Bega Cheese Limited · ASX:BGA
Bega Cheese — Shareholder Meeting (October 2024)
43 slides from Bega Cheese's shareholder meeting presentation, Oct 30, 2024
Slide 1: Annual General Meeting
Bega Cheese Limited For personal use only Annual General Meeting Barry Irvin – Executive Chairman Pete Findlay – CEO 30 October 2024
Slide 2: Barry Irvin, Executive Chairman
For personal use only Barry Irvin Executive Chairman
Slide 3: Agenda
Agenda For personal use only • FY2024 Annual Report • Chairman’s Report 5 • Chief Executive Officer’s Report 10 • Questions 33 • Adoption of Remuneration Report 37 • Election of Directors 38 3
Slide 4: Welcome
Welcome For personal use only • Shareholders • Suppliers • PricewaterhouseCoopers • Addisons Lawyers • Link Market Services • Bega Group staff • Apologies 4
Slide 5: FY2024 Overview
FY2024 Overview Branded growth • Branded results demonstrate strength and breadth of portfolio - Market leading brands with investment in key growth categories For personal use only - Strong innovation and in-market execution driving value growth - Strong results in International branded and foodser
Slide 6: Financial highlights
Financial highlights Earnings growth and Branded segment margin expansion in FY2024 Net revenue EBITDA Profit after tax Basic EPS For personal use only $164.1m 2% $29.2m 2% 9.6c 2% $3.5bn 4% Normalised Normalised Normalised $165.1m 15% $30.5m $260m 10.0c +85.6c Statutory Statutory Stat
Slide 7: Our Purpose
For personal use only OUR PURPOSE 7
Slide 8: Our transformation
Our transformation We have built the capability and focus to grow as a leading branded food business For personal use only BUILD EXPAND BALANCE STRENGTH 1899-2000 2001-2016 2017-2020 2021-FUTURE • Dairy co-operative based in Bega • Acquisition of Tatura and • New platform with acquisition of • Incre
Slide 9: Refreshed sustainability strategy for the future
Refreshed sustainability strategy Subject to discussion Our strategy has evolved to meet our sustainability ambitions with the Board / RSC. for the future Option 2/3 Our sustainability ambition For personal use only CIRCULARITY COMMUNITY COLLABORATION Leading in circularity through Making a positive
Slide 10: Pete Findlay, Chief Executive Officer
For personal use only Pete Findlay Chief Executive Officer
Slide 11: Strategy 28: Strengthening our business
Strategic priorities Protect and grow the core Grow our core domestic grocery business in Strategy 28: Strengthening our business attractive categories Grow Branded business Win on the street Improve our competitiveness in • Core domestic grocery Independent Grocery, Foodservice, For personal use on
Slide 12: Branded business momentum
Branded business momentum Sustained leading market positions and grew value Brands sustained leading market positions and volume while achieving value growth For personal use only • Pricing initiatives partially mitigated cost impacts, while supply efficiency programs enabled Branded margin expansio
Slide 13: Brand innovation
Brand innovation Expanded portfolio in core categories Yoghurt category is highly responsive to new product development For personal use only • New pouch formats: Farmers Union Greek Yoghurt Kids and YOP with no sugar added • New Dairy Farmers Thick & Creamy indulgent layered range Innovation helps
Slide 14: Core brand growth
Core brand growth Focused investment enabled growth Ongoing investment in iconic brands For personal use only • Vegemite’s 100-year anniversary activity led to a growth rate of nearly twice the total spreads category • Farmers Union achieved 11% retail sales growth with new advertising Portfolio wel
Slide 15: International market expansion
International market expansion Record year for Branded in Asia and Middle East For personal use only • Branded international sales of $257 million, up 11% on FY2023 Asian growth and prospects remain strong despite subdued China demand • South-East Asian operations performing well • Continuing expans
Slide 16: Brand momentum
Brand momentum Iconic brands leading revenue and margin growth Branded now represents 86% of Group external revenue1 in FY2024 For personal use only FY2024 Branded segment EBITDA margin improved due to cost savings, efficiencies and mix. 6.6% 4.5% Group 4.7% Normalised EBITDA margin Branded Branded
Slide 17: Brand shares – Australian retail categories
Brand shares – Australian retail categories Market leading brands in growth categories Category size Category Bega Market Category Brands For personal use only $m Annual growth share Position Fresh white 2,144 2% 11% 3 milk Yoghurt 1,919 11% 25% 1 Milk based 1,012 8% 50% 1 beverages Spreads 742 5% 2
Slide 18: Consumer trends
Consumer trends Four areas shaping portfolio and activation priorities for the future For personal use only Better Value Functional Demographic Sustainability Health Evolution Cost of living pressures see Continuing desire for Australia trends towards Sustainable solutions consumers shift to seek be
Slide 19: Bulk business overview
Bulk business overview • Disconnect between farm gate milk prices and commodity prices continued throughout the year For personal use only • Focus on higher value commodities and nutritional products • Responded to commodity markets changes to optimise revenue streams from milk solids • Strengthenin
Slide 20: Australian milk production
Australian milk production Volumes are stable Milk production volumes stabilised at 8.4 billion litres in response to farm For personal use only gate prices in FY2024 12 11 10 9 8 7 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Financial Years 1995 - 2024
Slide 21: Farm gate milk price and market returns
