Bubs Australia Ltd. · ASX:BUB
Bubs Australia — H1 FY2020 Earnings Presentation
35 slides from Bubs Australia's earnings presentation, Feb 26, 2020
Slide 1: FY20 Half Year Interim Results
For personal use only FY20 HALF YEAR INTERIM RESULTS 26 February 2020 1
Slide 2: For personal use only
For personal use only 2
Slide 3: Agenda
For personal use only AGENDA 01 | FINANCIAL RESULTS 02 | BUSINESS UPDATE 03 | PRODUCT & BRAND UPDATE 04 | REGIONAL & CHANNEL UPDATE 05 | STRATEGIC OUTLOOK 3
Slide 4: Financial Results
For personal use only 4 01 RESULTS FINANCIAL
Slide 5: 1H20 Continued Momentum and Scale
1H20 CONTINUED MOMENTUM AND SCALE Continuing solid trajectory to grow topline revenues and build on robust capital base. For personal use only Continued focus on executing our foundation strategy with key partners to build on strong competitive advantage and unique assets. Growth trajectory for Chin
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS Record revenue results and gross margin improvement. ASX 300 Bubs Australia For personal use only 1H20 results were driven by the strong performance of Bubs® infant formula in all retail channels and regions. +77% $28.8m Infant Formula Gross Revenue growth pcp. 1H20 Group Gross
Slide 7: Financial Overview
FINANCIAL OVERVIEW For personal use only 1H FY20 1H FY19 % CHANGE Key Drivers GROSS Total gross revenue of $28.75m, +37% pcp. REVENUE $28.75M $21.00M +37% Significant margin improvement, +24% pcp. NET REVENUE $27.10M $19.54M +39% The overall statutory net loss before tax of $7.7 million, incorporate
Slide 8: Expenses Overview
EXPENSES OVERVIEW For personal use only 1H FY20 1H FY19 % CHANGE Key Drivers DISTRIBUTION Distribution costs / Net revenue % at 3% (1H FY20) remain consistent with prior periods. AND SELLING $790K $679K +16% COSTS Employee costs* / Net revenue % at 11% (1H FY20) remain consistent with prior periods;
Slide 9: Group Revenue
GROUP REVENUE Half Yearly Gross Revenue. For personal use only $70 Key Highlights $60 Consistent half-year growth trend since listing in 2017. $50 $46.8M Record gross revenue in 1H FY20; +37% pcp. $40 Bubs® Goat Infant Formula remains key driver; +77% pcp. 1H: $28.8M Millions +37% pcp Stronger forec
Slide 10: Multiple Revenue Streams
MULTIPLE REVENUE STREAMS Gross Revenue by Product Group. For personal use only 1H FY20 growth predominantly driven by sales of Bubs® infant formula products, delivering the highest margin within group portfolio: - Infant Formula: +77% pcp - Baby Food: +23% pcp Goat Milk Powder delivered healthy reve
Slide 11: Portfolio Product Mix
PORTFOLIO PRODUCT MIX Gross Revenue Share by Product Group. For personal use only Key Drivers 6% 3% Increased focus on investing in growth of high 17% margin products, primarily infant formula. Bubs® products accounted for 53% of total net 35% revenue in 1H FY20 vs 43% in 1H FY19. 45% Deliberate red
Slide 12: Regional Market Mix
REGIONAL MARKET MIX Gross Revenue Share by Region. For personal use only Key Drivers Domestic gross revenue in 1H FY20 increased +30% pcp, driven by strong penetration in Coles and Woolworths, and launch into Chemist Warehouse. 1% 7% 23% Corporate Daigou Channel continues to grow month-on-month, wit
Slide 13: Gross Margin Improvements
GROSS MARGIN IMPROVEMENTS Gross margin improved 24% pcp with Bubs® Infant Formula gross margin at 41%. For personal use only Key Drivers +24% Strategic partnership with Tatura to produce Goat pcp Infant Formula directly from fresh Australian milk. 24% Integrated supply chain – Deloraine acquisition
Slide 14: Capital Management
CAPITAL MANAGEMENT With a strong balance sheet and cash position we retain the flexibility to execute our growth strategy. For personal use only Key Drivers Working capital movements include the steps taken to improve supply chain flexibility to meet stronger sales demand in 2H FY20. Increased trade
Slide 15: Group Inventories
GROUP INVENTORIES Fully transitioned to new products and ready to meet stronger demand of existing products. For personal use only Key Drivers $35 Inventory growth trend to meet strong forecasted $30 demand of existing product portfolio in 2H FY20. To ensure a smooth change over for refreshed $25 Ca
Slide 16: Business Update
For personal use only 16 02 UPDATE BUSINESS
Slide 17: Investment Highlights
INVESTMENT HIGHLIGHTS Core investment proposition. For personal use only Sustainable market leadership position in vertical supply chain with exclusive access to Australia’s largest goat milk pool. Bubs® is an established specialist super-premium formula brand with authentic provenance and a true fo
Slide 18: Growth Engines
