Past 11 o'clock, I'm going to open the meeting. So for those of you who don't know, my name is David Hearn, and as chair of your board, I have the privilege of chairing this annual meeting for the fiscal end in June 2023. On behalf of the board of The a2 Milk Company, I'd like to formally welcome you, our shareholders, both in the room and online, to the a2 Milk Annual Meeting. I'm satisfied that in accordance with the constitution of the company, a quorum is present, and I would therefore like to declare the meeting formally open. First of all, let me please introduce the company's directors. On my left, we have the following directors: Pip Greenwood, who is the chair elect, and will, at the end of this meeting, take over as chair of your company. David Bortolussi, our Managing Director and CEO. Kate Mitchell.
I'm just skipping over David Muscat, I'll come back to. Kate Mitchell, who's at, our latest, new, newly joined director, whose appointment you're going to be confirming later today. Warwick Every-Burns, Sandra Yu, followed by David Wang. And then in addition, we have David Muscat, sitting here in between David and Kate, who is the Chief Financial Officer, and Jaron McVicar at the end, the bouncer at the end of the stage there, to make sure nobody rushes up and, who's our Chief Legal Officer and Sustainability Officer and Company Secretary. Also joining us today from, are representatives from the company's legal advisors and our auditor, Ernst & Young, and we're grateful for their presence. We're also accompanied by most of our Executive Leadership Team here in the front row. We have Yohan Senaratne .
We have Eleanor, who is the Managing Director of our International Business. We have Eleanor Khor, who's the Managing Director of ANZ Business and our strategy overall. Xiaopan Zhang, our Chief Supply Officer, Edith Bailey, our Chief Marketing Officer, Amanda Hart, our Chief People and Culture Officer, and Andrew Clarke , the longest-serving member of the executive team, who is our Chief Scientific Advisor. So with the introductions over, I can say we have received no apologies in advance of this meeting. So I'd like just to draw your attention to a couple of housekeeping matters before we get fully underway. Because some people may be using their mobile phones to vote with later, could I please ask that everyone checks, all of those who are attending today, check your phone to ensure that they are switched to silent now.
The agenda for the meeting is shown on the slide here. I will make a few short introductory remarks, after which I shall ask David Bortolussi, our CEO, to address the meeting with the important review of the year past. We will then proceed to the formal business of the meeting and any general business as outlined in the notice of meeting, which has been circulated to all shareholders. Unless there are any objections, I would like, I would propose that we proceed on the basis that the notice of meeting is taken as read, and the notice of meeting and the annual report, for those that wish it, are available on our website. So if there are no objections, we will proceed on that basis.
I'd also like to inform the meeting that we have 1,095 valid proxies have been received, representing more than 407 million shares, which is about 56% of the total number of votes able to be cast at the meeting. The minutes of the last annual meeting, held on the eighteenth of November, 2022, have been signed by me as the chair of that meeting, as a correct record of those proceedings. So with those introductions over, I'd like to make a few short remarks before I hand over to our Chief Executive for his review of the business. I am proud to be able to report that we've delivered another strong result in 2023.
This is particularly pleasing, given the very challenging macroeconomic landscape and the general headwinds which we faced and continue to face in our key markets. I also want to acknowledge upfront that we understand how the recent share price decline has caused frustration among shareholders, as well as for us. I want to assure you that we are doing everything we can to continue to drive this business according to our strategy to deliver long-term shareholder value, and I want to convey to you my personal and the board's confidence in the actions that we're taking to deliver against those objectives. Our business has demonstrated an unwavering commitment to executing our growth strategy, delivering strong results and several important achievements in the areas that we can control ourselves.
In fact, almost all of the measures of the business performance that are in our hands have shown significant improvement, such as IMF brand share in China, brand awareness and attribute scores, and continued distribution expansion. All of these measures also remain in an upward trend. As a result of these important gains, I'm confident in the business's continued growth in the years ahead. I'm a great believer that if you do the right things for long enough, consistently enough, in the end, the rewards will come, and the share price has a life of its own, and we are responsible for running the business, and I'm pleased to say the business is demonstrating the trajectories we need.
I want to highlight that despite the challenging macroeconomic environment and the market conditions, the strong financial results we delivered in 2023 were in line with our medium-term ambitions that we've set for the business. The results were underpinned by our strategic China label infant milk formula brand, which delivered yet another year of double-digit growth in a market which showed double-digit declines. That is an extraordinary performance, if you think about it. This growth lifted our China label sales to over NZD 500 million in revenue across the total year.
In fact, our China and other Asia segment, which includes our China label business, along with sales in the English label channels of cross-border e-commerce and offline to online, reported sales of over NZD 1 billion in New Zealand currency, representing year-on-year growth of 38%, and nearly now 2/3 of our overall sales for the group. During the year, we also achieved a number of important regulatory milestones, the most important of which, and the highlight of, obviously, was receiving the re-registration of our upgraded China label milk formula product from China's State Administration for Market Regulation in June 2023.
The achievement of this re-registration was an enormous team effort over a number of years, and I would like to acknowledge here the support we received from SAMR, the Chinese regulatory body, New Zealand's Ministry for Primary Industries , our strategic partners in China, China National Agriculture Development Group Company, and China State Farm Agribusiness, and our manufacturing partner, Synlait, and its major shareholder, Bright Dairy, throughout the process. All of these players, in addition to our executive team, were vital in securing this re-registration, which is the core of our business. Just during fiscal 2023, significant progress was also made to further bolster the executive leadership team. This included the appointment of Dave Muscat as Chief Financial Officer and Xiaopan Zhang as the Chief Supply Chain Officer, both important roles.
The role expansion for Eleanor Khor, as now Managing Director of our ANZ business, as well as strategy, which she retains, and Kevin Bush, who moves from the Australian role to take on the role of Managing Director, United States. In addition to the strong operational and financial performance, we also undertook an important capital management activity, completing the NZD 149 million share buyback program during the year. Given our strong balance sheet and the amount of net cash that we're holding, it's entirely reasonable for shareholders to want better understanding of how we intend to use that capital, and also for shareholders to want to better understand the prospect and potential timing for any further capital returns, including dividends.
Our capital management framework continues to prioritize investments in growth initiatives and maintaining the balance sheet flexibility ahead of shareholder capital returns. Our immediate priority for capital is to drive the transformation of our supply chain by expanding our China label registered market access through additional registrations and better utilizing our capacity at Mataura Valley Milk through additional investment in our capability there. When we acquired MVM in 2021, we indicated at the time that we would also need to invest in a blending and canning solution and associated infrastructure on that site in order to realize the full benefits of that acquisition. At the time, we indicated that we intended to build our own blending and canning facility. Since then, we've developed plans for such an investment.
However, we've also considered other options, such as a commercial agreement or the acquisition of a blending and canning facility already existing in New Zealand, China, or other markets, to accelerate our ability to gain potentially additional China label registrations. In the interim, we've also established additional relationships with partners in New Zealand to provide blending and canning services to accelerate the utilization of MVM, as we consider the best option for deploying our capital to invest directly and expand the capability of our supply chain, which is essential to the long-term strategic security of this business.
We believe it is prudent for the company to first solve this supply chain transformation to set us up for future growth in the future, for further growth in the future, and then to consider, with the remaining capital, the most appropriate mechanism to implement further capital returns to shareholders. We are not in a position today to provide a full update on this. I trust, however, that shareholders will understand that while we're working hard on this objective, we are not quite ready to outline our plan in further detail. We're still evaluating these many complex options carefully. I assure you that this is a strong focus of the board and the management team, and as soon as we can, we will provide further details.
I know that a number of shareholders have also, quite rightly, I might add, asked why, with the recent share price decline, and at the same time having such a strong balance sheet, why are we not committing to yet another share buyback program? In addition to what I've already outlined, in terms of our firm belief that we need to invest in supply transformation first, we are also somewhat constrained in being able to undertake another meaningful on-market buyback, given our limited available subscribed capital, which was utilized in the last buyback. Rest assured, however, that we will continue to make a disciplined assessment of the potential to return capital to shareholders by any means appropriate, and we'll take the first appropriate option to do so.
Moving now on to another topic of interest to our shareholders, the topic of board renewal, which has also been a strong focus over the last couple of years. During the year, we delivered on succession plans for long-serving directors and announced several new appointments. As we announced at our last meeting here in November 2022, I will step down as a director and chair of your board after almost 10 years, and Pip Greenwood will replace me as chair of the board at the end of this meeting. During the last fiscal year, David Wang and Kate Mitchell were both appointed as directors. David was elected by shareholders at the last annual meeting, and Kate is seeking election at this meeting today.
Kate has also taken on the important role as Chair of our Audit and Risk Management Committee, replacing Julia Hoare, who stepped down earlier this year. I would like to take this opportunity, on behalf of my fellow directors, the company, and all of our shareholders, to again thank Julia for her service to the a2 Milk Company over many years. Julia was an outstanding director, and we will miss her greatly. I would also like to extend my gratitude to all my fellow directors for their efforts and significant contributions during this year, and in fact, all the years that we've worked together. At our last meeting, we also announced that the board would be reviewing the Chief Executive Officer's remuneration framework.
As a result, the short-term incentive plan structure for the CEO in FY 2023 included a percentage of the deferral of that bonus away from cash. In today's meeting, the board is also voluntarily putting the CEO's FY 2024 long-term incentive grant to shareholders for a vote on an advisory basis. On behalf of the board, I would like to sincerely express my gratitude to David Bortolussi, our managing director and CEO, for his leadership and impactful contribution, which has been immense through a period of particularly challenging time for our company. I extend my thanks and gratitude to the whole ELT team, and indeed every member of the a2MC team in all of our regions, for their contributions this year in such tough times. Reflecting on a decade for me at the a2 Milk Company, it has been an extremely extraordinary journey.
