Redbubble Annual Report 2020

← All annual reports

FY2020 Annual Report · Redbubble

Loading PDF…

Annual Report
2020

Contents

109

110

116

119

Year in Review

Highlights and Commentary

Chair’s Letter

CEO’s Review

Director’s Report

Auditor’s Independence Declaration

Remuneration Report

Consolidated Financial Statements

Directors’ Declaration

Independent Auditor’s Report

Shareholder and other ASX Required Information

Corporate Information

Redbubble Limited

ABN: 11 119 200 592
Year ended 30 June 2020

RedbubbleFounded in 2006, the Redbubble Group (RB Group)
incorporates Redbubble Limited and its subsidiaries
including TP Apparel LLC (TeePublic). RB Group owns
and operates the leading global online marketplaces
Redbubble.com and TeePublic.com. RB Group’s
community of passionate creatives sell uncommon
designs on high-quality, everyday products such
as apparel, stationery, housewares, bags, wall art
and so on. Through the Redbubble and TeePublic
marketplaces, independent artists are able to profit
from their creativity and reach a new universe of
adoring fans. For customers, it’s the ultimate in self
expression. A simple but meaningful way to show the
world who they are and what they care about.

This Report covers Redbubble Limited as a consolidated entity consisting of Redbubble Limited (referred to in this report as Redbubble or the
Company) and its controlled entities. Redbubble is a company limited by shares, incorporated and domiciled in Australia (ACN 1192002592).
Its registered office is at Level 3, 271 Collins Street, Melbourne VIC 3000. Redbubble is listed on the Australian Securities Exchange (ASX:RBL).
Through the use of the internet, the Company ensures that our corporate reporting is timely, complete and available globally. All press
releases, financial reports and other information are available on the Redbubble Investor Centre at shareholders.redbubble.com

RedbubbleAnnual Report 2020Year in Review(1)

P&L (A$M)

YoY

(FY20 v
FY19)

FY20

FY19(1)

Growth

Total Revenue

Less: Artist Revenue

416.3

307.0

(67.4)

(50.1)

Marketplace (MP) Revenue

348.9

256.9

Gross Profit

134.4

94.5

36%

35%

36%

42%

GP % (on MP Revenue)

38.5%

36.8%

1.7pp

Paid Acquisition (Marketing)

(39.8)

(27.0)

GPAPA (Gross Profit after Paid Acquisition)

94.5

67.5

47%

40%

GPAPA % (on MP Revenue)

27.1%

26.3%

0.8pp

Operating Expenses

Operating EBITDA

Operating EBITDA %
(on MP Revenue)

(79.3)

(61.2)

30%

15.3

6.3

141%

4.4%

2.5%

1.9pp

Other Income/Expenses(2)

(10.1)

(8.3)

22%

EBITDA

5.1

(2.0)

358%

Depreciation & Amortisation

(13.7)

(10.4)

EBIT

(8.6)

(12.4)

32%

31%

(1) FY19 results include TeePublic from 1 November 2018 onwards. On 1 July 2019 the Group adopted AASB 16 - Leases using the full retrospective

method of adoption. As a result of this FY19 comparative information has been restated.

(2) Includes non-cash share-based payments, currency gains/losses and rent expenses (as per AASB 16 effective 1 July 2019).

RedbubbleHighlights and Commentary

FY2020 Financial Performance

Redbubble Group’s (“RB Group” or “Group”) FY2020 financial metrics (with YoY growth rates(1), where
applicable) are:

• Marketplace Revenue of $349 million, up 36% (29% on a constant currency basis(2))

• Gross profit of $134 million, up 42% (36% on a constant currency basis)

• GPAPA of $95 million, up 40% (34% on a constant currency basis)

• Operating EBITDA(3) of $15.3 million, up 141% (123% on a constant currency basis)

Strategic & Business Update

Key metrics and highlights(6) for FY2020 include:

• 511k selling artists, up 51% and artist earnings were $67 million, up 35%

• 6.8 million unique customers, up 30%

• Repeat sales accounted for 40% of Marketplace Revenue

• Launch of 16 new products across the Group in FY2020, including face masks in April 2020

• Redbubble app sales saw growth of 159% in FY2020 and represented 12.6% of Redbubble Marketplace

• EBITDA of $5.1 million, up 358% (886% on a constant currency basis)

Revenue in FY20

• Free cash inflow of $38 million(4), compared to an outflow of $0.2 million in FY2019(5), resulting from the

Given ongoing uncertainty about COVID-19, RB Group will not be providing forward-looking guidance.

Group’s increasing profitability and working capital advantage

• Closing cash balance at 30 June 2020 of $58 million

During 4Q FY2020, growth and profitability accelerated:

• 4Q20 Marketplace Revenue of $103 million, up 73% on 4Q19 (64% on a constant currency basis)

• Gross profit grew 88% and GPAPA grew 83% in 4Q20 compared to 4Q19, outpacing topline growth,

driven by margin expansion and paid efficiency

• 4Q20 recorded Operating EBITDA of $8.4 million and EBITDA of $7.4 million

With a diversified network of 37 fulfillers across 10 countries and 41 locations, the Group fulfills products close
to customers, keeping shipping timelines and costs competitive. During FY2020, fulfillment capacity was added
in Europe, Canada and the United States.

RB Group’s marketing efforts maintained efficiency with FY2020 marketing spend at 11.4% of Marketplace
Revenue.

Operating expenses for the year were $79.3 million. This includes a one off $2.2 million provision for the
organisational restructure announced on 25 June 2020.

Teams are focused on 4 key initiatives to propel profitable growth:

1) Artist acquisition, activation and retention

2) User acquisition and transaction optimisation

3) Customer understanding, loyalty and brand building

4) Further physical product and fulfilment network expansion

RB Group CEO, Martin Hosking, said:

“RB Group’s on-demand fulfilment model and differentiated consumer
offerings provide us with distinctive advantages. The strong financial
performance follows from these fundamentals. It has been pleasing
to see the acceleration of existing trends in the last few months. 2021
represents a year of opportunity for the business. We are positioned
to build on a decade of momentum and aggressively pursue the global
opportunity presented by the shift to online activity and increasing
adoption of ecommerce platforms.”

(1) FY2020 YoY growth rates based on TeePublic contributions from 1 Nov 2018.

(2) “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes. Redbubble sources

about 94% of its Marketplace Revenue in currencies other than Australian dollars. TeePublic sources about 89% of its Marketplace Revenue in
US dollars.

(3) Operating EBITDA excludes non-cash share-based payments, currency gains/losses, rent expenses (as per AASB 16 effective 1 July 2019),

depreciation and amortisation. Comparative figures have been adjusted accordingly on a like for like basis. 4Q and FY2020 Operating EBITDA
also includes the impact of $2.2 million related to one-off reorganisation costs.

(4) Aggregate operating and investing cash flows excluding consideration for TeePublic.

(5) The AASB 16 change also increased FY2020 free cash flows by $3.6 million. The FY2019 comparative figures have been adjusted upwards by

$2.9 million to apply the same treatment to the prior period.

(6) Sourced from RB internal data.

RedbubbleAnnual Report 2020Chair’s Letter

CEO’s Review

On behalf of the Redbubble Board of directors, I am pleased
to present the Annual Report for 2020. The past year has
been uniquely challenging and I am proud of Redbubble’s
strong business performance during this period. The COVID-19
pandemic has had a profound impact on consumer behaviour
and has accelerated the shift to online platforms. The
Redbubble and TeePublic marketplaces have benefitted from
this shift, with strong growth evident across geographies and
product categories.

I am particularly pleased with the performance of the Redbubble supply chain, which has proven to be highly
resilient and largely unaffected by the pandemic.

One sign of a great business is its ability to adapt to changing circumstances. Redbubble was amongst the
first to move all staff to remote working, whilst maintaining the usual high levels of productivity. The Redbubble
team was also able to design and launch a new facemask product with impressive speed. Facemasks have
rapidly grown to be an important sales contributor for both Redbubble and TeePublic.

I was delighted to assume the role as Board Chair in March this year. I thank my predecessor Richard Cawsey
for his leadership of the Board and many contributions to Redbubble over the past decade. I also thank
Redbubble’s co-founder Martin Hosking for coming out of retirement to step in as interim CEO following Barry
Newstead’s departure from the company in February. Martin is continuing as interim CEO whilst the Board
completes a global search for a permanent CEO.

We welcomed Ben Heap to the Redbubble Board in April 2020. Ben is passionate about innovation and his
diverse experience has proved to be a great addition to the board.

Thanks to our wonderful community of committed artists. We are proud of the quality and diversity of art and
design work they bring to the Redbubble and TeePublic marketplaces. This year artists earned over $67 million
through our marketplaces. Thanks also to our valued third party fulfillers, content partners and customers for
their continued support.

My thanks also go to all Redbubble employees. Our success this year would not have been possible without
the efforts of our strong executive team and dedicated employees around the globe.

Finally, thanks to you, our shareholders. We will continue to focus on building long term value for you as we
realise our ambition of creating the world’s largest marketplace for independent artists.

The potential for the Redbubble Group (“RB Group”)
has become increasingly clear during FY2020 as both
marketplaces (Redbubble and Teepublic) have seized on
the opportunities presented by the Covid-19 crisis to extend
leadership positions serving independent artists and their
customers. The Company’s potential is reflected in financial
results highlighting rapidly accelerating profitability as the
advantages of increasing scale are realised.

In this review I want to highlight the four factors that have driven success of the Company through 2020 and
which underpin the potential for the Company in the coming decade: changes in the retail landscape, the
strong flywheel dynamics, the advantages of the on-demand model and finally our commitment to profitable
growth.

Changes in the Retail Landscape

The Covid-19 crisis that unfolded in the third and fourth quarters of 2020 has accelerated trends that were
already underway. 10 years of online growth were achieved over the course of a few months. There are signs
of enduring structural changes with consumer behaviour having shifted and online retail retaining share even
as reopening occurred.

The Group was particularly well suited, versus traditional retailers, by the nature of our offering: more
differentiated and personalised products, almost immediate timely product designs created by the artists and
negligible stocking or inventory risk as a result of the print-on-demand offering. The combined effect of these
factors was that the Redbubble marketplaces had the most relevant products for the customers made available
at attractive prices with attractive margins.

Growth for the Company was realized in all four of our principal geographies: North America, Continental
Europe, the UK and Australia and New Zealand. In the fourth quarter year-on-year growth was 121%, 61%,
124% and 79% respectively. These geographies represent a total addressable market of some 1 billion people.
There are very few consumer marketplaces from anywhere in the world, let alone Australia, that have such
global spread.

Anne Ward
Chair

RedbubbleAnnual Report 2020CEO’s Review (continued)
Changes in the Retail Landscape (continued)

CEO’s Review (continued)
Flywheel Dynamics (continued)

Gross Transaction Value by Region(1)

(A$m, FY16-FY20)

328

231

175

143

Region

ROW

AU/NZ

% total
business

FY19-20
YoY

4Q YoY

10%

24%

33%

24%

79%

124%

14%

30%

61%

474

North
America

69%

53%

121%

Marketplaces are especially difficult to create as without buyers there are no sellers and without sellers no
buyers. That means once established they have considerable resilience. They typically also have a second
inflection point as the offering is accepted by more mainstream consumers with even more rapid uptake by
the sellers. The Group is now moving through this point as in the last year:

• We had 511,000 selling artists;

• They earned a total of $67 million;

• They attracted 6.8 million customers;

• Who bought $474 million from these artists; and,

• With the products created from 41 fulfilment locations all over the world.

It is a flywheel because the more artists in the marketplace, the more relevant content and so more reason for
customers to come. The more customers the better the fulfilment network becomes, and this in turn brings
back more customers. And with more customers more artists are attracted. Given the overall size of the
addressable market this flywheel, which has been operating for more than a decade, will continue to drive
growth and profitability for many years.

112

142

215

328

On Demand Retail Model

FY16

FY17

FY18

FY19

FY20

Flywheel Dynamics(1)

ARTISTS & CONTENT

DISCOVERY

LOYAL CUSTOMERS

SERVICE

FULFILMENT & OPTIONS

Leading Print-On-Demand
marketplaces for
independent artists

511,000 selling artists on
RB marketplace (↑51% YoY)

Aggregated, growing demand

6.8 million customers (↑30% YoY)
bought from RB marketplaces
spending $474 million GTV
(↑44% YoY)

Scalable on-demand global
3rd party fulfilment

41 fulfilment locations across
global networks (↑9% YoY)

The third arm of the marketplace is the fulfilment network. It is this network which enables an artist in Pretoria
to sell a facemask to someone in Berlin. The network has taken 13 years to build and is without parallel in any
other company. With 41 fulfiller locations at 30 June 2020, 96% of all products sold are fulfilled by a partner
local to the same geographic region as the customer who bought them.

There are 117 products available in the marketplaces and 16 new products were added last year. Additional
products create annuity streams of revenue. Product diversity has provided resilience with year-on-year
growth strong in all categories. Areas of expansion for the group extend in all our category areas: apparel,
accessories, home and wall art and electronics as well as new categories such as home office, nursery and
baby and even pets.

Product contribution

(% of Marketplace Revenue, FY16 - FY20)

13%

12%

10%

13%

12%

13%

17%

11%

14%

19%

10%

12%

14%

17%

Category

FY19-20 YoY

Homewares

Artwork

Accessories

Other Apparel

Stationery and
Stickers

63%

68%

52%

30%

21%

51%

47%

40%

38%

T-shirts

30%

(1) Source: RB internal data

FY16

FY17

FY18

FY19

FY20

RedbubbleAnnual Report 2020CEO’s Review (continued)

Profitable Growth

Since IPO in 2016 Redbubble has shown consistent growth down the P&L. During 2020 the promise of this
was realised with Operating EBITDA(1) profitability of $15.3 million and EBITDA profitability of $5.1 million.
This reflected scaling across the Group with low customer acquisition costs, solid margins and low marginal
operating expenditure. These are all a feature of the fundamentals of the business model. Looking forward we
intend to continue to build on the advantages of the model to drive increasing levels of profitability with solid
top-line growth.

Marketplace Revenue

(A$m, FY16-FY20)

+32% CAGR

115

FY16

141

FY17

183

FY18

257

FY19

349

FY20

(A$m, FY16-FY20)

+36% CAGR

FY16

FY17

FY18

FY19

134

FY20

Operating EBITDA

(A$m, FY16-FY20)

+141% YoY

CEO’s Review (continued)

2021 A year of Promise

2021 is a year of promise. The flywheel for the group is turning faster as we become more mainstream. We aim
to maintain the momentum through focus on 4 things:

1.
Artist activation and retention at Group level. This is to ensure we are the
natural home for all artists on the Internet. We need to attract, retain and
develop them as they are the foundation for the differentiated consumer
experience.

2.
User acquisition and transaction optimisation. We have unique assets in
the vast content library and diverse product types. This allows us to attract
customers in a low cost way but it requires ongoing development activity.

3.
Customer understanding, loyalty and brand building. This is the biggest single
opportunity for the Company. The improvements in loyalty we are seeing are
encouraging. Both the Redbubble and Tee Public have loyal customers and
the brands are being built. We need to focus on this, and are bringing in new
expertise into the Company to do so.

4.
Finally, new physical products and network expansion. We can add 100s of
products and many more fulfilment partners. The technology is ever expanding
and what seemed fanciful only a few years ago is now everyday. Adding new
products and partners will increase the scale and scope of the marketplaces,
attracting and satisfying more customers.

-4.9

FY16

-3.4

FY17

-2.2

6.3

15.3

FY18

FY19

FY20

(1) Operating EBITDA: excludes non-cash share-based payments, currency gains/losses, rent expenses (as per AASB 16 effective 1 July 2019),

Martin Hosking
CEO

RedbubbleAnnual Report 2020Director’s Report

Your Directors present their report on the consolidated entity,
consisting of Redbubble Limited (the Company or Redbubble)
and the entities it controlled during the financial year ended 30
June 2020 (referred to hereafter as the RB Group or Group).

Directors

The following persons were Directors of the Company during the 2020 financial year and to the date of this
Report:

Anne Ward

Chair, Non-executive Director

Review of operations

FY2020 Financial Performance

The RB Group’s FY2020 financial result reflects a positive shift to online retail reporting the following core
metrics with year on year (YoY) growth rates(1), where applicable:

• Marketplace Revenue of $349 million, up 36% (29% on a constant currency basis(2));

• Gross profit of $134 million, up 42% (36% on a constant currency basis);

• Gross Profit After Paid Acquisition costs (GPAPA) of $95 million, up 40%

(34% on a constant currency basis);

• Operating EBITDA of $15.3 million, up 141% (123% on a constant currency basis);

• EBITDA of $5.1 million, up 358% (886% on a constant currency basis);

• Free cash inflow of $38 million(3), compared to an outflow of $0.2 million in FY2019(4),
resulting from the Group’s increasing profitability and working capital advantage; and

• Closing cash balance at 30 June 2020 of $58 million.

Marketplace Revenue growth was evident across both marketplaces, particularly in 4Q. This top line growth
has been achieved with strengthening margins, efficiency of paid marketing spend and controlled operating
expenses resulting in a record Operating EBITDA profit of $5.1 million.

Martin Hosking

CEO and Managing Director (reappointed effective 18 February 2020
following earlier appointments as Non-executive Director, Executive
Director and first appointment as CEO and Managing Director)

Gross profits strengthened in the period with the onboarding of additional fulfillment capacity in Europe,
Canada and the United States. The strength of the network across 37 fulfillers, 10 countries and 41 locations
allowed products to be produced close to consumers, keeping shipping timelines and costs competitive.

Jennifer (Jenny) Macdonald

Non-executive Director

Greg Lockwood

Non-executive Director

Ben Heap

Non-executive Director (appointed effective 20 April 2020)

Richard Cawsey

Barry Newstead

Grant Murdoch

Former Chair, Non-executive Director
(resigned effective 30 March 2020)

Former CEO and Managing Director
(ended effective 18 February 2020)

Non-executive Director
(resigned effective 23 October 2019)

Principal activities

RB Group, through its websites at Redbubble.com and TeePublic.com, owns and operates the Redbubble and
TeePublic online marketplaces. These marketplaces facilitate the sale and purchase of art and designs on
a range of products sold by independent creatives to consumers. The products are produced and shipped
by third party service providers (i.e. product manufacturers, printers and shipping companies) referred to as
fulfillers.

There was no significant change in the nature of RB Group’s activities during the year.

The RB Group expanded its paid social channels within the year to include podcast advertising, Twitch, and
TikTok, in addition to existing social channels. RB Group’s marketing efforts maintained efficiency with FY2020
marketing spend at 11.4% of Marketplace Revenue.

Operating expenses for the period were $79.3 million, however, within this cost base is a $2.2 million
restructure provision as a result of the organisational restructure announced on 25 June 2020. This restructure
aligns teams to the strategic activities within the organisation. The design commits the Group to deliver against
a smaller set of core activities whilst aggressively pursuing profitable growth.

FY2020 was the first full year of TeePublic’s inclusion in the RB Group’s Financial Statements. Redbubble
made a $7.1 million ($4.8 million USD) deferred consideration payment in May 2020, as required by the Equity
Purchase Agreement. The deferred consideration payment was net of agreed actual and contingent liabilities
in respect of the period pre-completion of the transaction.

At year end, the RB Group retained a cash balance of $58 million, an increase of $29 million ($7.8 million in
FY19) demonstrating the Group’s powerful working capital advantage as aggregate operating and investing
cash flows were positive for the first time in FY20.

(1) FY2020 YoY growth rates based on TeePublic contributions from 1 Nov 2018.

(2) “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes. Redbubble sources

about 94% of its Marketplace Revenue in currencies other than Australian dollars. TeePublic sources about 89% of its Marketplace Revenue in
US dollars.

(3) Aggregate operating and investing cash flows excluding consideration for TeePublic.

(4) The AASB 16 change also increased FY2020 free cash flows by $3.6 million. The FY2019 comparative figures have been adjusted upwards by

$2.9 million to apply the same treatment to the prior period.

RedbubbleAnnual Report 2020A reconciliation of reported results to non-IFRS numbers in this Directors’ report is provided below.

Reconciliation of reported results to non-IFRS(1) numbers

Total reported revenue from services

Less Artists' margin

Marketplace revenue

Fulfiller expenses

Gross profit

Gross profit margin on Marketplace revenue

Paid acquisition costs

Gross Profit After Paid Acquisition costs (GPAPA)

Cash Operating Expenses

Employee and contractor costs (excluding share based payments)

Marketing expenses (excluding paid acquisition costs shown above)

Operations and administration costs (excluding TeePublic acquisition costs)

Cash Operating Expenses

Operating (Cash) earnings before interest, tax, depreciation and amortisation
(Operating EBITDA)

Share based payments

TeePublic acquisition costs

Other expenses

Earnings before interest, tax, depreciation and amortisation (EBITDA)

Depreciation and amortisation

Interest expenses

Interest income

Total Loss before income tax

Income tax benefit/(expense) (4)

Reported total loss for the year

2020
$’m(2)

416.3

(67.4)

348.9

(214.5)

134.4

38.5%

(39.8)

94.5

(51.5)

(3.5)

(24.3)

(79.3)

15.3

(8.0)

(2.1)

5.1

(13.7)

(0.6)

0.2

(9.0)

0.2

(8.8)

2019
$’m(2)

Restated(3)

307.0

(50.1)

256.9

(162.4)

94.5

36.8%

(27.1)

67.5

(41.7)

(1.5)

(17.9)

(61.3)

6.3

(5.9)

(1.2)

(2.0)

(10.4)

(0.7)

0.3

(12.8)

(14.8)

(27.6)

Business Update

Key metrics and highlights(5) for FY2020 include:

• 511k selling artists, up 51% and artist earnings were $67 million, up 35%;

• 6.8 million unique customers, up 30%;

• Repeat sales accounted for 40% of Marketplace Revenue;

• Launch of 16 new products across the Group in FY2020, including face masks in April 2020; and

• Redbubble app sales saw growth of 159% in FY2020 and represented 12.6% of Redbubble Marketplace

Revenue in FY20.

COVID-19

The RB Group provided COVID-19 updates in April and June 2020 updating investors of the impact of
COVID-19 on trading activity. The initial impact of the global pandemic saw increased volatility in sales and a
reduction of demand. However, post this initial decline, the Group has benefited from an acceleration in online
activity throughout the last quarter of FY20. Increased demand was evident across both marketplaces, all core
geographies and product categories.

The Group’s early release of adult masks has led to strong sales performance of 741,000 masks shipped in
the period, recognition of $12.1 million of marketplace revenue (on a shipped basis) and $1.4 million of artist
earnings generated. Home decor and wall art categories were strong contributors to the Group’s performance.
400,000 masks were donated to Heart to Heart International and Direct Relief to support communities most in
need.

The financial impact of the increased consumer demand has led to high balances of cash in accordance with
the Group’s working capital advantage. Additionally, FY20 has a larger unearned revenue balance reflecting the
demand and time taken to produce and deliver goods to consumers. The increased time to deliver goods has
been well managed with customer communications and the Group NPS scores remain strong.

The impact for the Group’s community of artists has been overwhelmingly positive as evidenced by record
numbers of artists joining the marketplaces and artworks uploaded that translated into record numbers of
products sold by artists and payments made to them in 4Q FY20.

The RB Group did not receive any Government benefits across the jurisdictions in which the Group operates.

The RB Group quickly adapted to external health and safety information and transitioned the workforce across
our operations of New York, San Francisco, Melbourne and Berlin to a full time remote basis from March 10th.
The agility of the team, supported by secure cloud based technology has supported a decentralised working
model without losing productivity. Redbubble’s teams remained working remotely through until June 30th and
are not expected to return to the office until early in 2021.

