For personal use only

For personal use only

The a2 Milk Company Limited 2018 Annual Report

A transformative year

For personal use only

Contents

FY18 highlights

2

About us

4

Our Chair

15

Our CEO

16

Year in review

18

Social and environmental responsibility 28

Corporate governance

38

Remuneration

58

Financial statements

64

Other information

106

The a2 Milk Company, helping people enjoy a better life.

The a2 Milk Company | 1

For personal use only

2018 Annual Report Introduction

FY18 highlights

No.1 infant nutrition brand in Australia at 32% share and 5.1% share in China

No.1 brand for Australian millennials

9.8% value share of Australian fresh milk across all key supermarkets

10k store distribution in China

6k store distribution coast to coast in USA

2.5m unique visitors to our websites

8.5% of revenue invested in marketing, R&D and IP

2 | The a2 Milk Company

$923m Revenue 68%

$283m EBITDA 101% 27c Basic earnings per share 113%

The a2 Milk Company | 3

For personal use only

2018 Annual Report About us

About us

We are passionate about helping people enjoy a better life by providing premium branded dairy-based nutritional products that only contain the all natural A2 protein type.

The a2 Milk Company | 5

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2018 Annual Report About us

The A2 protein difference1

? Conventional cows' milk contains two main types of beta casein protein, A2 protein and A1 protein ? our branded milk is different from conventional cows' milk because it is A1 protein free. It is comparable to conventional cows' milk in other respects

? Our branded milk is naturally occurring and not a product of genetic engineering or technological processes

? We work closely with farmers to select and certify cows that naturally produce A1 protein free milk. These identified cows are segregated into their own herds and milked separately. The milk from these herds is kept separate and isolated throughout the supply chain. Subsequent quality assurance checks are carried out to ensure the supply remains A1 protein free

? Many consumers and healthcare professionals report that certain people who experience challenges drinking conventional cows' milk may experience benefits when they switch to our branded milk

? Scientific research has demonstrated a structural difference between the A1 and A2 protein types and the way in which the digestive system breaks them down

? We continue to support further research in a number of markets into understanding the potential benefits of consuming A1 protein free dairy-based products

Originally all cows produced milk containing only A2 protein

Genetic variation has resulted in mixed herds over time

1 Throughout this document A1 and A2 protein refers to A1 and A2 beta casein protein type

6 | The a2 Milk Company

Typical cow herds produce conventional milk containing a mix of

A1 and A2 protein

Our branded milk is sourced from herds producing milk

containing only the A2 protein and no A1

Our purpose

Helping people enjoy a better life

Our vision

To be the innovative and smart choice for dairy nutrition

Our ambition

To be the most admired and commercially attractive dairy-based nutritional company globally

Our strategic priorities

Branded dairy nutritional product portfolio

? Across a continuum from the purity of fresh a2 MilkTM to customised A1 protein free products

? Targeting the whole family from infants to adults to satisfy their growing digestive health needs

Investing in attractive markets

? Asia Pacific focus (ANZ, China, Other Asia)

? USA ? UK ? New market opportunities

Deepening our proprietary know-how and A2 protein expertise

? Integrated intellectual property portfolio ? Leading operational and

compliance capability ? Investing in relevant scientific research ? Differentiated brand development

The a2 Milk Company | 7

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