Annual Report
2023
kogan.com annual RepoRt 2023
Highlights 2023
Over
401,000
Kogan FIRST Subscribers,
and growing
Strong
Balance
Sheet
with no debt at
30 June 2023
2,945,000
Group Active Customers1
1.
Combined Active Customers of Kogan.com and Mighty Ape at 30 June 2023.
kogan.com annual RepoRt 2023
Growth in
Verticals
including our largest,
Kogan Mobile Australia
Improving
cost‑of‑doing‑business
Return
to underlying
profitability
in 2HFY23
CONTENTS
2 Chairman’s Letter
Founder & CEO’s Report
4
7 Operating & Financial Review
28 Directors’ Report
35 Remuneration Report
54 Environmental, Social and Governance
57 Auditor’s Independence Declaration
58 Financial Report
63 Notes to the Financial Statements
107 Directors’ Declaration
108 Independent Auditor’s Report
113 Shareholder Information
116 Corporate Directory
1
kogan.com annual RepoRt 2023
Chairman’s Letter
Dear Kogan.com Shareholders,
In FY23, we returned the business to underlying
profitability, right‑sized inventory to optimal levels,
completed the year in a strong capital position with
no bank debt and commenced a share buy‑back
program. These achievements have followed the
execution of a purposeful strategy to position the
Business to succeed in increasingly volatile market
conditions. These efforts have guaranteed we are
able to prioritise our millions of customers at the
core of our operations.
The right‑sizing of inventory to meet current levels
of demand has been a key initiative for the Business.
As at 30 June 2023, we completed the year with
$68.2 million of inventories, representing a reduction
of over 57% since 30 June 2022. This reduction has
been achieved through the rationalisation of our
in‑inventory offering, particularly through our
Exclusive Brands Division.
The significant reduction in inventory levels helped
to achieve material operational efficiencies in our
Variable Costs, specifically through our warehousing
and marketing expenses. Variable Costs reduced to
8.8% of Gross Sales in 2HFY23 from 9.5% of Gross
Sales in 2HFY22. We expect these cost efficiencies to
continue materialising in FY24 as further warehousing
reductions occur during the next 12 months.
2. Compound Annual Growth Rate.
2
I am delighted to share with you the
FY23 Annual Report for Kogan.com Ltd
(Kogan.com). This year highlighted the
evolutionary journey our company has been
on as it progressively becomes a primarily
subscription and software-based business.
In the latter part of the year, our business
returned to sustained underlying profitability,
signifying the successful execution of our
strategic realignment. We are now well
prepared to continue delighting our millions
of customers through FY24 and beyond.
The Kogan Marketplace achieved another strong result,
growing by 18.0% CAGR2 on pre‑COVID trading
conditions (FY23 vs FY20). We continue to have a
strong pipeline of potential Marketplace Sellers being
onboarded every week, allowing for the Business to
supplement its in‑warehouse inventory offering with
millions of Marketplace products, with no associated
capital investment. The Kogan Marketplace also
launched a new Advertising Platform towards the
end FY23, allowing Marketplace Sellers to bid on
the platform to gain prominence and additional sales.
We have seen strong uptake upon launch and expect
strong results from the platform in FY24.
Our Kogan FIRST loyalty program grew to over 401,000
Subscribers as at 30 June 2023, an increase of 7.8%
year‑on‑year. We continued to improve the program,
introducing double Qantas points, increasing Kogan
reward credits, providing additional exclusive
member‑only deals and introduced competition
giveaways. As we grow this loyal cohort of customers,
we expect to see improving return‑on‑investment
(ROI) of our marketing spend, as these shoppers are
more loyal and more likely to commence their online
shopping journey directly on one of the Kogan.com
platforms. Our ROI for marketing improved in FY23,
with marketing spend per Group Active Customer
reducing to $16 in FY23 from $18 in FY22, and our
owned & earned traffic on the Kogan.com website
increased to 71%, versus 65% in F22.
This year marked the exit of Simon Barton,
Mighty Ape Founder, from the Business in March 2023.
Gracie MacKinlay, who was appointed Mighty Ape
CEO in June 2022, and has delivered solid results
in a challenging macroeconomic environment in
New Zealand. We also welcomed Daniel Balasoglou
as the new CFO of Mighty Ape, who brings a wealth
of knowledge and experience to the team. We continue
to invest in the IT infrastructure, logistics network
and Mighty Ape team to set the Business up for
future growth.
During FY23, we maintained a majority independent
Board, Audit & Risk Committee and Remuneration &
Nomination Committee. Our commitment to rigorous
governance standards and effective risk management
remains steadfast across every facet of our Business.
Our Corporate Governance Statement and other
policies and charters are available on the Company’s
corporate website, www.kogancorporate.com.
STRATEGIC OPPORTUNITIES
Having completed the year with a strong Balance
Sheet and repositioned the Business to align with
current market conditions, we are filled with
confidence as we enter FY24.
We anticipate strong results and benefits from
the Kogan FIRST loyalty program, Kogan Marketplace
and the newly launched Advertising Platform. We also
look forward to strong growth in our Verticals, particularly
Kogan Mobile Australia, our largest Vertical, and Mighty
Mobile, our newest Vertical. Finally, we expect a return
to strong profitability in our Exclusive Brands Division,
and in turn, a return to positive operating leverage.
OUR TEAM
Our team has shown unwavering dedication in executing
our strategy throughout this year. On behalf of the
Kogan.com Board, I extend my heartfelt gratitude
to each of our outstanding team members for their
tireless efforts during a particularly challenging year.
kogan.com annual RepoRt 2023
CAPITAL MANAGEMENT
The Business commenced a share buy‑back program
in May 2023, which is due to complete in April 2024.
To date the Business has invested over $18.0 million,
with further purchases planned.
Having returned the Business to Adjusted EBITDA
profitability in FY23, and with continued cost efficiencies
expected to materialise in FY24, we look forward to
returning to strong positive operating leverage during
the upcoming financial year, consistent with our
historical performance.
LOOKING AHEAD
Having successfully stabilised the Business in FY23,
the Board is excited to build on the strong momentum
created and deliver robust results in FY24 and beyond.
In doing so, our aim is to continue delivering incredible
value to our customers and shareholders into the future.
Greg Ridder
Chairman
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kogan.com annual RepoRt 2023
Founder & CEO’s Report
In FY23, the evolution of our Business
toward a platform-based business gained
significant traction. For the first time ever,
the majority of our Gross Sales and Gross
Profit for Kogan.com (excluding Mighty
Ape) were generated by our Platform-Based
Sales. This signals our transition to a
Business with higher recurring, higher
quality and higher margin earnings
moving forward.
This transformation paves the way
for a greater allocation of capital towards
providing exceptional value to our
customers in the years ahead.
It is this evolution from being a 100% first‑party
retail business to a part‑retail, part platform business
that is the highlight for me. Transitioning Kogan.com
(excluding Mighty Ape) to a majority Platform‑Based
Sales business has been many years in the making,
and I’m pleased to say that we’re now there. In FY23,
Kogan.com’s Platform‑Based Sales contributed over
57% of total Gross Sales and over 71% of Gross Profit.
This evolution will continue to deliver higher recurring
Revenue, higher Gross Margin, lower inventory risk
and enable lower operating costs. Most importantly,
it’s leading to incredible deals for Aussie and
Kiwi customers.
In our 17th year of operations, Kogan.com continues to
be a leader in the eCommerce industry across Australia
and New Zealand. It’s impressive to think that we have
been delighting millions of shoppers for years, with
millions more yet to discover the convenience and
value of shopping online. This presents Kogan.com with
an enormous opportunity for growth and influence in
the market. With a solid foundation and key focus on
innovation, we are well placed to welcome many more
smart shoppers in an ever growing market.
Dear Kogan.com Shareholders,
At the start of FY23, we shared that we would
complete the right‑sizing of inventory levels,
implement cost reduction initiatives, return to
sustained profitability and set the Business up for
success in increasingly difficult trading conditions.
I’m glad to report that we have effectively delivered
on all fronts, demonstrating the strength of our
Business and the brilliance of the Kogan.com Team.
Delivering on these objectives has allowed us to
continue pursuing our mission of making the most
in‑demand products and services more affordable
and accessible.
Yet these achievements are not the highlight of FY23
for me. Many years ago we set Kogan.com on a path
of diversifying its revenue streams so that we could
build a more resilient Business. The first of our
Verticals, Kogan Mobile Australia, was launched all
the way back in 2015. Since then we have introduced
other Verticals such as Kogan Money, Kogan Mobile
New Zealand and Kogan Energy. Our Verticals see
us partner with industry leaders in their respective
fields, to bring our millions of customers everyday
essential services at incredible value. We then built
on the value we were bringing to millions of customers
with the introduction of Kogan Marketplace and the
Kogan FIRST loyalty program.
4
BUILDING THE KOGAN.COM
PLATFORM
At Kogan.com, we are in a constant state of evolution,
adapting our business to meet the needs of our millions
of customers and to maintain our competitive advantage.
Our growing portfolio of Platform‑Based Sales brings
diversification of Revenue streams, bolstering our
resilience as a Company. We are constantly on the
lookout for fresh ways to delight our customers.
In the 12 months to 30 June 2023, we have had millions
of customers transact with our retail platforms, across
Kogan.com, Dick Smith, Mighty Ape, Matt Blatt, and
Brosa. Through continued improvements to our
technology, we have achieved efficiency gains in our
marketing efforts, increasing the proportion of owned
& earned traffic and lowered the spend per Group
Active Customer. We expect to build on these
improvements as we grow our Kogan FIRST
loyalty program.
Our Kogan FIRST loyalty program had over 401,000
Subscribers at 30 June 2023, with an acceleration in
Subscribers towards the end of the financial year as
we introduced more compelling customer benefits.
These new benefits and features to the program
included the introduction of double Qantas points
and prize giveaways, including our first major prize
giveaway of a new car. To date our loyal Subscribers
have received tens of millions of dollars in member
benefits, and Kogan.com has been able to build a
direct relationship with these customers, which has
and will continue to deliver, long‑term benefits such
as marketing efficiencies.
The Kogan Marketplace is pivotal to the growth
of our Platform‑Based Sales. It has thousands of
Marketplace Sellers, with tens of millions of listings
on our platform. It provides support to many small
businesses across Australia and New Zealand, by giving
them access to our millions of customers. It also
provides Kogan.com with the ability to conserve capital
investment in inventory and to reduce inventory risk.
As we continue to deliver improvements for Customers
and Sellers alike, we expect to see the Marketplace
to return to growth in the near future.
A key pillar for the expected return to growth in
Kogan Marketplace is the launch of the Advertising
Platform. This platform allows for our Marketplace
Sellers to bid to increase the visibility of their product
kogan.com annual RepoRt 2023
listings. This allows Marketplace Sellers to positively
influence their sales results, and provides for an
improved shopping experience for our customers
by helping them find what they are looking for, faster.
We’ve only recently launched at the end of FY23,
and with positive early signs, we’re excited
about its prospects during FY24 and beyond.
Another pillar for Platform‑Based Sales is our Verticals.
Kogan Mobile Australia returned to sustained growth
during the year, growing Revenue year‑on‑year by
3.1%, having recently been impacted heavily during
the height of the COVID‑19 pandemic. Kogan Mobile
Australia delivers some of the best value prepaid plans
in the market, and is our largest Vertical. Adding to the
positive news, Kogan Mobile New Zealand continued
its strong uptake in New Zealand and Kogan Money
and Kogan Energy also achieved double digit growth
year‑on‑year.
PRODUCT OFFERING
AND PERFORMANCE
In FY23, our focus for the two Product Divisions,
Exclusive Brands and Third‑Party Brands, was to
recalibrate operations to the prevailing marketing
conditions. We commenced the year with
$159.9 million in inventory and subsequent elevated
operating costs across warehousing and marketing.
Our efforts throughout the year to rebase the Business
and rectify our inventory levels were successful. We
ended the financial year with $68.2 million of inventory,
a reduction of $91.7 million during the year. This involved
the rationalisation of all of our in‑inventory categories
and SKUs. For example, we reduced our unique SKUs
in Exclusive Brands by 38%, allowing us to only invest
in the most sought‑after products moving forward.
The impact to warehousing and marketing costs
began to materialise almost immediately, with our
second half results demonstrating a reduction in
Group Variable Costs to 8.8% of Gross Sales from
9.5% of Gross Sales in 2HFY22. We anticipate further
efficiencies to be achieved in FY24 as we reap the
benefit of the reduction in inventory levels in our
warehousing arrangements. Further, we achieved
a significant recovery in the Gross Margin of both
Product Divisions following the completion of
clearance sales towards the end of 1HFY23,
with further recovery expected in FY24.
5
kogan.com annual RepoRt 2023
Founder & CEO’s Report continued
We believe we’re still in the early stages of our
evolution to a largely Platform‑Based Sales business,
with much more to achieve and deliver for our
customers. We look forward to delighting our millions
of customers and winning many more in FY24 and
beyond, by making the most in demand products and
services more accessible and affordable.
Ruslan Kogan
Founder & CEO
The unwinding of excess inventory contributed to
strong positive operating cash flows, of $70.9 million
in FY23. Our net cash position (total cash less loans &
borrowings) increased by $34.2 million to $65.4 million
at 30 June 2023. The growth in our cash balance
included the repayment of all bank debt, completion
of the Mighty Ape Tranche 3 acquisition payment and
over $10 million of purchases for the share buy‑back
announced during FY23.
Despite facing tough market conditions in
New Zealand, our Mighty Ape business achieved a
strong performance for the year. We were honoured
to receive several customer awards, and the growth
of Jungle Express has continued to captivate and
delight our Kiwi customers.
Throughout FY23, the Mighty Ape and Kogan.com
teams collaborated closely to further harness the
synergies within the Group. These efforts resulted
in enhanced Gross Margin for Mighty Ape and cost
savings across various service contracts within
the Group.
FY24 & BEYOND
We expect the number of Kogan FIRST
Subscribers to accelerate following newly
introduced features and benefits to the
program. We anticipate continued growth
in our Verticals and have already launched
Mighty Mobile, our newest Vertical, in
New Zealand at the start of FY24. We expect
a return to growth in Kogan Marketplace
and we are excited about the potential of
our recently introduced Advertising Platform.
Finally, we expect continued improvement
in our Product Divisions’ profitability.
As we now turn our attention to FY24, we can’t wait to
get started. Having made significant strides to improve
profitability and reduce operating costs, we look
forward to returning the Business to positive operating
leverage. We anticipate that our Platform‑Based Sales
will continue to drive strong results, across Kogan FIRST,
Kogan Marketplace and our Verticals. In fact, we have
already started, with the launch of Mighty Mobile,
New Zealand’s first unlimited data prepaid mobile
offering. We will also continue focussing on our
Product Divisions, with expectations of strong
contributions particularly from our Exclusive
Brands and the Mighty Ape business.
6
kogan.com annual RepoRt 2023
Operating & Financial Review
ORGANISATIONAL OVERVIEW & BUSINESS MODEL
OUR BUSINESS MODEL
Kogan.com is a leading Australian consumer brand renowned for price leadership through digital efficiency.
It is a portfolio of retail and services businesses that includes Kogan Retail, Mighty Ape, Kogan Marketplace
and Kogan Verticals. The Company is focused on making in‑demand products and services more affordable
and accessible.
We have established a dynamic business model that allows us to be nimble, bold and innovative. Over the
years we have added much loved brands such as Dick Smith, Matt Blatt, Mighty Ape and Brosa to the Kogan
Group. We harness our platform to seize opportunities like the Kogan Marketplace and partner with industry
leading companies to offer our Kogan Verticals, driving growth and bringing best‑in‑market offers to our
millions of customers.
Our objective is to continue growing our portfolio of business, while also delivering exceptional value and
service to our customers.
WHO WE ARE
Kogan.com is an Australian eCommerce company, focused on making
the most in‑demand products and services more affordable and accessible.
We have built a vertically integrated eCommerce business across Australia
and New Zealand, with millions of products on our platform as well as
offering everyday essential services in partnership with industry leaders
such as TPG, QBE and NAB.
As at 30 June 2023, we had 2,945,000 Group Active Customers3. Within this
group, we had over 401,000 Kogan FIRST Subscribers4, who received exclusive
deals, discounts, draw entries for prize giveaways and reward points every
time they shop with us.
Kogan Retail & Kogan Marketplace
Kogan.com’s technology and sourcing driven business model is more than
just a disruptive, low cost distribution platform. In combining data analytics,
systems and culture with the deep technological expertise of its management
and team, Kogan.com has created a vertically integrated business model
with a market leading Exclusive Brands capability. This is complemented
by a compelling range of in‑demand Third‑Party Brands, supporting website
traffic and cash generation.
Kogan Marketplace partners with thousands of select sellers and distributors,
giving them access to our Kogan Community, in addition to our marketing
and online distribution capability. Our curated marketplace works with sellers
and distributors who generate incremental sales with exposure on the
Kogan.com platform and marketing initiatives to the Kogan Community.
3. Group Active Customers refers to unique customers who have purchased in the last twelve months from reference date on either the Kogan.com
or Mighty Ape platforms, rounded down to the nearest thousand.
4. Kogan FIRST Subscribers excludes Kogan FIRST customers who are in a trial period, and includes only non-trial members.
7
kogan.com annual RepoRt 2023
Operating & Financial Review continued
Kogan FIRST
Kogan FIRST loyalty program was launched in the last quarter of FY19, and
grew to over 401,000 subscribers at 30 June 2023, representing 7.8%
growth year‑on‑year.
Kogan FIRST Subscribers are offered exclusive deals on top of everyday
discounts on the platform, Kogan FIRST Reward Credits, free shipping,
double Qantas Rewards points, entries to win major prizes and priority
Customer Care.
Kogan Mobile Australia
Kogan Mobile Australia launched in October 2015 offering pre‑paid mobile
phone plans online. We partner with part of TPG to deliver this amazing
vertical. The strong commercial relationship with TPG has translated into
a return to growth in Revenue for Kogan Mobile Australia in FY23. The unique
model means that TPG is responsible for operations, while Kogan is
responsible for branding, marketing and customer acquisition.
Kogan Travel
Kogan Travel originally launched in May 2015 and was temporarily paused
during the COVID‑19 pandemic. It was relaunched during FY23, partnering
with Luxury Escapes to offer market leading travel package deals.
Kogan Insurance
Kogan Insurance launched in August 2017 to offer general insurance,
covering home, contents, landlord, car and travel insurance, with a focus
on value for money. Following a new agreement during FY22, QBE now
underwrites our general insurance policies, with Kogan.com earning
commission on the sale of all insurance policies. Similarly to our other
Verticals, Kogan.com provides branding, marketing and customer
acquisition for all insurance offerings.
Kogan Internet
Under an expanded partnership with part of TPG that was announced
in June 2017, Kogan Internet launched in April 2018, providing fixed line
NBN plans.
Kogan Money Super
In partnership with Mercer Australia, Kogan.com offers a no frills, ultra
low fee Australian superannuation fund, Kogan Super. Kogan Super
leverages Kogan.com’s digital efficiency as one of Australia’s lowest
fee superannuation options.
8
kogan.com annual RepoRt 2023
Kogan Mobile New Zealand
Kogan Mobile New Zealand launched in 1HFY20 in partnership
with One NZ, offering telecommunications services in New Zealand.
One NZ is New Zealand’s largest mobile network operator.
Kogan Energy
Kogan Energy offers competitive power and gas deals and was
launched in September 2019 in partnership with part of Shell Energy
Operations Pty Ltd.
Kogan Money Credit Cards
Kogan Credit Cards, in partnership with NAB, is a credit card with
uncapped Kogan reward points, no annual fee, complimentary
Kogan FIRST membership, and competitive rates and fees. It was
launched in October 2019.
Dick Smith
In 2016, Kogan.com acquired Dick Smith, one of Australia’s premier
consumer electronics brands and a pioneer of the consumer electronics
industry in Australia.
Matt Blatt
In May 2020, Kogan.com acquired Matt Blatt, one of Australia’s premier
furniture and homewares brands and a pioneer of the online furniture
industry in Australia.
Mighty Ape
In December 2020, Kogan.com acquired Mighty Ape, one of
New Zealand’s largest online retailers with a focus on gaming,
toys and other entertainment categories.
Brosa
In December 2022, Kogan.com acquired Brosa, one of Australia’s largest
online luxury furniture retailers, out of administration. The deal involved
the purchase of Brosa’s intellectual property and inventory, and excluded
all leases and liabilities.
9
kogan.com annual RepoRt 2023
Operating & Financial Review continued
HOW WE DELIVER VALUE TO OUR CUSTOMERS:
Compelling offering:
We aim to bring market leading prices to our customers on in‑demand products and services across our
portfolio of businesses.
We achieve this by leveraging our 17+ years’ experience in Exclusive Brands and Third‑Party Brands offering.
We also use the strength of the Kogan platform to partner with thousands of Marketplace sellers and industry
leaders across our many Kogan Verticals.
We are able to pass on savings to customers by streamlining and minimising overheads in our supply chains
and marketing.
Customer‑centric approach and industry leading IT platform:
The Kogan.com platform is renowned for price leadership through digital efficiency. We believe ‘There is always
a better way’ and our vision is to harness the power of technology and personalisation to change the way our
customers shop online.
Understanding and servicing our customers’ needs is central to what we do. We employ the power of technology
and personalisation to offer a seamless shopping experience. Our data analytics capability ensures we know what
our customers want and when they want it. Our investment in automation has driven faster fulfilment of products
and services and happier customers.
Along with data analytics, we are investing heavily in AI to optimise our marketing campaigns and merchandising,
making our offers more relevant than ever. Our projects today include improved search results for our customers
and we’re shortly rolling out immediate customer service resolutions, any time of day. We will also be producing
summarised product reviews to save our customers time.
As the technology improves, we anticipate leveraging generative AI to dynamically create in‑situ product placement
images. This will enable customers to personalise the product images to their environment, and provide savings on
expensive product staging and photography costs.
10
kogan.com annual RepoRt 2023
an evolution of our business model
Since launching in 2006, Kogan.com has sourced the latest and greatest products for millions of customers at the
best possible prices. This has required investment in developing and nurturing relationships with manufacturers and
wholesalers, creating an expansive logistics network across Australia and New Zealand and ensuring our Customer
Care team continue to delight our customers after they’ve received their products.
As the business grew and developed, Kogan.com evolved, introducing the first of our current Verticals in 2016, being
Kogan Mobile Australia. Since then many more Verticals have been launched with industry leading partners. These
Verticals provide everyday essential services at incredible value. We use our digital marketing expertise and our
platform to generate subscription‑based revenue with lower operating costs.
In 2019 Kogan.com extended its platform to thousands of Marketplace Sellers, allowing these Australian and
New Zealand businesses to reach millions of Kogan Group customers and grow their business rapidly. In turn, the
Kogan Marketplace enabled Kogan.com to offer millions of products online with no investment in inventory, sourcing,
logistics and reduced post‑delivery activity.
In 2019 we also introduced the Kogan FIRST loyalty program to reward our most loyal customers.
All of this has contributed to our transition from a 100% inventory‑based and capital intensive online retail business
in 2015, to a more sustainable and higher performing services and platform business with growing margins today.
The evolution of our business model reached a milestone this financial year. In FY23, the majority of Kogan.com
(excluding Mighty Ape) Gross Sales and Gross Profit was generated from subscription, platform and software based
sales. These sales deliver a higher quality, recurring, lower risk and higher margin Revenue than our traditional
inventory‑based Product Divisions.
Figure 1.1 Kogan.com Platform-Based Gross
Sales5 contribution6
Figure 1.2 Kogan.com Platform-Based Gross
Profit5 contribution6
60
50
40
30
20
10
0
57.3%
48.1%
36.3%
38.0%
26.7%
3.6%
FY17
4.8%
FY18
FY19
FY20
FY21
FY22
FY23
75
50
25
0
71.2%
45.7%
28.9%
27.5%
23.6%
17.0%
9.5%
FY17
FY18
FY19
FY20
FY21
FY22
FY23
5. Refers to Gross Sales/Profit generated by Kogan Marketplace, Kogan First, Kogan Verticals and Advertising & Other Income.
It excludes sales by Exclusive Brands, Third-Party Brands and Mighty Ape.
6. Chart reflects Kogan.com only (excluding Mighty Ape).
11
kogan.com annual RepoRt 2023
Operating & Financial Review continued
THE KOGAN.COM PLATFORM
As at 30 June 2023, the Kogan Group had 2,945,000 Group Active Customers across Australia and New Zealand.
Kogan.com had 2,190,000 Active Customers and Mighty Ape had 755,000 Active Customers, respectively.
Focusing on Kogan.com, growth since pre COVID‑19 was a CAGR2 of 8.0%, demonstrating the long‑term
growth achieved.
An integral component of building a strong platform is a community of loyal customers. In FY23 Kogan.com achieved
strong growth in the proportion of repeat customers, increasing to 72%. It’s this group of loyal and engaged
customers who are setting the foundation for future growth.
Figure 2.1 Kogan.com Active Customers7
Figure 2.2 Kogan.com proportion of Repeat Customers7
8.0% CAGR2 (pre-COVID-19)
75
3,314
3,207
3,189
3,003
72%
68%
2,183
1,609
1,699
2,550
2,190
61%
51%
50%
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Jun-19
Dec-19
Jun-20
Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
40
FY19
FY20
FY21
FY22
FY23
In FY23 we successfully reduced our marketing spend per Group Active Customer. This was a result of multiple
efficiency measures implemented by our Marketing team. In addition to this accomplishment, further improvements
are expected in FY24. This is because the majority of marketing efforts in the first half of FY23 were directed towards
the right‑sizing of our inventory levels, which impacted our efficiency on marketing during that period.