A range of initiatives have been provided to support the wellbeing of all employees including use of company
assets like monitors, allowances for the provision of an ergonomic work from home set up, allowances for home
internet costs, the provision of mindfulness activities, the official Employee Assistance Program with trained
health professionals as well as remote working wellbeing resource packs.

(1) Non-IFRS measures are presented to provide readers a better understanding of Redbubble’s financial performance. The non-IFRS measures are

unaudited, however, they have been derived from the audited financial statements.

(2) For presentation purposes, numbers have been rounded to millions of dollars, however calculations and totals are based on unrounded numbers.

(3) On 1 July 2019 the Group adopted AASB 16 - Leases using the full retrospective method of adoption. Prior year comparatives have been restated

to align the accounting treatment across both periods.

(4) Details of the movement in the income tax (expense)/benefit are found in note 7(b) of the financial statements. The movement is predominantly

due to the decision to write off the deferred tax asset during the prior year.

(5) Sourced from RB Group internal data.

RedbubbleAnnual Report 2020COVID 19 (continued)

Dividends

The COVID-19 pandemic adds inherent uncertainty into global economic conditions, and as such,
the RB Group continues to monitor online sales, trends and the fulfillment networks capacity.

No dividends were paid or declared since the start of the 2020 financial year.

Financial implications of COVID-19 are identified in the financial statements, specifically:

Corporate Sustainability Statement

•

in confirming the going concern basis of preparation of accounts; and

•

in assessing the carrying value of intangible assets.

In October 2019, the RB Group established an American Depository Receipts (ADR) program with the symbol
RDBBY. The program complements the Australian Stock Exchange listing, facilitating existing shares to be
issued as ADRs to US and international investors.

Strategy

The RB Group sells merchandise decorated from a unique collection of 35 million works by independent artists.
By leveraging printing technology allowing economic single prints on many types of products, supported by
worldwide fulfillment, the RB Group is able to offer amongst the largest catalogue of any ecommerce business
while holding no inventory. As the leading business of this kind, the Group’s objective is to expand its market
while extending its leadership position, and through this, to bring more creativity into the world.

A confluence of factors including a change of leadership and review, sharing of best practice between
TeePublic and Redbubble, the environmental shocks of COVID-19 and an increasing profit orientation has led
the company to refine strategy by focusing on a narrower set of core growth activities:

• Artist acquisition, activation and retention;

• User acquisition and transaction optimisation;

• Customer understanding, loyalty and brand building; and

• Further physical product and fulfilment network expansion.

In so doing, the RB Group has been able to restructure to align resources around fewer priorities while
supporting the cost discipline required to drive profitability. At the same time, the clarity of a narrower focus on
the basic drivers of the RB Group flywheel has been designed to sharpen execution within the business.

RB Group takes its corporate social responsibilities seriously and recognises that social, environmental and
ethical conduct has an impact on RB Group’s reputation and the broader community.

Redbubble’s Board is committed to creating enduring value for shareholders and other stakeholders. This is
achieved through:

•

Implementing sound corporate governance practices;

• Operating in a responsible manner towards employees through fair and equitable practices;

• Transparent reporting on operations and activities;

• Monitoring potential risks and applying mitigating policies; and

• Making a positive impact on the community.

Examples of RB Group’s contributions to the community are summarised below.

‘Create Some Good’

Redbubble’s commitment to the power of creativity and belief that a simple idea can help open hearts and
minds led to the launch of the ‘Create Some Good’ initiative. The Company funded 5 projects by 6 artists from
4 countries. All with a single goal – to use creativity to make the world a little better.

‘Community Collective’

Redbubble’s Community Collective is an employee-driven initiative with one core purpose: to creatively bring
compassion into our local communities. We’ve partnered with organizations who focus on issues like the
environment, cancer, HIV/AIDS, domestic violence, and poverty.

Major Global Incidents Policy

When a global incident occurs, the Company often sees works emerge on the Redbubble website as artists
respond to real life events. In certain scenarios, the Company donates all profits from related works to
the appropriate charity or organization, ensuring the funds will be used in a meaningful and relevant way.
Any content created in response to such events must comply with Redbubble’s User Agreement and all of
Redbubble’s usual policies.

Significant changes in the state of affairs

Mask Donations

In the Directors’ opinion, there have been no significant changes in the state of affairs of RB Group during the
2020 financial year.

Significant events after end of the 2020 financial year

Redbubble and TeePublic both launched face masks at the end of April to support the Group’s artist community
and have a positive impact on the world during the COVID-19 global pandemic. In June 2020 RB Group
announced plans to donate up to 400,000 face masks to Heart to Heart International and DirectRelief for
every face mask sold on Redbubble and TeePublic respectively. Donated masks will be given to health workers
responding to coronavirus.

In the Directors’ opinion, there have been no matters or circumstances arising since the end of the 2020
financial year that has significantly affected, or may significantly affect:

Bushfire support

• RB Group’s operations in future financial years;

•

the results of those operations in future financial years; or

• RB Group’s state of affairs in future financial years.

Redbubble donated $14,000 from bushfire related sales to Zoos Victoria Emergency Wildlife Fund to support
teams caring for displaced and injured animals. A number of Australian based Redbubble staff contributed by
salary sacrificing donations to the same emergency relief fund.

RedbubbleAnnual Report 2020Redbubble partnered with the Canberra Times, in conjunction with Artist David Pope, to support bushfire relief
efforts. Mr Pope created a special series of works aimed at celebrating some of the areas in Australia that were
hardest hit by the bushfires. The goal was to promote tourism to these areas and to raise money for bushfire
relief charities. The artworks were promoted on Redbubble and Redbubble donated $10,000 to bushfire
recovery efforts through the Foundation for Rural and Regional Renewal Public Fund.

Gillian Anderson collaboration

Due to popular demand of Gillian Anderson’s original lips design that she promoted and sold for charitable
causes on her Redbubble shop in 2019, Gillian partnered with Redbubble on a mask campaign supporting the
‘SayYes’ charity, which trains and supports mentors for youth in transition particularly in Africa. In light of the
COVID and BLM movements, supporting this cause was particularly important to Gillian. Gillian’s limited-time
shop was live for just under three months on Redbubble and drove more than $55k AUD in sales. Redbubble
donated 10% of total revenue from her shop to SayYes.

Further details about Redbubble’s Corporate Sustainability initiatives can be found on Redbubble’s Corporate
Sustainability page at:

redbubble.com/social-responsibility/giving-back/community-collective

Environmental regulations

RB Group is committed to compliance with all applicable environmental legislation. RB Group adopts
responsible environmental practices to meet its compliance requirements and operate consistent with its
values.

The Directors are not aware of any material breaches of any environmental legislation affecting RB Group’s
operations.

Ethical Sourcing Policies

As a global marketplace, RB Group places great emphasis on its contribution and impact in the wider
community, both socially and environmentally.

Print on Demand

Every product on RB Group’s marketplaces is printed on demand (i.e. made one at a time). That means the
product does not exist until the customer orders it. Print on demand allows fulfillers to combine multiple items
in the same package. That means fulfillers do not need as much shipping material. Less material means less
waste.

A Small Footprint

Around 95% of packages delivered via the Redbubble marketplace originate within the same region from
which they are ordered. For the TeePublic marketplace that proportion is over 90%. This regional fulfillment
ensures that less energy is used in the delivery of packages and leads to a smaller carbon footprint. To offset
the shipping emissions from annual package delivery, the Company is partnering with a leading third-party
carbon offset organisation. Current examples of conservation initiatives in which the Group is investing include
a grasslands conservation project in Oregon, USA and a cookstove replacement program to reduce emissions
in India.

Ethical Production

RB Group is committed to ethically-sourced apparel. Only independent third-party printers that source high
quality garments and value the health and welfare of their staff are permitted to participate in the RB Group
marketplaces. All Redbubble’s participating third-party printers hold formal social compliance approvals such
as Worldwide Responsible Accredited Production (WRAP) or equivalent certifications. The same is true for the
majority of TeePublic’s participating third-party printers and work continues on obtaining certifications for the
remaining manufacturers.

RB Group also requires that all third-party printers participating in the marketplace ensure safe working
conditions, minimise environmental impacts, and treat their employees with respect and dignity. Redbubble
ensures these requirements are met by requiring printers’ adherence to the Fair Labor Association (FLA) Code
of Conduct. The same is true for the majority of TeePublic’s printers and, as above, the remainder of printers
are being brought into compliance with the FLA Code.

The Group works with third-party firms to schedule announced compliance audits of the FLA Code of Conduct.
The core purpose is to ensure standards are being met and sustainable management, reporting, and tracking
systems have been established. Participants in the Group marketplaces must commit to continual improvement
where Code Standards are not met and assure ongoing compliance in a reasonable and timely manner.

California Transparency in Supply Chains Act

RB Group supports the California Transparency in Supply Chains Act, which requires members of the supply
chain to certify compliance, agree to audits, undergo Social Responsibility training and remain accountable for
their actions.

Australian Modern Slavery Act 2018 requirements

The Modern Slavery Act 2018 (Cth) commenced on 1 January 2019. Redbubble is subject to the new statutory
modern slavery reporting requirements and, in addition to the activities and processes described above, the
Company is reviewing supply chain operations ahead of its with the first mandatory compliance report due in
March 2021.

Governance and risk

RB Group is committed to strong and effective governance and risk management frameworks. These
frameworks are described in Redbubble’s Corporate Governance Statement - available in the Corporate
Governance section of the Redbubble’s Investor Centre at: shareholders.redbubble.com

RB Group manages its risks in an integrated, consistent and practical manner. The overall objective of risk
management is to assist the Group to achieve its objectives by appropriately considering both threats and
opportunities, and making informed decisions. Redbubble’s Audit and Risk Committee oversees the process for
identification and management of risk, as described in the Corporate Governance Statement. The Company
Secretaries are responsible for reporting to the Audit and Risk Committee and the Board in relation to the
management of RB Group’s significant risks.

The Group’s risk management framework, responsibilities and accountabilities are aligned with its business
model. The risk management policy and risk appetite is provided in the Corporate Governance Statement. The
key organisational controls within the risk management framework help to shape the strategies, capabilities
and culture of the Group, identify and address vulnerabilities, strengthen the system of internal controls and
build a more resilient organisation.

RedbubbleAnnual Report 2020Risk Framework

RB Group seeks to take and manage risk in ways that will generate and protect shareholder value. The
management of risk is a continual process and an integral part of the Group’s business.

The Group acknowledges that it has an obligation to shareholders, customers, employees, creatives and
contractors to implement a risk management framework that reflects its overall risk appetite and tolerances for
risk in specific areas.

The Directors believe that this approach contributes to the achievement of the Group’s strategic objectives.
The Group is committed to ensuring that a consistent and integrated approach to managing risk is established
at all levels and is embedded in its processes and culture.

The objective of RB Group’s risk appetite is to foster a culture of innovation. RB Group is aware that an overly
cautious approach to risk management may have a harmful impact on the achievement of strategic and
operational objectives. For this reason, the Board encourages prudent risk taking by RB Group staff that
balances the risks of action versus inaction and subject always to applicable RB Group policies.

The Board is ultimately responsible for ensuring risk management processes have been established and are
operating effectively. The Audit Risk Committee, through its Charter, is responsible for overseeing RB Group’s
ongoing risk management program framework and any key supporting policies and procedures. The CEO and
the Executive Team are responsible for managing and embedding risk management practices throughout RB
Group.

RB Group has adopted a risk management strategy that aims to identify and minimise the potential for loss
while also maximising strategic opportunities for growth and enhanced service delivery and profitability.
RB Group’s Risk Framework, Principles and Process is consistent with the following model from AS/NZ ISO
31000:2018

Continual
Improvement

Integrated

Human and
Cultural Factors

Structured and
Comprehensive

Value Creation
and Protection

Best
Available
Information

Customized

Dynamic

Inclusive

Principles (clause 4)

Integration

Design

Leadership and
Commitment

Improvement

Implementation

Evaluation

N
O
T
A
T
L
U
S
N
O
C
&
N
O
T
A
C
N
U
M
M
O
C

SCOPE, CONTEXT, CRITERIA

R I S K A S S E S S M E N T

Risk Identification

Risk Analysis

Risk Evaluation

RISK TREATMENT

RECORDING & REPORTING

M
O
N
T
O
R
N
G
&
R
E
V
E
W

Framework (clause 5)

Process (clause 6)

The Risk Framework outlines the responsibilities for risk management at all levels in the organisation. The
Board approves a Delegation Register that provides for delegation to management in specific areas and
prescribes the limits on such delegations. The Framework also supports these responsibilities by defining a risk
reporting structure, expectations and the resources and tools required.

The risk management process outlined in the Framework includes risk assessment methodology with
identification, analysis, evaluation and treatment in Redbubble’s key risk areas.

2323
23

Annual Report 2020Redbubble

Privacy and Data Protection Compliance Risk

To minimise the impact of this compliance risk we undertook an extensive compliance framework initiative with
the enactment of the European General Data Protection Regulation (GDPR) and California Consumer Privacy
Act and implemented appropriate IT security measures; including preventative, detective and responsive
capabilities.

Macroeconomic Risks

RB Group is subject to macroeconomic risks affecting consumer demand in relevant retail markets. These risks
are largely outside of RB Group’s control, and are mitigated by spreading risk and investments across a wide
range of countries and investments of varying sizes and value. The Group has benefited from an acceleration
in online activity due to the impacts of the COVID-19 pandemic on consumer behaviour. However, the negative
macroeconomic effects of the pandemic in RB Group’s major territories creates greater uncertainty for the
Group in the longer term.

Information on Directors

At the date of this report, the Board comprises four Non-executive Directors and one executive Director, who
collectively have a diverse range of skills and experience. The names of Directors and details of their skills,
qualifications, experience can be found below on pages 26 to 28 of this Report.

Details of the number of Board and Board Committee meetings held during the year and Directors’ attendance
at those meetings are shown on page 28 of this report.

Details of the qualifications and experience of the Directors and their directorships of other listed companies
held by each current Director in the three years before the end of the 2020 financial year are listed below.

Principal risks

The following are key risks that may impact RB Group’s financial and operating results in future periods:

Competitive activity / technological disruption

To mitigate the impact of this risk RB Group is focussing on ensuring that its marketplaces provide a market
leading experience for artists and customers.

Google search channel risk

The RB Group has prioritised search engine optimisation (SEO) work with allocation of internal resources and
external consultants, including improvements throughout an improved user and crawler navigation experience
generated by changes to website linking structures.

Fulfillment network capacity risk

RB Group has reduced this risk by implementation of a diversification strategy by integration of new fulfillers
and improvements to the fulfillment API, systems and tooling, enabling new fulfillers to be onboarded
significantly faster.

Attracting and retaining top talent in business critical functions

Redbubble continues to encounter competition for technology talent in Melbourne. This risk has been mitigated
with the introduction of the executive compensation plan during FY2020 and compensation adjustments for
key talent roles.

Technology Security Risk

As a technology‐focused business, managing security, and taking care of consumer and customer data
is essential. To manage this risk, the Group has developed and tested its disaster recovery capability and
procedures, implemented high availability infrastructure and architectures, and continually monitors our
systems for signs of poor performance, intrusion or interruption. The Group maintains appropriate data
management, security and compliance policies, procedures and practices in place.

Litigation brought against Redbubble for intellectual property infringement

Litigation risk arises from RB Group’s role as an intermediary for user-generated content. RB Group mitigates
this risk in various ways, including by responding expeditiously to takedown notices from intellectual property
rights holders; engaging in collaborative relationships with rights holders to promote the integrity of hosted
content (including by facilitating licensing through our Partner Program and by proactively finding and removing
content through our Policing Program); developing automated platform software to manage content at scale;
and building our litigation capabilities.

This approach has reduced risk, especially in the United States, where Redbubble has secured multiple
favorable decisions in 2019 and 2020. Although one of these cases is still pending, and plaintiffs in two other
cases have appealed the decisions, they are valuable wins for both RB Group and the independent artists who
use its marketplaces. The decisions provide a clear indication from the courts that RB Group’s business model
and IP enforcement procedures limit exposure to legal claims that assert RB Group is liable for the acts of
third-party sellers. RB Group will continue to mitigate risk in this area by further building its capabilities through
process and technology improvements.

RedbubbleAnnual Report 2020Directors’ qualifications and experience

Ms Anne Ward

Independent Non-executive Director and Board Chair
Member of the People and Nomination Committee
Chair of the Disclosure Committee

Anne Ward is a professional company director with extensive experience
in business management, strategy, finance, risk and governance across
a range of industries including banking, financial services, technology,
healthcare, education, property and tourism. In addition to chairing
Redbubble, Anne is independent Chairman of Colonial First State
Investments Ltd, a member of the Council at RMIT University, a Director
of the Foundation for Imaging Research, and a Governor of the Howard
Florey Neuroscience Institutes. Prior to becoming a professional director,
Anne was a commercial lawyer for 28 years and was General Counsel for
Australia at the National Australia Bank. She holds a Bachelor of Laws
and a Bachelor of Arts from the University of Melbourne, is admitted as a
barrister and solicitor in the Supreme Court of Victoria and is a Fellow of
the Australian Institute of Company Directors.

Anne has held the following listed company directorships in the 3 years
to 30 June 2020:

• MYOB Group Ltd (from March 2015 to May 2019)

Mr Martin Hosking

CEO and Managing Director
Member of the Disclosure Committee

Martin Hosking is a co-founder of Redbubble. He first became the
CEO and Managing Director in July 2010. Martin resigned as CEO and
Managing Director and became an Executive Director on 1 August 2018
and Non-executive Director on 1 October 2018. Martin was appointed
CEO and Managing Director on 18 February 2020 following Barry
Newstead’s departure. Martin has spent over 20 years scaling Australian
technology companies. Previously, Martin was the chair of Aconex, a
SaaS provider to construction firms, and Southern Innovation, a digital
pulse processing solution. He was instrumental in the development and
subsequent listing on the NASDAQ of search company, LookSmart.
Martin started his career as a diplomat with the Australian Department
of Foreign Affairs and Trade before joining McKinsey & Company, serving
clients focusing on emerging technologies. Martin has a Bachelor of
Arts (Hons – First class) degree from the University of Melbourne and an
MBA (with distinction) from Melbourne Business School, where he has
also lectured. Martin is a graduate of the Australian Institute of Company
Directors.

Martin has not held any other listed company directorships in the 3 years
to 30 June 2020.

Ms Jenny Macdonald

Independent Non-executive Director
Chair of the Audit and Risk Committee
Member of the People and Nomination Committee
Member of the Disclosure Committee

Jenny Macdonald is a professional company director, currently serving on the Board and is Remuneration Chair
and an audit committee member of ASX-listed Australian Pharmaceuticals Ltd (ASX: API), the parent company
of Priceline Pharmacy, Soul Pattinson Chemist and Pharmacist Advice, and serves as the Audit Chair for Bapcor
Ltd (ASX:BAP). Jenny was appointed a Non-Executive Director and Audit and Risk Chair of Property Guru Pte
Ltd, operator of Singapore’s marketing leading property portal propertyguru.com.sg, effective 10 September
2019. Jenny previously held Non-Executive Director role at Redflow Ltd (ASX: RFX) a producer of innovative
energy storage flow batteries. She also has extensive experience working for ASX-listed and global companies
at the CFO and general management level, including as CFO and interim CEO at Helloworld Limited, and CFO
and General Manager International with REA Group. Jenny holds a Masters of Entrepreneurship and Innovation:
Swinburne University (Victoria), a Graduate Diploma from the Securities Institute of Australia and a Bachelor of
Commerce from Deakin University (Victoria). She is a Graduate of the Australian Institute of Company Directors
and a Member of the Institute of Chartered Accountants ANZ.

Jenny has held the following listed company directorships in the 3 years to 30 June 2020:

• Australian Pharmaceuticals Ltd (from 9 November 2017 to present)

• Bapcor Ltd (from 1 September 2018 to present)

• Redflow Ltd (from 22 December 2017 to 30 September 2019)

Mr Greg Lockwood

Independent Non-executive Director
Member of the Audit and Risk Committee
Member of the Disclosure Committee

Greg Lockwood was appointed as a Non-executive Director with effect from June 2015. Greg is a partner of
Piton Capital, which is a shareholder in Redbubble. In 1999, Greg founded UBS Capital’s early stage venture
investing activities in Europe. Subsequently, he co-founded Piton Capital, the London-based venture capital
fund specialising in marketplaces and business models with network effects. Prior to his venture capital
activities, Greg worked in telecommunications corporate finance with UBS in London and Zurich and held
operating roles in classified media publishing in Toronto. Greg has an Honours Business degree from the
University of Western Ontario, and a Master’s degree in management from the Kellogg Graduate School of
Management.

Greg has not held any other listed company directorships in the 3 years to 30 June 2020.

RedbubbleAnnual Report 2020Redbubble

Mr Ben Heap

Independent Non-executive Director
Chair of the People and Nomination Committee
Member of the Audit and Risk Committee

Ben Heap is a professional company director with a portfolio of public, private, government and not-for-profit
roles. In addition to Redbubble, Ben is currently serving as a non-executive director of ASX100 company The
Star Entertainment Group Limited (ASX:SGR). He is also a founding partner and chairman of H2 Ventures, a
venture capital investment firm, and a member of the Commonwealth Government’s Fintech Advisory Group.
Ben was previously CEO of UBS Global Asset Management in Sydney and a managing director with UBS in New
York. Ben has extensive experience in a range of sectors including asset management, digital & technology
transformation, fintech & data science innovation and venture capital investment. He has a bachelor’s degrees
in science (Mathematics) and Commerce (Finance) from the University of NSW and is a graduate of the
Australian Institute of Company Directors.

Ben has held the following listed company directorships in the 3 years to 30 June 2020:

• The Star Entertainment Group Limited (from 23 May 2018 to present)

Board and Committee Meetings - attendance during FY2020:

Board

Audit and Risk
Committee

People and Nomination
Committee

Held whilst
in office

Attended
whilst in
office

Held whilst
a Committee
member

Attended
whilst in
office

Held whilst
a Committee
member

Attended
whilst in office

Anne Ward

Martin Hosking

Greg Lockwood

Jenny Macdonald

Ben Heap

Richard Cawsey

Barry Newstead

Grant Murdoch

Directors’ interests in shares and options

Name

Anne Ward

Martin Hosking

Ben Heap

Greg Lockwood

Jenny Macdonald

Total Interests

Shareholdings

Options outstanding

200,000

50,500,090

6,465,131

88,539

57,253,760

50,714

47,509

148,937

Retirement, election, continuation in office of Directors

Under the Company’s constitution, Directors cannot serve beyond three years or the third AGM after their
appointment, whichever is longer, without submitting for re-election by the Company. A retiring Director is
eligible for re-election without needing to give any prior notice of an intention to submit for re-election and
holds office as a Director (subject to re-election) until the end of the general meeting at which the Director
retires.

Anne Ward and Ben Heap are seeking re-election at the 2020 AGM. Martin Hosking, who is Managing Director
and Chief Executive Officer, is not required to be re-elected while he holds the position of Managing Director.

Change in key management personnel during the 2020 financial year and since
the end of that financial year

The “Key Management Personnel” (KMP) during FY2020 are the directors named above and the executive KMP
for the purposes of the FY2020 Remuneration Report. The executive KMP have been determined to be:

• Martin Hosking, Chief Executive Officer from 18 February 2020;

• Barry Newstead - Chief Executive Officer until 18 February 2020; and

• Emma Clark - Chief Financial Officer.

Whilst each of the Executive Team members listed on page 30 are considered key employees, only the
individuals above are considered “Key Management Personnel” within the definition in ‘AASB 124 - Related
Party Disclosures’.

