Announcement PDF INVESTOR PRESENTATION July 2017 incorporating 4Q2017 and FY2017* Results *Results subject to audit AGENDA 1 About Redbubble 2 Healthy marketplace 3 Historical top-line growth 4 Customer acquisition 5 The opportunity 6 Growth themes and initiatives 7 Financials 8 Wrap up 2 BUILDING A HIGH GROWTH, SUSTAINABLE AND DIVERSIFIED MARKETPLACE 3 Redbubble Video This is Redbubble 1. Link to Video 4 A RECAP ON THE RB STORY A THREE-SIDED MARKETPLACE, FOUNDED IN 2006 AND LISTED IN MAY 2016 ARTISTS CUSTOMERS CONTENT 600,000+ (as of Q4 FY2017) 2.9M (FY2017) 11.5M2 3rd PARTY FULFILLERS 15 FULFILLERS (24 locations), 64 PRODUCTS (as of Q4 FY2017) 1. Published artists net of removals: Source: Redbubble internal data 5 COMPANY SNAPSHOT: Redbubble Limited (ASX:RBL) As at 21 July 2017 (unless stated otherwise) $1.40 2.0 $1.20 $1.00 Millions 2.5 1.5 $0.80 1.0 $0.60 $0.40 0.5 $0.20 7/17/17 6/17/17 5/17/17 4/17/17 3/17/17 2/17/17 1/17/17 12/17/16 11/17/16 10/17/16 0.0 9/17/16 $0.00 8/17/16 Mr Barry Newstead: Chief Operating Officer Mr Chris Nunn: Chief Financial Officer $1.60 7/17/16 Board and Management: Mr Richard Cawsey: Non-executive Chairman Mr Martin Hosking: CEO and Managing Director Ms Teresa Engelhard:Non-executive Director Mr Greg Lockwood: Non-executive Director Mr Grant Murdoch: Non-executive Director Dr Hugh Williams: Non-executive Director 6/17/16 $0.95 208.4 million $198.0 million $1.33 $27.8million Shareholders (at 4 July 2017): Board &Management: 36.7% Top 20: 75.0% Osmium Partners (recent investor): 7.6% Acorn Capital (pre-IPO investor): 6.1% Simon Baker (ex-director): 5.8% Blackbird Ventures (pre-IPO investor): 5.5% 5/17/16 Capital Structure: Share Price (16 May 2017): Fully Paid Ordinary Shares: Market Capitalisation: Issue Price (16 May 2017): Net Cash (30 June 2017): 6 BUILDING A HIGH GROWTH, SUSTAINABLE AND DIVERSIFIED MARKETPLACE 7 THE R B MARKETPLACE IS SCALING RAPIDLY CONSISTENT GROWTH IN CUSTOMERS, ARTISTS AND FULFILLERS Repeat New 2.0 Fulfillers 280 Fulfillers 3.0 2.5 Selling Artists # of Artists (,000) # Customers (Millions) New and Repeat Customers 240 16 14 12 200 10 160 8 1.5 120 1.0 6 80 4 0.5 40 2 0.0 0 0 FY13 FY14 FY15 FY16 FY17 Large and Growing customer base FY13 FY14 FY15 FY16 FY17 SUSTAINABLE, LOW COST ARTIST COMMUNITY FY13 FY14 FY15 FY16 FY17 Diverse, Localised manufacturing 8 BUILDING A HIGH GROWTH, SUSTAINABLE AND DIVERSIFIED MARKETPLACE 9 R B HAS HAD STRONG TOP-LINE GROWTH Gross Transaction Value (Constant Currency Growth Rates) # Visits (Millions) $200 Visits and Conversions $160 $120 200 2.5% 160 2.0% 120 1.5% 80 1.0% Repeat GTV $80 First Time GTV $40 Visits 40 0.5% CVR $0 FY13 YoY Conversion Rate (%) $AUD Millions GTV GROWTH DRIVEN BY VISITS AND CONVERSION RATE IMPROVEMENTS
FY14 FY15 FY16 FY17 0 122.1% 55.9% 38.1% 46.2% 30.3%
YoY growth rates are based on constant currency exchange rates to eliminate exogenous FX spikes 0.0% FY13 FY14 FY15 FY16 FY17 10 BUILDING A HIGH GROWTH, SUSTAINABLE AND DIVERSIFIED MARKETPLACE 11 GROWS STRONGLY WITH LOW CUSTOMER ACQUISITION COSTS WITH ALL PAID CHANNELS PROFITABLE ON FIRST PURCHASE FY2017 TRAFFIC 4 2 % - Paid 5 8 % - Free 11% 32% 8% 8% 5% 37% Paid Social Paid Search and Other Other Free Email Direct Organic Search 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 12 BUILDING A HIGH GROWTH, SUSTAINABLE AND DIVERSIFIED MARKETPLACE 13 SUSTAINABLE GROWTH NOT SUBJECT TO A MARKET CEILING ESTIMATED ADDRESSABLE MARKET IN EXCESS OF US$60 BILLION Market Size (US$B) Estimated addressable market1 70 Global online market: Apparel = US$81B 60 50 Homewares2 = US$131B 42 40 64 30 20 grow at between 10 and 14% per annum through to 2020 10 $22B Existing markets 10 12 Both of these large online markets expected to 0 US/UK/Au 1. 