Red Bubble Annual Report 2022

Strategic and Business Update During FY22, Redbubble continued to execute against four strategic themes: • Artist activation and engagement • User acquisition and transaction optimisation • Customer understanding, loyalty and brand building • Product range and 3rd party fulfilment network Consistent with these strategic priorities, during FY22 the Group invested significantly in additional people to boost internal capacity and capability, particularly within the web product and engineering teams that are focused on improving technical foundations. Ongoing COVID-19 impacts have resulted in talent pools being constrained in the Group’s four operating regions, and competition for individuals has been high. This has meant a slower build up of capacity than initially forecast, however the Group enters FY23 with a large proportion of hiring now complete. The coming financial year will include brand investment into the Redbubble marketplace and the full year impact of our increased capacity and capability which will grow revenue, improve scale and drive further momentum across the flywheel. This will help to strengthen Redbubble’s competitive position, enabling the company to pursue its medium term growth aspirations and continue on its mission to create the world’s largest marketplace for independent artists, bringing more creativity into the world. Further detail regarding the Group’s strategy and business performance is contained within the attached Annual Report. Significant changes in the state of affairs In the Directors’ opinion, there have been no significant changes in the state of affairs of RB Group during the 2022 financial year. Significant events after end of the 2022 financial year In the Directors’ opinion, there have been no matters or circumstances arising since the end of the 2022 financial year that has significantly affected, or may significantly affect: • RB Group’s operations in future financial years; • the results of those operations in future financial years; or • RB Group’s state of affairs in future financial years. Dividends No dividends were paid or declared since the start of the 2022 financial year. Given the opportunities to invest in key initiatives, coupled with the uncertain future macro environment, the Board does not expect to pay a dividend in the short to medium term. Environmental Regulations and Performance RB Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory. Principal risks The following are key risks that may impact RB Group’s financial and operating results in future periods: • Competitive activity – The marketplaces operate in a competitive landscape alongside other online marketplaces and traditional vendors. There is potential for the Group’s business to be disrupted by new or existing user-generated content platforms. To mitigate the impact of this risk RB Group is focussing on ensuring that its marketplaces provide a market leading experience for both artists and their customers. • Macroeconomic Risks – RB Group is subject to macroeconomic risks affecting consumer demand and global marketplace supply chains. These risks are largely outside of RB Group’s control, and are mitigated by current diversity in product mix, geographic presence and the third party fulfillment network, combined with initiatives to continue to grow the size of the overall revenue base. • Google search channel risk – RB Group has prioritised search engine optimisation initiatives, including improved user and crawler navigation experience and site speed. RB Group is also focussed on further diversification of customer acquisition sources to reduce reliance on Google search. • Litigation brought against RB Group for intellectual property infringement – Litigation risk arises from the RB Group marketplaces’ roles as intermediaries for user-generated content. RB Group mitigates this risk in various ways, including by responding expeditiously to takedown notices from intellectual property rights holders; engaging in collaborative relationships with rights holders to promote the integrity of hosted content (including by facilitating licensing through our Partner Program and by proactively finding and removing content through our Policing Program); developing automated platform software to manage content at scale; building our litigation capabilities and holding appropriate levels of insurance. RB Group will continue to mitigate its IP infringement litigation risk by further building its capabilities through process and technology improvements. • Technology Security and Reliability Risk – As a technology‐focused business, managing security, and taking care of user data is essential. To manage this risk, the Group has developed and tested its disaster recovery capability and procedures, implemented high availability infrastructure and architectures, and continually monitors our systems for signs of poor performance, intrusion or interruption. The Group maintains appropriate data management, security and compliance policies, procedures and practices in place. • Platform/Technology constraints – ‘Technical debt’ slows delivery of marketplace improvements. Consistent investment in eliminating platform and technology constraints is undertaken to mitigate this risk. • Privacy and Data Protection Compliance Risk – Compliance with applicable Privacy and Data Protection Laws, including the GDPR, California Consumer Privacy Act and the Australian Privacy Act 1988 remains an ongoing focus. The Group has implemented appropriate data security measures; including preventative, detective and responsive capabilities. A Data Breach Response Plan is in place and is strictly adhered to. • Attracting and retaining top talent in business critical functions – The Group continues to face competition for talent across all our locations. The mitigations for this risk have included ongoing investment in employee engagement, review of the employee value proposition and compensation adjustments for key talent roles. Key management personnel during the 2022 financial year and since the end of that financial year The “Key Management Personnel” for the purposes of the FY2022 Remuneration Report have been determined to be the current Redbubble Limited directors and the following members of the Redbubble Executive Team: • Michael Ilczynski – Chief Executive Officer; and • Emma Clark – Chief Financial Officer. There were no changes to the membership of the Redbubble Limited Board during the 2022 financial year. Information on Directors At the date of this report, the Board comprises five Non-executive Directors, who collectively have a diverse range of skills and experience. Details of current Directors, their experience, qualification, special responsibilities and directorships of other listed entities are set out in Corporate Governance on pages 24 and 25. The Board met 12 times during the year ended 30 June 2022. Board and Committee attendance is set out in the table below. All Directors may attend Board and Committee meetings even if they are not a member of the particular Committee. The table does not include attendance of Directors at meetings of Committee of which they are not a member. Board Audit and Risk Committee (ARC) People, Remuneration and Nomination Committee (PRNC) Held whilst in office Attended whilst in office Held whilst an ARC member Attended whilst an ARC member Held whilst a PRNC member Attended whilst a PRNC member Anne Ward 12 12 6 6 6 6 Martin Hosking 12 11 - - 6 5 Greg Lockwood 12 12 6 6 - - Jenny Macdonald 12 12 6 6 6 6 Ben Heap 12 12 6 6 6 6 Directors Report continued 35 Redbubble – Annual Report 2022 34 Redbubble – Annual Report 2022