ATM - FY25 revenue guidance and 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 EBITDA1. 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.”

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