Noumi Limited · ASX:NOU
Noumi — Investor Presentation (May 2019)
66 slides from Noumi's investor presentation, May 23, 2019
Slide 1: Freedom Foods
FREEDOM FOODS 23rd May 2019
Slide 2: Important Information
NOT FOR DISTRIBUTION OR RELEASE IN THE USA Important Information Not for Distribution or Release in the United States This presentation is issued by Freedom Foods Group Limited ACN 002 814 235 (“Freedom Foods” or “the Company”). Summary Information This presentation contains summary information abou
Slide 3: Important Information
NOT FOR DISTRIBUTION OR RELEASE IN THE USA Important Information Future Performance This presentation contains certain 'forward-looking statements'. Forward-looking statements include those containing words such as: 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'int
Slide 4: Important Information
NOT FOR DISTRIBUTION OR RELEASE IN THE USA Important Information Investment Risk An investment in Shares is subject to investment and other known and unknown risks, some of which are beyond the control of Freedom Foods. Freedom Foods does not guarantee any particular rate of return or the performanc
Slide 5: Important Information
NOT FOR DISTRIBUTION OR RELEASE IN THE USA Important Information Disclosure The book runners, together with their affiliates, are full service financial institutions engaged in various activities, which may include trading, financing, financial advisory, investment management, investment research, p
Slide 6: Table of Contents
Table of Contents Overview • Overview • Proposed Use of Funds • Details of Equity Raising • Equity Raising Indicative Timetable Our Business Appendices • Appendix A – Financials FY 2019 1st Half • Appendix B – Key Risks • Appendix C – Foreign Selling Restrictions 6
Slide 7: Overview
Overview 7
Slide 8: Overview
Overview • Demand for the Company’s UHT Dairy operations are growing above plan, with demand reflecting: • Increasing demand for UHT dairy products in Australia, SE Asia and China; • No significant increase in industry UHT capacity to meet demand; and • Recognition by customers of the Company’s broa
Slide 9: Recent History
Recent History • The Company is strategically well positioned to build into a significant international food and beverage business • In recent years, the Company has invested in state of the art infrastructure for its products through an investment program of +$400m • In 2018 the Company raised $200
Slide 10: Dairy Demand: Emerging market milk deficits have widened
Dairy Demand Emerging market ‘milk deficits’ have widened Annual milk deficit, 2009 vs 2018 (and CAGR%) • The Company expects strong ongoing demand for dairy products including UHT milk from 14 14 5% 7% export markets 12 12 • China and SE Asia markets are projected to have increasing supply side “mi
Slide 11: Value Adding UHT Dairy
CTOSE FREE MILK Value Adding UAT Dairy
Slide 12: Functional Benefits of Key Proteins Produced
Functional Benefits of Key Proteins Produced nWHEY PROTEIN ISOLATE (nWPI) Key Muscle Synthesis Driver (maximising anabolic potential) Differential Protein Function (non-denatured protein providing differential functional properties) Faster Leucine & Essential Amino Acids delivered with less total pr
Slide 13: Demand for Dairy Proteins
Demand for Dairy Proteins Growth in Protein Consumption Dairy Proteins “Gold Standard” Consumption of dairy proteins has been increasing in recent Dairy proteins are often viewed by consumers as the ‘gold years, driven by rising income in emerging markets, growth standard’ in protein due to their co
Slide 14: Nutritionals Demand
Nutritionals Demand • The Company’s newly established Nutritional ingredients capability is experiencing strong customer demand for its unique capabilities • The Company has commitments for the sale of all its available capacity in FY 2020 for: • Native WPI (Powder) • Micellar Casein (Liquid) • Lact
Slide 15: Additional Protein
Additional Protein Milk Processing Capacity (litres) 500 • Nutritional ingredients capabilities were 500 established on processing the excess protein 450 streams from up to 180 million litres of dairy milk Opportunity (2017 Plan) 400 captured 400 Additional through Protein 350 • Dairy milk flows in
Slide 16: Nutritionals – Product Capabilities
