Loaded the relevant materials for the ASX. You can navigate through the slides as you choose, or you can follow up on screen. Questions can be submitted at any time. To ask a question, press on the Q&A icon. This will open a new screen, and at the bottom of that screen, there is a section for you to type in your question. Once you have finished typing, please press Enter on your keyboard. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Slide three is the agenda for today's call. I'll focus on the overview of the results and discuss the key elements of the progress of the company during the year. I will follow with the financial performance for the period.
I will then talk to our strategy, followed by closing remarks and time for Q&A at the end. Key messages for today's call. Once again, we are pleased to talk to the consistent execution of our strategy. The legacy items are now behind us. This means we can and will focus on the growth opportunities for the company. I'm proud of the progress we are making as we execute our plans, but there is more to do. As you will see in the results, FY 2025 represented another period of solid progress against our strategy, with the operating financial metrics moving consistently in the right direction. The improved revenue and earnings are underpinned by our strategy. The delivery of another year of improved adjusted operating performance provides the foundation for Noumi to pursue the significant opportunities before us to drive growth. I'll cover more on this later in the presentation.
As we wrap up our reset, transform, and growth strategy, it is with great pleasure to announce an EBITDA of AUD 57.4 million, up 13% from FY 2024. Our plant-based milk segment is up 1.7%, with an EBITDA of AUD 50.3 million, with healthy margins of 27.6%. The result was driven by MILKLAB's successful expansion into retail. The MilkLab brand has continued growth, with overall plant-based milk sales up 6.7%. For the third year in a row, Dairy Nutritionals has shown further improvement, with EBITDA in this period of AUD 11.1 million, more than doubling compared to the AUD 5.5 million in FY 2024. We have focused on the core, reduced our export volumes where margins didn't make sense. Lactose-free and lowest cholesterol products continue to show growth. Planning is underway for the potential solutions for the maturity of the convertible notes in May 2027.
Slide six has the financial highlights that further call out the operational metrics. The statutory net loss after tax of AUD 150 million includes AUD 112 million for the convertible note fair value adjustments and the previously disclosed non-cash impairment of Dairy and Nutritionals of AUD 50 million. Without these items, net earnings would have been positive. In 2022, we outlined the reset, transform, and growth strategy. This year has seen the legacy litigation matters close that directly involve the company. This means we have completed the reset, delivered significant transformation, and moved the business into the growth phase. Putting this behind us is a critical step in us thinking more about our future. With the Dairy and Nutritionals achieving three years of improved results, it means we can shift our focus to growth. Commodity prices have shown stronger demand, and we've been able to participate with bulk cream commodity prices recovery.
The performance of MILKLAB in retail has been exciting. It has helped grow our revenue by $9.3 million and accounts for 12.2% of MILKLAB's Australian sales. MILKLAB has 16% of the barista segment, with MILKLAB almond ranked as number one in the almond category. MILKLAB hope grew 28.4%, with plant-based milk export sales growing 18.8%. With our focus on growth, there is more emphasis around investment across brand, people, and technology. Innovation will form part of our growth with resources to support plant-based milks and Dairy and Nutritionals segments. Execution of our strategy is delivering results. The team at Noumi are critical to our success. The engagement survey saw an increase in participation, which for the second year running is a great result. This has enabled us to focus more on frontline leadership development programs, with the feedback received underpinning the focus areas.
I'm proud to say that with the focus on keeping everyone safe, we have seen safety measures improve compared to FY 2024, although we missed our own goal for FY 2025. We continue to embed safety across all aspects of the business. During the year, we've made several critical investments in systems as part of our transformation journey. A new ERP system was successfully implemented this year. This was no simple task, although I'm pleased to say it was delivered on time with no significant disruption to our operations. An updated CRM is in the pipeline for FY 2026. The new tools will allow us to continue to embed operational efficiencies. AI will form part of the operation as these tools have embedded features. Other productivity benefits will come as we look to other tools where it makes business sense. Slide 10. I'll talk to our Healthier Tomorrow plan.