The company had revenues of just over NZD 100 million and generated profit of less than NZD 5 million when I joined less than 10 years ago. And you know the numbers this year, which are, you know, in excess of NZD 1.5 billion and profits of NZD 200 million +. I know that the COVID-19 period and the current downward phase that almost all of the world's stock markets are facing have been tough, particularly for you as shareholders. And your board is determined to see the company through these tough times, stronger and more ready to grow again in the future. But in all this, it is worth just reminding ourselves of just how far we have come.
Despite these short-term setbacks, and I believe firmly that they are short-term setbacks, and the confidence that these results should give all of us, that the future for this company and its shareholders will surely be brighter again in the future. As the pioneer and leader of the A2 protein category, we have transformed from a fresh milk business in Australia to a global nutritional dairy products company and developed a leading brand in China, the largest infant milk formula market in the world. In FY 2023, we embraced our refreshed purpose to pioneer the future of dairy for good and our vision to create an A1-free world where dairy nourishes all people and our planet.
These guiding principles, now living, are now living through the business on an everyday basis, guiding the company to execute our goals and thrive to seize additional market opportunities more effectively in the years ahead. Your board and the executive leadership team are committed to the company's purpose and vision. As demonstrated by the achievements thus far, I am confident that the company will continue to adapt, pivot as necessary, and work through future challenges to be successful. We've achieved a great deal together over the years. That is not to say it's all been easy, and certainly, we face significant challenges. But as I look back on my ten years as a director and chair of this great company, I recall many of the challenges, but I also reflect fondly on many of our achievements.
My time with The a2 Milk Company has been one of the highlights of my career. Indeed, it's been my privilege and my honor to have been a director and chair of your company throughout this transformative period. At the end of the meeting today, as I said, I will hand over the reins to Pip Greenwood as our incoming chair. Pip is well known to many of you. She is an outstanding director, and I'm confident that she will lead the board and the company to even greater success when I'm out of the way. Finally, I'd like to thank you, our shareholders, for your continued support. I'd like now to invite David Bortolussi to present his address. Thank you.
Thank you, David. Good morning, everyone, and thank you for joining us, particularly those here with us in Auckland today. Thank you for making the effort to be with us. I really appreciate it. It's my great honor and privilege to be addressing you at my third annual meeting as your Managing Director and CEO. To start with, I also want to say that I understand that our shareholders are disappointed with the company's share price over the last year. So am I, and so is your management team. As David Hearn noted up front, I want to assure you that we're doing everything that we can to drive growth in our business and to create shareholder value.
So before I get into the detail of my presentation, I wanted to step back and share with you a few high-level thoughts on the company's performance and future ahead. Firstly, the context that led to a2's extraordinary growth up to FY 2020 has changed materially from a consumer, channel, and a competitor perspective... COVID-19 had a substantial impact on our business in FY 2021, disrupting particularly our cross-border English label business, which was our largest and most profitable business. Since then, we've been working hard to return our business to growth and have taken many actions and achieved a lot over the past couple of years. In particular, we've delivered double-digit growth in sales and earnings in FY 2022 and 2023. We've addressed channel inventory levels in infant milk formula, or IMF, as I'll refer to it now.
We've refreshed our growth strategy and laid out a plan to get to NZD 2 billion in sales over the medium term. We've renewed our ELT, executive leadership team, with all members either new to role or new to the company. We've re-registered our China label product and extended our China strategic partnerships. We've increased brand investment and achieved new highs in brand health. We've reshaped our distribution and achieved record China label market share in-store and online, and improved English label market share as well. We've ramped up innovation and launched new products across all categories and markets. We've increased investment in science and sustainability programs. And finally, we've commenced the transformation of our IMF supply chain.
In most aspects, we're executing extremely well, and I couldn't be more proud of what our team has achieved, particularly in our core IMF market in China, where we are one of the top share gainers in a fiercely competitive market. The key challenge for us and our competitors is that the IMF market in China has declined significantly, being down double digits in FY 2023, essentially due to the cumulative impact of fewer newborns and lower market pricing, which in combination is a significant headwind. These category issues, coupled with the challenging macroeconomic conditions, global geopolitical concerns, and capital markets dynamics, have weighed heavily on our share price. Notwithstanding this backdrop, we have a significant opportunity to grow our business and create shareholder value going forward in three main areas. Firstly, the IMF category in China is still over $30 billion at retail.
We have a 5%-6% share, and it's our biggest growth opportunity. Secondly, we have an exciting pipeline of innovation projects in our core IMF business in kids, adult, and seniors nutrition, liquid milk, and other adjacencies. And thirdly, we have growth opportunities in other markets that we're working on, which would ideally leverage existing products into new markets. I genuinely believe that A2 has the right strategy and a great future as market conditions hopefully stabilize and we execute on our strategy. I hope this provides a little bit more context for reviewing our FY 2023 performance, which I'll now move on to now on the next page. FY 2023 was a big year for the company, and we were pleased to report that our result was in line with guidance, delivering double-digit revenue and earnings growth.
The result was driven by strong growth in our China and other Asia segment. Sales increased by 38%, and we achieved record market share in China label IMF. In the past year, we stepped up marketing investment by $30 million - $260 million, which was a record level of brand investment for the company and achieved new highs in our China brand health metrics. Total IMF sales grew by over 8% in a market that declined by 14%, which is a remarkable achievement, resulting in A2 being a top three share gainer overall in the market, in China label and English label for the year based on Kantar data. Of course, as a key highlight for the year was the successful re-registration of our China label IMF product by SAMR, which we're very, very pleased about.
Moving to slide eight, which summarizes our financial results for FY 2023, and improvement over the past two years. Revenue for the year was NZD 1.59 billion, up 10%. Earnings before interest, tax, and depreciation and amortization, or EBITDA, was NZD 219.3 million, up 12%, with an EBITDA margin of 13.8%. Net profit after tax attributable to owners of the company was up 27% to NZD 155.6 million. Our earnings per share was up 29% to NZD 0.212, and our closing net cash position was NZD 757 million, which was after completing a NZD 149 million on-market share buyback during the year. Moving to the next slide. This slide highlights a significant change in our business mix since 2019.
You can see in the charts on the right-hand side, our IMF sales composition has evolved from 16% China label and 84% English label in FY 2019 to an equal 50/50 split in FY 2023. From a geographical perspective, the revenue recognized in China has grown from 32% in FY 2019- 63% in FY 2023, driven by growth in our China label IMF business and our cross-border e-commerce, or CBEC, sales in English label IMF. Moving to the next page. Despite the challenges we've experienced in the market, we've achieved a lot in FY 2023, with many highlights called out on this page, some of which I mentioned in the beginning, particularly in relation to brand health improvements and market share gains.
What I didn't mention before are the many operational achievements in our IMF business in areas such as distribution, channel, inventory levels, product freshness, early stage share, market pricing, et cetera. There's lots of underlying improvements in our business health.... We're also very pleased to extend our strategic partnership with China State Farm and CNADC Group, and to accelerate our embryo utilization with China Animal Husbandry Group. In the U.S., we achieved FDA enforcement discretion to import IMF product and progressed our long-term FDA approval, whilst also reducing our operating losses in the business. And from a sustainability perspective, we advanced our programs significantly, which I'll come back to shortly. Moving to the next slide. In terms of China label brand health, sorry, China brand health, our significant investment in marketing in FY 2023 and changes in approach have continued to translate into new highs in all metrics.
We have an incredibly strong brand in China, with our brand used most often or loyalty metric in IMF increasing to 16%. In addition to strong brand health, our growth strategy is driving significant China IMF market share increases. We delivered growth in our market share in China label channels in FY 2023, and our share in mother and baby stores, or MBS, increased to 3.4%, up from 3%, and our share in domestic online, or DOL, increased to 3.3%, up from 2.5%. This slide also shows that our share in English label channels recovered, with our share in CBEC increasing to 22.6%, up from 19.4%, and our share in the combined O2O and Daigou channel increasing to 20.8%, up from 19.5%.
Overall, our performance has resulted in a2 becoming a leading share gainer in FY 2023. This slide highlights the market share improvement for major IMF brands in FY 2023 versus the previous year. The gray bars on the chart are domestic brands, and the turquoise or aqua color represents international brands such as a2, which we've also highlighted there as well. You can see that in the MBS and DOL channels, we were a leading share gainer over the year, top three overall. This is important as we continue to drive towards our ambition of being a top five brand in China IMF. Our achievements in FY 2023 were all against the backdrop of very challenging IMF market conditions in China.
As we noted back in August, this has been mainly driven by the cumulative impact of a lower birth rate in China, as well as the market-wide transition to new GB registered product, which has been an extraordinary challenge for the market overall, with all brands having to phase out old product and phase in new product within a relatively short period of time. Sorry, for those of you who are not aware, GB is the shorthand, reference to China National Standards, which for IMF changed back in February of this year. The charts on the left show that the significant market declines in the MBS and DOL channels from July 2021 through to June 2023, and particularly over the past year, with a decline in the ultra-premium segment for the first time.
