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a2 Milk

ASX:A2M
Snowflake Description

Flawless balance sheet with solid track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
A2M
ASX
NZ$10B
Market Cap
  1. Home
  2. AU
  3. Food, Beverage & Tobacco
Company description

The a2 Milk Company Limited, together with its subsidiaries, sells A2 protein type branded milk and related products in Australia, New Zealand, China, other Asian countries, the United Kingdom, and the United States. The last earnings update was 53 days ago. More info.


Add to Portfolio Compare Print
  • a2 Milk has significant price volatility in the past 3 months.
A2M Share Price and Events
7 Day Returns
1%
ASX:A2M
-0.4%
AU Food
1.3%
AU Market
1 Year Returns
37.7%
ASX:A2M
-10%
AU Food
9.9%
AU Market
A2M Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
a2 Milk (A2M) 1% -5.9% -22.3% 37.7% 583.9% -
AU Food -0.4% 2.4% -2.3% -10% -6.5% 31.9%
AU Market 1.3% -0.6% -1% 9.9% 17.6% 17.8%
1 Year Return vs Industry and Market
  • A2M outperformed the Food industry which returned -10% over the past year.
  • A2M outperformed the Market in Australia which returned 9.9% over the past year.
Price Volatility
A2M
Industry
5yr Volatility vs Market

A2M Value

 Is a2 Milk undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of a2 Milk to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for a2 Milk.

ASX:A2M Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 14 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.1%
Perpetual Growth Rate 10-Year AU Government Bond Rate 2.3%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for ASX:A2M
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year AU Govt Bond Rate 2.3%
Equity Risk Premium S&P Global 6%
Food Unlevered Beta Simply Wall St/ S&P Global 0.54
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.542 (1 + (1- 28%) (0%))
0.693
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.8
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.31% + (0.8 * 5.96%)
7.08%

Discounted Cash Flow Calculation for ASX:A2M using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for a2 Milk is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

ASX:A2M DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (NZD, Millions) Source Present Value
Discounted (@ 7.08%)
2020 325.53 Analyst x3 304.00
2021 405.59 Analyst x5 353.73
2022 467.00 Analyst x3 380.35
2023 506.35 Analyst x1 385.14
2024 536.25 Est @ 5.9% 380.92
2025 562.14 Est @ 4.83% 372.90
2026 585.03 Est @ 4.07% 362.43
2027 605.77 Est @ 3.54% 350.46
2028 625.00 Est @ 3.17% 337.68
2029 643.23 Est @ 2.92% 324.55
Present value of next 10 years cash flows NZ$3,552.00
ASX:A2M DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= NZ$643.23 × (1 + 2.31%) ÷ (7.08% – 2.31%)
NZ$13,802.36
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= NZ$13,802.36 ÷ (1 + 7.08%)10
NZ$6,964.18
ASX:A2M Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= NZ$3,552.00 + NZ$6,964.18
NZ$10,516.18
Equity Value per Share
(NZD)
= Total value / Shares Outstanding
= NZ$10,516.18 / 735.37
NZ$14.3
ASX:A2M Discount to Share Price
Calculation Result
Non-primary Listing Adjustment Factor 1 share in ASX:A2M represents 0.93257x of NZSE:ATM
(This could be a different class, a depositary receipt, a different currency, or all of these things.)
0.93257x
Value per Share
(Listing Adjusted, AUD)
= Value per Share (NZD) x Listing Adjustment Factor
= NZ$ 14.30 x 0.93257
A$13.34
Value per share (AUD) From above. A$13.34
Current discount Discount to share price of A$12.31
= -1 x (A$12.31 - A$13.34) / A$13.34
7.7%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price a2 Milk is available for.
Intrinsic value
8%
Share price is A$12.31 vs Future cash flow value of A$13.34
Current Discount Checks
For a2 Milk to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • a2 Milk's share price is below the future cash flow value, but not at a moderate discount (< 20%).
  • a2 Milk's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for a2 Milk's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are a2 Milk's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
ASX:A2M PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-06-30) in NZD NZ$0.39
NZSE:ATM Share Price ** NZSE (2019-10-11) in NZD NZ$13.2
Australia Food Industry PE Ratio Median Figure of 21 Publicly-Listed Food Companies 25.25x
Australia Market PE Ratio Median Figure of 557 Publicly-Listed Companies 17.93x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of a2 Milk.