Company Secretaries

RB Group’s Company Secretaries are Ms Corina Davis (based in the US) and Mr Paul Gordon (based in
Australia).

Ms Corina Davis, Executive Vice President - Business Development, Chief Legal Officer and Company
Secretary

Corina Davis joined Redbubble in 2012 and oversees the company’s legal function. In 2017 Corina also
assumed responsibility for Redbubble’s partnerships and licensing initiatives. Corina has a wide range of cross-
functional experience with particular expertise in copyright and trademark law, litigation, compliance and risk
management. Before joining Redbubble, Corina practiced law in Los Angeles and New York City at Milstein
Adelman, McCurdy & Fuller and Mendes & Mount. Corina is an active member of the Women’s General Counsel
Network and the San Francisco General Counsel Group. Corina is a board member of the Australian Digital
Alliance, Australia’s peak body representing copyright users and innovators in digital. Corina holds a Bachelor
of Arts degree from the University of Michigan, Ann Arbor and a Juris Doctor degree from the University of San
Diego School of Law, California.

Mr Paul Gordon, Company Secretary

Paul Gordon is Principal of Gordon & Co Legal and provides company secretarial services to RB Group as an
independent consultant. Paul was previously in-house counsel and company secretary for the Group. Before
joining Redbubble in 2015, Paul was the General Counsel for ASX-listed REA Group and prior to that, Paul was
a Senior Associate at Nabarro LLP (UK) and also practiced at Hogan Lovells (UK) and Chapman Tripp (NZ).
Paul holds a Bachelor of Laws (Hons) and Master of Commerce from the University of Canterbury NZ and a
Certificate in Governance Practice from the Governance Institute of Australia.

Annual Report 2020Executive Team

The Executive Team members are:

• Mr Martin Hosking, Chief Executive Officer and

• Mr Arnaud Deshais, Chief Supply Chain Officer

Managing Director

• Ms Emma Clark, Chief Financial Officer

• Mr Daniel Vydra, Chief Technology Officer

• Dr Brett Watson, Chief Commercial Officer

• Ms Rebecca Zarate, Chief Marketing Officer

• Mr Georg Friedrich, Vice President -

• Ms Corina Davis, Executive Vice President,

Engineering

Business Development, Chief Legal Officer and
Company Secretary

• Mr Adam Schwartz, CEO – TeePublic

• Ms Vanessa Freeman, Chief People and

Culture Officer

Details of share options and performance rights for Directors and Executives

Below are details of options, share appreciation rights and performance rights in respect of ordinary shares in
the Company granted to Directors or any of the 5 most highly remunerated officers of the Company (other than
the Directors) during the 2020 financial year.

Name

Anne Ward

Martin Hosking

Richard Cawsey

Ben Heap

Greg Lockwood

Jenny Macdonald

Grant Murdoch

Barry Newstead

Joseph Burns

Emma Clark

Corina Davis

Arnaud Deshais

Adam Schwartz

Total granted

Number of options /
restricted stock units
granted

Number of ordinary
shares granted under
options / restricted
stock units

Number of share
appreciation rights
granted

27,798

23,910

47,820

27,798

23,910

47,820

27,798

232,937 (1)

1,424,755 (1)

233,097

140,546

131,129

625,561

233,097

140,546

131,129

625,561

1,069,298

338,405

271,464

1,490,596

3,103,922

(1) The options and share appreciation rights granted to Mr Newstead during the year lapsed at the conclusion of his employment

on 14 August 2020.

There are no options or performance rights granted to this group or since the end of the 2020 financial year to
the date of this Report.

The following table shows the total numbers of ordinary shares in the Company subject to options, share
appreciation rights or performance rights as at the date of this Report:

Options

Share appreciation rights(1)

Restricted Stock Units(2)

Total awards outstanding

Number outstanding

Last expiry date

14,119,702

5,851,406

2,090,647

22,061,755

24 June 2030

1 August 2025

(1) Share appreciation rights (SARs) entitle the holder to equity equal to the appreciation of the Group’s share price over a defined period.

There is not a 1 to 1 relationship with the number of SARs on issue and the number of shares that will be issued upon exercise.

(2) Restricted stock units granted do not have an expiry date. Ordinarily these vest and are settled according to a participants’ vesting

schedule, and any outstanding restricted stock units are otherwise forfeited when a participant no longer satisfies the service conditions in
their agreement.

Holders of options or performance rights do not, by virtue of their holdings, have any pre-emptive right to
participate in any share issue of the Company or any related body corporate.

The Financial Report contains details of the total number of ordinary shares in the Company issued following
exercise of options and vesting of performance rights during the 2020 financial year. The following table
shows the total number of ordinary shares in the Company issued following exercise of options and vesting of
performance rights since the end of the 2020 financial year, to the date of this Report:

Settlement of vested restricted stock units

Exercise of options

Total

Number

Exercise price paid ($)

65,465

2,841,340

2,906,805

1,773,227

No amounts remain unpaid in respect of the shares issued, as outlined above.

Indemnification and insurance of officers

The Company has entered into Deeds of Indemnity with all its Directors in accordance with the Company’s
constitution. During the 2020 financial year, the Company paid a premium to insure the Directors, Officers
and Managers of RB Group entities. The insurance contract requires that the amount of the premium paid is
confidential.

Proceedings against entities within the Group

As at the date of these financial statements there are current lawsuits filed against entities within RB Group
that relate to alleged intellectual property infringement and/or breach of consumer laws. There is no certainty
around the amount or timing of any outflow should any of the actions ultimately be successful (at first instance
or on appeal, as applicable).

RedbubbleAnnual Report 2020RB Group does not currently consider that any of the current proceedings are likely to have a material adverse
effect on the business or financial position of RB Group.

RB Group is not aware of any other current or material threats of civil litigation proceedings, arbitration
proceedings, administration appeals, or criminal or governmental prosecutions in which entities within RB
Group are directly or indirectly concerned.

Non-audit services

Taxation services

Other services(1)

Total

2020 ($)

2019 ($)

39,400

18,250

147,715

39,400

165,965

CEO and CFO declaration

(1) Other services for FY2019 include a one-off cost relating to the acquisition of TeePublic of $93k.

The CEO and CFO have provided a written statement to the Board in accordance with Section 295A of
the Corporations Act. With regard to the financial records and systems of risk management and internal
compliance in this written statement, the Board received assurance from the CEO and CFO that the declaration
was founded on a sound system of risk management and internal control, and that the system was operating
effectively in all material aspects in relation to the reporting of financial risks.

Fees for Audit services

Details of the amounts paid to the auditor for audit services provided throughout the 2020 and 2019 financial
years are set out in Note 25 to the Consolidated Financial Statements.

Remuneration Report

Auditor’s Independence Declaration

The Remuneration Report is set out on pages 35 to 62 and forms part of the Directors’ Report for the financial
year ended 30 June 2020.

A copy of the Auditor’s Independence Declaration, as required under section 307C of the Corporations Act, is
set out on page 34. The Auditor’s Independence Declaration forms part of the Directors’ Report.

The Directors’ Report is made in accordance with a resolution of the Directors of the Company.

Anne Ward
Chair
21 August 2020

Rounding of amounts

The amounts contained in the Financial Report have been rounded to the nearest $1,000 (where rounding is
applicable) where noted ($000) under the option available to the Company under ASIC Legislative Instrument
2016/191. The Company is an entity to which the Legislative Instrument applies.

Auditor

Ernst & Young was appointed as the Company’s Auditor on 25 November 2014 and continues in office in
accordance with section 327 of the Corporations Act 2001.

To the extent permitted by law, the Company has agreed to indemnify Ernst & Young, as part of the terms
of its audit engagement agreement, against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the end of the 2020 financial
year.

Commencing from the 2020 AGM the Company’s Audit Partner will be Mr Ashley Butler, Partner at Ernst &
Young. Mr Ashley Butler will succeed Ms Kylie Bodenham as she rotates off the RB Group engagement in
accordance with independence requirements of Section 324DA of the Corporations Act 2001 and Ernst &
Young’s policy.

Non-audit services

During the year Ernst & Young performed other services in addition to its audit responsibilities. The Directors
are satisfied that the provision of non-audit services by Ernst & Young during the reporting period did not
compromise the auditor independence requirements set out in the Corporations Act. All non-audit services
were subject to the Company’s External Auditor Policy and do not undermine the general principles relating to
auditor independence 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
Company, or jointly sharing risks and rewards.

Details of the amounts paid to the auditor of the Company and its related practices for non-audit services
provided throughout the 2020 and 2019 financial years are set out below.

RedbubbleAnnual Report 2020Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001

Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au

Auditor’s Independence Declaration to the Directors of Redbubble Limited

As lead auditor for the audit of the financial report of Redbubble Limited for the financial year ended 30
June 2020, I declare to the best of my knowledge and belief, there have been:

Remuneration
Report

Letter from the People and Nomination Committee

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in

Dear Shareholder,

relation to the audit; and

b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Redbubble Limited and the entities it controlled during the financial year.

Ernst & Young

Kylie Bodenham
Partner
21 August 2020

On behalf of the Board, I am pleased to present our Remuneration Report for FY2020.

The role of the People and Nomination Committee (Committee) is to ensure that the RB Group has appropriate
remuneration and retention strategies to attract and retain high quality talent - both locally and globally - to
enable the Company to execute its mission and purpose, in order to build long-term value for shareholders.

RB Group Executive Compensation Model (RECM)

As shareholders may recall, the Committee last year conducted a comprehensive review of the Group’s
executive remuneration arrangements and the Board approved a revised model designed to better align with
the Group’s strategic intent. During FY2020 the Company has implemented the RECM and transitioned RB
Group executives to the RECM.

The objectives of the RECM are to:

• Link executive performance with RB Group’s financial goals;

• Motivate executives to create sustainable, long-term value for shareholders;

• Align the leadership team by providing consistent goals that encourage a long-term focus; and

• Attract and retain exceptional talent in globally competitive, highly mobile markets.

As described in more detail in this Report, the RECM comprises cash compensation, long-term equity (LTE)
with restrictions on disposal and long-term incentives (LTI) with vesting and exercise conditions based on
compound annual share price growth.

The Committee is confident that the RECM will provide a strong foundation to attract and retain talent and align
them with building long-term value for shareholders.

Key Management Personnel (KMP)

This Report details the remuneration arrangements for the KMP being those persons who have authority and
responsibility for planning, directing and controlling the major activities of RB Group, directly or indirectly,
including any Director (whether executive or otherwise).

The current KMP of the RB Group are Mr Martin Hosking, our Managing Director and CEO, and Ms Emma Clark,
our CFO, together with our Chair, Ms Anne Ward, and our Non-executive Directors, Mr Greg Lockwood, Ms
Jenny Macdonald and myself.

During the year, we transitioned the role of the CEO. In February 2020, Barry Newstead ceased to be the Chief
Executive Officer of RB Group. Martin Hosking resumed the role of CEO on an interim basis, having retired from
this role in 2018. Mr Hosking remains a member of the Board. In addition, we transitioned the role of Chair of
the RB Group. In March 2020, Mr Richard Cawsey retired from the Board and Ms Anne Ward was elected as
Chair.

A member firm of Ernst & Young Global Limited
Liability limited on a scheme approved under Professional Standards Legislation

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

Annual Report 2020

Understanding RB Group’s Approach to Remuneration

We appreciate that shareholders may have questions on RB Group’s remuneration approach and structure
and so we have sought to provide a brief summary of some of the more common questions together with our
responses:

How has RB Group responded to the COVID-19 health crisis with respect to remuneration?

In response to the COVID-19 health crisis and resulting economic uncertainty, RB Group Non-executive
Directors agreed to a 20% reduction in the cash component of their remuneration, effective from 20 April
2020 until 30 June 2020. Mr Hosking (CEO) and Ms Clark (CFO) also agreed to a 20% reduction in the cash
component of their remuneration for this period of time.

Why did Redbubble Group revise its executive compensation plan?

RB Group’s previous compensation plan was developed prior to Redbubble’s IPO in 2016. In 2019 the
Committee undertook a review of the plan and concluded that it no longer best served the RB Group or its
shareholders. The review had two objectives: to align management to shareholder value creation by focusing
on long-term enduring value, and ensuring RB Group is able to attract and retain high quality talent in a globally
competitive marketplace. In addition, the Committee sought to simplify and improve the transparency of RB
Group’s remuneration arrangements and to recognise RB Group’s rapidly changing context often requires
executives to advance long-term objectives at the expense of short-term gains.

Which executives are covered by the RECM?

The RECM was introduced in FY20 and senior executives are progressively transitioning to this model. It is
intended that all senior executives at RB Group will participate in the RECM. Ten senior executives participated
in FY2020. TeePublic executives did not participate in the RECM in FY2020 (and are not currently participating)
as they remain on acquisition transition agreements.

RB Group also offers an equity program to all employees. Employees receive an equity grant of zero-priced
options or restricted-stock options, equivalent to 5% - 20% their base salary, vesting annually over three years.

How does Redbubble Group assess Executives’ annual performance?

The Board sets key result areas for the CEO and tracks performance against those objectives. The CEO sets
semi-annual performance objectives with each senior executive, in support of company objectives & key
results and personal development areas. Performance against these objectives, along with total company
performance informs annual compensation reviews for all executives. The performance of all senior executives
reporting to the CEO is also discussed with the Committee semi-annually to ensure all leaders are meeting
performance expectations in terms of both behaviours and outcomes.

Why did Redbubble Group remove the short-term incentives from the RECM?

The Committee believes that traditional short term incentives may encourage a focus on short-term
performance at the expense of long-term value creation. This is compounded by the difficulty of setting short-
term targets in a fast paced high growth environment. Under the RECM, the value of LTE and LTI components is
fundamentally dependent on share price performance, aligning executives with shareholder interests.

What is the difference between the long-term equity and long-term incentive, which are key components in
the RECM?

The long-term equity or LTE is an annual grant of restricted stock units or zero-priced options, with one year
vesting and one year disposal restriction period. LTE is intended to be a part of the guaranteed compensation
for executives and when included with cash compensation reduces the compensation gap to more established
talent competitors. LTE also encourages long-term share ownership by executives. The value of the LTE in the
hands of the executive is dependent upon the share price which aligns executive compensation to shareholder
outcomes.

The long-term incentive or LTI is an annual grant of share appreciation rights with specific vesting conditions
based on time and achievement of minimum business health metrics, and exercise conditions linked to share
price performance, as detailed in section 3.5 of the Remuneration Report. The share appreciation rights have
a strike price. The strike price is set in October of the financial year when grant and vesting commence (e.g. 1
October 2019 for FY2020). The strike price is set based on the 30 (calendar) day VWAP prior to the grant. For
FY20 the strike price was $1.4134.

How is the LTE and LTI in the RECM accounted for in the annual accounts of RB Group?

The cost of the LTE and LTI is recognised by expensing the grant date fair value of the options or rights over
the one year vesting period during which the executives become unconditionally entitled to these benefits.
The expense is recognised as a share based payment expense in the consolidated income statement, with
corresponding amounts recorded in equity.

The calculation of fair value includes the estimated impact of any market based performance conditions.
The impact of any service and non-market vesting conditions is excluded from the fair value calculation.
Instead, this is included in assumptions about the number of options or rights that are expected to vest. These
assumptions are revised at the end of each reporting period and when the outcome of the service or non-
market vesting condition is known. The amounts recorded as an expense for the LTE and LTI for the year are
shown in table 6.1.

Why does the RECM run on a different year to the financial year?

The Redbubble compensation review period for all employees is effective October 1st. The audited results for
the financial year are available in late August each year and announced to the market at that time. A share price
is determined following this announcement, using volume weighted average price methodology, that is used for
purposes of issuing LTE and LTI.

Why is the Managing Director & CEO not a participant in the RECM?

Mr Hosking’s reappointment to the Managing Director and CEO role is on an interim basis. In addition, as one of
RB Group’s co-founders, Mr Hosking continues to have a substantial shareholding in the Company. The Board
has set specific objectives for Mr Hosking as CEO, within a relatively short time period, and on that basis it was
not appropriate to compensate Mr Hosking under the RECM.

Is the RECM fixed or could it change in the future?

The Committee seeks to continuously improve the effectiveness of the RECM, and its other remuneration
arrangements with respect to all staff and and to Non-executive Directors, and will make further changes in
the future as are appropriate to best meet the objectives referred to above and to build long term value for
shareholders.

We thank you for your support in FY2020 and welcome any further questions you may have or any other
feedback on our Remuneration Report.

Yours sincerely

Ben Heap
Chair of the People and Nomination Committee

RedbubbleAnnual Report 2020Annual Report 2020

CONTENTS

1. Remuneration Report Overview

2. How Remuneration is Governed

3. Executive Remuneration

4. Performance & Executive Remuneration Outcomes in FY2019

5. Non-executive Director Remuneration

6. Statutory Reporting for FY2019

7. Other Information

In this Remuneration Report the following definitions are used:

• Redbubble means Redbubble Limited (ACN 119 200 592);

• Board means the Board of Directors of Redbubble;

• Committee means the People and Nomination Committee of the Board of Redbubble;

• Executives means the members of the RB Group senior executive team;

• NED means the Non-executive Directors of the Company;

• RB Group means Redbubble and its subsidiaries; and

• RECM means the RB Group Executive Compensation Model.

1. Remuneration Report Overview

The Directors of Redbubble present the Remuneration Report (Report) for the RB Group for the financial year
ended 30 June 2020. This Report forms part of the Directors’ Report and has been audited in accordance with
section 300A of the Corporations Act 2001.

The Report details the remuneration arrangements for Key Management Personnel (KMP) being those persons
who have authority and responsibility for planning, directing and controlling the activities of RB Group.

RedbubbleThe table below outlines the KMP of RB Group during FY2020:

2.2 Use of Remuneration Advisors

Classification

NED

Name

Anne Ward

Richard Cawsey

Ben Heap

Martin Hosking

Position

Chair (appointed Chair on 30 March 2020),
Non-executive Director (since 22 March
2018)

Chair, Non-executive Director (resigned 30
March 2020)

Non-executive Director (appointed 20 April
2020)

Non-executive Director (until appointment as
CEO on 18 February, 2020)

Greg Lockwood

Non-executive Director

Jennifer (Jenny) Macdonald

Non-executive Director

Grant Murdoch

Executive KMP

Martin Hosking

Non-executive Director (resigned 23 October
2019)

CEO and Managing Director (appointed on 18
February 2020)

The Committee periodically engages the services of independent external consultants to provide insights on
KMP remuneration trends, regulatory and governance updates, pros and cons of possible alternatives, and
market data. No remuneration recommendations as defined in Section 9B of the Corporations Act 2001 were
obtained during FY2020.

2.3 Clawback of Remuneration

In the event of serious misconduct or a material misstatement of RB Group’s financial statements, the Board
has the discretion to reduce, cancel or clawback any unvested STI, LTE or LTI.

2.4 Executive Employment Agreements

CEO Employment Agreements

The employment of Mr Hosking, as CEO and Managing Director, is governed by an Employment Agreement
that commenced 18 February 2020. Due to the interim nature of Mr Hosking’s appointment, his Employment
Agreement has a one month termination notice period.

The employment of Barry Newstead, as CEO and Managing Director, was initially governed by an Employment
Agreement dated 26 June 2018 (that commenced 1 August 2018) and then by an Employment Agreement
dated 1 November 2019 that had an effective date of 1 October 2019. Mr Newstead’s employment agreements
had a six month termination notice period.

Emma Clark

CFO

Other Executive Employment Arrangements

Former Executive KMP

Barry Newstead

CEO and Managing Director (ceased on 18
February 2020)

All other Executives are employed on open ended individual Employment Agreements that set out the terms of
their employment. Each Agreement varies according to the individual Executive but typically includes:

2. How Remuneration is Governed

2.1 People and Nomination Committee Role

The Committee is responsible for reviewing and advising the Board on remuneration policies and practices.
This Committee also reviews and advises the Board on the design and implementation of performance
packages, superannuation entitlements, termination entitlements and fringe benefits policies. The Committee
also manages the nomination process of Board members and the selection of the CEO.

The remuneration of Directors, the CEO, KMP, and other Executives is reviewed by the Committee which then
provides recommendations to the Board.

The members of the Committee during FY2020 were:

• Anne Ward;

• Jenny Macdonald;

• Martin Hosking (ceased to be a member on 18 February 2020);

• Greg Lockwood (was a member between 31 March 2020 and 20 April 2020); and

• Ben Heap (from 20 April 2020).

Ms Ward was Committee Chair until 20 April 2020 at which time Mr Heap was appointed Committee Chair.

• Termination provisions incorporating six month notice periods (to manage business continuity risk during

any executive transition);

•

In the case of termination due to death, disablement, redundancy or notice without cause, the Board
may in certain circumstances apply discretion to approve a payment of up to six months’ salary;

• Performance and confidentiality obligations on the part of both the employer and employee;

• Limited non-solicitation and post-employment restriction provisions; and

• Eligibility to participate in the RB Group RECM (or other transitional compensation plans).

3. Executive Remuneration

3.1 Remuneration Objectives & Strategy

RB Group’s vision is to build a global leading retail e-commerce platform and an enduring organisation that
creates value for shareholders over the long-term. RB Group operates in four highly competitive global talent
markets - Melbourne, San Francisco, New York and Berlin. Attracting and retaining talent in these markets must
be supported by a compelling remuneration strategy.

RedbubbleAnnual Report 2020The RECM is designed to attract and retain proven, global executive talent who will successfully execute
on RB Group’s vision and strategy in a manner that aligns with the company’s values. The RECM recognises
compensation will increasingly need to be positioned to extract mid-career executives on a strong earnings
trajectory from roles in companies that provide them with the experience that RB Group needs.

Executive remuneration levels are reviewed regularly by the Committee with reference to RB Group’s
remuneration strategy, company performance, talent competitor market activity and external benchmarks.

3.2 Objectives of RECM

The objectives of RECM are to:

Link

Motivate

Align

executive performance
with RB Group’s financial
goals

executives to create
sustainable, long-term
value for shareholders

the leadership team by
providing consistent
goals which encourage a
long-term focus

Attract &
Refrain
exceptional talent in
globally competitive,
highly mobile markets

3.3 Elements of Remuneration

The RECM is made up of the following components:

Component

Definition and approach

Cash compensation
35% - 60%

Long-term Equity (LTE)
15% - 20%

Long-term Incentive (LTI)
25% - 50%

(1) Australia only.

Base salary and superannuation(1) intended to provide the Executives with
the financial resources commensurate with executives at companies of a
similar size in that location.

Annual grant of zero-priced options or restricted stock units with one year
vesting and a further one year disposal restriction period. LTE is intended
to be a part of the guaranteed compensation for executives and when
included with cash compensation reduces the compensation gap to more
established talent competitors.

Annual grant of share appreciation rights intended to align Executives
with long-term value creation. Share appreciation rights have vesting
conditions based on time and achievement of minimum Company health
metrics, and exercise conditions based on achieving a share price growth
target as described below.

3.4 Technical Conditions of the LTE

The LTE component of the RECM operates as outlined below:

LTE instrument

Grant quantum

Granting date

Restricted Stock Units (RSUs) for US-based executives. RSUs are rights
to be issued Redbubble shares upon satisfaction of the applicable vesting
conditions. Zero-priced options (ZPOs) for Australian-based executives.
ZPOs are call options to acquire Redbubble shares, with a zero exercise
price to convert the option into shares.

Dollar value of LTE grant is set as a percentage of total compensation as
part of an Executive’s contract. Dollar amount is converted to RSUs or
ZPOs at the beginning of the grant period, i.e. 1 October of the relevant
year. For FY2020 the VWAP (based on 90 (calendar) day volume weighted
average price calculated on 1 October 2019) was $1.2879.

Grants are made on 1 October of the relevant year, following the setting of
total compensation for the year and Board approval.

