2017 Annual General Meeting Friday, 27 October 2017 Emergency - - PowerPoint PPT Presentation

2017 Annual General Meeting

Friday, 27 October 2017

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Emergency evacuation assembly areas

John Spark

Chairman

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Agenda

• 1. Formal Items of Business & Resolutions (in the Notice of Meeting)
• 2. CEO Presentation
• 3. Chairman Presentation
• 4. Supplier Director Presentation
• 5. Questions
• 6. Close of Meeting

Conduct of Meeting

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How to vote and ask questions

To ask a question, please make your way to the closest microphone with your admission card where an attendant will introduce you.

Yellow card Vote and ask questions Orange card Ask questions only Blue card Ask questions only

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Items of Business

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Item 1 Financial statements and reports

‘To receive the financial statements of Murray Goulburn for the year ended 30 June 2017, together with the Directors’ Report and the Auditor’s Report’

Questions on Item 1

Election of Directors

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Farewell

Mike Ihlein Natalie Akers Ken Jones Graham Munzel

Item 2(a) Election of Director – Ian Goodin

Questions on Item 2(a)

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Resolution 2(a) Election of Director – Ian Goodin

‘That Ian Goodin be elected as a Director of Murray Goulburn’ To pass as an ordinary resolution:

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Open votes held by the Chairman will be voted in favour of the resolution

Resolution 2(a) Proxy votes as at 25 October 2017

Number of votes % of total votes For 12,363,572 81.04% Open – Chairman 2,320,194 15.21% Open – Other 93,292 0.61% Against 479,620 3.14%

Item 2(b) Election of Director – Brock Williams

Questions on Item 2(b)

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Resolution 2(b) Election of Director – Brock Williams

‘That Brock Williams be elected as a Director of Murray Goulburn’ To pass as an ordinary resolution:

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Open votes held by the Chairman will be voted in favour of the resolution

Resolution 2(b) Proxy votes as at 25 October 2017

Number of votes % of total votes For 12,188,108 79.89% Open – Chairman 2,379,792 15.60% Open – Other 93,292 0.61% Against 595,486 3.90%

Item 3(a) Election of Special Director – John Spark

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Harper Kilpatrick

Supplier Director

Member of Finance, Risk and Audit Committee and Supplier Relations Committee

Questions on Item 3(a)

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Resolution 3(a) Election of Special Director – John Spark

‘That John Spark be elected as a Special Director of Murray Goulburn’ To pass as an ordinary resolution:

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Open votes held by the Chairman will be voted in favour of the resolution

Resolution 3(a) Proxy votes as at 25 October 2017

Number of votes % of total votes For 12,453,127 80.81% Open – Chairman 2,100,443 13.63% Open – Other 93,292 0.61% Against 763,339 4.95%

Item 3(b) Election of Special Director – Mark Clark

Questions on Item 3(b)

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Resolution 3(b) Election of Special Director – Mark Clark

‘That Mark Clark be elected as a Special Director of Murray Goulburn’ To pass as an ordinary resolution:

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Open votes held by the Chairman will be voted in favour of the resolution

Resolution 3(b) Proxy votes as at 25 October 2017

Number of votes % of total votes For 11,569,400 76.10% Open – Chairman 2,528,301 16.63% Open – Other 93,292 0.61% Against 1,011,955 6.66%

Strategic review

Ari Mervis

Chief Executive Officer

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Challenges facing Murray Goulburn

Uncompetitive MG FMP Milk Supply Support Package Footprint and cost rationalisation requirement Supplier trust Continuing decline in milk supply has decreased competitiveness of Murray Goulburn 1 2 3 Key issues 4

3.5 2.7 1.93 0.0 1.0 2.0 3.0 4.0 FY16A FY17A FY18 Forecast (27 Oct) Milk intake (bn L)

Significant reduction in milk intake ~(45%)

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Business initiatives

Removal of MSSP Plant rationalisation Cost out initiatives Strategic review 1 2 3

Actions

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Outcomes

$183m asset de-recognition 360 positions removed $100m anticipated total benefit Whole of business review

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Overview of the Strategic Review

