EZZ outperforms guidance with 147% revenue growth in FY23

EZZ Life Science Holdings records record revenue growth of 147.3% in FY23
Product expansion, sale channel selection and record trading days boost revenue growth
EZZ’s gross margin rises driven by larger percentage of sales generated from EZZ-branded products

From product expansion, broadening distribution to tapping into new geographic markets, EZZ enjoyed a record year in FY23.

Preliminary results including record revenue growth of 147.3% to $37.1m in FY23, a year which saw Australian life science company EZZ Life Science Holdings (ASX: EZZ) selected by the Australian Financial Review as one of Australia’s top 100 companies seeing international revenue growth.

Other financial highlights in FY23 results include:

Substantial gross margin expansion to 76.8% from 50% in FY22;
Strong EBITDA of $4.8 million, a sharp increase of 172.5% from FY22;
Positive operating cash flow of $4 million, up from $1.9 million last year;
Solid cash position of $13.8 million, representing a 32.2% increase from June 30, 2022;
Nil external interest-bearing debt other than lease liabilities; and
A fully franked final dividend of $0.0045/share pertaining to FY22 and a fully franked interim dividend of $0.0098/share for FY23.

Focus on genomic healthcare

EZZ is working to become a top life science company in Australia and New Zealand. Its core focus has been on genomic health and developing a product pipeline of healthcare solutions based on genomics research.

The company offers health supplements, health food, haircare, children’s health, and probiotics under the brand EZZ. It also has exclusive distribution rights for the EAORON brand of skin care products to pharmacies, supermarkets and specialist retailers in Australia and New Zealand.

EZZ and EAORON products are sold in pharmacies, supermarkets and specialist retailers in Australia and New Zealand.

South-east Asia is a key target for expansion, with Singapore and China already distributing its products, with negotiations under way with potential distributors in Malaysia.

The company also sees opportunities in Thailand, Vietnam, the Philippines, and Indonesia.

Product development drives record revenue growth

EZZ achieved record a revenue increase of 147.3% to $37.1 million in FY23, surpassing expectations.

EZZ focused its product portfolio strategy on children’s health and wellness, benefiting from this market segment’s swift rebound post the Covid-19 adjustments made by parents.

The EZZ brand introduced 18 new products, a significant rise from the previous year’s nine, contributing 56.1% of the company’s revenue during this period.

Remaining true to its dominant digital channel strategy, EZZ balanced its channel portfolio, with Douyin (China’s version of TikTok) surpassing Tmall Global as the leading business-to-consumer (B2C) channel, accounting for 51.4% ($19.1 million) of FY23 revenue.

EZZ also expanded its presence on e-commerce platforms, content sharing communities, and social commerce, contributing 5.7% of the total revenue in FY23.

The company says its strategic investment of $20.6 million in marketing during FY23 yielded a robust return.

Throughout the year, multiple marketing campaigns were executed in China and Southeast Asia to bolster brand recognition and promote EZZ-branded products.

Segment-wise, the EZZ-branded product portfolio, which comprised 87.6% of revenue, demonstrated remarkable underlying revenue growth of 299.8% in FY23, contributing $32.5 million.

The growth was achieved by effectively implementing the B2C strategy, enabling EZZ to capture a larger share of digital commerce expansion.

Revenue from EAORON-branded products in FY23 amounted to $4.6 million, representing 12.4% of total revenue.

On the geographical front, EZZ continued to enhance its international presence in FY23, particularly in Asia and China, while also promoting EZZ-branded products in Vietnam.

The company also showcased its key products for mothers, babies, and toddlers at the Vietbaby Exhibition in Vietnam.

International markets contributed to 73.7% of total revenue, a notable increase from 37.2% in FY22.

Solid financial position

EZZ recorded a strong cash position of $13.8 million as at June 30, 2023, representing an increase of 32.2% from the $10.5 million held as at June 30, 2022.

EZZ also maintained balance sheet strength with no debt, other than lease liabilities, “to allow for the flexibility to act when opportunities arise”.

This article was developed in collaboration with EZZ Life Science Holdings, 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.