Inghams Group Ltd. · ASX:ING
Inghams — Macquarie Investor Conference 2020
18 slides from Inghams's conference presentation, May 7, 2020
Slide 1: Macquarie Investor Conference
For personal use only Macquarie Investor Conference 7 May 2020
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER For personal use only Disclaimer The material in this presentation is general background information about the activities of Inghams Group Limited (Ingham’s) and its subsidiaries (Ingham’s Group), current at the date of this presentation, unless otherwise noted. It is
Slide 3: The Journey to Unlock Ingham's Potential
THE JOURNEY TO UNLOCK INGHAM’S POTENTIAL For personal use only • Attractive sector – poultry is an affordable staple, with room for innovation and growth • Strong foundations – proud history, market position, diversified network, biosecurity protected • Clear strategy – supported by structure and ca
Slide 4: A Well Diversified Network
A WELL DIVERSIFIED NETWORK For personal use only • Manage biosecurity and operational risk • Mitigate agricultural risk and feed price volatility • Regional production complexes ensure local supply • Fully service national and local customer requirements • Optionality and flexibility for future grow
Slide 5: Our Fully Integrated Operating Model
OUR FULLY INTEGRATED OPERATING MODEL For personal use only • Value is created across a highly complex and inter-related supply chain • Cost, capability and complexity creates barriers • Balance and operational excellence are key to margin capture FEED MILLING FURTHER PROCESSING SALES AND MARKETING C
Slide 6: Poultry Supply to Long Term Customers
POULTRY SUPPLY TO LONG TERM CUSTOMERS For personal use only Consistency Certainty of demand of supply 6
Slide 7: Our Strategic Framework to Build and Grow
OUR STRATEGIC FRAMEWORK TO BUILD AND GROW For personal use only OUR OBJECTIVE To deliver more consistent, predictable and reliable returns STRATEGIC OPTIMISE INNOVATE REINVEST PILLARS THE CORE TO GROW IN THE NEW STRATEGIC ENABLERS Consumer Cost Culture 7
Slide 8: Our Pillars Shape Our Priorities and Goals
OUR PILLARS SHAPE OUR PRIORITIES AND GOALS For personal use only OPTIMISE THE CORE INNOVATE TO GROW INVEST IN THE NEW • Deliver asset efficiency with • Manage our core new product • Be flexible, disciplined and well minimal capital spend development (NPD) and capitalised to take advantage portfolio
Slide 9: Our Enablers
OUR ENABLERS For personal use only CONSUMER Innovation and profitable growth • Become a consumer-centric organisation • Work with customers in new ways – align with and support their growth • Invest in new value-added products and channels CONSUMER COST CULTURE Efficiency and focus Engagement and ca
Slide 10: Progress on Our Strategy Continues
PROGRESS ON OUR STRATEGY CONTINUES A busy implementation schedule of our 5 year strategy For personal use only • New operational leadership team applying Continuous Improvement framework across the business to improve processing operations • Quantitative and qualitative review progressed for Overall
Slide 11: COVID-19 Has Created Profound Shifts in Our Poultry Markets
COVID-19 HAS CREATED PROFOUND SHIFTS IN OUR POULTRY MARKETS For personal use only • February - “Business tracking to plan and we continue to monitor the impact of bushfires, weather and health events on our consumers and customers” • May - “Whilst the Group has been on track for 2H FY20 to exceed 1H
Slide 12: Channel Update and Observations
CHANNEL UPDATE AND OBSERVATIONS For personal use only OUT OF HOME FOOD RETAIL QSR WHOLESALE SERVICE • Less foot traffic in store and • Realigned to predominantly • Restaurants, cafes, tourism, • Initial resilience but ultimately larger baskets drive-through and delivery hotels, clubs, largely closed
Slide 13: Operational Challenges and Responses
OPERATIONAL CHALLENGES AND RESPONSES We have enabled our people to work safely, and our business to keep operating For personal use only PRIMARY FURTHER FARMING FEED PROCESSING PROCESSING • Long lead times to adjust • Labour intensity creates high • Volume, mix and efficiency • Lower AUD leading to
Slide 14: Operational Challenges and Responses
OPERATIONAL CHALLENGES AND RESPONSES We have enabled our people to work safely, and our business to keep operating For personal use only Safety measures: • Protective barrier screens • Physical distancing • No external visitors allowed at sites • Car pooling limitations 14
Slide 15: Financial Commentary
FINANCIAL COMMENTARY For personal use only • Strong balance sheet and access to liquidity and funding • Closely managing working capital and inventory • Focus on debtors and cash collection and timely payment of all creditor obligations • Working collaboratively with some customers who are having di
Slide 16: Feed Market Observations
FEED MARKET OBSERVATIONS For personal use only TOTAL (‘m MT) QLD (‘m MT) % 5 year average 23.1 5 year average 1.0 4% ’19/20E 14.6 ’19/20E 0.4 3% ’20/21F 26.0 ’20/21F 1.5 6% WA (‘m MT) % NSW (‘m MT) % 5 year average 8.9 39% 5 year average 6.0 26% ’19/20E 5.8 40% ’19/20E 1.8 12% ’20/21F 9.7 37% ’20/21
Slide 17: Ingham's Is Managing the Challenges
INGHAM’S IS MANAGING THE CHALLENGES Our team has responded to implement rapid change and maintain a safe environment For personal use only • People first culture – exceptional team engagement and low absenteeism as we implemented social distancing, managed car pooling and other logistical challenges
Slide 18: Summary
SUMMARY For personal use only • Unprecedented shifts in poultry markets have created significant uncertainty as rapid changes to mix and volumes across our business have occurred • Our leadership team has shown their skill in managing the additional complexity and challenges across our supply chain