EZZ Life Science’s diversification delivers successful conclusion to 2022 financial year
- Written by Tess Sanders Lazarus
The chair of Australian genomic life science company, EZZ Life Science (ASX: EZZ), Glenn Cross has commended his company’s unrelenting discipline and strong work ethic, as the company continued to diversify and build during the economic and market challenges of the COVID pandemic.
“Despite significant market disruption and uncertainties, EZZ Life Science’s diversified distribution channels led to a substantial improvement in revenue and a successful conclusion to the 2022 financial year,” Cross said.
“In the second half of the financial year, the company experienced rapid revenue recovery resulting in total financial year revenue of $15,022,026. This is an excellent outcome and one which bolsters our position for continued growth and expansion.”
Strong sales rebound
“The second half of the 2022 financial year was characterised by a strong rebound in sales revenue for EZZ Life Science products. While the company’s revenue declined by 33 percent from $22,287,078 in the 2021 financial year to $15,022,026 in the 2022 financial year due to the impact of the pandemic, operating efficiencies increased and the groundwork was laid for strong future growth,” Cross said.
“Along with the rest of the world, we are moving past COVID and advancing forward. Our solid sales figures provide the proof: lockdowns are over, the economy is recovering and our customer spend is increasing.
“In the second half of the 2022 financial year, we experienced a 24 percent increase in sales revenue compared with the previous corresponding period. Further our second half growth equates to a 96 percent increase in sales revenue when compared to the first half of the 2022 financial year.
“EZZ Life Science’s continual success as a business has led to an 18 percent increase in our cash position, resulting in $10.5 million as at 30 June 2022. The substantial improvement in cashflow from increased operating activities demonstrates that our commitment to ongoing research and development and augmentation of our distributor networks globally during the financial year is delivering strong results.
“While many businesses across the sector panicked and rationalised and cut their operations and marketing spend, we focused on increased investment in our business to prepare the company for strong growth beyond COVID and the work is clearly garnering excellent results.”
Cross-border ecommerce store diversification an outstanding success
“In June 2022, we launched our cross-border ecommerce store on Douyin, mainland China’s version of TikTok, as an alternate direct-to-customer channel to Tmall Global. Revenue growth from this new channel exceeded our expectations in the first month of operation. Due to its outstanding success, we have earmarked Douyin to become another key ecommerce platform along with Tmall Global to reduce the company’s level of concentration on one single ecommerce platform in China’s market,” Cross said.
“Our strategy of adopting and embracing social media based platforms with growing user numbers, sophisticated targeting capabilities and complex selling tools is enhancing our ability to reach more customers with increased precision and efficiency.
“On a different note, the revenue generated through Tmall Global as a key distribution channel, which contributed 43 percent of the total revenue in 2021, dropped by 76 percent to $2,324,652 in the 2022 financial year, representing only 15 percent of total revenue. This happened after Alibaba Group Holdings Limited was penalised by market regulators as China stepped up antitrust scrutiny in the technology sector in 2021.
“The decrease in revenue through Tmall Global in the first half of the 2022 financial year was progressively clawed back in the second half of the 2022 financial year due to our rapidly deployed strategy of digital platform diversification.”
Expanded product range
“We also expanded our product range by adding seven new products and adding a new category – hair products,” Cross said.
“Three of these new products have contributed to 16 percent of total revenue in the 2022 financial year. The four new EZZ hair care products launched at the end of the financial year and are also growing in sales volume.
“Our EZZ L-Lysine Growth Capsule was introduced in July 2021 and represents another successful high margin product which contributed 27 percent to the revenue from EZZ branded products.
“In fact, our EZZ L-Lysine Growth Capsule is now the category leader on Tmall Global for kids supplements. It also leads in the areas of repurchases and positive reviews. Given the size of Tmall Global and its high volume of users, around 600 million plus users per month, this is an excellent outcome for our business and EZZ brand.
“We invested significant research and development into our kids’ bone health supplement. The EZZ L-Lysine Growth Capsule is a premium formula that includes over 380mg of lysine amino acid per capsule, which supports health growth and development for children and adolescents.
“Our special blend contains not just lysine but also calcium, vitamin D3, zinc, magnesium and other ingredients which support bone health, muscle function, immune system health and cognitive development. It’s a power house capsule which is being widely viewed as a market leader in its category.”
Successful recovery paves the way forward
“Without doubt, pandemic lockdowns adversely affected businesses worldwide and EZZ Life Science was not immune to these impacts. As people’s lives begin to return to some sense of normality, we expect to continue to see ongoing recovery and growth,” Cross said.
“Our clear strategy which involves ongoing product development and expansion of our distribution networks and sales points is delivering excellent results and we look forward to maintaining our strong and robust pathway forward in this respect.
“As a relatively new yet fast growing business, our strategic intent is to maintain our steadfast commitment to the growth of brand awareness and trust in our science based and consumer led products. The majority of our products are listed on the Australian Register of Therapeutic Goods and are also supported through a range of research projects including university trials.
“The world is in the midst of a health and wellbeing revolution driven by consumers who want more control around how they manage their own wellbeing. Critical to this is the need for trust and transparency in their pathway to purchase. Our operations are underpinned by a clear goal to ensure that our brand appears in as many physical and digital touch points as possible and the strength and validity of our science backed approach is inherent in all that we do and the market’s engagement with our brand and products. This is the brand confidence consumers want and need in this turbulent environment.”
About EZZ Life Science
EZZ Life Science Holdings Limited (ASX:EZZ) is a genomic life science company with a mission to improve quality of life and human health. EZZ Life Science has a focus on genomic research and development to address four key human health challenges: genetic longevity, human papillomavirus (HPV), helicobacter pylori, and weight management. EZZ Life Science is passionate about investing in the future of consumer health through the development of e-commerce and distribution of high-quality products via omnichannel models across Australia, New Zealand, China and worldwide.
www.ezzlife.com.au
www.ezzdna.com.au
