Annual Report
2021
Redbubble
Founded 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 hosted at Redbubble (redbubble.com)
and TeePublic (teepublic.com), powered by over one
million independent artists. 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.
Contents
03
04
06
08
11
18
43
44
71
118
119
124
127
Year in Review
Final Performance Highlights
Chair’s Letter
CEO’s Review
ESG Information
Directors’ Report
Auditor’s Independence Declaration
Remuneration Report
Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder and other ASX Required Information
Corporate Information
Front Cover Artworks:
FAST FOOD / Softdrink Art Board Print designed and sold by Daniel Coulmann
Let’s Dance Retro Rainbow Text Art Print designed and sold by ShowMeMars
Disco Poster designed and sold by souloff
Retro Spectrum Poster designed and sold by mojovalley
Malibu Art Board Print designed and sold by mojovalley
Retro Radio Boombox Art Print designed and sold by sundrystudio
Sunglasses Collection – Pink Ombré Palette Canvas Print designed and sold by Cat Coquillette
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
Redbubble Limited
ABN: 11 119 200 592
Year ended 30 June 2021
Butterfly Spots Throw Pillow
designed and sold by
Andrea Lauren
Monstera leaf tropical pattern
minimal botanical Throw
Pillow design designed and
sold by Andrea Lauren
Puffins Throw Pillow designed
and sold by Andrea Lauren
Safari Plants Throw Pillow
designed and sold by
Andrea Lauren
Swans Throw Pillow designed
and sold by Andrea Lauren
Alpaca - Wisteria Purple
Throw Pillow designed and
sold by Andrea Lauren
Year in Review
Total Revenue
Less: Artist Revenue
FY
YoY
(FY21 v FY20)
FY21
FY20
Growth
657.3
416.3
(104.0)
(67.4)
58%
54%
Marketplace (MP) Revenue
553.3
348.9
59%
Gross Profit (GP)
222.7
134.4
66%
GP % (on MP Revenue)
40.3%
38.5%
1.7pp
Paid Acquisition (Marketing)
(71.2)
(39.8)
79%
Gross Profit After Paid Acquisition (GPAPA)
151.5
94.5
60%
GPAPA % (on MP Revenue)
27.4%
27.1%
0.3pp
Operating Expenses
Other Income/Expenses(1)
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
(88.7)
(79.3)
(10.0)
(10.1)
12%
(1%)
52.7
5.1
930%
Depreciation & Amortisation
(13.3)
(13.7)
(3%)
Earnings before interest and tax (EBIT)
39.4
(8.6)
N/A(2)
(1) Includes non-cash share-based payments and currency gains/losses
(2) Meaningful growth rates cannot be provided for metrics that have moved from a negative to a positive amount.
03
Annual Report 2021 Financial Performance
Highlights
Marketplace Revenue
(A$m, FY17 - FY21)
GP
(A$m, FY17 - FY21)
GPAPA
(A$m, FY17 - FY21)
+41%
CAGR
553
+45%
CAGR
223
+41%
CAGR
152
Redbubble Group (consisting of Redbubble Limited and its subsidiaries) delivered record financial
results and operational achievements during FY2021, providing strong foundations from which to
drive future growth. The business is well capitalised to pursue its medium term aspirations with
confidence and conviction.
350
257
134
95
95
67
183
141
64
50
47
38
Gross Transaction Value (1)
Marketplace Revenue
Artist Revenue
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
$701m
$553m
$104m
↑ 48% floating currency
↑ 58% floating currency
↑ 58% floating currency
↑ 60% constant currency (2)
↑ 71% constant currency (2)
↑ 70% constant currency (2)
Gross Profit
EBITDA
Cash Balance
$223m
$53m
$99m
↑ 66% floating currency
↑ $48m
↑ $41m
↑ 79% constant currency (2)
Over the last 5 years Marketplace Revenue has grown at a compound annual growth rate (CAGR)
of 41%. Gross Profit and GPAPA growth also displayed scalable unit economics as shown on the
following page.
(1) Gross Transaction Value (GTV) represents total receipts from customers less fraud, refunds and chargebacks.
(2) “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes. Redbubble sources
about 93% of its Marketplace Revenue in currencies other than Australian dollars. TeePublic sources about 91% of its Marketplace Revenue
in US dollars.
Redbubble operates a unique three-sided marketplace with genuine flywheel effects where
improving one side creates a positive reinforcing impact on the other side.
The content that artists sell attracts customers and more customers enables the fulfilment network
to scale, lowering costs and improving services, thus attracting additional customers. This increase
in customers creates more Artist revenue, encouraging new Artists to the platform adding more
content, attracting more customers and the cycle continues. This powerful flywheel effect was
witnessed throughout FY2021 and drove record financial results for RB Group.
The RB Group Flywheel
Delivering value to artists
inspires them to create more
unique content
728,000 selling artists on RB
marketplaces (↑54% YoY) and
they earned $104m in FY2021
(↑54% YoY)
Driving top line growth
through customer acquisition
and loyalty reinforces our
competitive position
9.5 million unique customers
(↑40% YoY) spending $701
million GTV (↑48% YoY)
Scaling the network improves
the customer experience and
unit economics
44 fulfilment locations across
global networks (↑7% YoY).
04
05
RedbubbleAnnual Report 2021 Chair’s Letter
On behalf of the Redbubble Board of Directors, I am pleased to
present the 2021 Annual Report.
The past year has again been very challenging. Staff at all
Redbubble’s offices in Melbourne, San Francisco, New York and
Berlin worked remotely for almost the entire year and, while this
has become the norm in many places, prolonged absences from
the office continue to be demanding. The company has worked
hard to maintain a sense of community and support the mental
health and well-being of our people during this time.
All geographies in which the Redbubble and TeePublic
marketplaces operate continued to be disrupted by COVID-19
during FY2021. As we all faced the second year of the global
pandemic, Redbubble’s purpose of bringing more creativity into
the world has never been more important.
The pandemic continued to have a profound effect on consumer behaviour and accelerated the
shift to online platforms, including ours. We are now seeing a freeing of restrictions in many places
around the world, at least in relation to retail, hospitality and travel. I am pleased to report that, with
many countries entering the ‘post-COVID’ era in the latter part of FY2021, our business continued
to perform strongly and retain many of the customers introduced to our marketplaces during
lockdown.
In FY2021, the Group delivered record financial results and operational achievements including
record earnings for creative artists using our marketplaces to connect with their customers.
These results are a testament to how well Redbubble was able to meet the challenges of FY2021
through a resilient business model, a robust fulfillment network, adaptable staff and a loyal
community of artists who continued to produce work that attracted customers to our marketplaces
in greater numbers than ever before.
In addition to these outstanding financial results, in my first full year as Chair, I have been
particularly pleased with the collegiate approach of the Board to its work in challenging times.
A key responsibility of the Board during the year was to select and appoint a new CEO to take
over from interim CEO and Redbubble founder Martin Hosking. In November 2020, the Board was
pleased to appoint Michael Ilczynski who brought to the role a wealth of experience in leadership of
technology companies, development of high-performing teams and scaling of businesses, having
been most recently CEO of Seek, Asia Pacific & Americas.
With Mike’s commencement in January 2021 and changes to the structure and composition of
the Executive Leadership Team, the Group has the right team in place to build on the significant
achievements to date and lead Redbubble into its next phase. The FY2021 results provide strong
foundations for the team to drive future growth.
After a year of exceptional growth, we look forward in the short term to consolidating our
achievements and investing prudently to enable us to seize the opportunities that lie ahead.
Readers will note that, in this report, we provide greater detail than previous years in relation to
the Group’s approach to environmental, social and governance (ESG) issues. Redbubble’s business
model has always emphasised a small environmental footprint together with a strong focus on
social good. However, as the report explains, we have recognised the need to better understand our
material ESG impacts and more clearly integrate ESG into our strategy and decision making in the
future. In FY2022, we look forward to expanding further on the detail around ESG provided in this
report.
In closing, I would like to thank the talented artists who choose Redbubble to bring more creativity
into the world, the third party fulfillers and content partners and the customers who continue to use
our marketplaces in increasing numbers.
Thank you also to my fellow Directors, Mike and the Executive Leadership Team and the many
committed employees of the Group for their ongoing contribution. I would also like to welcome all
new employees who have joined us over the past year.
Finally, thank you to our shareholders for their continued support as we realise our ambition of
creating the world’s largest marketplace for independent artists
Anne Ward
Board Chair
06
07
RedbubbleAnnual Report 2021 CEO’s Review
I am delighted to be presenting my first annual review as CEO of
Redbubble Limited.
As readers will be aware, the COVID-19 pandemic has again
challenged us all in FY2021. Having commenced with the Group
in January 2021, travel restrictions have meant that I have not
yet had the opportunity to visit our offices in San Francisco, New
York and Berlin or meet many of our Melbourne staff in person.
Even without this face to face contact, though, I have been
impressed by the skill, professionalism and resilience of our staff
and their dedication to the Artist community whose customers
our marketplaces service.
In our Annual Report last year, our founder and then interim CEO, Martin Hosking, described FY2021
as a year of promise provided the Redbubble Group maintained the momentum of FY2020 through a
clear focus on our four key strategic themes: artist activation and engagement; user acquisition and
transaction optimisation; customer understanding, loyalty and brand building; and physical products
and the Third Party Fulfilment Network.
FY2021 Results
I am pleased to report that in FY2021 the Group delivered on that promise and achieved record
results demonstrating the power of the business when it is operating at scale. In summary, at the
Group level, Gross Transaction Value across the marketplaces was $701 million for the year, up 48%
year on year and up 60% on a constant currency basis, Marketplace Revenue was $553 million, up
58% year on year and 71% on a constant currency basis and NPAT was $31 million compared to a
loss of $9 million in FY2021.
This represents a remarkable year for the Group, but we are particularly proud of the record Artist
revenue that was earned by the community of creative Artists who use our platforms to connect
with their customers.
In April 2021, I shared our medium-term aspirations. These aspirations are focused on driving a
step-change in business scale and Artist impact by growing our core topline metrics of Gross
Transaction Value to $1.5 billion p.a., Marketplace Revenue to $1.25 billion p.a. and Artist revenue
to $250 million p.a. These aspirations will be achieved through a process of making disciplined and
phased investments against our 4 key strategic themes outlined above.
During FY2021, substantial progress was made against all four strategic themes delivering record
growth during the year and providing a solid foundation for sustained growth into the future.
Artist Activation and Engagement
FY2021 saw $104 million earned by 728,000 Artists across the Redbubble Group marketplaces, the
highest annual amount ever earned by the Artist community. This represents not only strong growth
in the number of selling Artists during the year, but also the continued engagement of existing
Artists, demonstrating the long-term value that Artists and their content bring to the marketplaces.
Operationally, a Group level Artists function was established in the second half of the year and
this will enable us to take a more proactive and segmented approach to Artist acquisition and
engagement across both the Redbubble and TeePublic marketplaces in the years ahead.
User Acquisition and Transaction Optimisation
We had 9.5 million unique customers that made purchases on our marketplaces during FY2021, up
40% year on year. Organic customer acquisition channels grew strongly and remain a key source
of competitive advantage for the Group, while we also saw particularly strong growth in acquisition
from Google Ads, affiliates and PR channels.
More than half of all sales on the platforms in the year occurred via a mobile device. Marketplace
revenue on our apps grew 77% year on year during FY2021. We also saw stronger engagement and
retention of customers who use our apps and we will continue to invest in improving the customer
experience and attracting customers to these platforms.
Customer Understanding, Loyalty and Brand Building
A very encouraging aspect of FY2021 performance was that purchases by repeat customers made
up 42% of marketplace revenue with the rate of revenue growth from repeat customers outpacing
that of first-time purchasers.
The rate of repeat purchases is a key loyalty metric and data from the H1 FY2021 customer cohort
showed that those customers who first purchased on the platform during the shutdowns last
year have shown a 6 month repeat rate at the same level as those who were first acquired in the
equivalent half in FY2020 (pre-COVID). This provides us confidence that many of the gains made
during this unique period will be sustained as economies re-open.
Increasing brand marketing to drive awareness and engagement will be a significant part of the next
phase of investments, and we are already making progress with early experiments on our brand
positioning. The focus on growing our PR channel started about 18 months ago and is progressing
well, the early results indicating we are laying the right foundations for launching future successful
brand campaigns.
08
09
RedbubbleAnnual Report 2021 Product Range and Third Party Fulfilment Network
In FY2021, we saw the value of our investments to enable the third party fulfillment network,
with the network maintaining continuity of operations and supply in the face of surging demand,
record holiday season volumes and constrained shipping conditions due to COVID, all without
compromising the customer experience.
We also continued to expand the product range by adding new products including jigsaw puzzles,
aprons and magnets, in addition to the significant lift from masks which were added in Q4 FY2020.
In addition to the uplift achieved by expanding the range, we also saw customer acquisition and
conversion gains through our focus on improving and refreshing existing product quality and range.
The focus of investment in the growth levers that we have will change over time, but the past year
has shown that we are well placed to deliver on the medium-term aspirations we have set ourselves
for the benefit of the community of Artists, their customers, our staff and shareholders.
I would like to close by thanking the talented and resilient teams at Redbubble and TeePublic
for their commitment and dedication during a challenging year and Anne and the Board for their
support.
Michael Ilczynski
Chief Executive Officer
ESG Information
Introduction
Redbubble Group’s mission is to create the world’s largest marketplace for independent artists. As a
socially responsible and environmentally conscious business, we have always felt a strong duty to
the artists, customers and third-party fulfillers that use our marketplace, as well as our employees,
shareholders and community, to evaluate the environmental and social impact of key aspects of the
marketplace flywheel.
With the growing sense of urgency about climate change, concerns about human rights impacts in
the supply chain and the global move towards a circular economy, responsible business practices
are now non-negotiable. Environmental, social and governance factors (ESG) are no longer
an externality of business success. Instead, they are critical for the long-term sustainability of
organisations.
This imperative is not new to Redbubble Group. Our mission-driven business model was designed
to have a small environmental footprint, but we know that we have the potential to do more. This
section introduces our first ESG strategy, reflecting our desire to better understand and formalise
our approach to ESG. The ESG strategy will inform our broader objectives, goals and disclosures
in the future, as we work towards building an enduring marketplace that connects people through
creativity and empowers our community without compromising the planet.
ESG strategy
In FY2021, Redbubble Group commenced a robust exercise to identify and prioritise the ESG areas
where we have the greatest impact across our value chain. The result of this work has informed our
ESG strategy, which reflects:
● our ESG vision, which is aligned to Redbubble Group’s broader mission
● the impact areas that are most important to our stakeholders and our business
● our overarching areas of ambition – People, Planet and Prosperity
● the United Nations Sustainable Development Goals (SDGs) that we believe our business can
contribute to
● the main enablers to delivering our strategy.
As we continue our ESG journey, our ESG strategy will evolve, as our business and the context in
which we operate are constantly changing, as is the understanding of our environmental and social
impacts.
10
11
RedbubbleAnnual Report 2021 Redbubble Group ESG strategy overview
Redbubble
mission:
Creating the world’s largest
marketplace for independent
artists, bringing more creativity
into the world
ESG
vision:
Build an enduring marketplace
that connects people through
creativity and empowers our
community without compromising
the planet
ESG ambitions
PEOPLE
PLANET
PROSPERITY
Enable our people to
positively impact our
culture and community
Impact areas:
Reduce waste and
emissions from our
operations and the third
party supply chain network
that uses our marketplace
● Inclusion & Diversity
Impact areas:
● Culture
● Community Impact
● Waste Management
Empower and protect
people who design, sell,
make and use products
from our marketplace
Impact areas:
● Artist Empowerment
● Supply Chain Social
● Carbon Emissions
Responsibility
● Supply Chain
● Digital Marketplace
Environmental Impact
Integrity
● Product Development
& Quality
SDGs:
Enablers:
Governance
Communication
and transparency
Technology and
innovation
Systems and
standards
Partnerships
The five enablers will support the delivery of our strategy and help embed ESG across the Group
through strong governance, transparent and effective communication, the smart use of technology,
clear marketplace standards and guidelines, and strategic partnerships. Our next steps include
a comprehensive review of the current state and the development of an action plan aimed at
achieving and reporting on these goals. We want to be more deliberate and impactful in the way
we run our business, and we believe that clear ownership and actions will be key to our success
in delivering on both existing efforts and new initiatives.
Strategy development process
We undertook a number of activities to develop our strategy with substantial support and
leadership from the Redbubble Group Leadership team and senior employees throughout the
business. The table below details the activities at each step.
Steps
Activities
Desktop research
Review of current trends, industry context, peer analysis,
sustainability reporting frameworks and internal documents
Stakeholder engagement
Internal and external interviews with selected stakeholders
including the Group’s Leadership team and senior employees,
customers and fulfillers, and a survey of over 2,000 artists
UN SDGs mapping
Gap analysis
Mapping of the identified impact areas to the UN SDGs, assessing
the extent of the Group’s potential impact on each and our
alignment to the SDGs goals
Analysis of the Group’s current management approach across
impact areas, the extent to which the Group is already addressing
the material topics, and areas for improvement
ESG strategy development Strategy development including the alignment of ESG impact areas
under agreed pillars, the development of goals for each People,
Planet and Prosperity pillar and creation of the overarching ESG
ambition
Validation
Tested and validated the impact areas and the ESG strategy with
the Group’s Leadership team and senior employees
12
13
RedbubbleAnnual Report 2021 UN Sustainable Development Goals
The Sustainable Development Goals (SDGs) were adopted by United Nations member states in
2015 as a universal call to action to end poverty, protect the planet and ensure that by 2030, all
people enjoy peace and prosperity. The SDGs can help a business define its aspirational purpose in
a way that is relevant and inspiring to stakeholders, allow purpose to become the foundation for its
strategy, and ignite long-lasting positive change to support increasing shareholder value over the
long term. The 17 goals translate to 169 targets.
