Cobram Estate Olives Ltd. · ASX:CBO
Cobram Estate Olives — Boundary Bend — Shareholder Meeting (October 2020)
53 slides from Cobram Estate Olives's shareholder meeting presentation, Oct 29, 2020
Slide 1: Boundary Bend Limited AGM
Boundary Bend Limited AGM 29 October 2020 1
Slide 2: Profit and Loss
PROFIT AND LOSS FY17 FY18 FY19 FY20 A disappointing year, ($’000) ($’000) ($’000) ($’000) with loss driven by 4 key factors EBITDA • Low yield from our Australian olive oil business 44,490 12,070 42,566 (2,947) Australian harvest USA olive oil business (6,759) (6,435) (4,430) (8,100) • Extra-ordinar
Slide 3: Operating Cash Flow
OPERATING CASH FLOW FY16 FY17 FY18 FY19 FY20 ($‘000) ($’000) ($’000) ($’000) ($’000) Operating Cash Flow (before interest and tax), by segment: Australian olive oil business 27,111 28,860 33,969 14,566 31,107 USA olive oil business (6,103) (7,091) (7,347) (4,160) (8,427) Wellgrove / Value-add (699)
Slide 4: Operating Cash Flow & Use of Funds
OPERATING CASH FLOW & USE OF FUNDS We have invested significantly in capital projects to deliver future growth Cash from operating, borrowing Use of cash (3yr average) and new equity (3yr average) Interest costs Dividends paid (p.a.), $4.9m (p.a.), $3.8m Operating cashflow before Equity raised inter
Slide 5: Summary of Investment in Future Growth
SUMMARY OF INVESTMENT IN FUTURE GROWTH FY17 FY18 FY19 FY20 ($’000) ($’000) ($’000) ($’000) Total USA Olive Oil - Operations 6,759 6,435 4,430 8,100 25,724 USA Olive Oil - Capex 2,955 10,748 16,024 10,798 40,525 66,249 Wellness / Wellgrove - Operations 2,540 3,936 4,887 8,619 19,982 Australia Olive O
Slide 6: Bank Debt & Interest Rate Hedging
BANK DEBT & INTEREST RATE HEDGING At 30 June 2020 FACILITY UNUSED Core Debt Facility AUD 58.0m - Working Capital Facilities AUD 75.0m AUD 8.0m Foreign Currency Facility USD 10.5m - • Facilities provided by Commonwealth Bank of Australia. • Secured against Australian assets only, and all Facilities h
Slide 7: Total Tangible Assets and Debt
TOTAL TANGIBLE ASSETS AND DEBT • Gearing has increased, Total Tangible Assets vs. Debt but in our view still at ($'000) acceptable levels 500,000 • At 30 June 2020, $164m 450,000 400,000 of borrowings, against 350,000 $421m of assets 300,000 250,000 • The asset value excludes 200,000 150,000 any bra
Slide 8: Balance Sheet Summary
BALANCE SHEET SUMMARY Shares: 61.46m shares on issue Assets of $390.5m Cash, inventory, oil and receivables of $81.2m Land & buildings, trees and irrigation $240.5m Plant and equipment $51.7m Intangibles $6.7m (mostly Cobram Estate and Red island trademarks) Other $10.4m Note: management estimate th
Slide 9: Australian Olive Oil Business: Looking Ahead and Trading Update
AUSTRALIAN OLIVE OIL BUSINESS Looking ahead and trading update • We are optimistic about the year ahead • This year is an “on-year”. The last on-year, we produced 13.2m litres, compared to this year’s harvest of 6.2m litres • Water costs have now returned closer to long term average, and we expect a
Slide 10: USA Business: Looking Ahead and Trading Update
USA BUSINESS Looking ahead and trading update • Continued investment in growing our packaged goods business has allowed us to significantly decrease the operating investment in the business • We have reported our first profitable month since start-up 6 years ago, and are EBITDA positive for the firs
Slide 11: Growth Strategies
GROWTH STRATEGIES FOUR CORE OPPORTUNITIES TO DRIVE FUTURE GROWTH Increasing yields from maturing existing orchards, together with incremental production from new plantings Our trees are still maturing, and in addition we are still planting. Increasing the farm-gate return for our Extra Virgin olive
