The Valens Company (TSX:VLNS, OTCQX:VLNCF) Inc has announced integration initiatives aimed at driving revenue growth and market share gains for each of its portfolio brands in their target markets, as well as margin improvement through more efficient operations, reduced operational and organizational costs and realization of M&A-related synergies following an acquisitive 2021.
The company said that the next phases of its 'Launch, Grow, Optimize' strategy is well underway after a highly successful 'Launch' phase that positioned Valens as a leading cannabis consumer products company.
Valens noted that the optimization strategies are underway and $10 million in annual cost efficiencies have been identified through operational process efficiency gains, reductions in manufacturing and sourcing costs, organizational realignment and realization of M&A synergies.
The company anticipates identifying an additional $10 million in annual cost efficiencies and implementing them by the end of 2022.
READ: The Valens Company launches two new cannabis brands in the value and premium markets
"It's a pivotal time for Valens after a very acquisitive 2021 that saw us accelerate our business plan from three years to one and create a leading cannabis consumer products company with an exciting portfolio of brands," said Tyler Robson, CEO of The Valens Company (TSX:VLNS, OTCQX:VLNCF).
He added: "As we redirect our focus to realizing the full package of targeted benefits from these acquisitions, we are now capturing the first wave of synergies through operational and organizational changes that we believe will not only improve our efficiencies but also drive the business towards becoming EBITDA positive in fiscal Q4 2022, which will be discussed in greater detail on our upcoming investor day.”
On the annual cost efficiencies identified by the company, Robson noted that investors can expect to start to see some of the benefits of the first wave of efficiencies in fiscal Q2 2022, with the majority of the impact being realized in the second half of the fiscal year.
The company is currently focused on a strategy to drive revenue growth aimed at Canadian recreational and U.S. health and wellness markets; and capturing market share across its brand portfolio in product categories of focus that include flower, vape, pre-roll, edible, and beverage offerings in the premium, accessible premium, and value segments.
It is also seeking to generate increased gross margins and positive EBITDA margins through revenue growth and cost reduction and efficiency initiatives aimed at keeping operations flexible and innovative; and creating shareholder value through operational performance, financial transparency, and increased trading liquidity.
"We remain focused on our strategic vision for Valens – to bring the benefits of cannabis to the world. We would like to invite our investors and interested potential investors to our virtual investor day, which is scheduled for February 7, 2022, where we will provide many more details and insights into our 2022 operational plan,” Robson said.
He concluded: “Through the implementation of our strategic initiatives, we are developing a roadmap for Valens in its next phase of growth, while always remaining focused on the needs of consumers.”
Contact Ritika at ritika@proactiveinvestors.com