2. Europe ROW Total Redbubble analysis of the total market of customers seeking creative expression on lifestyle products (apparel, electronic accessories, homewares and stationery) Homewares = furniture and household goods such as kitchen and bathroom accessories, textile furnishings, office supplies and stationery Sources: eMarketer, McKinsey and Company, ATKearney, Redbubble analysis 14 HUGE CONTENT LIBRARY & PRODUCTS PROVIDE INCREASING LEVERAGE # (Millions) ~60% OF SALES ARE FROM ENDURING CONTENT Items and Works Sold 5.0 4.3M Unique items sold Diversifying the range of items broadens potential customer base Increasing leverage from new products Content library can be instantly applied to new products 1.55M Unique works sold Content is a mix of enduring (~60%) and new/trending (~40%) 4.0 3.0 2.0 1.0 0.0 FY13 FY14 FY15 FY16 FY17 Source: Redbubble internal data A Product is a combination of physical product and artist work, a work is simply a single artist image 15 PRODUCTION IS LOCALISED IN OUR PRIMARY MARKETS WITH GAINS IN MARGIN, CONVERSION AND CUSTOMER EXPERIENCE Localisation of production has REDUCED GLOBAL AVERAGE DELIVERY TIME by a full day in the last 12 months, resulting in: MARGIN IMPROVEMENT 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 24 FULFILMENT 64 PRODUCTS 6 COUNTRIES N P S G A I N S from better service experience SYSTEMIC REDUNDANCY against fulfiller failure CENTRES Source: Redbubble internal data 16 BUILDING A HIGH GROWTH, SUSTAINABLE AND DIVERSIFIED MARKETPLACE 17 4 BIG THEMES FOR CY2017 STAY FOCUSED ON STRENGTHENING MARKETPLACE DYNAMICS Enhancing ability TO FIND YOUR THING Efficient GLOBAL ACQUISITION of new customers & artists ü Increase leverage of content library into paid channels (search, Facebook) Improvements in organic acquisition (social, search) to enrich experiences Personalised content recommendations Content discovery journey Content partnerships Developing DEEPER RELATIONSHIPS Enhancing SCALABILITY across the business ü EBITDA improvements of up to $3 million p.a. from operational efficiencies Faster core platform – critical for mobile experience with our customers ü Mobile app for rich, habitual browsing experience Upgrading account creation to enable personalisation 18 WITH A FINAL OBJECTIVE FOR CUSTOMERS More buyers acquired more profitably Seeing ever more content from more artists & partners With a personalised mobile discovery & shopping experience for all visitors Forming a mobile habit resulting in more orders from more loyal customers Supported by best-in-class site speed … Attracting more artists, generating more content to sell to more customers 19 BUILDING A HIGH GROWTH, SUSTAINABLE AND DIVERSIFIED MARKETPLACE 20 UNIQUE R B BUSINESS MODEL INSIGNIFICANT CAPITAL INVESTMENT (PP&E) POSITIVE WORKING CAPITAL CYCLE NO INVENTORY RISK NO DISTRIBUTION COSTS NO WAREHOUSING COSTS 21 4Q2017 and FY2017 P&L summary 4Q