Bega Cheese Limited · ASX:BGA
Bega Cheese — H1 2024 Earnings Presentation
30 slides from Bega Cheese's earnings presentation, Feb 22, 2024
Slide 1: Half Year 2024 Results Highlights Presentation
ASX ANNOUNCEMENT Half Year 2024 Results Highlights Presentation I enclose the Half Year 2024 Results Highlights Presentation for the Bega Group (ASX:BGA) to be discussed on the Half Year Result 2024 Conference Call scheduled for 11:00am today. 22 February 2024 For further information please contact
Slide 2: 1H FY2024 Results Presentation
1H FY2024 Results Presentation 22 February 2024
Slide 3: Welcome
Barry Irvin Executive Chairman Welcome
Slide 4: Our purpose, vision and values
OUR PURPOSE IS... OUR VISIONIS... uO ECOL THE GREAT AUSTRALIAN FOOD COMPANY py on r whi AN ii\g wk all GRow PASSION _ INVEST SUPPORT our people for the customer and consumer in our future each other OUR VALUES OUR BEHAVIOURS ARE OUR VALUES IN ACTION BE CARING BE INCLUSIVE BE OPEN “We look out for ea
Slide 5: Key messages
Key messages • Strong Branded performance in 1H FY2024 • Bulk business significantly impacted by farm gate milk price disconnect to global dairy commodity prices • More stable milk supply conditions • Business and organisational restructure successfully implemented • Continued refinement of Branded
Slide 6: Performance highlights
Performance highlights EBITDA ($ million) 86.1 76.5 74.6 71.6 Total dividend Profit after tax ($ million) Basic earnings per share (cents) per share (cents) 26.5 13.3 9.4 8.7 7.3 4.4 3.1 4.0 4.5 2.4 1H FY2024 1H FY2023 1H FY2024 1H FY2023 1H FY2024 1H FY2023 1H FY2024 1H FY2023 1H FY2024 1H FY2023 1
Slide 7: Pete Findlay CEO, Gunther Burghardt CFO
Pete Findlay CEO Gunther Burghardt CFO
Slide 8: Vision, purpose and 5 year horizon
VISION: To become ‘The Great Australian Food Company’ PURPOSE: 5 YEAR HORIZON: Focus & Simplify Secure solids Protect and grow Win on the street Streamline our sites Sustainability International Grow and diversify the the core Improve our Optimise our footprint and Meet our commitments to opportunit
Slide 9: Execution of strategy – focus and simplification
Execution of strategy – focus and simplification • Strong Branded performance in 1H FY2024 o Focus on innovation and expansion of core growth categories o Brand loyalty has remained strong despite inflationary environment o Pipeline of efficiency and optimisation projects in place • Bulk business pe
Slide 10: Execution of strategy – focus and simplification
Execution of strategy – focus and simplification • Brand growth and innovation o Kids snacking in yoghurt o Milk based beverage extensions o Building share in lactose free white milk o Vegemite 100th birthday celebrations • Optimisation of chilled distribution network o Implementing digital sales pl
Slide 11: Macro consumer trends
Macro consumer trends Demographics are changing Food needs are changing What is important is changing Lifestyles are changing 1H FY2024 Results Presentation | 10
Slide 12: Great categories
Great categories Retail Category Total Grocery and Sales Growth Household In growing categories bought by all Australian Convenience category Value $m annual value Penetration families Milk Based Beverages $979 10.8% 54.3% • Everyday categories • Defensive characteristics with resilience Yoghurt $1,
Slide 13: Our power brands
Our power brands • Founded in 1900, the Dairy Farmers brand is our largest trademark with over Our top 8 brands contribute $700m RSV, playing across white milk, yoghurt and culinary. • Providing ultimate mental clarity, Dare is almost a half a billion-dollar RSV brand 72% of branded revenue holding
Slide 14: Market leading brands
Market leading brands Bega Market Bega Market Grocery Category Bega Brands Share (value) Position • Iconic Australian brands with Milk Based Beverages 51% 1 enduring appeal • Strong market positions Yoghurt 25% 1 • Covering essential consumer items to discretionary Spreads 30% 1 purchases • Widely a
Slide 15: Multichannel strategy
Multichannel strategy Grocery Non-Grocery Supermarkets Convenience Foodservice and Local Trade 1H FY2024 Results Presentation | 14
Slide 16: Win on the Street