Vesting date

Grants vest after 12 months.

Disposal restriction period

12 months following vesting. Officers & Executives of the Group are
subject to the RB Group share trading policy.

Clawback

Termination

Clawback is available under certain business failure or bad actor
conditions.

Employees forfeit grants that have not vested. Board discretion in relation
to pro-rata vesting for good leavers is available.

3.5 Technical Conditions of the LTI

The LTI component of the RECM operates as outlined below:

LTI instrument

Grant quantum

Share Appreciation Rights (SARs)

Dollar value of LTI grant is set as a percentage of total compensation as
part of an Executive’s contract. The dollar amount is converted to SARs
at fair market value determined at the beginning of grant period based on
Monte Carlo valuation of the LTI instrument. For FY2020, the fair market
value of one SAR for the purpose of grant allocation was $0.5615.

Granting date

Grants are made on 1 October of the relevant year, following the setting of
total compensation for the year and Board approval.

RedbubbleAnnual Report 2020Vesting date & conditions

The LTI’s vest 12 months after grant subject to:

• The Executive remaining employed at RB Group (time vesting); and

• The Board agreeing that the minimum business health metrics for

the year have been achieved, see below.

The LTI has an exercise condition (see below) that must be achieved
in order for Executives to be able to exercise the grant. The SARs may
be exercised at any time before the fifth anniversary of the grant date,
conditional on the above vesting conditions having been met, subject to
the Redbubble’s share-price achieving a compound annual growth of 10%
and maintaining that price for 90 consecutive calendar days at any point
over the five year grant period.

As noted below, it is possible that the exercise condition could be met
on the first anniversary, assuming the minimum Company health metrics
have been achieved, in which case Executives could exercise on the first
anniversary of the grant date.

Company key health metrics
(see section 4.2 of this Report)

The proportion of the target LTI which vests to participants at the end of
the performance year will be determined based on the achievement of
three to five Company health metrics for that year.

This condition is designed to ensure management is building RB Group for
enduring value and not degrading operational metrics to achieve share
price gains. The Company will need to meet health metrics targets within
the year of grant in order for the LTI grant to be made. As the equity
grants motivate both short and long-term out-performance, the minimum
thresholds are designed to ensure that enduring value creation is not
damaged by any short-term imperatives. The Company health conditions
are set by the Board prior to the start of each financial year.

The Board will assess performance against the health metrics and may
approve for less than 100% of the target LTI grant to vest depending on
performance against the metrics. If less than 100% of the LTI vests under
the minimum health metrics, the non-vested portion would be cancelled.

The weighting between the health metrics is at the Board’s discretion.

Share-price appreciation
exercise condition

The SARs are only exercisable (following vesting) if the share-price
appreciation exercise condition is met during the five years of the grant.

The share-price appreciation exercise condition can be achieved in the
first 12 months of the grant. If this occurs exercise can only occur after the
time based and minimum health conditions have been met.

The exercise condition will be achieved (subject to vesting) when the
90 (calendar) day VWAP share price is greater than the strike price by
an annual compound rate of 10% at any point over the five year exercise
period. The exercise condition may be met at any time up to five years
from grant at which point the exercise condition will be deemed to have
failed and the SARs will expire.

There is no holding period following the exercise condition being met.
Executives of the company are subject to the RB Group share trading
policy.

Clawback is available under certain business failure or bad actor
conditions.

Termination as a bad leaver (for cause) would result in forfeiture of all LTI
where the exercise condition had not yet been met.

For good leavers, the Board can exercise discretion in relation to the
satisfaction of service and performance conditions.

Where the exercise condition has been met, but the Executive has not yet
exercised the SARs, the Executive would have 90 (calendar) days post-
termination to exercise the SARs, after which time the unexercised SARs
will be cancelled, unless the Board exercises discretion to extend the
post-employment exercise period.

Strike price is set in October of the financial year when grant and vesting
commence (e.g. 1 October 2019 for FY2020). The strike price is set based
on the 30 (calendar) day VWAP prior to the grant.

For FY20 the strike price was $1.4134.

The valuation is conducted by independent experts for the Committee and
the SARs are valued using Monte Carlo simulation.

LTI’s expire five years from grant date and therefore the SARs must be
exercised by this point or they lapse.

Executives are prohibited from hedging under RB Group’s Share Trading
policy and clawback under existing rules.

Holding period

Clawback

Termination

Strike price

SARs valuation

Expiration

Hedging

RedbubbleAnnual Report 2020Redbubble

Annual Report 2020

Vesting and exercise periods of the LTI

YEAR 0

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

PERIOD 1

PERIOD 2

PERIOD 3

PERIOD 4

PERIOD 5

Time based vesting period

Share price of 110%
of strike price

L E G E N D

Exercise condition testing period

Exercise condition achieved

Exercise condition not achieved

Exercise condition requirement

Share price of 121%
of strike price

Executive can exercise if YEAR 2 exercise condition is met

Executive can exercise if YEAR 1 exercise condition is met

Share price of 133%
of strike price

Executive can exercise if YEAR 3 exercise condition is met

Share price of 146%
of strike price

Executive can exercise if YEAR 4 exercise
condition is met

Share price of 161% of strike price

Executive can exercise if YEAR 5
exercise condition is met

3.6 KMP participants in the RECM

The table below lays out the compensation components for each Executive KMP.

Cash compensation

Short-term Incentive
(STI)

Long-term Equity (LTE)

Long-Term Incentive
(LTI)

Current Executive KMP

Martin Hosking
(CEO)

The fixed component
comprises base
salary, allowances and
superannuation.

A cash bonus, at the
Board’s discretion,
achievement in Key
Results Areas.

Emma Clark
(CFO)

Following the onset of
the COVID-19 crisis, Mr
Hosking agreed to a
voluntary 20% reduction
in cash compensation
effective until 30 June
2020.

The fixed component
comprises base
salary, allowances and
superannuation.

Following the onset of
the COVID-19 crisis,
Ms Clark agreed to a
voluntary 20% reduction
in cash compensation
effective until 30 June
2020.

Annual grant of ZPOs

Former Executive KMP

Barry
Newstead
(1/7/19 -
30/9/19)

The fixed component
comprises base
salary, allowances and
superannuation.

Performance Rights
(granted as zero-
exercise-price share
options) awarded based
on the delivery of Key
Performance Indicators
set by the Board.

1/10/19 -
18/2/19

The fixed component
comprises base
salary, allowances and
superannuation.

Annual grant of ZPOs

Annual grant of Share
Appreciation Rights
(SARs) that have vesting
conditions based on
time and achievement
of minimum business
health metrics, and
exercise conditions
based on a share price
performance exercise
condition.

A grant of Share
Appreciation Rights
(SARs) intended to
cover the life of the
contract (four years),
with share price
performance exercise
condition.

The remuneration of the KMP is set out in detail in section 6 (Statutory Reporting for FY2020).

4. Performance and Executive Remuneration Outcomes in FY2020

4.1 Performance against Financial Metrics

RB Group’s key financial measures of performance over the last five years are summarised in the table below:

Key indicators

Revenue ($'m)

Gross profit after paid acquisition (GPAPA) ($'m)

Earnings before Interest, taxes, depreciation and
amortisation (EBITDA) ($'m)

Cash balance ($'m)

Share price at year end ($)

2020

416.3

94.5

2019

307.0

67.5

5.1

(2.0)(2)

58.1

2.06

29.0

0.91

2018

218.7(1)

47.1

(7.4)

21.2

1.57

2017

141.0

37.9

(8.1)

27.8

0.97

2016

114.6

31.3

(10.7)

42.0(3)

1.07

(1) On 1 July 2018 the Group adopted AASB 15 - Revenue from Contracts with Customers using the full retrospective method of adoption.

The revenues for FY18 and onwards include the impact of this new standard.

(2) On 1 July 2019 the Group adopted AASB 16 - Leases using the full retrospective method of adoption. EBITDA for FY19 and FY20 includes

the impact of this new standard.

(3) Cash balance for 2016 includes net proceeds from issue of pre-IPO convertible notes and shares issued pursuant to the IPO of $39.7

million.

4.2 Performance Against Company Health Metrics

RB Group’s performance against Company health metrics are as follows for FY2020:

Type of measure

Cash Balance

Artist and Content Growth

Customer Loyalty

People and Culture

Result

Achieved

Based on achievement of the health metrics in the table above, 100% of the FY2020 LTI will be awarded,
subject to the 12 month service period being reached.

4.3 Performance Against LTI Exercise Hurdle

LTI awards are subject to an exercise condition. The exercise condition will be achieved (subject to vesting)
when the 90 (calendar) day VWAP of a RB Group share is greater than the strike price of the LTI by an annual
compound rate of 10% at any point over the five year exercise period. The exercise condition measurement
period runs from each 1st October to the 30th September of the following year.

RedbubbleAnnual Report 2020Achievement of the LTI exercise hurdle for awards made since the commencement of the RECM
is as follows:

Grant Date

% vested due to service based vesting and health metrics

Exercise hurdle result

(1) The 12 month service period is not yet complete, therefore none of the FY2020 LTI has vested.

(2) The exercise condition can be achieved within a five year period from grant date.

FY2020 LTI Award

October 2019

-%(1)

Not yet achieved(2)

4.4 CEO Remuneration

Mr Martin Hosking, CEO and Managing Director (from 18 February 2020)

The table below summarises the compensation arrangements of Mr Hosking, and the accounting treatment of
each component.

Martin Hosking Remuneration

Remuneration element

Total fixed remuneration,
including base salary and
superannuation

Contracted Annual
Remuneration

$600,000(1)
($480,000)(2)

Statutory
Remuneration
reported in Table 6.1

$261,977

Cash bonus

$300,000(1)

$80,211

Long service leave

$275

Details

The remuneration reported
in Table 6.1 represents salary
and superannuation paid for
services from 18 February
2020 to the end of the year
and annual leave entitlements
accrued during the period.

The remuneration reported in
Table 6.1 represents amounts
accrued for the cash bonus
during the period.

Represents amounts provided
for long service leave during
the year

Total

$900,000
($780,000)(2)

$342,463

(1) From 18 February 2020 to 20 April 2020 Mr Hosking’s Interim CEO compensation arrangements consisted of annualised remuneration

(inclusive of superannuation) of $900,000 salary. On 20 April 2020 Mr Hosking’s compensation was revised to a base salary (inclusive of
superannuation) of $600,000 and a discretionary cash bonus (inclusive of superannuation) of up to $300,000, awarded at the end of Mr
Hosking’s appointment, subject to Mr Hosking’s achievement in Key Results Areas, as follows:

• stabilisation of the Redbubble Group business;

• implementation of the business strategy;

• continuing to build the Redbubble Executive Team; and

• assistance in recruiting the new long term CEO.

(2) From 20 April 2020 to 30 June 2020 Mr Hosking took a voluntary salary reduction of 20% to his base salary and was paid at the rate of

$480,000 per annum (inclusive of superannuation) for that period.

Mr Barry Newstead, Former CEO and Managing Director (until 18 February 2020)

The table below summarises the compensation arrangements of Mr Newstead, and the accounting treatment
of each component.

Barry Newstead Remuneration

Contracted
Annual
Remuneration

Statutory
Remuneration
reported in
Table 6.1

$600,000(1)

$358,464

Remuneration
element

Total fixed
remuneration,
including base salary
and superannuation

Long Term Equity (LTE) $300,000(2)

Long Term Incentive
(LTI)

$800,000(3)

Cash bonus

Termination Benefits

Share options -
Performance Based

Share options - Time
Based

Share appreciation
rights - Performance
Based

Deferred STI

Long service leave

$12,760

$316,976

($297,747)

$66,102

$157,312

($16,481)

($23,001)

Details

The remuneration reported in Table 6.1 represents salary
and superannuation paid for services from 1 July 2019 to
18 February 2020 and annual leave entitlements accrued
during the period.

As Mr Newstead did not meet the 12 month service
condition of the LTE these options lapsed.

As Mr Newstead did not meet the 12 month service
condition of the LTI these rights lapsed.

Mr Newstead received an additional STI payment for the
month of July 2018, paid entirely in cash, and amounting
to $12,760. This STI payment was made in respect of Mr
Newstead’s tenure as Chief Operating Officer between
the end of the FY2018 STI period (i.e. 30 June 2018) and
the 1 August 2018 date that he commenced his new CEO
compensation arrangement. The $12,760 value of this
STI payment equalled the average monthly value of Mr
Newstead’s FY2018 STI award.

Mr Newstead’s salary and benefits paid to him subsequent
to 18 February 2020 and up until his employment end date
are classified as termination benefits.

Represents the forfeiture of unvested equity that had been
recognised as an expense in prior periods.

Represents expenses recognised for options granted in the
prior period but vesting in the current period.

Represents expenses recognised for share appreciation
rights granted in the prior period but vesting in the current
period.

Represents the forfeiture of unvested equity that had been
recognised as an expense in prior periods.

As Mr Newstead did not meet the threshold for payment
of long service leave at his employment end date, amounts
accrued in prior years were written back in the current
period.

Total

$1,700,000

$574,385

(1) From 1 July 2019 to 30 September 2019 Mr Newstead’s total annualised fixed remuneration (inclusive of superannuation) was $500,000. On

1 October 2019 Mr Newstead’s total annualised fixed remuneration (inclusive of superannuation) was revised to $600,000.

(2) The LTE is an annual grant of zero priced options subject to a 12 month minimum service condition.

(3) The LTI is an annual grant of share appreciation rights (SARs) subject to a 12 month minimum service condition, minimum health metrics

and an exercise hurdle.

RedbubbleAnnual Report 20204.5 Other KMP Remuneration

Ms Emma Clark, Chief Financial Officer

5. Non-executive Director Remuneration

5.1 NED Remuneration Policy

The table below summarises the compensation arrangements of Ms Clark, and the accounting treatment of
each component.

RB Group seeks to attract and retain high calibre NEDs who will provide good governance, strong oversight,
independence, a range of skills and alignment of interests with long-term share price appreciation.

Emma Clark Remuneration

Remuneration element

Total fixed remuneration,
including base salary and
superannuation

Contracted Annual
Remuneration

$450,000
($360,000)(1)

Statutory
Remuneration
reported in Table 6.1

$441,499(1)

Long Term Equity (LTE)

$225,000(2)

$262,783(2)

Long Term Incentive (LTI)

$450,000(3)

$527,489(3)

Long service leave

$742

Details

The remuneration reported
in Table 6.1 represents salary
and superannuation paid for
services and annual leave
entitlements accrued during
the period.

Represents expenses
recognised for zero priced
options vesting in the current
period.

Represents expenses
recognised for SARs vesting in
the current period.

Represents amounts provided
for long service leave during
the year

Total

$1,125,000
($1,035,000)(1)

$1,232,513

(1) From 20 April 2020 to 30 June 2020 Ms Clark took a voluntary salary reduction of 20% to her base salary and was paid at the rate of

$360,000 per annum (inclusive of superannuation) for that period.

(2) The LTE is an annual grant of zero priced options subject to a 12 month minimum service condition. During the year Ms Clark received the
annual grant of LTE and an additional pro rata portion for services from her commencement date on 1 June 2019 up until the date of the
annual grant.

(3) The LTI is an annual grant of share appreciation rights (SARs) subject to a 12 month minimum service condition, minimum health metrics

and an exercise hurdle. During the year Ms Clark received the annual grant of LTE and an additional pro rata portion for services from her
commencement date on 1 June 2019 up until the date of the annual grant.

4.6 KMP Terminations during the year

Mr Barry Newstead, Former CEO and Managing Director

Mr Newstead ceased to be the CEO and Managing Director of RB Group on 18 February 2020. Mr
Newstead’s employment with RB Group will end on 14 August 2020. He will continue to be paid his salary and
superannuation entitlements under his Employment Agreement until his employment end date.

Mr Newstead will retain his employee equity awards that have vested as at 14 August 2020 and, in accordance
with Mr Newstead’s employment contract, a further 1,652,778 Share Appreciation Rights that remain on foot,
subject to vesting conditions to be applied in August 2022. Mr Newstead’s other employee equity awards,
which have not vested at 14 August 2020, will lapse or be forfeited in accordance with applicable executive
plan rules.

The elements of the NED remuneration policy are as follows:

• NEDs receive a Board fee of value $97,612.50 per annum (inclusive of superannuation);

• The Board Chair is paid twice the NED Board fee;

• Committee Chairs receive additional remuneration of $15,000 per annum; and

• NED remuneration is paid two-thirds in cash and one-third in Deferred Stock on the terms outlined in

section 5.2.

The policy applies to all of Redbubble’s NEDs, except for Mr Lockwood. Mr Lockwood is a partner with Piton
Capital, a private equity firm with a shareholding in RB Group. Mr Lockwood receives no remuneration from
RB Group, in accordance with Piton Capital’s policy that their partners do not accept remuneration for external
board positions.

NEDs are also reimbursed for all reasonable travel and other expenses properly incurred by them in attending
Board meetings or any meetings of committees of the Board, in attending any general meetings of Redbubble
or otherwise in connection with the business or affairs of RB Group. NEDs may be paid additional or special
remuneration if they, with the approval of the Board, perform any extra services or make special exertions for
the benefit of RB Group.

There are no retirement benefit schemes for Directors.

The remuneration of the NEDs in FY2020 is set out in detail in section 6 (Statutory Reporting for FY20).

In response to the COVID-19 health crisis and resulting economic uncertainty, RB Group’s NEDs agreed to a
20% reduction in the cash component of their remuneration, effective from 20 April 2020 until 30 June 2020.

5.2 NED Deferred Stock Terms

NEDs are paid a portion of their fees in Deferred Stock (share options with a zero-exercise price) to provide
for alignment with shareholders and RB Group’s objective of share price appreciation over the medium to long
term.

The Deferred Stock is awarded annually and is priced when the market is fully informed of RB Group’s previous
financial year performance i.e. following the release of the results for the previous financial year. Accordingly,
For purposes of calculating Deferred Stock allocations, the NED remuneration year runs from 1 November to
the following 31 October.

The Deferred Stock vests 12 months after the grant date subject to the NED remaining a Director as at that
vesting date. If a NED departs within the remuneration year then pro-rata vesting is applied to the month of
departure.

RedbubbleAnnual Report 2020NEDs are subject to restrictions on the sale of shares allotted following exercise of Deferred Stock, with the
restrictions released incrementally over the four year period from the Deferred Stock grant date in accordance
with the following release schedule:

• a third of the shares are released from sale restrictions on the two year anniversary of the grant date;

• a further third of the shares are released from sale restrictions on the three year anniversary of the grant

date; and

•

the final third of the shares are released from sale restrictions on the four year anniversary of the grant
date.

In FY2020 the NEDs’ Deferred Stock remuneration was priced at $1.3504 per share option (the five day VWAP
following the release of RB Group’s final quarter results in July 2019). The fair value of the awards at the grant
date (November 2019) was $1.89 per share option.

NEDs who are appointed to fill a casual vacancy during the year are paid entirely in cash until the next AGM,
following which the cash/equity split applies from the following 1 November subject to their re-election at the
AGM and shareholders’ approval of their equity grant.

5.3 Maximum Aggregate NED Fee Pool

The total amount paid to all Directors for their services must not exceed in aggregate in any financial year the
amount fixed by shareholders in a general meeting, currently set at $1,200,000. Any changes to this amount in
future will require approval by shareholders in a general meeting in accordance with the ASX Listing Rules.

RedbubbleAnnual Report 2020Redbubble

Annual Report 2020

6. Statutory Reporting for FY20

6.1 Executive KMP remuneration for the year ended 30 June 2020

The following table shows details of the nature and amount of each element of remuneration paid or awarded
to Executives for services provided during the year while they were KMP.

Short term benefits

Post-
employment
benefits

Other benefits

Long-term
benefits

Cash salary(1)
$

Cash bonus(2)
$

Non-monetary
benefits(3)
$

Superannuation(4)
$

Termination
benefits(5)
$

Long service
leave(6)
$

Performance rights
(Time based)(7)
$

Share-based payments

Share options
(Performance
based)(7)
$

Share options
(Time based)(7)
$

Share appreciation
rights
(Performance
based)(8)
$

Deferred STI(9)
$

Total remuneration
$

Performance
-related(10)
%

Executive director

Martin Hosking (appointed
as CEO 18 February 2020)(11)

Barry Newstead
(terminated as CEO 18
February 2020) (5)

2020

2019

2020

2019

Other key management personnel

Emma Clark (CFO)

2020

2019

Prior key management personnel

Chris Nunn (resigned as
CFO 1 June 2019)

Total

2020

2019

2020

2019

252,179

87,125

80,211

333,464

12,760(12)

487,312

416,499

37,500

237,606

1,002,142

849,543

56,733

92,971

56,733

150

350

500

9,798

25,000

59,798

75,000

275

2,474

23,914

23,428

316,976(5)

(23,001)(6)

(297,747)(5)

28,181

66,102

13,456

23,411

484,900

233,192

742

(2,332)

(297,747)

262,783

5,246

98,491

328,885

365,110

316,976

(21,984)

13,621

47,325

508,328

157,312

453,930

527,489

10,491

684,801

464,421

3,395

(16,481)(5)

342,463

193,667

574,385

44,096

1,765,297

1,232,513

53,260

40,304

456,152

(16,481)

2,149,361

87,795

2,468,376

23%

14%

(25%)

56%

43%

20%

21%

(1) Includes base salary, excess superannuation (refer to footnote 4) and short term compensated absences, such as leave entitlements accrued. For 20 April 2020 to 30 June 2020 Martin Hosking and Emma Clark took a voluntary salary reduction of 20% to their base salary.

(2) Represents cash bonus accrued for the year.

(3) Non-monetary benefits in the prior year include wellness benefits available to all executives.

(4) Staff can elect to have their superannuation capped at $25,000 (2019: $25,000), with any amount above this included in cash salary. These amounts include superannuation on bonus paid during the year.

(5) Barry Newstead’s role as CEO ended effective 18 February 2020. Mr Newstead’s salary and benefits paid to him subsequent to this date and up until his employment end date are classified as termination benefits. Share options and rights that lapse due to termination have any previously accrued expenditure written back

in the current period.

(6) Australian executives are entitled to long service leave. The annual charge reflects long service leave accrued during the period. As Barry Newstead did not meet the threshold for payment of long service leave at his employment end date, amounts accrued in prior years were written back in the current period.

(7) Amounts disclosed reflect the value of remuneration consisting of performance rights/options, based on the value of rights/options expensed during the year. The fair value of rights is equivalent to fair value of shares at the grant date. The fair value of options is ascertained using the Black-Scholes model and is amortised

over the vesting period.

(8) Amounts disclosed reflect the value of remuneration consisting of share appreciation rights (SARs), based on the value of SARs expensed during the year. The fair value is ascertained using the Monte Carlo options model and is amortised over the vesting period.

(9) Includes share based payment expenses recognised during the year over the vesting period, in relation to deferred STI awards for prior years.

(10) Cash bonus, share options with a performance condition and deferred STI are all considered to be performance-related remuneration, based on their nature at grant date.

(11) Martin Hosking was appointed as CEO on 18 February 2020. He was a non-executive director of the Group until 17 February 2020 when he transitioned to an executive director role. The remuneration shown in this table is for his services as CEO only. Remuneration for his non-executive director role is shown in table 6.2.

(12) Barry Newstead received an additional STI payment for the month of July 2018, paid entirely in cash, and amounting to $12,760. This STI payment was made in respect of Mr Newstead’s tenure as Chief Operating Officer between the end of the FY2018 STI period (i.e. 30 June 2018) and the 1 August 2018 date that Mr

Newstead commenced his CEO compensation arrangement. The $12,760 value of this STI payment equalled the average monthly value of Mr Newstead’s FY2018 STI award.

