Step One Clothing Limited · ASX:STP
Step One Clothing — FY2022 Earnings Presentation
31 slides from Step One Clothing's earnings presentation, Aug 23, 2022
Slide 1: FY22 Results Presentation
23 AUGUST 2022 Greg Taylor, CEO and Founder Nigel Underwood, CFO 1
Slide 2: Agenda
01 FY22 Results Highlights 02 FY22 Results Overview 03 FY22 Financial Summary 04 Market Context and Strategy 05 Outlook 06 Questions 2
Slide 3: FY22 Results Highlights
FY22 Results Highlights Strong performance across key metrics Expanded product Revenue Gross Margin Expanded markets range - Women’s $72.2m 82.0% with USA launch Line, Thermals and and Amazon Sports products up 17% vs pcp down 0.6% vs pcp launched Average order Website Visits Customers Proforma EBIT
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Slide 5: Operational Highlights
Operational A brief history Highlights of STEP ONE Building our brand equity through product innovation Customer Database Growth (#'000 ) 1.1m people have Continued purchased strong growth Step One’s in Australian (+52%) market Launch of Launch of Thermals Women’s and Sports range New Customer Acqui
Slide 6: Strong Online Engagement
Strong Online Engagement Increasing website sessions by 65% on prior year WEBSITE TRAFFIC AVERAGE CONVERSION RATE 6 months, M 6 months, % 9.4 9.3% 7.1 65% 7.6% 8.1% 7.5% 5.0 6.3% 5.0 4.4% 9.3% 9.6% 8.3% 2.3 7.5% 7.5% 7.8% 6.6% 6.1% 5.5% 1.1 4.5% 3.3% 3.6% 3.1% 2.2% 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H 1H 2
Slide 7: International Markets
International Markets A tailored strategy for each region UK growth not at expected rate, with tougher than anticipated trading conditions impacted consumer confidence Highlights: • Over 153,000 new customers in FY22 • Continued support from existing customers who accounted for 61% of orders • Deman
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Slide 9: Financial Highlights
Financial Highlights Continued revenue growth while generating attractive gross profit margins SALES REVENUE GROSS PROFIT 6 MONTHS, $M 6 MONTHS, $M 38.1 34.1 1.4 34.1 2.1 27.6 11.0 10.7 83.2% 83.1% 11.0 82.1% 81.6% 81.6% 10.3 80.7% 12.9 9.3 1.0 25.5 31.7 23.4 28.0 27.5 21.1 17.3 23.0 11.9 9.3 10.6 7
Slide 10: Financial Highlights
Financial Highlights Revenue growth and advertising PROFORMA EBITDA ADVERTISING1,2 6 MONTHS, $M 6 MONTHS, $‘000 56.8% 10.0 26.9% 30.0% 30.0 60.0% 9.0 50.3% 25.0% 50.0% 8.0 19.6% 40.8% 39.2% 7.0 18.0% 36.3% 20.0% 17.2 40.0% 6.0 32.4% 15.7 14.9 2.7 5.0 15.0% 12.4 1.3 30.0% 11.0% 9.2 1.5 4.0 1 4.5 7.4
Slide 11: Strong Operational Metrics
Strong Operational Metrics Strong growth in returning customer order rates demonstrates trust in our product CUSTOMER ORDERS1 AVERAGE ORDER VALUE (AOV)2 CUSTOMER MIX 6 MONTHS, $‘000 6 MONTHS, $M 488 81.9 457 436 23 40% 40% 39% 397 27 50% 79.3 60% 60% 187 179 195 186 75.7 75.0 185 74.4 74.1 22 60% 60
Slide 12: Strong Operational Metrics
Strong Operational Metrics Marketing and advertising key to growing the business MARKETING AND ADVERTISING1,4 COST TO ACQUIRE CUSTOMERS2,3,4 6 MONTHS, % OF SALES REVENUE 6 MONTHS, $ PER CUSTOMER ORDER 20.0 56.8% 60.0% 18.0 50.3% 50.0% 16.0 39.2% 40.8% 14.0 36.3% 40.0% 12.0 32.4% 10.0 30.0% 93.8 17.2
Slide 13: Proforma Income Statement
Proforma Income Statement FY22 FY21 Movement Proforma $'000 $'000 $'000 % COMMENTARY Australia 46,596 40,667 5,929 14.6% UK 22,045 21,050 995 4.7% • Revenue growth of 17% on pcp USA 3,546 0 3,546 - predominantly in Australia and USA Revenue 72,187 61,717 (10,470) 17.0% Gross profit 59,173 50,984 8,1
Slide 14: Balance Sheet
Balance Sheet Impact of Other $’000 As at 30 June 2021 As at 30 June 2022 the Offer movements ASSETS Current Assets Cash and cash equivalents 10,845 32,809 (9,446) 34,208 COMMENTARY Inventories 9,731 15,652 25,383 Derivative financial instruments 134 (134) - Related party receivable 3,409 (3,409) -
Slide 15: Cash Flow Statement
Cash Flow Statement FY22 FY21 Movements $'000 $'000 $'000 % COMMENTARY COMMENTARY Cash flows from operating activities Receipts from customers (inclusive of Sales Taxes) 80,204 70,480 9,724 12.1% • Cash position strengthened by Payments to suppliers and employees (inclusive IPO of Sales Taxes) (83,0
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Slide 17: Forward Strategy