Nutritionals – Product Capabilities Timeline for Commercial Product Availability and Potential % Increases in Capacity based on Additional Infrastructure (Calendar Year) 2021 Stage 3 Capacity 2020 Native Whey Protein Isolate +67% Micellar Casein +67% Stage 2 Capacity Lactoferrin +58% Native Whey Pro
Slide 17: Leverage our Ingredients into Consumer Products
Leverage our Ingredients into Consumer Products 17
Slide 18: Milk Supply to Production
Milk Supply to Production Total Contracted Milk Supply 350 – 400 million Litres UHT Dairy Litres Production – All Sites FY 2020 400 350 300 250 Million Litres 200 150 100 50 0 FY 2017 FY 2018 FY 2019 FY 2020 FY 2017 Plan 85 110 150 180 FY 2018 Accelerated Plan 85 145 250 350 • Growth from category d
Slide 19: Milk Supply
Milk Supply • The Company’s sourcing model protects farmers from the cycle of volatility experienced by farmers who are working off traditional short term pricing • Farmers face 3 key areas of volatility to manage: Pricing, Seasonality and Input Costs. • Our prices are not conditional upon external
Slide 20: Strong Growth in Forecast FY 2019 Net Sales
Strong Growth in Forecast FY 2019 Net Sales Net Sales Growth vs Capex Spend 500 500 450 450 400 400 350 350 300 300 A$ Million A$ Million 250 250 200 200 150 150 100 100 50 50 0 - 2014 2015 2016 2017 2018 2019 Actual Net Sales Projected Net Sales Actual Net Sales Projected Net Sales Actual Capex Act
Slide 21: Strong Gross Sales Growth
Strong Gross Sales Growth in 68% Australia’s Own 143% Messy Monkey’s 1,950% Heritage Mill 20% Arnold’s Farm 162% • The Company is the 2nd fastest growing grocery supplier, growing at +37.1% vs total defined grocery (excluding tobacco) at +1.6%1 • 1 in 6 Woolworths & Coles shoppers (16%) were purchas
Slide 22: Actual Net Sales Mix / Geography
Actual Net Sales Mix / Geography Net Sales by Business Segment Net Sales by Key Category / Geography 120 Other 10% 100 Contract 7% 80 A$ Million 60 Grocery 40 Retailers Export 51% 21% 20 - Cereal & Snacks Plant Based Dairy Beverages Specialty Nutritionals Beverages Seafood Out of Home H1 FY 18 H1 FY
Slide 23: Development
Development Sales and Earnings Enablers Optimise New Business Streams Operational Leverage Scale Geography Growth Brand Growth Build Category Growth New Channels 2017 2018 2019 2020 2021 2022 • Harvesting benefits of building capacity in brands, innovation and operational capability • Building sales
Slide 24: Proposed Use of Funds
Proposed Use of Funds 24
Slide 25: Use of Funds
Use of Funds Accelerate capital expenditure programs in Nutritional ingredients through 2019 / 2020 to bring forward sales and earnings Nutritional Demand Capacity Increases ($100m) • Increased Protein fractionation • LF, WPI, MCC • Access new protein streams (Alpha Lac, IGG) • Additional Protein Dr
Slide 26: Impact on Balance Sheet
IMPACT ON BALANCE SHEET On basis of 31st December 2018 Balance Date For the period ending… 31 December Capital Raising Proforma 2018 Impact Post Capital ($’000) (Day 1) Raising ($’000) Inventory 104,244 104,244 Trade & Other Receivables 77,910 77,910 Trade & Other Creditors (102,612) (102,612) Worki
Slide 27: Equity Raising
Equity Raising 27
Slide 28: Details of Equity Raising
Details of Equity Raising • Freedom Foods Group Limited (“Freedom Foods” or “the Company”) is raising approximately $130 million (the “Equity Raising”) through: - a 1 for 18 accelerated non-renounceable pro-rata entitlement offer (“Entitlement Offer”) to eligible shareholders at $4.80 per share to r
Slide 29: Details of Equity Raising
Details of Equity Raising The Equity Raising comprises approximately $65 million accelerated non-renounceable pro-rata entitlement offer and approximately $65 million institutional placement • 1 for 18 accelerated non-renounceable pro-rata entitlement offer (“Entitlement Offer”) to raise Entitlement
Slide 30: Equity Raising Timetable
Equity Raising Timetable Key Events Key Dates Trading halt and open Placement and Institutional Entitlement Offer Thursday 23 May 2019 Close Placement and Institutional Entitlement Offer Thursday 23 May 2019 Resume trading, announce results of Placement and Institutional Entitlement Offer Monday 27
Slide 31: Our Business
OUR BUSINESS 31
Slide 32: What Do We Make
WHAT DO WE MAKE ree}, | tate gf \ "SNACKING —
Slide 33: Where
WHERE China North Sales Office America Sales Office SE Asia Middle East Sales Office Distributors Aust / NZ Head Office 33
