Key Highlights

  • a2 Milk shares were trading at A$7.00, up 7.20% or A$0.47 on 18 August 2026 at 12:48 pm.
  • FY26 group Revenue increased 12.4% to NZ$1.975 billion, while underlying NPAT rose 7.0% to NZ$207.5 million.
  • The company declared a NZ$300 million special dividend and increased total full-year Ordinary Dividends from 20.0 cents to 21.0 cents per share.
  • FY27 guidance calls for mid-single-digit revenue growth and an EBITDA Margin of approximately 15%.

The a2 Milk Company Limited (ASX:A2M) shares were trading at A$7.00 on 18 August 2026 at 12:48 pm, up 7.20%, or A$0.47, following the company's FY26 results released on 17 August. The company reported group revenue of NZ$1.9749 billion, an increase of 12.4% from FY25, with growth recorded across its major markets and categories. Underlying net profit after tax increased 7.0%, while underlying Earnings Per Share rose 6.8% to 32.5 New Zealand cents.

The earnings update also included a substantial Capital return. a2 Milk declared a NZ$300 million special dividend while increasing its total full-year ordinary dividend from 20.0 cents to 21.0 cents per share. The ordinary dividend represents an approximately 74% payout ratio, according to the company.

China Infant Formula Business Faces Supply Disruption

Infant Milk Formula remained a major contributor despite a difficult operating environment. The category grew 5% during FY26 even though the China infant formula market was described as flat.

However, the company's China-label infant milk formula business was affected by product availability problems during the fourth quarter. The disruption followed a combination of demand, freight and production-related constraints, including a Synlait production backlog, longer product release times and additional customs clearance and testing requirements.

The supply issues had a material effect on China-label product availability, second-half sales and earnings. The company said the key contributing factors have been resolved and that recovery actions are underway. This remains an important consideration in assessing the trajectory of the business into FY27.

Other Nutritionals and Liquid Milk Deliver Growth

Growth outside the core infant formula business provided a notable contribution to FY26 performance. Revenue from Other Nutritionals increased 42%, supported by products targeting children and seniors, as well as UHT products and supplements.

Liquid Milk also recorded significant growth, with revenue increasing 22%. The company attributed this performance to Market Share gains in Australia and New Zealand and the United States.

Geographically, China & Other Asia revenue increased 11.2%, while ANZ revenue rose 10.2%. The USA was the fastest-growing major region, with revenue increasing 28.6%.

Earnings and Cash Position

a2 Milk reported FY26 EBITDA of NZ$284.4 million, while underlying EBITDA increased 5.4%. Reported NPAT was NZ$207.5 million, with underlying NPAT also showing a 7.0% increase. The distinction between reported and underlying earnings is relevant because the results included losses and transformation costs associated with the company's a2 Pōkeno investment.

The a2 Pōkeno operation recorded a FY26 EBITDA loss of NZ$23.2 million and an NPAT loss of NZ$28.3 million. These losses reflected temporarily low production volumes ahead of the planned a2 Platinum transition, alongside transaction, separation, integration and transition costs.

Closing cash stood at NZ$784.5 million, while operating cash conversion was reported at 68%. The company therefore ended the year with a substantial cash balance despite the supply-chain disruption and Investment associated with its operational transformation.

FY27 Outlook and Supply Chain Transformation

For FY27, a2 Milk expects mid-single-digit percentage revenue growth and an EBITDA margin of approximately 15%. The outlook incorporates further product launches across infant milk formula, Other Nutritionals and Liquid Milk.

The company also expects a2 Pōkeno to play a greater role in its supply chain, with two new China-label infant milk formula products planned for launch in the first half of FY27. Innovation has become an increasingly important contributor to the business, with products launched in recent years accounting for more than half of FY26 sales growth.

Conclusion

a2 Milk's FY26 results show a business delivering double-digit revenue growth while navigating a significant fourth-quarter supply disruption in China. Revenue increased 12.4%, underlying NPAT rose 7.0%, and growth was recorded across China & Other Asia, ANZ and the USA. At the same time, the China-label supply issue affected second-half performance, while a2 Pōkeno generated losses during its transition phase. The NZ$300 million Special Dividend and higher ordinary dividend add a significant shareholder-return component to the result, while FY27 guidance points to continued revenue growth and an approximately 15% EBITDA margin.