Bega Cheese Limited
2024
ANNUAL
REPORT
TO BECOME
THE GREAT
AUSTRALIAN
FOOD
COMPANY
Our Vision
About us
1
Our business model
3
Our strategic priorities
9
2024 financial performance at a glance
11
Chairman and Chief Executive Officer’s Report
13
Directors’ Report
23
Review of Financial Performance and Operations
25
Auditor’s Independence Declaration
55
Financial Statements
58
Notes to the Financial Statements
63
Consolidated Entity Disclosure Statement
104
Directors’ Declaration
105
Independent Auditor’s Report
106
Shareholder Information
11 0
Corporate Directory
111
Contents
ABOUT US
Bega Group is a leading producer
of packaged foods, beverages
and ingredients that millions of
people use every day.
We operate across two business
segments:
1. Branded – consumer and
foodservice products sold through
grocery, route trade, foodservice,
petrol and convenience channels.
2. Bulk – nutritional powders and
dairy ingredients sold primarily to
food manufacturers.
1
Bega Cheese Limited
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Our transformation to
a brand-led business
Since 2001, we have transformed from a dairy co-operative
with a strong regional cheese brand into a diversified,
branded, food and beverage business. This transition
from a commodity-led to a brand-led company is
positioning Bega for higher and more consistent earnings.
We will continue to strengthen and grow as a branded
food products company, which creates value for
our customers, consumers, suppliers and investors,
and advances us towards our vision to become the
Great Australian Food company.
BALANCE
2017–2020
New platform with acquisition
of grocery brands.
Shift in focus to grow
branded business while
diversifying milk sourcing.
Branded food portfolio
including Vegemite.
Products expanded into
non-dairy categories.
BUILD
1899–2000
Dairy co-operative based
in the Bega Valley.
Primarily cheese production
at Bega sites.
EXPAND
2001–2016
Increase in scale with
acquisition of Tatura and
Strathmerton and investment
in capacity.
Successful ASX listing and
accessing growth capital.
Expanded dairy portfolio –
nutritionals, cream cheese,
cheese cut and wrap.
STRENGTH
2021–FUTURE
Acquisition of Dairy and Drinks.
Increased brand portfolio
with iconic dairy brands.
Extensive cold chain
distribution network with
expanded customer base.
Accelerated investments
in innovation and branded
growth.
Portfolio expanded into
branded beverages, yoghurts
and more.
2
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BRANDS
Diversified portfolio
of market-leading brands
MANUFACTURING
NETWORK
Comprehensive, robust
and flexible supply chain
OUR UNIQUE
CAPABILITIES
OUR
VALUE
CHAIN
THE
VALUE
WE
CREATE
1. Sourcing
We are one of Australia’s
largest purchasers of
milk, with over 600
farmer supply contracts.
We have 360 material1
suppliers that support
our business.
2. Manufacturing
We convert fresh
ingredients like milk
into bulk ingredients and
branded packaged goods
in 19 manufacturing
facilities.
Shareholders
$30.5m
profit after tax
$24.4m
dividends declared
for FY2024
Farmers and
suppliers
$1.5bn
paid for milk and
ingredients
1 Suppliers with annual purchases over $1 million
2 Relevant capital and research & development expenditure in FY2024
3 Data sourced from Circana Market Edge, AU Grocery Unweighted and AU Convenience, 12 months to 30 June 2024 (Measured Market).
4 Circana IHP panel data (MAT to 16 June 2024)
OUR
BUSINESS
MODEL
Our business model is built around an
integrated value chain which supports
our growth as a branded food products
manufacturer.
3
Bega Cheese Limited
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FARMER
RELATIONSHIPS
Strong, direct links
with farmers and suppliers
DISTRIBUTION
NETWORK
Extensive, efficient
logistics and distribution
3. Distribution
We deliver daily across
Australia through an
extensive network of
6 distribution centres
and 81 depots. We also
distribute products to
more than 40 countries.
4. Sales and marketing
We serve approximately
29,000 customers in
multiple sales channels
such as grocery retail,
route trade, petrol and
convenience, industrial
and foodservice.
