Investment Highlights: FY23 Results

In this report, we present the key highlights from Bubs Corporation's FY23 results presentation held on September 7, 2023.

New CEO Appointed: Reg Weine

Bubs Corporation (ASX: BUB) is excited to announce the appointment of Reg Weine as its new CEO and Managing Director. Reg Weine brings over 25 years of experience in fast-moving consumer goods (FMCG) and agri-food, with a strong track record of success in international markets. He has previously held leadership positions at SPC Ardmona (Coca-Cola Amatil), Bulla Dairy Foods, and Blackmores Limited. Reg's appointment reflects Bubs' commitment to responsible capital management and maximizing shareholder value. Katrina Rathie, Chair of Bubs Corporation, expressed optimism about the company's future under Reg Weine's leadership.

Financial Overview

Bubs Corporation reported its FY23 financial results, highlighting key figures:

• Group revenue of AU$60.1 million, down 32.7% compared to the previous year.
• Underlying gross margin of 30%.
• Underlying EBITDA loss of AU$34.4 million.
• Statutory after-tax loss of AU$108.4 million, including non-cash significant items.

Geographical Detail

Bubs Corporation's revenue was diversified across various regions:

• USA: Bubs strategically focused on the USA, contributing 40% of total revenue in FY23.
• Australia: Maintaining a strong presence in the domestic market.
• China: Implementing a reset strategy, targeting multi-channel distribution.
• Rest of World: Exploring growth opportunities in other international markets.

USA Growth Engine

• Bubs achieved a significant revenue increase of approximately 200% in the USA in FY23, totaling AU$23.9 million.
• Bubs is now the #1 goat milk brand in the USA, with a robust market share.
• The company is working closely with the FDA to obtain permanent access to the US infant formula market.

Regulatory Approvals

Bubs Corporation is on track to receive permanent FDA approval by October 2025, positioning it for substantial growth in the US market.

China Reset

• Bubs is resetting its China strategy, focusing on a multi-channel, multi-distributor approach.
• New distributors have been appointed in the Daigou channel and a China-based CBEC trade distributor.
• Emphasizing growth in the adult powder market in China with its CapriLac brand.

Outlook

For FY24, Bubs Corporation is targeting a revenue of AU$80 million with a gross margin of 40%. The company aims to achieve cash flow positivity in FY25, with a reduced cash burn rate from Q2'24. Overall, Bubs Corporation is strategically positioned for growth, with a focus on the USA market expansion, regulatory approvals, China reset, and portfolio optimization to maximize shareholder value and achieve financial stability.

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