As part of Redbubble Group’s ESG strategy development, we mapped our impact areas to the SDG
targets and identified the SDGs that we believe we could most meaningfully contribute to as a
business, in order to ensure our efforts were aligned with the bigger world picture.
SDGs
What this means for Redbubble Group
SDG 5 Gender equality | Relevant targets 5.1, 5.5, 5.b
As a thriving tech company, we have a duty to recognise the glaring gender inequities that exist
in the tech industry, and to make a positive impact where we can, such as by promoting gender
equality in our workforce. We also have the opportunity to use technology to support
the empowerment of women through STEM.
SDG 8 Decent work and economic growth | Relevant targets 8.3, 8.5, 8.7, 8.8
In working towards our mission, we enable entrepreneurship, creativity and innovation to thrive
amongst the network of artists and third-party fulfillers that use our marketplace; most of which
are small and medium-sized enterprises.
SDG 10 Reduced inequality | Relevant targets 10.2, 10.3, 10.4
The past few years have shone a light on social inequalities beyond gender, such as race and
ethnicity. We must take active steps to promote the social and economic inclusion of all the people
who use our marketplace, and extend this to the communities that we operate in.
SDG 12 Responsible consumption and production | Relevant targets 12.1, 12.2, 12.4, 12.5, 12.6,
12.7, 12.8
While our business model is designed to have a small environmental footprint, we have the
opportunity to support the reduction of waste generated by marketplace users throughout the
supply chain, including through supporting the efficient use of natural resources and encouraging
responsible consumption.
SDG 13 Climate action | Relevant targets 13.2, 13.3
As a business that intends to thrive for years to come, we believe that embedding climate positive
actions in our business decisions and company culture is crucial to achieving a prosperous future
for our company and for the world.
People
Impact areas
Inclusion and diversity
Culture
Community impact
SDGs
Our Goal: Redbubble Group enables our people to positively impact our culture
and community.
To do this, we need to ensure that we have a diverse workforce that reflects our broader
communities, and that we create a working environment that supports our employees’ development
opportunities and wellbeing. We provide flexible working arrangements and support their health and
wellbeing, which has been especially important during COVID-19. More broadly, this is one step
towards cultivating an inclusive workplace where everyone has the opportunity to thrive.
In early 2021, we launched our new Group Diversity Policy, which restates, reinforces and raises
the bar on our diversity objectives and commitments. Currently, 40% of our Board identify as
female and six of the eight direct reports to the Group CEO identify as female. We have a range
of commitments and objectives to deliver greater inclusion and diversity across the Group, and
support our employees’ sense of belonging. While we have strong female representation within our
leadership team, we know that identity extends beyond gender and that there is more work to be
done to achieve greater representation in our broader workforce, and among the artists and third-
party fulfillers that use our marketplace.
Social good is part of Redbubble Group’s DNA, and our employees embody this. As our business
grows, we are focused on keeping true to our social mission and values. Many of our employees
choose to work at Redbubble Group because they believe in our mission. We actively back them
to advocate for issues they care about through philanthropy, volunteering and in-kind support.
Our Community Collective is an employee-driven initiative that helps us give back to our local
communities. In previous years we’ve partnered with organisations who focus on issues like the
environment, cancer, HIV/AIDS, domestic violence, and poverty. Our efforts this year shifted to
donating clothes and tech equipment to communities and schools in need to support them during
COVID-19. This year, we also partnered with Black Art Futures Fund (BAFF) for Black History Month
celebration. BAFF provides general operating support for U.S. small and community-based Black-led
and Black-benefitting arts and culture organisations, and partnering with them allowed us to extend
our financial and cultural contribution to an artist community outside the Group. While we have
supported a range of social causes and community initiatives to date, we plan to be more deliberate
in the coming year in aligning our contributions to the areas where we believe we can have the most
impact.
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15
RedbubbleAnnual Report 2021 Planet
Impact areas
Waste management
Product development and quality
Carbon emissions
Supply chain environmental impact
SDGs
Our Goal: Redbubble Group is working towards reducing waste and emissions
from our operations and the third party supply chain network that uses our
marketplace.
As a digital marketplace where products are sold by artists on-demand, our business is designed to
have a small environmental footprint. While the local third-party fulfillers that manufacture products
offered through the marketplace minimise excess unsold stock and unnecessary transportation,
environmental impacts are still occurring throughout the product lifecycle.
We know that there are opportunities for us to support the third party supply chain network in
creating greater efficiencies and reducing waste from product development, manufacturing,
packaging, delivery and end-use, including encouraging continuous improvement of the quality and
design of products available on the marketplace so that they last and minimise returns, and better
managing returns when they are received. We are currently assessing how we can help artists be
more sustainable in the design of their products and support the circular economy. Where possible,
product returns are also donated to local charities. TeePublic’s partnership with Terecycle is an
example of finding recycling solutions for products that are not donated to charity, such as stickers
and phone cases.
While Redbubble Group does not own or control the businesses in the supply chain, it is important
that going forward, we better understand and manage the collective environmental footprint of the
marketplace, and that we do this in close cooperation with the supply chain. We help to identify
environmental benchmarks for the third-party fulfillers. We continue to work with the fulfillers and
other third parties in the supply chain to better understand the significant environmental impacts
and to establish a set of marketplace-wide standards and objectives specific to ESG. Emissions
from transportation also have an impact on the environment. Local fulfillers help to minimise
transport distances, but for the remainder, Redbubble offsets emissions from product shipping
through a renewable energy partner, 3Degrees.
In terms of the Group’s operations, we know there are more things we can do to take action on
climate change, such as reducing our own emissions and running our business with renewable
energy. Over this year we will assess our current state, evaluate areas of improvement and set
specific marketplace standards, goals and targets to track our progress in the years ahead.
Prosperity
Impact areas
Artist empowerment
Supply chain social responsibility
Digital marketplace integrity
SDGs
Our Goal: Redbubble Group strives to empower and protect people who design,
sell, make and use products from our marketplace.
To succeed in our purpose to bring more creativity into the world, we have a set of expectations and
guidelines for all the creators and users to maintain an open marketplace where artists are free to
express themselves, whilst protecting marketplace users from abusive, hateful or racist content.
As a tech company geared at empowering artists, the integrity of our marketplace is mission critical.
We want to ensure our marketplace is free from offensive, sexist, racist or hateful content, but this
comes with challenges in a marketplace of user-generated content. We proactively find and remove
content on the marketplace that falls outside our guidelines and are proud of our efforts, but as the
volume of content uploaded to the marketplace grows, it’s crucial that we continue to think about
how we can improve and continue to scale these efforts in the years ahead. We are also continually
improving our operational procedures for data security and privacy and ethical business conduct to
ensure we remain agile and responsive to changes in our operating landscape.
Our expectations, marketplace standards and guidelines support 728,000 independent artists to
be compensated fairly for their work, and to protect their intellectual property. Artists earnt $104
million in revenue across the platforms in FY21, the largest ever annual amount, of which we are
extremely proud. Our business model gives artists control over their products and what they earn,
and we are looking at ways we can help the development of emerging artists. We also have an
important role to play in helping artists to protect their intellectual property, and we do this through
a number of elements including offering anti-piracy and watermark features so artists can protect
their creations. We do our best to strike a balance between artistic freedom and IP protection
across the board. With the IP landscape and the social landscape often shifting, we will continue
to invest in improvements in this area to ensure we can deliver the best results.
To be true to our value of social responsibility, Redbubble Group extends our expectations to the
third-party fulfillers in the supply chain who use the marketplace, to ensure that they provide
safe and fair working conditions for their staff, and that they treat them with respect and dignity.
Our intentions are to only allow participation in our marketplace by third-party fulfillers that meet
our social responsibility standards, which are in line with the Australian Modern Slavery Act, the
California Transparency in Supply Chains Act and the Fair Labor Association Code of Conduct.
Due to COVID-19, we have paused the auditing of third-party fulfillers to verify compliance with
these marketplace standards, but we are working to resume these as soon as possible.
Our policies and statements guide how we address the issues that affect our business and enable
us to take swift mitigating actions, and our Corporate Governance Statement sets out our approach
to managing risk.
16
17
RedbubbleAnnual Report 2021 Directors’
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 2021 (referred to hereafter as the RB Group or Group).
Directors
The following persons were Directors of the Company during the 2021 financial year and to the date
of this Report:
Anne Ward
Martin Hosking
Chair, Non-executive Director
Non-executive Director (became a Non-executive Director
on 27 January 2021 following the end of Mr Hosking’s interim
Managing Director and CEO tenure)
Love is the Journey T-shirt
designed and sold by
goldendazeart
Jennifer (Jenny) Macdonald
Non-executive Director
Ben Heap
Non-executive Director
Greg Lockwood
Non-executive Director
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.
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Annual Report 2021 The group holds $99 million in cash at 30 June 2021. These cash reserves will be used to
sustainably invest into our future business growth and gives management and the Board
considerable strategic flexibility around a range of capital management options.
In January 2021, the Board was pleased to announce the appointment of Mr Michael Ilczynski
as the new CEO of Redbubble. As a result of Mr Ilczynski’s appointment, our interim CEO and
Managing Director, Mr Martin Hosking, has returned to his role as Non-Executive Director, as was
foreshadowed in last year’s Remuneration Report.
COVID-19
The Group has experienced significant growth and is operating at a much larger scale
than 12 months ago. Increased demand was evident across both marketplaces, in all core
geographies and product categories as the Group has benefited from an acceleration in online
activity since the beginning of the global pandemic.
The COVID-19 pandemic adds inherent uncertainty into global economic conditions, and as
such, the business continues to monitor online sales, trends and the fulfillment networks.
Teams across the business have demonstrated remarkable resilience with the entire company
operating remotely since April 2020. The agility of the team, supported by secure cloud based
technology has supported a decentralised working model without losing productivity and has
ensured the Group was able to exceed both customer and artist expectations.
The RB Group did not receive any Government benefits across the jurisdictions in which the
Group operates.
Review of operations
Redbubble delivered record financial results and operational achievements during FY2021, providing
strong foundations from which to drive future growth. The business is well capitalised to pursue its
medium term aspirations with confidence and conviction.
Redbubble’s FY2021 financial metrics1 (with year on year (YoY) growth rates, where applicable) are:
● Gross Transaction Value (GTV) of $701 million, up 48% (60% on a constant currency basis2 );
● Marketplace Revenue of $553 million, up 58% (71% on a constant currency basis);
● Gross profit of $223 million, up 66% (79% on a constant currency basis);
● EBITDA of $53 million, up 930% (695% on a constant currency basis);
● EBIT of $39 million, compared to a loss of $9 million in FY20;
● Net profit after tax of $31 million, compared to a loss of $9 million in FY20;
● Operating cash inflow of $55 million, compared to $47 million in FY2020; and
● Closing cash balance at 30 June 2021 of $99 million.
Marketplace Revenue of $553 million was up 58% (71% on a constant currency basis) on the prior
period. Customer demand was sustained throughout the entire year, even as the second half of
the year saw global macro conditions change noticeably with much of the offline economy opening
back up, particularly in the US which is our largest market.
Growth of the business across all geographies showed the broad and global appeal of the Group’s
offering, while growth across multiple product categories demonstrated the breadth and variety
of consumer markets in which the model can apply. Face masks were a significant contributor
during FY2021 contributing $57 million to Marketplace Revenue. FY2021 underlying Marketplace
Revenue was $497 million excluding masks, which still represents substantial growth over FY2020
Marketplace Revenue of $349 million. Unique customers increased 40% to 9.5 million in FY2021,
with repeat customer purchases accounting for $232 million in Marketplace Revenue.
Gross Profit margins were higher in FY2021 primarily due to the strong contribution of higher margin
product categories such as face masks. This resulted in a Gross Profit of $223 million, up 66%
(79% on a constant currency basis).
In FY2021 the marketplaces had a 54% increase in selling artists up to 728,000, with both new and
earlier artist cohorts witnessing significant growth. Artists earned $104 million in revenue across the
platforms in FY21, the largest ever annual amount, of which we are extremely proud. Artist activation
and engagement remains a core growth pillar for Redbubble and we are committed to growing and
optimising the library of unique content available on the platform.
(1) Please see table 1 on page 22 for calculations of the non-IFRS metrics
(2) “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes. Redbubble sources
about 93% of its Marketplace Revenue in currencies other than Australian dollars. TeePublic sources about 91% of its Marketplace Revenue
in US dollars.
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21
RedbubbleAnnual Report 2021 A reconciliation of reported results to non-IFRS numbers in this Directors’ report is provided below.
Strategic and Business Update
Table 1: Reconciliation of reported results to non-IFRS (1) numbers
Gross Transaction Value (3)
Less sales taxes and timing differences
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)
GPAPA% (on MP Revenue)
Employee and contractor costs
Marketing expenses (excluding paid acquisition costs shown above)
Operations and administration costs
Other expenses
Earnings before interest, tax, depreciation and amortisation (EBITDA)
Depreciation and amortisation
Earnings before interest and tax (EBIT)
Interest expenses
Interest income
Total profit/(loss) before income tax
Income tax benefit/(expense)
Reported total profit/(loss) for the year
FY2021
FY2020
$’m (2)
700.7
(43.3)
657.3
(104.0)
553.3
$'m (2)
474.1
(57.9)
416.3
(67.4)
348.9
(330.5)
(214.5)
222.7
40.3%
(71.2)
151.5
27.4%
(64.5)
(2.0)
(28.9)
(3.3)
52.7
(13.3)
39.4
(0.3)
0.0
39.1
(7.9)
31.2
134.4
38.5%
(39.8)
94.5
27.1%
(59.5)
(3.5)
(24.3)
(2.1)
5.1
(13.7)
(8.6)
(0.6)
0.2
(9.0)
0.2
(8.8)
(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 (with the exception of Gross Transaction
Value).
(2) For presentation purposes, numbers have been rounded to millions of dollars, however calculations and totals are based on unrounded
numbers.
(3) Gross Transaction Value (GTV) represents total receipts from customers less fraud, refunds and chargebacks.
As flagged in the Letter to Shareholders in April, Redbubble is undertaking investment in its four
strategic themes to build a strong foundation for future growth. These are across:
● Artist activation and engagement
● User acquisition and transaction optimisation
● Customer understanding, loyalty and brand building
● Product range and 3rd party fulfillment network
These investments will aid the Group to deliver continued top-line growth, reinforcing Redbubble’s
competitive position and enabling the Group to continue on its mission to create the world’s largest
marketplace for independent artists.
In pursuit of Redbubble’s medium term aspirations, targeted investments will continue to be made
across the Group. Specifically, investments in FY2022 will focus on key aspects of the customer
experience, both digital and physical. These are aimed at driving cumulative increases in users,
order rate, average order value and repeat rate. We remain focused on the tremendous opportunity
we have as a business, and on our medium term aspirations to grow GTV to more than $1.5 billion,
to grow Artist Revenue to $250 million, and to produce Marketplace Revenue of $1.25 billion per
annum.
Significant changes in the state of affairs
In the Directors’ opinion, there have been no significant changes in the state of affairs of RB Group
during the 2021 financial year.
Significant events after end of the 2021 financial year
In the Directors’ opinion, there have been no matters or circumstances arising since the end of the
2021 financial year that has significantly affected, or may significantly affect:
● 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.
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RedbubbleAnnual Report 2021 Dividends
Environment
No dividends were paid or declared since the start of the 2021 financial year. Given the
opportunities to invest in key initiatives, coupled with the uncertain future macro environment, the
Board does not expect to pay a dividend in the short to medium term.
Environmental, Social and Governance (ESG) Statement
RB Group’s mission is to create the world’s largest marketplace for independent artists. Empowering
the global artist community to make a living doing what they love is key to our success. The
business drives significant value for the artists, customers, third-party printers and manufacturers
(fulfillers) that participate in the marketplace, as well as for our employees and shareholders.
The ESG landscape is ever-evolving, with increasing stakeholder expectations, a more stringent
regulatory environment, a push for greater inclusivity in our workforce and through our marketplace.
A range of external factors, including COVID-19, the Black Lives Matter (BLM) movement, climate
change and the circular economy (designing products that can be reused, in contrast to the
traditional linear model of make and dispose) continued to evolve and challenge our thinking and
approach in FY2021. These will certainly not be the last of challenges that test our business model,
company culture and mission.
The artists, customers, employees and third-party fulfillers that participate in the marketplace have
high expectations of our approach to ESG. To keep true to our mission, to support our culture of
passionate people working collaboratively for a cause, and to ensure a sustainable business model,
we want to better understand our material ESG impacts and better integrate ESG into our strategy
and decision-making.
