Slide 1: FY2023 Results Presentation
FY2023 Results Presentation Barry Irvin – Executive Chairman Pete Findlay – CEO Gunther Burghardt – CFO 24 August 2023
Slide 2: Barry Irvin, Executive Chairman
Barry Irvin Executive Chairman
Slide 3: Key Messages
Key Messages • Branded strategy delivers • Market leading brands • Strong second half momentum • Investment in key growth categories • Accelerated alignment of organisation to branded strategy • Commodity market volatility • Rapid decline in dairy global commodity pricing in excess of 30% impacting
Slide 4: Performance Highlights
Performance Highlights Net revenue FY2023 FY2022 $3.38 $3.01 160.2 180.1 144.1 149.9 billion billion 7.5 11.0 28.5 46.3 24.2 9.4 15.2 8.0 (229.9) (75.6) FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 FY2023 FY2022 Normalised Statutory Normalised Statutory Normali
Slide 5: Our Purpose
OUR PURPOSE FY2023 Results Presentation | 5
Slide 6: Acquisitions and Portfolio
+ Acquis + Portfolio of + Broaden customer base bution Dairy and Drinks + Creating great food for a better future Australian bra + Diversified portfolio of market-leading brands jon network servicing FARMERS TASTY + Acquisition of Tatura + Acquisition of Strathmerta + Entry into nutritionals, crear
Slide 7: Sustainability and the Circular Economy
Sustainability and the Circular Economy Bega Cheese carbon target Scope 1 and 2 emissions targets established in support of Paris Agreement goals: 50% reduction in emissions intensity by 2030 40% reduction in absolute emissions by 2030 Net zero emissions by 2050 Circularity in the Bega Valley
Slide 8: Pete Findlay – CEO, Gunther Burghardt – CFO
Pete Findlay – CEO Gunther Burghardt - CFO
Slide 9: Branded Business Momentum
Branded Business Momentum • Brands sustained leading market positions and grew volume in an environment of unprecedented cost increases • Pricing initiatives substantially mitigated cost impacts • Strong growth in food service and convenience channels • Restructuring program announced to improve eff
Slide 10: Innovation and Growth in Brands
Innovation and Growth in Brands Investment in core brands • Focused marketing investment to enable strong pricing growth • Vegemite 100 Anniversary execution led to full year growth rate at nearly twice rate of spreads category • Four iconic brands with 100 years of heritage that remain contemporary
Slide 11: Innovation and Growth in Brands
Innovation and Growth in Brands Expanding the portfolio in core categories • Strong 2H branded growth • Product innovation delivered lactose free, higher protein, added probiotics and reduced sugar • Milk-based beverages flavour rotations • Development of key yoghurt innovation including expansion o
Slide 12: Growing Revenue with Iconic Australian Brands
Growing Revenue with 15% Bulk iconic Australian Brands 85% 73% Branded Branded FY2021 $3.5b FY2023 $3.0b 18% $2.5b Bulk 73% 82% Branded $2.0b Branded FY2022 FY2022 $1.5b $1.0b 27% 27% BulkBulk $0.5b 73% 73% Branded Branded FY2021 $0.0b FY2021 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20
Slide 13: Brand Shares | Australian Retail Categories
Brand Shares | Australian Retail Categories Category size Category Bega Market Category Brands $m Annual growth share Position Fresh white milk 2,118 13% 12% 3 Yoghurt 1,740 11% 26% 1 Milk based beverages 918 13% 52% 1 Spreads 700 5% 31% 1 Chilled juice 657 6% 22% 2 Creams and custards 596 16% 9% 4
Slide 14: Consumer Trends Shaping the Future Portfolio and Activation Priorities
Consumer Trends Shaping the Future Portfolio and Activation Priorities BETTER VALUE FUNCTIONAL HEALTH DEMOGRAPHIC EVOLUTION SUSTAINABILITY Cost of living pressures see Continuing desire for Australia trends towards Sustainable solutions consumers shift to seek better functional foods that enhance sm
Slide 15: Branded Market Strategy
Branded Market Strategy • Grow core grocery through focused innovation and brand execution excellence • More people consuming more often across more occasions • Greater presence in food service and convenience channels • Leverage our sales force and national cold chain distribution network • Dare th
Slide 16: Australian Milk Production
Australian Milk Production Industry 12b • Decline in milk production 10b • Relatively minor rationalisation of industry manufacturing capacity 8b • Reduced milk availability and industry over capacity increasingly creates disconnect between farm gate milk price 6b and commodity markets Bega 4b • Imp
Slide 17: Farm Gate Milk Price and Market Returns
Farm Gate Milk Price and Market Returns • Domestic consumer markets reflecting farm gate price • Global commodity prices highly volatile and now disconnected from farm gate milk price • Further decrease in total milk supply in FY2023 • Robust competition for milk procurement remains Export trend ind
Slide 18: Manufacturing Network
