Noumi Limited · ASX:NOU
Noumi — Recapitalisation Presentation
58 slides from Noumi's investor presentation, Mar 19, 2021
Slide 1: Freedom Foods Group Limited Recapitalisation
FREEDOM FOODS GROUP LIMITED RECAPITALISATION 19 MARCH 2021
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 by Freedom Foods Group Limited (Company) on information available at the time of its preparation. The Information
Slide 3: Agenda
Agenda 1. Executive summary 3. Further details of the Recapitalisation ▪ Overview of the Recapitalisation ▪ Background to the Recapitalisation ▪ Key benefits of the Recapitalisation ▪ Key terms of the Recapitalisation ▪ Key features of the Notes and Options ▪ Key terms of restructured and new senior
Slide 4: 1. Executive summary
1. Executive summary [store freed GROUP Making food better UMITED
Slide 5: Overview of Recapitalisation
Overview of Recapitalisation ▪ The Company is undertaking : – a capital raising to raise up to $265m (Capital Raising), by way of the issuance of unlisted, subordinated secured convertible notes (Notes); and – a restructure of its existing senior debt facilities with HSBC and NAB, (together, the Rec
Slide 6: Key benefits of the Recapitalisation
Key benefits of the Recapitalisation ✓ Completion of the Recapitalisation provides funding certainty to the Company and substantially repays existing senior lenders ✓ The Notes do not have financial covenants and provide flexibility on interest payments, enhancing cashflow and operational runway for
Slide 7: Key features of Notes and Options
Key features of Notes and Options The Recapitalisation provides eligible shareholders and new investors with an opportunity to participate in the future of the Company alongside, and on the same terms as, Arrovest Key features of the Notes1 Key features of the Options ▪ Up to $265 million ▪ Subject
Slide 8: Impact of the Recapitalisation on the Company and shareholders
Impact of the Recapitalisation on the Company and shareholders ▪ The Company has commenced a significant operational and financial turnaround, with the Recapitalisation providing a more flexible capital structure that will better facilitate the ongoing financial and operational turnaround of the Com
Slide 9: Indicative Timetable
Indicative Timetable A summary timetable is provided below, with a detailed timetable included in the body of the Prospectus Indicative transaction timetable provides sufficient time for shareholders to understand and consider the Recapitalisation holistically:1 Key step Date Announcement of Capital
Slide 10: 2. Strategy update
freedqm, GROUP Making food better
Slide 11: Market drivers / industry thematics | Plant Based Beverages (PBB)
Market drivers / industry thematics | Plant Based Beverages (PBB) Plant Based Beverages is a high growth segment with strong industry thematics driving future category expansion PBB represent a strong and growing market in the Food Service channel. Estimated Australian Market Size (millions of litre
Slide 12: Market drivers / industry thematics | Dairy & Nutritionals
Market drivers / industry thematics | Dairy & Nutritionals Freedom’s Dairy & Nutritionals segment is exposed to attractive end markets with strong industry thematics driving future market expansion Key Global Lactoferrin Producers1 Recognised health benefits, ranging from skin and bone health to dig
Slide 13: Vision
Vision VISION Creating sustainable growth through innovative brands and Our sustainable products for the nourishment and growth promise benefit of our stakeholders 13
Slide 14: Values
Values VALUES • • High performance, high integrity culture Customer and consumer centric • Integrity and respect Our culture promise • Courage and accountability • Collaboration 14
Slide 15: Strategic approach
Strategic approach Focus on segments with the greatest opportunity for future growth ✓ Focus on strong performances of key brands and product lines SHORT TERM OBJECTIVES such as plant based beverages and Lactoferrin Plant Based Beverages, Dairy & Nutritionals ✓ Growing into premium channels and expo
Slide 16: Turnaround status – what has been achieved so far?
