Cobram Estate Olives Ltd. · ASX:CBO
Cobram Estate Olives — Investor Presentation (December 2021)
59 slides from Cobram Estate Olives's investor presentation, Dec 6, 2021
Slide 1: Investor Presentation
Investor Presentation 6 December 2021 Cobram Estate Olives Limited | June 2021 Private & Confidential 1
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation is dated 6 December 2021 has been prepared by Cobram Estate Olives Limited (ACN 115 131 667) (CBO or Company) in connection with (a) an institutional placement of new fully paid ordinary shares (New Shares) in the Company (Placement), (b) an underwri
Slide 3: Important notice and disclaimer (cont’d)
Important notice and disclaimer (cont’d) Not financial product advice or an offer The information in this presentation does not constitute financial product or investment advice (nor tax, accounting or legal advice) nor is it a recommendation to subscribe for or acquire New Shares and does not and w
Slide 4: Important notice and disclaimer (cont’d)
Important notice and disclaimer (cont’d) Future performance and forward-looking statements (cont’d) Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward-looking statements. Investors and prospective investors are cautioned not to place und
Slide 5: Important notice and disclaimer (cont’d)
Important notice and disclaimer (cont’d) Disclaimer No representation or warranty, express or implied, is made as to the accuracy, reliability, completeness or fairness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, neither the Co
Slide 6: Agenda
Agenda 1. Company Overview and Business Update 2. Equity Raising Overview 3. Growth Strategy 4. Financial Year 2021 Results and Commercial Summary 5. Business Operations Highlights – FY2021 6. Key Risks, Foreign Selling Restrictions, and Summary of Placement Agreement Cobram Estate Olives Limited |
Slide 7: Company Overview
Company Overview Cobram Estate Olives is Australia’s largest vertically integrated olive grower, processor and marketer • Established in 1998, with operations in both Australia and the USA and export customers in 17 countries. • A market leader in the Australian extra virgin olive oil industry and a
Slide 8: Cobram Estate Olives - From Tree to Table
Cobram Estate Olives - From Tree to Table Growing and marketing olive goodness in Australia and the USA Cobram Estate Olives Limited | June 2021 Private & Confidential 8
Slide 9: Acceleration of our Growth Strategy
Acceleration of our Growth Strategy Equity Raising Overview • CBO is launching an equity raising via an Institutional Placement to raise approximately A$50 million (the Company reserves the right to increase the size of the raise) at $2.00 per share, and a Share Purchase Plan to raise up to an addit
Slide 10: Financial Outlook and Trading Update
Financial Outlook and Trading Update Sales off to a strong start in FY2022 • Sales across the group are off to a strong start in FY2022, especially in Australia. In the USA, as expected, oil supply has been extremely constrained, though this situation is anticipated to reverse now that 2021 season o
Slide 11: Positive Outlook for Australian Olive Harvest 2022
Positive Outlook for Australian Olive Harvest 2022 Flowering completed on our Australian groves • Our maturing Australian olive orchards are enjoying a favourable season to date. • Our Australian groves have passed their ‘full bloom’ flowering period. This is an important milestone and is the first
Slide 12: Water prices in the Southern Murray Darling Basin are below historical levels
Water prices in the Southern Murray Darling Basin are below historical levels In FY2022 YTD we have purchased 33% of our water needs at a weighted average price of $112.52/megalitre Water pricing Cobram Estate Olives annual Temporary Water purchases and average annual price • In FY2022 to date, the
Slide 13: 2021 California Olive Harvest and USA Oil Supply
2021 California Olive Harvest and USA Oil Supply Positive outlook for Harvest 2021 and third-party supply, plus new land for grove development California Olive Harvest 2021 • Our olive harvest in the USA is 92% complete. Both oil yields and olive oil quality are in line with expectations. • Although
Slide 14: Equity Raising Overview
Equity Raising Overview Cobram Estate Olives Limited | June 2021 Private & Confidential 14 14
Slide 15: Equity Raising overview
Equity Raising overview CBO to conduct an Institutional Placement and Share Purchase Plan PLACEMENT • Fully underwritten Institutional Placement to raise approximately $50 million (the Company reserves the right to increase the size of the raise) • 25 million New Shares to be issued, representing 6.