6.2 NED Remuneration for the year ended 30 June 2020(1)

Short term
benefits

Post-
employment
benefits

Director Fees(2)
$

Superannuation
$

Share-based
payments

Share-based
payments -
Share options
(Time based)(3)
$

Non-executive directors

Richard Cawsey(4)

Ben Heap(5)

Martin Hosking(6)

Jenny Macdonald

Grant Murdoch(7)

Anne Ward

Hugh Williams(8)

Greg Lockwood(9)

Total

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

94,803

123,000

17,940

35,960

46,125

64,760

65,525

20,594

65,297

83,369

74,658

56,375

317,426

430,980

1,704

3,416

2,864

6,225

1,956

6,203

7,920

7,092

29,658

74,660

15,788

27,818

37,194

27,818

2,720

43,396

37,575

32,341

27,095

17,860

19,520

122,935

233,128

Total
$

124,461

197,660

19,644

55,164

73,943

104,818

99,568

25,270

114,896

128,864

114,091

83,470

458,221

683,628

(1) The NED remuneration table has been prepared in accordance with Australian Accounting Standards and Section 300A of the Corporations

Act 2001 (Cth).

(2) In response to the COVID-19 health crisis and resulting economic uncertainty, RB Group non-executive directors agreed to a 20% reduction

in the cash component of their remuneration, effective from 20 April 2020 until 30 June 2020.

(3) Amounts disclosed reflect the value of remuneration consisting of options, based on the value of options expensed during the year. The

fair value of options is ascertained using Black-Scholes model.

(4) Richard Cawsey resigned effective 30 March 2020. His fees are paid to and options / rights are issued to Denali Venture Partners (Aust).

(5) Ben Heap was appointed effective 20 April 2020. In accordance with the NED remuneration policy Mr Heap is not granted equity

remuneration until it is approved at the next AGM. Mr Heap is paid entirely in cash until this time.

(6) Martin Hosking was appointed as CEO on 18 February 2020. He was a non-executive director until 17 February 2020 when he transitioned
to the CEO role. The remuneration shown in this table is for his services as a non-executive director from 1 July 2019 to 17 February 2020.

(7) Grant Murdoch resigned effective 23 October 2019.

(8) Hugh Williams resigned effective 29 May 2019. Amounts are provided for prior year comparatives.

7. Other Information

7.1 Options and Share Appreciation Rights

The tables below disclose the number of share options and share appreciation rights granted, exercised,
vested or forfeited during the year.

Option holdings

Share options do not carry any voting or dividend rights, and can only be exercised once the vesting conditions
have been met, until their expiry date.

Balance at
the start of
the year

Granted
during the
year as
compensation

Exercised
during the
year

Cancelled
during
the year

Balance at
the end of
the year

Vested and
exercisable
at the end
of the year

Unvested
at the end
of the
year

Vested
during
the year

2020

Non-executive directors

Jenny
Macdonald

Grant
Murdoch(1)

19,711

27,798

120,649

Anne Ward

22,916

27,798

Executive director

Martin
Hosking

19,711

23,910(2)

Former Executive director

47,509

19,711

27,798

8,217

120,649

9,553

50,714

22,916

27,798

9,553

43,621

19,711

23,910

8,217

Barry
Newstead (3)

3,491,940

232,937(4)

772,917(5)

2,951,960

2,440,811

511,149(4)

370,699

Other key management personnel

233,097

39,423

47,820

39,423

27,895

19,925

233,097

19,925

16,428

Emma Clark

Related party

Denali
Venture
Partners
Pty Ltd
(Beneficiary:
Richard
Cawsey)(6)

Total

3,714,350

593,360

39,423

800,812 3,467,475

2,623,798

843,677

422,667

(1) Grant Murdoch resigned from his role as Director on 23 October 2019. The table above reports activity for his period of service up until

resignation date.

(2) The options granted to Martin Hosking were for his services as a non-executive director (NED). Mr Hosking was appointed as CEO on

18 February 2020 and ceased as a NED on this date. The amount of options he will receive at his vest date will be subject to adjustment
based on what proportion of the NED remuneration year that Mr Hosking was a NED for.

(3) Barry Newstead’s role as CEO ceased effective 18 February 2020. The table above reports activity for his period of service up until 18

February 2020.

(4) The options granted to Mr Newstead during the year and all unvested options were forfeited or lapsed at the conclusion of his employment

on 14 August 2020.

(5) As part of Mr Newstead’s transition to the RECM a proportion of his equity entitlements under his earlier CEO Employment Agreement were

cancelled, reflecting the proportion of the four year equity vesting period that was yet to be completed.

(9) Greg Lockwood is a partner with Piton Capital, a private equity firm with a shareholding in Redbubble Ltd. Greg receives no remuneration
from the Group, in accordance with Piton Capital’s policy that their partners do not accept remuneration for external board positions.

(6) Richard Cawsey resigned from his role as Chair on 30 March 2020. The table above reports activity for his period of service up until

resignation date.

RedbubbleAnnual Report 2020Share Appreciation Rights holdings

Share appreciation rights do not carry any voting or dividend rights.

7.3 Shareholdings of Directors and KMP

Balance at
the start of
the year

Granted
during the
year as
compensation

Exercised
during the
year

Cancelled
during the
year

Balance at
the end of
the year

Vested and
exercisable
at the end of
the year

Unvested at
the end of the
year

Vested
during the
year

2020

Former Executive director

Barry
Newstead(1)

5,666,668

1,424,755(2)

- 4,013,890(3)

3,077,533

- 3,077,533(2)(3)

Other key management personnel

Emma Clark

1,069,298

Total

5,666,668

2,494,053

1,069,298

4,013,890

4,146,831

–

1,069,298

4,146,831

(1) Barry Newstead’s role as CEO ceased effective 18 February 2020. The table above reports activity for his period of service up until 18

February 2020.

(2) The 1,424,755 SARs granted to Mr Newstead during the year and shown within the balance of unvested equity at the end of the year were

subsequently forfeited on 14 August 2020 as he did not meet the service period vesting requirements.

(3) As part of Mr Newstead’s transition to the RECM a proportion of his equity entitlements under his earlier CEO Employment Agreement were
cancelled, reflecting the proportion of the four year equity vesting period that was yet to be completed. As noted in section 4.6 of this
Report, 1,652,778 of Mr Newstead’s SARs remain on foot subject to vesting conditions to be applied in August 2022 in accordance with Mr
Newstead’s CEO employment contract arrangements.

7.2 Shares on exercise of options/rights

2020

Related party

Denali Venture Partners
(Aust) (Beneficiary:
Richard Cawsey)

Total

Number of
ordinary shares
on exercise of
options

Exercise price
per option

Share price per
share at exercise
/ settlement
dates

Value at exercise
/ settlement
dates(1)

Nature of grant

Options

39,423

$0.00

$1.91

75,298

39,423

75,298

(1) Value at exercise / settlement date is calculated as share price on exercise date less exercise price paid, multiplied by number of options

exercised.

2020 - Redbubble Limited
ordinary shares (1)

Non-executive directors

Richard Cawsey(2)

Ben Heap(3)

Jennifer Macdonald

Anne Ward

Executive director

Martin Hosking

Former Executive director

Barry Newstead(4)

Other key management personnel

Emma Clark

Related parties

Beneficiary

Cawsey Superannuation Fund Pty
Ltd

Richard
Cawsey(2)

Denali Venture Partners Fund 1 LP

Denali Capital Managers Pty Ltd

Denali Investors Pty Ltd

Denali Venture Partners (Aust)

Denali Ventures Pty Ltd

Jellicom Pty Ltd as trustee for the
Three Springs Family Trust

Three Springs Foundation Pty Ltd
as trustee for the Three Springs
Foundation

Piton Capital Venture Fund II LP

Piton Capital Investments
Cooperatief B

G & M Murdoch Pty Ltd as
trustee for the Murdoch Family
Superannuation Fund

Richard
Cawsey(2)

Martin
Hosking

Greg
Lockwood

Grant
Murdoch(5)

Balance at
the start of
the year

Received
on exercise
of options /
rights

Purchase of
shares

Sale /
transfer of
shares

Balance at
the end of
the year

1,440,000

56,539

100,000

2,393,552

562,413

8,893,980

1,840,240

654,560

875,200

320,713

39,423

41,856

51,606,538

2,500,000

5,537,291

927,840

140,000

32,000

100,000

1,440,000

88,539

100,000

2,393,552

562,413

8,893,980

1,840,240

654,560

(562,000)

313,200

360,136

41,856

(5,000,000)

46,606,538

(1,000,000)

1,500,000

5,537,291

927,840

140,000

80,971

100,000

G & M Murdoch Pty Ltd as trustee
for the Murdoch Family

Grant
Murdoch(5)

80,971

Walros Pty Ltd as trustee for the
Anagnostou Super Fund

Anne Ward

Total

77,971,693

39,423

132,000 (6,562,000)

71,581,116

(1) Includes shares held directly, indirectly and beneficially by KMP.

(2) Richard Cawsey resigned as Chair on 30 March 2020. The total balance represents his shareholding at the date he ceased to be a KMP.

(3) Ben Heap was appointed effective 20 April 2020.

(4) Barry Newstead role as CEO ended effective 18 February 2020. The total balance represents his shareholding at the date he ceased to be

a KMP.

(5) Grant Murdoch resigned as Director on 23 October 2019. The total balance represents his shareholding at the date he ceased to be a KMP.

RedbubbleAnnual Report 2020Consolidated
Financial Statements

7.4 Details of equity awards granted

# of
options
/ rights
granted

Grant
date

Type of

equity Vest date(1) Expiry date (2)

Exercise
price

Unit
value
at
grant
date

Total Value
at grant
date (3)

Non-executive directors

Jenny Macdonald

01-Nov-19

27,798

Options

01-Nov-20

01-Nov-29

$0.00

$1.89

$52,497

Anne Ward

01-Nov-19

27,798

Options

01-Nov-20

01-Nov-29

$0.00

$1.89

$52,497

Executive director

Martin Hosking

01-Nov-19

23,910(4)

Options

01-Nov-20

01-Nov-29

$0.00

$1.89

$45,154

Former Executive director

Barry Newstead

23-Oct-19

232,937(5)

Options

01-Oct-20

23-Oct-29

$0.00

$1.42

$330,072

23-Oct-19

1,424,755

SARs

01-Oct-20

01-Oct-24

$0.00

$0.62

$883,348

Other key management personnel

Emma Clark

24-Jun-20

233,097

Options

01-Oct-20

24-Jun-30

$0.00

$1.42

$330,298

24-Jun-20

1,069,298

SARs

01-Oct-20

01-Oct-24

$0.00

$0.62

$662,965

Other related parties

Denali Venture
Partners (Aust)
- (Beneficiary -
Richard Cawsey)

Total

01-Nov-19

47,820(6)

Options

01-Nov-20

01-Nov-29

$0.00

$1.89

$90,308

3,087,413

$2,447,139

(1) The vesting of equity is subject to the director or KMP (as applicable) remaining in service with Redbubble as at the vest date and, in

relation to the SARs, the minimum health conditions being satisfied.

(2) If the director or KMP (as applicable) leaves Redbubble service then the expiry date is brought forward to be 90 days after the employment

end date.

(3) The value at grant date for options has been determined using the Black-Scholes method. The value for share appreciation rights has been
determined using the Monte Carlo method. For presentation purposes, share price has been rounded to two decimal places, however the
value at grant date has been calculated based on unrounded numbers.

(4) The options granted to Mr Hosking were for his services as a non-executive director (NED). Mr Hosking was appointed as CEO on 18

February 2020 and ceased as a NED on this date. The amount of options he will receive at the vest date will be subject to adjustment
based on what proportion of the NED remuneration year that Mr Hosking was a NED for.

(5) The options and SARs granted to Mr Newstead during the year were subsequently forfeited on 14 August 2020 as he did not meet the

service period vesting requirements.

(6) Richard Cawsey resigned effective 30 March 2020. Under the terms of the NED remuneration policy he received a pro-rata portion of this

grant to reflect his service period.

7.5 Other Transactions with KMP

Richard Cawsey, Redbubble’s former Board Chair, is a Director and shareholder of Denali Holdings Pty Ltd,
which is the owner of the ‘Bondle’ messaging application. Redbubble engaged Denali Holdings Pty Ltd in
respect of a licence of the Bondle application in May 2019 and paid $4,788 at that time for a two year licence
period. No further fees were paid for the Bondle application in FY2020. The engagement is on an arm’s length
basis and the fees charged are comparable to similar application licensors in the market. At the year end, there
were no balances outstanding in relation to this engagement (also nil in 2019).

RedbubbleConsolidated Statement of Comprehensive Income
for the year ended 30 June 2020

Consolidated Statement of Financial Position
as at 30 June 2020

Revenue from contracts with customers

Marketplace revenue

Artists’ revenue

Total revenue from contracts with customers

Operating expenses

Artists' margin

Fulfiller expenses (2)

Employee and contractor costs

Marketing expenses

Operations and administration

Depreciation and amortisation

Total operating expenses

Other income(3)

Other expenses(4)

Loss before income tax

Income tax benefit / (expense)

Total loss for the year attributable to owners

Other comprehensive income / (loss)

Items that will be reclassified subsequently to profit or loss

Gain / (loss) on foreign currency translation

Total other comprehensive income / (loss) attributable to owners

Notes

2020

$'000

2019

$'000

Restated(1)

348,888

256,889

67,369

50,065

416,257

306,954

(67,369)

(50,065)

(214,521)

(162,354)

(59,496)

(43,300)

(24,342)

(47,603)

(28,577)

(19,180)

(10,355)

12, 13 & 14

(13,727)

(422,755)

(318,134)

342

(2,838)

(8,994)

223

(8,771)

441

(2,013)

(12,752)

(14,817)

(27,569)

7(a)

1,512

(52)

Total comprehensive loss for the year attributable to owners

(7,259)

(27,621)

Loss per share attributable to the ordinary equity holders
of the company

Basic loss per share

Diluted loss per share

(0.03)

(0.12)

(1) The full retrospective approach has been selected by the Group in the first time application of AASB 16 Leases. Details regarding the

change in accounting policy are in Note 29. The comparative information has been restated as outlined in Note 28.

(2) Fulfiller expenses comprise product and printing, shipping and transaction costs, and are equivalent to cost of goods sold.

(3) Other income includes finance income.

(4) Other expenses include interest expenses on lease liabilities and net foreign exchange losses.

The above Consolidated Statement of Comprehensive Income should be read in conjunction with accompanying notes.

Current assets

Cash and cash equivalents

Other receivables

Prepayments

Net investment in sublease

Current tax assets

Other assets

Total current assets

Non-current assets

Property, plant and equipment

Intangible assets

Right of use assets

Net investment in sublease

Prepayments

Deferred tax assets

Other assets

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Unearned revenue(2)

Employee benefit liabilities

Provisions

Tax liabilities

Lease liabilities

Other liabilities

Total current liabilities

Non-current liabilities

Lease liabilities

Employee benefit liabilities

Deferred tax liabilities

Other liabilities

Total non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Treasury reserve

Share based payment reserve

Foreign currency translation reserve

Accumulated losses

Total equity

Notes

10(b)

14(b)

14(a)

14(b)

7(c)

14(a)

7(c)

18(a)

18(b)

18(d)

2020

$'000

58,129

5,236

4,063

994

1,032

7,328

76,782

2,229

71,576

6,649

617

1,621

82,738

159,520

44,991

28,855

5,059

1,780

3,944

1,326

85,955

5,819

198

6,087

92,042

67,478

145,438

(5,303)

13,699

(335)

(86,021)

67,478

2019

As at 1 July 2018

$'000

$’000

Restated(1)

29,030

2,562

2,786

677

2,274

37,329

2,925

71,417

8,378

571

132

1,463

84,958

122,287

26,520

8,101

2,423

1,121

849

3,278

7,773

50,065

8,570

227

8,842

58,907

63,380

135,194

(1,394)

8,677

(1,847)

(77,250)

63,380

21,247

997

1,968

595

2,066

26,873

3,596

10,532

8,509

1,184

129

13,956

1,200

39,106

65,979

19,524

5,305

2,045

192

438

2,252

29,756

10,198

149

10,347

40,103

25,876

74,555

(1,895)

4,692

(1,795)

(49,681)

25,876

(1) The full retrospective approach has been selected by the Group in the first time application of AASB 16 Leases. Details regarding the change

in accounting policy are in Note 29. The comparative information has been restated as outlined in Note 28.

(2) Unearned revenue represents the value of goods paid for by customers that are not yet delivered. Higher sales volumes and increased

delivery times at the end of the financial year have increased this balance.

The above Consolidated Statement of Financial Position should be read in conjunction with accompanying notes.

RedbubbleAnnual Report 2020
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020

Consolidated Statement of Changes in Equity
for the year ended 30 June 2020

Share
capital

Treasury
reserve (1)

Share based
payments
reserve

Foreign
exchange
translation
reserve

Accumulated
losses

Total

Notes

$’000

$'000

135,194

(1,394)

8,677

(1,847)

(77,250)

63,380

18(b)

3,556

3,009

18(b)

10,321

(10,321)

18(b)

(6,412)

6,412

18(b)

(230)

(3,009)

8,031

(8,771)

1,512

(8,771)

(7,259)

3,556

8,031

(230)

145,438

(5,303)

13,699

(335)

(86,021)

67,478

For the year ended
30 June 2020

Balance as at 1 July
2019 (restated)

Loss for the year

Other comprehensive
income

Total comprehensive
loss for the year

Exercise of share
options

Transfer to issued
capital (2)

Share based
payments expense

Shares issued to
Employee Share Trust

Shares issued
/ allocated to
participants (3)

Payment of
withholding taxes (4)

Balance as at 30
June 2020

(1) The Group operates an Employee Share Trust (the Trust) for the purpose of issuance of shares to participants on exercise of options
/ restricted stock units. The balance in the Treasury Reserve represents the book value of shares held by the Trust for future issue to
participants on exercise of options / restricted stock units.

(2) Transfer to issued capital on issuance of shares for exercised options / restricted stock units.

(3) Shares issued / allocated to participants from the Employee Share Trust.

(4) Payment of withholding taxes to US tax authorities on issuance of restricted stock units funded by shares withheld.

The above Consolidated Statement of Changes in Equity should be read in conjunction with accompanying notes.

Treasury
reserve (1)

Share based
payments
reserve

Foreign
exchange
translation
reserve

Share capital

Accumulated
losses

Total

Notes

$’000

$'000

74,555

(1,895)

4,692

(1,795)

(49,809)

25,748

128

74,555

(1,895)

4,692

(1,795)

(49,681)

25,876

18(b)

2,249

1,930

(1,930)

5,915

18(b)

7,515

(7,515)

18(b)

(8,016)

8,016

18(b)

(110)

60,572

(3,501)

(27,569)

(52)

(27,569)

(27,621)

2,249

5,915

(110)

60,572

(3,501)

135,194

(1,394)

8,677

(1,847)

(77,250)

(63,380)

For the year ended
30 June 2019

Balance as at 1 July
2018

Effect of adoption
of new accounting
standards (2)

Balance as at 1 July
2018 (restated)

Loss for the year
(restated)

Other
comprehensive loss

Total
comprehensive
loss for the year
(restated)

Exercise of share
options

Transfer to issued
capital (3)

Share-based
payments expense

Shares issued to
Employee Share
Trust

Shares issued
/ allocated to
participants (4)

Payment of
withholding taxes (5)

Shares issued to
fund the acquisition
of TeePublic LLC

Transaction costs for
above issued share
capital

Balance at 30 June
2019 (restated)

(2) The comparative information has been restated as a result of the initial application of AASB 16 as discussed in Note 28.

(3) Transfer to issued capital on issuance of shares for exercised options / restricted stock units.

(4) Shares issued / allocated to participants from the Employee Share Trust.

(5) Payment of withholding taxes to US tax authorities on issuance of restricted stock units funded by shares withheld.

The above Consolidated Statement of Changes in Equity should be read in conjunction with accompanying notes.

RedbubbleAnnual Report 2020

Consolidated Statement of Cash Flows
for the year ended 30 June 2020

Cash flows from operating activities

Receipts from customers

Payments to artists

Payments to fulfillers

Payments to other suppliers and employees

Payment of interest

Receipt of interest

Income taxes received / (paid)

Net cash provided by / (used in) operating activities

Cash flows from investing activities

Payment for property, plant and equipment

Acquisition of subsidiary (net of cash acquired)

Proceeds from net investment in subleases

Payment for development of intangible assets

Net cash provided by / (used in) investing activities

Cash flows from financing activities

Proceeds from exercise of share options

Payment of withholding taxes to US tax authorities on settlement of restricted
stock units funded by shares withheld

Payments for lease liabilities

Proceeds from issue of share capital

Transaction costs arising from issue of share capital

Net cash provided by / (used in) financing activities

Net increase / (decrease) in cash and cash equivalents held

Cash and cash equivalents at beginning of year

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at the end of the financial year

Notes

2020

$’000

2019

$’000

Restated (1)

471,973

330,793

(63,114)

(48,199)

(217,810)

(158,707)

(142,058)

(115,499)

(456)

232

(2,165)

46,602

(527)

326

(349)

7,838

14(a)

(476)

(428)

(7,104)

(46,674)

14(b)

785

616

(9,205)

(9,412)

(16,000)

(55,898)

18(b)

14(a)

18(b)

3,556

2,249

(230)

(110)

(3,576)

(250)

30,352

29,030

(1,253)

(2,911)

60,572

(3,501)

56,299

8,239

21,247

(456)

58,129

29,030

(1) The comparative information has been restated as a result of the initial application of AASB 16 as discussed in Note 28.

The above Consolidated Statement of Cash Flows should be read in conjunction with accompanying notes.

Notes to the consolidated
financial statements

For the year ended 30 June 2020

NOTES

PAGE

1.
2.

3.
4.
5.
6.
7.
8.

9.
10.

11.
12.
13.

14.
15.
16.
17.

Basis of Preparation
Changes in significant accounting policies

Performance

Revenue
Employee and contractor costs
Marketing expenses
Operations and administration expenses
Income tax
Loss per share

Cash

Cash and cash equivalents
Financial risk management

Assets

Other assets
Property, plant and equipment
Intangible assets

Liabilities

Leases
Trade and other payables
Employee benefits liabilities
Other liabilities

Equity

18.

Contributed equity and reserves

19.
20.
21.

22.

23.
24.
25.
26.
27.
28.
29.

Group Structure

Business combinations
Interest in subsidiaries
Parent entity financial information

Unrecognised items

Commitments and contingencies

Others

Share-based payments
Related party transactions
Remuneration of auditors
Segment information
Events occurring after the balance sheet date
Impact of new accounting standards
Other significant accounting policies

70
71

71
72
72
72
73
76

77
78

82
82
84

87
89
90
91

93
93
94

95
98
99
99
100
100
104

RedbubbleAnnual Report 2020

1. Basis of preparation

The consolidated financial statements of Redbubble Limited and its controlled entities (the Group) for the year
ended 30 June 2020 were authorised for issue by a resolution of the Directors on 21 August 2020. Redbubble
Limited (the Company or the parent) is a limited company incorporated and domiciled in Australia and whose
shares are publicly traded on the Australian Stock Exchange.

The Group, through its websites at Redbubble.com, TeePublic.com and three foreign language Redbubble.
com websites, owns and operates the Redbubble and TeePublic online marketplaces. These marketplaces
facilitate the sale and purchase of art and designs on a range of products between independent creatives
and consumers. The products are produced and shipped by third party service providers (i.e. product
manufacturers, printers and shipping companies) referred to as fulfillers.