5. Consumers
Our products are
consumed by the
majority of Australian
households, and are
part of the daily diet of
millions of consumers
worldwide.
Our people and
communities
$62m
invested in food
manufacturing2
Consumers
97%
of Australian
households are
fed with a Bega
branded product4
Customers
$1.8bn
est. retail sales
value generated3
$257m
branded export
revenue generated
4
2024 Annual Report
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White milk and
milk-based beverages
7
Milk-based beverages hub
1
Cheese
3
2
Dairy powder and fats
2
Peanuts
2
Juice
1
Yoghurt
1
Spreads
Malanda
Tolga
Kingaroy
Crestmead
Penrith
Wetherill Park
Smithfield
Leeton
Lenah Valley
Bega: Lagoon
and Ridge Streets
Morwell
Chelsea
Port Melbourne
Strathmerton
Koroit
Salisbury
Tatura
Bentley
Our manufacturing footprint
brings flexibility, efficiency
and scale
Our manufacturing sites are situated near major food and
milk producing regions and key distribution points in our
logistics network. This supports branded value creation
through cost effective manufacturing at scale and national
availability of our key branded consumer products.
The site footprint and supply chain integration between
our Bulk and Branded businesses help us maximise the
benefits from the annual 1.3 billion litres of milk we collect for
Bega products. These benefits include balancing seasonal
fluctuations in milk supply with demand, optimising milk
procurement costs and increasing the value generated
from the protein surplus of the branded business.
5
Bega Cheese Limited
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Our distribution network enables
our brands to be at favourable
points of purchase nationwide
We have a highly efficient national chilled distribution
network that delivers fresh food products daily across
Australia. We connect metropolitan and regional
Australia via large road/rail vehicles through to small
route trucks.
The breadth and scale of this distribution reach, and
our trusted partnerships with our customers, enable our
brands to be at the most favourable points of purchase,
serving consumers where they want to buy.
81
DEPOTS
~3,200
TRUCKLOADS
PER WEEK
~29,000
CUSTOMERS
SERVED
6
DISTRIBUTION
CENTRES
6
2024 Annual Report
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We have a diversified portfolio
of leading brands with strong
market positions
Our top eight brands contribute over
74% of branded revenue5 and include
both essential consumer items and
discretionary purchases. Many are
iconic Australian brands with enduring
consumer appeal.
VALUE CREATION
PRINCIPLES
Principles underlying
our brand portfolio
investment decisions
Enduring brand
competitive
advantages
5 Includes Bega owned and licenced brands only.
6 Data sourced from Circana Market Edge (AU grocery and structured convenience) 12 months to 30 June 2024 based on data definitions provided by Bega.
7 Yoplait brand used under licence.
Grocery
category
Bega
market share6
Bega
market position
Bega
brands
Milk-based
beverages
50%
1
Yoghurt7
25%
1
Spreads
29%
1
Fresh
white milk
11%
3
Chilled juice
and drinks
22%
2
TM
TM
Creams and
custards
8%
4
Water ice
85%
1
7
Bega Cheese Limited
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100%
80%
60%
40%
20%
0%
4%
2%
Circle size = category size
3 year compound annual growth rate (value)
Household
penetration
Australian retail categories
8%
6%
10%
$604m
Chilled juice
and drinks
$1,012m
Milk-based
beverages
$648m
Cream &
custards
$2,144m
Fresh white milk
$1,919m
Yoghurt
$742m
Spreads
We operate in growing categories
bought by the majority of
Australian families
These categories have shown resilient
demand through economic cycles and
present growth opportunities even with
high household penetration.
Leverage channel
and distribution
capability
Positive future category
growth and consumer
opportunities
Attractive and
sustainable
long-term returns
8
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OUR
STRATEGIC
PRIORITIES
TO BECOME THE
GREAT AUSTRALIAN
FOOD COMPANY
Our Vision
CREATING GREAT
FOOD FOR A
BETTER FUTURE
Our Purpose
Our Values
GROW
OUR
PEOPLE
PASSION
FOR THE
CUSTOMER
AND
CONSUMER
INVEST
IN OUR
FUTURE
SUPPORT
EACH
OTHER
We are a purpose-led organisation,
and our business structure, vision and
culture create an aligned and forward-
looking organisation.
