Blackmores FY2021 financials: Profit up 61% driven by growth in South East Asia and China CBEC sales

30-Aug-2021 - Last updated on 30-Aug-2021 at 02:47 GMT

China and South East Asia are the key growth regions for Blackmores. ©Getty Images

Related tags Blackmores Australia CBEC

Blackmores’ FY2021 profit was up 61 per cent yoy, with South East Asia and China highlighted as regions with good growth.

Total revenue was up 1.3 per cent to AUD$575.9m (US$416.5m), while net profit after tax was up 61.2 per cent to AUD$25.4m (US$18.4m).

The rate of growth was highest in China, where revenue climbed 27.8 per cent to AUD$131.6m (US$95.2m), led by growth in the cross-border e-commerce (CBEC) channel – where sales was up 36 per cent.

Two annual shopping events, Double 11 and June 618, have delivered strong CBEC sales.

In fact, the firm said that the CBEC channel had accounted for over 70 per cent of the net sales to China, and that this showed a shift away from the daigou channel to CBEC when selling from ANZ to China.

As for the international markets, including South East Asia, revenue also increased by 17.7 per cent to AUD$163.7m (US$118.4m)

Indonesia, Thailand, and Malaysia were cited as markets propelling growth.

This was due to 1) an expansion in distribution, 2) a surge in demand for immunity products due to COVID-19, 3) the growing presence of local product advisors which is now over 670, and 4) new products.

In FY2022, the company will be launching halal products in the region, starting with Indonesia after obtaining the Majelis Ulama Indonesia (MUI) certification.

Australia revenue down

In contrast, its largest market, Australia, reported that revenue was down 14 per cent to AUD$280.6m (US$203m).

This was due to three major reasons: 1) dwindling daigou trade to China, 2) a mild cold and flu season which impacted the sales of BioCeuticals, and 3) a shift in consumer purchase from pharmacies to grocery stores – where average spend per trip was lower.

As a result, the company has launched various promotional activities to drive sales in the country.

With strong growth momentum in China and its international markets, the firm expects these markets to contribute more than 60 per cent of sales by FY2024.

CEO Alastair Symington also reiterated the firm’s plan to reach one billion consumers by 2025. It will be investing in e-commerce, digital capabilities, and will officially launch in India in FY2022 Q1, as well as Philippines and Vietnam.

“Looking ahead to FY22 and beyond, the outlook remains positive in our international and China segments, with strong sales momentum to start FY22.

“In ANZ, we expect challenging conditions to persist in the vitamins and supplements market as international borders remain closed and state-based lockdowns continue to impact retail spend and foot traffic.

“However, our investment in the Blackmores and BioCeutical brands, as well as in supply chain capabilities and organisational redesign, have made the business more resilient and better positioned to capitalise on opportunities when conditions normalise,” Symington said.

NPD

Blackmores has been on a product innovation spree in the past year, launching 40 new products in its international markets, 16 in China, and seven in ANZ.

In the international markets, the new products addressed needs across energy and weight management, while in ANZ, the products catered to needs across sleep, immune health, and digestive care for pets.

As for China, the company said it would continue to innovate in the key categories of fish oil, kids health, and the emerging category of eye care.