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Today Allan Kohler interviewed Paul Hyslop, CEO of ZNO. I made some key points from the interview. For more details, or to listen to the podcast, you'll have to subscribe to InvestSmart! ;-)
On Cash Flow
How are the lockdowns affecting Zoono?
London Underground contract
It all comes down to Litres and Price
Whats in the Pipeline?
How is Zoono applied?
What about the Profits?
Are you spread to thin?
Customers want a guarantee the Aircraft are clean
What about the story that appeared in Independant Australia about you and the company?
I find valuing a company like Zoono very difficult, after all company valuations are based on future earnings. For Zoono there are a lot of factors at play with the potential to influence future earnings.
I liked the valuation elpaso96 stepped through in the post following the ZNO 1H report ($1.14). I think this is a very conservative valuation and the likely value is North of this!
ZNO first caught my attention in a Simply Wall Street screener. I screen for companies with PEG < 1, ROE >20%, Growth >20% and DCF > 25% discount, no or low debt (See Simply Wall Street for their DCF formula).
Simply Wall Street DCF valuation is $3.37 and a PEG ration of 0.4 . There is only 1 analyst contributing and the future full year revenue data has not been updated after the 1H report, still based on full year revenue of $58m and net income of $20m. I think revenue is more likely to be $38 - $40m based on $20m cash receipts in H1 and similar for H2. So valuation all comes down to future earnings and whatever formula use it is only as useful as the earnings figure you plug into it. As they say BS in = BS out.
For companies like Zoono, I like to do a SWAT (Strengths, Weakness, Opportunities and Threats). A SWOT helps to weigh up ALL the factors at play and to evaluate the risk to future earnings. Here is a start to the SWOT, but you might have more to add?
Strengths:
- ZNO produces unique, highly effective, long-lasting antibacterial products that have a distinct competitive advantage
- Intellectual Property, the “Zoono Molecule”
- a unique antibacterial molecule that bonds to any surface
- A non-toxic molecule that is effective for up to 24 hrs on hands and skin, 30 days on surfaces. (Imagine what this means for a kindergartens or schools, and the potential market here alone).
- Rapidly expanding world wide, including government approvals
- Customers include big corporates and governments e.g. United Airways, Qantas, London Underground, G8 childcare, and more...
- Becoming a household name, my granddaughter who attends the local Kindy saw our Zoono hand sanitiser (yes we use it) and said "Hey Pop, you've got Zoono"!
- Alternative for sufferers of dry hands and dermatitis. My 84yr old Mum avoids using alcohol based hand sanitiser because continued use is drying her hands and aggravating her dermatitis.
- A great marketing site. I ordered the Zoono combination pack, got a 10% discount and the products arrived quickly with Australia Post. My wife (School Principle) loves it and is using far more than she needs to because it feels great on her hands. She likes the idea that it is non-toxic and does not require a SDS (Safety Data Sheet) to be used in schools.
- Potential for disease control in chickens and pigs not factored into the price yet
- Potential takeover target, a highly profitable company with a PEG<1, no debt and a promising future with a large competitive edge if the intellectual property proves successful globally.
- Good liquidity
- no debt
Weaknesses
- Small company, so the share price can be easily manipulated (e.g. short sellers)
- There is research and regulatory approval in several countries, however still waiting for regulatory approvals to come through for some key markets e.g. US EPA and Canada Health. The US EPA outcome is expected any time. I think this will be turning point for the outlook for the company, positive or negative. There is enough research to prove Zoono, I don't expect a negative outcome.
- The company is based on one unique patented molecular formula. They have a lot of eggs in one basket. if this fails ZNO has nothing. (Its true, but I think these are golden eggs).
- Risk of mutation. Pathogens can evolve and mutate over time and develop resistance to chemical formulae, however the action of the zoono molecule is physical, i.e. it punctures the cell of the pathogen. This is unlike chemical formulas (eg. pesticides) and over time pathogens can evolve and develop resistance to the chemicals. Paul likened the action to alcohol which burns the cellular wall, and highly unlikely to develop resistance.
- Not a household name yet, but childcare centres could change that.
Opportunities
- Endless opportunities will open up after US EPA approval
- Vaccinations will increase demand for zoono. Airlines and Cruise Ships are likely to be in full swing with an increase in COVID 19 herd immunity. Sanitisers will remain an important strategy to stop the spread of viruses not just COVID 19. United Airlines, Qantas already using zoono. The distinct advantage of zoono is it significantly reduces the spread of harmful bacteria, viruses, fungi, mould and yeast. The innovative technology lasts up to 30 days on treated surfaces and up to 24 hours on skin.