ASX:A2M PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NZSE:ATM Share Price ÷ EPS (both in NZD)

= 13.2 ÷ 0.39

33.63x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • a2 Milk is overvalued based on earnings compared to the AU Food industry average.
  • a2 Milk is overvalued based on earnings compared to the Australia market.
Price based on expected Growth
Does a2 Milk's expected growth come at a high price?
Raw Data
ASX:A2M PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 33.63x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 14 Analysts
14.5%per year
Australia Food Industry PEG Ratio Median Figure of 13 Publicly-Listed Food Companies 1.47x
Australia Market PEG Ratio Median Figure of 357 Publicly-Listed Companies 1.69x

*Line of best fit is calculated by linear regression .

ASX:A2M PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 33.63x ÷ 14.5%

2.32x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • a2 Milk is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on a2 Milk's assets?
Raw Data
ASX:A2M PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-06-30) in NZD NZ$1.07
NZSE:ATM Share Price * NZSE (2019-10-11) in NZD NZ$13.2
Australia Food Industry PB Ratio Median Figure of 43 Publicly-Listed Food Companies 1.24x
Australia Market PB Ratio Median Figure of 1,705 Publicly-Listed Companies 1.8x
ASX:A2M PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NZSE:ATM Share Price ÷ Book Value per Share (both in NZD)

= 13.2 ÷ 1.07

12.32x

* Primary Listing of a2 Milk.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • a2 Milk is overvalued based on assets compared to the AU Food industry average.
X
Value checks
We assess a2 Milk's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Food industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Food industry average (and greater than 0)? (1 check)
  5. a2 Milk has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

A2M Future Performance

 How is a2 Milk expected to perform in the next 1 to 3 years based on estimates from 14 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
14.5%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is a2 Milk expected to grow at an attractive rate?
  • a2 Milk's earnings growth is expected to exceed the low risk savings rate of 2.3%.
Growth vs Market Checks
  • a2 Milk's earnings growth is expected to exceed the Australia market average.
  • a2 Milk's revenue growth is expected to exceed the Australia market average.
Annual Growth Rates Comparison
Raw Data
ASX:A2M Future Growth Rates Data Sources
Data Point Source Value (per year)
ASX:A2M Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 14 Analysts 14.5%
ASX:A2M Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 14 Analysts 15.6%
Australia Food Industry Earnings Growth Rate Market Cap Weighted Average 35.7%
Australia Food Industry Revenue Growth Rate Market Cap Weighted Average 9.1%
Australia Market Earnings Growth Rate Market Cap Weighted Average 10.2%
Australia Market Revenue Growth Rate Market Cap Weighted Average 3.6%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
ASX:A2M Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below
All numbers in NZD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
ASX:A2M Future Estimates Data
Date (Data in NZD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2024-06-30 2,991 585 1
2023-06-30 2,717 520 2
2022-06-30 2,310 455 478 12
2021-06-30 2,012 406 415 14
2020-06-30 1,673 323 332 13
2019-10-13
ASX:A2M Past Financials Data
Date (Data in NZD Millions) Revenue Cash Flow Net Income *
2019-06-30 1,304 289 288
2019-03-31 1,203 258 269
2018-12-31 1,101 227 250
2018-09-30 1,012 229 223
2018-06-30 923 231 196
2018-03-31 825 205 173
2017-12-31 728 178 150
2017-09-30 639 139 120
2017-06-30 550 100 91
2017-03-31 510 85 75
2016-12-31 470 70 60
2016-09-30 411 46 45

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • a2 Milk's earnings are expected to grow by 14.5% yearly, however this is not considered high growth (20% yearly).
  • a2 Milk's revenue is expected to grow by 15.6% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
ASX:A2M Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below