Win on the Street Market leading distribution network Scale – ~3,200 truck loads per week and ~850 mil Bega litres annually Network – Unparalleled connectivity between metropolitan, satellite and regional Australia with 133 chilled depots and distribution centres Reach – Capability to serve majority
Slide 17: Win on the street
Win on the street • Currently 79,000 Foodservice outlets in Australia • Australia’s propensity to eat out is amongst the highest in the western world with the breakfast being the highest day part spend • The Foodservice channel is valued almost on par with 2019 prior to lockdowns • Dairy is ranked 2
Slide 18: Manufacturing Network
Manufacturing Network 1H FY2024 Results Presentation | 17
Slide 19: Farm gate milk price and commodity returns trend
Farm gate milk price and commodity returns trend • Global dairy commodities rebounding from Aug 2023 lows in response to contraction in global Supply • Australian milk supply stable • Capacity better aligned to current Australian milk supply • Good seasonal conditions have seen opportunity milk purc
Slide 20: Sustainability
Sustainability Our Approach: Greater Good The Bega Group Greater Good strategy is aligned to the United Nations Sustainable Development Goals with a focus on addressing the impacts of our business and where we can contribute to sustainable development – our products, our people and communities and o
Slide 21: Financial key messages
Financial key messages • Branded business growth strategies implemented in current and prior year delivering revenue and product mix improvement with milk-based beverage and yoghurt performing well o Revenue growth of 8% driven by volume and value growth in key categories • Global dairy commodity pr
Slide 22: Branded results in 1H FY2024 offset Bulk segment
Branded results in 1H FY2024 offset Bulk segment • Branded segment working to recover $290 million of cost inflation, • Branded segment growth strategies, value creation and cost out but with a time lag impacting results initiatives implemented in both FY2023 and 1H FY2024 delivered strong, sustaina
Slide 23: Segments
Segments ($ million) Branded Bulk Unallocated Inter-segment Group Total Overheads elimination Revenue 1,508.3 366.4 - (146.7) 1,728.0 Growth vs 1H FY2023 % 8% (16%) - 6% 3% Normalised EBITDA 96.8 (5.6) (16.1) 1.4 76.5 Increase/(decrease) vs 1H FY2023 EBITDA 53.3 (55.1) 1.1 2.6 1.9 Branded • Revenue
Slide 24: Reconciliation of normalised result
Reconciliation of normalised result Consolidated Per Canberra Period Ending 24 December 2023 Financial sale and Betta Milk Tax Normalised ($ million) Statements restructuring acquisition adjustments outcome Revenue 1,728.0 - - - 1,728.0 Cost of sales (1,378.8) - - - (1,378.8) Gross Profit 349.2 - -
Slide 25: Balance sheet
Balance sheet 1H FY2024 2H FY2023 $m $m Cash 69.1 66.4 • Net debt of $251m leverage ratio of 1.9x, Trade and other receivables 355.1 306.1 compared to 2.7x in 1H FY2023 Inventories 434.8 428.7 • Strong December sales in both segments of Property, plant and equipment 681.7 687.2 the business Right of
Slide 26: Cash flow
Cash flow 1H FY2024 1H FY2023 Dec $m Dec $m Receipts from customers 1,798.5 1,772.4 Operating activities Payments to suppliers and employees (1,785.5) (1,807.1) • Focused operating cash flow Net proceeds from Trade Receivables Facility 6.3 42.7 management has minimised impact of Net interest and oth
Slide 27: Outlook
OUTLOOK • Maintaining momentum in the Branded business with further opportunity in innovation and market share • Cost out and efficiency programs continue • Improving industry environment for Bulk business • Organisational structure designed for channel growth • 1H benefited by strong pre-Christmas
Slide 28: Barry Irvin Executive Chairman
Barry Irvin Executive Chairman
Slide 29: Questions?
Questions? 1H FY2023 Results Presentation | 28
Slide 30: Disclaimer
DISCLAIMER This presentation contains a summary of information about Bega Cheese Limited ACN 008 358 503 (BGA) and its subsidiaries (Bega Group). The information does not purport to be complete and should be read in conjunction with other BGA ASX announcements. The presentation may contain statement