Articore Group Limited · ASX:ATG
Articore — Shareholder Meeting (October 2017)
40 slides from Articore's shareholder meeting presentation, Oct 25, 2017
Slide 1: Annual General Meeting: Management Presentation
ANNUAL GENERAL MEETING: MANAGEMENT PRESENTATION October 25, 2017 Presented by: Martin Hosking – CEO Chris Nunn – CFO Barry Newstead – COO
Slide 2: Disclaimer
DISCLAIMER The material herein is a presentation of non-specific background information about the Company’s current activities. It is information given in summary form and does not purport to be complete. Investors or potential investors should seek their own independent advice. This material is not
Slide 3: FY2017 in Review
FY2017 IN REVIEW Martin Hosking- CEO 3
Slide 4: Executive Summary
EXECUTIVE SUMMARY Redbubble is the world’s leading marketplace for independent artists. It continues to scale on all three sides, acquires customers profitably and at low cost and is demonstrating operating leverage. • The key metrics of marketplace health and scaling are evident in the number of se
Slide 5: A Recap on the RB Story
A RECAP ON THE RB STORY A healthy three-sided marketplace growing on all key metrics SELLING ARTISTS CUSTOMERS CONTENT 233,000 (FY2017) 2.9M 11.5M (FY2017) 3rd PARTY FULFILLERS (at end FY2017) 15 FULFILLERS (24 locations), 64 PRODUCTS (at end FY2017) All $’s are AUD throughout presentation and all y
Slide 6: FY2017 Key Marketplace Metrics
FY2017 KEY MARKETPLACE METRICS FY2016 FY2017 YOY growth GTV1 $142.9M $175.4M 22.8% • GTV and Repeat GTV grew 30.3% and 39.0% respectively on a Mobile GTV $38.8M $57.2M 47.2% constant currency basis in FY2017 • Growth in Mobile GTV Repeat GTV2 $50.7M $66.6M 31.2% particularly strong • Growing and hea
Slide 7: 1Q FY2018 Year on Year & Quarter on Quarter Key Marketplace Metrics
1Q FY2018 YEAR ON YEAR & QUARTER ON QUARTER KEY MARKETPLACE METRICS 1Q 4Q 1Q YoY QoQ FY2017 FY2017 FY2018 growth growth GTV1 $36.1M $38.7M $45.6M 26.4% 18.0% • YoY growth in Mobile GTV particularly strong • Visit growth impacted by Mobile GTV $10.9M $13.8M $16.6M 53.0% 20.7% increases in organic sea
Slide 8: Strong & Healthy Marketplace Dynamics
STRONG & HEALTHY MARKETPLACE DYNAMICS Solid growth in artists, customers and third party fulfilment capability Customers Selling Artists Fulfillers 240 24 # of Artists (,000) 3.0 Fulfillers # Customers (Millions) 21 2.5 200 18 2.0 160 15 1.5 120 12 9 1.0 80 6 0.5 40 3 0.0 0 0 FY13 FY14 FY15 FY16 FY1
Slide 9: Mobile Visits Exceed Desktop for First Time in FY2017
MOBILE VISITS EXCEED DESKTOP FOR FIRST TIME IN FY2017…….. ……and will continue to be major driver of Redbubble’s growth Desktop/Mobile visits LHS & Mobile GTV % RHS 120 32.6% 35% 100 30% 27.2% 25% 80 20.1% Visits millions 20% % GTV 60 12.4% 15% 40 10% 7.0% 20 5% - 0% FY2013 FY2014 FY2015 FY2016 FY201
Slide 10: Redbubble Is a Global Opportunity Shown in Its Geographic Scope
REDBUBBLE IS A GLOBAL OPPORTUNITY SHOWN IN ITS GEOGRAPHIC SCOPE 93% of sales outside Australia GTV by year and region (A$M) $175.4M 7.3% $142.9M 13.2% 6.9% 11.1% 14.3% 16.0% $88.4M 7.7% 10.9% $59.3M 16.0% 9.2% 63.9% 12.5% 65.0% $33.7M 15.1% 11.1% 11.5% 64.4% 15.2% 62.0% 60.4% FY2013 FY2014 FY2015 FY
Slide 11: Increasing Range of Products with Rapid Growth in New Categories
INCREASING RANGE OF PRODUCTS WITH RAPID GROWTH IN NEW CATEGORIES 100% 6.2 % 6.1 % 7.1 % 7.3 % 7.5 % 2.4 % 0.4% 2.4 % 90% 5.6 % 7.4 % 8.3 % 9.9 % 6.3 % 2.4 % 6.6 % 8.8 % 80% 6.3 % 11.4 % 11.5 % 70% 7.5 % 11.7 % 12.2 % 60% 10.2 % 13.3 % 50% 40% 75.2% 78.2 % 66.0 % 30% 54.6 % 47.2% 20% 10% 0% FY2013 FY
Slide 12: Results Analysis
RESULTS ANALYSIS Chris Nunn - CFO Non-IFRS measures GTV (Gross Transaction Value), Gross profit, Gross profit margin, Gross profit (after paid acquisition), GPAPA margin and EBITDA (earnings before interest, tax, depreciation and amortisation) are non-IFRS measures that are presented to provide read
Slide 13: FY2017 Income Statement Summary