Slide 34: Where
WHERE Australian Retailers Out of Home, Petrol and Convenience Partnerships and Distribution scale in China, SE Asia Building Distribution scale in North America Note: • No customer set out above has authorised or caused the issue of this presentation, made any statement in this presentation, nor ta
Slide 35: Investment in New Facilities and Capabilities
Investment in New Facilities and Capabilities (FY 2017 to FY 2019) 35
Slide 36: No 1 in UHT Capability
No 1 in UHT Capability in • Largest production capacity of branded and private label UHT milk in Australia • Complementary production sites in Shepparton and Ingleburn • Servicing Australia, NZ, China, SE Asia and Middle East 36
Slide 37: UHT Capabilities - Site
UHT Capabilities - Site Shepparton • High Speed dairy milk Capability (White, Flavoured) • 1 Litre and Portion Pack (Carton Capability) Capacity Total 4 x 1 Litre High Speed 1 x 2 Litre Litres 440m 5 x Portion Pack High Speed Packs 810m * Annualised, 6 Day basis Ingleburn • High Speed Plant Milk Cap
Slide 38: Brands Accelerating our Growth
Brands Accelerating our Growth Leveraging current and emerging trends in consumption 38
Slide 39: We Are Positioned on Trend Growth
Asian Market Convenience Source & Provenance Plant-based WE ARE POSITIONED ON TREND GROWTH New Taste Sensations Food as Out-of-home Medicine Protein 39
Slide 40: Disrupting Categories and Channels
DISRUPTING CATEGORIES AND CHANNELS 65 products launched in FY 2018 + ~99 new branded products launched in FY 2019 40
Slide 41: Category
Category • #1 within the Health Food Section of retail supermarkets in Australia* • +48.5% market share of health cereals, growth of +6% in the category* • Further innovation in value added cereals and snacks including products developed for on the go channels in out of home launched in FY 2019 *MAT
Slide 42: Building a Leading Global Dairy Brand: Australia's Own
Building a Leading Global Dairy Brand Australia’s Own 42
Slide 43: AO Kids Milk
AO KIDS MILK No 1 Imported Kids Milk in China where it is distributed and this is just the start ! • AO Kids Milk product has continued its strong growth trajectory, with the product still the No 1 imported Kid’s Milk brand in China, where it is distributed • Distribution covering 22 provinces acros
Slide 44: New Theland Partnership
NEW THELAND • Strategic new partnership with Theland, majority owned by Alibaba Group, was entered into in FY 2019 • Theland has distribution capabilities across online and offline channels in more than 25 provinces in China • A 200ml A2 Pure Milk was launched in early calendar 2019. This was the se
Slide 45: Australia's Own
AUSTRALIA’S OWN • The trend towards plant based food and beverages is increasing in Australia and global markets, driven by a desire for healthier and “cleaner” lifestyles, which is motivating consumers to focus on fruits, vegetables, nuts, seeds, grains and other botanicals • Upward trend in plant
Slide 46: Milklab & Almond Breeze
MILKLAB & ALMOND BREEZE +162% gross • The increasing growth of Out of Home channels (e.g. cafes and similar) and demand for plant based milks has seen increasing demand for coffee milk products sales growth in Milklab over • The Company’s range of barista blend brands including the premium “MilkLab”
Slide 47: Messy Monkeys
MESSY • Healthy snacking made for kids • Strong growth since launch in August 2017. • +143% growth in Messy Monkeys over last 10 months1 • Extended range and distribution through grocery retailers, with extensions into drinking yoghurt in CY 2019 Note: (1) 10 month period; as at the end of April 201
Slide 48: Vital Strength
VITAL STRENGTH • Recognised as a leader in high quality nutrition products • +39% growth in gross sales grocery retail, vs prior period across Vital Strength portfolio1 • Provides foundation for a unique vertical integration to the Group’s dairy nutritional capabilities Note: 48 (1) 10 month period;
Slide 49: Top 3 Cereal Brand
Top 3 CEREAL Brand • The “Arnold’s Farm” brand is ranked in the Top 3 oat cereals in sales on Tmall International with the cereal category holding significant growth potential • No. 2 selling cereal on Tmall during Single’s Day promotion • Gross sales growth across Australia and China +34 % vs prior
Slide 50: Making Food Better
