Noumi Limited · ASX:NOU
Noumi — Freedom Foods Group — FY2015 Earnings Presentation
45 slides from Noumi's earnings presentation, August 2015
Slide 1: Freedom Foods Group Limited FY 2015 Management Presentation
Freedom Foods Group Limited FY 2015 Management Presentation August 2015 Rory J F Macleod Managing Director 1
Slide 2: Important Information
Important Information This presentation is provided for information purposes only. The information contained in this presentation is not intended to be relied upon as advice to investors and does not take into account the investment objectives, financial situation or needs of any particular investor
Slide 3: Making Food Better
MAKING FOOD BETTER We desire to be recognised as creators — creating on-trend, great-tasting, responsibly Australian produced food and beverages. Food and beverages that people enjoy and feel good about. We aim to continually innovate and reimagine what is possible, to change the way the world eats
Slide 4: Integration through Supply Chain
Integration through Supply Chain A sustainable export model needs to be based on a Paddock to Plate Process Paddock to Plate, Quality Assurance Branding & Source Manufacturing Category Approach
Slide 5: FY 2015 Full Year Result Overview
FY 2015 Full Year Result Overview • Net Reported Profit of $56.7 million • Underlying Operating EBDITA (before significant items) of $16.4 million, an increase on FY 14. – Statutory reported EBDITA of $12.1 million impacted by a number of one off investment costs relating to snack bar commissioning
Slide 6: Sales Revenues Development
% Group Sales Revenues ex Aust / NZ 20.0% 15.0% Sales Revenues Development 10.0% 5.0% Net Sales Development 0.0% 2011 2012 2013 2014 2015 Total Group WW / Coles % Total Group Revenues Pactum Dairy 80% Seafood 75% 74% Pactum Non Dairy 70% Freedom Foods 60% 61% 61% 0 20,000 40,000 60,000 80,000 100,00
Slide 7: Operating EBDITA (Underlying vs Statutory)
Operating EBDITA (Underlying vs Statutory) Year ended 30th June (A$’000) 2015 2014 Underlying Operating EBDITA before significant items 16,420 15,289 Significant Items expensed to profit: Exchange and Market Demand Impact on Purchases of Almond inputs -1,183 - Underlying Operating EBDITA 15,237 15,2
Slide 8: R&D Product Development
We aim to continually innovate and reimagine R&D Product Development what is possible, to change the way the world eats for the better 40 New Products for our brands and our customer brands being launched • With cycle of capital expenditure in key in 1st half FY 16 locations substantively complete,
Slide 9: Food Service & Convenience
• Company is investing in a dedicated sales and product capability to access food service and convenience channels Food Service & Convenience – Café, leisure, institutions, education and health • Objective is to build a significant sales base, Food Service and Convenience further reducing dependence
Slide 10: Beverage Group
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Slide 11: Non Dairy FY 2015
Non Dairy FY 2015 • Growth in branded portfolio, led by Almond through Australia’s Own and Blue Diamond brands (accounting for +35% of non dairy production output) • Business provided production capability for private label • Almond category at 33% of retail non dairy category, Soy at 43.7% (PY + 50
Slide 12: Non Dairy Outlook
Non Dairy Outlook • Strong growth outlook led by innovation and category development through own brands • Increasing presence in branded non dairy category – All key retailers – Food service (convenience) • New segments including Almond blends, cashew and on the go formats • Increasing retailer and
Slide 13: Dairy FY 2015
FY 2015 Dairy • 1st full financial year for Pactum Dairy • Commencing year saw strong sales of $50m, with close to break even operating EBDITA • Slower growth in Export 1 Litre against plan, launch plans of customers delayed by Chinese import requirements and milk surplus market challenges • Investe
Slide 14: Dairy Outlook
Outlook Dairy • Building strong sales base across 3 regions (Australia, SE Asia and China) • Significant new customers secured in all three market regions including Aldi, Lion, Mengniu and IDP for both 1 litre and portion pack • Increasing recognition as the supplier of choice in UHT dairy ex Austra
Slide 15: Australia's Own Kids Milk in China
