Investor Presentation

NZX Code: ATM
ASX Code: A2M

The a2 Milk Company Limited
www.thea2milkcompany.com

9 September 2020
NZX/ASX Market Release

CLSA Investors’ Forum Presentation

Please find attached a presentation to be given by The a2 Milk Company Limited at the CLSA Investors' Forum on
9 and 10 September 2020.


Authorised for release by:
Geoffrey Babidge
Chief Executive Officer
The a2 Milk Company Limited

The a2 Milk Company Limited
BUILDING FROM
STRENGTH
27
th
Annual CITIC CLSA Flagship Investor’s Forum

About us
3
Results highlights
7
Group strategic updates
13
Outlook
17
Questions
19
AGENDA

The a2 Milk
Company
A B O U T U S

The a2 Milk Company at a glance
•New Zealand company with dual listing on NZX (ticker ATM)
and ASX (ticker A2M)
•Premium branded dairy nutritional company
•Uniquely focused on products containing the A2 beta casein
protein type
•Our strong, modern brand is building momentum in the two
largest consumer markets in the world
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$1.73B
FY20 revenue ↑ 33% vs FY19
$13.5B
Market capitalisation
2
52.39c
FY20 EPS
1
↑ 34% vs FY19
(all figures NZ$)
1
Basic earnings per share (EPS)
2
Based on share price of NZ$18.28 at 8 September 2020 (quoted securities only)
31.7%
FY20 EBITDA margin

What makes us unique
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Single-minded focus
Unique, modern and
premium brand
Innovative and
agile approach
Australia and New Zealand
sourcing for Asia Pacific
Capital-smart
approach
Focussed investment in
brand, IP and growth

Our key strategic priorities
BUILDING TOWARDS SUSTAINABLE BRAND LEADERSHIP
DELIVERING THE ORGANISATION OF THE FUTURE
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MAXIMISE SUSTAINABLE
GROWTH FROM CORE PRODUCTS
IN CORE MARKETS
BROADEN PORTFOLIO
IN CORE MARKETS
EXPAND IN OTHER
TARGETED MARKETS

Strong results
across all markets
and product groups
R E S U L T S H I G H L I G H T S

FY20 Highlights
•Total revenue of $1.73 billion, an increase of 32.8%
•EBITDA of $549.7 million, an increase of 32.9%
•Net profit after tax of $385.8 million, an increase of 34.1%
•Basic earnings per share (EPS) of 52.39 cents, an increase of 33.5%
•EBITDA to sales margin of 31.7%
•Operating cash flow of $427.4 million and a closing cash balance of $854.2 million
•Marketing investment of $194.3 million targeting opportunities in China and the USA
•Group infant nutrition revenue of $1.42 billion, up 33.8%
•China label infant nutrition sales more than doubling to $337.7 million and distribution expanded to ~19.1k stores
•USA milk revenue growth of 91.2% and distribution expanded to ~20.3k stores
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Notes:
All figures quoted in New Zealand Dollars (NZ$) and allcomparisons are with the 12 months ended 30 June 2019 (FY19), unless otherwise stated.
All figures are quoted based on all operations of the Group, including discontinued operations, unless otherwise stated.
Earnings before interest, tax, depreciation and amortisation (EBITDA) is a non-GAAP measure. However, the Company believes that it assists in providing investors
with a comprehensive understanding of the underlying performance of the business. A reconciliation of EBITDA to net profit aftertax is shown on Slide 30.
Marketing investment only included continuing operations.

COVID-19 impact –FY20 and current observations
FY20
•Staff safety, wellbeing programmes in place, and flexible and remote work practices enacted
•COVID-19 caused disruptions and changing consumer behaviour including:
‒Shift from offline to online, in particular in China in 3Q20
‒Pantry stocking of infant nutrition in 3Q20 across online and resellers, a proportion of which unwound in 4Q20, unable to estimate the full extent
‒Total USA market saw in-store foot traffic reduced, consumer purchasing limitations and we were unable to access stores with ourin-store merchandisers
•Short term changes to our sales and marketing programme in China during 3Q20
‒In-store Mother Baby Store (‘MBS’) promotional people began a home-delivery service
‒Softening of retail daigoudue to reduced tourism from China and international student numbers
‒Partial redeployment of in-store activation marketing into online live streaming events
•Estimated COVID-19 had a modest positive impact in FY20 on both revenue and EBITDA
Current observations
•Unwind of 3Q20 pantry stocking in the early part of FY21
•Softness in retail daigoucontinuing due to reduced tourism from China and international student numbers
•Some disruption being seen in the corporate daigou/ reseller channel resulting from Stage 4 lockdown in Victoria
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China-based retail channels now account for 48% of total infant nutrition
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167.6
297.8
482.5
652.9
745.1
41.8
71.5
158.0
243.1
341.1
4.9
24.8
83.9
167.8
337.7
214.3
394.1
724.4
1,063.8
1,423.9
FY16FY17FY18FY19FY20
ANZCBECChina label
a2MC IMF revenue (NZ$m)
1
CBEC = Cross border e-commerce.
78%
76%
66%
61%
52%
20%
18%
22%
23%
24%
2%
6%
12%
16%
24%
FY16FY17FY18FY19FY20
ANZCBECChina label
China-based channels strengthening
a2MC IMF % revenue by channel
Revenue growingacrossall channels
1