These financial statements:

• are general purpose financial statements;

• cover Redbubble Limited and its controlled entities as the consolidated Group. Redbubble Limited is the

ultimate parent entity of the Group;

• have been prepared in accordance with Australian Accounting Standards (AASBs) and interpretations

issued by the Australian Accounting Standards Board and the Corporations Act 2001;

• comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting

Standards Board (IASB);

• have been prepared on a going concern basis under the historical cost convention;

• are presented in Australian dollars with all values rounded off in accordance with the Australian

Securities and Investments Commission 2016/191 Legislative Instrument, to the nearest thousand dollars
or in certain other cases, nearest dollar, unless otherwise stated; and

• apply significant accounting policies consistently to all the years presented, unless otherwise stated.

Comparatives are also consistent with prior years, unless otherwise stated.

The preparation of financial statements requires the use of certain critical accounting estimates and exercise of
significant judgement in the process of applying the Group’s accounting policies. The areas involving a higher
degree of judgement and use of estimates are disclosed in the relevant notes. Estimates and judgements
are continually evaluated and are based on historical experience and other factors, including expectations
of future events that may have a financial impact on the entity and that are believed to be reasonable under
circumstances. The Group makes estimates and assumptions concerning the future which may not equal the
actual results.

At 30 June 2020, the Group had a net current asset deficiency of $9.2 million (2019: $12.7 million). Included
in this is $7.0 million of goods in transit and $28.9 million of unearned revenue that is not a cash liability of the
Group but will be recognised in the Statement of Comprehensive Income in the next financial year. The group
also has $3.9 million of lease liabilities in current liabilities but is required to report the corresponding right of
use asset as a non-current asset. Excluding these items the Group is in a positive net current asset position.
The Directors have satisfied themselves that the continued application of going concern basis is appropriate as
it is expected that the Group will be able to fully repay its debts as and when they become due. The Directors
have considered the potential impacts of trading volatility from COVID-19 in this assessment.

2. Changes in significant accounting policies

The Group applied AASB 16 Leases for the first time using the full retrospective approach that requires
restatement of previous years financial statements. The nature and effect of the changes as a result of
adoption of this new accounting standard are disclosed in Note 28.

The Group has also applied other amendments and interpretations for the first time in this period, but these do
not have a material impact on the consolidated financial statements.

3. Revenue

The Group provides internet-based marketplace platforms and associated services to facilitate the sale of
goods from artists to those who want to purchase goods bearing the artists’ designs. Artists display and
sell art via the Group’s websites. The Group aggregates demand from the buyers to support preferential
relationships between third party suppliers, fulfillers and drop shippers and the artists, using the Group’s
platforms.

The Group has concluded that when the customer contracts with the Group, there is only one performance
obligation for goods bearing the artists’ designs. Both the artist and the Group are involved in satisfying the
performance obligation. However, as the Group controls a substantial part of the process it is construed to
be the party primarily responsible for satisfying the performance obligation, the Group is determined (for
accounting purposes) to be the principal in the sale.

Under AASB 15 Revenue the performance obligation is satisfied (and therefore revenue is recognised) when
control of the goods is transferred to the customer, which is deemed to be when the product is delivered.

As the Group is seen as the principal (for accounting purposes) in the sale of goods bearing artists’ designs,
artists’ revenue is included in revenue with the corresponding artists’ margin being recognised in operating
expenses.

Amounts disclosed as revenue are net of trade discounts, returns, rebates, taxes and transaction fraud.

All of the unearned revenue balance as at 30 June 2019 was recognised as revenue during the FY2020 year.
High sales volumes at the end of the financial year combined with extended delivery times across all regions
has led to an increase in the unearned revenue balance as at 30 June 2020. This balance is expected to be
recognised as revenue within 12 months. Where possible the Group uses delivery tracking information to
calculate the volume of goods in transit at the end of the reporting period. When delivery tracking information
is not available the group estimates the likely delivery timeframe using average delivery times and information
from shipping partners.

For information regarding disaggregated revenue from contracts with customers refer to note 26.

RedbubbleAnnual Report 20204. Employee and contractor costs

Salary costs

Contractor costs

Share-based payments expense

Superannuation and other pension related costs (1)

Termination benefits

Restructure costs

2020

$'000

39,113

6,569

8,031

2,708

530

2,545

2019

$'000

33,139

5,974

5,915

2,422

153

Total employee and contractor costs

59,496

47,603

(1) Includes contribution to 401K funds, which is the superannuation equivalent for the US subsidiaries, and contributions to pension funds in

Germany.

5. Marketing expenses

Paid marketing (1)

Other marketing expenses

Total marketing expenses

2020

$'000

39,840

3,460

43,300

2019

$'000

27,051

1,526

28,577

(1) Paid marketing represents affiliate marketing and other paid marketing costs paid per click basis on search engines like Google, and

advertising on social media platforms such as Instagram, Facebook, Pinterest and SnapChat.

6. Operations and administration

Technology infrastructure and software costs

Travel expenses

Rental expenses (1)

TeePublic acquisition costs

Other operations and administration expenses

Total operations and administration

2020

$'000

14,704

928

155

8,555

24,342

2019

$'000

Restated

10,306

1,133

111

1,235

6,395

19,180

(1) Includes short-term leases with a lease term of 12 months or less. This amount is also recognised in the statement of cash flows as cash

flows from operating activities.

7. Income tax

Recognition of tax expense / (benefit)

The tax expense recognised in the statement of comprehensive income relates to current income tax expense
plus deferred tax expense (being the movement in deferred tax assets and liabilities and unused tax losses
during the year).

Current and deferred tax is recognised as income or an expense and included in the income statement for the
period except where the tax arises from a transaction which is recognised in other comprehensive income or
equity, in which case the tax is recognised in other comprehensive income or equity respectively.

Current tax

Current tax is the amount of income taxes payable / (recoverable) in respect of the taxable profit / (taxable
loss) for the year and is measured at the amount expected to be paid to / (recovered from) the taxation
authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of
the reporting period.

Current tax assets and liabilities are offset where there is a legally enforceable right to set off the recognised
amounts and there is an intention either to settle on a net basis or to realise the asset and settle the liability
simultaneously.

Deferred tax

Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of
tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the
extent:

•

it is probable that future taxable profits will be available against which the deductible temporary
differences and losses can be utilised;

the likelihood of achieving appropriate continuity of ownership levels and continuing to meet the relevant
definitions of “same business” are met; and

there are no changes in tax legislation that adversely affect the ability to realise the deferred tax asset
benefits.

Deferred tax assets and liabilities are offset where they relate to income taxes levied by the same taxation
authority and the intention is to realise the assets and settle the liabilities simultaneously in each future period
in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Critical accounting estimates and judgements

Deferred income taxes arise from temporary differences between the tax and financial statement recognition
of revenue and expense, the incurrence of tax losses and entitlement to non-refundable tax offsets. In
evaluating the Group’s ability to recover deferred tax assets within the jurisdiction from which they arise, the
Group considers all available positive and negative evidence, including probability of achieving appropriate
continuity of ownership levels, likelihood of meeting relevant definitions of “same business”, expected reversals
of temporary differences, projected future taxable income and results of recent operations. This evaluation
requires significant management estimates and judgments.

RedbubbleAnnual Report 20207. Income tax (continued)

In the prior year the Group de-recognised $13.9 million of the deferred tax asset balance during the year
aligning the accounting position on recognition of pre and post IPO losses. This asset predominantly related to
Australian carried forward tax losses and non-refundable research and development (R&D) tax offsets. These
losses remain in existence for taxation purposes.

The Group has in aggregate $83.7 million (2019: $72.0 million) of unrecognised losses and $8.7 million (2019:
$7.6 million) of unrecognised R&D tax offsets. An unrecognised deferred tax asset of $33.9 million exists as at
30 June 2020 (2019: $29.2 million), in relation to these items.

a) Income tax expense / (benefit)

Current tax

Current tax expense / (benefit)

Under/(over) provision in prior years

Deferred tax

Deferred tax expense / (benefit) (1)

Under/(over) provision in prior years

Total income tax expense / (benefit)

2020

$'000

339

(530)

(50)

(223)

2019

$'000

Restated

1,141

(420)

13,848

248

14,817

(1) In the prior year the group de-recognised its deferred tax asset on Australian tax losses. These losses remain in existence for taxation

purposes.

(b) Numerical reconciliation of income tax expense /

(benefit) to prima facie tax payable

Loss from ordinary activities before income tax expense / (benefit)

Income tax calculated @ 30%

Tax effect of amounts that are not deductible / (taxable) in calculating income tax:

Tax effect of foreign jurisdictions’ different tax rates

US income tax benefit due to exercise / disposition of employee stock options

Research and development

Share-based payments

Other non-deductible / non-assessable items

Effect of movements in foreign exchange

Over provision in prior year

2020

$'000

2019

$'000

Restated

(8,994)

(12,752)

(2,698)

(3,826)

(171)

(163)

(217)

1,517

226

193

(32)

(412)

165

(57)

1,217

224

(172)

Australian income tax benefit arising from deductibility of the issue of shares to
Employee Share Trust

(3,096)

(2,255)

Unrecognised tax losses and R&D tax offsets

Income tax expense / (benefit) attributable to loss from ordinary activities

4,218

(223)

19,848

14,817

7. Income tax (continued)

Deferred tax assets

Deferred tax liabilities

Net deferred tax asset / (liability)

The balance comprises temporary differences attributable to:

Amounts recognised in profit or loss:

Employee benefits

Property, plant, equipment

Lease assets and liabilities

Unrealised FX

Intangible assets

Other items

Net deferred tax (liability) / assets

Movements:

Opening balance at 1 July

Credited / (debited) due to the acquisition of TeePublic

Credited / (debited) to the consolidated statement of comprehensive
income

Exchange differences

Closing balance at 30 June

2020

$'000

617

2020

$'000

873

(275)

395

1,347

(1,395)

(328)

617

580

617

2019

$'000

Restated

(45)

2019

$'000

Restated

(898)

396

1,114

(588)

(68)

13,956

161

(14,096)

RedbubbleAnnual Report 20208. Loss per share

Basic earnings per share (EPS)

Basic EPS is calculated by dividing the profit attributable to ordinary equity holders of the Company by the
weighted average number of ordinary shares outstanding during the financial year.

Diluted EPS

Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the Company (after
adjusting for the after income tax effect of interest and other financing costs associated with the dilutive
potential ordinary shares) by the weighted average number of ordinary shares outstanding during the financial
year plus the weighted average number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.

Potential ordinary shares

None of the options over ordinary shares and restricted stock units over ordinary shares that could be
considered as potential ordinary shares have been included in determination of diluted EPS, since they are
anti-dilutive. Due to losses incurred during the current as well as the prior year, inclusion of potential ordinary
shares in weighted average number of shares would increase the denominator used in calculating diluted EPS
and thereby reduce the loss per share.

Basic and diluted loss per share

Basic and diluted loss per share attributable to the ordinary equity holders of the company is $0.03 (2019:
$0.12). The calculation for basic and diluted loss per share is detailed below.

Loss attributable to the ordinary equity holders of the company used in
calculating basic and diluted loss per share

2020

$'000

2019

$'000

(8,771)

(27,569)

Weighted average number of shares used as the denominator

Weighted average number of shares used as denominator in
calculating basic and diluted loss per share

2020

2019

259,379,690

237,934,306

There have been no other transactions involving ordinary shares or potential ordinary shares between the
reporting date and the date of authorisation of these financial statements that would significantly impact the
above calculations.

9. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and short-term deposits which are readily convertible to
known amounts of cash and which are subject to an insignificant risk of change in value.

Cash at bank and on hand(1)

Fixed term bank deposits(2)

Total cash and cash equivalents

2020

$'000

58,219

2019

$'000

18,028

11,002

29,030

(1) FY20 includes cash held in interest bearing accounts as described in note 10(b).

(2) Fixed term bank deposits attract interest at normal term deposit rates. They are placed for various periods of up to 12 months. All deposits

are capable of being called at 31 days’ notice with minimal financial impact.

(a) Reconciliation of loss for the year to net cash outflow from operating activities

Notes

Loss for the year

Non-cash items

(Recognition) / de-recognition of net deferred tax asset

7(c)

Depreciation and amortisation

Amortisation of share-based payments

Net exchange differences

Net loss on the disposal / write off of property, plant
and equipment and intangible assets

Unwinding of discount on deferred consideration

Change in operating assets and liabilities

Net (increase) in trade and other receivables,
prepayments and other financial assets

Net increase / (decrease) in current tax liabilities

Net increase in trade and other payables, employee
benefit and other liabilities and provisions

Net increase in unearned revenue

Net cash provided by operating activities

2020

$'000

(8,771)

(580)

13,727

8,031

2,233

171

188

2019

$'000

Restated

(27,569)

14,096

10,355

5,915

(93)

171

143

(9,077)

(1,004)

(1,881)

21,807

20,754

46,602

415

4,412

997

7,838

RedbubbleAnnual Report 20209. Cash and cash equivalents (continued)

(b) Changes in liabilities arising from financing activities

Lease liabilities

Opening balance at 1 July

Cash flows

New leases

Foreign exchange movement

Closing balance 30 June

Notes

14(a)

2020

$'000

11,848

(3,576)

1,335

156

9,763

2019

$'000

12,450

(2,911)

1,807

502

11,848

10. Financial risk management (continued)

(a) Market risk

Foreign exchange risk

The Group collects funds from customers in five currencies (USD, AUD, EUR, CAD and GBP) and maintains
bank accounts in these currencies. The Group has liabilities to fulfillers, artists and other suppliers in these
currencies. Where possible, the Group settles its liabilities in the native currency hence creating a natural
hedge. Any surplus funds are converted in to the required currencies’ operating accounts when management
feels it is prudent to do so.

Increased sales volumes during the year have led to larger foreign currency cash balances as at 30 June 2020.
The net exposure to foreign currency financial instruments (expressed in AUD) held by the Group, which are
largely held by the US subsidiaries whose functional currency is USD, are as follows:

10. Financial risk management

This note explains the Group’s financial risk management and how the exposure to these risks affects the
Group’s future financial performance. The Group’s risk management framework is maintained by senior
management through delegation from the Board of Directors. The Board oversees and monitors senior
management’s implementation of the Group’s risk management framework. This is based on recommendations
from the Audit and Risk Committee, where appropriate. The risk management framework includes policies and
procedures approved by the Board and managed by internal legal counsel and the Finance function.

Net exposure (asset / (liability)

30 June 2020

30 June 2019

Foreign Currency Sensitivity

GBP

$'000

4,206

(278)

USD

$’000

(766)

380

EUR

$’000

(525)

(409)

CAD

$’000

2,984

242

Total

$’000

5,899

(65)

Financial assets

Cash and cash equivalents

Other receivables

Security bonds

Net investment in sublease

Financial liabilities

Fulfiller payables

Artist payables

Staff payables

Other payables

Deferred consideration

Lease liabilities

Notes

10(b)

14(a)

2020

$'000

58,129

5,236

1,930

994

22,319

9,892

1,781

5,453

1,227

9,763

2019

$'000

Restated

29,030

2,562

1,873

1,248

14,877

4,663

1,252

3,311

7,773

11,848

The carrying value of the assets and liabilities disclosed in the table equals or closely approximates
their fair value.

The following table demonstrates the sensitivity to a reasonably possible change in exchange rates with all
other variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of
monetary assets and liabilities.

Year

Change in FX rate

30 June 2020

30 June 2019

+ 10%

- 10%

+ 10%

- 10%

Effect on profit before tax (amounts shown in AUD)

GBP

$'000

421

(421)

(28)

USD

$’000

(77)

(38)

EUR

$’000

(53)

(41)

CAD

$’000

298

(298)

(24)

Total

$’000

590

(590)

(7)

RedbubbleAnnual Report 202010. Financial risk management (continued)

10. Financial risk management (continued)

(b) Credit risk

Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss
to the Group. The Group faces primary credit risk from potential default on receivables by payment service
providers. The Group receives payments of the balance due from two of the three service providers, every day,
two to three days in arrears. The credit risk of balances held with the third party service provider is managed
by regularly sweeping funds out of the provider accounts into a portfolio of managed banking facilities held
with highly rated and regulated financial institutions.

The credit risk for net investment in subleases is considered negligible due to the credit worthiness of lessees.

Cash and bank balances / other financial assets

As at 30 June 2020, the Group holds $13 million (2019: $11.0 million) in bank deposits, classified as cash and
cash equivalents and other assets, that attract interest at normal rates.

The Group’s bank accounts are predominantly non-interest bearing accounts. These operating bank accounts
are not concentrated with any one bank. Funds in excess of the short-term liquidity requirements are moved to
interest-bearing accounts.

The other financial assets include certain other operational deposits over and above the deposits placed with
banks as security. The banks with which securities are held are reputable financial institutions and hence, the
credit risk is considered low.

Other receivables

The Group is not exposed to any significant credit risk on account of other receivables. The Group accepts
payments either via credit card platforms, PayPal, Amazon Pay or Apple Pay. In any case, the Group ensures
that cash is received prior to the product being manufactured. The other receivables balance as at 30 June
2020 represents amounts receivable from these payment service providers. It is believed that the credit risk
from collections from payment service providers is low.

Other receivables (1)

Total other receivables

2020

$’000

5,236

2019

$’000

2,562

(1) None of the other receivables balances are impaired or past due date. The Group does not hold any collateral in relation to these

receivables.

The Group encounters credit card fraud typical of the industry in which it operates, representing less than 0.1%
(2019: less than 0.1%) of marketplace revenue.

Prudent liquidity risk management implies maintaining sufficient cash in accordance with forecast cash usage.
Due to the dynamic nature of the underlying business, flexibility in funding is maintained by ensuring ready
access to the cash reserves of the business.

Term deposits classified as cash and cash equivalents in the prior year are placed for various periods up to 12
months. These can, however, be called at 31 days’ notice, with minimal financial impact.

All financial liabilities (excluding lease liabilities) are current and anticipated to be repaid over the normal
payment terms, usually 30 days.

Financial arrangements

The Group had no borrowing facilities at the end of reporting period nor at the end of the prior reporting
period.

Maturities of financial liabilities

Financial liabilities owed by the Group at 30 June 2020 are $55.8 million (2019: $41.4 million). These items are
based on contractual undiscounted payments. The table below summarises the maturity profile of the Group’s
financial liabilities based on contractual undiscounted payments:

Year ended 30 June 2020

Trade and other
payables

Lease liabilities

1 to 3 months

3 to 12 months

1 to 3 years

> 3 years

Total

$’000

44,991

$'000

1,169

3,315

3,864

2,458

44,991

10,806

Year ended 30 June 2019

Trade and other
payables

Lease liabilities

1 to 3 months

3 to 12 months

1 to 3 years

> 3 years

Total

$’000

26,520

$'000

984

2,975

5,443

4,038

26,520

13,440

Total

$'000

46,160

3,315

3,864

2,458

55,797

Total

$'000

27,504

2,975

5,443

4,038

39,960

RedbubbleAnnual Report 202010. Financial risk management (continued)

12. Property, plant and equipment (continued)

(d) Capital management

The Group’s policy is to maintain a capital structure for the business which ensures sufficient liquidity, provides
support for business operations, maintains shareholder confidence and positions the business for future
growth. The Group manages its capital structure and makes adjustments in light of changes in economic
conditions. The ongoing maintenance of the Group’s policy is characterised by ongoing cash flow forecast
analysis and detailed budgeting which is directed at providing a sound financial positioning for the Group’s
operations and financial management activities. The Group is not subject to externally imposed capital
requirements.

11. Other assets

Consolidated

Security bonds

Goods in transit (1)

Total other assets

Current

Non-current

2020

$’000

309

7,019

7,328

2019

$’000

410

1,864

2,274

2020

$'000

1,621

2019

$'000

1,463

(1) Goods in transit represents the cost of goods that have been manufactured but are in transit to customers.

12. Property, plant and equipment

Plant and equipment is measured on a cost basis and carried at cost less accumulated depreciation and any
accumulated impairment losses.

Depreciation

The depreciable amount of all fixed assets 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 asset are shown below:

Class of Fixed Assets

Leasehold improvements

Computer equipment

Furniture and equipment

Useful life

Life of the applicable lease

3 years

2-5 years

At the end of each annual reporting period, the depreciation method, useful life and residual value of each
asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.

Leasehold
improvements

Furniture and
equipment

Computer
equipment

$'000

Cost

Balance at 1 July 2019

Additions

Disposals

Exchange differences

Balance at 30 June 2020

Balance at 1 July 2018

Additions

Disposals

Exchange differences

Balance at 30 June 2019

Accumulated depreciation

Balance at 1 July 2019

Charge for the year

Disposals

Exchange differences

Balance at 30 June 2020

Balance at 1 July 2018

Charge for the year

Disposals

Exchange differences

Balance at 30 June 2019

Net book value

As at 30 June 2020

As at 30 June 2019

3,883

3,925

3,754

121

3,883

(2,017)

(560)

(7)

(2,584)

(1,360)

(622)

(35)

(2,017)

1,341

1,866

721

(8)

786

671

721

(356)

(140)

(1)

(494)

(227)

(123)

(6)

(356)

292

365

Total

$'000

7,359

476

(347)

7,562

6,739

428

(4)

196

7,359

(4,434)

(1,159)

285

(25)

(5,333)

(3,143)

(1,213)

(78)

2,755

410

(339)

2,851

2,314

393

(4)

2,755

(2,061)

(459)

282

(17)

(2,255)

(1,556)

(468)

(37)

(2,061)

(4,434)

596

694

2,229

2,925

RedbubbleAnnual Report 202013. Intangible assets (continued)

Critical accounting estimates and judgements

Key assumptions used in value in use calculations and sensitivity to changes in assumptions

The Group assesses the recoverability of its goodwill and brand name in the TeePublic CGU annually.
Recoverable amounts have been determined based on a value in use calculation using cash flow projections
over a 5 year period. Management have considered the potential impacts of trading volatility from COVID-19 in
this assessment. The key assumptions in the calculation are as follows:

(a) Growth rate

The long-term business growth rate is based upon Management’s experience with the historical growth of the
business and expectations about future performance. Cash flows beyond the forecast period are projected
using a growth rate of 2.5%.

(b) Gross margins

Gross margins are based on historical values and expectations about future performance. These values are
increased over the forecast period for anticipated efficiency improvements as the business scales.

The pre-tax discount rate applied to cash flow projections is 12.2%. Discount rates represent the consideration
of the time value of money and the individual risks of the underlying assets. The discount rate calculation is
based on the specific circumstances of the Group and is derived from its weighted average cost of capital
(WACC). Adjustments to the discount rate are made to factor in the specific amount and timing of the future
tax flows in order to reflect a pre-tax discount rate.

Impairment

The Group performed an impairment test as at 30 June 2020. Using the above assumptions, it was concluded
that the carrying value of the Group’s CGUs does not exceed its value in use and therefore no impairment
charge has been recognised. Sensitivity analysis has been completed which considered a range of possible
scenarios. There is no reasonably possible change in key assumptions used to determine the recoverable
amount that would result in impairment.

12. Property, plant and equipment (continued)

Critical accounting estimates and judgements

At the end of each reporting period, the Group assesses whether there is any indication that any property,
plant & equipment asset may be impaired. If such an indication exists, an impairment test is carried out on the
asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs
to dispose, and value in use, to the asset’s carrying amount.

Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately as a loss.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.

No items of property, plant and equipment have been impaired in the financial year ending 30 June 2020
(2019: $nil).

13. Intangible assets

Recognition and measurement

Capitalised development costs

Goodwill

Other intangible assets

Amortisation

Development expenditure is capitalised when future
economic benefits are probable. Expenditure during
the research phase of a project is recognised as an
expense when incurred.

Goodwill arising on the acquisition of subsidiaries
is measured at cost less accumulated impairment
losses. All of the goodwill held by the Group is
attributable to the TeePublic cash generating unit
(CGU).

