Adore Beauty Group Ltd. · ASX:ABY
Adore Beauty — FY2024 Earnings Presentation
29 slides from Adore Beauty's earnings presentation, Aug 26, 2024
Slide 1: FY24 Results Presentation
FY24 Results Presentation 26 August 2024 1
Slide 2: Adore Beauty maintains growth trajectory – delivers higher sales and improved profitability
Adore Beauty maintains growth trajectory – delivers higher sales and improved profitability FY24 FINANCIAL SUMMARY $195.7M 33.4% $4.8M Revenue1 Gross profit margin Reported EBITDA2 +7.4% on prior +0.8 ppts on PCP +661% on PCP corresponding period EBITDA margin 2.5% (PCP) 814K 519K $32.9M Active cust
Slide 3: Record customer metrics – demonstrating success of strategy
Record customer metrics – demonstrating success of strategy FY24 OPERATIONAL HIGHLIGHTS Customer centricity 64.7% 28.4% $235 Record customer retention1 App revenue contribution2 Record annual revenue +8.5 ppts on PCP +4.6 ppts on PCP per active customer +4.4% on PCP Further building the brand 71% 30
Slide 4: Loyal returning customers underpin strong performance
Loyal returning customers underpin strong performance FY24 REVENUE INSIGHTS Revenue1 Returning customer revenue ($A Million) ($A Million) 9% 7% 200 196 179 182 59 41 43 4 68 1.6 151 140 138 111 140 151 138 111 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 Returning customers 2 Other 3 New customers Return
Slide 5: Returning customers up 44% in three years
Returning customers up 44% in three years FY24 CUSTOMER INSIGHTS Active customers1 Annual revenue per active customer (‘000) ($) Returning customers 44% 1.6% 4.4% 872 818 814 801 399 311 295 458 235 229 490 519 225 472 360 219 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY24 Returning customers New customers
Slide 6: FY24 Financial Results
FY24 Financial Results 6
Slide 7: Strategic initiatives drive revenue and margin growth
Strategic initiatives drive revenue and margin growth COST MANAGEMENT & OPERATIONAL EFFICIENCIES IMPROVE PROFITABILITY Revenue1 Gross profit margin EBITDA ($A Million) (%) ($A Million) 7% 0.8 PPTS 661% 199.7 7.6 195.7 33.3 33.4 4.8 33.1 5.3 32.6 182.2 179.3 0.6 FY21 FY22 FY23 FY24 FY21 FY22 FY23 FY2
Slide 8: Disciplined cost management and operating leverage
Disciplined cost management and operating leverage FY24 PROFIT & LOSS A$M FY23 FY24 CHANGE Returning customers contribute 79% of sales Revenue 182.2 195.7 7.4% ▪ Revenue1 up 7.4% on the PCP, driven by repeat customer loyalty Cost of sales (122.8) (130.3) 6.1% ▪ Average Order Value (AOV) for all cust
Slide 9: Generating cash
Generating cash BALANCE SHEET A$M as at 30 Jun 23 30 Jun 24 ▪ Strong closing cash balance of $32.9 million, up 18.3% on the PCP, Cash and cash equivalents 27.8 32.9 funded $20 million up-front consideration for iKOU Inventory 21.1 21.6 ▪ Debt-free Other current assets 6.5 4.0 ▪ Capital efficient bus
Slide 10: Strategy
Strategy Beauty Done Better 10
Slide 11: Amplifying strategy to drive growth and profitability
Amplifying strategy to drive growth and profitability INCREASING BRAND AWARENESS, CUSTOMER FOCUS AND OPERATIONAL EFFICIENCY PROVIDE THE PLATFORM FOR CONTINUED GROWTH 1. CUSTOMER CENTRICITY 3. OPERATIONAL OPTIMISATION ▪ Utilising data insights ▪ Growing retail media revenue ▪ Optimising customer expe
Slide 12: Customer retention now at record high
1. CUSTOMER CENTRICITY Customer retention now at record high NEW INITIATIVES TO DELIGHT CUSTOMERS AND INCREASE LOYALTY ▪ Customer retention1 improved 8.5 ppts on prior year to 64.7% - a financial year record ▪ Adore Society loyalty members increased 8.6% on PCP ▪ New features supporting customer exp
Slide 13: App adoption and revenue contribution continues to grow
1. CUSTOMER CENTRICITY App adoption and revenue contribution continues to grow NEARING 30% SALES TARGET ▪ App accounted for 28.4% of all sales2 in H2 FY24, up 4.6 ppts on PCP and 14.2 ppts on FY22 ▪ User base steadily increasing, up ~50% on PCP 496k 4.8/5 APP downloads APP rating1 ▪ App delivering l
Slide 14: Brand awareness in core demographic now at record 71%
2. FURTHER BUILDING THE BRAND Brand awareness in core demographic now at record 71% LAUNCHING NEW BRAND CAMPAIGN AND TWO RETAIL CONCEPT STORES IN FY25 ▪ Brand awareness in core demographic improves to a record 71%1 in August 2024, up from 62% for the same period last year ▪ Benefitting from investme
