A2 Milk Company Limited · NZX:ATM
A2 Milk — The a2 Milk Company — First NZ Capital and Credit Suisse Dairy Day (April 2016)
31 slides from A2 Milk's conference presentation, Apr 6, 2016
Slide 1: First NZ Capital and Credit Suisse Dairy Day Presentation
For personal use only First NZ Capital and Credit Suisse Dairy Day Presentation April 2016 a2 Milk™, a2 Platinum™ and The a2 Milk Company™ are trade marks of The a2 Milk Company Limited
Slide 2: Agenda
Agenda For personal use only • Company overview • Financial information • Regional overview – Australia and New Zealand – China and other Asia – UK – USA • Infant formula • R&D update • Summary 2
Slide 3: Company overview
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Slide 4: The a2 Milk Company at a glance
The a2 Milk Company™ at a glance • The a2 Milk Company (“a2MC”) is in the business of producing, marketing and selling premium branded dairy and infant For personal use only formula products in targeted global markets • a2MC branded products contain only A2 beta-casein protein rather than both A1 pr
Slide 5: Distinctive and premium product portfolio is expanding
Distinctive and premium product portfolio is expanding For personal use only Australia China UK USA 5
Slide 6: What is the a2 Milk difference?
What is the a2 Milk™ difference? • The a2 Milk® brand is a naturally occurring cows’ milk and not a product of a technological process or genetic engineering For personal use only A1/A1 A2/A2 protein protein All regular milk ~70% mix of A2/A2 protein A1 and A2 proteins A1/A2 protein Genetic variatio
Slide 7: Investment highlights
Investment highlights a2MC is not a conventional dairy company For personal use only Premium brand and product range supported by an integrated intellectual property portfolio and growing 01 scientific evidence 02 Proven and profitable Australian business remains on a strong growth trajectory Outsta
Slide 8: Focussed and consistent strategic growth map
Focussed and consistent strategic growth map STRATEGIC INTENT STRATEGIC PRIORITIES PORTFOLIO COMPOSITION¹ For personal use only FY14 7% Continue to build a 1. Australian growth in liquid milk and other substantial premium dairy products dairy business in 2. Investigate NZ liquid milk opportunity 93%
Slide 9: Other corporate initiatives
Other corporate initiatives • Oversubscribed equity raising to fund increase in infant formula working capital and maintain conservative capital position: For personal use only – $40 million raised from institutional investors, October 2015 –$3 million share purchase plan, November 2015 • Admission
Slide 10: Financial overview
For personal use only vz Financial overview
Slide 11: Key consolidated financial results
Key consolidated financial results Movement • Gross margin increase reflects ongoing growth in For personal use only NZ$ million FY14 FY15 FY14 – FY15 1H16 Australian fresh milk business and significant Revenue 110.8 155.1 +40% 139.2 acceleration of infant formula. Trend has continued strongly into
Slide 12: Operating results by segment
Operating results by segment NZ$ million FY15 1H15 1H16 Movement For personal use only 1H15 – 1H16% ANZ 149.1 72.8 127.9 76% China and Other Asia 4.1 1.1 8.4 681% UK and USA 1.9 0.9 2.9 222% Group Revenue 155.1 74.8 139.2 86% ANZ 30.0 14.0 34.5 146% China and Other Asia (3.1) (2.2) 1.2 (155%) Corpor
Slide 13: Regional overview
For personal use only Regional overview
Slide 14: Australia and New Zealand business overview
Australia and New Zealand business overview Current position Growth strategy For personal use only • Significant branded milk business with a reliable supply • Continue to enhance premium brand strength chain, continued sales growth and premium pricing • Build on core ANZ liquid milk business • Aust
Slide 15: China and Other Asia business overview
China and Other Asia business overview Current position Growth strategy For personal use only • Launched a2 Platinum® in Nov 2013 with the intention • Build a high profile premium brand in China of establishing a position in China before expanding into • Educate consumers and health professionals ab
Slide 16: UK business overview
UK business overview Current position Growth strategy For personal use only • Commenced sales in the UK in Nov 2012 through a JV • Continue to build targeted premium brand with Robert Wiseman Dairies which was then subject to a • Grow distribution in existing supermarkets (in-store and takeover by t
Slide 17: USA business overview
USA business overview Current position For personal use only • Initial launch commenced in Southern California region from April 2015, extended to Northern California • a2MC pleased with progress in building distribution in Southern and Northern California, with future plan to extend to additional s
Slide 18: USA grocery milk category overview
USA grocery milk category overview1 • US$10.2 billion grocery milk category down ~5.5% over the 52 weeks ending 1 November 2015 For personal use only • Regular white milk sales driving overall decline (~9.2% category decline) • Main driver of decline in regular milk is digestive related2 • Strong gr
Slide 19: USA ramping up marketing support
USA ramping up marketing support For personal use only Click here to view 19
Slide 20: Infant formula
um) Infant formula Ajuo esn feuosied JOS
Slide 21: a2 Platinum overview
a2 Platinum® overview Current position Infant formula supply chain For personal use only • Infant formula accounts for ~53% of total group revenue • Compelling and unique point of difference Milk sourced Infant formula Imported into Distributed in ANZ sales focus on – The only infant formula natural
Slide 22: China regulatory issues under review
China regulatory issues under review • Presently a number of regulatory changes signalled for review by the Chinese Government For personal use only • A number of changes remain in draft form • a2MC continues to monitor developments in this area, positioned to respond to change Regulatory issues und
Slide 23: R&D update
Oo Ajuo esn feuosied JOS R&D update
Slide 24: R&D Update
R&D Update • Continuing to develop and enhance portfolio of brand assets, intellectual property and participate in R&D For personal use only associated with the benefits of the A2 beta-casein protein and the absence of A1 • Research findings from recent completed studies: – Explains at the human cel
Slide 25: New human clinical research under publication
New human clinical research under publication • As previously reported a human clinical trial was conducted in China and submitted for publication during H1 FY16 For personal use only • China was chosen due to the significant levels of reported lactose intolerance • The results lend further support
Slide 26: New global health care educational materials
New global health care educational materials For personal use only Disclaimer: The information contained within this page is intended for health care professionals and should not be construed as professional medical advice nor as any health claim associated with consuming a2 Milk™. 27
Slide 27: For personal use only
For personal use only 28
Slide 28: Summary
Summary A proven, sustainable, profitable business model in ANZ delivering upper quartile returns on capital For personal use only relative to the industry Establishing a premium infant formula brand and business synonymous with quality - targeting growth across multiple markets Business cente
Slide 29: a2MC receiving strong global media attention
a2MC receiving strong global media attention For personal use only Read article Read article Read article Millions of Australians are ditching organic Dairy products containing only one of two a2 Milk – milk from cows that only produce milk in favour of the best selling milk proteins might be easier
Slide 30: Disclaimer
Disclaimer For personal use only This presentation dated 6 April 2016 is provided for information purposes only. The information contained in this presentation is not intended to be relied upon as advice to investors and does not take into account the investment objectives, financial situation or ne
Slide 31: www.thea2milkcompany.com
For personal use only 32 www.thea2milkcompany.com
The a2 Milk Company — First NZ Capital and Credit Suisse Dairy Day (April 2016) on 6ix