Bega Cheese Limited · ASX:BGA
Bega Cheese — H1 2015 Earnings Presentation
23 slides from Bega Cheese's earnings presentation, Feb 18, 2015
Slide 1: ASX Announcement: Half Year 2015 Results Highlights Presentation
ASX ANNOUNCEMENT For personal use only Half Year 2015 Results Highlights Presentation I have pleasure in enclosing the Half Year 2015 Results Highlights Presentation to be discussed on the Half Year Result 2015 Conference Call scheduled for 2pm today. Brett Kelly Company Secretary 18 February 2015 F
Slide 2: 1H FY2015 Results Presentation
For personal use only 1H FY2015 Results Presentation February 2015 Barry Irvin – Executive Chairman Aidan Coleman – CEO Colin Griffin – CFO
Slide 3: Strategy on Track - Short Term Challenges
STRATEGY ON TRACK - SHORT TERM CHALLENGES For personal use only • Record sales revenue • Strong performance of consumer goods business • Nutritionals platform continues to grow • Milk intake increased by 8% • Over 90% of suppliers have signed to the Milk Sustainability and Growth Program • Global co
Slide 4: 1H FY2015 Statutory Results
1H FY2015 STATUTORY RESULTS For personal use only • Revenue increase by 8% to $552.5m • EBITDA $20.6m (normalised $31.3m) • PAT $6.1m (normalised $13.5m) • EPS 4.0 cps (normalised 8.9 cps) • Interim dividend 4.0 cps • Milk Sustainability and Growth Program $10.6m * Statutory result in current period
Slide 5: 1H FY2015 Normalised Results Highlights
1H FY2015 NORMALISED RESULTS HIGHLIGHTS For personal use only • Revenue increase to $552.5m • EBITDA decrease to $31.3m • PBT decrease to $18.5m • EPS decrease to 8.9 cps • Interim dividend 4.0 cps (record date 2 March, payment date 16 March) * Normalised for impact of sale of shares in WCB and inve
Slide 6: Normalised Business Performance
NORMALISED BUSINESS PERFORMANCE 1H FY2015 1H FY2014 For personal use only $m $m Sales Revenue 552.5 510.6 EBITDA 31.3 41.8 EBIT 20.0 31.1 PBT 18.5 27.8 PAT 13.5 20.0 • Strong revenue growth, particularly consumer packaged dairy products and nutritionals • EBITDA reduced as a result of commodity cycl
Slide 7: Balance Sheet Extract
BALANCE SHEET EXTRACT 28 Dec 2014 30 June 2014 For personal use only $m $m Cash & cash equivalent 30.7 28.6 Trade and other receivables 131.0 106.7 Inventories 203.7 184.2 Property, plant & equipment 208.2 213.6 Total Assets 588.8 548.6 Trade and other payables 134.8 164.2 Borrowings 85.6 20.6 Total
Slide 8: Group Cash Flows
GROUP CASH FLOWS 1H FY2015 1H FY2014 For personal use only $m $m Receipts from customers 549.0 521.4 Payments to suppliers (595.3) (509.2) Interest and other cost of financing paid (1.5) (3.5) Income tax paid (2.7) (2.7) Operating activities (50.5) 6.0 Investing activities (5.5) (18.5) Financing act
Slide 9: Bega Cheese Segment Normalised
BEGA CHEESE SEGMENT NORMALISED For personal use only $m • Strong segment performance 25 • Increasing sales in consumer 20 packaged goods volumes reflect domestic and overseas growth 15 EBITDA • Food service expansion into Asia PAT 10 helping deliver 18% growth in export volumes over prior period 5 0
Slide 10: Tatura Milk Segment Normalised
TATURA MILK SEGMENT NORMALISED For personal use only $m • Impacted by fall in commodity 25 prices 20 • Currency relativities not yet realised • Highly competitive milk pricing 15 EBITDA environment 10 PAT • Improved sales in value added and nutritional products 5 • Costs of commissioning and volume
Slide 11: Dairy Commodity Prices in USD/Tonne
DAIRY COMMODITY PRICES IN USD/TONNE For personal use only USD $/t 6,000 5,500 5,000 4,500 4,000 Cheddar 3,500 Butter 3,000 Skim Milk Powder 2,500 Whey Powder 2,000 1,500 1,000 Aug '13 Jun '14 Oct '13 Nov '13 Jan '14 Mar '14 Aug '14 Oct '14 Nov '14 Sep '13 Feb '14 Jul '14 Jul'13 Sep '14 May '14 Dec '
Slide 12: Strategic Priorities
