Synlait Milk Ltd. · NZX:SML
Synlait Milk — H1 FY2018 Earnings Presentation
29 slides from Synlait Milk's earnings presentation, Mar 21, 2018
Slide 1: Synlait Milk Limited Interim Results FY18
For personal use only NEXT GENERATION Synlait Milk Limited Interim Results FY18
Slide 2: Disclaimer
I PG 2 DISCLAIMER Synlait Milk Limited Interim Results 2018 For personal use only - This presentation is intended to constitute a summary of certain performance or achievements may differ materially from those - Forward looking statements in this presentation are unaudited and information about Synl
Slide 3: Strategic Update
STRATEGIC UPDATE For personal use only John Penno MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Slide 4: Opening Remarks
I PG 4 OPENING REMARKS Synlait Milk Limited Interim Results 2018 For personal use only - RECORD HALF YEAR NET PROFIT OF $40.7 MILLION COMPARED TO $10.6 MILLION FOR THE SAME PERIOD LAST YEAR (H1 FY17) GENERATED FROM INCREASING CANNED INFANT FORMULA VOLUMES, AND IMPROVED INGREDIENTS MARGINS - STRENGTH
Slide 5: We Are a Growth Company
For personal use only WE ARE A GROWTH COMPANY Synlait Milk Limited Interim Results 2018 I PG 5
Slide 6: Our Categories
I PG 6 INGREDIENTS INFANT NUTRITION EVERYDAY DAIRY ADULT NUTRITION Synlait Milk Limited Interim Results 2018 For personal use only OUR CATEGORIES WE WILL LEVERAGE OUR UNIQUE VALUE CHAIN IN TO SUCCEED EACH CATEGORY TO BUILD SUCCESSFUL BUSINESSES THAT CONTRIBUTE TO OUR LONG-TERM SUCCESS OUR VALUE CHAI
Slide 7: Our Categories
I PG 7 OUR CATEGORIES Synlait Milk Limited Interim Results 2018 For personal use only INGREDIENTS INFANT NUTRITION EVERYDAY DAIRY ADULT NUTRITION DELIVERED IN CONSUMER, BUILD SALES - BLENDING + CONSUMER PACKAGING II PRODUCT DEVELOPMENT FRESH MILK FOODSERVICE AND PEOPLE, TECHNICAL INGREDIENTS PACKAGI
Slide 8: A Portfolio of Infant Formula Customer Partnerships
I PG 8 A PORTFOLIO OF INFANT FORMULA CUSTOMER PARTNERSHIPS Synlait Milk Limited Interim Results 2018 For personal use only - CURRENTLY AVAILABLE IN AUSTRALIA AND NEW ZEALAND - DISTRIBUTING NATIONWIDE IN AUSTRALIA THROUGH COLES SUPERMARKETS - PENDING U.S. FOOD AND DRUG ADMINISTRATION (FDA) REVIEW - S
Slide 9: We Have Unlocked Infant Formula Capability
I PG 9 WE HAVE UNLOCKED INFANT FORMULA CAPABILITY Synlait Milk Limited Interim Results 2018 For personal use only WETMIX THREE HIGH SPECIFICATION KITCHENS SPRAY DRYERS CONTRACTED FARMS MILK SOLIDS 80,000 MT 120,000 MT CONSUMER PACKAGING APPROX 200 65.0m kgMS (FY17) MAX. CAPACITY MAX. CAPACITY 93,000
Slide 10: Second Nutritional Powder Manufacturing Site: Pokeno, Waikato
I PG 10 SECOND NUTRITIONAL POWDER MANUFACTURING Synlait Milk Limited Interim Results 2018 SITE: POKENO, WAIKATO For personal use only - Synlait is investing in nutritional powder manufacturing capacity to meet customer demand for infant formula products - Establishing this capacity on a second site
Slide 11: Lead With Pride Programme
I PG 11 Synlait Milk Limited Interim Results 2018 TRANSFORMATIONAL IN THE DAIRY INDUSTRY, SYNLAIT’S LEAD WITH PRIDE™ For personal use only PROGRAMME RECOGNISES AND REWARDS THOSE SUPPLIERS WHO ARE ACHIEVING DAIRY FARMING EXCELLENCE. LEAD WITH PRIDE™ IS AUSTRALASIA’S ONLY INTERNATIONALLY ACCREDITED IS
Slide 12: Entry into Everyday Dairy with Liquid Milk
I PG 12 ENTRY INTO EVERYDAY DAIRY WITH LIQUID MILK Synlait Milk Limited Interim Results 2018 For personal use only - Exclusive supply arrangement with Foodstuffs South Island to supply private label fresh milk and cream (Value and Pams brands) from early 2019 - Distributed in their network of PAK’n
Slide 13: Massey and FoodPilot Core to Delivering Synlait's Aspirations
I PG 13 MASSEY AND FOODPILOT CORE TO Synlait Milk Limited Interim Results 2018 DELIVERING SYNLAIT’S ASPIRATIONS For personal use only - Synlait Palmerston North was opened on Friday 2 March by Massey University’s Vice Chancellor, Professor Jan Thomas, and the mayor of Palmerston North, Grant Smith -
Slide 14: People
I PG 14 PEOPLE Synlait Milk Limited Interim Results 2018 For personal use only Deborah Marris - GENERAL COUNSEL AND Dr. Suzan Horst - DIRECTOR OF QUALITY, REGULATORY Hamish Reid - GENERAL MANAGER OF BRAND AND HEAD OF COMMERCIAL AND LABORATORY SERVICES CHIEF SUSTAINABILITY OFFICER Deborah Marris is j
