Reebonz Holding Limited (the “Company” or “Reebonz”) (Nasdaq: RBZ),
a leading online luxury marketplace and platform in Asia Pacific,
today announced its unaudited financial results for the interim
first half of 2019, ended June 30, 2019.
First Half 2019 Financial
Highlights
- GMV contribution from marketplaces increased to 63% in 1H 2019
from 51% in 1H 2018, and revenue contribution from marketplaces
increased to 9% in 1H 2019 from 5% in 1H 2018
- Annual revenue growth from marketplaces is 23% in 1H 2019 over
1H 2018
- Revenue was US$31.1 million, a decrease from US$44.3 million in
1H 2018
- Gross profit was US$7.8 million, a decrease from US$11.5
million in 1H 2018
- Gross profit margin was 24.9%, a decrease from 25.9% in
1H2018
- Operating loss was US$7.6 million, an increase in loss from
US$5.4 million in 1H2018
- Operating loss margin was 24.5%, an increase from 12.2% in
1H2018
- Loss for the period was US$8.9 million, an improvement from a
loss of US$21.6 million in 1H2018
- Adjusted EBITDA was negative US$3.9 million, an increase from
US$3.5 million in 1H 2018
- Adjusted EBITDA margin was negative 12.6%, an increase from
negative 7.9% in 1H2018
First
Half 2019 Operational Highlights
- GMV1 was US$97.6 million, a decrease from US$126.9 million in
1H 2018
- Number of total orders2 was 81,969, a decrease from 91,184
year-over-year
- Number of total buyers3 was 55,953, a decrease from 62,224
year-over-year
- Number of new buyers4 was 35,049, a decrease from 37,920
year-over-year
- Percentage of total orders placed by repeat buyers5 was 62.8%,
an increase from 62.6% year-over-year
- Average order value was $574, a decrease from US$738 in 1H
2018
Samuel Lim, Co-Founder, Chief Executive Officer and
Chairman, commented, “As expected, our results for the first half
of the year were lower than the same period last year. We continue
to invest in our Sell Back innovation, which has the potential to
deliver growth and profitability at scale. We are in the early days
of executing the strategy, but we are excited to see clear proof of
concept from the early data. Early data shows that customers who
have chosen to take advantage of the Sell Back Guarantee services,
have generated approximately SGD$2.00 to $2.50 of GMV for Reebonz
for every dollar of credit utilized, inclusive of GMV generated by
reselling the pre-owned products the Company receives.
“As we look forward, we expect to turn the corner
on growth later in the second half of the year or early next year,
once we are able to see the results of the capital deployed. We
believe that sustainability is key as we look to build our business
for the long term.”
Nupur Sadiwala, Chief Finance Officer of Reebonz,
commented, “We have been operating under tight resources for the
past few years, and have viewed building a sustainable business as
a key component of our strategy. We will consider raising capital
to invest in areas such as inventory and marketing in new and
existing markets, in order to fulfill our mission of making luxury
accessible to everyone.”
First Half 2019 Unaudited Financial
Results
Revenue decreased from US$44.3
million for the six months ended June 30, 2018 to US$31.1 million
for the six months ended June 30, 2019. The decrease was driven by
a decline in online orders, which decreased from 91,184 for the six
months ended June 30, 2018 to 81,969 for the same period in 2019,
primarily due to a decrease in total buyers and marketing spending.
Total buyers decreased from 62,224 for the six months ended June
30, 2018 to 55,953 for the same period in 2019, mainly due to a
decrease in both repeat buyers and new buyers. The Company believes
these decreases were primarily attributable to a decline in
marketing activities and a lower inventory balance. Marketing
expenses decreased by 26.6% for the six months ended June 30, 2019
compared to the same period in 2018.
Cost of Revenue decreased from
US$32.8 million for the six months ended June 30, 2018 to US$23.4
million for the same period in 2019, largely due to reduced cost of
merchandise, which in turn was primarily because of the decline in
sales volumes.
Gross Profit decreased from
US$11.5 million for the six months ended June 30, 2018 to US$7.8
million for the same period in 2019.
Fulfillment Expenses decreased by
30.8% from US$7.7 million for the six months ended June 30, 2018 to
US$5.3 million for the same period in 2019. The decrease was
primarily due to a reduction in selling and distribution costs as a
result of lower sales volume, rental costs, and staff costs due to
decreased headcount. The Company’s fulfillment expenses declined as
a percentage of revenue from 17.3% for the six months ended June
30, 2018 to 17.0% for the same period in 2019.
Marketing Expenses decreased by
26.6% from US$2.6 million for the six months ended June 30, 2018 to
US$1.9 million for the same period in 2019. This was primarily due
to lower staff costs and online marketing expenses, mainly because
the Company reduced customer acquisition, retargeting and branding
activities across all channels. The Company’s marketing expenses
increased as a percentage of revenue from 5.9% for the six months
ended June 30, 2018 to 6.2% for the same period in 2019.