“@ MAKING FOOD BETTER “| j a a ‘freedom mY Sad | FOODS GRO SOR FN OR eS ST
Slide 51: Appendix A: 1st Half FY 2019 Financials
Appendix A 1$* Half FY 2019 FINANCIALS as! _—= — ~ ~ SYS a2
Slide 52: Operating: Underlying vs Statutory
OPERATING Underlying vs Statutory 6 Months to 31st December (A$ m) 1H19 1H18 Movement Operating EBDITA(1) 21.0 16.0 + 5.0 Gain on Sale of Ingleburn - 3.4 (3.4) Other Costs not representing underlying performance(2) (2.7) (6.1) +3.4 Employee Share Option Expense (non cash)(3) (1.0) (0.4) (0.6) Statut
Slide 53: Financial Summary
FINANCIAL 6 Months to 31st December 1H19 1H18 % Change $’000 $’000 Net Sales Revenue 209,041 159,563 +31.0% EBDITA (Underlying Operating)(1) 21,003 16,008 + 31.2% EBDITA (Statutory) 17,309 12,896 + 34.2% Equity Associates Share of Profit(2) 240 240 - Pre Tax Profit (Operating) 8,878 7,584 + 17.1% Pr
Slide 54: Financial Summary by Segment
FINANCIAL SUMMARY BY 6 months to 31st December 2018 (A$m) Cereal & Plant Based Dairy Specialty Nutritionals Others Total Snacks Beverages Beverages Seafood Net Sales Revenue 43.1 46.3 102.7 7.8 9.4 209.0 Trading EBDITA 5.1 12.3 9.4 0.5 2.4 29.7 Equity Associates(1) 0.2 0.2 Corporate Costs(2) (8.9) (
Slide 55: Cash
CASH 6 Months to 31st December 1H19 1H18 6 Months to 31st December 1H19 ($’000) ($’000) Impact of Working Capital Growth ($’000) Cash from Operating Activities (15,143) 27,024 Profit after tax excluding non cash adjustments 11,689 Payments for Restructuring & Acquisition Increase in trade and other
Slide 56: Appendix B: Key Risks
Appendix B Key Risks
Slide 57: Key Risks
Key Risks A number of risks and uncertainties, which are both specific to Freedom Foods and of a more general nature, may affect the future operating and financial performance of Freedom Foods and the value of its shares. While some common risk factors are set out below, it is not possible to produc
Slide 58: Key Risks (cont'd)
Key Risks (cont’d) Delisting of a Significant Number of Product Lines by a Major Customer • The Freedom Foods business units have strong relationships with major retail customers that make it unlikely that they will be delisted entirely as a supplier. While each of the business brands have establish
Slide 59: Key Risks (cont'd)
Key Risks (cont’d) Freedom Foods’s Growth Strategies May Not Achieve Their Objectives • Freedom Foods has identified a number of growth strategies to continue to drive margin improvements and sales growth. There is a risk that the implementation of Freedom Foods’s growth strategies could be subject
Slide 60: Key Risks (cont'd)
Key Risks (cont’d) Environmental Risk • Freedom Foods and its associated entities’ operations are subject to environmental laws and regulations. Freedom Foods and its associated entities could incur material costs in order to comply with those laws and regulations, or as a consequence of a breach of
Slide 61: General Risks Relating to Equity Investments and Markets
Key Risks (cont’d) GENERAL RISKS RELATING TO EQUITY INVESTMENTS AND MARKETS • Investors should be aware that there are risks associated with any investment listed on the ASX. The value of Shares may rise above or fall below the Equity Raising price, depending on the financial condition and operating
Slide 62: Appendix C: Foreign Selling Restrictions
Appendix C Foreign Selling Restrictions
Slide 63: Foreign Selling Restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE USA Foreign Selling Restrictions International Offer Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of Freedom Foods in any jurisdiction in which it would be unlawful. This document may not be distributed to any pe
Slide 64: Foreign Selling Restrictions (cont'd)
NOT FOR DISTRIBUTION OR RELEASE IN THE USA Foreign Selling Restrictions (cont’d) Germany The information in this document has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under the Directive 2003/71/EC (“Prospectus Directive”), as amended and impleme
Slide 65: Foreign Selling Restrictions (cont'd)
NOT FOR DISTRIBUTION OR RELEASE IN THE USA Foreign Selling Restrictions (cont’d) Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this document shall not be deemed to constit
Slide 66: Foreign Selling Restrictions (cont'd)
NOT FOR DISTRIBUTION OR RELEASE IN THE USA Foreign Selling Restrictions (cont’d) United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section