The a2 Milk Company (ASX:A2M): FY26 Revenue, China Formula Supply and FY27 Priorities

Aditi Sarkar

22 October 2026 10:12 PM AEDT

The a2 Milk Company (ASX:A2M): FY26 Revenue, China Formula Supply and FY27 Priorities

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Highlights

The a2 Milk Company (ASX:A2M) reported FY26 continuing-operations revenue of NZD 1,974.9 million, up 12.4%.
FY26 EBITDA fell 2.5% to NZD 284.4 million, while underlying EBITDA increased 5.4%.
Fourth-quarter China-label infant formula availability was affected by logistics and manufacturing constraints.
The company declared a NZD 300 million special dividend and outlined FY27 revenue growth guidance.

The a2 Milk Company Limited develops and markets dairy-based nutritional products, including infant milk formula, liquid milk and other nutritionals across China, Australia, New Zealand and North America. On 22 October 2026, The a2 Milk Company (ASX:A2M) closed at AUD 6.97. Its FY26 disclosures highlight revenue growth alongside distribution constraints affecting China-label infant formula, changes to manufacturing arrangements and a revised capital position.

Company Business

The a2 Milk Company (ASX:A2M) markets products made from milk containing the A2-type beta-casein protein and without the A1-type beta-casein protein. Its product range spans China-label and English-label infant formula, fresh liquid milk, milk powders and nutrition products for children and older consumers. China and other Asian markets account for a substantial part of its commercial activity, supported by Australia, New Zealand and the United States.

Manufacturing arrangements include supply from Synlait Milk and production at the a2 Pokeno facility in New Zealand. The company completed its Pokeno acquisition and divested Mataura Valley Milk as part of its supply-chain restructuring during FY26. These changes affect manufacturing costs, capacity and the timing of new product transitions.

Recent Development

In August 2026, The a2 Milk Company (ASX:A2M) reported that fourth-quarter disruption had affected China-label infant formula availability and added supply-chain costs. Company disclosures identified freight limitations, production backlogs, additional testing and customs-clearance requirements among the contributing factors. Management outlined recovery measures and plans for additional infant formula launches in the first half of FY27.

For FY26, infant milk formula revenue increased 5%, while other nutritionals grew approximately 42%, excluding specified Pokeno ingredient sales. Liquid milk revenue increased 22%, reflecting growth across the Australia-New Zealand and United States businesses. The company stated that products introduced in recent years accounted for more than half of FY26 sales growth.

The a2 Milk Company (ASX:A2M) also completed regulatory steps supporting the transition of two China-label formula registrations to its brands. Separately, it declared a NZD 300 million special dividend in June 2026, with payment scheduled and made under the announced July timetable.

Financial Performance and Sector Context

On a continuing-operations basis, FY26 revenue increased 12.4% to NZD 1,974.9 million from NZD 1,757.2 million in FY25. EBITDA decreased 2.5% to NZD 284.4 million from NZD 291.7 million. Underlying EBITDA, which excludes specified Pokeno losses and transformation expenditure, rose 5.4% to NZD 307.6 million.

Reported continuing-operations net profit after tax declined 5.8% to NZD 207.5 million from NZD 220.3 million. Underlying net profit increased 7.0% to NZD 235.8 million. Basic earnings per share were NZ 28.6 cents, compared with NZ 30.4 cents in FY25. These differences underline the need to distinguish reported profitability from the company’s adjusted performance measure.

The a2 Milk Company (ASX:A2M) reported year-end net cash of NZD 784.5 million, compared with NZD 1,061.2 million in FY25. Operating cash flow totalled approximately NZD 133 million. Full-year ordinary dividends were NZ 21.0 cents per share, alongside the separately declared special dividend. All financial amounts in this section are in New Zealand dollars unless indicated otherwise.

China infant formula demand, product registration requirements, manufacturing dependability and foreign-exchange movements remain relevant industry considerations. Competitive conditions also shape brand spending and the pace of new-product introductions.

Risks to Consider

The principal operating risks for The a2 Milk Company (ASX:A2M) include supply interruptions, reliance on manufacturing counterparties, delays in regulatory approvals and changes in infant formula purchasing patterns. Higher logistics expenses or product-release times can affect availability and margins. Currency fluctuations, commodity input costs and the investment required at Pokeno also influence reported results.

What to Watch Next

The company outlined an FY27 outlook of mid-single-digit percentage revenue growth and an EBITDA margin of approximately 15%. Operational monitoring points include recovery of China-label supply, the Pokeno transition to a2 Platinum products, new nutrition launches and the effect of manufacturing investment on cash generation. The scheduled November 2026 annual meeting offers another forum for operational commentary.

Key Insights

The a2 Milk Company (ASX:A2M) increased FY26 sales, while reported EBITDA and continuing-operations profit declined. Underlying earnings rose on the company’s stated adjustments, and its cash balance decreased after operational and capital-management activity. FY27 disclosures will clarify whether product availability normalises and how the revised manufacturing structure affects operating margins.

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