Murray River Organics Pty — Shareholder Meeting (November 2018)
32 slides from Murray River Organics Pty's shareholder meeting presentation, Nov 22, 2018
Slide 1: AGM Presentation
AGM Presentation 22 November 2018
Slide 2: Disclaimer
Disclaimer This presentation (Presentation) has been prepared by Murray River Organics Group Limited (ACN 614 651 473) (Company). Any references to "Murray River Organics" or "Group" in this Presentation refer to the Company and its controlled entities. The information in this Presentation contains
Slide 3: Contents
Contents • Chairman’s Address • Managing Director’s Address o Company Overview o Farming Operations o Financial Performance o Transformation Program • AGM Resolutions I 2018 Annual Report 2018 Annual Report 1
Slide 4: Chairman's Address
Andrew Monk Chairman’s Address 4
Slide 5: Company Overview
Company Overview 5
Slide 6: Company Overview
COMPANY OVERVIEW Grower, processor & distributor of organic dried vine fruit & ‘better-for-you’ products $68.5M 13 farms in the Sunraysia Revenue region 71% 4,935 retail sales(1) hectares of land(2) 22% 67% dried vine fruit sales(1) land vacant and plantable $35M 2,606T Dried vine fruit Value of own
Slide 7: Key management
NEW TEAM EXPERIENCED IN FARMING, OPERATIONS & FMCG New management team formed, supported by an experienced Board • Accomplished executive with a track record of success in turnarounds and growing businesses in FMCG, agri and retail across Asia and global markets • Executive Director, Top Cut Group -
Slide 8: Business Model
BUSINESS MODEL Leveraging supply to grow a value added products business Sunraysia Organic & conventional Growers supply products sourced locally of dried vine fruit & internationally Sunraysia Mourquong Dandenong Value add Farming Processing Packaging, Dried Vine Fruit mixing, distribution Wholesal
Slide 9: Revenue
REVENUE Building core organic DVF supply & broader high growth organic category ranging Farmed Strategic Sourcing Growers supplied DVF 10% Dried vine fruit Farmed Dried vine fruit • Raisins dried vine • Raisins • Sultanas fruit (DVF) • Sultanas 12% • Currants • Currants % of 2018 Sales Key categorie
Slide 10: Manufacturing Facility Utilisation
MANUFACTURING FACILITY UTILISATION Excess capacity presents a growth opportunity Mourquong Dandenong Plant Utilization (OEE) 24/7 basis N/A 25% N/A 13% 13% 10% 15% 15% 8% Loose Snack Powder Rice Product Clusters Doy bags & pillows Bags Fruit Boxes Seeds Vol- Manual Bulk Yeaman Powder Doy 1 Doy 2 Ver
Slide 11: Customer and Export Growth
CUSTOMER AND EXPORT GROWTH Broad customer base in Australia with strong focus on growing exports 2018 Revenue Existing export destinations1 Asia Pacific - China - Vietnam - Hong Kong - Singapore - Japan Wholesale & industrial - South Korea 13% - New Domestic Zealand retail 71% Export 9% North Americ
Slide 12: Leveraging Brands and New Product Development
LEVERAGING BRANDS AND NEW PRODUCT DEVELOPMENT 100+ core product lines across the bulk and retail channels MRO Brand Portfolio (Bulk): MRO Brand* Portfolio (Retail): Certified organic food products and Dried vine fruit packed ingredients in re-sealable snack bags Conventional food products and Premiu
Slide 13: Channels to Market
CHANNELS TO MARKET $2.6bn addressable market for our better-for-you products Proportion of addressable market Large retailers ~40-45% (~A$1.1b) Specialty Retail Large specialty chains1 10-15% (~A$0.3b) Independent Channels to grocers & market specialty chains1 E-commerce <5% (<A$0.1b) Exports 40-45%
Slide 14: Addressable Market Size and Growth by Category
ADDRESSABLE MARKET SIZE AND GROWTH BY CATEGORY Market for nuts, seeds, dried vine fruit, rice growing strongly DRIVERS OF CATEGORY GROWTH Indicative future outlook1 Present Market Potential Uplift (2018F-23F) AUD AUD (Multiple of ’18 size) Drivers of future outlook Decreasing growth outlook Coconut
Slide 15: Global Raisin Pricing
GLOBAL RAISIN PRICING Raisin pricing on the rise Source: IEGVU Agri database 15
Slide 16: Dried Vine Fruit Market
DRIED VINE FRUIT MARKET Production increasing to meet future demand AUSTRALIAN DRIED VINE FRUIT PRODUCTION MARKET Domestic Production of Dried Grapes Domestic Plantation of • Domestic production of dried Kt Dried Vine Fruit1 grapes declined significantly Thousand Ha 80 8 from the early 90s 7.9 70 7.
