Slide 1: 1HFY20 Results Presentation
1HFY20 RESULTS PRESENTATION 18 FEBRUARY 2020
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. Important notice and disclaimer: This Presentation contains a general summary of the activities of Kogan.com Ltd (Kogan.com)
Slide 3: Contents
CONTENTS CEO Update Page 4 - 16 Financial Update Page 17 - 27 Outlook Page 28 - 32 3
Slide 4: CEO Update
CEO Update Ruslan Kogan Founder, CEO and Executive Director 4
Slide 5: 1HFY20 Highlights
1HFY20 HIGHLIGHTS We achieved a record half-year Gross Sales2 and Gross Profit result in the history of the Business. • Gross Sales2 of $322.9 million outperformed the prior corresponding half-year by 16.4%. FINANCIAL PERFORMANCE Gross Profit, Adjusted EBITDA1 and NPAT also outperformed the prior ye
Slide 6: 1HFY20 Results
1HFY20 RESULTS Adjusted EBITDA4 of $18.2 million exceeded 1HFY19 Adjusted EBITDA4 by 35.2% 1HFY19 vs 1HFY20 $m 1HFY192 1HFY20 Variance Gross Sales1 277.3 322.9 16.4% Revenue3 231.8 219.5 (5.3%) Gross Profit 45.1 49.9 10.6% Gross Margin 19.5% 22.7% 3.3pp/16.8% Adjusted EBITDA4 13.4 18.2 35.2% NPAT 7.
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS Operating Leverage allowed Kogan.com to grow Adjusted EBITDA2 at a faster rate than Gross Sales1 and Gross Profit. GROSS SALES1 GROSS PROFIT ADJUSTED EBITDA2 NPAT 16.4% Growth 10.6% Growth 35.2% Growth 20.8% Growth 322.9 49.9 18.2 8.9 45.1 277.3 7.4 13.4 $m $m $m $m 1HFY19 1HFY2
Slide 8: Who We Are
WHO WE ARE We have built a company that allows us to be agile, bold and innovative. Our growing portfolio of businesses provides diversification of income, making us a more resilient Business. 1,750 1,500 Active Customers (000's) 1,250 1,000 1,699,000 750 500 250 Active Customers 0 1HFY17 2HFY17 1HF
Slide 9: Dedicated to Serve Our Customers
DEDICATED TO SERVE OUR CUSTOMERS We continue to deliver a high level of customer satisfaction. NET PROMOTER SCORE1 100 Average NPS: 59.7 How do we continue to delight our customers? 50 • Offer a wide range of in-demand products & services at the best prices 0 • Execute fast & efficient delivery with
Slide 10: Kogan Kinetics
KOGAN KINETICS Our mission is to make the most in-demand products and services more affordable and accessible. ENHANCED CONSUMER OFFERING CUSTOMER & BRAND GROWTH • Broader selection • Scale of efficiencies • Improved pricing • Customer acquisition & retention The Kogan.com Virtuous Cycle MORE PARTNE
Slide 11: Building the Kogan Brand
BUILDING THE KOGAN BRAND The majority of our traffic continues to be driven by customer loyalty and brand recognition. ROI on marketing investment has improved significantly. The Company has achieved steady growth in customer orders and Gross Sales per customer1. LTM CUSTOMER ORDERS & AVERAGE GROSS
Slide 12: Building the Kogan Platform
BUILDING THE KOGAN PLATFORM UNRIVALLED TECHNOLOGY DELIVERY Delivering over 15 websites and mobile applications across our brands over the last twelve months. Kogan Credit Card Kogan Energy Kogan Super Kogan Homeloans Kogan Mobile New Zealand Kogan Smarter Home 12
Slide 13: Building the Kogan Platform
BUILDING THE KOGAN PLATFORM ALGORITHMS & A.I. POWER SCALE Kogan’s proprietary technology processes millions of events each day to achieve industry leading personalisation and optimisation across: • A.I. powered recommendations on site and in outbound marketing; • Dynamic and personalised marketing m
Slide 14: Exclusive Brands Strategy
EXCLUSIVE BRANDS STRATEGY Exclusive Brands achieved Revenue growth of 17.0% in 1HFY20 vs 1HFY19, continuing to meet strong consumer demand across a wide-array of products. CONTINUED YoY GROWTH IN EXCLUSIVE BRANDS REVENUE IN 1HFY20 17.0% Growth Exclusive Brands growth rate increased YoY 100.0 and ben
Slide 15: Kogan Marketplace
KOGAN MARKETPLACE Customers and sellers alike are loving our new marketplace, resulting in Gross Sales1 increasing by 44.6% QoQ. The platform is also resonating with sellers, with seller numbers growing by 55.2% QoQ. MARKETPLACE GROSS SALES1 QoQ NUMBER OF MARKETPLACE SELLERS QoQ 44.6% Growth 55.2% G