GROWTH ENGINES Key 1H20 Highlights For personal use only 1. LEAD IN Bullet points VERTICAL SUPPLY 2. BUILD BRAND 3. EXPAND INTO CHAIN VALUE CONNECTION TO NEW GROWTH Bullet points CREATION. DRIVE SCALE. AREAS. Bullet points + Continual review and evaluation of + Supported launch of Organic bovine + D
Slide 19: Bubs Australia Roadmap: Key Competitive Advantage
BUBS AUSTRALIA ROADMAP KEY COMPETITIVE ADVANTAGE For personal use only EXCLUSIVE GOAT MILK SUPPLY SECURE MANUFACTURING DIFFERENTIATED DAIRY PRODUCTS DIVERSIFIED MARKETS AUSTRALIA NEW ZEALAND PARTNERS DELORAINE AU RETAIL GENERAL AUSTRALIA ~65% total market ~25% total market & CBEC3 TRADE4 Strong mark
Slide 20: Product & Brand Update
For personal use only 03 PRODUCT & BRAND UPDATE 20
Slide 21: Brand Portfolio Expansion
BRAND PORTFOLIO EXPANSION Bubs® Junior range and expansion of the Adult Goat Dairy portfolio will mean our product offerings will cater for all stages of development, feeding occasions and dietary requirements, from infants to children, through to younger adults and seniors. For personal use only Or
Slide 22: New Product Innovation
NEW PRODUCT INNOVATION 1H FY20 investment in new product development will convert to revenue realisation in Q420. For personal use only CapriLac® brand refresh. Bubs® Junior Nutrition range to launch in Australian retailers and China CBEC, and CCIC approved China label product with Lactoferrin to la
Slide 23: Strengthening Goat Dairy Portfolio
STRENGTHENING GOAT DAIRY PORTFOLIO Clear adult brand portfolio strategy for CapriLac® re-launch and Deloraine® brand expansion to support forward outlook for demand growth of goat dairy sector in China. For personal use only REINVIGORATION OF OUR ADULT GOAT MILK DAIRY PORTFOLIO STRATEGY National Hea
Slide 24: Invigorating CapriLac Brand
INVIGORATING CAPRILAC® BRAND Preparing new marketing communication and packaging design to support CapriLac® brand refresh. For personal use only CapriLac® Brand Refresh New Brand Marketing support New Digital Content Assets New Pack Design Superior product with improved freshness and taste. Improve
Slide 25: Marketing Investments
MARKETING INVESTMENTS As an emerging brand in China, continued strengthening of marketing investment is an important strategic investment necessary to build long term sustainable consumer connection and brand growth. For personal use only Key Drivers As an emerging brand in China, continued investme
Slide 26: Investing in Brand Growth
INVESTING IN BRAND GROWTH Significant increase in China marketing activities in 1H FY20 to support brand equity and build awareness. For personal use only 26
Slide 27: Deepening Brand Connection
DEEPENING BRAND CONNECTION Harnessing the power of top Mother & Baby Social Influencers to engage with Chinese millennial parents. For personal use only 27
Slide 28: Regional & Channel Update
For personal use only 04 REGIONAL & CHANNEL UPDATE 28
Slide 29: National Ranging in Woolworths
NATIONAL RANGING IN WOOLWORTHS Major new supply agreement with Woolworths set to double retail exposure for Bubs® Infant Formula portfolio in the largest and fastest growing super-premium segment of Australia’s infant formula market. For personal use only Woolworths 2H20 Expansion A key strategic pa
Slide 30: Investing in Retailer Success
INVESTING IN RETAILER SUCCESS Continuing to support our key retailer strategic partnership with Chemist Warehouse. For personal use only Chemist Warehouse All of Bubs® 28 products stocked across 450 Chemist Warehouse stores nationally in 1H FY20. Continuing to support with strong merchandising activ
Slide 31: SE Asia Expansion
SE ASIA EXPANSION Developing marketing assets and brand support for our key new export markets. For personal use only Vietnam & Hong Kong Market Expansion Providing brand and marketing support for Master Current Market: Distribution Agreement with Viet Nam TVV Service (TVV), China one of the largest
Slide 32: Strategic Outlook
For personal use only 32 05 OUTLOOK STRATEGIC
Slide 33: Strategic Outlook
STRATEGIC OUTLOOK Pursuit of strategic goals towards delivering profitable and scalable sustainable growth. For personal use only Continued benefit from key competitive advantages: - Exclusive goat milk supply - Advanced and secure manufacturing capability - Differentiated products across infant, ju
Slide 34: Disclaimer
DISCLAIMER This presentation and any materials provided (materials) have been prepared by For personal use only Bubs Australia Limited (Bubs) and contains general information about Bubs activities. By accepting the Materials you agree to be bound by the below terms and conditions. Terms and Conditio
Slide 35: Growing Generation Joy
For personal use only 35 Growing Generation Joy