Else Nutrition Reports Second Quarter 2023 Financial Results - Seite 2

Hamutal Yitzhak, CEO of Else Nutrition, commented, “2Q23 was another step forward in our mission to become a global leader in the plant-based nutrition arena. We are continuing to expand our points of distribution among various geographies and channels. Else has now become a national brand in North America, and we are now being sold in prominent retailers such as Walmart, CVS, and Shoppers Drug Mart. We expect to reach over 15,000 retail locations by the end of 2023.

Our two new manufacturing facilities in the US and Europe are now operational, more than tripling our production capacity, allowing us to properly meet our customers’ growing demands and mitigating the risk of future out-of-stock situations. In addition, our new facilities have made our production more efficient and cost-effective, and we expect to realize a lower cost of production leading to higher margin in upcoming quarters.

While we have now rightsized our production and inventory levels, there is still work to do to remedy the effects caused by our production issues. After approximately nine months of diverting inventory from e-commerce channels in favor of brick-and-mortar customers, we are now in the process of rebuilding our sales velocity in e-commerce channels which should lead to increased growth in 2H23.

Our sales to retail stores remain robust as retailers are seeing healthy sales of our products and we continue to grow our store count. Importantly, major retailers are expanding the number SKUs. As an example, we recently announced that Walmart has added both Toddler Organic and Toddler Omega to its shelves alongside the already available Super Cereal and Kids Shake products.

Our international expansion remains on track. Our launch into the Canadian market in 3Q22 was above our expectations, and the consumer enthusiasm has continued. Furthermore, we are excited at the prospect of entering Western Europe and Australia in 2H23.

Our growth objectives in 2023 and beyond remain intact. However, given the challenging capital markets environment, we are now even more focused on expense management, capital efficiency and being good stewards of capital. In recent months we have reduced expenses across all areas of our business and implemented significant efficiencies. Total Operating expenses in 1H23 decreased 17% versus the same period last year, despite our revenues increasing 35%. We believe that our revised expense structure combined with our anticipated top-line growth and margin expansion will allow us to reach cash flow breakeven during 2H2024.”