Synlait Milk Ltd. · NZX:SML
Synlait Milk — FY2013 Earnings Presentation
19 slides from Synlait Milk's earnings presentation, Sep 24, 2013
Slide 1: Synlait Milk Limited Annual Report 2013
………………………… Synlait Milk Limited Annual Report 2013
Slide 2: Disclaimer
DISCLAIMER This annual results presentation dated 24 September 2013 provides additional comment on the media release and our annual report of the same date. As such, it should be read in conjunction with, and subject to, the explanations and views of future outlook on market conditions, earnings and
Slide 3: Key Messages
KEY MESSAGES Operating • FY2013 delivered on prospectus forecast • Achieved significant improvement in financial performance over FY2012 • We expect to achieve FY2014 prospectus forecast Growth • Our focus in FY2014 will be on the execution of growth initiative projects • Market development progress
Slide 4: Results Overview
RESULTS OVERVIEW • Revenue up 11.5% to $420 million • Gross Profit up 39.6% to $65.1 million • Gross profit per MT up 26.4% to $751 • EBITDA up 74.0% to $38.5 million • Net profit after tax up 161% to $11.5 million • Shareholders funds up 90% to $164 million • Adjusted¹ return of capital employed up
Slide 5: Growth in Volumes and Margins Improve Profitability
GROWTH IN VOLUMES AND MARGINS IMPROVE PROFITABILITY Key Financial Opertaing Metic's for FY 2013 Compared to FY 2012 and FY 2013 PFI Forecasts 2013 2012 Change 2013 Change NZD ($m) Actual Actual % PFI Forecast % Revenue 420.0 376.8 11.5% 426.4 (1.5)% Gross Margin 65.1 46.0 41.5% 64.6 0.8% EBITDA 38.5
Slide 6: Margin Growth Key to Success
MARGIN GROWTH KEY TO SUCCESS Gross Profit per MT (NZD) 800 700 600 500 $ (NZD) / MT 400 300 200 100 - FY09 FY10 FY11 FY12 FY13 © Synlait 2013 6
Slide 7: Improvement Across All Key Metrics
IMPROVEMENT ACROSS ALL KEY METRICS Improvement across all key metrics 2013 2012 Change 2013 Change Actual Actual % PFI Forecast % Sales Volumes (MT) Ingredients 81,085 73,003 11.1% 80,902 0.2% Nutritionals 5,661 4,412 28.3% 6,888 (17.8)% Total 86,746 77,415 12.1% 87,790 (1.2)% Production Volumes (MT
Slide 8: Milk Volumes and Price
MILK VOLUMES AND PRICE • Overall milk supply up 6.2% to 46,768 kg MS on last year and in line with prospectus forecast • Increased contracted milk supply by 12% to 42,076 kg MS • Contract suppliers average base milk price of $5.81 kg MS, plus additional $0.08 kg MS related to seasonal and added valu
Slide 9: SML Annual Milk Price
SML ANNUAL MILK PRICE SML Annual Milk Price 8.00 7.76 0.10 7.50 7.00 $ / KgMS 6.50 7.66 6.22 0.08 6.00 5.89 0.08 6.14 5.50 5.81 5.00 FY11 FY12 FY13 SML average base milk price Seasonal and Value-Added Premiums © Synlait 2013 9
Slide 10: Milk Volumes
MILK VOLUMES Milk Volumes 50,000 45,000 4,692 6,453 40,000 42,076 35,000 37,572 30,000 4,524 KgMS 25,000 4,525 24,934 20,000 21,865 4,101 15,000 14,404 10,000 5,000 - FY09 FY10 FY11 FY12 FY13 Contracted Other © Synlait 2013 10
Slide 11: Delivering on Our Strategy - Ingredients
DELIVERING ON OUR STRATEGY - INGREDIENTS • Increased volume processed driven by milk supply • Continuing to achieve increased value added volume • Strong margin growth • Improved quality of customers • Maximising product mix for value • Margins eroded in FY 2013 by strong butter pricing (approx. imp
Slide 12: Ingredient Category
INGREDIENT CATEGORY Revenue & Volume (Ingredients) 2013 2012 Change 2013 Change Actual Actual % PFI Forecast % Revenue ($000) 376,523 340,655 10.5% 373,512 0.8% Volume 81,085 73,003 11.1% 80,902 0.2% Value Add % 52% 38% 36.8% 52% - Revenue / Volume 400,000 90,000 350,000 80,000 70,000 300,000 Revenu
Slide 13: Delivering on Our Strategy – Infant and Nutritionals
DELIVERING ON OUR STRATEGY – INFANT AND NUTRITIONALS • First full year production on D2 for infant nutritionals • Achieved sales of 5,661 MT. • Building relationships with key Chinese customers • Sales of Bright’s Pure Canterbury brand continues to grow • Announcement of proposed new Chinese regulat
Slide 14: Infant and Nutritionals Category
INFANT AND NUTRITIONALS CATEGORY Revenue & Volume (Nutritionals) 2013 2012 Change 2013 Change Actual Actual % PFI Forecast % Revenue ($000) 43,487 24,462 77.8% 52,914 (17.8)% Volume 5,661 4,412 28.3% 6,888 (17.8)% Revenue / Volume 50,000 6,000 45,000 5,000 40,000 35,000 Revenue (NZD $000) 4,000 30,0
Slide 15: Capital Raise and Refinancing
CAPITAL RAISE AND REFINANCING • Successful completion of IPO on 23 July raising $68.9 million at initial share price of $2.20 per share and market cap of $322m • Bright Dairy diluted to 39.12% • Friesland Campina took a 7.5% interest • Completed refinance of Bank facilities to assist with funding of
Slide 16: Balance Sheet and Cash Flows
BALANCE SHEET AND CASH FLOWS Balance Sheet + Cashflow 2013 2012 Change 2013 Change Actual Actual % PFI Forecast % Net W orking Capit al (7,527) (51,402) (85.4)% (17,914) (58.0)% Fixed Asset s 210,780 214,099 (1.6)% 217,954 (3.3)% Net Debt 105,555 107,063 (1.4)% 109,183 (3.3)% Shareholders Funds 164,
Slide 17: Strategic Growth Initiatives
STRATEGIC GROWTH INITIATIVES • Six growth initiative projects outlined in prospectus totalling in excess of $180 million spend over 3 years. • Build of lactoferrin plant underway and to be commissioned in January 2014. • Decided to complete build of all warehouse capacity of an additional 22,500 m²,
Slide 18: Growth Initiative Projects
GROWTH INITIATIVE PROJECTS PFI Commission Total Capex Start Date Commission Comment Date ($m) Date On track to commission ahead of Blending & Canning Aug-13 Jun-14 Aug-14 27.5 schedule Building all warehouse space now, Warehouse Aug-13 Mar-14 Jan-14 16.9 including Dryer 3 Warehouse Lactoferrin May-1
Slide 19: FY 2014 Outlook
FY 2014 OUTLOOK • First half sales of infant nutritionals likely to be affected by announcement of new Chinese regulations and NZ food safety issues. • However still expect to achieve forecast sales of 10,000 MT of infant nutritionals this year. • Now forecasting to take a significant allocation of