Farm Pride Foods Limited · ASX:FRM
Farm Pride Foods — Shareholder Meeting (November 2017)
37 slides from Farm Pride Foods's shareholder meeting presentation, Nov 16, 2017
Slide 1: Farm Pride Foods Limited 2017 AGM
FARM PRIDE FOODS LIMITED For personal use only 2017 AGM 16 November 2017 People ‐ Performance ‐ Welfare
Slide 2: Farm Pride Foods Board of Directors
Farm Pride Foods Board of Directors For personal use only Peter Bell Non-executive Chairman Malcolm Ward Non-executive Director/ Audit Chairman Bruce De Lacy Executive Director/CEO
Slide 3: Farm Pride Foods Management Team
Farm Pride Foods Management Team For personal use only Bruce De Lacy CEO Don Woodhouse Business Manager – Manufacturing Brent Phillips National Sales Manager Darrell Boyle National Farms Manager
Slide 4: FY17 Performance Snapshot
Farm Pride Foods – FY17 Performance Snapshot For personal use only Revenue $97.78M up 4.3% EBITDA $15.71M down 1.7% Profit after tax $ 8.48M up 4.3% Net Assets $46.64M Cash at 30 June $ 8.04M Net Debt $ 0.33M Earnings per Share $ 0.15
Slide 5: FY17 Financial Performance
FY17 Financial Performance For personal use only ($'000) 2015 2016 2017 Revenue 91,341 93,765 97,778 Earnings before Interest & Tax (EBIT) 7,218 11,485 12,232 EBIT Depreciation & Amortisation (EBITDA) 12,190 15,988 15,713 Net Profit before tax (NPBT) 7,218 11,485 12,232 Net Profit after tax (NPAT) 5
Slide 6: Improved Performance
For personal use only Improved Performance
Slide 7: Improved Performance Continues
Improved Performance Continues For personal use only
Slide 8: Net Cash Flow From Operating Activity
Net Cash Flow From Operating Activity For personal use only
Slide 9: Half Year Revenue
For personal use only Half Year Revenue
Slide 10: FY17 Financial Performance Summary
FY17 Financial Performance Summary For personal use only • Balance sheet is now healthy. • The company is prioritising a number of capital projects. • There has been very little capital expenditure over the last five years apart from new farm construction. • Processing plant and equipment is very ol
Slide 11: OHS Performance
OHS Performance For personal use only Target: 20% decrease by FY17 19% decrease Total Recordable Injury Frequency Rate is calculated as the number of injuries per million hours worked. Includes lost time and medical injuries.
Slide 12: Farm Pride Foods – Leading the way
Farm Pride Foods – Leading the way For personal use only Farm Pride is working hard to In response to changing consumer satisfy the changing demands of its demand and buying habits, Farm customers. Pride has moved production investment to non-cage methods. New free range farm in northern Victoria to
Slide 13: Shareholder value proposition remains unchanged
Shareholder value proposition remains unchanged For personal use only Farm Pride focus is to generate long term sustainable returns for all shareholders EBIT NOPAT Targeting shareholder Investment case Drivers drivers value creation Targeting Modest capex ‐ Cage egg Mid single‐digit EPS low single‐
Slide 14: Farm Pride Foods – Today
Farm Pride Foods – Today For personal use only The Company continues to pursue its long term strategy of creating shareholder value. To this end in the last 12 months the Company has: • Purchased land in Northern Victoria for a new poultry farm. • Commenced construction at this site. • Purchased the
Slide 15: Farm Pride Foods Northern Victoria Expansion
Farm Pride Foods Northern Victoria Expansion For personal use only The company has purchased 650 acres of land in northern Victoria. This site will be utilised to satisfy the growing requirement of our customers for cage free eggs and free range eggs. Hens will be ranged at 1,500 per hectare. Infras
Slide 16: Farm Pride Foods Queensland Expansion
Farm Pride Foods Queensland Expansion For personal use only Announced ASX - 6 October 2017 Farm Pride Foods entered into an agreement with the Administrators to acquire the business and associated assets of Darling Downs Fresh Eggs, an egg business operating in Kincora, Queensland. The assets includ
Slide 17: The Australian Competition Commission
The Australian Competition Commission For personal use only The Full Federal Court has dismissed the ACCC’s appeal in its matter against the Australian Egg Corporation Limited (AECL), “The Farm Pride Board Farm Pride Foods Ltd (Farm Pride) and others. and Management have introduced new controls The
Slide 18: The Cyclic Nature of the Egg Industry
The Cyclic Nature of the Egg Industry For personal use only • Cyclical volatility is the norm for the egg industry. Profitability is impacted by changes in feed cost, national egg supply and disease. • The Board indicated when the FY17 Accounts were released that due to increased feed costs, anticip
Slide 19: The Cyclic Nature of the Egg Industry
