Bega Cheese Limited · ASX:BGA
Bega Cheese — Shareholder Meeting (October 2022)
36 slides from Bega Cheese's shareholder meeting presentation, Oct 26, 2022
Slide 1: Annual General Meeting 26 October 2022
For personal use only ANNUAL GENERAL MEETING 26 October 2022
Slide 2: Agenda
AGENDA For personal use only FY2022 Annual Report Chairman’s report 4 Chief Executive Officer’s report 10 Questions 29 Adoption of remuneration report 33 Election of Director 34
Slide 3: Welcome
WELCOME WELCOME For personal use only • Shareholders • Suppliers • PricewaterhouseCoopers • Addisons Lawyers • LinkAnnual FY2022 Market Services Report • Bega Group Chairman’s staff report X Chief Executive Officer’s report X • Apologies Questions X Adoption of remuneration report X Election of Dire
Slide 4: FY2022 Annual Report
For personal use only FY2022 ANNUAL REPORT
Slide 5: Key Messages
KEY MESSAGES For personal use only • 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 re
Slide 6: Our Purpose
OUR PURPOSE For personal use only 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 op
Slide 7: Our Transformation
OUR TRANSFORMATION For personal use only 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 AGM Presentation | 7
Slide 8: Performance Highlights
PERFORMANCE HIGHLIGHTS 184.5 For personal use only 180.1 Net revenue 149.9 FY2022 18% 141.7 78.0 $3.01 Bulk 46.3 39.6 82% 24.2 billion Branded FY2022 FY2021 FY2022 FY2021 FY2022 FY2021 FY2022 FY2021 Normalised Statutory Normalised Statutory EBITDA ($million) Profit after tax ($million) FY2021 27% $2
Slide 9: Sustainability and the Circular Economy
SUSTAINABILITY AND THE CIRCULAR ECONOMY For personal use only Bega Cheese carbon target Scope 1 and 2 emissions targets established in support of Paris Agreement goals: 50% reduction in emissions intensity by 2030 40% reduction in absolute emissions by 2030 Net zero emissions by 2050 Circulari
Slide 10: Paul van Heerwaarden, CEO
For personal use only Paul van Heerwaarden CEO
Slide 11: Major Initiatives
MAJOR INITIATIVES For personal use only • Executed BDD integration and synergy program – Completed IT transition from Lion – Leveraging combined distribution and go-to-market capabilities – Realising milk optimisation through expanded processing network • Investing in digital platform and network in
Slide 12: Commercial and Operations Review
COMMERCIAL AND OPERATIONS REVIEW For personal use only • Increases in both commodity and consumer prices for milk products • Strong retail sales volume and mix across brands • Investment in innovation of our products • Improved returns from dairy commodities • Significant COVID-19 related direct cos
Slide 13: Our Business Model
OUR BUSINESS MODEL Our core capabilities For personal use only Direct relationship with our farmers and other suppliers Globally competitive supply chain Diversified portfolio of market leading food brands Bulk segment Efficient distribution network serving customer growth Branded segment FY2022 AGM
Slide 14: Segments
SEGMENTS For personal use only ($ 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
Slide 15: Reconciliation of Normalised Result
RECONCILIATION OF NORMALISED RESULT For personal use only 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 P
Slide 16: Balance Sheet
BALANCE SHEET For personal use only 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
Slide 17: Cash Flow
CASH FLOW For personal use only 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 finan
Slide 18: Managing Operational and Market Impacts of COVID-19
MANAGING OPERATIONAL AND MARKET IMPACTS OF COVID-19 For personal use only • 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 • Interrupt
Slide 19: Becoming a Multi-Channel Branded Company
BECOMING A MULTI-CHANNEL BRANDED COMPANY Pre 2017 Acquisitions and major initiatives (2017 to 2021) TODAY For personal use only Commodity processor Divestment of certain infant formula assets (April 2017) to Mead Johnson DIVERSE AND GROWING and contract packer (who were subsequently acquired by Reck
Slide 20: Growing Value with Iconic Australian Brands
Growing value with 18% Bulk iconic Australian brands 73% 82% For personal use only 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 20
Slide 21: 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 For personal use only 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 j
Slide 22: Innovation and Growth in Consumer Brands
INNOVATION AND GROWTH IN CONSUMER BRANDS For personal use only 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
Slide 23: Manufacturing Network
MANUFACTURING NETWORK For personal use only FY2022 AGM Presentation | 23
Slide 24: Dairy Commodity and Farm Gate Milk Prices
DAIRY COMMODITY AND FARM GATE MILK PRICES For personal use only • 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 – globa
Slide 25: Approach to Corporate Social Responsibility
APPROACH TO CORPORATE SOCIAL RESPONSIBILITY For personal use only 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 adde
Slide 26: FY2023 Earnings Guidance
FY2023 EARNINGS GUIDANCE For personal use only • 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 t
Slide 27: Barry Irvin, Executive Chairman
For personal use only Barry Irvin Executive Chairman
Slide 28: Where Are We Today
WHERE ARE WE TODAY For personal use only • 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 an
Slide 29: Questions?
For personal use only Questions? FY2022 Results Presentation | 29
Slide 30: Annual General Meeting Formalities and Voting
For personal use only FY2022 ANNUAL GENERAL MEETING FORMALITIES AND VOTING 26 October 2022
Slide 31: Voting Procedure
VOTING PROCEDURE For personal use only • 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 • Results available on ASX after the meeting
Slide 32: Resolutions
RESOLUTIONS For personal use only • Adopt remuneration report for the year ended 30 June 2022 • Election of Director • Patria Mann
Slide 33: Remuneration Report
REMUNERATION REPORT For personal use only • Pages 40 to 52 of the 2022 Annual Report • Board, Executive Chairman, CEO and other key management personnel • Market data and external advisors Proxy Votes • Total Votes 154,293,218 (50.77%) • For 146,042,441 (94.65%) • Open 3,063,709 (1.99%) • Against 5,
Slide 34: Election of Director
ELECTION OF DIRECTOR For personal use only • Patria Mann Proxy votes • Total Votes 154,595,169 (50.87%) • For 147,908,641 (95.67%) • Open 3,048,693 (1.97%) • Against 3,637,835 (2.35%) FY2022 AGM Presentation | 34
Slide 35: For personal use only
For personal use only
Slide 36: 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