NUCHEV LIMITED NUCHEV LIMITED (ACN 163 225 090)
LEVEL 10, 420 ST KILDA ROAD MELB 3004
WWW.NUCHEV.COM.AU
ASX CODE: NUC
11 November 2021 onlyASX Market Release
useNuchev Limited (ASX:NUC) ("Nuchev" or "the Company") lodged an Appendix 4C and Quarterly Activities Report for the 30 September 2021 quarter on 25 October 2021.
The Company has reviewed its obligations under the ASX Listing Rules and, as such, includes some
additional information. Please refer to the amended Appendix 4C and Quarterly Activities Report
personalttached.
The Company is committed to compliance with the ASX Listing Rules. NUC continues to develop its i ternal processes in line with the ASX Listing Rules and the Corporate Governance Principles and Recommendations.
Ben Dingle
CEO and Executive Director
ForNuchev Limited
This announcement has been approved for release by the Board of Directors.
About Nuchev Limited
Nuchev is an Australian based, globally oriented food business with a dedicated focus on developing, marketing and selling a range of premium Australian made goat nutritional products. Nuchev's primary products include its Oli6® branded goat infant formula and nutritional range, which are sold across multiple sales channels in Australia, China and the Hong Kong Special Administrative Region. Oli6® products are formulated with the benefits of goat, supported by ongoing scientific research. Nuchev operates a capital-light business model, leveraging leading raw goat ingredient suppliers and Australian- based manufacturers in an established, secure and scalable supply chain to deliver high quality products under a premium, trusted brand.
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NUCHEV LIMITED (ACN 163 225 090)
LEVEL 10, 420 ST KILDA ROAD MELB 3004
WWW.NUCHEV.COM.AU
ASX CODE: NUC
11 November 2021 onlyASX Market Release
30 September 2021 Quarterly Activity Report and Appendix 4C - Updated
Quarterly Highlights
For personal use
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Net revenue stabilising with $2.1M1 delivered in Q1 FY22, representing 20% total growth on Q1 FY21 and 3% growth on prior quarter, with continued active management of customer inventory levels in the CBEC channel impacting revenue.
Core business2 Gross Margin improved in Q1 FY22, demonstrating continuing brand strength, pricing discipline and value chain enhancement.
Oli6® became the number 1 goat infant formula brand in Coles during September3 and is growing ahead of the category at 42% on an annual basis.4
Validation of the newly enhanced Oli6® formulation in progress with demonstrated success in TMall Flagship Store in the Cross Border E-Commerce (CBEC) channel. The newly enhanced Oli6® formulation is the only goat milk infant formula to offer Human Milk Oligosaccharides (HMOs) in Stages 1 and 2.
Nuchev continues to focus on building the CBEC channel and widening distribution, with consumer offtake / sell through growing 3.5% year to date and Oli6® flagship store on TMall ranked no.3 during the quarter5.
Nuchev recently welcomed additional senior talent adding capability to the China-based team with a focus on enhancing performance and building market share of Oli6® by enhanced in-market presence.
Strong cash position maintained at $12.9M and no debt, with company demonstrating a disciplined, resilient approach through a challenging period, ensuring it is well placed to capitalise on the strong growth in goat milk-based nutrition products.