Slide 12: What you need to know
What you need to know • Unfortunately, no dividend will be paid this year and the board will review again after our full year results • Oil production from our Australian groves will double in the medium term. Much of this revenue increase will fall to the bottom line. • Branded sales are strong, pr
Slide 13: Australian Olive Oil Business: Planted Hectares & Yield Profile
AUSTRALIAN OLIVE OIL BUSINESS Total planted hectares & yield profile 1,600 16 1,400 14 1,200 12 1,000 Not yet producing = 16% of grove (1,057 ha) 10 Hectares Ton/hectare 800 8 Hectare age profile 600 6 Typical yield evolution (t/ha) 400 4 200 2 0 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Slide 14: Australian Olive Oil Business: Expected Crop Evolution
AUSTRALIAN OLIVE OIL BUSINESS 250% Expected Crop Evolution vs. 2017 & 2018 Expected variation biennial cycle 200% Replants Frost Protection Base Production 150% Tree Removal 100% 50% 0% 2017 & 2018 2019 & 2020 2021 & 2022 2023 & 2024 2025 & 2026 2027 & 2028 -50% 14
Slide 15: Our 2020 Harvest and our people
Our 2020 Harvest and our people
Slide 16: Highlights – Strong Branded Sales Growth
HIGHLIGHTS – STRONG BRANDED SALES GROWTH Global Oil Sales Evolution by Product/Brand (all in AUD) $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 3 mths to 30 Cobram Estate Red Island Private Label
Slide 17: Retail Sales Australia
RETAIL SALES AUSTRALIA Australian Retail - Extra Virgin Olive Oil Dollar Sales Woolworths and Coles Brand Share of EVOO - 12 months to 4 October 2020 80,000 32.4% Dollars (000s) Litres (000s) Units (000s) 70,000 60,000 50,000 ('000) 40,000 30,000 11.5% 20,000 10,000 0 Cobram Moro Red Island La Espan
Slide 18: Time to take your oil tasting kits out
Time to take your oil tasting kits out 1. Serve Pour 1-2 tablespoons into a glass or plastic cup (whatever you have handy). 2. Swirl Cup the glass in your hands and swirl the oil gently to coat the sides and help release the aroma. 3. Smell Stick your nose in the glass, and inhale deeply. 4. Slurp S
Slide 19: USA Business
USA BUSINESS USA Packaged Goods - Net Oil Sales • EBITDA loss for FY20 (in US dollars) 25,000,000 $8.1m. First 3 months of FY21 all reported EBITDA 20,000,000 profit. • The USA business 15,000,000 continues to show strong sales growth, with 10,000,000 packaged goods net sales 5,000,000 expected to g
Slide 20: USA – Cobram Availability
COBRAM ESTATE DISTRIBUTION USA – COBRAM AVAILABILITY Cobram Estate is now in 12,528 stores Nationwide
Slide 21: USA – Cobram Now Top 10 National Brand
USA – COBRAM NOW TOP 10 NATIONAL BRAND #8 Brand in the US Market over the past 52 Weeks Grown from the #79 brand in 2017 US Brand Rank Brand Rank 2017 2018 2019 2020 1. 0 2. 10 20 3. 30 4. 40 5. 50 60 6. 70 7. 80 8. 90
Slide 22: USA – Cobram Line Extension Working
USA – COBRAM LINE EXTENSION WORKING Our new Cobram Estate California line extension is a success 41% of Retail Sales over the past 52 weeks. 52 Week Retail Dollar Sales $12,000,000.00 $10,000,000.00 $8,000,000.00 $6,000,000.00 $4,000,000.00 $2,000,000.00 $- 3 Year Ago 2 Year Ago Year Ago Current Sel
Slide 23: Wellness / Wellgrove
WELLNESS / WELLGROVE • Wellness reported an EBITDA loss of $8.6m in Boundary Bend Wellness Sales FY20 ($'000) 2,500 • Largely driven by the continued investment in 2,000 growing branded sales in both Australia and the 1,500 USA market • We have re-adjusted our 1,000 cost base, to minimise the downsi
Slide 24: Wellgrove USA
WELLGROVE USA • In the USA we continue to focus on digital sales channels, with a key focus being on Amazon and Direct to Consumer sales using affiliate introductions. • After a tough first year our USA Wellgrove business has started FY2021 well with gross sales of A$520k year to date. Our new launc
