a2 Milk meets full-year guidance but warns on China

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a2 Milk meets full-year guidance but warns on China
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A2 Milk has eking out a double-digit gain in revenue and small gain in earnings in 2023 but warned China this year will be more challenging due to fewer newborns.

But A2 Milk says it is on track to hit its longer term $NZ2 billion sales goalhas met its lower end of guidance for double-digit revenue growth, and eked out a small gain in earnings but warned the key China market this year will be more challenging with fewer children born.

A2 Milk CEO David Bortolussi says the China market remains very challenging due to a falling birth rate.David Bortolussi, a2 Milk’s chief executive, said on Monday that despite the Chinese market shrinking in value this year, he expects to increase market share and achieve low single-digit group revenue growth and an EBITDA margin in line with last year’s 13.8 per cent.

Group EBITDA gained 11.8 per cent to $NZ219.3 million with an EBITDA to sales margin of 13.8 per cent – virtually flat on a year ago’s 13.6 per cent. Margins held despite an increase in marketing to by 13 per cent to $NZ260 million in China, and higher administrative costs. Net profit after tax was up 26.2 per cent to $NZ155.6 million.

“Our China label infant formula sales exceeded English label sales for the first time, and our total infant formula sales were over $NZ1.1 billion making us a top-3 share gainer in the market overall,” Mr Bortolussi said.sell China label infant formula in China.Mr Bortolussi said on Monday this re-registration was critical to maintaining access to the domestic market.

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