HY Results 2019, page-247

Guys this could finally be the proof A2 is more than a fad and growth is only really just beginning when taking a long-term view.

Continuing market share gains in key China infant formula market. How many companies have reported such strong growth in the China market recently?

Even with 75% increase in marketing spend they achieved strong EBITDA margins giving me confidence that margins can expand even further moving forward. Planned doubling in second half is in response to the success of their marketing strategies and doesn't bother me a bit EBITDA margins are forecasted to dip as a consequence. Moreover this was in the face of a 5% increase in the nzd/aud cross rate reducing revenue by 5% as a result.

Improvement in EBITDA % loss to revenue in the USA market. They added another 20% in stores in January 2019 alone!! Only 1.5 years away from positive EBIDTA contribution, and generally A2 are conservative in their forecasts.

Encouraged to see growth in their 'other' category and the new products of pregnancy and manuka.

A2 are one of the only companies to have successfully developed a multi channel strategy and achieve pricing consistency across them. Other companies are scratching their heads in how to do this yet A2 have mastered it.

I hope now A2 can be priced to reflect its true potential. I can't see the growth in China dropping below 40%+ in sales over the next 3 years with the US market in full swing + introduction of new products and potential use of war chest to help grow future earnings.

Take a bow A2!