Where
creativity
meets
commerce
Annual Report
2022
Contents
06 FY2022 Snapshot
30 Values and Ethics
08 Chairman’s Message
31 Risk Management
10 CEO’s Review
32 Directors Report
16 Operating Environment
16 Outcomes
18 Company Overview
20
Environment, Social and
Governance
39
Auditor’s Independence
Declaration
40 Remuneration Report (audited)
57 Financial Report
90 Directors Declaration
24 Board of Directors
91
Independent Auditors Report
28 Executive Leadership Team
96 Shareholder Information
Across the Redbubble Group,
we are proud of our purpose
to create and inspire new ways
of experiencing connection
and a sense of belonging
for every person.
Our vision is to be the most
loved place at the intersection
of expression, empowerment,
and commerce – bringing
every person the very thing
that gives them joy.
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 12, 697 Collins Street Docklands VIC 3008 Australia. 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
Redbubble – Annual Report 2022
01
Rosie Sayers
Featured artist
For as long as I can remember, I have
always been making and creating things.
Finding and testing out different mediums.
My mother and grandmother are both
full time artists, so they have always
encouraged me to create since I was
very young. However, I found collage
as a medium when studying my Bachelor
of Graphic Design in 2014.
I find my inspiration in my dreams, the
places my mind visits when I’m asleep.
I also find inspiration from photographs
found in vintage magazines in op shops.
Sometimes I build an entire collage based
around a single image that inspires me.
My work is a psychedelic exploration
of colour and textures with a soft
and feminine colour palette. My art
varies in subject matter and themes.
However my most popular works of my
otherworldly landscapes, aim to transport
the viewer to a realm of their dreams or
another dimension.
I have sold my artwork exclusively on
Redbubble since 2017 because Redbubble
takes the stress out of owning a shop
for me. It saves me hours of time and
money as I don’t have to pack and ship
orders myself, or pre order stock. The
marketplace is easy to navigate for
sellers and buyers and the quality and
range of the products is outstanding.
02
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03
Redbubble Group’s marketplaces enable
artists such as Rosie to quickly upload an
artwork to their marketplace of choice.
Consumers are then able to find that
unique piece of art and purchase it on
up to 107 products, ranging from t-shirts
and caps to wall art, phone cases and
the new range of pet products.
Once purchased, the product is printed
and shipped directly to the customer.
The reach of the global fulfillment network
that services the marketplaces means
that in most cases the product purchased
is fulfilled in the same geographic region
as the customer.
04
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05
FY2022 Snapshot
Gross Transaction Value
Marketplace Revenue
Artist Revenue
Third party fulfiller locations
$630m
$483m
$91m
22
USA
6
UK
9
EU
4
3
Australia
Canada
Gross Profit
EBITDA
Cash Balance
Group Employees
$183m
($11m)
$89m
Selling artists
Unique customers
Active Members
809k
8.3m
14.4m
Fulfiller locations
Sales on mobile devices
44
60%
Marketplace Revenue from
repeat purchases
46%
149
Australia
169
USA
31
EU
2
3
4
Redbubble Group Offices
1 Melbourne
2 San Francisco
3 New York
4 Berlin
Europe and United Kingdom
23%
Marketplace revenue
1
North America
Australia and New Zealand
69%
7%
Marketplace revenue
Marketplace revenue
06
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07
Chairman’s Message
On behalf of the Redbubble Board of
Directors, I am pleased to present the
2022 Annual Report.
After a year of record financial results
in FY2021, the past year has been a
year of consolidation for the Redbubble
Group during which we have undertaken
important measures to provide a solid
foundation for the next step up in the
business while still achieving sound
financial and operating results.
As I noted in last year’s report, the
pandemic had a profound impact on
consumer behaviour and accelerated
the shift to online e-commerce
platforms. However, while there were
clear indicators that this shift would be
enduring, the extent to which the shift
would be ongoing was less clear.
we see as critically important to securing
the next phase of future growth.
I am pleased to report that in FY2022
our business retained many of
the customers introduced to our
marketplaces during the pandemic.
This is reflected in our financial results
for the year and other metrics such as
volume of packages shipped, repeat
purchasers and number of artists.
Our business is now substantially
larger than pre-COVID and this step-
up is consistent with historical growth
patterns which have often not been
linear. The past year has been
a period of consolidating gains and
building resilience in the business which
The investment in our marketplace and
staff over the past year, together with
a stable and talented executive team
and Board means the Group is well
positioned to achieve our medium-term
growth aspirations.
Notwithstanding these positive indicators
for the Group, it is clear that there has
been a cyclical shift in sentiment away
from the broader technology sector, in
part due to the reduction in the rapid
growth experienced by the sector during
the first two years of the pandemic.
This change in sentiment has affected
Redbubble also.
“ At its heart Redbubble is a company
with a purpose beyond financial results
and our purpose of bringing more
creativity into the world remains
central to everything we do.”
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
your continued support as we realise our
ambition of creating the world’s largest
marketplace for independent artists
Anne Ward
Chairman
This has not distracted the Board or
the management team from our roles
and we continue to actively investigate
value enhancing options on behalf of all
stakeholders. Our priority for FY2023
remains to invest organically, recognising
that inorganic opportunities that could
assist in the acceleration of shareholder
value will also be considered.
At its heart Redbubble is a company
with a purpose beyond financial results
and our purpose of bringing more
creativity into the world remains central
to everything we do. As the world
continued to endure COVID outbreaks
with health impacts and intermittent
lockdowns, our staff continued to show
extraordinary care for each other and
the artist community and consumers
that the marketplaces service.
Given the strong commitment to
purpose, it was no surprise that our
management and staff wanted to take
action to assist the victims of the tragic
events in Ukraine in 2022 and almost
immediately arrangements were made
to donate Redbubble’s profits on it’s
service fees from sales of products
by over 16,000 artists supportive of
Ukraine. This showed the ability to
respond quickly to an important world
event and harness the marketplace
for good when needed with $170,000
being donated by Redbubble to charities
supporting victims of the conflict.
In last year’s annual report, we provided
information in relation to the Group’s
approach to environmental, social and
governance (ESG) issues. While a small
environmental footprint is an intrinsic
element of our business model, we
thought it important for the Group to
more clearly integrate ESG into our
strategy and decision making in the
future. This year we provide some
further detail in this report in relation
to our approach to ESG and the metrics
we consider important to measuring our
progress. We look forward to publishing
our inaugural Sustainability Report
ahead of our Annual General Meeting
in October 2022.
As part of ongoing Board renewal, in
the latter part of FY2022, the Board
commenced a process for selection and
appointment of an additional director
with experience in scaling e-commerce
marketplaces and brand building. It is
expected that this additional director will
be appointed before the end of 2022.
In closing, I would like to thank the
talented artists who choose Redbubble
to bring more creativity into the world,
our network of third party fulfillers and
content licensing partners and the
customers who continue to use our
marketplaces in increasing numbers.
Thank you also to my fellow Directors,
Michael and the Executive Leadership
Team and the many committed
08
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09
CEO’s Review
I am delighted to be presenting my
second annual review as CEO of
Redbubble Limited.
The Redbubble and TeePublic businesses
are unique 3-sided marketplaces
operating at a remarkable level of scale.
The marketplaces produce a genuine
“flywheel” effect, where improvements
to one side generates value to the
other two. The marketplaces start
with the Artists, their content and the
products they choose to sell. Tens
of millions of Artists’ designs create
billions of Individual Product Listings
on our marketplaces, attracting millions
of customers. As customers make
purchases, this creates fulfilment
efficiencies, lowering costs and attracting
more customers. More customers
incentivises Artists to add even more
designs, and the flywheel starts over.
As you will be aware, the COVID-19
pandemic continued to challenge us all in
FY2022. However, the easing of COVID
restrictions meant that our employees
were able to return to our offices enabling
greater in person communication on a
regular basis. In March, I was pleased to
be able to travel and meet our US-based
executives and other staff in person for
the first time. I came away from those
meetings even more impressed by the
skill and resilience of our team and their
commitment to the Redbubble purpose.
The easing of COVID restrictions meant
that the Board was able to meet in
person with the full Executive team
in Melbourne in May. This was a very
valuable session that helped to further
align the Board and executive team on
our vision and strategy.
During the year, the macro environment in
which our marketplaces operate was one
of uncertainty and volatility exacerbated
by supply chain disruptions, increased
inflationary pressures impacting
consumer spending and exogenous
shocks such as the war in Ukraine.
Notwithstanding the operating
environmental challenges, the Group
delivered financial results largely in line
with expectations, demonstrating that
the business has continued to operate at
a much larger scale than pre COVID-19.
In summary, at the Group level, Gross
Transaction Value across the marketplaces
was $630 million for the year, down 10%
year on year and 12% on a constant
currency basis, Marketplace Revenue was
$483 million, down 13% year on year and
14% on a constant currency basis and
NPAT was ($25 million) compared to
$31 million in FY2021.
We are particularly proud that Artist
revenue of $91 million was earned by
a record high 809,000 selling artists
across the two marketplaces,
demonstrating the significant impact
the Group is deliving for the community
of creative Artists who use our platforms
to design and sell products and connect
with their customers.
It should be noted that the Group’s
year on year growth rates were materially
impacted by the $55 million of mask
sales that occurred in FY2021. Mask
sales in FY2022 were $10 million. On
an underlying basis (excluding both
mask sales and statutory delivery date
adjustments to revenue), underlying
Marketplace Revenue for FY2022
was down 2.6% from the prior year.
Viewed across the longer term,
Marketplace Revenue has grown at
38% since FY2020.
In FY2022, the Group continued its
focus on 4 key strategic themes and
2 key enablers:
1. Artist acquisition and engagement
2. User acquisition and transaction
optimisation
3. Customer understanding, loyalty and
brand building
4. Product range and third party
fulfilment network
5. Business enablement
6. Risk mitigation
This reflects our disciplined approach to
investing to drive sustainable growth for
the medium and long term.
During the year, we invested significantly
in additional people to boost our internal
capacity and capability. Our employee
base is geographically distributed
(Primarily San Francisco, Melbourne,
New York and Berlin) and subject to
talent markets within those geographies.
Ongoing COVID-19 impacts have resulted
in talent pools being constrained and
competition for individuals has been
high. This has meant a slower build up of
capacity than initially forecast, however
we enter FY2023 with a large proportion
of hiring complete. In FY2022, we have
hired more than 100 new staff and
contractors into the Redbubble business
which has significantly boosted our
capacity, particularly within the product
and engineering teams. This is especially
important as these teams are focused
on improving our technical foundations.
A key strategic priority for the Group
was to ensure we extended the market
leadership we had established through
the significant increase in both artists
and customers in FY2021. To this end,
the Group invested substantially in both
the artist and customer experiences
to improve loyalty and retention and
to ensure long-term growth.
I am pleased to report that in FY2022
artist uploads continued to grow from
the prior year baseline. In addition,
customers who made their first
transaction during FY2020 or FY2021
have demonstrated the same repeat
behaviour as cohorts that made their
first transaction in FY2019.
This was reflected in strong overall
customer retention across both
marketplaces in FY2022 with
46% of Marketplace Revenue from
repeat purchases.
Investments into the physical product
experience continued, with caps, desk
mats and mouse pads added to the
Redbubble marketplace. In addition,
Redbubble introduced a Pets category
in May 2022, the first new category
launched in over 6 years. This is an
important step, as new physical products
open up new customer segments for
artists as well as provide additional
annuity income streams for artists
over time.
The third party fulfilment network
continued to perform strongly even with
the headwinds of continued COVID-19
restrictions, sourcing constraints and
inflationary pressures. Both marketplaces
were able to extend last order by delivery
dates in the 2021 holiday season by
4-6 days, and work with the third party
fulfillment network to reduce production
(order to ship) times.
Given the uncertain macroeconomic
environment, it is important to have a
sound balance sheet that is capable of
both weathering near term headwinds
and taking advantage of opportunities
as they arise. The Group held $89 million
in cash as at 30 June 2022, and has no
debt on the balance sheet. A portion of
these cash reserves are being used to
fund our internal investments, with the
remaining cash balance both providing
a working capital buffer and important
operational flexibility.
Overall, the Group’s outcomes
demonstrate continued resilience across
all three sides of the marketplaces.
Longer term shareholders will recall
that in April 2021, I shared our medium-
term aspirations. We remain committed
to these aspirations that represent a
step-change in business scale and artist
impact through growth of our key 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. I look forward to reporting on
progress in the coming years.
I would like to close by thanking the staff
at Redbubble and TeePublic for their
commitment and dedication and Anne
and the Board for their ongoing support.
Michael Ilczynski
Chief Executive Officer
10
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11
Redbubble – Annual Report 2022 Steve Leadbeater
Featured artist
I’ve exhibited my work since the early
1990s, but I’ve been drawing my whole
life. It’s what kept me out of trouble while
growing up in the suburbs.
My style is something that I’m forever
trying to break and recreate, but others
have described my work as art brut,
outsider art and neo-expressionist.
For me, the work is not complete until
it has been viewed by other people.
I draw inspiration from my suburban life of
contrasts and also from a broad spectrum
of cultural and artistic influences from
Bacon, Warhol and Basquiat to Patti Smith
and the Clash.
I’ve been selling my work on the
Redbubble marketplace since its early
days in 2008. The supportive community
of independent artists really gives me a
sense of comradery. The marketplace also
provides the opportunity to reach a wider
audience and not have to worry about
production or delivery.
12
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13
Steve is one of over 800,000 artists who
sold products through the marketplaces in
FY2022. Artists have earned almost $200
million in the past 2 years through the
marketplaces and it is our aspiration to
grow this to $250 million per year over
the medium term.
14
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15
Overview
Operating Environment
The macro environment in which
our marketplaces operate has been
characterised by high levels of
uncertainty and volatility. Redbubble
is truly global in nature, with 69% of
marketplace revenue coming from North
America, 23% from Europe and 7% from
Australia and New Zealand. Whilst this
provides strong resilience and diversity,
it does mean that events occurring in
other regions have more of an impact
upon strategy and performance than
local events here in Australia.
Artists on Redbubble design and sell
products printed with their artwork
to individual consumers, and these
consumers have not only had to adapt
to the ongoing nature of COVID-19,
they have also been impacted by
other events. In particular, the Ukraine
conflict, supply chain disruptions and
more recently, a sustained increase in
non discretionary costs. These events
are resulting in material and sometimes
unpredictable changes in current
consumer spending patterns.
Outcomes
In FY2022, the business has continued to operate
at a much larger scale than pre COVID-19.
Redbubble’s FY2022 financial metrics are:
• Gross Transaction Value (GTV) of $630 million
• Marketplace Revenue of $483 million
• Gross Profit of $183 million
• An EBITDA loss of $11 million
• An EBIT loss of $22 million
• A net loss after tax (NPAT) of $25 million
• An operating cash inflow of $3 million
• A closing cash balance as at 30 June 2022 of $89 million
Gross Transaction Value (GTV) of
$630 million
down 10% (12% on a constant currency basis)
Marketplace Revenue of
$483 million
down 13% (14% on a constant currency basis)
16
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17
Company OverviewGovernanceFinancial ReportAdditional InformationRedbubble – Annual Report 2022 Company Overview
Business Model
Redbubble Group operates two
digital marketplaces – Redbubble
and TeePublic.