Our actions link with our sustainability
commitments, which are fundamental to
building trust with our stakeholders and
delivering ongoing growth and value for
our shareholders.
9
Bega Cheese Limited
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Secure solids
Grow milk, cream and cheese
supply to support branded growth
and plant efficiency
Protect and grow the core
Grow our core domestic grocery
business in attractive categories
Win on the street
Improve our competitiveness in
independent grocery, foodservice,
petrol and convenience, and
local trade
Organisational
enablement
Enabling a sustainable, high-performing
organisation to achieve our strategy
5 Year Horizon
Streamline our sites
Optimise our footprint and
reduce costs through
value-creation programs
Sustainability
Meet our commitments
to environment, social and
governance (ESG)
International opportunity
Focus and grow our
international business
We will expand gross margin and EBIT margin through:
• Enhanced technology solutions increasing
customer engagement and interaction.
• Insight-led new product development delighting
consumers.
• Revenue management - advanced promotional
and product portfolio management and an agile Bulk
business moved to the highest returning fat and
protein pairings.
• Supply and cost of goods optimisation through
supply productivity and site efficiency improvements.
• Cash flow and capital structure focus on enhancing
returns and reducing the cost of funds.
• Increasing our scale and efficiencies to optimise
our cost of doing business.
Over the next five years, we will
continue to strengthen our position as
a leading branded food manufacturer
through our six strategic priorities
underpinned by the foundation of
‘Organisational enablement’.
10
2024 Annual Report
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$3.52
billion
$3.38
billion
Top line revenue:
EBITDA ($ million):
Basic earnings per share (cents):
Profit after tax ($ million):
Total dividend per share (cents):
FY2024
FY2023
2024 FINANCIAL PERFORMANCE
AT A GLANCE
Normalised
Normalised
FY2024
164.1
FY2024
29.2
165.1
FY2024
30.5
FY2024
160.2
FY2023
28.5
FY2023
144.1
FY2023
(229.9)
FY2023
Statutory
Statutory
(75.6)
FY2023
Normalised
FY2024
9.6
10.0
FY2024
9.4
FY2023
Statutory
FY2024
8.0
7.5
FY2023
11
Bega Cheese Limited
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FY2024
134.3
8.2
FY2023
#Net debt/normalised EBITDA (adjusted for AASB 16 Leases).
Leverage ratio#
Net debt ($ million)
Branded EBITDA margin
Group gross margin
Cash flows from operating activities ($ million)
Normalised
Normalised
Normalised
FY2024
FY2024
FY2024
FY2024
162.4
1.3
6.6%
19.8%
203.6
1.6
4.5%
19.4%
FY2023
FY2023
FY2023
FY2023
12
2024 Annual Report
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Chairman and
Chief Executive Officer’s
Report
Barry Irvin
Executive Chairman
Peter Findlay
Chief Executive Officer
13
Bega Cheese Limited
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In FY2024 we embarked on the first year of a five-year
strategic plan focused on continuing the transition to a
brand-led business. Our results this year demonstrate the
strength and breadth of our Branded portfolio.
The Bega Group strategy continues our transition to a
predominantly brand-led business. The Bulk segment of
our business remains a key platform for providing product
to our Branded business and balancing our milk supply.
During the year, we largely completed a restructuring
program to further align the company to the strategy.
These changes eliminated overlap between teams in the
Branded business, improved focus, simplified operations,
reduced back office and Bulk segment costs, and
delivered more than $22 million in annualised savings.
Our Branded segment had a record year with strong
performance in our key categories of yoghurt, milk-based
beverages, and spreads. It is a testament to our brands
that volumes remained resilient despite the need to offset
high underlying cost inflation with pricing and product
mix initiatives implemented in the current and prior year.
