Recording in progress.
Today, I'm joined by Group CFO, Pete Myers. It's a pleasure to be with you today, and thank you for joining the call. We've already uploaded the presentation and documents to the ASX, and you can navigate to the slides as you choose, or you may follow on screen. Slide three is the agenda for today's call. I'll focus on the call-outs from the results and discuss the key elements of the company's evolution. Pete will then present the financial performance for the period. I will then talk to our strategy, followed by closing remarks. The key messages for today's call: consistent execution of our strategy, continued operational improvement. The combination of these have led to record revenues, record earnings, and record margin in the plant-based milk segment. Our dairy nutritional segment has shown another positive increase in earnings, although impacted by global commodity prices.
We continue to be proud of the progress we are making as we execute our plans, but there is more to do. As you can see, the results for FY 2024 represent another period of solid progress against our reset, transform, and grow strategy, with all key operating financial metrics moving consistently in the right direction. We continue to execute against our plans. As mentioned earlier, we've seen a record result. The transform and grow strategy continues to deliver improved results with EBITDA of AUD 50.8 million, up 22.2% from FY 2023. This is a result that is a credit to the entire team. We've delivered an increase in the plant-based milk segment, up 12.3% with an EBITDA of AUD 49.4 million.
We've continued growth in our MilkLab brand domestically and internationally as new channel and geography initiatives were launched. The MilkLab brand has continued its growth. Revenue up 9.4% across dairy and plant-based milks. Dairy Nutritionals continues to show improvement with EBITDA for the period of AUD 5.5 million, compared to the AUD 4.1 million we made in FY 2023. The domestic long life business continues to improve, although there remain headwinds from global dairy conditions. The impact is commodity pricing, global demand. Australia is now a net importer of dairy products. This issue is just not a new issue. It's an industry issue. We need a sustainable industry starting from the farm gate. We've reduced our export volumes where margins didn't make sense. With reduced volumes in long-life milk, lactoferrin volumes are also impacted due to milk processed through the plant.
Operating cash flow improved from AUD 35.2 million in FY 2023 to AUD 41.6 million this year. The statutory net loss after tax was AUD 98.3 million, after the convertible note revaluation and the non-cash impairment of the dairy segment due to global dairy conditions. The team at Noumi are critical to our success. I'm proud to say that with the focus on keeping everyone safe, we've seen improvements with a 21% increase in lead safety measures. We continue to embed safety across all aspects of the business to ensure that all the 500+ team members are safe and can perform their roles. This year, we moved to an external engagement survey through Gallup. We saw a significant increase in the participation, which has enabled us to work on the key priorities.
We continue to run leadership development programs plus general training to support the future initiatives that we have in the pipeline. There have been a couple of important leadership changes, with Tracey Hibbert coming in as Chief People Officer with a long history of experience in the food and beverage sector. As we want to accelerate the execution of our strategy, we have introduced a new role, Chief Transformation Officer, with Michael Howard commencing his role in June. Michael has extensive experience in transformation with consumer goods and in the food and beverage sector. In slide nine, you'll recall that we've been very clear about our three-part reset, transform, and grow strategy. We are embedding the transformational changes in dairy nutritionals and are firmly establishing the growth phase in plant-based. The company is focused on the great brands and world-class assets that we operate to produce our products.
Our transformation initiatives are well progressed, with operational improvements across the business already driving improved sales and margins with our new values incorporated into all work practices. Engaging experts to reform our operational practices and processes, a keen focus on margins and not just volumes, a disciplined approach to new product and channel initiatives, a focus on working capital discipline. These improvements provide the springboard to grow the business through these three pillars: products, channels, and geographies. Plant-based milks clearly established in growth phase. Previously, I laid out the transformation program to deliver long-term growth. Two thousand and twenty-four has been a busy year, but we have plans to build on the foundations we have laid out. There are a number of highlights. You will see we are executing against our strategy.