Our owned & earned traffic sources have increased to 71% during the year, compared to 65% in FY22. This makes it
clear that our underlying marketing efficiencies are working, compounded by the benefits associated with growing
our proportion of repeat customers and Kogan FIRST Subscribers.
Figure 2.3 Kogan.com traffic – owned & earned vs paid7
Figure 2.4 Group Marketing ROI8,9
Paid
29%
Owned & Earned
71%
$46
$46
$18
$16
Gross Profit per
Group Active Customer
Marketing Spend per
Group Active Customer
FY22
FY23
7. Chart reflects Kogan.com only (excluding Mighty Ape).
8.
9.
12-month Gross Profit divided by Group Active Customers.
12-month marketing spend divided by Group Active Customers.
12
kogan.com annual RepoRt 2023
PERFORMANCE REVIEW & OUTLOOK
RESULTS SUMMARY
This year has consisted of two distinct halves for Kogan.com. It has been well documented that the Business
embarked on a period of consolidation in the first half of FY23. This required us to achieve a sustainable level of
inventory along with more efficient operating costs, and build a strong Balance Sheet. Having achieved a significant
right‑sizing of inventory (see Figure 3.1), we achieved a stronger second half as can be seen in Table 1.1.
Our Gross Margin rapidly recovered with further improvement expected in FY24. Operating costs reduced and
Adjusted EBITDA grew by 622.4% in 2HFY23 YoY. Additionally, we grew the cash balance and cleared all bank debt
from the Business. As such, we have successfully rebased the Business to become less risky and a more efficient
operation, all while delivering exceptional value to our customers.
In rebasing the Business, we have delivered on our goal of increasing the quality of our earnings via a shift towards
Platform‑Based Sales (refer to Figure 1.1 and 1.2). This is expected to deliver increasing profitability in the Business in
future years, as Platform‑Based Sales deliver higher recurring Revenue, higher Gross Margin and lower inventory risk,
while also enabling lower operating costs.
Figure 3.1 Kogan.com inventory reduction
68.5% Reduction
103.7
91.6
84.2
78.6
69.9
56.4
)
m
$
(
e
s
u
o
h
e
r
a
w
-
n
i
y
r
o
t
n
e
v
n
I
49.0
44.5
40.0
38.5
35.6
32.7
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
13
kogan.com annual RepoRt 2023
Operating & Financial Review continued
Table 1.1 2HFY23 Kogan Group Results
$m
Gross Sales10
Revenue11
Cost of Sales
Gross Profit
Gross Margin
Other income
Variable costs
Marketing costs
Contribution profit
Contribution margin
People costs
Other costs
Total operating costs
Unrealised gains/(losses)
EBITDA
EBITDA margin
Unrealised gains/(losses)
Realised (loss) on Wonderfi shares
Equity‑based compensation
Bitbuy.com domain sale
Mighty Ape Tranches 3 & 4
Adjusted EBITDA12
Depreciation & amortisation
EBIT
Adjusted EBIT12
Interest
Net Profit Before Tax
Income tax benefit
NPAT
Adjusted NPAT12
EPS
Adjusted EPS12
2HFY22
2HFY23
YoY Var (%)
482.0
299.0
(222.6)
76.3
25.5%
(0.0)
(13.7)
(30.8)
31.9
10.7%
(39.9)
(10.1)
(94.3)
(1.8)
(19.8)
(6.6%)
(1.8)
0.0
(13.0)
(0.0)
(6.6)
1.6
(9.9)
(29.8)
(8.4)
(0.7)
(30.4)
6.8
(23.6)
(7.7)
(0.22)
(0.07)
373.7
213.9
(140.3)
73.6
(22.5%)
(28.4%)
(37.0%)
(3.6%)
34.4% 8.9pp/34.8%
0.0
(7.7)
(24.2)
41.7
(100.0%)
(43.8%)
(21.2%)
30.7%
19.5% 8.8pp/82.6%
(28.0)
(11.7)
(71.6)
0.2
2.2
(29.9%)
16.8%
(24.1%)
(110.2%)
111.1%
1.0% 7.7pp/115.4%
0.6
(0.4)
(17.1)
0.0
7.9
11.2
(8.2)
(6.0)
3.0
(0.1)
(6.1)
4.1
(2.0)
1.9
(0.02)
0.02
622.4%
(17.0%)
79.7%
135.4%
(89.3%)
79.9%
91.4%
125.0%
91.5%
124.7%
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
10. Non-IFRS measure.
11. The differential between Revenue and Gross Sales is reflective of Kogan Marketplace and Kogan Verticals recognising only commission-based
Revenue while the gross transaction values are recognised within Gross Sales.
12. Adjusted EBITDA, Adjusted EBIT, Adjusted NPAT and Adjusted EPS are measures of the underlying performance of the Business, they remove
non-cash items including the unrealised FX gain/ (loss), equity-based compensation and one-off non-recurring items. Refer to page 26 of
this Annual Report for a detailed reconciliation of adjusting items.
14
kogan.com annual RepoRt 2023
For the full financial year, the Group recorded Gross Sales of $844.8 million and Revenue of $489.5 million. The decline
in both Gross Sales and Revenue reflected a rebasing of inventory levels, as well as the impact from challenging
trading conditions caused by increasing cost‑of‑living pressures and interest rate rises.
Kogan.com’s Exclusive Brands and Third‑Party Brands Revenue declined 41.3% and 53.5% while being the focus of
significant right‑sizing of inventory. This right‑sizing was successfully achieved at the end of 1HFY23 (see figure 3.1),
and materially impacted profitability in that half. However we have seen a swift recovery of Gross Margin in these
Divisions in 2HFY23 and expect that to continue in FY24.
The Kogan Marketplace Gross Sales declined year‑on‑year by 28.5%, impacted by challenging top‑line trading
conditions. However seller‑fees reduced by a lesser percentage (22.2%) following improvements in seller management
and experience. Towards the end of the year our new Advertising Platform went live. The platform allows Marketplace
Sellers to sponsor their listings to enhance customer search results and gain further reach within the Kogan.com website.
While we did record top‑line reduction across Product Divisions, Marketplace and Mighty Ape, we did achieve
growth in Kogan FIRST and a number of Verticals.
The Kogan FIRST loyalty program grew to over 401,000 Subscribers as at 30 June 2023, with Revenue increasing
to $26.3 million, an increase of 69.6% year‑on‑year. The growth in proportion of owned & earned website traffic
(figure 2.3) confirms the importance of the Kogan FIRST program to the Business. As we grow our Kogan FIRST
Subscribers, there will be a reduction in the need for marketing investment, which frees up capital for alternative
investments. The unit economics of Kogan FIRST involve taking what we otherwise would have spent on paid
marketing to attract and retain customers, and share most of that saving with the consumer in the form of
better prices, and greater loyalty rewards.
Kogan Verticals achieved growth in FY23, and was highlighted with the sustained return to growth of Kogan Mobile
Australia, the largest Verticals. Kogan Mobile Australia Revenue grew 3.1% year‑on‑year, Kogan Mobile New Zealand
continued strong growth of 71.5%, while Kogan Money and Kogan Energy grew by 22.0% and 46.9%, respectively.
Gross Profit of $136.6 million declined 26.0% year‑on‑year, largely impacted by top‑line performance and significantly
reduced Gross Margin during the period of inventory right‑sizing in 1HFY23. Despite this, Gross Margin did improve
2.2pp year‑on‑year. The increase was a result of the rapid recovery of Gross Margin in the second half of the year
and the proportional increase in Platform‑Based Sales which drove a Gross Margin of 34.4% in 2HFY23, up 8.9pp
year‑on‑year.
Following the rebasing of the Business, Variable Costs reduced by 40.7% year‑on‑year. While the reduction in selling
costs reflects soft trading conditions versus the prior year, the reduction in warehousing costs is due to the significant
adjustment made to the inventory level in the Business. Importantly, the efficiency of Variable Costs has improved
year‑on‑year. Variable costs reduced to 8.0% of Gross Sales in FY23 from 8.8% in FY22. These efficiencies are
expected to improve in FY24, as we roll off more expensive warehousing arrangements to align our warehousing
with the current inventory level.
Statutory NPAT was significantly impacted by suppressed margins during 1HFY23 in order to right‑size inventory
levels, and also included a large non‑cash equity‑based compensation accrual driven by the legacy options award.
This non‑cash element has been discussed at length in prior years.
Adjusted EBITDA, Adjusted EBIT and Adjusted NPAT were all also significantly impacted by the right‑sizing of inventory
and challenging trading conditions, however did recover in 2HFY23.
15
kogan.com annual RepoRt 2023
Operating & Financial Review continued
Table 1.2 FY23 Kogan Group Results
$m
Gross Sales10
Revenue11
Cost of Sales
Gross Profit
Gross Margin
Other income
Variable costs
Marketing costs
Contribution profit
Contribution margin
People costs
Other costs
Total operating costs
Unrealised gains/(losses)
EBITDA
EBITDA margin
Unrealised gains/(losses)
Realised (loss) on Wonderfi shares
Equity‑based compensation
Bitbuy.com domain sale
Mighty Ape Tranches 3 & 4
Adjusted EBITDA12
Depreciation & amortisation
EBIT
Adjusted EBIT12
Interest
Net Profit Before Tax
Income tax benefit
NPAT
Adjusted NPAT12
EPS
Adjusted EPS12
FY22
1,180.0
718.5
(534.1)
184.4
25.7%
5.1
(32.5)
(71.2)
85.8
11.9%
(85.5)
(19.9)
FY23
YoY Var (%)
844.8
489.5
(352.9)
136.6
(28.4%)
(31.9%)
(33.9%)
(26.0%)
27.9%
2.2pp/8.7%
0.0
(100.0%)
(19.3)
(48.5)
68.8
(40.7%)
(32.0%)
(19.8%)
14.1%
2.1pp/17.7%
(67.1)
(22.6)
(21.6%)
13.6%
(204.0)
(157.5)
(22.8%)
(2.2)
(21.8)
(3.0%)
(2.2)
0.0
(26.6)
5.1
(17.0)
18.9
(19.2)
(41.0)
(0.3)
(1.7)
(42.7)
7.3
(35.5)
(2.9)
(0.33)
(0.03)
0.1
(104.4%)
(20.8)
4.5%
(4.2%)
1.2pp/40.1%
2.0
(2.1)
(31.3)
(0.1)
3.9
6.8
(16.6)
(37.4)
(9.8)
(0.7)
(38.1)
12.2
(25.9)
(64.0%)
(13.6%)
8.8%
(>1,000%)
(60.6%)
10.9%
27.1%
(7.7)
(168.9%)
(0.24)
(0.07)
27.2%
(168.4%)
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
16
kogan.com annual RepoRt 2023
MIGHTY APE
This year marked the exit of Founder, Simon Barton, from the Mighty Ape business. Gracie MacKinlay completed
her first full financial year as CEO, and she was joined in May of this year by Daniel Balasoglou, as the new CFO
of Mighty Ape. The transition has gone smoothly with no interruptions to operations.
Mighty Ape Gross Sales and Revenue both declined year‑on‑year, by 5.9% and 5.3%, respectively. The decline can
be attributed to continuing cost‑of‑living pressures and high interest rates in New Zealand, which led to a reduction
in the eCommerce market in New Zealand.
Despite this, Mighty Ape achieved relatively consistent and resilient Gross Profit year‑on‑year. This was driven by
an increase in Gross Margin, achieved through increased sales of Kogan.com Exclusive Brands products, and better
delivery economics from the growing Jungle Express delivery service.
Adjusted EBITDA reduced by 26.7% year‑on‑year as we continue to invest in setting up the business for future growth.
This includes investment in IT infrastructure, logistics network and the Mighty Ape team. These investments are
expected to produce long‑term benefits for our customers and the Group.
Table 2.1 Mighty Ape financial highlights
A$m
Gross Sales
Revenue
Gross Profit
Gross Margin
EBITDA
EBITDA Margin
Adjusted EBITDA
Adjusted NPAT
FY22
164.2
163.4
39.1
23.9%
12.3
7.5%
12.3
7.3
FY23 YoY Mvmt %
154.4
154.8
39.0
(5.9%)
(5.3%)
(0.1%)
25.2%
1.3pp/5.4%
8.7
(29.4%)
5.6% (1.9pp)/(25.5%)
9.0
5.0
(26.7%)
(32.1%)
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
17
kogan.com annual RepoRt 2023
Operating & Financial Review continued
PORTFOLIO BUSINESS MIX
The recovery of Gross Profit and Gross Margin in our Product Divisions in 2HFY23 has been a highlight during the
year (see Figure 3.1). Following the right‑sizing of inventory within Exclusive Brands and Third‑Party Brands, the deep
discounting ceased, allowing for Gross Margins and therefore Gross Profit to recover. While significant recovery has
occurred in the second half, we expect further improvements to come in FY24.
Mighty Ape, Marketplace, Kogan FIRST and Kogan Mobile have all continued to contribute materially to the Gross
Profit of the Group.
Figure 4.1 Kogan Group Gross Profit Product & Business Mix
1HFY23 Gross Profit Contribution
2HFY23 Gross Profit Contribution
Mighty Ape
Marketplace
Kogan First
Exclusive Brands
Kogan Mobile
8.9%
Kogan Money
2.1%
Other Business
3.8%
Third-Party Brands
-2.2%
34.3%
Mighty Ape
20.3%
Exclusive Brands
17.2%
15.6%
Exclusive Brands and
Third-PartyBrands
Gross Profit contribution
has grown HoH following
the removal of excess
inventory sicne 1HFY23
Kogan First
Marketplace
Kogan Mobile
Third-Party
Brands
15.1%
8.1%
3.7%
Kogan Money
2.9%
Other Business
2.5%
23.6%
23.1%
21.0%
Mighty Ape
Kogan FIRST
Kogan Mobile
Kogan Money
Executive Brands
Marketplace
Third-Party Brands
Other Business13
KOGAN.COM COST OF DOING BUSINESS
Our initiatives to increase operational efficiency were reflected in our FY23 results. As we drove down inventory
in the Business to the desired level, it produced cost savings, most notably in warehousing and marketing. This has
driven the reduction in Variable Costs to 8.8% of Gross Sales in 2HFY23 from 9.5% of Gross Sales in 2HFY22.
Further, IT costs reduction initiatives and restructuring of our off‑shore customer care teams has provided further
on‑going savings through our fixed costs. We have re‑tendered or renegotiated most of our major contracts,
with further savings expected to materialise through FY24.
Figure 5.1 Kogan.com Variable Costs 2HFY2314
Figure 5.2 Kogan.com Fixed Costs15
0.8pp Reduction
$2.3m Cost Reduction YoY
)
%
(
9.5%
23.0
8.8%
20.7
l
s
e
a
S
s
s
o
r
G
f
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e
g
a
t
n
e
c
r
e
P
)
m
$
(
s
t
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o
C
d
e
x
F
i
2HFY22
2HFY23
2HFY22
2HFY23
Variable Costs
Fixed Costs
13. Other Business includes Kogan Travel, Kogan Insurance, Kogan Internet and Kogan Energy.
14. Refers to Variable Costs and Marketing Costs for Kogan.com only (excluding Mighty Ape). Variable Costs consist of warehousing and
selling costs.
15. Refers to People costs and Other costs for Kogan.com only (excluding Mighty Ape). People costs excludes non-cash equity-based
compensation and the provision for Mighty Ape Tranche payments. Other costs includes IT, accounting, legal and compliance costs.
18
kogan.com annual RepoRt 2023
STATEMENT OF FINANCIAL POSITION
Table 3.1 Summary of Kogan Group Net Assets at 30 June 2022 and 30 June 2023
$m
Current assets
Non‑current assets
Total assets
Current liabilities
Non‑current liabilities
Total liabilities
Net assets
30‑Jun‑22
30‑Jun‑23
235.5
124.8
360.3
(137.6)
(50.1)
(187.7)
172.6
142.9
131.2
274.1
(97.7)
(8.7)
(106.4)
167.7
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
The Group ended FY23 in a strong capital position, with cash of $65.4 million and no bank debt. This is compared
to a net cash balance (after loans & borrowings) of $31.2 million as at 30 June 2022. The growth in cash was achieved
while paying down all bank debt, making the Tranche 3 payment for the Mighty Ape acquisition of $14.2 million and
completing in excess of $10.0 million of share buy‑backs (on‑going).
The business reduced inventory levels by $91.7 million, to end the year with $68.2 million in total inventory. This balance
comprised of:
• $60.6 million in‑warehouse; and
• $7.6 million in‑transit.
The Group completed the year with inventory aligned to current levels of market demand.
The acquisition of Mighty Ape in December 2020 resulted in the recognition of Goodwill, as well as significant
Right‑of‑Use Assets, Lease Liabilities and intangibles which continue to be reflected in the Group’s Net Assets.
An assessment of impairment to Goodwill was performed as at 30 June 2023 with no adjustment required. As at the
end of the financial year, a total of $11.0 million was provided for the final acquisition payment of Mighty Ape (Tranche 4).
CASH FLOWS
Table 4.1 Summary of Kogan Group Statutory Cash Flow from Operating Activities.
$m
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs paid
Income tax paid
Net cash provided by Operating Activities
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
FY22
745.0
FY23
509.9
(678.5)
(432.3)
0.0
(1.7)
(3.0)
61.8
0.9
(2.0)
(5.6)
70.9
19
kogan.com annual RepoRt 2023
Operating & Financial Review continued
Cash inflows from Operating Activities improved year‑on‑year to $70.9 million in FY23. This underpinned the
increase in net cash balance (after loans & borrowings) by $34.2 million, to a total of $65.4 million as at 30 June 2023.
Significant cash outflows for the year included $14.2 million for the Mighty Ape Tranche 3 acquisition payment,
$36.0 million of loans & borrowings repayments, $10.8 million of share buy‑backs (ongoing) and $1.5 million for the
acquisition of Brosa.
OUTLOOK
Having steadied the Business and ended the year with a strong capital position, our team is excited and optimistic
for what we can achieve in FY24.
In FY24, we expect:
• Accelerated growth in Kogan FIRST Subscribers;
• Continued growth in our Verticals;
• Growth in Kogan Marketplace;
• Growth in the recently introduced Advertising Platform;
• Launch of a new Vertical in New Zealand; and
• Continued improvement in our Product Divisions’ profitability.
NON‑IFRS MEASURES
Throughout this report, Kogan.com has included certain non‑IFRS financial information, including Gross Sales,
EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT, Adjusted NPAT and Adjusted EPS. Kogan.com believes that these
non‑IFRS measures provide useful information to recipients for measuring the underlying operating performance
of Kogan.com’s business. Non‑IFRS measures have not been subject to audit.
The table below provides details of the Non‑IFRS measures used in this report.
Table 5.1 Non-IFRS Measures
Gross Sales
The gross transaction value, on a cash basis, of products and services sold, of Kogan Retail,
Mighty Ape, Kogan Marketplace and the Kogan Verticals.
EBITDA
Earnings before interest, tax, depreciation and amortisation.
Adjusted EBITDA
Earnings before interest, tax, depreciation, amortisation, unrealised gain/(loss), equity‑based
compensation and one‑off non‑recurring items. Refer to page 26 of this Annual Report
for a detailed reconciliation of adjusting items.
EBIT
Earnings before interest and tax.
Earnings before interest, tax, unrealised gain/(loss), equity‑based compensation and one‑off
non‑recurring items. Refer to page 26 of this Annual Report for a details reconciliation of
adjusting items.
Net profit after tax and before unrealised gain/(loss), equity‑based compensation and
one‑off non‑recurring items. Refer to page 26 of this Annual Report for a detailed
reconciliation of adjusting items.
Earnings per share before unrealised gain/(loss), equity‑based compensation and one‑off
non‑recurring items. Refer to page 26 of this Annual Report for a detailed reconciliation
of adjusting items.
Adjusted EBIT
Adjusted NPAT
Adjusted EPS
20
kogan.com annual RepoRt 2023
STRATEGY, RISK AND OPPORTUNITIES
STRATEGY
Online retail in Australia continues to grow at a strong and steady pace. According to IBIS World’s latest industry
report, online retail in Australia is set to grow to $98.6 billion in FY29 at a CAGR2 of 10.1%. Having resolved our
inventory issues and rebased the business, Kogan.com looks forward to returning to growth in the latter half
of FY24 and benefitting from the overall growth in the Online retail market in Australia.
Figure 6.1 Australian Online Retail Market size (Source: IBIS Worlda).
)
n
o
i
l
l
i
b
$
(
9
2
Y
F
-
4
2
Y
F
k
o
o
o
l
t
u
O
y
r
t
s
u
d
n
I
60.8
FY24
66.2
FY25
73.3
FY26
81.8
FY27
92.0
FY28
98.6
FY29
a. Source: IBISWorld X0004 Online Shopping in Australia Industry Report Apr 2023.
Kogan.com’s strategy involves a number of initiatives that target long‑term growth. These include the continued
growth in Kogan FIRST, our loyalty program, which is pivotal in building a strong loyal customer base who start their
online shopping experience at one of Kogan.com’s online platforms. Towards the end of FY23 we launched a number
of new benefits to the program, and have already seen a strong acceleration in new Subscribers as a result. Our initiatives
also include the continued onboarding of Kogan Marketplace Sellers to the platform to further grow the Division,
as well as grow the recently launched Advertising Platform. Additionally, we look forward to maintaining growth
in our Verticals and the launch of new Verticals in FY24, as well as returning Exclusive Brands to growth.
21
kogan.com annual RepoRt 2023
Operating & Financial Review continued
KOGAN FIRST
Kogan FIRST Revenues grew by 69.6% year‑on‑year, achieving Revenues of $26.3 million in FY23 and ending the year
with over 401,000 Subscribers.
Kogan FIRST Subscribers receive millions of dollars worth of benefits in the form of Kogan reward credits, exclusive
member deals, every day discounts, free shipping, priority Customer Service and entries into our giveaway competitions.
Our program helps to build a loyal and growing customer base, with an associated benefit in the form of a growing
proportion of repeat customers. This, in turn, increases our marketing efficiency and return on investment.
Having recently introduced a number of new features, and expanded the program to New Zealand, we look forward
to strong growth of the program in FY24.
Figure 7.1 Kogan FIRST Subscribers16
82.7% CAGR2 Since FY21
7.8% YoY
401,594
372,684
s
r
e
b
i
r
c
s
b
u
S
T
S
R
F
n
a
g
o
K
I
120,352
FY21
FY22
FY23
16. Kogan FIRST Subscribers excludes Kogan FIRST customers who are in a trial period, and includes only non-trial members.
22
kogan.com annual RepoRt 2023
KOGAN MARKETPLACE
Top‑line performance of the Kogan Marketplace declined from COVID‑period highs in the prior years.
However the platform has grown at a CAGR2 of 18.0% from FY20, demonstrating the strong long‑term growth.
We are continuing to onboard new Sellers, resulting in an ever expanding range of products for our customers.
Figure 8.1 Kogan Marketplace Gross Sales growth
18.0% CAGR2 Since FY20 (pre-COVID)
363.8
302.3
260.1
)
m
$
(
l
s
e
a
S
s
s
o
r
G
158.3
FY20
FY21
FY22
FY23
It was with great excitement that Kogan Marketplace launched a new Advertising Platform at the end of FY23,
which allows the opportunity for our Marketplace Sellers to increase prominence on our platform and improve
customer search results. We anticipate this platform to scale quickly in FY24 following promising initial adoption
in the first weeks of FY24.
23
kogan.com annual RepoRt 2023
Operating & Financial Review continued
EXCLUSIVE BRANDS STRATEGY
Our Exclusive Brands represent the majority of our in‑warehouse inventory. The Division is essential to our Business,
offering a highly efficient method for delivering unique products from manufacturers to customers. This leads to
exceptional value and unique offers that are not available anywhere else in the market, and therefore creates a unique
proposition for consumers to choose Kogan.com.
Following the right‑sizing of inventory, Gross Margins in the Division have rapidly recovered, and so we look forward
to Exclusive Brands contributing strongly to the Group’s results in FY24.
Figure 9.1 Kogan.com Exclusive Brands Gross Margin
12.6pp HoH
21.9%
363.8
302.3
G
r
o
s
s
M
a
r
g
n
(
i
%
)
)
m
$
(
t
i
f
o
r
P
s
s
o
r
G
9.3%
10.0
1HFY23
17.0
2HFY23
Gross Profit
Gross Margin
Our Exclusive Brands business benefits from:
• Full control of the end‑to‑end supply chain;
• Strong competitive advantage;
• Building trusted brands renowned for value;
• Compelling consumer offering; and
•
17+ years’ experience.
24
kogan.com annual RepoRt 2023
RISKS
Set out below are the key financial and operational risks facing the Business. Kogan.com manages and seeks
to mitigate these risks through internal review and control processes at the Board and management level.
Australian retail
environment and general
economic conditions
may worsen
Many of Kogan.com’s products are discretionary goods and, as a result, sales levels are
sensitive to consumer sentiment. Kogan.com’s offering of products, and its financial and
operational performance, may be affected by changes in consumers’ disposable incomes,
or their preferences as to the utilisation of their disposable incomes. Any reduction in
the disposable incomes of Kogan.com’s customers as a result of changes to factors such
as economic outlook, interest rates, unemployment levels and taxation may decrease
consumer confidence and consumer demand, which may subsequently result in lower
levels of revenue and profitability.
Competition may
increase and change
Kogan.com could be adversely affected by increased competition in the various
segments in which it operates. The Australian online retail market is highly competitive
and is subject to changing customer preferences.
