Articore Group Limited · ASX:ATG
Articore — Investor Presentation (February 2022)
42 slides from Articore's investor presentation, Feb 16, 2022
Slide 1: Investor Presentation 1H FY22 Results Update
Investor Presentation 1H FY22 Results Update 16 February 2022 Redbubble Group owns and operates the leading global online marketplaces, Redbubble.com and TeePublic.com, bringing more creativity into the world. *The financial results have been audited and are on a delivered basis (unless otherwise no
Slide 2: 1H FY22 Financial Summary
1H FY22 Financial Summary (unchanged from preliminary results) Gross Transaction Value Marketplace Revenue $381m $288m ↓ 14% floating ↑64% 2-yr floating ↓ 18% floating ↑60% 2-yr floating ↓ 14% cc1 ↓ 18% cc1 ↑68% 2-yr cc1 Artist Revenue Gross Profit $54m $108m ↓ 17% floating ↑61% 2-yr floating ↓ 25%
Slide 3: Investment highlights
1. Investment highlights Bicycle building Designed and sold by Sam Brewster 3
Slide 4: RB Group offers a compelling investment opportunity
RB Group offers a compelling investment opportunity 1 2 3 4 5 World’s largest Strong unit Uncapped upside Multiple Energised and on-demand economics enables given massive high potential focused marketplaces exceptional returns addressable growth levers management for independent at scale markets and
Slide 5: World's largest on-demand marketplaces for independent artists
1 World’s largest on-demand marketplaces for independent artists RB Group operates large 3-sided marketplaces… Uniquely serves the creator economy Global 3rd party fulfilment network is by offering a simple, no upfront cost capital light, highly scalable and enables RB global selling model Group to
Slide 6: Highly scalable and dynamic content added without upfront cost drives marketplace success
1 World’s largest on-demand marketplaces for independent artists Highly scalable and dynamic content added without upfront cost drives marketplace success More artists More active and More content More variety and On-demand continue to join engaged artists combined with more artists model enables an
Slide 7: Growing artist community and content library has increasing value and defensibility
1 World’s largest on-demand marketplaces for independent artists The growing artist community and their content library has increasing value and defensibility Selling artists Content library RB Group has built the largest online (‘000, 1H FY18 - 1H FY22) (million, FY18 - 1H FY22) community of indepe
Slide 8: Host to one of the largest catalogues of content and product listings
1 World’s largest on-demand marketplaces for independent artists Host to one of the largest catalogues of content and product listings on the Internet Each piece of digital Digital image Possible on 126 products1 content can be sold by artists on a wide variety of everyday products Total listings Co
Slide 9: Organic traffic continues to drive the majority of customer acquisition
1 World’s largest on-demand marketplaces for independent artists Organic traffic continues to drive the majority of customer acquisition Unique customers As an aggregator of demand, (m,1H FY18 - 1H FY22) RB Group connects artists to +22% millions of customers CAGR 1H FY22 Marketplace Revenue from or
Slide 10: On-demand scales more efficiently by overcoming traditional pain points
1 World’s largest on-demand marketplaces for independent artists On-demand scales more efficiently by overcoming traditional pain points Market RB Group 3P fulfiller locations (#, as at 31 Dec 2021) RB Group provides artists access to a diversified global network of 3P USA fulfillment and logistics
Slide 11: Fueled by cash received upfront and positive unit economics
2 Strong unit economics enables exceptional returns at scale Fueled by cash received upfront and positive unit economics Inflows Outflows (average timing) $130 GTV $19 Artists (~4 weeks) $11 Tax (~3 months) $100 MPR $61 COGS (~4 weeks) $39 Gross Profit $13 Paid Marketing (~4 weeks) $26 Average GPAPA
Slide 12: Well positioned in massive consumer markets with uncapped upside
3 Uncapped upside given massive addressable markets Well positioned in massive consumer markets with uncapped upside US$1T+ by 2024 globally (up 9% CAGR) US$700bn+ across fashion (apparel, accessories, footwear), 35 - 40% of customers homewares, toys, stationery, are seeking something and art sold v
Slide 13: Continued and sustained growth driven by macro tailwinds
3 Uncapped upside given massive addressable markets Continued and sustained growth driven by macro tailwinds Structural shifts to eCommerce expected to endure post-pandemic Growing creator economy accelerated by new concept of ‘work’ Increasing consumer demand for unique and meaningful products Sust
Slide 14: Clear strategic plan based upon high potential levers over the medium term