Farm gate milk price and market returns Improved alignment between farm gate and commodity prices for FY2025 Subdued demand saw global dairy commodity prices hit lows in Sept 2023 followed by a mild rally Key themes: For personal use only 11.00 • Persistent industry theme of capacity rationalisation
Slide 22: Manufacturing facility update
Manufacturing facility update Streamlined and simplified footprint Key FY2024 Initiatives For personal use only • Canberra site sale in 1H FY2024 • Tasmania consolidation into Lenah Valley in 2H FY2024 • Agreement to sell Leeton juice primary processing facility in August 2024 further simplifies sup
Slide 23: Investing in line with strategy
Investing in line with strategy Restructuring program improved efficiency and customer focus of For personal use only Branded business and back office delivering >$22m annualised savings • $12m in-year savings delivered in FY2024; remainder to be achieved in FY2025 • Sales organisation aligned to ke
Slide 24: Major sustainability initiatives
Major sustainability initiatives Highlights of sustainability work conducted in FY2024 Commitments • 40% reduction in absolute scope 1 & 2 emissions by 2030 (FY2021 base year) • 30% reduction in water use by 2030 (FY2021 base year) For personal use only • Net Zero by 2050 • 40:40:20 HESTA by 2030 Be
Slide 25: Financials
For personal use only Financials
Slide 26: Profit and loss
Profit and loss Normalised Statutory FY2024 FY2023 +/- % FY2024 FY2023 $ millions $ millions Net Revenue 3,521.6 3,376.0 4% Net Revenue 3,521.6 3,376.0 For personal use only EBITDA 164.1 160.2 2% EBITDA 165.1 144.1 D&A (88.0) (101.9) (14)% D&A (90.8) (377.8) EBIT 76.1 58.3 31% EBIT
Slide 27: Reconciliation of normalised result
Reconciliation of normalised result Key callouts: Consolidated Per Canberra Betta Milk Tax Normalised Period Ending 30 June 2024 Financial Restructuring • Gain on Canberra property For personal use only sale and exit acquisition adjustments Outcome ($ million) Statements sale in 1H Revenue 3,5
Slide 28: Profitability overview
Profitability overview Focus on high value categories fuels Branded business while efficiency programs expand margin; disconnect between farm gate milk and commodities results in Bulk loss For personal use only $ million (84.0) 112.0 43.1 (61.3) Branded Branded cost efficiency Bulk 3.8 Branded & val
Slide 29: Key performance measures
Key performance measures $ millions unless otherwise stated FY2024 FY2023 Change (Normalised) For personal use only Net Revenue Growth vs prior year 4.3% 12.2% Key callouts: Gross margin (% of Net Revenue) 19.8% 19.4% 0.4 pts • Branded revenue growth 6% • Margin expansion in Branded EBITD
Slide 30: Balance sheet
Balance sheet FY2024 FY2023 Balance Sheet* $m $m Cash 65.6 66.4 Key callouts: For personal use only Trade and other receivables 350.9 306.1 • Receivables increase from higher sales in Q4 vs Inventories 358.1 428.7 same time last year Property, plant and equipment 673.4 687.2 • Focus on invent
Slide 31: Where we are today
Where we are today • Iconic leading brands • Integrated manufacturing and processing infrastructure For personal use only • Agile response to changing markets • Strong strategic positioning • Branded acquisitions ahead of business case • Opportunities for further branded innovation, promotional exce
Slide 32: Looking forward
Looking forward • Creating value for our shareholders • FY2025 is second year of our five-year strategic plan For personal use only • Challenging consumer environment in FY2025 • Focus on growth in core categories • Cost management and efficiency vital to continue earnings growth • Branded segment F
Slide 33: Questions?
For personal use only Questions?
Slide 34: Annual General Meeting
Annual General Meeting For personal use only begagroup.com.au
Slide 35: Voting Procedure
Voting Procedure • A poll is being held for all resolutions For personal use only • 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 35 35 35
Slide 36: Resolutions
Resolutions • Adopt remuneration report for the year ended 30 June 2024 For personal use only • Election of Directors • Barry Irvin • Rick Cross • Raelene Murphy • Harper Kilpatrick 36 36 36
Slide 37: Remuneration Report
Remuneration Report • Pages 39 to 53 of the 2024 Annual Report For personal use only • Board, Executive Chairman, CEO and other key management personnel • Market data and external advisors Proxy Votes • Total Votes 171,721,013 (56.31%) • For 151,685,547 (88.33%) • Open 1,537,657 (0.90%) • Against 18
Slide 38: Election of Directors: Barry Irvin
Election of Directors For personal use only Barry Irvin Proxy votes • Total Votes 171,894,780 (56.37%) • For 161,102,111 (93.72%) • Open 1,539,616 (0.90%) • Against 9,253,053 (5.38%) FY2024 Annual General Meeting | 38
Slide 39: Election of Directors: Rick Cross
Election of Directors For personal use only Rick Cross Proxy votes • Total Votes 171,887,579 (56.36%) • For 153,993,322 (89.59%) • Open 1,534,571 (0.89%) • Against 16,359,686 (9.52%) FY2024 Annual General Meeting | 39
Slide 40: Election of Directors: Raelene Murphy
Election of Directors For personal use only Raelene Murphy Proxy votes • Total Votes 171,897,571 (56.37%) • For 165,664,059 (96.37%) • Open 1,537,826 (0.89%) • Against 4,695,686 (2.73%) FY2024 Annual General Meeting | 40
Slide 41: Election of Directors: Harper Kilpatrick
Election of Directors For personal use only Harper Kilpatrick Proxy votes • Total Votes 171,878,984 (56.36%) • For 163,349,685 (95.04%) • Open 1,574,619 (0.92%) • Against 6,954,680 (4.05%) FY2024 Annual General Meeting | 41
Slide 42: For personal use only
For personal use only 42
Slide 43: Disclaimer
Disclaimer 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 For personal use only announcements. The presentation