Marketplaces are especially difficult to
create as without buyers there are no
sellers and without sellers no buyers, but
once established they have considerable
resilience. They typically also have a
second inflection point as the offering
is accepted by more mainstream
consumers with even more rapid uptake
by the sellers. The Group is now moving
through this point as in the last year:
• we had 809,000 selling artists;
• they earned a total of $91 million;
• they attracted 8.3 million customers;
• who bought $630 million from these
artists; and
• with the products created from 44
fulfilment locations all over the world.
Redbubble operates a unique three-
sided marketplace with genuine flywheel
effects where improving one side
creates a positive reinforcing impact
on the other side.
It is a flywheel because the greater
number of artists in the marketplace,
the higher the volume of relevant
content which creates more reasons for
customers to come to the marketplace.
More customers enables the fulfilment
network to scale, lowering costs and
improving services, thus attracting
additional customers. With more
customers, comes more artist revenue,
encouraging new artists to the platform
adding more content and the cycle
continues.
The RB Group Flywheel
The third arm of the marketplace is
the fulfilment network. It is this network
which enables an artist in South Africa
to sell wall art to someone in Italy. The
network has taken over a decade to
build and is without parallel in any other
marketplace. With 44 fulfiller locations at
30 June 2022, the majority of products
sold are fulfilled by a third party fulfiller
local to the same geographic region as
the customer who bought them.
There are 107 products available
in the marketplaces and 7 new products
that were added last year.
Our Strategy
The Group’s mission is to create the world’s largest marketplace for independent artists, to enable our vision of being the most loved
place at the intersection of expression, empowerment, and commerce - bringing every person the very thing that gives them joy.
To achieve this mission we have a very clear set of mid term aspirational outcomes:
Key Strategic Themes
Artist Revenue
FY22
$90.8m
Marketplace Revenue
$482.6m
GP (% of MPR)
Marketing (%)
38.0%
15.8%
Operating expenses (%)
22.9%
EBITDA (%)
(2.32)%
FY26-FY27
Implications for next 4-5 years
$250m+
$1.25b+
40-42%
12-15%
12-15%
13-18%
Step change in value for Artists
Grow MPR at historical CAGR of 20-30%
Improving margin structure through scale and efficiencies
Improve paid marketing efficiency to enable brand
investment
Realise scale efficiencies in core systems and processes
In the short-term EBITDA as a percent of MPR will reflect
ongoing investments across the business
To enable these outcomes we are investing in four key strategic theme areas, which contain the high
potential levers to drive value over the medium and long term:
Artist activation and engagement
Acquisition and engagement of artists to support growth and improvement
of the library of unique content
User aquisition and transaction
optimisation
Ongoing optimisation of user acquisition and transaction flows to drive uplift
in overall user value
Customer understanding, loyalty
and brand building
Deeper understanding of customers and their behaviour to create more
compelling experiences and increased customer loyalty
Product range and 3rd party
fulfilment network
Addition and changes to available product range from 3rd party fulfilment
network to reinforce user acquisition and customer loyalty
18
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19
Redbubble – Annual Report 2022 Environment, Social and Governance
The Redbubble marketplace was
created to be a platform for social
good and our stakeholders are
passionate about our mission. We
believe we have a responsibility to
the artists and customers that use the
Redbubble and TeePublic marketplaces
to ensure that our platforms are a
place for environmentally and socially
responsible products.
Redbubble’s marketplace business
model, since its inception, has always
emphasised a small environmental
footprint together with a strong focus
on social good. Still, we recognize the
responsibility every company, including
Redbubble, has to shine as bright a light
as possible upon the environmental and
social impacts that are front of mind for
ourselves and our stakeholders.
We also recognise the immediate value
a well-articulated ESG Strategy can
have for shareholders and our business.
For our business, formalizing our ESG
strategy enables us to ensure we devote
resources to areas of greatest impact
and ensure ESG related investments
relate to our core business strategy. For
shareholders, this translates to better
business outcomes and demonstrates
that our success is sustainable; not
further depleting material resources,
accelerating environmental tragedies,
or occurring at the expense of people.
In our FY21 report, we foreshadowed
our commitment to further evolve our
ESG strategy, including baselining key
metrics, and setting specific goals. This
year, we’re proud to introduce specific,
measurable, time-bound targets, which
tie directly back to our ESG areas of
ambition and maintain continuity with
Redbubble’s long-standing emphasis
on environmental and social good.
Further details about our ESG Strategy
will be shared in a dedicated ESG report
to be released later this year.
ESG Strategy
Redbubble Group is proud to launch our
inaugural ESG Strategy, which connects
our vision, ambitions and targets. Our
ESG vision - first outlined in our FY21
Annual Report - remains the same
today: build an enduring marketplace
that connects people through creativity
and empowers our community without
comprising the planet.
We directed our vision toward three
areas of ambition: People, Planet,
and Prosperity. We also conducted
a materiality assessment to set
targets on the most impactful areas
through benchmarking, research on
industry trends and interviews with
employees, customers, fulfillers,
and marketplace users.
Our 2025 ESG targets, described in
further detail below, were approved by
the Board in June 2022. We intend to
track our progress towards the targets
set out below and to report on our
performance annually. We expect to
refine our targets over time based on
learnings and new developments within
our business, external signals, and
stakeholder feedback.
Governance of ESG within the Group sits
with the following personnel:
• The Board has ultimate oversight of,
and accountability for ESG within the
Group, which includes approving the
ESG Strategy, reporting, materiality
assessments, and action plans.
• In FY22, the Group hired a Vice
President of ESG who is responsible
for developing and executing the
Group’s ESG Strategy.
• Executive Team members reporting
to the CEO are accountable for the
Group’s 2025 ESG targets.
• Senior Leaders reporting into the
Executive team are responsible for
executing initiatives that ladder up
to the 2025 targets.
People
At Redbubble Group, we strive to create a workforce where all employees feel a strong sense of belonging. We care
deeply about diversity and inclusion, and proudly embrace the opportunity we have to use our platform to celebrate
the unique work of artists and positively impact our local communities. We aim to enable our people to positively
impact our culture and community. Employees want to work for companies they trust and have purpose, so they feel
proud about the work they are doing knowing they are contributing to environmental and social good.
ESG Strategy Targets
zero
salary discrepancy
between genders
Key Employee Metrics:
40%
Continued 40% or greater
representation of women
in senior leadership positions
100%
of employees feel safe and
a sense of belonging
• 349 “Bubblers” are employed by Redbubble Group
• 15 employees took parental leave
globally
• 40% of Directors and 60% of Executives are women
• 4 average training hours per employee
• 3 active, executive-sponsored affinity groups
• 43% in Australia, 48% in the United States and
(LGBTQI+, All Gender, Neurodiversity)
9% in Europe
• 94% work full time; 6% are part time
• 140 new joined Redbubble in FY22
• 2 Engagement Surveys (84% Participation;
69% Engagement, 85% Belonging)
Community Impact
Our mission to create the world’s
largest marketplace for independent
artists is rooted in community impact
as we create opportunities for artists
to generate income from their work.
Beyond this, we support our employee-
led and executive sponsored initiatives
that give back to communities.
FY2022 community initiatives
included:
• Conflict in Ukraine – Almost
immediately following the
commencement of the conflict in
Ukraine, Redbubble and TeePublic
aligned to donate 100% of its
service fee profits $170,000 from
sales by artists supportive of the
Ukrainian people to two non-profits:
International Rescue Committee (IRC)
and Global Giving.
• Pride and IDAHOBIT* – we support
LGBTQIA+ events and dates both
globally and locally every year.
This year, we supported the San
Francisco Pride organisation in
reviving the in-person celebration and
fundraising efforts. Redbubble also
made a donation of USD$5,000 and
employees celebrated through our
Pride Fundraiser and Pride VIP party.
• Product donations – We donated
apparel, face masks and homewares
to Launch Housing that were returned
to the Redbubble marketplace.
• Museum of Comic and Cartoon
Arts (MoCCa) Festival – TeePublic
sponsored the MoCCA Arts Festival,
which is the largest comics and
cartoon festival. Participating artists
can connect with peers, publishers
and editors and reach potential
customers.
• Pillar Project – We partnered with
Just Another Agency to launch the
Pillar Program: an initiative designed
to keep employees connected to
the local arts community. Work by
local street artists is transformed
into large-scale works that appear
on 12 concrete columns. To provide
exposure to more artists, the columns
are updated monthly with new
artists chosen through Instagram
competition.
20
21
* International Day Against Homophobia, Biphobia, Intersexism & Transphobia.
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Environment, Social and Governance Continued
Planet
Prosperity
Every company, Redbubble included, has an imperative to identify ways - whether through direct control or influence - to
positively impact the planet. We recognise - even with the smaller footprint of a print-on-demand marketplace - that third parties
who participate in our marketplace create waste and emissions. Even though Redbubble does not own or control the independent
businesses who produce or ship products sold through our marketplace, we feel we have a responsibility - emboldened by our
stakeholders - to minimize the overall impact of our marketplace on the environment. It’s what led us to offset the emissions
created by third party carriers for over four years.
Key metrics
• Total number of independent
third party fulfillers: 33
• Emissions and offsets from
marketplace shipping: 6,949
Metric Tons
• Product return rate: 1.3% (CY22)
Waste management
The Redbubble Group business
model has been designed to
minimise waste and we are holding
ourselves accountable by signing
up for measureable waste and
emissions reducing targets. As a
digital marketplace, customers view
products online rather than driving to a
physical store, and third party fulfillers
manufacture products on-demand,
which keeps waste to a minimum by
eliminating pre-printed, unsold stock.
ESG Strategy Targets
15%
Reduce waste across our
marketplace, with a focus on
reducing product return rate
by 15% from 2021 baseline
Net zero Scope 1
and 2 emissions
and net zero marketplace
shipping emissions
Carbon emissions
Product quality
High quality products last longer, reduce
waste, and result in fewer emissions
from product returns. We set clear
expectations with third-party fulfillers
to continually improve their product
quality with the aim of reducing returns
and reprints to minimise waste. In
FY2023, we will continue to emphasize
product quality in pursuit of our 2025
target to reduce product returns by 15%
to the marketplace.
The delivery of products from third
party fulfillers to customers by third
party shippers produces emissions.
Fortunately, on our marketplace,
the majority of third party fulfillers are
located in the same regions to which
they ship.
For the fourth consecutive year,
Redbubble Group has offset the
emissions from marketplace shipments
through 3Degrees. This initiative has
been positively received by artists and
their customers. The details of the 2021
purchases are listed on the Redbubble
Social Responsibility pages. We track
the emissions offset by calendar year.
Redbubble Group aims to empower and protect people who design, sell, make and use products from our marketplace.
Our business unlocks opportunities for artists by connecting them with their customers on a global scale. In doing so,
we support artists to raise their profile and grow their businesses. These economic benefits extend to third-party fulfillers
that manufacture and deliver products to the artists’ customers. Artists and their customers care about the work that we do
and choose our marketplaces because they believe in our mission and the opportunities we create for artists. This business
model enables our work to support SDG 8 Decent Work and Economic Growth by providing meaningful work opportunities
to small independently-operated businesses.
Our mission to bring more creativity into the world would not be possible without the highest standards of integrity.
All marketplace users are expected to behave in a fair and ethical way, and we extend these expectations to the third-party
fulfillers who participate in our marketplace. We expect high standards of sustainability, quality and integrity through the entire
community of marketplace participants.
Key metrics
• Total number of selling artists:
809,000
• Total artist revenue: $91 million
• 100% of third party fulfillers
signed the Social Responsibility
Acknowledgement Form
ESG Strategy Targets
100%
of third-party fulfillers aligned to our
Social Responsibility Manual
100%
increase in total artist revenue
Artist empowerment
The Redbubble and TeePublic
marketplaces empower artists by
providing them with a reputable platform
to design and sell products printed with
their art. Our global artist marketplace
is open to all and celebrates work from
every voice.
We have dedicated services to support
artists on both Redbubble and TeePublic,
including account support, early access
to new product choices for their shops,
and access to online trend reports.
To increase the value of our platform
to artists, we provide artists with
online tools so they can advertise their
products on third-party ad platforms
and their social media accounts. We
pay close attention to cultural moments
(such as Black Lives Matter) and causes
(such as the conflict in Ukraine) to
identify opportunities to showcase
artists whose work aligns with
these moments.
We are proud of the work we do to
support artists; however, we recognise
that there are opportunities for
improvement. We want to support our
artists to earn more, and we have set the
ambitious target to increase artist sales
on our marketplace by 100% by 2025.
To support our artist community, we
work continuously to ensure that our
marketplace only hosts original and
high-quality work. We have extensive
proactive measures in place and
collaborations with many global brands
worldwide to remove fraudulent,
infringing, and low-quality content,
and this is an area that we will
continue to invest in and scale as
the marketplace grows.
Supply Chain Sustainability
Redbubble Group does not own or
control the third party fulfillers who
produce the products sold on the
marketplaces. They are independently-
operated businesses located around
the world, the vast majority of which are
small businesses. However, we set clear
expectations with fulfillers that only
businesses who comply with the law,
respect human rights and provide
safe and inclusive workplaces may
participate in our marketplace.
Intertek, an independent auditor
conducts social responsibility audits
for the marketplace as a part of the
approval process to participate in our
marketplace. The audits are focused on
assessing workplace conditions. At July
2022, 42% of third party fulfillers have
completed their audits with Intertek,
with an expected completion rate of
100% later this year.
Governance
Corporate Governance
The Redbubble Board is committed to
promoting a culture of integrity, ethical
behaviour and respect. The Board
strives for the highest governance and
risk management standards. To succeed
in the Group’s mission and purpose – to
bring more creativity into the world in a
fair and ethical way, the Group relies on
strong governance practices to help it
navigate rapidly evolving regulations and
stakeholder expectations.
22
23
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Board of Directors
The Directors bring strong corporate
governance credentials and
on‑target industry experience
to the Redbubble Board.
Ms Anne Ward
Independent
Non-Executive Chairman
Appointed: Non-Executive
Director from 22 March 2018,
Chairman from March 2020
Board Committees: Audit and
Risk, People, Remuneration and
Nomination, Disclosure (Chair)
Jenny Macdonald
Non-Executive Director
Appointed: 22 February 2018
Board Committees: Audit
and Risk (Chair), People,
Remuneration and Nomination,
Disclosure
Anne 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, tourism and entertainment.
In addition to chairing Redbubble, Anne
is independent Chairman of Symbio
Holdings Ltd (ASX: SYM) a Director of
the Foundation for Imaging Research,
and a Governor of the Howard Florey
Neuroscience Institutes and was
until June 2022 a director of Crown
Resorts Ltd (ASX: CRL) and a Council
member of RMIT University. 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 (ASX: MYO), 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.
Directorships of other listed entities
in the last three years:
Symbio Holdings Ltd (formerly MNF
Group Ltd) (ASX:SYM) – July 2021 –
present
Crown Resorts Ltd (ASX:CWN)
– October 2021 – June 2022
Jenny 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 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
(ASX: HLO), where she oversaw the
merger with AOT Group. Prior to that,
Jenny was the CFO and General Manager
International of REA Group (ASX: REA),
with responsibility for the financial
growth strategy and execution for
operations in South East Asia and
parts of Europe.
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.
Directorships of other listed entities
in the last three years:
Site Minder Ltd (ASX:SDR)
– October 2021 to present
Healius Ltd (ASX:HLS)
– November 2020 to present
Property Guru (NYSE:PGRU)
– September 2019 to present.
