Brand Architekts : BA FY23 results investor presentation Oct 2023

Full Year Results

For the 52 weeks 30th June 2023

Brand Architekts Group plc | Full Year Results

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Presenting today

Quentin Higham

Chief Executive Officer

Quentin joined as CEO in May 2020.

He was previously Managing Director of Yardley of London Ltd/Wipro Consumer Care between 2010- 2020.

Prior to that, he was Marketing Director at Coty, with responsibility for the Rimmel cosmetics brand; UK Brand Director at Swatch between 1999-2001 and Head of UK Marketing at global cosmetics company, Revlon between 1992-1999.

In addition, he has first-hand knowledge of our brands having been Commercial Director between 2002 and 2006 at KMI brands with responsibility for the Fish brand, Ted Baker and King of Shaves.

Geoff Ellis

Chief Financial Officer

Geoff joined as CFO in June 2023.

Geoff has had a distinguished career as an experienced Chief Financial Officer & Chief Operational Officer, with consistent achievement in international business development, combined with expertise in post-merger integration and restructuring.

Geoff is a chartered accountant and previously was CFO at Proteome PLC.

Between 1995 and 2009 Geoff held a variety of senior executive roles at Walt Disney Incorporated.

Brand Architekts Group plc | Full Year Results

BAR proposition

WE ARE?

Brand Architekts are a British based beauty challenger brand house

Focused On:

• Insight-led,profitable, problem-solving solution brands
• Omni-channelroutes to market
• Ethical and efficient outsourcing
• Digital 1st Brand thinking + invigoration

"Problem-solving solutions for everyday beauty"

Overview

Brand Architekts Group plc | Full Year Results

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Financial overview of the year

• Group sales for FY23 were up 41% to £20.1m (2022: £14.3m), primarily due to the full year effect of the acquisition of InnovaDerma Plc, which completed at the end of May 2022. Excluding InnovaDerma, revenue increased by 7% due to strong international sales, offset by challenging trading conditions in UK channels.
• Underlying gross profit margins increased by 6.2% to 39.7% (2022: 33.5%) driven by a full year of sales from Skinny Tan.
• Despite the challenging trading environment, the Group generated a reduced operating loss of £1.2m, £0.6m lower than the prior year (2022: £1.8m), primarily as a result of better targeted advertising & promotions.
• The Group retained a strong net cash position of £8.2m at the year-end.

Brand Architekts Group plc | Full Year Results

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Operational overview of the year

• Continued implementation of the strategy to support our Invest & Nurture brands, which command higher retail prices, engender strong consumer loyalty and deliver stronger margins.
• Branded Super Facialist instore merchandising trays rolled out to Boots and Morrisons. New Super Facialist Clear Skin, targeting problematic teenage skin care needs, launched on Amazon in September 22 and in Boots in June 23. New Super Facialist D2C site launched in March 23.
• 49% growth vs the prior year in international channel sales driven by post COVID-19 rebound in volumes from General Merchandise stores across North America and Europe, benefitting Dirty Works.
• Confirmed distribution roll out to AS Watson stores in 2023 & 2024 across the Middle East and Asia (Thailand - 200 stores, Vietnam - 7, The Gulf - 16, Philippines - 100, Malaysia - 66, Taiwan - 200, Singapore - 40, Turkey -100).
• Good sales growth from key historical Brand Architekts' Nurture and Harvest brands including Fish, MR, The Solution, Argan, SenSpa and Root Perfect.

Financial Headlines

Brand Architekts Group plc | Full Year Results

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Financial summary

Net Sales

+41%

14.3	20.1
FY22	FY23

Gross Profit Margin

FY22	33.5%

FY23	39.7%

Underlying EBITA

-1.8-1.2

FY22FY23

Loss Before Tax
-4.1	FY22
	-6.8
	FY23
FY22	FY23

Net Cash

11.3

8.2

FY23 Revenue Split %

DTC

9%

11% E-Tail

45%

Non UK Retail	35%

UK Retail

Brand Architekts Group plc | Full Year Results

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Net sales FY23 vs FY22

• Skinny Tan - full year of trading

1.5

0.5

• DTC / E-com - reduction in online trade volume vs PY

4.8

-0.2

-0.8

14.3	•	UK Grocer pressures - effect of
		range rationalization of Dirty Works

Skincare & Accessories in Sainsbury

and Dr Salts in Tesco

• Export - improved
20.1
trading in TK/TJ
Maxx and Normal

FY22

D2C

UK Grocer Pressures

Skinny Tan

Xmas Gifts

Export

FY23

Brand Architekts Group plc | Full Year Results

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BAR underlying operating profit FY23 vs FY22

-1.8

0.6

FY22	Targeted Advertising and Promotion

-1.2

• Improved paid digital marketing (Meta & Google) spend - change in media mix to reduce CPM (cost per £000) and increased our minimum ROAS in the UK from 2.5 to 4.4; cut unprofitable spend in USA & Aus.
• Removed tech stack inefficiencies.

FY23