Design Milk : Q2 Business Update and Appendix 4C

nal use only

Q2 FY22 Trading Update

@calvinseibert

onlyuse anenonal

Q2 FY22 Trading Highlights

9.5m+ f o l l o w e r s		A$9 40 k
A c r o s s I n s t a g r a m , T w i t t e r ,		Q 2 F Y 2 2 G r o u p r e v e n u e
P i n t e r e s t , F a c e b o o k a n d e m a i l		4 3 % C A G R o v e r t h e l a s t 2 y e a r s

			A$6 66 k					C o n t i n u e d w e b s i te t r a f f i c
		D e s i g n M i l k e C o m m e r c e				g r o w th a n d c o n ve r s i o n
			r e v e n u e						r a t e i m p r o ve m e n t
		1 4 6 % C A G R o v e r t h e l a s t 2 y e a r s
Total transaction value				Total revenue
		Design Milk	3%	17%		26%
		AHAlife1							eCommerce	74%
				80%				Advertising
		Kaufmann Mercantile
Note: 1. AHAlife website switched off from 30 December 2021					2
					Sydney, Australia and Columbus, OH, USA
					28th January 2022: Design Milk Co. Limited (ASX: DMC)

Q2 FY22 Financial and Operational Performance

T o t a l t r a n s a c t i o n v a l u e ( A $ ' 0 0 0 s )

1,200			Design Milk contributed to c.80% of
	Design Milk	Group TTV with AHAlife switched off
1,000		Kaufmann Mercantile	from 30 December 2021

only
800			AHAlife 1
600
400
200
-
Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22
D e s i g n M i l k w e b s i t e t r a f f i c ( ' 0 0 0 s )

T o t a l r e v e n u e ( A $ ' 0 0 0 s )

			eCommerce revenue impacted by
			supply chain delays and softer retail
1,400		eCommerce	trading during the holiday season
1,200		Advertising

1,000

800

600

400

200

-

Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22

D e s i g n M i l k e C o m m e r c e c o n v e r s i o n r a t e 2

600		1.2%
500		1.0%
400		0.8%
300		0.6%
200	Growth in website traffic from both	0.4%	Improvement in conversion rate
		from stronger brand following and
	organic and advertising sources	0.2%
100	enhanced eCommerce experience
use		-
-
nal	Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22		Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22

Notes: 1. AHAlife website switched off from 30 December 2021. 2. Calculated as total number of orders divided by website sessions

3

Sydney, Australia and Columbus, OH, USA

28th January 2022: Design Milk Co. Limited (ASX: DMC)

Design Milk's Journey

Design Milk social media followers (millions)

only9.4

9.2

9.0

8.8

use8.6

8.4

8.2

8.0

Design Milk Shop Launch in Q2 FY20 (Nov-19), complementing the existing offering of our high quality editorial content

•	Equity raise of	•	Design Milk
•	US$1m		already
Launched
	represents over
	initiatives to
		50% of sales in
	support brick &
		Q4 since
	mortar stores and
		launching in Q2
	digital pop-up store	•
•	New media sales
Over 200 vendor		opportunities
	brands
•		(Design Milk TV
Secured US$220k
	on Instagram)
	of COVID-19
	stimulus funding

		•	Equity raise of
•	Announced	•	$2.45m
Q2 FY21 revenue
	planned name
		of A$1.1m, up
	change from
		63% vs. LY
	AHAlife to Design	•
	Recovery of
	Milk
•		advertising sales,
Upgrade of
	following the
	behind-the-
		decline due to
	scenes marketing,
		COVID-19
	communication
	and data
	apparatus

				•	•	The Design Milk
		•	Genesis (car	Strongest	eCommerce platform
			quarterly sales	remained resilient
•			company) media		since acquisition	despite global supply
15th anniversary	•	campaign		and launch of	chain struggles,
•	for Design Milk	500 vendor	•	Design Milk	inflationary pressures
50:1 share	•	brands	Q1 FY22 revenue	and softer retail
•	consolidation	Q4 FY21 revenue		of A$1.2m, up	trading conditions
Q3 FY21		of A$1.1m, up		128% vs. LY
	revenue of		111% vs. LY
	A$706k, up 94%
	vs. LY

nal7.8

Q3FY20Q4FY20

Q1FY21	Q2FY21	Q3FY21	Q4FY21	Q1FY22	Q2FY22	4

Sydney, Australia and Columbus, OH, USA

28th January 2022: Design Milk Co. Limited (ASX: DMC)

onlyuse

@requitenal

CEO Update

"Following nearly two years of growth, FY2022 Q2 proved challenging. The global supply chain struggles, inflationary pressure, and understandable desire of many customers to visit stores and spend time with friends and family over the holidays, impacted our performance.

Our main Design Milk Q2 eCommerce sales closed -6% vs. last year's lock-down peak. Positively our two-year Design Milk performance remains very strong, closing +464% vs. Q2 FY2020, and our total Q2 business grew +105% over the same two-year period.

Our FY2022 H1 performance remains positive growing +23% vs. LY, and +117% vs. FY2020, although this growth falls short of our anticipated breakeven targets.

We completed multiple operational upgrades in Q1 FY2022 and I am very pleased with the results, especially the rollout of Zendesk that helps to connect our different business functions, the Design Milk website refresh and associated Search, Navigation, and SEO upgrades.

Completing these projects was essential to our Q2 and Holiday preparedness, enabling us to focus on our busy holiday customer service and purchase journey, vendor management and marketing efforts.

As a dropship specialist supporting 500+ vendors we were exposed to the supply chain struggles individual vendors suffered. Many of our partners ran out of best-selling products, used discounts to stimulate sales, and faced other head winds.

5

Sydney, Australia and Columbus, OH, USA

28th January 2022: Design Milk Co. Limited (ASX: DMC)