STRATEGIC PRIORITIES For personal use only • Focus on growth and efficiencies in key platforms • Sustainability and growth of milk supply • Grow consumer goods international business • Grow infant formula and child nutritional platform • Create new bio nutrient platform • Extracting more value from
Slide 13: Milk Sustainability and Growth
MILK SUSTAINABILITY AND GROWTH For personal use only • Over 90% of suppliers signed to Sustainability Program • 3 year commitment to supply • Farm practice audits (Environmental/Animal welfare etc.) • Almost $50 million of committed farmer investment as result of the Growth Program • Increased dairy
Slide 14: Export Consumer Goods and Food Service Growth
EXPORT CONSUMER GOODS AND FOOD SERVICE GROWTH For personal use only • 3 year cumulative forecast sales growth of 18% • Continue to build distribution & sales capability – great success in Chef lead selling • Expanding product portfolio and manufacturing partnerships • Product initiatives include UHT
Slide 15: Nutritional Growth
NUTRITIONAL GROWTH For personal use only • 3 year cumulative forecast sales growth of 21% • Blending and canning facility commissioned in 2014 • Increased portion of volume in valued added retail ready products • Full benefit of new infrastructure not realised in current FY (commissioning costs/volu
Slide 16: Bio Nutrient Platform
BIO NUTRIENT PLATFORM For personal use only • Identifying opportunities for commercialisation in a number of areas • Lactoferrin research project – expect commercialisation FY17 • Progressing strategic alliances with commercial partners and research centres • Finalising structure and commercial prio
Slide 17: Free Trade Agreement
FREE TRADE AGREEMENT For personal use only • Positive impact on competitiveness in key markets • Major increase in business enquires • Positive momentum across the supply chain • Significant increase in partnership opportunities • Benefits will be seen in the medium to long term • Current momentum e
Slide 18: Investing in Infrastructure
INVESTING IN INFRASTRUCTURE Bega Bega For personal use only Derrimut Processing and Packaging (Cut and Pack Cheese) Dairy Production (Cheddar Cheese, Stringers) Processing and Packaging (Infant Nutritionals) Bega Coburg Bega Strathmerton Tatura Dairy Production (Cheddar Cheese) Processing and Packag
Slide 19: Investing in Infrastructure
INVESTING IN INFRASTRUCTURE For personal use only • Ongoing investment in value adding activities • D90 project continues to be developed • Infant canning and blending • Value added cream cheese products • Environmental improvement project to reduce air emissions at Tatura BEGA CHEESE LIMITED 1H FY2
Slide 20: Operational Outlook
OPERATIONAL OUTLOOK For personal use only • Commodity prices showing signs of recovery • Seasonal inventory management • Continued growth in nutritionals and consumer goods • Updated full year normalised forecast, profit after tax reduced from $29.7m to a range of $25 to $28m * Normalised for impact
Slide 21: Strategic Outlook
STRATEGIC OUTLOOK For personal use only • Growth in demand in key platforms • Improved competitive position • Milk supply sustainable and growing • Continued investment in infrastructure and organic growth • Many opportunities for business improvement • Optimistic view of FY16 and beyond BEGA CHEESE
Slide 22: Questions
QUESTIONS For personal use only BEGA CHEESE LIMITED 1H FY2015 Results Presentation | PAGE 20
Slide 23: Disclaimer
DISCLAIMER For personal use only Bega Cheese Limited advises that these presentation slides contain forward looking statements which may be subject to significant uncertainties outside the control of Bega Cheese and its related entities. No representation is made as to the accuracy or reliability of