Red Bubble Annual Report 2022

Directors Report Operationally, the artist and product side of both marketplaces has continued to grow, with content uploads from artists continuing to be added to the platforms. Investments into the physical product experience for artists and their customers have continued, with caps, desk mats and mouse pads added to the Redbubble marketplace. In addition, Redbubble introduced a pets category in May 2022, the first new category launched in over 6 years. New physical products open up new customer segments as well as provide additional annuity income streams for artists over time. The third party fulfillment network continued to perform strongly even with the headwinds of continued COVID-19 restrictions, sourcing constraints and inflationary pressures. Overall, the Group has demonstrated continued resilience across all three sides of the marketplaces and is well positioned to continue to pursue its mid term aspirations. The Group holds $89 million in cash as at 30 June 2022, and has no debt on the balance sheet. A portion of these cash reserves are being used to fund mid term growth through investments across our four key strategic themes, as well as allowing for prudent management of working capital requirements. Further details about the Group’s operating and financial performance is contained within the attached Annual Report. A reconciliation of reported results to non-IFRS numbers in this Directors’ report is provided below. Table 1: Reconciliation of reported results to non-IFRS(1) numbers FY2022 $’m(2) FY2021 $’m(2) Gross Transaction Value(3) 629.6 700.7 Less sales taxes and timing differences (56.2) (43.3) Total reported revenue from services 573.4 657.3 Less Artists’ revenue (90.8) (104.0) Marketplace revenue 482.6 553.3 Fulfiller expenses (299.5) (330.5) Gross profit 183.1 222.7 Gross profit margin on Marketplace revenue 37.9% 40.3% Paid acquisition costs (76.4) (71.2) Gross Profit After Paid Acquisition costs (GPAPA) 106.7 151.5 GPAPA% (on MP Revenue) 22.1% 27.4% Employee and contractor costs (77.2) (64.5) Marketing expenses (excluding paid acquisition costs shown above) (4.0) (2.0) Operations, administration and technology expenses (36.1) (28.9) Other expenses (0.7) (3.3) Earnings before interest, tax, depreciation and amortisation (EBITDA) (11.2) 52.7 Depreciation and amortisation (10.7) (13.3) Earnings before interest and tax (EBIT) (21.9) 39.4 Interest expenses (0.4) (0.3) Total profit/(loss) before income tax (22.3) 39.1 Income tax benefit/(expense) (2.3) (7.9) Reported total profit/(loss) for the year (24.6) 31.2 (1) N on-IFRS measures are presented to provide readers a better understanding of Redbubble’s financial performance. The non-IFRS measures are unaudited, however, they have been derived from the audited financial statements (with the exception of Gross Transaction Value). (2) For presentation purposes, numbers have been rounded to millions of dollars, however calculations and totals are based on unrounded numbers. (3) Gross Transaction Value (GTV) represents total receipts from customers less fraud, refunds and chargebacks. Your Directors present their report on the consolidated entity, consisting of Redbubble Limited (the Company or Redbubble) and the entities it controlled during the financial year ended 30 June 2022 (referred to hereafter as the RB Group or Group). Directors The following persons were Directors of the Company during the 2022 financial year and to the date of this Report: Anne Ward Chair, Non-executive Director Martin Hosking Non-executive Director Jennifer (Jenny) Macdonald Non-executive Director Ben Heap Non-executive Director Greg Lockwood Non-executive Director Principal activities RB Group, through its websites at Redbubble.com and TeePublic.com, owns and operates the Redbubble and TeePublic online marketplaces. These marketplaces facilitate the sale and purchase of art and designs on a range of products sold by independent creators to consumers. The products are produced and shipped by third party service providers (i.e. product manufacturers, printers and shipping companies) referred to as fulfillers. There was no significant change in the nature of RB Group’s activities during the year. Review of operations Redbubble is truly global in nature. Whilst this provides strong resilience and diversity, it does mean that events occurring in regions outside of Australia have more of an impact upon strategy and performance than local events. In FY22 the macro environment in which the Group’s marketplaces operate has been characterised by high levels of uncertainty and volatility. Consumers have not only had to adapt to the ongoing nature of COVID-19, they have also been impacted by other events. In particular, the Ukraine conflict, supply chain disruptions and more recently, a sustained increase in non discretionary costs. These events are resulting in material and sometimes unpredictable changes in current consumer spending patterns. Operationally, the Group’s year on year financial performance was materially impacted by the following key factors: • A decrease in Mask sales from $55 million in FY21 to $10 million in FY22; • A decrease in sales of Homewares and Artworks products in FY22 as they cycled elevated FY21 comparatives driven by COVID related lockdowns; • Our decision to decrease shipping margin by not passing on shipping cost increases to customers; • An increase in performance marketing expense as competition in search channels rebounded strongly from FY21 lows and drove up paid customer acquisition costs; and • Our decision to invest in increased people capacity and capability within the Group, to enable increased resilience, scalability and the ability to pursue the Group’s mid term aspirations Noting the operating and environmental challenges outlined above, the Group reports the following FY2022 financial results(1) (with year on year (YoY) growth rates, where applicable), demonstrating that the business has continued to operate at a much larger scale than pre COVID-19. • Gross Transaction Value (GTV) of $630 million, down 10% (12% on a constant currency basis(2)) • Marketplace Revenue of $483 million, down 13% (14% on a constant currency basis) • Gross Profit of $183 million, down 18% (19% on a constant currency basis) • An EBITDA loss of $11 million, compared to a profit of $53 million in FY2021 • An EBIT loss of $22 million, compared to a profit of $39 million in FY2021 • A net loss after tax (NPAT) of $25 million, compared to a profit of $31 million in FY2021 • An operating cash inflow of $3 million, compared to an inflow of $55 million in FY2021 • A closing cash balance as at 30 June 2022 of $89 million Overall, the Group’s outcomes demonstrate continued resilience across all three sides of the marketplaces, and importantly, financial performance and operating momentum improved in Q4FY22. The Group delivered positive growth for the year in the core Apparel category, which represents almost 60% of Gross Transaction Value. The growth was particularly strong in Q4, and as such, we saw the whole Group record positive Q4 year on year growth. (1) Please see table 1 on page 33 for calculations of the non-IFRS metrics (2) “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes. 33 Redbubble – Annual Report 2022 32 Redbubble – Annual Report 2022

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