Overview

Hydralyte Worldwide (ASX:HPC) is an ASX-listed speedy hydration options enterprise targeted on the massive North American and European markets.

With a longtime provide chain in each Canada and america, the corporate not too long ago surpassed US$10.4 million in 12-month trailing income with a gross margin of a staggering 58 % throughout Q3 FY23. The corporate delivered robust income of US$2.6 million in Q3 2023, mixed with an ongoing discount in web money utilized in working actions.

Hydralyte speedy rehydration product was additionally the primary SKU within the hydration class on Amazon Prime Day in Canada, the place it is the quantity two hydration model total with a 21 % market share. Beginning on Prime Day, Hydralyte delivered ~US$140,000 in product sales over 48 hours – which has underpinned a robust ecommerce gross sales pipeline within the latest months.

It is also price noting that each one this income progress – alongside a partnership with Shay Mitchell – occurred with an ongoing discount in advertising and marketing expenditure; advertising and marketing prices as a share of gross sales had been down a 3rd straight quarter in Q3 FY2 to 30 % (a report low since IPO). That is due partially to the corporate’s strong management staff, that includes professionals with many years of experience in well being and wellness, in addition to heavy model investments which have been made all through 2022.

In Australia, New Zealand and components of Southeast Asia, Status Shopper Healthcare Integrated (NYSE:PBH) holds the unique gross sales and distribution rights to Hydralyte merchandise. PBH is an American over-the-counter healthcare advertising and marketing and distribution firm, relationship again greater than 100 years.

In the meantime, Hydralyte Worldwide’s gross sales within the UK are exceeding expectations, with the corporate’s merchandise now showing each on Amazon UK and retailer cabinets in Complete Meals and Chemist Warehouse shops, offering one other doubtlessly profitable income channel.

Hydralyte Worldwide’s sturdy provide chain, gross sales trajectory, manufacturing strategy and product technique are removed from the one causes it reveals such promise as an funding. Present market developments additionally considerably favor the corporate’s core worth proposition. Valued at US$1.42 billion in 2017, the world electrolyte hydration drinks market is predicted to achieve US$1.82 billion by 2025 as shoppers flip away from high-sugar, low-electrolyte drinks and in direction of extra scientific hydration merchandise.

Roughly 75 % of Individuals are dehydrated at any given time. The explanations are many and diverse, starting from journey and train to alcohol and sickness. Its signs are one thing many people have merely realized to dwell with – irritability, mind fog, dizziness, elevated thirst, dry mouth and fatigue, to call only a few.

Hydralyte matches the invoice completely for these shoppers. Based with the aim of creating a distinction by higher hydration, Hydralyte is ready to deal with dehydration extra successfully than the vast majority of sports activities drinks available on the market. Due to its proprietary method – which makes use of a exact ratio of water, electrolytes and glucose primarily based on the World Well being Group’s really useful method for speedy rehydration.

Hydralyte is out there in three kinds: ready-to-drink, pill and dissolvable powder stick. All three are extensively accepted within the medical group. Hydralyte can also be continuously utilized by skilled athletes as a substitute for sports activities drinks.

In brief, due to its market place, robust management and science-based method, Hydralyte represents the proper alternative for traders to enter the approach to life sports activities market.

Firm Highlights

• Hydralyte Worldwide is a speedy hydration drink enterprise with a concentrate on North America and established provide chains in each america and Canada.
• The corporate’s 2023 financials are extremely promising:
  • Trailing 12 months income of US$10.4 million in Q3 FY23
  • 58 % gross margin in Q3 2023
  • Money burn discount of 47 % on PCP to US$1.46 million in Q3 FY22, with initiatives in place anticipated to cut back this additional
  • US$140,000 in product sales from Amazon Prime Day in July.
• Though Hydralyte not too long ago diminished its advertising and marketing expenditure, it nonetheless skilled robust income progress all through the primary three quarters of 2023, pushed by ongoing eCommerce gross sales, a longtime brick-and-mortar footprint, new SKU additions and a partnership with main entrepreneur and actress, Shay Mitchell.
• The UK represents a global growth alternative for Hydralyte, with merchandise being bought on Amazon UK and showing on retailer cabinets in Complete Meals and Chemist Warehouse.
• Settlement with specialist e-commerce firm RooLife Group Restricted (ASX: RLG) to completely market, promote and distribute Hydralyte merchandise in China
• Appointed main well being and wellness merchandise dealer LeBeau Excel as its new gross sales dealer, giving Hydralyte the flexibility to considerably increase its footprint within the Canadian market.
• Along with a strong manufacturing base and provide chain, Hydralyte is supported by leaders with many years of expertise in well being and wellness.
• Hydralyte merchandise are extensively accepted in each the medical and athletic communities. Because of this, the corporate is extraordinarily well-positioned to leverage the fast-growing electrolyte hydration drinks market.

