Inghams Group Ltd. · ASX:ING
Inghams — Investor Presentation (August 2018)
23 slides from Inghams's investor presentation, Aug 22, 2018
Slide 1: Inghams Group Limited FY2018 Results Presentation
Inghams Group Limited FY2018 Results Presentation 22 AUGUST 2018
Slide 2: Important notice and disclaimer
Important notice and disclaimer Disclaimer The material in this presentation is general background information about the activities of Inghams Group Limited (Ingham’s) and its subsidiaries (Ingham’s Group), current at the date of this presentation, unless otherwise noted. It is information given in
Slide 3: Group highlights
Broiler Farm South Australia 01 Group highlights
Slide 4: Group highlights
Group highlights Delivering on our strategy – growing volumes and earnings with strong cash flow Chicken remains the competitive protein with 3.2% growth across ANZ in core Chicken & Turkey volumes Strategy implementation continues to deliver improved returns despite a challenging New Zealand ma
Slide 5: Financial highlights – FY18 vs FY17
Financial highlights – FY18 vs FY17 Core Gross Underlying Underlying Cash Net debt EPS Final Poultry Profit EBITDA EBITDA NPAT NPAT Conv Ratio Dividend Volume 397.7kt $476.9m $208.9m $212.0m $112.5m $114.6m 122.9% $145.4m 30.8 cps 11.6 cps ↑ 3.2% ↑ 4.4% ↑ 7.1% ↑ 8.7% ↑ 10.3% ↑ 12.4% ↑13.6% ↓ 154.2m
Slide 6: Segment Information – Australia
Segment Information – Australia Summary: Australia $ millions (AUD) Jun-18 Jun-17 Variance % Poultry volume growth excluding ingredients of 2.8% Australia Improved margin reflecting realisation of efficiency and Poultry volumes (kt) 428.5 421.8 6.7 1.6 automation initiatives and benefits of prem
Slide 7: Segment Information – New Zealand
Segment Information – New Zealand Summary: New Zealand $ millions (AUD) Jun-18 Jun-17 Variance % Poultry volume growth driven by QSR and Retail New Zealand Poultry volumes (kt) 76.8 73.5 3.3 4.5 Challenging market conditions deteriorated further in the Feed volumes (kt) 137.3 123.2 14.1 11.4 2H
Slide 8: Financial results
Further Processing Plant Edinburgh Parks, South Australia 02 Financial results
Slide 9: Profit & Loss
Profit & Loss $ millions Jun-18 Jun-17 Variance % Volume and Revenue Growth Poultry volumes (kt) 505.3 495.3 10.0 2.0 Continued growth in core poultry volume +3.2% (excluding ingredients) Feed volumes (kt) 504.7 565.2 (60.5) (10.7) 1H v 2H seasonality impact particularly evident in Total Revenue
Slide 10: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Statutory Pro Forma Cashflow $ millions Jun-18 Jun-17 Variance Jun-17 Non-cash items relate to the profit on sale of Wanneroo ($14.1m) and Leppington ($5.3m) offset by other minor items including EBITDA 212.0 198.8 13.2 195.0 LTIP Non-cash items (17.5) (6.6) (10.9) (6.6
Slide 11: Strategy update
Feed mill Berrima, New South Wales 03 Strategy update
Slide 12: Ingham’s – A World Class Food Company
Ingham’s – A World Class Food Company PAGE // 11
Slide 13: Project Accelerate – opportunity pipeline strong
Project Accelerate – opportunity pipeline strong Implementation of the multi year transformation project continues Optimise processing Farming operations Accelerate NZ FP network utilisation 2.0 Hatchery capacity & optimisation Premiumisation Innovation and Differentiation Focused expo
Slide 14: Strategy update
Strategy update Automation delivering benefits in improved processing yields and reduced unit costs across major Primary plants – program continues with deboning initiatives planned at Te Aroha (New Zealand) and a focus on FP plants – further opportunities in process streamlining and plant debottl
Slide 15: Strategy update
Strategy update Energy cost increases continue to flow through – new 3 year gas contract secured to provide cost certainty through to FY21 – 100% of electricity supply for FY19 and 20% of 1H FY20 secured through progressive procurement Energy costs All industry participants face similar challeng
Slide 16: Strategy update - Feed
Strategy update - Feed Focus on providing self sufficiency for own use, and improving mill utilisation and profitability of third party sales Construction of greenfield feed mill in Murray Bridge (SA) is on track to open in Q1 FY19 Acquired existing Wacol (QLD) mill during 2H FY18, consistent
Slide 17: Capital Management
Capital Management Capital Return Strong cash generation since IPO $150m of extra capital was raised at IPO cash balance of $273m at June 2018 leverage 0.7x (at listing 2.5x FY16 Pro forma EBITDA) Independent review of capital management options undertaken Capital return of $125m approve
Slide 18: Outlook
Outlook Demand for poultry products continues to grow Strategy implementation remains on track, opportunity pipeline is strong Expect a continuation of market price increases, reflecting increases in energy and feed costs – offset cost increases where possible or pass on to the market when nec
Slide 19: Appendix
S&S RS & & S S 5 SS = dix Appen
Slide 20: EBITDA reconciliation
EBITDA reconciliation Profit on Sale $ millions Jun-18 Jun-17 Variance % Relates to the sale and leaseback of Wanneroo and the sale of Leppington, which completed in EBITDA 208.9 195.0 13.9 7.1 December 17 and April 18 respectively (underlying) Profit on sale of assets 19.4 6.9 12.5 Restructuring
Slide 21: Reconciliation of FY17 Statutory results to pro forma
Reconciliation of FY17 Statutory results to pro forma FY2017 $ millions (AUD) 52 weeks Statutory EBITDA 160.3 1. Removal of costs of listing on ASX in November 2016 IPO transaction costs ❶ 28.0 2. Relates to fees for services charged by TPG entities that will not Advisory fees ❷ 1.2 be incurred post
Slide 22: Definitions
Definitions Certain non-IFRS information is referred to in this presentation. Defined below is what is included in each non-IFRS measure used throughout this presentation. EBITDA: Earnings before Interest, Tax, Depreciation and Amortisation EBIT: Earnings before Interest and Tax Net Debt: Debt
Slide 23: Risks Summary (per Financial Statements)
Risks Summary (per Financial Statements) Material business risks faced by the Group that may have a significant effect on the financial prospects of the Group include: Import restrictions: Changes to import quarantine conditions in Australia and/or New Zealand that would allow additional forms of