The a2 Milk Company (ASX:A2M): FY26 Revenue Growth, Special Dividend and FY27 Outlook

Aditi Sarkar

23 October 2026 12:29 AM AEDT

The a2 Milk Company (ASX:A2M): FY26 Revenue Growth, Special Dividend and FY27 Outlook

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Highlights

The a2 Milk Company (ASX:A2M) reported FY26 revenue of NZ$1,974.9 million, up 12.4%.
FY26 EBITDA was NZ$284.4 million, while underlying NPAT rose 7.0% to NZ$235.8 million.
A NZ$300 million special dividend was paid in July 2026, and total FY26 ordinary dividends were 21.0 cents per share.
The annual meeting is scheduled for 18 November 2026, with an update on the infant formula recovery plan.

The a2 Milk Company describes itself as a premium branded dairy nutritional company focused on products containing the A2 beta-casein protein type. The company released its FY26 results in August 2026, reporting higher revenue, lower reported earnings and a NZ$300 million special dividend, alongside FY27 guidance weighted to the second half.

Company Business

The a2 Milk Company (ASX:A2M) reports through three regions: China & Other Asia, Australia and New Zealand (ANZ) and the USA. Its products cover infant milk formula (IMF), liquid milk and other nutritionals, with IMF sold in both China label and English label formats that follow different regulatory and distribution pathways.

During FY26 the company divested Mataura Valley Milk and acquired a2 Pōkeno, a manufacturing site in New Zealand now undergoing a transformation programme of around NZ$100 million over several years. The company has also begun insourcing English label a2 Platinum from Synlait, with the transition planned for the first half of FY27.

Recent Development

The fourth quarter of FY26 was affected by a shortfall of China label IMF, which led some users to switch brands, mainly in June. The company cited prior-quarter demand, freight constraints, a production backlog at Synlait, longer release times and customs and testing requirements. It said the main factors have been resolved and availability has improved. A voluntary recall of limited USA label IMF batches in May 2026 also indirectly affected a2 Platinum offtake in China.

In July 2026 the company paid its NZ$300 million special dividend, after regulatory approval of two a2 Pōkeno China label registrations. Both new China label IMF products are being produced at a2 Pōkeno. In October 2026 the company issued its notice of annual meeting for 18 November 2026.

Financial Performance and Sector Context

Group revenue from continuing operations rose 12.4% to NZ$1,974.9 million. EBITDA was NZ$284.4 million, down 2.5%, and underlying EBITDA increased 5.4% to NZ$307.6 million. NPAT was NZ$207.5 million, down 5.8%, while underlying NPAT rose 7.0% to NZ$235.8 million. Total reported NPAT of NZ$111.1 million reflected a NZ$96.4 million loss from discontinued operations, mainly the non-cash Mataura Valley Milk divestment loss.

Gross margin was 47.7%, down 3.4 percentage points, and marketing investment was NZ$325 million. Net cash including term deposits was NZ$784.5 million, compared with NZ$1,061.2 million a year earlier, with operating cash conversion of 68%. The final ordinary dividend was 9.5 cents per share, taking total ordinary dividends to 21.0 cents, a payout of about 74% of continuing NPAT.

China & Other Asia revenue rose 11.2% to NZ$1,447.6 million, with English label IMF up 27.8% and China label IMF down 14.0% to NZ$544.3 million. ANZ revenue increased 10.2% to NZ$348.2 million, and USA revenue rose 28.6% to NZ$179.0 million, with the USA reaching breakeven EBITDA in the second half. The company noted that China newborn numbers fell 17% in the latest calendar year.

For FY27 the company expects mid single digit revenue growth, an EBITDA margin of about 15% and capital expenditure of about NZ$70 million. First-half EBITDA is expected to be materially below the prior corresponding period.

Risks to Consider

The company lists the pace of China IMF recovery, category competition and macroeconomic conditions among its risks. Other exposures include supply chain and cross-border trade requirements, foreign exchange, interest rates, and farmgate milk and commodity prices. Execution of the a2 Pōkeno transformation adds operational risk, and geopolitical developments, including the conflict in the Middle East, are also noted.

What to Watch Next

The annual meeting on 18 November 2026 is the next scheduled event, where the company has said it will update shareholders on the IMF recovery plan. Further milestones include the launch of two new China label IMF products in the first half of FY27, the insourcing of a2 Platinum and the FDA review of the USA IMF submission. For ASX:A2M, the half-year result will show whether earnings are tracking the second-half weighting in guidance.

Key Insights

The a2 Milk Company (ASX:A2M) closed FY26 with higher revenue, lower reported profit and net cash of NZ$784.5 million after the special dividend. Growth in English label IMF, liquid milk and the USA offset the decline in China label IMF. Monitoring points include China label availability, a2 Pōkeno performance and delivery against FY27 guidance, with ASX:A2M announcements expected around the annual meeting.

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