A2 Milk Company Limited · NZX:ATM
A2 Milk — The a2 Milk Company — 27th Annual CITIC CLSA Flagship Investors' Forum (September 2020)
22 slides from A2 Milk's conference presentation, Sep 9, 2020
Slide 1: CLSA Investors' Forum Presentation Market Release
NZX Code: ATM For personal use only ASX Code: A2M 9 September 2020 NZX/ASX Market Release CLSA Investors’ Forum Presentation Please find attached a presentation to be given by The a2 Milk Company Limited at the CLSA Investors' Forum on 9 and 10 September 2020. Authorised for release by: Geoffrey Bab
Slide 2: Building From Strength
For personal use only BUILDING FROM STRENGTH 27th Annual CITIC CLSA Flagship Investor’s Forum The a2 Milk Company Limited
Slide 3: Agenda
For personal use only AGENDA About us 3 Results highlights 7 Group strategic updates 13 Outlook 17 Questions 19
Slide 4: About us
ABOUT US For personal use only The a2 Milk Company
Slide 5: The a2 Milk Company at a glance
The a2 Milk Company at a glance (all figures NZ$) • New Zealand company with dual listing on NZX (ticker ATM) For personal use only and ASX (ticker A2M) • Premium branded dairy nutritional company $1.73B FY20 revenue ↑ 33% vs FY19 • Uniquely focused on products containing the A2 beta casein protein
Slide 6: What makes us unique
What makes us unique For personal use only Focussed investment in Single-minded focus brand, IP and growth Unique, modern and Capital-smart premium brand approach Innovative and Australia and New Zealand agile approach sourcing for Asia Pacific 5 | 27th Annual CITIC CLSA Flagship Investors' Forum
Slide 7: Our key strategic priorities
Our key strategic priorities For personal use only MAXIMISE SUSTAINABLE BROADEN PORTFOLIO EXPAND IN OTHER GROWTH FROM CORE PRODUCTS IN CORE MARKETS TARGETED MARKETS IN CORE MARKETS BUILDING TOWARDS SUSTAINABLE BRAND LEADERSHIP DELIVERING THE ORGANISATION OF THE FUTURE 6 | 27th Annual CITIC CLSA Flag
Slide 8: Results highlights
R E S U LT S H I G H L I G H T S For personal use only Strong results across all markets and product groups
Slide 9: 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 $385.8 million, an increase of 34.1% • Basic earnings per share (EPS) of 52.39 cents, an increase of 33.5% • EBITDA to sales margin
Slide 10: COVID-19 impact – FY20 and current observations
COVID-19 impact – FY20 and current observations FY20 For personal use only • Staff safety, wellbeing programmes in place, and flexible and remote work practices enacted • COVID-19 caused disruptions and changing consumer behaviour including: ‒ Shift from offline to online, in particular in China in
Slide 11: China-based retail channels now account for 48% of infant nutrition
China-based retail channels now account for 48% of total infant nutrition Revenue growing across all channels China-based channels strengthening For personal use only a2MC IMF revenue (NZ$m) a2MC IMF % revenue by channel 1,423.9 2% 6% 12% 16% 337.7 20% 24% 18% 1,063.8 22% 23% 167.8 341.1 24% 724.4 2
Slide 12: Focused on our one brand, two labels strategy
Focused on our “one brand, two labels” 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 ANZ • China label range delivers our super premium positioning, in particular in h
Slide 13: Growing market share positions in key China-based channels
Growing market share positions in our key China-based retail channels Nielsen MBS value share (%)1 Smartpath CBEC market share (%)2 For personal use only 21.5% 2.0% 1.7% 20.5% 1.3% 18.6% Jun-19 Dec-19 Jun-20 Jun-19 Dec-19 Jun-20 1 Nielsen MBS 12 month value share. 2 Smartpath CBEC 12 month value sha
Slide 14: Group strategic updates
G R O U P S T R AT E G I C U P D AT E S For personal use only An integrated approach to building a sustainable future
Slide 15: Robust balance sheet with substantial cash balance
Robust balance sheet with substantial cash balance For personal use only • FY20 operating cash flow of $427.4 million and closing cash balance of $854.2 million • Balance sheet strength provides us options to fund future growth and potential participation in manufacturing 14 | 27th Annual CITIC CLSA
Slide 16: Capital allocation framework prioritises investment in growth
Capital allocation framework prioritises investment in growth initiatives For personal use only Operating cash flow generation Capital funding Grow the core business in existing markets Expand the boundaries Balance sheet strength & flexibility • Investment in building our business in China • Adjace
Slide 17: Mataura Valley Milk
Mataura Valley Milk Overview For personal use only • On 21 August, announced engaged in discussions with Mataura Valley Milk (MVM), to explore options to participate in manufacturing at MVM’s facility in Southland, New Zealand. • Non-binding indicative offer to acquire a 75.1% interest in MVM, for a
Slide 18: Outlook
For personal use only OUTLOOK FY21 and medium-term target
Slide 19: Outlook
Outlook FY21 For personal use only • Globally, there continues to be uncertainty resulting from COVID-19, and the potential for moderation of economic activity. This could impact consumer behaviour in our core markets, as well as participants within the supply chain, most notably in China • Notwiths
Slide 20: Questions
QUESTIONS For personal use only 19 | 27th Annual CITIC CLSA Flagship Investors' Forum
Slide 21: Disclaimer
Disclaimer This presentation dated 9 September 2020 should be read in conjunction with, and subject to, the explanations and views in documents previously released to the For personal use only market by The a2 Milk Company Limited (the “Company”), including the Company’s Annual Report for the 12 mon
Slide 22: www.thea2milkcompany.com
For personal use only www.thea2milkcompany.com
The a2 Milk Company — 27th Annual CITIC CLSA Flagship Investors' Forum (September 2020) on 6ix