investor presentation - february 2018board and management , 36.1% aus&nz institutions, 18.2% us...

INVESTOR PRESENTATIONFebruary 2018

* Results subject to half year audit review

AGENDA

2

1 Redbubble: The Basics

2 10 Years of Solid Marketplace Growth

3 Strategic Focus on Accelerating Existing Dynamics

4 Financials and Forecasts

SUMMARY OF 1H FY2018 HIGHLIGHTS - Positive Momentum Continues

INCREASING GLOBAL RELEVANCE – Delivering Strong Top Line Growth in New Markets

3

T O T A L G T V S P A I N F R A N C EG E R M A N Y

+32% +110% +95% +50%

G O O G L E S H O P P I N G S K U S I N C R E A S E D F R O M 2 5 M I L L I O N T O 5 0 M I L L I O N

H E A L T H Y M A R K E T P L A C E M E T R I C S

SELLING ARTISTSto 219k

UNIQUECUSTOMERS3

to 2.35 million

SITE VISITSto 127.5 million+33% +40% +39%

> 200,000 MAUs2 on mobile app

20% product pages on new faster platform

> 1 MILLIONpackagesover Xmas

> $100MILLIONto artists1

since inception

1. Aggregate earnings to artists since the inception of the business2. Monthly Active Users3. An unique customer is defined as an unique email address

4

B U I L D I N G A H I G H G R O W T H ,

S U S T A I N A B L E A N D D I V E R S I F I E D

M A R K E T P L A C E

A RECAP ON THE RB STORY

5

A THREE-SIDED MARKETPLACE, FOUNDED IN 2006

UNIQUE CUSTOMERS1

269,000+(CY2017)

3.5M(CY2017) 14.0M

(at end of CY2017)

CONTENT

3rd PARTY FULFILLERS

SELLING ARTISTS

15 FULFILLERS (28 locations), 66 PRODUCTS (at 1H FY2018)

1. A unique customer is defined as an unique email address

6

Consumer demand for the personally relevant

Cost and capability of print-on-demand and manufacturing-on-demand

The sharing economy of the Internet

DRIVEN BY THREE MAJOR GLOBAL DISRUPTIONS

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

$0.50

$0.70

$0.90

$1.10

$1.30

$1.50

RBL Volume RBL Share Price (A$)

COMPANY SNAPSHOT: REDBUBBLE LTD (ASX:RBL)

7

Capital Structure Share Registry (at 04 January 2018)

Sources: Miraqle, CapitalIQ

Board and ManagementMr Richard Cawsey: Non-Executive ChairmanMr Martin Hosking: CEO and Managing DirectorMr Greg Lockwood: Non-Executive DirectorMr Grant Murdoch: Non-Executive DirectorDr Hugh Williams: Non-Executive DirectorMs Jennifer Macdonald: Non-Executive DirectorFrom 22 February 2018

Ms Anne Ward: Non-Executive DirectorFrom 24 March 2018

Mr Barry Newstead: Chief Operating OfficerMr Chris Nunn: Chief Financial Officer

Share Price (1 Feb 2018): $1.60

Fully Paid Ordinary Shares: 208.4 million

Market Capitalisation: $333.5 million

Net Cash (31 Dec 2017): $46.3 million

Enterprise Value: $287.1 million

RBL Share Price (last 12 months as at 1 Feb 2018)

Board and Management,

36.1%

Aus&NZ Institutions,

18.2%

US Institutions,

9.9%

Others, 35.8%

AS AT 1 February 2018 (unless stated otherwise)

8




RB. A FAST GROWTH GLOBAL COMPANY

9

93% SALES OUTSIDE AUSTRALIA

Source: Redbubble internal data1. GTV growth in each region measured in AUD

FY2013 FY2014 FY2015 FY2016 FY2017

GTV by year and region (A$M)