Inventory
management
In order to operate its business successfully, Kogan.com must maintain sufficient
inventory and also avoid the accumulation of excess inventory.
Key supplier,
service provider
and counterparty
factors
Manufacturing and
product quality
Kogan.com has a large number of international suppliers and service providers, from
which it sources a broad range of products and services. There is a risk that Kogan.com
may be unable to continue to source products or services from existing suppliers or
service providers, and in the future, to source products from new suppliers or services
from new service providers, at favourable prices, on favourable terms, in a timely
manner or in sufficient volume.
Kogan.com currently uses a wide range of third‑party suppliers to produce its Exclusive
Brands products. While Kogan.com employs dedicated engineers to assess product
samples, and uses third‑party inspection agencies for quality control and inspections,
there is no guarantee that every supplier will meet Kogan.com’s cost, quality and
volume requirements.
Marketplace
operations
As the Kogan Marketplace continues to grow, Kogan.com must maintain the integrity of
the platform by ensuring the quality of sellers and products being offered. Additionally,
processes are in place to ensure fair competition on the website amongst all sellers.
Performance and
reliability of Kogan.com’s
websites, databases and
operating systems
Kogan.com’s websites, Apps, databases, IT and management systems, including its ERP
and security systems, are critically important to its success. The satisfactory performance,
reliability and availability of Kogan.com’s websites, Apps, databases, IT and management
systems are integral to the operation of the Business.
Reputational product
sourcing factors
The Kogan.com portfolio of Exclusive Brands names and related intellectual property are
key assets of the Business. In addition, Kogan.com sells a range of Third‑Party Branded
products, where the intellectual property is owned by third‑parties.
Exposure
to litigation
Kogan.com may be subject to litigation, claims, disputes and regulatory investigations,
including by customers, suppliers, government agencies, regulators or other third
parties. These disputes may be related to warranties, product descriptions, personal
injury, health, environmental, safety or operational concerns, nuisance, negligence
or failure to comply with applicable laws and regulations.
25
kogan.com annual RepoRt 2023
Operating & Financial Review continued
Changes in GST and
other equivalent taxes
Changes in local indirect tax, such as the goods and services tax in Australia (“GST”),
and duty treatment of any of the markets in which Kogan.com operates, could have
an impact on the sales of imported brands.
Retention of key
team members
Kogan.com relies on the expertise, experience and strategic direction provided by its
Executive Directors and key team members. These individuals have extensive experience
in, and knowledge of, Kogan.com’s business and the Australian online retail market.
Additionally, successful operation of Kogan.com’s business depends on its ability
to attract and retain quality team members.
Reliance on third‑party
payment providers
Kogan.com is exposed to risks in relation to the methods of payment that it currently
accepts, including credit card, PayPal and vouchers. Kogan.com may incur loss from
fraud or erroneous transactions.
RECONCILIATION TO ADJUSTED EBITDA, ADJUSTED EBIT AND ADJUSTED NPAT
Table 6.1 Reconciliation to Adjusted EBIT, Adjusted EBITDA and Adjusted NPAT
Unadjusted
Unrealised
(gain)/loss
Realised
loss on
Wonderfi
shares
Equity‑
based
compensa‑
tion
Mighty Ape
purchase
– Tranche 4
Bitbuy.com
domain sale
Adjusted
Revenue
Cost of sales
Gross Profit
Gross margin
Variable costs
Marketing costs
People costs
Other costs
Total operating
costs
Unrealised
gain/(loss)
EBITDA
EBITDA margin
Depreciation
& amortisation
EBIT
Interest
Loss before tax
Income tax
benefit/(expense)
NPAT
EPS
489.5
(352.9)
136.6
27.9%
(19.3)
(48.5)
(67.1)
(22.6)
(157.5)
0.1
(20.8)
(4.2%)
(16.6)
(37.4)
(0.7)
(38.1)
12.2
(25.9)
(0.24)
(1.9)
2.1
0.1
31.3
(3.9)
(0.1)
0.6
(0.6)
(9.4)
(0.0)
489.5
(352.9)
136.6
27.9%
(19.3)
(48.5)
(39.7)
(22.3)
(129.7)
0.0
6.8
1.4%
(16.6)
(9.8)
(0.7)
(10.4)
2.8
(7.7)
(0.07)
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
26
kogan.com annual RepoRt 2023
Adjusted EBITDA, Adjusted EBIT, Adjusted NPAT and Adjusted EPS: are measures of the underlying performance
of the Business, they remove non‑cash items including the unrealised FX gain/ (loss), equity‑based compensation
and one‑off non‑recurring items. In respect of FY23 the below items have been adjusted:
• Unrealised gain/(loss): unrealised loss at year end related to shares still held and open forward foreign
exchange contracts.
• Equity‑based compensation: significant equity‑based compensation expenses driven largely by the award
of options after the Company’s AGM in November 2020. These options were granted to Ruslan Kogan, CEO,
and David Shafer, CFO & COO, with a strike price of $5.29.
• Mighty Ape purchase – Tranche 4: refers to the provision for the payment of Mighty Ape Tranche 4 purchase
price instalment as part of the Sale Agreement, which was contingent on the Mighty Ape Founder & former CFO
remaining with the Business until the delivery of the financial year 2023 result. In line with accounting standards,
Tranches 4 payment will be considered as compensation for post‑combination services, and as such, treated as
employee remuneration for accounting purposes. The Group will proportionately account for these expenses
up until the respective payment dates.
– For Australian income tax purposes, amounts paid for the acquisition of Mighty Ape shares are considered
as capital in nature and are therefore non‑deductible, rather increasing the tax cost base of the shares.
No deferred tax asset is recognised due to it being probable that the temporary difference will not reverse
in the foreseeable future.
• Bitbuy.com domain sale: relates to an adjustment on the sale of the domain name bitbuy.com. For full details
of the transaction, refer to the ASX release ‘Domain sale re Bitbuy’ on 14 December 2021.
27
kogan.com annual RepoRt 2023
Directors’ Report
The Directors of Kogan.com Limited and its controlled entities (“The Group”) present their report together with the
consolidated financial report of the Group for the financial year ended 30 June 2023 and the Audit Report thereon.
DIRECTORS
The following persons were Directors of the Group at any time during the financial 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
Particulars of each Director’s experience and qualifications are set out later in this report.
COMPANY SECRETARY
Kogan.com engages Acclime Australia Pty Ltd to provide company secretarial services, with Mark Licciardo
as Kogan.com’s Company Secretary.
PRINCIPAL ACTIVITIES
Kogan.com is a portfolio of retail and services businesses that included Kogan Retail, Kogan Marketplace, Kogan
Mobile, Kogan Internet, Kogan Insurance, Kogan Travel, Kogan Money, Kogan Cars, Kogan Energy, Dick Smith,
Matt Blatt, Brosa and Mighty Ape during the year ended 30 June 2023.
Kogan.com earns the majority of its Revenue and profit through the sale of goods and services to Australian and
New Zealand customers. 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 earned seller‑fee based Revenue from Kogan Marketplace and
commission‑based Revenue from the Verticals including Kogan Mobile, Kogan Internet, Kogan Insurance,
Kogan Money, Kogan Cars, Kogan Energy and Kogan Travel (“Kogan Verticals”).
In December 2022, Kogan.com acquired Brosa (excluding any leases or liabilities), one of Australia’s largest online
luxury furniture retailers, out of administration. The deal saw the popular furniture brand remain in operation and
relaunched stronger than ever with the backing of the Kogan Group.
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.
An operating and financial review of the Group during the financial year and the results of these operations are
contained on pages 7 to 27 of this report.
No significant change in the nature of other activities occurred during the year.
EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
There are no subsequent events post reporting date 30 June 2023.
28
kogan.com annual RepoRt 2023
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
Kogan.com has entered into a deed of indemnity, insurance and access with each Director confirming the Director’s
right of access to Board papers and requires Kogan.com to indemnify the Director, on a full indemnity basis and to the
full extent permitted by law against all losses or liabilities (including all reasonable legal costs) insured by the Director
as an officer of Kogan.com or of a related body corporate.
Under the deeds of indemnity, insurance and access, Kogan.com must maintain a Directors’ and Officers’ insurance
policy insuring a Director (among others) against liability as a Director and Officer of Kogan.com related to body
corporate (or the date any relevant proceedings commenced during the seven year period have been finally resolved).
Disclosure of the total amount of the premiums paid under this renewed insurance policy is not permitted under the
provisions of the insurance contract.
INDEMNIFICATION AND INSURANCE OF AUDITORS
No indemnities have been given or insurance premiums paid, during or since the end of the year, for any person
who is or has been an auditor of the Group.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
DIVIDENDS
With consideration to the on‑going share buy‑back, which is scheduled to complete on 10 May 2024, the Board
has decided not to declare a FY23 Dividend.
NON‑AUDIT SERVICES
During the year KPMG, the Group’s auditors, performed certain other services in addition to the audit and review
of the financial statements.
The Board of Directors has considered the non‑audit services provided during the year by the auditor and is satisfied
that the provision of those non‑audit services during the year is compatible with, and did not compromise the auditor’s
independence requirements of the Corporations Act 2001. The Directors are satisfied that the services disclosed
below did not compromise the external auditor’s independence for the following reasons:
• All non‑audit services were subject to the corporate governance procedures adopted by the Group and have
been reviewed by the Audit & Risk Management Committee to ensure they did not adversely affect the integrity
and objectivity of the auditor; and
• The non‑audit services provided do not undermine the general principles relating to auditor independence as
set out in APES 110: Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the
auditor’s own work, acting in a management or decision making capacity for the Group, acting as an advocate
for the Group or jointly sharing risks and rewards.
29
kogan.com annual RepoRt 2023
Directors’ Report continued
The following fees were paid or payable to KPMG for non‑audit services provided during the year ended 30 June 2023:
Tax advisory and compliance
$
119,774
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the financial year ended 30 June 2023 can be found on page 57
of the financial report and forms part of the Directors Report.
THE BOARD OF DIRECTORS AND COMPANY SECRETARY
Greg Ridder
(BBus (Acc), Grad Dip (Mktg), GAICD, CPA)
Independent, Non-Executive Chairman
Mr Ridder was appointed to the Board of Kogan.com in May 2016 as Independent,
Non‑Executive Chairman. Mr Ridder also serves as Chairman of the Remuneration
and Nomination Committee.
Formerly Asia Pacific Regional President at NYSE listed Owens‑Illinois, he is experienced
in leading businesses in multiple countries, cultures, economic circumstances and market
conditions. Mr Ridder also serves as Non‑Executive Director at Spirit Technology Solutions
Limited and a number of not‑for‑profit entities.
Mr Ridder holds a Bachelor of Business in Accounting from RMIT, a Graduate Diploma
in Marketing from Monash University, and has completed the Advanced Management
Programme at INSEAD in France. He is a CPA and a graduate member of the Australian
Institute of Company Directors.
Directorship of listed entities within the past three years
• Director of Spirit Technology Solutions Ltd (appointed in November 2019)
Board Committee membership
• Member of the Audit and Risk Management Committee
• Chairman of the Remuneration and Nomination Committee
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kogan.com annual RepoRt 2023
Janine Allis
Independent Non-Executive Director
Ms Allis was appointed to the Board of Kogan.com in April 2021, as an Independent,
Non‑Executive Director and also serves as a member of the Remuneration and Nomination
Committee and Audit and Risk Management Committee.
Ms Allis is the Founder of Boost Juice and Founder and Non‑Executive Chairman of Retail
Zoo group of food retail brands. Ms Allis has been Telstra Businesswoman of the Year,
Excellence in Women’s Leadership, Amex Franchisor of the Year, ARA Retailer of the Year
and was inducted into the Australian Franchise Hall of Fame.
Ms Allis was listed as one of BRW’s top 15 people who have changed the way we do business
in the last 20 years and is an ambassador for UNHCR.
Directorship of listed entities within the past three years
• Director of Australian Pharmaceuticals Industries (API) (ceased March 2022)
Board Committee membership
• Member of the Audit and Risk Management Committee
• Member of the Remuneration and Nomination Committee
David Shafer
(LLB (Hons), BCom, CFA)
Chief Financial Officer, Chief Operating Officer and Executive Director
Mr Shafer has worked with Kogan.com since 2006, moving to a full time role as Chief Financial
Officer, Chief Operating Officer and Executive Director in November 2010.
Prior to joining Kogan.com, Mr Shafer was Senior Associate at Arnold Bloch Leibler.
Mr Shafer holds a Bachelor of Law (Honours) and Bachelor of Commerce from The University
of Melbourne and is a Chartered Financial Analyst.
31
kogan.com annual RepoRt 2023
Directors’ Report continued
Harry Debney
(BAppSc (Hons))
Independent Non-Executive Director
Mr Debney was appointed to the Board of Kogan.com in May 2016, as an Independent,
Non‑Executive Director and also serves as Chairman of the Audit and Risk Management Committee.
Mr Debney currently serves as the Interim Chief Executive Officer of Costa Group, having
previously served as Chief Executive Officer of Costa Group from September 2010 to
March 2021. During his time at Costa Group he oversaw the business’ transition from
a privately‑owned Company to a member of the S&P/ASX 200 Index.
Prior to joining the Costa Group, Mr Debney spent 24 years at Visy Industries, including eight
years as Chief Executive Officer. During this time, he substantially grew the Visy business, both
organically and through acquisitions and oversaw a progressive renewal of core manufacturing
assets to ensure that Visy had the most advanced technology, and lowest cost manufacturing
base in the industry.
Mr Debney holds a Bachelor of Applied Science (Honours) from the University of Queensland.
Directorship of listed entities within the past three years
• Non‑Executive Director of Costa Group Holdings Ltd (appointed on 1 July 2021)
Board Committee membership
• Chairman of the Audit and Risk Management Committee
• Member of the Remuneration and Nomination Committee
James Spenceley
Independent Non-Executive Director
Mr Spenceley was appointed to the Board of Kogan.com in March 2021, as an Independent,
Non‑Executive Director and also serves as a member of the Remuneration and Nomination
Committee and Audit and Risk Management Committee.
Mr Spenceley founded Vocus Communications (now Vocus Group, ASX:VOC) in 2007 and
built it into an ASX100 company through organic growth and acquisitions. Mr Spenceley is
Chairman at Swoop Telecom and up until May 2023, was Chairman of Airtasker.
Mr Spenceley was the former owner of Illawarra Hawks NBL team and has twice won
Ernst & Young Australian Entrepreneur of the Year recognition. In 2018, he was inducted
into the Telecommunications Hall of Fame.
Directorship of listed entities within the past three years
• Chairperson of Swoop Telecom (appointed in February 2019)
• Chairperson of Airtasker Limited (ceased in May 2023)
• Non‑Executive Director at Think Childcare (ceased October 2021)
Board Committee membership
• Member of the Audit and Risk Management Committee
• Member of the Remuneration and Nomination Committee
32
kogan.com annual RepoRt 2023
Ruslan Kogan
(BBS)
Founder, Chief Executive Officer and Executive Director
Mr Kogan founded Kogan.com in 2006, and has been its CEO since inception, growing the
Business into Australia’s leading Pure Play Online Retailer in under a decade.
Prior to founding Kogan.com, Mr Kogan held roles in the IT departments of Bosch and GE,
and as a consultant at Accenture.
Mr Kogan holds a Bachelor of Business Systems from Monash University.
Mark Licciardo (Acclime Australia Pty Ltd)
(B Bus (Acc), GradDip CSP, FGIA, GAICD)
Company Secretary
Mark is the founder of Mertons Corporate Services, now part of Acclime Australia,
and is responsible for Acclime Australia’s Listed Services Division.
He is also an ASX‑experienced director and chair of public and private companies,
with expertise in the listed investment, infrastructure, bio‑technology and digital sectors.
He currently serves as a director on a number of Australian company boards as well as
foreign‑controlled entities and private companies.
During his executive career, Mark held roles in banking and finance, funds management,
investment and infrastructure development businesses, including being the Company
Secretary for ASX:100 companies Transurban Group and Australian Foundation Investment
Company Limited.
Mark holds a Bachelor of Business degree in accounting, a Graduate Diploma in Governance
and is a Fellow of the Chartered Governance Institute, the Governance Institute of Australia
and the Australian Institute of Company Directors.
MEETINGS OF DIRECTORS
Directors’ meetings held between 1 July 2022 and 30 June 2023:
Greg Ridder
Janine Allis
David Shafer
Harry Debney
James Spenceley
Ruslan Kogan
BOARD
AUDIT AND RISK
REMUNERATION
AND NOMINATION
A
11
11
11
11
11
11
B
11
10
11
11
10
11
A
3
3
3
3
3
3
B
3
2
31
3
3
11
A
3
3
3
3
3
3
B
3
3
11
3
3
11
(1)
Indicates that a Director is not a member of a specific committee and attended by invitation.
A Number of meetings held during the time the Director held office or was a member of the committee during the year.
B Number of meetings attended.
33
kogan.com annual RepoRt 2023
Directors’ Report continued
CORPORATE GOVERNANCE STATEMENT
The Board is committed to achieving and demonstrating the highest standards of Corporate Governance.
The Board continues to refine and improve the governance framework and practices in place to ensure they
meet the interest of Shareholders.
The Company complies with the Australian Securities Exchange Corporate Governance Council’s Corporate
Governance Principles and Recommendations 4th Edition (‘the ASX Principles’). Kogan.com’s Corporate Governance
Statement, which summarises the Company’s Corporate Governance practices and incorporates the disclosures
required by the ASX Principles, can be viewed at www.kogancorporate.com.
ENVIRONMENTAL REGULATIONS
The Group is not subject to any significant environmental regulations under Commonwealth or State legislation.
DIRECTORS INTERESTS
The following table sets out each Directors’ relevant interest in shares of the Company at the date of this report.
Ruslan Kogan
David Shafer
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
SHARE RIGHTS
Unissued Shares under Rights
Ordinary
Shares
15,853,321
5,225,642
158,000
98,099
14,761
10,000
At 30 June 2023 the Group had 1,199,662 unissued shares under Rights which are expected to vest up until
27 February 2027, all unissued shares under Rights are Ordinary Shares of the Company.
Shares Issued on Exercise of Rights
During the financial year, the Group issued 148,936 Ordinary Shares as a result of the Rights vesting.
RETENTION OPTIONS
Unissued Shares under Options
At 30 June 2023 the Group had 6,653,997 unissued shares under Options which are expected to vest up until
31 December 2027, all unissued shares under Options are Ordinary Shares of the Company.
As at 28 September 2023 the number of vested Options totalled 6,000,000, none of which have been exercised.
34
Remuneration Report
kogan.com annual RepoRt 2023
INTRODUCTION
The Directors are pleased to present the FY23 Remuneration Report, outlining the Board’s approach to the
remuneration for Key Management Personnel (KMP).
The Board recognises that the performance of the Group depends on the quality and motivation of its team
members. The Group remuneration strategy therefore seeks to appropriately attract, reward and retain team
members at all levels of the Business, but in particular for management and key executives. The Board aims
to achieve this by establishing executive remuneration packages that include a mix of fixed remuneration,
short‑term incentives and long‑term incentives.
The Report covers the following matters:
1. 2023 outcomes at a glance;
2. Details of Key Management Personnel;
3. Remuneration governance;
4. Remuneration policy;
5. Company’s performance;
6. Details of remuneration;
7. Equity instruments;
8. Executive Directors and Other KMP Service Agreements;
9. Key Management Personnel transactions; and
10. Remuneration framework review.
35
kogan.com annual RepoRt 2023
Remuneration Report continued
2023 OUTCOMES AT A GLANCE
Chief Executive Officer (CEO) remuneration
Chief Financial Officer (CFO) remuneration
For FY23, our CEO:
For FY23, our CFO:
• Had no increase to fixed remuneration;
• Had no increase to fixed remuneration;
• Was not awarded any additional variable
• Was not awarded any additional variable
remuneration;
remuneration;
• Received total realised remuneration
• Received total realised remuneration
of $448,792;
of $388,292;
• Had total statutory remuneration
• Had total statutory remuneration
of $17,179,675; and
of $11,549,765; and
• Has outstanding Options with a value
• Has outstanding Options with a value
of $6,189,13817. The associated strike price
is $5.29 and has vested as at the date
of this report.
of $4,126,09217. The associated strike price
is $5.29 and has vested as at the date of
this report.
Non Executive Directors (NED) fees
No increases to NED fees (the Chairman and other NED base fees remained unchanged).
DETAILS OF KEY MANAGEMENT PERSONNEL
Key Management Personnel (KMP) are individuals who have authority and responsibility for planning, directing and
controlling the activities of the Group, directly or indirectly, and comprise the Directors and the Senior Executives
of the Group, as listed below.
KMP
POSITION HELD
Independent Non‑Executive Directors
Greg Ridder
Janine Allis
Chairman, Independent Non‑Executive Director
Independent Non‑Executive Director
Harry Debney
Independent Non‑Executive Director
James Spenceley
Independent Non‑Executive Director
Executive Directors
David Shafer
Chief Financial Officer, Chief Operating Officer & Executive Director
Ruslan Kogan
Chief Executive Officer and Executive Director
Other KMP
Gracie MacKinlay
Mighty Ape, Chief Executive Officer
Simon Barton
Mighty Ape, Chief Financial Officer (until 31 March 2023)
TERM AS KMP
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Part year
17. Based on a valuation performed by SLM Corporate as at 22nd August 2023.
36
kogan.com annual RepoRt 2023
REMUNERATION GOVERNANCE
The Board has appointed the Remuneration and Nomination Committee (“the Committee”) whose objective is to
assist the Board in relation to the Group remuneration strategy, policies and actions. In performing this responsibility,
the Committee must give appropriate consideration to the Company’s performance and objectives, employment
conditions and external remuneration relativities.
Remuneration and Nomination Committee
Kogan.com’s Remuneration and Nomination Committee is composed of Independent Non‑Executive Directors.
The responsibilities of the Committee include to:
• develop criteria for Board membership and identify specific individuals for nomination;
• establish processes for the review of the performance of individual Directors, Board Committees and the Board
as a whole and implementation of such processes;
•
•
•
•
review and make recommendations to the Board on board succession planning generally;
review and make recommendations to the Board on the process for recruiting a new Director, including evaluating
the balance of skills, knowledge, experience, independence and diversity on the Board;
review and make recommendations to the Board on the Company’s remuneration framework, remuneration
packages and policies applicable to the members of the executive management of the Company (“Senior
Management”) and Directors;
review and make recommendations to the Board on equity‑based remuneration plans for senior executives and
other employees;
• define levels at which the Chief Executive Officer must make recommendations to the Committee on proposed
changes to remuneration and employee benefit policies;
• ensure that remuneration packages and policies attract, retain and motivate high calibre executives; and
• ensure that remuneration policies demonstrate a clear relationship between key executive performance
and remuneration.
All Directors who are not members of the Committee are entitled to attend any meeting of the Committee.
The Committee may invite any Director, including members of Senior Management.
A full Charter outlining the Committee’s responsibilities and the Process for Evaluation of Performance are
available at www.kogancorporate.com.
37
kogan.com annual RepoRt 2023
Remuneration Report continued
REMUNERATION POLICY
The Group has established incentive arrangements to assist in the attraction, motivation and retention of the
executive team and other selected team members. To align the interests of its team members and the goals of the
Group, the Directors have decided the remuneration packages of the executive team and other selected team
members will consist of the following components:
• Fixed remuneration (inclusive of superannuation);
• Short term cash‑based incentives; and
• Long term equity‑based incentives.
The payment of any cash and award of equity under the incentive arrangements will be subject to the achievement
of performance criteria or hurdles set by the Board. The remuneration packages of the senior management team
are determined by the Committee and reported to the Board. The remuneration of senior managers are reviewed
annually by the Committee. At the absolute discretion of the Committee, Kogan.com may seek external advice on
the appropriate level and structure of the remuneration packages of the senior management team from time to time.
Fixed remuneration
Fixed remuneration consists of the base salary and team member benefits which include superannuation,
leave entitlements and other benefits.
Executive KMP’s did not receive an adjustment to fixed remuneration, with the exception of the compulsory
superannuation increase, in the 2023 financial year.
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
G. MacKinlay
S. Barton
Total
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
G. MacKinlay
S. Barton
Total
Year
2023
2023
2023
2023
2022
2022
2022
2022
Cash
Salary
$
Super‑
annuation
$
AL & LSL
$
423,500
363,000
25,292
25,292
39,645
33,982
228,879
170,399
6,866
30,040
–
5,060
1,185,778
57,451
108,726
423,500
363,000
23,568
23,568
15,481
279,104
464
–
39,645
33,982
1,060
19,001
1,081,085
47,600
93,688
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
38
kogan.com annual RepoRt 2023
Short term incentives (STI) – Cash based
The following table outlines the significant aspects of the STI.
Purpose of STI plan
Provide a link between remuneration and both short‑term Company and
individual performance.
Eligibility
Create sustainable Shareholder value.
Reward individuals for their contribution to the success of the Group.
Actively encourage team members to take more ownership over the EBITDA18.
Offers of cash incentive may be made to any team member of the Group
(including a Director employed in an executive capacity) or any other person
who is declared by the Board to be eligible to receive a grant of cash incentive
under the STI.
Calculation & Target
The Adjusted EBITDA18 of Kogan.com shall exceed the management forecast
for the full financial year (after payment of the STI).
25% of the outperformance will be allocated to a ‘bonus pool’.
The ‘bonus pool’ will then be shared in cash bonuses among a number of team
members in fixed proportions.
