Bubs Australia Ltd. · ASX:BUB
Bubs Australia — FY2024 Earnings Presentation
39 slides from Bubs Australia's earnings presentation, Aug 28, 2024
Slide 1: FY24 Results Presentation
rsonal use only FY24 Results Presentation 28 August 2024 Slide 1
Slide 2: Disclaimer
DISCLAIMER This presentation is in summary form and is not necessarily complete. It should be read together with the rsonal use only Company’s other announcements lodged with the Australian Securities Exchange. This presentation contains information that is based on projected and/or estimated expect
Slide 3: Bubs leadership team joining me on today's call
Bubs leadership team joining me on today’s call rsonal use only Robin Johnston – Chief Financial Officer Richard Paine – Chief Operating Officer Chris Lotsaris – General Manager USA Jackie Lin – General Manager China Slide 3
Slide 4: Agenda
Agenda The Bubs investment rsonal use only proposition FY24 highlights & strategy update FY24 financial overview FY25 outlook & pathway to profitability Appendix Slide 4
Slide 5: The Bubs Investment Proposition
The Bubs Investment Proposition US $100B+ global Differentiated premium goat- rsonal use only addressable market with a 5- based product offering 10% CAGR supported by growing bovine range in both IMF and Adult Nutrition Bubs has a capital light asset Bubs is growing rapidly in the base with signifi
Slide 6: FY24 highlights & strategy update
FY24 highlights & rsonal use only strategy update Slide 6
Slide 7: FY24 Highlights
FY24 Highlights Successfully executing on our strategy • Achieved net revenue of $80m in line with guidance rsonal use only • Exceeded gross margin > 40% in line with guidance • US growth engine delivering, which provides a sustainable runway for growth • Meaningful progress on US FDA clinical trial
Slide 8: Portfolio Optimisation
Portfolio Optimisation rsonal use only New variants, new tin sizes and updated and refreshed packaging Slide 8
Slide 9: USA Update
USA Update rsonal use only Slide 9
Slide 10: Good House Keeping Award
Good House Keeping Award Earlier this year, Bubs US introduced Bubs rsonal use only Essential infant formula; the most affordable Clean Label Project Purity Award winning infant formula available on the US market, recognised for its high-quality whole-milk base, enriched with prebiotics and probioti
Slide 11: USA
USA US Quarterly Revenue & Tins Sold1 Continued strong momentum $12 300,000 Tins Sold US$'m rsonal use only USA revenue grew 46% to $35.0m. $11 275,000 $10 250,000 Record Q4 scan revenue of US$11.2m with over $9 225,000 280,000 tins sold1. $8 200,000 Record weekly scan revenue in Jun-24 over >US$1m
Slide 12: US Penetration
US Penetration Bubs products are ranged in approximately 5,500 physical stores1 across 42 states, in addition to e-commerce channels rsonal use only o eo a es ic 1 Circana Weekly To W/E 18/08/2024 Value Sales $'s Total US Multi-Outlet (Nb Excludes Online) Powder, RTD's, Electrolytes & Liquid Concent
Slide 13: USA Market Attractiveness
USA Market Attractiveness rsonal use only Total First Mover Attractive Profit Addressable Omni-channel Advantage Pool Market (TAM) $8.1B market with forecast Bubs was the first Goat Having successfully FY25 forecast gross margin CAGR growth of 3.9% IMF to enter the USA penetrated e-commerce, >40% an
Slide 14: Regulatory Update
Regulatory rsonal use only Update Slide 14
Slide 15: Regulatory Pathway
Regulatory Pathway Bubs is on track for permanent FDA approval by Oct-25, providing access to the worlds 2nd largest IMF market and is rsonal use only poised to deliver a long runway of sustainable growth May 2022: FDA exercised July 2022: FDA announces Dec 2022: FDA issues Bubs a Enforcement Discre
Slide 16: Canada IMF market size
US$340m Canada Canada IMF market size1 On 16 August 2024, Bubs was granted authorisation to sell both Bubs Goat and Bubs Essential infant formula rsonal use only under Health Canada’s Interi olicy and ransition Strategy via discretionary enforcement. The Interim Policy remains in effect until 31 Dec
Slide 17: China Update
China Update rsonal use only Slide 17
Slide 18: China
China Strategic reset gathers pace demonstrated by significant improvement in key financial metrics rsonal use only $’m FY24 FY23 % change Revenue 17 14 27% Gross profit 7 5 47% Gross margin (%) 39% 34% 5% Marketing expense 2 6 57% Marketing expense as a % of 14% 41% 27% revenue • Premium price arch
Slide 19: China update
China update Bubs is forecast to grow strongly and profitably in China within its premium niche product offering rsonal use only • A strong brand portfolio to build on: Goat, Supreme & Caprilac • Premium price architecture restored >15% increase in average RRP • A healthy portfolio gross profit marg
Slide 20: Australia Update
Australia rsonal use only Update Slide 20
Slide 21: Australia
