Articore Group Limited · ASX:ATG
Articore — FY2023 Earnings Presentation
27 slides from Articore's earnings presentation, Aug 22, 2023
Slide 1: FY23 Results
FY23 Results 22 August 2023 Tao & Ellie from Heartstopper Designed and sold by: Saevity Redbubble, 2023
Slide 2: Financial highlights
Financial highlights Drove significant GPAPA Q4FY23 FY23 margin improvement in 4QFY23, 350 bps above $89.9m Marketplace Revenue $467.5m historical average and Q4FY22: $98.2m, -8% FY22: $482.6, -3% 550 bps up YoY $39.2m Gross Profit $174.2m Reduced operating Q4FY22: $39.0m, 1% FY22: $183.1m, -5% GPAP
Slide 3: Group CEO review and actions taken to date
Group CEO review and actions taken to date Key findings Our response Group consists of two well-established Focused on leveraging core strengths marketplaces, with strong unit and returning both marketplaces to economics profitable growth We have Internal and external confusion Restructured organisa
Slide 4: FY23 operational highlights
FY23 operational highlights Leather Designed and sold by: IMPACTEES Throw Pillow Redbubble, 2023
Slide 5: The Group comprises two well-established creative marketplaces
The Group comprises two well-established creative marketplaces… Artists1 Artists1 650k Marketplace Revenue 115k 62% (% of FY23 Group 38% Customers MPR) Customers 5.0m 2.5m Designs sold2 Designs sold2 4.8m 50% Apparel 93% 1.4m (% of FY23 Marketplace MPR) Core demographic Core demographic Gen Z and th
Slide 6: Operating at a unique scale across the globe
…operating at a unique scale across the globe Geographic Diversity (% of Gross Transaction Value) North America 71% 71% Europe and United Kingdom Gross transaction value 22% third-party 50 fulfiller sites Australia and New Zealand 60% North America 6% 93% North America May represent multiple third-p
Slide 7: We remain focused on optimising each marketplaces' flywheel
We remain focused on optimising each marketplaces’ flywheel Artists & Fulfilment & Content Discovery Customers Service Operations Ensuring additive Increasing the number Enhancing customer content is uploaded to of new customers and post-purchase the marketplaces and turning existing experience and
Slide 8: The quality of the content uploaded to the Redbubble marketplace is improving
The quality of the content uploaded to the Redbubble marketplace is improving Key initiatives New content uploads (FY18 - FY23) Uploads from Pro and ● Increased friction to our signup and Premium artists 40% in upload processes to inhibit upload of June 2023 non-additive content June 2022: 10% New c
Slide 9: Higher-quality content and site improvements driving increased engagement
Higher-quality content and recent site improvements driving increased engagement on the marketplace Increasing use of AI Search engagement (3QFY22 - 4QFY23) to improve customer experience Current uses Future use ● Removing duplicate ● Improving search content relevancy and Search engagement ● Pre-em
Slide 10: Implemented a dynamic order routing system to optimise the supply chain
Implemented a dynamic order routing system to optimise the Redbubble marketplace’s supply chain Static process Highly-dynamic process Launched in the US Rules-based routing system Dynamic order routing system (DORS) March 2023 ● Fulfillers assigned volume For each line item, DORS selects from certai
Slide 11: TeePublic continues to deliver MPR growth, alongside margin improvements
TeePublic continues to deliver MPR growth, alongside margin improvements Key FY23 initiatives Introduction of account categories ● Focused on search engine Artisan Apprentice optimisation (SEO) ● Drove growth in customer retention through use of email and SMS marketing campaigns ● Optimised service
Slide 12: Continued progress against our ESG goals
Continued progress against our ESG goals to contribute to the generation of long-term shareholder value Prosperity People Planet 2025 ESG Goals 2025 ESG Goals 2025 ESG Goals We aim to empower and protect people who design, We aim to enable our people to positively impact our We aim to protect planet
Slide 13: FY23 financial overview
FY23 financial overview Stories of Mine Designed and sold by: fdasuarez T-Shirt Teepublic, 2023