Slide 16: Kogan First
KOGAN FIRST Kogan First provides members with a suite of consumer benefits, creating a large and growing community of loyal customers. KOGAN FIRST MEMBERS1 Kogan First grew rapidly through the period, demonstrating that customers are switching on to the value the loyalty program delivers. Members ha
Slide 17: Financial Update
Financial Update David Shafer CFO, COO and Executive Director 17
Slide 18: 1HFY20 Results Compared to 1HFY19
1HFY20 RESULTS COMPARED TO 1HFY19 Adjusted EBITDA4 growth to $18.2 million represents an increase of 35.2%. $m 1HFY191 1HFY20 Variance % OVERVIEW Gross Sales2 277.3 322.9 16.4% Revenue 231.8 219.5 (5.3%) Gross Sales2 reflects the total transactional value of Kogan Retail, Cost of sales (186.7) (169.
Slide 19: Key Drivers of Kogan.com 1HFY20 Financial Performance
KEY DRIVERS OF KOGAN.COM 1HFY20 FINANCIAL PERFORMANCE Ongoing implementation of our strategy to grow our brand, grow our product selection, accelerate New Verticals, expand Exclusive Brands offerings and deliver improved customer experience. The Business achieved growth in Active Customers in the la
Slide 20: Key Drivers of Kogan.com 1HFY20 Financial Performance
KEY DRIVERS OF KOGAN.COM 1HFY20 FINANCIAL PERFORMANCE Kogan Internet customers grew 344.4% year-on-year, resulting in commission-based revenue NEW VERTICALS increasing by 642.0% over the same time period. Kogan Mobile Australia also enjoyed growth, with customers increasing by 5.1% and commission- b
Slide 21: Improving Operating Leverage
IMPROVING OPERATING LEVERAGE 1HFY17 1HFY18 1HFY191 1HFY20 Revenue 100.0% 100.0% 100.0% 100.0% Gross Margin 18.0% 19.4% 19.5% 22.7% Delivered Margin (after all distribution & storage costs) 14.2% 16.1% 15.3% 17.8% Marketing costs 3.7% 4.5% 5.0% 4.0% Contribution Margin 10.5% 11.6% 10.3% 13.8% Fixed c
Slide 22: 1HFY20 Gross Profit Product & Business Mix
1HFY20 GROSS PROFIT PRODUCT & BUSINESS MIX New avenues of Gross Profit growth have been developed through Kogan Marketplace and Advertising income. 1HFY20 GROSS PROFIT MIX 7.2% Our core product ranges continue to be the 5.3% largest contributors to Gross Profit, with Exclusive Brands and Third-Party
Slide 23: Kogan Mobile & Kogan Internet
KOGAN MOBILE & KOGAN INTERNET Kogan Mobile Australia and Kogan Internet continue to achieve growth in customers. Kogan Mobile NZ launched during 1HFY20. KOGAN INTERNET CUSTOMERS1 Kogan Internet commission-based revenue grew 642.0% year-on-year driven by customer growth of 344.4%. Management are acti
Slide 24: Kogan Super, Kogan Energy, Kogan Credit Cards
KOGAN SUPER, KOGAN ENERGY, KOGAN CREDIT CARDS Recently launched Kogan Super, Kogan Energy and Kogan Credit Cards are growing strongly. KOGAN SUPER FUNDS UNDER MANAGEMENT1 KOGAN ENERGY CUSTOMERS2 Funds Under Management Customers Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Sep-19 Oct-19 Nov-19 Dec-19 KOGAN CRE
Slide 25: Kogan Insurance
KOGAN INSURANCE Kogan Insurance commission-based revenues for 1HFY20 grew by 44.0% year-on-year. KOGAN INSURANCE COMMISSION-BASED REVENUES 500,000 400,000 Commission-based revenue ($) 300,000 200,000 100,000 0.0 1HFY19 1HFY20 Kogan Insurance, which includes our suite of insurance products, continues
Slide 26: Net Assets
NET ASSETS A strong balance sheet at 31 December 2019 with $34.1 million of cash and an undrawn debt facility. $m Dec-19 CURRENT ASSETS Cash 34.1 Trade and other receivables 9.4 Inventories 94.7 Total current assets 138.2 Inventories held at 31 Dec 19 was comprised of: NON-CURRENT ASSETS • $81.6 mil
Slide 27: 1HFY20 Statutory Cash Flow
1HFY20 STATUTORY CASH FLOW $000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 250,274 Payments to suppliers and employees (228,007) Interest received 32 Finance costs paid (262) Income tax paid (4,658) Cash held by the Business increased by 24.1% to $34.1 million at the end of 1HFY20.
