Bega Cheese Limited · ASX:BGA
Bega Cheese — H1 FY2020 Earnings Presentation
24 slides from Bega Cheese's earnings presentation, Mar 2, 2020
Slide 1: Half Year 2020 Results Highlights Presentation
ASX ANNOUNCEMENT Half Year 2020 Results Highlights Presentation I enclose the Half Year 2020 Results Highlights Presentation to be discussed on the Half Year Result 2020 Conference Call scheduled for 11:00am today. 2 March 2020 For further information please contact Brett Kelly Company Secretary Beg
Slide 2: 1H FY2020 Results Presentation
1H FY2020 Results Presentation Barry Irvin – Executive Chairman Paul van Heerwaarden – CEO Pete Findlay – CFO Page 1
Slide 3: Key messages
Key messages Restatement of FY2019 earnings Transforming to become ‘The Great Australian Food Company’ Revenue growth for branded spreads and dairy categories Importance of diversified dairy infrastructure and food business Significant margin impact in dairy ingredients (reduced volume/str
Slide 4: Transformation to becoming 'The Great Australian Food Company'
Transformation to becoming ‘The Great Australian Food Company’ FOURTH TRANSFORMATION 2019 2017 THIRD TRANSFORMATION ACCELERATING GROWTH 2011 SECOND TRANSFORMATION NEW BUSINESS PLATFORM FIRST TRANSFORMATION 2008/09 STRUCTURED FOR THE FUTURE 2007 GROW AND DIVERSIFY 2001 Customer and consumer focussed
Slide 5: Bega Values
Making a differe Support ‘ Grow our each other people We ensure our: Page 4
Slide 6: Performance highlights
Performance highlights Revenue increased by 14% to $741 million Export revenue increased 17.3% to $230 million Statutory EBITDA decreased 1% to $39.3 million Normalised* EBITDA decreased by 16% to $48.5 million Working capital decreased by 53% to $177.8 million Net debt decreased by 35%
Slide 7: Revenue analysis
Revenue analysis Export accounts for 31% of total revenue 16% 8% Spreads and Nutritionals Pricing growth in ingredients, packaged other grocery goods, spreads and other grocery Volume growth across all categories Expanding product portfolio in 44% 32% nutritionals Dairy consumer packaged goo
Slide 8: Key measures
Key measures 1H FY2020 1H FY2019 Change 1H FY2020 Key Measures $’000 $’000 $’000 % Statutory performance Revenue 741,151 649,164 91,987 14 Statutory EBITDA result comparable EBITDA 39,262 39,627 (365) -1 with Prior Year EBIT 17,688 20,223 (2,535) -13 PAT 8,545 4,993 3,552 71 Koroit purchased 17
Slide 9: Reconciliation of normalised result
Reconciliation of normalised result Per Financial Legal Other Normalised Consolidated Statements Costs Costs Outcome Period Ending 29 December 2019 $’000 $’000 $’000 $’000 Revenue 741,151 - - 741,151 Cost of sales (615,312) - - (615, 312) Gross profit 125,839 - - 125,839 EBITDA 39,262 4,490 4,712 48
Slide 10: Balance sheet
Balance sheet 1H FY2020 1H FY2019 FY2019 Dec $m Dec $m Jun $m Cash 23.7 40.6 28.8 Reduction in level of bulk dairy Trade and other receivables 126.2 282.2 179.9 inventory (cheese and powder) Inventories 296.3 398.8 272.6 Receivable facility implemented Property, plant and equipment 452.1 443.6 4
Slide 11: Cash flow
Cash flow 1H FY2020 1H FY2019 FY2019 Dec $m Dec $m Jun $m Receipts from customers 867.0 718.3 1,422.1 Payments to suppliers (814.6) (824.7) (1,476.8) Net proceeds from trade receivables facility - - 188.6 Capital spend increased due to Interest and other costs of financing paid (6.2) (11.9) (20.4)
Slide 12: FY2019 Restatement
FY2019 Restatement FY2019 FY2019 Incorrect calculation of cost of sales Consolidated Balance Sheet (Restated) (Previous) Change (extracts) $m $m $m Understatement of trade and other Inventories 272.6 274.1 (1.5) payables Current tax assets 9.2 6.0 3.2 Overstatement of inventory Trade and other
Slide 13: Our consumer brands
Our consumer brands Successful launch of Farmer’s Table butter in 1H Growth of 12.4% in international branded business Modest revenue growth for Vegemite with momentum in 2H Increase market share of the peanut butter category Growth in peanut butter revenue of 6.5% driven by the Bega Simpl
Slide 14: Dairy commodity and farm gate milk prices
Dairy commodity and farm gate milk prices Australian milk production decreased 4.3% Drought impact on water, grain and hay prices High relative milk prices impacting margins Strong recovery in global commodity prices Australian dollar has continued to soften Global supply growth below gr
Slide 15: Operations review
Operations review Total production decreased 10.4% to 154,456 tonne Direct supply and toll milk processed decreased by 4.6% Total direct milk intake reduced by 13% (Supply impacted by drought conditions, farm closures and competition) Total recordable injury frequency rate increased to 8.6
Slide 16: Our manufacturing sites
TOLGA Our manufacturing sites KINGAROY Coburg site sold Ongoing rationalisation across dairy sites LAGOON ST, BEGA RIDGE ST, BEGA Ongoing milk toll processing arrangements Review of secondary processing consolidation Commissioned dips line at Port Melbourne TATURA STRATHMERTON Commission
Slide 17: Growing and diversifying our branded business
Growing and diversifying our branded business Pre 2017 Now Our focus 2023 Limited investment Building brand Strong brand platform in brands growth engine Increase brand for future growth organic growth rate Fonterra responsible for Extension of Bega brand into Strong portfolio of brands Bega brand i
Slide 18: Diversifying and value adding our milk pool
Diversifying and value adding our milk pool Pre 2017 Now Our focus 2023 Concentration of milk Infrastructure diversity Majority of milk destined pool regions and rationalisation Diversified milk for value added products regions Core dairy infrastructure Acquisition of Koroit and Network of facilitie
Slide 19: Approach to Corporate Social Responsibility
Approach to Corporate Social Responsibility our focus is on the five areas where we can have the greatest impact Aligned with the United Nations Global Compact Food Diversity, inclusion Greenhouse Packaging Water nutrition and equality gases sustainability sustainability Highlights Highlights Highli
Slide 20: Where are we today?
Where are we today? Transition progressing well to a diversified branded food company Competitive supply chain broadly aligned with market demand Volatile dairy industry facing ongoing structural change and cyclical challenges Intense competition for milk and excess domestic processing capac
Slide 21: Our priorities
Our priorities Organisation and process review Investment in brands and markets Accelerate new product development Further rationalise supply chain and manufacturing footprint Remain open to further dairy industry consolidation opportunities Protect and diversify current milk supply Co
Slide 22: Bega Cheese Limited
Page 21 Bega Cheese Limited
Slide 23: Slide 23
Slide 24: 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. This presentation has been prepared by B