Slide 1: FY18 Results Presentation
For personal use only FY18 RESULTS PRESENTATION 17 AUGUST 2018
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 - 13 Financial Update Page 14 - 25 Outlook Page 26 - 30 3
Slide 4: CEO Update
For personal use only CEO Update Ruslan Kogan Founder & CEO 4
Slide 5: FY18 Highlights
FY18 HIGHLIGHTS Kogan.com more than doubled earnings in FY18 compared with FY17, and has laid the foundation for future growth in both existing Product Divisions and New Verticals by growing the Kogan brand and customer base and entering For personal use only into new strategic partnerships. FINANCI
Slide 6: FY18 Results
FY18 RESULTS EBITDA of $26.0 million exceeded FY17 EBITDA1 by 108.0%. For personal use only FY18 vs FY17 FY17 FY18 Variance GTV 334.5 492.6 47.3% Revenue $m 289.5 412.3 42.4% Gross Margin 17.9% 19.5% 1.6pp/8.9% EBITDA1 $m 12.5 26.0 108.0% LTM REVENUE Notes: 1. The FY17 Pro Forma results represent th
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS Kogan.com has more than doubled earnings, again. Kogan.com has grown its market share to now represent ~2% of Australian online retail2. For personal use only REVENUE GROSS PROFIT EBITDA1 FY16 FY17 FY18 FY16 FY17 FY18 Pro Forma FY16 Pro Forma FY17 FY18 Notes: 1. The FY17 Pro For
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 enables us to scale with minimal capital requirements. For personal use only 1,388,000 Active Customers Additional Channels 8
Slide 9: Some Recent Awards
SOME RECENT AWARDS Kogan has received various awards and recognition in FY18. For personal use only Back to back winner of the People’s Choice Award at the Kogan TVs won the Televisions 2018 Value Australia Post Online Retail Industry Awards (ORIAS) For Money Award “Aussie brand Kogan was the only O
Slide 10: Kogan Kinetics: Our Virtuous Cycle
KOGAN KINETICS OUR VIRTUOUS CYCLE For personal use only CUSTOMER & BRAND GROWTH • Scale efficiencies • Customer acquisition & retention ENHANCED CONSUMER MORE PARTNERS OFFERING & PRODUCTS • Broader selection • More brands • Improved pricing • Additional verticals • Top tier manufacturing partners 10
Slide 11: Building the Kogan Brand
BUILDING THE KOGAN BRAND In the twelve months to June 2018, the business achieved 45.3% growth in Active Customers2. For personal use only Jun-17 vs Jun-18 Jun-17 Dec-17 Jun-18 Variance Active Customers 955,000 1,166,000 1,388,000 45.3% ACTIVE CUSTOMERS NET PROMOTER SCORE1 Notes: 1. Net Promoter Sco
Slide 12: Building the Kogan Brand
BUILDING THE KOGAN BRAND As our consumer offer improves, average revenue per customer is trending up, and a large percentage of traffic continues to come from free sources. For personal use only ANNUAL REVENUE PER CUSTOMER1 CONVERSION RATE3 LTM RETURN ON INVESTMENT IN MARKETING2 TRAFFIC - FREE (BRAN
Slide 13: Exclusive Brands Strategy
EXCLUSIVE BRANDS STRATEGY Exclusive Brands continue to demonstrate strong growth, as we continue to meet strong consumer demand across a wide-array of products. For personal use only STRONG YOY GROWTH IN EXCLUSIVE BRANDS REVENUE Our Exclusive Brands business benefits from: 39.6% • Full control of th
Slide 14: Financial Update
For personal use only Financial Update David Shafer CFO/COO 14
Slide 15: FY18 Results
FY18 RESULTS Kogan.com is focussed on building a price leading retailer of goods and services, that can sustainably deliver growing profits to shareholders by driving digital efficiency and maintaining low overheads. For personal use only $m FY18 GTV 492.6 Gross Sales 433.2 OVERVIEW Revenue 412.3 GT
Slide 16: FY18 Results Compared to FY17
FY18 RESULTS COMPARED TO FY17 As gross margin expands, and overheads are kept relatively stable, the business is starting to experience significant OVERVIEW For personal use only operating leverage. GTV growth of 47.3% versus Revenue growth of 42.4% is driven by Kogan Mobile, Kogan Insurance and Kog
Slide 17: Key Drivers of Kogan.com FY18 Financial Performance
KEY DRIVERS OF KOGAN.COM FY18 FINANCIAL PERFORMANCE For personal use only Ongoing implementation of strategy to grow brand, accelerate New Verticals, on-board new Partner Brands and invest in inventory, in order to continue to build an exceptional portfolio of businesses. The business achieved stron
Slide 18: Key Drivers of Kogan.com FY18 Financial Performance
KEY DRIVERS OF KOGAN.COM FY18 FINANCIAL PERFORMANCE For personal use only High performing team aligned with the interests of shareholders. Continued rapid growth in Kogan Mobile & strong growth in the Partner Brands Product GROSS MARGIN IMPROVEMENT Division drove gross margin improvement YoY. Kogan
Slide 19: FY18 Gross Profit Product & Business Mix