- Unaudited financial information
- Excluding raw materials
- IRI data (volume) - September 2021
- IRI data - MAT to September 2021
- Smartpath data - YTD September 2021
5 Smartpath data - YTD September 2021
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NUCHEV LIMITED (ACN 163 225 090) | ||||||||||||||||||||||
LEVEL 10, 420 ST KILDA ROAD MELB 3004 | ||||||||||||||||||||||
WWW.NUCHEV.COM.AU | ||||||||||||||||||||||
ASX CODE: NUC | ||||||||||||||||||||||
only | Net Revenue1 ($ millions) | Core Volume (MT or metric tonnes) | ||||||||||||||||||||
3.7 | ||||||||||||||||||||||
4.0 | 3.4 | 140.0 | ||||||||||||||||||||
116.8 | ||||||||||||||||||||||
3.5 | ||||||||||||||||||||||
120.0 | ||||||||||||||||||||||
105.1 | ||||||||||||||||||||||
3.0 | ||||||||||||||||||||||
100.0 | ||||||||||||||||||||||
2.5 | ||||||||||||||||||||||
2.0 | 2.1 | 80.0 | ||||||||||||||||||||
2.0 | 1.7 | 51.2 | ||||||||||||||||||||
60.0 | 45.7 | 49.3 | ||||||||||||||||||||
1.5 | ||||||||||||||||||||||
40.0 | ||||||||||||||||||||||
1.0 | ||||||||||||||||||||||
0.5 | 20.0 | ||||||||||
use | 0.0 | ||||||||||
- | |||||||||||
Q1 FY21 | Q2 FY21 | Q3 FY21 | Q4 FY21 | Q1 FY22 | Q1 FY21 | Q2 FY21 | Q3 FY21 | Q4 FY21 | Q1 FY22 | ||
Unaudited | Q1 FY21 | Q2 FY21 | Q3 FY21 | Q4 FY21 | Q1 FY22 | Growth | Growth | ||||
% | % | ||||||||||
(qoq) | (pcp) | ||||||||||
Net revenue | ($ millions) | 1.7 | 3.7 | 3.4 | 2.0 | 2.1 | 3% | 20% |
personalThe business continues to focus on sales platforms in Australia and China with | the highest opportunity for | ||||||||||
Vo ume - core6 | (metric tonnes) | 45.7 | 116.8 | 105.1 | 51.2 | 49.3 | -4% | 8% | |||
ASP / MT - core7 | ($ thousands) | 33.8 | 31.9 | 30.8 | 32.3 | 32.5 | 1% | -4% | |||
Net revenue stabilising with $2.1M delivered in Q1 FY22, representing 20% total growth on Q1 FY21 and 3% growth on prior quarter while managing in-channel inventory levels
Nuchev delivered net revenue of $2.1M in Q1 FY22 which included $450K of raw material sales and the continued active management of customer inventory sell through. It is expected that the impact of active inventory management on revenue isis likely to continue until late H2 FY22. Pleasingly, core business
r venue, excluding the impact of raw material sales, was in line with the prior quarter and demonstrated 4% growth on the prior year.
growth, including the high priority CBEC channel which saw revenue growth on the prior quarter. The ForAustralian supermarket and pharmacy channels saw reduced revenue in the quarter following pipeline fill in Q4 FY21 to fulfil increased store ranging in Coles and order phasing volatility in Chemist Warehouse,
h wever importantly consumer offtake for Oli6® continues to grow highlighted by Oli6® becoming the number one brand in Coles during September8
It is pleasing to see momentum building as the Daigou channel re-emerges with a refreshed business model focussed on servicing C2C direct via supply chains in China and fast growing social e-commerce platforms.
- Excludes impact of raw materials
- Excludes impact of raw materials
- IRI data (volume) - September 2021
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NUCHEV LIMITED (ACN 163 225 090)
LEVEL 10, 420 ST KILDA ROAD MELB 3004
WWW.NUCHEV.COM.AU
ASX CODE: NUC
Continued strong momentum in the Australian supermarket channel following increased ranging in onlyColes, with flagship goat milk infant formula brand Oli6® becoming the number 1 brand in Coles during
September9.
Following the increased ranging in Coles supermarket stores in May 2021 from 266 stores to 765 stores, consumer offtake of Oli6® continues to gain momentum growing ahead of the category at 42% on an annual basis10. A key achievement during the quarter was Oli6® taking the number 1 brand position in v lume share in the goat milk infant formula category demonstrating the strength of the Oli6® brand for Australian consumers.
useListing for Oli6® on Woolworths' new online marketplace was scheduled to go live in Q1 FY22, however given a delay in the launch of this platform, this is now expected in H2 FY22.
