Bega Cheese Limited · ASX:BGA
Bega Cheese — Shareholder Meeting (October 2017)
37 slides from Bega Cheese's shareholder meeting presentation, Oct 24, 2017
Slide 1: Bega Cheese Annual General Meeting
Bega Cheese Annual General Meeting Barry Irvin – Executive Chairman Paul van Heerwaarden – CEO
Slide 2: Agenda
Agenda § 2017 Annual Report § Executive Chairman’s Report § Chief Executive Officer’s Report § Questions § Approval of Remuneration Report § Election of Directors Bega Cheese Limited PAGE 2
Slide 3: Welcome
Welcome § Shareholders § Suppliers § PricewaterhouseCoopers § Addisons Lawyers § Link Market Services § Bega Cheese Staff § Apologies Bega Cheese Limited PAGE 3
Slide 4: Executive Chairman's Report
Bega Cheese Limited 2017 Annual Report Executive Chairman’s Report Barry Irvin – Executive Chairman
Slide 5: Key Messages
Key Messages § Creating a great Australian food company § Key strategic transactions § Mondelez Grocery Business § Mead Johnson § Successful capital raising § Revenue growth 3% § EBITDA growth 250% (normalised 7%) § Profit growth 382% (normalised 4%) § EPS growth 381% (normalised 4%) § Business stab
Slide 6: Key Highlights 2017
KEY HIGHLIGHTS 2017 REVENUE ($1000) wy 1,226,663 loze) PRODUCTION VOLUME (TONNES) | 236,928 EaTOA 000) 70,620 0 "NORMALISED 228,850 STATUTORY PROFIT rm ($1000) 30,331 mC) 138,748 SS = 19.9 29 fa 90.9 TOTAL DIVIDEND PER SHARE (cents) Ea
Slide 7: Bega Cheese Transformation
Bega Cheese Transformation Bega Cheese Limited PAGE 7
Slide 8: Mondelez Grocery Business Overview
Mondelez Grocery Business Overview § Cultural fit – Heritage, community, customers § Diversifies Bega Cheese into complementary markets and categories beyond dairy § Enhances our skills and capability to continue to evolve § Complements our significant knowledge of lean and innovative food manufactu
Slide 9: Strong Marketing Properties and Branding
Strong Marketing Properties and Branding Bega Cheese Limited PAGE 9
Slide 10: Mead Johnson Transaction
Mead Johnson Transaction § Long term nutritional partnership strengthens Bega Cheese’s relationship with one of its key customers § Sale of one spray dryer at Tatura and the infant formula finishing plant at Derrimut, Melbourne § Sale proceeds of $200 million: § $180 million received in April 2017 §
Slide 11: Capital Raising
Capital Raising § Bega Cheese targets $160 million capital § Strengthen balance sheet and positon for growth § Share Placement Plan target $122.5 million ($5.35) § Share Purchase Plan target $37.5 million ($5.25) § Significantly over subscribed § Placement scaled back, all valid applications for the
Slide 12: Customer Relationships
Customer Relationships Bega Cheese Limited PAGE 12
Slide 13: Dairy commodity price and farm gate milk price
Dairy commodity price and farm gate milk price § FY2017 milk supply stable § 654 million litres direct milk intake § Strong performance in context of 7% decline in national production and 15% decline in northern Victorian production § New suppliers added in FY2017 Export trend index - global commodi
Slide 14: Bega Cheese Limited PAGE 14
Bega Cheese Limited PAGE 14
Slide 15: Chief Executive Officer's Report
Bega Cheese Limited 2017 Annual Report Chief Executive Officer’s Report Paul van Heerwaarden – CEO
Slide 16: Key Highlights 2017
KEY HIGHLIGHTS 2017 REVENUE ($1000) wy 1,226,663 loze) PRODUCTION VOLUME (TONNES) | 236,928 EaTOA 000) 70,620 0 "NORMALISED 228,850 STATUTORY PROFIT rm ($1000) 30,331 mC) 138,748 SS = 19.9 29 fa 90.9 TOTAL DIVIDEND PER SHARE (cents) Ea
Slide 17: Reconciliation of Statutory to Normalised Result
Reconciliation of Statutory to Normalised Result Bega Foods Sale of Per Financial Inventory Acquisition Nutritional Asset Normalised Consolidated Statements Losses Costs Assets Impairments Outcome Period Ending 30 June 2017 $’000 $’000 $’000 $’000 $’000 $’000 Revenue 1,226,663 - - - - 1,226,663 Cost
Slide 18: Cash Flow
Cash Flow § Improved gross profit FY2017 FY2016 § Strong working capital and inventory management $m $m Receipts from customers 1,274.9 1,241.1 Payments to suppliers (1,203.8) (1,175.9) Interest and other costs of financing paid (3.2) (3.8) Income tax paid (10.7) (3.3) Operating activities 57.1 59.0
Slide 19: Balance Sheet (extract)
