Blackmores Full Year Results Announcement
- Group sales of $717 million, up 52% on the previous year
- Record net profit after tax of $100 million, up 115% on the previous year
- Exceptional sales in Australia, boosted by over $200 million in China influenced sales
- Acquisition of Global Therapeutics in the fourth quarter
- Final dividend of 210 cents per share, total ordinary dividends for the year were 410 cents per share (fully franked), 102% above last year's record dividends.
"Growing consumer demand for our products enabled us to realise further operational benefits and saw the Group double production capacity over the year," said Blackmores CEO Christine Holgate. "Importantly, we were able to maintain our commitment to unrivalled quality standards by further extending into our supply chain whilst productivity and efficiency was boosted."
AUSTRALIA (INCLUDING PAW)
Blackmores' Australian business delivered $495 million in sales, up 56% compared to the previous year, reflecting the strong growth from Australian consumers and further boosted by sales to Chinese tourists and exporters to satisfy the appetite for Blackmores' quality products in China.
Pure Animal Wellbeing (PAW), Blackmores' animal health division, achieved $7 million in sales (up 31%) and maintained a strong leadership position in the natural pet health market.
In-country sales in Asia were $129 million, a 54% increase compared to the previous corresponding period, driven through a range of channels including pharmacy, online retailers and health stores.
"Pleasingly, our more established markets in Asia had a strong sales year, and while Korea experienced sales challenges, the region delivered top line growth achieving sales of $81 million (up 6%) including sales from Thailand and Malaysia," said Christine Holgate.
"Asia sales were bolstered by in-country sales in China of $48 million (up 536%). The expansion of free trade zones and our ability to serve e-commerce customers through our bonded warehouse in China have enabled us to benefit from the opportunities in Asia."
"In China, Blackmores has invested in an 'omni-channel' strategy, utilising multiple sales channels to connect the brand with consumers, enabling us to leverage opportunities and evolving regulations," said Christine Holgate. "This included a greater retail presence that will underpin our future growth in this market. We estimate that Chinese consumers influence over $250 million of our Group sales through a combination of export sales, in-country sales and sales through Australian retailers."
"The Asia earnings before interest and taxes (EBIT) result includes Blackmores' investment to launch in Indonesia next month," said Christine Holgate. "Indonesia is an exciting opportunity with a fast growing middle class and an increasing number of consumers taking a greater interest in health.
It will take time to establish our brand and business in Indonesia and it is another important milestone in our Asia growth strategy."
BioCeuticals, Blackmores' practitioner-only range, delivered a strong result with $69 million in sales (up 25%). New product innovation and education were central to its success as the Australian market-leading brand for healthcare professional dispensing. They have also commenced distribution in the United States, a market with a strong network of allied health practitioners.
"Since acquiring BioCeuticals in 2012, we have doubled its profitability," said Christine Holgate. "BioCeuticals' growth was particularly pleasing given that this year's results include the payment of incentives and profit share to BioCeuticals employees following their adoption of the Blackmores Enterprise Agreement as well as the investment in new offices to support growth."
Developing businesses - including New Zealand; Blackmores' contribution from the nutritional foods partnership with Bega; and sales from the recently acquired Global Therapeutics - contributed $23 million to Group revenue (up 50%).
Sales in New Zealand of $16 million (up 53%) were positively impacted by a change to our business model in this country including the appointment of a Blackmores sales team.
Blackmores' partnership venture to develop nutritional foods including infant formula with Bega has achieved early sales of $9 million of which Blackmores has a 50% share.
In May 2016, Blackmores acquired Global Therapeutics, an Australian company, with two brands offering Chinese herbal medicine, Fusion Health and Oriental Botanicals. Each are market leaders in this category in health food stores and pharmacy with an estimated 80% market share of retail Chinese herbal medicine. We are excited about the growth opportunities for these products both in Australia and in Asia. Global Therapeutics contributed $3 million to our revenues since the acquisition.
The Board has declared a final dividend of 210 cents per share (fully franked), taking total dividends for the year to 410 cents (up 102% compared to last year). The dividend is payable on 21 September.
"We are pleased in a year of exceptional growth to be able to reward our shareholders with a record dividend payout which is a fitting way to thank them for their support," said Christine Holgate.
"We are pleased with our progress in the last year in delivering our strategic priorities and leveraging the strong social and demographic trends underpinning the growing consumer interest in natural health products, and demonstrating the proven demand for our brand."
"We are encouraged by strong consumer demand across our business and growing market share affirming our leadership in Australia and the strong momentum from Blackmores Asia and BioCeuticals."
"The Australian wholesale market is volatile and has softened in recent weeks impacted by retailers destocking and some exporters changing the channels through which they acquire products. As a result, at this stage we expect our first quarter result to be down compared to the prior corresponding period. We expect sales will improve as the year progresses and will continue to develop our business model, building new growth channels, adapting our cost base and accelerating our transition to support the changing retail landscape to ensure our continued optimism for long-term growth."
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About Blackmores Limited
Blackmores Limited (ASX:BKL) (OTCMKTS:BLMMF) is Australia's leading natural health brand. Its quality range of vitamin, minerals, herbal and nutritional supplements, and continued support of the community and environment, are among the many reasons Blackmores is the most trusted name in natural health.