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Bumper year for a2 Milk

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The anticipated bumper year for a2 Milk Company was delivered today with the company’s FY19 business results driven by strong performance across the portfolio.

 

Total revenue of $1,304.5 million was an increase of 41.4%2.  EBITDA of $413.6 million was up 46.1% and net profit after tax of $287.7 million jumped 47.0%

A2 Milk also produced remarkable operating cash flow of $289.1 million and a closing cash balance of $464.8 million.

“This result was enabled by strong revenue growth across our key product segments of liquid milk, infant nutrition and other nutritional milk products, and across each of our key regions.,” said managing director and chief executive Jayne Hrdlicka, who has completed her first year with a2 Milk with a glowing result.

She said “Our results were underpinned by growing brand awareness, expanding product distribution and strengthening in-market execution in our two most important regions of Greater China and the US.

“The continued growth of our infant nurition products was a strong contributor to the results with sales totalling $1.1 billion for the year – an increase of 46.9% on the prior year. This was driven by share gains in China and Australia.

“We achieved pleasing growth in our liquid milk businesses in particular within Australia and the USA – with total fresh milk growth of 22.9% and revenue of $174.9 million across the Group.

“We grew sales of other nutritional milk products by 17.3%, delivering total sales of $65.8 million.”

This was driven by milk powders and supported by new products launched towards the end of FY18 and in the fourth quarter of FY19.

“Our gross margin remains strong and has improved to 54.7%. The improvement was driven by a price increase partially offset by currency movements – most notably a weaker Australian dollar.

“Our balance sheet is strong with no debt and a substantial cash balance. The closing cash position reflects growth in revenue and earnings, partially offset by increased working capital, and our increased equity investment in Synlait Milk in August 2018”

 Net operating cash flow for the year was $289.1 million, with cash on hand at 30 June 2019 of $464.8 million.

“Our balance sheet continues to strengthen, which is important as we work our way through the delivery requirements of our long-term strategy. We continue to consider the appropriate use of available capital in the context of supporting our very significant growth ambitions.

“We have enhanced our approach to inventory management, enabling us to adjust more quickly to demand changes by increasing our inventory cover. A2 finished the year with $108.5 million of inventory, up 69.2% from the prior corresponding period and 49.0% from the first half.”

 


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