FY24 proved to be a positive year for Bubs Australia, with the infant formula manufacturer exceeding its revenue guidance of $80 million and delivering a 34 per cent increase on FY23.
Bubs CEO and MD, Reg Weine, said its key target market, the US, delivered “exceptional growth” with a 63 per cent increase on FY23 to total gross revenue of $48.9 million.
Snapshot
- FY24 group gross revenue: $100.2m (net revenue of $81.1m, up 35% on FY23: $60.1m);
- Q4 group gross revenue: $29.9m, up 50% on prior corresponding period (pcp) (Q4 FY23: $20.0m);
- US permanent access: FDA approval expected in October 2025;
- Q4 operating cash outflow down $3.6m due to improvements in working capital management
- FY24 cash burn: $27.2m including $12.4m of one-off non-recurring costs (normalised monthly cash burn: $1.2m);
- holds 52% domestic retail goat formula market – #1 domestic goat formula brand;
- total IMF portfolio growing three times faster than the category on an MAT basis; and
- $17.5m in total cash and cash equivalents plus $5m in undrawn debt facilities available as at 30 June 2024.
“In the US in June, we achieved over US$1 million in weekly scan sales, selling more than 27,000 tins in the week ending 9 June,” Weine said.
Sales tapered slightly as Bubs rolled out new look labels and pack formats in US retailers, but it is expected they will perform better than the existing range.
Domestically, Bubs achieved 11 per cent scan sales growth in 4Q24, compared to the total market growth of 2.2 per cent.
“We are one of the fastest growing infant formula manufacturers in the category and the fastest growing premium brand. Pleasingly, we are the largest player in the domestic goat IMF market with 52 per cent share,” he said.
Bubs performance in the China market also improved after a challenging 2023, particularly in its adult powder product, which was up 82 per cent on FY23 to $10.1 million. Gross revenue in China had a strong 2H24 at $11 million, up from $8 million in the first half.
“Our new look labels have also been recently launched in China. Now that the stock overhang from Bubs Supreme has been cleared in the marketplace, and our premium pricing architecture restored, we believe our new product offering and new go-to-market channels will deliver sustainable year on year growth in China,” Weine said.
Low margin SKUs were rationalised during the year and its new look labels and pack formats are expected to deliver improved velocity and profit margins.
Weine also said the company’s Deloraine canning facility was running at 85 per cent utilisation on a two shift, five day a week schedule, with “significant” capacity for growth. That’s an uptick from this time last year when it was running at around 31 per cent capacity.