Slide 17: Farming Operations
Farming Operations 17
Slide 18: Farming Operations
FARMING OPERATIONS Over $57M invested in farming properties (owned and leased) • Long term lease until 2042 + 2x10 year options thereafter • Owned • 1,085 ha total area • 3,042 ha total area • Largely organic • In conversion to organic • Organic dried vine fruit + (excluding citrus and wine conventi
Slide 19: Future Opportunities
FUTURE OPPORTUNITIES MRO’s farming assets have significant capacity Colignan 681 57 Nangiloc 96 2327 Gol Gol 95 15 Yatpool 198 128 Merbein 137 0 Fifth Street 79 31 Hectares planted Hectares available to be planted 19
Slide 20: Vine Development
VINE DEVELOPMENT As vines are developed and mature they are expected to deliver higher yield Current maturity of dried vine fruit plantings Mature, 60% Not yet * mature, 40% *All existing plantings expected to mature by 2022 20
Slide 21: Financial Performance
Farming Operations Financial Performance 21
Slide 22: Financial Performance
FINANCIAL PERFORMANCE FY18 affected by poor operational decisions & leadership changes $’000 FY18 FY17 Change % First full year post acquisitions of Food Source International and Australian Net sales revenue 68,539 48,522 20,017 41.3% Organic Holdings Reported loss after tax (59,607) (5,927) (53,680
Slide 23: FY17 to FY18 Underlying EBITDA Before SGARA Bridge
FY17 TO FY18 UNDERLYING EBITDA BEFORE SGARA BRIDGE Business restructure and “cost out” programme underway FY18 Performance • Revenue increase mainly due to acquisitions • EBITDA impacted by o poor integration of acquired businesses o sales team significantly reduced by prior management o stock suppl
Slide 24: Balance Sheet
BALANCE SHEET Balance Sheet stretched - now recapitalised and new 3 Year NAB facility New funding Key Balance Sheet Items $'000 Jun-17 Jun-18 New Equity & Facility Pro forma (Prospectus) Trade and other receivables 8,891 6,729 6,729 Inventories 27,069 16,194 16,194 Reduction due to change Trade and
Slide 25: Recap and New 3 Year NAB Facility Completed
RECAP AND NEW 3 YEAR NAB FACILITY COMPLETED Debt EQUITY RE-CAP Equity: DEBT FACILITY Facility $30.6m up to Capital Raised 3 Year Multi-Option banking facility $63.9m Use of funds: Key components: • Vineyard Development $10.5m • $34.0m term loan facility • Third Party Fruit $ 5.1m • $ 6.0m in additio
Slide 26: Cash Flows
CASH FLOWS $30.6m capital raising addressed cashflow needs $’000 Jun-18 Jun-17 Change Loss after tax (59,607) (5,931) (53,676) Non cash items (Impairments, depr'n & other) 31,756 4,166 27,590 FV gain agricultural produce & biological asset 1,417 (992) 2,409 Driven by Decrease/(increase) in working c
Slide 27: Transformation Program
Transformation Program 27
Slide 28: First 6 Months – Key Achievements
FIRST 6 MONTHS – KEY ACHIEVEMENTS Major phase of transformation program completed in first 6 months…foundations are now in place People Capital Customer Farms Operations ü Re-set leadership ü Re-set the balance ü Leveraged core organic ü Reviewed capex plans ü Restructured structure and recruited sh
Slide 29: Progress Underway
PROGRESS UNDERWAY Transformation program is well underway, with benefits currently being realised Short term (6-12 months) Progress Medium term (3 years) Progress Metric 1 ◑ ü Reset operating cost base in Dandenong – Project ◔ Muscat $5m Fill Rate >90% by Jun- Operations • Reconfigure warehouse foot
Slide 30: Summary
SUMMARY Momentum building • We are growing a broad organic food business targeting Australian and export demand for “healthier for you products” • Recent capital raise has aligned the balance sheet and capital base to accelerate our turnaround and growth • Demand for organic dried fruit remains stro
Slide 31: Thank you
Thank you 31
Slide 32: Contact details
Valentina Tripp Albert Zago Murray River Organics Murray River Organics 0414 550 337 0407 554 529 vtripp@murrayriverorganics.com.au albert@murrayriverorganics.com.au
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