A2 Milk Company Limited · NZX:ATM
A2 Milk — The a2 Milk Company — Shareholder Meeting (November 2020)
37 slides from A2 Milk's shareholder meeting presentation, Nov 18, 2020
Slide 1: NZX/ASX Market Release: Annual Meeting presentation
NZX Code: ATM For personal use only ASX Code: A2M 18 November 2020 NZX/ASX Market Release Annual Meeting presentation Please find attached the presentation to be given at The a2 Milk Company’s Annual Meeting of Shareholders, to be held online today at 11am NZ time. The Company’s outlook statement is
Slide 2: Annual Meeting
For personal use only ANNUAL MEETING 18 November 2020 The a2 Milk Company Limited
Slide 3: Welcome from the Chair
For personal use only WELCOME FROM THE CHAIR David Hearn
Slide 4: CEO's Address
CEO’S ADDRESS For personal use only Geoffrey Babidge
Slide 5: Agenda
AGENDA For personal use only The business today and FY20 highlights Regions up close Building a more sustainable future FY21 outlook 4 | Annual Meeting
Slide 6: FY20 Highlights
FY20 Highlights • Total revenue of $1.73 billion, an increase of 32.8% For personal use only • EBITDA of $549.7 million, an increase of 32.9% • Net profit after tax of $385.8 million, an increase of 34.1% • Basic earnings per share (EPS) of 52.39 cents, an increase of 33.5% • EBITDA to sales margin
Slide 7: Strong performance over recent years with clear key drivers of growth
Strong performance over recent years with clear key drivers of growth For personal use only Group revenue (NZ$ million) Group EBITDA (NZ$ million) Basic earnings per share (cents) 550 1,733 52.39 414 1,304 39.25 923 283 27.00 550 141 353 12.66 151 55 4.43 5 0.33 FY15 FY16 FY17 FY18 FY19 FY20 FY15 FY
Slide 8: Continued progress on strengthening our strategic execution
Continued progress on strengthening our strategic execution For personal use only MAXIMISE GROWTH DEVELOP BROADER INVESTIGATE NEW FROM INFANT& BUILD MEANINGFUL NUTRITIONAL MILK GROWTH TODDLER NUTRITION SCALE IN THE USA PORTFOLIO IN CHINA OPPORTUNITIES CONSUMED IN CHINA ENDURING BRAND STRENGTH SECURE
Slide 9: We have strong strategic partners who support our growth and adaptability
We have strong strategic partners who support our growth and adaptability For personal use only • Foundational partnership for infant • Partnership spanning multiple • Long term logistics and distribution nutrition products and emerging markets and partner for the company’s infant • Supply rights fo
Slide 10: Agenda
AGENDA For personal use only The business today and FY20 highlights Regions up close Building a more sustainable future FY21 outlook 9 | Annual Meeting
Slide 11: Market pathways to Chinese parents are complex and interrelated
Asia Pacific Market pathways to Chinese parents are complex and interrelated For personal use only 10 | Annual Meeting
Slide 12: Continue to support a multi-channel strategy into China
Asia Pacific Continue to support a multi-channel strategy into China For personal use only A1 protein free a2 Platinum® milk sourced produced in New from Synlait’s Zealand by ANZ ANZ dairy farmers, Synlait on behalf supermarkets supermarkets & Daigou/ certified by a2MC of a2MC pharmacy & pharmacy gi
Slide 13: Focused on our "one brand, two labels" product strategy
Asia Pacific Focused on our “one brand, two labels” product strategy for infant nutrition • Portfolio approach to developing “one brand with two labels” across key For personal use only consumer retail channels: MBS, CBEC and resellers in Australia and New Zealand in order to meet the diverse needs
Slide 14: Building our China-based retail channels has been a deliberate strategy
Asia Pacific Building our China-based retail channels has been a deliberate strategy Revenue growing across all channels China-based channels strengthening For personal use only a2MC infant nutrition revenue (NZ$m) a2MC infant nutrition % revenue by channel 1,423.9 2% 6% 12% 16% 337.7 20% 24% 18% 1,
Slide 15: Our marketing approach is building brand awareness and driving conversion to trial
Asia Pacific Our marketing approach is building brand awareness and driving conversion to trial • Multi-layered marketing approach to building brand awareness and fulfilling consumer desire for information to drive conversion to trial For personal use only ‒ Increased investment in mass media advert
Slide 16: Strong performance in FY20, challenges in FY21
Asia Pacific Strong performance in FY20, challenges in FY21 FY20 recap • Asia Pacific revenue of $1.66 billion, up 31.5% and EBITDA of $690.5 million, up 32.0% For personal use only • 33.8% growth in infant nutrition revenue, driven by 65.1% increase in China – strong growth in all channels • Signif
Slide 17: Focused on driving the USA business towards meaningful scale
North America Focused on driving the USA business towards meaningful scale For personal use only Broad national distribution occurred from FY19 USA distribution over time (store count) April 2015: 20.3k Launch into the USA via California region 17.5k (~500 stores in FY15) 13.1k 10.0k From FY19: Broa
Slide 18: FY21 plan focussing on increasing activation is delivering
