The a2 Milk Company (ATM) H2 2025 earnings summary

Executive summary

• Achieved record FY 2025 sales of NZD 1.9 billion, with double-digit growth in revenue, EBITDA, and EPS, driven by growth strategy execution and strong China market performance.

• Moved to #4 brand in China IMF market, with record market share in both China and English label IMF segments, supported by strong English and China label growth and new user recruitment.

• Announced major supply chain transformation: acquisition of Yashili NZ (a2 Pokeno) for NZD 282 million and divestment of MVM, enabling up to three China label product registrations.

• Launched new products in infant, kids, and seniors nutrition, and entered the Vietnam IMF market.

• Introduced and declared inaugural dividends, with a payout ratio of 71% for FY 2025, totaling 20.0 cents per share.

Financial highlights

• Revenue up 13.5% year-over-year to NZD 1,902.0 million, with 16.8% growth in H2.

• EBITDA increased 17.1% to NZD 274.3 million; EBITDA margin at 14.4%, up 0.4 ppts.

• Net profit after tax up 21.1% to NZD 202.9 million; basic EPS up 20.9% to 28.0 cents.

• Gross margin at 46.1%, slightly higher due to lower IMF ingredient costs and favorable FX.

• Operating cash inflows (excl. interest/tax) of NZD 259 million, 95% cash conversion; closing net cash of NZD 1.06 billion, up NZD 92.2 million from June 2024.

Outlook and guidance

• FY 2026 revenue growth expected at high single-digit percent vs. FY 2025 continuing operations; EBITDA margin guidance: 15%-16%.

• NPAT expected to be similar to FY 2025 reported (NZD 203 million); cash conversion targeted at 80–90%.

• Special dividend of NZD 300 million planned, subject to regulatory approvals and MVM divestment completion.

• Ordinary dividend policy reaffirmed at 60%-80% payout of normalized NPAT.

• Capital expenditure planned at NZD 50–70 million; MVM to be treated as discontinued operations, with an expected loss on sale of NZD 130 million.