Slide 1: FY19 Results Presentation
FY19 RESULTS PRESENTATION 20 AUGUST 2019
Slide 2: Important Notice
IMPORTANT NOTICE This disclaimer applies to this presentation and the information contained in it (the “Presentation”). By reading this disclaimer you agree to be bound by it. Important notice and disclaimer: This Presentation contains a general summary of the activities of Kogan.com Ltd (Kogan.com)
Slide 3: Contents
CONTENTS CEO Update Page 4 - 14 Financial Update Page 15 - 24 Outlook Page 25 - 29 3
Slide 4: CEO Update
CEO Update Ruslan Kogan Founder & CEO 4
Slide 5: FY19 Highlights
FY19 HIGHLIGHTS The business achieved double digit Gross Sales1, Gross Profit2 and EBITDA2 growth while also taking new steps towards becoming a more capital-light business by launching Kogan Marketplace. • Gross Sales1 grew to $551.8 million outperforming prior year by 12.0%, Gross Profit2 and FINA
Slide 6: FY19 Results
FY19 RESULTS EBITDA2 of $30.1 million exceeded FY18 EBITDA by 15.6% FY18 vs FY19 $m FY18 FY19 Variance Gross Sales1 492.6 551.8 12.0% Revenue2 412.3 438.7 6.4% Gross Profit2 80.6 90.7 12.5% Gross Margin 19.5% 20.7% 1.2pp/5.7% EBITDA2 26.0 30.1 15.6% Notes: 1. Gross Sales was formerly referred to as
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS Kogan.com grew Gross Profit2 and EBITDA2 at a faster rate than Gross Sales1. GROSS SALES1 GROSS PROFIT2 EBITDA2 600 100.0 35.0 90.7 551.8 12.5% 12.0% 90.0 550 30.1 80.6 15.6% 30.0 492.6 80.0 500 26.0 70.0 25.0 450 60.0 400 51.7 20.0 $m $m 50.0 $m 350 334.5 15.0 40.0 12.5 300 30.
Slide 8: Who We Are
WHO WE ARE We have built a company that allows us to be agile, bold and innovative. Our growing portfolio of businesses provides diversification of income, making us a more resilient business. 1,609,000 Active Customers 8
Slide 9: Some Recent Awards
SOME RECENT AWARDS Kogan.com has been recognised with several prestigious awards during the year Three-peat! Third year running, winner of the People's Choice Award MOZO Experts Choice Awards for Kogan Internet, at the Australia Post Online Retail Industry Awards (ORIAS) Kogan Money & Kogan Life Ins
Slide 10: Kogan Kinetics
KOGAN KINETICS OUR VIRTUOUS CYCLE CUSTOMER & BRAND GROWTH • Scale of efficiencies • Customer acquisition & retention ENHANCED CONSUMER MORE PARTNERS OFFERING & PRODUCTS • More brands • Broader selection • Additional verticals • Improved pricing • Top tier manufacturing partners 10
Slide 11: Building the Kogan Brand
BUILDING THE KOGAN BRAND In the twelve months to 30 June 2019, the Company achieved 15.9% growth in Active Customers2. The Company had 1,609,000 Active Customers as at 30 June 2019 (compared with 1,388,000 as at 30 June 2018). Jun-19 vs Jun-18 Jun-19 Jun-18 Variance Active Customers2 1,609,000 1,388
Slide 12: Building the Kogan Brand
BUILDING THE KOGAN BRAND A large proportion of traffic continues to come from free sources and ROI on marketing investment has significantly improved. The Company has achieved steady growth in customer orders while maintaining Gross Sales per customer1. LTM CUSTOMER ORDERS & AVERAGE GROSS SALES CONV
Slide 13: Exclusive Brands Strategy
EXCLUSIVE BRANDS STRATEGY Exclusive Brands achieved revenue growth of 41.6% in FY19 vs FY18, continuing to meet strong consumer demand across a wide-array of products. This demonstrates accelerated growth of Exclusive Brands through the year. STRONG YoY GROWTH IN EXCLUSIVE BRANDS REVENUE IN FY19 Exc
Slide 14: Kogan Marketplace
KOGAN MARKETPLACE Kogan Marketplace launched during FY19. 5.0 The launch of Kogan Marketplace is proving to be a transformational step for the Company. Kogan Marketplace was launched during 4.0 3QFY19 and has received positive responses from both sellers and customers. The Kogan.com team is working
Slide 15: Financial Update
Financial Update David Shafer CFO/COO 15
Slide 16: FY19 Results Compared to FY18
FY19 RESULTS COMPARED TO FY18 EBITDA1 growth to $30.1 million was achieved despite investments in expanding the Company’s warehouse footprint to 13 locations, laying the foundation for further growth in FY20 and beyond. $m FY18 FY191&2 Variance % OVERVIEW Gross Sales2 492.6 551.8 12.0% Revenue1 412.