North America UK EU AU/NZ ROW

$33.7M

$59.3M

$88.4M

$142.9M

$175.4M

6.9%

11.1%

16.0%

65.0%

7.3%

13.2%

14.3%

63.9%

7.7%

16.0%

64.4%

10.9%

9.2%

15.1%

62.0%

12.5%

11.1%

15.2%

60.4%

11.5%

1H FY2018 YoY Growth1

North America 26%United Kingdom 26%Continental EU 70%AU/NZ 34%ROW 45%

10

SIGNIFICANT GROWTH POTENTIAL ACROSS ALL MARKETS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 $0.45 $0.50

Yo

Y G

row

th R

ate

PenetrationRedbubble sales per Capita ($AUD)

YoY Product Sales Growth FY2017

Japan

Germany

Switzerland

United States,23% YoY

United Kingdom, 28% YoY

Australia,27% YoY

Canada

France

Italy

Spain

Singapore

Sweden

NorwayIreland

New Zealand

Denmark

Finland

AustriaBelgium

Netherlands

Source: Redbubble internal data and publicly available population information.

Share of GTV

RB STRONG & HEALTHY MARKETPLACE DYNAMICS

0

40

80

120

160

200

240

FY13 FY14 FY15 FY16 FY17

# o

f A

rtis

ts (,

00

0)

Selling Artists

11

0.0

0.5

1.0

1.5

2.0

2.5

3.0


# C

ust

om

ers

(Mill

ion

s)

Unique Customers1

CONSISTENT GROWTH IN CUSTOMERS, ARTISTS AND FULFILLERS

4.6X 5.3X

1. A unique customer is defined as a unique email address2. Number of fulfilment locations multiplied by average number of products per location

0

50

100

150

200

250

300


Pro

du

ct

/ Fu

lfillm

en

t C

om

bin

atio

ns

Product / Fulfilment Combinations2

6.6X

12

RB. >60% SELLING ARTISTS ARE ALREADY ON THE PLATFORM

Source: Redbubble internal data

25%27%

33%

31%

35%

36%

0

50

100

150

200

250

FY12 FY13 FY14 FY15 FY16 FY17

# o

f A

rtis

ts (

,00

0)

Selling Artists by Cohort

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

31K

44K

62K

95K

154K

232K

7.0%

12.4%

20.1%

27.2%

32.6%

35.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

20

40

60

80

100

120

140

FY13 FY14 FY15 FY16 FY17 CY17

% G

TV

Vis

its

mill

ion

s

Desktop & Mobile visits and Mobile GTV %

Mobile GTV % (RHS) Desktop visits (LHS) Mobile visits (LHS)

RB VISITS AND MOBILE DRIVE GROWTH

13

Co

nve

rsion

Rate

(%)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0

40

80

120

160

200

240

FY13 FY14 FY15 FY16 FY17 CY17

# V

isit

s (M

illio

ns)

Visits and Conversion

Visits CVR

14

RB. GROWING UNPAID AND OPTIMISING PAID CHANNELSBUT HAVING TO PAY FOR MORE CUSTOMERS WITH TREND TO MOBILE

1. Organic Search = traffic to the site originating from search click through that we do not pay for 2. Direct = Traffic coming directly to the RB homepage 3. Paid = Traffic from sources we pay for (Google ads, Facebook ads, etc.)Source: Redbubble internal data

