Articore Group Limited · ASX:ATG
Articore — Morgans Queensland Conference 2016
28 slides from Articore's conference presentation, Oct 12, 2016
Slide 1: Investor Presentation October 2016 including FY2016 Results
INVESTOR PRESENTATION October 2016 including FY 2016 Results
Slide 2: Disclaimer
Disclaimer The material herein is a presentation of non-specific background information about the Company’s current activities. It is information given in summary form and does not purport to be complete. Investors or potential investors should seek their own independent advice. This material is not
Slide 3: Agenda
# AGENDA 1. What is Redbubble? 2. Key Metrics & Drivers 3. Growth strategy & Update 4. Forecasts and Conclusion 3
Slide 4: What is Redbubble?
What is Redbubble’ © REDBUBBLE
Slide 5: A brief recap on our business for investors hearing the story for the first time
A brief recap on our business for investors hearing the story for the first time Founded in 2006 and listed in May 2016, Redbubble is a three sided marketplace with strong organic growth driven by network effects ARTISTS CUSTOMERS CONTENT 438,0001 (as at 30 June 2016) 2.2M (full year FY16) 10.2M1 (as
Slide 6: The Redbubble mission
The Redbubble mission REDBUBBLE IS CREATING THE WORLD’S LARGEST MARKETPLACE FOR INDEPENDENT ARTISTS, BRINGING MORE CREATIVITY INTO THE WORLD 6
Slide 7: Redbubble provides for granular content: An example
Redbubble provides for granular content: An example In 2016 Hillary Clinton started a meme on deplorables, which RB artists seized 7
Slide 8: RB product growth takes advantage of this
RB product growth takes advantage of this 60 products, a key growth driver 8
Slide 9: Riding the wave of consumers seeking personal style
Riding the wave of consumers seeking personal style The success of Redbubble has been driven by a change in consumer sentiments Market Share of Brand Logos Reflected in Attitudes 40% o Individuality, creatively expressed, is the new cool 35% o Tribalism is the new conformity 30% 25% & Lifestyle choi
Slide 10: A distinctive offer to a large consumer base
A distinctive offer to a large consumer base Consumers come to Redbubble to buy what they cannot get elsewhere 67% Of sales from Key Customer Stats 62% Under 35 * works that sold 50 times or less “I’VE BEEN USING REDBUBBLE FOR 58% 57% 1. * ALL MY GIFTS (BIRTHDAY AND CHRISTMAS)! I LOVE FINDING Female
Slide 11: Artists - With a huge & loyal group of creative sellers
ARTISTS - With a huge & loyal group of creative sellers Strong growth in selling artists drives the network R UARTE 438,000 154,300 G BY Q Key Artist Stats SELLIN Total Selling Artists Creatives with sales In FY2016 S 30 June 2016 ARTIST Up 62% YOY 40% 98,000 Artists who sold in FY2007 are $54,006 s
Slide 12: Adding more products and fulfillers
Adding more products and fulfillers Enabling the business to scale, improve customer experience and reduce risk 57 Number of Redbubble Fulfillers and Products (at year end) 48 Split of sales by product category FY2016 63% Apparel 35 12% Accessories 7% Home wares 10% Stationery / stickers 27 25 7% Ar
Slide 13: Key Metrics & Drivers
© REDBUBBLE ? Key Metrics & Drivers 13
Slide 14: Strong growth in key measures FY2016 vs FY2015
Strong growth in key measures FY2016 vs FY2015 FY2015 FY2016 YOY growth Visits 103.1M 147.8M 43% • Continued work on Search Engine Conversion rate1 1.75% 1.87% 7% Optimisation and paid marketing effectiveness AOV2 $49.6 $52.6 6% • Customer and Selling Artist numbers both grow in line with delivery of
Slide 15: Redbubble continues to see a strong sales growth trajectory
Redbubble continues to see a strong sales growth trajectory With a naturally hedged geographic mix GTV ($M) by Year & Quarter since launch FY16 $142.9M FY2016 GTV split by region FY15 (no significant change on 2015) $88.4M 65% Americas 27% Europe FY14 $59.3M 7% Oceania 1% ROW FY13 $33.7M FY12 FY11 $
Slide 16: Scalable cash generating model
Scalable cash generating model Redbubble margin analysis vs typical e-commerce retailer RB Cash Generating Model (1H FY16) Global Internet Retailer 124% 6% 100% 0% 50% 18% 100% 67% 15% 8% 0% 33% 27% GTV Tax Artist Rev Cost of Ware- GM as a % Sales Tax Cost Distrib- Ware- GM as a Markup (IFRS) Sales
Slide 17: Redbubble grows strongly with low customer acquisition costs
Redbubble grows strongly with low customer acquisition costs All paid channels are GP accretive, 68.5% of FY2016 traffic is from free sources Organic growth fuels sales…. ….with all channels profitable on first purchase Sales by source (FY16) Gross Profit (FY16) Organic Search1 (39.0%) 68.5% FREE $26.
