- The a2 Milk Company (ASX:A2M) releases its first-half results for the fiscal year 2024
- In a positive interim result, A2M achieved a 3.7 per cent growth in revenue, totalling A$812.1 million
- The company reached new heights in China’s brand awareness, trial, and loyalty metrics through increased investment and targeted marketing campaigns
- A2M shares are up 14.1 per cent, trading at $5.76 at 2:52 pm AEDT
The a2 Milk Company (ASX:A2M) shares jumped on the release of its financial results for the first half of fiscal year 2024, highlighting its expansion plans in the Chinese market.
The company reported a 3.7 per cent revenue growth to $812.1 million and a 5.0 per cent EBITDA growth to $113.2 million.
Despite historically low milk consumption due to cultural factors and an estimated 65 per cent lactose intolerance rate, a2’s entry into the Chinese market in 2023 has driven high demand for the company’s a2 Platinum infant formula in China and Southeast Asia.
“Essentially, without a strong Australian fan base we wouldn’t be perceived as a credible and aspirational brand for middle-class China,” A2M CEO of Asia Pacific Peter Nathan said.
“So, our first challenge was to prove to the Chinese that Australians are using and loving our fresh milk and a2 Platinum infant formula.”
Chinese market
Through increased investment and targeted marketing campaigns, the company reached new heights in brand awareness, trial, and loyalty metrics, achieving record market share in both mother and baby stores (MBS) and domestic online (DOL) retail channels.
“We continued to execute against our growth strategy, primarily focused on the China market which now represents approximately 80 per cent of our total branded sales,” A2M Managing Director and CEO David Bortolussi said.
“As we continue to invest and grow, consumers are increasingly seeing the benefits of a2 Milk, providing us with a platform to further expand our portfolio, with the launch of more new products expected later this year.”
The closing net cash position stood strong at $792.1 million, reflecting a $34.9 million increase from June 2023.
A2M last traded at $5.88.
