Inghams Group Ltd. · ASX:ING
Inghams — H1 2018 Earnings Presentation
22 slides from Inghams's earnings presentation, Feb 22, 2018
Slide 1: Inghams Group Limited 1H FY2018 Results Presentation
Inghams Group Limited 1H FY2018 Results Presentation 22 FEBRUARY 2018
Slide 2: Important notice and disclaimer
Important notice and disclaimer Disclaimer The material in this presentation is general background information about the activities of Inghams Group Limited (Ingham’s) and its subsidiaries (Ingham’s Group), current at the date of this presentation, unless otherwise noted. It is information given in
Slide 3: Group highlights
Broiler Farm South Australia Group highlights
Slide 4: Group highlights
Group highlights Delivering on our strategy – growing volumes and earnings with strong cash flow Chicken remains the competitive protein with 3.7% growth in core Chicken & Turkey volumes – despite cycling of customer EDLP initiatives in FY17 Strategy implementation on track and delivering improv
Slide 5: Financial highlights – 1H FY18 vs 1H FY17
Financial highlights – 1H FY18 vs 1H FY17 Poultry Gross EBITDA EBITDA NPAT Net debt EPS Interim Profit (underlying) Volume Dividend 255.2kt $243.1m $116.2m $108.9m $65.7m $193.3m 17.7 cps 9.5 cps ↑ 2.8% ↑ 6.1% ↑ 22.0% ↑ 14.8% ↑ 28.1% ↓ 104.4m Total Poultry volume growth of 2.8% (core chicken and t
Slide 6: Segment Information – Australia
Segment Information – Australia Summary: Australia Pro forma Poultry volume growth excluding ingredients of 2.7% $ millions 1H FY2018 1H FY2017 Variance % Price increases passed through across the vast majority Australia of volume and in all channels, reflecting flow through of Poultry volumes (
Slide 7: Segment Information – New Zealand
Segment Information – New Zealand Pro forma Summary: New Zealand $ millions 1H FY2018 1H FY2017 Variance % Challenging market conditions continued into this half New Zealand Poultry volumes (kt) 39.0 36.3 2.7 7.3 Improvement in trading performance reflects a Feed volumes (kt) 78.7 69.1 9.6 13.9
Slide 8: Financial results
Further Processing Plant Edinburgh Parks, South Australia Financial results
Slide 9: Profit & Loss
Profit & Loss Pro forma Volume & Revenue Growth $ millions 1H FY2018 1H FY2017 Variance % Continued growth in poultry volumes Poultry volumes (kt) 255.2 248.2 7.0 2.8 NZ volume run rate consistent with 2H FY17 Feed volumes (kt) 270.4 297.1 (26.7) (9.0) 1H vs 2H seasonality in Australian market
Slide 10: EBITDA reconciliation
EBITDA reconciliation Pro forma Profit on sale $ millions 1H FY2018 1H FY2017 Variance % 1H FY18 profit on sale attributable to sale of EBITDA Wanneroo farming and feedmill site (WA) 108.9 94.8 14.1 14.9 (underlying) 1H FY17 profit on sale from Foggo Road (SA) and Cardiff (NSW) processing plants
Slide 11: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Pro forma Cashflow $ millions 1H FY2018 1H FY2017 Variance Non-cash items relates to the profit on sale of Wanneroo EBITDA 116.2 95.2 20.9 ($14.1m) and other minor items ($1.5m), primarily LTIP Non-cash items (15.6) (0.3) (15.3) Continued improvements in working capit
Slide 12: Strategy update
Feed mill Berrima, New South Wales Strategy update
Slide 13: Ingham’s – A World Class Food Company
Ingham’s – A World Class Food Company PAGE // 12
Slide 14: Project Accelerate
Project Accelerate Implementation of the multi year transformation project is well underway Innovation and Differentiation Focused exports strategy Accelerate FP network utilisation Farming efficiency Feed business strategy Labour productivity Automation Procurement Accelerate Netw
Slide 15: Strategy update – Accelerate
Strategy update – Accelerate Automation delivering benefits in improved processing yields and reduced unit costs across major Primary plants – program continues with deboning initiatives planned at Te Aroha (New Zealand) and a focus on FP plants – further opportunities in process streamlining and
Slide 16: Strategy update – energy cost and feed prices
Strategy update – energy cost and feed prices Energy cost increases continue to flow through – gas prices currently ~30% higher than current contract which expires in December 2018 – electricity supply contracted to the end of FY18 with progressive procurement options for FY19 and beyond Energy co
Slide 17: Strategy update – Feed
Strategy update – Feed Focus on providing self sufficiency for own use, and improving mill utilisation and profitability of third party sales Construction of greenfield feed mill in Murray Bridge (SA) is on track to open in 2018 Acquired existing Wacol (QLD) mill during 2H FY18, consistent wit
Slide 18: Outlook
Breeder Farm Matamata, New Zealand Outlook
Slide 19: Outlook
Outlook Strategy implementation remains on track, with further opportunities identified Accelerate benefits expected to continue to underpin cost reduction and profit improvement as planned Increases in energy and feed costs expected to continue and, where they are unable to be offset, flow th
Slide 20: Appendix
> Fie Heart of the Table. — Appendix
Slide 21: Reconciliation of 1H FY17 Statutory results to pro forma
Reconciliation of 1H FY17 Statutory results to pro forma $ millions 1H FY2017 Statutory EBITDA 61.5 1. Removal of costs of listing on ASX in November 2016 IPO transaction costs ❶ 28.0 2. Relates to fees for services charged by TPG entities that will not be incurred post listing Advisory fees ❷ 1.2 W
Slide 22: Risks Summary (per Financial Statements)
Risks Summary (per Financial Statements) Material business risks faced by the Group that may have a significant effect on the financial prospects of the Group include: Import restrictions: Changes to import quarantine conditions in Australia and/or New Zealand that would allow additional forms of