The Cyclic Nature of the Egg Industry For personal use only Weekly Times 8 Nov 2017
Slide 20: Feed Costs
Feed Costs For personal use only ABARES has reported that overall, they expect the December 2017 forecast for Australia’s winter crop production in Australia to be lower than the September 2017 forecast, but likely still around the 10 year average to 2015–16. Although our feed prices are higher than
Slide 21: Shareholder Expectation vs. Reality
Shareholder Expectation vs. Reality For personal use only We continue to maintain a small management team that remains fully focused on the business. The market is changing rapidly with the major supermarket chains driving We have aging plant and price down and increasing equipment that requires the
Slide 22: Strategy Pressure Points
Strategy Pressure Points For personal use only •Retailer competition driving prices lower •Domestic AI risk increasing reflecting overseas experience. •Activist lobby continually trying to drive change in consumer preferences. •Climate change is a driver for increasing grain costs and future welfare
Slide 23: Strategy Opportunities
Strategy Opportunities For personal use only • Improve operational efficiency across the supply chain recognising the importance of hen welfare, hen welfare management and new manufacturing technology. • Maximise sales growth opportunities using cost effective promotional and marketing whilst contin
Slide 24: Strategy - Revenue Growth
Strategy ‐ Revenue Growth For personal use only • Align with those customers seeking to grow own brand product offerings. • Seek out and grow brand to better appeal to those looking to align with a quality brand and value outcome. • Invest in technology to grow higher value processed egg products. •
Slide 25: Strategy Growth
Strategy Growth For personal use only • Adopt appropriate cost effective smart marketing and promotional campaigns. • Leverage work undertaken by Australian Eggs. • Seek out further vertical integration opportunities including feed mills and further enhanced egg cartons. • Invest in lower cost base
Slide 26: Egg Wars vs Financial Performance
Egg Wars vs Financial Performance For personal use only
Slide 27: For personal use only
“Free-range egg sales now account for 40 per cent of For personal use only grocery store purchases — double that of a decade ago” “Companies that are better equipped to respond to market requirements and anticipate changing conditions are expected to achieve long‐run competitive advantage and superi
Slide 28: National Standards and Guidelines update
National Standards and Guidelines update For personal use only Farm Pride is working with the industry and its stakeholders to facilitate consistency of legislation across states and territories for improved and sustainable animal welfare outcomes. New Standards and Guidelines are being developed th
Slide 29: Consumer Trends
Consumer Trends For personal use only Courtesy AECL
Slide 30: Activists – Consumer rights
Activists – Consumer rights For personal use only The majority of our production is still cage eggs. The Animal Activist lobby has been very critical of industry and producers for failing to agree on a phase out of caged systems. The immediate removal of cages is something the Company simply cannot
Slide 31: Egg Farms are Capital Intensive
Egg Farms are Capital Intensive For personal use only
Slide 32: Farm Pride Foods – Leading the way
Farm Pride Foods – Leading the way For personal use only Expenditure on supporting our brand has increased. Historically we have invested very little in promoting our brand. Brand reputation has become a critical driver of repeat purchase. We will also continue to maintain our investment in Oritain
Slide 33: Farm Pride Foods – Leading the way
Farm Pride Foods – Leading the way For personal use only
Slide 34: Aussies on a health-kick as more shoppers opt for natural wholefoods
Aussies on a health-kick as more shoppers For personal use only opt for natural wholefoods “New research shows Aussies are more health conscious than ever, increasingly stocking their kitchens with natural wholefoods. As Mother Nature’s multi‐vitamin, eggs are a perfect addition to the shopping list
Slide 35: Egg Consumption
Egg Consumption For personal use only “New research, unveiled for World Egg Day, highlights popularity of eggs with 15 million eaten in Australia each day”. “Aussies have shown a real taste for eggs in new research unveiled to celebrate World Egg Day. Consumers now eat 35 per cent more eggs than the
Slide 36: How many eggs do you eat each week?
How many eggs do you eat each week? For personal use only
Slide 37: Farm Pride Foods Limited Questions?
Farm Pride Foods Limited For personal use only Questions?
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