Slide 14: 4QFY23 and FY23 Profit and Loss Statements
4QFY23 and FY23 Profit and Loss Statements P&L (A$M) 4Q FY22 4Q FY23 % change FY22 FY23 % change Decline in MPR reflects the Group’s focus on Total Revenue 116.9 106.0 (9%) 573.4 555.1 (3%) maximising GPAPA and weaker trading conditions. MPR 98.2 89.9 (8%) 482.6 467.5 (3%) Gross Profit 39.0 39.2 1%
Slide 15: Initiatives leading to 550 bps improvement in GPAPA margin in 4QFY23
Initiatives across Group leading to 550 bps improvement in GPAPA margin in 4QFY23 Group GPAPA margin Key drivers of Group GPAPA (1QFY19 to 4QFY23) margin improvement (4QFY22 to 4QFY23) Height of COVID-19 pandemic 1.5% 28.5% 4QFY19: 4QFY23: 4.0% 28.5% 28.5% 23.0% Average: 25% Paid spend focused on mo
Slide 16: Implemented significant cost savings in FY23 with full benefit in FY24
Implemented significant cost savings in FY23 with full benefit to be realised in FY24 Group operating expenditure (millions) $135 - $145 Annualised Cost of doing business benefits of $129 cost-saving Detailed review of business operations Cost measures identified areas for savings. of doing $42-$44
Slide 17: Necessary steps taken to deliver positive underlying cash flow in FY24
Necessary steps taken for business to deliver positive underlying cash flow in FY24 Closing cash balance (millions, FY19 - FY23) $100 ● Continued focus on cash reserves $99 and delivering sustainably positive $89 underlying cash flow $75 ● Cost base rightsized in FY23 ● Achieved neutral underlying c
Slide 18: Summary and guidance
Summary and guidance Hermit Designed and sold by MovePencilMove Tote Bag Redbubble, 2023
Slide 19: Foundation established for a return to growth and positive underlying cash flow
Foundation established for a return to growth and achieving sustainably positive underlying cash flow Operational Unit economics Neutral review remain strong underlying cash completed with ongoing focus on flow achieved improvement through in July 2023 and aiming to and immediate actions optimising
Slide 20: FY24 guidance
FY24 guidance1 The Group expects trading conditions to remain soft in its key markets, particularly the US, in the near term. In this environment, it will remain focused on optimising COGS, promotions and paid marketing activities to maximise GPAPA. The Group expects its FY24 GPAPA margin to be betw
Slide 21: Supplementary information
Supplementary information Taco Journey Designed and sold by: Kg07_shirts Classic tee Teepublic, 2023
Slide 22: Constant currency change
Constant currency change % % cc % % cc P&L (A$M) 4Q FY22 4Q FY23 FY22 FY23 change change change change Total Revenue 116.9 106.0 (9%) (15%) 573.4 555.1 (3%) (8%) Less: Artist Revenue (18.8) (16.2) (14%) (19%) (90.8) (87.6) (4%) (8%) MPR 98.2 89.9 (8%) (14%) 482.6 467.5 (3%) (8%) Gross Profit 39.0 39
Slide 23: Product category
Product category Gross transaction value by product category (A$m, FY19 - FY23) Category Total business FY22-FY23 change Artwork 8% (20%) Homewares 8% (15%) Stationery and Stickers 12% (6%) Accessories 7% (35%) Total Apparel 65% 6% GTV is a non-IFRS measure. Non-IFRS measures are unaudited. 23
Slide 24: Geographical diversity
Geographical diversity Gross transaction value by region (A$m, FY19 - FY23) Region Total business FY23- FY22 change ROW 1% (20%) AU/NZ 6% (11%) UK 9% (16%) EU 13% (6%) North America 71% (1%) GTV is a non-IFRS measure. Non-IFRS measures are unaudited. 24
Slide 25: Glossary
Glossary Term Definition $ All references to dollar amounts or figures are in AUD unless stated otherwise. 1H/2H First or second half of the financial year 1Q/2Q/3Q/4Q First, second, third or fourth quarter of the financial year AGM Annual General Meeting AI Artificial intelligence AOV Average order
Slide 26: Important notice and disclaimer
IMPORTANT NOTICE AND DISCLAIMER This presentation contains summary information about Redbubble Limited (ACN 119 200 592) and its related bodies corporate (together, the Redbubble Group or the Group) and the Group’s activities as at the date of this presentation. It is information given in summary fo
Slide 27: Contact us
Contact us: Virginia Spring VP, Investor Relations +61456441147 Rainbow Cats virginia.spring@redbubble.com PlanetCatArt Baseball Cap Redbubble, 2023