Turnaround status – what has been achieved so far? The Company has made significant progress on the turnaround since June 2020 Development of detailed business Reduction in losses Board and Management renewal Cultural and Governance change plan and operating strategy ▪ H1 FY21 results showed a stron
Slide 17: Business overview | Plant Based
Business overview | Plant Based Freedom is an early entrant in the plant based beverages market in Australia with a strong brand portfolio and a diversified channels to market strategy Business highlights Business overview ▪ Manufactures and distributes a range of UHT plant-based milk varieties MILK
Slide 18: Business overview | Plant Based: Financial performance
Business overview | Plant Based: Financial performance Financial results Summary of performance ▪ Revenue increased 17% to $75.2m as the plant-based beverages segment overcame H1 FY20 Change Change the impact of COVID-19 on the out-of-home market to deliver robust growth across all (A$m) H1 FY21 FY2
Slide 19: Business overview | Plant Based: Ingleburn Site Expansion Opportunity
Business overview | Plant Based: Ingleburn Site Expansion Opportunity Site Capacity Site Footprint ▪ New state-of-the-art facility producing predominantly plant-based beverages with a ▪ ~30,000 sqm facility, strategically designed to allow the floorspace currently used for total capacity of c.120ML
Slide 20: Business overview | Dairy & Nutritionals
Business overview | Dairy & Nutritionals Vertically integrated Dairy & Nutritionals business, focused on value-added products and building consumer brands Business highlights Location & facilities Marrickville: Largest supplier of UHT milk in Australia processing over 300 million litres of UHT ▪ Ble
Slide 21: Business overview | Dairy & Nutritionals: Financial performance
Business overview | Dairy & Nutritionals: Financial performance Financial results Summary of performance ▪ Revenue for the six months to 31 December 2020 rose 15% to $209.8m as the business H1 FY20 Change Change returned to profitability with adjusted EBITDA of $8.5m compared to a loss of $20.9 (A$m
Slide 22: Business segment strategies
Business segment strategies A major transformational program is underway, capturing financial, commercial, manufacturing, supply chain, engineering & maintenance, procurement, and critical enablers (management steering committee). Transformation program benefits expected to be realised over a 3 year
Slide 23: Board renewal
Board renewal Roles and Update Proposed Board ▪ From 19 March 2021, the roles assumed by the Directors are detailed below: ▪ Genevieve is a partner of private equity fund Genevieve Gregor Colinton Capital Partners. She was previously − Genevieve Gregor, joined the Board in March 2020, was appointed
Slide 24: Management leadership renewal
Management leadership renewal Progress Recent Appointments ▪ Renewal of the leadership team has been ▪ Michael has enjoyed a 25-year career in the agribusiness sector, most recently as director of dairy farm significantly progressed Michael Perich operations at the diversified farming business Leppi
Slide 25: Other segments – status update
Other segments – status update Cereals & Snacks Specialty Seafood ▪ As announced to the ASX on 17 December 2020, Freedom entered into an agreement ▪ Freedom Foods Group has reviewed all strategic options for the Specialty Seafood to sell the Cereals and Snacks segment to Arnott’s for $20m in cash bu
Slide 26: 3. Further details of the Recapitalisation
3. Further details of the Recapitalisation
Slide 27: Background to the Recapitalisation
Background to the Recapitalisation ▪ The Company intends to raise up to $265m under the Capital Raising by way of Notes. The Company has elected to issue the Notes (other than Shares or other securities) as it was determined to be the best way to attract the necessary funds on acceptable terms for t
Slide 28: Key terms of the Recapitalisation | Convertible Notes
Key terms of the Recapitalisation | Convertible Notes Overview Outlined below are some of the key terms and conditions attaching to the Notes. This is a summary only. Further information is set out in the Prospectus (including the Note terms) in full Unless otherwise defined, capitalised terms in th
Slide 29: Key terms of the Recapitalisation | Convertible Notes (continued)
Key terms of the Recapitalisation | Convertible Notes (continued) Key term Overview If the shareholder approvals are obtained prior to issuance of the Notes, a Noteholder has a right to convert its Notes into shares in the following circumstances: ▪ any time at a Noteholder’s election; ▪ if Notehold