This plan was released in 2022 following consultation with the Board, suppliers, business partners, and our 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. In the annual report that was released today, we detail our progress, and I would like to update you on a couple of our achievements. In FY 2025, we were successful in diverting 86% of our waste from landfill. Where feasible and commercially viable, plastic-based packaging will contain 50% recycled content and be recyclable by 2030. Our team is committed to working together to build the health, wealth, and happiness of our communities. During the year, we participated in Are You Okay Day, Australia's Biggest Morning Tea, and many more community events.
We're also proud to have set up a three-year partnership with Shepparton Foodshare, helping regional communities in need. As you can see, we are embedding ESG practices across all parts of our business. We'll continue to look for opportunities. Pete will now take you through this year's financial performance. After that, I'll talk more about strategy and how it is shaping our future plans.
Thanks, Michael, and good morning. Like Michael, I'm delighted that we're able to report more significant progress as we execute on our strategy. Our messages are similar to recent announcements. Our strategy is clear. We're executing more consistently, and as a result, another record result for plant-based milks and a dairy operating result double that of last year's result. We plan this next stage of growth around a set of clear initiatives: the launch of MILKLAB in retail, making MILKLAB an international brand, making the most of a new formulation for oat that was introduced a couple of years ago, and more consistent execution. All of these initiatives are delivering in today's result, and we're pleased with the outcome. As Michael has outlined, we've now resolved our involvement in the class action, and we've called time on the reset phase.
Whilst we're reporting on FY 2025 today, we can also bring a perspective that is more forward-looking. A perspective where we can begin to plan for a longer-term horizon to contemplate the investment we need to fuel our next period of growth. Of course, the biggest landmark in that outlook is the maturity of the convertible notes in May of 2027, which I will talk to a little later. To reflect for a moment on our achievements in FY 2025, overall, our results are continuing to improve. We're becoming stronger, and we're encouraged by our progress. Just before I turn to some of the specifics of the result, just a word on terminology. We consider the adjusted operating EBITDA numbers as being our most important measure of operating performance. It excludes all one-off restructuring such as impairment charges and things like the legacy litigation expenses.
It excludes the fair value accounting adjustment on the notes. This year, it excludes 6.1% that we spend on the new ERP system, which went live in H2, as Michael has mentioned, and is one of the final elements of our transformation phase. Adjusted operating EBITDA is the measure we use. We consider it most useful for investors. If Michael or I just say EBITDA this morning, that's what we mean. Turning to slide 15, I'm pleased to report record group revenue up 1% compared to the prior period. MILKLAB plant sales up 6.7%. Our three key plant-based milks initiatives delivering some gains from incremental changes in dairy and some recovery in commodity prices. Export continues to be an opportunity for plant, but a challenge for dairy.
Adjusted operating EBITDA for the group of AUD 57.4 million is up 13% year- on- year, and this comes on top of the 22% increase we announced last year. In a moment, I'll take you through the highlights of the operating performance and the positive set of improvements we've announced today. In respect of non-trading matters, there are a couple of key callouts. First, as Michael has indicated, the statutory loss of AUD 150 million includes certain significant items. The fair value adjustment on the convertible notes of AUD 112 million and a AUD 50 million non-cash impairment write-down to the dairy business. The earnings table on this slide 14 highlights the fact that before we count the fair value adjustment in the convertible notes and the non-cash impairment, we made money, AUD 12.4 million.
This means that after we take into account normal depreciation charges, normal interest on our financing other than the convertible notes, and even allowing for the AUD 14.4 million we provided for the legacy litigation and other transformation matters, earnings were positive. The second callout is to say that in relation to the impairment charge, you will recall that we put this adjustment six months ago, back in December. At that time, we were concerned about three things: the strength of the then emerging recovery in commodity prices, margins were contracting in long-life milk, both domestically and in our export markets, and we were yet to see the benefit of a range of value-added strategies. Since then, these concerns have abated somewhat, and we've seen the dairy result continue to improve. Accordingly, we see no reason to make any further impairment adjustments at year end.