Upgraded brand with demonstrated success of the newly enhanced Oli6® formulation, the only goat milk infant formula to offer Human Milk Oligosaccharides (HMOs) in Stages 1 and 2 and Student Milk.
Major strategic brand development and upgraded positioning has been completed underpinned by personalextensive consumer led qualitative and quantitative research. This has led to the development of a new
m sterbrand campaign which is driving targeted investment of ~ $1M across China digital channels. This work also informed the development of an exciting innovation pipeline - all positioning the brand as 'Leading through Science'.
New formulation momentum is demonstrated in the market with solid foundations in TMall Flagship Store, with Oli6® Stages 1 and 2 now 23% of total branded sales versus 16% last year, with 58% of purchases being new buyers to the brand. Additionally, the Oli6® brand is selling at a higher average selling price and is up 2.8% in the quarter versus the prior quarter11. This demonstrates the company is recruiting new consumers, a key driver of future sales, and strengthening consumer equity and channel confidence.
Nuchev continue to focus on building the CBEC channel and widening distribution, as well as strengthening capability to drive growth of Oli6®market share.
The CBEC channel remains a key focus for Nuchev, with the Oli6®TMall Flagship Store being its brand Forlighthouse and critical in developing a compelling brand position and value proposition, providing the
springboard for channel growth. Importantly, consumer offtake / sell through of Oli6® is growing 3.5% year to date and the brand was ranked no.3 during the quarter in TMall Flagship Store12. This platform is also key to helping to drive awareness of the new Oli6® formulation and sales of these new products have increased from 16% to 20% of the portfolio during the quarter.
- IRI data - September 2021
- IRI data - MAT to September 2021
- Smartpath data - September 2021 (Q1 FY22 v Q4 FY21)
- Smartpah data - September 2021
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NUCHEV LIMITED (ACN 163 225 090)
LEVEL 10, 420 ST KILDA ROAD MELB 3004
WWW.NUCHEV.COM.AU
ASX CODE: NUC
Driving growth through B2C remains a key priority with Nuchev working closely with strategic distribution onlypartners to achieve both both increased penetration of distribution in existing platforms and sourcing of
new accounts.
To help support this growth, Nuchev recently welcomed additional senior capability to the China-based team, with a focus on strengthening market share of Oli6® by enhanced in-market presence. This is particularly important given the impact of travel restrictions from Australia to China.
Strong cash position maintained with no debt, demonstrating a disciplined approach through a volatile usep riod and ensuring it is well placed to capitalise on growth.
Cash used in operations remained steady at $1.8M in Q1 FY22, with further details found below in the Appendix 4C.
N chev's disciplined approach to cash management and its capital light business model positions it well to drive the growth in goat milk based nutritional products.
personalNuchev CEO Ben Dingle commented, "We are emerging from a challenging period with our Oli6® "Leading with Science"core brand health upgraded, supported by our successful reformulated new recipe. This has
allowed us to improve average selling price, channel support and margin. In addition we have boosted the team with additional China based talent in order to build capability to fuel our next phase. The landscape n w looks increasingly positive and more stable as we focus on the the job of continuing to manage channel inventory, expanding distribution and developing our innovation pipeline in order to drive sales momentum in the fast moving goat nutritional category."
ASX Additional Information
Pursuant to ASX Listing Rule 4.7C.1, and as outlined In the Appendix 4C, the Company advises it spent $1.2M on product manufacturing and operating costs, $1.1M on advertising and marketing, $1.0M on staff costs and $0.7M on administration and corporate costs. Details of the business activities are found within this report. Pursuant to ASX Listing Rule 4.7C.3, the Company advises that payments to related parties consist of $199,311 to key management personnel and $52,192 to their
Forassociates. The Nuchev Limited Appendix 4C Quarterly Cashflow Statement for the period ended 30 September 2021 is attached.
Ben Dingle
CEO and Executive Director
Nuchev Limited
This announcement has been approved for release by the Board.
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Nuchev Ltd. published this content on 11 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 November 2021 06:36:06 UTC.
