Tassal Group Lim ited Tassal Group Lim ited Results Presentation - - PowerPoint PPT Presentation
Tassal Group Lim ited Tassal Group Lim ited Results Presentation Financial Year Ended 30 June 2008 27 August 2008 The follow ing slides should be read in conjunction w ith Tassal Group Lim iteds Appendix 4 E: Prelim inary Final Report for
The follow ing slides should be read in conjunction w ith Tassal Group Lim ited’s Appendix 4 E: Prelim inary Final Report for the Year Ended 3 0 June 2 0 0 8 lodged w ith the Australian Securities Exchange on 2 7 August 2 0 0 8
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Australian Securities Exchange on 2 7 August 2 0 0 8
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Tassal is pleased to announce a strong Full Year Norm alised result for 2 0 0 8 1 Tassal is pleased to announce a strong Full Year Norm alised result for 2 0 0 8 1
3 0 -June-2 0 0 8 3 0 -June- 20 0 7 Change Change U d l i ti l lt $ ’0 0 0 $ ’0 0 0 $ ’0 00 % Underlying operational result $ ’0 0 0 $ ’0 0 0 $ ’0 00 % Revenue (from all sources) 167,266 $ 144,001 $ 23,265 $ 16.16% EBITDA 34,661 $ 28,431 $ 6,230 $ 21.91% Depreciation (2,457) $ (1,623) $ (834) $ 51.39% EBIT 32,204 $ 26,808 $ 5,396 $ 20.13% Borrowing Costs (4 114) $ (4 590) $ 476 $ (10 37)% Borrowing Costs (4,114) $ (4,590) $ 476 $ (10.37)% Profit before income tax expense 28,090 $ 22,218 $ 5,872 $ 26.43% Tax expense (6,890) $ (6,230) $ (660) $ 10.59% NPAT 2 1 ,2 0 0 $ 1 5 ,9 8 8 $ 5 ,2 1 2 $ 3 2 .6 0 % EPS 0 .1 7 1 $ 0 .1 4 0 $ 0 .0 3 1 $ 2 1 .8 3 %
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1. Underlying operational earnings (i.e. normalised earnings) have been adjusted for the impact of AASB141 and non- recurring items to reflect the underlying financial performance of the Group
Key Highlights: y g g
production and higher effective price for domestic and export
contractors and packaging) was reduced to $6.54 kg hog [ FY2007: $6.91kg hog]
pursuing growth opportunities, accelerating capital investment and reducing debt
achieving synergies on supply and trading terms
Accelerated capital investment focused on growth, efficiency and risk mitigation
breeding program 4
Grow th in dom estic dem and for Salm on + trout leading to strong volum e grow th g g g 16,000 16,000 10 000 12,000 14,000 '000) 10 000 12,000 14,000 '000) 6,000 8,000 10,000
Export Domestic 6,000 8,000 10,000
Export Domestic ‐ 2,000 4,000 Ho Domestic ‐ 2,000 4,000 Ho Domestic 2004 2005 2006 2007 2008 Year ended 30 June 2004 2005 2006 2007 2008 Year ended 30 June 5
Tassal continues to consistently deliver a reducing cost base
Underlying finished goods cost * Underlying finished goods cost *
Driven by improved fish size fish survival FCR’s
$10.52 $9.49 $8.84 $6 91 $8 00 $10.00 $12.00 Hog Kg. $10.52 $9.49 $8.84 $6 91 $8 00 $10.00 $12.00 Hog Kg.