Slide 15: Private label growth – new products, categories and channels
2. FURTHER BUILDING THE BRAND Private label growth – new products, categories and channels FIRST COSMETICS RANGE AND INCREASED DISTRIBUTION ▪ Adore’s private label offering has grown to 61 products across its ‘Adore Beauty’, ‘AB LAB’ and ‘Viviology’ brands, up from 38 last year ▪ Gross margins subst
Slide 16: Comprehensive brand and product portfolio
2. FURTHER BUILDING THE BRAND Comprehensive brand and product portfolio 38 NEW BRANDS ADDED IN FY24; GROWING ADJACENT CATEGORIES ▪ Total range portfolio now consists of over 300 brands ▪ 23 brands onboarded in H2 FY24 ▪ Acquired iKOU in July 2024 ▪ Skincare, fragrance and haircare represented majori
Slide 17: Retail media revenue doubles to $4 million
3. OPERATIONAL OPTIMISATION Retail media revenue doubles to $4 million SUPPORTS MARGIN EXPANSION Content driven impressions1 (million) ▪ Content-driven impressions1 increased 46% on the PCP, driving 46% growth in retail trade media and brand advertising ▪ 7 million downloads2 across nine podcasts ▪
Slide 18: Operational improvements drive efficiency
3. OPERATIONAL OPTIMISATION Operational improvements drive efficiency MORE EFFECTIVE MARKETING, COST OPTIMISATION, AI & TECH UPGRADES ▪ More efficient marketing, focused on cost-effective re-targeting of existing, lapsing and lapsed customers plus profitable new customer acquisition ▪ Leveraging gro
Slide 19: iKOU acquisition
iKOU acquisition 19
Slide 20: iKOU to deliver sales growth and margin expansion
iKOU to deliver sales growth and margin expansion PREMIUM BEAUTY AND WELLNESS BRAND WITH SIGNIFICANT UNREALISED GROWTH POTENTIAL ▪ Completed acquisition of iKOU on 31 July 2024 GP Margin % Revenue by channel LTM24 ▪ Established Australian beauty and wellness brand with 1% premium, clean beauty posit
Slide 21: Multiple opportunities to cost-effectively grow iKOU
Multiple opportunities to cost-effectively grow iKOU COMPLEMENTARY EXPERTISE ENHANCES ADORE BEAUTY’S GROWTH AVENUES ▪ Multiple growth opportunities for iKOU with benefits in FY25 and beyond: ▪ Geographical expansion - NSW-centric business with immediate opportunity to replicate this success across A
Slide 22: iKOU growth plan
iKOU growth plan PLAN TO SIGNIFICANTLY SCALE THE BUSINESS ALREADY UNDERWAY, TARGETING $10 MILLION IN REVENUE IN THE FIRST YEAR OF OWNERSHIP AND TO MORE THAN DOUBLE REVENUE BY FY27 ONLINE WHOLESALE & INTERNATIONAL RETAIL More than 200 wholesale customers1 across PRESENT Direct-to-consumer (D2C) Austr
Slide 23: iKOU integration strategy and synergies
iKOU integration strategy and synergies EARLY OPPORTUNITIES IDENTIFIED ▪ iKOU integration aligned to Adore Beauty’s three-pillar growth strategy – customer centricity, further building the brand, and operational optimisation ▪ Full operational and integration plan underway - efficiency and effective
Slide 24: Outlook
Outlook 24
Slide 25: Key drivers of EBITDA margin expansion
Key drivers of EBITDA margin expansion AREAS OF FOCUS Revenue growth Improve gross profit margin Business optimisation Increased brand awareness Owned brands with Cost optimisation program and scale higher margins Pricing and promotional Improved marketing Retail stores review effectiveness, growing
Slide 26: Well-positioned for further growth
Well-positioned for further growth OUTLOOK ▪ Positive sales trajectory continues; total revenue in the first seven weeks of FY251 up 7.0% on PCP ▪ IKOU integration to drive sales growth and margin expansion ▪ Operational efficiencies and disciplined cost management initiatives to continue in FY25 ▪
Slide 27: Questions
Questions 27
Slide 28: Disclaimer
Disclaimer This presentation has been prepared by Adore Beauty Group Limited ACN 636 138 988 (Company). This An investor must not act on the basis of any matter contained in this presentation but must make its own presentation contains summary information about the Company and its subsidiaries (Grou
Slide 29: Australia's Online Beauty Store
AUSTRALIA’S ONLINE BEAUTY STORE WWW.ADOREBEAUTY.COM.AU 29