Strong delivery in our supply chain, and logistics efficiency
programs, created additional benefits through margin
expansion in the Branded business.
Farm gate milk prices, which moderated only slightly
in FY2024, remained disconnected from global dairy
commodity prices leading to a loss in our Bulk segment.
The Bulk business mitigated part of this loss by acquiring
volumes of lower cost opportunity milk from other dairy
companies, particularly during the high production months
in spring and by delivering manufacturing efficiencies at
key sites. It was encouraging to see Australia’s milk pool
stabilise in FY2024, and the availability of surplus milk
during the spring peak season indicates that rational
moves to reduce excess capacity by major processors are
beginning to bring the industry into better supply and
infrastructure alignment.
As we look forward to FY2025, farm gate milk prices for the
coming year have begun to better align with global dairy
commodity prices. While the overall basket of global dairy
commodities is not anticipated to materially increase in price
in FY2025, the measures we have implemented to further
enhance the agility and cost structure of our Bulk segment,
coupled with better alignment of farm gate milk prices, are
projected to return our Bulk segment to profitability.
The strong growth in our Branded business in FY2024
is expected to ease in FY2025. The challenging consumer
environment has led to lower out-of-home consumption
in 2H FY2024, and FY2025 is expected to see limited
opportunities to increase price and an uptick in consumer
promotional activity. To sustain earnings growth in our
Branded business, we will focus on volume growth in our
core categories and on delivering strong efficiencies and
savings in our supply chain, logistics and procurement
value creation programs.
The annualised impact of overhead savings delivered
during FY2024, as well as further cost savings initiatives,
will be important to ensure delivery of EBITDA growth in
the context of more limited pricing opportunities.
With our Bulk segment returning to profitability, we
project the Group’s results in FY2025 will remain firmly
on track to achieve the FY2028 Strategic Plan
profitability objective of greater than $250 million in
normalised EBITDA.
Financial performance
Our statutory revenue for FY2024 was $3.5 billion, up 4% on
FY2023. Branded business revenue grew by 6% while Bulk
segment external revenue declined by 3% due to lower
prices and subdued demand for global dairy commodities.
Our statutory EBITDA for FY2024 is $165.1 million, 15% higher
than the previous year. The statutory net profit after tax
for FY2024 is $30.5 million, an increase of $260.4 million
compared to a prior year result which included an
impairment of our Bulk business assets.
On a normalised basis the company achieved an EBITDA
of $164.1 million, consistent with guidance for the year.
Normalised net profit after tax is $29.2 million, an
increase of 2% compared to the prior year. These results
exclude profit from the sale of our Canberra site in 1H
FY2024, restructuring costs to align with our new strategy,
and integration costs for our Betta Milk acquisition -
including our subsequent consolidation of processing
capacity in Tasmania.
The Branded segment increased normalised EBITDA in
FY2024 by 55% to $199.9 million with revenue, mix and
promotional initiatives from the current and prior year
offsetting cost inflation, while efficiency programs
enabled margin expansion.
Despite our greater than expected purchases of lower-
cost spring milk and our Bulk segment efficiency programs,
the disconnect between farm gate milk prices and global
dairy commodities led to a normalised $18.2 million
EBITDA loss in our Bulk segment.
Our earnings in FY2024, the sale of the Canberra site
in 1H FY2024 and a strong focus on net working capital
enabled us to close FY2024 with net debt of $162.4 million,
20% lower than FY2023. We finished the year with a reduced
leverage ratio of 1.3 times, well within covenant limits.
We announced a final fully franked dividend of 4.0 cents
per share following an interim dividend of 4.0 cents per
share in February, bringing the total fully franked dividend
for the year to 8.0 cents per share, up 7% when compared
with the prior year.
Chairman and Chief Executive Officer’s Report
14
2024 Annual Report
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Focused brand innovation
and investment
Our focus on innovating and investing in our core categories
of yoghurt, milk-based beverages and spreads, coupled
with a strong nation-wide supply and logistics network
delivered for customers and consumers alike.
