The a2 Milk Company (ATM) H2 2026 earnings summary

Executive summary

• FY26 results met or slightly exceeded April guidance, with double-digit revenue growth and strong performance across all markets and categories.

• Supply chain disruption in Q4/FY26 materially impacted China label IMF sales, group earnings, and market share, but a comprehensive recovery plan is underway with product availability restored.

• Innovation and new product launches contributed over 50% of sales growth, with further launches planned for FY27.

• Special and ordinary dividends totaling NZD 453 million (including $300 million special dividend) were declared, reflecting strong cash generation and capital management.

• IMF grew 5% in a flat China market; Other Nutritionals up 42% and Liquid Milk up 22%.

Financial highlights

• Revenue increased 12.4% year-over-year to NZD 1.95 billion ($1,974.9 million).

• Reported EBITDA declined 2.5% to NZD 284 million ($284.4 million); underlying EBITDA up 5.4%.

• Underlying net profit after tax and EPS both grew approximately 7% year-over-year; basic EPS was 28.6 cents, underlying EPS up 6.8% to 32.5 cents.

• Gross margin was 47.7%, down 3.4 percentage points, reflecting higher COGS and supply chain costs.

• Operating cash flow was NZD 133.1 million, with cash conversion at 68%; closing cash balance was NZD 784.5 million, with no external debt.

Outlook and guidance

• FY27 revenue and EBITDA expected to grow, driven by innovation, new markets, and improved profitability at a2 Pokeno.

• IMF sales to recover gradually after Q4 supply chain disruption; group revenue and EBITDA to be weighted to the second half.

• Mid-single digit revenue growth expected for FY27, with EBITDA margin around 15%.

• Significant new product launches planned in 1H27 across IMF, Other Nutritionals, and Liquid Milk.

• Marketing investment to be higher in the first half, with gross margin pressured by product mix and COGS.