Maximum opportunity
The maximum payable is 25% of the outperformance and 35% of the team
member’s annual salary.
Performance conditions
Outperformance of the budgeted Adjusted EBITDA.18
Continuation of employment.
Why were the performance
conditions chosen
To achieve successful and sustainable financial business outcomes as well
as any annual objectives that drive short‑term and long‑term business success
and sustainability.
Performance period
1 July 2022 to 30 June 2023.
Timing of assessment
August 2023, following the completion of the 30 June 2023 accounts.
Form of payment
Paid in cash.
Board discretion
Targets are reviewed annually and the Board has discretion to adapt appropriately
to take into account exceptional items.
KMP’s did not receive a payment under the STI plan in the 2023 financial year (FY22:$0).
18. Non-IFRS measure.
39
kogan.com annual RepoRt 2023
Remuneration Report continued
Long Term Incentives (LTI) – Equity Incentive Plan (EIP)
The Group has established an Equity Incentive Plan (EIP), which is designed to align the interests of eligible team
members more closely with the interests of Shareholders in the listed entity post 7 July 2016. Under the EIP, eligible
team members may be offered Restricted Shares, Options or Rights which may be subject to vesting conditions.
The Group may offer additional long‑term incentive schemes to senior management and other team members
over time.
The following table outlines the significant aspects of the current EIP.
Purpose of LTI plan
Support the strategy and business plan of the Group.
Eligibility
Align the interests of team members more closely with the interests of Shareholders.
Reward individuals for their contribution to the success of the Group over the
long‑term.
Offers of Incentive Securities may be made to any team member of the Group
(including a Director employed in an executive capacity) or any other person who
is declared by the Board to be eligible to receive a grant of incentive Securities
under the EIP.
Service condition on vesting Individuals must be employed by the Group at time of vesting and not be in their
Form of award and payment Performance Rights or Options.
notice period.
Board discretion
The Board has the absolute discretion to determine the terms and conditions
applicable to an offer under the EIP.
Consideration
Nil.
Rights
Each Right confers on its holder an entitlement to a Share, subject to the satisfaction
of applicable conditions.
Restrictions on dealing
Shares allocated upon exercise of Performance Rights will rank equally with all
existing Ordinary Shares from the date of issue (subject only to the requirements
of Kogan.com’s Securities Trading Policy).
Upon vesting, there will be no disposal restrictions placed on the Ordinary Shares
issued to participants (subject only to the requirements of Kogan.com’s Securities
Trading Policy).
Lapse of Rights
A Right will lapse upon the earliest to occur of:
• expiry date;
•
failure to meet vesting conditions;
• employment termination;
•
the participant electing to surrender the Right; and
• where, in the opinion of the Board, a participant deals with a Right in contravention
of any dealing restrictions under the EIP.
40
kogan.com annual RepoRt 2023
Performance Rights awarded to KMPs
The statutory values below represent the expenses incurred through the Consolidated Income Statement and
Consolidated Statement of Other Comprehensive Income Statement in accordance with AASB 2 Share-Based Payments.
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
G. MacKinlay
S. Barton
Total
STATUTORY VALUE
Year
Value
Year
Value
2023
2023
2023
2023
–
–
75,155
–
75,155
2022
2022
2022
2022
–
–
393
–
393
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
Options awarded to KMPs
The statutory values below represent the expenses incurred through the Consolidated Income Statement and
Consolidated statement of Other Comprehensive Income Statement in accordance with AASB 2 Share-Based Payments.
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
G. MacKinlay
S. Barton
Total
STATUTORY VALUE
Year
Value
Year
Value
2023
2023
2023
2023
16,691,237
11,127,491
–
34,137
2022
2022
2022
2022
14,735,415
9,823,610
–
31,439
27,852,866
24,590,464
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
To better understand the underlying remuneration potentially being delivered to the Executive KMPs, the Committee
engaged SLM Corporate to perform an updated valuation as of 22nd August 2023, being the day of the FY23
Appendix 4E and Preliminary Financial Statements release. The results are as follows:
Options
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
S. Barton
Total
Date
Value
Date
Value
22/08/2023
6,189,138
23/08/2022
3,548,101
22/08/2023
4,126,092
23/08/2022
2,365,401
22/08/2023
1,603
23/08/2022
4,418
10,316,833
5,917,920
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
41
kogan.com annual RepoRt 2023
Remuneration Report continued
Mr. Barton did not receive any Options during FY23. As at 30 June 2023, 17,443 Options remained outstanding.
At the date of grant for Mr. Kogan and Mr. Shafer, being 30 November 2020, the value of their Options were worth
$41,325,935 and $27,550,623, respectively. At the date of grant for Mr. Barton, being 3 December 2020, his Options
were worth $161,871.
As part of Mrs. MacKinlay’s appointment to CEO, she was granted 112,360 Performance Rights which have both
a service condition and performance hurdle attached. As at 30 June 2023, Mrs. MacKinlay has 84,270 Performance
Rights remaining following the expiry of 28,090 Performance Rights in FY23 due to a performance hurdle not
being met.
Performance Rights
Date
Value
Date
Value
Other KMP
G. MacKinlay
Total
22/08/2023
427,249
23/08/2022
398,878
427,249
398,878
At the time of grant, these performance rights were worth $400,000.
The below relates to the Options awarded to Mr. Kogan and Mr. Shafer following the FY20 Annual General Meeting.
During FY23, no new Retention Options were granted. As at 30 June 2023, all Retention Options remained unvested.
As at 27 September 2023, all Retention Options were vested and not yet exercised.
The number and class of
securities issued to the
Directors
Details of the Retention
Options
3,600,000 options granted to Mr Kogan and 2,400,000 granted to Mr Shafer
under the EIP.
The Board (excluding Mr. Kogan and Mr. Shafer) decided to grant the Retention
Options to Mr. Kogan and Mr. Shafer because the Board believed it was in the best
interests of the Company and Shareholders to incentivise Mr. Kogan and Mr. Shafer
to remain in their positions for the next 3 years given their proven track records,
in order to maximise the prospect of Mr Kogan and Mr. Shafer contributing to
the creation of significant future returns for Shareholders.
The Retention Options are being accounted for in the same way the Company’s
current equity‑settled awards are treated (refer section 5.2 of the FY22 Annual
Report), with their accounting value determined at their date of grant (within 10
Business Days of the Meeting). Equity‑settled awards are measured at fair value
at the date of grant. The cost of these transactions is recognised in the Company’s
Consolidated Income Statement and Consolidated Statement of Other
Comprehensive Income and credited to equity on a straight‑line basis over the
vesting period after allowing for an estimate of shares that will eventually vest.
The level of vesting is reviewed annually and the charge adjusted to reflect actual
and estimated levels of vesting. Accordingly, any deductions allowable for tax
purposes will also be in line with current equity‑settled awards.
42
kogan.com annual RepoRt 2023
Details of the Retention
Options (continued)
The Company obtained an independent valuation of the Retention Options from
SLM Corporate dated 7 May 2020 to provide advice in relation to whether the
proposed grant of the Retention Options were reasonable in the circumstances
and by reference to industry standards. The valuation applied a number of
assumptions and variables, including the following:
•
the closing price of the Company’s Shares on ASX on 30 April 2020
(a reference date under the report), being $7.99 per Share;
• a risk‑free rate of 0.33%;
• a volatility factor of 62.5%;
• dividend yield of 1.96%; and
• a time to maturity of the underlying Options of 4 years.
The estimated value of each Retention Option pursuant to the valuation was $4.13
as at the reference date of the report of 7 May 2020. On this basis, the estimated
value as at the reference date of the report of 7 May 2020 of:
•
•
the Retention Options to be granted to Mr Kogan under Item 5.1 was $14,872,133; and
the Retention Options to be granted to Mr Shafer under Item 5.2 was $9,914,756.
The report from SLM Corporate dated 7 May 2020 reflects the value of the Retention
Options on or about the date that the Company agreed to grant the Retention
Options to Mr Kogan and Mr Shafer. For completeness, given the time that has
elapsed between the AGM (at which the Retention Options were approved by
Shareholders) and both the date of the independent valuation of the Retention
Options from SLM Corporate and the date that the Company agreed to grant the
Retention Options, the Company obtained an updated independent valuation of the
Retention Options from SLM Corporate dated 8 December 2020. This valuation
applied the same assumptions and variables as noted above, except that:
•
the closing price of the Company’s Shares on ASX on 30 November 2020
(date of issue of the Retention Options as per the updated independent
valuation), being $16.40 per Share;
• a risk‑free rate of 0.25%;
• a volatility factor of 62.5%; and
• dividend yield of 1.28%.
The value of each Retention Option pursuant to the valuation was $11.48 as at the issue
date of the updated independent valuation of 8 December 2020. On this basis, the value
as at the issue date of the updated independent valuation of 8 December 2020 of:
•
•
the Retention Options granted to Mr. Kogan was $41,325,935; and
the Retention Options granted to Mr. Shafer was $27,550,623.
The increase in the value of the Retention Options reflected the increase in the
Company’s share price since the Company announced the terms of the Retention
Options to the ASX on 12 May 2020 and the grant of the Retention Options following
the Company’s AGM on 20 November 2020.
Strike price
$5.29
Share price at grant date
$16.40
Share price at
27 September 2023
$5.08
43
kogan.com annual RepoRt 2023
Remuneration Report continued
Independent Non‑Executive Directors’ remuneration
Kogan.com’s Independent Non‑Executive Director remuneration policy is set up to attract and retain Directors with
the experience, knowledge, expertise and acumen to manage the Company.
Each of the Independent Non‑Executive Directors has entered into appointment letters with Kogan.com, confirming
the terms of their appointment, their roles and responsibilities and Kogan.com’s expectations of them as Directors.
Under the Constitution, the Board may decide the remuneration from Kogan.com to which each Director is entitled
for their services as a Director. However, under the ASX Listing Rules, the total amount paid to all Non‑Executive
Directors for their services must not exceed in aggregate in any financial year the amount fixed at Kogan.com’s
general meeting.
This amount has been fixed by Kogan.com at $800,000 per annum (FY22: $800,000 per annum). Any change to that
aggregate annual sum needs to be approved by Shareholders.
The annual Independent Non‑Executive Directors’ fees paid or payable to Greg Ridder (as Chairman of the Board and
Remuneration & Nomination Committee), Harry Debney (as Chairman of the Audit & Risk Management Committee),
Janine Allis and James Spenceley for FY23 are $185,000, $110,000, $95,000 and $95,000, respectively.
Included within Harry Debney’s fees is $15,000 per annum to acknowledge the additional duties linked to leading
the Audit and Risk Management Committee as Chairman.
As of 22 August 2023, James Spenceley has been appointed Chairman of the Remuneration and Nomination
Committee. To acknowledge the additional duties linked with this position, an additional $15,000 per annum will
be paid to James. Greg Ridder’s fees will remain unchanged, as he chose not to accept additional compensation
during his tenure as Chairman of the Remuneration and Nomination Committee until 22 August 2023.
All Directors’ fees include superannuation payments, to the extent applicable.
Independent Non‑Executive Directors are not eligible to participate in Kogan.com’s short‑term or long‑term
incentive programs.
Independent Non‑Executive Directors did not receive an adjustment to Directors’ fees in the 2023 financial year.
COMPANY PERFORMANCE
Relationship to remuneration policy
In considering the consolidated entity’s performance and the benefits of Shareholder wealth, the Committee
considered a range of indicators in respect of senior executive remuneration and linked these to the previously
described short and long term incentives.
At Kogan.com, we remunerate our KMP in a way which:
• aims to align executive interests with Shareholders;
•
is sufficiently competitive in the marketplace to enable us to attract, retain, and motivate exceptional talent; and
• encourages and rewards the behaviours and outcomes that will deliver business success and a good return for
our Shareholders.
To achieve this, we set challenging targets and monitor performance against them closely.
We have strengthened the connection between our key reward metrics and our business strategy by adapting the
performance conditions used for our STI.
We remain committed to the use of stretching performance metrics, and recognise the importance of having
performance conditions that are linked to customer engagement.
44
kogan.com annual RepoRt 2023
Shareholder wealth
The following table presents these indicators showing the impact of the Company’s performance on Shareholder
wealth, during the financial years:
Revenue (in $’m)
Net profit/(loss) after income tax
(NPAT)
Adjusted NPAT
Earnings per share (EPS)
Adjusted EPS
EBITDA (in $’m)
Adjusted EBITDA (in $’m)
Dividends paid (in $’m)
Share Price at 30 June
FY19
438.7
17.2
18.6
0.18
0.20
30.1
31.5
11.4
4.75
FY20
497.9
26.8
30.0
0.29
0.32
46.5
49.7
14.8
FY21
780.7
3.5
42.9
0.03
0.41
22.5
61.8
31.3
14.72
11.58
FY22
718.5
(35.5)
(2.9)
(0.33)
(0.03)
(21.8)
18.9
–
2.78
FY23
489.5
(25.9)
(7.7)
(0.24)
(0.07)
(20.8)
6.8
–
4.85
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
Profit amounts have been calculated in accordance with Australian Accounting Standards (AASB). EBITDA2 is
calculated based on the operating profit before interest, tax, depreciation and amortisation.
1. Adjusted EBITDA, Adjusted NPAT and Adjusted EPS are measures of the underlying performance of the Business, they remove non-cash items
including the unrealised FX gain/(loss), equity-based compensation and one-off non-recurring items. Refer to page 26 of this Annual Report
for a detailed reconciliation of adjusting items.
2. Non-IFRS measure.
3. Earnings Before Interest, Tax, Depreciation & Amortisation.
45
kogan.com annual RepoRt 2023
Remuneration Report continued
DETAILS OF REMUNERATION
KMP realised remuneration
The table below is a voluntary non‑statutory disclosure that displays actual cash remuneration (“realised remuneration”)
that the KMPs received in FY23 and FY22. It includes cash salary, superannuation contributions, STI earned and LTI
that vested during the period, including Mighty Ape – acquisition related remuneration that vested during the period.
This information differs from the statutory remuneration table found on the following page, which also includes
the expense for vested & unvested awards, along with other long term benefits, in accordance with Australian
Accounting Standards.
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
G. MacKinlay
S. Barton
Total
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
G. MacKinlay20
S. Barton
Total
Year
2023
2023
2023
2023
2022
2022
2022
2022
Fixed
Remun‑
eration19
448,792
388,292
235,745
170,399
1,243,229
447,068
386,568
15,945
279,104
1,128,685
Mighty Ape
– acquisition
related
remuneration
STI
Total
realised
remun eration
–
–
–
–
–
–
–
–
–
–
–
–
–
448,792
388,292
235,745
14,242,881
14,413,280
14,242,881
15,486,109
–
–
–
–
–
447,068
386,568
15,945
279,104
1,128,685
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
19.
Includes cash salary and superannuation consistent with statutory remuneration table in the next section, excluding accrued annual leave
entitlements.
20. Gracie MacKinlay was deemed a KMP following her appointment to CEO of Mighty Ape on 6 June 2022. This represents the period 6 June 2022
to 30 June 2022.
46
kogan.com annual RepoRt 2023
KMP statutory remuneration
Details of the statutory remuneration to the executive Key Management Personnel is set out below.
POST‑
EMPLOY‑
MENT
LONG
TERM
BENEFITS
EQUITY‑
BASED
COMPEN‑
SATION
SHORT TERM
Cash
Salary
$
Short‑Term
Incentives
$
Super‑
annuation
$
Annual
& long
service
leave
$
Share‑
Based
Payments21
$
Total
$
25,292
25,292
39,645
16,691,237
17,179,675
33,982
11,127,491
11,549,765
OTHER
LONG
TERM
BENEFITS
Mighty Ape –
acquisition
related
remun‑
eration
$
Total
$
–
–
–
17,179,675
11,549,765
340,940
–
–
–
15,222,128
10,244,160
17,398
6,866
30,040
–
5,060
75,155
34,137
340,940
209,596
(3,885,469)22
(3,675,873)
57,451
108,726
27,928,021
29,279,976
(3,885,469)
25,394,507
23,568
23,568
39,645
14,735,415
15,222,128
33,982
9,823,610
10,244,160
464
–
1,060
19,001
393
17,398
31,439
329,544
17,047,089
17,376,633
47,600
93,688 24,590,857
25,813,230
17,047,089
42,860,319
Year
2023
2023
2023
2023
2022
2022
2022
2022
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
G. MacKinlay
S. Barton
Total
Executive KMPs
R. Kogan
D. Shafer
Other KMPs
G. MacKinlay
S. Barton
Total
423,500
363,000
228,879
170,399
1,185,778
423,500
363,000
15,481
279,104
1,081,085
–
–
–
–
–
–
–
–
–
–
Any discrepancies between totals, sums of components and percentage variances in this table are due to rounding.
Mighty Ape – acquisition‑related remuneration
Mighty Ape acquisition related remuneration, refers to the payment of Mighty Ape Tranche 3 and Mighty Ape
Tranche 4 purchase price instalments as part of the Sale Agreement. Tranches 3 & 4 was contingent on the Mighty
Ape Founder, Simon Barton, remaining with the business until the delivery of the financial year 2022 and 2023 results,
respectively. In line with accounting standards, Tranches 3 & 4 payments have been considered as compensation for
post‑combination services, and as such, treated as employee remuneration for accounting purposes. The Group will
proportionately account for these expenses up until the respective payment dates.
During FY23, Tranche 3 of the Mighty Ape acquisition was paid to Simon Barton, totalling $14.3 million.
As at 30 June 2023 a total of $11.0 million has been provided for in relation to Tranche 4.
21. Share-based payments shown relate to the expense incurred in accordance with accounting standards for unvested Options awarded
to the CEO & CFO/COO and other Non-Executive KMP. KMP Share-Based Options at 22nd August 2023, as valued by SLM Corporate,
were worth $6,189,138 for Mr. Kogan, $4,126,092 for Mr. Shafer and $1,603 for Mr. Barton, respectively. Gracie MacKinlay held Performance
Rights on 22nd August 2023 worth $427,249.
22. The negative statutory value recorded here relates to a reversal of the over provision for Tranche 4 payment of the Mighty Ape Acquisition
in prior years.
47
kogan.com annual RepoRt 2023
Remuneration Report continued
Non‑Executive Directors’ remuneration
The table below sets out the remuneration paid to Non‑Executive Directors:
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
Total
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
Total
SHORT
TERM
BENEFITS
Total
fees
$
185,000
110,000
95,000
95,000
485,000
185,000
110,000
95,000
95,000
485,000
Year
2023
2023
2023
2023
2022
2022
2022
2022
POST‑
EMPLOY‑
MENT
BENEFITS
Super‑
annuation
$
–
–
–
–
–
–
–
–
–
–
Total
$
185,000
110,000
95,000
95,000
485,000
185,000
110,000
95,000
95,000
485,000
EQUITY INSTRUMENTS
Kogan.com successfully listed on the ASX on 7 July 2016. The following table presents the interests of each
Director/Key Management Personnel held directly, indirectly or beneficially, including their related parties:
No.
shares held
2023
%
ownership
2023
No.
shares held
2022
%
ownership
2022
15,853,321
15.08%
15,853,321
14.83%
5,225,642
4.97%
5,075,642
158,000
98,099
14,761
10,000
500
–
0.15%
0.09%
0.01%
0.01%
0.00%
‑%
158,000
98,099
4,761
–
500
–
4.75%
0.15%
0.09%
0.00%
‑%
0.00%
‑%
Ruslan Kogan
David Shafer
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
Gracie MacKinlay
Simon Barton
48
kogan.com annual RepoRt 2023
EXECUTIVE DIRECTORS AND OTHER KMP SERVICE AGREEMENTS
Notice and termination payments
Executives are on contracts with no fixed end date.
The following table captures the notice periods applicable to the termination of the Executive KMP and Other KMP
employment:
Executive KMP
CEO
CFO, COO
Other KMP
CEO – Mighty Ape
CFO – Mighty Ape
Termination notice
by Kogan.com
Termination notice
by employee
Termination
payments provided
for under contract
12 months
6 months
6 months
6 months
12 months
6 months
6 months
6 months
12 months
6 months
6 months
6 months
Executive and Other KMP Service Agreements
Prior to the Company’s ASX Listing on 7 July 2016, Ruslan Kogan and David Shafer were not subject to employment
arrangements and instead received profit distributions proportionate to their shareholdings in the Group.
Subsequent to Listing, Ruslan Kogan and David Shafer entered into employment contracts.
Simon Barton, Founder of Mighty Ape, had been determined to be a KMP from the acquisition date of Mighty Ape
Limited, 1 December 2020, and up until the time of his resignation on 31 March 2023.
Gracie MacKinlay was determined to be a KMP following her promotion to Chief Executive Officer – Mighty Ape
on 6 June 2022.
chief executive officer
Mr. Kogan is employed in the position of Chief Executive Officer of Kogan.com.
Kogan.com has entered into an employment contract with Mr Kogan to govern his employment with Kogan.com.
Mr. Kogan or Kogan.com may terminate Mr. Kogan’s employment by giving 12 months’ notice. Kogan.com may elect
to make payment in lieu of notice. Kogan.com may terminate Mr. Kogan’s employment without notice in circumstances
warranting summary dismissal.
Upon termination of Mr. Kogan’s employment, Mr. Kogan will be subject to a restraint of trade period of 12 months
during which time Mr. Kogan cannot compete with Kogan.com or provide services in any capacity to a competitor
of Kogan.com or solicit suppliers, clients or employees of Kogan.com. The enforceability of the restraint clause is
subject to all usual legal requirements.
The Board may invite Mr. Kogan to participate in Kogan.com’s incentive programs.
chief Financial officer and chief operating officer
Mr. Shafer is employed in the position of Chief Financial Officer and Chief Operating Officer of Kogan.com.
Kogan.com has entered into an employment contract with Mr. Shafer to govern his employment with Kogan.com.
Mr. Shafer or Kogan.com may terminate Mr. Shafer’s employment by giving 6 months’ notice. Kogan.com may elect
to make payment in lieu of notice. Kogan.com may terminate Mr Shafer’s employment without notice in circumstances
warranting summary dismissal.
49
kogan.com annual RepoRt 2023
Remuneration Report continued
Upon termination of Mr. Shafer’s employment, Mr. Shafer will be subject to a restraint of trade period of 6 months
during which time Mr. Shafer cannot compete with Kogan.com or provide services in any capacity to a competitor
of Kogan.com or solicit suppliers, clients or employees of Kogan.com. The enforceability of the restraint clause is
subject to all usual legal requirements.
The Board may invite Mr. Shafer to participate in Kogan.com’s incentive programs.
chief executive officer – mighty ape
Mrs. MacKinlay is employed in the position of Chief Executive Officer of Mighty Ape.
Kogan.com has entered into an employment contract with Mrs. MacKinlay to govern her employment with Mighty Ape.
Mrs. MacKinlay or Mighty Ape may terminate Mrs. MacKinlay’s employment by giving 6 months’ notice. Mighty Ape
may elect to make payment in lieu of notice. Mighty Ape may terminate Mrs. MacKinlay’s employment without notice
in circumstances warranting summary dismissal.
Upon termination of Mrs. MacKinlay’s employment, Mrs. MacKinlay will be subject to a restraint of trade period of
6 months during which time Mrs. MacKinlay cannot compete with Mighty Ape or provide services in any capacity to
a competitor of Mighty Ape or solicit suppliers, clients or employees of Mighty Ape. The enforceability of the restraint
clause is subject to all usual legal requirements.
The Board may invite Mrs. MacKinlay to participate in Kogan.com’s incentive programs.
KEY MANAGEMENT PERSONNEL TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Kogan Australia Pty Ltd entered into a Logistic Services Agreement with eStore Logistics Pty Ltd (“eStore”), in a
prior financial period, in relation to the provision of warehousing, distribution and logistics services by eStore to
Kogan Australia. Mr Kogan is a minority shareholder and Director of eStore. The agreement was entered into on
arm’s length terms.
KMP
Transaction type
Ruslan Kogan
Purchases from eStore warehousing
CONSOLIDATED GROUP
2023
$000
3,851
2022
$000
7,829
As at 30 June 2023, the total liability to eStore Logistics Pty Ltd was $253,873 (30 June 2022: $488,813).
The Directors’ Report is signed on behalf of the Board in accordance with a resolution of the Directors.
REMUNERATION FRAMEWORK REVIEW
With the anticipated expiry of the previously adopted 3‑year executive remuneration framework at the end FY23,
the Board determined to undertake a review of the executive remuneration framework for implementation in FY24.
The previous executive remuneration framework reflected the expectations and market position of the Business
in 2020, and included the following features:
1. the approach involved low amounts of cash in terms of salary and short‑term incentives, below market rates,
reducing the cash cost to the business,
2. the remuneration packages of top executives were largely based on an up‑front grant of service tested options
subject to annual vesting, intended to cover remuneration for 3 years (FY21 through to FY23 inclusive),
50
kogan.com annual RepoRt 2023
3. because of the high‑risk nature of the equity opportunity compared to cash and short‑term incentives, and the
low value of options at the time of the grant calculation, the number of options was significant, and
4. the value of the options at the time of the Annual General Meeting (AGM) was criticised by some stakeholders,
noting that the share price between the grant calculation date and the date of the AGM increased significantly.
This framework was viewed by the Board as creating a strong link between executive reward, and value creation
for shareholders, and a strong incentive to retain the high‑performing talent of the founding executives. In practice,
the framework produced mixed results, noting:
1. the executives were successfully retained, and
2. despite vesting due to service, there was no material value in the options at vesting due to volatility in the share
price; in that sense the link between performance and reward was appropriate in that executives received no
benefit from the equity structures while shareholders were not experiencing wealth creation. Executives only
received benefits/remuneration in the form of modest fixed remuneration as a result of this outcome, although
the Company does recognise the accounting cost of the vested equity (not a cash cost).
