with maintainable volume of scale. Expected volumes • June FY22: 2 planes ~180,000 tins (>$7M)1 • July FY23: 4 chartered planes @ ~360,000 tins (>$14M)1 • Aug – Mid Nov: Commercial Air/
Slide 26: USA: Long-Term Commitment to Market Access
INVESTOR PRESENTATION 5 July 2022 USA: LONG-TERM COMMITMENT TO MARKET ACCESS Identified as a strategic priority 2 years ago, recent events have fast-tracked USA by at least 18 months, and is now set to be a significant revenue and profit driver for the business going forward. PHASE 1 PHASE 2 PHASE 3
Slide 27: Fulfilling Increased Demand
INVESTOR PRESENTATION 5 July 2022 FULFILLING INCREASED DEMAND To meet our high growth objectives, a 2nd canning line is required to increase annual output from 10M to 30M tins. Realised plant capacity to triple capacity to ensure future demand is not limited • Deloraine facility was purpose built to
Slide 28: Trading Update
TRADING UPDATE
Slide 29: FY22 Financial Overview
INVESTOR PRESENTATION 5 July 2022 FY22 FINANCIAL OVERVIEW All key business segments are performing strongly, resulting in FY22 being a record year, more than doubling in size with over $100M in gross revenue. >$100M >$2.4m Forecasted FY22 Underlying EBITDA¹ ¹ Excludes non-cash equity compensation ex
Slide 30: Use of Proceeds
USE OF PROCEEDS
Slide 31: Use of Proceeds
INVESTOR PRESENTATION 5 July 2022 USE OF PROCEEDS ($million) 1. Working Capital • The Company optimised its working capital in FY22 while achieving >114% growth. Given the additional 18 accelerated and rapid market expansion, additional working capital is required to assist with the immediate scale
Slide 32: Timeline and Capital Structure
TIMELINE AND CAPITAL STRUCTURE
Slide 33: Equity Raising Overview
INVESTOR PRESENTATION 5 July 2022 EQUITY RAISING OVERVIEW • An underwritten1 Equity Raising of approximately $63.0 million comprising: – $32.4 million institutional placement (“Placement”); and EQUITY RAISING SIZE – $30.6 million 1-for-10.42 accelerated non-renounceable entitlement offer (“Entitleme
Slide 34: Equity Raising Overview
INVESTOR PRESENTATION 5 July 2022 EQUITY RAISING OVERVIEW Approximately $63.0 million equity raise, with $32.4 million institutional placement and $30.6 million entitlement offer. PRO FORMA BALANCE SHEET IMPACT ON SHARES ON ISSUE Pre-equity Post-equity ($million) Post-equity raise pro forma raise ra
Slide 35: Indicative Timetable
INVESTOR PRESENTATION 5 July 2022 INDICATIVE TIMETABLE Activity Date Trading halt and announcement of Equity Raising, Placement and Institutional Entitlement Offer opens Tuesday, 5 July 2022 Placement and Institutional Entitlement Offer closes Tuesday, 5 July 2022 Announcement of results of Placemen
Slide 36: Appendices
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Slide 37: Key Risks
INVESTOR PRESENTATION 5 July 2022 KEY RISKS There are a number of risks that are both specific to Bubs and its subsidiaries (Group) and of a general nature, which may affect the future operating and financial performance of the Group and the outcome of any investment in the Group. This section descr
Slide 38: Key Risks
INVESTOR PRESENTATION 5 July 2022 KEY RISKS Reliance on third parties generally As part of its ongoing commercial activities the Group enters into contracts with various third parties, including suppliers, processors, distributors and customers. The ability of these third parties to meet their commi
Slide 39: Key Risks
INVESTOR PRESENTATION 5 July 2022 KEY RISKS 2. COMPLIANCE AND REGULATORY RISKS Foreign regulatory risk and regulatory risk Laws and regulations affect the Group’s operations. There is a risk that a failure to comply with such laws or an adverse decision or change in policy by a regulatory authority
Slide 40: Key Risks
INVESTOR PRESENTATION 5 July 2022 KEY RISKS 3. FINANCIAL, MARKET AND COMPETITION RISKS Economic and market risks There are general risks associated with investments in equity capital such as Bubs shares. Share market conditions may affect the value of Bubs shares, regardless of their operating perfo
Slide 41: Underwriting Agreement
INVESTOR PRESENTATION 5 July 2022 UNDERWRITING AGREEMENT Bubs has entered into a conditional Underwriting Agreement with Citi and Bell Potter (the “Underwriters”) dated 5 July 2022 (“Underwriting Agreement”) under which the Underwriters have agreed to underwrite the Equity Raising, subject to the te
Slide 42: Underwriting Agreement
INVESTOR PRESENTATION 5 July 2022 UNDERWRITING AGREEMENT • any application to any government authority (including without any limitation any court or the takeovers panel, but excluding ASIC) for any order, declaration or other remedy or any government authority commencing an investigation of hearing
Slide 43: Underwriting Agreement
INVESTOR PRESENTATION 5 July 2022 UNDERWRITING AGREEMENT • a representation, warranty, undertaking or obligations given by Bubs in the Underwriting Agreement becoming not true correct or not being performed; • any aspect of the Equity Raising being not compliant with the Corporations Act, the ASX Li
Slide 44: Underwriting Agreement
INVESTOR PRESENTATION 5 July 2022 UNDERWRITING AGREEMENT The issue size is approximately 121.2 million shares or 19.8% of the existing shares on issue. If an Underwriter is required to take up shares on issue which would otherwise cause it to breach or notify under these provisions then, for the pur
Slide 45: International Offer Restrictions
INVESTOR PRESENTATION 5 July 2022 INTERNATIONAL OFFER RESTRICTIONS This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares
Slide 46: International Offer Restrictions
INVESTOR PRESENTATION 5 July 2022 INTERNATIONAL OFFER RESTRICTIONS New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the “FMC Act”). The New Shares are not being offered to the public within
Slide 47: International Offer Restrictions
INVESTOR PRESENTATION 5 July 2022 INTERNATIONAL OFFER RESTRICTIONS Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange or on any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other o
Slide 48: Bubs Australia
ASX: BUB Bubs Australia Growing Generation Joy