Finally, as far as the fair value charges on the convertible notes are concerned, these are higher than last year since we're getting closer to maturity. As we previously advised, these adjustments will continue until the notes mature in 2027. More about those in a moment. Now let's move to the detail of the segmental earnings. Moving to slide 16, we're once again delighted with the plant-based milks result, with EBITDA for the period up 1.7% to AUD 50.3 million. It's been another record year for the plant-based milk segments, on top of years of consistent growth, with our strategic initiatives adding to the result. Total revenue up 2.5%. Growth in our key brands, MILKLAB plant sales, up 6.7%. Growth in our range, MILKLAB oat formulation launched a couple of years ago, up 28%.
A solid period for MILKLAB almond, which is the foundation that underpins many of our growth initiatives and which led our successful launch into retail late in FY 2024. Finally, sales up 18.8% in export markets from the targeted initiatives underway to extend MILKLAB's geographic reach. Despite the contribution from the disciplined execution of these initiatives, our second half revenue growth was moderated slightly by a reduction in contract pack volumes. We think we may have seen some pressure from cost of living issues weighing on the consumer in the middle part of the year. Looking ahead, with the legacy issues resolved, we can plan with more confidence and position the plant-based milk segment for another strong period of growth. This will require some investments in our brands, our teams, and our tools, which Michael will touch on shortly.
We are confident that a combination of these investments, the more recent easing of that cost of living pressure for Australian households, and Australians' love affair with coffee is a very strong recipe for the future of our business. In short, another record result, a clear strategy, and a great future. Turning to Dairy Nutritionals, this slide outlines the progress that we've made. Positive EBITDA of AUD 11.1 million, more than double last year's AUD 5.5 million, and continuing the turnaround in earnings that began in FY 2023. The result reflects a solid performance in long-life milk, improvements in lactoferrin production, and some recovery in commodity prices, most notably bulk cream. Sales were highlighted by strong performance of two of our branded products. MILKLAB lactose-free grew by 8.4%, and Australia's Own lowest cholesterol grew by 32.9%.
In long-life milk, domestic sales were up 9.3%, all volume-related, whilst export sales were down 21.7% for the year. This year, export represented just 29% of long-life sales, down from 41% two years ago, as we had strategically decided to pull back on unprofitable volumes in a highly competitive market. There are two important callouts regarding lactoferrin. First, sales volumes rebounded to be up 10% in the year, following improved production efficiency compared to some of last year's disruptions. Importantly, we are only operating around 80% of our lactoferrin capacity as a consequence of the decision to reduce export volumes of long-life milk. Any recovery in long-life sales will also allow us to produce more lactoferrin. Commodity prices for products such as bulk cream have recovered progressively during the year.
Revenue is up AUD 7 million on steady volumes, which means we have recouped most, but not all, of the negative impact we felt from the bulk cream downturn that we reported on last year. In consumer nutritionals, there are some challenges this year with increased protein prices and some supply chain disruptions. However, we continue to invest in the Vital Strength brand, new marketing campaign and products, and New Protein, one of the best protein and supplement retailers by productreview.com.au for the fifth year in a row. Overall, the Dairy Nutritionals result demonstrates a reward for years of hard work in the transformation phase of the strategy and is now becoming a meaningful contributor to earnings. Moving to slide 18, in terms of cash and capital, we have got AUD 1.6 million more cash than we had at June 2024, and we've paid down our financial debt by AUD 12.9 million.
Convertible notes are now carried at AUD 437 million, which, as with other years, is an independent fair value of the notes. In terms of the convertible notes, I want to pause on three important callouts. First, as you will recall, fair value adjustments on the convertible notes have been included in all of our results since the notes were issued in 2021, although the annual adjustments get bigger as we approach maturity. These adjustments will effectively continue until the value of the notes on the balance sheet reaches the redemption value of a minimum of AUD 610 million in May of 2027. In short, the fair value on the balance sheet is a proxy for the present value of the redemption amount. The second callout in terms of the notes is to point out a change in classification to a current liability in the balance sheet from this year.
