Baby Bunting Group Ltd. · ASX:BBN
Baby Bunting — Morgans Queensland Conference 2016
32 slides from Baby Bunting's conference presentation, Oct 12, 2016
Slide 1: ASX announcement: Morgans Queensland Conference 2016
12 October 2016 ASX Market Announcements Office Australian Securities Exchange For personal use only Baby Bunting Group Limited (ASX: BBN) Morgans Queensland Conference 2016 Matt Spencer, CEO and Managing Director of Baby Bunting Group Limited, will today deliver a presentation at the Morgans Queens
Slide 2: Morgans Queensland Conference 2016
For personal use only Morgans Queensland Conference 2016 Baby Bunting Group Limited 12 October 2016 Matt Spencer Chief Executive Officer & Managing Director
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer This document is a presentation of general background information about the activities of Baby Bunting Group Limited (Baby Bunting). The information contained in this presentation is for general background information and does not purport to be complete. It is not int
Slide 4: Baby Bunting
Baby Bunting Baby Bunting is Australia’s largest specialty retailer of baby goods, aiming to provide customers with the widest range of products, high levels of service and low prices every day For personal use only • Founded in 1979, Baby Bunting is Australia’s largest specialty baby goods retailer
Slide 5: Strong Financial Track Record
Strong Financial Track Record FY2016 sales growth of +31.4% and pro forma EBITDA growth of +51.1% For personal use only SALES GROSS MARGIN ($ million) (%) +310 ~24% bps CAGR 236.8 34.3% 34.3% 180.2 33.3% 150.2 125.5 31.2% FY2013 FY2014 FY2015 FY2016 FY2013 FY2014 FY2015 FY2016 PRO FORMA CODB (%) 1 P
Slide 6: Industry overview
For personal use only 1. Industry overview
Slide 7: Industry Overview
Industry Overview Estimated addressable Large number of small, Strict Australian mandatory Changing competitive market is ~$2.4bn pa / specialty players & product safety standards For personal use only landscape ~1 million 0 to 3 year olds Department stores provide barriers to entry SPECIALTY BABY G
Slide 8: Business overview
For personal use only 2. Business overview
Slide 9: Drivers of Competitive Advantage
Drivers of Competitive Advantage For personal use only Consistent Retail Format Widest Product Offering, In Stock Convenient Network and Available of Stores and Online Competitively Cost Effective Priced Marketing Comprehensive Range of Ancillary Scale Platform Services Customer Centric Team Culture
Slide 10: Baby Bunting's Store Network
Baby Bunting’s Store Network 37 stores across Australia, with significant roll-out potential to over 80 stores For personal use only Queensland Helensvale Booval (29 Jul ‘15) Kawana North Lakes (18 Sep ‘15) Fortitude Valley Burleigh Waters (14 Nov ‘15) Townsville Capalaba (12 Feb ‘16) Macgregor New
Slide 11: Store Experience
Store Experience Stores are consistent in branding, range, operations and customer service For personal use only • The widest range of products with over 6,000 products in store • Price match guarantee and continued investment in value for the customer • Increasing range of Private Label and Exc
Slide 12: Online
Online www.babybunting.com.au continues to evolve & grow as the leading specialty baby goods website For personal use only • 47% increase in website visits (FY2016), and a 66% TOTAL WEBSITE SESSIONS BY MONTH (babybunting.com.au) (1) increase for the month of June year-on-year 1,200 1,050 • Significa
Slide 13: Sales and Marketing Strategy
Sales and Marketing Strategy Baby Bunting’s sales and marketing strategy delivering value to our customers every day, every visit For personal use only • Integrated promotions across traditional channels (catalogue, regional and pay TV, radio and print media), online (email, search and digital) as w
Slide 14: Logistics & Supply Chain
Logistics & Supply Chain Continuous improvement in the Distribution Centre (DC) supporting the growth of the business For personal use only • Implementation of the “Paperless” Warehouse LOGISTICS CONTROLLED FOR KEY PRODUCTS (FY2016) Management System driving efficiency % of products % of sales DC to
Slide 15: Supplier Relationships
Supplier Relationships Strong growth in Private Label and Exclusive Products(1) For personal use only • Network of more than 245 suppliers across third party SUPPLIER BREAKDOWN BY SALES (FY2016) brands, private label and exclusive products • Top 10 suppliers represent 46% of sales Top 10 • A focus o
Slide 16: Building the Best Team