Slide 30: Key terms of the Recapitalisation | Convertible Notes (continued)
Key terms of the Recapitalisation | Convertible Notes (continued) Key term Overview If the Notes are voluntarily redeemed by the Company, or become redeemable (such as on an Exit or at Maturity), the Company must pay an amount equal to the original Face Value of the notes issued, multiplied by the M
Slide 31: Key terms of the Recapitalisation | Convertible Notes (continued)
Key terms of the Recapitalisation | Convertible Notes (continued) Key term Overview The Notes will be secured by security interests over all of the assets of the Issuer Group 2 (including real estate interests and the issued share capital of each member of the Issuer Pro Forma Debt Outstanding (31-D
Slide 32: Key terms of restructured and new senior debt
Key terms of restructured and new senior debt ▪ The existing NAB and HSBC senior secured debt facilities will be restructured (and relevant documentation amended) such that, upon Financial Close, the only remaining senior secured indebtedness will be the senior debt below (Restructured Senior Debt)
Slide 33: Sources and uses of funds
Sources and uses of funds A range of scenarios are possible depending on the amount of capital raised from wholesale investors, other than Arrovest $200m scenario $215m scenario $265m scenario Sources of funds ($m) Issuance of Notes to Arrovest Pty Ltd 200 200 135(1) Issuance of Notes pursuant to th
Slide 34: H1 FY21 results
H1 FY21 results H1 FY201 ▪ Total revenue from continuing operations of $291.4m, an increase of 15% on the $ million H1 FY21 Change Change (%) previous corresponding period (restated) (restated) Revenue $317.3 $287.8 $29.5 10 ▪ Group returned to positive operating earnings, with an adjusted EBITDA fr
Slide 35: No H2 FY21 guidance or financial forecasts have been provided
No H2 FY21 guidance or financial forecasts have been provided ▪ The Company is facing significant volatility and uncertainty at this time due to: – material legal disputes; – the ongoing impact of COVID-19; – the operational turnaround of Dairy and Nutritionals segment; and – the ongoing volatility
Slide 36: Drivers of financial performance between H1 and H2 FY21
Drivers of financial performance between H1 and H2 FY21 H1 FY21 Adjusted EBITDA from continuing operations cannot be extrapolated into potential H2 FY21 financial performance H2 FY21 Adjusted EBITDA is expected to be materially lower Drivers of financial performance between H1 FY21 and H2 FY21 Dairy
Slide 37: Key drivers of potential future profitability into FY22 and beyond
Key drivers of potential future profitability into FY22 and beyond ✓ Operational turnaround initiatives will be critical to improving processes at the sites, particularly at Shepparton Operational initiatives - ✓ Transformation Program was launched with Pollen Consulting engaged to help drive implem
Slide 38: Purpose of Pro Forma financial information
Purpose of Pro Forma financial information ▪ The Pro Forma financial information set out on the following slides incorporate various adjustments to the reported 31 December 2020 half year (H1 FY21) results to: – Provide potential investors with illustrative impacts to the Company’s recent results, a
Slide 39: Pro Forma P&L
Pro Forma P&L H1 FY21 1 Recapitalisation Pro Forma Recapitalisation Pro Forma AUD ‘000s Reported Adjustments2 Impact $200m Assuming $200m Impact $265m Assuming $265m (continuing operations) 3 raised raised raised4 raised Revenue 291,378 - - 291,378 - 291,378 Cost of sales (240,121) - - (240,121) - (
Slide 40: Pro Forma balance sheet
Pro Forma balance sheet Pro Forma Pro Forma 31-Dec-2020 Pro Forma Adjustments 31-Dec-2020 31-Dec-2020 31-Dec-2020 Adjustments Adjustment Increase in Impact of the Pro Forma Basis of preparation Statutory Balance Pro Forma Pro Forma subordinated Cereals & Snacks (post increase in Impact of the Offer
Slide 41: Pro Forma cashflow
Pro Forma cashflow Impact of revised Consolidated Removal Restructuring / Impact of revised Pro Forma Pro Forma Capital Structure Statutory Cash Flow Cereals & Snacks Product recall costs Capital Structure Scenario 1 Scenario 2 (incremental) [1] [2] [3] [4] ($200m raised) ($265m raised) AUD '000s [5
Slide 42: Pro Forma ownership outcomes (as if converted at Day-1)
Pro Forma ownership outcomes (as if converted at Day-1) $265m scenario ($200m Arrovest, $65m $265m scenario ($135m Arrovest, $130m $200m scenario Wholesale) Wholesale) Current Current Current # shares (m) % # shares (m) % # shares (m) % Arrovest 146 52.5% 146 52.5% 146 52.5% Other existing sharehold