Bapcor Ltd (ASX:BAP)
– September 2018 to present
Australian Pharmaceutical Industries Ltd
(ASX:API) – November 2017 to March 2022
Redflow Ltd (ASX:RFX) – December 2017
to September 2019
Ben Heap
Independent
Non-Executive Director
Greg Lockwood
Independent
Non-Executive Director
Martin Hosking
Co-Founder/
Non-Executive Director
Appointed: 20 April 2020
Appointed: 1 June 2015
Appointed: 10 April 2006
Board Committees: Audit and
Risk, People, Remuneration and
Nomination (Chair), Disclosure
Board Committees: Audit
and Risk, Disclosure
Board Committees: People,
Remuneration and Nomination,
Disclosure
Ben Heap is a Sydney-based non-
executive director with a portfolio
of public and private roles. Ben is
the interim Chairman of The Star
Entertainment Group Limited (ASX: SGR),
a non-executive director of Pendal
Group Limited (ASX: PDL), the
Independent Chairman of CBA New
Digital Businesses and a non-executive
director of Avanteos Investments
Limited. He is also a founding partner
and chairman of H2 Ventures, a venture
capital investment firm.
Ben ended his executive career as
CEO of UBS Global Asset Management
in Sydney and a Managing Director
with UBS in New York.
He has extensive experience in a range
of sectors including asset management,
digital & technology transformation,
fintech & data science innovation
and venture capital investment.
Ben has 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.
Directorships of other listed entities
in the last three years:
Pendal Group Ltd (ASX:PDL) – March
2022 to present
Star Entertainment Group Ltd (ASX:SGR)
– May 2018 to present
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.
Directorships of other listed entities in
the last three years:
Nil
Martin Hosking is a co-founder of
Redbubble and was Managing Director
and CEO from July 2010 to September
2018 and from February 2020 to
January 2021.
He has spent over 20 years scaling
Australian technology companies and
has previously been the chair of Aconex,
a SaaS provider to construction firms,
and Southern Innovation, a digital pulse
processing solution.
Martin 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.
Directorships of other listed entities
in the last three years:
Nil
24
25
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Board of Directors continued
Board Tenure, Independence
and Gender Diversity
Tenure
<1 year
1 – <3 years
3 – 6 years
Over 6 years
0
20%
40%
40%
Independence
Independent 80%
Non-independent 20%
Gender Diversity
Male 60%
Female 40%
Board Skills
The Board recognises the importance of having an appropriate mix of experience and
expertise to ensure the Group is properly managed to protect and enhance shareholder
interests. The Board considers that, collectively, the Directors have the range of skills,
knowledge and experience necessary to direct the Company with substantial skills in
the following areas:
Board Independence
Board Committees
The Board supports the ASX Corporate
Governance recommendation that
the majority of Directors should be
independent.
The Board recognises the importance
of an appropriate committee structure
to assist the efficient and effective
operation of the Board.
Skill
1.
2.
3.
4.
5.
6.
7.
8.
9.
Internet marketplaces
Redbubble’s marketplace users
CEO and leadership oversight
Talent and remuneration
Strategy and planning
Digital and transformation
Corporate finance
Accounting and financial reporting
Governance oversight and risk management
10.
Legal
11.
Brand and marketing
12.
Technology and data
13.
Communications (including government and corporate affairs)
14.
Sustainability
The Board has formally adopted
guidelines in relation to the criteria for
independence of Directors and reviews
the independence of each Director in
light of interests disclosed to the Board.
The Board considers that Non-Executive
Directors Anne Ward, Ben Heap, Jenny
Macdonald and Greg Lockwood were
independent and free from any business
or any other relationship that could
materially interfere with the independent
exercise of their judgement and were
able to fulfil the role of independent
Directors for the purposes of the ASX
Recommendations.
Board Performance
The Board recognises the need to
monitor and seek to continually improve
its performance. To this end, each year
the Board assesses its performance,
identifies any areas for improvement and
implements appropriate actions.
The FY2022 performance review was
carried out with the support of an
external consultant enabling better
identification of priority areas and
benchmarking of results against other
similar organisations. Actions identified
by the performance review were
documented and implemented under
the oversight of the Board Chairman.
The key purposes of the company’s
Board Committees are to promote:
Efficient use of time and expertise.
In this regard, the Committee structure
allows Directors with particular skills
and expertise to assume a primary
role in particular areas of operations
or governance at a Committee level;
Good governance as the framework
provides for Committees to report back
to the full Board and where Directors
on the Board who have not been part
of the Committee deliberations can
question and test the Committee
recommendations.
The Board has three standing
committees. These are:
• Audit and Risk Committee;
• People, Remuneration and Nomination
Committee;
• Disclosure Committee.
Each Committee has adopted a formal
Board approved Charter that details
its role, responsibilities, membership
and administration which are reviewed
annually. The Committee structure
complies with all ASX Governance
Recommendations.
Shareholder Engagement
The Board is committed to making sure
that Shareholders are kept informed of
all major developments affecting the
Company and its business, including
information that enables Shareholders to
assess the performance of the Board.
To keep current and potential investors
who wish to obtain information about
the Company informed, the Company
has an investor relations program
managed by our Head of Investor
Relations. Under this program, the
Company communicates information
regularly to Shareholders and other
stakeholders through a range of forums
and publications in addition to periodic
and continuous disclosure required by
the ASX LIsting Rules. These include:
• The Annual Report distributed
to Shareholders;
• The Half-Yearly and quarterly results
presentations which are available on
the Company’s website;
• The Annual General Meeting;
• Announcements to the ASX;
• Investor information through the
Company’s investor website at
https://shareholders.redbubble.com/
site/content/.
All ASX announcements made to the
market, including annual and half-
year financial results, are posted on
the Company’s website as soon as
practicable following the release by
the ASX. The full text of all notices of
meetings and explanatory material, the
Company’s Annual Report and copies
of all investor presentations made to
analysts and media briefings are also
posted on the Company’s website
following release to the ASX.
Shareholders are also able to
communicate with Directors at the
Annual General Meeting. This year the
Company will hold a ‘hybrid’ AGM. This
will allow a face-to-face meeting with
Shareholders, while enabling virtual
attendance for those who may find
it difficult to physically attend and
participate in the meeting.
26
27
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Executive Leadership Team
The Company has skilled and experienced executives with a growth mindset led by Chief Executive Officer, Michael Ilczynski.
Prior to Michael’s appointment as Redbubble CEO, he spent 13 years at SEEK, leading
teams across strategy, product & technology and commercial operations, culminating
as CEO Asia Pacific & Americas. As SEEK’s CEO AP&A, Michael led over 3000 employees
operating the leading online employment marketplaces in 11 countries, covering the SEEK,
Jora, Jobstreet, JobsDB, Catho and OCC businesses. Prior to working at SEEK, Michael
has worked for McKinsey & Company, Tabcorp and the Collingwood Football Club.
Michael also served in the Australian Army Ready Reserve and is a graduate of the Royal
Military College, Duntroon.
Michael holds Bachelor of Science and Bachelor of Commerce degrees from Melbourne
University and a Master of Business Administration from the Kellogg School at
Northwestern University.
Emma is responsible for finance, investor relations, M&A and the Company Secretariat
function within the Group.
Prior to joining Redbubble, she was with ANZ Bank for a decade holding a variety of
executive roles, with the most recent being CFO of ANZ’s Technology Division. Emma
has previously been both CFO and Managing Director for the Diners Club business
in Australia.
Emma’s priorities include ensuring sound financial management of the Group and
continuous improvement in all systems, processes and people development; contributing
to overall business strategy, from a capital management perspective and in support
of business unit prioritisation; and ongoing management of external communications,
primarily within the investment community.
Emma has a Bachelor of Business from Monash University and is CPA qualified.
Rebecca is responsible for brand, creative and marketing at Redbubble.
She joined Redbubble in 2017 to lead customer engagement strategy. Since 2019, she has
overseen Redbubble’s global marketing strategy and creative operations program. Prior to
joining Redbubble, Rebecca built her career across a broad range of roles in eCommerce,
Marketing, and the Fine Arts. She has worked for brands including HBO, NBCUniversal,
Food Network as well as the Lora Schlesinger Gallery and the Rubins Museum of Art.
Her key priorities include growing brand awareness and ensuring growth in customer
acquisition and retention for the marketplaces.
Rebecca has completed executive education at the Stanford University Graduate School
of Business.
Siebert is responsible for ensuring that technology at Redbubble is an ongoing and growing
strategic strength.
His early career was spent as a software engineer, first in the UK and then later in Australia.
He has been in technology leadership positions for over 10 years. Siebert was previously
Chief Engineer at Open Universities Australia. Before that he served as Executive Manager
of Engineering for Residential at REA Group.
HIs priorities include leading and facilitating the engineering vision at Redbubble, building
and maintaining a strong engineering culture, ensuring that engineering at Redbubble
supports and enables strategic priorities and future opportunities and working in
close collaboration with Product and Design to ensure ongoing value realisation in
our cross-functional teams.
Siebert holds a Bachelor of Computer Engineering from University of Pretoria, South Africa.
Nicole is responsible for the digital product priorities, outcomes and roadmap that inform
how the website is evolved to meet the needs of artists, consumers and fulfillers.
Before joining Redbubble, Nicole spent a year at Xero as an Executive General Manager
leading Product and Engineering teams. Prior to Xero, Nicole was at SEEK for 15 years,
holding a variety of roles, with the most recent being APAC CPO.
Her priorities include driving improvements across the site that help artists efficiently
upload and manage their content, facilitating how that content is discovered and
purchased by consumers, and ensuring effective management of fulfilment requirements
of purchased goods.
Nicole holds a Bachelor of Business from Swinburne.
Michael Ilczynski
Chief Executive Officer
Appointed: January 2021
Emma Clark
Chief Financial Officer
Appointed: June 2019
Rebecca Zarate
Chief Marketing Officer
Appointed: January 2020
Siebert Lubbe
Chief Technology Officer
Appointed: February 2022
Nicole Brolan
Chief Product Officer
Appointed: May 2021
28
Corina Davis
Chief Legal Officer and EVP
of Business Development
Appointed: August 2013
Meahan Callaghan
Chief People and Culture Officer
Appointed: October 2021
Stacey Wallace
Chief Supply Chain Officer
Appointed: July 2021
Georg Friedrich
Senior Vice President – Engineering
Appointed: May 2019
Dr Brett Watson
Chief Commercial Officer
Appointed: August 2019
Corina has responsibility for the legal department and policy department.
Prior to Redbubble, Corina served as outside counsel in New York City and Santa
Monica, representing clients on complex litigation and transactional matters. She also
has experience as an informal advisor to multiple start-ups and other ventures. Corina is
an active member of Chief, Tech GC, the Women’s General Counsel Network and other
organisations.
Her priorities include oversight of all key group legal issues including intellectual property,
compliance, privacy, and date security and content safety issues
Corina holds a law degree from the University of San Diego School of Law and a
bachelor’s degree from the University of Michigan.
Meahan is responsible for global people and culture strategy including talent acquisition,
retention and performance culture.
Meahan has significant experience leading global P&C functions supporting teams in the
US, Canada, Europe, South America, Asia and Africa. She has been Chief People Officer at
Afterpay, MessageMedia and SEEK Ltd.
Her priorities include securing the best talent for Redbubble, evolving people operations
and culture to take on global growth and scale and championing Redbubble’s reputation as
an employer that promotes diversity, equality and inclusion in all aspects of its operations.
Meahan holds a Bachelor of Business (HR Management) from Victoria University and a Post
Graduate Diploma in Psychology from Deakin University.
Stacey has responsibility for Supply Chain (fulfillment, logistics, sourcing), Operations
(quality, customer service, content moderation) and the company’s approach to
ESG issues.
Prior to joining Redbubble, she spent over 14 years at Amazon in a variety of roles, most
recently as Director of Supply Chain and Operations for Amazon Go. Stacey also held
leadership roles in Fulfillment by Amazon, Kindle, and Amazon Fresh. Before Amazon,
Stacey worked at General Electric and Philips.
Her key priorities are improving customer and artist experience through improving product
quality, the delivery experience, and content onsite and scaling for growth through
improved tooling and automation across supply chain and operations.
Stacey holds a Bachelor of Science in Mechanical Engineering from Purdue University.
Georg joined Redbubble in 2009 and held various leadership roles within the engineering
team before being appointed to the Senior Leadership Team.
Georg serves as 2IC to the CTO and is responsible for growing Redbubble’s engineering
team and scaling technical excellence.
Georg’s experience spans 20 years of software development roles in industries ranging
from printing to online fundraising and e-commerce. In 2007, he co-founded ‘betterplace.
org’ and developed an online donation platform which remains Germany’s largest of
its kind.
His priorities include attraction and retention of engineers and ensuring a culture of
continuous learning and development within the Redbubble engineering department.
Georg holds a degree in business informatics from the Berlin School of Economics.
Brett is responsible for the e-commerce functions of the business.
Having joined Redbubble in 2016 as a Senior Strategy Manager, Brett was promoted to
the role of Chief Commercial Officer in August 2019. Prior to Redbubble Brett held senior
strategy positions at Coles and as a consultant with KPMG and Pacific Strategy Partners.
His priorities include ensuring artists can compete with mainstream retail through access
to a world class e-commerce function, delivering a physical product experience that
surpasses customer expectations, and supporting the operational efficiency of the fulfiller
network.
Brett holds a Bachelor of Mechanical Engineering from Curtin University and a PhD in
Engineering from Monash University.
29
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Values and Ethics
Risk Management
The Behaviours are supported by:
Core Values of Creativity and
Compassion that are fundamental to
Redbubble. Creativity is the heart of
everything we do. We aim not only to
build an organisation which enhances
creativity but to do so in a creative way.
Compassion is at the heart of our
culture, we are able to take the other’s
point of view. We are able to balance
our own interests with those of others.
We act with compassion to ourselves,
to others and to the planet that
supports us.
Code of Conduct which outlines
how Redbubble expects Bubblers to
behave and conduct business in the
workplace and includes requirements
around legal compliance and guidelines
on appropriate ethical standards.
All Redbubble personnel including
temporary employees, contractors,
executives and Directors must comply
with the Code of Conduct.
Anti-Bribery and Anti-Corruption
Policy which makes the Company’s zero
tolerance position clear and provides a
clear basis for addressing any issues as
they arise.
Whistleblower Policy under which
employees are encouraged to report
unlawful or unethical conduct to the
Company Whistleblower Reports Officer
or the Company’s independent reporting
hotline. The Company Secretary reports
to the Board on a monthly basis (or more
frequently if necessary) in relation to
whistleblower reports.
Redbubble seeks to ensure that a
consistent and integrated approach
to managing risk is established at all
levels and is embedded in its processes
and culture. This enables the Group to
take and manage risk in ways that will
generate and protect shareholder value.
The Board recognises that an overly
cautious approach to risk management
may adversely impact the achievement
of strategic and operational objectives.
Accordingly, the prudent assumption of
risk in a manner that balances the risks
of action versus inaction is encouraged.
The Board is ultimately responsible for
ensuring risk management processes
are in place and operating effectively,
while the Audit and Risk Committee is
responsible for overseeing the Group’s
ongoing risk management program
framework and any key supporting
policies and procedures.
The CEO and the Executive Team
are responsible for managing and
embedding risk management practices
throughout the Group.
During the year, a comprehensive risk
management review was undertaken
to ensure that the risk management
framework remains fit for purpose
and provides assurance to the Board
that risk is being managed effectively
throughout the Group.
The Board supports the need for
the highest standards of behaviour
and business ethics at Redbubble.
Accordingly, all Directors, managers
and employees are expected to act
with integrity, striving at all times
to enhance the reputation and
performance of Redbubble.
The Company has adopted Redbubble
Behaviours that define our culture
and the ways we work in all of our
locations across the globe.
