Ann: 2018 Half Year Results and Appendix 4D, page-4

Bubs Australia (ASX: BUB), producer of premium infant nutrition products and Australia’s largest producer
of goat dairy products, including BubsÒ Goat Milk Infant Formula and CapriLacÒ, submits the following
Activities Report and auditor reviewed financial results for the half year ended 31 December 2017.
A PERIOD OF BUSINESS GROWTH AND STRUCTURAL ADVANCE
• 1H focus on expanding domestic market, the vital prerequisite for international expansion.
• Significant domestic growth in terms of supermarket and pharmacy footprint, wholesale
distribution, product offering and revenue – accounting for 82% of 1H FY18 gross sales.
• Product mix led by BubsÒ Infant Formula with gross sales +176% versus same period last year.
• Acquisition of NuLac Foods provides pathway to become Australia’s only vertically integrated
producer of goat milk infant formula: provenance and sustainability sought by key markets.
• Continued investment in personnel, marketing and distribution.
• Strong foundation for shifting 2H focus to accelerating volume in China.
• Strong capital base confers optionalities in strategic execution.
Bubs Australia Chief Executive Officer, Nicholas Simms said: “The first half of the year has been a period of
accelerating growth of Bubs domestic platform.
“We continued to make strong progress in building our distribution, and securing ranging with key
retailers, such as the recent Woolworths announcement. We also gained further momentum in the
pharmacy segment through our partnership with HealthOne and pharmaceutical retailers. These
developments led to growth in domestic revenue doubling same period year on year.
“At the same time we have greatly expanded the e-Commerce distribution capacity for our emergent China
business with expanded product representation on NetEase Kaola.com, VIPshop and Kidswant during 1H
FY18, combined with signing an Agreement with JD.com this month.
“The successful acquisition of NuLac Foods in December 2017 created further options for growth with
Bubs to become Australia’s only vertically integrated producer of goat milk infant formula. We now have
control and ownership from the farm gate, and the capacity to meet growing future demand derived from
Australia’s largest herd of milking goats and complimented by additional capacity from New Zealand.
“Most importantly, the NuLac Foods acquisition gives Bubs a secure ‘pathway to provenance’ increasing
our appeal both domestically and in the Chinese market on which we will be increasing our focus in the
second-half onward,” Mr Simms said.
Bubs Australia Limited
ACN 060 094 742
2-4/6 Tilley Lane, Frenchs Forest
NSW 2086 Australia
1800 2827 2878 (1800 BUBS AUST)
[email protected]
Financial Performance
Bubs Australia continues to deliver consistent positive sales growth, quarter on quarter throughout FY17
and into 1H FY18.
• 1H Gross Sales was $3.72 million, up 92% on same period last year, and up 44% on previous half.
• Strong recurring domestic performance, accounting for 82% of total 1H FY18 revenue.
• Growth was driven by Infant Formula sales accounting for 70% of total 1H FY18 product mix, up 176%
same period last year.
• Statutory loss before tax of $3.85 million. Increased costs relate to the NuLac Foods acquisition, capital
raising and administration to support the strong growth.
Cash Position
Bubs Australia continues to maintain a strong balance sheet with A$8.7 million in cash reserves as at
31 December 2017, with $2m debt facility taken from NuLac Foods acquisition.