Technology and Content Expenses
decreased by 6.3% from US$1.9 million for the six months ended June
30, 2018 to US$1.8 million for the same period in 2019. This was
primarily attributable to reduced depreciation and amortization
expenses, a reduction in development headcount and contractor fees,
and decreased hosting and licensing fees. The Company’s technology
and content expenses increased as a percentage of revenue from 4.3%
for the six months ended June 30, 2018 to 5.8% for the same period
in 2019.
General and Administrative
Expenses increased by 33.2% from US$4.8 million for the
six months ended June 30, 2018 to US$6.4 million for the same
period in 2019. This increase was primarily due to a rise in
professional fees to US$2.1 million incurred in the public offering
and warrant exchange transactions in 1H 2019, and an increase in
depreciation expenses due to the adoption of IFRS 16 on 1 January
2019. The increase was partially offset by a decrease in staff to
support the business, which resulted in lower staff costs, reduced
rental expenses as the Company moved its Headquarters in Singapore,
and decreased travel expenses. The Company’s general and
administrative expenses increased as a percentage of revenue from
10.9% for the six months ended June 30, 2018 to 20.7% for the same
period in 2019.
Operating Loss widened from US$5.4
million for the six months ended June 30, 2018 to US$7.6 million
for the same period in 2019. The decline was primarily attributable
to the decrease in revenue and higher general and administrative
expenses.
Adjusted EBITDA was negative
US$3.5 million for the six months ended June 30, 2018 and negative
US$3.9 million for the same period in 2019. The Company’s adjusted
EBITDA as a percentage of revenue was -7.9% for the first six
months of 2018, which compares with -12.6% for the six months of
2019. See “Selected Consolidated Financial Data – Non IFRS
Financial Measures” section for a reconciliation of Adjusted EBITDA
to loss for the year.
Loss for the six months ended June
30, 2019 was US$8.9 million, an improvement from a net loss of
US$21.6 million for the same period in 2018 due to exclusion of
convertible preference shares for the six months ended June 30,
2019.
Basic and diluted loss per share
for the first half of 2019 were US$3.60 and US$3.46, respectively,
compared with US$28.48 and US$3.18 for both for the first half of
2018, respectively. The basic and diluted loss per share for 1H2018
was restated due to reverse stock split in 1H 2019.
Cash and Cash EquivalentsAs of
June 30, 2019, cash and cash equivalents were US$2.5 million as
compared to US$2.6 million as of December 31, 2018.
Conference Call The Company will
host a conference call to discuss the earnings at 8:30 a.m. Eastern
Time on Monday, September 23, 2019 (8:30 p.m. Singapore time on the
same day).
Dial-in numbers for the live conference call are as
follows:U.S. Toll Free: 1-866-652-5200Singapore Toll Free:
800-120-6157International: 1-412-317-6060Call Details: Reebonz
Holding Limited
A telephone replay of the call will be available
after the conclusion of the conference call through 11:59PM EST on
September 30, 2019.
Dial-in numbers for the replay are as follows:U.S.
Toll Free: 1-877-344-7529Singapore Toll Free:
800-120-6157International Toll: 1-412-317-0088Canada Toll Free:
855-669-9658Replay Access Code: 10135170
A live and archived replay of the conference call
will be available on the Investor Relations section of Reebonz’
website at http://ir.reebonz.com/.
Use of Non-IFRS Measures
The Company presents Adjusted EBITDA as a
supplemental performance measure because it believes that it
facilitates operating performance comparisons from period to period
and company to company by backing out potential differences caused
by various items. The Company defines EBITDA as net profit or loss
excluding depreciation and amortization of property and equipment,
leasehold land and intangible assets (affecting relative
depreciation and amortization expenses), variations in capital
structures (affecting interest income and interest expenses), and
tax positions (affecting income tax expenses) (such as the impact
on periods or companies of changes in effective tax rates). In
addition, The Company defines Adjusted EBITDA as EBITDA excluding
share based compensation expenses, changes in foreign exchange
rates that impact financial assets and liabilities denominated in
currencies other than its functional currency (affecting foreign
exchange gains/(losses), net), changes in the fair value of
convertible preference shares, and write offs of property and
equipment, other assets, intangible assets, listing and business
combination related transaction costs and recapitalization
expenses, as these changes are non-cash, and in each case, the
Company does not believe these exclusions to be reflective of the
underlying performance of its business. In addition, Adjusted
EBITDA Margin is defined to be Adjusted EBITDA as a percentage of
revenue.
Adjusted EBITDA and Adjusted EBITDA Margin are non
IFRS financial measures. EBITDA, Adjusted EBITDA and Adjusted
EBITDA margin should not be considered as a substitute for or
superior to net income prepared in accordance with IFRS.
Furthermore, because non-IFRS measures are not determined in
accordance with IFRS, they are susceptible to varying calculations
and may not be comparable to other similarly titled measures
presented by other companies. The Company encourages investors and
others to review its financial information in its entirety and not
rely on a single financial measure.