The Redbubble Behaviours are:
• Be Bold, Aim High – Set ambitious
objectives and support all Bubblers
to aim to deliver them. This is
about setting stretch objectives
but never taking unnecessary risks
without proper vetting, planning and
mitigation.
• Right Thinking, Right People, Right
Time – Showing ownership and
being accountable for an outcome
by balancing what people to involve
when the degree of effort and risk
required and the speed of decisions
with the potential value being sought.
It isn’t about always making perfect
decisions and being prepared to seek
other views when you are not sure.
• Proactively Solve for the Greater
Good – Developing solutions in a
scalable and sustainable way for
Redbubble and not ourselves. It
involves calling out issues if and
when you see them, speaking up
when you disagree and escalating
issues when you need to.
• Rapidly Deliver Value – Having
a sense of urgency in delivering
improvements that create value.
It isn’t rushing through and not
questioning when something
seems wrong or unfinished.
• Have Trust, Build Trust – All Bubblers
always engage on the assumption
of good intent and provide a
safe environment for each other.
Importantly we don’t want Bubblers
to stay silent or feel they can question
something they don’t understand.
30
31
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 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 2022 (referred to hereafter as the RB Group or Group).
Directors
The following persons were Directors of the Company during the 2022 financial year and to the date of this Report:
Anne Ward
Martin Hosking
Chair, Non-executive Director
Non-executive Director
Jennifer (Jenny) Macdonald
Non-executive Director
Ben Heap
Greg Lockwood
Non-executive Director
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
creators 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.
Review of operations
Redbubble is truly global in nature. Whilst this provides strong resilience and diversity, it does mean that events occurring in regions
outside of Australia have more of an impact upon strategy and performance than local events. In FY22 the macro environment in
which the Group’s marketplaces operate has been characterised by high levels of uncertainty and volatility. Consumers have not only
had to adapt to the ongoing nature of COVID-19, they have also been impacted by other events. In particular, the Ukraine conflict,
supply chain disruptions and more recently, a sustained increase in non discretionary costs. These events are resulting in material
and sometimes unpredictable changes in current consumer spending patterns.
Operationally, the Group’s year on year financial performance was materially impacted by the following key factors:
• A decrease in Mask sales from $55 million in FY21 to $10 million in FY22;
• A decrease in sales of Homewares and Artworks products in FY22 as they cycled elevated FY21 comparatives driven by COVID
related lockdowns;
• Our decision to decrease shipping margin by not passing on shipping cost increases to customers;
• An increase in performance marketing expense as competition in search channels rebounded strongly from FY21 lows and drove up
paid customer acquisition costs; and
• Our decision to invest in increased people capacity and capability within the Group, to enable increased resilience, scalability and
the ability to pursue the Group’s mid term aspirations
Noting the operating and environmental challenges outlined above, the Group reports the following FY2022 financial results(1) (with
year on year (YoY) growth rates, where applicable), demonstrating that the business has continued to operate at a much larger scale
than pre COVID-19.
• Gross Transaction Value (GTV) of $630 million, down 10% (12% on a constant currency basis(2))
• Marketplace Revenue of $483 million, down 13% (14% on a constant currency basis)
• Gross Profit of $183 million, down 18% (19% on a constant currency basis)
• An EBITDA loss of $11 million, compared to a profit of $53 million in FY2021
• An EBIT loss of $22 million, compared to a profit of $39 million in FY2021
• A net loss after tax (NPAT) of $25 million, compared to a profit of $31 million in FY2021
• An operating cash inflow of $3 million, compared to an inflow of $55 million in FY2021
• A closing cash balance as at 30 June 2022 of $89 million
Overall, the Group’s outcomes demonstrate continued resilience across all three sides of the marketplaces, and importantly, financial
performance and operating momentum improved in Q4FY22. The Group delivered positive growth for the year in the core Apparel
category, which represents almost 60% of Gross Transaction Value. The growth was particularly strong in Q4, and as such, we saw
the whole Group record positive Q4 year on year growth.
(1) Please see table 1 on page 33 for calculations of the non-IFRS metrics
(2) “Constant currency basis” reflects the underlying growth before translation to Australian dollars for reporting purposes.
32
Operationally, the artist and product side of both marketplaces has continued to grow, with content uploads from artists continuing
to be added to the platforms. Investments into the physical product experience for artists and their customers have continued, with
caps, desk mats and mouse pads added to the Redbubble marketplace. In addition, Redbubble introduced a pets category in May
2022, the first new category launched in over 6 years. New physical products open up new customer segments as well as provide
additional annuity income streams for artists over time.
The third party fulfillment network continued to perform strongly even with the headwinds of continued COVID-19 restrictions,
sourcing constraints and inflationary pressures. Overall, the Group has demonstrated continued resilience across all three sides of the
marketplaces and is well positioned to continue to pursue its mid term aspirations.
The Group holds $89 million in cash as at 30 June 2022, and has no debt on the balance sheet. A portion of these cash reserves
are being used to fund mid term growth through investments across our four key strategic themes, as well as allowing for prudent
management of working capital requirements.
Further details about the Group’s operating and financial performance is contained within the attached Annual Report.
A reconciliation of reported results to non-IFRS numbers in this Directors’ report is provided below.
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’ revenue
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, administration and technology expenses
Other expenses
Earnings before interest, tax, depreciation and amortisation (EBITDA)
Depreciation and amortisation
Earnings before interest and tax (EBIT)
Interest expenses
Total profit/(loss) before income tax
Income tax benefit/(expense)
Reported total profit/(loss) for the year
FY2022
$’m(2)
FY2021
$’m(2)
629.6
(56.2)
573.4
(90.8)
482.6
700.7
(43.3)
657.3
(104.0)
553.3
(299.5)
(330.5)
183.1
37.9%
(76.4)
106.7
22.1%
(77.2)
(4.0)
(36.1)
(0.7)
(11.2)
(10.7)
(21.9)
(0.4)
(22.3)
(2.3)
(24.6)
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)
39.1
(7.9)
31.2
(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.
33
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Directors Report continued
Strategic and Business Update
During FY22, Redbubble continued to execute against four strategic themes:
• Artist activation and engagement
• User acquisition and transaction optimisation
• Customer understanding, loyalty and brand building
• Product range and 3rd party fulfilment network
Consistent with these strategic priorities, during FY22 the Group invested significantly in additional people to boost internal capacity
and capability, particularly within the web product and engineering teams that are focused on improving technical foundations.
Ongoing COVID-19 impacts have resulted in talent pools being constrained in the Group’s four operating regions, and competition
for individuals has been high. This has meant a slower build up of capacity than initially forecast, however the Group enters FY23
with a large proportion of hiring now complete.
The coming financial year will include brand investment into the Redbubble marketplace and the full year impact of our increased
capacity and capability which will grow revenue, improve scale and drive further momentum across the flywheel. This will help to
strengthen Redbubble’s competitive position, enabling the company to pursue its medium term growth aspirations and continue
on its mission to create the world’s largest marketplace for independent artists, bringing more creativity into the world.
Further detail regarding the Group’s strategy and business performance is contained within the attached Annual Report.
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 2022 financial year.
Significant events after end of the 2022 financial year
In the Directors’ opinion, there have been no matters or circumstances arising since the end of the 2022 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.
Dividends
No dividends were paid or declared since the start of the 2022 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 Regulations and Performance
RB Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of
a State or Territory.
Principal risks
The following are key risks that may impact RB Group’s financial and operating results in future periods:
• Competitive activity – The marketplaces operate in a competitive landscape alongside other online marketplaces and traditional
vendors. There is potential for the Group’s business to be disrupted by new or existing user-generated content platforms.
To mitigate the impact of this risk RB Group is focussing on ensuring that its marketplaces provide a market leading experience
for both artists and their customers.
• Macroeconomic Risks – RB Group is subject to macroeconomic risks affecting consumer demand and global marketplace supply
chains. These risks are largely outside of RB Group’s control, and are mitigated by current diversity in product mix, geographic
presence and the third party fulfillment network, combined with initiatives to continue to grow the size of the overall revenue base.
• 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 focussed 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 marketplaces’
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 rights holders to promote
the integrity of hosted content (including by facilitating licensing through our Partner Program and by proactively finding and
removing content through our Policing Program); developing automated platform software to manage content at scale; 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 user 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 is undertaken to mitigate this risk.
• 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 face competition for talent across all
our locations. The mitigations for this risk have included ongoing investment in employee engagement, review of the employee
value proposition and compensation adjustments for key talent roles.
Key management personnel during the 2022 financial year and since the end
of that financial year
The “Key Management Personnel” for the purposes of the FY2022 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; and
• Emma Clark – Chief Financial Officer.
There were no changes to the membership of the Redbubble Limited Board during the 2022 financial year.
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.
Details of current Directors, their experience, qualification, special responsibilities and directorships of other listed entities are
set out in Corporate Governance on pages 24 and 25.
The Board met 12 times during the year ended 30 June 2022. Board and Committee attendance is set out in the table below.
All Directors may attend Board and Committee meetings even if they are not a member of the particular Committee. The table
does not include attendance of Directors at meetings of Committee of which they are not a member.
Board
Audit and Risk Committee
(ARC)
People, Remuneration and
Nomination Committee
(PRNC)
Held whilst
in office
Attended
whilst in
office
Held whilst
an ARC
member
Attended
whilst an
ARC member
Held whilst
a PRNC
member
12
12
12
12
12
12
11
12
12
12
6
-
6
6
6
6
-
6
6
6
6
6
-
6
6
Attended
whilst
a PRNC
member
6
5
-
6
6
Anne Ward
Martin Hosking
Greg Lockwood
Jenny Macdonald
Ben Heap
34
35
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Directors Report continued
Directors’ interests in shares and options
Name
Anne Ward
Martin Hosking
Ben Heap
Greg Lockwood
Jenny Macdonald
Total interests
Shareholdings
Options
outstanding
220,000
50,714
40,000,000
200,000
6,465,131
223,048
-
-
-
-
47,108,179
50,714
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.
Company Secretaries
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. Her experience is set out on page 29.
Mr Martin Bede, Company Secretary (Australia)
Type of Equity Security
Share Options
Share Appreciation Rights(1)
Restricted Stock Units(2)
Total
Number Outstanding
Last Expiry Date
01-December-2030
01-June-2028
4,731,315
5,658,416
1,901,999
12,291,730
(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 (RSUs) 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 2022 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 2022 financial year,
to the date of this Report:
Settlement of vested restricted stock units
Exercise of options
Total
Exercise
price paid
$
-
4,411
4,411
Number
33,241
118,231
151,472
Martin Bede joined Redbubble in August 2021 and 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.
No amounts remain unpaid in respect of the shares issued, as outlined above.
Indemnification and insurance of officers
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 and since the end of
the 2022 financial year. For FY2022, Board fees are paid entirely in cash and no equity has been granted to the Directors.
Name
Michael Ilczynski
Emma Clark
Corina Davis
Stacey Wallace
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
574,812
101,614
39,890
580,067
146,158
574,812
101,614
39,890
580,067
146,158
1,442,541
1,442,541
306,654
177,668
149,434
146,042
-
779,798
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:
The Company has entered into Deeds of Indemnity with all its Directors in accordance with the Company’s constitution. During the
2022 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, nor is it uncommon within the USA business environment where the majority of such claims arise.
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.
CEO and CFO declaration
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.
36
37
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Directors Report continued
Auditor’s Independence Declaration
Remuneration Report
The Remuneration Report is set out on pages 40 to 56 and forms part of the Directors’ Report for the financial year ended
30 June 2022.
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 2022 financial year.
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 Audit 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 2022
and 2021 financial years are set out below.
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
Auditor’s independence declaration to the directors of
Redbubble Limited
As lead auditor for the audit of the financial report of Redbubble Limited for the financial year ended
30 June 2022, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene 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.
Non-audit services
Fees to Ernst & Young (Australia)
Assistance in developing the Group’s ESG strategy
Taxation services
Fees to overseas member firms of Ernst & Young (Australia)
Taxation services
Total
Fees for Audit services
2022
$
2021
$
197,944
68,150
30,370
43,630
21,505
-
287,599
74,000
Ernst & Young
Ashley Butler
Partner
17 August 2022
Details of the amounts paid to the auditor for audit services provided throughout the 2022 and 2021 financial years are set out in
Note 23 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 39.
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
17 August 2022
38
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
39
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Remuneration Report (audited)
Letter from the People and Nomination Committee
Contents
Dear Shareholder,
On behalf of the Board, I am pleased to present our Remuneration Report for FY2022.
In FY22, consistent with our previously communicated strategic priorities, the Group has invested significantly in building internal
capacity and capability to deliver on our medium-term aspirations. We have recruited new talent into the business, and we have
worked hard to retain our existing talent.
Our Executives are committed to company cultures that promote high engagement and outstanding performance in their teams. In
the past year, it has been critical to foster this type of culture as the external talent market has been challenging and the competition
for talent has been intense. We have engaged with our teams to evolve our values and introduce behaviors that codify the way we
work, in order to be successful. Our employee engagement levels are strong but we are striving for continuous improvement and have
programs in place for internal communication, diversity & inclusion, and career development initiatives.
We have invested in our leadership capability through formal coaching, internal training, and a stronger alignment between our
organisational design and leadership expectations. We recognise that this work is critical to drive the next phase of our growth
and ensure we realise the maximum benefit from our capacity and capability investment.
We are encouraged by the depth of talent the team has built across our four operating geographies, and the positive culture that has
evolved. The Board is seeking to ensure the stability of its leadership team and so has chosen to implement a one-off equity-based
Executive Retention Incentive for eight key Leadership Team roles. The financial implications for the Company are modest, with the
total value of this Incentive being $1.3m in equity grants. As this Incentive was implemented in July, the detail will be documented in
the FY2023 Annual Report.
Finally, within this year’s Remuneration Report we have provided an analysis of the impact of a lower share price on our Executive
KMP compensation outcomes that makes clear the alignment of shareholder and executive interests under our Remuneration
Strategy.
1. Remuneration Report Overview
2. Remuneration Strategy Overview
3. How Remuneration is Governed
4. Company Performance in FY2022
5. Executive Remuneration
6. Non-Executive Director (NED) Remuneration
7. Statutory Reporting for FY2022
8. Other Information
42
42
43
44
45
49
50
52
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 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.
Ben Heap
Chair of the People, Remuneration and Nomination Committee
40
41
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Remuneration Report (audited) continued
1. Remuneration Report Overview
The Directors of Redbubble present the Remuneration Report (Report) for the RB Group for the financial year ended 30 June 2022.
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 (Executive KMP) those persons who have
authority and responsibility for planning, directing and controlling the activities of RB Group.
The table below outlines the Executive KMP of RB Group during FY2022:
Classification
NED
Name
Anne Ward
Ben Heap
Martin Hosking
Greg Lockwood
Position
Non-executive Chair
Non-executive Director
Non-executive Director
Non-executive Director
Executive KMP
Michael Ilczynski
Emma Clark
CEO
CFO
Jennifer (Jenny) Macdonald
Non-executive Director
2. Remuneration Strategy Overview
Our remuneration strategy is designed to support the Redbubble 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.
The Redbubble 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 RECM structure is
positioned to be competitive when looking to attract and retain key talent, with a focus on internationally based (US) Executives,
where our current target talent pool, operations and key competitors are primarily based. The objectives of the RECM are to:
3. How Remuneration is Governed
3.1 People, Remuneration and Nomination Committee Role
The role of the People, Remuneration 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 purpose, vision and mission, in order to build long-term value for shareholders.
