Thank you for standing by. Welcome to the Adore Beauty Group Limited first half 2024 results conference call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question via the phones, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question on the webcast, please type it into the Ask a Question box and click submit. I would now like to hand the conference over to Miss Tamalin Morton, CEO. Please go ahead. Thank you. Good morning, everyone. I'm Tamalin Morton, CEO of Adore Beauty Group. I'd like to begin by acknowledging the traditional owners of the land on which we meet today and pay my respects to their elders, past and present. Thanks for joining us today to discuss Adore Beauty's results for the first half of the 2024 financial year. We will be referencing slides from the investor presentation uploaded to the ASX earlier this morning. Here with me is our CFO, Stephanie Carroll. Adore Beauty has had a solid start to FY24, delivering growth across key metrics in a challenging retail environment. Revenue of $ 100.7 million increased 7% over the prior corresponding period, driven by a record 507,000 returning customers. Our continued focus on returning customers has seen us retain more of our customer base, up 5% on the same period last year. More broadly, active customers of 804,000 were up 0.5% over the prior period, and we have several initiatives underway to sustainably grow new customer acquisition. I'll provide more detail on this shortly. Gross profit margin of 33.5% with up 1.1 percentage points on the PCP, supported by product margin and freight improvements. Reported EBITDA of $ 2.4 million and margin of 2.3% is in line with guidance and reflects operating leverage, cost optimization programs, and our disciplined investment in margin expansion initiatives. Adore Beauty has a strong cash position of $ 32.3 million and no debt. As I mentioned, our lower returning customer base was the key driver of revenue growth in the first half of FY24, contributing 81% to product sales. This is up from 64% three years ago. Revenue contributions from returning customers increased 9% over the same period last year and is in line with H1 FY22, which was a record year for the business. We're also continuing to grow revenue from retail, trade, media, and brand partner advertising. This is shown in the other category in the graph on the left. Turning now to active customers on slide 4. In the first half of FY24, our disciplined marketing strategy focused on our existing customer base and profitable new customer acquisitions. The strength of our returning customers provides inherent resilience for the business, particularly in a highly competitive marketing environment. Over the past three years, our returning customers have grown at an annual rate of 22%, now accounting for 63% of all active customers. As they spend more on the platform and shop more often, our higher proportion of returning customers delivered record basket sizes of $1 30.90 and record annual spend of $ 231. Moving to slide 5. Brand awareness is key to cost-effective new customer acquisition. In November and December, we invested in Above the Line campaign focused on our core audience. While this campaign happened late in the half, awareness in the 25-45 female demographic has already improved to 66% in January, up from 62% in August. We're also working with a specialist design agency, AKQA, to explore how we can bring the Adore Beauty brand to life in a physical store, which will further support brand awareness. I'll now hand over to our CFO, Stephanie Carroll, to take you through our financial performance. Thanks, Tamalin, and good morning, everyone. Adore Beauty's solid financial performance in the first half of FY24 demonstrates the impact of our refined strategy, improved operational efficiency, and operating leverage. Revenue of $ 100.7 million was up 7% over the prior period, supported by a greater proportion of returning customers who have higher, more frequent average orders. Gross profit margin of 33.5% improved 1.1 percentage points on the prior year, with product margin and freight improvements being the main contributors. As Tamalin mentioned, reported EBITDA of $ 2.4 million was up more than 450%. Moving to the next slide. Slide 8 shows our profit and loss statement. Revenue of $ 100.7 million was driven by record returning customers who accounted for 81% of all product sales. Record average order values and multiple highly successful promotional events, including Black Friday and Cyber. As I mentioned, cost optimization across the business delivered a 1.1 percentage point annual improvement to gross margin. Moving down the P&L, improved marketing effectiveness, or marketing as a percentage of sales, decreased 1.1 percentage points over the prior year to 13.8%. Our cost focus and operating leverage improved profitability with operating EBITDA of $ 2.6 million and margin of 2.6%. Adore Beauty is cash flow positive and capital efficient, with a strong balance sheet of $ 32.3 million, up 16% on June 30 and up 7% on the prior corresponding period. Our strategic investment in inventory of higher turnover products continues to have a positive impact, improving sales due to enhanced availability. Adore Beauty's healthy balance sheet provides the flexibility to invest in long-term growth drivers and pursue potential M&A opportunities. I'll be happy to take questions at the end of the presentation, but for now, I'll hand you back to Tamalin. Thanks, Stephanie. So turning now to our strategy on slide two. Adore Beauty's Beauty Done Better ethos is centered on high-quality products for wide range, value, and convenience across beauty and wellness. We're an authentic, trusted, and relatable source of beauty information. Our refined strategy sets the business up for sustainable long-term growth within Australia's large and growing beauty and personal care markets. Our three-pillar strategy focuses on customers and customer centricity, building our brand awareness, and optimizing our operations. I'll now talk through how we're progressing with our key initiatives. Turning to slide 12. We continue to innovate our customer experience and value proposition to support retention and grow lifetime value. As I mentioned earlier, our focus on existing customers delivered a significant improvement in retention, up 8.4 percentage points on