next week annoucement, page-119

Hi, I used the figures in the latest UBS presentation which stated that IF in 2017 was 72% of Group Revenue.

By using Synlait's production figures and providing a range of potential revenue figures for A2M IF I then used the 72% figure to deduce the Group Revenue figure ie IF + milk.

It should be noted that A2M has increased supply of milk to Singapore (not sure what % may translate into actual sales) and sales in Australia seem pretty good from my observations of my local Woolies and Coles.

Obviously if milk sales do not grow at the rate that IF does then IF will be a greater percentage of a lower Group Revenue figure. The calculations in essence provide a basis for examination and you can adjust accordingly. Point being is that Group Revenue may well exceed analysts expectations of $770M NZD.

I thought it interesting also that the UBS presentation showed a value chain which illustrated the different products that are being developed and that this diagram was open to the right hand side which suggests that there are more potential products offerings being developed/contemplated. Again, I don't think that analysts previously understood the possibilities to grow product offering, revenue and market potential ie more than just selling milk and IF.

I think also that the additional Synlait plant which considerably expands potential production has not been contemplated by analysts either. Given the market potential of China (how large is the middle and wealthy class in China?) I think that there is plenty of upside for A2M to grow revenue in the medium term.

A2M also talks about geographic regions ie China and other Asia - there is plenty of room to grow Other Asia sales in the medium term also.

The AGM will certainly be interesting if forecasts and the way forward and far exceed analysts expectations.

Given we are very much still in the early growth phase and that the scientific evidence is already demonstrating that A2 may well disrupt the total milk and IF market then this is a great share to hold onto for some years to come.