Bega Cheese Limited · ASX:BGA
Bega Cheese — Shareholder Meeting (October 2016)
37 slides from Bega Cheese's shareholder meeting presentation, Oct 25, 2016
Slide 1: Bega Cheese Annual General Meeting
For personal use only Bega Cheese Annual General Meeting Barry Irvin – Executive Chairman Aidan Coleman – CEO
Slide 2: Agenda
Agenda For personal use only • 2016 Annual Report • Executive Chairman’s Report • Chief Executive Officer’s Report • Questions • Approval of Remuneration Report • Election of Directors • Directors fee pool increase BEGA CHEESE LIMITED | PAGE 2
Slide 3: Welcome
Welcome For personal use only • Shareholders • Suppliers • PricewaterhouseCoopers • Addisons Lawyers • Kidder Williams • Link Market Services • Bega Cheese Staff • Apologies BEGA CHEESE LIMITED | PAGE 3
Slide 4: Executive Chairman's Report
For personal use only 2016 Annual Report Executive Chairman’s Report Barry Irvin – Executive Chairman
Slide 5: Key Messages
Key Messages For personal use only Australian dairy industry • Global supply and demand • Australian markets • Competitor behaviour Bega Cheese • Significant revenue growth • Improved financial performance • Honoured milk price commitments to farmers • Continued investment in capacity and capabiliti
Slide 6: Result Highlights Statutory
Result Highlights Statutory For personal use only • Revenue increase to $1,196m • EBITDA increase to $65.4m • PAT increase to $28.8m • EPS increase to 18.9cps • Final dividend 5.0cps BEGA CHEESE LIMITED | PAGE 6
Slide 7: Result Highlights Normalised
Result Highlights *Normalised For personal use only • Revenue increase to $1,196m • EBITDA increase to $66.0m • PAT increase to $29.2m • EPS increase to 19.1cps • Final dividend 5.0cps (full year dividend 9.5cps) *Normalised for investment in Milk Sustainability and Growth Program (FY2016 and FY2015
Slide 8: Bega Cheese and Tatura Milk Segment Normalised
Bega Cheese and Tatura Milk Segment *Normalised $m Bega Cheese $m Tatura Milk Industries For personal use only 40 40 35 35 30 30 25 25 EBITDA EBITDA 20 20 PAT PAT 15 15 10 10 5 5 0 0 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 • Segment stability reflects busi
Slide 9: Dairy Commodity Prices and Farm Gate Milk Price
Dairy Commodity Prices and Farm Gate Milk Price For personal use only • Reflects milk price before retrospective cuts by MG and Fonterra • Farm gate milk price more reflective of market in FY2017 • Global supply/demand not in balance • Some global commodity market Export trend index - global commodi
Slide 10: Product Range
Product Range For personal use only BEGA CHEESE LIMITED | PAGE 10
Slide 11: Customer Relationships
Customer Relationships For personal use only BEGA CHEESE LIMITED | PAGE 11
Slide 12: Investing in Infrastructure
Investing in Infrastructure For personal use only • Infant canning facility upgrade • Continued research and development on high value whey protein infrastructure • Automated slice and shredded cheese capacity • Continued investment in Bionutrients • Enterprise resource planning implementation BEGA
Slide 13: Balance Sheet (extract)
Balance Sheet (extract) For personal use only FY2016 FY2015 $m $m Trade and other receivables 143.7 119.5 Inventories 192.4 194.9 Property, plant & equipment 219.9 209.7 Total Assets 586.7 552.4 Trade and other payables 156.0 139.1 Borrowings 62.7 69.0 Total Liabilities 258.8 239.8 Net Assets 327.8
Slide 14: Strategic Priorities
Strategic Priorities For personal use only • Maintain the growth trajectory of the business in all key platforms • Drive efficiencies through ongoing investment in infrastructure • Maximise the value of milk components • Further investment in brand portfolio • Continue to build strong long term rela
Slide 15: Outlook
Outlook For personal use only • Revenue growth • International business growth • Analysts predicting global dairy commodity price improvements • Challenges in dairy nutritionals • Financial performance impacted by Bemore provisions • Investing in business efficiency and growth • Company of choice fo
Slide 16: For personal use only
For personal use only BEGA CHEESE LIMITED | PAGE 16
Slide 17: Chief Executive Officer's Report
For personal use only 2016 Annual Report Chief Executive Officer’s Report Aidan Coleman – CEO
Slide 18: FY2016 Results Normalised