All data from a2 Milk Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

ASX:A2M Future Estimates Data
Date (Data in NZD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2024-06-30
2023-06-30
2022-06-30 0.64 0.70 0.59 6.00
2021-06-30 0.56 0.61 0.52 8.00
2020-06-30 0.45 0.47 0.42 7.00
2019-10-13
ASX:A2M Past Financials Data
Date (Data in NZD Millions) EPS *
2019-06-30 0.39
2019-03-31 0.37
2018-12-31 0.34
2018-09-30 0.31
2018-06-30 0.27
2018-03-31 0.24
2017-12-31 0.21
2017-09-30 0.17
2017-06-30 0.13
2017-03-31 0.11
2016-12-31 0.08
2016-09-30 0.06

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • a2 Milk is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess a2 Milk's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Australia market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Australia market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
a2 Milk has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

A2M Past Performance

  How has a2 Milk performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare a2 Milk's growth in the last year to its industry (Food).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • a2 Milk has delivered over 20% year on year earnings growth in the past 5 years.
  • a2 Milk's 1-year earnings growth is less than its 5-year average (47% vs 65%)
  • a2 Milk's earnings growth has exceeded the AU Food industry average in the past year (47% vs -28.6%).
Earnings and Revenue History
a2 Milk's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from a2 Milk Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

ASX:A2M Past Revenue, Cash Flow and Net Income Data
Date (Data in NZD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-06-30 1,304.50 287.74 240.42
2019-03-31 1,202.77 268.83 213.25
2018-12-31 1,101.05 249.91 186.07
2018-09-30 1,011.86 222.80 168.43
2018-06-30 922.68 195.68 150.79
2018-03-31 825.41 172.71 134.86
2017-12-31 728.13 149.73 118.92
2017-09-30 638.83 120.19 108.06
2017-06-30 549.53 90.65 97.20
2017-03-31 509.67 75.18 93.39
2016-12-31 469.81 59.71 89.58
2016-09-30 411.29 45.07 84.68
2016-06-30 352.78 30.44 79.78
2016-03-31 286.10 19.16 63.23
2015-12-31 219.41 7.89 46.68
2015-09-30 187.26 2.90 38.51
2015-06-30 155.11 -2.09 30.35
2015-03-31 143.29 -1.30 27.99
2014-12-31 131.48 -0.51 25.63
2014-09-30 121.16 -0.25 23.86
2014-06-30 110.85 0.01 22.08
2014-03-31 107.58 2.11 19.68
2013-12-31 104.32 4.21 17.27
2013-09-30 99.43 4.16 15.00
2013-06-30 94.55 4.12 12.72
2013-03-31 86.63 2.99 11.62
2012-12-31 78.72 1.86 10.52

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • a2 Milk has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • a2 Milk used its assets more efficiently than the AU Food industry average last year based on Return on Assets.
  • a2 Milk has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess a2 Milk's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Food industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
a2 Milk has a total score of 5/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

A2M Health

 How is a2 Milk's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up a2 Milk's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • a2 Milk is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • a2 Milk's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of a2 Milk's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • a2 Milk has no debt, it does not need to be covered by short term assets.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from a2 Milk Company Filings, last reported 3 months ago.

ASX:A2M Past Debt and Equity Data
Date (Data in NZD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-06-30 787.85 0.00 464.81
2019-03-31 787.85 0.00 464.81
2018-12-31 643.98 0.00 287.93
2018-09-30 643.98 0.00 287.93
2018-06-30 555.71 0.00 340.46
2018-03-31 555.71 0.00 340.46
2017-12-31 389.63 0.00 240.17
2017-09-30 389.63 0.00 240.17
2017-06-30 241.48 0.00 121.02
2017-03-31 241.48 0.00 121.02
2016-12-31 174.36 0.00 108.38
2016-09-30 174.36 0.00 108.38
2016-06-30 133.08 0.00 69.36
2016-03-31 133.08 0.00 69.36
2015-12-31 109.78 0.00 36.43
2015-09-30 109.78 0.00 36.43
2015-06-30 58.63 0.00 6.09
2015-03-31 58.63 0.00 6.09
2014-12-31 57.64 0.00 9.86
2014-09-30 57.64 0.00 9.86
2014-06-30 58.64 0.00 15.98
2014-03-31 58.64 0.00 15.98
2013-12-31 58.96 0.00 13.16
2013-09-30 58.96 0.00 13.16
2013-06-30 59.93 0.00 20.19
2013-03-31 59.93 0.00 20.19
2012-12-31 57.36 2.52 21.50
  • a2 Milk has no debt.
  • a2 Milk currently has no debt however we can't compare to 5 years ago as we have no data for that period.
  • a2 Milk has no debt, it does not need to be covered by operating cash flow.
  • a2 Milk has no debt, therefore coverage of interest payments is not a concern.
X
Financial health checks
We assess a2 Milk's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. a2 Milk has a total score of 6/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