Other intangible assets include brand name assets
that have been acquired by the Group.

Amortisation is calculated to write off the cost of intangible assets using the straight-line method over their
estimated useful lives, and is recognised in profit or loss. Goodwill is not amortised.

The estimated useful lives for current and comparative periods are as follows:

Capitalised development costs:

Goodwill (attributable to the TeePublic CGU):

Brand name asset (attributable to the TeePublic CGU):

2–3 years

Indefinite

The Brand name asset is considered to have an indefinite useful life as it is expected to contribute to future
economic benefits as the Group continues to sell its products under the brand name indefinitely.

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
deemed necessary.

RedbubbleAnnual Report 202013. Intangible assets (continued)

Brand name

Capitalised
development
costs

$'000

6,756

122

6,878

6,694

39,692

9,205

(109)

48,791

29,077

9,412

1,216

(185)

172

Goodwill

$'000

Restated

50,501

988

51,489

49,916

585

Cost

Balance at 1 July 2019

Additions

Disposals

Exchange differences

Balance at 30 June 2020

Balance at 1 July 2018

Additions

Acquisition of a subsidiary

Disposals

Exchange differences

Balance at 30 June 2019

6,756

39,692

50,501

Accumulated amortisation

Balance at 1 July 2019

Charge for the year

Exchange differences

Balance at 30 June 2020

Balance at 1 July 2018

Charge for the year

Exchange differences

Balance at 30 June 2019

Net book value

As at 30 June 2020

As at 30 June 2019

6,878

6,756

(25,532)

(10,041)

(9)

(35,582)

(18,545)

(6,873)

(114)

(25,532)

13,209

14,160

51,489

50,501

No intangible assets have been impaired in the financial year ending 30 June 2020 (2019: nil).

Total

$'000

96,949

9,205

(109)

1,113

107,158

29,077

9,412

57,826

(185)

819

96,949

(25,532)

(10,041)

(9)

(35,582)

(18,545)

(6,873)

(114)

(25,532)

71,576

71,417

14. Leases

a) Group as a lessee

The Group leases various offices in Australia, the United States and Germany. Rental contracts are typically
made for fixed periods of between 1 to 8 years. Lease terms are negotiated on an individual basis and contain
a wide range of different terms and conditions. Set out below are the carrying amounts of right-of-use assets
and lease liabilities and the movements during the period:

Right of use assets

Lease liabilities

Balance at 1 July 2019

Additions

Disposals (1)

Depreciation and amortisation expense

Interest expense

Lease liability repayment

Exchange differences

Balance as at 30 June 2020

Balance at 1 July 2018

Additions

Disposals

Depreciation and amortisation expense

Interest expense

Lease liability repayment

Exchange differences

Balance as at 30 June 2019

(1) The disposal is a result of recognising net investment in sublease during the year.

Classification of lease liabilities

Current

Non-current

Total lease liabilities

Amounts recognised in the statement of cashflow

Operating – payments of interest

Financing – payments of principal

Total cash (outflow) relating to leases

Total

$'000

8,378

1,348

(654)

(2,527)

104

6,649

8,509

1,807

(2,269)

331

8,378

2020

$’000

3,944

5,819

9,763

2020

$’000

(456)

(3,576)

(4,032)

Total

$'000

11,848

1,335

456

(4,032)

156

9,763

12,450

1,807

527

(3,438)

502

11,848

2019

$’000

3,278

8,570

11,848

2019

$’000

(527)

(2,911)

(3,438)

RedbubbleAnnual Report 202014. Leases (continued)

14. Leases (continued)

The Group has several lease contracts that include an extension. Management exercises significant judgement
in determining whether these extension options are reasonably certain to be exercised. Set out below are
the undiscounted potential future rental payments relating to periods following the exercise date of extension
options that are not included in the lease term:

Extension options expected not to be exercised

b) Group as a lessor

Within five
years

More than five
years

$'000

3,025

$’000

8,386

Total

$'000

11,411

Amounts recognised in the statement of cashflow

Operating – receipt of interest

Investing – receipt of principal

Total cash inflow relating to leases

2020

$’000

785

838

2019

$’000

616

685

The table below summarises the maturity profile of the Group’s net investment in sublease based on
contractual undiscounted receipts with a reconciliation to the carrying amount of net investment in sublease:

The Group has sub-let offices in the United States. These subleases have original terms of up to 4 years. Set
out below are the carrying amounts of net investment in sublease and the movements during the year:

Undiscounted lease receipts

Net investment in sublease

Balance at 1 July 2019

Additions

Disposals

Interest income

Net investment in sublease receipts

Exchange differences

Balance as at 30 June 2020

Balance at 1 July 2018

Additions

Disposals

Interest income

Net investment in sublease receipts

Exchange differences

Balance as at 30 June 2019

Classification of net investment in sublease

Current

Non-current

Total net investment in sublease

2020

$’000

994

Total

$’000

1,248

500

(838)

994

1,779

(685)

1,248

2019

$’000

677

571

1,248

Year 1

Year 2

Year 3

> 3 years

Total undiscounted lease receipts

Less: unearned finance income

Exchange differences

Net investment in sublease

15. Trade and other payables

Fulfiller payables

Artist payables

Staff payables

Sales tax payables

Other payables (1)

Total trade and other payables

(1) Other payables consist of operations, administration and marketing payables.

2020

$’000

1,046

(22)

(30)

994

2020

$’000

22,319

9,892

1,781

5,546

5,453

44,991

2019

$’000

754

611

1,365

(52)

(65)

1,248

2019

$’000

14,877

4,663

1,252

2,417

3,311

26,520

RedbubbleAnnual Report 202016. Employee benefit liabilities

Wages, salaries, annual and long service leave

A provision is made for the Group’s liability for employee benefits arising from services rendered by employees
to the end of the reporting period.

Employee benefits that are expected to be settled within one year represent the amounts expected to be paid
when the liability is settled. Employee benefits expected to be settled more than twelve months after the end
of the reporting period have been measured at the present value of the estimated future cash outflows to be
made for those benefits. In determining the liability, consideration is given to employee wage increases and the
probability that the employee may satisfy service period requirements. Cash flows are discounted using market
yields at the reporting date on high quality corporate bonds with terms to maturity that match the expected
timing of cash flows.

Employee benefits are presented as current liabilities in the balance sheet if the Group does not have an
unconditional right to defer settlement of the liability for at least 12 months after the reporting date regardless
of the classification of the liability for measurement purposes under AASB 119 Employee Benefits.

Changes in the measurement of the liability are recognised in the income statement.

Defined contribution schemes

Obligations for contributions to defined contribution superannuation plans are recognised as an employee
benefit expense in the income statement in the periods in which services are provided by employees.

Termination benefits and restructure costs

Termination benefits are those benefits paid to an employee as a result of either the Group’s decision to
terminate an employee’s employment before the normal retirement date or an employee’s decision to accept
an offer of benefits in exchange for the termination of employment. The Group also implemented a restructure
program in the current year. Termination payments made and restructure costs payable to employees are
disclosed in Note 4. Termination benefits and restructure costs are recorded as a provision when the Group can
no longer withdraw the offer of those benefits.

Annual leave

Long service leave

Termination benefits

Total employee benefit liabilities

Current

Non-current

2020

$’000

2,572

307

2,180

5,059

2019

$’000

2,058

212

153

2,423

2020

$'000

198

2019

$'000

227

17. Other liabilities

Deferred consideration payable (1)

Other

Total other liabilities

Current

Non-current

2020

$’000

1,227

1,326

2019

$’000

7,773

2020

$'000

2019

$'000

(1) A US $4.8 million (AU $7.1 million) payment of deferred consideration in relation to the TeePublic acquisition in May 2020. The estimated fair

value of the remaining deferred consideration at 30 June 2020 was US $0.8 million (AU $1.2 million).

18. Contributed equity and reserves

(a) Share capital

Consolidated and parent entity

Ordinary shares (1)

Issued and fully paid

Transferred from share based payments
reserve

2020

2019

2020

$'000

2019

$'000

263,462,966

256,156,543

135,965

128,730

9,473

6,464

Total share capital

263,462,966

256,156,543

145,438

135,194

(1) The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company. On a show of
hands at meetings of the Company, each holder of ordinary shares has one vote in person or by proxy, and upon a poll each share is
entitled to one vote. The Company does not have authorised capital or par value in respect of its shares.

(b) Movements in ordinary share capital

Balance at 1 July 2019

Exercise of options / warrants

Settlement of restricted stock units (RSUs)

Shares issued to Employee Share Trust

Number of shares

$’000

256,156,543

128,730

4,521,415

3,556

465,844

7,267,000

10,321

Shares allocated to participants from the Employee Share Trust

(4,795,461)

(6,412)

Payment of withholding taxes to US tax authorities (1)

Balance at 30 June 2020 (including treasury shares)

Treasury shares - unallocated (2)

Balance at 30 June 2020 (excluding treasury shares)

(152,375)

(230)

263,462,966

135,965

(3,865,657)

(5,303)

259,597,309

130,662

(1) Represents payment of withholding taxes accounted for as a deduction from equity in accordance with AASB 2 Share-based Payments.

(2) The unallocated treasury shares balance represents book value of shares held by the Trust for future issue to participants on exercise of

options / restricted stock units.

RedbubbleAnnual Report 202018. Contributed equity and reserves (continued)

19. Business combinations

(b) Movements in ordinary share capital (continued)

Balance at 1 July 2018

Number of shares

209,940,096

$’000

70,021

Shares issued to fund the acquisition of TeePublic LLC

40,381,447

60,572

Transaction costs for issued share capital

Exercise of options / warrants

Settlement of restricted stock units (RSUs)

Shares issued to Employee Share Trust

(3,501)

5,151,049

2,249

353,095

5,835,000

7,515

Shares allocated to participants from the Employee Share Trust

(5,432,588)

(8,016)

Payment of withholding taxes to US tax authorities (1)

Balance at 30 June 2019 (including treasury shares)

Treasury shares - unallocated (2)

Balance at 30 June 2019 (excluding treasury shares)

(71,556)

(110)

256,156,543

128,730

(1,394,118)

(1,394)

254,762,425

127,336

(1) Represents payment of withholding taxes accounted for as a deduction from equity in accordance with AASB 2 Share-based Payments.

(2) The unallocated treasury shares balance represents book value of shares held by the Trust for future issue to participants on exercise of

options / restricted stock units.

No dividends were declared or paid during the year (2019: $nil). The Group’s franking account balance is $nil
(2019: $nil).

(d) Nature and purpose of reserves

Share based payment reserve

The share-based payments reserve arises on issue of share options / restricted stock units as payment for
services to Board members, employees (including senior executives) and contractors.

Foreign Currency Translation Reserve

Exchange differences arising on translation of the foreign controlled entities are recognised in the foreign
currency translation reserve within other comprehensive income. The cumulative amount is reclassified to the
income statement when the foreign controlled entity to which it relates is disposed of.

Treasury reserve

The treasury reserve is used to hold the book value of shares held by the Employee Share Trust for future issue
to participants on exercise of options / restricted stock units.

There were no business combinations entered into in the current period. In the prior period the Group acquired
100% of TP Apparel LLC and its subsidiary TP Apparel Europe Limited (TeePublic). Details of this business
combination were disclosed in Note 17 of the Group’s annual financial statements for the year ended 30 June
2019. US $4.8 million (AU $7.1 million) of deferred consideration in relation to this acquisition was paid during
the financial year.

20. Interests in subsidiaries

Information about subsidiaries

The consolidated financial statements of the Group include:

Name of entity

Country of
incorporation

Principal activitiest

Redbubble
Incorporated

USA

Provider of global sales, marketing and
distribution services in respect of the
Redbubble marketplace

Redbubble Europe
Limited

Marketing and distribution services in
Europe

Redbubble Europe
GmbH

Germany

Marketing and distribution services in
Europe

TP Apparel LLC

USA

Provider of global sales, marketing and
distribution services in respect of the
TeePublic marketplace

TP Apparel Europe
Limited (1)

Ireland

Marketing and distribution services in
Europe

(1) The TP Apparel Europe Limited entity was voluntarily deregistered during the year.

Equity holding
2020
%

Equity holding
2019
%

100

RedbubbleAnnual Report 202021. Parent entity financial information

22. Commitments and contingencies

The financial information for the parent entity, Redbubble Limited, has been prepared on the same basis as the
consolidated financial statements except for investments in subsidiaries. They are recognised at cost in the
financial statements of the parent entity.

(a) Capital commitments

The Group had no capital commitments as at 30 June 2020 (2019: $nil).

(a) Summary financial information

Statement of financial position

Assets

Current assets

Non-current assets

Total assets

Liabilities

Current liabilities

Non-current liabilities

Total liabilities

Equity

Contributed equity

Share based payment reserve

Treasury reserve

Accumulated losses

Total equity

Loss and other comprehensive income

Loss for the year

Total comprehensive loss

2020

$’000

51,499

15,006

66,505

5,828

381

6,209

145,438

13,699

(5,303)

(93,538)

60,296

(7,686)

2019

$’000

Restated

49,092

12,932

62,024

3,921

1,476

5,397

135,194

8,677

(1,394)

(85,850)

56,627

(31,554)

(b) Guarantees entered into by the parent entity

The parent entity has not entered into any guarantees as at 30 June 2020 (2019: $nil).

As at the date of these financial statements there are current lawsuits filed against the Company that relate
to alleged intellectual property infringement and / or breach of consumer laws. There is no certainty around
the amount or timing of any outflow should any of the actions ultimately be successful (at first instance or
on appeal, as applicable). The Company does not consider that any of the current actions are likely to have a
material adverse effect on the business or financial position of the Company.

(d) Capital commitments

The parent entity had no capital commitments as at 30 June 2020 (2019: $nil).

(b) Contingencies

Legal claim contingencies

As at the date of these financial statements there are current lawsuits filed against some of the entities within
the Group that relate to alleged intellectual property infringement and/or breach of consumer laws. There is no
certainty around the amount or timing of any outflow should any of the actions ultimately be successful (at first
instance or on appeal, as applicable). The Group does not consider that any of the current actions are likely to
have a material adverse effect on the business or financial position of the Group.

23. Share-based payments

The Group operates equity-settled share-based payment employee share and option schemes. The fair value
of the equity to which employees become entitled is measured at grant date and recognised as an expense
over the vesting period, with a corresponding increase to an equity account.

The fair value of options with a strike price and share appreciation rights are ascertained using industry
standard valuation models. A Black-Scholes pricing model is used for options and the Monte Carlo simulation
model is used for share appreciation rights. The amount to be expensed is determined by reference to
the fair value of the options or shares granted. This expense takes into account any market performance
conditions and the impact of any non-vesting conditions but ignores the effect of any service and non-market
performance vesting conditions. Non-market vesting conditions are taken into account when considering the
number of options expected to vest and at the end of each reporting period, the Group revisits its estimate.
Revisions to the prior period estimate are recognised in the income statement and equity.

The fair value of zero priced options and restricted stock units is equal to the fair market value of a Redbubble
Ltd share at the grant date.

Critical accounting estimates and judgements

Some of the inputs to the pricing models require application of significant judgement.

The Black-Scholes and Monte Carlo simulation pricing models require inputs for the expected share price
volatility of Redbubble Limited shares for a period similar to the expected life of the options. The Group has
used its historical share price volatility to estimate expected future volatility.

RedbubbleAnnual Report 202023. Share-based payments (continued)

Options over ordinary shares

Redbubble Equity Incentive Plan for Australian and German employees

The “Redbubble Equity Incentive Plan” has been established to grant options over ordinary shares to
Redbubble Limited Board members, employees (including senior executives) and contractors. The options are
subject to service conditions and have a predetermined time-based vesting schedule. The grantees of options
under this Plan may exercise vested options at any time before the earlier of:

(a) a specified expiry date (generally 10 years from the grant date); and

(b) 90 days after ceasing to be a Director, employee or contractor for the Group.

Some of the options have a zero exercise price, so as to be akin to performance rights or restricted stock units.

2014 Option Plan

Options to employees / contractors of the US subsidiaries are granted under this plan. The vesting conditions
and expiry period under this plan are akin to the Redbubble Equity Incentive Plan.

Restricted Stock Units (RSUs)

Restricted Stock Units are granted under the Restricted Share and Performance Rights Plan to certain
employees including senior executives and consultants. Once granted, the rights have a predetermined time-
based vesting schedule. All the restricted stock units are subject to service conditions.

Share appreciation rights

Share appreciation rights have been granted to the Chief Executive Officer and the Executive team. The rights
are subject to the achievement of health metrics as agreed by the Board and are subject to a share price
exercise hurdle. Refer to the Remuneration Report for further details.

23. Share-based payments (continued)

(a) Movement

The table below summarises the movement in the number of options / restricted stock units during the year:

2020

2019

Number

WAEP ($) (1)

Number

WAEP ($)(1)

Options over ordinary shares

Outstanding at 1 July

Granted during the year (2)

Exercised during the year

Forfeited during the year

Expired during the year

Outstanding at 30 June

Exercisable at 30 June

Restricted stock units

Outstanding at 1 July

Granted during the year

Settled during the year

Forfeited during the year

Outstanding at 30 June

Share appreciation rights (SARs) (3)

Outstanding at 1 July

Granted during the year

Forfeited during the year

Outstanding at 30 June

Exercisable at 30 June

23,376,683

2,921,778

(4,521,415)

(2,788,674)

(478,314)

18,510,058

9,510,335

727,766

2,110,590

(465,844)

(172,112)

2,200,400

5,666,668

6,029,146

(4,419,653)

7,276,161

0.76

0.04

0.77

0.83

1.28

0.85

0.81

22,111,251

9,472,033

(5,151,049)

(2,014,819)

(1,040,733)

23,376,683

10,656,430

337,707

789,201

(353,095)

(46,047)

727,766

5,666,668

0.74

0.73

0.44

1.00

1.18

0.76

0.79

(1) WAEP stands for Weighted Average Exercise Price.

(2) 2,846,778 options granted during the year have a zero exercise price (2019: 900,431). The expiry period for options and RSU grants made

during the current and prior year is 10 years.

(3) SARs do not have an exercise price, however they do have a base share price from which any share appreciation is measured.

(b) Modifications to the awards

The table below details modifications to a number of options / restricted stock units during the year.

Accelerated vesting of unvested options over ordinary shares
upon termination

2020

Number

154,082

2019

Number

180,619

Total

154,082

180,619

RedbubbleAnnual Report 2020

23. Share-based payments (continued)

Weighted average fair value of

Share at the date of exercise of options / settlement of restricted stock units
during the year

Share options and share appreciation rights granted during the year

Restricted stock units granted during the year

Weighted average remaining contractual life of

Share options and share appreciation rights outstanding at the end of the year

Inputs to pricing models for options and SARs granted during the year
(weighted average)

Expected volatility (%) (1)

Risk-free interest rate (%)

Expected life (years)

Fair market value of share ($) (2)

2020

1.63

0.87

1.58

2020

7.81

2020

68.41

0.41

4.29

1.42

2019

1.39

0.63

1.55

2019

7.57

2019

33.08

2.58

6.20

1.35

(1) The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of

future trends, which may not necessarily be the actual outcome. The range of exercise prices for options outstanding at the end of the year
is $nil to $1.62 (2019: $nil to $1.62).

(2) The fair market value of a share has been calculated using the volume weighted average price over the seven trading days preceding grant

date.

24. Related party transactions

Compensation of the key management personnel of the Group

Short-term employee benefits

Post-employment benefits

Share-based employee benefits

Other long-term benefits

Termination benefits

2020

2019

1,412,539

1,337,755

77,658

822,393

(21,984)

316,976

94,520

1,706,107

13,622

24. Related party transactions (continued)

Transactions with related parties

Richard Cawsey, Redbubble’s former Board Chair, is a director and shareholder of Denali Holdings Pty Ltd,
which is the owner of the ‘Bondle’ messaging application. Redbubble engaged Denali Holdings Pty Ltd in
respect of a licence of the Bondle application in May 2019 and paid $4,788 at that time for a two year licence
period. No further fees were paid for the Bondle application in FY2020. The engagement is on an arm’s length
basis and the fees charged are comparable to similar application licensors in the market. At the year end, there
were no balances outstanding in relation to this engagement (also nil in 2019).

25. Remuneration of auditors

Ernst & Young (Australia)

Fees for auditing the statutory financial report of the parent covering the
group and auditing the statutory financial reports of any controlled entities

Fees for other services:

Taxation services

Other services (1)

Remuneration of Ernst & Young

(1) Other services for FY2019 include a one-off cost relating to the acquisition of TeePublic of $93k.

2020

2019

280,144

278,342

39,400

18,250

147,715

319,544

444,307

26. Segment information

AASB 8 Operating Segments allows for the aggregation of operating segments where they exhibit similar
economic characteristics. The Group considers the Redbubble and TeePublic marketplaces to have similar
economic characteristics and therefore have been aggregated to form a single reportable operating segment.

Geographical information required per AASB 8 and disaggregated revenue reporting is detailed below:

2020

Revenue

Non-current
assets (1)

$’000

22,624

287,810

43,299

62,524

416,257

$’000

14,708

66,564

176

81,448

2019

Revenue

$’000

19,215

200,061

34,277

53,401

306,954

Non-current
assets (1)

$’000

12,838

70,337

792

83,968

Australia

United States

United Kingdom

Rest of the world

Total

(1) Non-current assets for this purpose consist of property, plant and equipment, intangible assets, right of use assets and net investment in

Total transactions with key management personnel

2,607,582

3,152,004

sublease.

RedbubbleAnnual Report 202027. Events occurring after the balance sheet date

28. Impact of new accounting standard (continued)

The financial report was authorised for issue on 21 August 2020 by the Board of Directors.

Other than the above, there have been no further significant events after the balance sheet date that require
disclosure.

AASB 16 Leases (continued)
Impact on lease accounting (continued)
Former operating lease (continued)

28. Impact of new accounting standard

AASB 16 Leases

AASB 16 supersedes AASB 117 Leases. The date of initial application of AASB 16 for the Group is 1 July 2019.

AASB 16 introduces new or amended requirements with respect to lease accounting. It introduces significant
changes to lessee accounting by removing the distinction between operating and finance leases and requiring
the recognition of a right-of-use asset and a lease liability at commencement for all leases. Short-term leases
and leases of low value assets are exempt. In contrast to lessee accounting, the requirements for lessor
accounting have remained largely unchanged other than in respect of sub-leases for which lease classification
is performed by reference to the head lease right-of-use asset rather than the underlying asset. The impact of
the adoption of AASB 16 on the Group’s consolidated financial statements is described below.

The Group’s leasing activities

Impact of the new definition of a lease

The change in definition of a lease mainly relates to the concept of control. AASB 16 determines whether a
contract contains a lease on the basis of whether the customer has the right to control the use of an identified
asset for a period of time in exchange for consideration. The new definition in AASB 16 will not significantly
change the scope of contracts that meet the definition of a lease for the Group.

Impact on lease accounting

Former operating lease

AASB 16 changes how the Group accounts for leases previously classified as operating leases under AASB 117.
Leases classified as operating leases under AASB 16 have been amended under AASB 16 to bring values onto
the Consolidated statement of financial position which were previously off balance sheet.

Applying AASB 16, for all leases (except as noted below), the Group:

• Recognises right-of-use assets and lease liabilities in the consolidated statement of financial position,

initially measured at the present value of the future lease payments;

• Recognises depreciation of right-of-use assets and interest on lease liabilities in consolidated statement

of comprehensive income; and

• Separates the total amount of cash paid into a principal portion (presented within financing activities)

and interest (presented within operating activities) in the consolidated statement of cash flows.

