FOURTH QUARTER SUMMARY
OCTOBER – DECEMBER 2015
- Net sales for the fourth quarter amounted to 223 TSEK (91).
- Net income amounted to -7.8 MSEK (-6.8) or -0.56 SEK per share (-0.61).
- Cash flow from operating activities amounted to
-8.4 MSEK (-5.8) or -0.6 SEK per share (-0.53).
- Nicoccino Holding’s liquid assets were valued at 36.3 MSEK (14.0) by the end of the quarter.
- Building on its recent listing with WHSmith Travel, Nicoccino once again partnered with WHSmith to test launch NicoccinoTM in 250 of their prime-site High Street outlets throughout Great Britain.
- Nicoccino has entered into an agreement with Gawith Hoggarth, a tobacco distributor that services 1.000 tobacco outlets throughout the UK.
EVENTS AFTER THE END OF THE REPORTING PERIOD
- The Company’s CFO will leave his post in March to be replaced by previous CFO Hans Richter.
Comments from CEO
Sales and distribution
Nicoccino’s test launch in the UK is progressing, and we can confirm that the product delivers. Although there is no tradition of similar products in the market, we have in a small scale, been able to convince the consumers.
We are now in about 80% of the 400 WHSmith stores selected. There have been major challenges in achieving availability and marketing campaigns in these stores and it is a continuous work effort to improve the compliance. Essentially, there is a lack of awareness among consumers that limits Nicoccino’s sales development, and our capacity to change it in a large scale is limited.
During this quarter another test launch was initiated with tobacco distributor Gawith Hoggarth (in approximately 120 stores).
Online sales continue to increase and the fourth quarter is the best quarter so far. Further supported by increased sales through external websites.
Production and product development
We have not made any changes to our plans regarding production. Efforts to transfer production from our US supplier to a new factory in Germany is progressing according to plan.
Regulatory
The tobacco- and nicotine industries are awaiting the implementation of EU’s new Tobacco Directive (TPD) to see what the consequences will be. There is a challenge for Nicoccino as TPD do not include other alternative nicotine products besides e-cigarettes. It is therefore up to each country to decide how they should treat this category. Currently we are waiting to see how the major markets in EU will act.
In order to influence the outcome of these discussions in respective markets, we are having on-going meetings with Non-Governmental Organizations (NGO’s) in several EU-countries. Mainly to raise awareness of Nicoccino and the product’s benefits.
In the US, US Food and Drug Administration (FDA) is preparing an update of the regulatory framework for tobacco- and nicotine products.
A proposal from the FDA is currently being examined by the Office for Management and Budget (OMB). It is uncertain when this review is completed and how the new regulations will affect Nicoccino™ classification in the market.
Also in Asia, and in potentially interesting markets such as Japan, South Korea, Australia and New Zealand regulation reviews have been initiated. Most advanced is New Zealand with an aim to eliminate the use of cigarettes by 2025 with the aid of modern nicotine products with low risk. In these situations we see that Nicoccino™ will play an interesting role.
Future opportunities
Based on sales activities completed, we see that the regular customers are very satisfied and that the nicotine delivery meets their needs and expectations. Meanwhile we are responsive to the uncertain regulatory position which is a market risk that we constantly strive to minimize.
To market Nicoccino™ to consumers globally requires considerable financial resources. The company has therefore continually held meetings with potential partners within the tobacco and pharmaceutical industries. Our candidates are global organizations with the ability to launch Nicoccino™ to broad groups of consumers.
Experiences from the ongoing business supports our view that efforts to strengthen the product platform should be a priority. We are determined that an important step will be to proceed with the drug classification of Nicoccino™. It will in combination with the already confirmed functionality make our platform even more attractive for partners around the world.
Johan Cram,
CEO, Nicoccino Holding AB
About Nicoccino and our product
ABOUT THE COMPANY
Nicoccino produces and markets an innovative and patented, tobacco-free nicotine consumer product.
The product has the same name as the company – NicoccinoTM– and is manufactured through partners. Nicoccino is currently sold in the UK, Germany, Czech Republic, Poland and through our online platform (purenicoccino.com).
Nicoccino has its head quarter located in Täby outside of Stockholm and a sales office in London. The company’s shares have been listed on Nasdaq Stockholm First North since June 2014 and can be found under the abbreviation NICO.
Remium Nordic AB is Nicoccino Holding’s Certified Adviser.
For further information, please visit: http://www.nicoccino.se
ABOUT THE PRODUCT
Nicoccino’s patented, innovative and discrete nicotine strip instantly provides the user with nicotine without the detrimental side effects of smoking.
NicoccinoTM is a consumer product, the purpose of which is to offer smokers an attractive alternative for when they can’t, or don’t want to smoke.
Once the strip is placed under the lip and onto the gum, it delivers a quick and potent nicotine effect. Within a couple of minutes the nicotine has been expended and the product has been dissolved without leaving any residue in your mouth.
NicoccinoTM is formulated in Sweden and is the result of over ten years of research and development.
The product itself is a leaf thin and alginate based strip about the size of half a stamp. Each Nicoccino strip contains 1 mg of nicotine. The product contains medically classified nicotine and alginate, extracted from brown seaweed, as well as natural flavorings and aromas. All additional substances are medically approved.
The information Nicoccino Holding AB (publ) releases is provided according to financial regulations for the stock market and/or the law for trade with financial instruments. The information is prepared to be published on 26 February 2015, 08:00am. The report has to be communicated in Swedish and English. If differences between the versions exist, the Swedish version is pertained.
Release
Press release Year-end report Jan-Dec 2015
