ATM - A2 Milk Corporation Limited

[Sideshow Bob]

Farmers Weekly Article

https://farmersweekly.co.nz/s/fw-art...XJJHDOXVORINGQ

[carrom74]

If you have a lot to sell at a reasonable price.. then talk to the Australian media and they will do the needful 😀#Saputo!

[aperitif]

http://research.iress.com.au/IDS/old...091850000&ppv=

[Baa_Baa]

http://research.iress.com.au/IDS/old...091850000&ppv=

Encouraging for BUB's, especially the channel growth. But no mention of profit? Am I reading this correctly?

"Record quarterly gross revenue of $19.9m"

".. the Company advises it spent$14.4 million on product manufacturing and operating costs, $3.0 million on administration and corporatecosts, $1.9 million on staff costs, and $2.2 million on advertising and marketing." (= $21.5m)

= Loss $1.6m ???

[sb9]

Had to go look for the thread which is buried on Page 4.

Its been very loooong time between drinks, just broke through $6 mark. Forget the numbers, lower NZD FX should give decent tailwind for rest of 2022.

[Sideshow Bob]

More Bubs News:

Bubs says China’s infant formula demand exceeding pre-pandemic levels (nutraingredients-asia.com)

China’s corporate daigou channel is witnessing high growth momentum and demand for infant formulas is exceeding pre-COVID-19 levels, according to Australian infant formula maker Bubs.

[Sideshow Bob]

Half Year

1H22 Results and Interim Report - NZX, New Zealand’s Exchange

The a2 Milk Company (“the Company”, “a2MC”) today announces that its 1H22 result was in line with the Company’s expectations, placing the Company in a strong position to execute its strategy and deliver revenue growth in FY22 in a challenging and volatile market.

In October 2021, the Company announced its refreshed growth strategy which has been adapted to the rapidly changing infant milk formula (“IMF”) market dynamics in China. The Company also outlined its medium-term indicative sales and EBITDA margin ambition. With its growth strategy review completed, the Company has moved into the execution phase focused on implementing its strategic priorities and related initiatives, which is in its early stages and progressing well.

The actions taken by the Company in 4Q21 and 1Q22 to address excess inventory are also proving effective with channel inventory levels reducing to targeted levels, product freshness improving and market pricing increasing across English label and China label IMF, enabling healthier channel economics for participants in the a2MC business system.

Key points1
• Market conditions continued to be challenging with the China IMF market declining by 3.3% in value during 1H22 due mainly to the cumulative impact of a lower birth rate, while the Australian and US (premium) liquid milk markets were in growth. COVID-19 and other external factors continued to impact the Company’s supply chain

• Interim results in line with the Company’s expectations and expecting to deliver revenue growth in FY22• Revenue was marginally lower than 1H21 in line with guidance, down 2.5% to $660.5 million on the prior corresponding period (“pcp”), up 24.8% on 2H21- As disclosed in the Company’s announcement on 26 August 2021, China label IMF sales were constrained by a2MCin 1Q22 to rebalance distributor inventory levels with sales down 11.4% for 1H22 vs pcp. However, consumerofftake growth in store and online was up double-digits with higher market share- English and other label IMF sales were down 9.8% in 1H22 vs pcp with lower market share, but with an improvement in sales trajectory during the half particularly in the ANZ reseller channel- ANZ liquid milk sales were up with higher market share, while USA liquid milk sales were down

• Earnings before interest tax depreciation and amortisation (EBITDA2) was down 45.3% on pcp to $97.6 million• EBITDA to sales margin of 14.8% in 1H22 compared to 26.4% in 1H21; EBITDA to sales margin excluding MVM of 17.3%• Net profit after tax (“NPAT”) including the non-controlling interest was down 53.3% to $56.1 million on pcp

• Closing net cash was $667.2 million, now incorporating $80.0 million of MVM debt, with high operational cash conversion during 1H22• Mataura Valley Milk (“MVM”) acquisition and strategic partnership with China Animal Husbandry Group (“CAHG")completed in July 2021 and fully consolidated into the results. Commenced planning for a laboratory and blending and canning capability at MVM and accelerated actions to insource certain a2MC product

• Brand health metrics improved following a significant marketing campaign in 2Q22 with total brand / China label metrics improving and English label metrics remaining relatively flat. Brand investment increased in 1H22 by 37.3% vs pcp to $92.5 million in line with the Company’s growth strategy

Growth strategy refresh to respond to the rapidly changing China IMF market dynamics completed and implementation underway with good early progress across key initiatives

• The Company’s outlook for 2H22 revenue has improved. It is still expected to be significantly higher than 2H21, and with growth now expected on 1H22 and for FY22 ahead of initial expectations due mainly to growth in China label and English label IMF. However, this revenue improvement is not expected to translate into higher earnings as the Companysignificantly increases brand and other reinvestment consistent with its growth strategy (the Outlook section below has further detail including key industry and business risks

[carrom74]

Not a bad report...I guess.

MVM is improving but US is a drag...

[sb9]

They fared better than expected, seems as though DB has slowly but surely steadied the ship and steering in right direction. Long way to go but green shoots starting to appear.

[sb9]

Short squeeze on over at ASX...