4 Multiple high potential growth levers Clear strategic plan based upon high potential levers over the medium term CY24+ CY22-24 Amplified growth, CY21-22 Earned growth in core leveraging scale to drive Foundations laid markets through disciplined margin uplift for next phase of growth investment Gr
Slide 15: Significant loyalty upside via improving brand awareness and purchasing frequency
4 Multiple high potential growth levers Significant loyalty upside via improving brand awareness and purchasing frequency Frequency of purchases Awareness among target audience3 (%, annual purchase days1, LTM2) (%, respondents: Which of these companies have you heard of?) Opportunity to Both Redbubb
Slide 16: Energised team working together to execute on growth aspirations
5 Energised and focused management and team Yin Yang Balancing Cats Designed and sold by stylecomfy Energised team working together to execute on growth aspirations Further refined the people strategy and recruited experienced executives to complement the existing team over the coming years ● Adding
Slide 17: 1H FY22 operational highlights
Little girl in tea cups with giraffe friend Designed and sold by onMerryDay 2. 1H FY22 operational highlights 17
Slide 18: RB Group continues to execute against four strategic themes
RB Group continues to execute against four strategic themes Artist activation Acquisition and engagement of artists to support growth and improvement 1 and engagement of the library of unique content User acquisition Ongoing optimisation of user acquisition and transaction flows to drive 2 and trans
Slide 19: Continuing investments to promote ongoing artist engagement
1 Artist activation and engagement Continuing investments across RB Group to promote ongoing artist engagement Marketplace Revenue by artist cohort1 (A$m, CY17 - CY21) Onboarding Recurring sales from cohort existing artists ~60% CY21 CY20 Artists who have been on CY19 the platform for >1 year CY18 C
Slide 20: Scaling content operations to enable more new original works
1 Artist activation and engagement Scaling content operations to enable more new original works to be added to the platform Investments into content New original content uploaded to Redbubble operations (m, 1H FY18 - 1H FY22) 6x Increase in related headcount1 +58% CAGR since 1H FY18 Proactively ensu
Slide 21: Making investments and continuing to experiment across the funnel
2 User acquisition and transaction optimisation Making investments and continuing to experiment across the funnel Transaction funnel Experiments / initiatives in 1H FY21 Example results Remarketing campaigns via Direct Users Mail in the US in the lead up to 7x more households Holidays expanded reach
Slide 22: 58% of MPR comes from mobile with the app driving engagement
3 Customer understanding, loyalty and brand building 58% of MPR comes from mobile with the app driving engagement Marketplace Revenue from Mobile (A$m, 1H FY18 - 1H FY22) TeePublic mobile web Redbubble apps Redbubble 15% Redbubble Marketplace mobile web Revenue from apps in 1H FY22 (up 118% v 1H FY2
Slide 23: Large membership base continues to exhibit favourable purchasing behaviours
3 Customer understanding, loyalty and brand building Large membership base continues to exhibit favourable purchasing behaviours Of those members who made a purchase in 1H FY22: Active Members on Redbubble1 in 1H FY22 Active Members who made a purchase on Redbubble1 in 1H FY22 they are 1.7x more lik
Slide 24: A growing proportion of Marketplace Revenue from repeat purchases
3 Customer understanding, loyalty and brand building A growing proportion of Marketplace Revenue from repeat purchases Marketplace Revenue by customer segment and proportion from repeat purchases1 (A$m, %, 1H FY18 - 1H FY22) 1H FY22 Marketplace Revenue from repeat purchases1 45% (up from 40% in 1H F
Slide 25: Highly resilient 3P fulfillment network continues to scale
4 Product Range and 3rd Party fulfilment network Highly resilient 3P fulfillment network continues to scale 1H FY22 included one of the largest Extension of Last Order by Dates (LOBDs) Holiday volumes in company history for US, the Group’s largest region 21m+ # of units1 in 1H FY22 (down 18% vs 1H F
Slide 26: Delivered new product launches, line extensions and visual merchandising improvements
4 Product Range and 3rd Party fulfilment network Delivered new product launches, line extensions and visual merchandising improvements Designed and sold by micklyn, Lidiebug, and Daniel Watts Launched new products to gain market Recontextualised merchandise against Delivered product line extensions
Slide 27: Pets category to launch in CY22
