The A2 Milk Company Stock Earnings Reports

The a2 Milk Company reported a strong FY'25 with record sales of $1.9bn, revenue up 13.5% and EPS/NPAT up ~21%. Growth was driven by China & Other Asia (notably English‑label IMF), continued momentum in the U.S., ANZ liquid milk recovery and faster growth in other nutritionals. English‑label IMF grew strongly (17%) and a2 rose to #4 in the China IMF market (8% overall share). The company announced a major supply‑chain transformation: acquisition of Yashili New Zealand (a2 Pokeno) for NZ$282m to secure China‑label registrations, scale in‑country manufacturing and capture vertical margin; and the divestment of the 75% a2 stake in MVM (expected net proceeds ~NZ$100m), with MVM treated as discontinued operations until completion. Pro forma/forward guidance (assuming both transactions complete): FY'26 continuing operations revenue growth of high single digits, EBITDA margin around 15–16%, and NPAT similar to FY'25 (~$203m). Pokeno will be loss‑making in FY'26 (management expects ~NZ$30–35m EBITDA loss including transition costs), breakeven ~FY'27 before future profitability as in‑sourcing of a2 Platinum ramps. The combined transactions are expected to deliver attractive returns (IRR > WACC; ROIC at cost of capital by FY'29) and management intends to declare a NZ$300m special dividend (subject to approvals and transaction completions) while reaffirming ordinary dividend policy (60–80% payout of normalized NPAT). Key risks called out include regulatory timing for SAMR registration amendments (up to ~12 months), execution & operational risk integrating Pokeno and transitioning Platinum volumes (notably impacts on Synlait and timing of margin capture), and ongoing China market volatility and channel mix shifts. The company also highlighted sustainability progress (net‑zero by 2040 target, MVM emissions reductions, packaging improvements).