Baby Bunting Group Ltd. · ASX:BBN
Baby Bunting — FY2023 Earnings Presentation
26 slides from Baby Bunting's earnings presentation, Aug 11, 2023
Slide 1: FY23 Investor Presentation
FY23 Investor Presentation 11 August 2023 Darin Hoekman Acting Chief Executive Officer 1
Slide 2: Important notice and disclaimer
Investor Presentation 2023 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 (11 August 2023). The information contained in this presentation is f
Slide 3: Supporting new & expectant parents for over 40 years
Supporting new & expectant parents for over 40 years
Slide 4: FY23 Pro Forma Financial Summary
Investor Presentation 2023 FY23 Pro Forma(1) Financial Summary – 52 weeks Sales Group EBITDA(2) Full Year Dividend $515.8m $31.2m down 38.2% vs pcp 7.5cps Total sales growth 1.7% 6.0% of sales down 51.9% vs pcp Comparable store sales growth -3.6% Final dividend 4.8 cps Gross Profit % Group NPAT Free
Slide 5: FY23 Operating Summary
Investor Presentation 2023 FY23 Operating Summary 7 new stores opened (plus 1 relocation) – 6 new stores with positive earnings contribution throughout the year Marketplace launched in June ‘23 New Zealand store operations commenced, opened our first store in Auckland (Aug ‘22) and expanded ou
Slide 6: Baby Bunting is the clear leader in our category
Investor Presentation 2023 Baby Bunting is the clear leader in our category Strong underlying fundamentals with growth upside • ~300,000 births per annum in Australia • Market leading unaided brand awareness at 85% (1) • Highly engaged customer base with ~750k active customers (+6% vs pcp) and NPS o
Slide 7: Standing out in a fragmented competitive landscape
Investor Presentation 2023 standing out in a fragmented competitive landscape Baby Bunting current store numbers by state & country Drivers of competitive advantage Market leader boasting a national footprint with AU target +110 70 Australian stores (NZ: 1) and a store network stores plan of +120 st
Slide 8: Sustainability
Investor Presentation 2023 Sustainability Baby Bunting and sustainability Our ESG strategy is based around the following three pillars: • Our People – creating an equitable, inclusive and safe workplace where our team members can thrive. With a focus on being a parent friendly organisation. • Our Co
Slide 9: Sales performance
Investor Presentation 2023 Sales performance +1.7% -3.6% +42.4% ~750k total comparable 4-year sales active loyalty Total Sales ($m) sales sales growth members (1) growth growth (pre-COVID) (FY22 705k) $560.0 $507.3 $515.8 Sales growth slowing in 2H reflecting more difficult $540.0 $520.0 $500.0 $468
Slide 10: Gross margin
Investor Presentation 2023 Gross margin Focus on value everyday Margin improvement delivered in 2H • Drivers of 2H FY23 margin improvement: • Loyalty enhancements: $50 minimum spend for redemption transactions • Online order routing changes reducing number of split orders • Domestic freight efficien
Slide 11: CODB Overview
Investor Presentation 2023 CODB ($m) CODB Overview Store Expenses Administrative Expenses 60.0 20.0 CODB of $161.7m (1) up $16.5m vs pcp including: 49.1 53.5 53.8 18.0 18.1 47.4 15.8 16.5 50.0 16.0 14.6 • New and annualising stores $7.5m, delivering 40.0 14.0 ~$30m of sales in FY23 and $1.2m of EBIT
Slide 12: Stores continue to deliver strong returns
Investor Presentation 2023 Stores continue to deliver strong returns Both ROIC & EBITDA margins well above pre-COVID levels • FY23 mature store ROIC on average >100% (vs pre-COVID FY19: >70%) • Mature store EBITDA margin ~19%, down ~100 bps from FY22 noting that gains made during COVID have been lar
Slide 13: New Zealand: NZ$450m+ addressable market opportunity
Investor Presentation 2023 New Zealand: NZ$450m+ addressable market opportunity • Our first store in Albany, Auckland, opened in August 2022 and is Auckland now run rating at A$4.5m annualised sales with positive contribution Albany through 2H FY23 First store opened August 2022 • 3 new stores antic