Australia Growth MAT1 15.0% 12.1% 10.7% rsonal use only 10.0% 5.0% 6.2% #1 goat formula in Australia 2.2% 1.9% 0.0% Bubs remains the clear market leader -5.0% in the domestic goat formula IMF, -10.0% -8.4% holding a record 52% market share1. -15.0% -16.4% -20.0% Market Company Company Company Compan
Slide 22: Rest of World Update
Rest of World rsonal use only Update Slide 22
Slide 23: Bubs' goal to be the market leader in Goat IMF
Bubs’ goal to be the market leader in Goat IMF in 7 of the world’s 10 largest IMF markets by 2030 rsonal use only $8.1b1 $40.4b2 Total U.S. infant Total China infant formula market formula market $0.3b3 Top 10 Global IMF Markets4 Total AU infant 1. China formula market 2. USA 3. Mexico 4. Indonesia
Slide 24: Rest of World (ROW)
Rest of World (ROW) ROW continues to grow strongly YOY ROW Revenue Revenue has grown by 20% CAGR from FY20 rsonal use only $7 ($2.5m) to FY24 ($5.9m). $’ rowth in Bubs’ ROW operating seg ent has $6 been driven by Japan and Vietnam. Bubs is exploring strategic opportunities in North $5 America and pl
Slide 25: Bubs new market entry model and success
Bubs new market entry model and success as demonstrated by Japan, can be replicated in other markets rsonal use only Japan Revenue 78% Revenue $4 CAGR in Japan $’ Japan revenue has grown at a CAGR of $3 78% from FY20 ($0.2m) to FY24 ($3.1m). Japan contributed 51% $2 of ROW revenue in FY24, with Viet
Slide 26: FY24 financial overview
FY24 financial rsonal use only overview Slide 26
Slide 27: Income statement
Income statement $’m FY24 FY23 % change Income statement rsonal use only Revenue 80 60 34% Gross margin 39 (9) 414% Underlying gross margin1 (%) 41% 30% 11% 34% increase in revenue driven by strong USA Other income / (expense) - - (33)% performance and growth across all regions. Operating expenses D
Slide 28: FY24 gross revenue bridge
FY24 gross revenue1 bridge Growth across all regions rsonal use only 20 0 00 00 0 00 $'m 80 0 70 0 00 00 ustra ia ina 1 Gross revenue is a non-IFRS measure and refers to revenue before trade spend. Non-IFRS measures have not been subject to audit or review. Slide 28
Slide 29: FY24 revenue by region
FY24 revenue by region rsonal use only USA Australia 40 25 $'m $'m 35 20 30 25 15 20 15 10 10 5 5 - - FY22 FY23 FY24 FY22 FY23 FY24 China ROW 60 7 $'m $'m 50 6 5 40 4 30 3 20 2 10 1 - - FY22 FY23 FY24 FY22 FY23 FY24 Slide 29
Slide 30: Revenue growth driven by USA
Revenue growth driven by USA USA contributed 44% of Bubs’ revenue rsonal use only Revenue ($’m) 33% increase YOY in revenue. 6 USA contributed 44% of total FY24 revenue (up from 40% in FY23). 17 China reset strategy underway with H2 35 revenue up 38% over H1 and YOY growth of $80m 27%. Foundations h
Slide 31: Underlying gross margin
Underlying gross margin1 FY24 underlying Underlying gross margin %1 gross margin was rsonal use only 60% 41%1 50% 41%1 40% 30% 30% 30% Exceeded gross margin > 40% in line with 20% guidance. 14% 10% Reported gross margin for FY24 is 49%, 0% excluding inventory provisions for sale of SLOB FY21 FY22 FY
Slide 32: Balance sheet
Balance sheet $’m Jun-24 Jun-23 Balance sheet rsonal use only Cash and cash equivalents 18 26 Trade and other receivables 9 8 Inventories 28 21 Other current assets 5 3 Current assets 60 57 Slight increase in trade receivables given higher sales volume and Plant and equipment 4 4 consisted primarily
Slide 33: Cash flow
Cash flow $’m 2024 2023 Cash flow Cash flows from operating activities Bubs raised $17.4m in Dec-23 via a rsonal use only Receipts from customers 78 77 Placement and share purchase plan to Payments to suppliers and employees (104) (124) fund future strategic growth. The proceeds Net interest - - rai
Slide 34: FY25 outlook & pathway to profitability
FY25 outlook & pathway to rsonal use only profitability Slide 34
Slide 35: FY25 Outlook
FY25 Outlook What to expect in FY25 rsonal use only ✓ Revenue of $102m / gross revenue1 of $130m (up ~28% YOY) ✓ USA and China expected to grow by at least 50% YOY ✓ Gross margin of >40% ✓ Clinical study (GMS) patient enrollment completed by end of September 2024, FDA approval anticipated in October
Slide 36: Bridge to FY25 EBITDA positive
Bridge to FY25 EBITDA1 positive rsonal use only 0 0 02 ( 0) $'m ( 0 0) 8 ( 0) (20 0) 7 (2 0) FY24 BI DA ross profit Ope non recurring cost savings FY2 BI DA ▪ Additional $22m of revenue forecast in FY25 to provide $9m of gross profit at 40% gross margin ▪ $7m of FDA regulatory costs incurred in FY24
Slide 37: Outlook
Outlook Pathway to rsonal use only profitability Short term Medium term Long term • $102m revenue / $130m gross • Increase in debt – trade • stablished in 7 of the world’s revenue1 in FY25 finance facility to support top 10 IMF markets growth • Gross margin >40% • Consider domestic / overseas • Succ
Slide 38: Thank you
rsonal use only Thank you Slide 38
Slide 39: Q&A
Q&A rsonal use only investors@bubsaustralia.com Slide 39