Market announcements

August 26, 2021

FY21 Annual results

Challenging year impacted by COVID-19 
Channel inventory dynamics improving and growth strategy review underway 

The a2 Milk Company experienced a very challenging year in FY21 impacted by unprecedented levels of uncertainty and volatility due to the prolonged impact of COVID-19 and a rapidly changing China infant nutrition market. Over the past year China market growth has reduced significantly from globally high rates to be flat, and cross-border trade has been disrupted significantly which has had a profound impact on the Company’s results. 

While certain areas of the business performed well, with market share gains in China label infant nutrition and Australian fresh milk, the Company was impacted by a significant decline in cross-border English label infant nutrition and other nutritional sales through daigou/reseller and e-commerce channels. This created substantial demand and supply volatility, which caused material excess inventory issues that exacerbated the impact. 

In response to the dramatic change in circumstances, the Company took significant action, particularly from 4Q21, to address excess inventory issues, rebuild the management team, increase brand investment to drive demand, commence a review of its growth strategy and review options to deploy available capital. These actions have put the Company in a far better position now than it would have been otherwise to navigate the challenges ahead and enable it to return to growth in the medium-term. 

The Board and management are confident in the underlying fundamentals of the business and that the growth opportunity in core markets remains strong. Coupled with opportunities for product innovation, category expansion and new markets, and supported by a healthy brand and strong balance sheet, the long-term outlook is positive. However, the outlook for FY22 remains challenging and uncertain and it will take time to recover. 

The following items are attached in relation to the full year results for The a2 Milk Company Limited for the 12 months to 30 June 2021:

NZX Results Announcement
Results Commentary
Annual Report
Results Presentation
Corporate Governance Statement
ASX Appendix 4E
ASX Appendix 4G

Copyright © 2021 The a2 Milk Company Limited

a2 Milk™ is a brand of A1 protein-free milk from The a2 Milk Company Limited

*A1 and A2 proteins refer to A1 and A2 beta-casein protein types