A2M Dividends

 What is a2 Milk's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from a2 Milk dividends. Estimated to be 0.63% next year.
If you bought A$2,000 of a2 Milk shares you are expected to receive A$0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate a2 Milk's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate a2 Milk's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
ASX:A2M Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below
Australia Food Industry Average Dividend Yield Market Cap Weighted Average of 13 Stocks 3.1%
Australia Market Average Dividend Yield Market Cap Weighted Average of 407 Stocks 4.2%
Australia Minimum Threshold Dividend Yield 10th Percentile 1.6%
Australia Bottom 25% Dividend Yield 25th Percentile 2.5%
Australia Top 25% Dividend Yield 75th Percentile 5.6%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

ASX:A2M Future Dividends Estimate Data
Date (Data in NZ$) Dividend per Share (annual) Avg. No. Analysts
2024-06-30
2023-06-30
2022-06-30 0.17 6.00
2021-06-30 0.09 9.00
2020-06-30 0.00 7.00
2019-10-13

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as a2 Milk has not reported any payouts.
  • Unable to verify if a2 Milk's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of a2 Milk's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as a2 Milk has not reported any payouts.
Future Payout to shareholders
  • No need to calculate the sustainability of a2 Milk's dividends in 3 years as they are not expected to pay a notable one for Australia.
X
Income/ dividend checks
We assess a2 Milk's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.6%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can a2 Milk afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. a2 Milk has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

A2M Management

 What is the CEO of a2 Milk's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Jayne Hrdlicka
COMPENSATION NZ$2,086,666
AGE 57
TENURE AS CEO 1.3 years
CEO Bio

Ms. Carla Hrdlicka, also known as Jayne, BA, MBA has been a Managing Director, Chief Executive Officer and Director of The a2 Milk Company Limited since July 16, 2018. Ms. Hrdlicka served as the Chief Executive Officer of Qantas Loyalty from November 2017 to February 11, 2018. Ms. Hrdlicka served as the Chief Executive Officer of Qantas Loyalty & Digital Ventures at Qantas Airways Limited from August 28, 2017 to February 12, 2018 and served as the Chief Executive Officer of Jetstar Group from July 1, 2012 to August 28, 2017. She served at Qantas until March 31, 2018. She is a Senior Partner of Bain & Company. She has significant experience in management consulting. She served as Group Executive of Strategy and Technology at Qantas Airways Limited from February 1, 2011 to July 1, 2012. Recently, she joined Qantas. At Bain & Company, she advised on strategy and operational issues. Prior to her consulting career, she served as an Executive in the publishing and marketing industry. She has held a number of leadership positions. She served as a Non-Executive Director of Woolworths Limited from August 10, 2010 to February 8, 2016. She is widely recognized as an expert in customer strategy and loyalty. Ms. Hrdlicka holds a Bachelor of Arts Degree in Economics and Business Administration from the Colorado College, Colorado Springs, Colorado USA and an MBA from Dartmouth College, Hanover, New Hampshire USA.

CEO Compensation
  • Insufficient data for Jayne to compare compensation growth.
  • Jayne's remuneration is lower than average for companies of similar size in Australia.
Management Team Tenure

Average tenure of the a2 Milk management team in years:

1.8
Average Tenure
  • The average tenure for the a2 Milk management team is less than 2 years, this suggests a new team.
Management Team

