Myeco Group Ltd · ASX:MCO
Myeco — Secos Group — H1 FY24 Earnings Presentation
26 slides from Myeco's earnings presentation, February 2024
Slide 1: H1 FY24 Results Presentation
rsonal use only H1 FY24 RESULTS PRESENTATION FEBRUARY 2024 ASX: SES CHANGING THE WORLD OF PACKAGING SECOS GROUP LIMITED (ASX: SES) 1 FY24 HALF YEAR RESULTS PRESENTATION
Slide 2: Agenda
AGENDA rsonal use only • H1 FY24 Summary of Activities • H1 FY24 Financial Results • Strategy & Outlook SECOS GROUP LIMITED (ASX: SES) 2 FY24 HALF YEAR RESULTS PRESENTATION
Slide 3: H1 FY24 Summary of Activities
H1 FY24 SUMMARY OF rsonal use only ACTIVITIES SECOS GROUP LIMITED (ASX: SES) 3 FY24 HALF YEAR RESULTS PRESENTATION
Slide 4: H1 FY24 Summary of Activities
H1 FY24 SUMMARY OF ACTIVITIES • Major milestone achieved - the sale of SECOS’ traditional plastic manufacturing assets in December 2023 • SECOS now produces and sells 100% sustainable resins and plastics • The focus on sustainable products delivered rsonal use only • MyEco® branded products (Austral
Slide 5: Ongoing R&D and Certifications
ONGOING R&D AND CERTIFICATIONS • Upgraded to silver EcoVadis certification - a key ESG performance rating • SECOS’s brands are the first in Australia to be certified to meet rsonal use only • Textile Exchange's Recycled Content Standard and • Global Recycled Standard for recycled plastic products •
Slide 6: SECOS: Global Supplier of Sustainable Plastics
SECOS: GLOBAL SUPPLIER OF SUSTAINABLE PLASTICS H1 FY24 SALES Bio Film rsonal use only 4% Traditional* Bio Resin 22% * Traditional plastic 23% production ceased in October 2023 SECOS is now 100% focussed on sustainable plastics Bio Bags 51% • SECOS with strategy is to become a world leader in sustain
Slide 7: H1 FY24 Sales by Product Group
H1 FY24 SALES BY PRODUCT GROUP • Compostable bags • MyEco® branded products (Australia) sales up 20.9% on PCP rsonal use only • MyEcoWorld® branded products (USA and Canada) recorded no sales to exclusive distributor Jewett Cameron Company in H1 FY24 however new orders have been received in January
Slide 8: MyEco - Significant Australian Retail Growth
MyEco® - SIGNIFICANT AUSTRALIAN RETAIL GROWTH Growth in Retail Store Numbers rsonal use only 3000 2500 2000 1500 1000 500 0 Jun 21 Dec 21 Jun 22 Dec 22 Jun-23 Dec 23 SECOS GROUP LIMITED (ASX: SES) 8 FY24 HALF YEAR RESULTS PRESENTATION
Slide 9: H1 FY24 Sales by Product Segment
H1 FY24 SALES BY PRODUCT SEGMENT COMPOSTABLE BAGS- RETAIL $1,400,000 • MyEco® Retail sales grew by 20.9% in H1 FY24 rsonal use only on PCP $1,200,000 • Scale of MyEco® Branded products now $1,000,000 exceeding 2400 Australian stores comprising 970 Woolworths stores, 850 Coles Stores and independent
Slide 10: H1 FY24 Sales by Product Segment (Continued)
H1 FY24 SALES BY PRODUCT SEGMENT (CONTINUED) COMPOSTABLE BAGS- COUNCIL & WASTE rsonal use only $3,000,000 ● H1 FY24 sales increased by 11.1% on PCP $2,500,000 ● Sales in H2 are typically stronger due to timing of orders $2,000,000 ● FOGO rollout programs expected to continue as more local government
Slide 11: H1 FY24 Sales by Product Segment (Continued)
H1 FY24 SALES BY PRODUCT SEGMENT (CONTINUED) COMPOSTABLE RESIN SALES rsonal use only $3,000,000 ● Difficult global market conditions and excess $2,500,000 inventory of compostable resin held at some Latin American customers impacted sales orders $2,000,000 ● Entered into a new distribution agreement
Slide 12: H1 FY24 Sales by Product Segment (Continued)
H1 FY24 SALES BY PRODUCT SEGMENT (CONTINUED) TRADITIONAL PLASTIC SALES ● Divested lower margin traditional plastic rsonal use only $4,500,000 manufacturing assets in H1 FY24 $4,000,000 ● Enables SECOS to focus purely on the sale and $3,500,000 development of sustainable resins and MyEco® $3,000,000
Slide 13: Markets Driving Sales Growth
