The a2 Milk Company (ATM) H1 2025 earnings summary

Executive summary

• Achieved double-digit revenue growth of 10.1% to $893.8 million in 1H25, overcoming supply constraints and delivering at the top end of guidance, with upgraded full-year FY25 guidance and first-ever interim dividend declared.

• Continued strong execution of growth strategy, focusing on China and other key markets, brand investment, and product innovation, including new launches for infants, kids, and seniors.

• Maintained top-5 brand position in China IMF, with record market share and strong online channel growth.

• Introduced a dividend policy and declared the first-ever interim dividend of 8.5 cents per share, fully imputed and franked, totaling approximately $61.5 million.

• Expanded product portfolio and entered new markets such as Vietnam.

Financial highlights

• Revenue up 10.1% year-over-year to $893.8 million; EBITDA up 5.0% to $118.9 million, including $8 million in non-recurring airfreight costs; EBITDA margin at 13.3%.

• Net profit after tax rose 7.6% to $91.7 million; basic EPS up 7.4% to 12.7 cents.

• Gross margin at 44.8%, down 1.9ppts year-over-year due to non-recurring costs.

• Cash conversion exceeded 100%, with net operating cash inflow of $78.8 million and closing net cash position of $1,014.0 million, up $45.1 million from June 2024.

• Interim dividend payout ratio at ~67% of NPAT.

Outlook and guidance

• FY25 revenue growth guidance raised to low to mid double-digit percent year-over-year, with EBITDA margin expected to be slightly up versus FY24.

• Stronger-than-expected demand for a2 Platinum and higher liquid milk sales, especially in the U.S.

• Capital expenditure forecast at ~$20 million.

• Strong momentum into 2H25, with continued focus on innovation, supply chain transformation, and China market registrations.

• FX rates and higher GDT pricing noted as factors impacting results.