Slide 1: Financial Results HY 2020
FINANCIAL RESULTS HY 2020 COMPANY PRESENTATION Rory J F Macleod, Managing Director & CEO February 2020
Slide 2: Important notice and disclaimer
Important notice and disclaimer The following disclaimer applies to this presentation and any information provided in this presentation (Information) This presentation has been prepared on information available at the time of its preparation. The Information is in summary form and does not purport t
Slide 3: HY20 Results Highlights
HY20 Results Highlights For personal use only NET SALES(1) OPERATING EBITDA(1)(2) GROSS MARGINS(1)(2) $277.1 million $32.7 million 27.1% 32.6% on prior year 55.6% on prior year From 24.7% on prior year OPERATING NET PROFIT(1)(2) STATUTORY NET PROFIT(3) INTERIM DIVIDEND 42.1% to 45.6% to 2.25 cents $
Slide 4: HY20 Results Highlights
HY20 Results Highlights Growth achieved in key branded categories and channels For personal use only Sales Growth EBITDA Growth Launch of specialised Nutritional Ingredients including Lactoferrin (LF), Micellar Casein (MCC) and Whey Protein Isolate (WPI) 22.6 Australian retail grocery growth o
Slide 5: HY20 Results Highlights - Segments
HY20 Results Highlights - Segments HY20 Results1 ($ million) HY 2020 HY 2019 $ Change % Change Composition of Trading EBITDA Dairy & Nutritionals(2) Net Sales Value 162.1 111.8 50.3 +45.0% For personal use only Trading EBITDA 23.9 11.8 12.1 +102.5% 50.5% Margin 14.8% 10.6% +4.2% Plant Based Net Sale
Slide 6: Dairy & Nutritionals
Dairy & Nutritionals Composition of Group Trading EBITDA Sales and Brand highlights For personal use only Delivered 45.0% sales growth(2) 32.7% 41.6% 44.4% Increased demand in Australia, China and SE Asia Australia’s Own (AO) dairy brand achieved 20.1% (MAT) share of branded HY18 HY19 HY20 UHT
Slide 7: Dairy & Nutritionals
Dairy & Nutritionals Shepparton UHT Capacity Lactoferrin Capacity Shepparton UHT Facility Capacity Total Capacity Total For personal use only Litres 500m Tonnes 40 Processed volume was 150 million litres up from 107 million litres in HY19 Estimated site volumes from July 2020 - 6 days annualised
Slide 8: Sustainability
Sustainability Shepparton Solar Project Update For personal use only Completion in February 2020 of the largest on roof solar battery project in Victoria Carbon offset for this project is in excess of 5,000 tonnes of CO2 or in terms of trees it is equivalent to 1,700 trees being planted Solar
Slide 9: Nutritional Platform & Brands
Nutritional Platform & Brands Vertically integrated model commercialising our For personal use only Industrial Nutritionals Integrated Nutritionals Nutritionals Ingredients Consumer Brands Facility in Shepparton 9
Slide 10: Consumer Nutritionals Developments
Consumer Nutritionals Developments For personal use only New Product Development New nutritional products launching in FY 2020, delivering innovative formats and featuring ingredients made in our new Shepparton facility New Product Launch In February 2020, the VITAL LIFE brand launched with VITAL LI
Slide 11: Milk Supply Outlook
Milk Supply Outlook AFMH For personal use only AFMH 17.1% Other Partner Supply Other Partner Supply 4.9% 24.0% Milk Supply 16.9% Sources FY 2024 FY 2020 66.0% 71.1% Direct Farm Direct Farm Direct supply strategy; • Long term pricing relationships • Supports the Groups growth demands • Provides far
Slide 12: Australian Fresh Milk Holdings
Australian Fresh Milk Holdings The largest dairy milk producer in Australia, forecasted to produce more For personal use only than 190 million litres by end of FY 2021 Increasing capacity from 3,500 to 8,000 milking cows Acquisition of Torrumbarry Aggregation • 4,083 hectares on the Murray River