Automation restructuring
$6.91 $6.54 $4.00 $6.00 $8.00 ed cost per H $6.91 $6.54 $4.00 $6.00 $8.00 ed cost per H
track to deliver FY2015 global best practice target of $3 50 kg
$‐ $2.00 2004 2005 2006 2007 2008 Finishe $‐ $2.00 2004 2005 2006 2007 2008 Finishe
$3.50 kg
( nb: Data not broken dow n due to com petitor sensitivities)
2004 2005 2006 2007 2008 Year ended 30 June 2004 2005 2006 2007 2008 Year ended 30 June
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* Underlying finished goods cost = cost of fish, processing, third party contractors, and packaging expressed as a cost per head on gutted equivalent kilogram
Strong grow th in underlying NPAT and EPS Strong grow th in underlying NPAT and EPS
$0 16 $0.18 $25,000 $0 16 $0.18 $25,000 $0 10 $0.12 $0.14 $0.16 $15,000 $20,000 ing EPS g NPAT $0 10 $0.12 $0.14 $0.16 $15,000 $20,000 ing EPS g NPAT
EPS CAGR: FY2 0 0 4 – FY2 0 0 8 3 7 .6 %
$0.06 $0.08 $0.10 $10,000 Underlyi Underlyin $0.06 $0.08 $0.10 $10,000 Underlyi Underlyin $‐ $0.02 $0.04 $0 $5,000 2004 2005 2006 2007 2008 $‐ $0.02 $0.04 $0 $5,000 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Year ended 30 June Underlying NPAT Underlying EPS 2004 2005 2006 2007 2008 Year ended 30 June Underlying NPAT Underlying EPS
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Continuing to return an increasing dividend paym ent Continuing to return an increasing dividend paym ent to shareholders – payout ratio circa 4 0 %
7 00 $10 000 7 00 $10 000
DRP active - cash saved is being
5.00 6.00 7.00 $8,000 $10,000 000) 5.00 6.00 7.00 $8,000 $10,000 000)
utilised to grow the business from both an operational and infrastructure
3.00 4.00 $4,000 $6,000 ts per share ividend paid ($'0 3.00 4.00 $4,000 $6,000 ts per share ividend paid ($'0
perspective, as well as reducing gearing
‐ 1.00 2.00 $0 $2,000 Cent Di ‐ 1.00 2.00 $0 $2,000 Cent Di 2004 2005 2006 2007 2008 Year ended 30 June Quantum ($'000) CPS 2004 2005 2006 2007 2008 Year ended 30 June Quantum ($'000) CPS
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Strong underlying ( “Norm alised”) NPAT $ 2 1 .2 m illion ( + 3 3 % com pared to pcp) Strong underlying ( Norm alised ) NPAT $ 2 1 .2 m illion ( + 3 3 % com pared to pcp)
reduction in cost of growing and processing
“Normalised” results remove the impact of AASB 141 “Agriculture” and add
FY2 0 0 8
Reported AASB 1 4 1 im pact Non-recurring item s im pact Underlying
result
g back non-recurring items. Non-recurring items relate to restructuring
FY2 0 0 8
result $ ’00 0 $’00 0 $’000 $ ’0 00 Revenue (from all sources) 288,311 $ (121,045) $
167,266 $ EBITDA 33,614 $ (983) $ 2,030 $ 34,661 $ EBIT 31,157 $ (983) $ 2,030 $ 32,204 $ Profit before income tax expense 27,043 $ (983) $ 2,030 $ 28,090 $ Income tax expense (6,576) $ 295 $ (609) $ (6,890) $
and rebalancing of Tassal’s underlying marine and processing operating infrastructure during
FY2 0 0 7
Reported AASB 1 4 1 im pact Non-recurring item s im pact Underlying
result Income tax expense (6,576) $ 295 $ (609) $ (6,890) $ Net profit after income tax expense 20,467 $ (688) $ 1,421 $ 21,200 $
FY2008 – costs in line with previously advised quantum. Not recurring in FY2009 d b d
$ ’0 0 0 $ ’0 0 0 $ ’0 0 0 $ ’0 0 0 Revenue (from all sources) 245,919 $ (101,918) $
144,001 $ EBITDA 34,370 $ (7,150) $ 1,211 $ 28,431 $ EBIT 32,747 $ (7,150) $ 1,211 $ 26,808 $ Profit before income tax expense 28,157 $ (7,150) $ 1,211 $ 22,218 $ Income tax expense (8,012) $ 2,145 $ (363) $ (6,230) $ Net profit after income tax expense 20 145 $ (5 005) $ 848 $ 15 988 $
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FY2009 and beyond.
