Slide 1: Investor Presentation
kOgan.com INVESTOR PRESENTATION
Slide 2: Disclaimer & Important Notices
DISCLAIMER & IMPORTANT NOTICES This disclaimer applies to this Presentation and the information contained in it (the Presentation). This presentation (Presentation) is dated 10 June 2020 and has been prepared by, and is the sole responsibility of Kogan.com Ltd ACN 612 447 293 (Kogan.com). This Prese
Slide 3: Disclaimer & Important Notices
DISCLAIMER & IMPORTANT NOTICES This disclaimer applies to this Presentation and the information contained in it (the Presentation). Forward looking statements: This Presentation contains forward looking statements and comments about future events, which reflect Kogan.com’s intent, belief or expectat
Slide 4: Disclaimer & Important Notices
DISCLAIMER & IMPORTANT NOTICES This disclaimer applies to this Presentation and the information contained in it (the Presentation). Disclaimer: Except as required by law, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, reliability or correctness
Slide 5: Contents
CONTENTS Executive Summary Page 6 Business Update Pages 7 - 12 Equity Raising Overview Pages 13 - 15 Key Business Risks Pages 16 - 28 International Selling Restrictions Pages 29 - 32 Placement Agreement Summary Pages 33 - 35 Glossary Pages 36 – 38 Appendix Pages 39 - 41 5
Slide 6: Executive Summary
EXECUTIVE SUMMARY • Kogan.com is well positioned to pursue value accretive opportunities in the near term: GROWTH OPPORTUNITY • Ability to extract synergies through leading systems, diversified supply chain and low CODB1 • Increased momentum from the shift to online retailing • Significant pressure
Slide 7: Who is Kogan.com
WHO IS KOGAN.COM Kogan.com is a growing portfolio of online retail and services businesses. The growth of this portfolio provides diversification of income, creating multiple growth opportunities. The Company is agile, bold and innovative, and is focused on making in-demand products and services mor
Slide 8: Operational Update
OPERATIONAL UPDATE The Business has experienced a step-change increase in sales Customer orders and repeat purchase activity are at record levels LTM CUSTOMER ORDERS & AVERAGE GROSS REPEAT BUSINESS - DEMONSTRATING BRAND SALES PER CUSTOMER1 LOYALTY2 103.6% increase in April and May 2020 YoY combine
Slide 9: Operational Update (cont.)
OPERATIONAL UPDATE (CONT.) The Business has experienced a step-change increase in sales Growth in the online retail market is accelerating and Kogan.com’s market share is increasing1 Current trading conditions favour Kogan.com Record number of Active Customers Record sales in April and May 202
Slide 10: Growth Drivers
GROWTH DRIVERS Kogan.com is strongly positioned to take advantage of current market opportunities. • Changes in consumer spending habits are driving more spending online • Kogan.com has been successful in gaining eCommerce market share Pole Position • Ability to extract synergies through leading sys
Slide 11: Strategic Acquisition Model
STRATEGIC ACQUISITION MODEL Management has a strong track record of acquiring and integrating iconic Australian retailers such as Dick Smith and Matt Blatt. WHAT WE HAVE ACHIEVED IN PAST ACQUISITIONS Broadened offering and expanded customer base via integration of strong brands Quick return on i
Slide 12: Financial Update – FY20 YTD (to 31 May)
FINANCIAL UPDATE – FY20 YTD1 (TO 31 MAY) Adjusted EBITDA2 grew to $41.8 million, representing a 54.0% YoY increase. FY19 YTD vs FY20 YTD $m FY19 YTD FY20 YTD Variance Gross Sales3 499.0 674.0 35.1% Revenue4 402.3 437.5 8.8% Gross Profit 81.5 109.3 34.1% Gross Margin 20.3% 25.0% 4.7pp/23.3% Variable
Slide 13: Equity Raising Summary
EQUITY RAISING SUMMARY Fully underwritten Institutional Placement to raise $100m and Share Purchase Plan to raise up to an additional $15m. • Fully underwritten Institutional Placement to raise $100m via the issue of approximately Placement 8.7 million new ordinary shares (New Shares) offer structur
Slide 14: Use of Proceeds
USE OF PROCEEDS Funding to provide the financial flexibility to act quickly on future value accretive opportunities that broaden our offering, expand our customer base or enhance our operating model1. Sources2 $m Uses $m Proceeds of the Institutional Flexibility to pursue value Placement $100m accre
Slide 15: Equity Raising Timetable
EQUITY RAISING TIMETABLE Key Event Date Record Date for SPP 7.00pm, Tuesday, 9 June 2020 Trading halt and announcement of the Offer Wednesday, 10 June 2020 Placement bookbuild Wednesday, 10 June 2020 Results of the Placement announced to ASX Thursday, 11 June 2020 Trading Halt lifted - Shares recomm
Slide 16: Key Business Risks
KEY BUSINESS RISKS kbgan.com
Slide 17: Key Business Risks
KEY BUSINESS RISKS • This section sets out some of the key risks associated with any investment in Kogan.com, together with risks relating to participating in the Placement and SPP which may affect the value of securities in Kogan.com • The risks are not set out in order of importance and do not con
Slide 18: Key Business Risks
KEY BUSINESS RISKS • There is a risk that Kogan.com fails to anticipate and adapt to changing consumer preferences in a timely manner. Kogan.com’s financial performance depends on its ability to identify and respond to retail product trends, as well as to anticipate, gauge and react to changing cons
Slide 19: Key Business Risks
KEY BUSINESS RISKS • Kogan.com’s ability to offer a wide variety of brands, services, categories and product types, including both exclusive brand and third-party branded products and the suite of services offered by Kogan.com, is a key contributor to the appeal of its business to customers. Kogan.c
