Bega Cheese Limited · ASX:BGA
Bega Cheese — H1 FY2021 Earnings Presentation
26 slides from Bega Cheese's earnings presentation, Feb 24, 2021
Slide 1: Half Year 2021 Results Highlights Presentation
ASX ANNOUNCEMENT Half Year 2021 Results Highlights Presentation I enclose the Half Year 2021 Results Highlights Presentation to be discussed on the Half Year Result 2021 Conference Call scheduled for 11:00am today. 24 February 2021 For further information please contact Brett Kelly Company Secretary
Slide 2: 1H FY2021 Results Presentation
1H FY2021 Results Presentation Barry Irvin – Executive Chairman Paul van Heerwaarden – CEO Pete Findlay – CFO Page 1
Slide 3: Key message
Key message Strong financial performance, balance sheet strengthening Continuing to manage the impact of COVID-19 Volatile international dairy commodity market New lactoferrin capacity completed and commissioned Operational Performance Review outcomes implemented National dairy productio
Slide 4: Transformation to becoming 'The Great Australian Food Company'
Transformation to becoming ‘The Great Australian Food Company’ FOURTH TRANSFORMATION 2021 2017 THIRD TRANSFORMATION ACCELERATING GROWTH 2011 SECOND TRANSFORMATION NEW BUSINESS PLATFORM FIRST TRANSFORMATION 2008/09 STRUCTURED FOR THE FUTURE 2007 GROW AND DIVERSIFY Customer and consumer 2001 BUILDING
Slide 5: Bega values
Bega values Golden Safety Rules Safety always Page 4
Slide 6: Performance highlights
Performance highlights Revenue decreased by 4.5% to $708 million Statutory EBITDA increased 68% to $65.8 million Normalised EBITDA increased by 51% to $73.0 million Working capital decreased by 5% to $168.3 million Net debt pre capital raise decreased by 21% to $247.5 million Page 5
Slide 7: Revenue analysis
Revenue analysis Increase in international branded sales Increase in lactoferrin sales Increase in dairy toll manufacture (not reflected in revenue) Conclusion of milk supply guarantee arrangements (Koroit) Decrease in global dairy commodity prices and appreciation of Australian dollar D
Slide 8: Key measures
Key measures 1H FY2020 1H FY2021 1H FY2020 Key Measures $’000 $’000 Statutory performance Revenue 707,733 741,151 Bega Foods and Koroit acquisitions EBITDA 65,810 39,262 meeting earnings expectations EBIT 40,826 17,688 Margin improvement reflecting business PAT 21,707 8,545 diversity and product
Slide 9: Reconciliation of normalised result
Reconciliation of normalised result Per Financial Acquisition Legal Normalised Consolidated Statements Costs Costs Outcome Period Ending 27 December 2020 $’000 $’000 $’000 $’000 Revenue 707,733 - - 707,733 Cost of sales (564,734) - - (564,734) Gross profit 142,999 - - 142,999 EBITDA 65,810 6,337 842
Slide 10: Balance sheet
Balance sheet 1H FY2021 FY2020 Dec $m Jun $m Cash 251.2 22.9 Balance sheet reflects proceeds Trade and other receivables 97.8 117.4 of capital raise Inventories 296.2 257.4 Net debt leverage ratio pre Property, plant and equipment 435.0 446.0 capital raise reduced from Intangible assets 545.8 54
Slide 11: Cash flow
Cash flow 1H FY2021 1H FY2020 Dec $m Dec $m Receipts from customers 787.2 867.0 Payments to suppliers (763.0) (814.6) Interest and other costs of financing paid (5.0) (6.2) Income tax paid (12.3) (8.2) Operating activities 6.8 38.1 Investing activities (10.7) (32.2) Repayment of borrowings (148.6) (
Slide 12: Our consumer brands
Our consumer brands Spreads category growth of 9.4% for the six months to December to a year ago Bega category growth of 13.6% and market share increased to 30.9% Sales of Bega Simply Nuts has doubled with market share of naturals increasing to 21% B honey has grown 11.4% share in Coles afte
Slide 13: Dairy nutritionals
Dairy nutritionals Continued growth in new channels particularly Indonesia Significant sector challenges reflecting changed market and delivery channels in China Reduced demand from several longer term customers Subsequent to 1H FY2021 Reckitt Benckiser advised they are exiting Derrimut nutr
Slide 14: Dairy commodity and farm gate milk prices
Dairy commodity and farm gate milk prices Significant dairy commodity price decrease immediately following COVID-19 Consistent improvement in global pricing offset by appreciating Australian currency Stable national dairy supply Continued competitive procurement environment Announced 10c p
Slide 15: Operations review
Operations review Total production increased 0.5% to 155,170 tonnes Total milk processed including toll arrangements increased by 1.6% Tolling arrangements improving plant utilisations and efficiencies Direct milk intake decreased; Conclusion of milk supply guarantee at Koroit Strong com
Slide 16: Lion Dairy & Drinks acquisition
Lion Dairy & Drinks acquisition Acquisition completed 25 January Implementing 100 day transition plan Organisational re-structure Procurement program Milk management and manufacturing integration On track to achieve synergy target for FY2022 Business improvement and growth initiatives
Slide 17: Lion Dairy & Drinks transaction overview
Lion Dairy & Drinks transaction overview Bega Cheese Limited (“Bega”) has entered into a binding agreement to acquire Lion Dairy & Drinks Pty Ltd (“LD&D”) for $534 million1 Implies EV / EBITDA multiple of 10.9x pro forma normalised LTM Sep-20 EBITDA2 of $56 million and 6.3x post synergy realisat
Slide 18: Lion Dairy & Drinks highlights
Lion Dairy & Drinks highlights Attractive portfolio of Milk-Based Beverages, Yoghurt, Juice, White Milk, Plant-Based Beverages, Culinary and other brands Some of Australia’s iconic dairy and beverage brands with #1 and #2 market share positions in its core categories Australia’s largest national col
Slide 19: Brand portfolio
Brand portfolio Milk Based White Milk Yoghurt Juice and Dairy Foods Spreads and Water Ice Nutritionals Beverages Drinks condiments Culinary Plant-based Page 18 * Vitasoy Australia Products – Joint Venture
Slide 20: Combined manufacturing footprint
Combined manufacturing footprint Tolga Malanda 8 White Milk and Milk Based Beverages 20 1 Milk Based Beverages Hub Manufacturing facilities 3 Cheese Kingaroy Dairy powder and fats Crestmead 2 1 Peanuts 2 Juice Bentley 1 Yoghurt Wetherill Park Penrith Spreads Salisbury Leeton Smithfield 1 Wodonga ACT
Slide 21: 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 22: 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 23: Where are we today?
Where are we today? Financial results at expectation Performance reflecting strategy and benefit of Bega Foods and Koroit acquisitions Kraft legal case concluded in Bega’s favour and awaiting outcome of Fonterra case Organisational process review benefits being realised Challenges in dairy
Slide 24: Our priorities
Our priorities Ensure LD&D acquisition seamless for customers and dairy farmer suppliers Implement ‘One Bega’ program for the combined Bega/LD&D business Safety, people and culture focus Execute synergy opportunities to realise first full year target of $36 million Focused investment on le
Slide 25: Bega Cheese Limited
Page 24 Bega Cheese Limited
Slide 26: 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