An increased focus on customer experience (CX) and a new management team has been pledged in an effort to turn Blackmores’ fortunes around
An increased focus on customer experience (CX) and a new management team has been pledged in an effort to turn Blackmores’ fortunes around, following the release of its half-year results.
First-half revenue was confirmed at $303 million, down 5 per cent year-on-year, and the ASX-listed group reported net profit after tax (NPAT) of $18 million, down 48 per cent. Blackmores said brand metrics were strong, but noted costs and an overly complex structure as contributing to the result.
Revenue in Australia and New Zealand of $115 million was down $29 million (or 20 per cent) on the previous corresponding period, with earnings before interest and tax (EBIT) of $15 million, down 55 per cent.
Blackmores CEO and one-time marketer, Alistair Symington, who was appointed in October last year, said the Blackmores Group sales performance in the first-half has been broadly in-line with expectations and brand health metrics are very strong. However, there is acknowledgement costs have increased at a greater pace and structure has become overly complex, which is the responsibility of the new executive team to fix.
“With our renewed strategy we are making clearer choices that set the business on a stronger footing for the long-term that will free the group to focus on what matters – delighting consumers, improving natural health literacy and prioritising growth,” he said.
Moving forward, Blackmore will step up investment in Asia – in particular China - strengthen the Australian practitioner brands, simplify offerings and brands, divest non-core brands, invest in partnerships, and invest in talent.
It is also aiming to deliver better CX at every touchpoint to build on its strong brand. Blackmores reports one on five households in Australia use Blackmores products, it has the number one market share in Australia, Thailand, Singapore and Malaysia, is the number one most trusted brand in Australia, and is the number one practitioner brand in Australia.
“We will step up our investments in Asia by designing natural health care solutions for the modern career woman, strengthen and rejuvenate Australia as the engine and simplify our structure and brand offering. We will leverage our unique manufacturing and partnership capabilities to drive new growth in Indonesia and India and key to this will be to build a world-class global organisation," Symington said.
“Together with my new management team, we have established a clear vision for the future of the group and we are confident our strategic choices will deliver significant long-term value for shareholders.”
Rejuvenate Blackmores Australia is focused on growing the group’s top-line revenue in complementary medicine, along with establishing strategic revenue management disciplines across the group to improve profitability.
The three key levers are: Developing a superior consumer experience at every touchpoint powered by superior natural health education; building capabilities in strategic revenue management, optimising channel mix, marketing ROI and maximising return from trade spend; and with digital tools, expanding to a broader more active healthcare practitioner customer care.
Across its portfolio, Blackmores reported the BioCeuticals brand continues to be Australia’s clear market leader of practitioner-only products, with revenue growing 6 per cent during the half. However, overall revenue for the BioCeuticals Group segment was flat during the half. BioCeuticals continues to have a strong pipeline of new product development.
Launches during the half included PEA Liquid (a clinically trialled ingredient for neuropathic pain relief) and Calm Bursts – chewable capsules made from Kava for the symptoms of mild anxiety and stress. Extensions to the digestive range included Collagen Active, PepZin Pro and PreBiome Fibre.
BioCeuticals’ world-first medicinal cannabis trial, conducted in conjunction with Endeavour College, concluded in November 2019 with the last patient completing their treatment. Results from the trial are expected to be published in April 2020.
PAW by Blackmores is seen as the leading pet supplement brand in Australia but as a Group it is yet to fully capitalise on this asset with little to no investment in recent years.
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