Commercial review Business improvement program Structural review

Strategic review

Improve earnings through:

• Margin delivery
• Reducing cost-to-serve
• Future growth options
• Addressing cost base to

support commercial strategy

• Align structure to business
• bjectives
• Corporate structure
• Capital structure
• Access to capital
• Unit Trust
• Profit sharing mechanism

Annualised benefits of $117m identified Confidential unsolicited inbound interest

John Spark

Chairman

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Transaction

• verview
• The sale to Saputo of all MG’s operating assets and operating

liabilities for total value of $1,310 million(a)

• Transaction includes MG milk supply commitments by MG for

Active MG Suppliers(b) totalling approximately $114 million

Overview of Agreement with Saputo – Transaction overview

(a) Subject to completion adjustments including for movements in the working capital in the business (b) An Active MG Supplier is a supplier who is supplying milk to MG as at the date of MG’s 2017 annual general meeting, as at the completion of the Transaction and, if required, as at 15 August 2018

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MG’s milk supply commitment

• Step up of $0.40 per kg MS to $5.60 per kg MS for milk supplied

from 1 November 2017 and, on completion of the Transaction, for milk supplied from 1 July to 31 October 2017

• Additional $0.40 per kg MS loyalty payment for FY18 to Active

MG suppliers on transaction completion Saputo’s milk supply commitment

• Active MG suppliers will also benefit from commitments from

Saputo ensuring milk collection and market pricing into the future

• Saputo will also establish a Supplier Relations and Pricing

Policy Committee

Overview of Agreement with Saputo – Milk Supply Commitment

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Transaction value to shareholders and unitholders

• Estimated net value per share / unit of $1.10 – 1.15(a)
• Represents 76 – 84% premium to the last uninterrupted

price(b)

• Estimated initial distribution of the net Transaction proceeds of

approximately $0.75 to be paid shortly after completion

• Further cash distributions expected upon conclusion of the

regulatory actions and class action, or earlier if appropriate

Overview of Agreement with Saputo – Transaction Value

(a) After working capital adjustment other costs, including the repayment of MG’s bank debt and USPP Note program (including make whole fees) at completion of the Transaction, transaction costs,

• utstanding tax or other liabilities and the expected costs of continuing to operate MG while the regulatory actions and class action continue. This does not include the payment of any amount which

may ultimately arise as a result of the regulatory actions or class action, which would reduce proceeds available for distribution to shareholders and unitholders (b) Closing price as of 21 August 2017

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Other

• MG to retain all assets and liabilities associated with the MG

Unit Trust and any liabilities in relation to the current ACCC proceedings, ASIC investigation and unitholder class action (and any similar such actions)

• After conclusion of these matters, it is expected that MG will be

wound up

• Transaction is subject to approval by an ordinary resolution of

MG’s voting shareholders, ACCC and FIRB approvals and other customary conditions

Overview of Agreement with Saputo – Other items

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The Board assessed external proposals using the following criteria

Value of proposition FMP impact Supplier representation Certainty and speed 1 2 3 4

• What value is

proposed to share / unit holders under the proposition?

• How does the

proposal assist in the ability to pay Suppliers a competitive FMP over the long term?

• How much control

and representation will Suppliers have post transaction?

• What is the timing

and execution risk of the proposal?

• Can a proposal be

executed on a timetable that will support MG now?

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Board recommendation

• The Directors of MG unanimously recommend that

shareholders vote in favour of the Transaction with Saputo

• Each Director intends to vote their MG shares in favour of the

Transaction, in the absence of a superior proposal and subject to an Independent Expert concluding that the Transaction is in the best interests of MG shareholders

• No action required by shareholders at this time

Craig Dwyer

Supplier Director

Conclusion

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Next steps and timetable

Announcement of Transaction 27 October 2017 Notice of Meeting and Explanatory Memorandum issued Early 2018 Extraordinary Shareholders Meeting to vote on Transaction Early 2018 If approved and conditions met, Transaction completion First half 2018 ACCC and FIRB regulatory approval process Supplier roadshows with Saputo 8 November

Questions

Meeting Close