- Huge application in pigs and chickens to prevent the spread of disease in agriculture
Threats
- Discovery of another unique product with similar advantages
- The pending regulatory approvals are negative (seems highly unlikely to me given the research track record)
- Continued short selling (this is also an opportunity. Market failure, for whatever reason, provides a unique opportunity to buy a great company at a very cheap price).
Summary
I think the Strengths and Opportunities for ZNO far outweigh the Weaknesses and Threats.
I own shares in ZNO (not in Stawman yet, new member and still trying to work it out) and have been adding significantly to my holding over a number of weeks. I will continue buy shares in this low risk, undervalued company even though it feels like like I'm the only contrarian doing so at the moment! :-)
1HFY21 results + Conference call
Conference call - I only listened to the last half as I was refining notes for Alcidion
Interested to know what people thought during the first half of the call?
25 February 2021
Revenues of NZ$14.4m in H1FY21, up 741% on prior corresponding half-year
Global expansion continues with major deals worldwide
Half-Year Financial Highlights:
Half-Year Operational Highlights:
Its sales have dropped from $15m in Q1 to $5.5m in Q2 a rate of decline that approximately matches its declining share price
Zoono has many customers, here is an overview of customers per region:
UK/Europe:
Australia/NZ:
North America/Carribean
Middle East & Africa
China
Listed on 9 May 2017. Previously the ticker was under Goldsearch a gold exploration mining company. My guess is a reverse merger, but I do not know, plus I can't find the prospectus.
What do they do?
Zoono is an antimicrobial solutions company founded in New Zealand by Paul Hislop (who is the founder and the current managing director). They basically make wet wipes, dry wipes, microfibre cloths, antimicrobial body wash and hand sanitisers that claim to be 99.99% effective in almost all surfaces. Zoono seeks regulatory approval in different regions to make that claim so that they can use it for marketing.
What sectors do they target?
Zoono targets a wide range of sectors (Child Care, commercial cleaning, agriculture and veterinary, medical and retail). They decide to split the business into 3 segments (B2B, B2C and Animal Health) so moving forward, it makes sense to analyse the business on a segment basis not a sector basis.
Stable Management/Ownership?
Starting from the top, Paul Hyslop is the founder and have been running the business since 2007. He has a lot of skin in the game as he owns around 66M shares with 40% ownership. The founder is aligned with shareholders which is great to see as he started the company from scratch. Regal Funds own 10% of the company and is a hedge fund that gives me concern as those guys manipulate the stock price. Their ownership stake is currently not larger than management, so they cannot overthrow management - good for the long term investor.
What's their market entry strategy?
As explained above, Zoono's market entry strategy is through distributors. From my understanding, they sign an agreement with a distributor to sell "X" amount of product for a "Y" price. Depending on the distributor, the distributor should get (% or $) commission for selling "X" amount with a commission structure laid out on the contract.
Here is an example: John Lyng Group
Have they executed well?
Yes they have thanks to Covid-19. Their antimicrobial hand sanitiser Z-71 was added to the TGA approved list. Zoono made the smart decision back in 2018 to focus on B2B which proved to be an excellent corporate decision. As Zoono puts it on the FY20 Annual report "the decision to change focus [from B2C to B2B] was a recognition of the fact that the Company simply did not have either the funding necessary to build a retail brand or, with its limited human resources, the capacity to build a global retail business".
Growing revenue from $2M to $38M in one year is an amazing achievement so they have executed extremely well.
The big question is can they maintain their growth?
It depends on the new distribution agreements, growth in new verticals like Animal Health and new products. It is hard to project revenue growth as we are not given unit economics for the B2B segment. We are given B2C, but as Zoono said, they are not focusing on that segment for the forseeable future. What I need to do next is connect information across AGM slide decks, interviews and Annual report to make a guess on which distributors are generating the sales for the B2B segment.
This straw should be named detective work :D A lot of compilation involved to put the distributor arrangements together.
