Bubs has now a gross margin above A2 Milk : 48 % during H1 25, vs 45.8 % for A2 Milk during FY 24 and 46.5 % during FY 23. However, its EBITDA margin was 5.9 % during H1 25, well below the one of A2 Milk (14 % in FY 24).
It looks quite low, in particular if we consider the high level of capacity utilization (84 %).
So, it probably means that there is still a significant capacity to reduce fixed costs. We know that costs remain temporarily high in the US due to the ongoing process to get their permanent approval.
The margin difference between the 2 companies is not due to marketing and ad costs (similar for the 2 companies in % of revenue). It is explained by staff costs : around 16 % of revenues for H1 25 for Bubs vs 6 % for A2 Milk (in FY 24).
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