Slide 13: Plant-Based
Plant-Based Composition of Group Trading EBITDA For personal use only Sales & Brand Highlights Delivered +39.2% sales growth 36.8% 41.6% 44.4% Retail and Out of Home brands key drivers Earnings contribution improved from 26.5% to 32.5%(1) HY18 HY19 HY20 • Sales mix to higher margin channels in
Slide 14: Plant-Based
Plant-Based For personal use only UHT facility at Ingleburn Capabilities to support for long term growth Strong volume efficiency developing - global record for Tetra Pak 1 litre highspeed filler achieved in February 2020 Due to accelerated growth, fast tracked filling capacity installations a
Slide 15: Plant-Based Brand & Product Development
Plant-Based Brand & Product Development For personal use only The Group continues to be recognised as market McDonald’s to feature Milklab on 25 billboards in leaders for innovation Melbourne Metro area from March 16-29 Additional new plant for coffee and plant-based beverages launching in FY 2020 1
Slide 16: Cereal & Snacks
Cereal & Snacks Composition of Group Sales & Brand Highlights Trading EBITDA For personal use only Sales growth of +0.7% reflecting strategic decision to deprioritize contract customers in cereals and snacks to release capacity for our brands 32.7% 17.2% 4.9% Prior year’s results includes key co
Slide 17: Cereal & Snacks Development
Cereal & Snacks Development Product Development For personal use only Driving Messy Monkeys brand awareness through partnership with Shoes & Sox during our “Back To School” campaign New snacking products launching in FY 2020, expanding on existing ranges and utilising our snacking operations in Leet
Slide 18: Channels & Markets Mix
Channels & Markets Mix Continued strong demand through diversified markets & channels For personal use only SE Asia Other Export 6.0% SE Asia Other Export China 5.0% 11.3% China 13.7% Industrial & Other(1) 6.1% Industrial & Other(1) 14.4% 50.4% Grocery 54.3% Grocery 7.8% Contract 2.8% Contract 1.6%
Slide 19: Domestic Channel Update
Domestic Channel Update Sales Growth by Domestic 81.9% Highlights Channel For personal use only Sales in domestic channels increased by 35.0%, contributing $58.9 million in 214.9% sales growth 62.9% Key drivers were: 23.1% • Australian retail grocery growth of 23%, above category average growth
Slide 20: China Market Update
China Market Update Market Highlights Total China 11.3% Delivered sales growth +9.1% Sales Growth WOFE sales For personal use only not recognised China Dairy Established wholly owned foreign enterprise (WOFE) to improve service and +16.4% in HY20 efficiencies Sales Growth +9.1% Sales growth im
Slide 21: South East Asia Market Update
South East Asia Market Update Total SE Asia Sales Growth SE Asia Branded 6.0% For personal use only Market Highlights Sales Growth +58.1% • Exceptional sales growth 58.1% +221.2% • Freedom branded range key growth driver 221.2% • Significant growth potential with in branded and contract products • S
Slide 22: Creating Capacity for Growth
Creating Capacity for Growth For personal use only 5 Years of Investments Peak in the New Product 240 five year Development investment 220 cycle $62.0M 200 180 160 Acquisitions & 140 120 Investments 100 $134.8M 80 60 40 Capital Expenditure 20 $545.6M 0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 HY 2020
Slide 23: Sales Growth from New Product Development
Sales Growth from New Product Development Sales Growth vs 320 For personal use only 300 Investments 280 260 93.2 Highlights 240 Sales generated from products launched since 2017 contributed $93.2m 220 Sales from NPD (31% of total sales) 200 180 41 new products were launched 160 140 Investment