Forward Strategy Driving profitable growth globally PRODUCT MARKET SIZE1 CAPITAL LIGHT PARTNERSHIPS ADJACENCIES Every person needs Low capital invested Engage in partnerships Natural adjacencies to underwear • Ownership of Brand, • Use Amazon to establish men’s underwear designs, and brand presence
Slide 18: Business Model
Business Model Step One is built on an innovative product and customer engagement model with a strong ESG focus 1. DESIGN 4. ESG FOCUS Functional Product Features DESIGN ESG Our business model is built on a • UltraGlyde™ panels transparent production process • Elastic 3D pouch • Organically grown Ba
Slide 19: Sustainable and Ethical Supply chain
Sustainable and Ethical Supply chain Our ESG credentials baked into our entire product lifecycle, from inception to delivery FABRIC OTHER GARMENT RAW MATERIALS STEP ONE MANUFACTURING MANUFACTURING MANUFACTURE PACKAGING CHINA MANUFACTURERS Step One products are sustainability sourced and ethically ma
Slide 20: Looking Forward
EOOKING FORWARD
Slide 21: Looking Forward
A brief history Looking Forwardof STEP ONE Step One plans to continue expansion in existing markets while testing other markets. This will involve expanding customer reach using third party platforms such as Amazon and potentially other established retailers. Partnering with third party platforms wi
Slide 22: Thank You! Q+A
Real champions wearing Step One… Thank You! Q+A Browse our product range on www.stepone.life while we are talking 4.7 13,778 reviews1 4.6 13,862 reviews1 1. Customer reviews taken from respective websites as at 18 August 2022. 22
Slide 23: Step One
4 — ST=P ONE ———— |
Slide 24: Product Features
Product Features Step One underwear is design focused – with UltraGlydeTM panels, comfort pouches, and comfortable organically grown Bamboo – it has revolutionised the underwear market for all genders BAMBOO FABRIC • Wicks away sweat and has excellent breathing qualities SOFT AND SUPPORTIVE • Organi
Slide 25: A Brief History of Step One
A Brief brief History history of Step One STEP ONE Founder-led business with highly scalable model & strong track record of growth SCALE + HELLO UK! HELLO US! WOMEN’S LAUNCH STEP ONE IS BORN PRODUCTION GROWS COMPOSTABLE UK market testing Following a testing New product range Idea, Product Dev & A 2n
Slide 26: Flexible Production Cycle
Flexible Production Cycle A highly flexible production cycle which can be managed to meet demand Production facilities in China and Vietnam: Delays in global export logistics • Maintain flexibility across production cycle are affecting shipping, • Mitigate risk of disruption in one of the jurisdicti
Slide 27: Local Distribution
Local Distribution • Product is warehoused in each country with 3PLs in Australia East Coast, UK East Coast & USA West Coast • 3PLs manage all inventory & logistics in each country o Receive product from the port of entry o Receipt product into their warehousing systems o Secure storage & management
Slide 28: Proforma Income Statement
Proforma Income Statement FY20 FY21 FY22 $’000 1H20 2H20 1H21 2H21 1H22 2H22 Australia 9,304 11,943 23,358 17,309 25,601 20,995 COMMENTARY UK 0 1,000 10,726 10,323 11,031 11,014 USA 0 0 0 0 1,444 2,102 • Proforma financial information Revenue 9,304 12,943 34,085 27,632 38,076 34,111 for comparative
Slide 29: Proforma Adjustments
Proforma Adjustments FY20 FY21 FY22 $’000 1H20 2H20 1H21 2H21 1H22 2H22 COMMENTARY Statutory NPAT / (NLAT) 1,948 1,649 4,564 (4,683) (3,816) 813 • IPO costs align to prospectus Less Costs - share based payments 0 133 2,967 4,900 6,076 0 • Nature of proforma - IPO costs 0 0 0 605 3,927 0 - legal fees
Slide 30: Proforma Reconciliation
Proforma Reconciliation FY21 FY22 Statutory as Retrospective Statutory Proforma Proforma Proforma Statutory Proforma Proforma Proforma previously Adjustment Restated Adjustment / Adjustment Adjustment / Adjustment stated (1) normalisation (3) normalisation (3) (2) (2) Revenue 61,717 61,717 61,717 72
Slide 31: Important Notice
Important Notice The material in this presentation has been prepared by Step One Clothing Limited (ASX: STP) (“Step One” or the “Company") and is general background information about Step One’s activities current as at the date of this presentation. The information is given in summary form and does