MARKETS DRIVING SALES GROWTH Market Product Sales Channel Branding Status Australia Compostable Bags – Retail Direct Major Retailers (Coles/Woolworths/Ritchie's IGA) MyEcoBag® In Market/Growing Council FOGO Bags Direct to council Cardia® In Market/Growing rsonal use only Compostable Pet Waste Bags W
Slide 14: Markets Driving Sales Growth (Continued)
MARKETS DRIVING SALES GROWTH (CONTINUED) Market Product Sales Channel Branding Status Middle Compostable Resin/Films Direct to Converter Cardia Resin® In Market/Developing East Compostable Pet Waste Bags Direct to Retailers White Label Soon to Launch rsonal use only Compostable Pallet Wrap Direct to
Slide 15: Fully Integrated Value Chain
FULLY INTEGRATED VALUE CHAIN rsonal use only Specialist Technical Experts in Biopolymers Manufacturers of Leading Australian Market Brand in Sustainable Sustainable Packaging Products SECOS GROUP LIMITED (ASX: SES) 15 FY24 HALF YEAR RESULTS PRESENTATION
Slide 16: H1 FY24 Financial Results
rsonal use only H1 FY24 FINANCIAL RESULTS SECOS GROUP LIMITED (ASX: SES) 16 FY24 HALF YEAR RESULTS PRESENTATION
Slide 17: H1 FY24 Profit and Loss
H1 FY24 PROFIT AND LOSS (CONTINUED & DISCONTINUED OPERATIONS) ● H1 FY24 Group sales of $7.9m down by 31.6% impacted by: $’000 H1 FY24 H1 FY23 Var (%) • Strategic decision to exit low margin traditional plastic sales in line Sales 7,902 11,559 (31.6%) with Company’s strategy to become a leader in sus
Slide 18: H1 FY24 Gross Margin Recovery
H1 FY24 GROSS MARGIN RECOVERY (CONTINUED & DISCONTINUED OPERATIONS) GROSS MARGIN % 16.8% rsonal use only 14.3% 13.2% H1 FY23 H2 FY23 H1 FY24 Gross margin improvement driven by: ● Strategic decision to exit from low margin traditional plastic business in Q2 FY24 ● Freight rates and material costs ret
Slide 19: Loss Before Tax Movement
LOSS BEFORE TAX MOVEMENT (CONTINUED & DISCONTINUED OPERATIONS) rsonal use only SECOS GROUP LIMITED (ASX: SES) 19 FY24 HALF YEAR RESULTS PRESENTATION
Slide 20: Balance Sheet December 2023
BALANCE SHEET 31 DECEMBER 2023 $’000 Dec 2023 Jun 2023 Var % Cash at Bank 7,445 8,424 (11.6%) ● Cash balance at 31 December 2023 was $7.4m rsonal use only with no debt Trade and Other Receivables 2,483 4,033 (38.4%) ● Current ratio of 4.4x compared to 4.6x in June Inventories 3,444 4,095 (15.9%) 202
Slide 21: Cash Flow
CASH FLOW (CONTINUED & DISCONTINUED OPERATIONS) $’000 H1 FY24 H1 FY23 rsonal use only Opening Cash 8,424 4,122 Cash Flows from Operating Activities (386) 1,137 Cash Flows from Investing Activities (230) (372) Cash Flows from Financing Activities (352) (396) Net Cash Movement (968) 369 Foreign Exchan
Slide 22: Strategy & Outlook
STRATEGY & OUTLOOK rsonal use only SECOS GROUP LIMITED (ASX: SES) 22 FY24 HALF YEAR RESULTS PRESENTATION
Slide 23: Strategic Direction
STRATEGIC DIRECTION SECOS is leading the evolving regulatory and market landscape ● SECOS now has 100% sustainable or compostable products rsonal use only driving strategy to become a world leader in sustainable solutions ● Entering new markets to build market share with our leading Australian MyEco
Slide 24: Outlook
OUTLOOK SALES OUTLOOK IS STRENGTHENING ● Continuing retail momentum with adoption of MyEco® branded business in over 2,400 stores in Australia rsonal use only ● Continued growth in Council and waste business as more councils introduce FOGO waste programs to achieve their 2025 sustainability targets
Slide 25: Forward-Looking Statements Disclaimer
FORWARD-LOOKING STATEMENTS DISCLAIMER This presentation contains “forward-looking statements.” Such forward-looking statements may include, without limitation: rsonal use only • estimates of future earnings; • estimates of future production and sales; • estimates of future cash costs; • estimates of
Slide 26: rsonal use only
rsonal use only SECOS GROUP LIMITED (ASX: SES) 26 FY24 HALF YEAR RESULTS PRESENTATION