Bega Cheese Limited · ASX:BGA
Bega Cheese — FY2020 Earnings Presentation
26 slides from Bega Cheese's earnings presentation, Aug 27, 2020
Slide 1: FY2020 Full Year Results Presentation
FY2020 Full Year Results Presentation Barry Irvin – Executive Chairman Paul van Heerwaarden – CEO Pete Findlay – CFO Page 1
Slide 2: Key message
Key message Managing COVID-19 Continued Revenue growth Significant cash generation/debt reduction Successful commission of Koroit lactoferrin facility Implementation of organisation and process review Rationalisation of processed cheese capacities Stabilised dairy environment Ongoing
Slide 3: Values
Values Page 3
Slide 4: COVID-19
COVID-19 First priority is safety Working closely with government and all relevant stakeholders Internal COVID-19 management team COVID-19 management plan across all sites and entire supply chain In excess of 500 staff working from home Food service market significantly impacted Increa
Slide 5: Performance highlights
Performance highlights Revenue increased by 5% to $1.5 billion Operating cash flow $138 million Net debt reduction by $52 million to $236 million Export sales increased 15% to $523 million Inventory reduction by $15 million to $257 million Normalised EBITDA decreased by 2% to $103.0 mill
Slide 6: Reconciliation of normalised result
Reconciliation of normalised result Per Financial Legal ERP Koroit Normalised Consolidated Statements Costs Costs Acquisition Outcome Period Ending 30 June 2020 $’000 $’000 $’000 $’000 $’000 Revenue 1,493,219 - - - 1,493,219 Cost of sales (1,204,171) - - - (1,204,171) Gross profit 298,048 - - - 289,
Slide 7: Balance sheet
Balance sheet FY2020 *FY2019 $m $m Cash 22.9 28.8 Trade and other receivables 117.4 179.9 Inventories 257.4 272.6 Property, plant and equipment 454.7 443.3 Intangible assets 548.1 546.1 Total Assets 1,423.4 1,501.2 Trade and other payables 253.4 274.9 Borrowings (net of costs) 258.5 316.1 Total Liab
Slide 8: Cash flow
Cash flow FY2020 FY2019 $m $m Receipts from customers 1,691.6 1,422.1 Payments to suppliers (1,494.9) (1,476.8) Net proceeds from trade receivables facility (35.4) 188.6 Interest and other costs of financing paid (11.3) (20.4) Income tax paid (12.3) (13.3) Operating activities 137.7 100.3 Proceeds f
Slide 9: Strategy
Strategy Page 9
Slide 10: Transformation to becoming 'The Great Australian Food Company'
Transformation to becoming ‘The Great Australian Food Company’ FOURTH TRANSFORMATION 2019 2017 THIRD TRANSFORMATION ACCELERATING GROWTH 2011 SECOND TRANSFORMATION NEW BUSINESS PLATFORM FIRST TRANSFORMATION 2008/09 STRUCTURED FOR THE FUTURE 2007 GROW AND DIVERSIFY 2001 Customer and consumer focussed
Slide 11: Growing and diversifying our branded business
Growing and diversifying our branded business Pre 2017 Now Our focus 2023 Limited investment Building brand Strong brand platform in brands growth engine Increase brand for future growth organic growth rate Fonterra responsible for Extension of Bega brand into Strong portfolio of brands Bega brand i
Slide 12: Diversifying and value adding our milk pool
Diversifying and value adding our milk pool Pre 2017 Now Our focus 2023 Concentration of milk Infrastructure diversity Majority of milk destined pool regions and rationalisation Diversified milk for value added products regions Core dairy infrastructure Acquisition of Koroit and Network of facilitie
Slide 13: New segment reporting
New segment reporting Dairy ingredients Milk processing Business to business dairy ingredient sales (Australian and international) Dairy nutritionals Consumer packaged goods Secondary processing Retail and food service brands Retail packaged goods (including private label and third party
Slide 14: New segment reporting
New segment reporting FY2020 *FY2019 $’000 $’000 Sales to external customers in Australia Branded 649,842 612,944 Bulk 319,900 352,303 Total Sales to external customers in Australia 969,742 965,247 Sales to external customers in other countries Branded 228,726 209,189 Bulk 294,751 245,516 Total sale
Slide 15: Commercial operations
Commercial operations Page 15
Slide 16: Group sales
Group sales $1.6b $1.4b $1.2b $1.0b $0.8b $0.6b $0.4b $0.2b $0.0b 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Page 16
Slide 17: Strong growth in domestic grocery market
Strong growth in domestic grocery market Domestic retail grocery market grew by 10.5% in FY2020 Spreads category growth of 9.8% (5.8% volume growth) Vegemite growth of 4.8% Bega Peanut Butter growth of 14.3% across both core and Simply Nuts range Cheese category growth of 11.7% (4.2% volum
Slide 18: Launch of new brands and products
Launch of new brands and products B honey brand with Australian sourced honey and development of Purple Hive Project launched in May Happi baby and kids nutraceutical range containing lactoferrin launched in February 40% Less Salt Vegemite launched in March Simply Nuts 650g large jar and dar
Slide 19: Dairy Nutritionals
Dairy Nutritionals Strong growth with new customers for goat formula and in South East Asian markets Anticipate reduction in demand following short term increase in demand related to COVID-19 Diagou channel impacted following COVID-19 Progressed commissioning of Koroit lactoferrin facility a
Slide 20: Dairy commodity and farm gate milk prices
Dairy commodity and farm gate milk prices Improved seasonal conditions in 2H FY2020 Milk supply outlook positive Successful implementation of new dairy code of conduct Highly competitive milk procurement environment Export trend index – global commodity prices and Australian currency impact
Slide 21: Operations review
Operations review • Organisation and process review • Secondary manufacturing footprint • Factory optimisation • Logistics • Common ERP platform • Lactoferrin plant at Koroit Page 21
Slide 22: Approach to Corporate Social Responsibility
Approach to Corporate Social Responsibility our focus is on the five areas where we can have the greatest impact Aligned with the United Nations Global Compact Food nutrition Diversity, inclusion Greenhouse gases Packaging Water sustainability and equality sustainability Highlights FY2020 Highlights
Slide 23: Where are we today?
Where are we today? Transition to diversified brand food company well progressed COVID-19 varying impact on market channels Supply chain and operational issues due to COVID-19 under control Global uncertainty related to dairy demand Stabilised milk procurement environment Business improv
Slide 24: Our priorities
Our priorities Investment in brands and markets Focus on cash generation and costs Leveraging and rationalising existing assets and product capacities Protect and diversify current milk supply Phase 2 of operational process review optimizing new ERP system Remain open to further dairy in
Slide 25: Bega Cheese Limited
Page 25 Bega Cheese Limited
Slide 26: 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