Bega Cheese Limited · ASX:BGA
Bega Cheese — Shareholder Meeting (October 2018)
39 slides from Bega Cheese's shareholder meeting presentation, Oct 23, 2018
Slide 1: Bega Cheese Annual General Meeting
Bega Cheese Annual General Meeting Barry Irvin – Executive Chairman Paul van Heerwaarden – CEO
Slide 2: Agenda
Agenda • 2018 Annual Report • Executive Chairman’s Report • Chief Executive Officer’s Report • Questions • Approval of Remuneration Report • Election of Directors • Approval of the issue of shares under the September 2018 Institutional placement • Provision of financial assistance by Peanut Company
Slide 3: Welcome
Welcome • Shareholders • Suppliers • PricewaterhouseCoopers • Addisons Lawyers • Link Market Services • Bega Cheese Staff • Apologies Bega Cheese Limited Page 3
Slide 4: 2018 Annual Report: Executive Chairman's Report
2018 Annual Report Executive Chairman’s Report Barry Irvin – Executive Chairman
Slide 5: Key Messages
Key Messages • Creating the “Great Australian Food Company” • Bega Foods integration complete • Peanut Company of Australia integration complete • Financial performance at expectation • Increased milk supply • Continued growth in international business • Cheese packaging and processing remains highl
Slide 6: Revenue Highlights
Revenue Highlights • Revenue $1.44 billion up 17% • Export sales $0.43 billion up 29% Bega Cheese Limited Page 6
Slide 7: Financial Performance
Financial Performance • Statutory EBITDA $92.0 million • Normalised EBITDA $109.6 million • Normalised net profit after tax $44.0 million • Statutory net profit after tax $28.8 million (impacted by higher effective tax rate due to corporate activity) • Normalised earnings per share 23.9 cents • Stat
Slide 8: Bega Foods
Bega Foods • Integration completed quickly and seamlessly • International branded and Food Service business added • Consumers increasingly concerned about where their food comes from • Peanut Company of Australia now part of Bega Foods • Goal to significantly increase peanut crop grown in Australia
Slide 9: Koroit Facility
Koroit Facility • Acquisition of Koroit 17 August 2018 • Excellent facility added to our dairy manufacturing footprint • Pleased with the response from stakeholders • Rapid business transition (5 days) • Transition services agreement with Saputo Dairy Australia • Transferring customers, recruiting m
Slide 10: Dairy Commodity Price and Farm Gate Milk Price
Dairy Commodity Price and Farm Gate Milk Price • FY2018 total direct milk supply 750 million litres • FY2018 direct milk intake increased 97 million litres • Commodity price volatility remains • Global dairy commodity price softening in the past few months • Koroit provides further growth opportunit
Slide 11: Bega Cheese Limited Page 11
Bega Cheese Limited Page 11
Slide 12: 2018 Annual Report: Chief Executive Officer's Report
2018 Annual Report Chief Executive Officer’s Report Paul van Heerwaarden – CEO
Slide 13: Revenue Highlights
Revenue Highlights • Revenue $1.44 billion up 17% • Export sales $0.43 billion up 29% Bega Cheese Limited Page 13
Slide 14: Reconciliation of Statutory Normalised Result
Reconciliation of Statutory Normalised Result Bega Foods Acquisition PCA PCA Koroit Per Financial Costs and Fair Acquisition Bargain Acquisition Other Normalised Consolidated Statements Value Adj Costs Purchase Costs Costs Outcome Period Ending 30 June 2018 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Slide 15: Balance Sheet
Balance Sheet FY2018 FY2017 $m $m Cash 21.7 475.5 Trade and other receivables 200.6 168.5 Inventories 232.1 167.9 Property, plant & equipment 323.6 196.8 Intangible assets 411.5 22.7 Total Assets 1,215.8 1,056.3 Trade and other payables 225.9 169.3 Borrowings (net of costs) 267.1 215.3 Total Liabili
Slide 16: Cash Flow
Cash Flow FY2018 FY2017 $m $m Receipts from customers 1,499.9 1,274.9 Payments to suppliers (1,404.9) (1,190.7) Interest and other costs of financing paid (10.7) (3.2) Income tax paid (25.8) (10.7) Operating activities 58.6 70.2 Proceeds from sale of PPE 10.0 188.9 Tax on sale of infant nutritional
Slide 17: Operations Review
Operations Review • Total production 259,235 tonnes increased by 9% to previous year • Total capital expenditure of $46 million including business improvement ($21m), ERP ($17m) and compliance ($8m) • Key projects upgrading cream cheese, processed block line capacity/capability • Stage 1 and 2 of ER
Slide 18: Group Sales
Group Sales 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $0.0b $0.2b $0.4b $0.6b $0.8b $1.0b $1.2b $1.4b $1.6b Bega Cheese Limited Page 18
Slide 19: Our Sites
Our Sites Four new sites • Port Melbourne • Kingaroy • Tolga • Koroit Bega Cheese Limited Page 19
Slide 20: Koroit Acquisition
Koroit Acquisition • Dairy facility in western Victoria purchased for $250 million • Milk powder, nutritional dryers and butter manufacturing capacity • Retail packaging capacities in butter and powder • Milk supply guarantee 300 million litres until 30 June 2020 • Plant capacity 800 million litres
Slide 21: Investing in People
Investing in People • Development focus on safety behaviours, continuous improvement and innovation • Seamless integration of staff from Mondelez, PCA and Koroit acquisitions • Implemented the Aspire Leadership Program for developing young leaders of the future Bega Cheese Limited Page 21
Slide 22: Bega Cheese Limited Page 22
Bega Cheese Limited Page 22
Slide 23: Where are we Today?