In order to ensure that the next iteration of the executive remuneration framework would meet the future needs of
the Business, its market position and strategy for FY24, and address feedback on the previous framework, the Board
engaged independent remuneration advisors to review:
1. the overall remuneration governance framework,
2. market and stakeholder feedback,
3. current peer practices,
4. variable remuneration design, and
5. market benchmarking for top executives, using a comparator group of 20 ASX listed companies of comparable
market value, with 10 larger and 10 smaller (balanced), and limited to a range of half to double the Company’s
market value.
As a result of the review, the Board has adopted a new remuneration framework for implementation in FY24, which it
believes will better align with well‑regarded market practices and stakeholder expectations, while still having strong
links to the strategy of the business. The outcomes of this framework review include the following notable changes:
1. the Board has adopted a policy for current and future equity grant approaches, to limit the opportunity for major
discrepancies between intended equity remuneration value, and the remuneration value shareholders will be
asked to approve, as arose in 2020. The policy is based on a 20‑day trading volume weighted average price (VWAP)
commencing the day after release of the audited financial results. This VWAP is divided into the intended
maximum/stretch grant dollar value, to determine the grant number.
2. Fixed remuneration has been reviewed to better align with market peers as at the end of FY23, as indicated by
independent benchmarking.
3. a short‑term incentive plan and opportunity will be re‑introduced to ensure that there are separate components
of remuneration creating links between reward and performance over both the short and long term.
4. the combination of the foregoing increases to cash remuneration opportunities, brings down the long‑term
incentive weighting and value to be approved by shareholders, when setting remuneration relative to market
peers i.e., the long‑term incentive component will be smaller than in previous years, but still retain a significant
and appropriate weighting in the remuneration mix.
5. the Board has developed a new equity plan, which shareholders will be asked to approve, based on a modern
equity design, and complies with recently amended regulatory frameworks. The plan will provide the Board with
significant flexibility to offer various forms of equity to various employees, however the plan provides no ability
to offer options as they are unnecessarily dilutive compared to modern alternatives.
6. the Board has determined that grants of equity will be made annually, which is consistent with typical ASX market
practices, rather than “ad‑hoc” as was previously the case.
51
kogan.com annual RepoRt 2023
Remuneration Report continued
7. the next grant of equity to top executives will include the following features, which are intended to address the
feedback on previous arrangements, the Company current strategy and market position:
a. Performance Rights will be used instead of options,
b. The Measurement Period over which performance service will be tested will be 3 years,
i.
for the FY24 introductory/transitionary grant there will be a tranche (50%) that is eligible to vest after
2 financial years, to smooth the transition into annual granting processes,
ii. grants made in future years are not intended to include a 2‑year tranche, noting that long term incentive
are generally defined as having a 3‑year minimum vesting period i.e. this tranche is intended to be a
one‑off arrangement.
c. Performance Rights will be subject to a ranked total shareholder return (rTSR) vesting condition, which is a
form of relative TSR that is intended to align vesting with the experience of shareholders, creating a strong
link between reward and performance from the perspective of shareholders. The comparator group will be
comprised of the constituents of ASX Consumer Discretionary classified entities at the commencement
of the test period, and subject to a typical vesting scale (50% vesting at P50 and 100% vesting at P75).
d. while the Board considered additional tranches with non‑TSR vesting conditions, the other types of vesting
conditions used by peers were not considered appropriate at the time of review (such as earnings per share
growth rate or return on equity, due to the Company’s recent history not being profitable, making the necessary
calculations impossible). The Board may consider additional tranches and performance metrics in future years,
as the business’ circumstances change.
8. the total remuneration packages of executives in FY24 are to be composed of fixed remuneration, short‑term
incentives and long‑term incentives (the latter being subject to shareholder approval), set relative to market
benchmarks and assessments obtained by the Board. Fixed remuneration is intended to be positioned around
P50, +20% to recognise the exceptional talent and performance of the incumbents and noting that a +/‑ 20%
range is a common policy adopted by ASX listed company boards to recognise individual differences and calibre
of executives. The total remuneration packages, including target short term and long‑term incentives, are
intended to fall in the high end of the range of observed relevant market practices, to also recognise the high
performance and high calibre of the incumbents, and to recognise differences in the roles of the incumbents
compared to typical ASX roles:
a. the incumbent executives are deeply invested in the business; the success of the business has been driven by
this team over many years and the Board and key stakeholders intend to continue to retain and incentivise the
incumbents to make exceptional contributions. The business has significantly outperformed peers and typical
ASX market returns in most years, due to the contributions of the incumbents,
b. both the ED/CEO and CFO/COO roles are larger‑than‑typical roles, in terms of their scope, accountability,
and impact on the business; where in most ASX listed companies these roles would be supported by a large
team of highly experienced ASX executive veterans, Kogan runs‑lean and seeks to retain its loyal employees
in supporting roles. As a result, many of the functions, responsibilities accountabilities and key impacts that
would usually be the responsibility of the executive team, are carried by or in large part guided by the
founders as the strategic drivers,
c. the CFO/COO role is not typical, and cannot be directly compared to peers on the ASX; being a broader
operational role, the incumbent is able to bring a level of strategy and engagement with the rest of the
business that is exceptional, making the assessed job size larger than a typical CFO and/or COO role, and
d. as a result of the foregoing, it is the Board’s view that it is appropriate to position the remuneration of the
executive team high in the market compared to peers, but with the majority of the package subject to
the achievement of challenging performance conditions.
52
kogan.com annual RepoRt 2023
9.
it should be noted that the FY23 Remuneration Report will not reflect any of these changes, due to the
requirement to report on practices in the reporting period. Instead, the changes to practice resulting from this
review and subsequent decisions of the Board will only start to become evident in the FY24 Remuneration Report,
and subsequent reports.
James Spenceley
Remuneration & Nomination Committee Chairman
Melbourne, 28 September 2023
53
kogan.com annual RepoRt 2023
Environmental, Social and Governance
Governance
The Kogan.com Board of Directors and senior management team consistently prioritise strong corporate governance
practices and maintain transparency with shareholders, team members, and suppliers.
Kogan.com operates with a predominantly independent Board of Directors, supported by a majority independent
Audit & Risk Committee and Remuneration & Nomination Committee. The Audit & Risk Committee convenes at
least twice annually, while the Remuneration & Nomination Committee meets at least once a year to fulfill their
respective roles.
Kogan.com is steadfast in its commitment to fulfilling its disclosure obligations as stipulated by the ASX Listing Rules
and the Corporations Act 2001 (Cth). These obligations are overseen by the Company’s Continuous Disclosure Policy.
The Company communicates crucial information to shareholders by filing all pertinent financial reports, continuous
disclosure announcements, and other relevant details with the ASX. Additionally, this information is readily accessible
on Kogan.com’s Corporate Website.
Modern Slavery and Ethical Sourcing
Kogan.com places a strong emphasis on fulfilling its obligations under the Australian Modern Slavery Act 2018
(the Modern Slavery Act) and is dedicated to continuously evaluating and enhancing its role in upholding human rights.
In accordance with the Modern Slavery Act and the Commonwealth Modern Slavery Act 2018 Guidance for Reporting
Entities (the Guidance), Kogan.com has carefully developed its Modern Slavery Statement. This statement can be
readily accessed on Kogan.com’s Corporate Website and discloses the annual measures taken by the company to
mitigate the risk of modern slavery within its own operations and supply chain.
Kogan.com boasts a complex global supply chain and is committed to exclusively collaborating with ethical suppliers.
The company insists that its suppliers adhere to the non‑negotiable requirements outlined in its Ethical & Sustainable
Sourcing Policy, with a preference for those who also align with the desirable elements as outlined in the same policy
(available on Kogan.com’s Corporate Website). Additionally, suppliers are mandated to maintain and provide evidence
of internationally recognised accreditation, such as BSCI, for their production facilities.
Kogan.com employs a risk‑based approach to pinpoint areas within its business that may be more susceptible to
modern slavery. Detailed information regarding the supply chain risk assessment and the proactive measures taken
to mitigate these risks can be found in the Kogan.com Modern Slavery Statement, which is available on the company’s
Corporate Website.
Kogan.com opposes modern slavery in all its forms.
The Kogan.com Team
The Kogan.com team thrives in a dynamic, high‑performance culture.
The Company’s success is built off technology and digital efficiency and it is our dedicated team that makes it all
happen. Kogan.com’s team is central to the business, its culture and its ability to outperform the expectations of
shareholders and customers.
The team’s training sessions (Lunch & Learns) are held across the business to drive engagement, career development
and growth opportunities among its team members. The Company’s highly skilled Software Engineering team holds
“Tech Talks” and Meetups for the industry, sharing knowledge and experiences with like minded professionals in
their field.
Kogan.com embraces growing talent from within our team. The business is dedicated to supporting the growth of our
team members, with many of the role appointments made coming from internal team promotion within the business.
Kogan.com recognises that a diverse workplace is achieved through merit‑based decision‑making which is integral
to building and sustaining a culture that fosters equal opportunity, diversity and inclusion. Kogan.com operates under
an Equal Opportunity, Merit and Diversity Policy, which can be located on Kogan.com’s Corporate Website.
54
kogan.com annual RepoRt 2023
Kogan.com continues to recognise the importance of gender and cultural diversity with a commitment to ensuring
all representatives have equal opportunity through a merit based approach. The team are provided with a learning
and development budget, to further enhance their skill sets in their chosen fields.
Our people and our culture are at the heart of our business operations and a key ingredient in our success.
Our Values
Each team member is encouraged to work according to the Company’s core values, which ensure that we individually
and collectively maintain focus on putting our customers first, being honest with ourselves and each other and being
the pioneers of our industry to deliver on the Company’s long term growth strategy.
Put our customer first
Deliver on promises and delight customers. Win customers for life. Use your creativity, imagination and energy
to deliver value.
Have fun
Don’t take yourself too seriously. Be positive and work as a team. Treat others as you’d like to be treated.
Be honest
With yourself, customers & co‑workers. Confront the facts, even the hard ones. Think from first principles.
Pioneer
Experiment, fail fast, learn quickly, fix things quickly, and repeat. Embrace technology and change. Have an open mind
and don’t be afraid of a challenge. We’re changing the way people shop. There is always a better way – challenge the
status quo.
Do more with less
Do things in the most efficient way possible. Being frugal allows us to keep prices low for customers.
Keep it real
Focus on doing good, not looking good. Ensure merit‑based decisions by placing facts at the heart of your processes.
Concentrate on real life results and being objective. Always put health and safety first; nothing is more important.
Have high expectations
Work collaboratively, give your best in your work, and expect the same of the team.
Think long term
We’re creating customers for life and a company that’s built to last. Take the short term pain for a long term gain.
Step up
Do what it takes. Solve problems that need to be solved. Be a doer.
55
kogan.com annual RepoRt 2023
Environmental, Social and Governance continued
Safety, Health and Wellbeing
The safety, health and wellbeing of the Kogan.com team are the Company’s top priorities. The Company takes all
measures necessary to ensure that its team is safe.
Since the beginning of the COVID‑19 pandemic, Kogan.com has supported a flexible work model for its team
members as well as providing all the necessary facilities to offer a productive and safe office environment.
The health and wellbeing, including mental health, of our team members is imperative. There are various health and
wellbeing related activities the team are encouraged to participate in including yoga, pilates, meditation, Kogan.com
Fitness Squad activities including marathons, fun runs, Corporate Games, team group social activities and team event
celebrations (onsite and virtual) to keep the team connected. In addition, all team members have access to the
Company’s independent and confidential Employee Assistance Program (EAP) if required.
56
Auditor’s Independence Declaration
kogan.com annual RepoRt 2023
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Kogan.com Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit of Kogan.com Ltd for the
financial year ended 30 June 2023 there have been:
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
i.
ii.
KPM_INI_01
KPMG
Simon Dubois
Partner
Melbourne
28 September 2023
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the
independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.
57
kogan.com annual RepoRt 2023
Financial Report
59 Consolidated Income Statement and Consolidated
93 SECTION 4: Group Structure
93 4.1 Controlled Entities
94 4.2 Deed of Cross Guarantee
94 4.3 Parent Entity Disclosures
95 4.4 Related Parties
95 SECTION 5: Employee Reward and Recognition
95 5.1 Key Management Personnel Compensation
97 5.2 Incentive Plans
106 SECTION 6: Other
106 6.1 Subsequent Events
106 6.2 Remuneration of Auditors
106 6.3 Commitments
106 6.4 Contingent Liabilities
106 6.5 Company Information
107 Directors’ Declaration
108 Independent Auditor’s Report
113 Shareholder Information
116 Corporate Directory
Statement of Other Comprehensive Income
60 Consolidated Statement of Financial Position
61 Consolidated Statement of Changes in Equity
62 Consolidated Statement of Cash Flows
63 Notes to the Financial Statements
63 Basis Of Preparation
63 a. Principles of Consolidation
63 b. Uses of Judgements and Estimates
64 c. Common Control Transaction
64 d. Functional and Presentation Currency
64 e. New Accounting Standards and Interpretations
65 Segment Information
65 a. Basis of segmentation
65 b. Segment information provided to the Board
66 SECTION 1: Business Performance
66 1.1 Revenue
67 1.2a Operating activities
67 1.2b Finance costs
67 1.3 Tax Balances
71
1.4 Notes to the Cash Flow Statement
71 SECTION 2: Operating Assets And Liabilities
71 2.1 Working Capital
75 2.2 Intangible Assets
79 2.3 Property, Plant and Equipment
81 SECTION 3: Capital Structure And Financing
81 3.1 Loans and Borrowings
82 3.2 Capital and Financial Risk Management
90 3.3.1 Issued Capital and Reserves
92 3.3.2 Dividends
92 3.4 Earnings per Share
58
kogan.com annual RepoRt 2023
Consolidated Income Statement and
Consolidated Statement of Other
Comprehensive Income
For the Year Ended 30 June 2023
Revenue
Cost of sales
Gross profit
Other Income
Selling and distribution expenses
Warehouse expenses
Administrative expenses
Other expenses
Results from operating activities
Finance income
Finance costs
Unrealised gain/(loss)
Net finance (cost)
(Loss) before income tax
Tax benefit
(Loss) after income tax
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange gain/(loss) on translation of foreign operations
Other comprehensive income/(loss) for the year
Total comprehensive (loss) for the year
Basic earnings per Share
Diluted earnings per Share
The accompanying notes form part of these financial statements.
Note
1.1
1.2a
CONSOLIDATED GROUP
2023
$000’s
2022
$000’s
489,494
718,504
(352,931)
(534,076)
136,563
184,428
–
5,129
(54,215)
(79,217)
(13,549)
(24,553)
(103,073)
(121,702)
(2,072)
(36,346)
853
1.2b
(2,660)
96
(2,204)
(38,119)
48
(2,467)
(2,170)
(1,711)
(4,589)
(38,057)
(42,708)
1.3
12,205
7,251
(25,852)
(35,457)
451
451
(809)
(809)
(25,401)
(36,266)
3.4a
3.4b
(0.24)
(0.23)
(0.33)
(0.33)
59
kogan.com annual RepoRt 2023
Consolidated Statement
of Financial Position
As at 30 June 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Prepayments and other assets
Current tax assets
TOTAL CURRENT ASSETS
NON‑CURRENT ASSETS
Property, plant and equipment
Intangible assets
Deferred tax assets
TOTAL NON‑CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Acquisition payables
Lease liabilities
Employee benefits
Provisions
Deferred income
TOTAL CURRENT LIABILITIES
NON‑CURRENT LIABILITIES
Loans & borrowings
Lease liabilities
Employee benefits
TOTAL NON‑CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Merger reserve
Other reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of the financial statements.
60
CONSOLIDATED GROUP
Note
2023
$000’s
2022
$000’s
2.1.2a
2.1.1
2.1.2b
1.3
2.3
2.2
1.3
2.1.3a
2.1.3a
2.1.3b
2.1.3c
3.1
2.1.3b
3.3.1a
3.3.1c
65,438
5,432
68,158
146
2,928
755
66,230
5,357
159,898
532
2,785
716
142,857
235,518
17,214
88,153
25,834
131,201
274,058
61,429
10,957
7,532
1,743
2,862
13,155
97,678
–
8,200
462
8,662
106,340
167,718
291,014
(131,816)
71,431
(62,911)
24,642
92,077
8,073
124,792
360,310
83,021
29,086
7,670
1,929
2,072
13,773
137,551
34,869
14,993
261
50,123
187,674
172,636
301,082
(131,816)
40,429
(37,059)
167,718
172,636
kogan.com annual RepoRt 2023
Consolidated Statement
of Changes in Equity
For the Year Ended 30 June 2023
Share
Capital
$000
Retained
earnings
$000
Merger
reserve
$000
Note
CONSOLIDATED GROUP
Share‑
based
pay‑
ments
reserve
$000
Trans‑
lation
reserve
$000
Total
Equity
$000
299,186
(2,289)
(131,816)
(19)
15,667
180,729
3.3.1b
1,021
875
–
1,896
Equity‑settled share‑based payments
5.2c
Balance at 1 July 2021
Comprehensive income
Net loss after tax
Retained earnings relates to prior financial
years
Other comprehensive expense
Total net loss and other comprehensive
expense for the year
Transactions with owners,
in their capacity as owners
Issue of Ordinary Shares under
performance plans
Tax deduction for difference between
accounting expense and funds paid to
issue incentive plans
Total transactions with owners
and other transfers
Balance at 30 June 2022
Balance at 1 July 2022
Comprehensive income
Net loss after tax
Other comprehensive income
Total net loss and other comprehensive
expense for the year
Transactions with owners,
in their capacity as owners
Issue of Ordinary Shares under
performance plans
Tax deduction for difference between
accounting expense and funds paid to
issue incentive plans
3.3.1b
716
3
–
Equity‑settled share‑based payments
5.2c
Share buy‑back
3.3.1b
(10,787)
Total transactions with owners
and other transfers
(10,068)
–
–
–
–
(35,457)
687
–
(34,770)
–
–
–
(25,852)
–
(25,852)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(809)
(809)
–
–
–
–
(35,457)
687
(809)
(35,579)
–
–
–
–
(1,021)
–
–
875
26,611
26,611
25,590
27,486
–
–
–
–
–
–
–
–
–
451
451
–
–
–
–
–
–
–
–
(25,852)
451
(25,401)
(716)
–
–
3
31,267
31,267
–
(10,787)
30,551
20,483
301,082
(37,059)
(131,816)
(828)
41,257
172,636
301,082
(37,059)
(131,816)
(828)
41,257
172,636
Balance at 30 June 2023
291,014
(62,911)
(131,816)
(377)
71,808
167,718
The accompanying notes form part of the financial statements.
61
kogan.com annual RepoRt 2023
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs paid
Income tax paid
CONSOLIDATED GROUP
Note
2023
$000’s
2022
$000’s
509,930
744,950
(432,295)
(678,455)
853
(2,040)
(5,591)
48
(1,733)
(2,971)
Net cash provided by operating activities
1.4
70,857
61,839
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Purchase of intangible assets
Disposal of intangible assets
Disposal of financial assets
Business acquisition net of acquired cash23
Net cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans & borrowings
Draw down on debt facility
Transaction costs on draw down facility
Payments for shares bought back
Repayment of lease liabilities
Net cash (used in) financing activities
Net (decrease) in cash held
Cash and cash equivalents at beginning of financial year
Effects of exchange rate changes on cash
(404)
(3,756)
–
351
(1,505)
(4,054)
2,672
–
(14,243)
(29,891)
(18,052)
(32,778)
(36,033)
(48,980)
1,033
–
(10,787)
5,000
(9)
–
(8,004)
(10,252)
(53,791)
(54,241)
(986)
(25,180)
66,230
194
91,691
(281)
Cash and cash equivalents at end of financial year
3.2
65,438
66,230
The accompanying notes form part of the financial statements.
23. FY22 relates to the payment of Mighty Ape Tranche 2. FY23 relates to the payment of Mighty Ape Tranche 3.
62
kogan.com annual RepoRt 2023
Notes to the Financial Statements
For the Year Ended 30 June 2023
BASIS OF PREPARATION
The financial report of Kogan.com Ltd and its controlled entities (“the Group”; “Kogan.com”) for the year ended
30 June 2023 was authorised for issue in accordance with a resolution of the Directors on 28 September 2023.
The Group is a for‑profit entity for financial reporting purposes under Australian Accounting Standards and the
nature of its operations and principal activities are described in the Director’s Report on page 28.
These General Purpose Financial Statements have been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the Australia Accounting Standards Board and International
Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).
Accounting policies adopted in the preparation of these financial statements are presented below and have been
consistently applied unless stated otherwise.
The accounting policies applied in these financial statements are the same as those applied in the Group’s
consolidated financial statements as at and for the year ended 30 June 2022.
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on
historical costs, modified, where applicable, by the measurement at fair value of financial assets and financial liabilities.
Kogan.com is a Company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance with that instrument, amounts in the Directors’ Report and the Financial
Report are rounded to the nearest thousand dollars, except where otherwise indicated.
a. Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the Group, in line with
AASB 10 Consolidated Financial Statements. Subsidiaries are entities the parent controls. The parent controls an
entity when it’s exposed to, or has rights to, variable returns from the involvement with the entity and has the ability
to affect those returns through its power over the entity. A list of the subsidiaries is provided in Note 4.1.a.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group
from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the
date that the control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions
between group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed
and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.
b. Uses of Judgements and Estimates
In preparing the financial report, management has made judgements, estimates and assumptions that affect the
application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively.
Estimates that have the most significant effect on the amounts recognised in the financial statements are:
•
•
•
•
the provisions for warranties and sales returns, which are based on estimates from historical warranty and sales
returns data associated with similar products and services. The Group expects to incur most of the liability over
the next financial year.
the assessment of the carrying value of non‑current assets, including intangible assets, which is based on
management’s assessment of the nature of the capitalised costs and their expected continued contribution
of economic benefit to the Group, having regard to actual and forecast performance and profitability.
the provision for slow moving and obsolete inventory, which is based on estimates of net realisable value.
the valuation of Goodwill, which is based on value in use calculations.
Key estimates and judgements have not changed from those disclosed in the Group financial report for the year
ended 30 June 2022.
63
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
c. Common Control Transaction
On 6 July 2016 Kogan.com Ltd acquired control of Kogan Operations Holdings Pty Ltd and subsidiaries at book value
for consideration in preparation for the Initial Public Offering and the Group’s admission to the ASX on 7 July 2016
pursuant to a replacement prospectus dated 24 June 2016.
d. Functional and Presentation Currency
These consolidated financial statements are presented in Australian dollars, which is the Parent’s functional currency.
e. New Accounting Standards and Interpretations
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current
annual reporting period. Their adoption has not had any material impact on the disclosures or on amounts reported
in these financial statements.
The following Standards and Interpretations are issued but not yet effective. The effects of adopting these
in the following financial years are not expected to be material:
(i) AASB 17 Insurance Contracts; AASB 2020-5 Amendments to Australian Accounting Standards – Insurance
Contracts and AASB 2022-01 Amendments to Australian Accounting Standards – Initial application of AASB17
and AASB 9 – Comparative Information; AASB 2022-8 Amendments to Australian Accounting Standards
– Insurance Contracts: Consequential Amendments (effective 1 January 2023);
(ii) AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and
Definition of Accounting Estimates (effective 1 January 2023);
(iii) AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities
arising from a Single Transaction (effective 1 January 2023);
(iv) AASB 2022-7 Editorial Corrections to Australian Accounting Standards and Repeal of Superseded and
Redundant Standards (effective 1 January 2023);
(v) AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current
or Non-current (effective 1 January 2024);
(vi) AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants
(effective 1 January 2024); and
(vii) AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements (effective
1 January 2024).
64
kogan.com annual RepoRt 2023
SEGMENT INFORMATION
a. Basis of segmentation
The Group has the following two operating divisions, Kogan.com and Mighty Ape. These operating divisions offer
different products and services and are managed separately because they require different product sourcing and
marketing strategies.
The Board considers the business primarily from an operating divisions perspective, and receives monthly reports
that allow them to make strategic decisions about resource allocation to each. On this basis, management has
identified the operating divisions as the Group’s two reporting segments.
The Board monitors the performance of these two segments separately. The Group does not operate under any
other operating division.
REPORTABLE SEGMENTS OPERATIONS
Kogan.com
Online retailer and marketplace selling in‑house and third‑party brand household and
consumer electronics products, as well as providing services for telecommunication,
internet, insurance, home finances, utilities, vehicles and travel.
Mighty Ape
Online specialist retailer of gaming and entertainment products.
b. Segment information provided to the Board
Information related to each reportable segment, split by primary geographical market, is set out below.
Segment Adjusted EBITDA is used to measure performance as management believes that this information
is the most relevant in evaluating the results of the respective segments relative to other entities that operate
in the same sectors.