Slide 17: Key Drivers of Kogan.com FY19 Financial Performance
KEY DRIVERS OF KOGAN.COM FY19 FINANCIAL PERFORMANCE Ongoing implementation of strategy to grow the brand, accelerate New Verticals, expand Exclusive Brands offerings and deliver improved customer experience. The business achieved growth in Active Customers in the last 12 months of 221,000 (15.9%). B
Slide 18: Key Drivers of Kogan.com FY19 Financial Performance
KEY DRIVERS OF KOGAN.COM FY19 FINANCIAL PERFORMANCE Kogan Mobile Active Customers grew 24.4% during FY19, while Kogan Internet grew Active NEW VERTICLES Customers 273.2% during FY19. Commission-based revenues from Kogan Mobile grew 9.8% year-on-year. Kogan Insurance, which includes our suite of insu
Slide 19: FY19 Gross Profit Portfolio Business Mix
FY19 GROSS PROFIT PORTFOLIO BUSINESS MIX Exclusive Brands and Third-Party Brands represent 49.7% and 26.7% of gross profit in FY19, respectively. When combined with Kogan Mobile, these three core divisions accounted for 91.0% of gross profit. FY19 GROSS PROFIT MIX 5.3% Growth in Exclusive Brands and
Slide 20: Kogan Mobile & Kogan Internet
KOGAN MOBILE & KOGAN INTERNET Kogan Mobile and Kogan Internet continue to achieve growth in active customers, with Kogan Mobile NZ to be launched in 1HFY20. KOGAN MOBILE - ACTIVE CUSTOMERS Kogan Mobile, continues to grow and contribute significantly to Gross Profit. In FY19 Kogan Mobile represented
Slide 21: Kogan Insurance
KOGAN INSURANCE Kogan Insurance commission-based revenues for FY19 grew by 144.0% compared to FY18. KOGAN INSURANCE COMMISSION-BASED REVENUES 700.0 600.0 144.0% Commission-based revenue ($000) 500.0 400.0 300.0 200.0 100.0 0.0 FY18 FY19 Kogan Insurance, which includes our suite of insurance products
Slide 22: Net Asset Summary
NET ASSET SUMMARY A strong balance sheet at 30 June 2019 with $27.5 million of cash and $75.9 million inventories, with no bank debt. $m Jun-19 CURRENT ASSETS Cash 27.5 Trade and other receivables 5.7 Inventories 75.9 Financial assets 0.4 Total current assets 109.5 Inventories of $75.9 million compr
Slide 23: Inventory Turn
INVENTORY TURN In order to respond to consumer demand from our growing base of Active Customers, the business has invested in inventory to support continued sustainable growth. INVENTORY TURN Despite a significant increase of inventory in warehouse over (INVENTORY IN WAREHOUSE) the course of the fin
Slide 24: FY19 Statutory Cash Flow
FY19 STATUTORY CASH FLOW The change in net working capital reflects the investment in inventory over the course of the financial year to respond to consumer demand and drive Revenue1 growth of 41.6% in Exclusive Brands. $m Statutory FY19 Net working capital decreased by $19.8 million in FY19, Statut
Slide 25: Outlook
Outlook kogan.com Ea
Slide 26: FY20 & Beyond
