Bega Cheese Limited · ASX:BGA
Bega Cheese — Shareholder Meeting (October 2015)
44 slides from Bega Cheese's shareholder meeting presentation, Oct 27, 2015
Slide 1: Annual General Meeting 27 October 2015
For personal use only Annual General Meeting 27 October 2015 Barry Irvin – Executive Chairman Aidan Coleman – CEO
Slide 2: Agenda
Agenda • 2015 Annual Report For personal use only • Executive Chairman’s Report • Chief Executive Officer’s Report • Questions • Approval of Remuneration Report • Election of Directors • Consideration of shareholding limit in constitution FY2015 RESULTS | PAGE 1
Slide 3: Welcome
Welcome • Shareholders For personal use only • Suppliers • PricewaterhouseCoopers • Addisons Lawyers • Kidder Williams • Bega Cheese Staff • Apologies FY2015 RESULTS | PAGE 2
Slide 4: Executive Chairman's Report
For personal use only 2015 ANNUAL REPORT Executive Chairman’s Report Barry Irvin AM– Executive Chairman FY2015 RESULTS | PAGE 3
Slide 5: Key Messages
Key Messages • Result at expectation given global commodity market downturn and For personal use only highly competitive milk procurement environment • 4% increase in revenue ($1,112m) driven by $72m increase in sales of nutritionals and consumer packed goods • Margin impacted by $29m decrease in co
Slide 6: FY2015 Results (Statutory and Normalised)
FY2015 Results (Statutory and Normalised) Revenue ($’000) Basic Earnings Per Share (cents) For personal use only 1069392 43.4 1112630 4% 19.6 8.1 (81%) EBITDA ($’000) 14.4 (26%) 122506 70132 Total Dividend Per Share (Cents) 8.5 41978 (66%) 8.5 55705 (21%) Production Volume (Tonnes) Profit After Tax
Slide 7: Bega Cheese & Tatura Milk Segment (Normalised)
Bega Cheese & Tatura Milk Segment (*Normalised) $m Bega Cheese $m Tatura Milk Industries For personal use only 40 40 35 35 30 30 25 25 EBITDA EBITDA 20 20 PAT PAT 15 15 10 10 5 5 0 0 FY2011 FY2012 FY2013 FY2014 FY2015 FY2011 FY2012 FY2013 FY2014 FY2015 • Segment stability reflects business exposure
Slide 8: Dairy Commodity Prices and Farm Gate Milk Price
Dairy Commodity Prices and Farm Gate Milk Price For personal use only • Farm gate milk price generally linked to global dairy commodity market price • 2015 global production responded to strong market signals from previous year • High global inventories • Russian sanctions and China slow down • Decl
Slide 9: Sustainability and Growth
Sustainability and Growth • Strategic investment in long term milk supply For personal use only • 3 year supply relationship • Sustainability includes resource management and farm practice (BEMS) • 29% projected milk growth in the next 3 years from participating suppliers • Program funds now fully a
Slide 10: Product Range
Product Range For personal use only FY2015 RESULTS | PAGE 9
Slide 11: Customer Relationships
Customer Relationships For personal use only FY2015 RESULTS | PAGE 10
Slide 12: Investing in Infrastructure
Investing in Infrastructure • Focused on investment in value adding activities For personal use only • Capital Expenditure $18m • Cream cheese, environmental and nutritionals • High value bio nutrient extraction • $22m project ($5m grant) Target completion 2017 • Capacity and capability projects • N
Slide 13: Infrastructure
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 Strathmerton Bega Coburg Tatura Processing and Packaging Dairy Production Infant Nutritionals, Lacto
Slide 14: Balance Sheet Extract
Balance Sheet Extract FY2015 FY2014 For personal use only $m $m Trade and other receivables 119.5 106.7 Inventories 194.9 184.2 Property, plant & equipment 209.7 213.6 Total Assets 552.4 548.6 Trade and other payables 139.1 164.2 Borrowings 69.0 20.6 Total Liabilities 239.8 234.2 Net Assets 312.7 31
Slide 15: Operational Outlook
