H&H Group announces 2024 Annual Results

Media Release – 2024 Annual Results
25 March 2025

• High-margin nutritional supplements are a key growth contributor and now represent 67.7% of Group revenue, with VHMS (+10.4%) and pet supplements (+15.2%) achieving double digit revenue growth within this category
• Adult Nutrition and Care (ANC) segment achieved 8.8% revenue growth thanks to strong performances in both core markets – mainland China and Australia & New Zealand (ANZ) – and expansion markets, with Swisse cementing its leading market positions around the world
• Baby Nutrition and Care (BNC) segment saw overall 25.8% decline mainly due to slower than expected 'New GB' transition and industry-wide challenges in the infant milk formula (IMF) industry in mainland China, yet we expanded our market share in super-premium IMF
• Pet Nutrition and Care (PNC) segment became key revenue contributor (15.1% of total Group revenue) and saw 4.4% revenue growth, boosted by Zesty Paws' performance in North America
• Maintained a healthy EBITDA margin level at 15.0%
• Diversified sources of funding and optimised capital structure, while enhancing inventory management practices to improve working capital
• Significant sustainability milestone reached as the Group achieved 100% B Corp certification, reinforcing its commitment to using business as a force for good, benefiting people, pets, and the planet
  
  
  Leading global nutrition company Health and Happiness (H&H Group) International Holdings Limited (stock code: 1112.HK) has today announced its 2024 annual results, delivering single-digit revenue decline (-6.3%) despite achieving a healthy level of profitability across all its business segments, while maintaining a strong level of cash conversion.
  
  
  Nick Mann, Group CEO and CEO of Australia, New Zealand and Asia at H&H Group, says he's pleased with the Group's determination in 2024 to achieve key milestones and make substantial progress towards its strategic goals.
  
  
  "2024 was a dynamic year for the Group and I'm proud of the significant progress that we made towards achieving our goal of becoming the global leader in nutritional supplements. We've also demonstrated resilience and adaptability in the face of some challenges. Our nutritional supplements category has been a stand-out success, demonstrating healthy growth levels particularly across VMHS and pet supplements – bolstering our Adult and Pet Nutrition and Care segments. We are increasingly seeing health and wellness supplements remain a highly resilient sector around the world, withstanding both high and low inflationary conditions and volatile currency environments. This positive trend, alongside aging populations, rising health consciousness, and increasingly well-educated consumers, is ensuring supplements become a core part of consumers daily routines. It is a trend that we've been tapping into and we are reaping the benefits, as nutritional supplements now represent 67.7% of our Group revenue (and over 80% of the Group's EBITDA) a significant transformation over the last 10 years, when nutritional supplements accounted for only 9.0% of total revenue, reflecting our successful pivot towards higher-margin, structurally growing markets. Further VHMS penetration growth in developing markets, portfolio premiumisation, and the increased penetration of pet supplements will continue to help fuel our supplement growth for years to come."
  
  
  Mr Mann continues, "The Group's decline in revenue was due to the transition to our new 'GB' IMF series in China, which included depleting our old 'GB' IMF products, replacing our Pi-Star Flagship series, and introducing our new Pi-Star sub-series, which required more time than anticipated. We are facing and actively addressing this challenge, and I am pleased to share the solid progress we have made to expand our market share in super-premium IMF, with our Stage 1 and Stage 2 IMFs consistently gaining market shares to lay a solid foundation for the future. The revenue decline can also be attributed to Solid Gold's product portfolio premiumisation initiatives and channel optimisation in North America and China, both of which have progressed well."
  
  
  One of the Group's biggest accomplishments in 2024 was receiving Group-wide B Corp certification one year ahead of schedule, becoming the first global health and wellness multinational headquartered in APAC to achieve this[^1]. This milestone recognises the Group's dedication to responsible business practices and leadership in meeting environmental, social, and governance standards.
  
  
  The Group remains committed to strengthening its balance sheet, while maintaining a steady track record of dividend payout, and is pleased to announce a final dividend of HK$0.05 per ordinary share which, combined with its interim dividend of HK$0.30, brings its full year dividend to HK$0.35 per ordinary share. This represents a more balanced level compared to previous years, reflecting the Group's focus on deleveraging.
  
  
  Meaningful steps were made to diversify funding sources and optimise the Group's capital structure including successfully completing all refinancing initiatives planned for 2024, such as certain RMB bilateral loans, a RMB bond of RMB500 million, a USD bond tap of USD120 million, a CNH term loan facility equivalent to USD150 million, and a USD sustainability-linked term loan facility of USD540 million. Lower cost RMB-denominated debts now represent 36.1% of the total debts at the end of 2024, with no major maturities in the next 2 years.
  
  
  Mainland China

Mainland China retains its place as the Group's largest market (66.6%). The ANC segment grew 6.9% as Swisse capitalised on key health trends to cement its No. 1 position in the mainland China online VHMS market[^2], and No. 2 brand position in the overall VHMS market[^3] in 2024.

