After a $276 million impairment on dairy infrastructure and a net loss of $230 million in FY23, Bega Group more than rebounded in FY24, recording $3.5 billion in group statutory revenue and a 15 per cent uptick in earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $165.1 million.
Bega Group chair, Barry Irvin, said it was a welcome result following three challenging years of Covid, inflation, and major shifts in the commodity markets.
Snapshot
- Net revenue: $3.5bn, up 4%;
- Branded: $3.04bn
- Bulk: $482m
- Statutory EBITDA: $165.1m, up 15%;
- Normalised EBITDA: $164.1m, up 2%; and
- Normalised profit after tax (PAT): $29.2m, up 2%.
Irvin said the Branded segment’s strong performance offset the poor performance of the Bulk segment, which recorded a statutory EBITDA loss of $(18.2) million, down from $38.3 million in FY23. A sustained disconnect between global dairy commodity prices and farm gate milk were the primary cause, while Lactoferrin and cream cheese categories had profitable growth due to increasing popularity in Southeast and Northern Asia.
The Branded segment increased its statutory EBITDA by 48 per cent, recording a profit of $206.2 million and six per cent growth. Irvin said the fact the business achieved this in a difficult trading environment with low consumer confidence and downtrading within and across channels underscored the resilience of the portfolio and the benefits of a major organisational realignment.
The restructuring delivered $22 million in annualised savings. As well as operational improvements, there was around 200 redundancies at Bega’s head office and about 50 from its facilities.
CEO Pete Findlay said pricing initiatives partially mitigated the impacts of rising costs in ingredients, energy, and other supplies while efficiency programs enabled Branded margin expansion.
It was also a record year for International Branded business revenue and profit.
Yoghurt and milk-based beverages registered growth in volume and value, with the yoghurt category highly responsive to new product development.
Findlay said the Yoplait No Added Sugar range that was launched 18 months ago is now producing 10,000 tonnes, doubling in FY24. Around 8.5 per cent
The range and Farmers Union Greek Yoghurt Kids both moved into new pouch formats. And Farmers Union achieved 11 per cent retail sales growth due to a new advertising campaign. Yoplait achieved 10 per cent retail sales growth with new advertising and growth in large format yoghurt tubs.
Dare recorded nine per cent growth and its No Sugar Added range grew 23 per cent. Lactose-free milk more than tripled in volume in FY24.
Branded now represents 86 per cent of the group’s external revenue, with it being first in the market for Yoghurt, Milk based beverages, and Spreads.
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