UK/ Europe:
Aus/NZ/ Singapore
North America / USA / Carribean
Middle East & Africa (MENA)
China
Continued momentum with Q2 invoiced sales of NZ$14.1M
Q2 Financial Highlights:
• Total invoices sales and orders for the quarter were NZ$14.1M *(1) ;
• Cash at bank of NZ$7.3M with an additional positive net receivables/payables (unaudited) balance of NZ$1.8M, which will bring the bank balance to NZ$9.1M;
• Inventories of NZ$14.4M (unaudited) to meet current demand are being maintained. Zoono is holding stock across several global locations to enable timely delivery, including USA, UK, China, Australia and MENA regions;
• Total cash receipts from customers NZ$20.5M for the six months to date (unaudited).
*(1) Zoono refers to “invoiced sales” when an order is received from a customer. A sale is only recorded as revenue once the product is despatched to the customer. Additional revenue from this quarter’s sales will be seen later this year once the orders has been dispatched.
Disc: I hold
ZNO Company update - 16th December (Marked as price-sensitive, understandably so)
MENA update - Middle East & Africa
Russia update
New Product
Overall;
A very positive annoucement and the markets rather sluggish reaction (shares up ~4%) again makes me more confident in holding shares in this company - the market cannot perceive this company to be profit generating in future years.
Note - All figures in $NZD
New UAE deal is with Fine Hygienic Group, a FMCG company that according to Forbes has top 10 brand recognition in the Middle East. The company is doing US$1bn in sales, with a dominant position in toiletries (tissue / toilet paper). CEO was previously part of the senior leadership team at Procter & Gamble.
Recent pivot by the company into masks this year has seen millions of masks sold. Emboldened by its success in adjacent products, Fine has launched a full line of Zoono products as seen here:
Fine Guard Disinfectants | TheFineShop.com
The goal is for UAE (home market) launch initially next year, in all supermarkets and pharmacies, supported by a large advertising campaign.
This will be followed by rollout across 70 countries over the next 2 years.
Gross margins are north of 50%, so each dollar of Zoono sold will add $0.50c+ to Zoono's EBIT line. No additional opex or capex is required to fulfil this contract.
First year sales of NZ$20m+ will equate to NZ$10m+ in extra EBIT.
Conservatively valuing this at 10x EBIT, the deal just added NZ$100m of shareholder value.
Probably of success is quite high IMO coz Fine is a proven brand in the Middle East. Top 10 brand in the minds of consumers would rank it equivalent to a Mars, or a Colgate in MENA.
Company Update Highlights:
• Further testing in the UAE reconfirms Zoono surface spray efficacy at 30 days
• Two new distribution/supply agreements signed
• Combined revenue targets are for NZ$23.0m for year 1, NZ$31.0m for year 2 and NZ$39.95m for year three
• Regulatory approvals received for Russia
• New Zoono treated face mask launched
Disc : I hold ZNO
As mentioned in the AGM, Zoono has recently signed a deal to white-label its products with Fine Hygienic Group Holdings to rollout its products in 70 countries.
This group is one of the pre-eminent FMCG companies in the Middle East and North Africa.
Forbes Magazine has named Fine the ninth most recognized brand in the MENA region, underscoring the incredible strength of the brand in the minds of consumers.
Because Zoono's products are alcohol-free, they can be Halal-certified and this is a massive competitive advantage against incumbent products, for a mostly Muslim consumer base.
Also, with Fine's brand, 3500+ staff & 70-year history in the region, they have the infrastructure and marketing budget to implement a consumer strategy that Zoono is incapable of doing on its own.
The CEO of Fine Group has worked for Procter & Gamble for 24 years and is an Olympic coach & a marathon runner. Quite a determined bloke.
In terms of financials, its possible to envisage $5-10m within a year or two at a 50%+ gross margin (lower GP% but offset by large volume & no additional opex commitment). A bull case could see Zoono selling $30-40m per annum if the products are successful, which will add $15-20m+ in incremental EBIT per annum.
Apologies I am late to the party, but here is my breakdown of the AGM Presentation of last week.
UK
· Regulatory approval in most EU countries, with a list of others where regulatory approval has been submitted, or the process is underway
· Key customer in the UK – Atalian Servest (services rail networks across most of UK)
o Sales pipeline;
§ Zoono AG – fruit & veg sector
§ Trans Dev – global passenger trains
§ Opportunities in Russia – are pending reg. approval – this is only a matter of time
Aus/NZ
· Focus is on B2b – better margins and order
· Digital marketing specialist employed to drive b2c (worth it…?_)
· Partner with Qantas for “fly-well” program
· New agreement to distribute to John Lyng Group
· Focus on partnering with health care solutions – no break through yet but pipeline is always there.
