Baby Bunting Group Ltd. · ASX:BBN
Baby Bunting — Investor Presentation (August 2021)
28 slides from Baby Bunting's investor presentation, Aug 13, 2021
Slide 1: Full Year Results Presentation, year ended 27 June 2021
Full year ended 27 June 2021 Results Presentation Matt Spencer CEO & Managing Director Darin Hoekman CFO 13 August 2021
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 (13 August 2021). The information contained in this presentation is for general background infor
Slide 3: Our vision is to be the most loved baby retailer for every family, everywhere
Our vision is to be the most loved baby retailer for every family, everywhere 3
Slide 4: FY21 financial highlights
FY21 financial highlights 10% EBITDA (1) margin achieved in 2H FY21 FY20 Growth % $m $m Total Sales Growth 468.4 405.2 15.6% - Comparable store sales growth (2) 11.3% 4.9% - Total Online sales 90.8 58.9 54.2% - Total Online % of sales 19.4% 14.5% Gross Profit Improvement 173.7 146.9 18.3% - Gross Pr
Slide 5: FY21 operating highlights
FY21 operating highlights Keeping our Team & customers safe (LTIFR (1) < 10) All stores remained open during lockdowns No JobKeeper payments or rent relief received Private Label & Exclusive Product sales 41.4% of total sales Trading online in New Zealand 4 new stores opened – growing ou
Slide 6: The strongest nursery brand in the country
the strongest nursery brand in the country Brand BrandAwareness Awareness(1)(1) Brand Brand Preference Preference (1) (2) Net Promoter Score Unaided brand recall is 88%, ...and we are the preferred …providing exceptional customer significantly higher than any retailer place to shop for baby hardgood
Slide 7: Welcome to the family. Introducing our new loyalty program.
Welcome to the family. Introducing our new loyalty program. • Launched first phase of our new loyalty program, ‘Baby Bunting family’, during the year • 1.1m loyalty members with ~600,000 members active during the year. Loyalty members re-engage with subsequent births • Loyalty members spend 36% more
Slide 8: Transformation – investing to grow
Transformation – investing to grow Acquisition of Services Merchandise Financial Point of Sale Business Planning & ERP Acquisition of some of our car Implementation of a robust tool to Review of POS & ERP seat installation businesses assist in forward planning activities systems Demand Planning Data
Slide 9: COVID-19
COVID-19 COVID impacts across the business • Around 6,000 births per week • All stores remain open providing an open and spacious environment for customers to shop for their essential needs Supporting our Team • Paid COVID-19 leave & vaccination leave to support team members • Recognising the great
Slide 10: Environmental, social & governance (ESG) strategy
Environmental, social & governance (ESG) strategy Baby Bunting is a values driven organisation that seeks to be a good and responsible corporate citizen. As we grow, we continue to consider the ways in which we operate and the impact we have. Our ESG strategy has three core commitments: Our People B
Slide 11: Leads the industry in a fragmented market
leads the industry in a fragmented market Baby Bunting $2.5bn estimated addressable market (1) Baby Bunting store numbers by state (breakdown by category) Other $0.2 billion Cots, mattresses 100+ STORE Food, Nappies, and nursery furniture NETWORK PLAN Clothing $0.6 billion $0.3 billion 12 Car seats
Slide 12: Launching into New Zealand
launching into New Zealand 2 stores in FY22 10+ STORE NETWORK PLAN COVID-19 has delayed opening of stores to 2H FY22 Factors supporting our decision NZ$450m+(1) New Zealand market opportunity Customer research identified • 76% of respondents surveyed said they will shop with us • There are no large
Slide 13: Market share growth accelerates
Market share growth accelerates 15.6% 11.3% 29.2% total comparable 2 year total sales growth sales growth sales growth Headline sales growth accelerates to 15.6% Total Sales ($m) 500.0 Comp % $468.4 • Strong comparable store sales growth of 11.3% 480.0 460.0 440.0 $405.2 420.0 • Online sales (includ
Slide 14: Investment in Digital
Investment in Digital $100.0 $90.8 25.0% $90.0Online Sales ($m) 23.0% Sales $m Total online sales of $90.8m, up 54.2%, $80.0 % of total sales 21.0% $70.0 19.0% now 19.4% of sales $60.0 $58.9 19.4% 17.0% $50.0 $42.3 15.0% • Website visits continue to grow, ~30 million sessions for $40.0 14.5% 13.0% t
