@@madebychoice

Q3 FY22 Trading Highlights

9.5m+ followers

Across Instagram, Twitter, Pinterest, Facebook and email

Conversion rate improvement remains key to driving growth

(refer to page 4 for detail)

Total transaction value

Design MilkKaufmann Mercantile

All figures in AUD. Based on USD/AUD conversion rate of 0.74

A$580k

Q3 FY22 gross revenue1

23% CAGR over the last 2 years

LTM cash receipts continue to track ahead of payments, despite seasonally soft Q3

(refer to page 5 for detail)

Gross revenue1

eCommerceAdvertising

Note: 1. Represents gross sales revenue pre commission from sale of goods.

Sydney, Australia and Columbus, OH, USA

29 April 2022: Design Milk Co. Limited (ASX: DMC)

Q3 FY22 Financial and Operational Performance

eCommerce transaction value (A$'000s)

Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22

Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22

Gross margin: LTM rolling average

Average order value ($): LTM rolling average

58.0%

56.0%

54.0%

52.0%

50.0%

48.0% 46.0% 44.0%

Feb-21

Apr-21

Jun-21

Aug-21

Oct-21

All figures in AUD. Based on USD/AUD conversion rate of 0.74

Dec-21

Notes: 1. Represents gross sales revenue pre commission from sale of goods.

135

130 125 120

115

110

Feb-22

Feb-21

Apr-21

Jun-21

Aug-21

Oct-21

Dec-21

Feb-22

Progress on Conversion Rate Improvement

Our Followers

  • • Design Milk's strong community of nearly 10 million follower forms the strong foundation of the brand's continued growth

  • • The follower to customer conversion funnel remains the focus of the management team

Number of followers (m)

10.0

9.0

8.0

7.0

6.0

5.0

Q3FY20

Q1FY21

Q3FY21

Q1FY22

Q3FY22

Conversion Rate Improvement

  • • Our engaged follower base and the refreshed Design Milk website with more shop-friendly features are the dual engines of continued conversion rate improvement

  • • There remains substantial room for improvement given Design Milk's conversion rates are still well below industry average

0.800%

0.750%

0.700%

0.050%

Design Milk's growth

0.000%

Feb-21

Apr-21

Jun-21

Aug-21

Oct-21

Dec-21

Feb-22

Conversion rate (online sessions to customer)

Conversion rate (follower to customer)

0.650% 0.200%

0.61050%

0.100%

Improvement in the follower to customer conversion rate is key to

Website Refresh

  • • Since the homepage refresh, we have seen positive growth in page views, shop sessions and a +47% increase in average session duration

  • • The Shop function has been made more prominent on the site to continue to drive followers to our products

Update on Cash Runway

Operational cashflows (A$000's): LTM rolling average

Commentary

360

340

320

300

280

260

240

Mar-21

May-21

Jul-21

Operational Cash ReceiptsOperational Cash Paid OutSep-21

Nov-21

Jan-22

Mar-22

Quarterly cash position

  • • Q3 is a traditionally soft quarter given it falls between the strong Christmas/New Year trading period and North American summer holidays

  • • On a LTM rolling average basis, operational cash receipts grew whilst operational cash paid out remained flat over the quarter, due to the team's continued focus on managing the expense base

  • • Cash position is expected to improve in the following quarters given seasonality and efficient cost base of our business

Strategic opportunities

  • • The team continues to explore a number of strategic opportunities, aimed at improving scale and accelerating activities to monetise our large follower base

Shareholder support

  • • Major shareholders remain supportive on the business outlook and are committed to provide cash injection if/when needed

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Design Milk Co. Ltd. published this content on 29 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 April 2022 06:41:02 UTC.