US
· New GM
· New chemical reactor, allowing for raw materials to be self-developed, higher production capabilities
· Regulation and EPA testing is underway in related to COVID longevity claims – this is sure to be positive news to market once finished
· New website to be launched in relation to B2c ….
· Expansion of distributors in Panada, Jamaica, Mexico etc
Current top customers
· United Airlines – entire airline fleet (this contract was only signed in q1 and hence won’t start fruiting till q2, q3 onwards)
· CVS – Pharmacy retailer
· California, Texas, Florida – jails, government offices and squad cars
o MANY MORE
Top Prospects;
· 7 Eleven stores – currently testing versus a competitor (68,000 stores potential)
· ARDA – 400k resorts
· Boeing
· Many big contracts with initial orders placed
· UPS logistics – looking to treat facilities
· Delta airlines – awaiting testing results and eager to take the same path of United Airlines!!
· Many many trials underway, LAX airport, Grand Rapids Airpoty, Olympia Entertainment, Microsoft offices, Virgin Hotels and many more
Middle East & Africa
· Development of new sales channels underway in Bahrain, SA, Egypt and Africa
· Further testing
*I do hold some ZNO shares
This AGM was a very positive presentation in my view and just goes to show how deep the sales pipeline for the company is going to be moving forward in 2021.
The release of a vaccine has only given a cheaper entry point in my view, the re-opening of the economy etc is going to see greater potential sales opportunities.
19-Nov-2020: Zoono AGM Presentation
[I hold ZNO shares.] I note their two resolutions put to shareholders at their AGM today were passed by 99% and 99.9% respectively. I also note that on 6-Nov-2020, BoA/Merrill Lynch served a notice that they were no longer substantial shareholders of ZNO. In that notice, it was clear that they had been lending ZNO shares to shorters (i.e. short-sellers, see Appendices A & B of the announcement). I also note that ZNO's share price has been in a downward channel for 4 months and they appear to have broken out of the top end of that channel today if I'm not mistaken. There's a lot to like about this company. They are producing the right product at the right time, and their sales are increasing at a good clip. The market seems to have moved away from so-called "COVID-plays" to "Recovery Plays", and that's OK. I don't have a problem with that. However, this is a fast growing company that is highly profitable and doing everything right, including paying dividends, and the demand for their sanitiser and surface treatment products are not going to evaporate when the COVID-19 vaccine(s) are rolled out. I believe they are just at the start of their growth runway.
05-Nov-2020: I received the following via email from Zoono Group (ZNO) this morning:
Test Results & Global Media Exposure | 5 November 2020 - Update On Longevity Claims
Update On Longevity Claims
Germ-busting business determined to let people see the scientific testing evidence that substantiates long lasting anti-viral effectiveness
Zoono, a New Zealand headquartered business that is listed on the Australian Stock Exchange and has offices in the US and UK, is making the results of testing on their antimicrobial products public and emphasising how the results prove longer lasting effectiveness against dangerous pathogens, including viruses and bacteria.
Confusion had previously arisen when it was reported that Zoono had withdrawn claims that their products were effective over long periods – up to 24 hours for their hand sanitiser and up to 30 days for their surface sanitiser. On reflection, Zoono say that their response to queries raised by Suffolk Trading Standards should have been much more focused on the best way to rapidly prove and clarify, rather than allow misconceptions to form. They wish to emphasise that there was no ‘enforcement action’ against them and they had simply volunteered to change product labelling for UK customers during the clarification period. It was a statement by a Zoono customer, not Zoono itself, relating specifically to Covid-19 that triggered the queries.
It is important to explain that no laboratories have been testing specifically with Covid-19 – they use very efficient indicator processes that cover a wide range of pathogens. And this means that even when there is strong evidence regarding effectiveness against human coronaviruses, as in the Zoono case, effectiveness against Covid-19 cannot currently be specifically cited. This applies to all disinfectant products, including hand sanitisers and surface treatments.
The reality is that over 100 laboratory tests have been completed that demonstrate the effectiveness and long lasting nature of the Zoono advanced antimicrobial products – and recently in the UK further tests, both in approved UK laboratories and ‘in situ’ have backed up their value. A UK police authority is in the process of placing a major order after having the product tested at a renowned Public Health England testing facility – and just last week a Channel 4 Dispatches programme conducting tests in public places and transport reported that a test carried out on a Travel for London bus had shown that the tested surfaces were remarkably pathogen-free. What the reporters did not know was that Transport for London have been using Zoono.
