Synlait Milk Ltd. · NZX:SML
Synlait Milk — H1 FY2014 Earnings Presentation
16 slides from Synlait Milk's earnings presentation, Mar 27, 2014
Slide 1: On Track - Synlait Milk Limited Interim Report 2014
“MA oC a \2\ 1 ON TRACK Synlait Milk Limited Interim Report 2014
Slide 2: Disclaimer
DISCLAIMER This interim results presentation dated 27 March 2014 provides additional comment on the media release and our interim report for the six months ended 31 January 2014 of the same date. As such, it should be read in conjunction with, and subject to, the explanations and views of future out
Slide 3: Key Messages
KEY MESSAGES Operating - Significant improvement in the financial performance over FY2013 interim results. — China market regulations impacting FY2014 infant nutritional product sales and requiring inventory provisions. — Favourable product mix in the ingredient business leading to improving gross m
Slide 4: Results Overview
RESULTS OVERVIEW Revenue Gross Profit $284. 9million *62% $40 million 442% Gross Profit per MT* EBITDA $919 4 26% $24.6 million 422% Net Profit After Tax Shareholders Funds $12.1 million 479% $176.5 million 94% * Compared to full year FY2013 © Synlait 2014
Slide 5: Growth in Volumes and Margins Improve Profitability
GROWTH IN VOLUMES AND MARGINS IMPROVE PROFITABILITY NZD ($m) 2014 Interim Unaudited 2013 Interim Unaudited Change % © Synlait 2014
Slide 6: Margin Growth Key to Success
MARGIN GROWTH KEY TO SUCCESS Gross Profit per MT $ (NZD) 1,000 919 900 800 700 600 751 504 500 462 400 385 300 260 200 100 FY09 FY10 FY11 FY12 FY13 $ (NZD) / MT FY14H © Synlait 2014
Slide 7: Improvement Across All Key Metrics
IMPROVEMENT ACROSS ALL KEY METRICS 2014 Interim Unaudited 2013 Interim Unaudited Change % Sales Volumes (MT) Ingredients 40,503 38,908 Nutritionals 3,005 1,586 Total 43,508 40,494 74% Production Volumes (MT) Ingredients Nutritionals 4,726 3,924 20.4% Total 60,979 56,360 8.2% Milk Procurement (KgMS)
Slide 8: Milk Volumes and Price
MILK VOLUMES AND PRICE re — Milk supply up 7.0% to 31,547 KGMS on last year to date. — Increased contracted milk supply by 12.6% to 30,742 KGMS. — Have taken some DIRA milk this year, however less than anticipated due to strong contract milk supply growth. — Record milk price for this season expecte
Slide 9: Milk Volumes
MILK VOLUMES Milk Volumes 50,000 i) 1 45,000 4,692 i 1 40,000 42,076 Bl ! 35,000 ! ! 805 30,000 ! ’ 30,742 2 4,524 ' 2,177 oi 25,000 27,312 2 loa 24,934 ! ’ 1 20,000 21,865 1 4,101 1 15,000 1 14,404 ! 10,000 1 1 5,000 1 1 1 FYO9 FY10 FY11 FY12 FY13 FY13HY FY14HY @ Contracted m Other @ Contracted Hal
Slide 10: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW — Net working capital and cash outflow from operations improved from last year principally due to unwind of FY 2013 position. — Growth in fixed assets and capital expenditure due to investment in growth initiative projects. — Shareholders funds significantly up due to cap
Slide 11: Balance Sheet and Cash Flows
BALANCE SHEET AND CASH FLOWS 2014 Interim Unaudited 2013 Interim Unaudited Change % Capital Expenditure 35,467 2,440 1,353.6% © Synlait 2014 1
Slide 12: Strategic Growth Initiatives
STRATEGIC GROWTH INITIATIVES — Six growth initiative projects outlined in prospectus totalling in excess of $235 million spend over three years. — Lactoferrin plant to be commissioned in March 2014. — Decided to complete build of all warehouse capacity of an additional 22,500 m2, due to be commissio
Slide 13: Growth Initiative Projects
GROWTH INITIATIVE PROJECTS Start Date Commission Date PFI Commission Total Capex ($ m) PFI Total Capex Comment Date ($m) Blending & August 2013 June 2014 August 2014 28.3 27.5 On track to Canning commission ahead of schedule. Drystore August 2013 March 2014 January 2014 16.9 11.8 Building all drysto
Slide 14: FY 2014 Outlook
FY 2014 OUTLOOK Favourable product mix resulting in higher returns from our ingredients business (before tax estimated benefit $31.0 million). New China infant formula regulations having short term impact resulting in: — Lower infant nutritional sales, now expected to be similar to those of last yea
Slide 15: Beyond FY14 Market Development
BEYOND FY14 MARKET DEVELOPMENT - Growing engagement with multinational infant formula companies. - Expect 30% of production to be sold as infant formula ingredients and finished products in FY2015. - Targeting 70% of product to be sold to top five customers in FY2015. - Engaged in Chinese infant for
Slide 16: Thank You
THANK YOU Media or investor queries can be directed to: Michael Wan Marketing & Communications Manager Synlait Milk Limited P: +64 3 373 3084 i michael.wan@synlait.com www.synlait.com © Synlait 2014 16