Ridley Corporation Limited · ASX:RIC
Ridley — H1 FY2022 Earnings Presentation
29 slides from Ridley's earnings presentation, Feb 17, 2022
Slide 1: FY22 1H Results
ASX : RIC FY22 1H Growth RESULTS Strategy Delivering Improved Growth Strategy Earnings Delivering Improved Earnings Quinton Hildebrand, CEO Richard Betts, CFO 17 February 2022
Slide 2: FY22 1H Highlights
FY22 1H HIGHLIGHTS Improvement in all financial metrics EBITDA NPAT Health and safety performance (underlying) (reported) • Demonstrated resilience to COVID-19 challenges • Focus on safety remains a priority: 4.85 LTIFR $39.1m $22.6m Earnings growth • Growth Strategy driving earnings growth (+21%YOY
Slide 3: Segment Performance
Segment Performance. Growth from both segments. 3
Slide 4: Packaged Feeds & Ingredients
PACKAGED FEEDS & INGREDIENTS Comprising the Group’s premium quality, high performance animal nutrition feed and ingredient solutions delivered in packaged form from 1 tonne bulka bag down to 3kg bags, and includes the Aquafeed Business Unit. FY22 1H FY21 1H Variance $m $m EBITDA before significant i
Slide 5: Bulk Stockfeeds
BULK STOCKFEEDS Comprising the Group’s premium quality, high performance animal nutrition stockfeed solutions delivered in bulk. FY22 1H FY21 1H Variance $m $m EBITDA before significant items 18.6 14.6 28% EBIT 10.6 6.4 67% Segment Assets 270.8 264.5 Segment Liabilities (145.1) (128.9) Segment Net A
Slide 6: Financial Results
Financial Results. Earnings growth and strong balance sheet. 6
Slide 7: Profit & Loss Summary
PROFIT & LOSS SUMMARY Consolidated Result ($m) FY22 1H FY21 1H1 Analysis of result EBITDA - Packaged Feeds and Ingredients 27.1 23.0 See Segment Performance Reporting (slide 4) EBITDA - Bulk Stockfeeds 18.6 14.6 See Segment Performance Reporting (slide 5) EBITDA – Ongoing operations before significa
Slide 8: Balance Sheet
BALANCE SHEET Balance Sheet ($m) Dec June Analysis of balances and movements 2021 2021 Cash & cash equivalents 27.8 39.9 Balance is a function of timing of receipts/payments and draw down/repayment of bank funding Increase in inventory, includes a deliberate build of ~$10m to support the 2H earning
Slide 9: Working Capital
WORKING CAPITAL Working Capital ($m) Dec 2020 June 2021 Dec 2021 Deliberate Inventory Current Receivables 116.9 113.6 114.6 Build in FY22 1H Inventory 95.3 82.0 94.7 120 Less Current Payables (162.6) (169.8) (177.6) 100 Working Capital 49.6 25.8 31.7 80 $M Additional working capital primarily relate
Slide 10: Cash Management
CASH MANAGEMENT Consolidated Cash Flow ($m) FY22 1H FY21 1H EBITDA 39.1 32.4 (before individually significant items) Decrease / (Increase) in Working Capital 1 (11.1) 2.1 Less Maintenance Capital (2.7) (4.2) Operating Cash Flow 25.3 30.3 (before individually significant items) Operating Cash Flow Co
Slide 11: Debt Reduction
DEBT REDUCTION Net Debt In FY22 1H, the sale of Westbury, 160 ~$64M increased earnings and disciplined } Earnings, working capital reduction and 140 capex discipline capital expenditure management 120 drove the debt reduction. 100 ~$50M Partially offsetting the debt reduction Net Proceeds from sale
Slide 12: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Embedding greater discipline Operating Cashflow Delivered in FY22 1H: Operating cashflow after significant items of $31.2m was an increase on the prior year. Maintenance & ESG Capital and Working Capital Maintenance & ESG capital was below targeted ~60 – 80% of Depreciat
Slide 13: Growth Strategy
Growth Strategy. A focus on improvements in core business, whilst growing sales. 13
Slide 14: Growth Strategy
GROWTH STRATEGY OPTIMISATION – Earnings Growth Contributors in FY22 EARNINGS GROWTH POTENTIAL • NovacqTM operational efficiencies • NovacqTM international sales EXPANSION / • New range of Packaged Products INNOVATION • Rendering product development • Acquisitions • Westbury utilisation / Aquafeed re
Slide 15: Growth Strategy: Expansion / Innovation
GROWTH STRATEGY EXPANSION / INNOVATION – Earnings Growth Contributors in FY22 Rendering New Range of Novacq™ Product Packaged Development products New animal protein concentrate • Partnerships in urban pet • Thailand commercial operation plant commissioned and specialty delivering double has tripled