The closure of the ASIC matter represents a pivotal milestone for the company and will enable us to focus more time and resources on growing the business. The only substantive recent item left is the shareholder class action. Dairy Nutritionals has performed well in FY 2024, with a focus on margin, operating efficiencies, and brand development. The global commodity pressure has impacted Dairy Nutritionals business, with cream revenue down over AUD 7.5 million compared to last year, and lower lactoferrin production. Now focusing on growth initiatives. MilkLab launched in retail. New oat formulation continues to grow, maintained a strong margin, and grew at the same time. We continue to partner with distributors locally and internationally as we drive further initiatives. Strategically, we are focused on five key international markets.
Overall, there's been a strong operating performance for the business in what has been a busy and successful year. Pete will now take you through the financial performance. After that, I'll come back and talk to you more about our strategy and how we're shaping our future plans. Pete?
Thanks, Michael. Thank you, and good morning to all of those listening. I'm delighted that we're able to report another year of significant progress as we execute on our transform and grow agenda. Our messages are consistent with recent announcements, namely, our strategy is clear, it is working, and we're executing more consistently. The result, another record result for plant-based milks, improvement in dairy compared to last year. However, we are mindful that conditions remain tough and there is uncertainty ahead, but we're clear and committed on what we're doing, maintaining our focus, executing on the key initiatives launched this year. At the half year, we foreshadowed key opportunities to grow channel and geographies in the plant-based business. These are now underway, and in dairy, we've remained disciplined in the belief that global conditions would normalize at some stage, so we're pleased with the lift in earnings.
There is still much to do to fulfill our transform and grow strategy, but our results continue to improve, we are becoming stronger, and we are encouraged by our ... Now, let me turn to the specifics of the result, but before I do, a couple of grounding comments. First, we refer to our adjusted operating EBITDA numbers as being our most important measure of operating performance, and the most useful for investors, and so if Michael or I just say EBITDA this morning, that's what we mean. It includes all one-off restructuring amounts, such as the impairment charges and things like the legacy litigation expenses. Second, I want to remind listeners that at the half year, we transitioned the way we present our operating EBITDA results from a pre-AASB 16 to a post-AASB 16 basis.
And since this is our first full year result where we're talking post-AASB 16 numbers, I just want to explain the issue briefly. AASB 16 is the accounting standard that deals with leasing. It effectively recharacterizes rent into depreciation interest. This change ensures we're now presented on a comparable basis to all our peers. And just to remind you, there's no difference to revenue or our balance sheet or our cash flow, and we've updated all of the relevant comparisons in our material this morning on the same basis as the current year numbers. So all of the improvement metrics that we're describing are genuinely like to like. And finally, there is a complete reconciliation of these adjustments in the appendices at the back of the slide deck.
Turning to slide 14, I am pleased to report revenue up 6.9% overall compared to the prior period. In plant-based milks, MilkLab up, as well as private labels. In dairy nutritionals, price and volume increases in domestic dairy, offset by the impact of global dairy headwinds. Adjusted operating EBITDA for the group, AUD 50.8 million, is up 22% on last year. In a moment, I will take you through the highlights of the operating performance and the positive set of improvements that we've announced today. The table on slide 14 highlights the fact that after we take into account normal depreciation charges, interest on all of our financing, other than the convertible notes, and even allowing for the full AUD 6 million for the cost of closing out the ASIC matter, earnings were a positive AUD 8.3 million.
The statutory loss of AUD 98.3 million includes a fair value adjustment on the convertible notes of AUD 59 million, and a non-cash impairment write-down of the dairy business, reflecting the global dairy factors that we've spoken about. Turning to slide 15, in terms of cash and capital, we've got AUD 4 million lower cash than we had at June 2023, and we have repaid AUD 6 million of financial debt. In terms of the convertible notes, I just want to pause on three important call-outs. First, a reminder that the notes were issued in FY 2021 and FY 2022, and they provided critical capital to allow the company to implement its reset, transform, and growth strategy. The terms are very competitive, no financial covenants, a 6-year term, and no cash interest returns until December 2023, and there have been no changes to the terms of the notes since they were issued.
