Spc Global Holdings Ltd · ASX:SPG
Spc Global — Merger or Acquisition (November 2024)
46 slides from Spc Global's merger presentation, Nov 25, 2024
Slide 1: SPC Global: A Leading Australian Food and Beverage Business
1 SPC Global A Leading Australian Food and Beverage Business Project Shoelace | November 2024 1
Slide 2: SPC Global: A market-leading F&B business
SPC Global A market-leading F&B business Project Shoelace | November 2024 2
Slide 3: Transaction overview
3 Transaction overview • The Original Juice Company (‘OJC’) to acquire SPC Global Limited (‘SPC’) (the ‘Transaction’), creating a market leading Australian and global food and beverage company (the ‘Combined Business’). Proposed merger of OJC • OJC will undertake a 10:1 consolidation of its shares,
Slide 4: Executive summary
4 Executive summary • SPC Global Limited (‘SPC’) will be a market-leading agrifood business with significant scale and a diversified product offering SPC Global • SPC produces high-quality and health-conscious food and beverage products to Australian and global consumers under an enviable portfolio
Slide 5: SPC Global is a unique investment opportunity
5 SPC Global is a unique investment opportunity 1 Strong underlying business restored since corporate carve out 2 Established platform undertaking unique acquisitions in juices and powdered milk 3 Product scale and diversification underpins a resilient agri-food business 4 Seasonal production divers
Slide 6: Strong underlying business restored since corporate carve out
6 1 Strong underlying business restored since corporate carve out Since the carve out from Coca-Cola Amatil in 2019, SPC has undertaken a number of strategic initiatives to restore fundamental value in the business – there are additional levers of ‘low hanging fruit’ to support operational turnaroun
Slide 7: Established platform undertaking unique acquisitions
7 2 Established platform undertaking unique acquisitions SPC is an iconic Australian agribusiness established over 100 years ago, and is the largest local producer of fruit, tomato, baked beans and spaghetti nationwide. SPC’s next chapter of growth sees the business expanding its product offering to
Slide 8: Product scale and diversification underpins a resilient agri-food business
8 1 3 Product scale and diversification underpins a resilient agri-food business Significant scale and diversified product offering provides a platform to leverage the existing operations and reputation of iconic Australian brands brand across packaged largest supplier in the Core brands offering a
Slide 9: Seasonal production diversification bolsters working capital cycle
9 43 1 Seasonal production diversification bolsters working capital cycle OJC and SPC’s diversified product range allows for a counter cyclical production timeframe 1 2 SPC is the largest producer of tomato-based Conversely as a predominantly citrus-based juice products in Australia. Tomatoes have a
Slide 10: Four go-to-market channels creates platform to expand future demand
10 1 3 5 Four go-to-market channels creates platform to expand future demand SPC distributes products through four distinct channels and there exists a significant opportunity for the Combined Business to leverage this platform to expand current categories and enter into new product categories
Slide 11: An attractive portfolio of brands and categories to leverage for growth
11 3 1 6 An attractive portfolio of brands and categories to leverage for growth The merger of SPC, OJC and the Powdered Milk Business and concurrent ASX listing provide a platform to continue executing on this strategy, with multiple levers for future growth Medium and longer-term growth opportunit
Slide 12: Turbocharging OJC by leveraging available capacity at Shepparton
12 3 1 7 Turbocharging OJC by leveraging available capacity at Shepparton The existing vacant space at SPC's site in Shepparton can be utilised to enhance OJC's production capacity and production processes, allowing for output volume increases and a step-change in production process efficiencies OJC
Slide 13: The combination of SPC and OJC is highly synergistic
13 3 1 8 The combination of SPC and OJC is highly synergistic The combination of OJC with SPC Global will reduce the requirement for OJC infrastructure or overheads, driving operating leverage • A robust process was followed to assess the synergies, including full involvement of the Board of SPC and
Slide 14: Credentialed Board with skin in the game…
14 7 1 3 5 9 Credentialed Board with skin in the game… Combined business board with extensive expertise in the food and beverage industry, corporate finance and legal field. The Directors will have a shareholding of ~23% of the merged group and will be escrowed upon re-listing Hussein Rifai Andrew C
Slide 15: …and experienced management team