Operational Outlook • Improved financial performance For personal use only • Commodity markets recovering albeit on reduced volumes, sustainability of recovery yet to be established • Continued growth in nutritionals and consumer goods • Nutritionals value added infrastructure fully operational • Ve
Slide 16: Strategic Priorities
Strategic Priorities • Leverage strong nutritional demand and grow infant formula For personal use only and child nutritional platform • Grow consumer goods international business • Extract more value from existing milk components. Decrease exposure to skim milk • Drive efficiency through ongoing in
Slide 17: For personal use only
For personal use only FY2015 RESULTS | PAGE 16
Slide 18: Chief Executive Officer's Report
For personal use only 2015 ANNUAL REPORT Chief Executive Officer’s Report Aidan Coleman – CEO FY2015 RESULTS | PAGE 17
Slide 19: Business Performance (Normalised)
Business Performance (*Normalised) FY2015 FY2014 For personal use only $m $m Sales Revenue 1,112.6 1,069.4 EBITDA 55.7 70.1 EBIT 33.5 47.2 PBT 30.2 42.1 NPAT 22.0 29.8 • Appropriate to review financial performance from a normalised perspective • Revenue attributable to increased volumes and high val
Slide 20: FY2015 Results (Normalised)
FY2015 Results (*Normalised) Milk Per Financial Sustainability and Change from For personal use only Consolidated Statements Growth outcome Normalised Result prior year Period Ending 30 June 2015 $’000 $’000 $’000 $’000 % Revenue 1,112,630 - 1,112,630 43,238 4 Cost of sales (991,538) 13,727 (977,811
Slide 21: Cash Flow Extract
Cash Flow Extract For personal use only Receipts from customers 1,160.8 1,102.0 Payments to suppliers (1,164.8) (1,049.1) Interest and other costs of financing paid (3.4) (5.3) Income tax paid (9.9) (7.1) Operating activities (17.3) 40.5 Investing activities (36.4) 67.9 Financing activities 35.4 (10
Slide 22: Manufacturing Operations
Manufacturing Operations Production For personal use only • 224,986 tonnes • 4% increase in total volume Continuous improvement • 3.2% decrease in average conversion costs Consumer packaged dairy • 6% increase in line efficiencies (FMCG) products • 4.2% reduction in energy use per tonne Nutritionals
Slide 23: Sales & Marketing
Sales & Marketing • Bega Brand Export Markets For personal use only • Number one Australian cheese brand - 15.3% market Total Sales $310 million share • Launch of UHT Bega branded milk in Chongqing South East Asia • Food service • International food services now represents 5% of North Asia revenue (
Slide 24: Food Service "out of home eating"
Food Service “out of home eating” • 50% of food expenditure is spent out of the For personal use only home in many Asian countries • Includes traditional outlets and Western style outlets • International food service revenue 5% of group sales (increase of 50% in last 3 years) • Established distribut
Slide 25: Nutritionals
Nutritionals • Derrimut For personal use only • Expansion of blending and canning • Market growth • China market remains strong • Distribution driven by online sites and Mother and Baby stores • Assessing ways to expand spray drying capacity at Tatura • Exploring opportunities in the adult nutrition
Slide 26: Bio-Nutrients
Bio-Nutrients • Well credentialed General Manager being appointed to manage For personal use only platform - Matthieu Arguillere • Previously CEO of Ingredia Nutritionals in France • Experience in Europe, USA/Canada & Asia • Lactoferrin • Expanded capacity at Tatura Milk utilised • Ongoing research
Slide 27: Bio Nutrients
Bio Nutrients Dairy Non Dairy For personal use only • Milk protein hydrolysates • Plant extracts • Infant formula • Weight management products • Adult and elderly nutritional products • Dietary Supplements • Sports nutrition products • Nutricosmetic products • Dietary Supplements • Functional foods
Slide 28: Strategic Focus