Slide 16: Equity Raising – Use of Funds
Equity Raising – Use of Funds The equity raising, combined with additional debt capacity and operating cashflows, is sufficient to fully-fund our current expansion plans USA Grove Development Boort Olive Mill Upgrade • Funds to be invested – $35 million • Funds to be invested – $15 million • CBO is
Slide 17: Equity Raising – Director Sell-Down
Equity Raising – Director Sell-Down Explanation of change in holdings of four CBO Directors • As a result of strong demand, concurrent with the Placement the Company’s Joint CEOs, Sam Beaton and Leandro Ravetti, and the Company’s Non Executive Directors, Paul Riordan and Tim Jonas, have agreed to se
Slide 18: Equity Raising – Director Sell-Down (cont’d)
Equity Raising – Director Sell-Down (cont’d) Full details of Director Share Sales Sam Beaton (joint-CEO) has agreed to sell 2.0 million shares totalling $4.0 million, representing 23.5% of his shareholding in CBO. Proceeds from the sale will be used as follows: • $1.33 million will be paid to the Co
Slide 19: Equity Raising timetable
Equity Raising timetable Event Date Record Date for SPP 5:00pm Friday, 3 December 2021 Trading halt and announcement of the Placement and SPP Monday, 6 December 2021 Announcement of the outcome of the Placement Tuesday, 7 December 2021 Trading halt lifted – trading resumes on ASX Tuesday, 7 December
Slide 20: Growth Strategy
Growth Strategy Cobram Estate Olives Limited | June 2021 Private & Confidential 20 20
Slide 21: Growth Strategy – Four Core Pillars of Future Growth
Growth Strategy – Four Core Pillars of Future Growth Clearly articulated and well-understood growth plan Increasing supply from our Australian olive groves through new plantings and efficiency gains 1. 39% of the company’s total Australian plantings are not fully mature and are not yet producing mat
Slide 22: 1. Increasing Supply From Our Australian Olive Groves
1. Increasing Supply From Our Australian Olive Groves Through New Plantings and Efficiency Gains Boort grove redevelopment • In 2021 we completed the redevelopment of the Boort olive grove, with 331 hectares planted with 118,000 new trees in Autumn 2021. • Over the past six years the company has rep
Slide 23: Increasing Supply From Our Australian Olive Groves (cont’d)
1. Increasing Supply From Our Australian Olive Groves Through New Plantings and Efficiency Gains (cont’d) Current age profile of the company’s olive trees Embedded growth in olive oil production (Australian alongside average oil yield per year of age olive oil busines) 1,600 3,000 8,000 Average oliv
Slide 24: 2. Growing Our Vertically Integrated Business in the USA
2. Growing Our Vertically Integrated Business in the USA Replicating our Australian business in the world’s biggest olive oil import market Why the USA? Where are we at with our USA expansion? • USA consumer demand for olive oil is growing however access to local product has been • Our strategy to r
Slide 25: Development of USA milling, bottling and laboratory operations
2. Growing Our Vertically Integrated Business in the USA (cont’d) Development of USA milling, bottling and laboratory operations Harter Avenue USA head office USA bottling Woodland California Operations • In July 2014 we purchased a 3.6- hectare industrial property in Woodland, California, which now
Slide 26: Development of new olive groves in the USA
2. Growing Our Vertically Integrated Business in the USA (cont’d) Development of new olive groves in the USA USA grove development Esparto South Ranch - grove development • In Spring 2021 we developed 110 hectares of new olive groves on the Esparto South ranch near Woodland, California, with 53,000
Slide 27: Cobram Estate and private label sales showing strong growth
2. Growing Our Vertically Integrated Business in the USA (cont’d) Cobram Estate® and private label sales showing strong growth Evolution of packaged olive oil sales by Cobram Estate Olives’ USA business Cobram Estate® brand - expanding USA store footprint 35.0 30.0 25.0 A$ million 20.0 15.0 10.0 5.0
Slide 28: 3. Growing Branded Product Sales and Increasing the Net Price Per Litre
3. Growing Branded Product Sales and Increasing the Net Price Per Litre For Our Extra Virgin Olive Oil CBO is continuing to focus on premiumisation whilst growing sales of its brands and supporting key customers with Private Label olive oil Supermarket sales of Cobram Estate® in Australia and price
Slide 29: Cobram Estate price per litre and market share supported by third-party recognition