Jayne Hrdlicka

TITLE
MD, CEO & Director
COMPENSATION
NZ$2M
AGE
57
TENURE
1.3 yrs

Craig Louttit

TITLE
Chief Financial Officer
TENURE
5.5 yrs

Shareef Khan

TITLE
Chief Operating Officer

Phil Rybinski

TITLE
Chief Technical Officer
TENURE
0.5 yrs

David Akers

TITLE
Head of Investor Relations

Jaron McVicar

TITLE
General Counsel & Company Secretary
TENURE
2.9 yrs

Susan Massasso

TITLE
Chief Marketing Officer
TENURE
6.1 yrs

Lisa Burquest

TITLE
Chief People Officer
TENURE
0.9 yrs

Andrew Clarke

TITLE
Chief Scientific Advisor to the CEO
TENURE
1.2 yrs

Peter Nathan

TITLE
Chief Executive Officer of Asia Pacific
TENURE
2.3 yrs
Board of Directors Tenure

Average tenure and age of the a2 Milk board of directors in years:

2.8
Average Tenure
62.5
Average Age
  • The average tenure for the a2 Milk board of directors is less than 3 years, this suggests a new board.
Board of Directors

David L. Hearn

TITLE
Chairman of the Board
COMPENSATION
NZ$232K
AGE
63
TENURE
4.6 yrs

Jayne Hrdlicka

TITLE
MD, CEO & Director
COMPENSATION
NZ$2M
AGE
57
TENURE
1.3 yrs

Julia Hoare

TITLE
Deputy Chairman & Lead Non Executive Director
COMPENSATION
NZ$233K
TENURE
4.6 yrs

Warwick Every-Burns

TITLE
Independent Non-Executive Director
COMPENSATION
NZ$193K
AGE
66
TENURE
3.2 yrs

Jesse Wu

TITLE
Independent Non-Executive Director
COMPENSATION
NZ$213K
AGE
62
TENURE
2.4 yrs

