A2 Milk Company Ltd
NZX:ATM

Watchlist Manager
A2 Milk Company Ltd Logo
A2 Milk Company Ltd
NZX:ATM
Watchlist
Price: 10.51 NZD -2.05%
Market Cap: 7.6B NZD

A2 Milk Company Ltd
Investor Relations

A2 Milk Company Ltd, hailing from New Zealand, has carved out a unique niche within the global dairy industry by revolutionizing the way people perceive and consume milk. Founded in 2000 by Dr. Corran McLachlan and Howard Paterson, the company diverged from traditional dairy producers by focusing exclusively on milk that contains only the A2 beta-casein protein. The science behind this innovation is grounded in research suggesting that A2 milk could offer digestive benefits for those sensitive to the more common A1 protein found in most cow's milk. This unique selling proposition allowed A2 Milk to position itself as a premium product, catering to health-conscious consumers and those seeking alternatives to regular dairy products. Through rigorous marketing and strategic product differentiation, A2 Milk expanded its footprint into major markets such as Australia, China, and the United States, establishing itself as a global player.

The company's business model is strategically designed around branding and supply chain efficiency. A2 Milk operates by partnering with dairy farmers who specifically breed cows that produce only the A2 protein, ensuring authenticity and consistency in their product offerings. This approach not only supports a robust supply chain but also fosters strong relationships with suppliers and enhances quality control. A2 Milk generates revenue primarily through the sale of fresh milk, infant formula, milk powder, and other related dairy products. This portfolio diversification helps mitigate risks and tap into various customer segments. Moreover, A2 Milk's success lies in its ability to leverage strategic partnerships, innovative marketing, and consumer trust to maintain its competitive edge in the niche market, attracting both loyal customers and investors alike.

Show more
Loading
No Stocks Selected

Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

Select Stock to Compare
Last Earnings Call
Fiscal Period
Q4 2023
Call Date
Aug 22, 2023
AI Summary
Q4 2023

Revenue Growth: The a2 Milk Company reported FY '23 revenue of $1.59 billion, up 10% year-on-year, driven by strong performance in the China and US segments.

Profitability: Net profit after tax rose 26.9% to $155.6 million, while EBITDA increased 11.8% to $219 million. EPS grew 28.7% to $0.212.

Margin Performance: Gross margin improved to 46.5% from last year, with EBITDA margin at 13.8%. Management expects gross and EBITDA margins to be broadly in line with FY '23 for FY '24.

China Market Strength: China segment sales surged 38%, with China label IMF sales up 27.8% to $559.3 million and record-high market share gains, despite a market decline of nearly 15%.

Challenging Market Outlook: FY '24 is expected to be more challenging, with further double-digit value decline in the China IMF market, lower ASPs, and fewer newborns, resulting in guidance for low single-digit revenue growth.

Strategic Shifts: The company increased marketing investment to $260 million and shifted its distribution strategy toward more controlled online channels. Innovation efforts and supply chain transformation remain key priorities.

Inventory & Cash: Cash and term deposits stood at $802 million, net cash at $757 million post-buyback, but cash conversion declined to 58% due to inventory build and payment timing.

Guidance: Management reiterated medium-term ambitions of $2 billion in sales and EBITDA margins in the teens, but cautioned margins above 20% are unlikely given market conditions.

Key Financials
Revenue
$1.59 billion
EBITDA
$219 million
Net Profit After Tax
$155.6 million
EPS
$0.212
Gross Margin
46.5%
EBITDA Margin
13.8%
Cash and Term Deposits
$802 million
Net Cash Position
$757 million
Cash Conversion
58%
China Segment Sales Growth
up 38%
China Label IMF Sales
$559.3 million
IMF Sales Growth (Group)
up 8.4%
Marketing Investment
$260 million
ANZ Segment Revenue
$184.1 million
US Revenue
$105.1 million
MVM Net Sales Revenue
$114 million
MVM EBITDA Loss
$26.5 million loss
Earnings Call Recording
Other Earnings Calls
2023

Management

Mr. David L. Bortolussi B.Com., BComm, F.C.A., FFin
MD, CEO & Director
No Bio Available
Mr. David Muscat BComm, CA
Chief Financial Officer
No Bio Available
Mr. David Akers
Group Head of Investor Relations & Sustainability
No Bio Available
Mr. Jaron McVicar
Chief Legal & Sustainability Officer and Company Secretary
No Bio Available
Ms. Edith Bailey
Chief Marketing Officer
No Bio Available
Ms. Amanda Hart
Chief People & Culture Officer
No Bio Available
Mr. Li Xiao
Chief Executive of Greater China
No Bio Available
Ms. Eleanor Khor
Managing Director of ANZ & Strategy
No Bio Available
Mr. Kevin Bush
Managing Director of USA
No Bio Available
Mr. Yohan Senaratne
Managing Director of International
No Bio Available

Contacts

Address
AUCKLAND
Level 10, 51 Shortland Street
Contacts