3. Growing Branded Product Sales and Increasing the Net Price Per Litre For Our Extra Virgin Olive Oil (cont’d) Cobram Estate® price per litre and market share supported by third-party recognition of superior quality 18 gold medals for Cobram Estate’s 2021 Australian extra virgin olive oils, includi
Slide 30: 4. Value-Adding Our Olive By-Products
4. Value-Adding Our Olive By-Products Towards zero waste - capturing value from the by-products of olive oil production • The production of olive oil generates a substantial quantity of by- Waste zero example – fresh olive leaves products. These products include olive pit, olive pomace, olive leaves
Slide 31: Growing the portfolio of Wellgrove health and wellness products
4. Value-Adding Our Olive By-Products (cont’d) Growing the portfolio of Wellgrove® health and wellness products in Australia and USA Wellgrove® product distribution Wellgrove® USA product range includes: Wellgrove® products are currently available in the following channels: • Super Immunity + Heart
Slide 32: Financial Year 2021 Results and Commercial Update
Financial Year 2021 Results and Commercial Update Cobram Estate Olives Limited | June 2021 Private & Confidential 32 32
Slide 33: Financial Highlights – FY2021
Financial Highlights – FY2021 Cobram Estate Olives Limited | June 2021 Private & Confidential 33 *Adjusted for water costs to long-term average and one-off ASX listing costs
Slide 34: Australian Olive Oil Division Performance – two-year rolling average
Australian Olive Oil Division Performance – should be assessed on two-year rolling average Two-Year Rolling Average EBITDA of $43.7 million driven by past investment and strong brand returns 20.0 80.0 Yield vs EBITDA vs two-year Average 18.0 70.0 Australian olive oil division performance EBITDA (Aus
Slide 35: Group Income Statement (Statutory)
Group Income Statement (Statutory) Increased statutory EBITDA largely driven by the larger Australian crop of 16.05 million litres (FY2020: 6.2 million litres) Divisional results The Australian Olive Oil division reported an EBITDA of $75.1m (FY2020 $2.9m loss), driven by: • Increase in the Australi
Slide 36: Group Cash Flow Statement
Group Cash Flow Statement Operating cash flow highlights the management of oil between a higher and lower yielding crop years Key points Strong operating cashflow reflective of the company managing its oil supply over two (2) financial years (24-months), to meet the consistent monthly customer deman
Slide 37: Group Balance Sheet
Group Balance Sheet Strong balance sheet, and significant increase in current assets Key points Significant increase in Current Assets, predominantly due to the oil produced from the 2021 Australian harvest • The company’s olive trees are carried at cost (within property, plant and equipment). • The
Slide 38: Strong growth in packaged olive oil sales despite lower oil supply
Strong growth in packaged olive oil sales despite lower oil supply Packaged good sales growth of 9.5% in FY2021 Global olive oil sales for Cobram Estate® and Red Island® Packaged goods showing continued strong growth branded products and Private Label products • Sales of packaged consumer goods incl
Slide 39: Continued Strong Marketing Support For Our Brands – Harvest 2021
Continued Strong Marketing Support For Our Brands Focus on Harvest 2021 and ‘fresh’ education Harvest 2021 Harvest 2021 Media Campaign Launch Event The objective is to educate the Australian community Harvest was also celebrated with an immersive about the fact that extra virgin olive oil is harvest
Slide 40: Continued Strong Marketing Support For Our Brands
Continued Strong Marketing Support For Our Brands Guinness world record event and virtual tastings Virtual Tastings Guinness - The Plan Guinness - The Activation Guinness - The Partnerships Date July 6 Health Professional Event July 15 Consumer Event July 21 Consumer Event July 22 Consumer Event Aug
Slide 41: Business Operations Highlights FY2021
Business Operations Highlights FY2021 Cobram Estate Olives Limited | June 2021 Private & Confidential 41 41
Slide 42: Australian Olive Harvest – Results Summary
Australian Olive Harvest – Results Summary Record 2021 Australian olive harvest and olive oil yield 2021 Australian olive harvest results - summary Total Yields vs Mature Groves (Hectares) • Recently completed the 2021 Australian olive harvest, producing 18,000 7000 16.05 million litres, a record ha
Slide 43: Water Outlook in Australia
Water Outlook in Australia 2021/22 seasonal outlook is positive with high storage levels and allocations Southern Murray Darling Basin – current storage levels Total and key storages Southern Murray Darling Basin - historical water price per ML (2007-2021ytd) Storage Full % Full % 24/11/2021 25/11/2
Slide 44: Environmental Sustainability