the prior period to 63.3%. As you can see here, average customer lifetime value grows to more than 6 times the acquisition cost by year 5. Our newly launched subscription service for frequently used products improves convenience, removes friction from the sale process, and supports average order frequency. Now available across 30 brands, our Subscribe and Save offer means customers receive their frequently used products at the right time and at the best price. The initiative has been well received by customers, and we're pleased with the performance so far. Our mobile app remains our most cost-effective owned channel, accounting for more than 26% of all product sales for the half year, up 8.1 percentage points on the same period last year. The graph at the bottom right shows app revenue contribution on a half-yearly basis. App downloads have increased significantly over the year, and we have several initiatives underway to drive adoption, including improved customer targeting and app-only promotion. Importantly, the app continues to deliver notably higher average order values and frequency compared to the web, even as it scales. Now to our own brands on slide 14. Our own brands portfolio continues to expand, up 30 SKUs over the same period last year to 41 SKUs across AB Lab, Viviology, and Adore Beauty. Sales of owned brand products continue to grow, delivering a gross margin substantially higher than third-party brands. New product and category launches are planned for all three brands in the second half, and we are exploring initiatives to increase awareness of our own brands. We're also continuing to evaluate and review M&A opportunities. Turning now to slide 15. New brands and products are a key driver of retention and new customer acquisition. We continue to refine our brand and product portfolio, onboarding 15 new brands during H1 FY24 and a further 3 in January alone. New additions include luxury brands such as Prada, Valentino, and Viktor&Rolf. We're also broadening our offering to ensure a complete customer proposition, adding NYX, Dr. LeWinn's, and more. We continue to see strong growth in adjacent product categories, with fragrance recording the strongest annual growth, albeit off a lower base. Adore Beauty's extensive product portfolio now spans over 13,000 products across more than 270 brands. Now moving to slide 16. Improving our operational efficiency and effectiveness has been a key focus in H1 FY24. We've optimized our marketing effectiveness with new marketing channels, campaigns, and improved channel analysis. This has enabled us to decrease our marketing as a percentage of sales, even as we've invested in an Above the Line brand campaign. Changes to our customer fulfillment center shift structures, as well as renegotiated supplier and freight terms, have also improved efficiency while reducing cost. We're also leveraging AI to improve efficiency. Adore Beauty has implemented Amazon Bedrock to efficiently summarize thousands of customer product reviews for more than 13,000 SKUs. We're also using AI to optimize content efficiency, automate more of our customer marketing, improve personalization capabilities, and increase data insights. Adore Beauty's content is an authentic and entertaining voice on beauty and personal care, with a loyal and highly engaged community. Our content continues to resonate with content-driven impressions, increasing to 35% on the prior period, supporting traffic to our organic marketing channels. These include multiple podcasts, blogs, and follower communities across Instagram, YouTube, TikTok, and Facebook. Engagement with our content is compelling, with our podcast now downloaded a combined 6.7 million times. Adore's content capability was recognized in November at the Australian Podcast Awards, where the Beauty IQ Uncensored podcast was named the 2023 Best Branded Podcast. Continued growth in content-driven impressions is also supporting the commercialization of our marketing assets, including digital retail media, which is now contributing to revenue. Increasing profitability remains a key focus. The next slide outlines the key margin expansion levers: revenue growth, improved gross margin, and reduced expenses. Scale, improved brand awareness, and initiatives to increase average order values and frequency will support top-line revenue growth and deliver operating leverage. Longer term, we will continue to evaluate opportunities to drive further growth through M&A. Gross margin improvements will come from ongoing pricing and promotional review, partner support, adjacency expansion, and owned brands with higher margins. And finally, our cost optimization program is reducing expenses, while our growing owned media channels and retail media will enhance our marketing efficiency. So turning to our outlook. Adore Beauty is executing on its refined strategy to drive top-line revenue growth, increase the lifetime value of returning customers, improve brand awareness, cost-effectively acquire new customers, and build our own brand portfolio to expand margins. Our positive sales momentum has continued into the second half, with revenue for the first six weeks of half 2 FY24 up 8.1% on the prior period. However, given higher cost of living pressures and subdued consumer sentiment, we do expect challenging trading conditions will continue. Continued focus on margin and cost improvement is supporting profitability, and we are on track to achieve an EBITDA margin of 2%-4% in FY24. We're leveraging our strong balance sheet to reinvest in key strategic initiatives that set the business up for the short, mid-, and long-term growth within Australia's $ 12.8 billion beauty and personal care market. Adore Beauty has a long growth runway, with Euromonitor forecasting online growth to ramp up in this calendar year before growing to $ 2.9 billion to being a $ 2.9 billion market by 2027. Thank you for the opportunity today. Before we open the call to questions, I'd like to acknowledge the hard work and dedication of the entire Adore Beauty team. Our solid performance in a challenging retail environment reflects their innovation and their customer-first mindset, and we remain focused on delivering value for our customers, for our partners, and for our shareholders. Stephanie and I are now happy to take any questions. Thank you. Thank you. If you wish to ask a question