• Strong 1HY25 Group Results with continued successful implementation of Bubs strategic plan
• Significant improvement in 1HY25 net cash used in operating activities of $0.5m, versus $12.2m in 1HY24
• Gross profit optimisation and expansion well ahead of plan delivering 50% gross profit margins in 1HY25

Bubs Australia reported strong 1HY25 results, with a statutory NPAT of $3.6m, an improvement of $11.2m compared to 1HY24. EBITDA improved by $7.5m to $0.5m, and net cash used in operating activities reduced significantly to $0.5m, down from $12.2m in the prior period. The company's revenue grew by 23% to $48m, with all regions showing strong growth. Gross profit margins improved to 50%, exceeding the company's target of 40% for FY25, driven by higher margin new pack formats in the US, better inventory management, lower ingredient and packaging costs, and favorable currency movements. Operating expenses as a percentage of revenue decreased to 52% from 68% in the prior period, reflecting Bubs' cost-out initiatives and reduction in one-off expenses. Brand marketing investment increased to 16% of revenue from 13% in the prior period, as the company launched and educated consumers on its new global branding and product portfolio across the US and China markets. The company's balance sheet remained strong, with $17.2m in cash and $5m in undrawn debt as of December 2024.

Bubs expects gross margin for the full year FY25 to be approximately 45%, an upgrade from 40% at the start of the financial year.

Bubs remains on track for permanent FDA approval by October 2025, providing access to the world's second-largest IMF market and is poised to deliver a long runway of sustainable growth. The company's China strategy, focused on CBEC and O2O channels, continues to deliver strong profitable growth with scope to grow distribution footprint and branded sales in the coming years.