Normally, liabilities are only current when you have to pay them back within 12 months. Our notes don't get repaid until May of 2027, so they would generally be treated as non-current. During the year, the accounting rules changed regarding circumstances where liabilities, in our case, the notes, can be converted into shares at any time. Even though it is most unlikely that our noteholders would convert into shares in the next 12 months, given current valuation and share price considerations, the mere fact that they can means we have to show them as a current liability. The thing to remember is that this change has no impact at all on our liquidity position. Now for the third callout. Planning has commenced for the maturity of the notes in May of 2027, by which time the noteholders will be owed a minimum of AUD 610 million.
This has not been possible whilst the legacy litigation has been unresolved. However, the finalization of our involvement in the class action means we can now plan for this important event. The opportunity is to review the capital structure so that we optimize the capital structure to support the group's future strategic plans. At the same time, we create liquidity for the noteholders that provided critical capital for the reset, transform, and grow phase. We will have more to say on this as things develop. Finally, in terms of our balance sheet, as we have said before, we do not carry any value in the books for our flagship asset, the MILKLAB brand. MILKLAB has been built from scratch, and it's 10 years old this year, and we consider it to be worth hundreds of millions of dollars, and it continues to grow.
Turning to slide 19, our cash flow performance was very strong. Net cash from trading was AUD 67 million, up from AUD 41.6 million in the same period last year. Now, with AUD 57 million of EBITDA for the year and AUD 67 million net cash from trading, it's apparent that the year had some positive impact from timing differences as well as very strong underlying cash conversion. The big drivers were trade receivables down by AUD 4 million year on year, trade payables up AUD 4 million, including some timing differences compared to last year, and more effective utilization of our data financing arrangements. We are very pleased with our working capital management across the board. Inventory is well managed and in line with last year, and whilst payables are up a little, all suppliers are current.
Apart from working capital, our approach to capital expenditure remains disciplined, with AUD 4.9 million spent during the period on some interesting value-add products, which allow us to improve our lactoferrin production yields and support our NPD teams with their best-tasting lactose-free projects. Their finance, mostly interest, were AUD 18.8 million, not including any cash payments on the convertible notes. With all of that going on, we repaid financial borrowings by AUD 13 million during the period, and we increased our cash AUD 1.6 million. To recap on the financials, group EBITDA up 13% to AUD 57.4 million. Dairy Nutritionals doubled its earnings from last year with commodity prices and a strong focus on value-added opportunities making a difference. Another record result for the plant-based milk segment, highlighted by the effective execution of our key initiatives.
As we look forward, an increased focus on the target investments we plan to make to make our company even stronger, and our capital structure and planning for the 2027 maturity of the convertible notes are now firmly on the agenda. All in all, another period of progress executing against our strategy. With that, I'll hand back to Michael for some further remarks.
Thanks, Pete, for the summary of the financial results for FY 2025. Moving to slide 21, I'd like to discuss our strategy for the plant-based milk segment. Our focus areas are very clear. Investing in brand strength and out-of-home channel to fortify our position as the number one barista almond milk. Enhancing the out-of-home sales team's capability, this is through development and also tools, with streamlining engagement with our customers and baristas. With MILKLAB almond, oat, and coconut available in retail, we will leverage our number one position with barista almond to drive further consumption. There'll be a focus on marketing activities to drive trial and aim to catch new consumers that are looking for premium coffee experience, especially at home. Innovation in new product development and accelerating progress in export markets is also key to our growth aspirations.
Focusing on our key strategic international markets will allow us to make MILKLAB an international brand. These focus areas are aimed to build awareness and increase market penetration and sustain growth momentum in this dynamic segment. The plant-based milk segment led by MILKLAB continues to deliver record results with strong sales and earnings across categories and markets, reflecting the strength of our diversified channel mix. Our targeted international expansion is also delivering strong results as coffee culture grows across Southeast Asia. MILKLAB is widely available in our international markets, with overseas MILKLAB plant sales up 20% year- on- year. MILKLAB is a brand that we are proud of, a brand that originated and we developed in-house. We've been very systematic in building the reach and the value of the brand. With MILKLAB turning 10 this year, it's time to celebrate this milestone, and its future is exciting.