Outlook Australia’s Own Kids Milk in China • Licence partnership with Shenzhen JLL • Australia’s Own Kids Milk launched in China in February 15 • Initially targeted distribution in Tier 2 / Tier 3 cities • Considerable marketing investment including point of sales promotion and sampling, external pr
Slide 16: Cereal and Snacks Group
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Slide 17: Cereals FY 2015
Cereals FY 2015 • Material investment in Cereal production capacity and capabilities for future growth (extrusion, packaging) • Extrusion capability critical to Bar ingredients and external 3rd partly supply • New packaging upgrade – star rating based on normal serving sizes • Growth in new format c
Slide 18: Cereals Outlook
Outlook • Capacity to drive growth • Strong growth outlook led by innovation and category development through own brands (+10% per annum growth target) • Focus on driving Health (retail) leadership through premium innovation (i.e. Crafted Blends – hitting the shelves in September) • Segmentation of
Slide 19: Snacks FY 2015
Snacks FY 2015 • Significant investment in Snack Bar production capacity and capabilities for future growth (new line installation) • Material impact on earnings during period through commissioning impacts including on Cereal and other operational outputs • Material improvement in quality, specifica
Slide 20: Snacks Outlook
Snacks Outlook • Capacity for growth • Strong growth outlook led by innovation and category development • Focus on premium higher margin single formats for Health, Food Service channels • Broad range of capabilities (extrusion, oats and paste formats) • New categories / channel focus • Family / kids
Slide 21: Cereals & Snacks North America FY 2015
Cereals & Snacks North America FY 2015 • Good progress in increasing sales and store distribution within the Specialty and Natural Product Retailer markets • Strong developing relationships with Sprouts, Whole Foods, Wegmens, Kroger and HEB • Total of 3,500 distribution points as at June 2015 with F
Slide 22: Cereals & Snacks North America Outlook
Cereals & Snacks North America Outlook • Continue to build distribution and consumer awareness, reflecting unique proposition in • Allergen Free (to lowest detectable standard) • Non GMO • New product launches (Cereals) with format and taste better aligned to North American consumer preference • Bar
Slide 23: Darlington Point Mill
• Acquired Darlington Point Mill operations based in the Riverina district of New South Wales (completed 31 August 15) Darlington Point Mill • The mill gives Freedom a + 40% share of popping corn processing in Australia, also gluten free and non GMO grains. It also brings customers in food service a
Slide 24: Oats Cereal & Snacks Manufacturer
• Freedom has entered into an Exclusive Term sheet to acquire a Australian based major Oats Cereal & Snacks Manufacturer manufacturer of Oats based Cereal and Snacks • Oats is an expanding consumer preference in Australia and Asia • Capability will enable Freedom to expand its brand and category seg
Slide 25: Specialty Foods
freedom, crour Specialty Foods
Slide 26: Specialty Foods FY 2015
FY 2015 Specialty Foods • Brunswick sardines maintained its No 1 brand leadership position in Australia and New Zealand • Commencing Salmon inventory reduced exposure to AUD / USD exchange rate decline • Tight management of sales promotions, while leading to lower gross sales during the year reduced
Slide 27: Specialty Foods Outlook
Outlook Specialty Foods • Focus on introduction of innovation into portfolio in FY 16 • Improving shelf presence in major retailers, independents • Exchange rate impacts may potentially be offset by improved Salmon pricing from 2015 catch • Business is reviewing opportunities for other food formats
Slide 28: Strategic Supply Chain
freedom, czour Strategic Supply Chain
Slide 29: Dairy Supply Chain (Australia into China and SE Asia)
Dairy Supply Chain (Australia into China and SE Asia) Packaged Innovation in Dairy Dedicated Strategic Supply Dairy Milk Supply Open Market Access Northern Victoria 29
Slide 30: Australian Fresh Milk Holdings
• Australian Fresh Milk Holdings consortium (AFMH) acquired Moxey Farms, Australia's largest single- site dairy operation in July 15 Australian Fresh Milk Holdings (10% Investment) • Fully integrated dairy farming operation located in the Lachlan Valley, New South Wales, 340 km west of Sydney • 2,70