Please refer to the table at the end of the
financial statements below for a reconciliation to IFRS
figures.
Forward-Looking and Cautionary
Statements
Certain statements made in this release are
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. When used in this press release, the
words “estimates,” “projected,” “expects,” “anticipates,”
“forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,”
“will,” “should,” “future,” “propose” and variations of these words
or similar expressions (or the negative versions of such words or
expressions) are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside Reebonz’s control, that could
cause actual results or outcomes to differ materially from those
discussed in the forward-looking statements. Important factors,
among others, that may affect actual results or outcomes include:
the ability to maintain NASDAQ’s continued listing standards;
Reebonz’s ability to manage growth; the reaction of Reebonz
customers and suppliers to its business combination; rising costs
adversely affecting Reebonz’s profitability; potential litigation
involving Reebonz’s intellectual property; and general economic and
market conditions impacting demand for Reebonz’s products. See the
risk factors disclosed in Reebonz’s most recently filed prospectus,
filed with the SEC on July 3, 2019 for additional risks. Reebonz
does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
About Reebonz
Headquartered in Singapore and founded in 2009,
Reebonz (pronounced “ribbons”) is the trusted online marketplace
and platform for buying and selling new and pre-owned luxury
products in the Asia Pacific region. Leveraging data and
technology, Reebonz makes luxury accessible by operating as an
eco-system of B2C e-tail and B2C marketplace for over 1,000 brands,
supported by C2C marketplaces that enable individuals to sell
through its platform. With an easy shopping experience,
members can enjoy convenient access to the selection of products
that Reebonz sources as well as from a curated collection of
multi-brand luxury boutiques from all around the world.
For investor and media inquiries, please
contact:
Reebonz Holding Limited | ir@reebonz.comChristensen
| Tip Fleming | tfleming@ChristensenIR.com | Contact: +1 917 412
3333
For more information on Reebonz, please visit
www.reebonz.com
Stay connected with us: Facebook @Reebonz |
Instagram @ReebonzOfficial
Selected Consolidated Financial Data – Non
IFRS Financial Measures
The following table reconciles Adjusted EBITDA
to loss for the six months ended June 30, 2018 and 2019:
|
1H2018US$’000 |
|
1H2019US$’000 |
Loss for the period |
(21,592) |
|
(8,907) |
Add: Interest expense |
1,794 |
|
3,392 |
Less: Interest income |
(4) |
|
(4) |
Add: Depreciation of property and equipment |
814 |
|
893 |
Add: Amortization of leasehold land |
107 |
|
109 |
Add: Amortization of intangible assets |
297 |
|
258 |
Add: Income tax expenses |
65 |
|
(30) |
EBITDA |
(18,519) |
|
(4,289) |
Less: Change in fair value of convertible preference shares |
14,219 |
|
— |
Add/(Less): Foreign exchange losses/(gains), net |
327 |
|
290 |
Add: Employee share option expense |
116 |
|
127 |
Add: Recapitalization expenses |
— |
|
— |
Add: Provision for Bad Debt |
— |
|
19 |
Add : Intangible asset written off |
49 |
|
— |
Add : Property and equipment written off |
— |
|
54 |
Add : Impairment-deferred IPO cost/IPO related transaction
cost |
297 |
|
1,677 |
Add : Change in fair value of settlement of liabilities by
shares |
— |
|
(1,802) |
Adjusted EBITDA |
(3,511) |
|
(3,924) |
|
|
|
|
1 “GMV” for a specified period represents gross merchandise
value and is an operating metric, which is the total value of
online orders placed and offline merchandise sold through the
Company’s Merchandise Business or Marketplace Business that are
generally initiated through the Company’s platform.
2 “Total orders” for a specified period means total online
orders (Reebonz currently does not track the number of offline
orders), regardless of the order being returned or cancelled.
3 “Total buyers” for a specified period means, collectively, the
unique buyers, as identified by his or her unique customer
identification number in the Company’s system, who have made online
purchases through the Company’s platform during the specified
period (Reebonz currently does not track offline orders from buyers
using their unique customer identification number), regardless of
the buyer returning or cancelling the order.
4 A “new buyer” means any unique buyer, as identified by his or
her unique customer identification number in the Company’s system,
who made his or her first online purchase in the specified period
(Reebonz currently does not track offline orders from buyers using
their unique customer identification number), regardless of the
buyer returning or cancelling the order.
5 A “repeat buyer” means any buyer, as identified by his or her
unique customer identification number in the Company’s system, who
made an online purchase in the specified period and had previously
made one or more online purchase through the Company’s platform
from the inception of the business to the end of the specified
period (the Company currently does not track offline orders from
buyers using their unique customer identification number),
regardless of the buyer returning or cancelling the order. A new
buyer that makes his or her first purchase and then a repeat
purchase during the same period would be considered a “repeat
buyer” for such period and would also be considered a “new buyer”
for such period.
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