Second, we have paid our first cash interest during FY 2024, AUD 13.5 million. We funded this out of cash flow without having to draw down on any credit lines. One of the many reasons we're pleased with our improved earnings is that we need the improvement so we could meet the scheduled introduction of cash interest on the notes. I should also point out that the payment is akin to interest, but for accounting purposes, it's treated like a repayment, and now that it's started, the cash interest is payable at the rate of about AUD 18 million a year, each year until maturity of the notes in FY 2027.
The third call-out is that fair value adjustments, just like the AUD 59 million booked in this year, will continue until the notes mature in FY 2027, and will continue to impact our statutory earnings and the balance sheet. Then finally, in terms of our balance sheet, as we have said before, we don't carry any value in our books for our flagship asset, the MilkLab brand. MilkLab has been built from scratch and is not yet 10 years old, and we consider it to be worth hundreds of millions, and its value continues to grow. Now, let's move on to the detail of the operating earnings. In Slide 16, we're delighted with the plant-based milk result, with EBITDA for the year up 12.3% to AUD 49.4 million.
It's been a busy year for the plant business, and we have implemented key elements of the strategy. Total revenue is up 9.4%. Growth in our key brands, MilkLab plant sales up 7.4%, and growth in our range, the new oat formulation delivering growth of 42.5% on the same period last year. A solid year for MilkLab Almond, the flagship that is leading our launch into retail. The launch of MilkLab Minis, sales up 16.7% in export markets. Targeted initiatives underway to extend MilkLab's geographic reach. And underpinning our branded progress, a strong performance from private label, giving value-conscious customers options. Our operations team have played their part in the performance, too, having supported a 9.3 increase in volume and the introduction of a differentiated square pack for our retail launch.
We continue to be excited about the future of this business, and we look forward to our recent initiatives delivering in FY 2025 and beyond. We respect that cost of living pressures are a factor for some of our consumers, and that makes us a little cautious. But with a mix of branded and private label volumes across different channels, we are well placed to adapt to shifts resulting from macroeconomic factors. A strong result, a clear strategy, and a great future. Slide 17 demonstrates the progress of the dairy and nutritional segment. Positive adjusted operating EBITDA of AUD 5.5 million, up AUD 1.4 million on last year, and continuing the turnaround in earnings that began in FY 2023. The result reflects a mix of good wins in respect to things within our control, balanced against the challenges presented by global dairy conditions.
Domestic long-life milks, milk sales up 19.6% with increases in volumes, as well as the recovery of cost increases. Consumer nutritional sales up 9.8% on top of last year's double-digit revenue growth. Sales of Australia's Own Dairy up 16.9%. Global dairy factors reflect demand challenges, mainly out of China, and the impact of higher increases in Australian farm gate milk price relative to other markets that has occurred over the last couple of years. We have been affected in two ways. First, the price that we receive for our commodity products, such as bulk cream, just on price alone, our full-year EBITDA was impacted by AUD 7.5 million compared to last year. We reported AUD 4 million as being the first half effect, so the impact was slightly lower in H2.
Second, export volumes were down 12%, and while we took actions to protect profitability by reducing our low-margin formats, lower volumes create a knock-on impact to lactoferrin volumes. Together, with the impact of some production disruptions we reported during the year, lactoferrin sales were down 17.2% for the year. Putting aside the lactoferrin disruptions, operations contribute, contributed positively to our result by further reducing wastage by 1 percentage point, and since we spend circa AUD 200 million a year on milk, every percentage point matters. The overall dairy and nutritional result demonstrates progress, and we recognize that it could have been better but for some global factors. The earnings were still relatively small, and dairy is not yet cashflow positive, hence the impairment charge.