Slide 31: Freedom Farmers
• Quality and security of supply will be critical to managing and developing growth Freedom Farmers • Freedom utilises complex and unique grains that have inherent supply challenges • Freedom Farmers are a network of key supplier relationships based: • Long term contracted supply • Fair price • Seed
Slide 32: Strategic Investments
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Slide 33: a2 Milk Company Limited (17.8% shareholding)
a2 Milk Company Limited (17.8% shareholding) • The Company is the largest single shareholder in the a2 Milk Company Limited (a2MC) • a2™ branded milk accounts for 9.3% of grocery channel market share by value * • a2MC also markets a2™ Platinum™ infant formula to consumers in Australia and China * •
Slide 34: Capital Expenditure
freedom, czour Capital Expenditure
Slide 35: 3 Pillar Capital Investment and Acquisition Program
3 Pillar Capital Investment and Acquisition Program • The Group is well advanced on a 3 pillar capital investment and acquisition programme which will transform its operations over the next 3 years and provide the opportunity to become a leading Australian based Food Company with a strong export pla
Slide 36: New UHT facility Ingleburn Sydney
New UHT facility Ingleburn Sydney • Existing non dairy capabilities are constrained at Taren Point, restricting growth and financial returns • Ingleburn to provide increased capacities to drive growth in Liquids categories • Non Dairy • Value Added Dairy • Lowest Cost / Efficient Operations • Best i
Slide 37: Other Capital Expenditure
Other Capital Expenditure Key Project Timelines (FY 16 – FY 18) 1st half 2nd Half 1st half 2nd Half 1st half 2nd Half Financial Year ended 30 June 2016 2016 2017 2017 2018 2018 Cereal and Snacks Leeton - Bar Line and Associated Expenditures - Completion of Mill and Upgrades Non Dairy Beverage - Ingl
Slide 38: People and Resourcing
People and Resourcing • The group has invested significantly in the last twelve months in the recruitment of skilled senior management capability to provide capability to deliver on the strategy • Key resource additions have included: • Quality • Group Quality Manager • New Site Quality Managers at
Slide 39: Financial Summary – Financial Year 2015
Financial Summary – Financial Year 2015 12 Months to 30 June 2015 2014 $’000 $’000 % Change Gross Sales Revenues (1) 129,502 122,772 5.5% Net Sales Revenues (1) 111,125 104,616 6.2% Net Sales Revenue (Statutory) 91,460 87,856 4.1% EBDITA (Underlying Operating) 16,420 15,289 7.4% EBDITA (Statutory Op
Slide 40: Cashflow
Cashflow Year ended 30 June (A$'000) 2015 2014 Change • Cashflow from operating activities: increased Net Cash from Operating Activities 8,678 7,909 9.0% 9% impacted by improved working capital Net Interest Paid -1,681 -1,010 mix in 2nd half of FY 15. Income Tax Paid -960 - • Net Interest Paid: incr
Slide 41: Funds Employed
Funds Employed Year ended 30 June (A$'000) 2015 2014 Change • Inventory: increase relating to working capital Inventory 24,475 18,967 5,508 for snack bar and higher componentry for non Trade Creditors -18,779 -13,068 -5,711 dairy products Net Investment in Inventory 5,696 5,899 -203 Receivables 25,3
Slide 42: Capital Expenditure
Capital Expenditure • Cereal and Snacks: expenditure relating to Bar Line, completion of Cereal upgrade and other operational site expenditure FY 15 Capital Expenditure % Split • Non Dairy Beverages: includes acquisition of land at Ingleburn, project costs and payments relating to 1st stage warehous
Slide 43: Outlook
Outlook • The group will continue to invest in its people, brands and manufacturing capabilities to build a leading value added specialised food group operating across Australia and key Asia Pacific Global markets • Acquisitions will be progressed where they accelerate the business plan or provide f
Slide 44: Appendix – Business Unit Financials
Appendix – Business Unit Financials • FY 2015 (Adjusted from Appendix 4E) * Excludes Pactum Dairy Group Equity Associate FF North Business Group Freedom Foods Pactum Specialty Foods America Group Services Total Net Sales Adjusted 48,163 * 48,600 12,802 1,560 111,125 EBDITA (Reported) 3,350 10,457 2,
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