The chart on the right shows average market selling prices for IMF from the end of calendar 2021 to the end of FY 2023. This highlights the decline in average selling prices in the market, coinciding with the beginning of the GB transition process around Double Eleven last year, as brands started to increase their promotional activity and discounting to clear old inventory. Despite the challenging market conditions, we're delivering on our growth strategy, and we're proud of our achievements in FY 2023, particularly in China label IMF. Moving to the next slide on English label market. It's important that shareholders, especially those that have followed us for several years, to understand how much the English label market has changed since 2019.
The chart on the left highlights how significant the English label market has been impacted by the contraction in the Daigou channel over the past five years, including a further sharp decline in FY 2023 of 39%. This has resulted in the Daigou channel as a proportion of total English label sales, more than halving from 57% in FY 2019- 27% in FY 2023. It also highlights the shift towards the CBEC channel, with more English label users preferring to shop online, which is where we are investing in our execution capability and growing share. This is consistent with our distribution strategy to shift more towards the controlled channels in CBEC and in O2O. That said, English label share in the total IMF market has stabilized at around 15%, and our share in CBEC and Daigou, + O2O channels, improved in FY 2023.
And again, for those who are not aware of the O2O channel, it's the acronym stands for offline to online. It's essentially a drop ship, cross-border model. Moving to the next page. Notwithstanding these market challenges, there are several key segment trends which continue to support our growth strategy. Firstly, our China label products compete in the ultra-premium segment, which now represents well over half the market. Secondly, the continued growth in the a2 protein segment, which has grown rapidly in China label product in particular, now accounting for 13% and 15% of the MBS and DOL channels respectively. Thirdly, brand concentration is increasing, with the top 10 brands continuing to gain greater share of the market and with concentration within that top 10 also increasing. So despite the significant challenges in the China IMF market, we are well positioned for growth going forward.
Moving now to our outlook for FY24. As stated at the time of our results release, we expect China IMF market conditions to be more challenging in FY24 compared to FY23, with a further double-digit decline in market value. Despite these headwinds, we expect to continue to gain market share in IMF, and at the group level, we're expecting low single-digit revenue growth, EBITDA margins to be similar to FY23, and an improvement in cash flow. There is no material change to our FY24 outlook, but I'll provide a couple of updates. Firstly, the launch of our new China label product is progressing well, including inventory, transition, marketing activities, and consumer reaction. And secondly, our Double Eleven performance overall has been in line with our plan. Moving to the next page, shows our strategy on a page.
We first shared this in October 2021, with a few incremental changes since. Capturing the full potential of China IMF is central to our strategy, and we are also focused on driving innovation to capture growth opportunities in other nutritional products, including kids and seniors, and by entering new markets. In FY 2023, we undertook an extensive process to refresh our bold values and standards of behavior, which are included here at the bottom of the page, underpinning our strategy and execution, which has been very well received by our team internally. Otherwise, it remains unchanged and is how we articulate internally and externally, our purpose, vision, goals, and strategic priorities. Moving to the next page. This slide shows our measures of success in executing our strategy, which are a balanced scorecard of non-financial and financial measures.
There have been a number of progress updates since the annual meeting last year that we shared in our FY 2023 results announcement. In the people goal, our team engagement improved from FY 2022 to 2023. In the planet goal, we've continued to make meaningful progress in emissions reduction, animal welfare, and farm environmental plans. Although we've made some progress in sustainable packaging, there's a lot more work that we need to do in that area. Across our consumer goals, we're pleased with our strong China brand health, as previously mentioned, but we're working to improve our household penetration and share in Australia and the U.S.A. Importantly, market share across IMF is in good shape and continues to improve, and we've worked hard to develop our innovation pipeline over the past couple of years.
A lot of work to do to transform our supply chain in IMF and other nutritional products. Finally, for our shareholder goal, whilst we always want to achieve more, overall, we are pleased with the progress we're making towards our medium-term sales and profitability goals, which I'll move on to the next slide. But again, I acknowledge that our recent share price has been frustrating for our shareholders. Back in 2021, we set our financial ambition to grow sales to NZD 2 billion in FY 2026 or later, and to improve our EBITDA margin. We're still on track to achieve our medium-term sales ambition and improve EBITDA margin in the teens with year-on-year improvements, which is tracked in the chart on the left side of this page.
the middle of this page, we provide tracking of how key components of our growth of our business are tracking towards our growth ambition. Our China label business has been the standout performer and is ahead of plan. ANZ and USA sales are in line with plan. Conversely, our English label business has been more challenging than we envisaged when we set these targets back in 2021. We also have more work to do over the next few years to realize the opportunities in other nutritional products and emerging markets, which I'm optimistic about. I'd now like to touch on some additional key highlights from FY 2023. Moving to the next page. As you know, our strategy focuses on realizing the full potential of our China IMF opportunity.
Maintaining market access and continuing to grow our China label business is obviously critical to our strategy, with the domestic registered market accounting for 85% of the total market. After all the work we put into the registration process with Synlait, it was very pleasing to receive approval from SAMR in June of this year. Our new GB product transition continues to be the highest priority initiative for our team in FY 2024. The registration process was supported by our brand strength and market position in China, as well as our strategic partners, which David Hearn acknowledged in his address. Moving to the next slide. We're pleased to update shareholders today that our new China label IMF product has been available in the market since the tenth of October.
You can see images on the left of our new product on our Tmall and Douyin or TikTok flagship stores. We air freighted some of our product earlier for those consumers who wanted to transition to our new GB product earlier, particularly for early-stage users. In terms of the overall transition process, we are managing a soft changeover process, where old product will phase out and new product will phase in as seamlessly as possible in the trade, starting this month after the Double Eleven sales period. In preparation for this, new product commenced shipping to distributors in October, and we're commencing shipments to retailers now. Stage three product will transition first in November, December, with early and late-stage product transitioning in December and January.
We're excited to launch our new upgraded product over the next few months and have a significant marketing campaign planned for December and January, building on the various pre-launch initiatives. While our new China label product has been a key focus and an important, important from an innovation perspective, we've also refreshed and/or introduced a range of new products in other categories and markets over the past year.... The most important new products introduced during the year were our refreshed a2 Platinum IMF range, our new lactose-free milk in Australia, our upgraded a2 Smart Nutrition for kids, and our new full cream milk powder in a tub, and lastly, our a2 Milk Grassfed product in the U.S. on the bottom right of the page.
We'll continue to focus on capturing opportunities, not only in IMF, where you should expect to see important new products introduced over the next calendar year, but also in adjacent categories and new markets. Moving to the next page. Consistent with our growth strategy, our marketing investment has increased significantly. Marketing investment for the group was up 13% in FY 2023. In China, we increased our marketing spend by 19%, with a significant uplift in consumer marketing and a further shift in our mix towards more targeted digital channels. As a percentage of revenue, marketing investment increased by 0.5% to 16.4% for the year. Some of our China marketing initiatives are shown on the right-hand side of the page. Our team has executed some very creative campaigns, increasing our share of voice well above our share of spend.
Our marketing capability and execution really are a source of competitive advantage for our company. Moving to the next page. We're also pleased to have made significant progress against our strategic priority of transforming our supply chain, following the appointment of Xiaopan Zhang during this year as our Chief Supply Chain Officer. Highlights to date include increasing our raw A1 protein-free milk supply with our farming community, completing the insourcing of all a2 whole and skim milk powdered products, commencing manufacturing of Stage 4 English label IMF product at MVM with a new supply partner, undertaking production trials for a new English label IMF product with MVM and another new supply partner. Accelerating MVM's path to profitability by FY 2026 or earlier is a key strategic priority for the company.
As David Hearn noted, we are also exploring M&A, JV, and alliance opportunities to gain additional China label registrations and to accelerate the development of our supply chain. Lastly, and most importantly, in many ways, I wanted to highlight the continued progress we are making towards a2 becoming a more sustainable business. We are determined to pioneer the future of dairy for good, and our efforts in sustainability support our purpose. We've continued to invest to reduce greenhouse gas emissions within our supply chain. Importantly, we are nearing completion of the installation of a high-pressure electro boiler in Southland and completing the full electrification of the MVM site, powered by renewable resources such as hydro and wind, which is a first in the New Zealand dairy industry. We've also commenced an on-farm methane inhibitor feasibility study and are scoping additional studies.
We've already set targets to be net zero for Scope one and two emissions by 2030, and for Scope three emissions by 2040. In FY23, we expanded on these targets across climate and nature. We have also introduced an interim on-farm Scope three emissions reduction target of a 30% reduction by 2030 on an intensity basis. We've also introduced an initial target for nitrogen loss to waterways on an intensity basis. Given our presence across New Zealand, a great deal of the work we've undertaken in sustainability supports New Zealand farmers and the dairy industry across the nation.
We thank our partners and suppliers for their collaboration across a number of projects that have been undertaken over the past 12 months, including our Farmer Grants program, the a2 Farm Sustainability Fund in New Zealand, which is managed by Lincoln University, and a similar program in Australia with Landcare. We also commenced a research partnership with Lincoln University and an initial research project aimed at improving environmental impact on-farm. Finally, on sustainability, we remain committed to making meaningful change in packaging. In FY 2023, we developed a packaging roadmap, a sustainable packaging roadmap, and have plans to include recycled HDPE in milk containers in Australia. So that's it from me. I hope my presentation has provided you with a good summary of our achievements in FY 2023 and our strategy going forward.
I look forward to answering any questions you may have after the formal part of the business today or after the meeting closes, if you prefer. So thank you very much for your time. I will now hand back to our chair, David.