The members of the Committee during FY2022 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
3.2 Remuneration Governance Overview
During the year, the Board reviewed the Charter of the Group’s People and Nomination Committee and changed the name of the
Committee to People, Remuneration, and Nomination to reflect the Committee’s responsibilities in relation to remuneration strategy
and oversight.
Redbubble Board
� Overall Responsibilty for the remuneration strategy and outcomes for executives
and non-executive directors
� Reviews and approves recommendations from the People, Remuneration and Nomination Committee
People, Remuneration and Nomination Committee
� 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
• Attract and retain exceptional talent in highly competitive, highly mobile global markets - the absence of a Short Term Incentive
Non-Executive Directors
(STI) award and inclusion of the Base Equity (BE) award reflects US market practices amongst RB Group’s peers;
• Align executive performance with Redbubble Group’s financial goals with a long term incentive (LTI) heavily aligned to the creation
of long-term value for shareholders; and
• Attach performance expectations of the leadership team to shared Objectives and Key Results (OKRs) that ensure delivery of the
Redbubble corporate strategy
Our RECM creates strong shareholder alignment through the incorporation of significant deferred equity components to encourage
Executives to behave like owners of the company. It is through this ownership that Executives are driven to create long-term
shareholder value. Shareholder alignment is continually demonstrated through the RECM model, with Executives having considerable
and direct alignment with that of the shareholders.
We are committed to engaging with our shareholders and other key stakeholders in relation to the Company’s remuneration strategy
and to continuously improving the effectiveness of our remuneration arrangements.
� 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 PRNC 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 FY22
42
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Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Remuneration Report (audited) continued
3.3 Remuneration Benchmarking
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 skill set 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.
3.4 Clawback of Remuneration
In the event of serious misconduct or a material misstatement of RB Group’s financial statements, the Board has the discretion
to reduce, cancel or claw back any unvested equity or other long-term incentives.
3.5 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 payment of up to six months’ salary in lieu of notice;
• Performance, Intellectual Property 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).
4. Company Performance in FY2022
4.1 Performance against Financial Metrics
Key indicators(1)
FY2022
FY2021
FY2020
FY2019(2)
FY2018(3)
CAGR(4)
Gross Transaction Value (GTV) ($’m)
Total Revenue ($’m)
Marketplace Revenue ($’m)
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 ($’m)
Share price at year end ($)
629.6
573.4
482.6
90.8
183.1
700.7
657.3
553.3
104.0
222.7
474.0
416.3
348.9
67.4
134.4
328.0
307.0
256.9
50.1
94.5
231.3
218.7
182.8
35.9
63.9
106.7
151.5
94.5
67.5
47.1
(11.2)
89.1
0.90
52.7
98.7
3.61
5.1
58.1
2.06
(2.0)
29.0
0.91
(7.4)
21.2
1.57
28%
27%
27%
26%
30%
23%
N/A
43%
(13%)
(1) The non-IFRS metrics in the table above such as GTV, GP and GPAPA are defined in table 1 on page 33 of the Directors’ Report. The non-IFRS measures
are unaudited, however, they have been derived from the audited financial statements.
(2) On 1 July 2019 the Group adopted AASB 16 – Leases using the full retrospective method of adoption. EBITDA for FY19 and FY20 includes the impact of this
new standard.
(3) 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 FY2018. Meaningful growth rates cannot be provided for metrics that have moved from
a negative to a positive amount.
5. Executive Remuneration
5.1 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 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 Objectives and Key Results (OKRs) for the CEO and tracks performance against these. The CEO sets
annual performance OKRs with each executive aligned to the company OKRs. Performance is also measured against the Redbubble
Behaviours that are in line with our purpose and values and clearly set our expectations on ways of working. Performance against
these objectives, along with total company performance informs annual compensation reviews for all executives. The performance
of all executives reporting to the CEO is discussed with the Committee from time to time, as required.
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. In the interest of aligning the structure of the RECM with our direct peers located in the US, the current structure is
considered robust and best aligned with shareholder value creation whilst attracting and retaining key talent.
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.
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 which encourage
a long-term focus
Attract & Retain
exceptional talent in
globally competitive,
highly mobile markets
44
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Remuneration Report (audited) continued
5.2 Elements of Remuneration
The following remuneration mix summarises the key components, and weightings associated, that make up the RECM:
Executive KMP
Role
Fixed Remuneration (60%)
At Risk Remuneration (40%)
FY2022 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.
Fixed Salary (40%)
Base Equity (20%)
Long Term Incentive (40%)
The LTI component of the RECM operates as outlined below:
Michael Ilczynski
Emma Clark
CEO
CFO
800,000
463,500
400,000
231,750
800,000
463,500
Fixed Salary
Base salary (and superannuation, in Australia only) intended to provide the Executives with the financial resources commensurate
with executives at companies of a similar size in that location.
FY2022 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. There is also a longer-term retention mechanism employed, with the BE granted in a given year also required to be held
for one-year post vesting to ensure there is a continued focus on sustainable share value appreciation.
The BE is part of the base compensation and does not have a performance hurdle beyond service requirements. It is designed
to ensure Executives act as owners from the outset of each financial year. Further, with the 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 the 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 Board has also continued to
implement this award in light of the absence of any STI award, this award best reflects the markets in which we primarily operate.
This award, importantly, is not a replacement for an STI award, but rather an extension of the base compensation provided to
Executives, with the only performance-based element being our LTI award.
The BE component of the RECM operates as outlined below:
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.
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.
Grant quantum
The grant quantum of the BE award to Executives is calculated as a percentage of fixed salary.
Grant date
Vesting date
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
the time of vesting.
Disposal restriction period
12 months following vesting. The holding period remains in place even if employment ends.
Officers & Executives of the Group are subject to the RB Group share trading policy.
Termination
Executives forfeit grants that have not vested.
Holding periods remain on foot.
Clawback
Change of Control
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.
LTI instrument
Share Appreciation Rights (SARs)
Grant quantum
The grant quantum of the LTI award to Executives is calculated as a percentage of base salary.
Grant date
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 is to be determined based on a 10% per annum Total Shareholder
Return (TSR) from the 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. The 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
Strike price
Strike price is set on 1 October based on a 30-day VWAP.
The Board retains complete discretion in these matters.
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 FY2022 the strike price was $4.1884
SARs valuation is 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 the 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.
The accounting valuation of the award for expensing purposes is governed by AASB 2 -
Share-Based Payment. A Monte Carlo simulation model is used that takes into account the probability
of performance hurdles being achieved.
46
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Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Remuneration Report (audited) continued
Expiration
6 years from the grant date and therefore the SARs must be exercised by this point or they lapse.
5.4 LTI Outcomes
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.
Vesting and exercise periods of the LTI
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Period 1
Period 2
Period 3
Period 4
Period 5
Share price of 133%
of strike price
Executive can exercise if year 3 conditions are met
Legend
Exercise condition testing period
Exercise condition achieved
Exercise condition not achieved
Exercise condition requirement (10%CAGR)
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
5.3 Unvested equity held by Executive Key Management Personnel at 30 June 2022
The table below shows the unvested equity held by the Group’s Executive KMP at 30 June 2022 and the performance hurdles
associated with each grant. It is notable that Executive compensation has been impacted by the Redbubble share price, further
highlighting the alignment of the RECM with shareholder value.
Grant name
Grant date
Chief executive officer
Michael Ilczynski Base Equity
LTI
LTI
Limited
recourse loan
shares(5)
01-Oct-21
04-Jan-21
01-Oct-21
Total unvested equity held by Michael Ilczynski
Other executive KMP
Emma Clark
Base Equity
LTI
LTI
01-Oct-21
01-Oct-20
01-Oct-21
Total unvested equity held by Emma Clark
Total
# of
options/
rights
granted
Exercise
price / total
shareholder
return (TSR)
hurdle price(2)
Original
contract
value of
the grant(3)
Vest
date(1)
Current
value(4)
95,502
159,854
306,654
01-Oct-22
01-Oct-23
01-Oct-24
$0.00
$7.97
$5.57
$400,000
$591,781
$800,000
$85,952
$0
$0
Type of
equity
Options
SARs
SARs
04-Mar-21
In-substance
share options
289,161
851,171
04-Mar-26
n/a
$1,600,000
$3,391,781
$260,245
$346,197
Options
SARs
SARs
01-Oct-22
01-Oct-23
01-Oct-24
55,331
174,385
177,668
407,384
1,258,555
$0.00
$5.61
$5.57
$231,750
$450,000
$463,500
$1,145,250
$49,798
$0
$0
$49,798
$4,537,031 $395,995
No LTI awards for Executive KMP have vested during the year. The current LTI program commenced in FY2021 and the first possible
vesting date for equity under this plan is in FY2024 (the grants have a minimum 3-year vesting period).
5.5 CEO Employment Arrangements
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)
6. Non-executive Director (NED) Remuneration
6.1 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 FY2022, the Committee reviewed the level of Board fees paid to NEDs having regard to appropriate peer benchmarks and the
scale and complexity of the business. While the base director fee was not changed following this review, increases to the fees for the
Board Chair and the Chairs and members of Committees were made. The following fees were approved effective 1 October 2021:
Chair
Member
Board
$265,000
$120,000
Audit & Risk
Committee
$30,000
$15,000
People,
Remuneration
& Nomination
Committee
$30,000
$15,000
All Board fees are paid entirely in cash (and therefore, no deferred equity grants were made to NEDs in FY2022).
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.
6.2 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 the future will require approval by shareholders in a general meeting in accordance with the
ASX Listing Rules.
6.3 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 FY2022 is set out in detail in section 7.2.
(1) The vesting of equity is subject to the KMP remaining in service with Redbubble as at the vest date and, in relation to the SARs, the total shareholder return
hurdle being satisfied. The vest date shown is the earliest possible vest date.
(2) In order to vest, the SARs need to achieve the TSR hurdle that is set at a compounding Total Shareholder Return (TSR) of 10% per annum on either the third,
fourth or fifth anniversaries following the grant date.
(3) The original contract value of the grant is a non-IFRS number based on the contracted BE and LTI grant amounts shown in KMP employment agreements.
See Section 5.2 for further information. This information differs from the statutory remuneration tables in Section 7 and 8 of this report which are prepared in
accordance with Australian Accounting Standards.
(4) Current value is a non-IFRS number based on the share price at 30 June 2022 and what the outcome would be for the KMP if they were able to exercise
on this date. As the share price at 30 June 2022 is lower than the TSR hurdle for the SARs, these are shown at zero. This information differs from the statutory
remuneration tables in Section 7 and 8 of this report which are prepared in accordance with Australian Accounting Standards.
(5) 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 8.6 for further details.
48
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Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Remuneration Report (audited) continued
7. Statutory Reporting for FY2022
7.1 Executive KMP remuneration for the year ended 30 June 2022
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 Executive KMP.
Short term benefits
Post employment
benefits
Long-term benefits
Share-based
payments
Chief executive officer
Michael Ilczynski
(appointed as CEO on 27 January 2021)
Executive director
Martin Hosking
(resigned as CEO on 27 January 2021)(10)
Other executive KMP
Emma Clark (CFO)
Total
2022
2021
2022
2021
2022
2021
2022
2021
Cash salary(1)
$
Cash bonus(2)
$
Non-monetary
benefits(3)
$
Super-
annuation(4)
$
812,947
390,520
-
-
-
-
317,206
177,293
446,570
431,322
1,259,517
1,139,048
-
-
-
177,293
20,529
8,420
-
750
-
770
20,529
9,940
27,500
25,000
-
25,000
27,500
25,000
55,000
75,000
(1)
Includes base salary, excess superannuation (refer to footnote 4) and short term compensated absences, such as leave entitlements accrued.
(2) Represents cash bonus accrued for the year.
(3)
(4)
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.
Staff can elect to have their superannuation capped at $27,500 (2021: $25,000), with any amount above this included in cash salary. These amounts include
superannuation on bonuses paid during the year.
(5) Australian executives are entitled to long service leave. The annual charge reflects long service leave accrued (or lapsed) during the period.
(6)
(7)
(8)
(9)
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 8.6 for further details. The fair value of in-substance options is ascertained using the Black-Scholes model and
is amortised over the loan period.
Amounts disclosed reflect the value of remuneration consisting of options, based on the value of options expensed during the year. The fair value of options
is ascertained using the Black-Scholes model and is amortised over the vesting period.
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.
Cash bonuses and share appreciation rights with a performance condition are all considered to be performance-related remuneration, based on their nature
at grant date.
(10) 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.
Long service
leave(5)
$
Limited recourse
loan (In-substance
share options)(6)
$
Share options
(Time based)(7)
$
Share
appreciation rights
(Performance
based)(8)
$
Total
remuneration
$
Performance-
related(9)
%
1,512
302
-
(275)
3,642
2,112
5,154
2,139
159,927
52,141
460,047
144,534
370,529
89,426
-
-
-
-
159,927
52,141
-
-
235,084
225,659
695,131
370,193
-
-
229,939
214,547
600,468
303,973
1,852,991
710,343
-
519,974
942,735
899,410
2,795,726
2,129,727
20%
13%
-
34%
24%
24%
50
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Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Remuneration Report (audited) continued
7.2 NED Remuneration for the year ended 30 June 2022(1)
8.2 Options and Share Appreciation Rights
Non-executive directors
Ben Heap
Martin Hosking(4)
Greg Lockwood(5)
Jenny Macdonald
Anne Ward
Total
Short term
benefits
Director
Fees(2)
$
143,322
116,473
Post-
employment
benefits
Superannuation
$
14,332
11,065
-
-
-
-
143,322
115,025
237,759
201,275
524,403
432,773
-
-
-
-
14,332
-
23,776
19,121
52,440
30,186
Share-based
payments
Share options
(Time based)(3)
$
-
-
-
-
-
-
-
17,642
-
17,642
-
35,284
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Total
$
157,654
127,538
-
-
-
-
157,654
132,667
261,535
238,038
576,843
498,243
(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.
(3) Amounts disclosed reflect the value of remuneration from options granted in FY20 that vested in FY21. 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 and FY22, 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.
8. Other Information
8.1 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.
The tables below disclose the number of share options and share appreciation rights granted, exercised, vested or forfeited during
the year.
Option holdings
Share options do not carry any voting or dividend rights, and can only be exercised once the vesting conditions have been met,
until their expiry date.
Balance
at the
start of
the year
Granted
during the
year as
compensation
Exercised
during
the year
Cancelled
during
the year
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
2022
Non-executive
directors
Greg Lockwood
-
Jenny
Macdonald
Anne Ward
Ben Heap
47,509
50,714
-
Martin Hosking
26,832
-
-
-
-
-
-
47,509
-
-
26,832
Chief executive
officer
Michael
Ilczynski
Other executive
KMP
49,388
95,502
-
Emma Clark
53,411
55,331
53,411
Total
227,854
150,833
127,752
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,714
50,714
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
144,890
49,388
95,502
49,388
-
-
55,331
-
55,331
53,411
250,935
100,102
150,833
102,799
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.
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
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.
2022
Chief executive
officer
Direct and indirect shares and equity instruments (such as RSUs, ZPOs and SARs) count towards this minimum shareholding target.
52
Michael Ilczynski
159,854
306,654
Other executive
KMP
Emma Clark
1,152,683
177,668
Total
1,312,537
484,322
-
-
-
-
466,508
-
466,508
-
-
1,330,351
978,298
352,053
1,796,859
978,298
818,561
-
-
-
53
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Remuneration Report (audited) continued
Limited recourse loan share option holdings(1)
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.
