Adore Beauty Group Ltd. · ASX:ABY
Adore Beauty — FY2023 Earnings Presentation
27 slides from Adore Beauty's earnings presentation, Aug 23, 2023
Slide 1: FY23 Results Presentation
FY23 Results Presentation 23 August 2023 1
Slide 2: Revenue returns to growth; improved profitability in H2
Revenue returns to growth; improved profitability in H2 IMPROVED OPERATIONAL EFFICIENCY & COST MANAGEMENT ▪ H2 FY23 revenue increased 0.5% on H2 FY22 ▪ Growth driven by multiple record sales events in H2, including Afterpay and Click Frenzy Mayhem ▪ Focus on high quality brands at great value resona
Slide 3: Customer loyalty proving resilient
Customer loyalty proving resilient FY23 FINANCIAL SUMMARY $180.6M 32.8% $0.6M Revenue Gross profit margin Reported EBITDA1 -9.6% on PCP -0.5 ppts on PCP +14% 3-year CAGR 801K 490K $27.8M Active customers2 Returning customers3 Cash4 -8% on PCP +4% on PCP -7.7% on PCP +11% 3-year CAGR +31% 3-year CAGR
Slide 4: Value proposition driving repeat customer revenue
Value proposition driving repeat customer revenue FY23 REVENUE INSIGHTS Revenue Returning customer revenue ($A Million) ($A Million) 14% CAGR 27% CAGR 9.6% 1.7% 200 179 181 59 43 68 121 140 138 53 111 140 138 111 68 68 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Returning customers New customers Returni
Slide 5: Almost 500K returning customers & growing
Almost 500K returning customers & growing FY23 CUSTOMER INSIGHTS Active customers1 Annual revenue per active customer2 (‘000) ($) 11% CAGR 3% CAGR 8% 2% 872 818 801 399 311 590 458 229 371 225 219 472 490 360 205 219 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Returning customers New customers Returning
Slide 6: FY23 Financial Results
FY23 Financial Results 6
Slide 7: FY performance reflects challenging environment
FY performance reflects challenging environment OPERATIONAL ADJUSTMENTS DRIVING IMPROVED PERFORMANCE IN H2 Revenue Gross profit margin EBITDA1 ($A Million) (%) ($A Million) 14% CAGR 1 PPTS 50% CAGR 9.6% 0.5 PPTS 88% 33.3 7.6 199.7 179.3 180.6 33.1 32.8 5 5.3 121.1 31.8 0.6 FY20 FY21 FY22 FY23 FY20 F
Slide 8: Optimising operations & managing costs
Optimising operations & managing costs FY23 PROFIT & LOSS A$M FY20 FY21 FY22 FY23 76% of all revenue from returning customers Revenue 121.1 179.3 199.7 180.6 ▪ Revenue declined 9.6% on the lockdown-impacted PCP; up 14% on a three-year CAGR Cost of sales (82.6) (120) (133.1) (121.3) ▪ Record trading
Slide 9: Strong cash position
Strong cash position BALANCE SHEET A$M as at 30 Jun 22 30 Jun 23 ▪ Strong closing cash balance of $27.8 million Cash and cash equivalents 29.8 27.8 ▪ Debt-free Inventory 17.5 21.1 ▪ Capital efficient business model Other current assets 4.3 6.5 ▪ Investment in higher-turnover inventory, reducing miss
Slide 10: Beauty done better: Strategy
Beauty done better Strategy 10
Slide 11: Strategy to drive growth
Strategy to drive growth FOCUS ON CUSTOMER, BRAND AWARENESS & OPERATIONAL OPTIMISATION 1. CUSTOMER CENTRICITY 3. OPERATIONAL OPTIMISATION ▪ State of Beauty data insights ▪ Marketing efficiency & effectiveness ▪ Enhance loyalty program ▪ Retail media ▪ Optimise customer/user experience ▪ Scaling owne
Slide 12: State of Beauty Report
1. CUSTOMER CENTRICITY State of Beauty Report CUSTOMER INSIGHTS & DATA INFORMING ADORE BEAUTY’S EVOLVING STRATEGY ▪ Adore Beauty is launching a “State of Beauty 2023” report in September ▪ Created in collaboration with SOON Future Studies, the report analyses the mindset and motivation of the Austra
Slide 13: Enhanced loyalty program
1. CUSTOMER CENTRICITY Enhanced loyalty program SUPPORTING RETENTION & LIFETIME VALUE Average LTV/CAC1 by financial year2 ▪ Customer acquisition unit economics show average Year-1 LTV/CAC tracking at 1.3x before growing to 6.9x by Year-5 ▪ New initiatives to engage loyalty members, returning custome
