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Vinamilk (VNM VN) – Q1 2025 Earnings – Strategic Reset Drives Long-Term Growth
Summary of Q1 2025 results and outlook of Vinamilk JSC (VNM VN)
- Net revenue declined 8.3% y/y to VND12,935bn in Q1/2025, mainly due to a 12.9% fall in local sales (77.4% of total) following the strategic phase-out of underperforming distributors in the traditional channel. Although the average selling price rose by 2% to partially pass on higher input costs, the one-off restructuring led to temporary overall distributors’ destocking. In the e-commerce channel, VNM expands its footprint, ranking in the top 10 on e-commerce platforms with high double-digit growth in sales, targeting young consumers. Meanwhile, global sales (22.6% of total) rose 11.8% y/y, led by key markets in the Middle East, Asia, and new West Asian markets.
- Net profit fell 28.5% y/y to VND1,568bn mainly due to lower sales during the short-term transition period while certain fixed costs including staff and marketing increased as per normal development and new product launched. On the positive note, net financial income grew 13.9% y/y on reduced borrowing costs.
- For the remainder of 2025, net sales are forecast to increase. Operations have normalized post-restructuring, evidenced by strong April sales (+10.0% y/y). Local sales are forecast to be led by restocking, new products launched in Q1, and expanded distribution channels. Stricter enforcement against counterfeit dairy products should further benefit established brands like Vinamilk. International sales are forecast to grow and maintain solid momentum. On the cost side, VNM secured raw milk material contracts until Q3, with full-year input milk material prices estimated to be higher than 2024’s average. Additionally, the scale impact from Q1 restructuring is expected to reverse as operations normalize in the rest of the year. Yet, the full year gross margin is forecast to be slightly higher than last year’s level.
- In the medium term, the local dairy market is expected to retain single-digit growth, driven by rising rural demand, increased consumption of premium and plant-based products, and rapid F&B expansion. Though rural areas account for 61.8% of the population, they contribute only one-third of dairy sales volume —yet FMCG spending per household is growing at twice the urban pace—offering potential growth. In urban areas, VNM is leveraging e-commerce growth and scaling B2B channels. Product innovation has remained a strategic focus following a 2023’s comprehensive re-branding campaign with new products such as nut-based yogurt, Vietnam’s first infant formula with Human Milk Oligosaccharides (HMO). Globally, VNM continues to expand in Europe and Oceania, retaining high growth through global standards (FSSC 22000, Organic EU/China, Halal), tailored offerings, and affordable pricing.
Read our previous analysis on VNM’s quarterly earnings.
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Featured image credit: https://www.vinamilk.com.vn/