Building the Best Team Continued focus on the development of our growing team For personal use only • Implementation of a Learning Management System BREAKDOWN OF EMPLOYEES (including casuals) • Building the talent pipeline FUNCTION Dec 2014 Jun 2015 Dec 2015 Jun 2016 • Inductions, training & develop
Slide 17: Growth strategy
For personal use only 3. Growth strategy
Slide 18: Growth Priorities
Growth Priorities Multiple drivers of organic growth For personal use only 1 Growth from existing stores and online • 45% of stores are less than 3 years old (at 26 June 2016) • Multiple initiatives to improve customer experience across all channels • Growing brand awareness across all states and te
Slide 19: Growth from Existing Stores and Online
Growth from Existing Stores and Online Strong FY2016 comparable store sales growth1 of 12.5% For personal use only • Significant comparable store sales growth across STORE MATURITY PROFILE AT 26 JUNE 2016 (YEARS OPENED) the network. 45% of stores were less than 3 years old at the end of FY2016 • Ave
Slide 20: Growth from New Store Roll-Out
Growth from New Store Roll-Out 5 new stores opened in FY2016, 4-8 planned for FY2017 NUMBER OF STORES (AT YEAR END) For personal use only 80+ 80 60 40 36 31 21 23 19 20 15 12 9 0 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Network Plan • Currently operating 37 stores. Preston (Victoria)
Slide 21: EBITDA Margin Improvement: Gross Margin
EBITDA Margin Improvement Product mix has shaped gross profit performance For personal use only Gross Margin • Gross profit income up 31.2% to $81.2 million • Gross profit as a percentage of sales is consistent with FY2015 • Strong growth in prams, car seats, nappies and consumables • Market dynamic
Slide 22: EBITDA Margin Improvement: Operating Leverage
EBITDA Margin Improvement Further operating leverage achieved Cost of Doing Business Metrics (% sales) For personal use only Store expenses Leverage investment in Technology, Support Office and the 20.5% Distribution Centre 20.2% 20.0% 19.3% • Cost of doing business (pro forma) improvement of 109bps
Slide 23: Outlook
For personal use only 4. Outlook
Slide 24: Outlook
Outlook FY2017 outlook reflecting continuing strong trading performance and new store rollout For personal use only • FY2017 guidance: • EBITDA expected to be in the range of $21.5 million to $24.5 million, representing growth of between 15% to 31%. This excludes employee equity incentive expenses •
Slide 25: Thank You!
For personal use only Thank You! 24
Slide 26: Appendix – FY2016 Results Highlights
For personal use only 5. Appendix – FY2016 Results Highlights
Slide 27: FY2016 Results Highlights
FY2016 Results Highlights 1 • Sales of $236.8 million, up 31.4% on the prior corresponding period • Comparable store sales growth of 12.5%, including 15.7% in the second half For personal use only TRADING • Gross profit income up 31.2%, gross margin of 34.3% is consistent with FY2015 • Cost of doing
Slide 28: Summary Pro Forma Income Statement
Summary Pro Forma Income Statement Pro forma statement of profit or loss For personal use only Financial highlights Pro Forma Pro Forma Change • Total sales of $236.8 million, up 31.4% FY16 FY15 ̵ Comparable store sales growth of 12.5%, including $ million Sales 236.8 180.2 31.4% 15.7% in the second
Slide 29: Balance Sheet
Balance Sheet Statement of financial position For personal use only Capital structure Statutory Statutory • $7.4 million net cash position 26-Jun-16 28-Jun-15 $ million • Inventory increase reflects 5 new stores added ($4.0 million), and $1.5 million of inventory to Cash and cash equivalents 7.4 3.6
Slide 30: Cash Flow Statement
Cash Flow Statement For personal use only Statement of cash flows Statutory Statutory • Change in working capital reflects new store FY16 FY15 openings and investment in inventory to support strong sales growth $ million Tax paid includes finalisation of FY2015 tax return • ($2.4m) and FY2016 provis
Slide 31: Statutory - Pro Forma Reconciliation
Statutory - Pro Forma Reconciliation Statutory Pro Forma Pro Forma Prospectus For personal use only FY16 adjustments FY16 pro forma FY16 fct $ million Sales 236.8 236.8 218.6 Cost of sales (155.7) (155.7) (141.8) Gross Profit 81.2 81.2 76.8 Cost of doing business: Store expenses (45.6) (45.6) (43.8)
Slide 32: Glossary
Glossary For personal use only Comparable Store Sales Growth • Calculated as a percentage change of the total sales generated from stores (including the online store) in a relevant period, compared to the total sales from the same set of stores in the prior corresponding period, provided the stores
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