Baby Bunting, page-40

Investor Presentation with CEO held last week;
Following is a Summary.
. Target market, 0-3yrs and parents to be.
. One stop shop for baby products.
. Over 6000 products . Largest baby goods retailer in the Industry.
. Grown organically currently with 33 stores and target of 70 stores.
. Acquisitions not part of strategy.
. $2.3B market and is highly fragmented.
. IBIS World – Annual growth of 18%pa in online baby goods sales last 5yrs
Forecast for next 5yrs is 13% growth pa
. Management team and Board have all invested in the business.
. Management and Board is well credentialed with significant Industry experience.
. Currently 3yrs of healthy profit growth. Revenue growth 20% pa. Forecast FY16 EBITDA 32% increase from FY15
. Online sales grown 59% in the last 12mths. Currently only 3% of sales. Massive growth potential.
. 3 phase Growth Strategy
(i) Existing stores and online - 45% of stores are <3yrs old. Takes 5yrs to reach potential.
(ii) Rollout new stores - 4-8 per annum. Total stores 70 within 5yrs
(iii) Margin improvement – advantage of scale
. Significant barriers to entry
Stringent AUS quality assured standards, and compliance.
. You cannot just purchase baby products from overseas (US,Europe, China etc) as they need to meet stringent AUS quality standards.
. Peers - My babywarehouse, Toys r Us (Babies R Us) and dept store retailers (Myer, BigW, Target etc)
. Morgans analyst report lists financial comparisons with Burson, Lovissa, Adairs,Beacon, Premier Inv, Domino’s Pacific Smile, Greencross as well as others
Av PE of above is around 22X and includes Dominos
. No shares sold by executives and management and shares escrowed until 2017
. Only selldown is by TDM private equity co and will retain 30% of company.
. TDM were the company that sold Pacific Smiles, the dentist rollup last year