Bega Cheese Limited · ASX:BGA
Bega Cheese — FY2021 Earnings Presentation
34 slides from Bega Cheese's earnings presentation, Aug 27, 2021
Slide 1: FY2021 Full Year Results Presentation
FY2021 Full Year Results Presentation Barry Irvin Executive Chairman Paul van Heerwaarden Chief Executive Officer Pete Findlay Chief Financial Officer
Slide 2: Agenda
Agenda Key messages 03 Becoming The Great Australian Food Company 04 Our year in review 11 Our way forward 29 Q&A 32
Slide 3: Key messages
Key messages Strong financial performance in the context of challenging markets and a major acquisition Revenue of $2.07b (includes five months LDD) Statutory EBITDA of $182.7m and normalised EBITDA of $141.7m Balance sheet continues to strengthen, leverage ratio 2.25 Executed acquisition
Slide 4: Becoming The Great Australian Food Company
Becoming The Great Australian Food Company Barry Irvin Executive Chairman
Slide 5: Bega is a values led organisation
Bega is a values led organisation Our Vision To become The Great Australian Food Company Our Values Passion for the customer Grow our Invest in Support and the consumer people our future each other What will Great food Great people Great aspirations Greater good make us Great We create great food an
Slide 6: Our transformation to becoming The Great Australian Food Company
Our transformation to becoming The Great Australian Food Company The Future The Great Australian 2021 Food Company Transformational 2018 Acquisition Creating Strengthening 2017 Our Supply Chain Acquisition of Lion great food for a better future New Business 2011 Dairy and Drinks Diversified portfo
Slide 7: Creating sustainable growth through an integrated value chain
Creating sustainable growth through an integrated value chain Our vision The Great Australian Food Company Our values We are a value-led company Passion for the customer and consumer Grow our people Invest in our future Support each other These values are reflected in our vision and define what make
Slide 8: Acquisition of Lion Dairy and Drinks is aligned to our strategy
Acquisition of Lion Dairy and Drinks is aligned to our strategy Our vision The Great Australian Food Company Our core capabilities Diversified portfolio of Efficient distribution network Globally competitive Direct relationship with market leading brands servicing customer growth supply chain our fa
Slide 9: Growing a portfolio of iconic brands
Growing a portfolio of iconic brands Pre 2017 2020 Acquisition rationale Today Limited investment Acquiring brands Acquisition of Lion in brands in new categories Iconic Australian Dairy and Drinks brands in growth Strong portfolio of iconic brands Fonterra responsible for Extension of Bega brand ca
Slide 10: 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 11: Our year in review
Our year in review Paul van Heerwaarden Pete Findlay Chief Executive Officer Chief Financial Officer
Slide 12: Commercial and operations update
Commercial and operations update A year of challenge, opportunity and transformation Financial performance and balance sheet position to support further growth Well progressed with Bega Dairy and Drinks integration and realisation of synergies Full year benefit from Koroit lactoferrin investme
Slide 13: Creating value through organic and acquisitive sales growth in a challenging market
Creating value through organic and acquisitive sales 27% growth in a challenging market 73% Bulk Branded FY2021 $2.0b $1.5b 41% 59% Bulk Branded $1.0b FY2020 20% $0.5b Branded 80% Bulk $0.0b Pre 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Slide 14: Performance highlights
Performance highlights FY2021 Revenue FY2020 Revenue $2.07 $1.49 Reduction in normalised EBITDA to net debt leverage ratio from 2.35 times to 2.25 times Normalised EBITDA increased by 38% to $141.7 million Statutory EBITDA increase by 108% to $182.7 million Operating cash flow $111.4 million
Slide 15: Our business model
Our business model Creating sustainable value from farm to consumer Our core capabilities Direct relationship with our Farmers and other suppliers farmers and other suppliers Globally competitive Bulk processing Packaged goods processing supply chain Contract packing Diversified portfolio of market
Slide 16: Segments
Segments Unallocated Inter-segment ($ million) Branded Bulk Overheads elimination Group Total Revenue 1,519.9 897.5 - (344.0) 2,073.4 Growth vs FY2020% 73 (8) - (5) 39 Normalised EBITDA 98.4 69.1 (24.8) (1.0) 141.7 Increase/(decrease) vs FY2020 EBITDA 22.4 26.8 (9.9) (0.6) 38.7 Branded Bega Dairy
Slide 17: Reconciliation of normalised result
Reconciliation of normalised result LDD Gains Consolidated Per Transaction Relating Reckitt Period Ending 30 June 2021 Financial Related to LDD Termination Kraft Legal Other Normalised ($ million) Statements Costs Acquisition Fees Settlement Costs Outcome Revenue 2,073.4 - - (13.9) - - 2,059.5 Cost