Core Product Providing

Hydralyte Speedy Rehydration

Hydralyte is predicated on the World Well being Group’s really useful method for speedy rehydration. Made out of all-natural substances, it incorporates the exact ratio of glucose and electrolytes essential to rehydrate. Its revolutionary method incorporates as much as 75 % much less sugar and 4 instances extra electrolytes than the vast majority of sports activities drinks.

Highlights:

• A number of SKUs: Obtainable as a pill, powder and premade drink, Hydralyte is available in a variety of various flavors and formulations, together with:
  • Liver Assist: 7 key electrolytes, six antioxidants, ginger, turmeric, milk thistle and prickly pear.
  • Apple Cider Vinegar: 4 key electrolytes, apple cider vinegar, nutritional vitamins B12, B6 and C.
  • Collagen: 5 key electrolytes, Verisol collagen, vitamin C and zinc.
  • Immunity with Elderberry: 7 key electrolytes, vitamin C, magnesium and zinc.
  • SPORT: Launched in 2022, these tablets are designed with the wants of athletes in thoughts.
• Promising Partnerships: In December 2022, Hydralyte launched a model partnership with Shay Mitchell, a Canadian actress and entrepreneur with over 36 million Instagram followers. The 2 events launched a co-branded product by HPC eCommerce channels and Amazon USA. A Canadian launch is at the moment pending.
• Strategic Agreements: Hydralyte has engaged specialist e-commerce firm RooLife Group Restricted to completely market, promote and distribute Hydralyte merchandise in China. It has additionally appointed LeBeau Excel as its new gross sales dealer to considerably increase Hydralyte’s footprint within the Canadian market.

Administration Crew 

Oliver Baker – CEO

Oliver Baker is the previous basic supervisor of Swisse Wellness USA, a vitamin, complement and skincare model that in 2015 bought for US$1.7 billion. Throughout his tenure at Swisse, Baker employed a devoted eCommerce technique that enabled a profitable US launch. He additionally led the combination staff in Guangzhou, migrating ~US$73 million in gross sales and increase an area Chinese language staff.

Previous to his place at Swisse, Baker labored in a number of world and nationwide gross sales and advertising and marketing roles with a concentrate on sports activities sponsorships.

George Livery – Chairman

George Livery has near thirty years of expertise in senior roles each domestically and internationally. Most not too long ago, he served as director of technique & company at Swisse Wellness, the place he initially started as industrial director. Livery has additionally served as govt chairman for a number of main organizations, together with Bod Australia.

Adem Karafili – Non-executive Director

A registered CPA and enterprise skilled with greater than 15 years of expertise, Adem Karafili has operated in management positions throughout a variety of various sectors and industries. Most not too long ago, he spent a number of years at Swisse Wellness, starting as chief monetary officer earlier than changing into chief working officer and managing director. Whereas there, he helped to determine Swisse as a number one world well being and wellness model.

Karafili holds a Bachelor of Enterprise Administration in accounting and is chairman of a number of well being and wellness firms.

Chris Kavanaugh – CFO

Chris Kavanaugh has over 20 years of expertise working finance and operations for rising startups from inception to US$30M+ in income. He has labored with Hydralyte for over 5 years, beginning as a controller earlier than being promoted to chief monetary officer in 2021. Previous to his place at Hydralyte, he served as a director of finance for firms together with Fullbridge, Training Integrated and OneVision Assets.

Kavanaugh has a Bachelor in Accounting and Administration with a double main in info techniques from Indiana College of Pennsylvania.

Margaret Hardin – Non-executive Director

Over the course of her profession, Margaret Hardin has served as CEO and CFO for quite a few main product firms in america together with Child Tremendous Manufacturers, ERGObaby Provider Integrated and Munchkin. With over twenty years of expertise, Hardin has a well-established fame for driving progress by innovation, strategic acquisitions and geographic growth. She holds a BBA from New Mexico State and an MBA from the Sales space Graduate Faculty of Enterprise on the College of Chicago.

Brandon Fishman – US Advisor

Brandon Fishman is the Founder and CEO of VitaCup, a vitamin-infused useful espresso and tea model that surpassed US$20 million in gross sales in 5 years. Over the course of his profession, Fishman has labored with a number of Fortune 500 manufacturers in a variety of various capacities, within the course of increase appreciable entrepreneurial knowledge. Different firms based by Fishman embrace NewCondosOnline and Web Advertising and marketing Integrated.

Fishman holds a Bachelor of Enterprise Administration and Finance from Emory College and a Grasp in Actual Property & Enterprise from the College of San Diego.