Thank you, David. And I hope that what you take out of that presentation is that despite the strangeness that our share price seems to be weakening at the moment and traveling in the opposite direction, there is real, genuine, sustainable progress being made in the underlying drivers of the business. And in fact, when you consider what the market dynamics are, some of those results are truly extraordinary and a result of the people sitting in front of you at the front row here, not the directors so much, but the team on the ground, who've done a magnificent job. So, I'm a great believer, I'll say something at the end. I'm a great believer that if you keep doing the right things, even in tough times, you will emerge stronger and be more able to take the benefits when the better times come.
So we're going to move now to the formal parts of the business. Before I do so, can I just go through some housekeeping, which is a little tedious, but needs to be done to make sure everybody knows where we are and how to vote. So, as mentioned earlier, we have shareholders attending today's meeting, both in person, obviously, and virtually. Voting will be conducted by way of a poll, in accordance with the NZX listing rules. Those here in Auckland will be able to cast your votes by filling out the form that you will have received at the registration desk on your way in, and which will be collected at the end of the formal part of the meeting.
Those attending the meeting online will be able to vote by clicking the Get a Voting Card box on the online portal, and you can find further instructions in the Virtual Annual Meeting Online Portal Guide that has been filed on the ASX and the NZX market announcement platforms, and is in the Annual Meetings section on our website. You can also vote by using your mobile phone through LinkVote app . If you plan to use your mobile phone to vote, you should already have downloaded the LinkVote app and received a PIN to check in to the meeting from the registration desk on your way in.
Once we tally the votes and the result, the results will be posted on the market announcement platforms of the NZX and the ASX as soon as possible after the meeting, which does mean that we will not be announcing the results of the resolutions at this meeting itself, but very shortly afterwards. That's, that's consistent with last year's practice. Proxy votes. I should just make it clear to you that I've been appointed proxy in respect of approximately 399 million shares, either voting for, against, or open for resolutions one to three, and as indicated in the proxy form, I intend to vote all discretionary proxies where I have been appointed in favor of each resolution. Questions. There will be an opportunity for shareholders here in Auckland to ask questions on each resolution before it's voted upon.
If you're attending the meeting online, you're also able to ask questions, in this case, by clicking the Ask a Question button on the online portal, and further information on this is set out in the Virtual Annual Meeting Online Portal Guide. To ensure that the questions asked online relating to the resolutions make it to me as we go through each resolution, I would ask that shareholders attending the meeting online submit those questions now. I would also ask that general questions from shareholders here in person be put to the board during the last part of the meeting, which is set aside for general business. General questions received online during the meeting will also be addressed at that time. If we're unable to get through all the questions today within the time allocated, we will respond individually after the meeting.
When asking your questions in person, could you please state your name so that we can keep an accurate record of proceedings? And equally, for the questions online, we will note the name or names of the shareholders who submitted those questions. As stated in the notice of meeting, all the resolutions are ordinary resolutions. This means that for such resolutions to be passed, the approval of a simple majority of the votes of those shareholders entitled to vote and voting is required. If there are no questions at this stage on the process, I would now like to move on to the formal business, including resolutions before this annual meeting. The first item of business is to receive and consider the company's financial statements for the year ended thirtieth of June 2023, together with the directors' and the auditors' reports.
The annual report, containing the financial statements and the auditors' report for the 12 months ended June 30th 2023, have been circulated to all the shareholders. So are there any questions specifically on the annual report or the financial statements? So I'm just looking here. This is not one for yet, so that's fine. So there are no questions on this item, in which case, I would now like to move to that resolution, and take that as approved. So the first resolution is the auditor's fees and expenses. So pursuant to the Companies Act, the company wishes to authorize the directors of the company to fix the fees and expenses of the company's auditor, Ernst & Young, for the ensuing year. Are there any questions related to this resolution? No? Fine.
In which case, I'd now like to propose that the directors of the company be authorized to fix the fees and expenses of the company's auditor, Ernst & Young, for the ensuing year, and I put the motion to a vote. Would you please now cast your votes? Thank you. The second resolution is the election of our new and latest director, Kate Mitchell, as I mentioned earlier. As you know, Kate Mitchell was appointed as a director on the first of June, twenty twenty-three, and in accordance with the company's constitution, Kate is retiring at this meeting, and being eligible, offers herself for re-election. Kate is currently the chair of the Audit and Risk Committee. Kate has significant governance experience as a director of both private and public companies. She also has extensive experience in the areas of financial risk management, structured financing, and investments.
Kate has already made a significant contribution to our board, and her insights have been very valuable to the company. I and the board therefore wholeheartedly recommend Kate to you as a director of the company, and we unanimously support her recommendation. I would now like to ask Kate to say a few words about herself.
Thank you very much, David, and good morning to all of you. As mentioned, my name is Kate Mitchell, and I was delighted to be appointed as a director of The a2 Milk Company in June, earlier this year. Since joining the board, I have also taken on the responsibility of chairing the Audit and Risk Management Committee, following on from Julia Hoare, our former director, who made a very significant contribution to the company over an extended period. Let me provide you with a quick overview of my experience. My professional background is in investment banking, as a specialist in risk management, where I held a number of senior leadership roles within global investment banks, including Deutsche Bank, Goldman Sachs, and Merrill Lynch, predominantly based in London. Ten years ago, I moved to New Zealand for family reasons, settling in Christchurch.
In 2015, I co-founded a consulting business advising small and medium enterprises on succession planning, strategy, and financial optimization, subsequently moving into more governance roles. Currently, I chair the boards of the New Zealand Merino Company, Link Engine Management, and I'm also a director of the Heartland Group Holdings Limited and Christchurch International Airport. I chaired the Risk, Audit, and Finance Committee at the Christchurch Airport for the last six years and have recently exchanged that role to chair the People, Culture, and Safety Committee. I also chair the newly created Sustainability Committee of Heartland Group Holdings.
In New Zealand, I'm an active member of the Institute of Company Directors and a member of Chapter Zero in New Zealand, both of which reflect my commitment to the environment, aligning closely to the a2 Milk Company's strategic priorities and our purpose of pioneering the future of dairy for good. I am drawn to ambitious, growth-oriented companies which like to challenge the status quo, so I was delighted to be given the chance to work with the a2 Milk Company, for which that description is very apt. I'm looking forward to bringing my experience in banking, risk management, and governance to a2 Milk, and look forward to working with David Bortolussi and his management team to execute on the many opportunities we have ahead.
I have very much enjoyed serving on the board these past few months and can assure you that I possess the capacity, commitment, and passion to continue serving as a director of this company. I would be very grateful for your ongoing support as I seek election today, and I'm happy to answer any questions you may have. Thank you.
Thank you, Kate. So I now throw the room open for questions, again, for Kate's election. There is one from online. David, are you going to read that out, or do you want me to?
I'll read it out, Director.
Okay.
So the first question is from Stephen Mayne . Could new director, Kate Mitchell, and the chair comment on the recruitment process that led to her appointment to the board? Was a headhunter involved? Did the board, full board interview Kate, and did they interview any other candidates? Did Kate know how, did know any other directors before engaging with the recruitment process? And also, having only joined the board in June, was it a bit rushed to immediately appoint Kate as chair to the important Audit and Risk Committee? Thank you.
Okay. Well, at the risk of saying yes, yes, no, yes, I will say to answer those questions, firstly, obviously a headhunter, an external headhunter, one of the most significant in this field of board appointments, was used for the purpose. A full list of candidates was produced for that, for that appointment. It should be noted that actually, it was very important that we had a locally based New Zealand director for that role, because as part of the constitution of the company as a New Zealand organization, we must have two New Zealand resident directors, so the pool was only New Zealand resident directors. We had a full list of candidates.
The nominations committee, which consisted of Pip, Julia, and myself, interviewed several of those candidates, and we deemed that Kate was by far and away the most experienced and the most suitable for that role, and Kate then met everybody on the board, virtually in most cases, I should say, not in every case. So she met all the directors, and the directors met her. It's very important, I think, that this works both ways. She did not know any of the directors, to my knowledge, before she joined, so there was no insider track, as it were. So, let me just read it. And brought on as the market without relying on incentive scheme. She's certainly not relying on an incentive scheme to build an equity position in the company. No, sorry, it's the next question. Sorry. What are we doing here?
And sorry, the last half of them was having joined, was it appropriate? She was hired—Kate was hired specifically for the role of Chair of Audit and Risk. Kate has already explained the number of positions she's held where that is relevant and her past experience as a banker and in a risk management first. So it was actually part of the recruitment process to find a Chair of Audit and Risk, therefore, it's not precipitate to make her into that role. That was what we hired Kate for. So that hopefully answers Stephen's questions. Are there any other questions for Kate, which she can answer, or I can answer if it's about process? If there's nothing else, then I would like to propose that Kate Mitchell be elected as a director of the company, and I'd like to put the motion to a vote.
Please, therefore, now cast your votes. The next one is the grant of performance rights to David Bortolussi, the Chief Executive Officer and Managing Director. During FY 2023, to further align to recent practices for New Zealand and the Australian executive remuneration, the board reviewed the company's remuneration practices and REM committee, and that is a permanent process to keep reviewing what we're doing to make sure we're in line with best practices.
The board also committed to submitting the CEO's long-term incentive grant for the 2024 plan as a resolution on an advisory-only basis to the annual meeting this year, which is by way of background, the company's LTI plan is designed to reward performance in support of the achievement of the company's long-term growth strategy by targeting profitable long-term revenue and earnings per share growth, which requires appropriate investment. An overview of the key terms and the proposed grants of rights to David is set out in the notice of meeting.
