Bubs Australia Ltd. · ASX:BUB
Bubs Australia — FY2019 Earnings Presentation
31 slides from Bubs Australia's earnings presentation, Aug 30, 2019
Slide 1: FY19 Annual Results
FY19 ANNUAL RESULTS 30 August 2019 SCALABLE GROWTH
Slide 2: Table of Contents
TABLE OF CONTENTS 01 | FINANCIAL RESULTS 02 | STRATEGIC PROGRESS 12 03 | VERTICAL INTEGRATION 17 04 | KEY PARTNERS 05 | SCALABLE GROWTH
Slide 3: Creating new generations of happy, healthy bubs
Creating new generations of happy, healthy bubs gee “3 fs a Fa +f. j ;
Slide 4: A Period of Scalable Growth
A PERIOD OF SCALABLE GROWTH FY19 FOUNDATIONS FOR SUSTAINABLE GROWTH + Enhanced vertical integration and increased milk pool to meet growing demand. + Advanced China expansion strategy via channel development and key partnerships. + Extended infant nutritionals product portfolio into new segments and
Slide 5: Financial Results
01 FINANCIAL RESULTS 5
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS Improved Margins Significant uplift in revenue reflects market share gains in Record Growth Year the most profitable products across all regions resulting in FY19 results are characterised by our exceptional revenue trajectory. The margin improvement. Company has continued to fo
Slide 7: Financial Overview
FINANCIAL OVERVIEW Key Drivers 2H19 gross margin improved to 23% vs. 19% in 1H19, due to the optimisation of product FY19 FY18 % CHANGE and channel mix, engaging new suppliers and improvements in allocating the milk pool. Bubs® products delivered 35% gross margin vs. 20% in FY18. Further group margi
Slide 8: Group Revenue
GROUP REVENUE Quarterly Gross Sales Revenue $50,000,000.00 $46.8M $45,000,000.00 Key Drivers $40,000,000.00 +154% Consistent strong growth since listing in 2017. $35,000,000.00 $30,000,000.00 Record 2H19 gross revenue: $25.8 million; +75% pcp, and +22% on 1H19. $25,000,000.00 $18.4M Growth predomina
Slide 9: Profitable Growth Drivers
PROFITABLE GROWTH DRIVERS Half Year Gross Sales Revenue by Product Category Adult Dairy Revenue Bubs® Product Revenue $14,000,000 $16,000,000 $12,000,000 $14,000,000 $10,000,000 $12,000,000 +196% pcp $10,000,000 $8,000,000 $8,000,000 $6,000,000 NuLac Foods Acquisition $6,000,000 $4,000,000 (Dec 2017
Slide 10: Balanced Product Mix
BALANCED PRODUCT MIX Net Sales Revenue by Product Group Key Drivers Bubs® products $21.6 million, increased +223% pcp and 1% +65% on 1H19. 0% 20% 14% Adult milk powder $15.6m increased +133% pcp . 30% Enhanced focus on high margin products: 43% FY18 FY19 + Infant Formula sales increased +278% pcp an
Slide 11: Regional Channel Mix
REGIONAL CHANNEL MIX Net Revenue by Market Key Drivers Domestic sales grew +153% pcp and +41% on 1H19, driven by strong domestic presence in major 2% 1% supermarkets, strategic alliance with Chemist 15% 18% Warehouse (from June), and activation of a new corporate Daigou partnership. Direct sales to
Slide 12: Capital Management
CAPITAL MANAGEMENT Key Drivers Positive Q4 operating cashflow represents a significant improvement on the working capital management and cashflow management of the Group. Working capital movements are attributable to the investment in inventory to meet the growing demand and the increased trade and
Slide 13: Strategic Progress
02 STRATEGIC PROGRESS 13
Slide 14: Our Building Blocks
OUR BUILDING BLOCKS Bubs ability to leverage our foundation building blocks is what sets us apart. We have unrivalled strategic equity-linked partnerships and end-to-end vertical integration of our value chain. Bubs® brand value, JV with Beingmate, 13yrs of authentic Key strategic driving China heri
Slide 15: FY19 Strategic Progress
FY19 STRATEGIC PROGRESS Significant advancement on progressing our four Key Pillars critical to delivering growth. INCREASED INNOVATION INCREASED DOMESTIC BRAND ENHANCED ASIA INNOVATION DOMESTIC AND PRODUCT MARKET PENETRATION AWARENESS FOCUS AND PRODUCT MARKET DEVELOPMENT AND IMPACT DEVELOPMENT PENE
Slide 16: Product Expansion
