Inghams Group Ltd. · ASX:ING
Inghams — H1 FY2019 Earnings Presentation
23 slides from Inghams's earnings presentation, Feb 28, 2019
Slide 1: Inghams Group Limited H1 FY2019 Results Presentation
Inghams Group Limited H1 FY2019 Results Presentation 28 FEBRUARY 2019
Slide 2: Important notice and disclaimer
Important notice and disclaimer 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 information given in
Slide 3: Group performance
Broiler Farm South Australia Group performance
Slide 4: Group highlights
Group highlights Growing volumes and earnings with strong cash flow Chicken remains the competitive protein with 3.0% growth across ANZ in core Chicken & Turkey volumes Strategy implementation continues to deliver improved returns despite challenges in the New Zealand business Rising feed cost
Slide 5: Financial highlights – H1 FY19 vs FY18
Financial highlights – H1 FY19 vs FY18 Core Poultry Gross EBITDA EBITDA NPAT NPAT Net Debt EPS Interim Volume Profit (underlying) (underlying) Dividend 207.5kt $250.2m $109.6m $152.0m $55.4m $84.4m $234.5m 22.6 cps 9.0 cps ↑ 3.0% ↑ 2.9% ↑ 3.6% ↑ 30.8% ↓ 5.3% ↑ 28.5% ↑ 89.1m ↑ 27.7% Total Poultry v
Slide 6: Profit & Loss
Profit & Loss $ millions Dec-18 Dec-17 Variance % Volume and Revenue Growth Core Poultry volumes (kt) 207.5 201.4 6.1 3.0 Continued growth in Core Poultry volume and revenue of 3.0% and 5.5% respectively Feed volumes (kt) 233.3 270.4 (37.1) (13.7) Loss of NSW feed customer in March 2018 Revenue
Slide 7: EBITDA and NPAT reconciliation
EBITDA and NPAT reconciliation $ millions Dec-18 Dec-17 Variance % Profit on Sale of Assets EBITDA 152.0 116.2 35.8 30.8 Current year relates to sale of Mitavite, Cardiff and Mile End, prior year relates to Wanneroo Profit on sale of assets (53.9) (14.1) (39.8) (282.3) Impairment of assets Impairm
Slide 8: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet $ millions Dec-18 Dec-17 Variance Cashflow EBITDA 152.0 116.2 35.8 Non-cash items predominantly relate to the profit on sale of Non-cash items (47.1) (15.6) (31.5) Mitavite and Cardiff offset by other minor items, including LTIP EBITDA excluding non-cash items 104.9 100
Slide 9: Segment results
Further Processing Plant Edinburgh Parks, South Australia Segment results
Slide 10: Segment Information – Australia
Segment Information – Australia $ millions (AUD) Dec-18 Dec-17 Variance % Summary: Australia Australia Core Poultry volume growth and revenue growth of 3.6% and 6.5% respectively Core Poultry volumes (kt) 175.4 169.0 6.4 3.6 Feed volumes (kt) 157.3 191.7 (34.4) (17.9) Improved margin reflecting
Slide 11: Segment Information – New Zealand
Segment Information – New Zealand $ millions (AUD) Dec-18 Dec-17 Variance % Summary: New Zealand New Zealand Core Poultry volume decline driven by softer Retail and Wholesale demand resulting from an oversupply in the Core Poultry volumes (kt) 32.1 32.4 (0.3) (0.9) market Feed volumes (kt) 76.0 78
Slide 12: Strategy update
Feed mill Berrima, New South Wales Strategy update
Slide 13: Ingham’s – A World Class Food Company
Ingham’s – A World Class Food Company PAGE // 12
Slide 14: Project Accelerate – opportunity pipeline strong
Project Accelerate – opportunity pipeline strong Implementation of the multi year transformation project continues Optimise processing Farming operations Accelerate NZ FP network utilisation 2.0 Hatchery capacity & optimisation Premiumisation Innovation and Differentiation Focused expo
Slide 15: Strategy update
Strategy update Automation delivering benefits in improved processing yields and reduced unit costs across major Primary plants – program continues with deboning initiatives (New Zealand) and further opportunities in process streamlining Labour savings continue to be delivered through improved l
Slide 16: Strategy update - Feed
Strategy update - Feed Inghams has progressed the objective of self sufficiency for own use and the business focus is now on improving mill utilisation in relation to third party sales The Murray Bridge (SA) greenfield site is now fully operational and supplying all of Inghams requirements in SA
Slide 17: Outlook
Breeder Farm Matamata, New Zealand Outlook
Slide 18: Outlook
Outlook Demand for poultry products continue to grow at historical levels Project Accelerate initiatives remain on track and the opportunity pipeline is strong The outcome of the strategic plan will be shared in Q4 FY19 Feed costs expected to remain high through to the start of the next dome
Slide 19: Appendix
> Fie Heart of the Table. — Appendix
Slide 20: Mitavite trading results
Mitavite trading results $ millions Dec-18 Dec-17 Variance % Trading period Weeks 15.0 26.0 Completion of sale of Mitavite to Adamantem Capital was 12 October 2018 Feed volumes (kt) 12.7 19.0 (6.3) (33.2) H1 FY19 Profit & Loss includes 15 weeks of trading Trading Results results Revenue 11.8 15.
Slide 21: Restructuring costs
Restructuring costs $ millions Dec-18 Dec-17 Variance % Restructuring Restructuring 11.4 6.8 4.6 67.6 Farming exits relate to NSW (end of lease) as breeder farming capacity shifts to SA, and exits of Farming exits 1.4 1.9 contract growers in VIC FP Network optimization 8.2 - FP Network optimisat
Slide 22: Definitions
Definitions Certain non-IFRS information is referred to in this presentation. Defined below is what is included in each non-IFRS measure used throughout this presentation. EBITDA: Earnings before Interest, Tax, Depreciation and Amortisation EBIT: Earnings before Interest and Tax Net Debt: Debt
Slide 23: Risks Summary (per Financial Statements)
Risks Summary (per Financial Statements) Material business risks faced by the Group that may have a significant effect on the financial prospects of the Group include: Import restrictions: Changes to import quarantine conditions in Australia and/or New Zealand that would allow additional forms of