REPORTABLE SEGMENT
KOGAN.COM
MIGHTY APE
TOTAL
30 June 2023
Segment revenue
Adjusted EBITDA
Finance income
Finance costs
Depreciation and amortisation
Total Segment assets
Capital expenditure
Total Segment liabilities
(Australia)
$000’s
(New
Zealand)
$000’s
(Australia)
$000’s
(New
Zealand)
$000’s
$000’s
300,816
33,882
14,845
139,951
489,494
(2,003)
(226)
603
8,439
751
(2,232)
(11,412)
–
–
–
–
–
–
102
(428)
6,813
853
(2,660)
(5,172)
(16,584)
204,178
23,836
1,536
44,508
274,058
3,850
78,638
–
2,726
–
–
310
4,160
24,976
106,340
65
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
REPORTABLE SEGMENT
KOGAN.COM
MIGHTY APE
TOTAL
30 June 2022
Segment revenue
Adjusted EBITDA
Finance income
Finance costs
Depreciation and amortisation
Total Segment assets
Capital expenditure
(Australia)
$000’s
(New
Zealand)
$000’s
(Australia)
$000’s
(New
Zealand)
$000’s
$000’s
523,020
32,054
6,197
45
(2,038)
(14,040)
310,005
4,585
380
–
–
–
7,995
–
21,875
1,787
141,555
718,504
10,544
18,908
–
–
–
3
(429)
(5,163)
48
(2,467)
(19,203)
3,714
38,596
360,310
–
–
974
5,559
24,901
187,674
Total Segment liabilities
160,469
2,304
SECTION 1: Business Performance
1.1 Revenue
Sale of goods
Revenue is recognised when the Group satisfies its performance obligation by transferring a promised good to a
customer. When a performance obligation is satisfied, the Group recognises as revenue the amount of the transaction
price which excludes the associated costs and possible return of goods. Prior to these conditions being met, receipts
from the sale of the goods are recorded in deferred income. Revenue is measured net of returns, trade discounts
and volume rebates.
The majority of sales undertaken by Kogan.com are through the website, where payment is received upfront.
Kogan.com is an online‑only retailer. Each sale represents a separate identified contract with a customer for which
generally two performance obligations are expected: sales of goods and delivery revenue.
The timing of transfer of control varies depending on the individual terms of the sales agreement. For sale of goods,
transfer usually occurs upon dispatch of the goods, where control is contractually transferred to the customer.
A provision for warranties is recognised when the underlying products or services are sold, based on historical
warranty data and a specific review of warranty claims outstanding.
A provision for sales returns is recognised for the expected value of returns, based on historical sales return data
and a specific review of the profile of sales for the period and post period‑end.
Rendering of services
Revenue from the rendering of services is recognised when management has fulfilled its service obligations to the
Group’s customers, recovery of the consideration is probable, and the amount of revenue can be measured reliably.
Revenue is measured net of returns and trade discounts.
The timing of revenue recognition varies depending on the individual terms of the services agreement and the
contractual obligations of the Group.
Revenue from the rendering of services is deferred when a customer has paid up front but the Group has not yet
fulfilled its obligations to the customer, in line with the terms and conditions of sale.
66
kogan.com annual RepoRt 2023
2023
$000
2022
$000
419,992
651,561
40,474
26,283
46,318
15,496
486,749
713,375
1,627
1,118
2,745
4,223
906
5,129
489,494
718,504
2023
$000
2022
$000
352,931
534,076
67,051
16,584
85,475
19,203
2023
$000
305
921
610
824
2022
$000
396
990
781
300
2,660
2,467
Revenue
Sales revenue:
sale of goods24
rendering of services
Kogan FIRST membership
Other revenue:
marketing subsidies
other revenue
Total revenue
1.2a Operating activities
expenses
Cost of sales
Employee benefit expense
Depreciation and amortisation expense
1.2b Finance costs
Realised foreign exchange losses
Finance costs on debt facilities
Interest Expense
Bank Fees
Total finance costs
1.3 Tax Balances
Income tax expense (income) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities
(assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax assets and deferred tax liability balances during
the year as well as unused tax losses.
24. Includes associated delivery fee income.
67
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates
to items that are recognised outside profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled and their measurement also reflects the manner in which management
expects to recover or settle the carrying amount of the related assets or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Deferred tax assets and liabilities are offset where: (i) a legally enforceable right of set‑off exists; and (ii) the deferred
tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the
respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liability
are expected to be recovered or settled.
The components of tax (benefit)/expense comprise:
Current Tax
Deferred Tax
Under/(Over) provision in respect of prior year
Income tax (benefit) attributable to the Group
CONSOLIDATED GROUP
2023
$000
2022
$000
3,702
4,694
(17,761)
(11,855)
1,854
(12,205)
(90)
(7,251)
The prima facie tax on (loss)/profit from ordinary activities before income tax is
reconciled to income tax as follows:
Prima facie tax on (loss)/profit from ordinary activities before income tax at 30% (2022: 30%):
• Consolidated Group
(11,417)
(12,812)
• Effect of expenses that are not deductible in determining taxable profit
• Effect of revaluations that are not deductible in determining taxable profit
• Effect of other deductibles in determining taxable profit
• Effect of other non‑allowable items (Mighty Ape Tranche 3 & 4)
• Effect of capital loss on disposal of Wonderfi shares
• Effect of prior year losses recognised in current tax
• Effect of variations in tax rates of foreign controlled entities
• Under/(Over) provision in respect of prior year
• Other
Income tax (benefit) attributable to the Group
The applicable weighted average effective tax rates are as follows:
119
(569)
95
(1,166)
623
(1,842)
(134)
1,854
232
(12,205)
32%
393
569
(454)
5,114
–
–
(193)
(90)
222
(7,251)
17%
The Group’s consolidated effective tax rate for the 12 months ended 30 June was 32% (for the 12 months ended
30 June 2022: 17%). The effective tax rate is impacted by the difference in accounting versus tax treatment of the
Mighty Ape Tranche 4 payment. For Australian income tax purposes, amounts paid for the acquisition of Mighty Ape
shares are considered as capital in nature and are therefore non‑deductible, rather increasing the tax cost base of the
shares. No deferred tax asset is recognised due to it being probable that the temporary difference will not reverse in
the foreseeable future.
68
kogan.com annual RepoRt 2023
Effective tax is impacted by the differences between when an amount of revenue or expense is recognised for
accounting purposes and when income and deductions are recognised under the tax laws.
CONSOLIDATED GROUP
2023
$000
2022
$000
755
25,834
26,589
716
8,073
8,789
BALANCE AT 30 JUNE
Current and deferred tax balances
Assets
CURRENT
Current tax asset
Deferred tax asset
Total
movements in deferred tax balances
2023
$000
Net
balance
at 1 July
Under/
Over
Recog‑
nised in
profit or
loss
Recog‑
nised in
OCI
Recog‑
nised
directly
to equity
Acqui‑
sitions
Other
Net
Deferred
tax
assets
Deferred
tax
liabilities
Property, plant
& equipment
(5,256)
Intangible assets
(10,832)
–
828
3,001
86
4,419
825
12,377
2,625
8,073
Financial assets
Employee benefits
Provisions
Deferred Income
Lease Liability
Other items
Share‑based
payments reserve
Tax losses
carried forward
Tax assets
(liabilities)
before set‑off
Set‑off of tax
Net tax assets
(liabilities)
–
–
–
–
–
–
–
–
–
–
–
1,765
1,207
(29)
(17)
(935)
(86)
(1,901)
(332)
9,165
8,924
17,761
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,491)
(9,625)
(29)
811
55
256
–
811
2,066
2,066
(0)
–
2,518
2,518
493
493
21,542
21,542
11,549
11,549
(3,546)
(9,880)
(29)
–
–
–
–
–
–
–
–
25,834
39,290
(13,456)
–
(13,456)
13,456
25,834 25,834
–
69
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
2022
$000
Net
balance
at 1 July
Under/
Over
Recog‑
nised in
profit or
loss
Recog‑
nised in
OCI
Recog‑
nised
directly
to equity
Acqui‑
sitions
Other
Net
Deferred
tax
assets
Deferred
tax
liabilities
BALANCE AT 30 JUNE
Property, plant
& equipment
(1,855)
Intangible assets
(13,696)
(76)
619
2,182
172
2,963
1,079
4,700
166
(3,746)
Financial assets
Employee benefits
Provisions
Deferred Income
Lease Liability
Other items
Share‑based
payments reserve
Tax losses
carried forward
Tax assets
(liabilities)
before set‑off
Set‑off of tax
Net tax assets
(liabilities)
–
–
–
–
–
–
–
–
–
–
–
(3,401)
2,864
76
209
819
(86)
1,456
(254)
7,677
2,754
12,114
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(295)
(295)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(5,256)
(10,832)
–
828
–
–
–
828
3,001
3,001
(5,256)
(10,832)
–
–
–
86
198
(112)
4,419
4,419
825
825
12,377
12,377
2,625
2,625
–
–
–
–
8,073
24,273
(16,200)
– (16,200)
16,200
8,073
8,073
–
70
kogan.com annual RepoRt 2023
1.4 Notes to the Cash Flow Statement
Reconciliation of Cash Flows from Operating Activities with Loss after Income Tax
(Loss) after income tax
Non‑cash flows in profit:
• depreciation & amortisation
• provision for aged and slow‑moving stock
• Mighty Ape Tranche 3 & 4 Accrual
•
issue of Performance Rights and Shares
• unrealised (gain)/loss on financial instruments
•
income tax (benefit)/expense
• other
Changes in assets and liabilities:
•
•
(increase) in trade and term receivables
(increase) in prepayments and other assets
• decrease in inventories
•
•
•
•
(decrease) in trade payables and accruals
(decrease)/increase in deferred income
increase/(decrease) in provisions
tax paid
Cash flows from operating activities
CONSOLIDATED GROUP
2023
$000’s
2022
$000’s
(25,852)
(35,457)
16,584
(3,632)
(3,885)
31,267
(96)
(12,205)
101
(1,063)
(139)
19,203
4,934
17,047
26,611
2,170
(7,251)
(71)
(5,138)
(483)
95,919
62,108
(20,709)
(19,783)
(647)
805
(5,591)
1,925
(1,005)
(2,971)
70,857
61,839
SECTION 2: Operating Assets And Liabilities
2.1 Working Capital
2.1.1 Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the
weighted average cost principle and includes all direct costs attributable to purchase, such as freight and insurance.
CURRENT
Inventory in transit
Inventory on hand
Total inventories
CONSOLIDATED GROUP
2023
$000
2022
$000
7,553
60,605
68,158
21,982
137,916
159,898
71
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
In 2023, inventories of $353 million (2022: $534 million) were recognised as an expense during the year and included
in ‘cost of sales’.
In addition, inventories have been reduced by $3.9 million (2022: $7.5 million) as a result of the write‑down to net
realisable value. This write‑down was recognised as an expense during the year.
2.1.2a trade and other receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the
ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period
are classified as current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any provision for impairment.
CURRENT
Trade receivables
Other receivables
Total trade and other receivables
Credit risk
CONSOLIDATED GROUP
2023
$000
2022
$000
4,422
1,010
5,432
4,434
923
5,357
The Group has no significant concentration of credit risk with respect of any single counterparty or group of
counterparties other than those receivables specifically provided for and mentioned within Note 3.2. The class of
assets described as “trade and other receivables” is considered to be the main source of credit risk related to the
Group.
On a geographical basis, the Group has significant credit risk exposures in Australia given the substantial operations
in this region. The Group’s exposure to credit risk for receivables at the end of the reporting period in those regions
is as follows:
AUD
Australia
New Zealand
CONSOLIDATED GROUP
2023
$000
4,834
598
5,432
2022
$000
4,941
416
5,357
The following table details the Group’s trade and other receivables exposed to credit risk with ageing analysis
and impairment provided for thereon. Amounts are considered as “past due” when the debt has not been settled,
within the terms and conditions agreed between the Group and the customer or counterparty to the transactions.
Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided
for where there are specific circumstances indicating that the debt may not be fully repaid to the Group.
The balance of receivables that remain within initial trade terms (as detailed in the table) is considered to be
of high credit quality.
72
kogan.com annual RepoRt 2023
PAST DUE BUT NOT IMPAIRED
(DAYS OVERDUE)
Gross
Amount
$000
Past Due
and
Impaired
$000
< 30
$000
31‑60
$000
61‑90
$000
> 90
$000
4,422
1,010
5,432
4,434
923
5,357
–
–
–
–
–
–
3,962
1,010
4,972
4,311
923
5,234
165
–
165
53
–
53
68
–
68
23
–
23
227
–
227
47
–
47
2023
Trade and term receivables
Other receivables
Total
2022
Trade and term receivables
Other receivables
Total
2.1.2b prepayments and other current assets
CURRENT
Prepayments
Rental bond
Total prepayments and other assets
2.1.3a trade and other payables
CONSOLIDATED GROUP
2023
$000
2022
$000
2,681
247
2,928
2,538
247
2,785
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at
the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within
45 days of recognition of the liability.
CURRENT
Trade payables
Other payables
Total Trade and other payables
CURRENT
Mighty Ape Tranche 3
Mighty Ape Tranche 4
Total Acquisition payables
CONSOLIDATED GROUP
2023
$000
2022
$000
40,924
20,505
61,429
–
10,957
10,957
59,643
23,378
83,021
14,804
14,282
29,086
73
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Mighty Ape – acquisition‑related remuneration
Mighty Ape acquisition related remuneration refers to the provision for the likely payment of Mighty Ape Tranche 4
purchase price instalments as part of the Sale Agreement, which are contingent on the Mighty Ape Founder & former
CFO, Simon Barton, remaining with the Business until 31 March 2023. The remaining payable balance as at 30 June 2023
will be paid after the delivery of the audited financial year 2023 results.
In line with accounting standards, the Tranche 4 payment has been considered as compensation for post‑combination
services, and as such, treated as employee remuneration for accounting purposes. The Group has proportionately
accounted for these expenses up until 31 March 2023.
2.1.3b lease liability
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group
assesses whether:
• The contract involves the use of an identified asset – this may be specified explicitly, and should be physically,
or represent substantially, all the capacity of a physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
• The Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout
the period of use; and
• The Group has the right to direct the use of asset. The Group has this right when it has the decision‑making rights
that are most relevant to determining how and for what purpose the asset is used. In rare cases where all the
decisions about how and for what purpose the asset is used are predetermined, the Group has the right to direct
the use of the asset if either;
• The Group has the right to operate the asset; or
• The Group designed the asset in a way that predetermines how and for what purpose it will be used.
As a lessee
The Group recognises a right‑of‑use asset and a lease liability at the lease commencement date. The right‑of‑use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset, less any lease incentives received.
The right‑of‑use asset is subsequently depreciated using the straight‑line method from the commencement date
to the earlier of the end of the useful life of the right‑of‑use or the end of the lease term. The estimated useful lives
of the right‑of‑use assets are determined on the same basis as those property, plant and equipment. In addition,
the right‑of‑use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise:
•
fixed payments, including in‑substance fixed payments;
• amounts expected to be payable under a residual guarantee; and
•
lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option,
and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
74
kogan.com annual RepoRt 2023
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s
estimate of the amount expected to be payable under a residual value guarantee or if the Group changes its
assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right‑of‑use asset, or is recorded in profit or loss if the carrying amount of the right‑of‑use asset has been
reduced to zero.
The Group presents right‑of‑use assets that do not meet the definition of investment property in ‘property, plant and
equipment’ and lease liabilities separately in the statement of financial position. As at 30 June 2023, the net carrying
amount of the right‑of‑use asset is $15.1 million (2022: $22.1 million), please refer to note 2.3.
The lease liability as of 30 June 2023 is presented below:
Lease liability – Maturity analysis
Maturity analysis – contractual undiscounted cash flows
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities as at 30 June
Lease liabilities included in the statement of financial position as at 30 June
Current
Non‑current
2.1.3c Deferred Income
2023
$000
8,810
8,642
–
17,452
15,732
7,532
8,200
2022
$000
8,795
14,252
942
23,989
22,663
7,670
14,993
Deferred Income relates to receipts from the sale of the goods which have not been dispatched, unfulfilled services
to be performed under the Group’s Kogan FIRST and Primate loyalty programs and advertising fees received upfront
with the obligation to be fulfilled in a future period as per the agreement.
CURRENT
Deferred Income
Total Deferred Income
2.2 Intangible Assets
(i) Website development and software costs
2023
$000
2022
$000
13,155
13,155
13,773
13,773
Website development and software costs are measured at cost less any accumulated amortisation and accumulated
impairment losses. Such development costs are only capitalised if they can be reliably measured, the process is
technically and commercially feasible, future economic benefits are probable, and the Group has sufficient resources
to complete development.
75
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
(ii) Intellectual property
Acquired intellectual property, including customer lists, which enable direct marketing of products and services,
are capitalised to the extent it is probable that expected future economic benefits attributable to the asset will flow
to the entity, and the cost can be reliably measured.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands,
is recognised in profit or loss as incurred.
(iv) amortisation
Amortisation is calculated to write‑off the cost of intangible assets less their estimated residual values using
the straight‑line method over their estimated useful lives and is generally recognised in the Statement of
Comprehensive Income.
Intangibles that are considered to have indefinite useful lives are not subject to amortisation.
The estimated useful lives for the current and comparative periods are as follows:
Patents and trademarks – general
Patents and trademarks – Matt Blatt
Website development costs
Software costs
Intellectual property
Brand Names
2.5 years
10.0 years
2.5 years
2.5 years
2.0 years
10.0 – 15.0 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted,
if appropriate.
(v) Impairment of assets
At each reporting date, the Group reviews the carrying amounts of its non‑financial assets (other than inventories
and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists,
then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (CGU).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell.
Value in use is based on the estimated future cash flows, discounted to their present value using a pre‑tax discount
rate that reflects current marketing assessments of the time value of money and the risks specific to the asset
or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in the Statement of Comprehensive Income. They are allocated to reduce the
carrying amount of assets in the CGU on a pro‑rata basis only if Goodwill has been fully impaired. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
76
kogan.com annual RepoRt 2023
(vi) Impairment testing for goodwill
Goodwill arising on the acquisition of Mighty Ape in New Zealand of $46.3 million, has been allocated to the
Mighty Ape Cash Generating Unit (“CGU”) based on its expected earnings contribution to the Group arising from
the acquisition.
The recoverable amount of the Mighty Ape CGU has been determined based on a value in use calculation using cash
flow projections over a 5‑year period based on financial budgets approved by the Group’s Board for FY24 together
with detailed management forecasts for future years. The projected cash flows have been updated to reflect current
economic forecasts and business growth opportunities.
The Group performed its annual impairment test applying the following key assumptions:
In percent
Discount rate (post tax)
Terminal growth rate
EBITDA growth rate – 4 year CAGR2
FY23
14.8
2.0
29.7
FY22
11.2
2.0
14.2
The increase in EBITDA growth rate is a result of the expected growth of the Mighty Ape Primate loyalty program
and launch of a new Vertical in New Zealand in FY24, in addition to a number of other initiatives.
The calculation of value in use for the Might Ape CGU is most sensitive to the following assumptions:
• Discount rates – based on Mighty Ape’s weighted average costs of capital (WACC). The discount rate was a
post‑tax measure estimated based on the average rates of return required by providers of debt and equity capital
to compensate for the time value of money and the perceived risk or uncertainty of the cashflow, weighted in the
proportion to the market value of the debt and equity capital provided.
• EBITDA growth – reflects Mighty Ape’s forecasted operating and financial performance based on past experience,
improvements from efficiencies and market factors such as forecast growth in the New Zealand online retail industry.
The estimated recoverable amount of the Mighty Ape CGU exceeded its carrying amount by $19.5 million
(2022: $53.2 million). Management has identified that a reasonably possible change in the key assumptions identified
above for financial year 2023 could cause the carrying amount to exceed the recoverable amount.
The following table shows the amount by which these two assumptions would need to change individually for the
estimated recoverable amount to be equal to the carrying amount.
Increase/(Decrease) in percent
Discount rate (post tax)
EBITDA growth rate – 4 year CAGR2
FY23
2.2
(6.4)
77
CONSOLIDATED GROUP
2023
$000
2022
$000
45,595
45,522
(9,580)
36,015
16,935
(11,861)
5,074
1,288
(1,236)
52
(6,331)
39,191
13,792
(8,791)
5,001
1,284
(1,096)
188
23,770
23,233
(23,069)
(21,847)
701
1,386
46,311
46,311
–
46,311
88,153
–
46,311
92,077
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Patents and trademarks:
Cost
Accumulated amortisation
Net carrying amount
Website development costs:
Cost
Accumulated amortisation
Net carrying amount
Software costs:
Cost
Accumulated amortisation
Net carrying amount
Intellectual property:
Cost
Accumulated amortisation
Net carrying amount
Goodwill:
Cost
Accumulated amortisation
Net carrying amount
Total intangibles
78
kogan.com annual RepoRt 2023
Patents and
trademarks
$000
Website
develop‑
ment costs
$000
Software
costs
$000
Intellectual
property
$000
Goodwill
$000
Total
$000
Consolidated Group:
Year ended 30 June 2022
Balance at the beginning
of the year
Additions
Disposals
Amortisation
42,613
200
(294)
4,477
2,691
–
214
130
–
1,874
1,305
–
(3,320)
(2,168)
(156)
(1,793)
Foreign Currency exchange
differences
(8)
–
Closing value at 30 June 2022
39,191
5,001
–
188
–
45,920
95,098
391
–
–
–
4,717
(294)
(7,436)
(8)
1,386
46,311
92,077
Year ended 30 June 2023
Balance at the beginning
of the year
Additions
Disposals
Amortisation
188
1,386
46,311
92,077
39,191
73
–
5,001
3,142
–
4
–
537
–
(3,247)
(3,069)
(140)
(1,222)
–
–
–
–
3,756
–
(7,678)
(2)
46,311
88,153
Foreign Currency exchange
differences
(2)
–
Closing value at 30 June 2023
36,015
5,074
–
52
–
701
2.3 Property, Plant and Equipment
property, plant and equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation
and impairment losses.
Property, plant and equipment is measured on a cost basis and therefore carried at cost less accumulated depreciation
and any accumulated impairment losses. In the event the carrying amount of property, plant and equipment is greater
than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable
amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment
losses relate to a revalued asset. A formal assessment of the recoverable amount is made when impairment indicators
are present.
The carrying amount of property, plant and equipment is reviewed annually by management to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs
and an appropriate proportion of fixed and variable overheads.
79
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance are recognised as expenses in the Statement
of Comprehensive Income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets purchased is depreciated on a straight‑line basis over the asset’s useful life
to the Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated
over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Computer equipment (straight‑line basis)
Office equipment (straight‑line basis)
Leasehold improvements
Class of Fixed Asset
Right of use asset
Depreciation
Rates
67%
14%‑20%
20%
Lease Term
2‑10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are recognised in the Statement of Comprehensive Income in the period in which they arise.
Equipment & Vehicles:
Cost
Accumulated depreciation
Net carrying amount
Leasehold improvements:
Cost
Accumulated depreciation
Net carrying amount
Right‑of‑use asset:
Cost
Accumulated depreciation
Net carrying amount
Total property, plant and equipment
80
CONSOLIDATED GROUP
2023
$000
2022
$000
5,089
(3,006)
2,083
40
(39)
1
4,961
(2,410)
2,551
40
(36)
4
40,778
39,416
(25,648)
(17,329)
15,130
17,214
22,087
24,642
kogan.com annual RepoRt 2023
movements in carrying amounts
Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the
end of the current financial year:
Consolidated Group:
Year ended 30 June 2022
Balance at the beginning of the year
Additions
Additions through acquisition of entities
Depreciation Expense
Closing value at 30 June 2022
Year ended 30 June 2023
Balance at the beginning of the year
Additions
Disposals
Depreciation Expense
Foreign Currency exchange differences
Closing value at 30 June 2023
Equipment &
Vehicles
$000
Leasehold
improve‑
ments
$000
Right‑of‑use
asset
$000
Total
$000
1,942
1,350
(665)
(76)
2,551
2,551
404
(277)
(601)
6
2,083
7
–
(3)
–
4
4
–
–
(3)
–
1
15,719
17,594
17,668
18,944
(11,016)
(11,684)
(210)
(286)
22,087
24,642
22,087
1,363
–
24,642
1,767
(277)
(8,220)
(8,824)
(100)
15,130
(94)
17,214
SECTION 3: Capital Structure And Financing
3.1 Loans and Borrowings
NON‑CURRENT
Trade Advance
Amortised borrowing costs
Net carrying amount
The Group’s interest bearing loans and borrowings have been measured at amortised cost.
CONSOLIDATED GROUP
2023
$000
2022
$000
–
–
–
35,000
(131)
34,869
81
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Debt Facilities
The group has multiple debt facilities, referring to loans and borrowings in the balance sheet. The tables below set out
the various structures of the debt facilities for Kogan.com and Mighty Ape as at balance dates.
Debt Facility
2023
$000
AUD
KOGAN
2022
$000
AUD
Debt Facility
Multi‑option facility
35,000
55,000
Overdraft facility
Additional debt facility
–
–
Trade finance facility
Total Debt Facility
35,000
55,000
Total Debt Facility
MIGHTY APE
2023
$000
NZD
1,500
6,000
7,500
2022
$000
NZD
1,500
6,000
7,500
For details relating to the amounts drawn down against these facilities, please refer to the table below. Mighty Ape
drawn down amount is nil for the financial year ended 30 June 2023 (FY22: Nil).
Reconciliation of liabilities arising from financing activities
Opening loans & borrowings
Draw down of loans & borrowings
Repayment of loans & borrowings
Amortisation of borrowing costs
Foreign currency exchange differences
Balance at 30 June
CONSOLIDATED GROUP
2023
$000
AUD
34,869
1,033
2022
$000
AUD
78,699
5,000
(36,033)
(48,980)
131
–
–
72
78
34,869
3.2 Capital and Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, short‑term
investments and payable derivatives.
Financial risk management policies
The Board’s overall risk management strategy seeks to assist the Group in meeting its financial targets, while minimising
potential adverse effects on financial performance. This includes the review of the use of hedging derivative instruments,
credit risk policies and future cash flow requirements.
