The collapse of the daigou/reseller and ecommerce channels and subsequent inventory write-downs had a bruising impact on The a2 Milk Company, with it recording a 77.6 per cent fall in revenue in FY21.
- EBITDA down 77.6% to NZ$123m (inclusive of $109m stock write-downs, NZ$10m acquisition Mataura Valley Milk);
- revenue down 30.3% to NZ$1.21bn; and
- NPAT down 79.1% to NZ$80.7m.
The company said it was “unprecedented levels of uncertainty and volatility” that made FY21 “very challenging”. Its China & Other Asia revenue was down 16.6 per cent with EBITDA of $75.6 million, down 66.4 per cent. The proportion of the inventory write-down allocated the the segment was half the total amount at NS$50.3 million.
In the ANZ segment revenue was NZ$559.7 million, down 42 per cent, with EBITDA of $148.8 million, down 68 per cent. A small bright light was Australian fresh milk revenue increased 10.8 per cent to $169 million with a market share of 12.2 per cent.
Its US revenue was down 3.7 per cent to NZ$63.6 million and an EBITDA of NZ$33.5 million, a NZ$17 million improvement on FY20.
The company said it recognised the China infant nutrition market structure was changing rapidly and it needed to change its approach. “While the daigou/reseller channel will continue to play an important role, the company needs to further evolve its routes to market and brand marketing programmes in parallel in order to adjust to the changing environment in which it operates,” it said.
A2 Milk didn’t declare a dividend and said it couldn’t provide a specific guidance for FY22.