The a2 Milk Company (a2MC) achieved several milestones in 1H FY25, including double digit revenue growth, declaring its first dividend, and upgrading its full year revenue and earnings guidance.
A2MC managing director and CEO, David Bortolussi, said the continued execution of the company’s growth strategy drove the strong operational and financial performance.
“Our strong first half results and momentum going into the second half have resulted in an upgrade to our FY25 revenue and earnings guidance. We are pleased to declare our first ever dividend, recognising the substantial progress we have made as a business and rewarding our shareholders for their continued support,” Bortolussi said.
Snapshot
- Revenue: $893.8m, up 10.1% on prior corresponding period (pcp);
- China & Other Asia revenue – up 11.8%
- US revenue – up 13.2%
- ANZ revenue – down 2.7%
- MVM external ingredients sales – up 31.9%
- Earnings before interest, taxes, depreciation, and amortisation (EBITDA): $118.9m, up 5% pcp;
- EBITDA margin – 13.3%
- Net profit after tax (NPAT): $91.7m, up 7.6%
- Interim dividend: 8.5 cents per share declared, fully imputed and fully franked (~67% NPAT payout)
In the infant milk formula category (IMF), total revenue was up 7.2 per cent, with China label up two per cent and English label up 13 per cent. In China, a2MC maintained its top five brand position for IMF, and was the third highest share gainer for 1H25. It also achieved record China label IMF market share of 5.3 per cent.
“As we look ahead, obtaining access to additional China label IMF registrations to support future growth and developing our own nutritional manufacturing capability remain critical to the company’s supply chain transformation strategy,” Bertolossi said.
That includes the development and sell-in of the company’s first HMO containing formulation, a2 Genesis, in partnership with Yashili NZ.
The rapid growth of HMO and specialty product segments also contributed to English label market growth with consumers adopting English label products due to ingredients and specialised formulations not widely available in China label (such as those including various HMOs), a2MC said.
To capitalise on this growing market opportunity, the Company has developed and commenced sell-in of its most premium English label IMF product, a2 Genesis with a China focused launch planned for 2H25. The product contains HMOs and is positioned above a2 Platinum.
The company is also expanding its fortified milk powder range that targets the senior market. The China seniors milk powder market is worth more than $1.5 billion and growing at double-digit rate, a2MC said. Three new products using a2 Milk powder, produced at its Mataura Valley Milk plant, have been developed and are being manufactured in China through an agreement with Shanghai Howell Nutrition Dairy Co. They target immunity, bone, gut and heart health.
Bertolossi said the revised forecast was for revenue growth to be in the low to mid double-digit per cent range, up from the previous mid to high single-digit per cent statement.
