BioTechUSA CEO Charts Course for New Heights After Successful 2023

BBJ: What challenges did BioTechUSA face in 2023, when it achieved significant growth, and how did the company overcome them?

Bálint Lévai: The turbulent economic environment of the last few years has of course affected our group. While the COVID crisis has mainly tested our commercial footing, the energy crisis and high inflation in the context of the Russian-Ukrainian armed conflict have tested us more on the manufacturing side. We had to cope with the fact that, while consumers are becoming more health-conscious with the market for dietary supplements growing by 8-10% a year, they are also more careful with their spending.

Overall, however, our sales figures have not been affected, as we have focused on diversifying our own channels, opening new stores, and continuously improving the customer experience and service. As a result, last year we increased our sales by almost 15% to EUR 236.4 million, compared to the record high base of a year earlier. Our financial position also continued to improve in 2023, with our EBITDA margin rising by more than 3.5% to EUR 27.36 million.

In addition to the above, we invested nearly EUR 10-12 mln in investments, including the construction of a four-story, more modern and comfortable social block of more than 1,000 sqm in Szada, the commissioning of our automated warehouse, the opening of 45 new stores across Europe and the complete renovation of our old office building in Óbuda.

BBJ: What are the company's objectives for this year, especially with regard to the international market?

BL: This year should bring more than 50 store openings: 15-15 in France and Germany, eight in Spain, five each in Poland and Italy. With the Southern European country, we will be able to expand our list of destinations with another important market. We are planning to open two stores each in Austria and Slovakia, and if we can push the start button in Romania, we could instantly open 5 to 10 stores in that country. Meanwhile, in Hungary, we could realistically add six or seven Scitec Nutrition and one or two BioTechUSA stores to our network.

In addition, a production line capable of producing more than 50 million premium protein bars per year is under construction at our manufacturing and logistics complex in Szada. The uniqueness of this technology is demonstrated by the fact that there is only one competitor on the market with this type of production line, with the others doing manufacturing on a contract basis. The investment, which is worth EUR 10-12 mln, is expected to be completed in Q4 2024, roughly half of which will be financed by various forms of state aid. It is precisely for these reasons that, if we compare the life of the group to a marathon run, we are at the fifth kilometer of the 42 kilometers. Five kilometers means that we still have a tenfold increase in, say, 5-10 years.

BBJ: How does managing the entire workflow in-house contribute to BioTechUSA's competitiveness in the market?

BL: In-house we have all the areas from product development, manufacturing, and quality assurance to sales, which gives us a huge know-how and therefore a huge advantage over our competitors. In addition, the primary secret to success is a good and motivated team. Our continuous double-digit growth would not have been possible without our cohesive and loyal colleagues and our extremely strong corporate culture. Thanks in part to this, we are present with 2,000 products, 4,500 B2B partners, 49 webshops and 307 stores in 103 countries, and in addition to the continuous store openings, our presence in e-commerce is becoming increasingly robust: in addition to our own webshops, we are also gaining a more dominant foothold in large online marketplaces such as Amazon and Facebook Marketplace.

BBJ: What role does the logistics center in Szada play in the company's operations and what developments in logistics can be expected in the near future?

BL: We have 44,000 sqm of usable floor space and a storage capacity of 24,000 pallets in our own production centers in Szada and Dunakeszi, which is a huge competitive advantage for us. We are not at the mercy of other contract manufacturers and can only be our own boss. This gives us the opportunity to produce a truly unique and high-quality product for our consumers, and we can also react quickly and efficiently to the ever-changing trends in the dietary supplements market.

In the critical economic climate of recent years, in-house production has given us the opportunity to compensate for the shortage of raw materials across the industry and to stockpile and use our inventories in a planned way. In 2024, in addition to the construction of a production line for premium protein bars, we will also start investing in the expansion of the social part of the factory, increasing the changing and dining areas. At the same time, we are modernizing the technology at our plant in Dunakeszi and have also started work on further energy upgrades, mainly solar PV systems.

BBJ: What role does corporate social responsibility play in BioTechUSA's business strategy?

BL: We believe that we are most successful when we can give back to the community. It's important to us that our economic successes are translated to an emotional level as well, so we spend not only on business but also on things that are essential to our well-being. Our Corporate Social Responsibility program has so far donated more than EUR 1 mln worth 95,000 boxes of products, cash, and rehabilitation, diagnostic and therapeutic equipment to 149 NGOs and healthcare organizations. We are working with our partners to provide a platform for those who have fewer opportunities to seek help and to start a social dialogue on important issues such as eating disorders, endometriosis, and dementia.