Zoono say that what is necessary is that people understand completely how their products work and how they work best, including using their products correctly, in conjunction with best practice hygiene. They, their partners and their customers are striving for a level of excellence – a ‘hygiene hero’ status that can play a critical role in safeguarding people – not just in the current crisis, but also on an ongoing basis as it should not be forgotten that every year millions are severely affected all over the world from a wide range of germs including, of course, flu and many gastrointestinal pathogens, including norovirus outbreaks.
Whilst there will be some variables within the spectrum of such widespread testing, all the scientific evidence is showing overwhelmingly that Zoono products have exceptional advantages over ‘traditional’ products that use alcohol and bleach, and that the tests do show that they can be effective for up to the claimed durations. The advantages also include much lower levels of toxicity. Zoono acknowledges that it is not possible to put all of the scientific proof on product labels and it should be clarified, so their revised labelling emphasises ‘scientifically proven’ and ‘longer lasting’ – and the explanation of the advanced science and test results is being provided online and on request. This information can then also be compared to (for example) the time an alcohol-based hand sanitising product might be effective – which is only around 2 minutes. Promoting such facts is considered an essential part of enabling people to consider which products are going to provide protection over the longest periods.
In terms of the UK situation, what has been misdescribed there, is being resolved – although ironically, the Suffolk Trading Standards process has been held up as the laboratory they were using to test Zoono products was forced to shut down when employees there became infected with Covid-19. In the meantime, Zoono has shared the results of expert testing carried out in the UK and many other countries and is making them generally available for others to study.
To read the results of Zoono's latest test results, please click here
To read the Zoono press release, please click here
To read BBC News' London's transport network tests negative for Covid-19 story, please click here
Zoono Group Limited
Paul Hyslop
Managing Director
paul.hyslop@zoono.com
Media Enquiries
The Capital Network
Julia Maguire
+61 2 8999 3699
julia@thecapitalnetwork.com.au
Customer Service & Online Shop
hello@zoono.com
For Wholesale Queries
wholesale@zoono.com
Distributor Queries (per country)
info@zoono.com
About Zoono Group Limited (ASX:ZNO)
Zoono Group Limited is a global biotech company that develops, manufactures and distributes a suite of scientifically-validated, long-lasting and environmentally-friendly antimicrobial solutions. Zoono’s mission is to improve health and well-being through innovative, safe, non- toxic and durable germ protection.
Zoono produces sprays, wipes and foams suited for skin care, surface sanitisers, and mould remediation treatments. The products are based on the ‘zoono molecule’, a unique antimicrobial molecule that bonds to any surface and kills pathogens including bacteria, viruses, algae, fungi and mould.
Zoono’s products have received numerous regulatory approvals and the company’s technology claims are supported by independent testing conducted in laboratories worldwide. Zoono is headquartered in New Zealand and its products are available globally.
To learn more, please visit www.zoono.com
--- ends ---
[I hold ZNO shares.]
29-Oct-2020: Latest Testing Confirms Zoono Efficacy and Longevity
Highlights:
Zoono Group Limited (ASX: ZNO) is pleased to provide an overview of recent test results from a series of independent laboratory tests commissioned on its products. All results re-confirm the efficacy and longevity of Zoono’s Microbe Shield against pathogens.
In the UK, a series of “in situ” tests were conducted on passenger trains servicing UK Rail. This is in addition to London Underground’s original substantive “live” trials of Zoono Microbe Shield against a variety of pathogens in 2015. That original trial found that “Zoono achieved 100% effectiveness over a 21-day period”.