15 7 1 3 5 9 …and experienced management team Management has a proven track record of operational excellence in the food and beverage industry Robert Iervasi Brant Clutterbuck Nick Dimopoulos Group Managing Director Chief Financial Officer Chief Executive Officer, Asia Pacific SPC Board member sin
Slide 16: Financial Overview
Financial Overview Project Shoelace | November 2024 16
Slide 17: Volumes profile
17 Volumes profile The combined business has scale in distinct consumer verticals. The enhanced capacity from OJC being able to utilise existing Shepparton facilities is expected to catalyse a step-change in volumes for OJC going forward Production Volumes: ‘000s FY22 FY23 FY24 Production and sales
Slide 18: Revenue
18 Revenue An uplift in SPC sales volumes and the frozen ingredients acquisition (Natural Ingredients), is expected to drive a significant increase in group revenue in FY25 Group Pro Forma Revenue ($000s) (FY22 – FY25) Commentary SPC revenue decline in FY24 was due to stock outs 450,000 as a resul
Slide 19: Gross margin
19 Gross margin The gross profit for the combined business is forecast to increase in FY25 due to various production initiatives, price increases, and a return to normal supply conditions Group Pro Forma Gross Profit and Gross Margins ($000s) (FY22 – FY25) Commentary 32.3% 35.0% 140,000 30.2% 30.3%
Slide 20: Overheads
20 Overheads Group overheads as a % of revenue are expected to decline as the business scales and benefits from operating leverage with SPC and NOD’s largely fixed overhead cost base Group Pro Forma Operating Expenditure ($000s) (FY22 – FY25) Commentary 120,000 97,121 94,671 SPC overheads decline
Slide 21: EBITDA profile
21 EBITDA profile Operating efficiencies and inorganic growth are expected to contribute to an increase in EBITDA in FY25, with further upside as full run-rate synergies are extracted over time Group Pro Forma EBITDA ($000s) (FY22 – FY25) 35,000 29,247 30,000 2,747 13,033 25,000 18,124 20,000 10,057
Slide 22: Merged Group pro forma net revenue
22 Merged Group pro forma net revenue 410,000 35,471 404,422 390,000 11,805 370,000 3,701 23,151 $'000s 350,000 11,745 330,295 330,000 17,422 320,369 (8,975) 7,156 310,000 6,909 4,021 292,016 290,000 270,000 250,000 Natural Ingredients net sales revenue net sales revenue net sales revenue net sales
Slide 23: Synergy overview
23 Synergy overview Total synergies from the combination of SPC and OJC are estimated to be material and across direct cost savings and production efficiencies. There is upside with no synergies from PMB factored into the Merged Group earnings forecast CATEGORY DESCRIPTION Direct cost savings from m
Slide 24: Pro forma balance sheet at 30 June 2024
24 Pro forma balance sheet at 30 June 2024 SPC ADJUSTMENTS PRO FORMA 30-JUN-24 30-JUN-24 Assets Current Assets Cash and cash equivalents 330 8,700 9,030 Trade and other receivables 50,681 19,124 69,805 Inventories 133,770 (20,288) 113,482 Other assets 6,777 212 6,988 Total Current Assets 191,558 7,7
Slide 25: Trading Update
25 Trading Update FY25 Q1 MERGED GROUP FY25 Q2-Q4 MERGED MERGED GROUP ACTUALS GROUP FORECAST TOTAL Net sales revenue 97,969 306,453 404,422 EBITDA 3,505 25,742 29,247 EBITDA margin (%) 3.6% 8.4% 7.2% Historically the second half revenues for the combined business have been stronger than the first
Slide 26: Appendix A: Financial Overview
Appendix A: Financial Overview Project Shoelace | November 2024 26
Slide 27: Merged group pro forma profit and loss summary
27 Merged group pro forma profit and loss summary PRO FORMA STATUTORY HISTORICALS FOR THE FULL YEAR ENDED FORECAST FOR FORECAST FOR THE FULL THE FULL YEAR ENDED YEAR ENDED $’000 FY22 FY23 FY24 FY25 FY25 Sales 292,016 320,369 330,295 404,422 334,967 Cost Of Sales (203,695) (233,930) (223,478) (281,95
Slide 28: SPC stand alone pro forma profit and loss
28 SPC stand alone pro forma profit and loss HISTORICALS FOR THE FULL YEAR ENDED FORECAST FOR THE FULL YEAR $’000 FY22 FY23 FY24 FY25 Sales 239,778 243,798 234,824 257,974 Cost Of Sales (169,392) (187,675) (162,166) (183,955) Gross Profit 70,386 56,123 72,658 74,019 Other Income 3,511 4,698 1,185 83
Slide 29: OJC stand alone pro forma profit and loss
29 OJC stand alone pro forma profit and loss HISTORICALS FOR THE FULL YEAR ENDED FORECAST FOR THE FULL YEAR $’000 FY22 FY23 FY24 FY25 Sales 35,383 42,292 49,448 53,149 Cost Of Sales (23,976) (30,058) (38,121) (35,852) Gross Profit 11,407 12,234 11,327 17,297 Other Income 7 27 – – Operating Expenses
Slide 30: NOD stand alone pro forma profit and loss
30 NOD stand alone pro forma profit and loss HISTORICALS FOR THE FULL YEAR ENDED FORECAST FOR THE FULL YEAR $’000 FY22 FY23 FY24 FY25 Sales 16,856 34,278 46,023 57,828 Cost Of Sales (10,328) (16,196) (23,191) (32,092) Gross Profit 6,528 18,082 22,832 25,736 Other Income 1,244 430 255 – Operating Exp
Slide 31: Prospectus forecast sensitivities