In the yoghurt category, we commissioned our new pouch
line in Morwell at the beginning of FY2024, enabling
no added sugar innovation in Farmers Union Greek
Yoghurt for kids and Yoplait YOP. The Farmers Union brand
achieved 11% retail sales value growth supported by new
marketing initiatives and Yoplait achieved 10% retail
sales growth with new large format yoghurt tubs and a
strong advertising campaign. Our yoghurt portfolio is well
positioned for consumers who, in a challenging environment,
increasingly seek the important combination of good value
and good quality.
Our milk-based beverages category also performed strongly,
with 9% retail sales growth in the Dare brand. The expansion
of the Dare INTENSE line, continued roll-out of recycled
PET packaging, introduction of lactose-free and no-sugar-
added offerings, and the launch of our first plant-based
Dare offering in 2H FY2024 all contributed to this growth.
The success of these functional benefit product launches
spurred growth in categories other than yoghurt and milk-
based beverages. While overall fresh white milk sales were
largely flat in FY2024, lactose-free white milk more than
tripled in volume when compared with the prior year.
This year we celebrated the 100th birthday of the iconic
Vegemite brand, accompanied by TV advertising, online
media and activity which led to a growth rate of nearly
twice that of the spreads category. Vegemite is an excellent
example of how, with strong support, a brand can thrive
over a very long time. Vegemite joins Dairy Farmers and
Bega as one of three brands in our portfolio which now
have a century of history.
We were also very pleased with the results in our
International Branded business. Despite subdued demand
in China, our Southeast Asia business performed strongly.
Our new Middle East model improves capability to service
and grow retail, quick-service restaurants, and key account
customers. Overall, it was a record year in terms of both
revenue and profitability for our International Branded
business and we believe this business has the potential to
more than double organically in the next several years.
Investing in the future
In December 2023, we completed the acquisition of Betta
Milk in Tasmania after selling our Canberra facility the month
before. In 2H FY2024, we consolidated our Tasmanian
processing operations to our Lenah Valley site, leading to
synergies and more efficient use of capacity in the industry.
During FY2024, we completed most of the restructuring
program announced in June 2023 to align the organisation
with our strategy. The strategy enhances focus on our most
important product categories, completes the delivery of
synergies from the Lion Dairy & Drinks acquisition and
ensures greater visibility and accountability for our sales
channels. A strong example of this was the launch in 2H
FY2024 of our new foodservice product range under the
Dairy Farmers brand, coupled with investments in capability.
With a product portfolio that includes milk, creams, peanut
butters, Vegemite, juices, cheese, milk-based beverages,
yoghurts and more, we have a substantial opportunity to
grow our foodservice business to a share which is more
aligned to our presence in the grocery channel.
With $75 million of investment in FY2024, our capital
investment program focused on growth, capabilities and
efficiency. Our new Business to Business (B2B) customer
portal went live in late FY2024. While it will take a few
months to roll it out to our local trade base of approximately
29,000 customers, we are very encouraged by the
feedback we are receiving from customers who have
already made the transition. In a channel where data and
information have historically been more difficult to access,
this portal has significant potential to enable us to sell a
broader range of products to customers including cafes,
restaurants, petrol and convenience, institutions and more.
In 2H FY2024 we also began investing in the automation of
our main national logistics centre in Laverton. This is a long-
term investment which is expected to go live in FY2026, and
the annualised benefits of this automation are compelling.
Investments in efficiency also made up a substantial share
of our capital program, with site-based investments leading
to conversion cost savings. The integration of our core
ERP Order to Cash processes improves our back-office
processes and efficiency, and has also delivered savings.
Agile Bulk business positioned
for the future
The disconnect between farm gate milk prices and global
dairy commodity prices reached a peak in FY2024, leading to
an EBITDA loss of $18.2 million in our Bulk segment.
We purchase more than 1.3 billion litres of milk each year,
with the most important use being the provision of milk
to our dairy brands. We are absolutely committed to
maintaining an agile Bulk business and took a number of
steps during the year to optimise this business which will
enable it to return to profitability in the future.