Slide 18: Growth Strategy
3 Growth Strategy 18
Slide 19: The strategic plan is about reinforcing the marketplace dynamics
The strategic plan is about reinforcing the marketplace dynamics MOBILE & CUSTOMER PRODUCTS & SUPPLY EXPERIENCE CHAIN Data Traffic Search Physical Products & Supply Chain Shop Engage Mobile ARTISTS NEW & CONTENT GEOGRAPHIES Artist services New markets 19
Slide 20: Six new products launched since January
Physical Products & Supply Chain iPhone Wallet Six new products launched since January A-line Triblend Dress Tee Chiffon Top Contrast Tank Heavy Tee
Slide 21: New homepage
Collections > : Pe Animal Farm Art Styles Colors Destinations New homepage REDBUBBLE Q B VIEW ALL MEN'S WOMEN'S KIDS CASES&SKINS STICKERS WALLART HOMEDECOR STATIONERY BAGS — GIFT CERTIFICATES COLLECTIONS Imaginarium Feed Found Following Activity Leman Tree by Fifikoussout J J d wee sees Proto(ea) ‘A
Slide 22: Three new local language sites
New markets Thee new local language sites GERMAN FRENCH 22
Slide 23: Planned for H1 2017
Planned for H1 2017 Data - Improve search relevancy onsite and with Google Traffic - Google Shopping and Facebook integration upgrades Search - New email platform Product - 6 new physical products focused on home and gift giving for holiday & Supply - Continued localisation of fulfillment (EU focus)
Slide 24: Financials and Conclusion
4 Financials and Conclusion 24
Slide 25: Tracking to Forecast with EBITDA ahead of target as Redbubble scales
Tracking to Forecast with EBITDA ahead of target as Redbubble scales Achieved FY2016 revenue and gross profit targets with less Operating expenses than anticipated P&L FY2015 FY2016 FY 2017 Full Year Full Year (A$M) Full Year 1H Actual1 2H Actual Forecast Actual Forecast GTV 88.4 80.3 62.6 142.9 143
Slide 26: Year on year Q3 and Q4 analysis, demonstrates scaling of the business
Year on year Q3 and Q4 analysis, demonstrates scaling of the business P&L Q3 Q4 (A$M) Q3 FY15 Q3 FY16 Growth Q4 FY15 Q4 FY16 Growth GTV 20.6 30.3 47.2% 23.0 32.3 40.4% Revenue 16.4 26.2 59.2% 18.3 26.11 42.8% Cost of Sales (11.3) (17.2) 51.8% (11.9) (16.6) 39.0% Gross Profit 5.1 9.0 75.6% 6.3 9.5 50
Slide 27: Redbubble has enjoyed exceptional growth and is scaling profitability
Redbubble has enjoyed exceptional growth and is scaling profitability on the back of strong fundamentals. Massive Global Market High Entry Barriers Redbubble is part of a massive fast growing global The Redbubble marketplace attracts more artists and market (online apparel, accessories, stationary a
Slide 28: Thank You
r THANK YOU REDBUBBLE