Net profit after income tax expense 20,145 $ (5,005) $ 848 $ 15,988 $
Strong grow th in sales revenue ( 1 6 .1 % ) and sales volum e ( 1 4 .3 % )
Volum e - FY2 0 08 Volum e - FY2 00 7 Change Change 00 0 0 00 0 0 0 % Salm on Tassal - Domestic 11,641 10,381 1,260 12.14% Superior Gold - Domestic 388 388 Domestic Salmon 12 029 10 381 1 648 15 87%
Domestic market delivered solid growth profile
Domestic Salmon 12,029 10,381 1,648 15.87% Export 1,974 1,612 362 22.45% Overall 14,003 11,993 2,010 16.76% Trout Tassal - Domestic
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Superior Gold - Domestic 87 87 Domestic Trout 87 87
Positioning platform for profitable increased export market penetration laid down
Export
87 331 244
Total 14,090 12,324 1,766 14.33% Revenue - FY20 0 8 Revenue - FY2 00 7 Change Change
laid down Superior Gold in line with expectations Overall price increase
FY20 0 8 FY2 00 7 Change Change $ '0 00 $'00 0 $ '0 00 % Salm on Tassal - Domestic 138,762 125,584 13,178 10.49% Superior Gold - Domestic 6,803 6,803 Domestic Salmon 145,565 125,584 19,981 15.91% Export 17,235 13,514 3,721 27.54% Overall 162 800 139 098 23 702 17 04%
Overall price increase
Overall 162,800 139,098 23,702 17.04% Trout Tassal - Domestic
(2,441) $ (100.00)% Superior Gold - Domestic 1,502 1,502 Domestic Trout 1,502 2,441 (939) $ (38.46)% Export
1,502 2,441 (939) $ (38.46)%
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Total 164,303 141,539 22,764 16.08%
Balance Sheet strengthened and net debt reduced to $32.6 million g $ Tassal is conservatively geared leading into 2009 FY2008 Gearing – 17 24% (Net debt - $32 59m) FY2008 Gearing 17.24% (Net debt $32.59m) FY2007 Gearing – 49.71% (Net debt - $52.18m) FY2006 Gearing – 55.32% (Net debt - $44.79m)
As at As at As at As at As at As at 30- Jun- 08 30- Jun- 07 30- Jun- 06 30- Jun- 08 30- Jun- 07 30- Jun- 06 $'000 $'000 $'000 $'000 $'000 $'000 Current Assets Current Liabilities Cash and cash equivalent s 7,093 1,654 1,459 Trade and ot her payables 29,133 24,356 17,450 Trade and ot her receivables 19,391 9,811 8,609 Borrowings 16,119 7,739 34,940 Invent ories 37,239 33,110 11,270 Provisions 2,932 2,617 2,587 Biological asset s 83,289 66,660 58,362 Ot her 306 338 270 Ot her financial asset s 847 998 Ot her financial asset s 847 998 Ot her 906 892 418 Total Current Assets 148,765 113,125 80,118 Total Current Liabilities 48,490 35,050 55,247 Non- Current Liabilities Non- Current Assets Invest ment s account ed for using Borrowings 23,567 46,091 11,313 equit y met hod 7,439 6,370 6,042 Deferred t ax liabilit ies 18,052 12,167 1,952 Ot her financial asset s 135 143 143 Provisions 646 602 536 Propert y, plant and equipment 85,095 63,892 48,398 Ot her 27
23,118
14,851 14,851 14,851 Ot her 467 489 473 Total Non- Current Assets 131,105 85,745 69,907 Total Non- Current Liabilities 42,292 58,860 13,801 Total Assets 279,870 198,870 150,025 Total Liabilities 90,782 93,910 69,048 N t A t 189 088 104 960 80 977
