SYNLAIT MILK LIMITED A NNOUNCEMENT
19 SEPTEMBER 2016
NOT FOR RELEASE OR DISTRIBUTION INTHE UNITED STATES
SYNLA IT' S PROFIT TR I PLES I N FY16, LA UNCHES NEXT GROWTH PHASESynlait's reported net profit after tax (NPAT) has more than tripled to $34.4 million for the financial year ending 31 July 2016.
Driven by an almost fourfold increase in canned infant formula volumes and growth in powder and cream product volumes, the positive result has also set the foundation for Synlait's next phase of growth.
"Synlait is a growth company. Our FY16 performance highlights the progress we've made since our IPO in 2013 towards our aspiration of making more frorn milk,11said Chairman Graeme Milne.
"We are continuing this momentum with an accelerated pro-rata entitlement offer to eligible shareholders1to raise approximately $98 million insupport of ournext growth phase. Investing infurther capital projects to expand our capability and capacity will put us ina strong position to pursue customer, product and market development opportunities inthe coming years, 11said MrMilne.
SYNLAIT'S STRONGEST YEA R YET
Year on year revenue increased $98.8 million from FY15's $448.1 million to $546.9 million and underlying NPAT, which removes the impacts of unrealised foreign exchange gains or losses onUSD inventory financing, is $32.7 million ($12.2 million in FY15).
"Operatingcash flow of $103.9 million in FYl 6 allowed us to reduce net debt by 18%to
$2.13.9 million. Asa result, ourleverage ratio has improved to 2.5x, " said Managing Director and CEO John Penna.
1Eligible retail shareholders arethose with their registered addressesin New Zealand. Expressly, under thB terms ofthB
offer, any shareholdersinthe USA are ineligible due totheirdomestic securitieslaws.
SynlaitMilkLtd 1028 HeslertonRoad RD13.Rakaia7783PrivateBag 806 Ashburton 7740NewZealand
P +643 373 3000
www.synlait.comPage 1of3
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FY16. We're also promoting opportunities to earn premiums, which totaled $5.7 million in FY16."
SYNLAIT'S NEXT GROWTH PHASE
Mr Milne believes Synlait has positioned itself well internationally as a trusted and innovative dairy manufacturer.
"We are looking at investing approximately $300 million in capital growth projects over the next three years to solidify this position and continue pursuing profitable opportunities to make more from milk, " said Mr Milne.
Synlait intends to invest in additional capacity for infant formula manufacturing, consumer packaging, infrastructure requirements and value added cream manufacturing.
The rights issue to shareholders is expected to raise approximately $98million ofnew equity by mid-October 2016 and it will be used for a mix of debt repayment and funding capital growth projects.
Synlait has also announced plans to start the process to dual list on the Australian Securities Exchange (ASX) and expects to commence trading on the ASXbefore the end of 2016.
"Interest from investors in Australia has grown in the past few years and dual listing on both the NZX and ASX will allow institutional and retail investors on bath sides of the Tasman to be a part ofour journey," said Mr Penna.
Synlait's 2016 Annual Report and supporting information, including full offer details for the rights issue, can be found on NZX'swebsite. Further, eligible retail shareholders will be able to obtain offer details for the rights issue atwww.synlaitmilkshareoffer.co.nz .
ENDS
For more information, please contact: Dan Walraven
Communications Manager, Synlait Milk
P: +64 27 836 7532
E:daniel.walraven@synlait.comwww.synlait.com
This announcement has beenprepared for publicationin New Zealancl anclmay not bereleasecl or clistributeclin the United States.This announcementcloes not constitute an offe-r to sell,or a solicitation of an offerto buy, securities in theUnited States ar anyotherjurisdiction. Anysecurities de-scribedin this announcementhavenot been, and willnot be, registerecl under the US SecuritiesActof 1933 andmay not beoffered or soldin the United States exceptin transactions exempt from, ornot subject to, the registrat10n of theUS Secunties Act and appllcable- USstate- secunt1es laws.
Synlait MilkLtd1028 Heslerton RoadRD13,Rakaia 7783
Private Bag 806
Ashburton 7740
New Zealand
P +643 373 3000
www.synlait.comPage 3of 3