A2 Milk Company Limited · NZX:ATM
A2 Milk — The a2 Milk Company — H1 FY2019 Earnings Presentation
17 slides from A2 Milk's earnings presentation, Feb 20, 2019
Slide 1: Half year interim results FY19
Half year interim results FY19 Jayne Hrdlicka| Managing Director & CEO] 20 February 2019 . J a2 Miljgtt_a2/platinum™ and The a2 Milk Company™ are trad =! of Thess -_- ~
Slide 2: Record results and step changing investment for the future
Record results and step changing investment for the future Record financial results in 1H19, continuing strong momentum ¢ Group revenue: $613.1 million! +41.0%; EBITDA2: $218.4 million +52.7% ¢ Net profit after tax: $152.7 million +55.1% ¢ — Strong balance sheet with closing cash balance: $287.9 mil
Slide 3: Key financial charts - continuing strong momentum
Key financial charts’ - continuing strong momentum Group revenue (NZ$ million) 922.7 FY16 FYI7 FY18 1H19 @©H1 wH2 Group EBITDA? (NZ$ million) 283.0 FY17 FY18 ©H1 BH2 Basic Earnings Per Share (cents) 27.0 20.9 12.7 FY16 FYI7 FY18 1H19 @Full Year mHalf Year 1 The Company’s financial year ends 30 June;
Slide 4: Financial summary - step changing investment
Financial summary - step changing investment NZ$ million 1H19 1H18 % change Revenue 613.1 434.7 +41% + Reflects continuing strong growth across key regions Gross margin 340.6 216.5 +57% * GM of 55.6% reflects benefits of scale and mix (higher proportion of infant formula sales), partially offset by
Slide 5: Cash position - strong balance sheet
Cash position - strong balance sheet Group cash movement: 1H19 (NZ$ million) 340.5 (47.3) (2.4) 46.9 40.1 287.9 (162.3) Cash on hand Group NPAT — Working capital Investments in Investment in Depreciation, FX and other Cash on hand (Jun-18) PPE & intangibles Synlait amortisation & (Dec-18) other non-
Slide 6: Geographic and product segment performance
Geographic and product segment performance Geographic segment revenue & EBITDA Product segment revenue an Australia & China & Total Liquid Infant NZ§ million New Zealand _ other Asia UK & USA Corporate Group milk nutrition Other Revenue 418.4 171.7 23.0 = 613.1 83.4 495.5 34.2 1H19 EBITDA’ 192.0 68.
Slide 7: Australia goes from strength to strength
Australia goes from strength to strength * Continued strong performance across all key product segments: liquid milk, infant ANZ segment revenue formula and other nutritional products with strong underlying brand health 656.6 ¢ a2 Milk™ branded fresh milk, our most mature business, achieved record v
Slide 8: China performing well
China performing well Infant formula consumption market share growing across China China & other Asia — 5.7% Kantar Tier 1 & Key A cities market value share, up from 5.1% as at 30 June 18! segment revenue — 5.4% Kantar Tier 1, Key A, B, C & D cities market value share up from 4.7% as at 30 June 18?
Slide 9: US momentum building
US momentum building ¢ a2 Milk™ building sales velocities UK & USA! _ 2 Revenue more than doubled, up 114.1% segment revenue — Strongest sales velocities in accounts where a2 Milk™ ranged >2 years ¢ Distribution increased from ~6,000 stores June 18) to over 10,000 stores (Dec 18) — ~12,400 by end of
Slide 10: FY19 outlook
FY19 outlook’ + In the first half the Company has invested strongly in both internal and external capability to better understand our Chinese consumers, channel dynamics and ways of improving brand awareness + Following a very strong first half performance, and encouraged by growing market share in
Slide 11: thea2milkcompany.com
thea2milkcompany.com
Slide 12: Appendix
Appendix
Slide 13: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures NZ$ million 1H19 1H18 Australia & New Zealand segment EBITDA 192.0 116.4 China & other Asia segment EBITDA 68.4 48.3 UK & USA segment EBITDA! (14.6) (8.4) Corporate EBITDA (27.4) (13.4) EBITDA' 218.4 143.0 Depreciation/amortisation (1.0) (1.1) EBIT! 217.4 141.9 Ne
Slide 14: Geographic and product segment performance
Geographic and product segment performance NZ$ millon New Zealand __other Asia USA Group Liquid milk 67.1 11 15.2 83.4 Infant nutrition 321.6 166.1 7.8 495.5 mo Other 29.7 45 - 34.2 TOTAL 418.4 171.7 23.0 613.1 Liquid milk 61.1 0.8 7.5 69.4 Infant nutrition 221.5 111.0 8.5 341.0 mis Other 21.7 2.6 -
Slide 15: China regulatory environment
China regulatory environment * The Chinese government issued a number of regulatory updates during the half with respect to e-commerce and CBEC across all products and services. A new e-commerce law (effective 1 Jan 2019) and CBEC policy framework (effective 31 March 2019) together confirmed: - Astr
Slide 16: Disclaimer
Disclaimer This presentation dated 20 February 2019 provides additional comment on the Interim Report for the six months ended 31 December 2018 of The a2 Milk Company Limited (the “Company” or “a2MC") and accompanying information released to the market on the same date. As such, it should be read in
Slide 17: thea2milkcompany.com
thea2milkcompany.com
The a2 Milk Company — H1 FY2019 Earnings Presentation on 6ix