31 Prospectus forecast sensitivities MERGED FY25 MERGED FY25 GROUP PRO FORMA ADJUSTED GROUP PRO FORMA ADJUSTED PRO FORMA EBITDA PRO FORMA PRO FORMA REVENUE PRO FORMA ASSUMPTION ($’000) EBITDA IMPACT EBITDA REVENUE IMPACT REVENUE +5.0% revenue 29,247 1,462 30,709 404,422 20,221 424,643 -5.0% revenue
Slide 32: Appendix B: More detail on the business
Appendix B: More detail on the business Project Shoelace | November 2024 32
Slide 33: Deep Australian history spanning over 100 years
33 Deep Australian history spanning over 100 years SPC traces its roots to 1917 when it commenced operations from its Shepparton based factory in regional Victoria. With over 100 years of history, SPC has grown from a grower cooperative to becoming one of Australia’s most loved brands Shepperton Fru
Slide 34: SPC is an iconic Australian household brand
34 SPC is an iconic Australian household brand SPC is an iconic and highly reputable brand , with strong affinity amongst Australian consumers Distinguished name in its category Recognised Australian household brand 100+ years of history with strong customer loyalty Widely recognised as a pioneer in
Slide 35: SPC Global will have a portfolio of ten distinguished brands
35 SPC Global will have a portfolio of ten distinguished brands SPC Global will have a portfolio of high-quality brands with proven brand equity, solidified by high brand awareness scores across the group Iconic and heritage brand, founded in 1917 Local pomegranate manufacturer based in the Goul
Slide 36: Significant asset value embedded in production facilities
36 Significant asset value embedded in production facilities SPC has large and well-located facilities backed by strategic procurement management Shepparton, Victoria Auburn Plant, New South Wales Chonburri, Thailand Comprises of three state-of-the-art Production centre for frozen meals and Ma
Slide 37: Go-to-market channel 1: Retail – Grocery and Convenience
Go-to-market channel 1: 37 Retail – Grocery and Convenience Nationally recognised heritage brand, with 100+ years of customer loyalty and #1 position across four product streams Overview Market leading brands across five categories The largest segment of SPC Global, supplies brands into all of Aus
Slide 38: Go-to-market channel 2: SPC Food Solutions
Go-to-market channel 2: 38 SPC Food Solutions Industrial and bulk ingredient and product supply to restaurants, cafes, pubs, clubs and schools, as well as private label Overview Process private label packaged fruits on the behalf of supermarkets B2B model – supply products and ingredients to a var
Slide 39: Go-to-market channel 3: SPC Care
Go-to-market channel 3: 39 SPC Care Provides various products to healthcare and aged care facilities through the SPC ProVital and the Good Meal Company brands Overview SPC ProVital range Provides various products to the healthcare and aged care market including to hospitals and nursing homes, ensu
Slide 40: Go-to-market channel 4: SPC International
Go-to-market channel 4: 40 SPC International Encompasses all international export, import sourcing and contracting of food products and ingredients Overview Thailand production facility Manages the production facility located in Thailand which SPC’s presence in Thailand is primarily through its
Slide 41: Appendix C: Overview of OJC and the Powdered Milk Business
Appendix C: Overview of OJC and the Powdered Milk Business Project Shoelace | November 2024 41
Slide 42: Overview of The Original Juice Company
42 Overview of The Original Juice Company OJC has 30+ years of experience in producing high quality juice products Overview Brands and products OJC has a presence in major supermarket The Juice Lab The Original Juice retailers, convenience and industrial juice, whilst Company continuing to explore
Slide 43: Overview of PMB and the go-to-market strategy
43 Overview of PMB and the go-to-market strategy The Powdered Milk Business provides counter-cyclical product diversification and distribution channels into Asia Overview of PMB Sales and distribution footprint across the Asia Pacific region The powdered milk business of Nature One Dairy (PMB) is
Slide 44: PMB range and market tailwinds
44 PMB range and market tailwinds The PMB serves customers of all ages and is well-positioned to take advantage of market tailwinds PMB serves a broad customer base across 9 key brands... … and is strategically positioned to take advantage of market tailwinds PMB’s footprint across the Asia Pacifi
Slide 45: Strategic rationale for the acquisition of PMB
45 Strategic rationale for the acquisition of PMB The acquisition of PMB offers significant opportunities for future growth as well as product and market expansion Strategic fit with the Combined Business 1 | Security of supply – manufacturing is wholly owned and managed at the facility in Carrum Do
Slide 46: Thank you
46 Thank you Project Shoelace | November 2024 46
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