4 Product Range and 3rd Party fulfilment network Pets category to launch in CY22 Gain access to new market share by aligning product portfolio to shifts in consumer demand Designed and sold by ILoveDoodle, Audrey Herbertson, and dachshundrescue 27
Slide 28: 1H FY22 financial performance and outlook
Rainbow reef Designed and sold by Bobbilockyer 3. 1H FY22 financial performance and outlook 28
Slide 29: 1H FY22 Financial Summary
1H FY22 Financial Summary (unchanged from preliminary results) Gross Transaction Value Marketplace Revenue $381m $288m ↓ 14% floating ↑64% 2-yr floating ↓ 18% floating ↑60% 2-yr floating ↓ 14% cc1 ↓ 18% cc1 ↑68% 2-yr cc1 Artist Revenue Gross Profit $54m $108m ↓ 17% floating ↑61% 2-yr floating ↓ 25%
Slide 30: Delivering above system growth over the medium term
Delivering above system growth over the medium term Marketplace Revenue GP GPAPA (A$m, 1H FY18 - 1H FY22) (A$m, 1H FY18 - 1H FY22) (A$m, 1H FY18 - 1H FY22) +30% +32% +25% CAGR CAGR CAGR RB Group has a long term track record of growth ● Topline grew at CAGR of 30% since 1H FY18 ● Increasing scale wil
Slide 31: Consolidating global footprint with all regions growing strongly
Consolidating global footprint with all regions growing strongly over the last 2 years Gross Transaction Value by Region (A$m, 1H FY18 - 1H FY22) % total 1H FY22 v 1H FY22 v Region business 1H FY21 1H FY20 ROW 1% (14%) 31% AU/NZ 7% 5% 101% UK 10% (21%) 61% EU 13% (19%) 51% North America 69% (13%) 64
Slide 32: Diversified product mix enabled RB Group to maximise opportunities
Diversified product mix enabled RB Group to maximise opportunities in a changing environment Gross Transaction Value by Product Category (A$m, 1H FY18 - 1H FY22) Category % Total 1H FY22 v 1H FY22 v business 1H FY21 1H FY20 Artwork 10% (14%) 86% Homewares 10% (23%) 71% Stationery and Stickers 12% (1
Slide 33: Bridge between Reported and Underlying Marketplace Revenue
Bridge between Reported and Underlying Marketplace Revenue Marketplace Revenue (A$m, 1H FY20 - 1H FY22) $353 1H FY22 underlying Marketplace Revenue growth was down 5% YoY (5% cc) Taking a longer term view, 1H FY22 Marketplace Revenue was 60% (68% cc) higher than 1H FY20 Source: RB Group internal dat
Slide 34: Strong balance sheet provides significant strategic flexibility
Strong balance sheet provides significant strategic flexibility All time peak of $143m cash at bank with nil debt provides ample flexibility to: ● Accelerate mid-term growth through investments across Closing cash balance four key strategic themes (A$m, 1H FY18 - 1H FY22) ● Fund M&A opportunities ●
Slide 35: Outlook
Outlook Marketplace Revenue (A$m, FY19 - FY22) Redbubble provided updated outlook statements in its market announcement on 18 January 2022. Slightly Redbubble now expects FY22 Marketplace Revenue to below FY21 underlying be slightly below FY21 underlying Marketplace Revenue. FY22 EBITDA margin as a
Slide 36: RB Group is committed to medium term aspirations
RB Group is committed to medium term aspirations that will deliver a step change in the scale of the business Medium Term Aspiration $1.25b $1.5b+ in Marketplace Revenue in Gross Transaction Value $250m in Artist Revenue We believe this is achievable through organic investment and growth We will loo
Slide 37: The enhanced scale will expand margins and increase profitability
The enhanced scale will expand margins and increase profitability CY21 CY24+ Implications Artist Revenue 92.8 $250m+ Step change in value for Artists Marketplace Revenue 488.6 $1.25b+ Grow MPR at CAGR of 20-30% Grow the product portfolio while GP (% of MPR) 38.2% 40-42% maintaining similar margin st
Slide 38: Q&A
sunshine enrapture me Designed and sold by leafandpetal Q&A 38
Slide 39: Appendix
Kingfisher Designed and sold by drewpicturez Appendix 39
Slide 40: 2Q and 1H Income Statement Summary – RB Group
2Q and 1H Income Statement Summary – RB Group YOY 2-year YOY 2-year 2Q (2Q FY22 v (2Q FY22 v 1H (1H FY22 v (1H FY22 v P&L (A$M) 2Q FY21) 2Q FY20) 1H FY21) 1H FY20) FY21 FY22 Growth Growth FY21 FY22 Growth Growth Total Revenue 241.8 214.9 (11%) 64% 417.6 341.6 (18%) 60% Less: Artist Revenue (36.5) (3
Slide 41: Glossary
Glossary ● Marketplace Revenue (MPR): Total Revenue less Artist Revenue (i.e. margin). ● Gross Transaction Value (GTV): Gross Transaction Value less Taxes and Artist Revenue is equal to Marketplace Revenue. ● Constant currency: reflects the underlying growth before translation to Australian dollars
Slide 42: About Redbubble Group
About Redbubble Group Founded in 2006, the Redbubble Group incorporates Redbubble Limited and its subsidiaries, including TP Apparel LLC (TeePublic). The Redbubble Group owns and operates the leading global online marketplaces hosted at Redbubble.com and TeePublic.com, powered by over one million in
Articore Group — Investor Presentation (February 2022) on 6ix