Revenue rockets at Swisse parent firm Health and Happiness as probiotics perform well

By Tingmin Koe contact

- Last updated on GMT

The baby nutrition and care, along with adult nutrition and care, are the core performing sectors for H&H.
The baby nutrition and care, along with adult nutrition and care, are the core performing sectors for H&H.

Related tags: Business, Probiotics, Infant formula

Health and Happiness (H&H) achieved a revenue of RMB4573.6m (about US$669m) in the first half of 2018, which is 28.8% higher than the same period last year.

The firm which completed acquiring Australian Swisse Wellness last year released its unaudited interim financial results​ for the six months of this year on August 27.

Gross profit also reached 3075.7 million yuan – a 32.8% higher than the same period last year.

The baby nutrition and care (BNC) and adult nutrition and care (ANC) businesses are the firm’s core performing segment, contributing about 60.7% and 39.3% of total revenue.

Comprising of infant milk formula and probiotic supplements, the BNC business reached 2777.9 million yuan during the first half of the year – a 33.2% increase from the same period last year. 

On the other hand, its ANC business brought in 1795 million yuan, which was a 22.5% growth from last year.  Swisse supplements were the main contributor to the ANC business.

The firm attributed its market success to “rigorous consumer demand, consumption trade-up and rising health awareness” ​in all markets where its baby nutrition and care and adult nutrition and care businesses are present.

“The group’s profitability during the first half of the year was also underpinned by effective and continuous investments in branding and marketing, as well as in product innovation and channel expansion,”​ it added.

Best selling products

Infant formulas were the main revenue contributor. Sales of infant formulas contributed 2093 million yuan, a 26% increase from last year.

The fastest growing category goes to its probiotic supplements for infants. It recorded sales of 553.9 million yuan – a 64% increase as compared to the same period last year.

Other paediatric products brought in 130.7 million yuan in the first half of this year.

Geographical sales

Similar to last year, mainland China remained H&H’s core market, amassing 3301 million yuan for the firm in the first half of 2018. This is approximately 39.9% more than the same period last year.

Australia and New Zealand trail behind, bringing in 1081 million yuan. Other locations such as special administrative regions of China brought in 190 million yuan.

Swisse’s performance

Sales of Swisse supplement products rose 29.3% in the first half of 2018, due to strong growth momentum in Chinese and Australian markets.

In Australia, strong marketing and sponsorships of sports events such as the Winter Olympics and Australian Football League have driven sales.

As for China, H&H continued Swisse’s earlier success in cross border e-commerce (CBEC) by introducing Swisse to more platforms.

This includes conducting Super Brand Day campaigns (an event which spotlights selected brands for Chinese consumers) with key CBEC channels such as Tmall.hk, JD.com, VIP.com and NetEase Kaola.com.

Outlook

To remain competitive, H&H said it would accelerate product development to meet rising demand.  During the review period alone, its R&D expenditure rose by 22 million yuan, a 56.8% increase. 

For instance, it will launch a pregnancy and infant range and adult probiotics range under the Swisse brand later this year.

These products will be available in-store and online in Australia and New Zealand, as well as across Chinese CBEC channels.

On the other hand, Swisse’s Calcium + Vitamin D product – the first Australian vitamin or mineral supplement product approved by the CFDA via the new filing process, will also be introduced in China.

H&H added that it would continue to invest in branding and marketing campaigns to build brand awareness.

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