Slide 14: App revenue represents a quarter of all sales
1. CUSTOMER CENTRICITY App revenue represents a quarter of all sales CREATING HIGHER-VALUE CUSTOMERS WITH IMPROVED CONVERSION, AOV & LTV 334k 4.8/5 ▪ Contributed 25% of revenue in Q4 FY23, nearing 30% target ▪ App AOV and AOF remain significantly higher than web, at 14% and 34% respectively ▪ Conten
Slide 15: Real-life activations to build brand, audience
2. FURTHER BUILDING THE BRAND Real-life activations to build brand, audience TAKING ADORE BEAUTY FROM SCREEN TO “REAL LIFE” ▪ Brand awareness in the 25-45 female demographic increased from 59% in June 2022 to 62% as at August 2023, up 7% in 45-65 segment over same period1 ▪ Growing strong LTV custom
Slide 16: Scaling owned brands faster
2. FURTHER BUILDING THE BRAND Scaling owned brands faster UPDATED STRATEGY TO INCLUDE WHITE-LABEL & OWN FORMULATIONS ▪ Adore now has three private label brands; ‘Adore Beauty’, ‘AB LAB’ and ‘Viviology’ ▪ Private label SKU count more than tripled over FY23 – 38 SKUs as at 30 June 2023 ▪ Private label
Slide 17: Expanding product range & adjacencies
2. FURTHER BUILDING THE BRAND Expanding product range & adjacencies 20 NEW BRANDS ADDED OVER THE YEAR ▪ Onboarded 20 new brands, including Dior and Huda Beauty ▪ Focus on growing mass and luxury offerings ▪ New brands accounted for 2.6% of total FY23 revenue ▪ Expanding into complementary adjacent p
Slide 18: Content, marketing & data
3. OPERATIONAL OPTIMISATION Content, marketing & data COST-EFFECTIVELY SUPPORTING ORGANIC, OWNED CHANNELS Content driven impressions1 (million) ▪ Content marketing cost-effectively supports organic traffic 23% ▪ 23% growth in content-driven impressions1 Content ▪ Podcast downloads grew to ~6.2m2 acr
Slide 19: Outlook
Outlook 19
Slide 20: Long growth runway in resilient category
Long growth runway in resilient category AUSTRALIAN ONLINE SALES YEARS BEHIND UK & US MARKETS Large addressable market ▪ Online BPC sales accounted for $1.6b in Online sales in mature markets at 43% Australian beauty & personal care (BPC) 2022, or 12.3% of total market Beauty & personal care online
Slide 21: Key margin expansion levers
Key margin expansion levers AREAS OF FOCUS Revenue growth Improve gross profit margin Reduce expenses Pricing and promotional Increase scale Cost optimisation program review Improved marketing Improved brand awareness Partner support effectiveness, growing owned media channels Attractive adjacency R
Slide 22: Phased investment in growth strategy
Phased investment in growth strategy OUTLOOK ▪ Sales momentum continues; FY24 year-to-date1 revenue up 5.9% on PCP ▪ Trading conditions expected to remain challenging given higher cost of living pressures and subdued consumer sentiment ▪ Leveraging healthy balance sheet to phase investment in key sh
Slide 23: Questions
Questions 23
Slide 24: Appendix
Appendix 24
Slide 25: Proforma adjustments to statutory income statement
Proforma adjustments to statutory income statement Statutory Actual Pro-forma Actual A$M FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 A$M FY20 FY21 FY22 FY23 Revenue 121.1 179.3 199.7 180.6 121.1 179.3 199.7 180.6 Statutory NPAT -1.2 0.8 2.4 (0.6) Cost of sales (82.6) (120) (133.1) (121.3) (82.6) (120) (
Slide 26: Disclaimer
Disclaimer This presentation has been prepared by Adore Beauty Group Limited ACN 636 138 988 (Company). This An investor must not act on the basis of any matter contained in this presentation but must make its own presentation contains summary information about the Company and its subsidiaries (Grou
Slide 27: Australia's Online Beauty Store
AUSTRALIA’S ONLINE BEAUTY STORE WWW.ADOREBEAUTY.COM.AU 27