Environmental Sustainability Environmental sustainability is central to everything we do • For over 20 years we’ve been working to improve our carbon capture rates. Through the implementation of key agricultural practices, our groves sequestrate nearly 10 times the global olive industry average of C
Slide 45: People and Health and Safety Leadership
People and Health and Safety Leadership Providing our people with a supportive and safe work environment and culture Health and Safety Leadership • Protecting the health and wellbeing of staff and the wider community is front of mind as we continue to follow directions from state and federal governm
Slide 46: Key Risks, Foreign Selling Restrictions, and Summary of Placement Agreement
Key Risks, Foreign Selling Restrictions, and Summary of Placement Agreement Cobram Estate Olives Limited | June 2021 Private & Confidential 46 46
Slide 47: Key Risks
Key Risks There are a number of factors, specific to the Company and of a general nature, which may affect the future operating and financial performance of the Company and the industry in which it operates. This section discusses some of the key risks associated with an investment in shares in the
Slide 48: Key Risks (cont’d)
Key Risks (cont’d) Weather variability As a horticultural business, Cobram Estate Olives is affected by weather and climate issues. Variable weather conditions and severe weather events may cause impacting crop yield fluctuations in market supply or lead to severe crop damage and crop yield volatili
Slide 49: Key Risks (cont’d)
Key Risks (cont’d) Water Availability Water is a key input to the production of olives. Cobram Estate Olives currently uses approximately 35.8 gigalitres of water per annum in Australia and approximately 1 gigalitre of water per annum in California. While the Company has always been able to source s
Slide 50: Key Risks (cont’d)
Key Risks (cont’d) Customer While the Company sells its products to a range of customers globally, sales to the Company’s two largest customers, being supermarket operators Woolworths Limited concentration – and Coles Group Limited, accounted for 55% of the Company’s sales in FY2021 and are forecast
Slide 51: Key Risks (cont’d)
Key Risks (cont’d) General market and There are general risks associated with any investment in the share market. The price of a Cobram Estate Olives share may increase or decrease due to a number of share price risks factors. Those factors include fluctuations in domestic or global financial market
Slide 52: Key Risks (cont’d)
Key Risks (cont’d) Olive oil price The world price of olive oil may be impacted by global economic conditions and actions taken by individual governments, particularly Mediterranean based countries movements that supply the majority of global olive oil production. Changes in the world price of olive
Slide 53: Foreign Selling Restrictions
Foreign Selling Restrictions This presentation does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this presentation may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Aus
Slide 54: Foreign Selling Restrictions (cont’d)
Foreign Selling Restrictions (cont’d) Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials
Slide 55: Foreign Selling Restrictions (cont’d)
Foreign Selling Restrictions (cont’d) Singapore (cont’d) Singapore SFA Product Classification: In connection with Section 309B of the SFA and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the CMP Regulations 2018), the Issuer has determined, and hereby notifies
Slide 56: Summary of Placement Agreement
Summary of Placement Agreement The Joint Lead Managers are acting as the managers, bookrunners and underwriters of the Placement. The Company has entered into a placement agreement with the Joint Lead Managers (Placement Agreement). The obligations of the Joint Lead Managers are subject to the satis
Slide 57: Summary of Placement Agreement (cont’d)
Summary of Placement Agreement (cont’d) • ASX does not, or states that it will not, grant official quotation of all the New Shares on an unconditional basis (or on a conditional basis provided such condition would not, in the opinion of the Joint Lead Managers, have a material adverse effect on the
Slide 58: Summary of Placement Agreement (cont’d)
Summary of Placement Agreement (cont’d) Each Joint Lead Manager may also terminate the Placement Agreement and be released from its obligations under it on the occurrence of certain events where their occurrence has, or the Joint Lead Manager has reasonable grounds to believe that they will likely h
Slide 59: Thank-you!
Thank-you! Private & Confidential 59
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