Mr Mann comments, "Our ANC segment in mainland China continues to perform extremely well which is down to a few factors: strategically aligning with evolving consumer preferences through successful product launches in innovative categories, reinforcing our PPAE (Premium, Proven, Aspirational and Engaging) model and megabrand strategy, and skilfully tapping into the ongoing demand for health supplements. By extending our product portfolio across Swisse Plus+, Swisse Me and Little Swisse, we have catered to a wider audience of customers and capitalised on increasing consumer segmentation and penetration. We developed our channel strategy to focus on consumer education and effective marketing, accelerating our growth in online channels, including cross-border e-commerce, which grew by 9.6% and contributed 78.1% of our mainland China ANC revenue. Swisse Plus+ continued its successful track record by maintaining its leading position in the overall anti-aging category, while making a double-digit contribution to total ANC revenue in mainland China in 2024."

The BNC segment in mainland China faced challenges in 2024 mainly due to the contraction of the super-premium IMF market by 17.7%[^4] and knock-on effects from the transition to the new 'GB' series.

Mr Mann explains, "2024 was a challenging period for our BNC segment in mainland China as the transition to the new 'GB' series meant depleting our old 'GB' IMF products and replacing our Pi-Star flagship series, while the launch of our new Pi-Star sub-series took longer than expected. In addition, we faced a contracting super-premium IMF market, although this appeared to stabilise in the final few months of 2024. Despite this volatile environment, we remained steadfast in our determination and successfully grew Biostime's share in this category from 12.4% to 13.3%[^5], reaching a peak of 14.5% in December 2024[^6]."

The Group's new Stage 1 IMFs performed well across all channels in the second half of the year, especially the fourth quarter when it reached its highest market share of 4.7% versus 4.4% for the full year (with a 24.7% year-on-year increase in retail scanned sales). This momentum was further underscored by a boost in brand searches in the fourth quarter across RedNote and Douyin, and an outstanding performance during the Double Eleven shopping festival where GMV for Stage 1 IMFs grew 117% year-on-year – paving the way for future growth.

Sales of paediatric probiotics and nutritional supplements declined by 32.9%. Despite this, paediatric nutritional supplements grew by 77.7% and contributed 12.1% of total paediatric probiotic and nutritional supplements sales. Biostime successfully fortified its position as the No. 1 paediatric probiotics brand in the mainland China market[^7].

For the PNC segment, premiumisation was a key focus for Solid Gold in mainland China as the Group launched new higher-margin pet food and supplement products such as Solid Gold fish oil, which contributed 14.7% of total PNC revenue in mainland China. E-commerce was also a main priority as it became the most profitable channel in both developed and emerging markets.


Australia & New Zealand (ANZ)

The Group saw sustained double-digit growth in the ANZ region amidst normalising industry growth levels, while solidifying Swisse's No. 1 position in the overall Australia VHMS market[^8].

Mr Mann says, "ANZ is our second largest market and continues to deliver exceptional results thanks to our impressive innovation portfolio, effective marketing tactics and successful distribution strategy in the domestic channel. I am especially proud that we have reinforced our No. 1 position in the market, and a particular highlight is the Swisse gummies range which still holds the No. 2 market share (17.2%)[^9]. Meanwhile, we have achieved enormous industry recognition, from Reader's Digest Australia's Most Trusted Vitamin Brand, to Complementary Medicines Australia's Marketing Campaign of the Year Award (for Multivitamins), The Australian Marketing Institute's Marketing Excellence Award for Social Media Marketing (Sleep), and runner-up in the Tik Tok Awards' "Greatest Creative Campaign" (Sleep), demonstrating our unwavering commitment to quality, innovation and consumer trust."


North America

North America, the Group's third largest market, accounted for 12.4% of total Group revenue and saw 7.1% revenue growth in 2024, led by a strong year for Zesty Paws in its home market.

Mr Mann comments, "Our growth strategy for Zesty Paws has paid off as we expanded our customer base and capitalised on the growing pet population as well as pet humanisation and premiumisation trends, strengthening the brand as one of the most recognised pet supplement brands in the US (achieving 11.8% growth for full-year 2024 with 15.3% accelerated growth in Q4). We strengthened our footprint on Amazon as well as across our key retailers Sam's Club, Costco, Petco, Meijer, Walmart, Target, PetSmart, CVS and Tractor Supply. While our expansion last year created a high-base effect which pushed down the brands top-line growth rate into the high single-digits for 2024, Zesty Paws still saw strong profitable growth thanks to its broad consumer base and consistent market share."

Sales of Solid Gold declined as the Group incurred one-off restructuring costs in its pursuit of channel optimisation and portfolio premiumisation, to ultimately drive long-term growth. As of 31 December 2024, Zesty Paws and Solid Gold were present in more than 18,000 stores and 4,800 stores, respectively, across the US.


Other Territories

The Group's other territories performed well, most notably key expansion markets including Hong Kong SAR, Thailand, Malaysia, India and the Middle East. H&H maintained its high market shares, with Swisse retaining its No. 1 position in beauty VMHS, liver health and men's health in Singapore[^10] and No. 2 position in Italy's beauty VHMS market[^11].