Specific financial risk exposures and management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk, and market risk
consisting of interest rate risk and foreign currency risk. There have been no substantive changes in the types of risks
the Group is exposed to, how these risks arise, or the Board’s objectives, policies and processes for managing or
measuring the risks from the previous period.
82
kogan.com annual RepoRt 2023
credit risk
Exposure to credit risk relating to financial assets arises from the potential non‑performance by counterparties
of contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through internal procedures (such as the utilisation of systems for the approval, granting and
renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability
of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to
transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating,
or in entities that the Board has otherwise assessed as being financially sound. Where the Group is unable to ascertain
a satisfactory credit risk profile in relation to a customer or counterparty, the risk may be further managed through
title retention clauses over goods or obtaining security by way of personal or commercial guarantees over assets
of sufficient value which can be claimed against in the event of any default.
credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period
excluding the value of any collateral or other security held, is equivalent to the carrying amount and classification
of those financial assets (net of any provisions) as presented in the Statement of Financial Position. Credit risk also
arises through the provision of financial guarantees, as approved at Board level, given to parties’ security liabilities
of certain subsidiaries.
The Group has no significant concentrations of credit risk with any single counterparty or group of counterparties.
However, the Group has significant credit risk exposures to Australia given the substantial operations in this region.
Details with respect to credit risk of trade and other receivables are provided in Note 2.1.2a. The Group’s exposure
to credit risk is minimised given a significant portion of sales are paid for at the time purchase.
Management has assessed that trade and other receivables are either not past due or are considered to be of good
credit rating. Aggregates of such amounts are detailed in Note 2.1.2a.
Cash and cash equivalents
Credit and risk related to balances with banks and other financial institutions is managed by management.
The Group held cash and cash equivalents of $65.4 million as at 30 June 2023 and $66.2 million as at the end of
30 June 2022. The cash and cash equivalents are held with bank and financial institution counterparties, which are
rated A to AA–, based on Standard & Poor’s ratings.
Impairment of cash and cash equivalents has been measured on a 12‑month expected loss basis and reflects the
short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit risk based
on the external credit ratings of the counterparties.
The Group uses a similar approach for assessment of expected credit losses (ECLs) for cash and cash equivalents
to those used for debt securities.
No impairment allowance was recognised during FY23 (FY22: Nil).
83
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:
• preparing forward‑looking cash flow analysis in relation to its operating, investing and financing activities;
• using derivatives that are only traded in highly liquid markets;
• monitoring undrawn credit facilities;
• maintaining a reputable credit profile;
• managing credit risk related to financial assets; and
• only investing surplus cash with major financial institutions.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation.
Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle
financial liabilities reflects the earliest contractual settlement dates.
Financial liability and financial asset maturity analysis
Consolidated Group
Note
2023
$000
2022
$000
2023
$000
2022
$000
2023
$000
2022
$000
2023
$000
2022
$000
WITHIN 1 YEAR
1 TO 5 YEARS
OVER 5 YEARS
TOTAL
Financial liabilities
due for payment
Trade and other
payables
2.1.3a
(61,429)
(83,021)
Acquisition payables
(10,957)
(29,086)
–
–
–
–
–
–
–
–
(61,429)
(83,021)
(10,957)
(29,086)
Lease liabilities
2.1.3b
(7,532)
(7,670)
(7,934)
(13,804)
(266)
(1,189)
(15,732)
(22,663)
Loan & borrowings
3.1
–
–
–
–
–
–
(34,869)
–
–
–
–
–
–
–
(34,869)
–
(79,918)
(119,777)
(7,934)
(48,673)
(266)
(1,189)
(88,118)
(169,639)
Other financial assets
146
2.1.2a
5,432
5,357
532
65,438
66,230
71,016
72,119
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
65,438
66,230
5,432
146
5,357
532
71,016
72,119
(8,902)
(47,658)
(7,934)
(48,673)
(266)
(1,189)
(17,102)
(97,520)
Financial liabilities
Total Expected
outflows
Financial assets
– cash flows
realisable
Cash and cash
equivalents
Trade and other
receivables
Total anticipated
inflows
Net (Outflow)/inflow
on financial
instruments
84
kogan.com annual RepoRt 2023
market risk
a. Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting
period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial
instruments. The Group is also exposed to earnings volatility on floating rate instruments.
The financial instruments that primarily expose the Group to interest rate risk are borrowings and cash and cash equivalents.
b. Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating
due to movement in foreign exchange rates of currencies in which the Group holds financial instruments which are
other than the functional currency of the Group.
With instruments being held by overseas operations, fluctuations in the US dollar may impact on the Group’s financial
results unless those exposures are appropriately hedged.
Foreign currency transactions
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars,
which is the parent entity’s functional currency.
Foreign exchange forward contracts
The Group has open foreign exchange forward contracts at the end of the reporting period relating to highly probable
forecast transactions and recognised financial assets and financial liabilities. These contracts commit the Group to
buy and sell specified amounts of foreign currencies in the future at specified exchange rates. It is the Group’s policy
to manage pricing of its products (with exception of ageing and obsolete inventory) according to specified target
Gross Margins, rather than to sacrifice Gross Margin to drive sales volumes. In an environment where the Australian
dollar may be declining, in particular, relative to the United States dollar, the Group’s ability to price Third‑Party branded
international products competitively in comparison with other Australian retailers deteriorates (to the extent that
those retailers have not adjusted retail prices). As a result, lower volumes of Third‑Party branded international
products are generally sold during periods of sharp decline in the Australian dollar, leading to lower revenues in that
product segment. The reverse occurs in periods in which there is a sharp increase in the Australian dollar, while there
has historically been neutral revenue impact in periods in which the currency is relatively stable, whether that is at
high or low levels.
The following table summarises the notional amounts of the Group’s commitments in relation to foreign exchange
forward contracts. The notional amounts do not represent amounts exchanged by the transaction counterparties
and are therefore not a measure of the exposure of the Group through the use of the contracts.
Consolidated Group
Buy USD/sell AUD
NOTIONAL AMOUNTS
AVERAGE EXCHANGE
RATE
2023
$000
2022
$000
2023
$
2022
$
Settlement
– less than 6 months
– 6 months to 1 year
16,373
–
(0)
–
0.67
–
0.69
–
The fair value of foreign exchange contracts at 30 June 2023 totalled $96,476 (2022: ($170))
85
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Sensitivity analysis
The following table illustrates sensitivities to the Group’s exposures to changes in exchange rates. The table indicates
the impact of how profit and equity values reported at the end of the reporting period would have been affected by
changes in the relevant risk variable that management considers to be reasonably possible.
These sensitivities assume that the movement in a particular variable is independent of other variables.
Year ended 30 June 2023
+/‑10bps in foreign exchange rates
Year ended 30 June 2022
+/‑10bps in foreign exchange rates
CONSOLIDATED GROUP
Profit
$000
Equity
$000
16
–
16
–
The Group, through its hedging of foreign exchange using forward contracts, reduces its exposure to foreign
exchange risk by locking in the exchange rate with the bank on deal date. Any movement in interest rates has
been deemed to be immaterial.
Fair values
The Group measures some of its assets and liabilities at fair value on either a recurring or non‑recurring basis,
depending on the requirements of the applicable Accounting Standards.
Fair value estimation
The carrying value of financial assets and financial liabilities are not materially different to their fair values.
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions
to the instrument. For financial assets, this is equivalent to the date that the entity commits itself to either the
purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified
“at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method,
or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at
initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
amortisation of the difference between that initial amount and the maturity amount calculated using the effective
interest method.
86
kogan.com annual RepoRt 2023
The effective interest method is used to allocate interest income or interest expense over the relevant period
and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying amount with a
consequential recognition of an income or expense item in profit or loss.
The Group does not designate any interests in subsidiaries, associates, or joint ventures as being subject to the
requirements of Accounting Standards specifically applicable to financial instruments.
Financial assets and financial liabilities at fair value through profit or loss (FVTPL) are initially recognised at fair value
and thereafter carried at fair value.
a. Financial assets at amortised cost
Financial assets at amortised cost are non‑derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are subsequently measured at amortised cost. Gains or losses are recognised
in profit or loss through the amortisation process and when the financial asset is derecognised.
b. Financial assets/financial liabilities at fair value through profit or loss
Financial assets/financial liabilities relating to foreign exchange forward contracts are measured at fair value and
fair value changes are recognised in profit or loss.
c. Financial liabilities at amortised cost
Non‑derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss when the financial liability is derecognised.
Derivative instruments
The Group enters into forward contracts to manage the cash flow risk attached to inventory purchased in foreign
currency. The Group has elected not to adopt hedge accounting, with any period movements in the fair value
of the derivative contract taken to the income statement.
Impairment
The Group recognises loss allowances for (ECL) on:
•
•
financial assets measured at amortised cost;
financial assets measured at FVTPL.
The Group measured loss allowances at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and
when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available
without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the
Group’s historical experience and informed credit assessment and including forward looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.
The Group considers a financial asset to be in default when:
•
•
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions; or
the financial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12‑month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the
reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
87
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group
is exposed to credit risk.
measurement of ecls
ECLs are a probability‑weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash
flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
credit‑impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and financial assets
at FVTPL are credit‑impaired. A financial asset is ‘credit‑impaired’ when one or more events that have a detrimental
impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit‑impaired includes the following observable data:
• significant financial difficulty of the borrower or issuer;
• a breach of contract such as a default or being more than 90 days past due;
•
•
•
the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
the disappearance of an active market for a security because of financial difficulties.
presentation of allowance for ecl in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount
of the assets.
For financial assets at FVTPL, the loss allowance is charged to profit or loss.
Write‑off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of
recovering a financial asset in its entirety or a portion thereof. For individual customers, the Group has a policy of
writing off the gross carrying amount when the financial asset is 180 days past due based on historical experience
of recoveries of similar assets. For corporate customers, the Group individually makes an assessment with respect
to the timing and amount of write‑off based on whether there is a reasonable expectation of recovery. The Group
expects no significant recovery from the amount written off. However, financial assets that are written off could still
be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.
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kogan.com annual RepoRt 2023
The Group holds the following financial assets and financial liabilities at reporting date:
Financial assets
Cash and cash equivalents
Trade and other receivables
Foreign exchange forward contracts
Other financial assets
Total financial assets
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables
Loans & borrowings
Acquisitions payable – current
Lease liability – current
Lease liability – non‑current
Total financial liabilities
Fair value measurements
CONSOLIDATED GROUP
Note
2023
$000
2022
$000
65,438
5,432
96
50
66,230
5,357
532
–
71,016
72,119
61,429
–
10,957
7,532
8,200
88,118
83,021
34,869
29,086
7,670
14,993
169,639
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after
initial recognition:
• cash and cash equivalents;
•
foreign exchange forward contracts; and
• shares investment in Bitbuy entity.
The Group does not subsequently measure any liabilities at fair value on a non‑recurring basis.
a. Fair value hierarchy
AASB 9 Financial Instruments requires the disclosure of fair value information by level of the fair value hierarchy,
which categorises fair value measurements into one of three possible levels based on the lowest level that an input
that is significant to the measurement can be categorised into as follows:
Level 1
Level 2
Level 3
Measurements based on quoted
prices (unadjusted) in active
markets for identical assets
or liabilities that the entity can
access at the measurement date.
Measurements based on inputs
other than quoted prices included
in Level 1 that are observable for
the asset or liability, either directly
or indirectly.
Measurements based on
unobservable inputs for
the asset or liability.
89
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Cash & cash equivalents and shares are Level 1 measurements, whilst foreign exchange contracts are Level 2.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one
or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.
The table below sets out the fair value of foreign exchange contracts and the shares as at 30 June 2023.
This represented the amount ‘in/(out) of the money’ on financial instruments as at the reporting dates.
Fair Value
Foreign exchange contracts
Shares investment in Bitbuy entity25
b. Disclosed fair value measurements
CONSOLIDATED GROUP
2023
$000
96
–
2022
$000
–
532
The carrying amounts of assets and liabilities are the same as their carrying values.
The Group enters into forward exchange contracts to manage the foreign exchange risk attached to inventory
purchased in foreign currency. The Group has elected not to adopt hedge accounting, with any period movements
in the fair value of the derivative contract taken to the income statement.
The fair value of forward exchange contracts is determined based on an external valuation report using forward
exchange rates at the balance sheet date.
3.3.1 Issued Capital and Reserves
a. ordinary Shares
CONSOLIDATED GROUP
2023
$
2022
$
2023
No.
2022
No.
Fully paid ordinary shares
291,013,771
301,081,639
104,690,203
106,927,603
Ordinary Shares participate in Dividends and the proceeds on winding‑up of the parent entity in proportion to the
number of Shares held. At the Shareholders’ meetings each Ordinary Share is entitled to one vote when a poll is
called, otherwise each Shareholder has one vote on a show of hands.
25. Refer to the ASX announcement dated 14 December 2021 for details regarding the sale of the Bitbuy domain name.
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kogan.com annual RepoRt 2023
b. movement in ordinary Shares
Details
Balance
Shares issues to eligible employees
under an incentive plan
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
Shares issues to eligible employees
under an incentive plan
Shares issues to eligible employees
under an incentive plan
Shares issues to eligible employees
under an incentive plan
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
Date
Shares No.
Issue price
$
30 June 2021
106,561,563
299,185,901
24 August 2021
326,646
$1.79
585,544
31 December 2021
–
–
931,667
25 February 2022
37,831
$11.26
425,934
25 February 2022
6 April 2022
30 June 2022
678
885
–
$6.04
4,096
$5.65
5,000
–
(56,503)
Balance
30 June 2022
106,927,603
301,081,639
Shares issues to eligible employees
under an incentive plan
Tax deduction for difference between
accounting expense and funds paid
to issue incentive plans
Shares issues to eligible employees
under an incentive plan
23 August 2022
116,495
$3.99
464,945
31 December 2022
–
–
2,757
27 February 2023
32,445
$7.74
251,018
On‑market share buy‑back
On‑market share buy‑back
30 June 2023
30 June 2023
(1,563,000)
$4.44
(6,944,159)
(823,340)
$4.67
(3,842,429)
Balance
30 June 2023
104,690,203
291,013,771
c. merger reserve
The acquisition of Kogan Operations Holdings Pty Ltd by Kogan.com Ltd has been treated as a common control
transaction at book value for accounting purposes, and no fair value adjustments have been made. Consequently,
the difference between the fair value of issued capital and the book value of net assets acquired was recorded
within a merger reserve of $131,816,250.
d. Share‑based payments reserve
The reserve of $71.8 million (FY22: $41.3 million) has been used to recognise the value of equity benefits provided to
employees as part of their remuneration. The Group measures the cost of equity‑settled transactions with employees
by reference to the fair value of the Ordinary Shares at the date at which they are granted. The fair value is determined
using a discounted cash flow valuation model, taking into account the terms and conditions upon which the equity
instruments were granted, as discussed in Note 5.2.
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kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
e. Share buy‑back
The Group commenced an on‑market share buy‑back program in May 2023, anticipated to remain ongoing until
May 2024. The Group purchased $10.8 million of shares by 30 June 2023, resulting in a reduction of Issued Capital.
f capital management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate
long‑term shareholder value and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the
prior year.
3.3.2 Dividends
No dividends were paid or declared in FY23 (FY22: $nil).
a. ordinary Shares
Recognition and measurement
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity before or at the end of the financial year but not distributed at balance date.
There was no final 2023 dividend declared and therefore is not reflected in the consolidated financial statements
for the year ended 30 June 2023.
b. Franking credits
The franking account balance as at 30 June 2023 is $10,528,182 (2022: $9,591,844).
3.4 Earnings per Share
a. Basic earnings per share
Net loss for the reporting period
Net loss for the reporting period used in calculating EPS
Weighted average number of ordinary shares of the entity
Basic Earnings per Share
CONSOLIDATED GROUP
2023
2022
(25,852,194)
(35,456,513)
(25,852,194)
(35,456,513)
107,613,697
106,852,382
(0.24)
(0.33)
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kogan.com annual RepoRt 2023
CONSOLIDATED GROUP
2023
2022
(25,852,194)
(35,456,513)
107,613,697
106,852,382
6,174,935
365,155
113,788,632
107,217,537
(0.23)
(0.33)
b. Diluted earnings per share
Net loss for the reporting period
Weighted average number of ordinary shares of the entity on issue
Adjustments to reflect potential dilution for Performance Rights
Diluted weighted average number of Ordinary Shares of the entity
Diluted Earnings per Share
SECTION 4: Group Structure
4.1 Controlled Entities
a. Information about principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of Ordinary Shares or, in the case of Kogan
Technologies Unit Trust, Ordinary Units, which are held directly by the Group. Kogan.com Holdings Pty Ltd is the
Trustee of the Kogan Technologies Unit Trust. The Trustee and the Trust are wholly‑owned entities within the Group.
The proportion of ownership interests held equals the voting rights held by the Group. Each subsidiary’s principal
place of business is also its country of incorporation.
Name of subsidiary
Kogan Mobile Operations Pty Ltd
(formerly Kogan Mobile Australia Pty Ltd)
Kogan Mobile Pty Ltd
Kogan Australia Pty Ltd
Kogan International Holdings Pty Ltd
Kogan HK Limited
Kogan HR Pty Ltd
Kogan Travel Pty Ltd
Dick Smith IP Holdings Pty Ltd
(formerly Kogan Technologies UK Pty Ltd)
Online Business Number 1 Pty Ltd
Kogan Technologies Unit Trust
Kogan.com Holdings Pty Ltd
Kogan Operations Holdings Pty Ltd
Kogan Superannuation Pty Ltd
Kogan US Trading Inc26
Matt Blatt Pty Ltd
Mighty Ape Limited
Mighty Ape Australia Pty Ltd
26. Kogan.com discontinued its Kogan US Trading Inc subsidiary in FY23.
OWNERSHIP INTEREST
HELD BY THE GROUP
Principal place
of business
2023
%
2022
%
Australia
Australia
Australia
Australia
Hong Kong
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United States
Australia
New Zealand
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
93
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
b. Significant restrictions
There are no significant restrictions over the Group’s ability to access or use assets, and settle liabilities, of the Group.
4.2 Deed of Cross Guarantee
A deed of cross guarantee between Kogan.com Ltd and its entities listed above was enacted during FY22 and relief
was obtained from preparing individual financial statements for the Group under ASIC Corporations (Wholly‑owned
Companies) Instrument 2016/785. Under the deed, Kogan.com Ltd guarantees to support the liabilities and obligations
of its subsidiaries listed above. As its entities are a party to the deed the income statement and balance sheet
information of the combined class‑ordered group is equivalent to the consolidated information presented in this
financial report.
4.3 Parent Entity Disclosures
The following information has been extracted from the books and records of the parent (Kogan.com Ltd) and has
been prepared in accordance with Australian Accounting Standards.
2023
$000
2022
$000
23,248
178,675
13,550
189,715
201,923
203,264
392
392
969
969
201,531
202,295
159,198
71,808
–
169,266
41,257
–
(29,475)
(8,228)
201,531
202,295
9,046
9,046
(15,567)
(15,567)
Statement of Financial Position
ASSETS
Current assets
Non current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Performance Rights reserve
Dividends
Retained earnings
TOTAL EQUITY
Statement of Profit or Loss and Other Comprehensive Income
Total profit
Total comprehensive income
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kogan.com annual RepoRt 2023
4.4 Related Parties
a. the group’s main related parties are as follows:
(i) Entities exercising control over the Group:
The ultimate parent entity that exercised control over the Group at year‑end was Kogan.com Ltd, which is incorporated
in Australia.
(ii) Key Management Personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any Director (whether executive or otherwise) of the entity, are considered Key
Management Personnel (refer to 5.1).
(iii) Entities subject to significant influence by the Group:
An entity that has the power to participate in the financial and operating policy decisions of an entity, but does not
have control over those policies, is an entity which holds significant influence. Significant influence may be gained
by share ownership, statute or agreement. There are no such entities at year end (2022: nil).
(iv) Other related parties:
Other related parties include entities controlled by the ultimate parent entity and entities over which Key Management
Personnel have joint control.
b. transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Kogan Australia Pty Ltd entered into a Logistic Services Agreement with eStore Logistics Pty Ltd (“eStore”), in a prior
financial period, in relation to the provision of warehousing, distribution and logistics services by eStore to Kogan
Australia. Ruslan Kogan is a minority Shareholder and Director of eStore. The agreement was entered into on arm’s
length terms.
Services provided by eStore warehousing
Amounts payable to eStore as at 30 June
SECTION 5: Employee Reward and Recognition
5.1 Key Management Personnel Compensation
CONSOLIDATED GROUP
2023
$
2022
$
3,851,485
7,829,196
253,873
488,813
As deemed under AASB 124 Related Parties disclosures, Key Management Personnel (KMP) include each of the
Directors, both Executive and Non‑Executive, and those members who have authority and responsibility for planning,
directing and controlling activities within the business. A summary of the KMP compensation is set out in the
following table. Refer to the Remuneration Report for full details.
A summary of the KMP compensation is set out in the following table. Refer to the Remuneration Report for full details.
95
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Cash Salary
Short‑term incentives
Post‑employment
Long‑term benefits
Equity‑based compensation
Other long‑term benefits
movement in shares
CONSOLIDATED GROUP
2023
$
2022
$
1,185,778
1,081,085
–
57,451
108,726
–
47,600
93,688
27,928,021
24,590,857
(3,885,469)22
17,047,089
25,394,507
42,860,319
The movement during the reporting period in the number of Ordinary Shares in Kogan.com held, directly, indirectly
or beneficially, by each key management person, including their related parties, is as follows:
Held at
1 July 2022
15,853,321
5,075,642
Received on
exercise of
rights
Shares
purchased
Shares Sold
Held at
30 June 2023
–
–
–
150,000
–
–
15,853,321
5,225,642
Held at
1 July 2022
Received on
exercise of
rights
Shares
purchased
Shares Sold
Held at
30 June 2023
500
–
–
–
–
–
–
–
500
–
Held at
1 July 2022
Received on
exercise of
rights
Shares
purchased
Shares Sold
Held at
30 June 2023
158,000
98,099
4,761
–
–
–
–
–
–
–
10,000
10,000
–
–
–
–
158,000
98,099
14,761
10,000
Executive KMP
Ruslan Kogan
David Shafer
other non‑executive kmp
Gracie MacKinlay
Simon Barton
non‑executive Directors
Greg Ridder
Harry Debney
Janine Allis
James Spenceley
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kogan.com annual RepoRt 2023
5.2 Incentive Plans
Kogan.com Ltd has adopted an Equity Incentive Plan (EIP) to assist in the motivation and retention of management
and selected team members.
The Group has established incentive arrangements subsequent to listing on the ASX to assist in the attraction,
motivation and retention of the executive team and other selected team members. To align the interests of its
employees and the goals of the Group, the Directors have decided the remuneration packages of the executive
team and other selected team members will consist of the following components:
•
fixed remuneration (inclusive of superannuation);
• short‑term cash‑based incentives; and
• equity based long‑term incentives.
The Group has established the EIP, which is designed to align the interests of eligible employees more closely with
the interests of Shareholders in the listed entity post 7 July 2016. Under the EIP, eligible employees may be offered
Restricted Shares, Options or Rights which may be subject to vesting conditions. The Group may offer additional
long‑term incentive schemes to senior management and other employees over time.
Short term incentives – cash based
The following table outlines the significant aspects of the STI.
Purpose of STI plan
Provide a link between remuneration and both short term Company and
individual performance.
Eligibility
Create sustainable Shareholder value.
Reward individual for their contribution to the success of the Group.
Actively encourage team members to take more ownership over the EBITDA.
Offers of cash incentive may be made to any team members of the Group (including
a Director employed in an executive capacity) or any other person who is declared
by the Board to be eligible to receive a grant of cash incentive under the STI.
Calculation & Target
The actual Adjusted EBITDA of Kogan.com shall exceed the management forecast
for the full financial year (after payment of the STI).
25% of the outperformance will be allocated to a ‘bonus pool’.
The ‘bonus pool’ will then be shared in cash bonuses among a number of team
members in fixed proportions.
Maximum opportunity
The maximum payable is 25% of the outperformance and 35% of the team member’s
annual salary.
Performance conditions
Outperformance of the actual Adjusted EBITDA.
Continuation of employment.
Why were the performance
condition chosen
To achieve successful and sustainable financial business outcomes as well
as any annual objectives that drive short‑term and long‑term business success
and sustainability.
Performance period
1 July 2022 to 30 June 2023.
Timing of assessment
August 2023, following the completion of the 30 June 2023 accounts.
Form of payment
Paid in cash.
Board discretion
Targets are reviewed annually and the Board has discretion to adapt appropriately
to take into account exceptional items.
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kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
long term incentives – equity Incentive plan
The following table outlines the significant aspects of the current EIP.
Consideration
Nil.
Eligibility
Offers of Incentive Securities may be made to any employee of the Group (including
a Director employed in an executive capacity) or any other person who is declared
by the Board to be eligible to receive a grant of incentive Securities under the EIP.
Amount payable &
Entitlement
No amount is payable upon the exercise of a Performance Right that has vested,
with each Performance Right entitling the holder to one fully paid Ordinary Share
on exercise.
Service condition on vesting Individual must be employed by the Group at time of vesting and not be in their
notice period.
Restrictions on dealing
Shares allocated upon exercise of Performance Rights will rank equally with all
existing Ordinary shares from the date of issue (subject only the requirements
of Kogan.com’s Securities Trading Policy).