FY18 GROSS PROFIT PRODUCT & BUSINESS MIX For personal use only Kogan Mobile increased as a % of gross profit to 14.9% from 7.0% in FY17. Exclusive Brands continues to be the largest contributor to Gross Profit. FY18 GROSS PROFIT MIX 0.5% Gross margin improvement was driven by mix shift. 0.7% Kogan M
Slide 20: Kogan Mobile
KOGAN MOBILE Kogan Mobile achieved strong YoY growth in Gross Profit and Active Customers For personal use only KOGAN MOBILE AUSTRALIA - ACTIVE CUSTOMERS Kogan Mobile achieved Gross Profit of $12.0 million in FY18. Kogan Mobile brought on ~ 1% of the total number of mobile phone users in Australia1
Slide 21: New Verticals Launched in FY18
NEW VERTICALS LAUNCHED IN FY18 For personal use only KOGAN INSURANCE GROSS KOGAN INTERNET GTV & ACTIVE WRITTEN PREMIUMS CUSTOMERS (SINCE LAUNCH) GWP GTV Active Customers Kogan Insurance includes the new insurance verticals launched in 2HFY18 – Kogan Health, Kogan Pet & Kogan Life, as well as the gen
Slide 22: Operating Leverage
OPERATING LEVERAGE Acceleration of EBITDA materially outpaced revenue in FY18, as the business is experiencing significant operating leverage For personal use only OPERATING COSTS BREAKDOWN OPERATING LEVERAGE FY171 – FY18 YOY % INCREASE IN REVENUE AND EBITDA (as a % of revenue) 16.0% 14.0% 12.0% 2.1
Slide 23: Net Asset Summary
NET ASSET SUMMARY Strong balance sheet with $42.6 million of cash1 at 30 June 2018 $m Jun-18 For personal use only CURRENT ASSETS Cash and cash equivalents1 42.6 Trade and other receivables 5.7 Inventories 50.2 Financial assets 0.6 Total current assets 99.0 NON-CURRENT ASSETS Inventories of $50.2 mi
Slide 24: Inventory Turn
INVENTORY TURN The business continues to invest in inventory to support revenue growth, range expansion and meet consumer demand For personal use only INVENTORY TURN Inventory in warehouse has increased significantly following (INVENTORY IN WAREHOUSE) investment post IPO to meet consumer demand, sup
Slide 25: FY18 Statutory Cash Flow
FY18 STATUTORY CASH FLOW The business achieved operating cash conversion of 122.9% in FY18 OVERVIEW $m Statutory FY18 For personal use only The business generated operating cash flow before capital Statutory EBITDA 26.0 expenditure of $31.7 million in FY18, resulting in an operating Non-cash items i
Slide 26: Outlook
For personal use only Outlook 26
Slide 27: FY19 & Beyond
FY19 & BEYOND In FY19, we expect continued brand growth, deeper market penetration in existing portfolio businesses and to launch new portfolio businesses. For personal use only SELECTIVE & OPPORTUNISTIC M&A LAUNCH ADDITIONAL BUSINESS VERTICALS 27
Slide 28: Portfolio Business - Market
PORTFOLIO BUSINESS - MARKET Achieved greater than Portfolio Business Partner Launch date Market size 1% market share? For personal use only Kogan Retail n/a FY06 $21.3 billion1 ✓ Kogan Internet Vodafone Launched 4QFY18 10.9m premises2 - Kogan Insurance Hollard Launched 1QFY18 $43.0 billion3 - Kogan
Slide 29: FY19 Outlook
FY19 OUTLOOK FY19 will see the scaling up of New Verticals, and further growth in the Active Customer base For personal use only The Board will not be providing formal EBITDA guidance for FY19. However, the Board will provide an update on trading performance of the business at the Company’s AGM in N
Slide 30: Dividend
DIVIDEND The Board has declared a fully franked final dividend of 6.1 cents per share, which represents 80% of NPATA. For personal use only DPS (cents) Franking (%) Record date Payment date Final dividend 6.1 100.0 24 August 2018 7 September 2018 FY17 FY18 Growth Dividend per share (cents) 7.7 13.0
Slide 31: Glossary
GLOSSARY 1HFYxx: the six months ended 31 December 20xx. 2HFYxx: the six months ended 30 June 20xx. For personal use only 3QFYxx: the three months ended 31 March 20xx. 4QFYxx: the three months ended 30 June 20xx. Active Customers: unique customers who have purchased in the last twelve months from X d
Slide 32: Glossary
GLOSSARY Kogan Mobile: New Vertical offering pre-paid mobile phone plans available online using Vodafone’s mobile network in Australia. Kogan Mobile New Zealand: New Vertical due to launch in FY19 offering pre-paid mobile phone plans available online using Vodafone’s mobile network in New Zealand. F
Slide 33: Annexure: FY18 Reconciliation of Gross Sales to Revenue
ANNEXURE 1 FY18 RECONCILIATION OF GROSS SALES TO REVENUE For personal use only At 30 June 2018, presales were $7.3 million, representing Gross Sales yet to be dispatched. $m FY18 Gross Sales 433.2 Change in presales1 (2.2) Refunds and cancellations (18.7) Statutory revenue 412.3 Notes: 1. Change in
Slide 34: Annexure: FY18 Gross Sales & Revenue by Portfolio Business
ANNEXURE 2 FY18 GROSS SALES & REVENUE BY PORTFOLIO BUSINESS For personal use only 95.1% of total revenue was generated by the product divisions. FY17 FY18 YoY revenue $m Gross Sales Revenue Gross Sales 1 Revenue growth % Exclusive Brands 97.5 93.1 137.0 130.0 39.6% Global Brands 126.7 118.2 173.0 16