Build-a-bear Workshop, Inc. · NYSE:BBW
Build-a-bear Workshop — Investor Presentation (March 2023)
30 slides from Build-a-bear Workshop's investor presentation, Mar 21, 2023
Slide 1: Investor Update
INVESTOR UPDATE
Slide 2: Forward Looking and Cautionary Statements
FORWARD LOOKING AND CAUTIONARY STATEMENTS 2 This presentation contains certain statements that are, or may be considered to be, “forward-looking statements” for the purpose of federal securities laws, including, but not limited to, statements that reflect our current views with respect to future eve
Slide 3: Executive Summary
J F) EXECUTIVE SUMMARY
Slide 4: In 1997, we pioneered experiential retail for kids
In 1997, we pioneered experiential retail for kids 4 © 2023 Build-A-Bear Workshop, Inc. BUILD-A-BEAR WORKSHOP, INC. (NYSE: BBW) Today, we are a MULTI-CHANNEL, SITE-BASED EXPERIENCE and ENTERTAINMENT COMPANY with DIVERSIFIED CATEGORIES and CONSUMER SEGMENTS Started as a mall-based vertical kid’s reta
Slide 5: BBW FY2022 Results
MOST PROFITABLE YEAR in COMPANY HISTORY 2ND CONSECUTIVE YEAR of RECORD-BREAKING PROFITABILITY 8 CONSECUTIVE QUARTERS of YEAR-OVER-YEAR REVENUE GROWTH 5 © 2023 Build-A-Bear Workshop, Inc. BBW FY2022 RESULTS FY2022 delivered record-breaking performance… On top of record-breaking performance in FY2021
Slide 6: BBW Snapshot: By the Numbers
25 YEARS OF EMOTIONAL CONNECTIONS 6 93% Brand Awareness* 20MM+ First Party Data Contacts, Social Media Followers & Loyalty Members ~225MM Furry Friends Sold Since Inception ~500 Experience Locations Worldwide with Multiple Business Models >135% Digital Demand Growth (vs pre-pandemic 2019) Skilled As
Slide 7: BBW Key Investor Considerations
BBW KEY INVESTOR CONSIDERATIONS BUSINESS STRENGTH AND MOMENTUM SUPPORTS PROVEN STRATEGIC INITIATIVES: Strong financial results with profitable, growing revenue, high margins, good free cash flow, clean debt-free balance sheet and seasoned executive team BRAND POWER PRESENTS MONETIZABLE OPPORTUNITIES
Slide 8: Brand Power
BRAND POWER
Slide 9: BBW Is Beloved
BBW IS BELOVED MULTIPLE OCCASIONS BALANCE BUSINESS SEASONALITY** Jan-Mar Jul-Sep Apr-Jun Oct-Dec First party data email contacts, social followers and loyalty members 20MM+ ~80% of visits to experience locations are Planned* and the top occasion is a birthday Well-Known Multi-Generational Emotional
Slide 10: BBW Has Diverse and Highly Coveted Consumers
BBW HAS DIVERSE AND HIGHLY COVETED CONSUMERS Build-A-Bear appeals to a broad demographic market with strong purchasing power and brand loyalty Wide interest across ages Educated with spending power: Professional careers, Appx 70% attended college Over 80% are homeowners Approximately 70% are married
Slide 11: 13 Billion Annual Media and PR Impressions
11 11 Annual media and PR impressions exceeded 10B in 2020 and 2021. Increased to 13B in 2022 © 2023 Build-A-Bear Workshop, Inc. 13 BILLION ANNUAL MEDIA AND PR IMPRESSIONS Build-A-Bear IS pop culture; iconic status drives media exposure. Our brand is regularly mentioned on popular TV shows, movies a
Slide 12: BBW Co-Brands with Leading Licenses
BBW CO-BRANDS WITH LEADING LICENSES License relationships with over 75 world-class collaborators from film, TV, art, games, sports and more support enthusiast, collectible, affinity and gifting businesses with appeal to expanded consumer demographics…yet BBW is a brand unto itself providing balanced
Slide 13: Proven Strategy & Dynamic Multi-Channel Business Model
PROVEN STRATEGY & DYNAMIC MULTI-CHANNEL BUSINESS MODEL
Slide 14: BBW Harnesses Brand Equity and Technology to Drive Growth
BBW HARNESSES BRAND EQUITY and TECHNOLOGY TO DRIVE GROWTH BBW operates a dynamic “circle of engagement” model designed to efficiently create multiple consumer touchpoints using our one-to-one experience locations, data capture and advanced digital analytics & communications capabilities to increase
Slide 15: BBW Has Competitive Dynamic Business Model
EXPERIENCE LOCATIONS PRODUCT DEVELOPMENT SOURCING PRODUCTION LOGISTICS CONSUMERS STRATEGIC BRAND INSIGHTS 15 MORE BUSINESS CONTROL: BBW uses proprietary data to design/develop concepts that are directly sourced, distributed, marketed, priced, and sold providing business flexibility. Stores also serv
Slide 16: Execution of 2022 Strategy Delivering Another Record Year
EXECUTION OF 2022 STRATEGY DELIVERING ANOTHER RECORD YEAR © Build-A-Bear Workshop, Inc. 16 © 2023 Build-A-Bear Workshop, Inc. DIGITAL CAPABILITIES TRANSFORMED CATEGORIES & CONSUMERS EXPANDED EXPERIENCE & BUSINESS MODELS DIVERSIFIED Disciplined and agile execution of strategic pillars which provide a