Slide 25: Wellgrove USA – New Product Snapshot Keto Super Powder
WELLGROVE USA – NEW PRODUCT SNAPSHOT KETO SUPER POWDER Combining the unique health benefits and popularity of Extra Virgin Olive Oil with Prebiotic Fibre in an easy-to-use creamy powder • Launched in the USA in August • Direct to consumer sales channel, introduced by third parties • Launch to date s
Slide 26: Wellgrove Australia
WELLGROVE AUSTRALIA • FY2020 was a challenging period with first half sales dampened by slow moving pipe- fill stock, and the last quarter impacted by a lack of pharmacy foot traffic. • In March we saw a dramatic spike in sales driven by COVID-19 panic buying. This has since subsided. • Our marketin
Slide 27: Wellgrove Heart Health Campaign
WELLGROVE HEART HEALTH CAMPAIGN • Our seasonal marketing focus has shifted to our Heart Health olive leaf extract and the opportunity for these products to be used to complement consumption of extra virgin olive oil as part of a Mediterranean Diet. • Visit our blog on “Using Olive Products to Help K
Slide 28: Water & Boundary Bend: Storage Levels
0.0% 100.0% 120.0% 20.0% 40.0% 60.0% 80.0% Jul-07 Source: H2OX water exchange Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 WATER & BOUNDARY BEND Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 (% full) Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Southern Murray Darling Basin - storage leve
Slide 29: Water & Boundary Bend: Historical Water Price
$100 $200 $300 $400 $500 $600 $700 $800 $900 $- 1/07/2007… 1/12/2007 1/05/2008 1/10/2008 1/03/2009 1/08/2009 1/01/2010 1/06/2010 1/11/2010 1/04/2011 1/09/2011 WATER & BOUNDARY BEND 1/02/2012 1/07/2012… 1/12/2012 1/05/2013 1/10/2013 1/03/2014 1/08/2014 1/01/2015 1/06/2015 Long term VWAP $180.53 per M
Slide 30: Water & Boundary Bend
WATER & BOUNDARY BEND Volume (ML) Cost ($’000) $/ML • Expected usage of around 38,000ML FY14 41,059 3,146 77 in FY20 FY15 38,172 4,677 123 • FY2020 average price of $643 / ML FY16 39,927 9,881 247 • Current spot price (28 October FY17 32,995 2,603 79 2020) FY18 31,155 3,720 119 – ~$190 on Vic Murray
Slide 31: Water & Boundary Bend: Desal
WATER & BOUNDARY BEND Desal Objective • To pump salty abundant unutilised ground water in Aquifers beneath our groves and Desal it on-site and use to irrigate our olive trees in periods of drought and/or high water prices. Desktop review suggests total cost of between $300 and $500 per ML. This is m
Slide 32: Water & Boundary Bend: ACCC and Senate Inquiry
WATER & BOUNDARY BEND ACCC AND SENATE SELECT COMMITTEE ENQUERY ACCC • Final report been delayed to 26 February 2021 due to COVID-19. • It seems material positive changes will be recommended to the water markets and trade however we are concerned that the ACCC has not grasp the scale of damage to our
Slide 33: Overview: Boundary Bend Proprietary Olive Production System
Overview Boundary Bend Proprietary Olive Production System
Slide 34: What is Oliv.iQ?
What is Oliv.iQ®? - Oliv.iQ® is Boundary Bend Ltd exclusive and proprietary integrated olive oil production system. - Oliv.iQ® achieves 60% higher oil yields than the average of the world’s top 6% most productive groves and nearly 9 times more oil than the global average with a production cost per l
Slide 35: Why did we start the work with Oliv.iQ?
Why did we start the work with Oliv.iQ? - To protect and promote the diverse areas of IP that we apply from site selection and olive growing to processing. - To add value to BBL and make our hard-earned knowledge more marketable and attractive for growers or investors capitalising on the value that
Slide 36: What are the key advantages of Oliv.iQ?
