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Sanford FY24 Results Presentation Annual Shareholders’ Meeting 18 December 2024
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Directors David Mair Managing Director Joined the Board in November 2022. Appointed MD 01 May 2024. Sir Robert McLeod Chair, Independent Non-Executive Director Joined the Board in January 2016. Chair of the Nomination Committee Tom McClurg Independent Non-Executive Director Joined the Board in February 2024. Chair of Audit, Finance and Risk Committee Joanne Curin Independent Non-Executive Director Joined the Board in August 2024. Craig Ellison Non-Executive Director Joined the Board in December 2021. John Strowger Non-Executive Director Joined the Board in December 2023. Chair of People, Health and Safety Committee 2
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Order of Events • Chair’s Address, Sir Robert McLeod. • Managing Director’s Address, David Mair. • Resolutions • Election of Tom McClurg. • Election of Jo Curin. • Re-election of Craig Ellison. • Re-election of Sir Robert (Rob) McLeod. • Auditor remuneration. • Issue of Options to David Mair. • General Business. 3
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Chair’s Address Sir Rob McLeod 4
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Managing Director’s Address David Mair 5
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• Revenue of $582.9m up 5% on FY23. • Earnings per share increase from 10.7c to 21.1c. • Final dividend of 5.0c per share; full year dividend of 10.0c per share. 450.3 463.5 477.9 515.0 545.1 468.8 468.8 531.9 553.4 582.9 0 100 200 300 400 500 600 700 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Revenue $m 47.5 63.2 63.4 64.7 64.8 38.3 23.3 40.2 49.4 74.2 0 10 20 30 40 50 60 70 80 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Adjusted EBIT $m FY24 Growth and Progress • A record adjusted EBIT of $74.2m. • Prices were consistent with solid demand across the business. • Reduction in head office costs. 6
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Improved Profitability Improvement in Gross Margin. • Channel simplification. • Firm prices throughout FY24 for most products in all markets. • Reduction in freight costs and more favourable fx rates (USD). NPAT of $19.7m, up 97% on PCP . • Improved performance impacted by significant asset impairments (including North Island Mussels, Auckland site and other assets). • FY23 NPAT impacted by the high abnormal costs of our Sancore system investment. Implementation now complete but increased ongoing licensing and maintenance costs. 13.8 34.7 37.4 42.3 41.7 19.4 16.2 55.8 10.0 19.7 0 10 20 30 40 50 60 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 NPAT $m 26.5% 24.3% 23.5% 22.1% 19.7% 17.6% 14.6% 18.2% 19.6% 21.6% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Gross Margin % 7
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Operating Cashflow improvement, increased interest costs Operating cashflow of $73.0m. • Improved operating cashflow from increased profitability and one-off inventory rationalisation in 2H. • Operating cashflow funded $46.0m of capital expenditure, a 10c dividend and a reduction in debt of $8.7m. Net debt of $185.5m, increasing interest costs. • Reduction in net debt to below $200m. • Increased interest costs from higher rates and increased debt throughout the year. • Interest rate swaps at lower levels rolling off. 55.0 34.4 50.3 72.4 48.7 14.6 32.2 44.9 41.1 73.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 Operating Cashflow $m 0.0 5.0 10.0 15.0 20.0 0 50 100 150 200 250 HY19 FY19 HY20 FY20 HY21 FY21 HY22 FY22 HY23 FY23 HY24 FY24 Interest ($m) Net debt ($m) Sanford Net Debt and Interest Net Debt Interest (incl hedging) 8
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Five Principles of Capital Allocation Capital is people + $$ • Fund Strategies, not Projects • Zero tolerance for bad growth • Zero-based allocation • What is the right amount of capital (and the right number of people) to have in this business to support the strategy that will generate the most wealth? • (Note – no reference to historical investment) • No Capital Rationing • “Scarce but Free” • Plentiful but expensive • Know the value of your assets 9
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Cash Allocation Operating Cashflow (FY24 $73.0m incl net interest paid $16.2m) Finance for Strategic Investment Capex plan less than $46.0m (FY24) Debt repayments $3.0m Shareholder returns/dividends $10.3m (FY24) Strategic investment Organic growth Debt reduction a priority - enabling focused growth investment. 10
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Looking forward to F25 • Sanford does not give guidance due to inherent variability of the business. • Business simplification and focus on overhead costs. • Review of all assets. • Increasing costs such as fuel, feed, freight and wages and salaries. • Price pressure on some species, particularly products to China. • Need to mitigate these cost increases with productivity plans. • Targeting further reduction in debt for FY25. 11
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Questions Sir Rob McLeod, Chair 12
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Resolutions Sir Rob McLeod, Chair 13
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Resolution 1 Election of Tom McClurg Resolution 2 Election of Jo Curin Resolution 3 Re-election of Craig Ellison Resolution 4 Re-election of Sir Rob McLeod. Motion put forward by John Strowger 14
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Resolution 5 Auditor remuneration Resolution 6 Issue of Options to David Mair 15
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General Business Sir Rob McLeod, Chair 16
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Thank you 17