Adore Beauty Group Ltd. · ASX:ABY
Adore Beauty — Shareholder Meeting (November 2022)
28 slides from Adore Beauty's shareholder meeting presentation, Nov 14, 2022
Slide 1: Annual General Meeting – Presentation and Addresses
Adore Beauty Group Limited ABN 78 636 138 988 For personal use only ASX ANNOUNCEMENT 14 November 2022 Annual General Meeting – Presentation and Addresses Adore Beauty Group Limited (ASX: ABY) (Adore Beauty) attaches a copy of the presentation and addresses to be made at today’s Adore Beauty Annual G
Slide 2: Forward Looking Statements
forecasted in the forward -looking statements. Adore Beauty cautions shareholders and prospective shareholders not to place undue reliance on these forward-looking statements, which reflect the view of Adore Beauty only as of the date of this release. There can be no assurance that actual outcomes w
Slide 3: 2022 Annual General Meeting
For personal use only 2022 ANNUAL GENERAL MEETING 14 November 2022
Slide 4: Beauty Done Better. Looking to the future by building on our past
For personal use only BEAUTY DONE BETTER. LOOKING TO THE FUTURE BY BUILDING ON OUR PAST
Slide 5: Adore Beauty Board and Management
ADORE BEAUTY BOARD AND MANAGEMENT For personal use only MARINA GO KATE MORRIS JAMES HEIGHT SANDRA BIRKENSLEIGH LISA HENNESSY Chair Executive Director Executive Director Non-Executive Director Non-Executive Director Non-Executive Director TENNEALLE STEPHANIE O’SHANNESSY CARROLL Chief Executive Office
Slide 6: Chair's Address
For personal use only CHAIR’S ADDRESS
Slide 7: CEO Report
For personal use only CEO REPORT
Slide 8: Sustainable Revenue Growth
SUSTAINABLE REVENUE GROWTH VALUABLE RETURNING CUSTOMERS GROWING STRONGLY For personal use only FY22 RESULTS $200M 33.3% MARKET LEADER IN REVENUE GROSS PROFIT GROWING $1.5B ONLINE +11% ON PCP MARGIN BEAUTY & PERSONAL CARE +28% 2-YEAR CAGR +0.3 PPTs ON PCP MARKET $5.3M $29.8M INVESTMENTS IN EBITDA1 CA
Slide 9: Strategy Driving Topline Growth
STRATEGY DRIVING TOPLINE GROWTH INITIATIVES TO SUPPORT GROWTH ACROSS ALL KEY CUSTOMER METRICS For personal use only STRATEGIC PRIORITY MOBILE APP LOYALTY OWNED MEDIA INCREASE OWNED AND BRAND PRODUCT BRANDS AWARENESS OFFERING FY22 OUTCOMES DELIVERED ■ Contributed 11.3% of ■ Member sign-ups ■ Industry
Slide 10: Record Revenue from Higher-Value Customers
RECORD REVENUE FROM HIGHER-VALUE CUSTOMERS MORE RETURNING CUSTOMERS DELIVERING HIGHER ANNUAL SPEND For personal use only REVENUE ANNUAL REVENUE ($A MILLION) ACTIVE CUSTOMERS1 (‘000) PER ACTIVE CUSTOMER1 ($A) 28% CAGR 22% CAGR 6% CAGR 11% 7% 4% 872 818 200 179 59 399 590 68 458 121 219 229 371 205 53
Slide 11: Track Record of Delivering Long-Term YoY Growth
TRACK RECORD OF DELIVERING LONG-TERM YOY GROWTH RECORD REVENUE AND GROSS PROFIT MARGIN For personal use only REVENUE ($A MILLION) GROSS PROFIT MARGIN (%) EBITDA ($A MILLION) 40% CAGR 3.3 PPTS 49% CAGR 11% 0.3 PPTS 4% CAGR 33.1 33.3 7.6 199.7 179.3 31.8 5.3 5.0 121.1 30.0 73.2 1.6 FY19 FY20 FY21 FY22
Slide 12: Returning Customers Contribute 70% of Revenue and Shop 3x a Year
RETURNING CUSTOMERS CONTRIBUTE 70% OF REVENUE AND SHOP 3X A YEAR For personal use only CONTENT & OWNED CHANNELS COST-EFFECTIVELY RETAINING CUSTOMERS NUMBER OF CUSTOMERS SUPERIOR LOYALTY METRICS OVER TIME1 70% of revenue from returning customers who shop ~3x per year 350 300 ■ Normalised operating en
Slide 13: Lifetime Value Grows to 8x Acquisition Cost
LIFETIME VALUE GROWS TO 8X ACQUISITION COST PERSONALISATION, LOYALTY & EXPERIENCE SUPPORTING LTV GROWTH For personal use only AVERAGE LTV/CAC BY YEAR2 ■ Strong unit economics ─ FY22 LTV/CAC 1 was 0.7x, meaning investment in customer 7.8x acquisition is recovered in just over one year ─ Year-1 averag
Slide 14: Sustainable and Ethical Operations
SUSTAINABLE AND ETHICAL OPERATIONS AN INCLUSIVE EMPLOYER WITH DIVERSE REPRESENTATION ACROSS CONTENT For personal use only REDUCING PACKAGING ■ New smaller box size, reducing cardboard and plastic tape usage ■ Partnering with brands to reduce/ eliminate non-recyclable packaging ■ 100% of packaging an
Slide 15: Long-Term Strategy to Drive Earnings Accretion
LONG-TERM STRATEGY TO DRIVE EARNINGS ACCRETION For personal use only 2 PERSONALISATION 3 4 1 & MOBILE APP GROW PRODUCT OFFERING ■ Scale mobile app CONTENT, LOYALTY OWNED BRANDS ■ Increase data-driven & OWNED MEDIA & INTERNATIONAL personalisation ■ Increase core skincare, ■ Improve user experience, h