Lease incentives (e.g. a rent-free period) are now recognised as part of the measurement of the right- of-use
assets and lease liabilities. In contrast under AASB 117 they resulted in the recognition of a lease incentive,
amortised as a reduction of rental expenses generally on a straight-line basis.
AASB 16 requires right-of-use assets to be tested for impairment in accordance with AASB 136 Impairment of
Assets.

For short-term leases (lease term of 12 months or less) and leases of low-value assets (such as tablet and
personal computers, small items of office furniture and telephones), the Group has opted to recognise a lease
expense on a straight-line basis as permitted by AASB 16. This expense is presented within operations and
administration expenses in statement of comprehensive income.

Impact on lessor accounting

AASB 16 does not substantially change how a lessor accounts for leases. Under AASB 16, a lessor continues
to classify leases as either finance leases or operating leases and account for those two types of leases
differently. Under AASB 117, subleases were previously accounted for as an operating lease and has now been
classified under AASB 16 as a finance lease as the sublease has the majority of the remaining term to the main
lease.

Under AASB 16, an intermediate lessor accounts for the head lease and the sub-lease as two separate
contracts. The intermediate lessor is required to classify the sub-lease as a finance or operating lease by
reference to the right-of-use asset arising from the head lease (and not by reference to the underlying asset).

Because of this change, the Group has reclassified some of its sub-lease agreements as finance leases and
recognised a net investment in sublease.

The tables below shows the amount of adjustments for each financial statement line item affected by the
application of AASB 16 for prior years.

The impact on profit/(loss) for the year ended 30 June 2019 is outlined below with explanatory notes on page 103.

Summary of impacts

30 June 2019

Impact on profit/(loss) for the year

Operations and administration (1)

Depreciation and amortisation (1)

Other income (7)

Other expenses (1)

Deferred tax (expense)/benefit (5)

Increase/(decrease) in profit for the year

As previously
reported

AASB 16
Adjustments

30 June 2019

As restated

$’000

(22,338)

(8,086)

1,053

(1,486)

(15,162)

$’000

3,158

(2,269)

(612)

(527)

345

$’000

(19,180)

(10,355)

441

(2,013)

(14,817)

100

101

RedbubbleAnnual Report 202028. Impact of new accounting standard (continued)

28. Impact of new accounting standard (continued)

AASB 16 Leases (continued)
Summary of impacts (continued)

Impact on assets, liabilities and equity as at 1 July 2018

Right-of-use assets (1)

Net investment in sub-lease – current & non-current (7)

Deferred rent received – current & non-current (7)

Deferred tax assets (6)

Net impact on total assets

Lease liabilities – current & non-current (1)

Lease incentive liability - current & non-current (2)

Deferred rent – current & non-current (7)

Rent received in advance (7)

Net impact on total liabilities

Retained earnings

As previously
reported

AASB16
Adjustments

As restated

$’000

13,952

14,012

(1,450)

(842)

(54)

$’000

8,509

1,779

(60)

10,232

(12,450)

1,450

842

$’000

8,509

1,779

13,956

24,244

(12,450)

(2,346)

(10,104)

(12,450)

128

The implementation of AASB 16 resulted in an increase in net assets (over what was reported in the prior period) of $128,000 at 1 July 2018.

Impact on assets, liabilities and equity as at 30 June 2019

Summary of impacts (continued)

The Group as a lessee:

1. The application of AASB 16 to leases previously classified as operating leases under AASB 117 resulted in the
recognition of right-of-use assets and lease liabilities. It also resulted in a decrease in rent expenses for the
year ended 30 June 2019 of $3,158,000, an increase in depreciation of $2,269,000 and interest expenses of
$527,000.

2. Lease incentive liabilities previously recognised with respect to operating leases have been derecognised

and factored into the measurement of the right-of-use assets.

3. Prepaid rent has been derecognised and factored into the measurement of right-of-use assets.

4. The value of Goodwill has reduced due to a change in the fair value of identifiable net assets of TeePublic on

acquisition.

5. Deferred tax expense has decreased by $345,000.

6. Deferred tax assets have been recognised in relation to the right-of-use assets and lease liabilities.

The Group as an intermediate lessor:

7. The Group, as an intermediate lessor, has reclassified its sub-lease agreements as finance leases and
recognised a net investment in sublease. Deferred rent received in relation to the sub-lease has been
derecognised and a net investment in sublease has instead been recognised. Rental income of $612,000
has been de-recognised.

The consolidated statement of cash flows of the Group has been amended in accordance with AASB 16 as
follows:

• Short-term lease payments, payments for leases of low-value assets and variable lease payments are

not included in the measurement of the lease liability as part of operating activities;

As previously
reported

AASB16
Adjustments

As restated

• Cash received and paid for the interest portion of net investment in sublease and lease liability

respectively are presented as operating activities, as permitted by AASB 107 Statement of Cash Flows;

Right-of-use assets (1)

Net investment in sub-lease – current & non-current (7)

Deferred rent received – current & non-current (7)

Intangibles (4)

Prepayments (3)

Deferred tax assets (6)

Net impact on total assets

Lease liabilities – current & non-current (1)

Lease incentive liability – current & non-current (2)

Deferred rent – current & non-current (7)

Deferred tax liabilities – non-current (6)

$’000

71,492

2,804

74,356

(807)

(1,377)

(296)

$’000

8,378

1,248

(60)

(75)

(18)

9,545

(11,848)

807

1,377

251

$’000

8,378

1,248

71,417

2,786

83,901

(11,848)

(45)

Net impact on total liabilities

(2,480)

(9,413)

(11,893)

Retained earnings

132

The implementation of AASB 16 resulted in an increase in net assets (over what was reported in the prior period) of $132,000 at 30 June 2019.

• Cash receipts for the principal portion of the net investment in sublease are presented as part of

investing activities; and

• Cash payments for the principal portion of the lease liability are presented as part of financing activities.

AASB 117 required all lease payments on operating leases to be presented as part of cash flows from operating
activities. Consequently, under AASB 16 the net cash generated by operating activities has increased by
$2,295,000, being the lease liability payments (now shown in net cash used in financing activities) and
proceeds from net investment in subleases (now shown in net cash used in investing activities).

102

103

RedbubbleAnnual Report 202029. Other significant accounting policies

(a) Principles of consolidation

Subsidiaries are all entities over which the Group has control. Control is established when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from
the date on which the Group gains control. They would be deconsolidated from the date that control ceases.
A list of the subsidiaries is provided in note 20 to the financial statements.

Intercompany transactions, balances and unrealised gains or losses on transactions between Group entities
are fully eliminated on consolidation. Accounting policies of subsidiaries have been aligned where necessary
to ensure consistency with the policies adopted by the Group.

(b) Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the
amount of any non-controlling interests in the acquiree. For each business combination, the Group elects
whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share
of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in
operations and administration expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts
by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition
date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is
accounted for within equity. Contingent consideration classified as an asset or liability that is a financial
instrument and within the scope of AASB 9 Financial Instruments, is measured at fair value with the changes
in fair value recognised in the statement of profit or loss in accordance with AASB 9.

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests and any previous interest held over the net identifiable
assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the
aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets
acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be
recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets
acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to
each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.

29. Other significant accounting policies (continued)

Where goodwill has been allocated to a single cash-generating unit (CGU) and part of the operation within
that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount
of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is
measured based on the relative values of the disposed operation and the portion of the cash-generating unit
retained.

Functional and presentation currency

The functional currency of each of the Group’s entities is 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 and presentation currency.

Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional
currency spot rates at the date the transaction first qualifies for recognition.

At the end of the reporting period:

• Foreign currency monetary items are translated using the closing exchange rate;

• Non-monetary items that are measured at historical cost are translated using the exchange rate at the

date of the transaction; and

• Non-monetary items that are measured at fair value are translated using the exchange rate at the date

when fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at
exchange rates different from those at which they were translated on initial recognition or in prior reporting
periods are recognised through the statement of comprehensive income, except where they relate to an item
of other comprehensive income.

Group companies

The results and financial position of all the Group entities that have a functional currency different from the
presentation currency are translated into the presentation currency (none of which has the currency of a
hyperinflationary economy) as follows:

• Assets and liabilities for each balance sheet are translated at the closing exchange rate at the date of

that balance sheet;

•

Income and expenses for each income statement and statement of comprehensive income are
translated at average exchange rates; and

• All resulting exchange differences are recognised in other comprehensive income.

(d) Other income

Finance income

Finance income is recognised on an accruals basis using the effective interest method.

(e) Inventories

Inventories of packaging materials are measured at the lower of cost and net realisable value. Cost of inventory
is determined using the first-in-first-out basis and are net of any rebates and discounts received.

104

105

RedbubbleAnnual Report 202029. Other significant accounting policies (continued)

29. Other significant accounting policies (continued)

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs
of completion and the costs necessary to make the sale. Net realisable value is estimated using the most
reliable evidence available at the reporting date and inventory is written down through an obsolescence
provision if necessary.

(f) Financial assets

Trade and other receivables and other financial assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. After initial recognition, loans and trade and
other receivables are measured at amortised cost using the effective interest method. Any change in their
value is recognised in the statement of comprehensive income.

The Group assesses at the end of each financial reporting period whether there is any objective evidence that
a financial asset is impaired. If there is objective evidence that an impairment loss on loans and receivables has
been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and
the present value of estimated future cash flows.

(g) Trade and other payables

Trade and other payables represent the liabilities for goods and services received by the Group that remain
unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts
normally paid within 30 days of recognition of the liability.

(h) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects
some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a
provision is presented in the statement of income net of any reimbursement.

(i) Sales Tax (includes Goods and Services Tax (GST) and Value Added Tax (VAT))

Revenue, expenses and assets are recognised net of the amount of sales tax, except where the amount
incurred is not recoverable from the Australian Taxation Office (ATO) or other similar international bodies.
Receivables and payables are stated inclusive of sales tax, where applicable. The net amount of sales tax
recoverable from, or payable to, the ATO or other similar international bodies, is included as part of receivables
or payables in the statement of financial position.

The statement of cash flows includes cash on a gross basis and the sales tax component of cash flows arising
from investing and financing activities which is recoverable from, or payable to, the taxation authority is
classified as operating cash flows.

Critical accounting estimates and judgements

The Group currently collects and remits sales tax on sales made in a number of States in the United States
where management believes that a sales tax nexus may exist.

(j) Leases

Set out below are the new accounting policies of the Group upon adoption of AASB 16, which have been
applied from the date of initial application:

Group as a lessee

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying
asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct costs incurred and lease payments made at or
before the commencement date of the lease less any lease incentives received. Unless the Group is reasonably
certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets
are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-
of-use assets are subject to impairment in accordance with AASB 136 Impairment of Assets.

Lease liabilities

The Group recognises lease liabilities at the commencement date of the lease (i.e., the date the underlying
asset is available for use), measured at the present value of lease payments to be made over the lease term.
The lease payments include fixed payments (including in- substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid
under residual value guarantees. The variable lease payments that do not depend on an index or a rate are
recognised as expense in the period on which the event or condition that triggers the payment occurs.

Significant judgement in estimating the incremental borrowing rate

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. The rate is determined
using a government bond (risk free) rate adjusted for a risk premium commensurate with each lessee’s profile.
The bond rates used are for a bond with a term and security similar to each lease and are country specific.

After the commencement date, the amount of the lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. The carrying amount of lease liabilities are adjusted if there
is a modification, a change in the lease terms or a change in the in-substance fixed lease payments.

Group as a lessor (subleases)

In classifying a sublease, an intermediate lessor shall classify the sublease as a finance lease or an operating
lease as follows:

•

if the head lease is a short-term lease, the Group will classify the sublease as an operating lease;

• otherwise, the sublease will be classified by reference to the right-of-use asset arising from the head

lease, rather than by reference to the underlying asset.

Sublease classified as finance lease

The Group recognises net investment in sublease at the commencement date of the sublease (i.e., the date
the underlying asset is subleased) due to the term of the sublease constituting a major part of the economic
life of the right-of-use asset relating to the head lease. The net investment in the sublease is measured using
the discount rate for the head lease. The Group dercognises the right-of-use asset relating to the head lease
that it transfers to the sublessee and replaces it with a net investment in the sublease. Any difference between
the right-of-use asset and the net investment in the sublease is recognised in profit or loss. The lease liability
relating to the head lease is retained and represents the lease payments owed to the head lessor. During the
term of the sublease, the Group recognises both interest income on the sublease and interest expense on the
head lease.

106

107

RedbubbleAnnual Report 202029. Other significant accounting policies (continued)

Sublease classified as operating lease

Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership
of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis
over the lease terms and is included in revenue in the statement of comprehensive income due to its operating
nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent
rents are recognised as revenue in the period in which they are earned.

Short-term leases and leases of low-value assets

Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a
straight-line basis over the lease term.

Significant judgement in determining the lease term of contracts with renewal options

The Group determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by
an option to terminate the lease, if it is reasonably certain not to be exercised.

The Group has the option under some of its leases to extend the term of the original lease. The Group applies
judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers
all relevant factors that create an economic incentive for the Group to exercise the renewal option. After the
commencement date, the Group reassesses the lease term when there is a significant event or change in
circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew.

The Group has determined that no lease extension options will be exercised as they are not reasonably
certain that those options will be exercised and therefore, the extended periods have not been included in
calculations.

Practical expedients applied

In applying AASB 16 for the first time, the Group has used the practical expedients permitted by the standard.
The Group has made use of the practical expedient on transition to AASB 16 not to reassess whether a
contract is or contains a lease. Accordingly only leases in existence at 1 July 2019 have been assessed
and transitioned into the new standard. The definition of a lease in accordance with AASB 117 Leases and
Interpretation 4 Determining whether and Arrangement contains a Lease will continue to be applied for those
leases entered or modified before 1 July 2019.

(k) Accounting standards issued but not yet effective

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not
yet effective.

There are other new accounting standards, interpretations or amendments issued but not yet effective,
however they are not considered relevant to the activities of the Group and are not expected to have a material
impact on the financial statements of the Group.

Director’s Declaration

In accordance with a resolution of the Directors of Redbubble Limited, we state that in the Directors’ opinion:

(a) the financial statements and notes, as set out on pages 64 to 108 are in accordance with the Corporations
Act 2001 including:

(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory

professional reporting requirements; and

(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of

its performance for the financial year ended on that date; and

(b) there are reasonable grounds to believe that Redbubble Limited will be able to pay its debts
as and when they become due and payable.

The financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer
required by Section 295A of the Corporations Act 2001.

Anne Ward

Chair
Melbourne

21 August 2020

Martin Hosking

Chief Executive Officer
Melbourne

21 August 2020

108

109

RedbubbleAnnual Report 2020

Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001

Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au

Independent Auditor's Report to the Members of Redbubble Limited

Why significant

How our audit addressed the key audit matter

Capitalised development costs

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Redbubble Limited (the Company) and its subsidiaries (collectively
the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements, including
a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:

giving a true and fair view of the consolidated financial position of the Group as at 30 June 2020
and of its consolidated financial performance for the year ended on that date; and

complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. 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 auditor
independence requirements of 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 also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.

As disclosed in Note 13 to the financial
statements, the carrying value of capitalised
development costs in the consolidated statement
of financial position at 30 June 2020 was
$13.2m.

The accounting for capitalised development costs
involves judgment, including considering technical
feasibility, the Group’s intention and ability to
complete the intangible asset, future economic
benefits to be generated by the asset, the ability
of the Group to measure the costs reliably, and
determining the useful lives for capitalised
development costs. In addition, determining
whether there is any indication of impairment of
the carrying value of assets requires judgment in
making assumptions which are affected by future
market or economic developments.

This was considered a key audit matter given the
judgement required in accounting for it, the value
of development cost assets relative to total
assets, the rapid technological change in the
industry, and the specific Australian Accounting
Standards criteria that have to be met to enable
costs incurred to be capitalised.

Revenue recognition

Why significant

As disclosed in Note 3 to the financial report,
revenue is recognised when the goods are
transferred to the customer, which is deemed to
be when the product is delivered.

Due to the volume of online transactions
processed on a daily basis, and the arrangement in
place with suppliers whereby suppliers dispatch
goods directly to the Group’s customers, the
judgement involved in the timing of when revenue
is recognised is considered to be a Key Audit
Matter.

Our audit procedures included the following:
•

assessing the eligibility of the development
costs for capitalisation as an intangible
asset in accordance with Australian
Accounting Standards;
selecting a sample of capitalised
development costs by project and assessing
whether the nature of projects and costs
incurred were supported by underlying
evidence such as employee time sheets,
employee contracts and supplier invoices;
checked the clerical accuracy of the
capitalised development cost rollforward;
assessing whether the amortisation rates
used are appropriate;
testing for a sample of projects, the
feasibility and benefits expected from each
based on the current status, forecast
performance and related assumptions. This
included discussions with project managers
and developers;
considering whether there were any
indicators of impairment; and
evaluation of the disclosures in Note 13 of
the financial report.

•

How our audit addressed the key audit matter

Our audit procedures included the following:
• Testing the operating effectiveness of

•

controls over the capture and measurement
of revenue transactions;
For a sample of revenue transactions,
testing whether the revenue was recorded
in the appropriate period and whether
management’s estimate of sale transactions
not delivered to the customer at 30 June
2020 were appropriately included as
unearned revenue as at that date;

• Assessing whether the revenue recognition

policy applied to the terms and conditions
of sale was in accordance with Australian
Accounting Standards; and

• Considered the adequacy of the revenue
recognition policy disclosure contained in
Note 3.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

110

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

111

Information Other than the Financial Report and Auditor’s Report Thereon

The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2020 Annual Report other than the financial report and our auditor’s report
thereon. We obtained the Directors’ Report that is to be included in the Annual Report, prior to the date
of this auditor’s report, and we expect to obtain the remaining sections of the Annual Report after the
date of this auditor’s report.

Our opinion on the financial report does not cover the other information and we do not and will not
express 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 and,
in doing so, 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.

If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.

In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are 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 the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and 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 this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.

Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.

From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

112

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

113

Report on the Audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 24 to 49 of the directors' report for the year
ended 30 June 2020.

In our opinion, the Remuneration Report of Redbubble Limited for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.

Responsibilities

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 responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.

Ernst & Young

Kylie Bodenham
Partner
Melbourne
21 August 2020

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

100

114

Shareholder and other ASX
Required Information

The shareholder information set out below was applicable as at 21 September 2020
(except as otherwise stated).

A. Distribution of shareholders

Analysis of numbers of ordinary shareholders by size of holding:

Range

100,001 and Over

10,001 to 100,000

5,001 to 10,000

1,001 to 5,000

1 to 1,000

Grand Totals

Total holders

% of Issued Capital

359

350

1,290

1,548

3,644

251,989,564

10,249,113

2,615,536

3,365,330

743,423

268,962,966

2.66

9.85

9.60

35.40

42.48

100

There were 97 holders of less than a marketable parcel of ordinary shares.

B. Top 20 Registered Holders of Fully Paid Ordinary Shares

The names of the twenty largest registered holders of quoted fully paid ordinary shares are listed below:

Name

J P Morgan Nominees Australia Pty Limited

HSBC Custody Nominees (Australia) Limited

National Nominees Limited

Jellicom Pty Ltd

Citicorp Nominees Pty Limited

Blackbird FOF Pty Ltd

Piton Capital Venture Fund II LP

CBC Co Pty Limited

HSBC Custody Nominees (Australia) Limited-GSCO ECA

BNP Paribas Nominees Pty Ltd

Radiata Investments Pty Ltd

UBS Nominees Pty Ltd

Continued on next page

Number of
ordinary shares

% of Issued Capital

46,706,045

34,040,215

33,493,391

28,509,720

12,488,257

11,361,819

5,537,291

4,404,907

4,245,263

4,118,404

3,914,640

3,620,241

17.37

12.66

12.45

10.60

4.64

4.22

2.06

1.64

1.58

1.53

1.46

1.35

B. Top 20 Registered Holders of Fully Paid Ordinary Shares (continued)

Name

Number of ordinary shares

% of Issued Capital

BNP Paribas NOMS Pty Ltd

BNP Paribas Nominees Pty Ltd

Solium Nominees (Australia) Pty Ltd

CS Third Nominees Pty Limited

Martin Hosking

Radiata Super Pty Ltd

HSBC Custody Nominees (Australia) Limited

HSBC Custody Nominees (Australia) Limited - A/C 2

Top 20 holders of Ordinary Fully Paid Shares (TOTAL)

Total Remaining Holders Balance

Grand Totals

3,463,584

3,013,209

2,920,448

2,808,042

2,393,552

1,945,568

1,919,048

1,880,591

212,784,235

56,178,731

268,962,966

C. Unquoted equity securities

The numbers of unquoted equity securities in the Company are set out below:

Type of equity security

Share Options

Share Appreciation Rights

Performance Rights

Total number of ordinary shares subject of options and performance rights

1.29

1.12

1.09

1.04

0.89

0.72

0.71

0.70

79.11

20.89

100.00

Number held

10,700,599

5,851,406

2,t097,508

18,649,513

D. Redbubble’s American Depository Receipt (ADR) program

Redbubble ADRs are negotiable certificates issued by BNY Mellon, with one ADR representing ten RBL ordinary
shares. They are traded under the symbol RDBBY and are classified as Level 1. They are traded over the
counter via brokers.

BNY Mellon is the depositary bank for the ADRs and plays a key role in the process of issuance and
cancellation of ADRs. For additional questions about ADRs please contact:

BNY Mellon Shareowner Services
P. O. Box 505000
Louisville, KY 40233-5000
U.S. Toll Free Telephone: 1-888-BNY-ADRS (1-888-269-2377)
Telephone for International Callers: 1-201-680-6825
Website: http://www.mybnymdr.com/
E-Mail: shrrelations@cpushareownerservices.com

Further information about Redbubble’s ADR program can be found on Redbubble’s Investor Centre website at:
https://shareholders.redbubble.com/site/investor-information/adr-information

116

117

RedbubbleAnnual Report 2020E. Substantial Holders

Substantial holders in the Company are set out below (as at 8 September 2020):

Name

Mr Martin Hosking

Osmium Partners

Greencape Capital

BlackRock Investment Mgt (Australia)

Number held

% of Issued Capital

32,403,272

18,035,631

15,033,803

13,575,234

12.0%

6.7%

5.6%

5.0%

F. Securities subject to escrow arrangements

There are no shares on issue that are subject to voluntary escrow.

G. Voting Rights

The voting rights attaching to each class of equity securities are set out below:

Corporate
Information

Directors

Anne Ward (Chair)

Martin Hosking (Managing Director and Chief Executive Officer)

Ben Heap

Jennifer (Jenny) Macdonald

Greg Lockwood

Company Secretaries

Corina Davis

Ordinary Shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.

Options, Share Appreciation Rights and Performance Rights

No voting rights

Registered Office

Share Register

Paul Gordon

Level 3, 271 Collins Street
Melbourne VIC 3000
Australia

Link Market Services
Tower 4, 727 Collins Street
Melbourne VIC 3008
Australia

H. Other ASX Required Information

Auditors

Ernst & Young

The Company has used the cash and assets in a form readily convertible to cash, that it had at the time of
admission to the ASX, in a way consistent with its business objectives. This statement is made pursuant to ASX
Listing Rule 4.10.19.

8 Exhibition Street
Melbourne VIC 3000
Australia

Bankers

Commonwealth Bank of Australia

Stock Exchange Listing

Redbubble shares are listed in the Australian Securities Exchange
(ASX: RBL)

ADR Program

Redbubble ADRs are negotiable instruments issued by BNY Mellon,
with one ADR representing ten RBL ordinary shares. They are traded
under the symbol RDBBY.

Website

Redbubble.com

Investor Centre

Shareholders.redbubble.com

118

119

RedbubbleAnnual Report 2020120

Redbubble