Slide 16: Growth Strategy: Monogastric Growth and Aquafeed Reset
GROWTH STRATEGY SALES GROWTH – Earnings Growth Contributors in FY22 Monogastric Aquafeed Growth Reset • Secured additional volumes • Transitioned to single facility from poultry and pig in FY22 1H with the sale of customers Westbury • Increased utilisation with the • Narangba plant has high shift to
Slide 17: Growth Strategy: Supply Chain and Raw Material Sourcing
GROWTH STRATEGY OPTIMISATION – Earnings Growth Contributors in FY22 Supply Raw Material Chain Sourcing Rationalisation This project has been delayed as we have prioritised current operational requirements DIRECT Ingredients sales desk selling to livestock producers who mix feed on farm. during a per
Slide 18: Project Boost
PROJECT BOOST Project on track to drive profitable growth Project Targets 6 month scorecard (announced July 2021) New De- Operational Total Capability bottlenecking Efficiency to Date $15m FY22-23 Targeted Capital Expenditure Projects approved (#) 5 5 4 14 Approved $1.6m $3.2m $3.3m $8.1m $9m spend
Slide 19: Summary
SUMMARY Business maintaining momentum • Successful D365 ERP implementation • EBITDA up strongly in both operating segments • Operational performance and asset utilisation improved • Strong cash generation • De-leveraged balance sheet • Key strategic initiatives delivered • Dividend of 3.4cps declare
Slide 20: Outlook
Outlook. On track to deliver improved earnings. 20
Slide 21: Outlook
OUTLOOK Second half earnings (EBITDA) are expected to improve on the previous corresponding period with the business well positioned to grow earnings through; • maintaining the momentum in the underlying business segments, and • the ongoing delivery of the Growth Strategy. Cash generation is expecte
Slide 22: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Disclaimer The material in this presentation is general background information about the activities of Ridley Corporation Limited and its related entities (Ridley), current at the date of this presentation, unless otherwise stated. The content is information given in
Slide 23: Appendix
Appendix Supporting information 23
Slide 24: Profit & Loss Summary
PROFIT & LOSS SUMMARY Consolidated Result ($m) FY22 1H FY21 1H1 Analysis of result FY20 1H FY19 1H FY18 1H EBITDA – Ongoing operations before significant items 45.7 37.6 Up $8.1m, or 21.5% on prior year period 33.3 30.6 31.8 Additional accruals for employee LTIs, linked to improved Corporate Costs (
Slide 25: Balance Sheet: Assets
BALANCE SHEET Assets Dec June Dec June June June Balance Sheet ($m) Analysis of balances 2021 2021 20201 20201 2019 2018 Balance is a function of timing of receipts/payments and draw Cash & cash equivalents 27.8 39.9 35.2 45.8 17.5 23.4 down/repayment of bank funding Majority of Increase in inventor
Slide 26: Balance Sheet: Liabilities
BALANCE SHEET Liabilities Dec June Dec June June June Balance Sheet ($m) Analysis of balances 2021 2021 20201 20201 2019 2018 Reflects timing of creditor payments within agreed trading terms and Current payables 173.4 165.5 158.3 161.3 158.8 155.9 increased commodity prices. Includes current portion
Slide 27: Cash Flow
CASH FLOW Consolidated Cash flow ($m) FY22 1H FY21 1H 1 Analysis of movement FY20 1H FY19 1H FY18 1H Consolidated EBIT 33.3 17.0 1 Consolidated EBIT after significant items. 2.6 15.4 18.7 Depreciation and amortisation 13.2 15.0 P&L charges for the year. 12.9 9.1 9.0 Consolidated EBITDA 46.5 32.0 1 C
Slide 28: Net Debt, Gearing and Leverage
NET DEBT, GEARING AND LEVERAGE Major capital projects ($m) FY22 1H FY21 1H Analysis of movements FY20 1H FY19 1H FY18 1H Development capital expenditure 3.4 2.6 Includes PPC line at Laverton and Narangba upgrade 24.8 23.7 7.1 Maintenance capital expenditure 2.7 4.2 1 Reduction in maintenance capex 8
Slide 29: Contact details
Contact details Quinton Hildebrand Chief Executive Officer E: Quinton.Hildebrand@ridley.com.au P: +61 3 8624 6529 Ridley Corporation Limited ABN 33 006 708 765 Level 4, 565 Bourke Street Melbourne, VIC. 3000 Australia ridley.com.au ASX: RIC 29