Slide 24: Top FMCG Growth Drivers
Top 10 FMCG Growth Drivers We remain a key growth driver for branded For personal use only sales in Australian grocery 123.2% 40.0% 32.6% 28.8% 23.8% 19.6% 19.4% 15.9% 10.9% 10.2% Source: IRI Big Picture MAT to 06.10.19 Top 100 Manufacturers Report 24 Rankings based of Total Defined Grocery Excludin
Slide 25: HY20 Key Brand Performance
HY20 Key Brand Performance These 5 brands represent 74.3% of Our focus is on our our HY 2020 brand For personal use only global & scalable brands +152.1% revenue growth +69.9% $37,812 +15.9% +19.2% +17.3% $35,705 $37,813 $6,452 $6,967 $11,172 $71,106 $15,255 $16,607 $18,291 $7,185 $11,177 *Growth ar
Slide 26: HY20 Funds Employed
HY20 Funds Employed For the period ending(1) 31-Dec-19 30-June-19 Movement ($ Million) For personal use only Significant progress made on inventory management. Key area of Inventories 122.3 120.2 2.1 focus to further reduce while maintaining capability to manage Trade and other receivables 98.7 87
Slide 27: HY20 Cash and Liquidity
HY20 Cash and Liquidity For the period ending(1) HY 2020 HY 2019 Cash generated from operations was $21.4m, ($ million) +$36.5m improvement Operating EBITDA (Adjusted for non cash items) 27.3 20.4 For personal use only 16.6 Progress on reducing inventory holdings Working Capital Movement: Increa
Slide 28: Outlook
Outlook Our increasing scale and diversification of Well positioned to build into a major global food and beverage business with scale the Group’s activities provides an For personal use only important hedge to assist in mitigating Diversification in sales, together with earnings growth, from ke
Slide 29: Appendix
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Slide 30: Appendix: Group Profit and Loss reconciliation
Appendix 1 a) Group Profit For the period ending HY 2020 AASB 16 HY 2020 ($ million) (Statutory) Impact (Pre AASB 16) and Loss reconciliation to For personal use only Revenue from sale of goods 299.7 - 299.7 pre application Cost of sales (218.5) (4.5) (223.0) AASB 16 Gross Profit 81.2 (4.5) 76.7 Gro
Slide 31: Appendix: Operating Segment reconciliation
Appendix 1 b) Operating Segment HY20 Results ($ million) HY 2020 AASB 16 HY 2020 (Operating) Impact (Pre AASB 16) reconciliation to pre application AASB 16 For personal use only Dairy & Nutritionals2 Net Sales Value 162.1 - 162.1 Trading EBITDA 24.9 (0.9) 24.0 Margin 14.8% 14.8% Plant Based Net Sale
Slide 32: Appendix: Balance Sheet reconciliation
Appendix 1 c) Balance Sheet For the period ending1 HY 2020 AASB 16 HY 2020 ($ Million) (Statutory) Impact (Pre AASB 16) reconciliation to pre application AASB 16 Inventories 122.3 - 122.3 For personal use only Trade and other receivables 98.7 - 98.7 Trade and other payables (111.7) - (111.7) Working
Slide 33: Appendix: Group Cash Flow reconciliation
Appendix 1 d) Group Cash For the period ending1 HY 2020 AASB 16 HY 2020 ($ Million) (Statutory) Impact (Pre AASB 16) Flow reconciliation For personal use only to pre application Cash generated from operations 24.3 (4.5) 19.8 AASB 16 Net cash from/(used) operating activities 15.4 1.0 14.4 Net cash us
Slide 34: Appendix: Underlying to Statutory EBITDA
Appendix 2 For personal use only 12 Months to 30th June 2019 2020 2019 $ Movement % Change (A$ million) Underlying Operating EBITDA(1) 32.7 21.0 +11.7 +55.7% Other costs not representing underlying performance(2) (3.4) (2.7) -0.1 Employee Share Option Expense (non cash) (3) (0.8) (1.0) +0.2 Statutor
Slide 35: Building a Major Global Food & Beverage Company from Australia
Building a Major Global Food & Beverage Company from Australia