Slide 17: Experience Locations Build Brand and Support E-commerce
EXPERIENCE LOCATIONS BUILD BRAND and SUPPORT E-COMMERCE Award winning concept enjoys >25% average contribution margin and ~100% of our “experience locations” were EBIT positive and generate meaningful cash flow for the company Over 50 million guests enter an experience location per year. The iconic
Slide 18: Experience Locations Have Diverse Formats and Models
EXPERIENCE LOCATIONS HAVE DIVERSE FORMATS AND MODELS OPPORTUNITY FOR ADDITIONAL LOCATIONS - BBW is NOT overstored Opened over 20 new locations in 2022 including sites such as Six Flags Magic Mountain and the Pro Football Hall of Fame; expect to add 20-30 locations through combination of corporately-
Slide 19: E-commerce Growth Includes Expansion of Consumer Base
Rather than “digitizing” the BBW “physical” experience, BBW extended the reach and size of our market with diverse consumer segments including teens, adults, gift-givers, brand enthusiasts and collectors with new licensed relationships, experiences, and advanced digital marketing activities E-COMMER
Slide 20: Diverse Digital Experiences Appeal to Variety of Guests
DIVERSE DIGITAL EXPERIENCES APPEAL TO VARIETY OF GUESTS Buildabear.com offers various online shopping experiences and product options to meet the preferences of diverse consumer segments for multiple occasions and products Age-gated shop-in-shop focused on edgier products and licensing including the
Slide 21: BBW Business Is Enhanced by Profitable E-commerce Platform
BBW BUSINESS IS ENHANCED BY PROFITABLE E-COMMERCE PLATFORM Expanded digital marketing technology enables efficient targeting of broadened consumer segments to drive e-commerce demand E-commerce strong in both US and UK Salesforce technology expanding loyalty and digital capabilities and efficiencies
Slide 22: Business Strength and Momentum
BUSINESS STRENGTH AND MOMENTUM
Slide 23: 2022 Financial Snapshot
2022 FINANCIAL SNAPSHOT TOTAL REVENUES $467.9MM +13.7% OVER 2021 +83.3% OVER 2020 PRE-TAX INCOME +$11.2MM OVER 2021 +$82.1MM OVER 2020 HIGHEST IN COMPANY’S HISTORY YEAR-END CASH AND EQUIVALENTS $42.2MM VS $32.8MM 2021 VS $34.8MM 2020 GROSS PROFIT MARGIN 52.5% VS 53.0% IN 2021 VS 38.2% IN 2020 THE MO
Slide 24: 2023 Financial Expectations
2023 FINANCIAL EXPECTATIONS TOTAL REVENUES +5%-7% VS 2022 With growth in all 3 operating segments PRE-TAX INCOME VS 2022 HIGHEST IN COMPANY’S HISTORY CAPITAL EXPENDITURES $15MM – $20MM +20-30 NEW EXPERIENCE LOCATIONS COMBINED CORPORATELY AND THIRD-PARTY OPERATED 2023 TO BE MOST PROFITABLE IN COMPANY
Slide 25: Current Management Led Successful Business Turnaround
CURRENT MANAGEMENT LED SUCCESSFUL BUSINESS TURNAROUND $384 $467.9 2012 2022 In millions TOTAL REVENUES 2022 highest level in over a decade EBITDA Nearly $100MM swing in profitability PROFITABLE STORES In North America LOCATION DIVERSIFICATION More than doubled non-traditional locations AVERAGE DOLLA
Slide 26: Sustained Growth
SUSTAINED GROWTH (Excluding 2020 due to negative COVID impact) TOTAL REVENUES Highest in more than a decade PRETAX INCOME Double-digit profit margin 26 © 2023 Build-A-Bear Workshop, Inc. +13.7% In millions In millions +22.1% 12.3% of Ttl Rev 13.2% of Ttl Rev In millions` QUARTERLY REVENUES Q4 2022 d
Slide 27: Experienced Management Drives Results with Focus on Future
EXPERIENCED MANAGEMENT DRIVES RESULTS WITH FOCUS ON FUTURE Sharon Price John President and Chief Executive Officer Former President of Stride Rite Children’s Group LLC, a division of Wolverine World Wide, Inc. Also: Hasbro, Inc., VTech Industries, Inc. and Mattel, Inc. Eric Fencl Chief Administrativ
Slide 28: Continued Focus on Shareholder Return
CONTINUED FOCUS ON SHAREHOLDER RETURN 28 © 2023 Build-A-Bear Workshop, Inc. * Share repurchase program in effect through August 31, 2025 Second special dividend declared on 3/8/2023 by Board of Directors reflecting ongoing commitment to continue to return value to shareholders in the form of stock r
Slide 29: BBW in Review
BBW IN REVIEW BUSINESS STRENGTH AND MOMENTUM SUPPORTS PROVEN STRATEGIC INITIATIVES BRAND POWER PRESENTS MONETIZABLE OPPORTUNITIES 29 © 2023 Build-A-Bear Workshop, Inc. PROVEN STRATEGY AND DYNAMIC BUSINESS MODEL DIVERSIFIES REVENUE BBW’S UNIQUE COMPETITIVE POSITION, GROWTH OPPORTUNITIES AND SIGNIFICA
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