The recent testing was carried out by an GTECH Strategies Limited in collaboration with an independent UKAS accredited test laboratory. 72 ‘hot’ touch points areas were tested across 23 trains for any presence of Human COVID-19, E.coli and Staphylococcus. These ‘hot points’ within carriages and drivers’ cabs had been treated with Microbe Shield between 8-30 days prior to testing. The independent laboratory found the following:
In the UAE, a UAE Government appointed laboratory, Dubai Central Laboratory, conducted a series of efficacy and durability tests on Zoono Microbe Shield applied to numerous surfaces – steel, glass, plastics, tile and carpet. The results confirmed 99.9% efficacy of Zoono Microbe Shield against Staphylococcus and E.Coli 30 days after the initial coating . In the case of testing Microbe Shield on wood and rubber, the results were still >90% efficacy at 30 days. **
Intertek, a global laboratory chain operating under GLP (the OECD Principles of Good Laboratory Practice) has also recently completed testing of Zoono’s Microbe Shield out to 30 days against E.coli, Pseudomonas, Staphylococcus, Enterococcus, Listeria and Salmonella. In all cases results confirmed efficacy 30 days after the initial coating was at >7 Log (efficacy greater than 99.99999%). ***
Zoono also recently commissioned additional testing against E-coli to European standard, EN1500:2013-07 (20 persons), of Zoono’s Hand Alcohol Free Sanitiser GermFree24 by Lab-Test Laboratorium S.C, Poland. Results demonstrated that it meets the requirements of the EN1500 standard for hygienic hand rubs. ****
Zoono products are backed by over 100 laboratory reports proving its efficacy and longevity against a variety of pathogens. It is also completely safe for humans. Globally recognised companies continue to order Zoono products to help them protect their staff, customers and communities from pathogens and infection. It is successfully used in buildings, vehicles, aircrafts, homes and hospitals globally.
Notes:
[I hold ZNO shares.]
About Zoono
Zoono Group Limited is a global biotech company that develops, manufactures and distributes a suite of scientifically-validated, long-lasting and environmentally-friendly antimicrobial solutions. Zoono’s mission is to improve health and well-being through innovative, safe, nontoxic and durable germ protection.
Zoono produces sprays, wipes and foams suited for skin care, surface sanitisers, and mould remediation treatments. The products are based on the ‘zoono molecule’, a unique antimicrobial molecule that bonds to any surface and kills pathogens including bacteria, viruses, algae, fungi and mould.
Zoono’s products have received numerous regulatory approvals and the company’s technology claims are supported by independent testing conducted in laboratories worldwide. Zoono is headquartered in New Zealand and its products are available globally.
To learn more, please visit: www.zoono.com
14-Oct-2020: Quarterly Report - Q1 FY21
Financial Highlights:
Zoono Group Limited (ASX: ZNO) is pleased to provide an overview of operations for Q1 2021.
Australia / New Zealand
Strong sales and orders continue in Australia and New Zealand (NZ$5.1M) across both the B2B and B2C markets. While B2C sales are important, especially for brand awareness, the B2B sector remains Zoono’s primary focus. B2B sales across the region remain consistent, despite a glut of other competing products in the market.
During the quarter, the Company engaged a digital marketing specialist to help drive growth within the B2C sector via localised market specific programs. The Company also secured additional support (Financial and Human Resources) from New Zealand Trade and Enterprise (NZTE) to complement its growth strategies.
UK & Europe
Zoono promoted Jamal McCleary to the role of General Manager for UK and Europe during the quarter. Originally a Christchurch (NZ) based Zoono distributor partner, Jamal's move to the UK comes after an 8-month induction process completed in the NZ Head Office.
Zoono is working with leading participants in the facilities management, transport, agriculture and healthcare sectors in the UK and EU, while also continuing to build relationships with key customers including Bunzl, Rentokil Initial, Atalian Servest, Killis and One Spray.
Zoono is also progressing well in obtaining regulatory approvals across the EU and continues to gain new customers in Scandinavia, Eastern Europe, Spain and Portugal. In addition, with the Company's products passing the new testing requirements in Germany, the Company is confident of sales growth in the German B2B market, including into new channels in the healthcare, childcare and government sectors.
In the UK, Zoono is continuing to work with Trading Standards in an effort to restore our efficacy and 30-day claims. Zoono has provided Trading Standards with additional test data which it believes sets out a compelling case for approval of its claims.
Asia & China
In China, Zoono is moving to a direct contact model with its customers. For that purpose, Zoono has established a wholly owned foreign entity in Shanghai, to be managed by Zoono's Chinese Regional Manager, Michael Wu, and is building a business development team in that country.
The recently opened Ali Baba international on-line store will be followed later this year by a TMall flagship store. Online sales have made a solid start and the Company will be investing a significant amount to grow both B2B and B2C channels in China.
Regulatory approvals (to hospital grade standard) have been now been received in China and the Company intends to aggressively target the healthcare markets.
