The A2 Milk Company has announced robust sales growth in the double digits for the first half of the fiscal year. This growth has been driven largely by the company’s strong performance in both the China and US markets.
Revenue for the six-month period ending December 31 grew by 18.8% to reach NZ$993.5 million ($845 million). This growth spanned all segments and product categories.
In the “China & other Asia” segment, sales saw an increase of 20.3%, spurred primarily by the growth of English label Infant Milk Formula (IMF) and other nutritional products. Meanwhile, the US segment experienced a considerable surge, with growth registering at 29.1%, thanks largely to the success of its core and Grassfed liquid milk products.
The ANZ region also experienced an increase, albeit a more modest one, with a growth rate of 8.8%. This was mainly driven by the growth of Australian liquid milk. Daigou channel sales within this region appear to have stabilized.
When considering sales by category, total IMF sales experienced a growth of 13.6%. This has been attributed to the strong health of the brand and effective sales execution. English label revenue saw a sizeable growth of 20.9%, driven by the company’s performance within the CBEC and O2O channels.
Sales of China-label products also saw a rise, with a growth rate of 6.5%. In addition, liquid milk sales grew by 18.5%. Other nutritional products saw a significant surge of 42.9%. This increase was largely due to growing contributions from children’s and seniors’ fortified milk powder products.
In terms of earnings, EBITDA increased by 18.4% to reach NZ$155.0 million, while the EBITDA margin remained steady at 15.6%. NPAT from continuing operations saw an increase of 9.4% to reach NZ$112.1 million.
In August, the company made the announcement that it had acquired a fully integrated nutritional manufacturing facility in Pokeno. Additionally, it disclosed the divestment of MVM in an effort to optimize its asset footprint and financial performance. Both transactions were carried out during the half.
The company also signed a long-term agreement with Fonterra for the supply of A1 protein-free milk from the North Island in New Zealand.
A2 Milk has revised its outlook for the full year, anticipating revenue growth in the mid double digits and an EBITDA margin of approximately 15.5-16%.
What drove the growth of A2 Milk Company in the first half of the fiscal year?
The growth was driven by a strong performance in the China and US markets across all segments and product categories.
Which product categories experienced the most significant growth?
Other nutritional products saw the most significant surge of 42.9%, with growing contributions from children’s and seniors’ fortified milk powder products.
What does A2 Milk anticipate for its full-year outlook?
The company expects mid double-digit revenue growth and an EBITDA margin of approximately 15.5-16%.