In particular, the earnings per share, compound annual growth rates, and the revenue compound annual growth rate performance hurdles have been determined, having regard to the company's growth strategy and the associated medium-term financial ambition to grow the revenue to NZD 2 billion over the next five years or more from the FY 2021 base, and to target EBITDA margins in the teens with year-on-year improvements. Achieving the FY 2024 LTI plan performance hurdles will require significant market share gains in the company's core infant formula milk business in the China market, which is currently, as you have heard several times, in double digit value and volume decline, as well as a significant improvement in group profitability. So these are by no means easy targets.
The board considers the performance hurdle sufficiently challenging to align with shareholder value creation, but still being motivating for and viewed as achievable by David. I and the board therefore recommend you to vote in favor of this resolution, and we unanimously support this grant of performance rights to David. So again, I'm gonna throw this open to questions from shareholders concerning this resolution. There is one from online, but I just want to check there's nothing in the room first. Okay, then, David, would you read out the one from online, please?
Thank you, Chair. How will this resolution benefit shareholders?
Essentially, the purpose of an LTI scheme is quite simply to motivate the executive who's in receipt of those, to deliver shareholder value for all of the shareholders. And that's done by obviously giving a financial incentive to that individual, but in shares, so that effectively, if the shareholders benefit, the employee benefits. So it is entirely a mechanism designed to create greater alignment between the people who hold the company in their hands, the shareholders and the management. And that's essentially what it's about, and it's as simple as that. Right.
Thank you, Chair. Next question-
Yeah.
- is from Stephen Mayne . Since joining in 2021, could the CEO summarize his past LTI grants as to whether they are on track to vest or lapse? Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? Please don't say, "Look it up in the annual report and through ASX announcements." It's complicated, and the CEO could factually summarize the situation in 60 seconds.
So it should be between David and/or Warwick, who chairs the program. So whichever you want to answer.
I can do it in less than 60 seconds. I was granted... Is the mic working? Yeah.
Yep.
Yep. So I was granted, when I joined the company, I was granted some time-based rights, which vested over two years to assist with my transition. And then I've been granted three tranches of performance-based rights, referred to in the annual report as the FY 21, 22, and 23 performance-based rights. The FY 21 performance-based rights vested this year. The 22 and 23 are still on foot. They're on track to vest, but they're subject to future performance, so the extent of any payout in relation to those depends on our performance. And I have not acquired or sold any shares in the meantime.
Okay. Any other questions online or in the room?
Thank you, Chair. Another question, another from Stephen Maine. Australian investors are used to an annual non-binding vote on public companies' remuneration practices. New Zealand is behind on governance when it comes to this matter, as this is also standard in many other jurisdictions, including the U.S. and the U.K. Given that our CEO resides in Australia and, and we have thousands of Australian-based shareholders, will you voluntarily introduce a non-binding vote on your remuneration practices at the 2024 AGM?
I'm going to ask Warwick Every-Burns, who's the Chair of our People and Remuneration Committee, to answer that.
Yeah. Stephen, what you say is correct. We are a New Zealand company, and therefore, unlike Australian companies, we're not required to put our remuneration report up for a vote. Having said that, you'll note that the company, over the last three or four years, has continued to move in a direction of giving additional disclosures, many of which we're not required to, as a New Zealand company. We have elected, for example, to retain 25% of the CEO's short-term incentive for 12 months. And as just noted, the CEO's long-term incentive is also being put up for a non-binding vote at this year's annual general meeting. We will continue to review the disclosures that we make. We'll continue to discuss, as we do every year, with our significant investment community and proxies.
At the moment, we have no intention of putting our remuneration report up for a vote. But as I said, we'll continue to review our practices.
... Okay. David?
Thank you, Chair. The next question is, there is no disclosure of the performance targets for the CEO. The company has certainly not performed as expected. Why, then, should performance rights for an LTIP be awarded to the CEO for non-performance?
Well, again, I'll ask Warwick to comment on those, but I would just like to question the first comment, which is the company not performed as expected. I think what you have seen from the results of the performance of the business, which is quite separate from the performance of the share price. I would argue that the company has performed according to its plans. So the first point to say is the company has not underperformed its own business plans and profile, but that's a separate point. So, Warwick, do you want to make comments on the rest?
Thank you, Mr. Chairman. The only thing I would add or challenge, I guess, is that we do have very specific hurdles for our long-term awards. They're clearly set out in the annual general meeting, and they're a combination of revenue and earnings per share targets over a three-year cumulative period. And the CEO and other executives, their long-term awards do not vest unless they achieve those performance hurdles. Those performance hurdles are consistent with the growth expectations of our shareholders.
Okay. It's also perhaps just worth also pointing out that the structure of the CEO's targets, and therefore payout hurdles, is mirrored with the entire senior executive team. So it is a one for all and all for one program. So everybody who's in this company operating the business has got the same incentives to deliver the same results, to try and improve the business, which hopefully long term, will be reflected in the value that shareholders ascribe to it. So we are operating a holistic system here. Okay, I believe that's no more questions from online. If there's nothing else in the room, I would now like to propose the acquisition of 690,066 performance rights for Mr. David Bortolussi or an associate named in the notice of meeting, by grant of the company's long-term incentive plan to be approved, and I'd like to put the motion to a vote.
Please now cast your votes. Thank you. That concludes the resolutions, the formal resolutions, to be presented at this meeting, and I thank you for your support. If you're holding a white voting card, please make sure that you've marked your votes on that card now and hold it up for collection by a representative from our share registrar. May I ask representatives from Link Market Services now to collect all the voting cards they can? For those attending the meeting online, voting will close shortly.
As mentioned earlier, the votes will be tallied and the results available on the market announcement platforms of the NZX and ASX following this meeting, which will obviously include all the proxies we've received, which I might just add, are overwhelmingly in favor of the resolutions. So I'd now like to move on to the subject of general business. Thank you all for the questions we've received so far, and we're aiming to conclude the meeting in about half an hour, or less if there are no questions. So it leaves about that for the general business Q&A. If we're unable to get through the questions today, all of them, we will respond individually after the meeting, as I said earlier on. So I'd now like to ask any questions from the floor and online, and I'd start with questions from the room.
If there are none there, then, David, would you like to read out the ones online, please?
There is the one.
Oh, sorry. Is there one? Have I missed it? Where is that?
[audio distortion]
Oh, I'm sorry. You're right.
[audio distortion]
No, no, it includes me, my friend.
You drink too much milk. Gordon Wallace, just shareholder. A couple of things. One was really getting back to the rights for David here. It's not, I think, what we're against you. It's just that this company's been known to give away enormous amounts of these type of rights, and especially one that we went to Australia and was only with us for about six or eight months and wasn't too good at all. But I know you've been past the, how would I say, the hard ball, 'cause it's been a very hard few years and cleaning up, especially the that daigou market, which is obviously was a mess problem. But really, what I was gonna say is to do with Synlait.
You don't talk anything about it much, and yet, if it weren't for them, they're one of your main areas of getting the milk through. You talk about trying to get the South Island one going. You're saying also, are you, that you're looking at other avenues to try... Why is Synlait, to you, not working as well or what seems to be in the press, working out that well? And also, you've got no board directors on that board, have you?
Okay, well, I'd like to answer those at least a little, and maybe I'll offer David the chance to answer as well. Just to be clear, we have built this business in conjunction with Synlait over the eight or nine years, and it has been a staggeringly profitable relationship for both parties. And we are delighted and very grateful to Synlait for everything they've done to help build our business, which has been very important for them as well. So let me be very clear about that. There is nothing but praise and gratitude for what they've done to get us where we are today.... The reason why we recently and announced it recently, why we terminated our exclusivity part of the contract. We have not terminated the contract with Synlait. We still buy all of our infant formula from Synlait.
We are contracted, we've agreed that we'll certainly continue to do so while all of these difficulties that we currently have are legislated or agreed upon, and we're not committed to doing anything. What we have done is that the contract we had with Synlait had a two-way agreement, an exclusivity that we would buy from them, subject to the fact that they provided all the product we needed, called DIFOT in this horrible world of acronyms, stands for Delivered In Full On Time, provided they delivered in full and on time the requirements we gave them. That process worked for many years very successfully.
It is fair to say that in our view, it has worked much less successfully over recent months, and as a result, we're saying simply that the exclusivity part of the contract that went with that commitment has, we think, should fall away. Now, that doesn't mean that we intend to walk away from them immediately. Indeed, we have no plan so to do. Our current ratios of volume with them has not changed, and it won't for several months. So whilst the press may have looked as if there's some enormous change afoot, there is not, and that's very important for us to say.
However, we are looking at what is the best long-term solution for this company, and the thing that we have to bear in mind is that the way that the Chinese regulator operates, perhaps unusually, the regulated license to sell in China is owned not by the brand owner, which is more normal, but by the manufacturer. Now, if you're Nestlé, if you're Mead Johnson, if you're Friso, they have their own factories, and therefore it doesn't make any difference, because their factories hold the license, and they own the factory, so it makes no difference. In our case, because we don't own the factory, it actually is quite significant.
And so the reality is, we are looking at long term, and we've said this for many years, what is the most secure manufactured supply chain that guarantees that you, our shareholders, are never left exposed, where we don't own the biggest asset that drives value in this company? Now, we don't yet know what the answer to that is. We haven't committed to anything. It may involve Synlait, it may involve less of Synlait, part of Synlait, more of Synlait. It may involve somebody else, but we're not in any committed position to do harm to Synlait. We are simply saying it is in our interests, as shareholders of this company, to protect the biggest asset we own, which is the license for our most important brand. So that's what we're busy wrestling with.
