A2 Milk Company Limited · NZX:ATM
A2 Milk — The a2 Milk Company — H1 2015 Earnings Presentation
15 slides from A2 Milk's earnings presentation, Feb 25, 2015
Slide 1: 1H15 Results Presentation
1H15 Results Presentation 25 February 2015 Geoffrey Babidge Managing Director & CEO 1
Slide 2: 1H15 Result Highlights
1H15 Result Highlights UK and China 38% revenue Strong Australia initiatives growth result gaining traction • Total Revenue of $74.79 million • Net Profit After Tax of $125k consistent with strategic plan to fund revenue growth from increasing Australian profits • Effective tax rate of 93% attributa
Slide 3: Financial Highlights
Financial Highlights % NZ$ million 1H14 1H15 change • Revenue growth of 38% on PCP Revenue 54.2 74.8 +38% • Gross margin reflects higher milk costs in Australia Gross margin 19.9 26.1 +31% and modest UK margin to date • EBITDA before non-recurring items growth of 27% on EBITDA before non- 2.6 3.31 +
Slide 4: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures NZ$ million 1H14 1H15 Australia & New Zealand Segment EBITDA1 2.3 4.9 China & other Asia Segment EBITDA1 0.7 (0.6) UK & USA Segment EBITDA1 (0.1) (1.9) Corporate & other Segment EBITDA1 (0.3) 0.1 EBITDA2 2.6 2.5 EBITDA before non-recurring items 2.6 3.3 Depreciati
Slide 5: Financial Highlights
Financial Highlights • Working capital movement driven largely by an increase in inventories, prepayments and current tax liabilities • Investments in PPE ($0.3 million) and intangibles ($1.9 million) largely reflects capitalised development costs associated with the entry to the USA 5
Slide 6: Financial highlights (cont'd.)
Financial highlights (cont'd.) 1H15 Segment EBITDA (NZ$ million) Australia and New Zealand ($9.1) million $14.0 million $4.9 million ANZ Operating EBITDA Net intercompany charges* ANZ Segment EBITDA China ($2.2) million +$1.6 million ($0.6) million China Operating EBITDA Net intercompany charges Chi
Slide 7: Australia growth continues strongly
Australia growth continues strongly • Australia and New Zealand Segment revenue grew by 39% vs PCP. Australia revenue increased 43% vs PCP in AUD terms – a2Milk™ fresh milk sales increased 16% in AUD YOY – a2 Platinum® infant formula sales showed strong growth • Increase in fresh milk sales during p
Slide 8: United Kingdom distribution to plan
United Kingdom distribution to plan • Revised business model – Build distribution in existing and new accounts – Build awareness amongst those with A1 milk intolerance – Improve messaging, packaging format, price position and margin – Slower volume build than originally assumed, but at higher margin
Slide 9: China Infant Formula business resumed
China Infant Formula business resumed • Changes in China regulatory environment continued to evolve during 2014 – New access arrangements for imported product from May 2014 – New form of registration for manufacturers – Synlait Milk Limited achieved manufacturer registration in September 2014 – Chan
Slide 10: USA entry plan near final
USA entry plan near final • USA fresh milk entry plan further progressed during half • Core USA based team recruited to manage sales, marketing, logistics, administration • Key retailer presentations concluded with high levels of acceptance • Launch to take place in the West Coast region in 4th quar
Slide 11: Proposed ASX listing and board changes
Proposed ASX listing and board changes • As advised at the November General Meeting, the Board resolved to commence the process to seek a dual listing on the ASX • The company will maintain its NZX listing and remain New Zealand incorporated • An ASX listing will provide a closer alignment between o
Slide 12: Intellectual Property and Science development continues
Intellectual Property and Science development continues • The Company continued to invest in building its portfolio of IP: trademarks, patents, proprietary processes and know-how • a2MC acquired full ownership of an ANZ and China registered patent from NZ Milk Institute which relates to benefits of
Slide 13: The a2 Milk Company Strategic Growth Map remains consistent
The a2 Milk Company™ Strategic Growth Map remains consistent STRATEGIC INTENT STRATEGIC PRIORITIES STRATEGIC APPROACH 1. Australian growth in To have a recognised and Continue to build a fresh milk and other enviable position in the global substantial premium dairy products dairy business in dairy i
Slide 14: Disclaimer
Disclaimer This presentation dated 25 February 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. This presentation is provided for information purposes only. The info
Slide 15: The a2 Milk Company
The a2 Milk Company www.thea2zmilkcompany.com 15