FY20 & BEYOND In FY20 we expect continued brand growth and deeper market penetration of maturing portfolio businesses alongside continued expansion of new portfolio businesses. SELECTIVE & OPPORTUNISTIC M&A LAUNCH ADDITIONAL BUSINESS VERTICALS 26
Slide 27: Portfolio Business - Market
PORTFOLIO BUSINESS - MARKET Achieved greater than Portfolio Business Partner Launch date Market size 1% market share? Kogan Retail n/a FY06 $23.7 billion1 ✓ Kogan Internet Vodafone Launched 4QFY18 15.5m premises2 - Kogan Insurance Hollard Launched 1QFY18 $48.0 billion3 - Kogan Health Medibank Launch
Slide 28: FY20 Outlook
FY20 OUTLOOK FY20 will see the scaling up and launch of New Verticals, and further growth in the Active Customer base. The Company will not be providing formal earnings guidance for FY20. However, the Company will provide regular business updates during the year. 1HFY20 has started well with July un
Slide 29: Dividend
DIVIDEND The board has declared a fully franked final dividend of 8.2 cents per share, which reflects total dividends of 14.3 cents per share in respect of FY19. DPS (cents) Franking (%) Record date Payment date Dividend per share 8.2 100.0 27 August 2019 14 October 2019 (cents) 29
Slide 30: Glossary
GLOSSARY 1HFYxx: the six months ended 31 December 20xx. 2HFYxx: the six months ended 30 June 20xx. 1QFYxx: the three months ended 30 September 20xx. 2QFYxx: the three months ended 31 December 20xx. 3QFYxx: the three months ended 31 March 20xx. 4QFYxx: the three months ended 30 June 20xx. Active Cust
Slide 31: Glossary
GLOSSARY Kogan Marketplace: A platform launched in 3QFY19 for sellers and buyers to complete transactions on Kogan.com, with commission-based revenue being earned by Kogan.com. Kogan Mobile Australia: Launched in 2QFY16, vertical offering pre-paid mobile phone plans available online using Vodafone’s
Slide 32: Annexure 1: FY19 Revenue Growth by Portfolio Business
ANNEXURE 1 FY19 REVENUE GROWTH BY PORTFOLIO BUSINESS Exclusive Brands achieved Revenue growth of 41.6% year-on-year. FY18 FY19 $m Revenue Revenue YoY Revenue growth % Exclusive Brands 130.0 184.1 41.6% Third-Party Brands 262.2 233.2 -11.1% Product Divisions 392.2 417.3 6.4% Travel1 6.9 0.8 n/a Insur
Slide 33: Annexure: FY19 Impacts of AASB Revenue from Contracts with Customers
ANNEXURE 2 FY19 IMPACTS OF AASB 15 ‘Revenue from contracts with customers’ FY19 without adoption of FY19 $m AASB 15 1 2 Reported Revenue 441.5 (5.2) 2.4 438.7 Cost of Sales (353.2) 5.2 - (348.0) Gross Profit 88.3 - 2.4 90.7 Gross Margin % 20.0% - - 20.7% EBITDA 27.7 - 2.4 30.1 In line with changes t
Slide 34: Annexure: FY19 Impacts of AASB Leases
ANNEXURE 3 FY19 IMPACTS OF AASB 16 ‘Leases’ FY19 without adoption FY19 $m of AASB 16 1 2 Reported Revenue 438.7 438.7 Cost of Sales (348.0) (348.0) Gross Profit 90.7 90.7 Gross Margin % 20.7% 20.7% Operating costs (61.0) 0.6 (60.4) Unrealised FX loss (0.2) (0.2) EBITDA 29.5 0.6 30.1 EBITDA Margin %