Bega Cheese Limited · ASX:BGA
Bega Cheese — H1 2023 Earnings Presentation
23 slides from Bega Cheese's earnings presentation, Feb 23, 2023
Slide 1: 1H FY2023 Results Presentation
1H FY2023 Results Presentation 23 February 2023
Slide 2: Barry Irvin, Executive Chairman
Barry Irvin Executive Chairman
Slide 3: Key Messages
KEY MESSAGES • Challenging year with solid foundations in place for FY2024 • 1H FY2023 Net Revenue of $1.68b is up 11.1% compared to the prior year o Majority of pricing taken in 1H with residual price and mix benefits in 2H o Price and mix improvements expected to offset cost inflation on monthly r
Slide 4: Performance Highlights
PERFORMANCE HIGHLIGHTS Net revenue EBITDA ($ million) 1H FY2023 1H FY2022 106.4 97.2 $1.68 billion $1.51 billion 11% Net Revenue growth includes 4% growth in branded volumes compared to the prior year 74.6 71.6 Total dividend Profit after tax ($ million) Basic earnings per share (cents) per share (c
Slide 5: Our Purpose
OUR PURPOSE Our purpose helps connect our people, We are proud of our heritage as To deliver on our purpose for consumers we must customers, consumers, suppliers and the an iconic Australian business with anticipate consumer needs and food trends. The communities in which we operate. It helps strong
Slide 6: Our Transformation
OUR TRANSFORMATION Creating great food for a better Acquisition of future Dairy and Drinks Acquisition of Koroit Acquisition of grocery brands Accessing capital for Acquisition of growth Strathmerton Acquisition of Tatura Co-operative founded in 1899 1H FY2023 Results Presentation | 6
Slide 7: Sustainability and the Circular Economy
SUSTAINABILITY AND THE CIRCULAR ECONOMY Bega Cheese carbon target Scope 1 and 2 emissions targets established in support of Paris Agreement goals: 50% reduction in emissions intensity by 2030 40% reduction in absolute emissions by 2030 Net zero emissions by 2050 Circularity in the Bega Valley
Slide 8: Pete Findlay CEO, Gunther Burghardt CFO
Pete Findlay CEO Gunther Burghardt CFO
Slide 9: Innovation and Growth in Consumer Brands
INNOVATION AND GROWTH IN CONSUMER BRANDS Investing behind our core brands • Significant price realisation across all brands and categories • Front weighted marketing investment to support brand equity and volumes • Accelerated growth in food service • Progression of brand led sustainability initiati
Slide 10: Portfolio of Leading Iconic Brands in Growth Categories
PORTFOLIO OF LEADING ICONIC BRANDS IN GROWTH CATEGORIES Category Category size $m Category growth Bega share Market Position Brand portfolio Fresh white milk1, 2 2,123 7.0% 13% 3 Yoghurt1 1,642 9.3% 24% 2 Milk based beverages1, 2 924 8.1% 49% 1 Spreads3 680 4.8% 32% 1 Chilled juice1 641 7.6% 22% 2 C
Slide 11: Manufacturing Network
MANUFACTURING NETWORK - Transitioning 2023 1H FY2023 Results Presentation | 11
Slide 12: Dairy Commodity and Farm Gate Milk Prices
DAIRY COMMODITY AND FARM GATE MILK PRICES • Significant increase in global dairy commodity pricing now correcting • Increases in northern hemisphere milk production in response to historic high prices and a mild European winter • Global demand impacted by softening demand in Asian markets (lockdowns
Slide 13: Major Initiatives
MAJOR INITIATIVES • Executed unprecedented price changes in the Australian domestic market • Responded to changes in global dairy commodity and foodservice markets • Continued capacity rationalisation and processing optimisation • Maintained CAPEX investments in key sites, efficiency and IT o Invest
Slide 14: Our Business Model
OUR BUSINESS MODEL Our core capabilities Direct relationship with our farmers and other suppliers Globally competitive supply chain Diversified portfolio of market leading food brands Bulk segment Efficient distribution network serving customer growth Branded segment 1H FY2023 Results Presentation |
Slide 15: Segments
SEGMENTS ($ million) Branded Bulk Unallocated Inter-segment Group Total Overheads elimination Revenue 1,394.2 436.4 - (155.5) 1,675.1 Growth vs 1H FY2022% 13% 2% - -1% 11% Normalised EBITDA 43.5 49.5 (17.2) (1.2) 74.6 Increase/(decrease) vs 1H FY2022 EBITDA (33.7) 13.4 (10.4) (1.1) (31.8) BRANDED •
Slide 16: Reconciliation of Normalised Result
RECONCILIATION OF NORMALISED RESULT Consolidated Per Period Ending 25 December 2022 Financial Normalised Normalised ($ million) Statements Items Outcome Revenue 1,675.1 - 1,675.1 • Normalised items largely consist of Cost of sales (1,323.4) - (1,323.4) investment in certain software as a service app
Slide 17: Balance Sheet
BALANCE SHEET 1H FY2023 FY2022 $m $m Cash 78.6 44.9 • Trade receivables higher from price increases and Trade and other receivables 316.6 274.7 key seasonal sales period leading into half year end Inventories 414.5 317.6 • Inventory higher from seasonal inventory build and Property, plant and equipm
Slide 18: Cash Flow
CASH FLOW 1H FY2023 1H FY2022 Dec $m Dec $m Receipts from customers 1,772.4 1,688.1 Operating activities Payments to suppliers and employees (1,807.1) (1,696.2) • Increase in receipts and payments Net from Trade Receivables Facility 42.7 46.7 reflect inflationary environment Net interest and other c
Slide 19: Outlook
OUTLOOK • The annualised benefits of price and mix initiatives actioned during FY2023, as well as strong efficiency programs, give us confidence that Bega will see an increase in EBITDA in FY2024 • Synergy opportunities as we complete the integration of recent acquisitions will further enhance earni
Slide 20: Barry Irvin, Executive Chairman
Barry Irvin Executive Chairman
Slide 21: Where Are We Today
WHERE ARE WE TODAY • Strong underlying brand revenue and volume growth • Step change in Australian domestic dairy pricing • Significant cost increases late in FY2022 and throughout FY2023 are being appropriately reflected in the Australian market • Further opportunities in business efficiencies and
Slide 22: Questions?
Questions? 1H FY2023 Results Presentation | 22
Slide 23: Disclaimer
DISCLAIMER This presentation contains a summary of information about Bega Cheese Limited ACN 008 358 503 (BGA) and its subsidiaries (Bega Group). The information does not purport to be complete and should be read in conjunction with other BGA ASX announcements. The presentation may contain statement