Thursday 18th Aug, 2022

Bellamy’s sets sights on growth after profit in FY18

Milk powder. Photo: Creative Commons / ProjectManhattan

Baby formula manufacturer Bellamy’s Australia says it can grow to half a billion dollars in revenue by FY21, after it returned to profit in FY18 thanks to strong sales growth.

Bellamy’s, which positions itself as the healthiest, organic option in the booming baby formula market, reported a $41 million net profit after tax in FY18.

This followed a $1 million net loss in FY17.

This turnaround came from a 37% increase in sales revenue, with just a 20% increase in underlying overhead costs.

“Our FY18 results set a new high for the business, delivering a 37% increase in sales and a 65% increase in EBITDA, and represents a material turnaround of our business,” Bellamy’s chief executive Andrew Cohen said.

“We have established a more sustainable business model, including stronger revenue management disciplines, material savings in cost of goods and logistics, and greater investment in our brand, product and marketing.”

The company faces some uncertainty relating to Chinese marketing approvals, but stressed in its annual report its Chinese-label product accounted for less than 6% of sales in FY18.

While the company expects “more moderate” growth in FY19, Cohen said the business is positioned to grow from its $329 million revenue figure in FY18, to half a billion dollars in FY21.

“The medium to long term outlook remains compelling, supported by category fundamentals, our differentiated position and future brand and channel opportunities,” Cohen said. “We have laid the foundations with an ambiti0on to build a $500 million revenue business by FY21.”