Our job is to continue to focus on margins and efficiencies so that we can achieve the positive returns that will enable us to invest to meet the expectations of our customers. Overall, further progress, but more to do. Finally, to slide 18. Our cash flow performance was solid. We've improved our net cash from operations to AUD 41.6 million, up from AUD 35 million last year. We are very focused on working capital. Our accounts receivable were up 12%, a little higher than our sales growth, but impacted by some year-end timing differences. Delinquencies were less than AUD 500,000. Inventory was down slightly for the year. Payables were down year on year, with all of our suppliers current in their terms. And our approach to capital expenditure remains disciplined, with AUD 8.9 million spent over the last two years.
Net finance costs, mostly interest, were AUD 9 million, not including any cash interest on the convertible notes. Net financial debt, excluding the AASB 16 leases and the convertible notes, was repaid AUD 6 million during the period, and as noted earlier, cash payments on the notes became payable this year and are treated as part repayment of the fair value. To recap, group EBITDA are up 22% to AUD 51 million. Dairy and Nutritionals continues its earnings recovery against difficult global conditions, not yet cash flow positive, but we remain focused on execution. Another record result for our plant-based milk segment, with a year of significant activity. Key strategic initiatives launched at the same time as maintaining sales and margin momentum. All in all, a reflection of a disciplined approach to executing against our strategy.
With that, I'll hand back to Michael for some further remarks.
Thanks, Pete. We'll be available also to take questions through the Q&A function in the webinar, so please post your question, and we'll respond verbally to any relevant question that is posted. Moving to slide 20. I'd like to talk further regarding our strategy. We developed our strategy to drive shareholder value. We are focused on developing high quality and innovative dairy and plant-based products to meet the different nutrition and taste needs of customers and consumers across life stages. As many of you are aware, we have five key strategic pillars that we focus on, and they haven't changed. These five fundamental pillars remain consistent with the strategic priorities outlined previously. The outcomes make it clear that we are concentrating on the appropriate areas, and these will steer the direction of the business. The priorities remain consistent as we continue to transform and accelerate our growth.
I want to bring your attention to a few priorities. Build dairy into a profitable and growing business. Invest to strengthen and grow MilkLab brand, including investing to accelerate global market expansion. We have aspirations for MilkLab to become an international brand in the food and beverage sector. We want to embed Noumi culture and values, develop future growth platforms based on emerging consumer trends. These priorities will assist in driving shareholder value. In slide 21 is our strategy for the plant-based milk segment. We are continuing to grow MilkLab in the domestic market as we build on our relationships with our distributors and retailers, but most importantly, our baristas in cafes and in-home. Our focus areas are very clear. We'll accelerate our investment in marketing to strengthen the brand equity of MilkLab.
Our big opportunity is to concentrate our efforts and grow in key international markets with attractive demographics and strong coffee cultures, where we can benefit from the skills and experience we've gained from the establishment of MilkLab in Australia. We have a select number of key strategic markets where we have distribution agreements locked away with partners, who work together with us to deliver growth. This will be supported by innovation, as we ensure our products work well for all beverage occasions. We've recently developed formulations that will work well in cold applications that suit the international market. MilkLab is a brand that we are proud of, a brand that originated and we developed in-house, and we've been very systematic in building the reach and the value of the brand, and it has a great future.
We'll build on further improvements that we have gained in the dairy segment. We'll continue to work with our suppliers in providing a sustainable platform for investment along the supply chain. Moving dairy nutritionals in a growth phase, as mentioned earlier, we want to continue to build on the momentum of previous years of investment. We've been able to show improvement in dairy long life business against the headwinds that we have faced. We're investing to develop value-added dairy innovation across core platforms of liquid milk, cream, and protein. We continue to focus on opportunities in markets seeking higher specification lactoferrin, and there are opportunities to expand into new products and applications in new markets. As we benefit from operational efficiencies and improvements, we're ensuring that we are prepared for the expansion in the international markets, as we see early signs of recovery.
