The a2 Milk Company announced a positive FY24 result, driven by the solid execution of its growth strategy despite challenging market conditions.
It delivered a positive full-year result with solid revenue, EBITDA, and EPS growth and became a top-5 China IMF brand, growing total IMF sales despite a double-digit decline in China's market value.
The company achieved revenue growth of 5.2 percent to $1,675.5 million and increased total IMF sales by 4.6 percent despite a challenging China IMF market that was down 10.7 percent in value.
Conditions in the China IMF market remain challenging. They are impacted by the cumulative decline in China's newborns over the past few years, increased competitive intensity, the market-wide transition to new GB standard products, and macroeconomic conditions.
Increased marketing investment and improved brand health metrics, including unprompted awareness, top-of-mind brand awareness, and brand use most often, supported the top-5 brand position in the overall China IMF market.
The company also delivered 9.5 percent growth in China label IMF sales and a record market share in China label IMF channels, with a 3.5 percent market value share in mother and baby stores (MBS) and a 3.9 percent market value share in domestic online (DOL) retail channels on an MAT basis.
A2 Milk Company also launched an upgraded China-label IMF product that the trade and consumers received well. This resulted in distribution gains and minimal stock write-offs during the transition.
The brand has continued to optimise the route-to-market of the English label through direct drop-shipping from Tier 1 distributors to consumers. It has also developed a new strategic distribution partnership with Yuou, a market leader in the O2O channel.
Other nutritional products, primarily sourced from MVM, also experienced accelerated growth, with sales up 36.7 percent. Two new fortified milk powder products for adults and seniors, a2 Immune and a2 Move, were launched.
At the same time, the company continued to drive a2 Milk Lactose Free share growth in Australia, supported by a brand relaunch. It also progressed with a significant upgrade of the Kyabram milk processing site in Victoria, which is due to be completed in FY25.
The Company remains focused on securing further China label registrations and exploring other investment opportunities, mainly in New Zealand and China.
In New Zealand, it expanded English label IMF commercial supply chain partnerships with Yashili NZ (a subsidiary of Mengniu) and New Zealand New Milk (a subsidiary of Lactalis), produced new English label IMF and fortified milk powders in partnership with MVM and continued to invest significantly in upgrading supply chain capability.
“After several years of COVID-19 related disruption and market decline, we are pleased that our English label IMF sales stabilised in the first half and grew 6.9 percent in the second half,” said a2 Milk Company’s Managing Director and CEO David Bortolussi.
“We made significant progress delivering against our sustainability strategy, including reducing our Scope 1 and 2 greenhouse gas emissions by 45 percent and completing a methane inhibitor feasibility study.”
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