A2 Milk Company Limited · NZX:ATM
A2 Milk — The a2 Milk Company — Shareholder Meeting (November 2015)
27 slides from A2 Milk's shareholder meeting presentation, Nov 17, 2015
Slide 1: For personal use only
For personal use only a2 Milk, a2 Platinum and The a2 Milk Company are trade marks of The a2 Milk Company Limited
Slide 2: David Hearn, Chairman
For personal use only J David Hearn Chairman
Slide 3: Geoffrey Babidge, Managing Director & CEO
For personal use only J Geoffrey Babidge Managing Director & CEO
Slide 4: Agenda
Agenda 1. Year in review For personal use only • Financial performance • FY15 Highlights • Strategic initiatives • ASX listing update 2. Regional update 3. Infant formula 4. Financial update 5. Close 4
Slide 5: Year in review
For personal use only © Year in review © Click here to view a film overview of the FY15 highlights
Slide 6: Key financial summary
Key financial summary NZ$ million FY14 FY15 % change For personal use only Revenue 110.8 155.1 +40% Gross margin 39.8 54.4 +37% • Gross margin reflects higher milk costs in Australia in part offset by efficiency gains and contribution from infant formula Administration (12.0) (15.4) +28% Marketing (
Slide 7: 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 8: FY15 Highlights
FY15 Highlights ANZ For personal use only • Total gross revenue of AU$148.4 million, an increase of 45% on pcp • Record operating EBITDA1 of NZ$30.0 million • Successful launch of a2 Milk™ whole milk powder in June 2015 China • a2MC assumed direct responsibility for sales and distribution of a2 Plat
Slide 9: FY15 Highlights
FY15 Highlights USA For personal use only • a2 Milk™ launched into Southern California from April 2015, retailer distribution building • Developing internal capabilities and infrastructure • Establishing committed local farmer base Infant Formula • Substantial growth in a2 Platinum® infant formula w
Slide 10: Focussed strategic plan is transforming the business
Focussed strategic plan is transforming the business STRATEGIC INTENT STRATEGIC PRIORITIES PORTFOLIO COMPOSITION1 For personal use only Continue to build a 1. Growth in liquid milk and launch of other FY13 substantial premium dairy products in Australia 3% dairy business in 2. Investigate NZ liquid
Slide 11: Dual listing on the ASX and recent capital raise
Dual listing on the ASX and recent capital raise • a2MC was admitted to the Official List of the ASX on 31 March alongside the existing NZX listing For personal use only • Place of incorporation maintained in New Zealand • Successfully achieved objective to broaden investor participation • Company s
Slide 12: Regional update
J Regional update Ajuo esn jfeuosied 105
Slide 13: Australia and New Zealand
Australia and New Zealand • ANZ business continues to perform ahead of plan • Fresh milk revenue continues to grow – with market share increasing to circa 9.4% for the latest quarter1 and trending upwards For personal use only • Fresh milk gross margin stable • New advertising campaign launched in O
Slide 14: China
China • Changes to supply and distribution arrangements for infant formula yielding positive results • Local Shanghai based team significantly strengthened For personal use only • Sales growth being achieved for both China label infant product and cross border ANZ label • Multi-channel retailer appr
Slide 15: Growing presence within China e-commerce stores
Growing presence within China e-commerce stores • a2MC building branded flagship stores across selected e-commerce retailers to build and capitalise on the genuine a2 Platinum® point of difference For personal use only Currently T mall and JD.com account for ~70% of the industry’s e-commerce sales w
Slide 16: United Kingdom
United Kingdom • Revised fresh milk platform in place – Now ranged in four of the top five retailers: J Sainsbury, Tesco, Waitrose and Morrisons For personal use only – Distribution in over 1,200 stores – Unit sales, whilst modest, up circa 50% since March 2015 • Revised UK business model broadens t
Slide 17: United States of America
United States of America • a2 Milk™ brand milk launch into Southern California commenced from April 2015 – Positive retail trade acceptance, only one major retailer group outstanding For personal use only – Now achieved retail weighted distribution estimated at 65% – Sales behind budget given delay
Slide 18: Consumers reacting positively, retailers expanding distribution
Consumers reacting positively, retailers expanding distribution SOUTHERN CALIFORNIA RETAILER ACCEPTANCES (~65% OF ACV): NORTHERN CALIFORNIA RETAILER TARGETS (~65% ACV): For personal use only [Kroger] 271 stores 130 stores 125 stores 128 stores Rock Island (independent grocers) (independent grocers)
Slide 19: United States of America
United States of America For personal use only 19
Slide 20: Infant formula
NW, © Infant formula Ajuo esn jfeuosied 105
Slide 21: a2 Platinum demand is growing exponentially
a2 Platinum® demand is growing exponentially • Group revenue for infant formula was ~NZ$38 million for four months to October 2015, compared to NZ$41.7 million for FY15 For personal use only • Infant formula now accounts for ~47% of total group revenue (FY16 forecast) • Demand and appeal is growing
Slide 22: Financial update
Financial update Ajuo esn jfeuosied 105
Slide 23: FY16 Financial update
FY16 Financial update • For personal use only a2MC has made a very positive start to the 2016 financial year • The first four months' trading performance for infant formula in ANZ and China well ahead of plan • The Company is today issuing a revised earnings guidance for the full year • a2MC previou
Slide 24: Chairman quote
“The a2 Milk Company is on the cusp of converting our recent For personal use only investments into significant and meaningful business platforms, both in Australia and abroad, which will generate significant growing returns across the coming years.” David Hearn, Chairman
Slide 25: For personal use only
www.theazmilkcompany.com
Slide 26: Disclaimer
Disclaimer This presentation dated 17 November 2015 is provided for information purposes only. The information contained in this presentation is not intended to be relied upon as For personal use only advice to investors and does not take into account the investment objectives, financial situation o
Slide 27: For personal use only
www.theazmilkcompany.com 7
The a2 Milk Company — Shareholder Meeting (November 2015) on 6ix