Slide 20: Key Business Risks
KEY BUSINESS RISKS • Kogan.com’s websites, Apps, databases, IT and management systems, including its SAP and security systems, are critically important to its success. The satisfactory performance, reliability and availability of Kogan.com’s websites, Apps, databases, IT and management systems are i
Slide 21: Key Business Risks
KEY BUSINESS RISKS • Kogan.com may experience marketing strategy fatigue with a growing customer base. The frequency of Kogan.com’s marketing may be underestimated or overestimated and have the result of reducing conversion rates. If Kogan.com does not make Marketing strategy efficient use of data a
Slide 22: Key Business Risks
KEY BUSINESS RISKS • Kogan.com’s databases of customers, suppliers and data analytics are valuable assets for its continued success. However, such databases are subject to various risks including computer viruses, electronic theft, physical terminal theft, physical damage resulting in a loss or corr
Slide 23: Key Business Risks
KEY BUSINESS RISKS • Kogan.com relies on the services provided by third party banking and payment providers such as credit card companies. It also relies on the services of third party logistic providers to deliver ordered products to customers. Kogan.com has limited influence over these third parti
Slide 24: Key Business Risks
KEY BUSINESS RISKS • The majority of products sourced by Kogan.com are purchased directly in foreign currency and, accordingly, Kogan.com is exposed to the foreign exchange rate movements, in particular movements in the AUD/USD exchange rate. Kogan.com also has Foreign currency retail operations out
Slide 25: Key Business Risks
KEY BUSINESS RISKS Inadvertent sale of • Kogan.com can offer no assurances that Third-Party Branded Products will not attempt to infringe rights associated with other products sold by other third parties. There is a risk that Third-Party Branded Products offered and supplied for sale through infring
Slide 26: Key Business Risks
KEY BUSINESS RISKS • Kogan.com may consider acquisitions where it believes they are supportive of Kogan.com’s growth strategy. There are a number of difficulties associated with acquisitions, including but not limited to the integration of financial, operational and managerial resources. If the asse
Slide 27: Key Business Risks
KEY BUSINESS RISKS • Kogan.com could be adversely affected by increased competition in the various market segments in which it operates. The Australian online retail market is highly competitive and is subject to changing customer preferences. Kogan.com competes for customers with a wide variety of
Slide 28: Key Business Risks
KEY BUSINESS RISKS • Kogan.com may be required in the future to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and a failure to raise capital when needed could harm Kogan.com’s Financial business. Kogan.com
Slide 29: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS 29
Slide 30: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold in the
Slide 31: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold in the
Slide 32: International Selling Restrictions
INTERNATIONAL SELLING RESTRICTIONS This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold in the
Slide 33: Placement Agreement Summary
PLACEMENT AGREEMENT SUMMARY 33
Slide 34: Placement Agreement Summary
PLACEMENT AGREEMENT SUMMARY Kogan.com has entered into a placement agreement (Placement Agreement) with the Joint Lead Managers of the Offer who have agreed to fully underwrite the Placement, subject to the terms and conditions of that Placement Agreement. Kogan.com has given certain representations
Slide 35: Placement Agreement Summary
PLACEMENT AGREEMENT SUMMARY In addition, the following termination events will depend on whether the matter or circumstance has or is likely to have a material adverse effect on the financial position of the Kogan.com and its subsidiaries or the outcome or success of the Placement, or the market pri
Slide 36: Glossary
GLOSSARY kbgan.com | 36
Slide 37: Glossary
GLOSSARY 1HFYxx: the six months ended 31 December 20xx. 2HFYxx: the six months ended 30 June 20xx. 1QFYxx: the three months ended 30 September 20xx. 2QFYxx: the three months ended 31 December 20xx. 3QFYxx: the three months ended 31 March 20xx. 4QFYxx: the three months ended 30 June 20xx. 4QTDFYxx: t
Slide 38: Glossary
GLOSSARY Kogan Insurance: Vertical launched in 1QFY19 offering insurance online. Kogan Internet: Vertical launched in 4QFY18 offering NBN plans via Vodafone’s fixed line NBN network. Kogan Life: Vertical launched in 4QFY18 offering life insurance online. Kogan Marketplace: A platform launched in 3QF
Slide 39: Appendix: 4QTDFY20 Update
APPENDIX: 4QTDFY20 UPDATE 39
Slide 40: Financial Update – April and May 2020
FINANCIAL UPDATE – APRIL AND MAY 20201 Combined April and May 2020 (4QTDFY20) Adjusted EBITDA2 grew by 219.3% YoY, driven by Gross Profit growth of 132.9% YoY. 4QTDFY19 vs $m 4QTDFY19 4QTDFY20 4QTDFY20 Variance Gross Sales3 82.8 168.6 103.6% Revenue4 62.7 104.1 65.9% Gross Profit 13.3 30.9 132.9% Gr
Slide 41: Net Assets Summary
NET ASSETS SUMMARY1 Strong Balance Sheet at 31 May 2020 with $58.6 million of cash (debt facility drawn to $26.0m). $m May20 CURRENT ASSETS Cash 58.6 Trade and other receivables 6.8 Inventories 103.5 Total current assets 169.0 NON-CURRENT ASSETS Property, plant and equipment 0.2 Right of use asset 2