Bega Cheese Limited · ASX:BGA

Bega Cheese — FY2014 Earnings Presentation

22 slides from Bega Cheese's earnings presentation, Aug 22, 2014

  1. Slide 1: FY2014 Full Year Results

    For personal use only FY2014 Full Year Results August 2014 Barry Irvin – Executive Chairman Aidan Coleman – CEO Colin Griffin – CFO

  2. Slide 2: Key Messages

    KEY MESSAGES For personal use only • Record profit • Record normalised profit • Significant increase in share price • Significant increase in milk price • Investment in infant formula and nutritional capacity • Very strong balance sheet BEGA CHEESE LIMITED FY2014 FULL YEAR RESULTS | PAGE 1

  3. Slide 3: FY2014 Results Highlights

    FY2014 RESULTS HIGHLIGHTS For personal use only • Revenue increase to $1,069.4m • EBITDA increase to $122.5m • PBT increase to $93.6m • EPS increase to 43.44 cps • No net debt ($8.0m net cash) • Balance sheet significantly strengthened by WCB outcome BEGA CHEESE LIMITED FY2014 FULL YEAR RESULTS | PA

  4. Slide 4: FY2014 Results Highlights - Normalised

    FY2014 RESULTS HIGHLIGHTS - NORMALISED For personal use only • Revenue increase to $1,069.4m • EBITDA increase to $70.1m • PBT increase to $42.1m • EPS increase to 19.6 cps • Total dividend 8.5 cps • H2 dividend 4.5 cps (record date 1 September, payment date 15 September) BEGA CHEESE LIMITED FY2014

  5. Slide 5: Warrnambool Cheese & Butter Investment

    WARRNAMBOOL CHEESE & BUTTER INVESTMENT For personal use only • Bid launched September 2013 • Initial bid 1.2 Bega shares and $2 cash • Highly competitive bid • Highlighted the value, interest and position in the Australian dairy industry • Bega Cheese remained disciplined throughout • Concluded more

  6. Slide 6: Milk Sustainability and Growth Program

    MILK SUSTAINABILITY AND GROWTH PROGRAM For personal use only • Strategic investment in milk supply • Responding to customer requirements both now and in the future • Sustainability includes resource management and farm practice (BEMS) • Growth programs with goal of growing supply over the next 3 yea

  7. Slide 7: FY2014 Results Normalised

    FY2014 RESULTS NORMALISED Milk Change Per Financial WCB Sustainability and Normalised from Consolidated For personal use only Statements outcome Growth outcome Result prior year Period Ending 30 June 2014 $’000 $’000 $’000 $’000 $’000 % Revenue 1,069,392 - - 1,069,392 65,005 6% Cost of sales (951,11

  8. Slide 8: Business Performance

    BUSINESS PERFORMANCE FY2014* FY2013* For personal use only $m $m Sales Revenue 1,069.4 1,004.4 EBITDA 70.1 65.7 EBIT 47.2 44.0 PBT 42.1 35.9 NPAT 29.8 25.8 • Good revenue growth in all areas, particularly nutritionals (23%) and core dairy ingredients (12%) • Plant efficiencies driving EBITDA and pro

  9. Slide 9: Balance Sheet Extract

    BALANCE SHEET EXTRACT FY2014 FY2013* For personal use only $m $m Trade and other receivables 106.7 103.5 Inventories 184.2 163.0 Investments - 39.0 Property, plant & equipment 213.6 209.1 Total Assets 548.6 549.2 Trade and other payables 164.2 142.7 Borrowings 20.6 110.9 Total Liabilities 234.2 287.

  10. Slide 10: Cash Flow Extract

    CASH FLOW EXTRACT For personal use only Receipts from customers 1,102.0 1,024.7 Payments to suppliers (1,049.1) (953.3) Interest and other costs of financing paid (5.3) (8.1) Income tax paid (7.1) (3.9) Operating activities 40.5 59.4 Investing activities 67.9 (27.4) Financing activities (102.5) (11.

  11. Slide 11: Milk Intake

    MILK INTAKE FY2014 FY2013 For personal use only million litres million litres Bega 163 191 Coburg 110 107 Tatura 326 343 Contract including milk swaps 130 108 Total 729 749 • Milk pool well balanced to meet production requirements • Competition for milk with Bega Cheese Group • Launching the Milk Su

  12. Slide 12: Production

    PRODUCTION 250,000 For personal use only 200,000 150,000 100,000 50,000 0 FY2013 FY2014 Core Dairy Ingredients Consumer packaged Nutritional • Total production 208,120 tonnes in line with previous year • Mix change towards nutritionals BEGA CHEESE LIMITED FY2014 FULL YEAR RESULTS | PAGE 11

  13. Slide 13: Segments Volume & EBITDA

    SEGMENTS VOLUME & EBITDA Tatura *Bega For personal use only 60,000 120,000 50,000 100,000 40,000 80,000 Tonnes/$’000 Tonnes/$’000 30,000 FY2013 60,000 FY2013 FY2014 FY2014 20,000 40,000 10,000 20,000 0 0 Core t Nutritional t EBITDA #039;000 Core t FMCG t EBITDA #039;000 • Strong growth in nutritional • Mi

  14. Slide 14: Infrastructure

    INFRASTRUCTURE Bega • Capital expenditure $28 For personal use only million • Infant nutritional blending and canning at Derrimut (16,000t) Tatura • Increased lactoferrin Derrimut expansion at Tatura (19t) • Increased cheddar cheese capacity at Coburg (18,000t) Strathmerton Coburg Derrimut • New whe

  15. Slide 15: High Quality Value Added Product Range

    HIGH QUALITY VALUE ADDED PRODUCT RANGE For personal use only • Natural cheddar • Processed cheese • Cream cheese • Nutritional powders • Milk proteins BEGA CHEESE LIMITED FY2014 FULL YEAR RESULTS | PAGE 14

  16. Slide 16: Sales Revenue by Destination

    SALES REVENUE BY DESTINATION Bega Cheese Sales 2014 For personal use only 28% 4% 65% 3% BEGA CHEESE LIMITED FY2014 FULL YEAR RESULTS | PAGE 15

  17. Slide 17: Strategic Focus Areas

    STRATEGIC FOCUS AREAS For personal use only BEGA CHEESE LIMITED FY2014 FULL YEAR RESULTS | PAGE 16

  18. Slide 18: Strategic Priorities

    STRATEGIC PRIORITIES For personal use only • Focused investment on further development of life stage nutritionals • Grow infant formula and child nutritional platforms • Create new platform in bio-nutrients • Extracting more value from existing milk components • Sustainability and growth of milk sup

  19. Slide 19: Strategic Priorities - Bio-nutrient platform

    STRATEGIC PRIORITIES For personal use only Bio-nutrient platform • Develop new science based innovation platform • Dairy and non dairy micro nutrients • Leverage off existing knowledge and capabilities • Reviewing global knowledge and capacities • Organic growth and acquisition opportunities BEGA CH

  20. Slide 20: Outlook

    OUTLOOK For personal use only • Impact of falling commodity prices • Uncertainty created by Russia sanctions • Strong underlying demand for dairy products in Asia • Good base for Asian expansion using new capacity • High value whey protein project in final development stages (approximate cost $30m)

  21. Slide 21: For personal use only

    For personal use only BEGA CHEESE LIMITED FY2014 FULL YEAR RESULTS | PAGE 20

  22. Slide 22: 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

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