The sports and wellness nutrition market continues to grow. We are increasing the activation within the consumer nutritionals portfolio, together with an updated range, building on our brands, innovation, and operational capabilities. Vital Strength during last year has grown 20.9%. We are focusing on the controllable elements. Moving on to slide 23. Our ESG strategy is brought together in our integrated Healthier Tomorrow plan. This plan was released in 2022, following consultation with the board, suppliers, business partners, and our own team. Our ESG strategy is integrated across our value chain, from dealing with our supply partners, to manufacturing, to delivery of our products to our customers. We are continuously improving processes to meet or exceed our ESG targets. The annual report that was released today, we have detailed our progress, and I'd like to update on a couple of our achievements.
We set a goal to have over 50% of our packaging from sustainable sources and/or recycled. This target has been met. We've worked closely with our dairy farmer suppliers to have 100% compliance with our food safety program. This target has been met. We've been aiming to have 100% of all Noumi-branded plant-based milks with added calcium by the end of twenty twenty-five. We're currently at 88%, with two more products under development. As you can see, we are deeply embedding the ESG practices across all parts of our business, but we'll continue to look for opportunities. In terms of outlook, we do still remain cautious on global conditions and also consumer demand due to cost of living pressures. We're mindful that global conditions for dairy are creating issues for all Australian producers.
While these factors can't be ignored, we are sticking to the strategy. Our portfolio operates across a diverse range of channels, offering choices to all consumers, however they want to engage with us. In plant, we are growing in range, channel, and geography. We are focused on service, quality, and efficiency. We are doing what's in our control. We are setting up for medium to long-term growth. Just want to check now if there's any questions that have come through? Yep.
There are. Michael, I might take the first one-
Yep.
And you can perhaps take the second one. First question is around the impact of the commodity prices on the business and bulk cream and traded milk sales. So as we indicated, just on the story of price alone, the lower price that we've received for bulk cream in FY 2024 compared to FY 2023 has cost us AUD 7.5 million. I think we called out four at the first half, so three and a half in the second. Now, that's only on price alone, and obviously, the milk price in FY 2024 was higher than FY 2023. So I'm really just making the point in relation to just the selling price.
The second part of the question was around losses around traded milk, and there's a couple of million AUD in the result. That is also the impacts of trading out our excess milk that we've had during the year.
The other question we have here is regarding AMF, and butter prices have been improving in the global market. Are we seeing any signs in the domestic cream pricing following these trends, or is there typically a lag? Generally, what we've seen through those prices, especially referencing back to Global Dairy Trade, there's normally roughly about a six-month lag before you see these coming into the domestic market. There is competition still coming in from New Zealand in terms of that import of butter, in terms of length of contract, but there's normally roughly a six-month lag. But for us, it's focusing on how do we create value within our sector around that cream opportunity that we've got. I'll just wait a little bit longer. There's only those couple of questions here at this point in time.
I'll just wait a short period of time before I just do a wrap-up. So another question we've got here is, "Revenue growth has accelerated in the Q4 of twenty-four in plant-based. Vitasoy has documented issues with production. Do you think this assisted you, or did you see an uplift in customer acquisition in this period through distribution expansion?" In terms of a lot of the growth that we're seeing is opportunities around domestic. As highlighted in our presentation, we did have launch MilkLab into retail. That's been a significant part of our revenue opportunities here for Noumi, but continued brand loyalty that we have around that business as well. All right. With that, I'll turn to wrap up.
I'd like to thank everybody for listening today, and I wanted to reiterate that the execution of the significant transformation of your company, the results we are delivering today are a testament to that. There is still more work to do. We have a clear roadmap. Execution is key. While considerable challenges remain, from increased domestic and international competition to cost of living pressure on consumers, the operating improvements we have been making as a business are now reflected in a more consistent performance that have put us on a clear path to long-term, sustainable growth. Right across the business, including the board, we remain committed to the pathway forward, and we hope this is evident. I want to thank all stakeholders within the business. Our team are instrumental to our success. We would not be here today without them.
I want to thank everyone, every one of them for their effort. That does conclude the formal part of the presentation. I want to thank everybody for listening. So thank you for your time, and hope you all stay safe.