Bubs Australia Ltd. · ASX:BUB
Bubs Australia — H1 FY2021 Earnings Presentation
32 slides from Bubs Australia's earnings presentation, Feb 26, 2021
Slide 1: For personal use only
For personal use only
Slide 2: Disclaimer
obs DISCLAIMER DISCLAIMER This investor presentation (Presentation) is dated 26 February 2021 and has been prepared by Bubs Australia Limited (ACN 060 094 742) (Bubs or the Company). The material in this Presentation is general background information about Bubs’ activities current at the date of the
Slide 3: For personal use only
For personal use only
Slide 4: Vision & Values
cbs VISION & VALUES Creating new generations of happy, healthy )Csbs GOODNESS We believe in wholesome, healthy food and a positive approach to life. HONESTY We believe in 100% transparency, this is ‘clean’ food from a brand you trust. VERY BEST We believe in being thorough and uncompromising, sticki
Slide 5: Contents Page
CONTENTS PAGE Financial Highlights 06 Market Context 1H FY21 Financial Performance Sustainable Growth Response Outlook
Slide 6: Financial Highlights
Despite COVID-led disruption to the Daigou channel, 1H FY21 results were partly offset by the strong performance of Bubs® Goat Infant Formula growth momentum in both domestic retail and China eCommerce. . if FY21 sroup Gross Revenue ' Gross revenue is a non-IFRS measure. Non-IFRS measures have not b
Slide 7: Market Context
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Slide 8: Key Highlights - Market Opportunity
orbs MARKET CONTEXT KEY HIGHLIGHTS — MARKET OPPORTUNITY In the “next normal” new consumer trends will drive acceleration of change in China consumer consumption. o 2 1 2 3. 1. 1 $37bn China remains the world’s biggest infant formula market with premiumisation segment in growth. Goat milk infant form
Slide 9: Challenging COVID Macro Impact
orbs MARKET CONTEXT CHALLENGING COVID MACRO IMPACT Notwithstanding external forces creating channel disruption and volatility across our sector in 2020, Bubs is well placed with strong foundations, emerging brands and a robust balance sheet to go forward delivering sustainable and profitable growth
Slide 10: Growth Momentum Interrupted by Channel Shifting
orbs MARKET CONTEXT GROWTH MOMENTUM INTERRUPTED BY CHANNEL SHIFTING Total Bubs Goat Formula direct sales to China increased significantly during the first half, although only partially off-setting the COVID-led disruption to the much larger contribution from the Daigou channel, caused by internation
Slide 11: Bubs Australia Is the Clear Lead Challenger
bobs: MARKET CONTEXT BUBS AUSTRALIA IS THE CLEAR LEAD CHALLENGER otal infant formula category scan sales in Australian grocery and pharmacy retailers have also been heavily impacted by the demand shock in the Daigou channel. Despite this severe contraction, Bubs® remains in high scan sales growth, n
Slide 12: For personal use only
For personal use only 3 4.0 3.0 2 2.0 1 1.0 0 0.0 FY19 Q3 FY19 Q4 FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 FY 21 Q2 Total Bubs Australia Scan Dollar Sales Total Bubs Australia Market Share %
Slide 13: Bubs Goat Formula Remains Our Most Profitable Segment
orbs MARKET CONTEXT BUBS GOAT FORMULA REMAINS OUR MOST PROFITABLE SEGMENT Bubs Goat Infant Formula product margin’ was consistent with FY20 despite COVID disruption to most profitable channel routes. The ONL ( Australian Goat Milk = Drink. 34% Goat Infant Formula product margin’ Retained. cobs g Gen
Slide 14: Financial Performance
orbs FINANCIAL PERFORMANCE
Slide 15: 1H FY21 Group Financial Performance
bobs: FINANCIAL PERFORMANCE 1H FY21 GROUP FINANCIAL PERFORMANCE Sy First half growth momentum was restricted due to COVID-led channel disruption, although swift recovery was evident in the second quarter with strong quarter-on-quarter turnaround. GROUP GROSS REVENUE" ($ million) — S Zp) 50 =) 4s Gu)
Slide 16: For personal use only
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Slide 17: 1H FY21 Market and Portfolio Expansion
bobs: FINANCIAL PERFORMANCE 1H FY21 MARKET AND PORTFOLIO EXPANSION > \Multiple revenue streams and growth drivers across Australia and Asia. REGIONAL DIVERSIFICATION BALANCED PRODUCT MIX OD) International expansion strategy continues with Investing in driving Infant Formula growth advances in China
Slide 18: 1H FY21 Robust Balance Sheet
orbs FINANCIAL PERFORMANCE 1H FY21 ROBUST BALANCE SHEET Managed working capital and inventory position throughout a volatile period. $M 30.6 (0.4) 50.0 8.8 40.2 (17.0) (7.8) 300 26.0 10.0 00 Capital raising (net of costs) Group loss before tax Working capital movement Cash on hand FY20 Investments P
Slide 19: Sustainable Growth Response
pCobs SUSTAINABLE GROWTH RESPONSE
Slide 20: Sustainable Growth Response
TAINABLE GROWTH RESPONS Focus on driving profitability through increasing operating efficiencies and effectiveness. Deep dive into operating productivity and cost savings across the end-to-end value chain, including procurement, warehousing and distribution, whilst ensuring supply chain resilience.