Moving to slide 22. In Dairy Nutritionals, we are building on the improvements we have achieved. Our service and quality have seen further improvements. The Dairy Nutritionals strategy focuses on maximizing returns from milk components to ensure yield and performance is best practice. With commodity pricing strengthening during the year, opportunities exist with new products to leverage our skill set. Lactose-free is a key area for us as consumers are looking for better tasting products. Other products such as long-life cream also present opportunities for us. Leveraging the health benefits of PUREnFERRIN lactoferrin will play a role as we continue to build on the investment of our lactoferrin plant. Reshaping the export long-life milk portfolio has been and will continue to be pivotal in delivering returns. Innovation will be key to bringing margin growth to the company. The consumer nutritional product range is set for further refinement.
The demand for quality protein remains firm, and we are seeking to position ourselves with our three brands: Vital Strength, Crankt, and New Protein to generate positive returns. These initiatives aim to enhance product value, expand market reach, and strengthen our competitive position in both domestic and international markets. The Dairy Nutritional segment has continued its three-year turnaround in challenging industry conditions and is now delivering more consistent operating results. In terms of outlook on slide 23, with the legacy issues resolved for the company, Noumi will be focusing on the investment in the MILKLAB brand for longer term by building on successful initiatives underway, including marketing investment to support expansion into new channels and product development, as well as expansion into select overseas markets.
Key transformation projects in the Dairy Nutritional segment will continue in FY 2026 with the aim of maximizing yield from milk components and focused on value-added opportunities. Noumi has commenced planning around potential solutions for the maturity of the convertible notes in May 2027. Addressing the notes, which will have a minimum redemption value of AUD 610 million at maturity, will ensure Noumi establishes a capital structure that supports strategic plans for future growth opportunities. Noumi is confident that the improved operating and financial performance it has achieved will be reflected in a recapitalization outcome. I'd like to reiterate a few points to summarize this morning's call. We are focused on service, quality, and innovation. In plant, we are growing in range, channel, and internationally. Dairy Nutritionals is now making a significant contribution to earnings.
With good momentum and legacy issues behind us, we are confident to invest for the longer-term growth in Australia and overseas, focusing on key strategic markets and at the same time reinforcing the strength of our flagship milk brand in the out-of-home heartland. I'd like to thank everybody for listening today, and I wanted to reiterate the execution of this strategy of your company. These results are a testament to that. Right across the business, including the Board, we remain committed to the pathway forward. I want to thank all our stakeholders within the business. Our team are instrumental in our success. We would not be here today without them. I want to thank everyone for their efforts. That concludes the formal part of the presentations, and we'll now take questions from callers. As a reminder, questions can be submitted by pressing on the Q&A icon.
This will open a new screen. At the bottom of that screen, there's a section for you to type in your question. Once you have finished typing, please press Enter on the keyboard. If you would like to ask a verbal question, please type that you would like to request a verbal question, and we will unmute your line when ready. We do have a number of questions that have come through, so I'll read out the question. The first one is from Garth Francis from MST. Good morning, Michael and Peter. Plant-based revenue was slow in the second half. Sales were down 4.8%. Looks like it was more of a factor in the out-of-home versus the retail channel. Can you provide more color on the growth and your comments around investing in the sales team to drive growth? I'll let Peter answer.
Thanks, Michael. I gave a little bit of color, I think, during my remarks in relation to that question. There was a little slowing in out-of-home, and as I said, we're attributing that to a cost of living issue because it was kind of weaker in the middle part of the year and has picked up a little as we've seen some interest rate relief and the like from a cost of living point of view. Also, within retail, you've got some, as I indicated, some contract pack or private label business that contracted slightly in the second half, and that's probably masking the fantastic performance out of MILKLAB in retail that we're very pleased with. Finally, the other thing I'd add, Garth, would be that you're also lapping a little bit of last year MILKLAB in retail in the comp, so it's a little harder to chase that number.