FY2016 Results *Normalised Milk Sustainability For personal use only Per Financial and Growth Normalised Change from Consolidated Statements outcome Result prior period Period Ending 30 June 2016 $’000 $’000 $’000 $’000 % Revenue 1,195,967 - 1,195,967 83,337 7 Cost of sales (1,042,595) 604 (1,041,99
Slide 19: Cash Flow
Cash Flow For personal use only Receipts from customers 1,241 1,161 Payments to suppliers (1,175) (1,165) Interest and other costs of financing paid (3.8) (3.4) Income tax paid (3.3) (9.9) Operating activities 59.0 (17.3) Investing activities (39.6) (36.4) Financing activities (20.0) 35.4 Net (decre
Slide 20: Operations
Operations For personal use only Manufacturing • Production increased 6% to over 238,000 tonnes • Continued improvement in quality performance Environment • Energy use down 7.9% on prior year • Further investments in compliance infrastructure across key sites Capital Investment ($34 million) • Nutri
Slide 21: Milk Intake
Milk Intake For personal use only • Continued decrease in global commodity pricing • Challenging farming conditions in a number of our supply regions • 3.8% growth in milk supply • Direct intake 656 million litres BEGA CHEESE LIMITED | PAGE 21
Slide 22: Workplace Safety
Workplace Safety For personal use only • Industry leading metrics… • Injuries reduced by 69% • LTIFR < 4 BEGA CHEESE LIMITED | PAGE 22
Slide 23: Business Platforms
Business Platforms For personal use only Bega Brand • Number one Australian cheese brand with 15.7% market share • Brand portfolio available in over 40 countries Food Service and Consumer Goods • International portfolio now exceeds $100 million • Continued growth in domestic cheese cut, pack and pro
Slide 24: Customer Relationships
Customer Relationships For personal use only BEGA CHEESE LIMITED | PAGE 24
Slide 25: Reflections
Reflections For personal use only • Publicly listed 2011 • In the last 5 years • Revenue growth from $933 million to $1,196 million, a CAGR of 6.4% • Profit after tax growth from $20.4 million to $29.2 million a CAGR of 9.34% • EPS growth from 12.81 cents to 19 cents, a CAGR of 10.5% • Customers, su
Slide 26: For personal use only
For personal use only BEGA CHEESE LIMITED | PAGE 26
Slide 27: For personal use only
For personal use only BEGA CHEESE LIMITED | PAGE 27
Slide 28: Formalities and Voting
For personal use only 2016 Annual Report Formalities and Voting Barry Irvin – Executive Chairman
Slide 29: Remuneration Report
Remuneration Report For personal use only • Pages 24–28 of Annual Report • Board, Executive Chairman, CEO and other key management personnel • Market data and external advisors Resolution • Adopt remuneration report for the year ended 30 June 2016 BEGA CHEESE LIMITED | PAGE 29
Slide 30: Remuneration Report Proxies
Remuneration Report For personal use only • Proxies • Total votes – 44,794,050 (29.35%) • For – 43,275,204 (96.61%) • Open – 1,169,603 (2.61%) • Against – 349,243 (0.78%) BEGA CHEESE LIMITED | PAGE 30
Slide 31: Election of Directors
Election of Directors For personal use only • Max Roberts • Richard Platts BEGA CHEESE LIMITED | PAGE 31
Slide 32: Election of Directors - Max Roberts
Election of Directors For personal use only • Total Votes – 45,146,114 (29.58%) • For – 28,355,393 (62.81%) • Open – 1,217,600 (2.7%) • Against – 15,573,121 (34.49%) Max Roberts BEGA CHEESE LIMITED | PAGE 32
Slide 33: Election of Directors - Richard Platts
Election of Directors For personal use only • Total Votes – 45,145,688 (29.58%) • For – 30,429,826 (67.4%) • Open – 1,220,452 (2.7%) • Against – 13,495,410 (29.89%) Richard Platts BEGA CHEESE LIMITED | PAGE 33
Slide 34: Directors Fee Pool Increase
Directors Fee Pool Increase For personal use only • Current maximum aggregate yearly remuneration for Directors $900,000 • Remuneration payable to Directors for FY2016 $825,164 • Directors remuneration review by Nom and Rem committee with the assistance of independent remuneration experts (recommend
Slide 35: Directors Fee Pool Proxies
Directors Fee Pool For personal use only • Proxies • Total votes – 44,797,682 (29.36%) • For – 42,987,837 (95.96%) • Open – 1,144,263 (2.55%) • Against – 665,582 (1.49%) BEGA CHEESE LIMITED | PAGE 35
Slide 36: For personal use only
For personal use only
Slide 37: Disclaimer
Disclaimer For personal use only 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