That's why the capital management program is under review, because we have to be certain what we think the right answer for you, our shareholders, is. So we haven't canceled any contracts. Synlait is doing all our volume. We'll continue to do so for months to come, regardless of what happens, years to come, probably, regardless of what happens. And, but you need to understand that this issue of how we protect your assets is critical to your long-term value, and therefore is the biggest concern of our board. David, do you want to make any other comments?
Gordon, the only thing, the only couple things I'd add to that is, strategically, we are an outlier in the industry. So if we look at the top 10 infant milk formula companies in the world, of which we just make it into that top 10 globally, we're the only one that doesn't own and control a substantial portion of its manufacturing capability. And the other thing I would add is that, from a growth point of view, when we look at the China infant formula market, we only have one brand and one label, one series of products, which is beneficial in terms of simplicity, but when we look at the competition, they have anywhere between. The market leaders have anywhere between, you know, 10-27, product ranges in the market.
So it limits our ability to you know appeal to different need states of different segments of consumers, and to serve the trade as well as we can. And to gain, and to expand our portfolio, we need more access to China label registrations. Synlait has one registration with us, which is terrific, and I would echo the sentiments of our chair around how that relationship has worked over time. But we need more access to China label registrations to innovate, to fuel our growth. In terms of the last thing, I think part of the question was, why don't we have any directors on the Synlait board? It's not necessarily by our choice, it's just as a minority shareholder, we have no rights to have a director on the board unless we went through a nominations process, like it happens at shareholder meetings.
Bright Dairy controls Synlait with their 38%-39% interest, and it has an unusual constitution around independent directors and Bright-appointed directors. That's why we don't have a directorship or formal role in relation to Synlait, but we have a very close partnership with Synlait. We've worked with them for many years.
It's good to hear that, because, you know, after a while, you don't hear a lot of news, you know, on that side.
Yeah, it's, I mean, it's partly the nature of this, the cancellation notice that we have served, because it's a confidential arbitration process, and in addition to that, our agreement, our supply agreement with Synlait is subject to confidentiality provisions, so we try and respect that, confidentiality.
Thank you.
Okay, a question here from the room, sir?
... John Clearwater, a shareholder from the days when the shares were NZD 0.07 each. I was very happy to hear at a previous meeting that the company was replacing coal as an energy source with electricity. I also heard through the news media that the existing government was putting NZD 5 million towards that transition. My question is, do we still have access to that NZD 5 million or has it gone?
Thanks, John, for your question. So John is referring to our electrification project at MVM, which is just being commi-- It's in the process of being commissioned now. So the total expenditure for that is roughly a NZD 16 million project, of which we have access to. I don't know if we've actually received it yet, because I think it depends on completion of the project, but NZD 5 million under the GIDI scheme here in New Zealand, and to our knowledge, we still have access to that payment. Which is a valuable contribution by the government to that really important program, which is to eliminate the use of lignite-fired, coal-fired boiler at MVM, to replace it with a full electrification there, which is a fantastic project.
Thank you for your question.
You're confident, you're still confident that you will be able to put your hands on that NZD 5 million?
I believe so. I haven't seen anything that would indicate anything to the contrary. There are agreements and binding commitments. I would be, I'd be surprised if... It would only be in relation to the performance and execution of the project, of which we're on track to commission it within a certain timeframe that was required.
Okay, we'll take a question from online, and I'll come back to you, sir, if I may, just to sort them out. David?
Thank you, Chair. It's a combination of questions from online, so we've grouped them together. Why is the share price now so low and there's no sign of improvement? Why is the performance not matching the share price? What are you doing to raise the share price back? Will the chairman and board apologize to shareholders for their part in the 80% decline in share price? And what actions will the incoming chair take to restore shareholder confidence? Thank you.
Okay, well, I'll answer all of those and then leave Pip to be left hanging with the answer. The answer, that's not a fair question to her, so, but we will. I'll deal with the other questions. I know this may sound like a weak answer, but we need to be very clear that we are not in a position to influence the share price directly. The market takes a view on our business and on our management, and on our performance, and most importantly, on our outlook, and then decides what value it delivers against that package. Our job as directors is to make the best of that package, to deliver the best business we can, to create the best opportunities for future growth and future value, and then to communicate those to the market openly and transparently, and then let the market decide.
Now, my view, after having lived in the public market for 30 or 40 years, 25 of which have been as either a CEO or as a director, is that, in truth, share markets are overall not bad valuers of businesses, but they are typically very poor valuers of businesses at a specific point in time. In other words, sentiment, all sorts of things swirl around, and values move about tremendously. But over time, share value will typically reflect the underlying value of the business if you've correctly presented it to the marketplace. And obviously, in cases of, you know, seriously fraudulent presentations and things, strange things happen. But in the event of a proper business, which is properly communicated, the market will respect the value that that business is generating over time.
Now, it's unhelpful and unnecessary for me to say that we believe our business is undervalued. We know that. We bought shares not that long ago at a higher market price, and we thought it was undervalued then. So we are doing what we can, but what we can do is deliver a better business. And to be honest with you, in the face of the headwinds that are facing us at the moment, with double-digit market declines in birth rates... I mean, if you have a 15% decline in the number of babies, it's relatively hard for that not to have a pretty serious impact on the business when you're selling to infants. I mean, it's pretty logical, right?
You know, so the only way we can grow our business in the face of that is to grow our market share. Whereas historically, when we had the great times, some time before, the market was growing at 15% a year. So all you had to do was hold on, and you've got 15%, and if you grew share, which we did as well, you got more than that. So if you look at the things that have been going on in this business and the performance that David outlined, I believe that we, as directors, are doing, you know, all the right things. And in fact, in tough times, you find out who's really going to make the grade. We've invested record shares in marketing. We could easily have said, "We'll try and make a bit more money.
We'll cut our marketing to the bone." We've said the only way to get through this is to grow market share. So we're investing in our brand, we're investing in innovation, we're investing in distribution growth, we're investing in finding new partners in China to help drive into new sectors. We're driving away from the big cities only, where we tended to be five years ago, and we're now driving deeper into what they call BCD cities. I might add that a BCD city is the size of the whole of New Zealand population, just to give it in some perspective. So these are not small places. So we are doing all the things we need to do to drive a business which has got a stronger business base and a better future... Why is the share price low? Well, look at the world markets.
Two things I would just say about the share price. Number one, the whole world share markets are in retreat. Of course, there are individual shares that have done well in this space. That's obvious. I'm not saying every market, every share in the world has gone down, but markets have come off significantly because the world is full of risk and people are nervous. And, you know, people are saying, "Am I sure that these companies will do what we thought they would do?" On the other side, interest rates have rocketed. So now suddenly you can do something with cash and make a reasonable return, because you can put it on deposit and make 5%-6%. Two years ago, if you put it on deposit, you made 0.5%.
Now you've got a world where there's more uncertainty over here, and the chance to keep your money in cash and make at least a meaningful, if not fantastic, return. A lot of people are doing that. The market's view of risk and the future is what's driving our share price. It's also worth just pointing out that if you take the share price of our share price against all our basket of competitors who are competing in the China, local China IMF market, so that includes people like Feihe, who are public markets in China. It includes people like Danone, who have Aptamil, et cetera, et cetera.
Our share price is actually at the top end of the performance of all of those brands, because everybody has looked at the headwinds in China, the geopolitical headwinds, the physical headwinds about the short-term decline in birth rates, and said, "This is gonna be a tough market for a while, and unless you can grow share, you're not gonna make success," which is why we've decided to keep going with our plans. So what is the board doing? We're not going to do. We're not aiming as a board to drive the share price up. That's where you get into real trouble. You start to do things that are not right for the business long term to try and drive the share price, and it will come back and bite you.
What we're doing is continuing to do the right things for the business, and we expect that the share price will finally come back to where it should be. You know, it's not for me or the board to comment on the valuations of businesses, but obviously, we would agree with you. We're all shareholders. I'm still a substantial shareholder. Everybody in the management is a shareholder. All the board are shareholders. We're all disappointed. We all want the share price to go up, but we have to continue to do the right things, and I'm absolutely clear that Pip will continue to do the right things, not the wrong things, to try and give us a short-term stimulus of shares, of share price, which isn't gonna be reflected in the long-term future of the business.
Pip, do you want to say anything?
I think, thanks, David. I think you've covered well the strategy and drive for performance. The only thing I'd add is we've got a fantastic CEO in David and a brilliant executive team to drive that. The other thing I'd like to add is that the board had the privilege recently of traveling to China, which we hadn't done since 2019 because of the pandemic, and we got the opportunity to meet our absolutely outstanding team in China, who I think, as David has mentioned, is growing our brand and market share in a declining market, which is quite an exceptional achievement. So that's all I'd like to add.
The two numbers you need to remember is a double-digit decline in the infant formula market and a 38% growth in our market share, in our market volumes in China this year. I mean, that's an extraordinary performance. So, that's what we're doing to keep the right things happening. Any other questions? Sorry. Yes, sir, we have a question here.
Thank you, Chair. Malcolm Tweed from the New Zealand Shareholders Association. If I might address a question to David. First of all, I want to say, David, well done on the recovery between channels, and I particularly talk about how you've managed to keep your revenue going as the Daigou channel has collapsed, and you can see that in the data quite clearly. I think you've done very well. But I would say, though, that the last three half-year results are showing that infant formula revenue is flat. And I think we need to be cognizant of the challenges that you have going forward to lift it beyond that NZD 550 million per half year.
