A2 Milk Company Limited · NZX:ATM
A2 Milk — The a2 Milk Company — FY2015 Earnings Presentation
17 slides from A2 Milk's earnings presentation, Aug 20, 2015
Slide 1: FY15 Results Presentation
For personal use only 20 August 2015 Geoffrey Babidge Managing Director & CEO
Slide 2: FY15 Result Highlights
FY15 Result Highlights For personal use only Exceptional Revenue EBITDA Record Australia infant formula growth 40% growth 35%1 result result • Total revenue of $155.1 million, up 40% on pcp • Group EBITDA2 before non-recurring items of $4.8 million up 35% on pcp • ANZ total sales up 42% on pcp in AU
Slide 3: Financial Summary
Financial Summary % NZ$ million FY14 FY15 change For personal use only • Revenue growth of 40% on pcp Revenue 110.8 155.1 +40% • Gross margin reflects higher milk costs in Australia in part Gross margin 39.8 54.4 +37% offset by efficiency gains and contribution from infant Administration (12.0) (15.
Slide 4: Geographic Financial Performance
Geographic Financial Performance Actuals Forecast For personal use only NZ$ million FY14 FY15 % Mvmt FY16 % Mvmt Revenue ANZ 106.9 149.1 40% 216.0 45% China and other Asia 2.8 4.1 46% 13.0 217% UK and USA 1.0 1.9 90% 38.0 1,900% Corporate and other 0.1 0.0 n/m 0.0 n/m Group Revenue 110.8 155.1 40% 2
Slide 5: Cash Position
Cash Position For personal use only • Working capital movement driven largely by an increase in inventories and prepayments relating to infant formula • Investments in intangibles include costs associated with USA entry (NZ$2.7 million) • FX and other includes gains on foreign currency cash holdings
Slide 6: Australia and New Zealand
Australia and New Zealand • Australia and New Zealand segment revenue grew by 40% vs pcp – For personal use only a2Milk™ fresh milk sales increased 10% in AUD on pcp, a2 Platinum® infant formula increased ~650% • White milk market share circa 9.3% by value in grocery at June 2015 (Australian Grocery
Slide 7: China
China • China regulatory changes during calendar 2014 limited direct sales to China • For personal use only Marketing funding continued to assist sale of in-market inventory and build brand awareness • Changes to supply and distribution arrangements from November 2014: a2MC1 assumed in- market distr
Slide 8: Expanding China distribution network
Expanding China distribution network Existing New (post July 2015) China office For personal use only Heilongjiang Jilin Beijing Liaoning Xinjiang Gansu Inner Mongolia Tianjin Hebei Ningxia Qinghai Shanxi Shandong Tibet Shaanxi Henan Jiangsu Anhui Sichuan Hubei Shanghai Zhejiang Chongqing East Hunan
Slide 9: United Kingdom
United Kingdom • Revised business model in place since March 2015 – For personal use only Grow distribution in existing and new accounts – Build awareness of A1 protein intolerance in targeted manner – New 1 litre pack format, enhanced price position – Significantly improved unit margins • New fresh
Slide 10: United States of America
United States of America • Phased launch of a2 Milk™ brand into Southern California commenced from April 2015 – For personal use only ½ gallon ESL carton, consistent with specialty milk segment – Plan to achieve circa 65% retail weighted distribution end August 2015 – Objective to achieve similar di
Slide 11: Initial USA consumer and retailer engagement favourable
Initial USA consumer and retailer engagement favourable • Growing consumer engagement across digital and social • Anticipated on shelf presence in ~65% retail weighted media platforms distribution by end August in Southern California For personal use only • a2milk.com; YouTube; Facebook; blogger for
Slide 12: Focussed and consistent strategic growth plan
Focussed and consistent strategic growth plan STRATEGIC INTENT STRATEGIC PRIORITIES For personal use only Continue to build a 1. Australian growth in liquid milk and other dairy products substantial premium 2. Investigate NZ liquid milk opportunity dairy business in Australia and NZ 1. Capitalise on
Slide 13: ASX listing and board changes
ASX listing and board changes • The Company was admitted to the Official List of the ASX on 31 March 2015 • For personal use only The Company maintained its NZX listing and remains New Zealand incorporated • The listing had broad shareholder support, provides closer alignment between our capital mar
Slide 14: Intellectual Property and Science
Intellectual Property and Science • The Company continued to develop its portfolio of IP, and invest in targeted research and development associated with the benefits of the A2 protein For personal use only • Four new provisional patent applications were filed relating to benefits and testing method
Slide 15: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures NZ$ million FY14 FY15 For personal use only Australia & New Zealand Segment EBITDA 4.5 5.7 China & other Asia Segment EBITDA (1.7) 1.8 UK & USA Segment EBITDA (2.2) (7.7) Corporate & other Segment EBITDA 3.0 3.3 EBITDA1 3.6 3.1 EBITDA before non-recurring items 3.
Slide 16: Disclaimer
Disclaimer This presentation dated 20 August 2015 provides additional comment on the market release of the same date. As such, it should be read in conjunction with, and subject to, the explanations and views in those documents. For personal use only This presentation is provided for information pur
Slide 17: The a2 Milk Company
The a2 Milk Company www.thea2zmilkcompany.com