Slide 15: Our Financial Results
OUR FINANCIAL RESULTS For personal use only Nigel Greenwood CHIEF FINANCIAL OFFICER
Slide 16: Overview
I PG 16 OVERVIEW Synlait Milk Limited Interim Results 2018 For personal use only $ MILLIONS NET PROFIT AFTER TAX 45.0 40.7 40.0 35.0 - First half profit eclipses all previous results 30.0 27.6 24.2 25.0 - Profit growth is product margin led, driven by increasing 20.0 canned infant formula volumes, a
Slide 17: Sales Volume
I PG 17 SALES VOLUME Synlait Milk Limited Interim Results 2018 SALES VOLUME For personal use only MT 100,000 80,000 12,427 - H1 FY18 powders and cream volumes down on prior year due to: 60,000 10,753 6,349 67,895 16,839 - Increase of milk consumed in canned infant formula 40,000 5,246 59,285 54,693
Slide 18: Production Volume
I PG 18 PRODUCTION VOLUME Synlait Milk Limited Interim Results 2018 For personal use only MT PRODUCTION VOLUME MILLIONS KGMS 100,000 45.0 - First half contracted milk supply consistent with prior years’ collections at 41.4 million kgMS 40.0 - Total production volumes slightly down on H1 FY17 80,000
Slide 19: Gross Profit per Metric Tonne
I PG 19 GROSS PROFIT PER METRIC TONNE Synlait Milk Limited Interim Results 2018 For personal use only - Consumer packaged sales volume growth and improved ingredient margins have driven the increase in gross profit per MT from $830 per MT $ GROSS PROFIT PER MT to $1,390 per MT 1,600 1,390 1,400 - Ma
Slide 20: Overheads
I PG 20 OVERHEADS Synlait Milk Limited Interim Results 2018 For personal use only $ MILLIONS OVERHEADS 30.0 3.5 0.6 (0.4) (0.9) - Net overheads have increased by 13.1% over H1 FY17 to $24.5 million, 24.5 25.0 21.7 however only $1.4 million, or 6%, above H2 FY17 20.0 - Largest driver of the increase
Slide 21: Operating Cash Flow
I PG 21 OPERATING CASH FLOW Synlait Milk Limited Interim Results 2018 For personal use only $ MILLIONS YEAR-ON-YEAR OPERATING CASH FLOW 100.0 13.8 (12.1) - Synlait generated strong operating cash flows in H1 FY18 of 75.0 80.0 21.9 $75.0 million. This is an improvement of $89.2 million from the same
Slide 22: Net Debt
I PG 22 NET DEBT Synlait Milk Limited Interim Results 2018 For personal use only $ MILLIONS NET DEBT 300.0 250.0 89.6 (204.3) - Record operating cash flow generation of $204.3 million 200.0 for the 12 months ended 31 January 2018 has fully 146.6 funded our capital expenditure program and enabled the
Slide 23: Outlook
OUTLOOK For personal use only John Penno MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Slide 24: Second Half Returns
I PG 24 SECOND HALF RETURNS Synlait Milk Limited Interim Results 2018 For personal use only MT CANNED INFANT FORMULA SALES 20,000 - The material increase in first half earnings has been 18,000 achieved from both large increases in manufacture and 18,000 16,839 sales of our highest margin products, a
Slide 25: Appendix
For personal use only APPENDIX Synlait Milk Limited Interim Results 2018 I PG 25
Slide 26: Gross Profit per MT (Powders and Cream)
I PG 26 GROSS PROFIT PER MT (POWDERS AND CREAM) Synlait Milk Limited Interim Results 2018 For personal use only $ POWDERS AND CREAM GROSS PROFIT PER MT 1,200 1,115 1,000 837 800 726 692 667 600 400 200 0 H1 FY16 H2 FY16 H1 FY17 H2 FY17 H1 FY18
Slide 27: Gross Profit per MT (Consumer Packaged)
I PG 27 GROSS PROFIT PER MT (CONSUMER PACKAGED) Synlait Milk Limited Interim Results 2018 For personal use only $ CONSUMER PACKAGED GROSS PROFIT PER MT 900 842 800 800 762 700 600 490 500 463 400 300 200 100 0 H1 FY16 H2 FY16 H1 FY17 H2 FY17 H1 FY18
Slide 28: Lactoferrin Update
I PG 28 LACTOFERRIN UPDATE Synlait Milk Limited Interim Results 2018 For personal use only $ LACTOFERRIN GROSS PROFIT PER MT 250,000 - Synlait has a strong and growing customer base for lactoferrin, spanning from use in health supplements to infant formula 213,681 200,000 - A demand and supply imbal
Slide 29: Investors and Media Contacts
For personal use only INVESTORS MEDIA Casey Blatch, Strategic Finance Manager Dan Walraven, Communications Manager +64 3 373 3091 +64 27 836 7532 Casey.Blatch@synlait.com Daniel.Walraven@synlait.com