Zoono is increasing B2B contact with key customers (unless already covered by existing Distributors) and intends to expand this model in all major markets. For example, IdsMED, Zoono’s channel partner for selected ASEAN countries, continues to place regular orders and, following the United Airlines announcement, a number of Asian airlines are in discussions with the Company about the use of its products in the aviation sector.
USA / Canada
As previously advised, Zoono now fully controls its US distribution and is selling direct within the USA through a newly established subsidiary, Zoono Holdings USA LLC.
The Company is growing the team to meet demand and has signed a new premises lease in Eatontown, New Jersey. This new facility will be the distribution hub for Zoono brands in North, Central and South America.
Zoono will be launching a new on-line sales website during November to drive B2C salesin the US. The Company is also partnering with national organisations to increase its distribution channels. Animal Health sales also continue to grow in the US.
A new chemical reactor, located in South Carolina, US, that allows the Company to make its own raw materials has been finished at a total cost of NZ$200k* [see Note 1 below]. This minimises Zoono’s reliance on third parties to produce its finished goods and follows establishment of the Company’s bottle manufacturing abilities in NZ.
Following the recent announcement by United Airlines that it will be using Zoono Microbe Shield to spray its entire mainline and express fleet, there is fresh interest from aircraft manufacturers and other airlines to utilise Zoono Microbe Shield to inhibit the colonisation and growth of microbes.
Zoono also has new EPA applications underway (including further testing being undertaken by Nelson Laboratories in New Jersey), which could take several months, following which the Company expects it will be allowed to make COVID related and longevity claims in the US.
India & MENA [Middle East and North Africa]
Following the appointment of Dennis Montgomery as Zoono Regional Manager with responsibility for the Middle East, Africa, Turkey, India, Pakistan and Bangladesh, a new, UAE registered company is being established to protect Zoono’s intellectual property and prevent unauthorised distributors from operating in the Middle East.
South Africa is performing well with large orders under negotiation. A new Egyptian distributor has also come on board. Zoono is expecting significant business from these regions in the next six months.
Animal Health
Significant business continues to be pursued in the veterinary and animal health sector through Zoono’s channel partner, Zoono Animal Health, particularly in New Zealand, Australia, USA, UK, Ireland, Portugal, Hungary and Germany. Pig and poultry are forming the core of this business where Zoono products have already been shown to be very effective against several viral and bacterial groups, including African swine fever** [see Note 2 below].
New operations around the globe continue to be set-up based around best practice to ensure ongoing success and obtaining new customers.
Zoono has recently commissioned a series of further tests, benchmarked to the latest EN1500 Standard (Hand Sanitiser), plus a series of tests for Microbe Shield efficacy on plastics, steel, rubber, carpet and even wood. The testing is being done by the UAE Government Laboratories. It is expected that the test results will allow Zoono to make a series of efficacy and 30-Day durability claims in this region.
Appendix 4C
The Appendix 4C Quarterly Cash Flow Report follows. Payments to related parties of the entity and their associates detailed in the report are to directors.
Summary of Q1 Expenditure
Expenditure incurred during the quarter on business activities was primarily on product manufacturing and operating costs (NZ$3M), staff costs (NZ$1.1M) and administration and corporate overheads (NZ$1.1M). Other expenditure included advertising and marketing (NZ$200k), payments for leased assets (NZ$88k), research and development (NZ$62k) and other selling costs (NZ$600K).
Zoono remains confident of delivering a year-end revenue that surpasses last year.
Notes:
About Zoono:
Zoono Group Limited is a global biotech company that develops, manufactures and distributes a suite of scientifically-validated, long-lasting and environmentally-friendly antimicrobial solutions. Zoono’s mission is to improve health and well-being through innovative, safe, nontoxic and durable germ protection. Zoono produces sprays, wipes and foams suited for skin care, surface sanitisers, and mould remediation treatments. The products are based on the ‘zoono molecule’, a unique antimicrobial molecule that bonds to any surface and kills pathogens including bacteria, viruses, algae, fungi and mould.
Zoono’s products have received numerous regulatory approvals and the company’s technology claims are supported by independent testing conducted in laboratories worldwide. Zoono is headquartered in New Zealand and its products are available globally.
To learn more, please visit: www.zoono.com
--- click on the link at the top for the full report - including the Appendix 4C ---
[I hold ZNO shares, and I also use their products. My daughter has a skin condition and can't use alcohol-based hand sanitiser, but she can and does use Zoono's hand sanitiser which does not contain any alcohol - and protects for a lot longer than alcohol-based sanitisers.]