Last year, I asked a question at this meeting as to whether or not Stage Four represented an effort by the company to move beyond infants into kids. At the time, my question was batted away as playing semantics, not by you, but by another member of the board. I don't believe that it's semantics to say that Stage Four targeted at kids is the right way to describe it. It's clearly a critical part. The reason I say that is because the cohort of infant formulas that you currently sell to through your network of distribution is only 30 million. But the cohort that sits in the Stage Four category is 110 million, if you define that category as going from four years right through to, say, 10 years.
So it's a big category, and I, and I don't see the emphasis nor the passion for Stage Four and however that's represented in your product range. I don't see that coming through in the public domain documentation that we have today.
Mm.
So I'm quite keen to hear from you as to what you're doing rather than just putting an S4 label there with a slightly less expensive formula? There's my first question: What are you doing in that space? The second one is to ask: What's your confidence that the decline that we're seeing in retail prices in China for infant formula, which sit at around about the NZD 74-NZD 75 per 900-gram can, or thereabouts. What's your confidence that that 74 bucks isn't gonna start tracking back towards the 40-45 New Zealand dollar price that the company's achieving in the New Zealand market, and indeed achieving in the Australian market for same product? All right. Because I'm not confident that you're gonna be able to hold those platinum prices or those premium prices at the level they currently are.
Thank you.
Thanks. Thanks, Malcolm. Just in terms of the growth, like, and maybe we haven't communicated this well, and I tried to address part of this in my address. So we definitely need to grow share in infant because we've got a huge opportunity to do that going forward through expanding our portfolio, investing in marketing and execution, et cetera, what we've talked about. But beyond that, we're definitely focused on growing into adjacent categories in nutritional products and other, we call it, kind of macro milk-related products and new markets.
So when we think of the kind of next in adjacencies, we're very focused on transition products through to kids growing years, which includes Stage four, plus other nutritional products in that space, as well as at the other end, which is the senior space, which is a rapidly growing segment. Which, you know, in a way, not surprising, a lot of the nutritional requirements of seniors actually mirror many of the requirements of kids in growing years as well. So. And we're ideally positioned, as are other nutritional companies, to actually tap into that market as well. So in Stage four and what we're doing, we are in the process of actually refreshing and insourcing Stage four English label into MBS with another supply partner.
You may have noticed in the innovation page that I presented, we've refreshed our Smart Nutrition range in English label, which is exactly targeting that segment as well. And later next year, we'll have a range of China label kids nutrition product for those growing years as well, and also the senior segment as well. So part of it you can see at the moment, but part of it's part of our innovation pipeline, which is coming. So it's definitely a priority. Number one priority is infant, and we've got to capture the share there, because it's the biggest growth opportunity, the highest margin product for us, but we're also very focused on kids nutrition and seniors as well, and you'll expect to see more in that space as well.
In terms of your comment on pricing, yes, we've seen, in particular in China label rather than English label, our English label pricing, market pricing, has, improved over recent periods, over the last year or so. As we've gained, you know, more control over our distribution and cross-channel trading, and worked with our distribution partners in the market, we've seen, and, and controlled our inventory levels effectively and allocations, et cetera, among other things, and investing in the brand. We've seen our a2 Platinum range, we've seen the market pricing of that, increase over time. It was below 200 RMB, and now it's above 200 RMB, depending which channels you're in by stage.
We're seeing it across not only in the CBEC platforms, which are most obvious, but also in POP stores and O2O channels and in the Daigou trade as well. It's really important that our consumer average selling prices across the trade kind of make sense to the market, so that all our trade partners have confidence to distribute our brands as well. In China label, one of the charts that I presented highlighted the average price pressure that we're seeing in the market, in the order of, you know, 5% on average over the last, you know, period, 6-12 months, as we've been going through this GB transition period. That's been an enormously disruptive event for the market.
I've never seen, in any category, in any market around the world, the scale of what we're dealing with, where all of the participants in the market, in China label, have had to phase out all of their products and phase in all of the new products. Just doing that in one category, in one market, and even in a niche of a market, is an exercise in itself. So it's not surprising that there's been a lot of mismatches of demand and supply in the market that have actually put pressure on China label pricing. The good news from our point of view is our China. We're actually just in the process of transitioning ours in the market now.
And throughout that process, by you know, tightly controlling inventory, investing in our brand, and everything else that we've done, we've actually seen our China label brand ASPs in the market. We don't control the average selling price; it's with our retail partners. We've actually seen that improve as well, which is above 300 RMB as well. So that's firming up, and we're transitioning as well. So I'm hoping that as we get through this transition period, that our retail pricing is going to hold. It's really important for confidence in the trade across all of our channels. There's a possibility we may come under, and the market may come under pricing pressure going forward, but most of the industry, as they're introducing their new products, are definitely trying to lift their retail pricing as well.
Because the industry requires heavy investment in R&D and innovation to bring products to market. You know, the highest quality manufacturing process, the cost of doing business are very high. So pricing, you know, hopefully, pricing will recover in the market and be stable going forwards. So there is a risk, but at this stage, we're not seeing that translating into our business, yeah.
Okay, and just to add to that, just to say, the issue of pricing is an incredibly important component of what Chopin and Li Xiao in China, and David spend their time worrying about. So we are absolutely on your case around making sure that our pricing remains as strong as we can do, and it's a key focus of our plans. Now, we're coming towards the time available. I don't want to cut us short, so I'm going to say there's another question over here, a couple on the, on the online, and then we may come to an end. But I don't want to cut people short who have important things to say. So we may run on a little bit.
Greetings to you all. My name is Eva Quiding. I'm a shareholder. Two questions, if I may. To Ms. Kate Mitchell, I wonder how you would assess the risk of a2 Milk Company doing business with China or in China? I haven't come up with a way to better phrase my question, but, I'm wondering that because of hearing about the CEO and the chair talking about the usual way of doing business or the normal way of doing business is this. But in China, certain aspects, we have to do it this way. We have to do it the non-normal way. So that's where I'm coming from. How do you assess the risk of doing business in China or with China partners?
The other question, one of the CEO's earlier presentation slides talked about BOLD, where the D stands for disrupt, disruptive thinking. Could one of you talk a bit more about how disruptive thinking is implemented in your business operation? Thank you.
Well, David will answer that, but, Kate, why don't you start?
Sure. Interesting question, and risk, as you know, is, is really two things. It's, it's the risk of bad things happening, and it's also opportunity. And I think the one thing I would say in the, in the four to five months that I've been on the board of this company, is that we have a phenomenal opportunity ahead of us in terms of the China market. And as Pip alluded to, we've just been, as a board and exec team, over to see our China team in action and visit some of our key, partners in market. And I, and I can say that I saw firsthand just how well we're executing or starting to execute on that opportunity, 'cause I still think there's a long way to go. How do we manage the risks inherent in dealing in a market like China?
Well, obviously, we work very closely with a variety of different partners in market to help us get best access to our end customers, to understand the regulations and the environment in which we're operating, and to make sure that we don't inadvertently trip ourselves up. We stay very close to trends to make sure that actually our proposition is appropriate to our customers, and that we're developing the right range of products to meet that in the future. You know, risk, talk about the risk of China, I mean, it breaks down to a myriad of different risks, which we can only treat and understand by really fundamentally understanding China as a country and as a marketplace, and engaging appropriately. I hope that goes some way to answering your question. Thanks.
And on the Eva, on the disruptive thinking, I think disruptive thinking is really part of a2's DNA. If you go right back to the beginning and how the company was founded on the science around you know the a2 protein and being A1 free, it's really at the core of the business and the investment in science and thinking about things differently, entering the Australian milk market, entering IMF into China. Like, there's a history of really disruptive thinking and execution in the business. More recently, we focus on it as a matter of process and thinking about you know our strategy and what we do and how we execute. And we also reflect it in our recruiting process.
We try to get people, particularly in our China business, not necessarily directly from the industry. We take people from broader FMCG, pharma industry, other categories, to ensure that we've got really diversity of thinking in the business. We try to do things in a different way, in our marketing programs and our trade execution. For example, we've recently done executing a mobile roadshow in BCD or lower-tier cities.
So we've traditionally, we've done roadshows in major shopping centers in NKA cities, but we found that we weren't getting the coverage in the BCD cities, and so now we've got 14 trucks and caravans going around from BCD city to one after the other and doing thousands of brand activations and roadshows in partnership with our MBS retail partners as well. And we've got a jump on the market by six months or so, and we're finding that others are starting to replicate what we do. That's just one small example of things that we do. So we do value thinking differently and achieving more with less in everything that we do. So hopefully that gives you some color around that.
Okay. We're going to have two questions from the online sector, one of which, which cover off, I think, nearly the bulk areas that we haven't done, and then, we'll just do some closing remarks. So, David, would you like to read out the first one?
Thank you, Chair. It's around competition and trends. Can you please provide an update on the competitive landscape in China and the A2 protein segment? The company is capturing a smaller share of the A2 protein segment. What's driving the category growth, and why isn't the company capturing more overall, and how do you think about these dynamics in the medium to long term? Thank you.
David, do you want to cover that?
Yes. So the a2 category or segment has been growing rapidly. Last financial year, it grew by, depending on which channel you look at, but around 30% growth in the market. In terms of our position within it, in English label, we have less competition. We have over 90% share of the English label market. That accounts for 15% of the total market. The China label business, which accounts for 85% of the total market, there's much more competition in that. So we have about a 30% share now of the-
... the a2 segment in China. And going back over time, when we first entered the market, obviously, we had 100% share of a smaller category. But it has been growing, it has been growing rapidly. The ultra-premium segment and the a2 segment has been growing rapidly, and our share over time, naturally, as we've developed and founded the, the category and expanded and the consumers are seeing the benefits of a2 protein and being A1 free, they're gravitating towards that, and that's attracting competition into the market. And just so that you're aware of what's likely to happen going forward, we're seeing more of the new GB registrations, which have been approved in this big transition process that I referred to earlier. More and more of those are being in the a2 segment.