1H FY15 2H FY15 1H FY16 2H FY16 1H FY17 2H FY17 1H FY18

Organic Search Direct Email Other Free Paid Search & Other Paid Social

$45.3M $44.1M

$81.6M

$64.0M

$100.7M

$78.9M

$132.7M

8%

2%

5%16%

42%

27%8%

2%

7%19%

45%

23%

9%

4%

6%

17%

39%

25%

9%

7%

7%14%

37%

27% 8%

10%

8%

6%

36%

32%

7%

12%

7%5%

38%

31%

6%

11%

6%

5%

38%

35%

23%

32%

80%

Unpaid% 71% 75% 70% 67% 58% 57% 54%Paid% 29% 25% 30% 33% 42% 43% 46%

Paid

Un

paid

24%

PAID MARKETING DOLLARS BEING SPENT MORE EFFICIENTLY

15

WITH ALL PAID CHANNELS PROFITABLE ON FIRST PURCHASE

Paid Spend / $ Paid GTV

Paid Spend / $ Total GTV

GP / $ Total GTV

4.8c 5.4c

7.0c 7.4c

18.0c 17.1c 16.4c 16.2c

27.2c 27.3c 28.6c

27.2c

$-

5.0c

10.0c

15.0c

20.0c

25.0c

30.0c

FY2015 FY2016 FY2017 1H FY2018

AU

D $

Gross Profit v. Paid Spend to generate a $ of Total GTV or a $ Paid GTV

16Source: Redbubble internal data

RB. DIVERSIFIED PRODUCT RANGE & RAPID GROWTH IN NEW CATEGORIES

75.3 % 78.2 %

66.0 %

54.6 %47.3 %

43.3 %

6.3 %6.6 %

7.5 %

10.2 %

13.3 %16.3 %

9.9 % 6.3 %

11.4 %

11.7 %

12.2 % 11.2 %

2.4 % 2.4 %

2.4 %

8.8 %11.5 %

10.2 %

5.6 % 7.4 % 8.3 %10.4 %

6.2 % 6.1 % 7.1 % 7.3 % 7.5 % 8.6 %

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY2013 FY2014 FY2015 FY2016 FY2017 1H FY2018

GTV by Product Category

T-shirts Stationery / Stickers Accessories Apparel (ex t-shirts) Homewares Artwork

0.0

1.0

2.0

3.0

4.0

5.0


#

(Mill

ion

s)

Items1 and Works2 Sold

17Source: Redbubble internal data1. An Item is a combination of physical product and artist work2. A Work is simply a single artist image

Increasing leverage from new physical products

4.3M Unique items1 sold

1.55M Unique works2 sold

Content library can be instantly applied to new products

Diversifying the range of items broadens potential customer base

Content is a mix of enduring (~60%) and new/trending (~40%)

RB. HUGE CONTENT LIBRARY & PRODUCTS PROVIDE INCREASING LEVERAGE~60% OF SALES ARE FROM ENDURING CONTENT

RB PRODUCTION IS LOCALISED IN THE PRIMARY MARKETS

18Source: Redbubble internal data, updated to 1H FY20181. Number of fulfilment locations multiplied by average number of products per location

Localisation of production has R E D U C E D G L O B A L A V E R A G E D E L I V E R Y T I M E by a full day in FY17, resulting in:

M A R G I N I M P R O V E M E N T via reduction of shipping charges

C O N V E R S I O N U P L I F T from improved delivery times

N P S G A I N S from better service experience

S Y S T E M I C R E D U N D A N C Y against fulfiller failure

Further N A T U R A L H E D G E

F U L F I L M E N T

L O C A T I O N S

28 6C O U N T R I E S

WITH GAINS IN MARGIN, CONVERSION, CUSTOMER EXPERIENCE & NETWORK REDUNDANCY

P R O D U C T / F U L F I L M E N T

C O M B I N A T I O N S 1

309

19




THE REDBUBBLE FLYWHEEL OF AWESOMENESS

20

21




22

P&L (A$M)2Q 2Q YoY

(2Q18 v 2Q17)1H 1H YoY

(1H18 v 1H17)

FY17 FY18 Growth CC Growth1 FY17 FY18 Growth CC Growth1

GTV $62.5 $84.2 34.7% 34.7% $98.6 $129.8 31.7% 33.1%

Revenue $49.8 $67.0 34.6% 35.5% $78.7 $102.3 30.0% 32.0%

Gross Profit $17.8 $22.7 27.8% 28.1% $28.3 $35.3 24.7% 26.1%

GP Margin 35.7% 33.9% (5.1%) (5.4%) 36.0% 34.5% (4.1%) (4.5%)

Paid Acquisition $(4.2) $(5.9) 40.3% 42.9% $(6.6) $(9.6) 47.0% 50.7%

Gross Profit (after Paid Acquisition) (GPAPA)

$13.6 $16.8 23.9% 23.5% $21.7 $25.7 18.0% 18.6%

GPAPA Margin 27.3% 25.1% (8.0%) (8.8%) 27.6% 25.1% (9.2%) (10.1%)

Operating Expenses $(11.4) $(12.8) 12.3% 13.2% $(21.2) $(23.1) 9.1% 10.5%

Operating EBITDA $2.2 $4.0 85.0% 79.8% $0.6 $2.6 332.4% 325.4%

Other Income/Expenses $(0.9) $(0.8) (9.2%) 27.7% $(1.7) $(1.5) (9.4%) 2.8%

EBITDA Profit/(Loss) $1.3 $3.2 149.8% 99.2% $(1.1) $1.1 202.5% 299.8%

Source: Redbubble internal unaudited management accounts

1. “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes.