What are the key advantages of Oliv.iQ®? - World leading fruit and oil yields per hectare. - World leading olive oil processing efficiencies. - World leading extra virgin olive oil quality. - Amongst the lowest production costs per litre of olive oil in the world. - Genetically diversified with prov
Slide 37: UC Davis Report
UC Davis Report After reviewing the Oliv.IQ® system, I am convinced that Boundary Bend’s high performance is the result of expert personnel, integrated management practices, embrace of scientific trials and experimentation, advanced data collection, rigorous analysis and a company culture seeking co
Slide 38: Boundary Bend Limited Sustainability Report
Boundary Bend Limited Sustainability Report STRIC TLY CONFIDENTIAL
Slide 39: Sustainability Report – what is it?
Sustainability Report – what is it?
Slide 40: Sustainability Report – why we did it
Sustainability Report – why we did it • Baseline guidance document that’s heavily referenced and researched to enable us to create other materials from, e.g. • Public health policy (Australian Dietary Guidelines) • Marketing materials (HCPP and consumer) • Other BBL strategic objectives • Needed to
Slide 41: Sustainability Report – how we did it
Sustainability Report – how we did it • Eat Lancet Report – key document • Sets targets on healthy diets from sustainable food systems to achieve climate change goals such as The Paris Agreement • Report goes through EVOO vs other main stream cooking oils at a category level, and then BBL EVOO vs ol
Slide 42: Oils and biodiversity loss/land system change
Oils and biodiversity loss/land system change • The diversity and richness of all living organisms on land and in water is necessary for the stability of ecosystems, and productivity and resilience of food production systems. • Of more than 14 000 edible plant species, only 150–200 are used by human
Slide 43: Zero Waste
Zero Waste Boundary Bend Ltd Zero Waste Production Model “Refined olive oll ‘Second extraction alive oll "Extra virgin olive oil 27
Slide 44: Healthy eating / diet
Healthy eating / diet Macronutrient intake grams per day Caloric intake (possible range) kcal per day Whole grains Rice, wheat, corn and other 232 a1 e Tubers or starchy vegetables Potatoes and cassava 50 (0-100) 39 i Vegetables All vegetables 300 (200-600) 78 6 Fruits All fruits 200 (100-300) 126 D
Slide 45: Summary of key findings
Summary of key findings • Extra Virgin Olive Oil is the only mainstream cooking oil that acts as a carbon sink. • Extra Virgin Olive Oil is a more desirable source of unsaturated and saturated oil than refined oils from a sustainable food production perspective. • Our Oliv.iQ® Boundary Bend groves a
Slide 46: General Questions Prior to Formal Proceedings
GENERAL QUESTIONS PRIOR TO FORMAL PROCEEDINGS 46
Slide 47: Resolution 1: Approve the financial statements and the reports
Resolution 1 Approve the financial statements and the reports Direct / Proxy Percentage of Votes votes cast For 18,117,253 97.84% Against 400,000 2.16% Abstain - - Resolution approved 47
Slide 48: Resolution 2(a): Re-election of Mr Paul Riordan
Resolution 2(a) Re-election of Mr Paul Riordan Direct / Proxy Percentage of Votes * votes cast For 15,008,135 97.40% Against 400,000 2.60% Abstain - - * Excluding votes cast by Mr Paul Riordan Resolution approved 48
Slide 49: Resolution 2(b): Re-election of Mr Craig Ball
Resolution 2(b) Re-election of Mr Craig Ball Direct / Proxy Percentage of Votes * votes cast For 17,489,720 97.76% Against 400,000 2.24% Abstain - - * Excluding votes cast by Mr Craig Ball Resolution approved 49
Slide 50: Resolution 2(c): Re-election of Mr Alan Hilburg
Resolution 2(c) Re-election of Mr Alan Hilburg Direct / Proxy Percentage of Votes votes cast For 18,117,253 97.84% Against 400,000 2.16% Abstain - - Resolution approved 50
Slide 51: Resolution 3: Adopt the Remuneration Report
Resolution 3 Adopt the Remuneration Report Direct / Proxy Percentage of Votes * votes cast For 1,618,146 79.96% Against 405,446 20.04% Abstain - - * This excludes any proxy votes from the Directors or senior management referred to in the Remuneration Report Resolution approved 51
Slide 52: Resolution 4: Renewal of the Proportional Takeover Provisions
Resolution 4 Renewal of the Proportional Takeover Provisions Direct / Proxy Percentage of Votes votes cast For 18,117,253 97.84% Against 400,000 2.16% Abstain - - Resolution approved 52
Slide 53: Questions and Thanks
QUESTIONS AND THANKS 53