The a2 Milk Company reported revenue of $1,975 million for FY26, representing 12.4 percent growth from the prior year, with underlying EBITDA reaching $308 million up 5.4 percent. Net cash increased 26.1 percent to $784 million, reflecting the company’s strong cash generation despite the integration of the a2 Pลkeno acquisition. The results demonstrate that the core business continues to perform well amid strategic transformation, though reported profitability metrics were tempered by losses at the newly acquired New Zealand manufacturing facility.
The a2 Pลkeno acquisition represents a significant strategic move to vertically integrate production and control supply chain costs. The facility recorded an EBITDA loss of $23.2 million and NPAT loss of $28.3 million in FY26, primarily due to deliberately low production volumes ahead of the planned transition to a2 Platinum products in the first half of 2027. This timing is important for investors to understand, as the losses are not indicative of the facility’s long-term economics but rather reflect a deliberate ramp-down of legacy production before the transition. Excluding a2 Pลkeno’s impact, underlying NPAT grew 7.0 percent to $236 million, showing the underlying business momentum.
Geographic performance remains dominated by China and Other Asia, which generated $1,448 million in revenue, up 11.2 percent from FY25 and accounting for approximately 73 percent of group revenue. The company added two approved China label registrations for its infant milk formula portfolio, creating additional growth avenues in its largest market. Australia and New Zealand revenues grew 10.2 percent to $348 million, while the Rest of World segment expanded 28.6 percent to $179 million, suggesting successful market diversification beyond the core Asian markets.
Within product segments, infant milk formula revenue of $1,334 million grew 4.7 percent but reflects relatively modest growth given its dominance in the portfolio. Liquid milk products showed stronger momentum with revenue up 21.8 percent to $422 million, while other nutritionals delivered impressive growth of 59.9 percent to $216 million. This portfolio broadening, combined with geographic expansion, is reducing reliance on single product categories in single markets and positioning the company for more resilient, diversified growth.
The earnings per share figures of 28.6 cents basic and 32.5 cents underlying both grew at approximately 6 to 7 percent, which is reasonable but unspectacular given the top-line growth rate. Operating cash flow declined 33.9 percent to $133 million, which warrants attention, though this appears tied to the a2 Pลkeno transaction and transition costs rather than operational deterioration. Investors should monitor the upcoming 1H27 results closely, as the a2 Platinum transition at Pลkeno and ramp-up of this facility’s production volumes are critical milestones that should materially improve profitability and cash generation. The company’s strong net cash position of $784 million provides flexibility to navigate this transition and fund growth initiatives.
View the full ASX announcement (PDF)
About The a2 Milk Company Limited (ASX: A2M)
The a2 Milk Company Limited is a dairy nutritionals company that sells A2-type protein branded milk and related products, including infant milk formula and other dairy products. The company operates across Australia, New Zealand, China, rest of Asia, and the United States, manufacturing and selling nutritional products and providing licensing services under the a2 Milk and a2 Platinum brands.
If you would like to discuss this announcement or how it might affect your portfolio, request a callback or call us on 1300 889 603.