We are currently developing our inaugural ESG Strategy. The strategy will help us identify and
prioritise the areas where we can have the greatest positive impact across the value chain.
We are conducting a materiality assessment to identify our key impact areas and to get a better
understanding of our stakeholders’ needs and expectations. These material topics will inform
our broader strategic objectives, goals and future disclosure.
Below we cover our current approach to ESG and provide a preliminary indication of likely
material topics.
With the growing sense of urgency about climate change, concerns about human impacts on the
environment and the global move towards a circular economy, responsible business practices are
now non-negotiable. Our mission to create the world’s largest marketplace for independent artists
means that we have a duty to them and to customers to ensure that the products sold by artists on
the marketplace are environmentally and socially responsible.
We designed our business model to have a small environmental footprint. The third-party fulfillers
make products on-demand, which means there are no warehouses full of unsold stock, and as a
result, less waste. Over 90% of the third-party fulfillers that use the marketplace are based in the
same region as the customers, which significantly reduces the carbon emissions from international
shipping. We also offset carbon emissions from shipping for all products sold via our marketplace.
This is a great start, but we have more to do to manage the Group value chain’s environmental
impacts. While we don’t own the businesses in the supply chain, we are mindful of our collective
environmental footprint. We identify environmental benchmarks for the third-party fulfillers and we
are assessing how we can help artists be more sustainable in their designs and support the circular
economy through setting specific goals and targets in these areas allowing us to track our impact.
RB Group is committed to compliance with all applicable environmental legislation. The Directors
are not aware of any material breaches of any environmental legislation affecting the Group’s
operations.
Social
Social good is part of the Group’s DNA. The artists, employees and third-party fulfillers that
participate in the marketplace are crucial to the delivery of our social mission and ultimately our
success. Being socially responsible means treating artists with respect, backing our employees on
issues they care about and ensuring that we only engage with third-party fulfillers that ensure fair
working conditions for their staff.
The Redbubble marketplace gives 728,000 independent artists a new way to express themselves.
Artists have the flexibility to set their own pricing for their products to ensure they are paid fairly
and have control over what they earn. We also have anti-piracy and watermark features to make
sure that artists’ creations are protected.
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RedbubbleAnnual Report 2021 We have a diverse and distributed employee base in the United States, Australia and Germany,
and are committed to building a workforce reflective of the communities we serve, of which we are
individually and collectively members. Many of our employees choose to work in our organisation
because they believe in our social mission.
In early 2021, we launched a new Group Diversity Policy, to restate, reinforce and raise the bar on
our diversity objectives and commitments. We are proud to report that 40% of our Board identify as
female and six of the eight direct reports to the Group CEO identify as female.
Redbubble and TeePublic have programs and strategies in place to promote diversity and inclusion,
aligned to each company’s business and community contexts. These enable us to achieve our Group
objectives and commitments and deliver an inclusive workplace environment, where belonging
underpins our collective impact and outcomes.
While we have been successful in achieving strong representation of women within our leadership
team, we know that identity extends beyond gender; it is fluid, complex and multifaceted, and there
is more work to be done to achieve greater representation in our broader workforce, and among our
partners and artists.
The COVID-19 pandemic challenged us to better support our workforce during this time of
uncertainty. We responded by giving our employees flexibility in their working conditions and
greater support for their health and wellbeing.
The Group strives to inspire our employees and the marketplace customers every day, and to
treat members of the artist and wider communities with compassion. Our Community Collective
is an employee-driven initiative that looks to extend this compassion into our local communities.
In previous years we’ve partnered with organisations who focus on issues like the environment,
cancer, HIV/AIDS, domestic violence, and poverty. In the current year, due to the impacts of COVID,
we have shifted our efforts to donating clothing and tech equipment to communities and schools in
need.
For this year’s Black History Month celebration, the Group partnered with Black Art Futures Fund
(BAFF) to make a significant financial and cultural contribution to an artist community outside of the
Group. Black Art Futures Fund provides general operating support for U.S. small and community-
based Black-led and Black-benefitting arts and culture organisations.
Greater transparency and collaboration across the marketplace supply chain will help us continue
to mitigate associated risks and promote responsible working practices. Like our supplier
environmental standards above, we also have social standards that all third-party fulfillers have
agreed to comply with in order to use the Group’s marketplaces. We expect the fulfillers to ensure
that their employees have safe working conditions and to treat their employees with respect and
dignity, in line with the Australian Modern Slavery Act, the California Transparency in Supply Chains
Act and the Fair Labor Association Code of Conduct.
Governance
To succeed in bringing more creativity into the world in a fair and ethical way, we rely on strong
governance practices to help us navigate rapidly evolving regulations and stakeholder expectations.
We look to our leadership team for direction on ethics and moral standards. We aim to maintain an
open marketplace where artists are free to express themselves, whilst protecting marketplace users
from abusive, hateful or racist content. While we do our best to strike a balance between freedom
and protection, this can sometimes be challenging in a marketplace of user generated content.
We strive for the highest governance and risk management standards. These standards are
described in Redbubble’s Corporate Governance Statement - available to view in the Corporate
Governance section of the Redbubble Ltd Investor Centre at: shareholders.redbubble.com. Our
policies and statements guide how we address the issues that affect our business and enable us
to take swift mitigating actions. We are now looking to more transparently and assertively address
the key governance issue areas for our stakeholders, especially our shareholder base. We will also
continue to improve our operational procedures for data security and privacy, content moderation
and ethical business conduct to ensure we remain agile and responsive to changes in our operating
landscape.
Risk Framework
The Group acknowledges that it has an obligation to shareholders, customers, employees, creatives
and contractors to implement a risk management framework that reflects its risk appetite, thus
contributing to the achievement of its strategic objectives. RB Group seeks to take and manage risk
in ways that will generate and protect shareholder value.
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 Group has a risk appetite the objective of which is to foster a culture of innovation. The
Redbubble Board 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 and management have agreed on specific risk tolerance levels for each risk within these
categories and review the tolerance levels in the annual risk review:
● Strategic risk;
● Operational risk;
● Reputational risk;
● Financial risk;
● People and Culture risk; and
● Legal & Regulatory Compliance risk.
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RedbubbleAnnual Report 2021 Redbubble
Governance
The Redbubble Board is ultimately responsible for ensuring risk management processes have been
established and are operating effectively. The Redbubble Audit and Risk Committee, through its
Charter, is responsible for overseeing the Group’s ongoing risk management program framework
and any key supporting policies and procedures. The Audit and Risk Committee ensures that the
scope of the annual risk review encompasses whether the Group is operating with due regard
to the Board’s risk appetite. The CEO and the Executive Team are responsible for managing and
embedding risk management practices throughout the Group.
Framework for Managing Risk
The 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:
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.
Annual Report 2021
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
I
N
O
T
A
T
L
U
S
N
O
C
&
N
O
T
A
C
N
U
M
M
O
C
I
I
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
I
I
M
O
N
T
O
R
N
G
&
R
E
V
E
W
I
Framework (clause 5)
Process (clause 6)
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Principal risks
The following are key risks that may impact RB Group’s financial and operating results in future
periods:
● Competitive activity - To mitigate the impact of this risk RB Group is focusing on ensuring
that its marketplaces provide a market leading experience for artists and customers.
● 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 current diversity in both product mix and geographic presence, combined
with the intention to continue to grow the size of the overall revenue base. Whilst the Group
benefited from an acceleration in online activity due to the impacts of the COVID-19 pandemic
on consumer behaviour, as the business cycles these comparatives and various geographies
move to a post COVID normal there may be some short term volatility.
● Google search channel risk - RB Group has prioritised search engine optimisation initiatives,
including improved user and crawler navigation experience and site speed. RB Group is also
focused on further diversification of customer acquisition sources to reduce reliance on
Google search.
● Litigation brought against RB Group for intellectual property infringement - Litigation risk
arises from the RB Group marketplace’s roles as intermediaries 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
rightsholders 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;
building our litigation capabilities and holding appropriate levels of insurance. RB Group will
continue to mitigate its IP infringement litigation risk by further building its capabilities through
process and technology improvements.
● Technology Security and Reliability 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.
● Platform / Technology constraints - ‘Technical debt’ slows delivery of marketplace
improvements. Consistent investment in eliminating platform and technology constraints will
be required to further improve the Group’s marketplaces.
● Privacy and Data Protection Compliance Risk - Compliance with applicable Privacy and Data
Protection Laws, including the GDPR, California Consumer Privacy Act and the Australian
Privacy Act 1988 remains an ongoing focus. The Group has implemented appropriate data
security measures; including preventative, detective and responsive capabilities. A Data
Breach Response Plan is in place and is strictly adhered to.
● Attracting and retaining top talent in business critical functions - The Group continues to
encounter competition for talent across all our locations. The mitigations for this risk have
included improvements to the executive compensation plan in FY2021 and compensation
adjustments for key talent roles.
Change in key management personnel during the 2021 financial year
and since the end of that financial year
The “Key Management Personnel” for the purposes of the FY2021 Remuneration Report have
been determined to be the current Redbubble Limited directors and the following members of the
Redbubble Executive Team:
● Michael Ilczynski - Chief Executive Officer from 27 January 2021; and
● Emma Clark - Chief Financial Officer.
There were no changes to the membership of the Redbubble Limited Board during the 2021
financial year, however Martin Hosking transitioned from Managing Director and CEO to Non-
executive Director upon Michael Ilczynski’s commencement as CEO on 27 January 2021.
Information on Directors
At the date of this report, the Board comprises five Non-executive Directors, 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 32 to 35 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 36 of this report.
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RedbubbleAnnual Report 2021 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 2021 financial year
are listed below.
Directors’ qualifications and experience
Ms Anne Ward
Independent Non-executive
Director and Board Chair
Member of the People and
Nomination Committee
Member of the Audit and Risk
Committee
Chair of the Disclosure
Committee
Anne Ward is a highly experienced company director with
extensive experience in business management, strategy,
finance, risk and governance across a range of industries
including financial services, technology, healthcare, government,
education and tourism. In addition to chairing Redbubble, Anne
is independent Chairman of MNF Group Ltd (ASX:MNF), a
Council member at RMIT University, a Director of the Foundation
for Imaging Research, and a Governor of the Howard Florey
Neuroscience Institutes. Anne was formerly Chairman of Colonial
First State Investments Ltd, Chairman of Qantas Superannuation
Ltd, Chairman of Zoos Victoria and a director of MYOB Group Ltd,
Flexigroup Ltd (ASX:HUM), the Transport Accident Commission,
Epworth Hospital and the Brain Research Institute. 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 and a partner at Minter Ellison in
Melbourne. Anne holds a Bachelor of Laws and a Bachelor of Arts
from the University of Melbourne and is a Fellow of the Australian
Institute of Company Directors and a Life Member of ASFA.
Anne has held the following listed company directorships in the
last 3 years:
● MNF Group Ltd (from July 2021 to current)
● MYOB Group Ltd (from March 2015 to May 2019)
Mr Martin Hosking
Non-executive Director
Member of the People and
Nomination Committee
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
from executive duties and commenced as a Non-executive
Director on 1 October 2018. Martin was then re-appointed CEO
and Managing Director on 18 February 2020, before resuming as
a Non-executive Director upon Michael Ilczynski’s appointment
as CEO on 27 January 2021. 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
last 3 years.
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RedbubbleAnnual Report 2021 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 brings extensive expertise in corporate
finance, accounting, and auditing, coupled with a strong focus
on and understanding of market trends, customer and consumer
behaviour. She has a proven track record in developing and
implementing strategy with a focus on risk management, growth,
and value creation.
Jenny spent her executive career in customer facing
organisations primarily in technology, retail, travel services
and manufacturing, where she was responsible for strategic
turnaround and digital transformation.
Her last executive role was CFO and interim CEO at Helloworld
Limited, where she oversaw the merger with AOT Group to
create the second largest integrated travel distribution business
in Australia and New Zealand. Prior to that, Jenny was the CFO
and General Manager International of the REA Group, with
responsibility for the financial growth strategy and execution
for operations in South East Asia and parts of Europe, having
delivered record revenue and net profit for the company.
Jenny holds a Masters of Entrepreneurship and Innovation:
Swinburne University (Victoria) 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
last 3 years:
● Healius Limited (from 2 November 2020 to present)
● Bapcor Limited (from 1 September 2018 to present)
● Australian Pharmaceutical Industries Limited
(from 9 November 2017 to present)
● Redflow Limited
(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
last 3 years.
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 Sydney-based non-executive director with a
portfolio of public, private, government and non-for-profit roles.
Ben is currently the independent chairman of CBA New Digital
Businesses, a non-executive director of The Star Entertainment
Group Limited (ASX:SGR) and of Colonial First State Investments
Limited. 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 (GAICD).
Ben has held the following listed company directorships in the
last 3 years:
● The Star Entertainment Group Limited
(from 23 May 2018 to present)
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RedbubbleAnnual Report 2021 Board and Committee Meetings - attendance during FY2021:
Company Secretaries
Board
Audit and Risk Committee
(ARC)
People and Nomination
Committee (PNC)
Held whilst in
office
Attended
whilst in office
Held whilst an
ARC member
Attended
whilst an ARC
member
Held whilst a
PNC member
Attended
whilst a PNC
member
Anne Ward
Martin Hosking
Greg Lockwood
Jenny Macdonald
Ben Heap
14
14
14
14
14
14
14
14
14
14
5
-
5
5
5
5
-
5
5
5
8
4
-
8
8
8
4
-
8
8
Directors’ interests in shares and options
Name
Anne Ward
Martin Hosking
Ben Heap
Greg Lockwood
Jenny Macdonald
Total interests
Shareholdings
Options outstanding
200,000
44,500,090
50,000
6,465,131
95,539
51,310,760
50,714
26,832
-
-
47,509
125,055
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.
Jenny Macdonald, Greg Lockwood and Martin Hosking are seeking re-election at the 2021 AGM.
RB Group’s Company Secretaries are Ms Corina Davis (based in the US) and Mr Martin Bede (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 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 Martin Bede, Company Secretary (Australia)
Martin Bede is a lawyer with experience in private practice and in-house legal roles. He holds
Bachelor of Laws and Bachelor of Commerce degrees from the University of Melbourne, a Graduate
Diploma in Applied Corporate Governance from the Governance Institute of Australia (GIA) and is a
fellow of the GIA.
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 2021 financial year. For FY2021, Board fees are now
paid entirely in cash and no equity has been granted to the Directors.
Name
Michael Ilczynski
Emma Clark
Corina Davis
Joseph Burns
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
338,549 (1)
53,411
30,881
12,910
194,373
630,124
338,549
53,411
30,881
12,910
194,373
630,124
159,854
174,385
100,824
-
-
435,063
(1) Options granted to Michael Ilczynski include shares purchased with a limited recourse loan. Under the requirements of AASB 2 - Share
Based Payment these shares are considered to be options until the loan is repaid. Please see section 7.6 in the renumeration report for
further details.
36
37
RedbubbleAnnual Report 2021 There are no options or performance rights granted to this group or since the end of the 2021
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
6,855,123
4,523,698
1,388,175
12,766,996
Last expiry date
1 December 2030
1 June 2027
(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 2021 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 2021 financial year, to the date of
this Report:
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 2021 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
Although the Group is strictly a service provider that does not sell or manufacture the products sold
on the Redbubble and TeePublic marketplaces, it periodically receives notices alleging infringement
of third party copyright, trade marks, other intellectual property rights or publicity rights via the
marketplaces or for breach of consumer protection laws. This is not uncommon for marketplaces
that host user generated content.
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 (or inflow from related insurance
recoveries) should any of the actions ultimately be successful (at first instance or on appeal, as
applicable).
RB 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 the 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 the Group are directly or indirectly concerned.
Number
Exercise price paid
CEO and CFO declaration
Settlement of vested restricted stock units
Exercise of options
Total
23,000
68,145
91,145
$
-
73,324
73,324
No amounts remain unpaid in respect of the shares issued, as outlined above.
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.
Remuneration Report
The Remuneration Report is set out on pages 44 to 70 and forms part of the Directors’ Report for
the financial year ended 30 June 2021.
38
39
RedbubbleAnnual Report 2021 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 Group’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 2021 financial year.
Mr Ashley Butler, Partner at Ernst & Young, commenced as the Group’s Audit Partner from the
Company’s 2020 AGM. Mr Butler succeeded Ms Kylie Bodenham, Partner at Ernst & Young, as Ms
Bodenham rotated 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 Group’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 Group, or jointly sharing risks
and rewards.
Details of the amounts paid to the auditor of the Group and its related practices for non-audit
services provided throughout the 2021 and 2020 financial years are set out below.