Upon vesting, there will be no disposal restrictions placed on the Shares issued
to participants (subject only to the requirements of Kogan.com’s Securities
Trading Policy).
Lapse of Rights
A Right will lapse upon the earliest to occur of:
• expiry date;
•
failure to meet vesting conditions;
• employment termination;
•
the participant electing to surrender the Right; and
• where, in the opinion of the Board, a participant deals with a Right in contravention
of any dealing restrictions under the EIP.
98
kogan.com annual RepoRt 2023
executive Retention options awarded at the 2020 agm issued under the groups eIp
The following table outlines the significant aspects of the Executive EIP.
The number and class of
securities issued to the
Directors
Details of the Retention
Options
3,600,000 options granted to Mr Kogan and 2,400,000 granted to Mr Shafer
under the EIP.
The Board (excluding Mr Kogan and Mr Shafer) decided to grant the Retention
Options to Mr Kogan and Mr Shafer because the Board believed it was in the best
interests of the Company and Shareholders to incentives Mr Kogan and Mr Shafer to
remain in their positions for the next 3 years given their proven track records, in order
to maximise the prospects of Mr Kogan and Mr Shafer contributing to the creation
of significant future returns for Shareholders.
The Retention Options are being accounted for in the same way the Company’s
current equity‑settled awards are treated (refer above), with their accounting value
determined at their date of grant (within 10 Business Days of the Meeting).
Equity‑settled awards are measured at fair value at the date of grant.
The cost of these transactions is recognised in the Company’s Consolidated
Statement of Comprehensive Income and credited to equity on a straight‑line basis
over the vesting period after allowing for an estimate of shares that will eventually
vest. The level of vesting is reviewed annually and the charge adjusted to reflect
actual and estimated levels of vesting.
The Company obtained an independent valuation of the Retention Options from
SLM Corporate dated 7 May 2020 to provide advice in relation to whether the
proposed grant of the Retention Options was reasonable in the circumstances and
by reference to industry standards. The valuation applied a number of assumptions
and variables, including the following:
•
the closing price of the Company’s Shares on ASX on 30 April 2020 (a reference
date under the report), being $7.99 per Share;
• a risk‑free rate of 0.33%;
• a volatility factor of 62.5%;
• dividend yield of 1.96%; and
• a time to maturity of the underlying Options for 4 years.
The estimated value of each Retention Option pursuant to the valuation was $4.13
as at the reference date of the report of 7 May 2020. On this basis, the estimated
value as at the reference date of the report of 7 May 2020 of:
•
•
the Retention Options to be granted to Mr Kogan under Item 5.1 was $14,872,133; and
the Retention Options to be granted to Mr Shafer under Item 5.2 was $9,914,756.
The report from SLM Corporate dated 7 May 2020 reflects the value of the
Retention Options on or about the date that the Company agreed to grant the
Retention Options to Mr Kogan and Mr Shafer . For completeness, given the time that
has elapsed between the AGM (at which the Retention Options were approved
by Shareholders) and both the date of the independent valuation of the Retention
Options from SLM Corporate and the date that the Company agreed to grant
the Retention Options, the Company obtained an updated independent valuation
of the Retention Options from SLM Corporate dated 8 December 2020.
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kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Details of the Retention
Options (continued)
This valuation applied the same assumptions and variables as noted above, except that:
•
the closing price of the Company’s Shares on ASX on 30 November 2020
(date of issue of the Retention Options as per the updated independent
valuation), being $16.40 per Share;
• a risk‑free rate of 0.25%;
• a volatility factor of 62.5%; and
• dividend yield of 1.28%.
The value of each Retention Option pursuant to the valuation was $11.48 as at the issue
date of the updated independent valuation of 8 December 2020. On this basis, the
value as at the issue date of the updated independent valuation of 8 December 2020 of:
•
•
the Retention Options granted to Mr Kogan was $41,325,935; and
the Retention Options granted to Mr Shafer was $27,550,623.
The increase in the value of the Retention Options reflects the increase in the
Company’s share price since the Company announced the terms of the Retention
Options to the ASX on 12 May 2020 and the grant of the Retention Options following
the Company’s AGM on 20 November 2020.
Strike price
$5.29
Share price at grant date
$16.40
Recognition and measurement
a. Equity‑settled transactions
The charge related to equity‑settled transactions with team members is measured by reference to the fair value
of the equity instruments at the date they are granted, using an appropriate valuation model selected according to
the terms and conditions of the grant. The fair value is determined using a discounted cash flow valuation model.
Judgement is applied in determining the most appropriate valuation model and in determining the inputs to the
model. Third‑party experts are engaged to advise in this area where necessary. Judgements are also applied in
relation to estimations of the number of rights which are expected to vest, by reference to historic leaver rates
and expected outcomes under relevant performance conditions.
The Group issues equity‑settled share‑based payments to certain team members, whereby team members render
services in exchange for Shares or Rights over Shares of the Parent Company.
Equity‑settled awards are measured at fair value at the date of grant. The cost of these transactions is recognised
in the Consolidated Income Statement and Consolidated Statement of Comprehensive Income and credited to
equity on a straight‑line basis over the vesting period after allowing for an estimate of shares that will eventually vest.
The level of vesting is reviewed annually and the charge adjusted to reflect actual and estimated levels of vesting.
Where an equity‑settled share‑based payment scheme is modified during the vesting period, an additional charge
is recognised over the remainder of that vesting period to the extent that the fair value of the revised scheme at the
modification date exceeds the fair value of the original scheme at the modification date. Where the fair value of the
revised scheme does not exceed the fair value of the original scheme, the Group continues to recognise the charge
required under the conditions of the original scheme. Individuals must be employed by the Group at the time of
vesting, and not in their notice period, to be entitled to the equity incentives.
b. Cash‑settled transactions
The amount payable to team members in respect of cash‑settled share‑based payments is recognised as an expense,
with a corresponding increase in liabilities, over the period which the team members become unconditionally entitled
to the payment. The liability is measured at each reporting date and at settlement date based on the fair value, with
any changes in the liability being recognised in profit or loss.
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kogan.com annual RepoRt 2023
c. Expense recognised in profit or loss
During the period the Group recognised a share‑based payment expense of $31.3 million (2022: $26.6 million)
which relates to Performance Rights and Options granted during the year or in previous years.
The Group has recognised no expense in relation to cash based short term incentives in 2023 (2022: nil).
Incentive plans inputs
Long term incentives – Equity
The following inputs were used in the measurement of the fair values of Performance Rights issued, at grant date:
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
6 April 2018
20 August 2019
20 August 2019
18 February 2020
18,013
$151,273
$8.60
$0.00
30,711
$173,210
$5.64
$0.00
36,550
$206,141
$5.64
$0.00
3,906
$20,000
$4.98
$0.00
1 to 5 years
1 to 4 years
1 to 4 years
1 to 2 years
31 Dec 2018
31 Dec 2019
30 Jun 2020
30 Jun 2022
31 Dec 2019
31 Dec 2020
30 Jun 2021
30 Jun 2023
31 Dec 2020
31 Dec 2021
30 Jun 2022
31 Dec 2021
31 Dec 2022
30 Jun 2023
31 Dec 2022
Dividend yield
1.4%
1.3%
1.3%
1.5%
LONG‑TERM INCENTIVE PLANS
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
17 August 2020
17 August 2020
19 October 2020
1 December 2020
21,767
$369,979
$17.00
$0.00
11,831
$174,744
$14.77
$0.00
134
$1,973
$14.77
$0.00
1 to 4 years
1 to 5 years
1 to 3 years
6,000,000
$68,876,559
$16.40
$5.29
3 years
30 Jun 2021
31 Dec 2021
31 Dec 2021
30 Jun 2023
30 Jun 2022
31 Dec 2022
31 Dec 2022
30 Jun 2023
31 Dec 2023
31 Dec 2023
30 Jun 2024
31 Dec 2024
31 Dec 2025
Dividend yield
1.4%
1.4%
0.6%
1.4%
101
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
3 December 2020
25 January 2021
25 January 2021
16 April 2021
LONG‑TERM INCENTIVE PLANS
61,632
$571,945
$19.00
$16.38
3 years
6,125
$118,825
$19.40
$0.00
167,607
$3,251,576
$19.40
$0.00
11,279
$180,013
$15.95
$0.00
1 to 3 years
1 to 4 years
1 to 3 years
1 Apr 2023
31 Dec 2021
30 Jun 2021
31 Dec 2021
31 Dec 2022
30 Jun 2022
31 Dec 2022
31 Dec 2023
30 Jun 2023
31 Dec 2023
30 Jun 2024
Dividend yield
1.7%
0.9%
0.9%
1.2%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
16 April 2021
30 June 2021
30 June 2021
25 August 2021
8,773
$140,017
$15.95
$0.00
1,806
$20,000
$11.07
$0.00
149,869
$1,652,050
$11.07
$0.00
7,208
$81,500
$11.30
$0.00
1 to 3 years
1 to 2 years
1 to 3 years
1 to 2 years
30 Jun 2022
31 Dec 2022
30 Jun 2022
31 Dec 2022
30 Jun 2023
31 Dec 2023
30 Jun 2023
31 Dec 2023
30 Jun 2024
30 Jun 2024
Dividend yield
1.2%
0.0%
0.0%
0.0%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
25 August 2021
25 August 2021
25 August 2021
25 August 2021
11,766
$200,022
$17.00
$0.00
1,546
$29,992
$19.40
$0.00
1 to 2 years
1 to 2 years
8,233
$91,139
$11.07
$0.00
3 years
38,780
$438,214
$11.30
$0.00
1 to 4 years
30 Jun 2023
30 Jun 2023
30 Jun 2024
30 Jun 2022
30 Jun 2024
30 Jun 2024
30 Jun 2023
30 Jun 2024
30 Jun 2025
Dividend yield
0.0%
0.0%
0.0%
0.0%
102
kogan.com annual RepoRt 2023
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
7 October 2021
7 October 2021
7 October 2021
31 December 2021
6,193
$69,981
$11.30
$0.00
5,736
$64,071
$11.17
$0.00
1 to 4 years
1 to 3 years
430,000
$4,248,400
$9.88
$9.88
3 years
32,048
$299,969
$9.36
$0.00
1 to 2 years
30 Jun 2022
30 Jun 2022
25 Feb 2024
31 Dec 2022
30 Jun 2023
30 Jun 2023
31 Dec 2023
30 Jun 2024
30 Jun 2024
30 Jun 2025
Dividend yield
0.0%
0.0%
0.0%
0.0%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
31 December 2021
6 April 2022
6 April 2022
6 April 2022
LONG‑TERM INCENTIVE PLANS
6,411
$60,007
$9.36
$0.00
8,763
$55,032
$6.28
$0.00
33,997
$213,501
$6.28
$0.00
345,464
$1,951,872
$5.65
$0.00
1 to 2 years
less than 1 year
1 to 2 years
2 to 3 years
30 Jun 2023
31 Dec 2022
30 Jun 2023
30 Jun 2024
30 Jun 2024
30 Jun 2024
30 Jun 2025
Dividend yield
0.0%
0.0%
0.0%
0.0%
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
30 June 2022
30 June 2022
30 June 2022
30 June 2022
10,583
$40,004
$3.78
$0.00
39,684
$150,006
$3.78
$0.00
less than 1 year
1 to 2 years
10,204
$30,000
$2.94
$0.00
1 year
5,291
$20,000
$3.78
$0.00
1 year
31 Dec 2022
30 Jun 2023
30 Jun 2023
30 Jun 2023
30 Jun 2024
Dividend yield
0.0%
0.0%
0.0%
0.0%
103
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
LONG‑TERM INCENTIVE PLANS
30 June 2022
30 June 2022
23 August 2022
23 August 2022
112,360
$400,002
$3.56
$0.00
60,000
$226,800
$3.78
$3.78
5,000
$17,750
$3.55
$0.00
17,200
$61,060
$3.55
$0.00
2 to 4 years
2 to 5 years
1 to 2 years
1 to 3 years
30 Jun 2024
27 Feb 2024
30 Jun 2023
30 Jun 2023
30 Jun 2025
27 Feb 2025
30 Jun 2024
30 Jun 2024
30 Jun 2026
27 Feb 2026
30 Jun 2025
27 Feb 2027
Dividend yield
0.0%
0.0%
0.0%
0.0%
LONG‑TERM INCENTIVE PLANS
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
3 October 2022
3 October 2022
3 October 2022
4 October 2022
18,919
$55,433
$2.93
$0.00
225,721
$661,363
$2.93
$0.00
1 to 2 years
1 to 4 years
95,747
$280,539
$2.93
$3.68
2 years
176,929
$541,403
$3.06
$3.68
2 years
31 Dec 2022
30 Jun 2023
1 Sep 2024
31 Dec 2024
31 Dec 2023
30 Jun 2024
31 Dec 2024
30 Jun 2025
30 Jun 2026
Dividend yield
0.0%
0.0%
0.0%
0.0%
LONG‑TERM INCENTIVE PLANS
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
12 January 2023
12 January 2023
13 January 2023
31 January 2023
50,611
$203,456
$4.02
$0.00
10,936
$43,963
$4.02
$0.00
1,359
$5,477
$4.03
$3.68
17,805
$80,123
$4.50
$0.00
1 to 2 years
1 to 2 years
1 to 2 years
1 to 3 years
31 Dec 2023
30 Jun 2023
30 Jun 2024
30 Jun 2023
31 Dec 2024
30 Jun 2024
30 Jun 2024
30 Jun 2025
Dividend yield
0.0%
0.0%
0.0%
0.0%
104
kogan.com annual RepoRt 2023
LONG‑TERM INCENTIVE PLANS
Grant Dates
Number
Fair value at grant date
Share price at grant date
Strike price
Rights life
Vesting dates
14 April 2023
14 April 2023
42,439
$153,205
$3.61
$0.00
63,987
$230,993
$3.61
$0.00
2 to 3 years
1 to 4 years
30 Jun 2024
31 Dec 2023
30 Jun 2025
31 Dec 2024
30 Jun 2026
31 Dec 2025
31 Dec 2026
Dividend yield
0.0%
0.0%
Reconciliation of outstanding Performance Rights
The following table details the total movement in Performance Rights issued by the Group during the year:
Outstanding at beginning of period
Granted during the period
Exercised during the period
Forfeited during the period
Expired during the period
Outstanding at the end of the period
Exercisable at the end of the period
LONG‑TERM INCENTIVE
PLANS
Performance Rights
No.
2023
No.
2022
963,331
789,348
452,618
700,182
(148,940)
(364,477)
(67,348)
(161,722)
–
1,199,661
179,142
–
963,331
116,495
105
kogan.com annual RepoRt 2023
Notes to the Financial Statements continued
SECTION 6: Other
6.1 Subsequent Events
Subsequent to the financial year end, there were no events which would require adjustment or disclosure to the
financial statements.
6.2 Remuneration of Auditors
Remuneration of the auditors for:
auditing or reviewing the financial statements
Due diligence
Tax advisory and compliance
CONSOLIDATED GROUP
2023
$
2022
$
465,938
413,330
–
119,774
585,712
–
5,121
418,451
6.3 Commitments
The Group has an agreement to lease a warehouse in Sydney, with expected availability ready for use in early 2024.
This agreement will give rise to an annual expense of $2.1 million over a 2 year period.
6.4 Contingent Liabilities
As at 30 June 2023 the Group had bank guarantees of A$1.2 million (30 June 2022: A$1.2 million) and NZ$8.6 million
(30 June 2022: NZ$8.6 million) with Westpac Banking Corporation in relation to its ordinary course of business.
6.5 Company Information
The registered office of the Company is:
Kogan.com Ltd
Level 7
330 Collins Street
Melbourne VIC 3000
The principal place of business is:
Kogan.com Ltd
139 Gladstone Street
South Melbourne VIC 3205
106
Directors’ Declaration
kogan.com annual RepoRt 2023
1
In the opinion of the Directors of Kogan.com Ltd (‘the Company’):
(a) the consolidated financial statements and notes that are set out on pages 59 to 106 and the
Remuneration report in pages 35 to 53 in the Directors’ report, are in accordance with the Corporations
Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance
and its cash flows, for the financial year ended on that date; and
(ii) complying with Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2 There are reasonable grounds to believe that the Company and the group entities identified in Note 4.1 will be able
to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross
Guarantee between the Company and those group entities pursuant to ASIC Corporations (Wholly‑owned
Companies) Instrument 2016/785.
3 The Directors draw attention to the Basis of Preparation note to the consolidated financial statements, which
includes a statement of compliance with International Financial Reporting Standards.
4 This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2023.
Signed in accordance with a resolution of the Directors:
David Shafer
Executive Director
Melbourne, 28 September 2023
107
kogan.com annual RepoRt 2023
Independent Auditor’s Report
Independent Auditor’s Report
To the shareholders of Kogan.com Ltd
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report
of Kogan.com Ltd (the Company).
In our opinion,
the accompanying
Financial Report of the Company is in
accordance with the Corporations Act
2001, including:
•
•
giving a true and fair view of the
Group’s financial position as at 30
June 2023 and of its financial
performance for the year ended on
that date; and
with
complying
Accounting Standards
Corporations Regulations 2001.
Australian
the
and
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2023
• Consolidated income statement
of
and consolidated
income,
statement
Consolidated statement of changes in equity, and
Consolidated statement of cash flows for the year then
ended
comprehensive
other
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during the
financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
108
kogan.com annual RepoRt 2023
Key Audit Matters
The Key Audit Matters we identified
are:
• Revenue recognition from sale of
goods
• Valuation of goodwill
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in our
audit of the Financial Report of the current period.
These matters were addressed in the context of our audit
of the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
Revenue recognition from sales of goods (AUD $489m)
Refer to Note 1.1 to the financial report
The key audit matter
The key audit matter
Revenue recognition from sale of goods is a
key audit matter due to the:
•
relative size of sale of goods revenue
(being 86% of total revenue) within the
Group’s consolidated income
statement;
•
•
significant audit effort to test the high
volume of sale of goods transactions
recorded as revenue by the Group;
the Group has specific processes and
controls they perform at year end to
check revenue is recognised in the right
period. This increases the risk of bias
and our audit effort to perform specific
testing of revenue transactions in the
last week of the reporting period.
Our procedures included:
•
evaluating the Group’s accounting policies for
revenue recognition against the requirements of
AASB 15 and our understanding of the business;
• Understanding processes and testing key controls
relating to the sale of goods;
•
•
•
for a sample of sale of goods revenue recognised
by the Group throughout the year, we checked
the amount of revenue recorded by the Group to
the customer sales invoice and cash receipts
obtained from the Group’s bank statements. We
checked the date revenue was recognised by the
Group to the underlying shipping documentation
and against the terms of sale of goods;
selecting a sample of revenue transactions before
and after the year end due to the increased risk of
potential bias. For each sample selected we:
o
o
checked the amount of revenue recorded by
the Group to the amount of the sales invoice
to the customer and cash receipts from the
Group’s bank statements; and
checked the date the revenue was recognised
to shipping documents; and
evaluating the adequacy of the disclosures made
in the financials against the requirements of the
accounting standards.
109
kogan.com annual RepoRt 2023
Independent Auditor’s Report continued
Valuation of goodwill (AUD $46m)
Refer to Note 2.2 to the financial report
The key audit matter
How the matter was addressed in our audit
A key audit matter was the Group’s annual
testing of the recoverability of goodwill
valuation associated with Mighty Ape given
the size of the balance (being 17% of total
assets) and there is estimation uncertainty
associated with current economic and
market conditions.
The Group assessed valuation of the Mighty
Ape Cash Generating Unit via detailed value
in use (VIU) discounted cash flow
modelling, which contains a number of
assumptions.
The Mighty Ape VIU model is internally
developed and uses a range of internal and
external data as inputs. Forward looking
estimates may be prone to greater risk for
potential bias, error and inconsistent
application. These conditions necessitate
additional scrutiny by us, over key
assumptions including forecast cash flows,
forecast growth rates over the forecast
period and discount rate.
Our audit procedures included:
•
•
•
assessing the Group’s value in use (VIU) model
for Mighty Ape and key assumptions by:
o evaluating the appropriateness of the VIU
method applied by the Group against
accounting standard requirements;
o assessing the integrity of the model used,
including the accuracy of the underlying
calculation formulas;
o comparing significant inputs into the relevant
cash flow forecasts to the Group’s Board
approved budgets;
o assessing the accuracy of previous Group
forecasts to inform our evaluation of
forecasts incorporated in the models;
o using our knowledge of the Group, its past
performance, published studies on industry
trends and our industry knowledge to
challenge and assess key assumptions
including forecast cash flows, forecast
growth rates over the forecast period and
terminal growth rate; and
o working with our valuation specialists, we
independently developed a discount rate
range using publicly available market data for
comparable entities, adjusted by risk factors
specific to Mighty Ape;
considering the sensitivity of the model by
varying key assumptions, such as forecast
growth rates, discount rate and terminal growth
rate within a reasonably possible range; and
assessing the disclosures in the financial report
using our understanding of the recoverability
assessment obtained from our testing and
against the requirements of the accounting
standards.
110
kogan.com annual RepoRt 2023
Other Information
Other Information is financial and non-financial information in Kogan.com Ltd’s annual reporting which
is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible
for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information.
In doing so, we consider whether the Other Information is materially inconsistent with the Financial
Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error
assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our
Auditor’s Report.
111
kogan.com annual RepoRt 2023
Independent Auditor’s Report continued
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion,
the Remuneration
Report of Kogan.com Ltd for the year
ended 30 June 2023, complies with
Section 300A of the Corporations Act
2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages
35 and 53 of the Directors’ report for the year ended 30 June
2023.
is to express an opinion on the
Our responsibility
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
KPMG
Simon Dubois
Partner
Melbourne
28 September 2023
112
Shareholder Information
kogan.com annual RepoRt 2023
The Shareholder information set out below was applicable as at 15 September 2023.
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report, is listed below.
A. NUMBER OF HOLDERS OF EQUITY SECURITIES
Ordinary Share Capital
103,363,797 fully paid ordinary shares are held by 39,276 individual shareholders.
All issued ordinary shares carry one vote per share and the rights to dividends.
Performance Rights
976,809 performance rights are held by 77 individuals.
All performance rights are unvested and do not carry a right to vote.
B. DISTRIBUTION OF EQUITY SECURITY
Total holders
of Ordinary
Shares
Total holders
of
Performance
Rights
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holdings less than a marketable parcel
30,052
7,460
1,059
669
36
39,276
8,205
6
33
19
19
–
77
113
kogan.com annual RepoRt 2023
Shareholder Information continued
C. EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders
Name
KOGAN MANAGEMENT PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
SHAFER CORPORATION PTY LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
MATTHEW WONG INVESTMENTS (AUS) PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
MR JOHN STEVEN LUNDGREN
GARRETT SMYTHE LTD
MR GORAN STEFKOVSKI
ABICHANDANI & ASSOCIATES PTY LTD
SUPERHERO SECURITIES LIMITED
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
CITICORP NOMINEES PTY LIMITED
BOND STREET CUSTODIANS LIMITED
Units
15,515,701
9,250,988
9,017,898
6,094,443
5,075,642
1,056,267
848,146
842,079
786,813
542,352
466,247
403,889
350,000
310,750
288,384
275,000
273,818
244,490
234,554
212,529
% units
15.01%
8.95%
8.72%
5.90%
4.91%
1.02%
0.82%
0.81%
0.76%
0.52%
0.45%
0.39%
0.34%
0.30%
0.28%
0.27%
0.26%
0.24%
0.23%
0.21%
Total
Total Remaining Holders Balance
52,089,990
51,273,807
50.39%
49.61%
D. SUBSTANTIAL SECURITY HOLDERS
The Company has received no substantial holder notices from shareholders who hold relevant interest in the
Company’s Ordinary Shares as at 15 September 2023.
114
kogan.com annual RepoRt 2023
E. VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
Ordinary Shares
Each Share is entitled to one vote when poll is called, otherwise each member present at a meeting or by proxy has
one vote on a show of hands.
Performance Rights
All Performance Rights are unvested and do not carry a right to vote.
F. STOCK EXCHANGE LISTING
Quotation has been granted for all of the Ordinary Shares of the Company on all Member Exchanges of the ASX Limited.
G. UNQUOTED SECURITIES
976,809 performance rights held by 77 holders.
H. SECURITIES SUBJECT TO VOLUNTARY ESCROW
There are no securities subject to voluntary escrow.
I. ON MARKET BUY‑BACK
The Group commenced an on‑market share buy‑back program in May 2023, which is anticipated to remain ongoing
until May 2024. The Group purchased $10.8 million of shares by 30 June 2023, resulting in a reduction in Issued Capital.
115
kogan.com annual RepoRt 2023
Corporate Directory
COMPANY SECRETARY
Mark Licciardo, Acclime Australia
PRINCIPAL REGISTERED OFFICE
KOGAN.COM LTD
C/‑ Acclime Australia
7/330 Collins Street
Melbourne VIC 3000
+61 3 8689 9997
PRINCIPAL PLACE OF BUSINESS
KOGAN.COM LTD
139 Gladstone Street
South Melbourne VIC 3205
+61 3 6285 8572
LOCATION OF SHARE REGISTRY
AUTOMIC GROUP
Suite 5 Level 12
530 Collins Street
Melbourne VIC 3000
1300 288 664
STOCK EXCHANGE LISTING
Kogan.com Ltd (KGN) shares are listed on the ASX.
AUDITORS
KPMG
Tower Two, Collins Square
727 Collins Street
Docklands VIC 3008
116
www.colliercreative.com.au #KOG0017