Pip Greenwood

TITLE
Director
TENURE
0.3 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month open market individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (A$) Value (A$)
09. Oct 19 Sell UBS Asset Management Company 30. Sep 19 07. Oct 19 -4,566,341 A$13.12 A$-59,823,766
09. Oct 19 Buy UBS Asset Management Company 30. Sep 19 07. Oct 19 4,322,088 A$13.22 A$56,647,954
30. Sep 19 Sell UBS Asset Management Company 25. Sep 19 26. Sep 19 -2,125,323 A$13.29 A$-25,016,692
30. Sep 19 Buy UBS Asset Management Company 25. Sep 19 26. Sep 19 1,802,327 A$13.36 A$23,995,808
25. Sep 19 Sell UBS Asset Management Company 23. Sep 19 23. Sep 19 -1,651,959 A$13.60 A$-22,379,105
25. Sep 19 Buy UBS Asset Management Company 23. Sep 19 23. Sep 19 994,114 A$13.63 A$13,546,836
02. Sep 19 Sell UBS Asset Management Company 29. Aug 19 29. Aug 19 -1,739,116 A$13.31 A$-23,141,832
02. Sep 19 Buy UBS Asset Management Company 29. Aug 19 29. Aug 19 828,997 A$13.35 A$11,032,762
13. Aug 19 Sell UBS Asset Management Company 09. Aug 19 09. Aug 19 -974,471 A$15.38 A$-14,921,669
13. Aug 19 Buy UBS Asset Management Company 09. Aug 19 09. Aug 19 108,520 A$15.34 A$1,655,662
12. Aug 19 Sell UBS Asset Management Company 01. Aug 19 08. Aug 19 -6,104,414 A$16.57 A$-98,107,246
12. Aug 19 Buy UBS Asset Management Company 01. Aug 19 08. Aug 19 5,153,017 A$15.93 A$81,899,555
01. Aug 19 Sell UBS Asset Management Company 22. Jul 19 30. Jul 19 -14,167 A$17.26 A$-244,550
01. Aug 19 Buy UBS Asset Management Company 22. Jul 19 30. Jul 19 3,307,010 A$17.30 A$57,195,605
22. Jul 19 Sell UBS Asset Management Company 10. Jul 19 18. Jul 19 -3,777,935 A$15.88 A$-59,309,383
22. Jul 19 Buy UBS Asset Management Company 10. Jul 19 18. Jul 19 4,865,059 A$15.77 A$75,976,340
23. Jul 19 Sell UBS Asset Management Company 19. Jul 19 19. Jul 19 -295,679 A$16.17 A$-4,779,557
23. Jul 19 Buy UBS Asset Management Company 19. Jul 19 19. Jul 19 528,257 A$16.19 A$8,552,757
03. Jul 19 Sell UBS Asset Management Company 13. Jun 19 01. Jul 19 -9,639,821 A$13.74 A$-132,453,308
03. Jul 19 Buy UBS Asset Management Company 13. Jun 19 01. Jul 19 8,648,471 A$13.83 A$119,320,321
12. Jun 19 Sell UBS Asset Management Company 11. Feb 19 07. Jun 19 -54,752,197 A$14.87 A$-770,902,943
12. Jun 19 Buy UBS Asset Management Company 11. Feb 19 10. Jun 19 46,782,675 A$14.47 A$653,924,892
27. Feb 19 Sell Peter Hinton Individual 21. Feb 19 21. Feb 19 -325,000 A$13.46 A$-4,375,357
18. Dec 18 Sell The Vanguard Group, Inc. Company 30. Nov 18 06. Dec 18 -13,169 A$10.27 A$-135,244
27. Nov 18 Sell Macquarie Group, Ltd., Banking & Securities Investments Company 29. Oct 18 23. Nov 18 -781,472 A$10.40 A$0
27. Nov 18 Buy Macquarie Group, Ltd., Banking & Securities Investments Company 29. Oct 18 23. Nov 18 3,528,601 A$10.49 A$0
27. Nov 18 Buy Macquarie Capital Investment Management LLC Company 20. Nov 18 20. Nov 18 13,051 A$9.81 A$128,030
27. Nov 18 Sell Macquarie Investment Management Limited Company 29. Oct 18 21. Nov 18 -34,789 A$9.81 A$-24,786
27. Nov 18 Buy Macquarie Investment Management Limited Company 29. Oct 18 23. Nov 18 99,106 A$10.06 A$0
18. Nov 18 Sell UBS Asset Management Company 12. Oct 18 14. Nov 18 -22,493,392 A$9.65 A$-212,949,781
18. Nov 18 Buy UBS Asset Management Company 12. Oct 18 14. Nov 18 18,163,410 A$9.92 A$173,322,435
30. Oct 18 Sell Macquarie Group, Ltd., Banking & Securities Investments Company 18. Oct 18 25. Oct 18 -46 A$9.59 A$0
30. Oct 18 Buy Macquarie Group, Ltd., Banking & Securities Investments Company 18. Oct 18 25. Oct 18 46 A$9.59 A$0
30. Oct 18 Sell Macquarie Group, Ltd., Banking & Securities Investments Company 16. Oct 18 26. Oct 18 -784,687 A$9.79 A$0
30. Oct 18 Buy Macquarie Group, Ltd., Banking & Securities Investments Company 16. Oct 18 26. Oct 18 405,661 A$10.53 A$0
30. Oct 18 Sell Macquarie Investment Management Limited Company 18. Oct 18 26. Oct 18 -32,104 A$9.82 A$-1,060
30. Oct 18 Buy Macquarie Investment Management Limited Company 16. Oct 18 25. Oct 18 12,937 A$9.80 A$59,966
18. Oct 18 Buy Macquarie Investment Management Limited Company 15. Oct 18 15. Oct 18 1,701 A$9.10 A$0
18. Oct 18 Sell Macquarie Group, Ltd., Banking & Securities Investments Company 15. Oct 18 15. Oct 18 -149,760 A$9.22 A$0
18. Oct 18 Buy Macquarie Group, Ltd., Banking & Securities Investments Company 15. Oct 18 15. Oct 18 43,956 A$9.69 A$0
X
Management checks
We assess a2 Milk's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. a2 Milk has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

A2M News

Simply Wall St News

The a2 Milk Company Limited (ASX:A2M) Investors Are Paying Above The Intrinsic Value

I am going to run you through how I calculated the intrinsic value of The a2 Milk Company Limited (ASX:A2M) by estimating the company's future cash flows and discounting them to their present value. … 5-year cash flow forecast 2018 2019 2020 2021 2022 Levered FCF (NZ$, Millions) NZ$189.00 NZ$224.87 NZ$309.17 NZ$361.73 NZ$419.60 Source Analyst x2 Analyst x3 Analyst x3 Extrapolated @ (17%, capped from 46.74%) Extrapolated @ (16%, capped from 46.74%) Present Value Discounted @ 8.55% NZ$174.11 NZ$190.82 NZ$241.68 NZ$260.48 NZ$278.35 Present Value of 5-year Cash Flow (PVCF)= NZ$1,145 The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = NZ$420 × (1 + 2.8%) ÷ (8.6% – 2.8%) = NZ$7,460 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = NZ$7,460 / ( 1 + 8.6%)5 = NZ$4,949 The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is A$6,094.

