FY25 revenue guidance and dividend policy

NZX Code: ATM
ASX Code: A2M


The a2 Milk Company Limited
www.thea2milkcompany.com

22 November 2024
NZX/ASX Market Release

The a2 Milk Company updates FY25 revenue guidance and announces dividend policy


The a2 Milk Company (“the Company”, “a2MC”) has today announced that it has updated its FY25 revenue guidance
and established a dividend policy for the first time in Company history.

Updated FY25 revenue guidance
Year to date trading is ahead of plan and previous guidance provided on 19 August 2024, primarily due to a significant
increase in MVM external ingredient sales compared to plan and prior year due to higher Global Dairy Trade prices,
currency impacts and changes in product mix, which have an immaterial impact on EBITDA
1
. In addition, English
Label IMF sales and Liquid Milk sales are slightly ahead of plan.

Having regard to year to date trading and outlook, the Company is now expecting mid to high single-digit revenue
growth in FY25 versus FY24, compared to previous guidance of mid single-digit growth. EBITDA margin (as % of
revenue) in FY25 is still expected to be broadly in line with FY24, with 1H25 down and 2H25 up compared with prior
year.

For the full FY25 trading update and outlook commentary, refer to page 27 of the Annual Meeting Presentation dated
22 November 2024.

Implementation of dividend policy

a2MC has also today announced that it has established a dividend policy. The dividend policy targets a payout ratio
range of between 60% and 80% of net profit after tax excluding non-recurring and other items (normalised NPAT).

The implementation of a2MC’s dividend policy commences immediately, with the first interim dividend expected to
be declared in February 2025 based on the Company’s 1H25 result and in line with the bottom end of the range,
being 60% of normalised NPAT.

Chair of the Board, Pip Greenwood said: “The a2 Milk Company has made considerable progress in developing its
operating model and creating a more resilient business. Given this progress and our strong balance sheet position,
the Board believes the time is right to introduce a dividend policy that delivers sustainable cash returns to
shareholders over time.”

1
Additional MVM ingredient sales largely consist of commodity milk powder sales which have an immaterial impact on EBITDA and a slightly dilutive impact on
gross margin and EBITDA margin (as % of revenue).

2

The Board remains conscious of the Company’s significant cash balance, which is being prioritised for supply chain
transformation, growth opportunities and risk mitigation. As a2MC executes its strategy and risk evolves, the Board
will continue to review capital management options which may result in further capital returns to shareholders, likely
in the form of special dividends over time.

The a2 Milk Company’s Managing Director and CEO, David Bortolussi said: “I am pleased to introduce The a2 Milk
Company’s first dividend policy to reward our shareholders for their support over many years and to reflect the
significant progress made since we announced our refreshed growth strategy in 2021.”

In determining the payment of a dividend for any period, a number of factors will be taken into consideration,
including market conditions, current and future earnings, cash flows, capital requirements and the Company's
financial position. As the Company operates in a dynamic, regulated and competitive market, capital needs may
fluctuate over time.

Subsequent dividends are expected to be declared on a semi-annual basis in February and August each year at a level
consistent with the Company’s target payout ratio range. It is the Company’s intention to impute and frank dividends
to the maximum extent possible subject to available credits, noting that imputation credits are limited.

The declaration and payment of all dividends will be subject to Board approval.


Authorised for release by the Board of Directors

David Bortolussi
Managing Director and Chief Executive Officer
The a2 Milk Company Limited


For further information, please contact:

Investors / Analysts
Chante Mueller
Head of Investor Relations
M +61 400 374 133
chante.mueller@a2milk.com



Media – New Zealand
Barry Akers
M +64 21 571 234
barryakers9@gmail.com
Media – Other markets
Rick Willis
M +61 411 839 344
rick@networkfour.com.au