So a lot of our competition are adding a2 as a sort of plus to one of their flagship brands as well. So you'll see more competition in the market. From our point of view, you know, we need to focus on continuing to tell the category story around the benefits of a2, but also why the small a2 brand is the best version of it, the most distinctive, and superior version as well. But other competitors entering the category, promoting the benefits of a2, is a good thing overall. It's consistent with our purpose and vision. And we just need to be as good as we can and make sure that we continue to grow our business in absolute terms, even though our share will probably come down.
Yeah, I'd just like to add to that. I mean, this, this is an absolutely standard program. If you're an innovator and it's successful, you will find that people imitate you, and as a share of the category that you started, you will fall because you were 100% when you innovated, and you'll definitely be less. But if the category is growing enough, a smaller share of a bigger category is a better place to be. That's the first point. The second point is, it wasn't very long ago when we stood up in these meetings and the world of main dairy, the A1 dairy boys, spent a huge amount of time trying to suggest that a2 was a focus of hocus pocus and snake oil salesman, and all sorts of comments. Today, we've got a clear view.
The whole dairy world knows that a2 is a viable and sensible place to be. So we don't have that fight anymore. We're not having to justify the a2 proposition because people have all bought it. So I think it's a good place to be. If we just measure the share of the a2 segment, we will continue to fall. But if the segment grows far and fast enough, a smaller share of a bigger category is a better place to be. So I mean, just look at... I've used this illustration before, but I'll just say it once before. Look at Dyson, Dyson vacuum cleaners. You know, 15, 20 years ago, they invented cyclonic vacuum cleaners. They all looked very strange, Hoover and Miele and all these other people. We have already said, "What on earth are these things doing?" Today, the whole world has one.
What's gone on? Dyson's business has never been better, but they have a very much smaller share of a cyclonic sector because everybody's got it now. So it doesn't mean the end of the business. Right. We've got two more questions, or one more question, rather, very quickly, and then I think we'll call it a day with some closing remarks. David, would you read the last one out?
Thank you, Chair. It's on capital management. What is the company's plan for using its cash and balance sheet? When will the company start paying dividends? When will there be another share buyback?
Well, they're perfectly good questions. I had hoped that I'd sort of covered those off in my introductory remarks, so I won't say them again. But the answer is, we're using the cash. If we use the cash, we'll be using it almost exclusively in the pursuit of strengthening and improving our supply chain. And that, of course, means potentially some relatively large outlays of capital. So that's where the money will go. It is a subject of extensive review inside the management, who have yet to present a formalized plan to the board, but a lot of options have been discussed, and we don't know exactly where that's going to fall out yet.
And therefore, until we know where that's going to fall out, we don't know when we will be able to assess how much of that cash we need and how much is free for other uses. And we are very conscious of the fact that if we have serviced our needs as a business from a capital point of view, we should be able to release more cash, the surplus cash, to shareholders. We have to find a clever way of doing it because of some of the structured financial issues. But that's our plan. So we will do that as and when we can, but not before. And, it may not be the answer people want to hear, but I think it's the right answer for the security of the long-term business. So hopefully, that covers off the questions.
There will be time afterwards to ask questions of any directors if you'd like, and I'd like to hand over just before I close the meeting to Pip, as your incoming Chairman.
Thank you, David. Tena koutou katoa. Good afternoon, everyone. It's been an honor and a privilege to serve on the board of a2 Milk over the past four years, a role I have thoroughly enjoyed. I'm passionate about the a2 Milk Company and looking forward to taking over the chair role from the closure of this meeting, a role I promise I will give you my full commitment to. I was gonna make some comments about the progress and performance of the company, but I think we've covered that well today, and I'm very conscious that I'm standing here between you and your lunch. So I will limit the comments about my views, which I can keep till next year, and focus on what I'm really here to do, and that is to acknowledge the service and contribution of our current chair, David Hearn.
He's a hard act to follow, I might add. David was first engaged with our company as the non-executive chairman of the U.K. subsidiary in 2013. He then joined our board in February 2014 and became chair in March 2015. That represents almost 10 years of service, including nine years as our chair, and demonstrates the significant commitment David has made to this business.
... It's not only the length of time, but the quality of David's contribution, for which we are very grateful. I think David mentioned earlier in his speech, the significant increase in revenue and EBITDA growth during his time in the company, where in 2014, net profit was only breakeven, compared to a net profit after tax of NZD 155 million in FY 2023. Over his time as Chair, the company has achieved a record compound annual growth rate of 34% and EBITDA CAGR of 58%. As we're all aware, and I think has come up today, it certainly hasn't been as linear as that and not all plain sailing. There have been many achievements and milestones along the way, as there have been challenges and difficult decisions.
I'm confident that we will continue to navigate through these challenges to fully realize the growth opportunities ahead of us, as we've discussed today. From a business that was predominantly liquid milk, which was sourced and consumed in Australia in 2014, to today, a business predominantly infant milk formula, sourced from New Zealand and mainly consumed in China. David has presided over a significant transformation in a relatively short period of time. That David has managed to steer the a2 ship through immense challenges, including a global pandemic. I remember David and I talking about the pandemic, and we'd started our recruitment for David Bortolussi at the time, and David saying: "Surely, surely we'll be open again in a few months. Surely. How will the world cope?" And that was 2020. Seems a long time ago.
And on behalf of us all, David, I want to thank you for your commitment and contribution to this company over what has been a remarkable decade. We wish you, and I wanted to acknowledge your wife, Laurie, who's in the front row, and I'm sure she hasn't missed an AGM. And I know that Laurie is also a huge supporter herself of the company. We wish you all the very best and good health to you and your family. Thank you.
Well, thank you very much, Pip. Those are kind words. Of course, they're not fully justified. The reality is that the reason why the comp... Not even the directors, really, but the enormous number of people who've worked in it tirelessly. Geoffrey Babidge, who was the CEO for a huge period of that extraordinary growth, is sitting here as well today. It's the result of an enormous commitment from a lot of people, and that's what should be recognized. My, I've had a hell of a good time doing it. What I would like to say is just a couple of things. I'm gonna go off script here. The guys will have a heart failure in the back there, but don't let's worry. I'm gonna go off script here for just a second, and I just want to make one point about perspective.
I've almost exactly 40 years from when I first became a CEO, and I can honestly say, I mean, that was in the glory days when, you know, I became a CEO in the 1980s and the 1990s, when life was easy, things were all booming, everything went well. I can honestly say that I don't think I've ever seen a set of external to this business in any business I've ever looked at in 40 years. Now, that's not a complaint. That's why we're here. If it was easy, there's a friend of mine who used to be in operations, used to say, and Chopin would probably agree, "If it was easy, David, they'd automate it." Right? So we're here because life isn't easy, and it's our job to get through that.
But what I would say is, please don't underestimate the achievements inside the business, which you heard of today and yesterday. The team that David has assembled is a remarkable team. I've, again, had the privilege of working with some wonderful teams over many countries over the last 30 or 40 years. I can honestly say I don't know a better team. The cohesiveness, the determination, the commitment. You've got people here who will get through this. What I would say is the theory that, you know, if you keep doing the right things, then the right thing will happen in the end. What you mustn't do is get discouraged by, you know, what are short-term things. The birth rate will come back in China. The world economy will recover.
Hope to God that the wars that we're in will settle down, and we'll get a more stable environment in the world. Geopolitics will calm down. These things will move on, and our job is to put the business in the best place it can be to take advantage of those things when we can. I think that's what we're doing. We're growing share, we're growing market presence, we're growing distribution, we're growing brand attributes. Those are the things that you must focus on. I gave an illustration when we were in China to the Chinese team, and I would just leave it with you, which is that if you're climbing up a hill, and we are at the moment. It's a steep hill, and we're plodding up it.
For those of you who that walked up hills, you will know that as you walk up them, you only ever see 50 meters ahead, and the view never seems to change. And you kind of think, after three hours of walking up the hill: Where have I got to? I'm, I'm basically looking at the same thing. But if you stop and you look back, and you look back at where you've come from, you say: My goodness, it's a long way down there. I've come up. Look at where we've come from in this business, and you've got the same characteristics, the same qualities, the same brand strengths, and a really strong team that got you there, who'll get you through this. So don't lose sight of that perspective, even if the share price is horrible.
I shouldn't say that, but now I'm no longer chairman, I'm allowed to. So the share price is horrible. I hate it. It's all wrong, but... And I understand how terrible you feel. And I can tell you, I do well. I do as well, because I've got still a lot of shares.
Prime minister.
What?
You must have been prime minister.
So in closing, you'll be glad to know. Thank you, all of you who've come, who were able to join us here today in Auckland, and for those of you online who've attended virtually. I do want to thank you, our shareholders, for your patience and commitment to our business, which is substantial, and I know that, and we recognize it, and the board are very grateful to you for it. I do believe that our FY 2023 full year result has demonstrated that our growth strategy is working, and if that works, eventually it will pay the dividends in the share price we need. And finally, on behalf of the board, I want to say to the shareholders that we very much appreciate your support and the way you've given us that so consistently over the last few years.
In conclusion, I'd like to say thank you very much. Goodbye. The best of luck.