Simply Wall St -

Has The a2 Milk Company Limited (ASX:A2M) Got Enough Cash?

Today we will look at A2M’s financial liquidity and debt levels, which are strong indicators for whether the company can weather economic downturns or fund strategic acquisitions for future growth. … See our latest analysis for a2 Milk Is A2M’s debt level acceptable? … For a2 Milk, investors should not worry about its debt levels because the company has none!

Simply Wall St -

What Are Analysts Saying About the future of The a2 Milk Company Limited's (ASX:A2M)?

Margin Calculation for A2M Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 149.73 Million ÷ 728.17 Million = 20.56% a2 Milk's margin has expanded in the past five years, due to 62.23% in average net income growth outstripping average revenue growth of 40.95%, indicating that that the previous revenue growth has been acompanied by a growing portion translated in to earnings. … Understanding what could be driving a2 Milk's future earnings Forward looking projections suggest margins will keep on expanding, with an expectation of 23.50% in annual revenue growth and 33.02% earnings growth expected annually. … This suggests future earnings growth is driven further by enhanced cost efficiency alongside revenue increases, which is enlarging the incremental amount of net income that is retained from the forecasted revenue growth.

Simply Wall St -

Should You Sell The a2 Milk Company Limited (ASX:A2M) At This PE Ratio?

Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for A2M Price per share = NZ$12.4 Earnings per share = NZ$0.208 ∴ Price-Earnings Ratio = NZ$12.4 ÷ NZ$0.208 = 59.6x The P/E ratio itself doesn’t tell you a lot; however, it becomes very insightful when you compare it with other similar companies. … At 59.6x, A2M’s P/E is higher than its industry peers (15.5x). … For example, if you are inadvertently comparing riskier firms with A2M, then A2M’s P/E would naturally be higher than its peers since investors would reward its lower risk with a higher price.

Simply Wall St -

Have Investors Priced In The a2 Milk Company Limited's (ASX:A2M) Growth?

a2 Milk is available at price-to-earnings ratio of 67.77x, showing us it is overvalued based on current earnings compared to the food industry average of 15.01x , and overvalued compared to the AU market average ratio of 16.97x. … ASX:A2M PE PEG Gauge Mar 23rd 18 We understand A2M seems to be overvalued based on its current earnings, compared to its industry peers. … A PE ratio of 67.77x and expected year-on-year earnings growth of 30.59% give a2 Milk a quite high PEG ratio of 2.22x.

Simply Wall St -

Why Investors Should Run Towards The a2 Milk Company Limited (ASX:A2M)

Looking at its size, financial health and track record, I believe there's an opportunity with a2 Milk during these volatile times. … This continuous market outperformance demonstrates a strong track record of delivering robust returns over many years, raising my confidence in a2 Milk as a long-term hold. … Next Steps: a2 Milk makes for a robust long-term investment based on its scale, financial health and track record.

Simply Wall St -

Did The a2 Milk Company Limited (ASX:A2M) Create Value For Shareholders?

View our latest analysis for a2 Milk Peeling the layers of ROE – trisecting a company’s profitability Return on Equity (ROE) is a measure of a2 Milk’s profit relative to its shareholders’ equity. … Return on Equity = Net Profit ÷ Shareholders Equity ROE is measured against cost of equity in order to determine the efficiency of a2 Milk’s equity capital deployed. … This is called the Dupont Formula: Dupont Formula ROE = profit margin × asset turnover × financial leverage ROE = (annual net profit ÷ sales) × (sales ÷ assets) × (assets ÷ shareholders’ equity) ROE = annual net profit ÷ shareholders’ equity ASX:A2M Last Perf Feb 23rd 18 Basically, profit margin measures how much of revenue trickles down into earnings which illustrates how efficient the business is with its cost management.

