A2 Milk Company Limited · NZX:ATM
A2 Milk — The a2 Milk Company — Shareholder Meeting (November 2014)
21 slides from A2 Milk's shareholder meeting presentation, Nov 18, 2014
Slide 1: Annual Meeting
Annual Meeting November 18, 2014
Slide 2: Agenda
Agenda 1. Introduction 2. Key financial results 3. Australian business 4. UK business 5. China business 6. New market entry 7. Intellectual capital 8. Outlook 2
Slide 3: Consumer testimonials
“Well we have had a2 Milk for nearly 2 weeks and I have to say I have been “Our life has been pleasantly surprised. My kids are not transformed and complaining of tummy aches any more. They this happened are actually asking for glasses of milk, literally overnight!” whereas before they would only as
Slide 4: Key financial results
Key financial results NZ$m FY13 FY14 % change Sales 94.3 110.6 +17% • Revenue growth of 17% on prior year • EBITDA comprises EBITDA of $18.7m for NPAT 4.1 - -100% Australia (before license fees) less investments EBITDA 10.6 3.6 -66% in new market development of $7.5m (UK and China) and corporate cos
Slide 5: Reconciliation of non GAAP measures
Reconciliation of non GAAP measures % NZ$m FY13 FY14 change Australia Segment Profit1 3.6 4.5 +25% China Segment Profit1 (0.1) (1.7) New Zealand Segment Profit1 6.7 3.0 -55% UK & Unallocated Segment Profit1 (0.4) (2.2) EBITDA including non-recurring items2 9.8 3.6 -63% EBITDA2 10.6 3.6 -66% Deprecia
Slide 6: Australian business – FY14 ahead of plan
Australian business – FY14 ahead of plan • Total revenue increased +31% in AUD PCP – a2 Milk™ fresh milk sales increased 24% in AUD PCP – Market share of fresh milk increased to circa 9% by value in grocery at year end (weighted scan June quarter) – a2Platinum® infant formula and a2™ Thickened Cream
Slide 7: Australian business – FY15 continues to grow
Australian business – FY15 continues to grow • Australian business revenue continues to grow • a2MC Australia’s total sales from July to October 2014 have grown +38% in AUD on PCP – Fresh milk continues to grow and a2Platinum® infant formula growth ahead of plan – a2Platinum® accepted for ranging in
Slide 8: UK business – FY14 reset in place
UK business – FY14 reset in place • Full acquisition of interest in a2MC (UK) JV effective from Jan 2014 • New structure provides increased control and a2MC to benefit from 100% of future value • Support for a2MC farmer base with one-off herd incentive scheme and a2 Milk™ premium • Primary focus to
Slide 9: UK business – FY15 new model in progress
UK business – FY15 new model in progress • Prior JV plan positioned a2 Milk™ within the regular fresh milk segment given Muller Wiseman Dairy distribution model • New model – Repositions a2 Milk™ within the speciality added value milk segment – Consistent with launch in Australia from 2007 – New 1 l
Slide 10: Welcome back to breakfast with a2 Milk
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Slide 11: China business – FY14 regulatory changes slowed momentum
China business – FY14 regulatory changes slowed momentum • Launch of a2Platinum® infant formula to Chinese consumers commenced in November 2013 • New Asia regional structure implemented from January 2014 • Regulatory environment continued to evolve during 2nd half FY14 given the China Government’s a
Slide 12: China business – FY15 growth plans underway
China business – FY15 growth plans underway • Synlait Milk Limited announced new infant formula manufacturer registration for China on 30 September 2014 • a2MC working to enhance importation and distribution model following disruption from regulatory changes and sales being behind plan • a2MC to con
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Slide 14: USA – an attractive market opportunity
USA – an attractive market opportunity Overall Milk Category Down 25% per consumer since 1980 • North American market characterised by a commoditised and declining regular milk market and a dynamic and growing premium milk market (organic and alternate milks) • Increasing consumer demand for health
Slide 15: USA – market entry plan
USA – market entry plan • Entry model – Wholly owned USA subsidiary, local experienced management team now recruited – Sales, marketing, logistics to be managed by a2MC – Packaging and milk supply to be outsourced – Targeted launch initially in one region on the west coast – Product to be positioned
Slide 16: Intellectual capital - science momentum building
Intellectual capital - science momentum building • Continued advances in scientific research supports that a2 Milk™ makes dairy nutrition accessible to many consumers who would otherwise limit or avoid their intake of dairy • Further scientific studies were published in FY14 – Compared to convention
Slide 17: Intellectual capital - brand identity refresh globally
Intellectual capital - brand identity refresh globally • New global brand vision and positioning will be progressively implemented over coming months • Strategy continues to bring awareness of the benefits of a2 Milk™, build brand values and create greater consumer engagement • New packaging graphic
Slide 18: Proposed ASX dual listing
Proposed ASX dual listing • The Board has been assessing the merits of dual listing the company on the ASX for some time • The core operating subsidiary is currently located in Australia and its profile is increasing • An ASX listing provides an opportunity to access a broad range of investors who i
Slide 19: Long term strategic direction remains consistent
The a2 Milk Company™ long term strategic direction remains consistent STRATEGIC INTENT STRATEGIC PRIORITIES STRATEGIC APPROACH 1. Australian growth in To have a recognised and enviable Building a major dairy fresh milk and other position in the global dairy dairy products business in Australasia ind
Slide 20: Chairman's closing quote
“The Company today is stronger and better positioned than at any time previously and our conservative balance sheet provides a secure basis for our growth plans in international markets.” CJ Cook Chairman 20
Slide 21: Disclaimer
Disclaimer This presentation dated 18 November 2014 is provided for information purposes only. The information contained in this presentation is not intended to be relied upon as advice to investors and does not take into account the investment objectives, financial situation or needs of any particu
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