PRODUCT EXPANSION Grown Bubs® portfolio from 18 to 29 SKU’s, now catering for all stages of development, feeding occasions and dietary requirements. Opportunity for further expansion in Adult Goat milk products. Infant Milk Formula Infant Milk Formula Organic Toddler Snacks Australian Goat Milk Orga
Slide 17: FY20 Hero Product Launch
FY20 HERO PRODUCT LAUNCH Australia’s first organic grass fed infant formula with advanced formulation containing prebiotics and probiotics. Key Highlights Long-term supply and manufacturing partnership with Fonterra Australia. First production completed in August 2019 with national roll-out into Che
Slide 18: Vertical Integration
03 VERTICAL INTEGRATION 18
Slide 19: End-to-End Supply Chain
1. Leading producer of >65% Australian goat milk END-TO-END SUPPLY CHAIN products. Ownership of our goat milk pool, including 20 million litres of fresh milk from >20,000 goats in Australia and NZ. Providing secure, scalable vertical integration back to farm gate to deliver both traceability and fle
Slide 20: Goat Milk Supply Security
GOAT MILK SUPPLY SECURITY Bubs owns exclusive access to a secure, long-term premium goat milk supply in Australia and New Zealand. Milk Pool Domination Bubs is the market leader in goat dairy, producing >65% of all Australian goat milk products. Our herd has grown to circa 20,000 milking goats acros
Slide 21: Deloraine Acquisition
DELORAINE ACQUISITION A critical acquisition supporting our vertical integration vision. Deloraine is purpose built with advanced infrastructure and capacity to process 10 million tins per annum. Key Highlights 1 of only 15 CNCA accredited infant formula facilities in Australia. Deloraine carries SA
Slide 22: Key Partners
04 KEY PARTNERS 22
Slide 23: Strategic Partnerships
STRATEGIC PARTNERSHIPS Bubs has now established unrivalled equity-linked and/or strategic alignment with leading industry retail giants representing each of China’s key routes to market. Domestic CHEMIST Retail WAREHOUSE Cross-border ALIBABA eCommerce TMALL Mother & Baby Stores BEINGMATE From left t
Slide 24: Increased Domestic Penetration
INCREASED DOMESTIC PENETRATION INCREASED DOMESTIC MARKET PENETRATION In Q4 Bubs entered a strategic equity-linked agreement with Chemist Warehouse, securing a giant retail footprint and significant sales and marketing support for Bubs® full range of products in our home market. Chemist Warehouse A f
Slide 25: B2C Cross-Border E-Commerce
B2C CROSS-BORDER E-COMMERCE In Q4 Bubs entered into a strategic cooperation agreement with Alibaba Tmall. Alibaba Launching Bubs Organic® baby food on the Alibaba Hema App for collection in their stores across Beijing and Shanghai in Q1 FY20. Planned relaunch of Bubs® and CapriLac® Tmall Global Flag
Slide 26: In-Market Representation
ENHANCED IN-MARKET REPRESENTATION ASIA FOCUS In Q4 Bubs established a Joint Venture with Beingmate Baby & Child Food Co., a leading Chinese owned enterprise specialising in the infant nutrition industry, with a distribution network covering 30,000 Mother and Baby stores. Beingmate The Joint Venture
Slide 27: China Mother and Baby Stores
CHINA MOTHER AND BABY STORES In June, the Beingmate JV entered into a strategic channel partnership with Kidswant, China’s leading mother and baby retail chain with annual turnover of RMB 10 billion (AUD 2 billion). Kidswant Bubs Organic® food products ranged in 275 physical stores in 123 cities, co
Slide 28: Scalable Growth
05 SCALABLE GROWTH 28
Slide 29: Scalable Growth
SCALABLE GROWTH The strategic foundational building milestones we passed in FY19 means we are well placed to pursue our goals towards delivering profitable and sustainable growth. Whilst we continue to scale the business at a rapid pace, we are confident of achieving overall profitability in FY20. V
Slide 30: Disclaimer
DISCLAIMER This presentation and any materials provided (materials) have been prepared by Bubs Australia Limited (Bubs) and contains general information about Bubs activities. By accepting the Materials you agree to be bound by the below terms and conditions. Terms and Conditions This presentation i
Slide 31: Investor Resource Centre
INVESTOR RESOURCE CENTRE www.investor.bubsaustralia.com 31 Growing Generation Joy