Non-audit services
Taxation services
Assistance in developing the Group’s inaugural ESG strategy
Total
40
2021
$
43,630
30,370
74,000
2020
$
39,400
-
39,400
Enjoy the Little Things Throw
Pillow designed and sold by
Alexandra Bordallo
Kenya Poster designed and sold
by Ross Murray
Pomegranate and Lovebirds
Canvas Print designed and sold
by CatyArte
Flower Garden Photographic Print
designed and sold by CatyArte
41
RedbubbleAnnual Report 2021
Fees for Audit services
Details of the amounts paid to the auditor for audit services provided throughout the 2021 and 2020
financial years are set out in Note 24 to the Consolidated Financial Statements.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration, as required under section 307C of the
Corporations Act, is set out on page 43. 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
19 August 2021
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
Annual Report 2021
Auditor’s Independence Declaration to the Directors of Redbubble
Limited
Tel: +61 3 9288 8000
Ernst & Young
As lead auditor for the audit of the financial report of Redbubble Limited for the financial year ended
Fax: +61 3 8650 7777
8 Exhibition Street
30 June 2021, I declare to the best of my knowledge and belief, there have been:
ey.com/au
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
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
Auditor’s Independence Declaration to the Directors of Redbubble
year.
Limited
As lead auditor for the audit of the financial report of Redbubble Limited for the financial year ended
30 June 2021, I declare to the best of my knowledge and belief, there have been:
Ernst & Young
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
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.
Ashley Butler
Partner
19 August 2021
Ernst & Young
Ashley Butler
Partner
19 August 2021
42
43
A member firm of Ernst & Young Global Limited
Liability limited by 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
Redbubble
Remuneration
Report
Remuneration
Report
Cat Invaders Laptop Skin
designed and sold by
GloriaSanchez
Letter from the People and Nomination Committee
Dear Shareholder,
On behalf of the Board, I am pleased to present our Remuneration Report for FY2021.
Overview of company performance and remuneration outcomes
The business has performed exceptionally well within a challenging macro environment. Record
Marketplace Revenue of $553 million and EBITDA of $53 million, driven by a 54% increase in selling
artists (to 728,000) and a 40% increase in unique customers (to 9.5 million) have demonstrated
the strength of the marketplace model. This level of business performance enables Redbubble
to commit to the investment required for continued growth, including investing in our people
– domestically and around the world - that will underpin our ability to build long term value for
shareholders.
Turning to our people, COVID-19 continued to impact business operations throughout the entire
period. Our teams in Melbourne, San Francisco, New York and Berlin, continued to operate
almost completely remotely. Given the operating environment and the level of business growth
experienced, our management and staff have experienced significantly increased workloads
during FY2021. We are very proud of the outcomes our people have achieved in these challenging
circumstances.
Other marketplace participants, such as the third party fulfillers and logistics partners faced their
own workplace limitations but were able to continue producing and shipping products to customers
and we thank them for continuing to meet Redbubble’s service standards, and to service the artist
community with such care and diligence.
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 FY2020 long-term incentive share price appreciation target was achieved in July 2020, as is
detailed in Section 4.3. Further remuneration decisions and outcomes are detailed in Sections 4 & 5
of this Remuneration Report.
44
45
RedbubbleAnnual Report 2021 Successful transition to a new CEO
Remuneration Framework Changes
In January 2021, the Board was pleased to announce the appointment of Mr Michael Ilczynski as
the new CEO of Redbubble. Mr Ilczynski has extensive experience in helping Australian companies
to become global forces in the technology and consumer space, having worked in a range of senior
roles in Australia and overseas. That track-record, including the successful development of his
teams, evolution of products and his experience in scaling businesses are the right combination to
continue Redbubble’s transition from a niche to mainstream global consumer marketplace.
Further information on Mr Ilczynski’s remuneration and contractual arrangements can be found in
section 4.4.
As a result of Mr Ilczynski’s appointment, our interim CEO and Managing Director, Mr Martin
Hosking, has returned to his role as Non-Executive Director, as was foreshadowed in last year’s
Remuneration Report.
Remuneration strategy overview
Our remuneration strategy is designed to support the business strategy and drive sustainable
outperformance over the long-term. The remuneration framework itself is subject to ongoing
improvement to ensure it maintains the strongest alignment possible with shareholder experience
and with contemporary executive compensation philosophy and practice.
As shareholders may recall, the RB Group Executive Compensation Model (RECM) applies to the
Company’s senior executives and provides a strong foundation to attract and retain talent and align
them with building long-term value for shareholders. 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.
During FY2021, the Board implemented several changes to the RECM framework to further
strengthen the alignment between senior executives and shareholders (refer to section 4.2 for
further detail on these changes):
● The Long Term Incentive (LTI) performance period has been amended (in relation to future
awards), with a minimum of 3 years required for any awards to vest (previously the minimum
performance period was 1 year). The share appreciation rights remain as the instrument,
with a 10% compound TSR requirement needed to be achieved for any LTI awards to vest.
The awards, should they not vest after 3 years, are able to vest after years 4 or 5, with the
required compounding rate continuing throughout these years; and
● The former long term equity award has been repositioned as Base Equity (BE), forming part
of the base compensation of senior executives, but with a direct link to shareholder value
creation.
The Board also implemented several changes in relation Non-Executive Directors (NEDs)
remuneration (refer to section 5.1 for further detail on these changes):
● Removal of the deferred equity component such that Board Fees are now paid entirely in
cash, but with the introduction of a minimum shareholding expectation; and
● Increases to NED base fees, in consideration of the increasing scale and complexity of the
business.
On behalf of the Board, we invite you to read the Report and we look forward to receiving your
feedback at the Annual General Meeting (AGM).
Our RECM creates strong shareholder alignment through the incorporation of significant deferred
equity components to encourage executives to behave like owners of the business. It is through this
ownership that executives are driven to create long-term shareholder value.
Ben Heap
Chair
People and Nomination Committee
We are committed to engage with our shareholders and other key stakeholders in relation to
the Company’s remuneration strategy and to continuously improve the effectiveness of our
remuneration arrangements.
46
47
RedbubbleAnnual Report 2021 Contents
1.
2.
3.
4.
5.
6.
7.
Remuneration Report Overview
How Remuneration is Governed
Company Performance in FY2021
Executive Remuneration
Non-executive Director (NED) Remuneration
Statutory Reporting for FY2021
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 2021. 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.
The table below outlines the KMP of RB Group during FY2021:
Classification
NED
Name
Anne Ward
Ben Heap
Martin Hosking
Position
Non-executive Chair
Non-executive Director
Non-executive Director
(re-appointed from 27 January 2021)
Greg Lockwood
Non-executive Director
Jennifer (Jenny) Macdonald
Non-executive Director
Executive KMP
Michael Ilczynski
CEO (appointed 27 January 2021)
Former Executive KMP
Emma Clark
Martin Hosking
CFO
Interim CEO and Managing Director
(retired 27 January 2021)
2. How Remuneration is Governed
2.1 People and Nomination Committee Role
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.
The members of the Committee during FY2021 were:
● Ben Heap - Independent Non-Executive Chair;
● Anne Ward - Independent Non-Executive Member;
● Jenny Macdonald - Independent Non-Executive Member; and
● Martin Hosking - Non-Executive Member (from 9 February 2021)
48
49
RedbubbleAnnual Report 2021 2.2 Remuneration Governance Overview
2.3 Remuneration Benchmarking
Redbubble Board
● Overall Responsibilty for the remuneration strategy and outcomes for executives and
non-executive directors
● Reviews and approves recommendations from the People and Remuneration Committee
The quantum of both Fixed Salary and the Total Remuneration Package are generally positioned
having consideration for benchmarking data, relevant market conditions and sentiment, the
trajectory of the company’s growth, strategic objectives, competency and skillset of individuals,
scarcity of talent, changes in role complexities and the geographical spread of the company and of
the relevant talent pool.
Market benchmarks are undertaken independently and set with reference to market capitalisation,
and with reference to industry sector and levels of business complexity, as determined by external
advisors, in collaboration with the Committee each year.
People and Nomination Committee
2.4 Clawback of Remuneration
● Four Non-Executive Directors (75% Independent with an Independent Chair) make
recommendations to the Board on remuneration strategy, governance and policy for
Executive KMP and Non-Executive Directors
● 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.
Management
Remuneration Advisors
Provides information to the PNC in relation to:
● Incentive targets and outcomes
● Remuneration Policy
● Short and Long-term incentive
participation eligibility
● Individual remuneration and
contractual arrangements for
executives
● Annual performance reviews
and target setting
● Provide external independent
advice, information and
recommendations relevant to
remuneration decisions
● 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 FY21
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 equity or other long term
incentive.
2.5 Standard Employment Arrangements
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:
● Termination provisions incorporating six month notice periods (to manage business continuity
risk during any executive transition)
● 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).
Specific employment arrangements for our CEO, Mr Ilczynski, are included in section 4.4.
50
51
RedbubbleAnnual Report 2021 3. Company Performance in FY2021
3.1 Performance against Financial Metrics
RB Group’s key financial measures of performance over the last five financial years are summarised
in the table below:
Gross Transaction
Value FY2021
$700.7m
Marketplace Revenue
FY2021
$553.3m
Artist Revenue FY2021
$104.0m
Key indicators (1)
FY2021
FY2020 FY2019(2)
FY2018(3)
FY2017
CAGR (4)
Gross Transaction Value (GTV) ($'m)
Total Revenue ($'m)
700.7
657.3
474.0
328.0
416.3
307.0
Marketplace Revenue ($'m)
553.3
348.9
256.9
Artist Revenue ($'m)
Gross profit (GP) ($'m)
Gross profit after paid acquisition (GPAPA) ($'m)
Earnings before Interest, taxes, depreciation and
amortisation (EBITDA) ($'m)
Cash balance ($'m)
Share price at year end ($)
104.0
222.7
151.5
52.7
98.7
3.61
67.4
134.4
94.5
5.1
58.1
2.06
50.1
94.5
67.5
(2.0)
29.0
0.91
(1) The non-IFRS metrics in the table above are defined as follows:
231.3
218.7
182.8
35.9
63.9
47.1
(7.4)
21.2
1.57
175.4
141.0
141.0
N/A
50.1
37.9
(8.1)
27.8
0.97
41%
47%
41%
43% (5)
45%
41%
N/A
37%
39%
• Gross Transaction Value (GTV) represents total receipts from customers less fraud, refunds and chargebacks.
• Gross Profit represents marketplace revenue less fulfiller expenses
• Gross Profit After Paid Acquisition costs (GPAPA) represents Gross Profit less paid acquisition cost
Non-IFRS metrics are unaudited.
(2) On 1 July 2019 the Group adopted AASB 16 - Leases using the full retrospective method of adoption. EBITDA for FY19 and onwards
includes the impact of this new standard.
(3) 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.
(4) Compound Annual Growth Rates (CAGR) are shown for the period since FY2017. Meaningful growth rates cannot be provided for metrics
that have moved from a negative to a positive amount.
(5) Artist Revenue as a reported metric began in FY2018 with the introduction of AASB 15 - Revenue from Contracts with Customers.
The CAGR has been calculated from FY18 to FY21.
4. Executive Remuneration
4.1 Remuneration Objectives & Strategy
RB Group’s vision is to scale the business to be a global leading online marketplace 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.
The RECM is designed to attract, motivate 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 needs 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.
The Board sets key annual 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, behaviours that are in line with our purpose and values, 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.
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 growth environment. Under the RECM, the value of
Base Equity and Long Term Incentive components are fundamentally dependent on share price
performance, aligning executives with shareholder interests. Furthermore, the Committee has
carefully considered a wide range of performance scenarios and outcomes in order to ensure the
remuneration outcomes are consistent with its expectations in those circumstances.
52
53
RedbubbleAnnual Report 2021
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.
Fixed Salary
Fixed salary and superannuation(3) intended to provide the Executives with the financial resources
commensurate with executives at companies of a similar size in that location.
Link
Motivate
Align
Attract & Retain
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
exceptional talent in
globally competitive,
highly mobile markets
FY2021 Base Equity (BE)
BE ensures immediate alignment between executives and shareholders and creates an owner
mindset in executives that has a retention impact within the compensation year. Executives are
taking on risk when accepting part of their base compensation in equity. Equity is also required to
be held for one year post vesting to ensure focus on sustainable share value appreciation.
The BE is part of the base compensation and does not have a performance hurdle but rather varies
in value with the Company’s share price. It is designed to ensure executives act as owners from the
outset with a focus on sustainable value creation rather than short-term financial metrics which
may be incompatible with shareholder longer-term interests. Further, with US and other overseas
remuneration practices in mind, the Board has assessed many alternative remuneration structures,
noting that we acknowledge this award does not reflect typical Australian market practice. The
Board determined that having a deferred equity component such as this BE award to be best fit-
for-purpose at this time to best align executives with shareholder experience in conjunction with
the newly structured LTI award, noting that this approach to remuneration is widely accepted
internationally.
The BE component of the RECM operates as outlined below:
4.2 Elements of Remuneration
The following remuneration mix summarises the key components, and weightings associated, that
make up the RECM:
BE instrument
Restricted Stock Units (RSUs) for US-based executives and US citizens resident
in Australia or Germany. RSUs are rights to be issued Redbubble shares upon
satisfaction of the applicable vesting conditions.
Executive KMP
Michael Ilczynski
Emma Clark
(1) Assumes full vesting of LTI.
Role
CEO
CFO
Fixed Salary
Base Equity (BE)
Long Term Incentive
(LTI) (1)
$800,000
$450,000
$400,000
$225,000
$800,000
$450,000
Grant quantum
Grant date
Vesting date
Zero-priced options (ZPOs) for Australian-based (non-US resident) executives.
ZPOs are call options to acquire Redbubble shares, with a zero exercise price to
convert the option into shares.
The grant quantum of the BE award to executives is calculated as a percentage
of fixed salary.
Grants are made on 1 October of the relevant year following the setting of total
compensation for the year and Board approval.
Grants vest after 12 months, subject to the executive remaining in service with
an RB Group company at the vesting date. The Board has unfettered discretion
to determine any adjustment to awards at time of vesting.
Disposal restriction period
12 months following vesting. Holding period remains in place even if employment
ends. Officers & Executives of the Group are subject to the RB Group share
trading policy.
54
55
(3) Australia only
RedbubbleAnnual Report 2021 Termination
Executives forfeit grants that have not vested.
Clawback
Change of Control
Holding periods remain on foot.
The Board has unfettered discretion to award pro rata vesting in the event of an
employee’s termination.
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
BE to the extent that the law will allow.
The early vesting of any unvested awards may be permitted by the Board
in other limited circumstances such as a change in control of Redbubble. In
these circumstances the Board will determine the timing and proportion of any
unvested awards that vest.
FY2021 Long-Term Incentive (LTI)
It is intended that LTI will allow executives to access uncapped fair upside based on strong
shareholder value creation, while assuming significant risk as the SARs have no value unless the
executive remains with the business for a minimum of 3 years and enterprise value grows at a rate
that provides shareholders with attractive returns.
The LTI component of the RECM operates as outlined below:
LTI instrument
Share Appreciation Rights (SARs)
Grant quantum
Grant date
The grant quantum of the LTI award to executives is calculated as a percentage
of fixed salary.
Grants are made on 1 October of the relevant year following the setting of total
compensation for the year and Board approval.
Vesting date & conditions
The LTI’s vest on the earlier of either the third, fourth or fifth anniversaries
following the grant date subject to:
• The Executive remaining employed at RB Group (time vesting)
• The achievement of a compounding target of 10% Total Shareholder Return
(TSR) per annum on either the third, fourth or fifth anniversaries following the
grant date.
The compounding return target to be determined based on a 10% per annum
Total Shareholder Return (TSR) from time of grant. TSR is calculated as the total
of the share price appreciation plus any dividends paid during the period. TSR
has been chosen as the appropriate target so that Executives are fully aligned
with shareholders.
Disposal restriction period
12 months following vesting. Holding period remains in place even if employment
ends.
Termination
Should a participant exit during the LTI vesting period, participants will retain
pro-rata retention of LTI awards that have yet to vest.
Pro-rata retention has the following conditions:
• The employee must have been part of the RECM LTI program for at least 3
years
• The employee must not be considered a “bad leaver”
• The employee must have served at least 12 months of a grant’s vesting period
to be entitled to a pro-rata portion
• The award retained will be pro-rata for the number of months since that award
was granted and the employee’s resignation, divided by the total number of
months until First testing of that award
• The pro-rata award remains subject to all testing, disposal restriction and other
conditions
• Once an award has achieved its TSR hurdle and has vested, the (former)
employee will have 90 days to exercise before the equity expires
The Board retains complete discretion in these matters.
Strike price
Strike price is set on 1 October based on 30 day VWAP.
The Board retains Board discretion in respect of adjusting the strike price if it
considers there have been unusual trading circumstances within the 30 day
period.
For FY2021 the strike price was $4.2126.
SARs valuation used for the allocation
of equity
The dollar amount of equity is converted to SARs at the fair market value
determined at the beginning of grant period based on a Black Scholes valuation
of the SAR.
The Black Scholes valuation will use the 30 (calendar) day VWAP calculated on 1
October and be calculated on an “unhurdled” basis i.e. valued for the purposes of
equity allocation as if there was no performance hurdle.
Expiration
6 years from grant date and therefore the SARs must be exercised by this point
or they lapse.
Hedging
Clawback
Change of Control
Upon resignation or termination, the exercise period for SARs ends 90 days
following the date of resignation or termination unless the Board decides
otherwise.
Executives are prohibited from hedging under RB Group’s Share Trading policy
and clawback under existing rules.
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
LTI to the extent that the law will allow.
The early vesting of any unvested awards may be permitted by the Board
in other limited circumstances such as a change in control of Redbubble. In
these circumstances the Board will determine the timing and proportion of any
unvested awards that vest.