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Net Assets 189,088 104,960 80,977
p y p ($ ) ($0.7m)
3 0 - June-2 0 0 8 3 0 - June-2 0 0 7 Change Change $ '0 0 0 $ '0 0 0 0 0 0 % Bilogical asset component 6,002 $ 5,307 $ 695 $ 13.10% Tassal - finished goods 24,205 $ 24,185 $ 20 $ 0.08% Superior Gold - finished goods 3,374 $
3,374 $ Raw materials 3,658 $ 3,618 $ 40 $ 1.11% Raw materials 3,658 $ 3,618 $ 40 $ 1.11% Total 37,239 $ 33,110 $ 4,129 $ 12.47% Volum e - 3 0 June 2 0 0 8 Volum e - 3 0 June 2 0 0 7 Change Change Sales Tonnes Sales Tonnes 0 0 0 % Sales Tonnes Sales Tonnes 0 0 0 % Tassal - Product 1,550 1,800 (250) (13.89)% Superior Gold - Product 166
Total 1,716 1,800 (84) (4.69)% Volum e - 3 0 June 2 0 0 8 Volum e - 3 0 June 2 0 0 7 Change Change Hog Equivalent Tonnes Hog Equivalent Tonnes 0 0 0 % Tassal - Product 2,308 2,330 (22) (0.94)% Superior Gold - Product 363
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Superior Gold Product 363 363 Total 2,671 2,330 341 14.64%
Strong cash generation and reduction in net debt Strong cash generation and reduction in net debt
growth opportunities, accelerating capital investment and reducing debt
$65.6m $3.0m $29.1m $m
Strong underlying
$52.1m $25.4m
Strong underlying cash flow from
Utilised to underpin growth in inventory
$5 $11.4m $32.6m
growth in inventory
Net debt Superior Gold Capital Net Capital Operating Dividend / Net debt
Gearing 17.2% Gearing 49.7%
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Net debt 30 June 2007 Superior Gold Brand & Inventory Capital Investment Net Capital Raising Operating Cash Flow Dividend / Other Net debt 30 June 2008
Significant cash profit
Movement Movement 12 Months 12 Months Period Ended Ended Movement
Significant cash profit uplift from operations 2008 focus on targeted and planned investment in live fish growth
ded ded
e t 30/06/2008 30/06/2007 Differential Profit after tax add back non-cash items $34,979 $28,363 $6,616 (Increase) / decrease in assets: Inventories (net of AASB 141 Impact) ($3 434) ($17 884) $14 450
in live fish growth 2007 focus on processed stock build to the required level to meet both future demand
Inventories (net of AASB 141 Impact) ($3,434) ($17,884) $14,450 Biological assets (net of AASB 141 Impact)) ($16,341) ($5,104) ($11,237) Combined inventory category movement ($19,775) ($22,988) $3,213 Current trade and other receivables ($9,580) ($1,702) ($7,878) Other ($311) ($474) $163
requirements and accompanying sales lead times Debtors increase reflects
Total (Increase) / decrease in assets: ($29,666) ($25,164) ($4,502) Increase / (decrease) in liabilities Current trade and other payables $3,360 $6,091 ($2,731) Other $354 $96 $258
increased retail sales and Petuna sales commencement in H2 FY2008.