Slide 28: Outlook
Outlook kogan.com EZ
Slide 29: 2HFY20 & Beyond
2HFY20 & BEYOND In 2HFY20 we expect continued brand growth and deeper market penetration of more mature portfolio businesses alongside continued expansion of the Kogan Marketplace platform and traction in many of our New Verticals. SELECTIVE & OPPORTUNISTIC M&A LAUNCH ADDITIONAL BUSINESS VERTICALS 2
Slide 30: Portfolio Business - Market
PORTFOLIO BUSINESS - MARKET Achieved greater than Portfolio Business Partner Launch date Market size 1% market share? Kogan Retail n/a FY06 $23.7 billion1 ✓ Kogan Marketplace n/a Launched 3QFY19 $23.7 billion1 - Kogan Internet Vodafone Launched 4QFY18 15.5 million premises2 - Kogan Insurance Hollard
Slide 31: 2HFY20 Outlook
2HFY20 OUTLOOK 2HFY20 will see the scaling up of Kogan Marketplace and New Verticals, further growing our Active Customer base. Consistent with prior years, the Company will not be providing formal EBITDA guidance for 2HFY20. However, the Company will provide regular Business updates during the half
Slide 32: Dividend
DIVIDEND Kogan.com raised $32.0 million (after offer costs) in its IPO in 2016, and has paid more than $32.0 million in fully franked dividends over the past 3 years, since IPO. The Board has declared a fully franked Interim Dividend of 7.5 cents per Share in respect of 1HFY20. Kogan.com announced a
Slide 33: Glossary
GLOSSARY 1HFYxx: the six months ended 31 December 20xx. 2HFYxx: the six months ended 30 June 20xx. 1QFYxx: the three months ended 30 September 20xx. 2QFYxx: the three months ended 31 December 20xx. 3QFYxx: the three months ended 31 March 20xx. 4QFYxx: the three months ended 30 June 20xx. Active Cust
Slide 34: Glossary
GLOSSARY Kogan Insurance: Vertical launched in 1QFY19 offering Insurance online. Kogan Internet: Vertical launched in 4QFY18 offering NBN plans via Vodafone’s fixed line NBN network. Kogan Life: Vertical launched in 4QFY18 offering life insurance online. Kogan Marketplace: A platform launched in 3QF
Slide 35: Annexure 1: 1HFY20 Growth by Portfolio Business
ANNEXURE 1 1HFY20 GROWTH BY PORTFOLIO BUSINESS Revenue growth was achieved across Exclusive Brands and a number of our New Verticals, offset by a decline in Third-Party Brands which has partly been impacted by Kogan Marketplace growth. 1HFY20 1HFY19 $m Revenue Revenue YoY Revenue growth % Exclusive
Slide 36: Annexure 2: 1HFY19 Impacts of AASB 16 Leases
ANNEXURE 2 1HFY19 IMPACTS OF AASB 16 Leases Restated As reported at 31 AASB 16 AASB 16 31 December 2018 $m December 2018 adjustment 1 adjustment 2 for AASB 16 impact Revenue 231.8 231.8 Cost of Sales (186.7) (186.7) Gross Profit 45.1 45.1 Gross Margin % 19.5% 19.5% Operating costs (32.4) 0.3 (32.2)