Bega Cheese Limited · ASX:BGA
Bega Cheese — Shareholder Meeting (October 2023)
39 slides from Bega Cheese's shareholder meeting presentation, Oct 24, 2023
Slide 1: FY2023 Annual General Meeting
For personal use only FY2023 Annual General Meeting 24 October 2023
Slide 2: Barry Irvin, Executive Chairman
For personal use only Barry Irvin Executive Chairman
Slide 3: Agenda
Agenda For personal use only • FY2023 Annual Report • Chairman’s Report 6 • Chief Executive Officer’s Report 12 • Questions 30 • Adoption of Remuneration report 34 • Election of Directors 35 • Modifications to Constitution 37
Slide 4: Welcome
Welcome • Shareholders For personal use only • Suppliers • PricewaterhouseCoopers • Addisons Lawyers • Link Market Services • Bega Group staff • Apologies
Slide 5: FY2023 Annual Report
For personal use only FY2023 Annual Report
Slide 6: Key Messages
Key Messages • Branded strategy delivers For personal use only • Market leading brands • Strong second half momentum • Investment in key growth categories • Accelerated alignment of organisation to branded strategy • Commodity market volatility • Rapid decline in dairy global commodity pricing in ex
Slide 7: Performance Highlights
Performance Highlights Net revenue FY2023 FY2022 $3.38 $3.01 For personal use only 160.2 180.1 144.1 149.9 billion billion 7.5 11.0 28.5 46.3 24.2 9.4 15.2 8.0 (229.9) (75.6) FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 Normalised Statutory Normal
Slide 8: Our Purpose
OUR PURPOSE For personal use only 2023 Annual General Meeting | 8
Slide 9: For personal use only
+ Acquisition o better future + Portfol + Broad distribution leading brands work servicing 19 and supplier TASTY For personal use only
Slide 10: Sustainability and the Circular Economy
Sustainability and the Circular Economy For personal use only 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 Circulari
Slide 11: Pete Findlay – CEO
For personal use only Pete Findlay – CEO
Slide 12: Branded Business Momentum
Branded Business Momentum • Brands sustained leading market positions and grew volume in an environment of unprecedented cost increases For personal use only • Pricing initiatives substantially mitigated cost impacts • Strong growth in food service and convenience channels • Restructuring program an
Slide 13: Innovation and Growth in Brands
Innovation and Growth in Brands Investment in core brands • Focused marketing investment to enable strong pricing growth For personal use only • Vegemite 100 Anniversary execution led to full year growth rate at nearly twice rate of spreads category • Four iconic brands with 100 years of heritage th
Slide 14: Growing Revenue with Iconic Australian Brands
Growing Revenue with 15% Bulk iconic Australian Brands 85% 73% Branded Branded FY2021 For personal use only $3.5b FY2023 $3.0b 18% $2.5b Bulk 73% 82% Branded $2.0b Branded FY2022 FY2022 $1.5b $1.0b 27% 27% BulkBulk $0.5b 73% 73% Branded Branded FY2021 $0.0b FY2021 2003 2004 2005 2006 2007 2008 2009
Slide 15: Brand Shares | Australian Retail Categories
Brand Shares | Australian Retail Categories Category size Category Bega Market Category Brands $m Annual growth share Position For personal use only Fresh white milk 2,118 13% 12% 3 Yoghurt 1,740 11% 26% 1 Milk based beverages 918 13% 52% 1 Spreads 700 5% 31% 1 Chilled juice 657 6% 22% 2 Creams and
Slide 16: Branded Market Strategy
Branded Market Strategy • Grow core grocery through focused innovation and brand execution excellence For personal use only • More people consuming more often across more occasions • Greater presence in food service and convenience channels • Leverage our sales force and national cold chain distribu
Slide 17: Australian Milk Production
Australian Milk Production Industry For personal use only 12b • Decline in milk production 10b • Relatively minor rationalisation of industry manufacturing capacity 8b • Reduced milk availability and industry over capacity increasingly creates disconnect between farm gate milk price 6b and commodity
Slide 18: Farm Gate Milk Price and Market Returns
Farm Gate Milk Price and Market Returns • Domestic consumer markets reflecting For personal use only farm gate price • Global commodity prices highly volatile and now disconnected from farm gate milk price • Further decrease in total milk supply in FY2023 • Robust competition for milk procurement re
Slide 19: Manufacturing Network
Manufacturing Network For personal use only 2023 Annual General Meeting | 19
Slide 20: Dairy Commodity Strategy
Dairy Commodity Strategy • Right sizing commodity infrastructure For personal use only • Further aligning commodity capacities and capabilities with branded business • Focus on higher value commodities and nutritional products • Ensure capability to respond to international commodity market opportun