"Our expansion markets have continued to excel, achieving strong growth as well as being recognised for several prestigious awards including H&H Group Singapore receiving the 'Company for Good (1 Star)' by the government in acknowledgment of our sustainability practices. Swisse was also awarded a Trusted Brand (Gold) by Reader's Digest Singapore and Gold at the 2024 FMCG Asia Awards for 'Digital Marketing Strategy of the Year' (Singapore Swisse's men's health campaign) and 'Consumer Good of the Year' (vitamins and supplements category) for our Swisse Collagen MOV innovation in Thailand. Additionally, Swisse Malaysia earned a silver medal at the 2024 Asia Ecommerce Awards for its e-commerce strategy. Zesty Paws was also recognised as the 'Fastest Growing Brand 2024 (Lifestyle)' on Shopee, one of the largest e-commerce platforms in Singapore and Southeast Asia."

The Group has also been successfully expanding its BNC segment internationally, earning recognition and trust around specialised and innovative IMF products. Notably, Biostime in Hong Kong SAR was honoured with the 'Most Trusted Brand' award by parenting platform Ophbama, and continued to retain its No. 1 positions in the organic IMF and goat milk IMF categories in the French pharmacy channel, with market shares of 40.1% and 43.4%, respectively[^12].


2025 Outlook

The key focus for 2025 will be to return to positive top-line growth by driving the growth of high-margin, fast-growing nutritional VHMS and pet supplements. Additionally, the Group will continue to demonstrate strategic focus, operational resilience and disciplined execution across its ANC, BNC and PNC segments to deliver a consistent level of profitability.

Mr Mann expands on this, "Our ANC segment is well-positioned for sustained growth, thanks to a growing global trend of consumers becoming more wellness conscious which is driving strong demand for supplements as they become a core part of their daily routines. In mainland China we are steadfast in our commitment to maintain our market share and leverage our market leadership, while in ANZ we expect to maintain our growth rate in the domestic market through innovative formats and premiumisation – including a first-to-market Nootropics range for cognitive health, and a Smart Melts range, which offers convenient, dissolvable formats targeting stress relief, sleep support, energy enhancement and detoxification. We will also continue to invest and develop in expansion markets by leveraging successful strategies in Singapore and Hong Kong SAR."

In the BNC segment, the Group is on track to complete its 'GB' transition by the end of the first half of 2025, and is positioning itself for a return to growth in IMF sales for the full year through a continued focus on new customer acquisition and leveraging e-commerce channels.

In the PNC segment, the Group will continue focusing on expanding Zesty Paws in North America through an omni-channel approach and ongoing innovation strategy, while pursuing global expansion across the UK, Europe, Asia and ANZ markets. Solid Gold in North America will focus on the premium pet food category and further expand its presence through e-commerce channels. In mainland China, the priority will be returning Solid Gold to a growth trajectory in 2025 by leveraging new high-margin pet food and supplements products.

H&H remains committed to further reducing its leverage and strengthening its balance sheet, through a high cash-generating business model and gradually lowering its net leverage ratio in the coming years.



FINANCIAL RESULTS

Year ended 31 December (RMB million)

Revenue by product segment
	2024	2023	Reported Change	LFL Change	% rev 2024	% rev 2023
Nutritional Supplements	8,830.5	8,415.3	4.9%	4.6%	67.7%	60.4%
– VHMS products	6,660.0	6,030.7	10.4%	10.2%	51.0%	43.3%
– Pet supplements	1,349.2	1,171.3	15.2%	14.0%	10.4%	8.4%
– Paediatric probiotic and nutritional supplements	821.3	1,213.3	-32.3%	-32.3%	6.3%	8.7%
Infant formulas	3,332.4	4,397.5	-24.2%	-24.2%	25.5%	31.6%
Others*	888.8	1,113.7	-20.2%	-20.5%	6.8%	8.0%

Revenue by business segment
	2024	2023	Reported Change	LFL Change	% rev 2024	% rev 2023
Adult nutrition and care products	6,696.2	6,145.0	9.0%	8.8%	51.3%	44.1%
Baby nutrition and care products	4,382.3	5,907.5	-25.8%	-25.8%	33.6%	42.4%
Pet nutrition and care products	1,973.2	1,874.1	5.3%	4.4%	15.1%	13.5%

Revenue by geography
	2024	2023	Reported Change	LFL Change	% rev 2024	% rev 2023
Mainland China	8,685.4	9,972.7	-12.9%	-12.9%	66.6%	71.6%
ANZ	2,012.7	1,794.6	12.2%	11.6%	15.4%	12.9%
North America	1,621.7	1,498.2	8.2%	7.1%	12.4%	10.8%
Other Territories	731.9	661.0	10.7%	10.4%	5.6%	4.7%
Total	13,051.7	13,926.5	-6.3%	-6.5%	100.0%	100.0%

*\* Others include pet food from Solid Gold, baby food and snacks from Good Goût, baby accessories from Dodie and other skincare products.*