• GTV growing at >30% on both floating and constant currency basis for 2Q & 1H

• Relative Revenue growth in 1H impacted by higher sales tax component in GTV from faster growing European markets

• GP Margin lower due to seasonal product mix and pricing and promotional initiatives

• Benefits of higher base volumes and already negotiated fulfiller discounts to assist underlying GP Margin to rebound in 2H

• Operating leverage evident in 1H ratio of Revenue growth to aggregate of Paid Acquisition and Operating Expenses growth of 1.6x

• Operating EBITDA up $2.0M compared to 1H FY2017

2Q & 1H FY2018 INCOME STATEMENT SUMMARY

23

1. GTV (Gross Transaction Value) = Total receipts from customers less fraud, refunds and chargebacks2. Repeat GTV = GTV earned from customers who have previously purchased from Redbubble, regardless of the date of their initial purchase3. AOV: Average Order Value (Order sales / number of orders) 4. Customers are unique customers counting only once however many times they have bought on Redbubble during the period5. Repeat customers are customers who have purchased more than once on Redbubble, regardless of the date of their initial purchase6. “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes

• GTV growth at 34.7% for 2Q and 33.1% for 1H on constant currency basis6

• 61.0% YoY growth in 2Q Mobile GTV particularly strong, more than double Desktop’s GTV growth of 23.8% for the quarter

• Visits growth driven by ~50% increase in both organic searches and mobile traffic with associated effect on conversion

• Lower AOV caused by increasing product share of lower value sticker items. 1H AOV comparison also includes small FX effect

• Marketplace metrics of Visits, Customers and Selling Artists all remain healthy

2QFY2017

2QFY2018

YOYgrowth

1HFY2017

1HFY2018

YOYgrowth

GTV1

Selling Artists

Visits

Repeat GTV2

AOV3

Conversion rate

Repeat Customers5

Mobile GTV

Customers4

$62.5M

49.6M

$23.0M

$49.5

2.55%

0.35M

136,300

$19.4M

1.10M

$84.2M

70.4M

$31.0M

$47.3

2.53%

0.51M

183,500

$31.3M

1.55M

34.7%

42.0%

34.5%

-4.6%

-0.6%

45.3%

34.6%

61.0%

41.5%

$98.6M

91.6M

$36.8M

$48.7

2.21%

0.52M

164,300

$30.3M

1.68M

$129.8M

127.5M

$48.2M

$45.9

2.22%

0.75M

218,800

$47.9M

2.35M

31.7%

39.3%

30.9%

-5.7%

0.3%

43.6%

33.1%

58.1%

40.2%

2Q & 1H FY2018 KEY MARKETPLACE METRICS

SUMMARY: A GLOBAL AUSTRALIAN GROWTH STOCK

On strong momentum, Redbubble is reaffirming its previous guidance of moving into ongoing operating EBITDA profitability late in FY2018.

24

GLOBAL LEADER RIDING 3 MAJOR DISRUPTIONS

SCALING RAPIDLY ON BACK OF FUNDAMENTALS

PROXIMATE TO BREAKEVEN

NO INVENTORY RISK

NO WAREHOUSING COSTS

UNIQUE R B BUSINESS MODEL

26

NO DISTRIBUTION COSTS

POSITIVE WORKING CAPITAL CYCLE

INSIGNIFICANT CAPITAL INVESTMENT (PP&E)

27

Inflows

Days

Out-flows

$100GTV

0 1 - 2

- $3.30PAYMENT

PLATFORM

$96.7

1 - 3

PRODUCT SHIPPED &

REVENUE EARNED1

7

- $15.0ARTIST

32

- $48.50FULFILLERS

85 - 90

- $4.70TAX

CASH GENERATED

BEFORE

OPERATING EXPENSES

$28.60

Analysis based on FY17

1. Revenue earned is GTV less artist margin and tax (i.e.. $79.80 on $100 GTV)

POSITIVE CASH CYCLE

1H FY2018 MOBILE AND DESKTOP KEY METRICS

28

Source: Redbubble internal data1. Conversion rate is the percentage of visits to the site that result in a purchase being made2. AOV: Average Order Value (Order sales / Order count)3. Includes Tablet