Slide 21: Profit and Loss
Profit and Loss Normalised Statutory FY2023 FY2022 +/- % FY2023 FY2022 $ millions $ millions For personal use only Net Revenue 3,376.0 2,985.8 13% Net Revenue 3,376.0 3,009.9 EBITDA 160.2 180.1 -11% EBITDA 144.1 149.9 D&A (101.9) (103.7) 2% D&A / Impairment (377.8) (103.7) EBIT 58.3 76.4 -24% EBIT (
Slide 22: Reconciliation of Normalised Result
Reconciliation of Normalised Result Consolidated Per For personal use only Period Ending 30 June 2023 Financial Vegemite Other Tax Normalised ($ million) Statements Way Impairment Restructuring Costs Consolidation Outcome Revenue 3,376.0 - - - - - 3,376.0 Cost of sales (2,719.6) - - - - - (2,719.6)
Slide 23: Profitability Overview
Profitability Overview For personal use only • Complex, diverse and rapidly changing circumstances • Strong double-digit growth – price, volume and product mix improvements for the Branded business • By Q4 cumulative price increases had offset increased costs • FY2023 Volume growth in Branded segmen
Slide 24: Brand Momentum and Commodity Impact
Brand Momentum and Commodity Impact For personal use only EBITDA Margin by Quarter (% Net Revenue) • Successful price execution in branded business in 1H • Continued branded momentum into FY2024 • Rapid decline in global commodities in 2H • Commodity impact continues in FY2024 Q1 Q2 Q3 Q4 Branded Bu
Slide 25: Cash Flow
Cash Flow FY2023 FY2022 For personal use only $m $m Receipts from customers 3,611.1 3,342.8 • Operating cash flow impacted by lower EBITDA in the bulk business, and Payments to suppliers and employees (3,607.8) (3,179.2) higher inventory costs due to inflation Net proceeds from the Trade Receivables
Slide 26: Balance Sheet
Balance Sheet FY2023 FY2022 For personal use only $m $m Cash 66.4 44.9 • FY2023 decrease in Property, Plant and Trade and other receivables 306.1 274.7 Equipment and corresponding increase in Lease Liability reflect the Sale and Leaseback Inventories 428.7 317.6 transaction of the Port Melbourne sit
Slide 27: Where We Are Today
Where We Are Today • Iconic leading brands For personal use only • Integrated manufacturing and processing infrastructure • Agile response to changing markets • Strong strategic positioning • Both branded acquisitions ahead of business case • Opportunities for further branded pricing and innovation,
Slide 28: Looking Forward
Looking Forward • Creating value for our shareholders For personal use only • Implementing new five-year strategic plan (FY2023 - FY2028) • EBITDA target $250m plus, ROFE 10% or greater within that timeframe • Revenue and growth primarily driven by the branded business • Less exposed to milk volume
Slide 29: Barry Irvin, Executive Chairman
For personal use only Barry Irvin Executive Chairman
Slide 30: Questions?
For personal use only Questions? 2023 Annual General Meeting | 30
Slide 31: Formalities and Voting
For personal use only FY2023 Annual General Meeting Formalities and Voting 24 October 2023
Slide 32: Voting Procedure
Voting Procedure • A poll is being held for all resolutions For personal use only • Share registrar Mr Nick O’Hagan of Link Market Services Limited will act as Returning Officer in relation to the polls • Results available on ASX after the meeting
Slide 33: Resolutions
Resolutions • Adopt remuneration report for the year For personal use only ended 30 June 2023 • Election of Directors • Terry O’Brien • Peter Margin • Modifications to Constitution
Slide 34: Remuneration Report
Remuneration Report • Pages 39 to 52 of the 2023 Annual Report For personal use only • Board, Executive Chairman, CEO and other key management personnel • Market data and external advisors Proxy Votes • Total Votes 147,182,961 (48.33%) • For 132,081,312 (89.74%) • Open 1,739,756 (1.18 %) • Against 1
Slide 35: Election of Directors – Terry O'Brien
Election of Directors For personal use only Terry O’Brien Proxy votes • Total Votes 149,460,411 (49.08%) • For 119,789,245 (80.15%) • Open 1,720,034 (1.15%) • Against 27,951,132 (18.70%) 2023 Annual General Meeting | 35
Slide 36: Election of Directors – Peter Margin
Election of Directors For personal use only Peter Margin Proxy votes • Total Votes 149,453,035 (49.08%) • For 146,273,261 (97.87%) • Open 1,719,907 (1.15%) • Against 1,459,867 (0.98%) 2023 Annual General Meeting | 36
Slide 37: Modifications to Constitution
Modifications to Constitution For personal use only To consider and, if thought fit to pass, the following as a special resolution: “That the Company’s Constitution be modified in the following manner: a) by replacing Rule 9.1(a) with the following new Rule 9.1(a): Subject to the Act and this Consti
Slide 38: For personal use only
For personal use only
Slide 39: Disclaimer
Disclaimer For personal use only 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