Focused on our “one brand, two labels” strategy for infant nutrition
•Portfolio approach to developing ‘one brand with two labels’ across key
consumer retail channels: MBS, CBEC and resellers in ANZ
•China label range delivers our super premium positioning, in particular in higher
tier cities and MBS; whilst our English label which is premium priced within the
reseller and online channels, is more accessible for some consumers
•Our focused portfolio strategy has engaged strongly with our consumers and
still has significant growth potential
•China based channels now account for 48% of total infant nutrition sales
•Executing on strategy and with 2.0% share in MBS, significant opportunity for
further growth
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Growing market share positions in our key China-based retail channels
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1.3%
1.7%
2.0%
Jun-19Dec-19Jun-20
1
Nielsen MBS 12 month value share.
2
SmartpathCBEC 12 month value share.
18.6%
20.5%
21.5%
Jun-19Dec-19Jun-20
SmartpathCBEC market share (%)
2
Nielsen MBS value share(%)
1

An integrated
approach to building
a sustainable future
G R O U P S T R AT E G I C U P D AT E S

Robust balance sheet with substantial cash balance
•FY20 operating cash flow of $427.4 million and closing cash balance of $854.2 million
•Balance sheet strength provides us options to fund future growth and potential participation in manufacturing
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Capital allocation framework prioritises investment in growth initiatives
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Operating cash flow generation
Capital funding
Excess cash flow
Balance sheet strength & flexibility
•Capacity to support business growth and risk
management initiatives
•Maintain a conservative cash reserve to manage
in an uncertain environment
Expand the boundaries
•Adjacent new product categories in existing
markets
•Geographic expansion of existing products into
new markets
•Assess complementary M&A to drive further
growth within core markets
Grow the core business in existing markets
•Investment in building our business in China
•Assess participation in IMF manufacturing
•Enabling investment in systems, infrastructure,
quality, safety and expertise
•Organic growth –existing and new products / new
retail channels
Shareholder returns

Mataura Valley Milk
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Overview
•On 21 August, announced engaged in discussions with Mataura Valley Milk (MVM),
to explore options to participate in manufacturing at MVM’s facility in Southland,
New Zealand.
•Non-binding indicative offer to acquire a 75.1% interest in MVM, for approximately
NZ$270 million, based on an enterprise value of circa NZ$385 million.
•MVM has agreed to provide us a period of exclusivity to conduct confirmatory due
diligence and negotiate definitive transaction documentation.
Strategic rationale
•Mitigate risk by providing both supplier and geographic diversification.
•MVM is a recently constructed and commissioned state of the art nutritionals facility,
which will complement our existing supply relationships.
•The plant has been independently validated by industry experts as being capable of
producing the highest quality nutritional products.
•It is well located for access to a growing productive milk pool supported by
favourable climatic conditions and water availability.
•Currently majority owned by a respected China state owned enterprise –China
Animal Husbandry Group –which will continue as a minority holder.

FY21 and
medium-term
target
O U T L O O K

Outlook
FY21
•Globally, there continues to be uncertainty resulting from COVID-19, and the potential for moderation of economic activity. Thiscould impact
consumer behaviour in our core markets, as well as participants within the supply chain, most notably in China
•Notwithstanding these uncertainties, overall for FY21, we anticipate continued strong revenue growth supported by our continued investment in
marketing and organisational capability
•FY21 EBITDA margin is expected to be in the order of 30% to 31% reflecting
‒Higher raw and packaging material costs partially offset by price increases
‒Increase of marketing investment
‒FX benefit of prior year not expected to be replicated
‒3Q20 COVID-19 benefit not replicated
•FY21 Capex is currently expected to be $50 million due to our ERP investment and capital projects supporting fresh milk processing in Australia
Medium-term target
•As previously announced, the Board considers it appropriate that the Company target an EBITDA margin in the order of 30% in the medium-term.
This assumes the market performance and mix of our products remains broadly consistent and the competitive environment evolves as
anticipated. We will keep the balance between growth and investment under constant review
18| FY20 Annual Results

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Q U E S T I O N S

Disclaimer
This presentation dated 9 September 2020 should be read in conjunction with, and subject to, the explanations and views in documents previously released to the
market by The a2 Milk Company Limited (the “Company”), including the Company’s Annual Report for the 12 months ended 30 June 2020 and accompanying
information released to the market on the same date.
This presentation is provided for general 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 particular investor. Investors should assess their own
individual financial circumstances and consider talking to a financial adviser or consultant before making any investment decision.
This presentation is not a prospectus, investment statement or disclosure document, or an offer of shares for subscription, or sale, in any jurisdiction.
Certain statements in this presentation constitute forward looking statements. Such forward looking statements involve known andunknown risks, uncertainties,
assumptions and other important factors, many of which are beyond the control of the Company and which may cause actual results,performance or
achievements to differ materially from those expressed or implied by such statements.
While all reasonable care has been taken in relation to the preparation of this presentation, none of the Company, its subsidiaries, or their respective directors,
officers, employees, contractors or agents accepts responsibility for any loss or damage resulting from the use of or reliance on this presentation by any person.
Past performance is not indicative of future performance and no guarantee of future returns is implied or given.
Some of the information in this presentation is based on unaudited financial data which may be subject to change.
All values are expressed in New Zealand currency unless otherwise stated.
All intellectual property, proprietary and other rights and interests in this presentation are owned by the Company.
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www.thea2milkcompany.com