1HFY2017

Conversion rate1 3.00%

Visits 46.3M

AOV2 $49.2

Desk

top3

Conversion rate1 1.41%

Visits 45.3M

AOV2 $47.6

% of Total visit 50.6%

% of Total visit 49.4%

1HFY2018

3.01%

58.3M

$46.7

1.55%

69.3M

$44.6

45.7%

54.3%

YOYgrowth

0.5%

25.8%

-5.2%

10.1%

53.0%

-6.1%

-4.9% pts

4.9% pts

Mobil

e

WHAT WE HAVE DELIVERED DURING 1H FY2018

29

F I N D Y O U R T H I N GD E E P E R

R E L A T I O N S H I P SG L O B A L A C Q U I S I T I O N S C A L A B I L I T Y

Goals Accelerate growth in high value, discoverable content, mitigating piracy

Build a personalised mobile experience for our members

Sustainable, low-cost, global new customer acquisition

Reinvest in a faster platform, lower prices and faster delivery

Allocation of Engineering

Resources30% 30% 10% 30%

Highlights ü Improved search and browsing experience

ü English language search pages (~20% of all views) moved to a new and faster platform

ü Site features enabling partnerships between rights holders and artists

ü Continued scaling of the app,login & signup, and push notifications

ü Synchronisation of favorites enabled across different devices

ü Personalised content feed enhancements using new ranking algorithm

ü Optimised organic search

ü Google inventory expanded from 25 million to 50 million SKUs

ü Expanded German payment options and trust signals

ü Rolled out new and faster platform for all T-Shirt products on mobile and desktop in English

ü 5 new product launches

ü 4 new fulfiller locations on-boarded

Success Indicators

• Speed of a mobile search query increased more than 2x

• 200,000 Monthly Active Users (MAUs)1 on mobile app

• > 1.8 million new customers during 1H FY2018

• Ability to increase site capacity on Black Friday and to support high loads on Cyber Monday foundation for auto-scaling

30

F I N D Y O U R T H I N GD E E P E R

R E L A T I O N S H I P SG L O B A L A C Q U I S I T I O N S C A L A B I L I T Y

Goals Accelerate growth in high value, discoverable content, mitigating piracy

Build a personalised mobile experience for our members

Sustainable, low-cost, global new customer acquisition

Reinvest in a faster platform, lower prices and faster delivery

Focus Areas • Continue to strengthen value proposition for artists and rights holders

• Make it easier for high quality content to be created and found

• Reduce and rapidly remove low quality/IP infringing content

• Transform the user experience and data platform for Redbubble members

• Continueto encourage customer loyalty

• Sustain growth and profitability of new user acquisition through organic and paid channels

• Drive profitability through operational scale and pricing/promotion optimisation

• Drive speed in our platforms with a priority focus on:

• Systems that enable faster addition of new products and fulfillers

• Continuation of work to migrate key site pages and key systems to new faster, more scalable platform

Success Indicators

• New user conversion

• Orders per user

• Improved revenue per user

• Enhanced member experience

• European market growth

• Paid channel growth and ROI

• Page speed improvements

• Increased GTV from new products

WE WILL CONTINUE TO DELIVER AGAINST OUR STRATEGIC INITIATIVES

DISCLAIMERThe material herein is a presentation of information in summary form and does not purport to be complete. Investors or potential investors should seek their own independent advice. This material is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of a particular investor. These should be considered when deciding if a particular investment is appropriate.

Forward-looking Statements

This presentation includes certain forward-looking statements that are based on information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performance or achievements could be significantly differentfrom those expressed in, or implied by, these forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Redbubble. These factors may cause actual results to differ materially from those expressed in the statements contained in this announcement.

32

investor presentation - february 2018board and management , 36.1% aus&nz institutions, 18.2% us...

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