Andy, could you please unmute Garth Francis' line so he can ask a question?
Good day, guys. Sorry, I jumped in with the typed questions before I understand I could ask in person. Thank you for taking questions and thank you for providing the color today. Just in terms of that milk brand export market growth, you mentioned a few opportunities, and I think you've called out South Korea, Indonesia, and Thailand. The growth that you're expecting, is that in those current markets, or have you got new expanded markets that you're also looking at penetrating?
Yeah, thanks, Garth. That's a good question. As you would have noted in our presentation or in the annual report that was released, we are in roughly 24 countries with our brands, but our strategic focus is on those three core markets. We see growth in generally all of the markets, but we are focusing on building the brand in those three markets: Indonesia, Thailand, and South Korea. We'll see growth across a number of the international markets.
Terrific. In your outlook statement, you mentioned value-added product opportunities for Dairy Nutritional. Can you just give some color on those, whether those new product opportunities or value-added are in the domestic or export markets, and you could just maybe provide just a little bit more detail on what that might look like?
Yeah. There's a mixture there, Garth, around what is domestic and what will go into the international market. Generally, in Dairy Nutritionals, they do cross both areas, but we did mention lactose-free products and also the long-life cream. They're two products that do have reach in both domestic and the international market, where the long-life cream is generally more of an international market. MILKLAB lactose-free is a well-performing SKU, especially in the out-of-home channel in Australia. Continued refinement around the taste profile is important as consumers are looking for better-tasting products.
Michael, I might just add that that sort of umbrella of value-added initiatives also is reflected in some of the modifications we've made, some of the CapEx we've made around our ability to capture more yield out of our more lactoferrin yield out of our milk throughput, and also the way we have approached bulk cream. Not all of that improvement that we've seen in bulk cream is attributable only to the commodity price. We have had, we've adopted a very much more active sales agenda, if you like, in terms of maximizing the value of our commodities. It's a bit of a catch-all for quite a number of initiatives.
Terrific. One more, if I can, just before joining the queue again. The farm gate milk pricing obviously plays an important role in profitability of Dairy Nutritionals. We noticed that some of the supermarkets have moved on fresh pricing. Do you think that will allow for pricing? What do you see for pricing in the long-life milk and also in your plant-based milk divisions as a result of that?
The farm gate price did strengthen this year, hence why the price has moved on shelf in retail. We do have the ability at certain times of the year around certain cost movements around raw material increases. Hence why we've seen that price change on shelf. In terms of impact across the long-life milk segment, I think depending on the use, there is a general consumer that will either buy long-life versus fresh. I don't think there'll be a significant change in behavior based on the price changes that we've seen in retail. In terms of the plant-based, we don't see any changes around farm gate milk price impacting that. On the same response there, generally there are an ability for us to talk with our customers there around any price changes that we do there.
As has been highlighted over time, there is promotional activity that's probably driving some of those behaviors around consumers. All right. Thanks, Garth. We do have another written question here from a Journey team, which is, given that the free cash flow and the cash reserves do reach the convertible note total value, what will happen to the notes when it reaches maturity in 2027? How will they be paid off?
Thank you for that question. The maturity of the notes is almost two years away, and we've been very clear that our planning is well underway in terms of dealing with that maturity. It is a AUD 600 million refinancing that is required for those notes, and we're not really going to sit here today and speculate on what the right approach may be. Suffice to say that we'll be working hard to make sure that we get the best possible outcome for all of our stakeholders. We also recognize that a very important part in a successful refinancing of those notes is the improved financial performance that the company has been able to achieve over the last couple of years.
All right. We don't have any other questions online. Thank you very much, everyone, for joining the call. It's really a pleasure to be able to present these improved earnings that we're seeing across the business, which are a testament to the strategy that we put forward in 2022. Thank you all for joining the call, and I hope you stay safe. Thank you.