P&L (A$M) FY16 FY17 Full year Growth CC Growth1 FY16 FY17 Growth CC Growth1 GTV $32.3 $38.7 19.6% 23.3% $142.9 $175.4 22.8% 30.3% Revenue * $26.1 $30.9 18.6% 22.3% $114.6 $141.0 23.0% 30.1% Cost of Goods Sold * $(16.6) $(19.7) 19.0% 21.6% $(75.6) $(90.8) 20.2% 26.7% Gross Profit $9.5 $11.2 18.0% 23.4% $39.0 $50.1 28.5% 36.8% GP Margin 36.5% 36.3% 34.0% 35.6% Paid Acquisition $(1.8) $(3.1) $(7.7) $(12.2) 59.9% 63.8% 71.4% Gross Profit (after Paid Acquisition) (GPAPA) $7.7 $8.1 GPAPA Margin 29.6% 26.4% Operating Expenses $(9.8) $(11.2) 13.9% Operating EBITDA $(2.1) Other Income/Expenses EBITDA (Loss)/Profit 5.6% 72.0% $31.3 $37.9 27.4% 26.9% 14.6% $(37.4) $(3.0) (44.7%) (23.6%) $(1.1) $(0.7) (39.2%) $(3.2) $(3.7) (16.2%) Source: Redbubble internal unaudited management accounts 12.1% (12.3%) 20.8% 30.2% $(43.1) 15.3% 18.0% $(6.0) $(5.2) 13.6% 44.2% $(2.7) $(3.1) 15.5% $(8.7) $(8.3) 4.7% 29.0% • Key financial measures in line with or better than guidance • Strong 4Q GP Margin bolstered by some one-offs as in FY2016. Underlying GP at year end around 35.8% • Paid acquisition costs continuing to increase with shift to mobile but profitability per $ spend maintained • Whilst not evident in 4Q in isolation due to prior period paid acquisition being low, operating leverage emerging with slowing operating expense growth • Overall impact of FX on Operating EBITDA < $50,000 22 4Q2017 and FY2017 Key Metrics 4Q FY2016 GTV1 4Q FY2017 YOY growth YTD FY2016 YTD FY2017 YOY growth $32.3M $38.7M 19.6% $142.9M $175.4M 22.8% Repeat GTV2 $12.4M $15.4M 23.8% $50.7M $66.6M 31.2% 48.8M 33.0% 147.8M 188.4M 27.4% Visits 36.7M Conversion3 1.72% 1.65% -4.2% 1.87% 1.96% 4.6% AOV4 $51.3 $48.1 -6.2% $51.6 $47.54 -7.9% Customers5 0.55M 0.70M 27.7% 2.2M 2.9M 32.8% Selling Artists 97,800 134,800 37.8% 154,300 233,000 51.0% 1. 2. 3. 4. 5. • Healthy market place maintained in growth of repeat GTV, and # of customers, selling artists and visits • Conversion rate impacted by accelerating transition to lowerconverting mobile • Lower AOV continues to be predominantly as a result of strong AUD GTV (Gross Transaction Value) = Total receipts from customers less fraud, refunds and chargebacks Repeat GTV = GTV earned from customers who have previously purchased from Redbubble Conversion rate is the percentage of visits to the site that result in a purchase being made AOV: Average Order Value (Order sales / Order count) The numbers disclosed in the April 2017 4C release for 3QFY17 for Customers were actually orders and not unique customers. The correct numbers of unique customers for 3QFY17 were 750,000 (up 36.9%) and for YTD FY17 were 2,130,000 (up 34.4%). Source: Redbubble internal data 23 BUILDING A HIGH GROWTH, SUSTAINABLE AND DIVERSIFIED MARKETPLACE 24 POSITIONED FOR LOW RISK LONG-TERM GROWTH… HIGH GROWTH • • • • Leading global marketplace 10 consecutive years of growth Enormous addressable market Opportunities on many dimensions SUSTAINABLE DIVERSIFIED • • • • Fresh and enduring content From global artists Range of product offering From geographically dispersed fulfillers • • • • • Capital efficiency from outsourcing and business model Manufacturing outsourced Positive cash cycle Low customer and artist acquisition costs Strong balance sheet 25 26 DISCLAIMER The 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. 27