Slide 15: Gross Margin improvement up 83 bps to 37.1%
Gross Margin improvement up 83 bps to 37.1% Gross Profit $200.0 40.0% Gross Margin % up up 119 bps vs pcp in 2H $180.0 GP ($m) GP % $173.7 39.0% Competitive pricing with the widest range delivering $160.0 $146.9 38.0% great value to our customers: $140.0 $126.7 $120.0 37.0% • Investment in value - i
Slide 16: CODB leverage achieved
Cost of Doing Business metrics (% sales) (1) CODB leverage achieved Store expenses Store expenses of 19.2% of sales decreased by 94 bps (vs pcp) 19.2% 20.1% 20.1% 20.1% 19.2% • No JobKeeper or rent assistance • Labour ratios leveraged • Operational efficiencies achieved 0.0% FY17 FY18 FY19 FY20 FY21
Slide 17: Summary Pro Forma Income Statement
Summary Pro Forma Income Statement Total sales of $468.4m, up 15.6% vs pcp • Comparable store sales growth of 11.3% Summary Pro Forma Income Statement Pro Forma Pro Forma Change FY21 FY20 Gross margin of 37.1%, up 83 bps above pcp $ million Sales 468.4 405.2 15.6% Cost of sales (294.7) (258.3) CODB
Slide 18: Statement of Financial Position
Statement of Financial Position Statutory Statutory 27-Jun-21 28-Jun-20 $ million • Inventory increase of $14.9m compared to 28 June Cash and cash equivalents 10.9 13.3 2020, noting we were $10m below plan in the prior Inventories 80.0 65.1 year due to COVID impacts. $3m of inventory Plant and equip
Slide 19: Cash Flow
Cash Flow FY21 FY20 $ million EBITDA (1) 43.5 33.7 • Change in working capital reflects increase in Movement in working capital (1) (15.4) 8.8 inventories, cycling lower than usual stock holdings from Tax Paid (5.3) (7.2) prior year Net cash flow from operating activities 22.8 35.3 • Investment expe
Slide 20: Stores deliver great returns
Stores deliver great returns • Mature store ROIC now on average exceeding 100%, up from >80% pcp • Mature store EBITDA margin 19%, up 200 bps from FY20 driven by gross margin improvements and operational efficiency initiatives • New stores opened – Westfield Knox (Vic), Castle Towers (NSW), Coffs Ha
Slide 21: Exciting times ahead
Exciting times ahead We remain focused on executing our growth strategy of growing market share: • Completing the deployment of our new headless e-commerce architecture • Phase 2 of the ‘Baby Bunting family’ loyalty program launching • Building out our network to 100+ stores, including alternative s
Slide 22: Baby goods are essential & less discretionary in nature
Baby goods are essential & less discretionary in nature ~300,000 babies born each year There has been an uptick in 12-week Medicare (1) scan data year-on-year • Maternity & baby goods are less All 12-week Medicare (1) scan volumes up on pcp discretionary in nature • Essential product purchases up 13
Slide 23: Essential & non-discretionary category
Essential & non-discretionary category • Essential purchases continue through lockdown • Purchasing remains resilient around lockdowns • After lockdowns, sales recovered quickly to pre-lockdown run rates • Sales are not lost, they are temporarily deferred Parents with young Shopper Type 1st Trimeste
Slide 24: FY22 outlook
FY22 outlook COVID lockdowns affect sales timing No. of stores impacted by lockdowns by week (FY22) Stores not impacted by lockdowns As at 12 August 2021, comparable store sales growth: Stores impacted by lockdowns YTD Comp % • -6.4% year-to-date, impacted by current stay-at-home orders 100% 5.0% •
Slide 25: Appendices
Appendices 25
Slide 26: Appendix 1: Statutory - Pro Forma Income Statement Reconciliation
Appendix 1: Statutory - Pro Forma Income Statement Reconciliation FY2021 FY2020 Statutory Add Pro Forma Statutory Add Pro Forma FY21 Pro Forma Adj (1) FY21 FY20 Pro Forma Adj (1) FY20 $ million Sales 468.4 468.4 405.2 405.2 Cost of sales (294.7) (294.7) (258.3) (258.3) Gross Profit 173.7 173.7 146.9
Slide 27: Appendix 2: AASB 16 Transition Impact - Pro Forma Income Statement
Appendix 2: AASB 16 Transition Impact - Pro Forma Income Statement FY2021 FY2020 Reversal of AASB 16 Reversal of AASB Pro Forma Depreciation Add Operating Pre-AASB Pro Forma 16 Depreciation Add Operating Pre-AASB FY21 and Interest Lease Expenses 16 FY21 FY20 and Interest Lease Expenses 16 FY20 $ mil
Slide 28: 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
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