via the phone, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. We'll take phone questions first. Your first phone question comes from Apoorv Sehgal with UBS. Please go ahead. Good morning to Tamalin and Steph. First question, just in terms of the trading update. Second half sales tracking up 8% so far. In terms of projecting growth over March to June, anything we should consider in terms of prior year comparables? Because I guess third quarter 2023, on face value, looks like a bit of an easier comp: $ 41 million sales. Fourth quarter 2023 was closer to $ 46 million. So I'm just curious as to if that 8% maybe gets a little bit harder into Q4. Hi Apoorv. Look, I think firstly, we're not giving guidance in terms of revenue, but we are really pleased with the H1 result. We're certainly seeing positive momentum in the first six weeks, and we continue to focus on supporting the business and further growth. That's probably the best I can answer that for you, of course. Okay. Just in terms of the retention rate, 63%, it looks like probably your best-ever number on that metric. Is that sort of what you would have expected, or has it surprised to the upside a bit? We've been very focused on retention and ensuring that we deliver for our customers. So we'd like to, I think, be confident that that is a good result, but it was due to focus on that. Steph, is there anything else? Yeah. I mean, I think we're a business that we've had very good retention historically. I think perhaps we might have had it once a little bit higher, but I think it would be our second highest number. And it is really something that we think is very good, and we continue to focus on it. So the customer experience is one of our strategic initiatives, and we're very focused on making sure we do the best in terms of a customer experience perspective. Okay. Steph, just on gross margins, so the first half was obviously a reasonably strong result. You talked about the benefit from freight costs. I'm just wondering, was there a benefit from the private label mix also helping that gross margin performance in the first half? Not materially. We were pleased with private label continues to grow. It is higher margin, but it isn't having a material impact at this stage. In terms of gross margin improvements, you've already called out freight there, so freight is one of them, but it's also around product margin. There'll be an element around mix. There'll also be an element around price there as well. Into the second half for gross margins, would you expect a pretty similar sort of outcome, or is there any sort of seasonality or anything else we should consider for the second half? Look, there'll be an element if you look historically at seasonality, but we continue to focus on optimizing both gross margin but as well as our operating costs. So that focus will remain. Okay. Final question from me, just on the cost optimization program, is that kind of fully complete in FY24, or are there sort of incremental initiatives that will come in FY25 as well? We'll continue to remain focused on cost upwards. We've seen improvements in all of our cost lines there. Pleasingly, we've also seen an improvement in our marketing and advertising dropping 1.1 percentage points as a percentage of sales. Yeah. No, I'd absolutely second that. I feel it's a keen area of focus for us. Yep. Okay. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. We'll just pause momentarily for any further questions to register. There are no further questions at this time. I'll now hand back to Miss Morton for closing remarks. Sorry. I I believe there's a question from Joseph Michael from Morgan Stanley. Please go ahead, Joseph. Morning, Tamalin. Morning, Steph. Can you hear me okay? Yes, we can. We can. Hi. Wonderful. Just had a question around the store that you were exploring, exploring a physical store format that you mentioned in the presentation. Just wondering, what's the sort of aim or what are you trying to achieve from this, I guess, experiment, if you want to call it that? Is this just a brand-building exercise, or do you genuinely see an opportunity to generate revenue from the store channel? So it's a great question. It's absolutely aligned to our desire to increase our brand awareness. Within the format, we will also look to have retail sales. So it does cover both. It is, at this stage, an early phase. So we're working with a design agency to pull together what this could look like. It is a trial for us, but it certainly has broader potential and application. Okay. Wonderful. What about the timing? When will we hear more on that? At this point, we haven't determined the timing. We're actively working through it. So probably early to give you a timeframe, but we are actively progressing on that front. Okay. Wonderful. And then I just had one other question just around M&A. Can you just help us understand where you're at with that, what sort of things you're looking at, and maybe a comment on the number of opportunities you're seeing? Are they generally increasing, decreasing? I mean, the consumer backdrop's obviously pretty challenging at the moment. So yeah, if you could just maybe talk us through how you're thinking about M&A. M&A's also a focus for us, and we have been spending some good time really investigating opportunities. At this point in time, there's nothing to update on specifically, but we are continuing in that vein and hope to make some good progress there also. Okay. Wonderful. That's all I had. Thank you. Thank you. We'll now move to webcast questions. Your first question is from Aryan Norozi from Barrenjoey. Will freight continue to benefit GM in the second half? Obviously, all of the efforts that we've been working through in gross margin, we'll continue to work through in that vein. In terms of any quantum, we're not providing any detail there, but those improvements that we're working through, we'll continue to work through, including freight. Thank you. There are no further questions at this time. I'll now hand back for closing remarks. Thank you. So it just remains for me to say thank you for joining us today and for your continued support. Look forward to meeting many of you over the coming days, and we'll now close out the call. Thank you. That concludes our conference for today. Thank you for participating. You may now disconnect.