Strategic Focus • Recovery in global pricing, however volatility remains For personal use only • Medium to long term business outlook positive • Continued investment in the four key business platforms • Identify acquisitions aligned with core capabilities FY2015 RESULTS | PAGE 27
Slide 29: 2015 Annual Report
For personal use only 2015 ANNUAL REPORT FY2015 RESULTS | PAGE 28
Slide 30: Questions
Questions For personal use only FY2015 RESULTS | PAGE 29
Slide 31: Formalities and Voting
For personal use only 2015 ANNUAL REPORT Formalities and Voting Barry Irvin AM – Executive Chairman FY2015 RESULTS | PAGE 30
Slide 32: Remuneration Report
Remuneration Report • Pages 27– 28 of Annual Report For personal use only • Board, Executive Chairman, CEO and other key management personnel • Market data and external advisors Resolution • Adopt remuneration report for the year ended 30 June 2015 FY2015 RESULTS | PAGE 31
Slide 33: Remuneration Report
Remuneration Report • Proxies For personal use only • Total votes – 53,975,794 (35.37%) • For – 52,229,213 (96.76%) • Open – 1,555,319 (2.88%) • Against – 191,262 (0.35%) FY2015 RESULTS | PAGE 32
Slide 34: Election of Directors
Election of Directors • Barry Irvin For personal use only • Rick Cross • Jeff Odgers • Raelene Murphy For the purpose of conducting Barry Irvin election Director Max Roberts will act as Chairman of the meeting. FY2015 RESULTS | PAGE 33
Slide 35: Election of Directors – Barry Irvin
Election of Directors Barry Irvin For personal use only • Total Votes – 54,451,019 (35.68%) • For – 49,320,846 (90.58%) • Open – 1,526,659 (2.80%) • Against – 3,603,514 (6.62%) FY2015 RESULTS | PAGE 34
Slide 36: Election of Directors – Rick Cross
Election of Directors Rick Cross For personal use only • Total Votes – 54,433,170 (35.67%) • For – 42,689,561 (78.43%) • Open – 1,562,099 (2.87%) • Against – 10,181,510 (18.7%) FY2015 RESULTS | PAGE 35
Slide 37: Election of Directors – Jeff Odgers
Election of Directors Jeff Odgers For personal use only • Total Votes – 54,434,220 (35.67%) • For – 47,377,448 (87.04%) • Open – 1,561,081 (2.87%) • Against – 5,495,691 (10.10%) FY2015 RESULTS | PAGE 36
Slide 38: Election of Directors – Raelene Murphy
Election of Directors Raelene Murphy For personal use only • Total Votes – 54,434,570 (35.67%) • For – 52,826,713 (97.05%) • Open – 1,563,796 (2.87%) • Against – 44,061 (.08%) FY2015 RESULTS | PAGE 37
Slide 39: Consideration of Shareholding Limit
Consideration of Shareholding Limit • During first 2 years of company’s listing (2011-2013) For personal use only shareholding limit was 5% • Shareholding limit 2013-2016 limit automatically moved to 10% • On 16 August 2016 (5th anniversary of listing) shareholder limit either moves to 15% or is rem
Slide 40: Consideration of Shareholding Limit
Consideration of Shareholding Limit • Board recommends continuation of shareholding limit at For personal use only the higher level (refer notice of meeting page 7) In support of this recommendation • Consistent with views at time of listing (allow transition to public listed company and provided co
Slide 41: Consideration of Shareholding Limit
Consideration of Shareholding Limit Arguments not supporting the continuation on the For personal use only shareholding limit (refer notice of meeting page 8) • Bega Cheese has successfully navigated its initial listing on the ASX and established itself as part of the ASX200 • Acquisition of Bega Ch
Slide 42: Consideration of Shareholding Limit
Consideration of Shareholding Limit Vote will be held by poll For personal use only • Total Votes – 54,447,358 (35.68%) • For – 15,702,622 (28.84%) • Open – 1,549,633 (2.85%) • Against – 37,195,103 (68.31%) FY2015 RESULTS | PAGE 41
Slide 43: For personal use only
For personal use only
Slide 44: 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. For personal use only This presentation