Manufacturing Network FY2023 Results Presentation | 18
Slide 19: Dairy Infrastructure Supporting Brands & Markets
Dairy Infrastructure Supporting Brands & Markets Site Key Products Site Key Products Site Key Products • Milk based beverages • Milk receival & Wetherill Park (MBB) Crestmead • White milk processing Tatura • Cream cheese & Infant Penrith • White milk & cream formula • Lactoferrin • White milk & crea
Slide 20: Dairy Commodity Strategy
Dairy Commodity Strategy • Right sizing commodity infrastructure • Further aligning commodity capacities and capabilities with branded business • Focus on higher value commodities and nutritional products • Ensure capability to respond to international commodity market opportunities when they arise
Slide 21: Profit and Loss
Profit and Loss Normalised Statutory FY2023 FY2022 +/- % FY2023 FY2022 $ millions $ millions Net Revenue 3,376.0 2,985.8 13% Net Revenue 3,376.0 3,009.9 EBITDA 160.2 180.1 -11% EBITDA 144.1 149.9 D&A (101.9) (103.7) 2% D&A / Impairment (377.8) (103.7) EBIT 58.3 76.4 -24% EBIT (233.7) 46.2 Net Financ
Slide 22: Reconciliation of Normalised Result
Reconciliation of Normalised Result Consolidated Per Period Ending 30 June 2023 Financial Vegemite Other Tax Normalised ($ million) Statements Way Impairment Restructuring Costs Consolidation Outcome Revenue 3,376.0 - - - - - 3,376.0 Cost of sales (2,719.6) - - - - - (2,719.6) Gross Profit 656.4 - -
Slide 23: Profitability Overview
Profitability Overview • Complex, diverse and rapidly changing circumstances • Strong double-digit growth – price, volume and product mix improvements for the Branded business • By Q4 cumulative price increases had offset increased costs • FY2023 Volume growth in Branded segment delivered $28m of EB
Slide 24: Key Performance Measures
Key Performance Measures $ millions unless otherwise stated FY2023 FY2022 Change (Normalised) Net Revenue Growth vs prior year 13% 45% • FY2022 first full year of branded Dairy and Gross margin (%of Net Revenue) 19.4% 22.3% -2.9 pts Drinks • FY2023 branded Net Revenue +16% (price and EBITDA 160.2 18
Slide 25: Brand Momentum and Commodity Impact
Brand Momentum and Commodity Impact EBITDA Margin by Quarter (% Net Revenue) • Successful price execution in branded business in 1H • Continued branded momentum into FY2024 • Rapid decline in global commodities in 2H • Commodity impact continues in FY2024 Q1 Q2 Q3 Q4 Branded Bulk FY2023 Results Pres
Slide 26: Segments
Segments ($ million) Branded Bulk Unallocated Inter-segment Group Total Overheads elimination Revenue $2,880.7 $797.4 - $(302.1) $3,376.0 Growth vs FY2022% 16% 8% - 46% 12% Normalised EBITDA $128.8 $43.1 $(10.4) $(1.3) $160.2 Increase/(decrease) vs FY2022 EBITDA $(6.2) $(17.9) $7.1 $(2.9) $(19.9) BR
Slide 27: Cash Flow
Cash Flow FY2023 FY2022 $m $m Receipts from customers 3,611.1 3,342.8 • Operating cash flow impacted by lower EBITDA in the bulk business, and Payments to suppliers and employees (3,607.8) (3,179.2) higher inventory costs due to inflation Net proceeds from the Trade Receivables Facility 36.6 18.9 •
Slide 28: Balance Sheet
Balance Sheet FY2023 FY2022 $m $m Cash 66.4 44.9 • FY2023 decrease in Property, Plant and Trade and other receivables 306.1 274.7 Equipment and corresponding increase in Lease Liability reflect the Sale and Leaseback Inventories 428.7 317.6 transaction of the Port Melbourne site Property, plant and
Slide 29: Approach to Corporate Social Responsibility
Approach to Corporate Social Responsibility Our focus is on the five areas where we can have the greatest impact Food and Diversity, inclusion Greenhouse Packaging Water nutrition and equality gases sustainability sustainability Highlights FY2023 Highlights FY2023 Highlights FY2023 Highlights FY2023
Slide 30: Where We Are Today
Where We Are Today • Iconic leading brands • Integrated manufacturing and processing infrastructure • Agile response to changing markets • Strong strategic positioning • Both branded acquisitions ahead of business case • Opportunities for further branded pricing and innovation, efficiency programs a
Slide 31: Looking Forward
Looking Forward • Creating value for our shareholders • Implementing new five-year strategic plan • EBITDA target $250m plus, ROFE 10% or greater over that timeframe • Revenue and growth primarily driven by the branded business • Less exposed to milk volume farm gate milk price volatility • Restruct
Slide 32: Barry Irvin, Executive Chairman
Barry Irvin Executive Chairman
Slide 33: Questions?
Questions? FY2023 Results Presentation | 33
Slide 34: Disclaimer
Disclaimer This presentation contains a summary of information about Bega Cheese Limited ACN 008 358 503 (BGA) and its subsidiaries (Bega Group). The information does not purport to be complete and should be read in conjunction with other BGA ASX announcements. The presentation may contain statement