Slide 16: Strategy to Drive Long-Term Margin Expansion
STRATEGY TO DRIVE LONG-TERM MARGIN EXPANSION SCALE OWNED BRANDS, OWNED MEDIA CHANNELS TO DRIVE IMPROVEMENTS For personal use only REVENUE IMPROVE GROSS REDUCE MARKETING GROWTH PROFIT MARGIN EXPENSE Growing owned media Increased scale, Owned brands with channels: app, loyalty, new products higher mar
Slide 17: Targeting Margin Expansion Over the Long Term
TARGETING MARGIN EXPANSION OVER THE LONG TERM A CLEAR PATH TO MARGIN EXPANSION For personal use only TARGETS DRIVING MARGIN EXPANSION1 ■ Owned brands to LONG ■ Owned brands to contribute 10% of revenue at gross TERM contribute 15%+ of revenue ■ Investment in FY27 margin target of 80%+ TARGET ■ New g
Slide 18: Structural Tailwinds to Drive Future Growth
STRUCTURAL TAILWINDS TO DRIVE FUTURE GROWTH MARKET LEADER IN A GROWING & RESILIENT SEGMENT For personal use only LARGE ADDRESSABLE MARKET A RESILIENT CATEGORY ONLINE ADOPTION SIGNIFICANTLY BEHIND MORE MATURE MARKETS AUSTRALIAN BEAUTY AND PERSONAL BEAUTY AND PERSONAL CARE MARKET BEAUTY AND PERSONAL C
Slide 19: FY23 Update & Outlook
FY23 UPDATE & OUTLOOK For personal use only ■ Q1 revenue of $45.4 million, down 29% on the prior corresponding period (PCP) when most of Australia was in lockdown; revenue is up on the two most recent quarters1 ─ Strong growth in returning customers, up 14% on PCP , and up 85% on a 2-year basis ─ Ac
Slide 20: Growing Portfolio of Owned Brands
GROWING PORTFOLIO OF OWNED BRANDS AB LABS IS ADORE’S FIRST MASTHEAD BRAND For personal use only ■ Initial range features two skincare-led sunscreens ■ Formulated with cosmeceuticals ■ Designed for different skin types and concerns ■ Developed in response to engagement with loyalty members ■ 80% said
Slide 21: Disclaimer
DISCLAIMER For personal use only This presentation has been prepared by Adore Beauty Group Limited ACN 636 138 988 An investor must not act on the basis of any matter contained in this presentation but (Company). This presentation contains summary information about the Company and must make its own
Slide 22: Australia's Online Beauty Store
For personal use only AUSTRALIA’S ONLINE BEAUTY STORE WWW.ADOREBEAUTY.COM.AU
Slide 23: Chair's Address
CHAIR’S ADDRESS Before I hand over to CEO Tennealle O’Shannessy to provide an update on the 2022 financial year, I would like to make a few comments as your Chair. For personal use only For more than 20 years, Adore Beauty has been disrupting the traditional beauty shopping experience. The Company h
Slide 24: For personal use only
achievements during a year of unpredictable operating conditions is a testament to your passion and commitment. Adore Beauty has significant bench strength across the business, led by a highly experienced and well-regarded management team, and benefitting from the vision and experience of co- founde
Slide 25: For personal use only
We are a cashflow positive business, and remain well funded to execute on our growth initiatives with a strong balance sheet of almost $30 million cash as at 30 June, 2022 and no debt. The key pillars of our growth strategy are already contributing to topline revenue and driving improvements across
Slide 26: For personal use only
Despite navigating higher acquisition costs, our unit economics remain strong. For the FY18 to FY22 cohorts, the average customer acquisition cost is recovered in under a year while the lifetime value continues to grow over time. By year-5, customer lifetime value is almost eight times the acquisiti
Slide 27: For personal use only
And we’re reducing marketing costs through growing our owned media channels, increasing revenue contribution from our valuable returning customers, and growing brand awareness and brand co-funding. Moving now to what we expect margins to look like over the mid and longer-term. For personal use only
Slide 28: For personal use only
Strategic initiatives, including owned brands and marketing channels, and scale benefits, are expected to increase operating leverage and deliver EBITDA margin expansion. We are targeting an EBITDA margin of 8-10% by FY27 and longer-term, Adore Beauty is targeting an EBITDA margin of 10%+. For perso
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