56
57
RedbubbleAnnual Report 2021 Vesting and exercise periods of the LTI
4.4 CEO Employment Arrangements
YEAR 0
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
Period 1
Period 2
Period 3
Period 4
Period 5
Share price of 133%
of strike price
Executive can exercise if year 3 conditions are met
Share price of 146%
of strike price
Executive can exercise if
year 4 conditions are met
Share price of 161%
of strike price
Executive can
exercise if year
5 conditions
are met
Legend
Exercise condition testing period
Exercise condition achieved
Exercise condition not achieved
Exercise condition requirement (10%CAGR)
4.3 LTI Outcomes
Ms Clark, our CFO, was the only KMP Executive to have an eligible LTI Award vest during the year,
as is outlined in the table below:
Participant
Grant Date
Vesting Date
Share price performance calculated to trigger exercise condition achievement
(90 day VWAP calculated from 25 April 2020 to 23 July 2020)
FY2020 Minimum health conditions (Cash Balance, Artist & Content Growth,
Customer Loyalty, and People & Culture)*
Percent vested due to service and performance based vesting
FY2020 LTI Award
Emma Clark
1 October 2019
1 October 2020
Increase of 11% at
23 July 2020
Achieved
100%
* Minimum health conditions applied in relation to the LTI equity award issued for FY2020. The principles behind the minimum health metrics
remain an important part of annual Executive performance evaluation; however, these conditions have been removed from the LTI award
methodology in FY2021. The Board continues to review the remuneration framework on an annual basis to ensure it provides a strong
foundation to attract and retain talent and align them with building long-term value for shareholders.
The employment of Mr Ilczynski, our CEO, is governed by an Employment Agreement that
commenced 4 January 2021. The table below summarises the compensation arrangements of Mr
Ilczynski:
Remuneration Element
Contracted Annual Remuneration
Fixed Salary
Base Equity (BE)
$800,000 inclusive of superannuation
$400,000 (50% of fixed salary)
Long-Term Incentive (LTI)
$800,000 (100% of fixed salary)
The Company also entered into a one-off limited recourse Loan Arrangement with Mr Ilczynski at
the time of his appointment (see section 7.6 for further information).
4.5 Executive KMP Terminations during the year
Mr Hosking ceased to be the interim CEO and Managing Director of RB Group on 27 January 2021.
Mr Hosking was paid a pro-rata proportion of his contracted bonus ($300,000) following his time
as interim CEO and Managing Director at the period to 27 January, as well as being paid his agreed
fixed remuneration until 27 January 2021. Mr Hosking has since returned to the Board as a
non-executive director. Details of Mr Hosking’s remuneration throughout FY2021 can be found
in section 6.1.
5. Non-executive Director (NED) Remuneration
5.1 NED Remuneration Policy
RB Group seeks to attract and retain high calibre Non-Executive Directors who will provide good
governance, strong oversight, independence, a range of skills and alignment of interests with long-
term share price appreciation.
During FY2021, the Committee undertook a review of the level of Board fees awarded to NEDs.
As part of this review, the Committee considered not only the level, but also the structure of NED
remuneration and how it could be enhanced to best align with shareholder expectations, whilst
attracting and retaining high calibre NEDs. The Committee also considered the increasing scale and
complexity of the business.
58
59
RedbubbleAnnual Report 2021 The following fees were approved, effective 1 November 2020, as a part of a review of the NED
Remuneration Policy:
Chair
Member
Board
Audit & Risk Committee
$250,000
$120,000
$15,000
Nil
People & Nomination
Committee
$15,000
Nil
It was further resolved that all Board fees would be paid entirely in cash (and therefore, no deferred
equity grants were made to NEDs in FY2021).
The above fees apply to all of Redbubble’s NEDs, except for Mr Lockwood and Mr Hosking. 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. Mr Hosking has declined to
accept remuneration for his role as a NED of Redbubble.
5.2 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
which has remained unchanged since the Company’s IPO in 2016. Any changes to this amount in
future will require approval by shareholders in a general meeting in accordance with the ASX Listing
Rules.
5.3 Other Information
NEDs are 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 FY2021 is set out in detail in section 6.2.
Pink Angel Classic
T-Shirt designed and
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60
61
RedbubbleAnnual Report 2021 Redbubble
Annual Report 2021
6. Statutory Reporting for FY2021
6.1 Executive KMP remuneration for the year ended 30 June 2021
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
Long service
leave (5)
Share-based payments
Limited recourse
loan (In-
substance share
options) (6)
Share options
(Performance
based) (7)
Share options
(Time based) (7)
Share
appreciation
rights
(Performance
based) (8)
Chief Executive Officer
Michael Ilczynski
(appointed as CEO on
27 January 2021)
Executive Director
Martin Hosking
(resigned as CEO on
27 January 2021) (11)
Barry Newstead
(terminated as CEO
18 February 2020)
2021
2020
2021
2020
2021
$
390,520
-
$
-
-
$
$
8,420
25,000
-
-
317,206
177,293
750
25,000
252,179
80,211
-
-
-
-
-
770
-
9,798
-
25,000
25,000
2020
333,464
12,760
25,000
316,976
(23,001)
Other key management personnel
Emma Clark (CFO)
2021
2020
431,322
416,499
-
-
Total
2021
1,139,048
177,293
9,940
75,000
$
-
-
-
-
-
$
302
-
(275)
275
-
-
-
-
2,112
742
2,139
$
-
-
-
-
-
$
$
144,534
89,426
-
-
-
-
-
-
-
-
Deferred STI (9)
Total
remuneration
Performance
-related (10)
$
-
-
-
-
-
$
710,343
-
519,974
342,463
-
$
13%
0%
34%
23%
0%
(297,747)
66,102
157,312
(16,481)
574,385
(25%)
-
-
-
225,659
214,547
262,783
527,489
370,193
303,973
-
-
-
899,410
1,232,513
2,129,727
24%
43%
$
52,141
-
-
-
-
-
-
-
52,141
2020
1,002,142
92,971
-
59,798
316,976
(21,984)
-
(297,747)
328,885
684,801
(16,481)
2,149,361
(1) Includes base salary, excess superannuation (refer to footnote 4) and short term compensated absences, such as leave entitlements accrued. In the prior period from 20 April
2020 to 30 June 2020 Martin Hosking and Emma Clark took a voluntary salary reduction of 20% of their base salary.
(2) Represents cash bonus accrued for the year.
(3) Non-monetary benefits include wellness benefits available to all executives. For Michael Ilczynski the amount also includes fringe benefits tax payable by the Group on the
limited recourse loan.
(4) Staff can elect to have their superannuation capped at $25,000 (2020: $25,000), with any amount above this included in cash salary. These amounts include superannuation
(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.
on bonus paid during the year.
(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
(5) Australian executives are entitled to long service leave. The annual charge reflects long service leave accrued (or lapsed) during the period.
(6) The accounting standard, AASB 2 – Share Based Payment, requires limited recourse loans for the purchase of shares to be treated (for accounting) as an option. Amounts
disclosed represent the deemed in-substance option cost for the limited recourse loan provided to Michael Ilczynski to acquire Redbubble shares. Please see section 7.6 for
further details. The fair value of in-substance options is ascertained using the Black-Scholes model and is amortised over the loan period
date.
(11) Martin Hosking resigned as CEO on 27 January 2021 and resumed as a non-executive director of the Group at this time. The remuneration shown in this table is for
his services as CEO only.
62
63
6.2 NED Remuneration for the year ended 30 June 2021 (1)
Short term
benefits
Post -
employment
benefits
Director Fees (2) (8)
Superannuation
$
$
Non-executive directors
Ben Heap
Martin Hosking (4)
Greg Lockwood (5)
Jenny Macdonald
Anne Ward
Richard Cawsey (6)
Grant Murdoch (7)
Total
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
116,473
17,940
-
35,960
-
-
115,025
64,760
201,275
83,369
-
94,803
-
20,594
432,773
317,426
11,065
1,704
-
3,416
-
-
-
2,864
19,121
7,920
-
-
-
1,956
30,186
17,860
Share-based
payments
Share-based
payments - Share
options (Time
based) (3)
$
-
-
-
15,788
-
-
17,642
37,194
17,642
37,575
-
Total
$
127,538
19,644
-
55,164
-
-
132,667
104,818
238,038
128,864
-
29,658
124,461
-
2,720
35,284
122,935
-
25,270
498,243
458,221
(1) The NED remuneration table has been prepared in accordance with Australian Accounting Standards and Section 300A of the
Corporations Act 2001 (Cth).
(2) Effective 1 November 2020 all Board fees are paid in cash. See section 5 for further details on this change.
(3) Amounts disclosed reflect the value of remuneration from options granted in the prior year but still vesting in the current year. The fair
value of options is ascertained using Black-Scholes model.
(4) Martin Hosking resigned as CEO on 27 January 2021 and resumed as a non-executive director at this time. The remuneration shown in
this table is for his services as a non-executive director only. In FY21, Mr Hosking did not accept remuneration as a non-executive director.
(5) Greg Lockwood is a partner with Piton Capital, a private equity firm with a shareholding in Redbubble Ltd. Mr Lockwood 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 effective 30 March 2020. His fees were paid to and options / rights are issued to Denali Venture Partners
(Aust). Amounts are provided for prior year comparatives.
(7) Grant Murdoch resigned effective 23 October 2019. Amounts are provided for prior year comparatives.
(8) In the prior year 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.
7. Other Information
7.1 Minimum Shareholding Expectation
The Board has set minimum shareholding expectations for the Directors and Executives to promote
alignment between their interests and those of shareholders.
In the case of Executives, the design of the RECM ensures that all Executives progressively
acquire shares or other equity instruments, so that they are aligned in building long term value for
shareholders. The RECM operates to ensure that over time the Executives will acquire an equity
exposure equal to or greater in value than 100% of their annual base salaries.
In the case of NEDs, who are paid entirely in cash and do not participate in any incentive program,
the Board has introduced a minimum shareholding expectation. NEDs are expected to progressively
acquire shares over a three year period from the date of their appointment (or, for existing directors,
within three years from the 1 November 2020 commencement of this requirement) and within this
timeframe are expected to hold shares equal in value to their annual base fees at the time of their
appointment.
Direct and indirect shares and equity instruments (such as RSUs, ZPOs and SARs) count towards
this minimum shareholding target.
7.2 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.
64
65
RedbubbleAnnual Report 2021
Option holdings
Limited recourse loan share option holdings (1)
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.
Limited recourse loan 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.
2021
Balance at
the start of
the year
Granted
during the
year as
compensation
Exercised
during the
year
Cancelled
during the
year
Expired
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
Non-executive directors
Greg Lockwood
-
Jenny Macdonald
47,509
Anne Ward
50,714
Ben Heap
-
Martin Hosking
43,621
Chief executive officer
-
-
-
-
-
Michael Ilczynski
-
49,388
Other key management
-
-
-
-
-
-
Emma Clark
233,097
53,411
233,097
-
-
-
-
16,789 (1)
-
-
Total
374,941
102,799
233,097
16,789
-
-
-
47,509
47,509
50,714
50,714
-
-
26,832
26,832
-
-
-
-
-
-
27,798
27,798
-
7,121
49,388
53,411
-
-
49,388
-
53,411
233,097
227,854
125,055
102,799
295,814
-
-
-
-
-
-
-
2021
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
Chief executive officer
Michael Ilczynski
Total
-
-
289,161
289,161
-
-
-
-
298,161
289,161
-
-
298,161
289,161
-
-
(1) Under the requirements of AASB 2 - Share Based Payment the shares purchased by Michael Ilczynski with a limited recourse loan are
considered to be options until the loan is repaid. Please see section 7.6 for further details.
7.3 Shares on exercise of options/rights
Number of
ordinary shares
on exercise of
options/rights
Exercise
price per
option (1)
Share price per share at
exercise / settlement dates
Value at
exercise /
settlement
dates (2)
(1) 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. A portion of his NED options were cancelled at the November 2020 vesting date to
reflect the proportion of the NED remuneration year that Mr Hosking was a NED for.
2021
Nature of grant
Key Management Personnel
Share Appreciation Rights holdings
Share appreciation rights do not carry any voting or dividend rights, and can only be exercised once
the vesting conditions have been met, until their expiry date.
2021
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
Chief executive officer
Michael Ilczynski
-
159,854
-
Other key management personnel
Emma Clark
1,069,298
174,385
91,000
Total
1,069,298
334,239
91,000
-
-
-
159,854
-
59,854
-
1,152,683
978,298
174,385
1,069,298
1,312,537
978,298
334,239
1,069,298
Emma Clark
Emma Clark
Total
Options
233,097
$0.00
Between $4.04 and $5.51
$996,364
SARs
66,713
$1.41
Between $5.13 and $5.45
$353,651
299,810
1,350,015
(1) For SARs, the exercise price represents the share price from which any share appreciation is measured.
(2) Value at exercise / settlement date is calculated as:
• for options: share price on exercise date less exercise price paid, multiplied by number of options exercised
• for SARs: share price on exercise date multiplied by number of shares received upon exercising the SAR
66
67
RedbubbleAnnual Report 2021 Jungle leopard Floor Pillow
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7.4 Shareholdings of Directors and KMP
2021 - Redbubble Limited
ordinary shares (1)
Non-executive directors
Ben Heap
Greg Lockwood
Jennifer Macdonald
Anne Ward
Martin Hosking
Chief executive officer
Michael Ilczynski (2)
Other key management personnel
Emma Clark
Related parties
Beneficiary
Jackson Alexander Capital
Pty Ltd
Ben Heap
Jellicom Pty Ltd as trustee
for the Three Springs
Family Trust
Martin
Hosking
Three Springs Foundation
Pty Ltd as trustee for the
Three Springs Foundation
Martin
Hosking
Piton Capital Venture
Fund II LP
Greg
Lockwood
Piton Capital Investments
Cooperatief B
Greg
Lockwood
Balance at the
start of the
year
Received on
exercise of
options / SARs
Purchase of
shares
Sale / transfer
of shares
Balance at the
end of the year
-
-
88,539
100,000
2,393,552
-
-
-
46,606,538
1,500,000
5,537,291
927,840
-
-
-
-
-
-
-
-
7,000
-
-
-
-
-
-
(1,633,452)
-
-
95,539
100,000
760,100
72,339
-
72,339
299,810
-
(99,810)
200,000
-
-
-
-
-
-
50,000
-
50,000
-
-
-
-
-
(4,366,548)
42,239,990
1,500,000
5,537,291
927,840
-
100,000
Walros Pty Ltd as trustee
for the Anagnostou Super
Fund
Anne Ward
100,000
Total
57,253,760
299,810
129,339
(6,099,810)
51,583,099
(1) Includes shares held directly, indirectly and beneficially by KMP.
(2) Michael Ilczynski also holds 289,161 shares funded by a limited recourse loan from the Group. Under the requirements of AASB 2 - Share
Based Payment these shares are not shown in this table until the loan is repaid. Please see section 7.6 for further details
68
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RedbubbleAnnual Report 2021
7.5 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)
Chief executive officer
Michael Ilczynski
04-Jan-21
49,388
Options
04-Jan-22
04-Jan-27
$0.00
$5.95
$293,859
04-Jan-21
159,854
SARs
01-Oct-23
04-Jan-27
$5.99
$3.10
$495,547
04-Mar-21
289,161
In-substance
share
options (4)
04-Mar-26
04-Mar-26
$6.45
$2.77
$800,510
Other key management personnel
Emma Clark
01-Oct-20
53,411
Options
01-Oct-21
01-Oct-26
$0.00
$4.09
$218,451
01-Oct-20
174,385
SARs
01-Oct-23
01-Oct-26
$4.21
$2.06
$359,233
Total
726,199
$2,167,600
(1) The vesting of equity is subject to the CEO or KMP (as applicable) remaining in service with Redbubble as at the vest date and, in relation
to the SARs, the total shareholder return hurdle being satisfied.
(2) For options and SARs, if the CEO or KMP (as applicable) leaves Redbubble service then the expiry date is brought forward to be 90
days after the employment end date. For in-substance share options, if the CEO leaves Redbubble service then the expiry date is the
employment end date.
(3) The value at grant date for options and in-substance share options has been determined using the Black-Scholes valuation model. The
value for share appreciation rights has been determined using the Monte Carlo valuation model. 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) Under the requirements of AASB 2 - Share Based Payment the shares purchased by Michael Ilczynski with a limited recourse loan are
considered to be options until the loan is repaid. Please see section 7.6 for further details.
7.6 Other Transactions with KMP
On 10 February 2021, Redbubble Limited and Mr Ilczynski, CEO, entered into a limited recourse loan
arrangement with a loan amount of $1,600,000. Mr Ilczynski used the loan amount plus $400,000 of
his own funds to purchase Redbubble Limited shares on-market in the trading window that followed
release of Redbubble’s half-year 2021 results and Appendix 4D. This transaction was completed on
4 March 2021, with an average share price of $5.53. The loan amount plus interest equal to the RBA
cash rate plus 3% (compounding annually) is to be repaid 5 years from date of loan, or on cessation
of employment if earlier. The purchased shares are subject to dealing restrictions, including a
prohibition on granting security interests, which fall away upon the loan being repaid in full. The
security for the loan is limited to the shares acquired with the loan amount.