FY2017 INCOME STATEMENT SUMMARY Full year • Key financial measures growing at P&L (A$M) FY16 FY17 Growth CC or above 30% on a constant Growth 1 currency basis GTV 142.9 175.4 22.8% 30.3% • Strong GP Margin resulting from: • Improved pricing strategies; Revenue 114.6 141.0 23.0% 30.1% • Continuing ec
Slide 14: 1Q FY2018 Income Statement Summary
1Q FY2018 INCOME STATEMENT SUMMARY YoY QoQ • Improved YoY GTV growth rate 1Q 4Q 1Q (1Q18 v 1Q17) (1Q18 v 4Q17) supported by particularly strong 22.1% P&L (A$M) CC CC growth over 4Q17 FY17 FY17 FY18 Growth Growth Growth1 Growth1 • Revenue and Gross Profit growth impacted by larger than normal GTV $36
Slide 15: 1Q FY2018 Cashflow Waterfall ($M)
1Q FY2018 CASHFLOW WATERFALL ($M) 1Q FY2018 working capital inflated by: • Extraordinary unearned revenue due to month end activity ($1M) • Delay in receipt of Supplier invoices at month end ($1.3M) $40.0 • Superannuation payments ($0.4) $35.0 $4.6 $30.0 $0.4 $28.8 $27.8 ( $2.0 ) ( $0.4 ) ( $0.1 ) $
Slide 16: Strong & Increasing GP Margin Showing Economies of Scale
STRONG & INCREASING GP MARGIN SHOWING ECONOMIES OF SCALE 5.3% ( 0.5% ) ( 2.6% ) ( 0.4% ) ( 0.2% ) 35.6% 34.0% FY2016 Margin % Change in Change in Promotions/ Refunds, Fraud & Other 1 FY2017 Margin % Manufacturing Shipping Margin Pricing Chargebacks deductions Margin 1. Other deductions = includes fr
Slide 17: Paid Marketing Dollars Being Spent More Efficiently
PAID MARKETING DOLLARS BEING SPENT MORE EFFICIENTLY…. ……but having to pay for more customers as shift to mobile continues Paid Marketing spend to generate a $ of GTV or a $ Paid GTV 20.0c 18.0c 18.0c 17.1c 16.4c 16.0c 14.0c 12.0c AUD $ 10.0c 7.0c 8.0c 5.4c 6.0c 4.8c 4.0c 2.0c $- FY2015 FY2016 FY2017
Slide 18: Conservative & Consistent Capitalisation of Development Costs
CONSERVATIVE & CONSISTENT CAPITALISATION OF DEVELOPMENT COSTS Capitalised development cost v Operating expenses 1 (FY17, $M) 60.0 16.7% 7.2 50.0 16.3% 6.1 40.0 17.2% 30.0 4.2 AUD $M 42.8 20.0 13.5% 37.4 14.2% 1.6 24.5 10.0 1.2 11.8 8.2 0.0 FY13 FY14 FY15 FY16 FY17 Total Opex Cap Dev Cost 1. Employee
Slide 19: Strategy and Operations Update
STRATEGY AND OPERATIONS UPDATE Barry Newstead 19
Slide 20: Redbubble's Addressable Market Is Large & Growing
REDBUBBLE’S ADDRESSABLE MARKET IS LARGE & GROWING Estimated Addressable Market Size1 (US$ billion) 30 22 13 Europe 10 US / UK / AUS 17 12 2015 Total 2017 Total Total global online market for Apparel and Homewares is ~US $280B2 : Both of these large online markets expected to grow at between 10- 14%
Slide 21: Strategic Focus: Accelerating Marketplace Dynamics of the Last 10 Years
STRATEGIC FOCUS: ACCELERATING MARKET PLACE DYNAMICS OF THE LAST 10 YEARS * Content is the marriage of Digital Art and the Products they are sold on 21
Slide 22: The Redbubble Flywheel
THE REDBUBBLE FLYWHEEL OF AWESOMENESS 22
Slide 23: New Product: Premium T-shirt
Premium product: AS Colour tees; These t-shirts are high thread count. This means that the quality of the print is New Product: premium too! Premium previews: New previews including dynamic lifestyle and packaging previews Premium T-shirt Premium print: A larger printable area than our standard t-sh
Slide 24: New Product: Lightweight Sweatshirts
New Product: Product: Targeting the youthful audience; Lightweight Sweatshirt for Guys & Girls, available in 6 new colours Lightweight Material: 55% Cotton 45% Polyester Heather Colours and Raglan Sleeves Sweatshirts Launch: Feb 2017 24
Slide 25: New Product: Long T-shirt
New Product: Product: Targeting the youthful audience; Longer Length Tee Scooped Back Hem and Set-in Sleeve & 100% Cotton Long T-shirt Print: Larger Print Area for Front or Back Printing Launch: May 2017 25
Slide 26: New Product: iPhone Cases
New Product: Product: For iPhone Loyalist's; iPhone 8, 8+ and X* generation snap and tough cases iPhone Cases Launch: Sep 2017 (Pre-Launch Sale) *Manufacturing starts 13 November for pre-orders of iPhone X cases 26
Slide 27: Summary and Outlook
