China Food

A2 milk’s share price soared today, and the share of milk powder in the latest fiscal year set a record in China

A2 milk (hereinafter referred to as A2) which successfully passed the adjustment period handed over its latest annual report. Today, the New Zealand dairy company released the results of fiscal year 2022 (the year ended June 30, 2022), showing that the revenue during the period was NZ $1446.2 million (about RMB 6.119 billion), an increase of 19.8% year-on-year; Earnings before interest, tax, depreciation and amortization (EBITDA) was NZ $196.2 million (about RMB 830 million), an increase of 59.0% year-on-year. “For A2, despite the resistance, it was a successful year, with double-digit growth in revenue and profits.” David bortolussi, CEO of A2, said in the financial report.


It is worth noting that in China’s infant milk powder market, A2’s share of mother and infant stores and online channels reached a new high. The company described fully exploiting the potential of Chinese infant powder as its “most critical business development focus”. Regarding the Chinese market, A2 also talked about the adjustment of cross-border business and the progress of the application for the “new national standard” of milk powder. Let’s have a look.


In fiscal year 2022, China’s region is the largest market in A2 and the main driving force for performance growth. According to the financial report, in “China and other Asian markets”, the annual revenue of A2 was NZ $726.5 million (about RMB 3.074 billion), an increase of 24.5%, and the income before interest, tax, depreciation and amortization was NZ $145 million (about RMB 613 million), an increase of 92.0%. The growth was driven by the performance in the second half of the fiscal year. The company strengthened the implementation of the growth strategy against the background of strong demand for Chinese label (hereinafter referred to as “winning the bid”), and the exchange rate also had a positive impact during the period. In the whole year, the sales of the company’s winning milk powder “A2 to the beginning” was 437.6 million New Zealand dollars (about 1.851 billion yuan), an increase of 12.2%. This also means that A2 milk’s business recovery strategy in China plays a role. Xiaoshidai said that the company announced a series of measures for the Chinese market last year, including investing more than NZ $100 million to solve the inventory problem.

The right side of the picture shows the sales of A2 winning milk powder in the past five fiscal years

A2 said today that last year’s inventory management action was proved to be “effective”. The channel inventory reached the target level and the market price was improved. “The company restricted shipments to distributors in the first half of the fiscal year to rebalance the channel inventory level and improve the channel sales. Therefore, although the sales volume decreased in the first half of the fiscal year, it increased significantly in the second half of the fiscal year.”. In order to promote recovery, A2 also increased its investment in China’s market promotion, and its brand recognition of infant milk powder in China has also increased from 16% to 21%. In terms of channels, A2 disclosed that it promoted the development of new stores and improved the sales of the same store offline. The number of offline distribution points increased from 22800 at the end of June 2021 to 26500 at the end of June 2022. “The company has expanded the scope of key work, not only focusing on the share of national key customers, but also pursuing regional development

“We are willing to turn the distribution of British standard products to a more transparent and performance-based exclusive partner. The company is still committed to developing purchasing channels and will strengthen A2’s direct participation and marketing support in purchasing,

David Bortolussi

Planning in China

According to the financial report, A2 has started to produce whole milk powder in matoura dairy since the first half of this year, which was previously produced by xinlaite.

As for the more important infant milk powder, A2 and xinlaite still maintain close cooperation. The company disclosed that with the “new national standard” of milk powder coming into effect next year, it has supported xinlaite to complete and submit the new formula registration file of A2 winning infant formula. The existing formula will expire at the end of September this year. At present, an application for renewal of the formula has been applied, and it is expected to pass in September. This will allow xinlaite to continue to produce the existing formula before the “new national standard” grace period (February 21, 2023), and then transition to the new formula.


Looking to the future, A2 said that the sales of the bid winning infant powder is expected to increase in fiscal year 2023. The sales in the first half of fiscal year increased significantly year on year, and the sales growth in the second half of fiscal year is expected to be affected by the transition of the new national standard registration. The sales of British standard infant powder is expected to increase in fiscal year 2023, and the sales in the first half of fiscal year is expected to be roughly the same as that in the second half of fiscal year 2022. Overall, in fiscal year 2023, A2 expects the group’s revenue to achieve high single digit growth, and the growth in the first half of fiscal year is expected to be much higher than that in the second half of fiscal year; EBITDA will increase; The gross profit margin is broadly consistent with that of fy2022, and the increase in milk, ingredients and packaging costs will be offset by pricing, portfolio benefits and cost mitigation measures. Brand investment continued to increase during the period.

“The company takes a positive view of the business prospects in fy2023 and expects that the revenue and profit will continue to grow.” A2 said today that in view of its strong balance sheet, the company intends to conduct an on-site share repurchase of up to NZ $150 million. “This shows that effective capital management and our confidence in the company’s strategy, execution and prospects have improved,” said David bortolussi. Stimulated by the news, A2, which is listed in Australia and New Zealand, rose sharply. It closed up 9.98% at a $5.40 per share on the Australian Stock Exchange today, and closed up 9.689% at NZ $6.00 per share on the New Zealand stock exchange.

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A2 milk’s share price soared today, and the share of milk powder in the latest fiscal year set a record in China

David Bortolussi






展望未来,a2表示,中标婴配粉销售预计在2023财年将有所增长,上半财年销售同比明显增长,下半财年销售增长预计将受到新国标注册的过渡影响。英标婴配粉销售额预计在2023财年将有所增长,上半财年销售额预计将与 2022年下半财年大致持平。  

“公司积极看待2023财年的业务前景,预计收入和利润将继续增长。”a2今天称,考虑到强劲的资产负债表,该公司拟进行至多1.5亿新西兰元的场内股票回购。“这表明了有效的资本管理和我们对公司战略、执行和前景的信心提高。” David Bortolussi说。


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