Balance Sheet (extract) FY2017 FY2016 $m $m Cash 475.5 9.7 Trade and other receivables 168.5 143.7 Inventories 167.9 192.4 Property, plant & equipment 196.8 219.9 Total Assets 1,056.3 586.7 Trade and other payables 169.3 156.0 Borrowings (net of costs) 215.3 62.7 Total Liabilities 485.6 258.8 Net As
Slide 20: Group Sales
Group Sales 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $0.0b $0.2b $0.4b $0.6b $0.8b $1.0b $1.2b $1.4b Bega Cheese Limited PAGE 20
Slide 21: Business Platforms
Business Platforms Bega Brand § Number one Australian cheese brand with 15.7% market share § Brand portfolio available in over 40 countries Food Service and Consumer Goods § International portfolio now exceeds $100 million § Continued growth in domestic cheese cut, pack and processing Nutritionals §
Slide 22: Operations and Infrastructure
Operations and Infrastructure § Production of 236,928 tonnes § Commenced continuous improvement program § Capital expenditure § Slice line at Ridge St, Bega § Shred line at Ridge St, Bega § Cream cheese at Tatura § Management information system Bega Cheese Limited PAGE 22
Slide 23: Workplace Safety and Environmental
Workplace Safety and Environmental Workplace safety § 15% decrease in TRIFR § Safety behaviour leadership program Environmental § 6.5% energy decrease per tonne of production § 6.7% decrease in water usage across the group § Sustainability report Bega Cheese Limited PAGE 23
Slide 24: Strategic Focus
Strategic Focus “The Great Australian Food Company” § Build and protect key business platforms § Leverage sales channels and brand strength § Integrate operational excellence § Continue to develop strong leadership team § Respond to international demand and changing markets § Maximise product return
Slide 25: Bega Cheese Limited PAGE 25
Bega Cheese Limited PAGE 25
Slide 26: Where we are Today?
Where we are Today? A stable business growing in dairy and building in food § Completing the MDLZ Grocery Business acquisition on 4 July 2017 § Brand portfolio including iconic Australian brands Bega and Vegemite § Company of choice for dairy farmers with strong milk supply growth § Stability in dai
Slide 27: Our focus
Our focus Creating a great Australian food company § Protect the strengths, reputation and returns of the existing businesses § Manage volatility in changing markets and maintain a globally competitive supply chain § Leverage and grow the iconic brand portfolio § Expand channels and markets for our
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Slide 29: Formalities and Voting
Bega Cheese Limited 2017 Annual Report Formalities and Voting Barry Irvin – Executive Chairman
Slide 30: Remuneration Report
Remuneration Report § Pages 22-30 of Annual Report § Board, Executive Chairman, CEO and other key management personnel § Market data and external advisors Resolution § Adopt remuneration report for the year ended 30 June 2017 Bega Cheese Limited PAGE 30
Slide 31: Remuneration Report Proxies
Remuneration Report Proxies § Total Votes – 78,572,099 (42.46%) § For – 76,663,052 (97.57%) § Open – 1,542,943 (1.96%) § Against – 366,104 (0.47%) Bega Cheese Limited PAGE 31
Slide 32: Election of Directors
Election of Directors § Richard Parbery § Peter Margin § Terrence O’Brien Bega Cheese Limited PAGE 32
Slide 33: Election of Directors Richard Parbery
Election of Directors § Total Votes – 80,988,764 (43.76%) § For – 51,978,202 (64.18%) § Open – 1,500,976 (1.85%) § Against – 27,509,586 (33.97%) Richard Parbery Bega Cheese Limited PAGE 33
Slide 34: Election of Directors Peter Margin
Election of Directors § Total Votes – 80,986,907 (43.76%) § For – 71,920,960 (88.81%) § Open – 1,503,939 (1.86%) § Against – 7,562,008 (9.34%) Peter Margin Bega Cheese Limited PAGE 34
Slide 35: Election of Directors Terry O'Brien
Election of Directors § Total Votes – 80,960,637 (43.75%) § For – 78,674,442 (97.18%) § Open – 1,511,296 (1.87%) § Against – 774,899 (0.96%) Terry O’Brien Bega Cheese Limited PAGE 35
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Slide 37: Disclaimer
Disclaimer The following disclaimer applies to this presentation and any information provided in this presentation (Information). You are advised to read this disclaimer carefully before reading or making any other use of this presentation or any Information. This presentation has been prepared by B