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FY2019 Results ASX Announcement


Summary:
Revenue from continuing operations decreased 16% to $27.2m1 in FY2019 compared to $32.5m in FY2018, driven by
35% growth in high margin Elixinol branded and co-branded product sales
Elixinol branded product sales represent 59% of FY2019 revenue (37% in FY2018)
 34% decline in bulk sales due to influx of cheap, poor quality product and 56% decline in private label sales due to termination of low margin private label contracts
Actions taken to significantly reduce future cash burn
Simplified business model to focus on the hemp derived CBD market
EBITDA from continuing operations (-$22.9m) in FY2019 compared to +$1.0m in FY2018
NPAT of (-$83.5m) in FY2019 compared to +$0.9m in FY2018
Results include non-cash asset impairment charges of $48.8m due to a reset of expectations including $39.4m goodwill and $8.4m for excess inventory provisions
Growth in the human and pet hemp derived CBD market has underperformed expectations
Unclear regulatory environment allowing inferior and potentially unsafe hemp derived CBD products creating a crowded and confusing market
Elixinol brand and product refresh on track to launch in March 2020, expected to drive growth in e-Commerce and Retail sales of high margin Elixinol branded products
Continued development of global distribution strategy
Completed investment in infrastructure to drive operating efficiencies and margin
improvement
Bipartisan support in US Congress to resolve hemp derived CBD classification

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