Comments by CEO


Comments by CEO - Karl Kristian Bergman Jensen

2019-10-31

We had a good 3 quarter with record revenue and record earnings. In the first 9 months of the year we achieved organic growth of 14.2%. In local currencies, growth was 9.5%. In the third quarter, the increase was 4.8% in Swedish kronor and 1.6% in local currencies. The third quarter of last year, 2018, was a really good quarter which we were aware would be difficult to match in 2019, but we succeeded. Growth is driven by increased marketing efforts, product innovation and increased geographical distribution. In the first nine months we have seen growth in all geographical areas with particularly high growth in Europe. In the third quarter we saw a slight decline in North America. This is due to structural changes in ownership and procurement among some of our largest customers in Canada as well as periodical shifts in purchase from our major US customers. We are confident that growth will continue in North America. With a favorable product mix and focus on savings in raw material purchases and cheaper freight, we achieved a satisfactory gross profit of 70.4% in the first 9 months of the year. We have a good cost control even though during the year we have strengthened our organization in line with increased activity level. EBITDA increased by 20% in the first nine months and 5% in the third quarter. Earnings per share after tax in- creased by 21% in the first nine months of the year. We have some markets that are new to us and where we are working to establish ourselves and create good profitability. Establishment in Hong Kong and China is progressing well, but they still do not contribute to positive earnings. The same is true of the situation in Switzerland, Slovakia, Romania and Kazakhstan. We have just re-established our sales company in Sydney, Australia, and hired a country manager there. We expect to start sales in Australia in the second quarter of 2020.

We have several markets where it might be relevant to establish New Nordic but we have concluded that we will have enough new geographical initiatives to handle at the moment. Our pace of innovation is also fine. At the end of the quarter, we introduced a few news for test marketing in Denmark. Clear BrainTM Active Memory, is a further development of our popular Clear BrainTM tablet. As the first cognitive supplement in the world it contains broccoli sprouts. The tablet strengthens our strong position in the category for brain function supplements. In addition, we have launched Cal Mag Bone StrongTM - the first calcium and magnesium supplement based on the highly absorbed calcium and magnesium sources; calcium citrate malate and magnesium malate. Of course with the addition of vitamins K2 and D plus herbs that work in synergy with the minerals. Together with our b-energyTM and magnesium malateTM, the capsule strengthens our premium vitamin and mineral range. We currently also have extraordinary product news that we are presenting to the trade in some selected mar- kets for launch in the first quarter of 2020. It is still a secret what it is, but it represents huge opportunities for further growth for New Nordic many years to come. In the quarter we have further fuelled the education of trade personnel. Several countries have initiated the highly popular New Nordic Herbal School. Again, our international team has made a great effort and I am encouraged by the determination to create further growth and further establish New Nordic as an international brand with a Scandinavian heritage. I look forward to the last months of the year and where we are also planning the actions to further develop New Nordic in 2020 - our 30th year anniversary.

New Nordic Healthbrands AB
Södra Förstadsgatan 3 C
SE-211 43 Malmö
Sweden

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