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
2022
Chief executive
officer
Michael Ilczynski
289,161
Total
289,161
-
-
-
-
-
-
289,161
289,161
-
-
289,161
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 8.6 for further details.
8.3 Shares issued on exercise of options/rights
2022
Other executive KMP
Emma Clark
Number of
ordinary
shares on
exercise of
options/rights
Exercise price
per option
Share price
per share
at exercise/
settlement
dates
Value at
exercise/
settlement
dates(1)
Nature of grant
Options
53,411
$0.00
$1.84
$98,276
Total
53,411
98,276
(1) For options, value at exercise/settlement date is calculated as share price on exercise date less exercise price paid, multiplied by number of options exercised.
For presentation purposes, share price has been rounded to two decimal places, however the value at exercise/settlement date has been calculated based
on unrounded numbers.
8.4 Shareholdings of Directors and Executive KMP
2022 - Redbubble Limited
ordinary shares(1)
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
Non-executive directors
Ben Heap(2)
Martin Hosking(3)
Greg Lockwood(4)
50,000 -
150,000 -
200,000
44,500,090
26,832
473,078
(5,000,000)
40,000,000
6,465,131 - - -
6,465,131
Jennifer Macdonald
95,539
47,509
80,000 -
Anne Ward(5)
200,000 -
20,000 -
223,048
220,000
Chief executive officer
Michael Ilczynski(6)
Other executive KMP
Emma Clark
Total
72,339 -
60,000 -
132,339
200,000
53,411 - - 253,411
51,583,099
127,752
783,078
(5,000,000)
47,493,929
(1) Includes shares held directly, indirectly and beneficially by KMP.
(2) The shares attributable to Ben Heap are held by Eighty Two Capital Pty Ltd, formerly known as Jackson Alexander Capital Pty Ltd.
(3) The shares attributable to Martin Hosking are held in his personal name and by Jellicom Pty Ltd as trustee for the Three Springs Family Trust and by
Three Springs Foundation Pty Ltd as trustee for the Three Springs Foundation.
(4) The shares attributable to Greg Lockwood are held by Piton Capital Venture Fund II LP and Piton Capital Investments Cooperatief B.
(5) The shares attributable to Anne Ward are held in her personal name and by Walros Pty Ltd as trustee for the Anagnostou Super Fund.
(6) 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 8.6 for further details.
54
55
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Remuneration Report (audited) continued
Financial Report Contents
58
Consolidated Statement
of Comprehensive Income
59
Consolidated Statement
of Financial Position
60 Consolidated Statement
of Changes in Equity
62
Consolidated Statement
of Cash Flows
63
Notes to the Consolidated
Financial Statements
90 Directors’ Declaration
91
Independent Auditor’s Report
96 Shareholder Information
98 Glossary of Terms
99 Corporate Information
8.5 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
01-Oct-21
95,502
Options
01-Oct-22
01-Oct-27
01-Oct-21
306,654
SARs
01-Oct-24
01-Oct-27
$0.00
$4.19
$4.35
$415,434
$2.49
$763,568
Other executive KMP
Emma Clark
01-Oct-21
55,331
Options
01-Oct-22
01-Oct-27
01-Oct-21
177,668
SARs
01-Oct-24
01-Oct-27
$0.00
$4.19
$4.35
$240,690
$2.49
$442,393
Total
635,155
$1,862,085
(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 unless the pro-rata retention criteria of the LTI awards as set out in section 5.2, is satisfied.
(3) The value at grant date for 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.
8.6 Other Transactions with Executive KMP - Legacy Item
In the prior year, 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 the release of Redbubble’s half-year 2021 results and Appendix 4D. The loan amount plus interest
equal to the RBA cash rate plus 3% (compounding annually) is to be repaid 5 years from the date of the loan, or on cessation of
employment if earlier. The security for the loan is limited to the shares acquired with the loan amount.
56
Redbubble – Annual Report 2022
57
Redbubble – Annual Report 2022
Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2022
Consolidated Statement of Financial Position
As at 30 June 2022
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, administration and technology expenses
Depreciation and amortisation
Total operating expenses
Other income(2)
Other expenses(3)
Profit/(loss) before income tax
Income tax (expense)/benefit(4)
Notes
2022
$’000
2021
$’000
482,582
553,285
90,811
104,038
3
573,393
657,323
(90,811)
(104,038)
(299,454)
(330,541)
(77,177)
(64,534)
(80,414)
(73,180)
(36,068)
(28,947)
4
5
6
12, 13 & 14
(10,676)
(13,331)
(594,600)
(614,571)
35
(1,101)
(22,273)
7(a)
(2,315)
43
(3,692)
39,103
(7,856)
Total profit/(loss) for the year attributable to owners
(24,588)
31,247
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
3,454
3,454
(21,134)
Cents
(8.96)
(8.96)
(3,073)
(3,073)
28,174
Cents
11.57
11.28
8
8
(1) Fulfiller expenses comprise product and printing, shipping and transaction costs.
(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.
Current assets
Cash and cash equivalents
Other receivables
Prepayments
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
Total current liabilities
Non-current liabilities
Lease liabilities
Employee benefit liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Treasury reserve
Share based payments reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Notes
2022
$’000
2021
$’000
9
89,133
98,686
10(b)
7(b)
11
12
13
14
7(d)
11
15
16
14
14
16
17(a)
17(b)
17(d)
17(d)
5,314
4,581
2,226
4,770
4,602
4,525
1,270
4,693
106,024
113,776
3,069
70,746
8,085
618
1,401
677
1,928
62,486
4,466
506
2,717
723
84,596
72,826
190,620
186,602
59,619
13,023
2,443
1,749
3,117
47,473
12,235
2,195
2,561
2,280
79,951
66,744
6,508
3,722
149
55
6,712
86,663
268
–
3,990
70,734
103,957
115,868
162,526
162,552
(4,005)
13,347
46
(7,351)
11,414
(3,408)
(67,957)
(47,339)
103,957
115,868
58
Redbubble – Annual Report 2022
59
(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.
Redbubble – Annual Report 2022
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2022
Consolidated Statement of Changes in Equity continued
For the Year Ended 30 June 2022
Contributed
equity
$’000
Treasury
reserve(1)
$’000
Share
based
payments
reserve
$’000
Foreign
exchange
translation
reserve
$’000
Accumulated
losses
$’000
Total
$’000
for the year ended 30 June 2021
Notes
Contributed
equity
$’000
Treasury
reserve(1)
$’000
Share
based
payments
reserve
$’000
Foreign
exchange
translation
reserve
$ ’000
Accumulated
losses
$’000
Total
$ ’000
162,552
(7,351)
11,414
(3,408)
(47,339)
115,868
Balance as at 1 July 2020
145,438
(5,303)
13,699
(335)
(86,021)
67,478
–
(24,588)
(24,588)
Profit/(loss) for the year
for the year ended 30 June 2022
Notes
Balance as at 1 July 2021
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
17(b)
17(b)
4
–
–
–
1,459
4,954
–
–
–
–
–
–
–
–
–
–
–
(4,954)
6,887
Shares issued to Employee Share Trust
17(b)
10,120
(10,120)
Shares issued/allocated to participants(3)
17(b)
(15,283)
15,283
Payment of withholding taxes(4)
17(b)
(1,276)
–
Income tax benefit recognised
directly in equity for Employee
Share Trust deductions(5)
Transfer to accumulated losses(6)
17(b)
17(b)
–
–
2,153
(3,970)
–
–
–
–
–
3,454
3,454
–
3,454
(24,588)
(21,134)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,970
1,459
–
6,887
–
–
(1,276)
2,153
–
Balance as at 30 June 2022
162,526
(4,005)
13,347
46
(67,957)
103,957
(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. The treasury reserve also includes shares used as security for the limited recourse loan provided to the CEO. Details of this transaction are
disclosed in Note 22(b).
(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 tax benefit of $2.1m 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.
Other comprehensive income/(loss)
Total comprehensive loss for the year
Exercise of share options
Transfer to issued capital(2)
Share based payments expense
17(b)
17(b)
4
–
–
8,366
8,990
–
–
–
–
–
–
–
–
–
(8,990)
6,705
Shares issued to Employee Share Trust
17(b)
44,326
(44,326)
Shares issued/allocated to participants(3)
17(b)
(41,413)
41,413
Payment of withholding taxes(4)
17(b)
(3,155)
–
Limited recourse loan made
to related parties(5)
Income tax benefit recognised
directly in equity for Employee
Share Trust deductions(6)
Transfer to accumulated losses(7)
17(b)
17(b)
17(b)
–
–
–
(1,600)
9,900
(7,435)
–
–
–
–
–
–
–
31,247
31,247
(3,073)
(3,073)
–
(3,073)
31,247
28,174
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,435
8,366
–
6,705
–
–
(3,155)
(1,600)
9,900
–
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.
(6) The balance transferred to accumulated losses represents the income tax benefit recorded in the reserve for equity rights that were converted into shares
(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.
in the current period.
Details of this transaction are disclosed in Note 22(b).
The above Consolidated Statement of Changes in Equity should be read in conjunction with accompanying notes.
(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.
60
Redbubble – Annual Report 2022
61
Redbubble – Annual Report 2022
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2022
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2022
Notes
2022
$’000
2021
$’000
Notes
Page
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
Payments for development of intangible assets
Payment of deferred consideration for TeePublic acquisition(1)
Proceeds from net investment in subleases
Net cash provided by/(used in) investing activities
Cash flows from financing activities
Payments for lease liabilities
Proceeds from exercise of share options
Payment of withholding taxes to US tax authorities on settlement
of restricted stock units funded by shares withheld
Payments for limited recourse loans to related parties(2)
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
636,324
715,556
(87,497)
(100,907)
(296,619)
(330,093)
(249,510)
(228,785)
(410)
23
484
(333)
27
(360)
2,795
55,105
12
(2,303)
(8,892)
–
–
(861)
(5,384)
(979)
854
(11,195)
(6,370)
14
17(b)
(3,473)
1,459
17(b)
(1,276)
–
(3,290)
(11,690)
98,686
2,137
89,133
(3,919)
8,366
(3,155)
(1,600)
(308)
48,427
58,129
(7,870)
98,686
(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 in the prior year.
(2) In the prior year the Group provided a limited recourse loan to the CEO to purchase Redbubble Ltd shares on-market. Details of this transaction are disclosed
in Note 22(b).
The above Consolidated Statement of Cash Flows should be read in conjunction with accompanying notes.
1.
2.
Basis of Preparation
Changes in significant accounting policies
Performance
3.
4.
Revenue from contracts with customers
Employee and contractor costs
5. Marketing expenses
6.
7.
8.
Operations, administration and technology expenses
Income tax
Earnings per share
Cash
9.
Cash and cash equivalents
10. Financial risk management
Assets
11. Other assets
12. Property, plant and equipment
13.
Intangible assets
14. Leases
Liabilities
14. Leases
15. Trade and other payables
16. Employee benefits liabilities
Equity
17. Contributed equity and reserves
Group structure
18.
Interests in subsidiaries
19. Parent entity financial information
Unrecognised items
20. Commitments and contingencies
Others
21. Share-based payments
22. Related party transactions
23. Remuneration of auditors
24. Segment information
25. Events occurring after the balance sheet date
26. Other significant accounting policies
64
64
64
65
65
65
65
68
69
70
73
73
75
77
77
78
79
79
81
82
83
83
85
86
86
87
87
62
63
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
1. Basis of preparation
4. Employee and contractor costs
The consolidated financial statements of Redbubble Limited and its controlled entities (the Group) for the year ended 30 June 2022
were authorised for issue by a resolution of the Directors on 17 August 2022. Redbubble Limited (the Company or the parent),
the owner of global online marketplaces for independent artists, 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.
2. Changes in significant accounting policies
There are no new or amended accounting standards that required Redbubble to change its accounting policies for the 2022 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 2021 was recognised as revenue during the FY2022 year. All of the unearned
revenue balance at 30 June 2022 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 24.
Salary costs
Contractor costs
Share-based payments expense
Superannuation and other pension related costs(1)
Total employee and contractor costs
2022
$’000
51,517
15,461
6,887
3,312
77,177
2021
$’000
41,880
13,219
6,705
2,730
64,534
(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
(1) Paid marketing represents search and social paid marketing costs, paid on a per click basis.
6. Operations, administration and technology expenses
Technology infrastructure and software costs
Other operations and administration expenses
Total operations, administration and technology expenses
7. Income tax
Recognition of tax expense/(benefit)
2022
$’000
76,432
3,982
80,414
2021
$’000
71,208
1,972
73,180
2022
$’000
22,610
13,458
36,068
2021
$’000
19,060
9,887
28,947
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.
64
65
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
7. Income tax continued
Deferred tax
Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets
and liabilities to the carrying amounts in the consolidated financial statements.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the
reporting period.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent:
• it is probable that future taxable profits will be available against which the deductible temporary differences and losses can be utilised;
• the likelihood of achieving appropriate continuity of ownership levels and continuing to meet the relevant definitions of “same
business” are met; and
• there are no changes in tax legislation that adversely affect the ability to realise the deferred tax asset benefits.
Deferred tax assets and liabilities are offset where they relate to income taxes levied by the same taxation authority and the intention
is to realise the assets and settle the liabilities simultaneously in each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
Critical accounting estimates and judgements
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 $123.4 million (2021: $92.4 million) of unrecognised losses and $10.6 million (2021: $9.6 million) of
unrecognised R&D tax offsets. An unrecognised deferred tax asset of $47.7 million exists as at 30 June 2022 (2021: $37.3 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.
(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
Total income tax expense/(benefit) recorded in the Statement of Comprehensive Income
(b) Current tax assets/(liabilities)
The current tax asset is comprised of the following
Current tax expense recorded in the Statement of Comprehensive Income
Tax benefit recorded in equity(1)
Tax instalments made and refunds due for prior years
Total current tax asset
2022
$’000
2021
$’000
605
191
1,479
40
2,315
9,902
(24)
(2,076)
54
7,856
2022
$’000
2021
$’000
(605)
(9,902)
2,153
678
2,226
9,900
1,272
1,270
(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
exceed the cumulative remuneration expense. The excess of the associated current or deferred tax is recognised in equity and forms part of the treasury
shares reserve.
(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
2022
$’000
(22,273)
(6,682)
210
(375)
2021
$’000
39,103
11,730
(270)
(3,335)
Net Australian income tax benefit from funding the employee share trust
(1,964)
(12,222)
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)
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Employee benefits
Property, plant, equipment
Lease assets and liabilities
Unrealised FX
Intangible assets
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
2,153
(120)
(1,426)
67
231
10,221
2,315
9,900
(99)
(647)
(352)
30
3,121
7,856
2022
$’000
2021
$’000
501
(200)
286
3,331
(3,205)
848
(160)
1,401
2,717
(1,519)
203
1,401
1,039
(249)
332
1,203
(2,142)
2,781
(247)
2,717
617
2,022
78
2,717
(1) Deferred tax assets (DTAs) are recognised in relation to temporary differences that arise in jurisdictions where the Group is generating taxable income as it
is probable that the tax benefit associated with these DTAs will be realised. As noted above, the Group has unrecognised DTAs for tax losses which remain
available for use but for which recognition is not currently supportable. These DTAs may be recognised at a future point in time when there is sustainable
evidence of taxable income in the relevant jurisdiction.