Where are we Today? • Integrated Australian dairy industry and food company exporting to over 40 countries • Significant new capacity added in dairy with the acquisition of Koroit • Successful milk procurement program • Strong international business growth • Stabilised dairy nutritionals and improvi
Slide 24: Our Priorities
Our Priorities • Continue to grow branded retail and food service business • Increase production volumes at Koroit facility • Integrate Koroit into our production network • New milk pricing option for dairy farmers to encourage lower farm production costs • Increase peanut crop size with improved gr
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Slide 26: 2018 Annual Report: Formalities and Voting
2018 Annual Report Formalities and Voting Barry Irvin – Executive Chairman
Slide 27: Voting Procedure
Voting Procedure • A poll is being held for all resolutions • Share registrar, Ms Julie Stokes, of Link Market Services Limited, will act as Returning Officer in relation to the polls • If leaving early please place voting cards in ballot boxes • Results available on ASX after the meeting Bega Chees
Slide 28: Resolutions
Resolutions • Adopt remuneration report for the year ended 30 June 2018 • Election of Directors • Approval of the issue of Shares under the September 2018 Institutional Placement • Provision of financial assistance by Peanut Company of Australia Bega Cheese Limited Page 28
Slide 29: Remuneration Report
Remuneration Report • Pages 22 – 29 of the 2018 Annual Report • Board, Executive Chairman, CEO and other key management personnel • Market data and external advisors Bega Cheese Limited Page 29
Slide 30: Remuneration Report Proxies
Remuneration Report Proxies • Total Votes – 108,320,564 (50.90%) • For – 105,610,744 (97.50%) • Open – 2,175,000 (2.01%) • Against – 534,820 (0.49%) Bega Cheese Limited Page 30
Slide 31: Election of Directors
Election of Directors • Barry Irvin • Raelene Murphy • Rick Cross • Jeff Odgers Bega Cheese Limited Page 31
Slide 32: Barry Irvin
Barry Irvin • Total Votes – 108,458,766 (50.96%) • For – 97,378,800 (89.78%) • Open – 2,150,539 (1.98%) • Against – 8,929,427 (8.23%) Bega Cheese Limited Page 32
Slide 33: Jeff Odgers
Jeff Odgers • Total Votes – 108,457,487 (50.96%) • For – 72,564,165 (66.91%) • Open – 2,155,906 (1.99%) • Against – 33,737,416 (31.11%) Bega Cheese Limited Page 33
Slide 34: Raelene Murphy
Raelene Murphy • Total Votes – 108,458,158 (50.96%) • For – 105,957,373 (97.69%) • Open – 2,156,469 (1.99%) • Against – 344,316 (0.32%) Bega Cheese Limited Page 34
Slide 35: Richard Cross
Richard Cross • Total Votes – 108,452,698 (50.96%) • For – 71,971,966 (66.36%) • Open – 2,216,075 (2.04%) • Against – 34,264,657 (31.59%) Bega Cheese Limited Page 35
Slide 36: Share Placement Proxies
Share Placement Proxies • Total Votes – 5,259,814 (2.47%) • For – 2,872,428 (54.61%) • Open – 2,239,036 (42.57%) • Against – 148,350 (2.82%) Bega Cheese Limited Page 36
Slide 37: Provision of Financial Assistance Proxies
Provision of Financial Assistance Proxies • Total Votes – 108,349,281 (50.91%) • For – 106,056,869 (97.88%) • Open – 2,219,770 (2.05%) • Against – 72,642 (0.07%) Bega Cheese Limited Page 37
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Slide 39: Disclaimer
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