Kogan com : Appendix 4D - Half-Year Financial report - 31 Dec 2021

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APPENDIX 4D

APPENDIX 4D - KOGAN.COM LIMITED

ABN 96 612 447 293

RESULTS FOR ANNOUNCEMENT TO THE MARKET

HALF‑YEAR ENDED 31 DECEMBER 2021

(Previous corresponding period: Half‑year ended 31 December 2020)

	Half‑year	Half‑year
	ended	ended	Change	Change
	31 December	31 December	increase/	increase/
	2021	20201	(decrease)	(decrease)
	$'000	$'000	$'000	%
Revenues from ordinary activities	419,543	414,009	5,534	1.3%
(Loss)/Profit before tax	(12,298)	35,134	(47,432)	(135.0%)
(Loss)/Profit after tax	(11,870)	23,592	(35,462)	(150.3%)

Abbreviated explanation of results

Revenue from ordinary activities grew $5.5 million (1.3%) from $414.0 million to $419.5 million in the

six months ended 31 December 2021, compared to the prior corresponding period. Revenue growth was driven by Mighty Ape, Kogan Marketplace and Kogan First. Kogan Marketplace revenue reflects only the commissions received on sales, and not the Gross Sales.

Profit before tax was down by $47.4 million compared to the prior period. The half was significantly impacted by COVID related interruptions and associated fluctuations in demand, experienced across the entire retail industry, resulting in increased logistics and other operating costs. Revenue growth was tempered during the half, following the significant growth experienced during the prior period. The Company invested in marketing to grow Kogan First Subscribers, which the Company believes will form a foundation for long‑term benefits to customers and shareholders alike. The half also included the following:

• Equity‑based compensation expense of $13.6 million (1HFY21: $2.6 million) driven by the award of options after the Company's AGM in November 2020.
• Provisions of $10.4 million for the likely payment of Tranches 3 and 4 of the Mighty Ape purchase price (1HFY21: $1.8 million). As part of the Sale Agreement, Tranche 3 and 4 are contingent on the Mighty Ape Founder & CEO remaining with the business until the delivery of the financial year 2023 results. In line with accounting standards, Tranches 3 and 4 payments will be considered as compensation for post‑combination services for accounting purposes, and as such, treated as employee remuneration. The Group will proportionately account for these expenses until the respective payment dates.
• Profit on sale of the bitbuy.com domain of $5.1 million. For full details of the transaction, refer to the ASX release 'Domain sale re Bitbuy' on 14 December 2021.

These items are not considered by the Company to be representative of the underlying performance of the business, and as such consider the Adjusted Profit After Tax of $4.8 million a useful metric of underlying performance.

Refer to the accompanying market release and the 1HFY22 Results Presentation dated 25 February 2022 for further commentary.

1. Results include 1 month contribution from Mighty Ape Limited.

Kogan.comAppendix 4D 2021/22		i

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Appendix 4D CONTINUED

Net tangible assets per share

	31 December	31 December
	2021	2020
Net tangible assets backing per Ordinary Share	$0.84	$1.10

Dividends

		Franked
		Amount per
	Amount per	share at
	Share	30% of Tax
	(cents)	(cents)
Ordinary shares:
2021 interim - paid 31 May 2021	16.0	16.0

Current period

To support the Company with its growth plans, the Board has decided to conserve cash for business investment and growth purposes and has paused dividends - having not declared an 1HFY22 interim dividend.

Foreign entities

The results of Kogan HK Limited, a Hong Kong registered entity, Kogan US Trading Inc, a US incorporated entity and Mighty Ape Limited, a New Zealand registered entity, have been compiled using International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board.

Other information required by Listing Rule 4.2A

Other information requiring disclosure to comply with Listing Rule 4.2A is contained in the 31 December 2021 Financial Report.

Signed on behalf of Kogan.com Ltd, on the 25 February 2022.

Greg Ridder

Non‑Executive Chairman

ii		Kogan.comAppendix 4D 2021/22

For personal use only

Half-Year Report

2021/22

For personal use only

HIGHLIGHTS HALF-YEAR 2021/22

$698.0m $221.1m

Gross Sales up 9.4% YoY	Marketplace Gross Sales -
more than $200.0 million
	in a half for the first time ever.

	176.4%				$17.4m
	YoY increase in			Adjusted EBITDA1
	Kogan First subscribers

1. Kogan believes that non‑IFRS measures referred to in this document provide useful information to recipients for measuring the underlying operating performance of the business. Non‑IFRS measures are not subject to audit.

CONTENTS

1	Directors' Report	27	Directors' Declaration
5	Auditor's Independence Declaration	28	Independent Auditor's Report
6	Interim Financial Statements	30	Corporate Directory

11 Notes to the Condensed Financial Statements

Kogan.comHalf-Year Report 2021/22

For personal use only

DIRECTORS' REPORT

The Directors of Kogan.com Limited (Kogan.com) and its controlled entities ("the Group") present their report together with the consolidated financial report of the Group for the half‑year ended 31 December 2021 and the review report thereon.

DIRECTORS

The following persons were Directors of the Group at any time during the half‑year and up to the date of signing this report.

Greg Ridder - Independent, Non‑Executive Chairman

Janine Allis - Independent, Non‑Executive Director

David Shafer - Chief Financial Officer, Chief Operating Officer and Executive Director Harry Debney - Independent, Non‑Executive Director

James Spenceley - Independent, Non‑Executive Director

Ruslan Kogan - Founder, Chief Executive Officer and Executive Director

PRINCIPAL ACTIVITIES

Kogan.com is a portfolio of retail and service businesses that includes Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel, Kogan Money, Kogan Cars, Kogan Energy, Dick Smith, Matt Blatt and Mighty Ape.

Kogan.com earns the majority of its Revenue and profit through the sale of goods and services to Australian and New Zealand consumers. Its offering comprises products released under Kogan.com's Exclusive Brands, such as Kogan, Ovela, Fortis, Vostok and Komodo ("Exclusive Brands Products"), and products sourced from imported and domestic Third‑Party Brands such as Apple, Canon, Swann and Samsung ("Third‑Party Brands Products").

In addition to product offerings, Kogan.com earns Revenue from seller fees from Kogan Marketplace and commission‑based Revenue from the New Verticals including Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Money, Kogan Cars, Kogan Energy and Kogan Travel ("New Verticals") and advertising fees for promotional activity. Kogan.com trades through a number of channels including the Kogan.com website and Apps, the Dick Smith website, the Matt Blatt website, the Mighty Ape group websites, and a number

of other channels.

The results of Kogan HK Limited, a Hong Kong registered entity, Kogan US Trading Inc, a US incorporated entity, and Mighty Ape Limited, a New Zealand registered entity, have been compiled using Australian Accounting Standards issued by the Australian Accounting Standards Board (AASB).

No significant change in the nature of other activities occurred during the half‑year.

REVIEW OF OPERATIONS

TRADING PERFORMANCE

Kogan.com delivered its highest Gross Sales result in the half‑year ended 31 December 2021 with Gross Sales up $59.8 million (9.4%1) on the prior corresponding period, and a CAGR of 46.9% on the half-year ended

31 December 2019.

The Group achieved an Adjusted EBITDA2 of $17.4 million in 1HFY22.

1. Gross Sales percentage growth is based on the absolute value, not rounded figures as disclosed in this report.
2. Kogan believes that non‑IFRS measures referred to in this document provide useful information to recipients for measuring the underlying operating performance of the business. Non‑IFRS measures are not subject to audit.

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