New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>An opportunity but the market is significantly different, and much less attractive</li><li>We are supportive of the US entry as an earnings diversifier but the earnings benefit may only be minor</li><li>ATM likely to persist with the liquid milk business (for now)</li></ul>

An opportunity but the market is significantly different, and much less attractiveWe are supportive of the US entry as an earnings diversifier but the earnings benefit may only be minorATM likely to persist with the liquid milk business (for now)

The A2 Milk Company: Heading Stateside — A Worthy Journey?

<ul><li>Refined FY23 guidance (higher revenue but lower margins) implies low double digit EBITDA growth in FY23 versus FY22 which is consistent with our prior expectations and modestly below consensus</li><li>ATM also reaffirmed prior commentary that it anticipates SAMR re-registration approval in 2H23 and will transition to its new product in 1H24</li><li>We leave our forecasts unchanged and in light of ATM's downgraded margin expectations</li></ul>

Refined FY23 guidance (higher revenue but lower margins) implies low double digit EBITDA growth in FY23 versus FY22 which is consistent with our prior expectations and modestly below consensusATM also reaffirmed prior commentary that it anticipates SAMR re-registration approval in 2H23 and will transition to its new product in 1H24We leave our forecasts unchanged and in light of ATM's downgraded margin expectations

<ul><li>The a2 Milk Company (ATM) has refined its FY23 guidance.</li><li>Revised guidance is for “low double digit” revenue growth (prior guidance of “high single digit”) and EBITDA margins to be “similar to the prior year” (prior guidance of “modest improvement”)</li><li>The revised guidance primarily reflects currency impacts (positive to revenue but negative to costs)</li></ul>

The a2 Milk Company (ATM) has refined its FY23 guidance.Revised guidance is for “low double digit” revenue growth (prior guidance of “high single digit”) and EBITDA margins to be “similar to the prior year” (prior guidance of “modest improvement”)The revised guidance primarily reflects currency impacts (positive to revenue but negative to costs)

The A2 Milk Company (ATM): AGM Guidance Update

<ul><li>The American Dream remains alive. The a2 Milk Company (ATM) has received FDA clearance to sell Stage 1 and 2 a2 Platinum Infant Formula (IF) as part of the FDA's enforcement discretion to fill its shortage</li><li>Medium-term market presence is reliant on further FDA approval(s)</li><li>Assuming ongoing approval, we estimate a base case valuation benefit of ~+NZ15–20cps</li></ul>

The American Dream remains alive. The a2 Milk Company (ATM) has received FDA clearance to sell Stage 1 and 2 a2 Platinum Infant Formula (IF) as part of the FDA's enforcement discretion to fill its shortageMedium-term market presence is reliant on further FDA approval(s)Assuming ongoing approval, we estimate a base case valuation benefit of ~+NZ15–20cps

The A2 Milk Company: American Dream Is Still Alive

<ul><li>ATM expects it to be incrementally beneficial: ATM has received confirmation to sell and distribute a2 Platinum Stage 1 and 2 IF product as part of the enforcement discretion</li><li>Valuation benefit: Assuming approval can be granted medium-term which is still to be confirmed</li><li>State of the market now – product shortage is largely over</li></ul>

ATM expects it to be incrementally beneficial: ATM has received confirmation to sell and distribute a2 Platinum Stage 1 and 2 IF product as part of the enforcement discretionValuation benefit: Assuming approval can be granted medium-term which is still to be confirmedState of the market now – product shortage is largely over

The A2 Milk Company: US FDA Clearance – The American Dream?

Australia

a2 Milk Company Limited produces cow milk which is free of a protein called beta casein A1.  The Company 
offers its products in Australia and New Zealand.

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A2 Milk Co Ltd (A2M AU)

The A2 Milk Company: Heading Stateside — A Worthy Journey?

The US is the world's second largest Infant Formula (IF) market with a retail market size ~15% that of China and in light of competitor supply...

Forsyth Barr

The A2 Milk Company: Crawling Forward

The a2 Milk Company's (ATM) AGM update had little surprises - refined FY23 guidance (higher revenue but lower margins) implies low double digit...

Forsyth Barr

The A2 Milk Company (ATM): AGM Guidance Update

The a2 Milk Company (ATM) has refined its FY23 guidance; revised guidance is for “low double digit” revenue growth (prior guidance of “high single...

Forsyth Barr

The A2 Milk Company: American Dream Is Still Alive

The a2 Milk Company (ATM) has received FDA clearance to sell Stage 1 and 2 a2 Platinum Infant Formula (IF) as part of the FDA's enforcement...

Forsyth Barr

The A2 Milk Company: US FDA Clearance – The American Dream?

This morning the FDA has reported The a2 Milk Company (ATM) has finally been granted approval to sell Infant Formula (IF) into the US; ATM’s...

Forsyth Barr

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