Consolidated
Financial Statements
Strawberry Chequers
Fruit Squares Pattern
Jigsaw designed and
sold by Rock
70
71
RedbubbleAnnual Report 2021 Consolidated statement of comprehensive income
for the year ended 30 June 2021
Consolidated statement of financial position
as at 30 June 2021
Revenue from contracts with customers
Marketplace revenue
Artists’ revenue
Total revenue from contracts with customers
Operating expenses
Artists' margin
Fulfiller expenses (1)
Employee and contractor costs
Marketing expenses
Operations and administration
Depreciation and amortisation
Total operating expenses
Other income (2)
Other expenses (3)
Profit / (Loss) before income tax
Income tax (expense) / benefit (4)
Notes
2021
$'000
2020
$'000
553,285
348,888
104,038
3
657,323
67,369
416,257
(104,038)
(67,369)
(330,541)
(214,521)
(64,534)
(59,496)
(73,180)
(43,300)
(28,947)
(24,342)
4
5
6
12, 13 & 14
(13,331)
(13,727)
(614,571)
(422,755)
43
(3,692)
39,103
(7,856)
31,247
(3,073)
(3,073)
28,174
Cents
11.57
11.28
342
(2,838)
(8,994)
223
(8,771)
1,512
1,512
(7,259)
Cents
(3.38)
(3.38)
7(a)
8
8
Total profit / (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
Total comprehensive income / (loss) for the year attributable to owners
Profit / (loss) per share attributable to the ordinary equity holders of the company
Basic profit / (loss) per share
Diluted profit / (loss) per share
(1) Fulfiller expenses comprise product and printing, shipping and transaction costs, and are equivalent to cost of goods sold.
(2) Other income includes finance income.
(3) Other expenses include interest expenses on lease liabilities, losses recognised on disposal of assets and net foreign exchange losses.
Refer to note 10(a) for further details on foreign exchange losses.
(4) A portion of the income tax benefit applicable to the Group is recorded directly in equity. Please see note 7(b) for further details.
The above Consolidated Statement of Comprehensive Income should be read in conjunction with accompanying notes.
72
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
Prepayments
Deferred tax assets
Other assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Unearned revenue (1)
Employee benefit liabilities
Provisions
Lease liabilities
Other liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Employee benefit 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
9
10(b)
14(b)
7(b)
11
12
13
14(a)
7(d)
11
15
16
14(a)
17
14(a)
16
17
18(a)
18(b)
18(d)
18(d)
2021
$'000
98,686
4,602
4,525
-
1,270
4,693
113,776
1,928
62,486
4,466
506
2,717
723
72,826
186,602
47,473
12,235
2,195
2,561
2,280
-
66,744
3,722
268
-
3,990
70,734
115,868
162,552
(7,351)
11,414
(3,408)
(47,339)
115,868
(1) Unearned revenue represents the value of goods paid for by customers that are not yet delivered.
The above Consolidated Statement of Financial Position should be read in conjunction with accompanying notes.
2020
$'000
58,129
5,236
4,063
994
1,032
7,328
76,782
2,229
71,576
6,649
46
617
1,621
82,738
159,520
45,036
28,855
5,059
1,780
3,944
1,281
85,955
5,819
198
70
6,087
92,042
67,478
145,438
(5,303)
13,699
(335)
(86,021)
67,478
73
RedbubbleAnnual Report 2021 Consolidated statement of changes in equity
for the year ended 30 June 2021
Consolidated statement of changes in equity
for the year ended 30 June 2021
Contributed
equity
Treasury
reserve (1)
Share
based
payments
reserve
Foreign
exchange
translation
reserve
Accumulated
losses
Total
Contributed
equity
Treasury
reserve (1)
Share
based
payments
reserve
Foreign
exchange
translation
reserve
Accumulated
losses
Total
For the year ended 30 June 2021
Notes
$'000
$'000
$'000
$'000
$'000
$'000
For the year ended 30 June 2020
Notes
$'000
$'000
$'000
$'000
$'000
$'000
Balance as at 1 July 2020
145,438
(5,303)
13,699
(335)
(86,021)
67,478
Balance as at 1 July 2019
135,194
(1,394)
8,677
(1,847)
(77,250)
63,380
-
31,247
31,247
Profit / (loss) for the year
(3,073)
-
(3,073)
(3,073)
31,247
28,174
Profit / (loss) for the year
Other comprehensive income / (loss)
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)
Limited recourse loan made to
related parties (5)
Income tax benefit recognised
directly in equity for Employee Share
Trust deductions (6)
-
-
18(b)
18(b)
4
8,366
8,990
-
-
-
-
-
-
-
-
-
(8,990)
6,705
18(b)
44,326
(44,326)
18(b)
(41,413)
41,413
18(b)
18(b)
18(b)
(3,155)
-
-
-
-
(1,600)
9,900
(7,435)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,366
-
6,705
-
-
(3,155)
(1,600)
9,900
-
-
-
-
-
-
-
-
-
Other comprehensive income / (loss)
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)
-
-
-
18(b)
18(b)
4
3,556
3,009
-
-
-
-
-
-
-
18(b)
10,321
(10,321)
18(b)
(6,412)
6,412
-
-
-
-
(3,009)
8,031
-
-
-
-
(8,771)
(8,771)
1,512
-
1,512
1,512
(8,771)
(7,259)
-
-
-
-
-
-
-
-
-
-
-
-
3,556
-
8,031
-
-
(230)
Payment of withholding taxes (4)
18(b)
(230)
-
Balance at 30 June 2020
145,438
(5,303)
13,699
(335)
(86,021)
67,478
(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.
Transfer to accumulated losses (7)
18(b)
7,435
-
(3) Shares issued / allocated to participants from the Employee Share Trust.
Balance as at 30 June 2021
162,552
(7,351)
11,414
(3,408)
(47,339)
115,868
(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. In FY2021 the Treasury Reserve also includes shares used as security for the
limited recourse loan provided to the CEO.
(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.
(5) A limited recourse loan was provided to the Redbubble Group CEO to purchase Redbubble shares on-market. This is treated as an
acquisition of treasury shares. Refer to Note 23(b) for further details.
(6) A tax benefit of $9.9m was recognised directly in equity for income tax benefits relating to contributions to the Employee Share Trust in
excess of the associated cumulative remuneration expense.
(7) The balance transferred to accumulated losses represents the income tax benefit recorded in the reserve for equity rights that were
converted into shares in the current period.
The above Consolidated Statement of Changes in Equity should be read in conjunction with accompanying notes.
(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.
74
75
RedbubbleAnnual Report 2021
Consolidated statement of cash flows
for the year ended 30 June 2021
Notes to the consolidated financial statements
for the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to artists
Payments to fulfillers
Payments to other suppliers and employees
Payments of interest
Receipts of interest
Income taxes received / (paid)
Net cash provided by / (used in) operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payment of deferred consideration for TeePublic acquisition (1)
Proceeds from net investment in subleases
Payments for development of intangible assets
Net cash provided by / (used in) investing activities
Cash flows from financing activities
Proceeds from exercise of share options
Payments for limited recourse loans to related parties (2)
Payment of withholding taxes to US tax authorities on settlement of restricted
stock units funded by shares withheld
Notes
2021
$'000
2020
$'000
715,556
471,973
(100,907)
(63,114)
(330,093)
(217,810)
(228,785)
(142,058)
(333)
27
(360)
55,105
(861)
(979)
854
(456)
232
(2,165)
46,602
(476)
(7,104)
785
(5,384)
(9,205)
(6,370)
(16,000)
8,366
(1,600)
(3,155)
3,556
-
(230)
14(a)
14(b)
13
18(b)
23(b)
18(b)
Payments for lease liabilities
14(a)
(3,919)
(3,576)
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
(308)
48,427
58,129
(7,870)
98,686
(250)
30,352
29,030
(1,253)
58,129
(1) In FY2019, the Group acquired 100% of TP Apparel LLC and its subsidiary TP Apparel Europe Limited (TeePublic). The final deferred
consideration payment of US $0.7 million (AU $1.0m) was made during the year (US $4.8 million (AU $7.1m) was paid in the prior year).
(2) During the year Redbubble provided a limited recourse loan to the Redbubble Group CEO to purchase Redbubble shares on-market.
Refer to Note 23(b) for further details.
The above Consolidated Statement of Cash Flows should be read in conjunction with accompanying notes.
76
Notes
1.
2.
Basis of Preparation
Changes in significant accounting policies
Performance
3.
4.
5.
6.
7.
8.
Cash
9.
10.
Assets
11.
12.
13.
14.
Liabilities
14.
15.
16.
17.
Equity
18.
Revenue from contracts with customers
Employee and contractor costs
Marketing expenses
Operations and administration expenses
Income tax
Earnings per share
Cash and cash equivalents
Financial risk management
Other assets
Property, plant and equipment
Intangible assets
Leases
Leases
Trade and other payables
Employee benefits liabilities
Other liabilities
Contributed equity and reserves
Group structure
19.
20.
Interests in subsidiaries
Parent entity financial information
Unrecognised items
21.
Commitments and contingencies
Others
22.
23.
24.
25.
26.
27.
Share-based payments
Related party transactions
Remuneration of auditors
Segment information
Events occurring after the balance sheet date
Other significant accounting policies
Page
78
79
79
80
80
80
81
85
86
87
91
91
94
97
97
99
100
101
101
103
104
105
106
110
111
111
111
112
77
RedbubbleAnnual Report 2021
1. Basis of preparation
2. Changes in significant accounting policies
The consolidated financial statements of Redbubble Limited and its controlled entities (the Group)
for the year ended 30 June 2021 were authorised for issue by a resolution of the Directors on 19
August 2021. Redbubble Limited (the Company or the parent) is a for profit 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.
There are no new or amended accounting standards that required Redbubble to change its
accounting policies for the 2021 financial year.
3. Revenue from contracts with customers
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.
Under AASB 15 Revenue from Contracts with Customers the Group is 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.
The Group has concluded 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. 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.
Amounts disclosed as revenue are net of trade discounts, returns, rebates, taxes and transaction
fraud.
Critical accounting estimates and judgements
All of the unearned revenue balance as at 30 June 2020 was recognised as revenue during the
FY2021 year. All of the unearned revenue balance at 30 June 2021 is expected to be recognised as
revenue within the following month. 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 25.
78
79
RedbubbleAnnual Report 2021 4. Employee and contractor costs
7. Income tax
Salary costs
Contractor costs
Share-based payments expense
Superannuation and other pension related costs (1)
Termination benefits
Restructure costs
2021
$'000
41,880
13,219
6,705
2,730
-
-
2020
$'000
39,113
6,569
8,031
2,708
530
2,545
Total employee and contractor costs
64,534
59,496
(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
2021
$'000
71,208
1,972
73,180
2020
$'000
39,840
3,460
43,300
(1) Paid marketing represents affiliate marketing and other paid marketing costs paid on a per click basis on search engines and social media
platforms.
6. Operations and administration
Technology infrastructure and software costs
Other operations and administration expenses
Total operations and administration expenses
2021
$'000
19,060
9,887
28,947
2020
$'000
14,704
9,483
24,342
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). The tax effect of share based payment awards granted
is recognised in current income tax expense, except to the extent that the total tax deductions
are expected to exceed the cumulative remuneration expense. In this situation, the excess of the
associated current or deferred tax is recognised in equity and forms part of the treasury shares
reserve.
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.
80
81
RedbubbleAnnual Report 2021 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
Current and deferred income taxes arise from temporary differences between the tax and financial
statement recognition of revenue, expense and equity items, 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.
The Group has in aggregate $92.4 million (2020: $83.7 million) of unrecognised losses and $9.6
million (2020: $8.7 million) of unrecognised R&D tax offsets. An unrecognised deferred tax asset
of $37.3 million exists as at 30 June 2021 (2020: $33.9 million), in relation to these items. These
losses will be recognised at a future point in time when sustainable taxable income can be reliably
estimated. In addition, the Group has unrecognised temporary deferred income tax items that will
be recognised on a similar basis
(a) Income tax expense / (benefit) recorded in the Statement of Comprehensive Income
Recorded in the Statement of Comprehensive Income
Current tax
Current tax expense / (benefit)
Under/(over) provision in prior years
Deferred tax
Deferred tax expense / (benefit)
Under/(over) provision in prior years
2021
$'000
9,902
(24)
(2,076)
54
Total income tax expense / (benefit) recorded in the Statement of Comprehensive Income
7,856
(b) Current tax assets / (liabilities)
The current tax asset is comprised of the following
Current tax expense recorded in the Statement of Comprehensive Income
Current tax benefit recorded in equity (1)
Total net current tax payable on current year operations
Tax instalments made and refunds due for prior years
Total current tax asset
2021
$'000
(9,902)
9,900
(2)
1,272
1,270
2020
$'000
339
18
(530)
(50)
(223)
2020
$'000
(339)
-
(339)
1,371
1,032
(1) The tax effect of share based payment awards granted is recognised in current income tax expense, except to the extent that the total
tax deductions are expected to exceed the cumulative remuneration expense. In this situation, the excess of the associated current or
deferred tax is recognised in equity and forms part of the treasury shares reserve.
Bixby Creek Bridge Art Print designed and
sold by fernandaschalle
It is not the mountain we conquer but ourselves
Art Print designed and sold by Matcha & Ink
Lilac Skys Art print designed and sold by
Cassia Beck
Stardust Aquarius Duvet Cover designed and
sold by Daniel Coulmann
82
83
RedbubbleAnnual Report 2021 (c) Numerical reconciliation of income tax expense / (benefit) to prima facie tax payable
Profit / (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
Net Australian income tax benefit from funding the employee share trust
Tax effect of share based payment deduction recognised in equity
Research and development
Other non-deductible / non-assessable items
Effect of movements in foreign exchange
Under/(Over) provision in prior year
Unrecognised tax losses and R&D tax offsets
Income tax expense / (benefit) attributable to loss from ordinary activities
(d) Deferred tax asset / (liability)
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 and equipment
Lease assets and liabilities
Unrealised FX
Intangible assets
US Carried Forward Tax Losses
Other items
Net deferred tax (liability) / assets
Movements:
Opening balance at 1 July
Credited / (debited) to the consolidated statement of comprehensive income
Exchange differences
Closing balance at 30 June
84
2021
$'000
39,103
11,730
(270)
(3,335)
(12,222)
9,900
(99)
(647)
(352)
30
3,121
7,856
2021
$'000
2,717
-
2,717
2021
$'000
1,039
(249)
332
1,203
2020
$'000
(8,994)
(2,698)
(171)
(163)
(1,579)
-
(217)
226
193
(32)
4,218
(223)
2020
$'000
617
-
617
2020
$'000
873
(275)
395
1,347
(2,142)
(1,395)
2,781
(247)
2,717
617
2,022
78
2,717
-
(328)
617
27
580
10
617
8. Earnings 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.
Basic and diluted earnings per share
The following table reflects the profit / (loss) and share data used in the basic and diluted EPS
calculations:
Profit / (loss) attributable to the ordinary equity holders of the company used
in calculating basic and diluted earnings per share
Weighted average number of shares used as the denominator
Weighted average number of shares used as denominator in
calculating basic earnings per share
Adjustments for calculation of diluted earnings per shares:
Add: Options
Add: Restricted stock units
Add: Share appreciation rights
2021
$'000
31,247
2020
$'000
(8,771)
2021
Number
2020
Number
270,031,293
259,379,690
4,269,483
1,156,139
1,652,778
-
-
-
Weighted average number of shares used as denominator in calculating diluted
earnings per share
277,109,693
259,379,690
(1) In the prior year, none of the options, restricted stock units and share appreciation rights 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, 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.
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.
85
RedbubbleAnnual Report 2021 9. Cash and cash equivalents
10. Financial risk management
Cash at bank and on hand
Total cash and cash equivalents
2021
$'000
98,686
98,686
2020
$'000
58,219
58,219
(a) Reconciliation of profit / (loss) for the year to net cash outflow from operating activities
Profit/(Loss) for the year
Non-cash items
(Recognition) / de-recognition of net deferred tax asset
7(d)
Notes
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
Other
Change in operating assets and liabilities
Net decrease / (increase) in trade and other receivables, prepayments
and other assets
Net (decrease) in current tax liabilities
Net increase / (decrease) in trade and other payables, employee
benefit and other liabilities and provisions
Net increase / (decrease) in unearned revenue
Net cash provided by operating activities
(b) Changes in liabilities arising from financing activities
Lease liabilities
Opening balance at 1 July
Cash flows from principal repayments
New leases
Foreign exchange movement
Closing balance 30 June
Notes
14(a)
14(a)
14(a)
2021
$'000
41,146
(2,022)
13,331
6,705
9,255
241
2020
$'000
(8,771)
(580)
13,727
8,031
2,233
171
(128)
188
3,245
(9,077)
(238)
190
(16,620)
55,105
2021
$'000
9,763
(3,919)
826
(668)
6,002
(1,881)
21,807
20,754
46,602
2020
$'000
11,848
(3,576)
1,335
156
9,763
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.
