Bega Cheese Limited · ASX:BGA
Bega Cheese — FY2022 Earnings Presentation
29 slides from Bega Cheese's earnings presentation, Aug 26, 2022
Slide 1: FY2022 Full Year Results Presentation
ANNUAL 62,, FY2022 Fu Results Prese 26 August 2022
Slide 2: Barry Irvin, Executive Chairman
Barry Irvin Executive Chairman
Slide 3: Key Messages
KEY MESSAGES • Solid financial performance in a challenging environment • Revenue of $3 billion • Normalised EBITDA of $180.1 million and statutory EBITDA of $149.9 million • Strong operating cash generation ($158 million) • Strong balance sheet, leverage ratio 1.8 (net debt reduction $60 million) •
Slide 4: Our Purpose
OUR PURPOSE Our purpose helps connect our people, We are proud of our heritage as To deliver on our purpose for consumers we must customers, consumers, suppliers and the an iconic Australian business with anticipate consumer needs and food trends. The communities in which we operate. It helps strong
Slide 5: Performance Highlights
PERFORMANCE HIGHLIGHTS Net revenue 180.1 184.5 FY2022 18% 141.7 149.9 $3.01 Bulk 78.0 46.3 82% 39.6 billion Branded 24.2 FY2022 FY2021 FY2022 FY2021 FY2022 FY2021 FY2022 FY2021 Normalised Statutory Normalised Statutory EBITDA ($million) Profit after tax ($million) FY2021 27% $2.07 73% Bulk 29.5 11.0
Slide 6: Our Transformation
OUR TRANSFORMATION Creating great food for a better Acquisition of future Dairy and Drinks Acquisition of Koroit Acquisition of grocery brands Accessing capital for Acquisition of growth Strathmerton Acquisition of Tatura Co-operative founded in 1899 FY2022 Results Presentation | 6
Slide 7: Sustainability and the Circular Economy
SUSTAINABILITY AND THE CIRCULAR ECONOMY Bega Cheese carbon target Scope 1 and 2 emissions targets established in support of Paris Agreement goals: 50% reduction in emissions intensity by 2030 40% reduction in absolute emissions by 2030 Net zero emissions by 2050 Circularity in the Bega Valley
Slide 8: Paul van Heerwaarden, CEO and Pete Findlay, CFO
Paul van Heerwaarden CEO Pete Findlay CFO
Slide 9: Major Initiatives
MAJOR INITIATIVES • Executed BDD integration and synergy program – Completed IT transition from Lion – Leveraging combined distribution and go-to-market capabilities – Realising milk optimisation through expanded processing network • Investing in digital platform and network infrastructure • Complet
Slide 10: Commercial and Operations Review
COMMERCIAL AND OPERATIONS REVIEW • Increases in both commodity and consumer prices for milk products • Strong retail sales volume and mix across brands • Investment in innovation of our products • Improved returns from dairy commodities • Significant COVID-19 related direct costs • Global supply cha
Slide 11: Our Business Model
OUR BUSINESS MODEL Our core capabilities Direct relationship with our farmers and other suppliers Globally competitive supply chain Diversified portfolio of market leading food brands Bulk segment Efficient distribution network serving customer growth Branded segment FY2022 Results Presentation | 11
Slide 12: Segments
SEGMENTS ($ million) Branded Bulk Unallocated Inter-segment Group Total Overheads elimination Revenue 2,480.9 735.5 - (206.5) 3,009.9 Growth vs FY2021% 63% (18%) - (40%) 45% Normalised EBITDA 135.0 61.0 (17.5) 1.6 180.1 Increase/(decrease) vs FY2021 EBITDA 36.6 (8.1) 7.3 2.6 38.4 BRANDED • Significa
Slide 13: Reconciliation of Normalised Result
RECONCILIATION OF NORMALISED RESULT Consolidated Per Period Ending 30 June 2022 Financial Reckitt LDD Transaction Other Normalised ($ million) Statements Termination Related Costs Costs Outcome Revenue 3,009.9 (24.1) - - 2,985.8 Cost of sales (2,320.5) 0.2 - - (2,320.3) Gross Profit 689.4 (23.9) - -
Slide 14: Balance Sheet
BALANCE SHEET FY2022 FY2021 $m $m Cash 44.9 87.2 • 18% reduction in net debt Trade and other receivables 274.7 348.7 Inventories 317.6 345.0 • Leverage ratio 1.8 times Property, plant and equipment 844.0 911.6 (2.3 in FY2021) Assets held for sale 60.5 - • Strong receivables and inventory Right of us
Slide 15: Cash Flow
