Redbubble Annual Report 2020

6 7 Redbubble Annual Report 2020 Highlights and Commentary FY2020 Financial Performance Redbubble Group’s (“RB Group” or “Group”) FY2020 financial metrics (with YoY growth rates (1) , where applicable) are: • Marketplace Revenue of $349 million, up 36% (29% on a constant currency basis (2) ) • Gross profit of $134 million, up 42% (36% on a constant currency basis) • GPAPA of $95 million, up 40% (34% on a constant currency basis) • Operating EBITDA (3) of $15.3 million, up 141% (123% on a constant currency basis) • EBITDA of $5.1 million, up 358% (886% on a constant currency basis) • Free cash inflow of $38 million (4) , compared to an outflow of $0.2 million in FY2019 (5) , resulting from the Group’s increasing profitability and working capital advantage • Closing cash balance at 30 June 2020 of $58 million During 4Q FY2020, growth and profitability accelerated: • 4Q20 Marketplace Revenue of $103 million, up 73% on 4Q19 (64% on a constant currency basis) • Gross profit grew 88% and GPAPA grew 83% in 4Q20 compared to 4Q19, outpacing topline growth, driven by margin expansion and paid efficiency • 4Q20 recorded Operating EBITDA of $8.4 million and EBITDA of $7.4 million With a diversified network of 37 fulfillers across 10 countries and 41 locations, the Group fulfills products close to customers, keeping shipping timelines and costs competitive. During FY2020, fulfillment capacity was added in Europe, Canada and the United States. RB Group’s marketing efforts maintained efficiency with FY2020 marketing spend at 11.4% of Marketplace Revenue. Operating expenses for the year were $79.3 million. This includes a one off $2.2 million provision for the organisational restructure announced on 25 June 2020. Strategic & Business Update Key metrics and highlights (6) for FY2020 include: • 511k selling artists, up 51% and artist earnings were $67 million, up 35% • 6.8 million unique customers, up 30% • Repeat sales accounted for 40% of Marketplace Revenue • Launch of 16 new products across the Group in FY2020, including face masks in April 2020 • Redbubble app sales saw growth of 159% in FY2020 and represented 12.6% of Redbubble Marketplace Revenue in FY20 Given ongoing uncertainty about COVID-19, RB Group will not be providing forward-looking guidance. Teams are focused on 4 key initiatives to propel profitable growth: 1) Artist acquisition, activation and retention 2) User acquisition and transaction optimisation 3) Customer understanding, loyalty and brand building 4) Further physical product and fulfilment network expansion RB Group CEO, Martin Hosking, said: “RB Group’s on-demand fulfilment model and differentiated consumer offerings provide us with distinctive advantages. The strong financial performance follows from these fundamentals. It has been pleasing to see the acceleration of existing trends in the last few months. 2021 represents a year of opportunity for the business. We are positioned to build on a decade of momentum and aggressively pursue the global opportunity presented by the shift to online activity and increasing adoption of ecommerce platforms.” (1) FY2020 YoY growth rates based on TeePublic contributions from 1 Nov 2018. (2) “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes. Redbubble sources about 94% of its Marketplace Revenue in currencies other than Australian dollars. TeePublic sources about 89% of its Marketplace Revenue in US dollars. (3) Operating EBITDA excludes non-cash share-based payments, currency gains/losses, rent expenses (as per AASB 16 effective 1 July 2019), depreciation and amortisation. Comparative figures have been adjusted accordingly on a like for like basis. 4Q and FY2020 Operating EBITDA also includes the impact of $2.2 million related to one-off reorganisation costs. (4) Aggregate operating and investing cash flows excluding consideration for TeePublic. (5) The AASB 16 change also increased FY2020 free cash flows by $3.6 million. The FY2019 comparative figures have been adjusted upwards by $2.9 million to apply the same treatment to the prior period. (6) Sourced from RB internal data.