SUMMARY AND OUTLOOK A leading global marketplace Redbubble is scaling strongly on the back of: 1. Healthy marketplace dynamics on all 3 sides 2. Continued strong top-line growth 3. Sustained low-cost customer acquisition 4. Demonstrated operating leverage With positive momentum, Redbubble is positio
Slide 28: Thank You
: [HANK YOU \ J yy
Slide 29: Appendix
© REDBUBBLE Appendix 29
Slide 30: Our Track Record in FY17 Has Been Strong
OUR TRACK RECORD IN FY17 HAS BEEN STRONG DEEPER F IND YOUR THING GL OBAL ACQUISITION SCAL ABIL ITY REL ATIONSHIP S Goals Accelerate growth in high value, Build a personalised mobile Sustainable, low-cost, global new Reinvest in a faster platform, lower discoverable content, mitigating experience for
Slide 31: We Will Continue to Deliver Against Our Road Map Over the Next Year
WE WILL CONTINUE TO DELIVER AGAINST OUR ROAD MAP OVER THE NEXT YEAR DEEPER F IND YOUR THING GL OBAL ACQUISITION SCAL ABIL ITY REL ATIONSHIP S Goals Accelerate growth in high value, Build a personalised mobile Sustainable, low-cost, global new Reinvest in a faster platform, lower discoverable content
Slide 32: 1Q FY2018 Mobile and Desktop Key Metrics
1Q FY2018 MOBILE AND DESKTOP KEY METRICS 1Q 4Q 1Q YOY QoQ FY2017 FY2017 FY2018 growth growth Visits 18.3M 19.9M 22.7M 24.0% 14.0% Desktop % of Total visit 43.6% 40.9% 39.8% -3.9% pts -1.1% pts Conversion rate1 2.62% 2.29% 2.64% 0.8% 15.1% AOV2 $47.3 $48.6 $43.4 -8.1% -10.7% Visits 20.9M 25.9M 31.2M
Slide 33: Annual General Meeting: Proxy Voting Results
ANNUAL GENERAL MEETING: PROXY VOTING RESULTS October 25, 2017
Slide 34: Proxy Voting Results: Resolution 1 Remuneration Report
Proxy voting results* Resolution 1: Remuneration Report ‘That the Remuneration Report for the year ended 30 June 2017 be adopted.’ Votes in favour: 28,989,618 (93.00% of votes) Votes left open: 2,152,643 (6.91% of votes) Votes against: 28,500 (0.09% of votes) *valid proxies after application of voti
Slide 35: Proxy Voting Results: Resolution 2 Election of Richard Cawsey
Proxy voting results Resolution 2: Election of Mr Richard Cawsey as a Director 'That, Mr Richard Cawsey, who having been re-elected as a Director at the 2014 AGM for a period of three years, retires in accordance with the Company’s Constitution and ASX Listing Rules and being eligible offers himself
Slide 36: Proxy Voting Results: Resolution 3 Election of Dr Hugh Williams
Proxy voting results Resolution 3: Election of Dr Hugh Williams as a Director 'That, Dr Hugh Williams who, having been appointed by the Board as a Director since the last AGM, retires in accordance with the Company’s Constitution and ASX Listing Rules and being eligible offers himself for election a
Slide 37: Proxy Voting Results: Resolution 4 RSU Grant to Chair
Proxy voting results* Resolution 4: Grant of Restricted Stock Units to the Chair of the Board, Mr Richard Cawsey ‘That approval be given, for the purposes of ASX Listing Rule 10.14 and for all other purposes, to the grant to the Chair of the Board, Mr Richard Cawsey, of 72,353 Restricted Stock Units
Slide 38: Proxy Voting Results: Resolution 5 RSU Grant to Grant Murdoch
Proxy voting results* Resolution 5: Grant of Restricted Stock Units to Non-executive Director, Mr Grant Murdoch ‘That approval be given, for the purposes of ASX Listing Rule 10.14 and for all other purposes, to the grant to Non-executive Director, Mr Grant Murdoch, of 42,059 Restricted Stock Units (
Slide 39: Proxy Voting Results: Resolution 6 RSU Grant to Dr Hugh Williams
Proxy voting results* Resolution 6: Grant of Restricted Stock Units to Non-executive Director, Dr Hugh Williams ‘That approval be given, for the purposes of ASX Listing Rule 10.14 and for all other purposes, to the grant to Non-executive Director, Dr Hugh Williams, of 36,176 Restricted Stock Units (
Slide 40: Proxy Voting Results: Resolution 7 Grant to Managing Director and CEO
Proxy voting results* Resolution 7: Grant of Restricted Stock Units and Share Options to the Managing Director and ‘ Chief Executive Officer, Mr Martin Hosking ‘That approval be given, for the purposes of ASX Listing Rule 10.14 and for all other purposes, to the grant to the Managing Director and Ch