‘Exceeded our expectations’: EZZ focuses on robust growth after strong FY23

EZZ Life Science chairman Glenn Cross says focus on high-demand, high-margin products safeguarded performance in FY23
FY24 focus on driving robust organic growth, pursuing strategic acquisitions, and maintaining strong operating margin
Robust start to H1 FY24, including strong demand for its products during Double 11 Global Shopping Festival

Special Report: EZZ Life Science chairman Glenn Cross says FY23 was a strong year for the genomic life science company as key markets recovered from the pandemic.

Cross says EZZ Life Science (ASX:EZZ) had a strong financial performance in FY23, marked by astute decisions and strategic advancements despite the backdrop of heightened input cost inflation.

“Our focus on high-demand, high-margin products safeguarded our performance while enabling us to invest significantly in product development and robust marketing initiatives,” he says.

“The growth of EZZ’s revenues in FY23 exceeded our expectations with the company increasing revenue by 147.3% year on year to $37.1 million.”

There was also a significant expansion in gross margins to 76.8% from 50.0% in the previous year, which resulted in EBITDA of $4.8 million, a sharp increase of 172.5% from FY22.

He says in FY23, EZZ further strengthened its cash position with a positive operating cash flow of $4m resulting in a cash position of $13.8m at year-end, a 32.2% increase from 30 June 2022.

“With no external interest-bearing debt other than lease liabilities, the company is in a favourable position to pursue our strategic plan and future growth opportunities,” he says.

Four pillars underpin success

Cross says in FY23, EZZ continued its commitment to the four strategic pillars underpinning its success including life science, technology, people, and consumers.

“In life science our pursuit of excellence in product development has been instrumental in our continued growth,” he says.

In FY23, the company’s sharpened product development process facilitated creation of a robust pipeline of 27 innovative products.

“Notably, the resounding success of EZZ’s new Bone Growth Chews significantly bolstered our total revenue by a substantial 19.7%,” he says.

“Our operations team has dedicated significant efforts to establish scalable technology infrastructure.”

Cross says EZZ’s focus has remained on creating a dynamic B2C experience by amalgamating data from diverse channels to holistically understand its customers’ needs and behaviours.

“Exploring strategic technology partnerships to strengthen our B2C capabilities and expedite the realisation of our objectives remains a priority,” he says.

Cross says investing in its team has been pivotal in supporting rapid growth while carefully managing its cost base.

“In FY23, EZZ has focussed on building a culture of cohesion within our team whilst nurturing talent to ensure we have the right people to deliver on the company’s future growth,” he says.

Finally, Cross says leveraging influencers and communities to grow its B2C strategy has been a cornerstone of its digital footprint.

“FY23 saw EZZ launch a presence on a total of nine new channels, adding to our already extensive omni-channel network, to reach more consumers in more places,” he says.

Recognising shifts in consumer behaviour, EZZ has diversified its focus from e-commerce marketplaces to social selling, aligning with changing preferences from consumers, particularly in mainland China.

“The evolution of our brick-and-mortar strategy, coupled with the resurgence of in-store shopping, is poised to further augment EZZ’s consumer reach, and foster a resilient, future-ready business model,” he says.

Strong leadership through difficult times

Cross says CEO Qizhou (Mark) Qin, who took up the role in February, has been as asset to the company with his vast experience in the consumer health sector.

“He has navigated the company through a period of significant economic volatility, showcasing exemplary crisis management skills and leading a strong and successful turnaround,” Cross says.

“Amidst global economic challenges post the covid-19 pandemic, our leadership team steered EZZ adeptly, achieving strong results.”

Driving robust growth in FY24

Cross says he’s proud of EZZ’s performance in FY23 as the business again showed resilience and an ability to remain adaptable.

“While we expect FY24 will present its own set of challenges, the board is confident that EZZ has the team with the requisite skills and experience to navigate some of the more recent challenges, like inflationary pressures, and emerge in a stronger position,” he says.

“Our focus for FY24 will be on driving robust organic growth, pursuing strategic acquisitions, and maintaining a healthy operating margin and competitive edge.”

Cross says EZZ is already seeing promising results in H1 FY24, including strong demand for its products during this year’s Double 11 Global Shopping Festival held in November.

“Across our three key participating China marketplaces (Douyin, Tmall, and Kuaishou), this year’s festival resulted in sales of $3.21 million, a 25% increase from $2.56m achieved last year,” Cross says.

This article was developed in collaboration with EZZ Life Science, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.