Financial assets
Cash and cash equivalents
Other receivables
Security bonds
Net investment in sublease
Total financial assets
Financial liabilities
Fulfiller payables
Artist payables
Staff payables
Other payables
Deferred consideration
Lease liabilities
Total financial liabilities
Notes
9
10(b)
11
14
Notes
15
15
15
15
17
14(a)
2021
$'000
98,686
4,602
1,685
-
2020
$'000
58,129
5,236
1,930
994
104,973
66,289
2021
$'000
22,500
12,673
1,602
6,810
-
6,002
49,587
2020
$'000
22,319
9,892
1,781
5,498
1,227
9,763
50,480
The carrying value of the assets and liabilities (excluding lease liabilities) disclosed in the table
equals or closely approximates their fair value. Refer to note 14 for more information on lease
liabilities.
(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 partial natural hedge. Any surplus funds are converted into the required currencies’
operating accounts when management feels it is prudent to do so.
86
87
RedbubbleAnnual Report 2021
Increased sales volumes during the year have led to larger foreign currency cash balances as at
30 June 2021. 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 and
Redbubble Ltd whose functional currency is AUD, are as follows:
Net exposure (asset / (liability) (expressed in $’AUD)
30 June 2021
30 June 2020
GBP
$’000
3,924
4,206
USD
$'000
35,964
(766)
EUR
$'000
4,361
(525)
CAD
$’000
2,809
2,984
Total
$’000
47,058
5,899
The aggregate net foreign exchange gains / (losses) recognised in profit or loss were:
Net foreign exchange loss included in other expenses
2021
$’000
(3,092)
Total net foreign exchange losses recognised in profit / (loss) before income tax for the year
(3,092)
2020
$’000
(1,860)
(1,860)
Foreign Currency Sensitivity
Cash and bank balances / other financial assets
As at 30 June 2021, the Group holds $1.3 million (2020: $13 million) in bank deposits within cash
and cash equivalents and other assets, that attract interest at normal rates.
The Group’s bank accounts are predominantly non-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 2021 represents amounts receivable from these payment service
providers and other non-trade receivable balances. It is believed that the credit risk from collections
from payment service providers is low.
2021
$’000
1,526
3,076
4,602
2020
$’000
4,614
622
5,236
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.
Receivables from payment service providers
Other receivables
Total other receivables (1)
Change in FX rate
+ 10%
- 10%
+ 10%
- 10%
Effect on profit before tax (amounts shown in AUD)
GBP
$’000
392
USD
$'000
3,596
(392)
(3,596)
421
(421)
(77)
77
EUR
$'000
436
(436)
(53)
53
CAD
$’000
281
Total
$’000
4,706
(281)
(4,706)
298
(298)
590
(590)
Year
30 June 2021
30 June 2020
(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.
(1) None of the other receivables 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% (2020: less than 0.1%) of marketplace revenue.
(c) Liquidity risk
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.
All financial liabilities (excluding lease liabilities and deferred consideration in FY20) 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.
88
89
RedbubbleAnnual Report 2021 Maturities of financial liabilities
11. Other assets
Financial liabilities owed by the Group at 30 June 2021 are $50.0 million (2020: $51.5 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 2021
1 to 3 months
3 to 12 months
1 to 3 years
> 3 years
Total
(1) Excludes sales taxes.
Year ended 30 June 2020
1 to 3 months
3 to 12 months
1 to 3 years
> 3 years
Total
(1) Excludes sales taxes.
Trade and other
payables (1)
Lease liabilities
$’000
43,585
-
-
-
43,585
$’000
840
1,751
3,097
745
6,433
Deferred
consideration
$’000
-
-
-
-
-
Trade and other
payables (1)
Lease liabilities
Deferred
consideration
$’000
39,490
-
-
-
$’000
1,169
3,315
3,864
2,458
$’000
-
1,227
-
-
39,490
10,806
1,227
Total
$’000
44,425
1,751
3,097
745
50,018
Total
$’000
40,659
4,542
3,864
2,458
51,523
(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.
Security bonds
Goods in transit (1)
Total other assets
Current
Non-current
2021
$'000
962
3,731
4,693
2020
$'000
309
7,019
7,328
2021
$’000
723
-
723
2020
$’000
1,621
-
1,621
(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.
90
91
RedbubbleAnnual Report 2021 Leasehold
improvements
Furniture and
equipment
$’000
$’000
Computer
equipment
$’000
Cost
Balance at 1 July 2020
Additions
Disposals
Reclassification
Exchange differences
Balance at 30 June 2021
Balance at 1 July 2019
Additions
Disposals
Exchange differences
Balance at 30 June 2020
Accumulated depreciation
Balance at 1 July 2020
Charge for the year
Disposals
Reclassification
Exchange differences
Balance at 30 June 2021
Balance at 1 July 2019
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2020
Net book value
As at 30 June 2021
As at 30 June 2020
3,925
166
-
-
(192)
3,899
3,883
-
-
42
3,925
(2,584)
(464)
-
-
106
(2,942)
(2,017)
(560)
-
(7)
(2,584)
957
1,341
786
135
-
(81)
(43)
797
721
66
(8)
7
786
(494)
(116)
-
19
23
(568)
(356)
(140)
3
(1)
(494)
229
292
Jungle leopard Floor Pillow
designed and sold by
steveswade
Jungle Leopard Family! Premium
T-Shirt designed and sold by
Amber Davenport
Dragon Kids T-Shirt designed
and sold by fishcakes
Total
$’000
7,562
861
(106)
-
(340)
7,977
7,359
476
(347)
74
7,562
(5,333)
(995)
71
-
208
(6,049)
(4,434)
(1,159)
285
(25)
2,851
560
(106)
81
(105)
3,281
2,755
410
(339)
25
2,851
(2,255)
(415)
71
(19)
79
(2,539)
(2,061)
(459)
282
(17)
(2,255)
(5,333)
742
596
1,928
2,229
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
2021 (2020: $nil).
92
93
RedbubbleAnnual Report 2021
13. Intangible Assets
Recognition and measurement
Capitalised development costs
Goodwill
Brand Name
Amortisation
Development expenditure is capitalised when
future economic benefits are probable. The
Group capitalises internal engineering time
spent on development of the Redbubble and
TeePublic marketplace websites. Expenditure
during the research phase of a project is
recognised as an expense when incurred.
All costs for Software as a Service (SaaS) are
expensed.
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).
The brand name asset is measured at cost less
accumulated impairment losses. The brand
name asset is attributable to the TeePublic cash
generating unit (CGU).
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
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.
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 business growth rate in year 1 is based on the next financial year’s budget approved by the
board. Growth in years 2 to 5 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% (2020: 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.
(c) Discount rates
The pre-tax discount rate applied to cash flow projections is 12.5% (2020: 13.9%). 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 2021. 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.
94
95
RedbubbleAnnual Report 2021 Cost
Balance at 1 July 2020
Additions
Disposals
Exchange differences
Balance at 30 June 2021
Balance at 1 July 2019
Additions
Disposals
Exchange differences
Balance at 30 June 2020
Accumulated amortisation
Balance at 1 July 2020
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2021
Balance at 1 July 2019
Charge for the year
Exchange differences
Balance at 30 June 2020
Net book value
As at 30 June 2021
As at 30 June 2020
Brand name
Capitalised
development
costs
$'000
$'000
6,878
-
-
(552)
6,326
6,756
-
-
122
6,878
-
-
-
-
-
-
-
-
-
6,326
6,878
48,791
5,384
(140)
-
54,035
39,692
9,205
(109)
3
48,791
(35,582)
(9,647)
2
-
(45,227)
(25,532)
(10,041)
(9)
(35,582)
8,808
13,209
Goodwill
$'000
51,489
-
-
(4,137)
47,352
50,501
-
-
988
51,489
-
-
-
-
-
-
-
-
-
47,352
51,489
Total
$'000
107,158
5,384
(140)
(4,689)
107,713
96,949
9,205
(109)
1,113
107,158
(35,582)
(9,647)
2
-
(45,227)
(25,532)
(10,041)
(9)
(35,582)
62,486
71,576
No intangible assets have been impaired in the financial year ending 30 June 2021 (2020: nil).
96
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 (2020: 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
Balance at 1 July
Additions
Disposals (1)
Depreciation and amortisation expense
Exchange differences
Balance as at 30 June
(1) The disposal is a result of recognising net investment in sublease in the prior year.
Lease liabilities
Balance at 1 July
Additions
Interest expense
Lease liability repayment
Exchange differences
Balance as at 30 June
Classification of lease liabilities
Current
Non-current
Total lease liabilities
2021
$’000
6,649
953
-
(2,689)
(447)
4,466
2021
$’000
9,763
826
320
(4,239)
(668)
6,002
2021
$’000
2,280
3,722
6,002
2020
$’000
8,378
1,348
(654)
(2,527)
104
6,649
2020
$’000
11,848
1,335
456
(4,032)
156
9,763
2020
$’000
3,944
5,819
9,763
97
RedbubbleAnnual Report 2021
Amounts recognised in the statement of cashflow
Operating – payments of interest
Operating – payments for short term leases (1)
Financing – payments of principal
Total cash (outflow) relating to leases
2021
$’000
(320)
(4)
(3,919)
(4,243)
2020
$’000
(456)
(155)
(3,576)
(4,032)
(1) Includes leases with a lease term of 12 months or less. This amount is also recognised in operations and administration expenses in the
consolidated statement of comprehensive income.
The future cash outflows relating to leases that have not yet commenced are disclosed
in Note 20 (b).
The Group has several lease contracts that include an extension option. 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:
Within five years
More than five years
$’000
2,757
$’000
6,015
Total
$’000
8,772
Extension options not reasonably
certain to be exercised
b) Group as a lessor
The Group sub-let offices in the United States. These subleases had original terms of up to 4 years
and all ended in FY2021. Set out below are the carrying amounts of net investment in sublease and
the movements during the year:
2021
$’000
994
-
17
(871)
(65)
(75)
-
2020
$’000
1,248
500
53
(838)
-
31
994
Net investment in sublease
Balance at 1 July
Additions
Interest income
Net investment in sublease receipts
Other
Exchange differences
Balance as at 30 June
98
Classification of net investment in sublease
Current
Non-current
Total net investment in sublease
Amounts recognised in the statement of cashflow
Operating – receipt of interest
Investing – receipt of principal
Total cash inflow relating to leases
2021
$’000
-
-
-
2021
$’000
17
854
871
2020
$’000
994
-
994
2020
$’000
53
785
838
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:
Undiscounted lease receipts
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.
2021
$’000
-
-
-
-
-
-
-
-
2021
$’000
22,500
12,673
1,602
3,888
6,810
47,473
2020
$’000
1,046
-
-
-
1,046
(22)
(30)
994
2020
$’000
22,319
9,892
1,781
5,546
5,498
45,036
99
RedbubbleAnnual Report 2021 16. Employee benefit liabilities
17. Other 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.
Termination benefits and restructure costs are recorded as a provision when the Group can no
longer withdraw the offer of those benefits.
Current
Non-current
2021
$'000
1,912
283
-
2,195
2020
$'000
2,572
307
2,180
5,059
2021
$’000
-
268
-
268
2020
$’000
-
198
-
198
Annual leave
Long service leave
Termination benefits
Total employee benefit liabilities
100
Deferred consideration payable (1)
Other
Total other liabilities
Current
2021
$'000
-
-
-
2020
$'000
1,227
54
1,281
Non-current
2021
$’000
-
-
-
2020
$’000
-
70
70
(1) The final deferred consideration payment of US $0.7 million (AU $1.0 million) in relation to the TeePublic acquisition was made in June
2021.
18. Contributed equity and reserves
(a) Share capital
Ordinary shares (1)
Issued and fully paid
Total share capital
Consolidated and parent entity
2021
Shares
2020
Shares
273,620,223
263,462,966
273,620,223
263,462,966
2021
$’000
162,552
162,552
2020
$’000
145,438
145,438
(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.
101
RedbubbleAnnual Report 2021 (b) Movements in ordinary share capital and treasury reserve
(c) Dividends
Number of shares
$’000
256,156,543
135,194
4,521,415
465,844
-
7,267,000
(4,795,461)
(152,375)
3,556
-
3,009
10,321
(6,412)
(230)
No dividends were declared or paid during the year (2020: $nil). The Group’s franking account
balance is $nil (2020: $nil).
(d) Nature and purpose of reserves
Share based payments 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.
263,462,966
145,438
Foreign Currency Translation Reserve
Share Capital
Balance at 1 July 2019
Exercise of options
Settlement of restricted stock units (RSUs)
Transferred from share based payments reserve
Shares issued to Employee Share Trust
Shares allocated to participants from the Employee Share Trust
Payment of withholding taxes to US tax authorities (1)
Balance at 30 June 2020
Exercise of options
Settlement of restricted stock units (RSUs)
Transferred from share based payments reserve
Shares issued to Employee Share Trust
Shares allocated to participants from the Employee Share Trust
Other shares issued
Payment of withholding taxes to US tax authorities (1)
Balance at 30 June 2021
12,004,768
1,344,372
-
10,100,000
(12,783,499)
57,257
(565,641)
273,620,223
8,366
-
8,990
44,326
(41,413)
-
(3,155)
162,552
(1) Represents payment of withholding taxes accounted for as a deduction from equity in accordance with AASB 2 Share-based Payments.
Treasury Reserve
Balance at 1 July 2019
Shares issued to Employee Share Trust and held in Treasury Reserve
Shares allocated to participants from the Employee Share Trust
and released from treasury reserve
Balance at 30 June 2020
Shares issued to Employee Share Trust and held in Treasury Reserve
Shares allocated to participants from the Employee Share Trust and released from
treasury reserve
Income tax benefit for contributions to the Employee Share Trust in excess of the
associated cumulative remuneration expense
Transfer of the income tax benefit to accumulated losses for equity rights that were
converted to shares in the current period
Shares held as security for limited recourse loan (2)
Balance at 30 June 2021
Number of shares
(1,394,118)
(7,267,000)
4,795,461
(3,865,657)
(10,100,000)
12,783,499
-
-
(289,161)
(1,471,319)
$’000
(1,394)
(10,321)
6,412
(5,303)
(44,326)
41,413
9,900
(7,435)
(1,600)
(7,351)
(2) Represents limited recourse loan provided to the CEO to purchase Redbubble shares on-market. Refer to Note 23(b) for further details.
102
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. FY2021 also includes
limited recourse loan provided to the Redbubble Group CEO to purchase Redbubble shares on-
market. Refer to Note 23(b) for further details. The tax effect of tax deductions for contributions to
the Employee Share Trust in excess of the associated cumulative remuneration expense is recorded
directly in equity and forms part of the treasury shares reserve. Amounts are transferred out of this
reserve and into accumulated losses when the relevant equity rights are converted into shares.
19. Interests in subsidiaries
Information about subsidiaries
The consolidated financial statements of the Group include:
Name of entity
Country of incorporation
Principal activities
Redbubble Incorporated
USA
Redbubble Europe Limited UK
Redbubble Europe GmbH
Germany
TP Apparel LLC
USA
Provider of global sales, marketing and
distribution services in respect of the
Redbubble marketplace
Marketing and distribution services in
Europe
Marketing and distribution services in
Europe
Provider of global sales, marketing and
distribution services in respect of the
TeePublic marketplace
Equity
holding
Equity
holding
2021
2020
%
100
%
100
100
100
100
100
100
100
103
RedbubbleAnnual Report 2021 20. Parent entity financial information
(d) Contingent liabilities of the parent entity
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) 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
Profit / (loss) and other comprehensive income
Profit / (loss) for the year
Total comprehensive profit / (loss)
b) Commitments
2021
$’000
98,041
10,465
108,506
6,122
364
6,486
162,559
11,414
(7,351)
(64,602)
102,020
23,301
23,301
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)
(7,686)
The parent entity has signed a new lease agreement for new Melbourne office premises that has
not yet commenced as at 30 June 2021. The future undiscounted lease payments for the lease
contract are $0.9m (2020: $nil) within one year and $5.4m (2020: $nil) within five years.
At 30 June 2021, the parent entity had capital commitments of $3.4m (2020: $nil) relating to fit-out
works for its new Melbourne office. These commitments have not been recognised as liabilities as
the relevant asset has not yet been received. The Group will also receive a $2.3m lease incentive
for the fit-out works.
(c) Guarantees entered into by the parent entity
During the year the parent entity obtained a bank guarantee as security amounting to $0.9m
(2020: $nil) in respect of a lease agreement signed for its new Melbourne office. No liability is
expected to arise.
Although the Group is strictly a service provider that does not sell or manufacture the products sold
on the Redbubble and TeePublic marketplaces, it periodically receives notices alleging infringement
of third party copyright, trade marks, other intellectual property rights or publicity rights via the
marketplaces or for breach of consumer protection laws. This is not uncommon for marketplaces
that host user generated content. 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
(or inflow from insurance recoveries) 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.
21. Commitments and contingencies
(a) Commitments
Other than the commitments mentioned in note 20(b), the Group had no other commitments as at
30 June 2021 (2020: $nil).
(b) Contingent liabilities/assets
Legal claim contingencies
Although the Group is strictly a service provider that does not sell or manufacture the products sold
on the Redbubble and TeePublic marketplaces, it periodically receives notices alleging infringement
of third party copyright, trade marks, other intellectual property rights or publicity rights via the
marketplaces or for breach of consumer protection laws. This is not uncommon for marketplaces
that host user generated content. 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 (or inflow from insurance recoveries) 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.