Slide 21: Key Pillars to Sustained Profitable Growth
bobs SUSTAINABLE GROWTH RESPONSE KEY PILLARS TO SUSTAINED PROFITABLE GROWTH —>-Reprioritisation of immediate strategic focus to ensure we are fit for purpose in the “nextnormal" Oo6000e sonal use on Core Goat Gross Margin en 4. Regional e Dairy Focus 2. Improvement 3. Expansion commerce. FOr per 21
Slide 22: Key Initiatives to Improve Group Gross Margin
orbs SUSTAINABLE GROWTH RESPONSE KEY INITIATIVES TO IMPROVE GROUP GROSS MARGIN Short-term response to improve product margin in branded products: 1. Direct investment towards accelerating growth of greatest contributing portfolio segment with highest margin; Bubs Goat Infant Formula. 2. Actively dri
Slide 23: Focus on Our Core Goat Dairy Profit Centres
bobs: SUSTAINABLE GROWTH RESPONSE FOCUS ON OUR CORE GOAT DAIRY PROFIT CENTRES Drive goat milk value conversion as highest and best use of our core asset across our more profitable product lines in our more profitable channels alongside our strategic partners in Australia and China. Bubs® CapriLac® C
Slide 24: Chinese Consumer Demand for Bubs Goat Formula Grows
pcos SUSTAINABLE GROWTH RESPONSE CHINESE CONSUMER DEMAND FOR BUBS® GOAT FORMULA GROWS Integrated social marketing campaigns fueled by KOL’s and KOC’s successfully drive consumer engagement, e-commerce traffic and user acquisition on cross-border ecommerce marketplaces. / +121%' +24% 1H FY21 1H FY21
Slide 25: Completed Successful CapriLac Re-launch
bobs SUSTAINABLE GROWTH RESPONSE COMPLETED SUCCESSFUL CAPRILAC® RE-LAUNCH Now set to expand into new markets, new channels and new occasions. NEW Nod NEW Fresh Goat Milk cdnn ana Product Launch with pack upgrade. goat dairy Brand on Double addressable Launched January 2021 ime eet / market size® wit
Slide 26: Supporting Daigou Channel 2.0 Reactivation
orbs SUSTAINABLE GROWTH RE SUPPORTING DAIGOU CHANNEL 2.0 REACTIVATION Significant upside and long-term growth potential via Daigou facilitated e-commerce and 020. CORPORATION China is set to be the first country where e-commerce sales outstrip bricks-and-mortar retail in 2021". * Despite short term
Slide 27: Accelerate Asian Expansion
orbs SUSTAINABLE GROWTH RESPONSE ACCELERATE ASIAN EXPANSION Significant sales momentum continues for growth across new Asian markets, with export gross revenue’ outside of China increasing +44% 1H FY21pcp’. Secured |= Commenced _ Planned Launch FY20 / 1H FY21 2H FY21 South Korea i Py Hong Kong Malay
Slide 28: New Market 2H FY21 Launch in South Korea
bobs SUSTAINABLE GROWTH RESPONSE NEW MARKET 2H FY21 LAUNCH IN SOUTH KOREA _¥ntering the world’s second largest Goat Infant Formula market’ with 10% category share. For personal use on $431m! INFANT FORMULA CATEGORY VALUE AUD (000) mil$ m Bovine Infant Formula == Goat Milk Infant Formula ' Euromonito
Slide 29: Outlook
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Slide 31: Outlook
orbs OUTLOOK OUTLOOK Bubs is well placed with strong foundations, brand share growth and a robust balance sheet to go forward with a sustainable expansion strategy to emerge ahead of industry peers once the crisis has subsided and market dynamics normalise. Responding to channel interruptions with o
Slide 32: Bubs Australia
ASX: BUB - Bubs Australia Growing Generation Joy