Total Increase / (decrease) in liabilities $3,714 $6,187 ($2,473) Net cash from operating activities for the period $9,027 $9,386 ($359) Adjustment for Superior Gold inventory acquired at brand purchase date $2,366
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Underlying net cash from operating activities for the period $11,393 $9,386 $2,007
Tassal’s accelerated capital investm ent plan is focused on grow th, efficiency and p p g , y risk m itigation capital item s Efficiency related item s target pay back less than 2 years and I RR + 3 0 % .
g p
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4 million Smolt Cost – circa $15m - $18m Funding via debt /
Funding via debt /
Will allow significant improvement in smolt size and smolt size and reduction of late smolts Low water requirement - q 209,500,000 fewer litres water per day Controlled environment Oxygen Temperature Easier to staff Closer to farms = Closer to farms lower transport cost 16
All stock now fed via automatic feeders No missed feeding No missed feeding
Scale down marine labour force numbers Scale down vessel Scale down vessel fleet Maximise technology Maximise our Feed Conversion Ratio Conversion Ratio – i.e. “kgs of feed in for a kg of growth out”: Cost (3 units) - $2.5m - $3.0m $2.5m $3.0m Payback < 1 year IRR + 50% 17
“Tassal 1” in use Arctic Bear en route Reduced risk
Quality S i ld h i
Cost - $3m Payback 1 - 2 yrs 18 y y IRR – 43%
35% 19
upgraded to be primary fresh primary fresh processing site
investment as part of FY2015 t t i Pl FY2015 strategic Plan and 30,000 tonnes platform
impact FY2009 20
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Superior Gold m ade a positive EBI T contribution for the 4 .5 m onths to 3 0 June p p 2 0 0 8 in line w ith expectations.
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Tassal continues to m ake sound progress on its key priorities: Tassal continues to m ake sound progress on its key priorities: Fish size - number one priority. FY2009 target 4.3kg harvest size (from current 4.1kg) underpinned by: all fish now fed by automatic feeders; earlier smolt input profile; appropriate mix of smolt types; and increased use of effective lighting regimes
Tassal Hatchery on stream Q4 FY2 0 0 9
increased use of effective lighting regimes Fish survivability - improved fish husbandry and on-site harvesting to underwrite improving fish survivability. On-site harvesting expected to deliver an improvement in survivability of 1% to 2% . FY2009 target survival 84% – 85% (from current 82% – 83% ) y g ( ) Selective Breeding Program ( “SBP”) - expected to deliver significant improvement in average fish size and survivability. Component of 2009 Year Class smolt intake to be sourced from the SBP stock – this stock harvested in FY2010 Processing im provem ents – global best practice cost positioning on track via continued automation investment in FY2008 and FY2009 23
Branding opportunities - essential that Tassal has a strong Tassal “Pure Tasmania”
strengthens product range positioning; strengthens product range positioning; provides innovation delivery conduit to consumers; builds on existing customer loyalty; and provides imported products protection I m ported Product – must maintain vigilance and not become complacent - we have strong competition from both our local competitor (from a fresh Salmon perspective) and imports (from a smoked and frozen Salmon perspective). The Superior Gold acquisition was an important strategic acquisition in this context p g q Revenue I nitiatives - Tassal continues to seek out new profitable markets and products both from a domestic and export sales perspective. With limited global supply and an ever increasing demand, we remain confident of strong growth in the 2009 financial year and g , g g y beyond 24
Tassal is w ell positioned to deliver continued earnings m om entum in 2 0 0 9 p g
underpinning the Strategic Plan to FY2015
into an improved export price in 2009
is experiencing strong earnings momentum and expects to achieve an p g g g p underlying NPAT of $30 million for FY2009, in line with its previous guidance 25
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This presentation has been prepared by Tassal Group Limited for professional investors The information This presentation has been prepared by Tassal Group Limited for professional investors. The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment
financial situation or particular need of any particular person. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in the presentation. To the maximum extent permitted by law, none of Tassal Group Limited, its directors, employees or agents, nor any other extent permitted by law, none of Tassal Group Limited, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or particular, no representation or warranty, express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies are by their nature subject to significant uncertainties and contingencies. Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance. The distribution of this document is jurisdictions outside Australia may be restricted by law. Any recipient of this document outside Australia must seek advice on and observe such restrictions.
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