Slide 14: Growing our customer spend
Investor Presentation 2023 Growing our customer spend Significant opportunity to grow engagement & spend Customer Revenue Distribution • 85% of transactions are attributed to our Top 10% loyalty customers 10%-20% • Our loyalty program provides rich insights 20%-30% about our customers preferences an
Slide 15: Transformation program supporting long-term growth
Investor Presentation 2023 Transformation program(1) supporting long-term growth Project Project features Status Acquisition of Services Business • 146,000 car seat installations installed in FY23: 18.5% CAGR since FY19 • Platform for future B2B growth Brand modernisation • Roll-out of new brand c
Slide 16: Summary Pro Forma Income Statement
Investor Presentation 2023 Summary Pro Forma Income Statement $ million Pro Forma Pro Forma Change Total sales of $515.8m, up 1.7% vs pcp FY23 FY22 • Comparable store sales growth of -3.6%, Sales 515.8 507.3 1.7% Comp growth % -3.6% 5.0% cycling 5.0% pcp Cost of sales (322.8) (311.5) • 1H comp growt
Slide 17: Statement of Financial Position
Investor Presentation 2023 Statement of Financial Position Statutory Statutory $ million FY23 FY22 • Inventory well managed, $1.3m increase year-on-year Cash & cash equivalents 5.0 12.2 includes: Inventories 98.0 96.7 • ~$7m increase for 8 new stores (incl. Christchurch) Plant and equipment 29.5 30.
Slide 18: Cash Flow
Investor Presentation 2023 Cash Flow $ million FY23 FY22 • Working capital increase moderate despite ~$7m EBITDA (1) 31.2 50.5 investment in new store inventory Movement in working capital (1.0) (9.5) Tax Paid (4.7) (4.9) • Investment expenditure of $13.5m includes Net cash flow from operating activ
Slide 19: Investor Presentation 2023
Investor Presentation 2023 19
Slide 20: Introducing Marketplace on babybunting.com.au
Investor Presentation 2023 Introducing Marketplace on babybunting.com.au The one stop shop for baby goods & growing families in Australia More products, more brands, more suppliers, and more choice • With ~30 million website visitations a year and <10% share of a $1.5 billion online baby goods marke
Slide 21: Priorities
Investor Presentation 2023 Priorities Open 5 new stores in FY24 - expand our store network to 110+ AU stores (10+ NZ) Grow brand awareness and market share through expansion of store network in New Zealand Continue to explore sustainable cost reductions across the business Investment in Priv
Slide 22: Trading update
Investor Presentation 2023 Trading update 110+ STORE Last 6 weeks of trade: NETWORK • Total sales down 4.0%, cycling +19.3% pcp PLAN (AU) • Comparable store sales down 9.0%, cycling +15.3% pcp Outlook With the continued economic uncertainty and challenging trading environment, FY24 earnings guidance
Slide 23: Appendices
Appendices 23
Slide 24: Appendix 1: Statutory - Pro Forma Income Statement Reconciliation
Investor Presentation 2023 Appendix 1: Statutory - Pro Forma Income Statement Reconciliation FY23 FY22 Statutory Add Pro Forma Statutory Add Pro Forma FY23 Pro Forma Adj (1) FY23 FY22 Pro Forma Adj (1) FY22 $ million Sales 524.3 (8.5) (a) 515.8 507.3 507.3 Cost of sales (328.1) 5.2 (322.8) (311.5) (
Slide 25: Appendix 2: AASB 16 Transition Impact - Pro Forma Income Statement
Investor Presentation 2023 Appendix 2: AASB 16 Transition Impact - Pro Forma Income Statement FY23 FY22 Reversal of AASB Reversal of AASB 16 Pro Forma 16 Depreciation Add Operating Pre-AASB 16 Pro Forma Depreciation and Add Operating Pre-AASB 16 FY23 and Interest Lease Expenses FY23 FY22 Interest Le
Slide 26: Glossary
Investor Presentation 2023 Glossary Comparable Store Sales • Calculated as a percentage change of the total sales generated from stores (including Growth 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 w