Simply Wall St -

Investors In The a2 Milk Company Limited (ASX:A2M) Are Paying Above The Intrinsic Value

5-year cash flow forecast 2018 2019 2020 2021 2022 Levered FCF (NZ$, Millions) NZ$130.00 NZ$209.00 NZ$258.50 NZ$302.45 NZ$350.84 Source Analyst x2 Analyst x2 Analyst x2 Extrapolated @ (17%, capped from 44.87%) Extrapolated @ (16%, capped from 44.87%) Present Value Discounted @ 8.55% NZ$119.76 NZ$177.37 NZ$202.09 NZ$217.82 NZ$232.76 Present Value of 5-year Cash Flow (PVCF)= NZ$950 We now need to calculate the Terminal Value, which accounts for all the future cash flows after the five years. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = NZ$351 × (1 + 2.8%) ÷ (8.6% – 2.8%) = NZ$6,224 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = NZ$6,224 / ( 1 + 8.6%)5 = NZ$4,130 The total value, or equity value, is then the sum of the present value of the cash flows, which in this case is A$5,079. … ASX:A2M Intrinsic Value Feb 8th 18 The assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows.

Simply Wall St -

Why The a2 Milk Company Limited (ASX:A2M) Is A Financially Healthy Company

Let’s take a look at A2M’s debt concentration and assess their financial liquidity to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures. … For A2M, the debt-to-equity ratio is zero, meaning that the company has no debt. … Given zero long-term debt on its balance sheet, a2 Milk has no solvency issues, which is used to describe the company’s ability to meet its long-term obligations.

Simply Wall St -

The a2 Milk Company Limited (ASX:A2M): Poised For Long-Term Success?

The a2 Milk Company Limited (ASX:A2M) is expected to deliver a whopping 157.77% in earnings growth per share over the next three years. … To assess the reasonability of A2M’s earnings growth per share, we should look at its most recent growth rate delivered. … This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 157.77% over the next few years.

Simply Wall St -

A2M Company Info

Description

The a2 Milk Company Limited, together with its subsidiaries, sells A2 protein type branded milk and related products in Australia, New Zealand, China, other Asian countries, the United Kingdom, and the United States. The company offers fresh milk under the a2 Milk brand; and infant formula under the a2 Platinum brand. It also provides a2 Platinum premium stage 4 junior milk drink; premium a2 Milk powder blended with Manuka honey; and a2 Platinum premium pregnancy milk formula. The company was formerly known as A2 Corporation Limited and changed its name to The a2 Milk Company Limited in April 2014. The a2 Milk Company Limited was founded in 2000 and is based in Auckland, New Zealand.

Details
Name: The a2 Milk Company Limited
A2M
Exchange: ASX
Founded: 2000
NZ$9,055,778,408
735,370,589
Website: http://www.thea2milkcompany.com
Address: The a2 Milk Company Limited
51 Shortland Street,
Level 10,
Auckland,
1010,
New Zealand
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NZSE ATM Ordinary Shares New Zealand Stock Exchange NZ NZD 21. Apr 2004
OTCPK ACOP.F Ordinary Shares Pink Sheets LLC US USD 21. Apr 2004
DB 14L Ordinary Shares Deutsche Boerse AG DE EUR 21. Apr 2004
ASX A2M Ordinary Shares Australian Securities Exchange AU AUD 21. Apr 2004
CHIA A2M Ordinary Shares Chi-X Australia AU AUD 21. Apr 2004
OTCPK ACOP.Y UNSPONSRED ADS Pink Sheets LLC US USD 21. May 2019
Number of employees
Current staff
Staff numbers
228
a2 Milk employees.
Industry
Packaged Foods and Meats
Food, Beverage & Tobacco
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/10/13 10:45
End of day share price update: 2019/10/11 00:00
Last estimates confirmation: 2019/10/04
Last earnings filing: 2019/08/21
Last earnings reported: 2019/06/30
Last annual earnings reported: 2019/06/30


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.