66
67
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
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
2022
$’000
2021
$’000
(24,588)
31,247
2022
Number(1)
2021
Number
Weighted average number of shares used as denominator in calculating basic earnings per share
274,393,330
270,031,293
Adjustments for calculation of diluted earnings per shares:
Add: Options
Add: Restricted stock units
Add: Share appreciation rights
–
–
–
4,269,483
1,156,139
1,652,778
Weighted average number of shares used as denominator in calculating diluted earnings per share
274,393,330
277,109,693
(1) In FY2022, 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.
9. Cash and cash equivalents
Cash at bank and on hand
Total cash and cash equivalents
2022
$’000
89,133
89,133
2021
$’000
98,686
98,686
(a) Reconciliation of profit / (loss) for the year to net cash inflow from operating activities
Profit/(Loss) for the year
Non-cash items
Notes
2022
$’000
2021
$’000
(24,588)
31,247
(Recognition)/de-recognition of net deferred tax asset
7(d)
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
Income tax benefit recognised directly in equity for Employee Share Trust deductions
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
Interest expense incurred over rent free period
Foreign exchange movement
Closing balance 30 June
Notes
14
14
14
1,519
10,676
6,887
(3,736)
66
2,153
-
(911)
(956)
10,897
788
2,795
2022
$’000
6,002
(3,473)
6,675
40
381
9,625
(2,022)
13,331
6,705
9,255
241
9,900
(129)
3,245
(238)
190
(16,620)
55,105
2021
$’000
9,763
(3,919)
826
–
(668)
6,002
68
69
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
10. Financial risk management
This note explains the Group’s financial risk management and how the exposure to these risks affects the Group’s future financial
performance. The Group’s risk management framework is maintained by senior management through delegation from the Board
of Directors. The Board oversees and monitors senior management’s implementation of the Group’s risk management framework.
This is based on recommendations from the Audit and Risk Committee, where appropriate. The risk management framework
includes policies and procedures approved by the Board and managed by internal legal counsel and the Finance function.
Financial assets
Cash and cash equivalents
Other receivables
Security bonds
Total financial assets
Financial liabilities
Fulfiller payables
Artist payables
Staff payables
Other payables
Lease liabilities
Total financial liabilities
Notes
2022
$’000
2021
$’000
9
89,133
98,686
10(b)
11
5,314
1,027
4,602
1,685
95,474
104,973
Notes
15
15
15
15
14
2022
$’000
24,203
15,928
4,238
11,498
9,625
2021
$’000
22,500
12,673
1,602
6,810
6,002
65,492
49,587
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.
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 2022
30 June 2021
GBP
$’000
15,794
3,924
USD
$’000
11,036
35,964
EUR
$’000
16,613
4,361
The aggregate net foreign exchange gains/(losses) recognised in profit or loss were:
Net foreign exchange loss included in other expenses
Total net foreign exchange losses recognised in profit/(loss) before income tax for the year
CAD
$’000
5,103
2,809
2022
$’000
(626)
(626)
Total
$’000
48,546
47,058
2021
$’000
(3,092)
(3,092)
Foreign Currency Sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in exchange rates with all other variables held constant.
The impact on the Group’s profit before tax is due to changes in the fair value of monetary assets and liabilities.
Year
30 June 2022
30 June 2021
(b) Credit risk
Effect on profit before tax (amounts shown in AUD)
Change in
FX rate
+ 10%
- 10%
+ 10%
- 10%
GBP
$’000
1,579
(1,579)
392
(392)
USD
$’000
1,104
(1,104)
3,596
(3,596)
EUR
$’000
1,661
(1,661)
436
(436)
CAD
$’000
510
(510)
281
(281)
Total
$’000
4,855
(4,855)
4,706
(4,706)
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.
Cash and bank balances/other financial assets
As at 30 June 2022, the Group holds $14.2 million (2021: $1.3 million) in bank deposits 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, Apple Pay or Buy Now Pay Later (BNPL) platforms. The other receivables balance as at 30 June
2022 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.
Receivables from payment service providers
Other receivables
Total other receivables(1)
2022
$’000
1,824
3,490
5,314
2021
$’000
1,526
3,076
4,602
(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% (2021: less than 0.1%)
of marketplace revenue.
70
71
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
10. Financial risk management continued
(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) are current and anticipated to be repaid over the normal payment terms, usually 30 days.
Financial arrangements
The Group had no borrowing facilities at the end of reporting period nor at the end of the prior reporting period.
Maturities of financial liabilities
Financial liabilities owed by the Group at 30 June 2022 are $65.9 million (2021: $50 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 2022
1 to 3 months
3 to 12 months
1 to 3 years
> 3 years
Total
(1) Excludes sales taxes.
Year ended 30 June 2021
1 to 3 months
3 to 12 months
1 to 3 years
> 3 years
Total
(1) Excludes sales taxes.
(d) Capital management
Trade
and other
payables(1)
$’000
55,867
–
–
–
Lease
liabilities
$’000
908
2,528
4,918
1,663
Total
$’000
56,775
2,528
4,918
1,663
55,867
10,017
65,884
Trade
and other
payables(1)
$’000
43,585
–
–
–
43,585
Lease
liabilities
$’000
840
1,751
3,097
745
6,433
Total
$’000
44,425
1,751
3,097
745
50,018
The Group’s policy is to maintain a capital structure for the business which ensures sufficient liquidity, provides support for business
operations, maintains shareholder confidence and positions the business for future growth. The Group manages its capital structure
and makes adjustments in light of changes in economic conditions. The ongoing maintenance of the Group’s policy is characterised
by ongoing cash flow forecast analysis and detailed budgeting which is directed at providing a sound financial positioning for the
Group’s operations and financial management activities. The Group is not subject to externally imposed capital requirements.
11. Other assets
Consolidated
Security bonds
Goods in transit(1)
Total other assets
Current
Non-current
2022
$’000
350
4,420
4,770
2021
$’000
962
3,731
4,693
2022
$’000
677
–
677
2021
$’000
723
–
723
(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.
72
73
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
12. Property, plant and equipment continued
Leasehold
improvements
$’000
Furniture and
equipment
$’000
Computer
equipment
$’000
Cost
Balance at 1 July 2021
Additions(1)
Disposals
Exchange differences
Balance at 30 June 2022
Balance at 1 July 2020
Additions
Disposals
Reclassification
Exchange differences
Balance at 30 June 2021
Accumulated depreciation
Balance at 1 July 2021
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2022
Balance at 1 July 2020
Charge for the year
Disposals
Reclassification
Exchange differences
Balance at 30 June 2021
Net book value
As at 30 June 2022
As at 30 June 2021
3,899
1,091
–
39
5,029
3,925
166
–
–
(192)
3,899
(2,942)
(406)
–
(144)
(3,492)
(2,584)
(464)
–
–
106
(2,942)
1,537
957
Total
$’000
7,977
2,303
(56)
246
10,470
7,562
861
(106)
–
(340)
7,977
(6,049)
(1,094)
17
(275)
(7,401)
(5,333)
(995)
71
–
208
797
317
–
51
1,165
786
135
–
(81)
(43)
797
(568)
(147)
–
(36)
(751)
(494)
(116)
–
19
23
3,281
895
(56)
156
4,276
2,851
560
(106)
81
(105)
3,281
(2,539)
(541)
17
(95)
(3,158)
(2,255)
(415)
71
(19)
79
(568)
(2,539)
(6,049)
414
229
1,118
742
3,069
1,928
(1) Leasehold improvements additions of $1m mainly relates to a five year lease agreement signed for the new Melbourne office premises.
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 2022 (2021: $nil).
13. Intangible Assets
Recognition and measurement
Capitalised
development costs
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
Brand Name
Amortisation
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. 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 3.3% (2021: 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 10% (2021: 12.5%). 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 for the CGU 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 2022. 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.
74
75
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
13. Intangible Assets continued
Cost
Balance at 1 July 2021
Additions
Disposals
Exchange differences
Balance at 30 June 2022
Balance at 1 July 2020
Additions
Disposals
Exchange differences
Balance at 30 June 2021
Accumulated amortisation
Balance at 1 July 2021
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2022
Balance at 1 July 2020
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2021
Net book value
As at 30 June 2022
As at 30 June 2021
Capitalised
development
costs
$’000
Brand name
$’000
Goodwill
$’000
Total
$’000
6,326
54,035
47,352
107,713
–
–
577
6,903
6,878
–
–
(552)
6,326
9,618
(236)
–
63,417
48,791
5,384
(140)
–
–
–
4,325
51,677
51,489
–
–
9,618
(236)
4,902
121,997
107,158
5,384
(140)
(4,137)
(4,689)
54,035
47,352
107,713
–
–
–
–
–
–
–
–
–
–
(45,227)
(6,206)
182
–
(51,251)
(35,582)
(9,647)
2
–
(45,227)
–
–
–
–
–
–
–
–
–
–
(45,227)
(6,206)
182
–
(51,251)
(35,582)
(9,647)
2
–
(45,227)
6,903
6,326
12,166
8,808
51,677
47,352
70,746
62,486
No intangible assets have been impaired in the financial year ending 30 June 2022 (2021: $nil).
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 5 years (2021: 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
Depreciation and amortisation expense
Exchange differences
Balance as at 30 June
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
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
2022
$’000
4,466
6,747
2021
$’000
6,649
953
(3,376)
(2,689)
248
8,085
2022
$’000
6,002
6,675
385
(447)
4,466
2021
$’000
9,763
826
320
(3,818)
(4,239)
381
9,625
2022
$’000
3,117
6,508
9,625
2022
$’000
(345)
-
(3,473)
(3,818)
(668)
6,002
2021
$’000
2,280
3,722
6,002
2021
$’000
(320)
(4)
(3,919)
(4,243)
(1) Includes leases with a lease term of 12 months or less. This amount is also recognised in operations, administration and technology expenses in the consolidated
statement of comprehensive income.
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:
Extension options not reasonably certain to be exercised
5,945
8,874
14,819
Within
five years
$’000
More than
five years
$’000
Total
$’000
76
77
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
(b) Group as a lessor
The Group previously sub-let offices in the United States. These subleases had original terms of up to 4 years and all ended
in FY2021.
Net investment in sublease
Balance at 1 July
Additions
Interest income
Net investment in sublease receipts
Other
Exchange differences
Balance as at 30 June
Amounts recognised in the statement of cashflow
Operating – receipt of interest
Investing – receipt of principal
Total cash inflow relating to leases
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.
2022
$’000
–
–
–
–
–
–
–
2021
$’000
994
–
17
(871)
(65)
(75)
–
2022
$’000
2021
$’000
–
–
–
17
854
871
2022
$’000
24,203
15,928
4,238
3,752
11,498
59,619
2021
$’000
22,500
12,673
1,602
3,888
6,810
47,473
16. Employee benefit liabilities
Wages, salaries, annual and long service leave
A provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the
reporting period.
Employee benefits that are expected to be settled within one year represent the amounts expected to be paid when the liability
is settled. Employee benefits expected to be settled more than twelve months after the end of the reporting period have been
measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability,
consideration is given to employee wage increases and the probability that the employee may satisfy service period requirements.
Cash flows are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity that
match the expected timing of cash flows.
Employee benefits are presented as current liabilities in the balance sheet if the Group does not have an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date regardless of the classification of the liability for measurement
purposes under AASB 119 Employee Benefits.
Changes in the measurement of the liability are recognised in the income statement.
Defined contribution schemes
Obligations for contributions to defined contribution superannuation plans are recognised as an employee benefit expense in the income
statement in the periods in which services are provided by employees.
Annual leave
Long service leave
Total employee benefit liabilities
17. Contributed equity and reserves
(a) Share capital
Ordinary shares(1)
Issued and fully paid
Total share capital
Current
Non-current
2022
$’000
2,169
274
2,443
2021
$’000
1,912
283
2,195
2022
$’000
–
149
149
2021
$’000
–
268
268
Consolidated and parent entity
2022
Shares
2021
Shares
2022
$’000
2021
$’000
275,920,223
273,620,223
275,920,223
273,620,223
162,526
162,526
162,552
162,552
(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.
78
79
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
17. Contributed equity and reserves continued
(b) Movements in ordinary share capital and treasury reserve
Share Capital
Balance at 1 July 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
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)
Number
of shares
$’000
263,462,966
145,438
-
-
-
10,100,000
8,366
-
8,990
44,326
-
(41,413)
57,257
-
-
(3,155)
273,620,223
162,552
-
-
-
2,300,000
-
-
1,459
-
4,954
10,120
(15,283)
(1,276)
Balance at 30 June 2022
275,920,223
162,526
(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 2020
Number
of shares
(3,865,657)
$’000
(5,303)
Shares issued to Employee Share Trust and held in Treasury Reserve
(10,100,000)
(44,326)
Shares allocated to participants from the Employee Share Trust and released from treasury reserve
12,783,499
41,413
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
-
-
(289,161)
(1,471,319)
9,900
(7,435)
(1,600)
(7,351)
Shares issued to Employee Share Trust and held in Treasury Reserve
(2,300,000)
(10,120)
Shares allocated to participants from the Employee Share Trust and released from treasury reserve
2,788,239
15,283
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
Balance at 30 June 2022
-
-
(983,080)
2,153
(3,970)
(4,005)
(2) Represents limited recourse loan provided to the CEO to purchase Redbubble shares on-market. Details of this transaction are disclosed in Note 22(b).
(c) Dividends
No dividends were declared or paid during the year (2021: $nil). The Group’s franking account balance is $nil (2021: $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
and employees (including senior executives).
Foreign Currency Translation Reserve
Exchange differences arising on translation of the foreign controlled entities are recognised in the foreign currency translation reserve
within other comprehensive income. The cumulative amount is reclassified to the income statement when the foreign controlled entity
to which it relates is disposed of.
Treasury reserve
The treasury reserve is used to hold the book value of shares held by the Employee Share Trust for future issue to participants on
exercise of options/restricted stock units. It also includes limited recourse loan provided to the Redbubble Group CEO in the prior year
to purchase Redbubble shares on-market. 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.
18. 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
Provider of global sales, marketing and distribution
services in respect of the Redbubble marketplace
Redbubble UK Limited
UK
Marketing and distribution services in Europe
Redbubble Europe GmbH
Germany
Marketing and distribution services in Europe
TP Apparel LLC
USA
Provider of global sales, marketing and distribution
services in respect of the TeePublic marketplace
Equity holding
2022
%
Equity holding
2021
%
100
100
100
100
100
100
100
100
80
81
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
19. Parent entity financial information
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
2022
$’000
2021
$’000
81,600
19,242
98,041
10,465
100,842
108,506
8,875
4,142
13,017
6,122
364
6,486
162,533
162,559
13,347
(4,005)
11,414
(7,351)
(84,050)
(64,602)
87,825
102,020
(23,173)
(23,173)
23,301
23,301
The parent entity does not have any capital commitments as at 30 June 2022 (2021: In FY2021 the parent entity signed a lease
agreement for the new Melbourne office premises that had not yet commenced as at 30 June 2021. The future undiscounted lease
payments for the lease contract were $0.9m within one year and $5.4m within five years. At 30 June 2021, the parent entity also had
capital commitments of $3.4m relating to fit-out works for the new Melbourne office. These commitments were not recognised as
liabilities as the relevant asset had not yet been received. The lease commenced in FY22 and therefore there are no commitments for
lease contracts that have not yet commenced. The Group was also due to receive a $2.3m lease incentive for the fit-out works which
it received in FY2022. There are no outstanding obligations.)
(c) Guarantees entered into by the parent entity
20. Commitments and contingencies
(a) Commitments
Other than the commitments mentioned in note 19(b), the Group had no other commitments as at 30 June 2022
(2021: Other than the commitments mentioned in note 19(b), the Group had no other commitments as at 30 June 2021).