(c) Guarantees
Other than the guarantees mentioned in note 20(c), the Group did not obtain any other guarantees
as at 30 June 2021 (2020: $nil).
104
105
RedbubbleAnnual Report 2021 22. Share-based payments
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.
Limited recourse loans for the purchase of shares
The granting of limited recourse loans to purchase Redbubble shares is considered to be an
in-substance option grant in accordance with AASB 2 Share Based Payment. An option pricing
model is used to determine the fair value of the in-substance option and expensed in the financial
statements over the service period. During the year a limited recourse loan has been provided to
the Chief Executive Officer (CEO). The CEO does not have a beneficial interest in the shares until
the loan is repaid. The repayment of the loan principal plus accrued interest represents the exercise
of the option, and returning the shares as settlement of the loan is the expiry of an unexercised
option. Further details on the loan are provided in Note 23(b).
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 (SARs)
Share appreciation rights have been granted to the Chief Executive Officer and the Executive team.
Refer to the Remuneration Report for further details.
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.
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 employees (including senior executives under the RB Group Executive
Compensation Model (RECM)) and contractors. In FY21, board members are no longer granted
equity. Board fees are now paid entirely in cash.
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.
106
107
RedbubbleAnnual Report 2021 (a) Movement
(b) Modifications to the awards
The table below summarises the movement in the number of options, restricted stock units and
share appreciation rights during the year:
The table below details modifications to a number of options / restricted stock units (RSUs) during
the year.
2021
2021
Number
WAEP ($) (1)
2020
Number
2020
WAEP ($) (1)
2021
2020
Number
Number
Options over ordinary shares
Outstanding at 1 July
Granted during the year (2)
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
Restricted stock units
Outstanding at 1 July
Granted during the year
Settled during the year
Forfeited during the year
Outstanding at 30 June
Share appreciation rights (SARs) (3)
Outstanding at 1 July
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at 30 June
Exercisable at 30 June
18,510,058
867,545
(10,405,267)
(2,188,371)
(11,969)
6,771,996
3,401,054
2,200,400
942,592
(1,344,372)
(333,567)
1,465,053
7,276,161
985,378
(2,215,514)
(1,522,327)
4,523,698
1,983,114
0.85
-
0.80
0.64
0.93
0.90
0.87
-
-
-
-
-
-
-
-
-
-
-
23,376,683
2,921,778
(4,521,415)
(2,788,674)
(478,314)
18,510,058
9,510,335
727,766
2,110,590
(465,844)
(172,112)
2,200,400
5,666,668
6,029,146
-
(4,419,653)
7,276,161
-
0.76
0.04
0.77
0.83
1.28
0.85
0.81
-
-
-
-
-
-
-
-
-
-
-
Accelerated vesting of unvested options / RSUs over ordinary shares upon termination
459,214
154,082
Total
459,214
154,082
(c) Additional disclosures
Weighted average fair value of
Share at the date of exercise of options / settlement of restricted stock units during the year
Share options granted during the year
Share appreciation rights granted during the year
Restricted stock units granted during the year
Weighted average remaining contractual life of
Share options outstanding at the end of the year
Inputs to pricing models for options and SARs granted during the year (weighted average)
Expected volatility (%) (1)
Risk-free interest rate (%)
Expected life (years)
Expected dividend yield (%)
Fair market value of share ($) (2)
2021
$
4.23
4.27
2.21
4.34
2020
$
1.63
0.45
0.42
1.58
2021
2020
(years)
(years)
7.07
7.29
2021
69.94
0.67
4.72
-
4.32
2020
68.41
0.41
4.29
-
1.42
(1) WAEP stands for Weighted Average Exercise Price.
(2) 867,545 options granted during the year have a zero exercise price (2020: 2,846,778). The expiry period for options and RSU grants
made during the current and prior year is 10 years.
(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 (2020: $nil to $1.62).
(3) SARs do not have an exercise price, however they do have a base share price from which any share appreciation is measured.
(2) The fair market value of a share has been calculated using the close price on grant date.
108
109
RedbubbleAnnual Report 2021
23. Related party transactions
24. Remuneration of auditors
(a) 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
Total transactions with key management personnel
2021
$
2020
$
1,759,054
1,412,539
105,186
77,658
761,591
822,393
2,139
(21,984)
-
316,976
2,627,970
2,607,582
(b) Transactions with key management personnel
Limited recourse loan
On 10 February 2021, Redbubble Limited and Mr Ilczynski, CEO, entered into a limited recourse loan
arrangement with a loan amount of $1,600,000. Mr Ilczynski used the loan amount plus $400,000
of his own funds to purchase Redbubble Limited shares on-market in the trading window that
followed release of Redbubble’s half-year 2021 results and Appendix 4D. This transaction was
completed on 4 March 2021, with an average share price of $5.53. The loan amount plus interest
equal to the RBA cash rate plus 3% (compounding annually) is to be repaid 5 years from date
of loan, or on cessation of employment if earlier. The purchased shares are subject to dealing
restrictions, including a prohibition on granting security interests, which fall away upon the loan
being repaid in full. The security for the loan is limited to the shares acquired with the loan amount.
The loan is recognised as an option grant under AASB 2 Share Based Payment and as a result this
loan is not recognised in the consolidated statement of financial position.
(c) Transactions with related parties
There were no other related party transactions in the current and prior year.
Ernst & Young (Australia)
Audit fees:
2021
$
2020
$
Fees for auditing the statutory financial report of the parent covering the group and auditing
the statutory financial reports of any controlled entities
285,890
280,144
Fees for other services:
Assistance in developing the Group’s inaugural ESG strategy
Taxation services
Remuneration of Ernst & Young
30,370
-
43,630
39,400
359,890
319,544
25. 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:
2021
2020
Revenue Non-current assets (1)
Revenue
Non-current assets (1)
$’000
37,715
443,682
73,476
102,450
657,323
$’000
7,939
60,475
-
466
68,880
$’000
22,624
287,810
43,299
62,524
416,257
$’000
14,708
66,564
-
176
81,448
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
sublease.
26. Events occurring after the balance sheet date
The financial report was authorised for issue on 19 August 2021 by the Board of Directors. Other
than the above, there have been no further significant events after the balance sheet date that
require disclosure.
110
111
RedbubbleAnnual Report 2021 27. 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 19 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.
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.
(c) Foreign currency transactions
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.
112
113
RedbubbleAnnual Report 2021 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
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.
(h) 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.
Finance income is recognised on an accruals basis using the effective interest method.
(i) Leases
(e) 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 applies a simplified approach in calculating Expected Credit Losses (ECLs) in trade
receivables. Therefore, the Group does not track changes in credit risk, but instead recognises
a loss allowance based on lifetime ECLs at each reporting date, where appropriate, based on
historical credit loss experience and adjusted for forward-looking factors specific to the receivables
and the economic environment.
(f) 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.
(g) 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
Set out below are the 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.
114
115
RedbubbleAnnual Report 2021 Significant judgement in estimating the incremental borrowing rate
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.
(j) Accounting standards issued but not yet effective
A number of new accounting standards, amendments to standards and interpretations, have
also been issued and will be applicable in future periods. While these remain subject to ongoing
assessment, no significant impacts on the financial statements of the Group have been identified to
date. These standards have not been applied in the preparation of these Financial Statements.
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 derecognises
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.
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.
116
117
RedbubbleAnnual Report 2021 Directors’ Declaration
In accordance with a resolution of the Directors of Redbubble Limited, we state that in the Directors’
opinion:
Report on the Audit of the Financial Report
Report on the Audit of the Financial Report
Independent Auditor's Report to the Members of Redbubble Limited
Independent Auditor's Report to the Members of Redbubble Limited
Ernst & Young
Ernst & Young
8 Exhibition Street
8 Exhibition Street
Melbourne VIC 3000 Australia
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
Fax: +61 3 8650 7777
ey.com/au
ey.com/au
(a) the financial statements and notes, as set out on pages 71 to 117 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
2021 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.
Jennifer Macdonald
Audit and Risk Committee Chair
Melbourne
19 August 2021
Anne Ward
Board Chair
Melbourne
19 August 2021
118
Opinion
Opinion
We have audited the financial report of Redbubble Limited (the Company) and its subsidiaries
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
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2021, the consolidated statement of comprehensive income, consolidated statement of changes
June 2021, 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
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.
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
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
Act 2001, including:
a)
a)
b)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2021 and of its consolidated financial performance for the year ended on that date; and
2021 and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
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
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
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
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
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
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
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
for our opinion.
Key Audit Matters
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
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 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
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
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
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
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
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
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
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
accompanying financial report.
A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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119
Redbubble
Capitalised development
Why significant
As disclosed in Note 13 to the financial statements,
development costs associated with development and
engineering activities of website and mobile
applications are capitalised as intangible asset. The
carrying value of capitalised development in the
consolidated statement of financial position at 30
June 2021 was $8.8m.
The accounting for capitalised development involves
judgment, including considering technical and
commercial 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
a)
development costs. In addition, determining whether
there is any indication of impairment of the carrying
value of assets requires judgment in making
b)
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 and economic 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
fulfillers whereby fulfillers 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.
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
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
Independent Auditor's Report to the Members of Redbubble Limited
Information Other than the Financial Report and Auditor’s Report Thereon
How our audit addressed the key audit matter
Report on the Audit of the Financial Report
Our audit procedures included the following:
Opinion
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
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 2021, 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.
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
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
development cost rollforward;
appropriate;
assessing whether the amortisation rates used are
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2021 and of its consolidated financial performance for the year ended on that date; and
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 and reviewing project plan approvals and
reporting;
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
impairment; and
considering whether there were any indicators of
evaluation of the disclosures in Note 13 of the financial
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.
How our audit addressed the key audit matter
report.
Our audit procedures included the following:
The directors are responsible for the other information. The other information comprises the
Report on the Audit of the Financial Report
information included in the Company’s 2021 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
Opinion
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.
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
Our opinion on the financial report does not cover the other information and we do not and will not
June 2021, the consolidated statement of comprehensive income, consolidated statement of changes
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
in equity and consolidated statement of cash flows for the year then ended, notes to the financial
and our related assurance opinion.
statements, including a summary of significant accounting policies, and the directors' declaration.
In connection with our audit of the financial report, our responsibility is to read the other information
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
and, in doing so, consider whether the other information is materially inconsistent with the financial
Act 2001, including:
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
If, based on the work we have performed on the other information obtained prior to the date of this
giving a true and fair view of the consolidated financial position of the Group as at 30 June
a)
auditor’s report, we conclude that there is a material misstatement of this other information, we are
2021 and of its consolidated financial performance for the year ended on that date; and
required to report that fact. We have nothing to report in this regard.
b)
Responsibilities of the Directors for the Financial Report
Basis for Opinion
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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
and for such internal control as the directors determine is necessary to enable the preparation of the
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
financial report that gives a true and fair view and is free from material misstatement, whether due to
Report section of our report. We are independent of the Group in accordance with the auditor
fraud or error.
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
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
the Code.
operations, or have no realistic alternative but to do so.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
testing the operating effectiveness of controls over the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
Auditor's Responsibilities for the Audit of the Financial Report
for our opinion.
capture, timing of revenue recognition and
measurement of revenue transactions;
Key Audit Matters
for a sample of revenue transactions, testing whether
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.
the revenue was recorded in the appropriate period and
whether management’s estimate of sale transactions not
delivered to the customer at 30 June 2021 were
appropriately included as unearned revenue and Goods
in Transit for items shipped but not yet delivered, as at
that date;
test the assumptions used in management’s estimate
based on the average delivery days between payment,
shipment and delivery;
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.
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.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
Key Audit Matters
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
Key audit matters are those matters that, in our professional judgment, were of most significance in
audit conducted in accordance with the Australian Auditing Standards will always detect a material
our audit of the financial report of the current year. These matters were addressed in the context of
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
if, individually or in the aggregate, they could reasonably be expected to influence the economic
a separate opinion on these matters. For each matter below, our description of how our audit
decisions of users taken on the basis of this financial report.
addressed the matter is provided in that context.
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:
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
•
Identify and assess the risks of material misstatement of the financial report, whether due to
included the performance of procedures designed to respond to our assessment of the risks of
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
material misstatement of the financial report. The results of our audit procedures, including the
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
procedures performed to address the matters below, provide the basis for our audit opinion on the
detecting a material misstatement resulting from fraud is higher than for one resulting from
accompanying financial report.
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
120
A member firm of Ernst & Young Global Limited
Liability limited by 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
A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Liability limited by a scheme approved under Professional Standards Legislation
121
•
•
•
•
•
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
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
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.
Report on the Audit of the Financial Report
Independent Auditor's Report to the Members of Redbubble Limited
Independent Auditor's Report to the Members of Redbubble Limited
Report on the Audit of the Remuneration Report
Report on the Audit of the Financial Report
Opinion on the Remuneration Report
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Opinion
We have audited the Remuneration Report included in pages 23 to 43 of the directors' report for the
Opinion
year ended 30 June 2021.
44 to 70
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.
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 2021, 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:
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.
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2021 and of its consolidated financial performance for the year ended on that date; and
a)
We have audited the financial report of Redbubble Limited (the Company) and its subsidiaries
In our opinion, the Remuneration Report of Redbubble Limited for the year ended 30 June 2021,
(collectively the Group), which comprises the consolidated statement of financial position as at 30
complies with section 300A of the Corporations Act 2001.
June 2021, 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
Responsibilities
statements, including a summary of significant accounting policies, and the directors' declaration.
The directors of the Company are responsible for the preparation and presentation of the
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
Act 2001, including:
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2021 and of its consolidated financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
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.
Basis for Opinion
b)
Ernst & Young
Basis for 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 conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
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
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
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
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Ashley Butler
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Partner
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
We also provide the directors with a statement that we have complied with relevant ethical
Melbourne
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
requirements regarding independence, and to communicate with them all relationships and other
19 August 2021
the Code.
the Code.
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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.
Key Audit Matters
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.
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.
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.
122
A member firm of Ernst & Young Global Limited
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Liability limited by a scheme approved under Professional Standards Legislation
123
Shareholder and other
ASX Required Information
The shareholder information set out below was applicable as at 10 September 2021
(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
Shares
% of Issued Capital
83
343
434
2,252
5,458
8,570
253,580,156
9,222,816
3,210,934
5,526,649
2,079,668
273,620,223
92.68
3.37
1.17
2.02
0.76
100
There were 945 holders of less than a marketable parcel of ordinary shares.
124
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:
Rank Name
Number of ordinary shares
% of Issued Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
JELLICOM PTY LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
CITICORP NOMINEES PTY LIMITED
BLACKBIRD FOF PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
PITON CAPITAL VENTURE FUND II LP
CBC CO PTY LIMITED
RADIATA INVESTMENTS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
DENALI VENTURE PARTNERS FUND 1 LP
OSBORNE TAS PTY LTD
CS THIRD NOMINEES PTY LIMITED
PAUL VANZELLA
20
RADIATA SUPER PTY LTD
Top 20 holders of Ordinary Fully Paid Shares (TOTAL)
Total Remaining Holders Balance
Grand Totals
76,547,084
24,466,374
19,143,172
16,527,488
16,383,373
12,407,901
11,361,819
8,384,937
6,407,195
5,537,291
4,404,907
3,914,640
3,886,820
2,531,416
1,996,717
1,840,240
1,836,968
1,751,503
1,661,500
1,600,568
222,591,913
51,028,310
273,620,223
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
27.98
8.94
7.00
6.04
5.99
4.53
4.15
3.06
2.34
2.02
1.61
1.43
1.42
0.93
0.73
0.67
0.67
0.64
0.61
0.58
81.35
18.65
100
Number held
6,261,331
4,552,861
1,247,734
12,061,926
125
RedbubbleAnnual Report 2021 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.
Corporate Information
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:
Directors
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
E. Substantial Holders
Substantial holders in the Company are set out below:
Name
Number held
% of Issued Capital
Kayne Anderson Rudnick Investment Management
Mr Martin Hosking
Osmium Partners
29,174,143
26,403,272
13,814,925
10.66%
9.65%
5.05%
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:
● 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
H. Other ASX Required Information
There is no current on-market buy-back of shares.
126
Anne Ward (Chair, Non-Executive Director)
Martin Hosking (Non-Executive Director)
Ben Heap (Non-Executive Director)
Jennifer (Jenny) Macdonald (Non-Executive Director)
Greg Lockwood (Non-Executive Director)
Chief Executive Officer
Michael Ilczynski
Company Secretaries
Registered Office
Share Register
Auditors
Corina Davis (US)
Martin Bede (Australia)
Level 3, 271 Collins Street
Melbourne VIC 3000
Australia
Link Market Services
Tower 4, 727 Collins Street
Melbourne VIC 3008
Australia
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000
Australia
Bankers
Citibank, N.A.
Stock Exchange Listing
Redbubble shares are listed in the Australian Securities
Exchange (ASX listing code: RBL)
Redbubble has a Level 1 American Depository Receipt (ADR)
facility trading in the Over-The-Counter (OTC) market in the
United States and is managed by The Bank of New York Mellon
(ADR Code: RDBBY)
Website
Redbubble.com and TeePublic.com
Investor Centre
Shareholders.redbubble.com
127
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