North America FY21 plan focussing on increasing activation is delivering FY20 recap For personal use only • Revenue up 91% to $66.1 million • Increased marketing investment and distribution growth delivered EBITDA losses of $50.5 million • Brand awareness more than doubling and conversion rates up s
Slide 19: Agenda
AGENDA For personal use only The business today and FY20 highlights Regions up close Building a more sustainable future FY21 outlook 18 | Annual Meeting
Slide 20: Group long term strategy is focused on building a sustainable future
Group long term strategy is focused on building a sustainable future For personal use only MAXIMISE GROWTH DEVELOP BROADER INVESTIGATE NEW FROM INFANT& BUILD MEANINGFUL NUTRITIONAL MILK GROWTH TODDLER NUTRITION SCALE IN THE USA PORTFOLIO IN CHINA OPPORTUNITIES CONSUMED IN CHINA ENDURING BRAND STRENG
Slide 21: Growing scientific evidence continues to underpin our brand strength
Growing scientific evidence continues to underpin our brand strength • The company has pioneered and sponsored a significant body of scientific research since 2000 when it was founded which has led to a comprehensive understanding of the differences between the A1 and A2 protein types For personal u
Slide 22: Continuing to strengthen our supply chain strategy
Continuing to strengthen our supply chain strategy Overview For personal use only • Assessing opportunities to participate in manufacturing nutritional products that complements our existing supply arrangements to create supplier and geographic diversification • Similar approach was taken for our Au
Slide 23: Building a sustainable business for the future
Building a sustainable business for the future • Progress in FY20 included: For personal use only ‒ Preliminary impact assessment as part of our commitment to the objectives under the Taskforce on Climate-related Financial Disclosure (TCFD) ‒ Series of assessments regarding ethical supply chain and
Slide 24: Agenda
AGENDA For personal use only The business today and FY20 highlights Regions up close Building a more sustainable future FY21 outlook 23 | Annual Meeting
Slide 25: Outlook
Outlook • At the end of September, we advised of challenging market dynamics that were being experienced For personal use only • We are maintaining guidance as advised in September: ‒ We expect Group revenue for 1H21 of $725 million to $775 million; ‒ Group revenue for FY21 of $1.80 billion to $1.90
Slide 26: CEO's Address
CEO’S ADDRESS For personal use only Geoffrey Babidge
Slide 27: Formal Business
For personal use only FORMAL BUSINESS
Slide 28: Notice of 2020 Annual Meeting and voting instructions
Notice of 2020 Annual Meeting and voting instructions For personal use only 27 | Annual Meeting
Slide 29: Item 1: Financial statements and reports
Item 1: Financial statements and reports To receive and consider the Company’s financial statements for the year ended 30 June 2020, together with the Directors’ and Auditor’s reports. For personal use only 28 | Annual Meeting
Slide 30: Item 2: Auditor's Fees and Expenses (Resolution 1)
Item 2: Auditor’s Fees and Expenses (Resolution 1) To consider and, if thought fit, to pass the following resolution as an ordinary resolution of the Company: For personal use only “That the Directors of the Company be authorised to fix the fees and expenses of the Company’s auditor, Ernst & Young,
Slide 31: Item 3: Re-election of Director – David Hearn (Resolution 2)
Item 3: Re-election of Director – David Hearn (Resolution 2) To consider and, if thought fit, to pass the following resolution as an ordinary resolution of the Company: For personal use only “That David Hearn, who will retire at the meeting by rotation in accordance with the Company’s constitution,
Slide 32: Item 4: Re-election of Director – Julia Hoare (Resolution 3)
Item 4: Re-election of Director – Julia Hoare (Resolution 3) To consider and, if thought fit, to pass the following resolution as an ordinary resolution of the Company: For personal use only “That Julia Hoare, who will retire at the meeting by rotation in accordance with the Company’s constitution,
Slide 33: Item 5: Re-election of Director – Jesse Wu (Resolution 4)
Item 5: Re-election of Director – Jesse Wu (Resolution 4) To consider and, if thought fit, to pass the following resolution as an ordinary resolution of the Company: For personal use only “That Jesse Wu, who will retire at the meeting by rotation in accordance with the Company’s constitution, be re-
Slide 34: General Business
For personal use only GENERAL BUSINESS
Slide 35: Closing Remarks
For personal use only CLOSING REMARKS
Slide 36: Disclaimer
Disclaimer This presentation dated 18 November 2020 should be read in conjunction with, and subject to, the explanations and views in documents previously released to For personal use only the market by The a2 Milk Company Limited (the “Company”), including the Company’s Annual Report for the 12 mon
Slide 37: For personal use only
For personal use only www.thea2milkcompany.com
The a2 Milk Company — Shareholder Meeting (November 2020) on 6ix