CASH FLOW FY2022 FY2021 $m $m Receipts from customers 3,342.8 2,221.7 • Strong operating Payments to suppliers and employees (3,179.2) (2,086.5) cashflow of $158 million Net receipts/(payments) from/to Trade Receivables Facility 18.9 (12.7) Net interest and other costs of financing paid (12.5) (10.5
Slide 16: Managing Operational and Market Impacts of COVID-19
MANAGING OPERATIONAL AND MARKET IMPACTS OF COVID-19 • Direct costs of COVID-19 in FY2022 in excess of $40 million • Absenteeism at times exceeded 30% • Significant investment in PPE and additional safety measures • Disruption and extended supply chain of core inputs • Interrupted and inconsistent cu
Slide 17: Becoming a Multi-Channel Branded Company
BECOMING A MULTI-CHANNEL BRANDED COMPANY Pre 2017 Acquisitions and major initiatives (2017 to 2021) TODAY Commodity processor Divestment of certain infant formula assets (April 2017) to Mead Johnson DIVERSE AND GROWING and contract packer (who were subsequently acquired by Reckitt) realising $200m f
Slide 18: Growing Value with Iconic Australian Brands
Growing value with 18% Bulk iconic Australian brands 73% 82% Branded Branded FY2022 FY2022 $3.0b $2.5b 27% 27% BulkBulk $2.0b 73% 73% Branded Branded FY2021 FY2021 $1.5b $1.0b 41% $0.5b Bulk 59% Branded $0.0b FY2020 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 19: Portfolio of Leading Iconic Brands in Growth Categories
PORTFOLIO OF LEADING ICONIC BRANDS IN GROWTH CATEGORIES Category Category size $m Category growth Bega share Market Position Brand portfolio Fresh white milk1, 2 1,942 1.4% 12% 3 Yoghurt1 1,563 6.3% 25% 1 Milk based beverages1, 2 851 2.3% 50% 1 Spreads3 666 5.2% 32% 1 Chilled juice1 620 5.2% 23% 2 C
Slide 20: Innovation and Growth in Consumer Brands
INNOVATION AND GROWTH IN CONSUMER BRANDS Investing behind our core brands • Advertising and activation support behind our leading brands of Vegemite, Dairy Farmers, Dare, Farmers Union, Yoplait and Daily Juice • Expansion of the Dare No Added Sugar Range • Strong growth of kids snacking via pouch yo
Slide 21: COVID-19 Market Channel Impacts
COVID-19 MARKET CHANNEL IMPACTS March 2020: Panic buying The national lockdown commencing March 2020 had two major impacts on sales volumes: increased foot traffic and stay-at-home orders drove grocery sales higher while the closure of the hospitality industry saw non-grocery volume plummet. July 20
Slide 22: Manufacturing Network
MANUFACTURING NETWORK FY2022 Results Presentation | 22
Slide 23: Dairy Commodity and Farm Gate Milk Prices
DAIRY COMMODITY AND FARM GATE MILK PRICES • Significant increase in global dairy commodity pricing • Commodity pricing reflected in farm gate milk price increase • Global supply continues to be constrained • Global demand remains stable and consistent Export trend index – global commodity prices and
Slide 24: Approach to Corporate Social Responsibility
APPROACH TO CORPORATE SOCIAL RESPONSIBILITY Food and Diversity, inclusion Greenhouse Packaging Water nutrition and equality gases sustainability sustainability Highlights FY2022 Highlights FY2022 Highlights FY2022 Highlights FY2022 Highlights FY2022 Removed 1,000 tonnes of added Increased the repres
Slide 25: FY2023 Earnings Guidance
FY2023 EARNINGS GUIDANCE • Confirm July Earnings guidance Normalised EBITDA range of $160 million to $190 million • Initially expected Victorian farm gate milk price increases in the range of 15% to 20% • Competition for milk during June and July resulted in further increases to approximately 30% hi
Slide 26: Barry Irvin, Executive Chairman
Barry Irvin Executive Chairman
Slide 27: Where Are We Today
WHERE ARE WE TODAY • Year of achievement in challenging circumstances • Transition to branded food company • Strong underlying brand growth • Step change in white milk retail pricing • Significant cost increases late in FY2022 • Further opportunities in business efficiencies and cost out programs •
Slide 28: FY2022 Results Presentation | 28
FY2022 Results Presentation | 28
Slide 29: Disclaimer
DISCLAIMER 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 may contain statement