(b) Contingent liabilities/assets of the Group
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, nor is it uncommon within the USA business environment where the majority of such claims arise. 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.
(c) Guarantees
Other than the bank guarantees mentioned in note 19(c), the Group has also obtained a bank guarantee of $0.25m as security for office
premises in the USA (2021: $nil). No liability is expected to arise.
21. Share-based payments
The Group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to which
employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding
increase to an equity account.
The fair value of options with a strike price and share appreciation rights are ascertained using industry standard valuation models.
A Black-Scholes pricing model is used for options and the Monte Carlo simulation model is used for share appreciation rights.
The amount to be expensed is determined by reference to the fair value of the options or shares granted. This expense takes into
account any market performance conditions and the impact of any non-vesting conditions but ignores the effect of any service
and non-market performance vesting conditions. Non-market vesting conditions are taken into account when considering the
number of options expected to vest and at the end of each reporting period, the Group revisits its estimate. Revisions to the prior
period estimate are recognised in the income statement and equity.
The fair value of zero priced options and restricted stock units approximates 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.
A bank guarantee of $0.9m exists as security for the Melbourne office lease. No liability is expected to arise. The parent entity did not
enter into any new guarantees for the financial year ended 30 June 2022 (2021: $0.9m).
Options over ordinary shares
(d) Contingent liabilities of the parent entity
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, nor is it uncommon within the USA business environment where the majority of such claims arise. 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.
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)).
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 6 years from the grant date); and
(b) 90 days after ceasing to be an employee or contractor for the Group.
Some of the options have a zero exercise price, so as to be akin to performance rights or restricted stock units.
2014 Option Plan
Options to employees/contractors of the US subsidiaries are granted under this plan. The vesting conditions and expiry period under
this plan are akin to the Redbubble Equity Incentive Plan.
82
83
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
21. Share-based payments continued
(b) Modifications to the awards
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. In the prior year a limited recourse loan was 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.
Please see Note 22(b) for more information.
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.
(a) Movement
The table below summarises the movement in the number of options, restricted stock units and share appreciation rights during the year:
2022
Number
2022
WAEP ($)(1)
2021
Number
2021
WAEP ($)(1)
Options over ordinary shares
Outstanding at 1 July
Granted during the year(2)
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
Restricted stock units
Outstanding at 1 July
Granted during the year
Settled during the year
Forfeited during the year
Outstanding at 30 June
Share appreciation rights (SARs)(3)
Outstanding at 1 July
Granted during the year
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
6,771,996
1,004,450
(2,161,917)
(1,126,450)
(682,571)
3,805,508
2,631,587
1,465,053
1,266,984
(868,480)
(459,644)
1,403,913
4,523,698
1,490,626
(127,662)
(178,246)
(50,000)
5,658,416
1,805,452
0.90
18,510,058
–
0.67
0.79
1.54
0.70
0.94
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
–
–
–
–
–
–
–
–
–
–
–
–
(1) WAEP stands for Weighted Average Exercise Price.
(2) 1,004,450 options granted during the year have a zero exercise price (2021: 867,545). The expiry period for options and RSU grants made during the current
and prior year is 6 years.
(3) SARs do not have an exercise price, however they do have a base share price from which any share appreciation is measured.
The table below details modifications to a number of options/restricted stock units (RSUs)/share appreciation rights (SARs) during the
year.
Accelerated vesting of unvested options/RSUs/SARs over ordinary shares upon cessation
of employment
Total
(c) Additional disclosures
Weighted average fair value of
Share price 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 price ($)(2)
2022
Number
2021
Number
310,147
459,214
310,147
459,214
2022
$
3.49
3.83
2.21
3.54
2021
$
4.23
4.27
2.21
4.34
2022
(years)
5.82
2021
(years)
7.07
2022
70.91
1.30
4.47
–
3.95
2021
69.94
0.67
4.72
–
4.32
(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 $1.56 (2021: $nil to $1.62).
(2) The fair market value of a share has been calculated using the closing price on grant date.
22. Related party transactions
(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
Total transactions with key management personnel
2022
$
2021
$
1,804,449
1,759,054
107,440
1,455,526
5,154
105,186
761,591
2,139
3,372,569
2,627,970
84
85
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
22. Related party transactions continued
(b) Transactions with key management personnel
2022
There were no related party transactions in the current year.
2021
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.
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:
Australia
United States
United Kingdom
Rest of the world
Total
2022
2021
Revenue
$’000
Non-current
assets(1)
$’000
Revenue
$’000
Non-current
assets(1)
$’000
38,202
16,601
37,715
396,856
64,828
443,682
56,013
82,322
–
471
73,476
102,450
7,939
60,475
–
466
573,393
81,900
657,323
68,880
(1) Non-current assets for this purpose consist of property, plant and equipment, intangible assets and right of use assets.
25. Events occurring after the balance sheet date
The financial report was authorised for issue on 17 August 2022 by the Board of Directors.
Other than the above, there have been no further significant events after the balance sheet date that require disclosure.
2022
$
2021
$
26. Other significant accounting policies
(a) Principles of consolidation
23. Remuneration of auditors
Fees to Ernst & Young (Australia)
Audit fees:
Fees for auditing the statutory financial report of the parent covering the group and auditing the
statutory financial reports of any controlled entities
331,791
285,890
Fees for other services:
Assistance in developing the Group’s ESG strategy
Taxation services
Remuneration of Ernst & Young
Fees to other overseas member firms of Ernst & Young (Australia)
Fees for other services:
Taxation services
Remuneration of other overseas member firms of Ernst & Young Australia
Total auditor’s remuneration
24. Segment information
197,944
68,150
30,370
43,630
597,885
359,890
21,505
21,505
-
-
619,390
359,890
AASB 8 Operating Segments allows for the aggregation of operating segments where they exhibit similar economic characteristics.
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 18 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.
86
87
Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Notes to the Consolidated Financial Statements continued
For the Year Ended 30 June 2022
26. Other significant accounting policies continued
(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 profit or loss,
except where they relate to an item of other comprehensive income.
Group companies
The results and financial position of all the Group entities that have a functional currency different from the presentation currency
are translated into the presentation currency (none of which has the currency of a hyperinflationary economy) as follows:
• Assets and liabilities for each balance sheet are translated at the closing exchange rate at the date of that balance sheet;
• Income and expenses for each income statement and statement of comprehensive income are translated at average exchange
rates; and
• All resulting exchange differences are recognised in other comprehensive income.
(d) Other income
Finance income
Finance income is recognised on an accruals basis using the effective interest method.
(e) Financial assets
(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.
(i) Leases
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.
Significant judgement in estimating the incremental borrowing rate
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily determinable. The rate is determined using a government bond (risk free) rate
adjusted for a risk premium commensurate with each lessee’s profile. The bond rates used are for a bond with a term and security
similar to each lease and are country specific.
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.
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.
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.
The Group applies the general approach in calculating ECLs in other receivables. The Group tracks changes in credit risk and
recognises a loss allowance for lifetime expected credit losses if there has been a significant increase in credit risk (measured using
the lifetime probability of default, based on historical credit loss experience and adjusted for forward-looking factors specific to the
receivables and the economic environment) since initial recognition of the receivable. If, at the reporting date, the credit risk on
a financial instrument has not increased significantly since initial recognition, a loss allowance for 12-month expected credit losses
is recognised.
(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 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.
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.
88
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Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Directors’ Declaration
Independent Auditor’s Report
In accordance with a resolution of the Directors of Redbubble Limited, we state that in the Directors’ opinion:
(a) the financial statements and notes, as set out on pages 58 to 89 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 2022 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.
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
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.
Independent auditor’s report to the members of Redbubble Limited
Anne Ward
Board Chair
Melbourne
17 August 2022
Jennifer Macdonald
Audit and Risk Committee Chair
Melbourne
17 August 2022
Report on the audit of the financial report
Opinion
We have audited the financial report of Redbubble Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2022, 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:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
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.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
90
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Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Independent Auditor’s Report continued
Revenue recognition
Why significant
As disclosed in Note 3 to the consolidated financial
statements, 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.
Capitalised development
Why significant
As disclosed in Note 13 to the consolidated financial
statements, the Group capitalises cost related to the
development and engineering activities of website
and mobile applications as intangible assets. The
carrying value of capitalised development as at 30
June 2022 totalled $12.2m.
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,
determining when the asset is ready for use, the
useful lives for capitalised development costs and
the amortisation recognised. In addition,
determining whether there is any indication of
impairment of the carrying value of assets requires
judgment in making assumptions which are affected
by future market or economic developments.
This was considered a key audit matter given the
judgement required in accounting for internal
capitalised development costs, 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.
How our audit addressed the key audit matter
Our audit procedures included the following:
a combined testing approach, including testing the operating
effectiveness of controls and performing substantive
procedures over the capture, timing of revenue recognition
and measurement of revenue transactions;
for a sample of revenue transactions, testing whether the
revenue was recorded in the appropriate period and whether
management’s estimate of sale transactions not delivered to
the customer at 30 June 2022 were appropriately included as
unearned revenue and Goods in Transit for items shipped but
not yet delivered, as at that date;
testing the assumptions used in management’s estimate based
on the average delivery days between payment, shipment and
delivery;
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.
How our audit addressed the key audit matter
Our audit procedures included the following:
assessing the eligibility of the development costs for
capitalisation as an intangible asset in accordance with
Australian Accounting Standards;
selecting a sample of capitalised development costs by project
and assessing whether the nature of projects and costs
incurred were supported by underlying evidence such as
employee time sheets, employee contracts and supplier
invoices;
checked the clerical accuracy of the capitalised development
cost rollforward;
assessing whether the amortisation rates used are appropriate;
testing for a sample of projects, the feasibility and benefits
expected from each based on the current status, forecast
performance and related assumptions. This included
discussions with project managers and developers and
reviewing project plan approvals and reporting;
considering whether there were any indicators of impairment;
and
evaluation of the disclosures in Note 13 of the consolidated
financial statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2022 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
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
92
93
Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Independent Auditor’s Report continued
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 40 to 56 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of Redbubble Limited for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Ashley Butler
Partner
Melbourne
17 August 2022
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
94
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Redbubble – Annual Report 2022Redbubble – Annual Report 2022
Shareholder Information
The shareholder information set out below was applicable as at 14 July 2022 (except as otherwise stated).
Number of
Ordinary Shares
Issued Capital
%
A. Top 20 Shareholders
Rank Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
JELLICOM PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
NATIONAL NOMINEES LIMITED
BLACKBIRD FOF PTY LTD
RADIATA INVESTMENTS PTY LTD
PITON CAPITAL VENTURE FUND II LP
CBC CO PTY LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMS(NZ) LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
CAWSEY SUPERANNUATION FUND PTY LTD
SOLIUM NOMINEES (AUSTRALIA) PTY LTD
OSBORNE TAS PTY LTD
DENALI VENTURE PARTNERS FUND 1 LP
PAUL VANZELLA
20.
RADIATA SUPER PTY LTD
Top 20 Holders Total
Remaining Holders Balance
Total
B. Holding Distribution
Range
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
96
Number of
Holders
92
450
451
2,216
4,706
7,915
%
1.16
5.69
5.70
28.00
59.46
Shares
252,799,157
12,453,830
3,364,848
5,490,302
1,812,086
100
275,920,223
37,861,592
33,643,172
32,132,598
23,219,937
21,908,881
18,909,810
13,190,127
11,361,819
5,564,640
5,537,291
4,404,907
4,005,111
2,594,269
2,277,459
2,003,446
1,925,044
1,901,968
1,840,240
1,631,500
1,600,568
227,514,379
48,405,844
275,920,223
13.72
12.20
11.65
8.42
7.94
6.85
4.78
4.12
2.02
2.01
1.60
1.45
0.94
0.83
0.73
0.70
0.69
0.67
0.59
0.58
82.46
17.54
100
%
91.62
4.51
1.22
1.99
0.66
100
Overview
Company Overview
Governance
Financial Report
Additional Information
C. Substantial Holders
Name
Mr Martin Hosking
Osmium Partners
Southeastern Asset Management
Mitsubishi UFJ Financial Group, Inc.
D. Unquoted Equity Securities
The numbers of unquoted equity securities in the Company are as follows:
Type of Equity Security
Share Options
Share Appreciation Rights
Performance Rights
Total
Number of
Shares
Issued capital
%
40,000,000
16,762,230
15,024,108
13,905,651
14.49
6.1
5.45
5.04
Number of
Holders
151
15
97
Number
4,000,444
5,658,416
1,403,913
263
11,062,773
E. Redbubble’s American Depository Receipt (ADR) program
Redbubble ADRs are negotiable certificates issued by BNY Mellon, with one ADR representing ten RBL ordinary shares.
They are traded under the symbol RDBBY and are classified as Level 1. They are traded over the counter via brokers.
BNY Mellon is the depositary bank for the ADRs and plays a key role in the process of issuance and cancellation of ADRs.
For additional questions about ADRs please contact:
BNY Mellon Shareowner Services
P. O. Box 505000
Louisville, KY 40233-5000
U.S. Toll Free Telephone: 1-888-BNY-ADRS (1-888-269-2377) Telephone for International
Callers: 1-201-680-6825
Website: 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
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
At a general meeting of shareholders, each shareholder is entitled to one vote on a show of hands and one vote per fully paid
ordinary share on a poll.
Options, Share Appreciation Rights and Performance Rights
No voting rights
H. On-market Buy-back
There is no current on-market buy-back of shares.
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Redbubble – Annual Report 2022Redbubble – Annual Report 2022 Glossary of Terms
Corporate Information
Active members
unique members who visited either the web or app platform while logged in at least once during
the period.
Annual purchase days
frequency of purchase made by customers over a 12 month period.
Bubbler
a Redbubble Group employee.
Constant currency
reflects the underlying growth before translation to Australian dollars for reporting purposes.
Redbubble sources about 91% of its Marketplace Revenue in currencies other than Australian
dollars. TeePublic sources about 88% of its Marketplace Revenue in US dollars.
Content library
based on indexable content across both Redbubble and TeePublic. To classify as indexable
content. the work must be in a published state and available on at least one product, and the
artist must be active and payable.
COGS
DDA
Cost of Goods Sold
delivery date adjustment
Existing customers
customers that have purchased already in the 12 months prior; does not account for overlaps
between Redbubble and TeePublic.
GPAPA
Gross Profits after Paid Acquisition
Gross Transaction Value (GTV) Gross Transaction Value less Taxes and Artist Revenue is equal to Marketplace Revenue.
Marketplace Revenue (MPR)
Total Revenue less Artist Revenue (i.e. margin).
Reactivated customers
customers that have purchased before, but not in the previous 12 months; does not account for
overlaps between Redbubble and TeePublic.
Repeat purchases
based on repeat Marketplace Revenue earned from purchases made by repeat customers who
have previously purchased, regardless of the date of their initial purchase.
Selling artists
currently active artists (i.e. not suspended or deleted) who sold a currently published work
during the period; does not account for overlaps between Redbubble and TeePublic.
Unique customers
defined as an unique email address; does not account for overlaps between Redbubble and
TeePublic.
Units
every item in an order counts as one (i.e. an order with 2x stickers and 1x t-shirt will count
as 3 units).
Directors
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
Corina Davis (US)
Martin Bede (Australia)
Registered Office
Level 12, 697 Collins Street
Docklands VIC 3008
Australia
Share Register
Link Market Services
Tower 4, 727 Collins Street
Melbourne VIC 3008
Australia
Auditors
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
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Redbubble – Annual Report 2022