Slide 43: Related party policy
Related party policy The Board has related party protocols in place to manage potential conflicts of interest Overview of related party arrangements1 Amendment to recent related party arrangements 2 The Company has the following related party arrangements in place with entities affiliated ▪ In light
Slide 44: 4. Other
4. Other freedqm, GROUP Making food better
Slide 45: Summary of key risks
Summary of key risks Outlined below are some of the key risks associated with an investment in the Notes, many of which are outside the control of the Company. Before applying for any Notes under the Prospectus, Eligible Investors should read the Prospectus in full, seek professional guidance and co
Slide 46: Summary of key risks (continued)
Summary of key risks (continued) Key risk Overview Any material disruption to key parts of the manufacturing process may result in a failure to meet contractual sales volumes, loss of sales and revenue, termination of contracts, litigation and Manufacturing disruption reputational damage. The Compan
Slide 47: Summary of key risks (continued)
Summary of key risks (continued) Key risk Overview The Company is exposed to other further specific risks relating to its business and operations including: ▪ intellectual property; ▪ reputation and brand names; ▪ new products and innovations; ▪ relationships with suppliers; ▪ finished goods and raw
Slide 48: Summary of key risks (continued)
Summary of key risks (continued) Key risk Overview KEY RISKS ASSOCIATED WITH THE CAPITAL RAISING The Company will issue Shares to Noteholders upon Conversion of the Notes as set out in the Prospectus. The issue of Shares will dilute the interests of existing Shareholders to differing extents Dilutio
Slide 49: Summary of key risks (continued)
Summary of key risks (continued) Key risk Overview KEY RISKS ASSOCIATED WITH INVESTING IN THE NOTES Investment in the Notes are an Investment in the Notes may be affected by the ongoing performance, financial position and solvency of the Company and its Subsidiaries. investment in the Company The No
Slide 50: Summary of key risks (continued)
Summary of key risks (continued) Key risk Overview KEY RISKS ASSOCIATED WITH INVESTING IN THE NOTES The Company has an obligation to Convert the Notes upon the occurrence of certain events. The Notes may be Converted into Shares or may only be capable of being Cash-Settled if the Shareholder Convers
Slide 51: Material litigation and investigations
Material litigation and investigations Overview ▪ Blue Diamond dispute: Freedom Foods Pty Ltd (FFPL) and certain other Subsidiaries of the Company are parties to proceedings with Blue Diamond, a contractual supplier. The subject matter of the dispute involves matters which are material to Freedom Fo
Slide 52: Appendix
freed GROUP Making food better
Slide 53: Convertible note values
Convertible note values $265m scenario ($200m $265m scenario ($135m $200m scenario Arrovest, $65m Wholesale) Arrovest, $130m Wholesale) Aggregate Face Value of Notes 200 265 265 Maximum PIK interest (first 30 months) (8.5% p.a., accrued quarterly) 47 62 62 Maximum PIK interest (month 31 to 36) (3.5%
Slide 54: Pro Forma ownership outcomes (as if converted at end of Year 3)
Pro Forma ownership outcomes (as if converted at end of Year 3) $265m scenario ($200m Arrovest, $65m $265m scenario ($135m Arrovest, $130m $200m scenario Wholesale) Wholesale) Current Current Current # shares (m) % # shares (m) % # shares (m) % Arrovest 146 52.5% 146 52.5% 146 52.5% Other existing s
Slide 55: Pro Forma ownership outcomes (maximum dilution as converted Maturity)
Pro Forma ownership outcomes (maximum dilution as converted Maturity) $265m scenario ($200m Arrovest, $65m $265m scenario ($135m Arrovest, $130m $200m scenario Wholesale) Wholesale) Current Current Current # shares (m) % # shares (m) % # shares (m) % Arrovest 146 52.5% 146 52.5% 146 52.5% Other exis
Slide 56: International Offer Restrictions
International Offer Restrictions This presentation does not constitute an offer of Notes and Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this presentation may not be distributed to any person, and the Notes and Shares may not be offered or sold, in any cou
Slide 57: International Offer Restrictions (continued)
International Offer Restrictions (continued) Singapore This presentation and any other materials relating to the Notes and Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this presentation and any other d
Slide 58: Making food better
MAKING FOOD BETTER