Slide 18: Balance sheet
Balance sheet The FY2021 balance sheet includes a provisional fair value assessment on the acquisition of Lion Dairy and Drinks FY2021 FY2020 $m $m Cash 87.2 22.9 Provisional fair value of net Trade and other receivables 348.9 69.5 assets acquired in Bega Dairy and Drinks $600m Inventories 345.0 2
Slide 19: Cash flow
Cash flow FY2021 FY2020 $m $m Receipts from customers 2,221.7 1,691.6 Continued strong operating cash flow performance and focus on working capital Payments to suppliers and employees (2,086.5) (1,494.9) Increase in net debt to fund the acquisition of Net payments to trade receivables facility (
Slide 20: Lion Dairy and Drinks integration update
Lion Dairy and Drinks integration update Integration and synergy realisation program Initial 100 day plan successfully completed and new organisation design in place Strong cultural alignment and depth of talent in the newly combined businesses Several key services have been migrated off the T
Slide 21: Portfolio of leading iconic brands in growth categories
Portfolio of leading iconic brands in growth categories Category Category size $m1 Category growth1 Bega share1 Brand portfolio Fresh white milk2 1,913 0.4% 13% Yoghurt 1,472 4.7% 26% Milk based beverages2 836 5.6% 50% Spreads 633 1.7% 31% Chilled juice 605 3.9% 24% Creams and custards 509 5.5% 11%
Slide 22: Innovation and growth in consumer brands
Innovation and growth in consumer brands Diversified portfolio of market leading brands New innovation in attractive dairy categories Expansion of the yoghurt portfolio into ‘better for you offerings’ in convenient formats Further innovation supporting growth under the Dare brand Innovation in
Slide 23: Diversified portfolio of market leading brands
Diversified portfolio of market leading brands Continued innovation and growth in the spreads category Improved market share in the category by 2.8 points to 31.4% by value Growth in B honey supported by the Purple Hive project Further innovation in Vegemite with the launch of a squeeze format
Slide 24: Expanded and diversified manufacturing network across Australia
Expanded and diversified manufacturing network across Australia 24 | FY2021 Full Year Results Presentation
Slide 25: Operations review
Operations review Globally competitive supply chain Major initiatives Implementation of DuPont safety leadership and engagement Organisation and process review completed Koroit lactoferrin facility delivering to business plan Factory utilisation and optimisation program Network logistics c
Slide 26: Managing operational and market impacts of COVID-19
Managing operational and market impacts of COVID-19 First priority is the safety of our employees and our communities Internal COVID-19 management team and Internal Advisory Panel ensuring adherence to COVID-19 policies Group policies to ensure efficient and effective response Response manag
Slide 27: Dairy commodity and farm gate milk prices
Dairy commodity and farm gate milk prices Australasian dairy export index (Jan 2013 - now) 290 280 Improved seasonal conditions in FY2021 270 260 FY2022 milk supply outlook stable to positive 250 240 Highly competitive milk procurement environment continues 230 220 FY2022 opening milk prices
Slide 28: Approach to corporate social responsibility
Approach to corporate social responsibility Our focus is on the five areas where we can have the greatest impact Food Diversity, inclusion Greenhouse Packaging Water nutrition and equality gases sustainability sustainability Highlights FY2021 Highlights FY2021 Highlights FY2021 Highlights FY2021 Hig
Slide 29: Our way forward
Our way forward Barry Irvin Executive Chairman
Slide 30: Where are we today?
Where are we today? Continuing integration of Bega Dairy and Drinks Improving financial performance and benefits of scale Strengthening balance sheet Strong brands in growth categories Opportunity for further growth and business improvement Geographic product and channel diversity creati
Slide 31: Our priorities
Our priorities Safety of our people and wellbeing Ongoing management of the impacts of COVID-19 Continue to realise Bega Dairy and Drinks synergies Invest in brands, market and new capabilities Further manufacturing optimisation projects Opportunities for further rationalisation and busi
Slide 32: Q&A
Q&A Barry Irvin Executive Chairman
Slide 33: Disclaimer
Disclaimer The following disclaimer applies to this presentation and any information provided in this presentation (Information). You are advised to read this disclaimer carefully before reading or making any other use of this presentation or any Information. This presentation has been prepared by B
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