We modified shift structures in parts of the Bulk business
where global demand for commodities was lower, resulting
in efficiencies and savings. Importantly, we benefited from
surplus milk during the spring peak season, which indicates
that dairy industry processing capacity is slowly beginning
to better align with milk supply.
We also sharpened our focus on higher value commodities
and nutritional products. With commodity protein powders
at lower prices in FY2024, and some dairy fats trading
at higher prices, we were able to respond to market
movements and mitigate some of the impacts of global
pricing by selling higher value dairy commodities.
Chairman and Chief Executive Officer’s Report
15
Bega Cheese Limited
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Sustainability
Our sustainability strategy since 2019 has been ‘the greater
good’ and we are pleased to announce its evolution. This
iteration of the strategy works with our business of today
and our ambitions for the future. Its three strategic pillars
are circularity, community and collaboration.
We continue to maintain our previous commitment of a
40% reduction in absolute scope 1 and 2 GHG emissions
by 2030 (from FY2021 base year) and net zero by 2050.
We are also committed to a 30% reduction in water use by
2030 (from FY2021 base year).
Significant progress has been made in FY2024 in meeting
our targets associated with the National Packaging Covenant.
We have continued to introduce recycled plastic bottles of
less than 1 litre and invested $14 million establishing in-house
recycled bottle production at our Wetherill Park facility.
In preparation for the upcoming obligations associated with
climate related financial disclosures the Company has
conducted a gap analysis assessment for the draft Australian
Standards and designed a road map to ensure timely
compliance of our future disclosure obligations.
As we look to the future, we recognise that effective
collaboration will be vital to ensure a sustainable world.
The Regional Circularity Co-operative (RCC) is a great
example of collaboration between all tiers of government,
large and small businesses, academic and research
institutions, and the community. As a foundation member
of the RCC, Bega Group has been instrumental in ensuring
the success of this ambitious ‘place based’ project that
has already seen research and innovation projects creating
many sustainability opportunities.
Knowledge and understanding developed at Bega Group
and the RCC will extend across the Company and build on
our objectives of collaboration, circularity and working
with the community to ensure we are creating great food
for a better future.
People and safety
We have continued to invest heavily in safety in FY2024,
with a focus on improvements in manual handling, machine
guarding, and traffic management at our key manufacturing
and logistics sites. We continue to roll out training with
respect to our six life-saving rules and have also started a
program which focuses on wellbeing initiatives supported
by our onsite physiotherapy providers at key sites.
Conclusion
Our Branded business delivered strong results in FY2024,
with innovation and focused investment in our core
categories and channels driving growth. Our supply,
logistics and procurement efficiency programs enabled
margin expansion in the Branded business. Both the
dairy and drinks portfolio and the spreads portfolio are
now performing at margin levels greater than when they
were acquired and have created a Branded platform for
the Bega Group to recognise its vision of becoming
The Great Australian Food Company.
Our transition to a predominantly brand-led business also
saw us increase investment in the foodservice, local trade
and other channels. Pleasingly, our International Branded
business had a very strong year in Southeast Asia and the
Middle East, despite soft demand in China.
Low global dairy commodity prices, disconnected from
farm gate milk prices, led to a loss in our Bulk business for
FY2024. We implemented programs to reduce costs in
Bulk and optimise the agility of this segment to maximise
returns from commodities and best support our Branded
business with milk and cream.
We have continued a robust investment program with our
FY2024 capital investment targeting growth, capabilities,
and efficiencies which have helped to partly mitigate
manufacturing, logistics and back-office cost inflation.
We thank all our employees, the executive team, the Board,
our farmer suppliers, other valued partners, investors,
customers, and consumers for their unwavering support
and commitment throughout the year.
While FY2024 presented significant challenges and we still
have work to do to fully address some of them, we emerge
from the year with a portfolio of market-leading brands,
high quality bulk commodity assets, improved efficiency
across our operations and confidence for the future.
We enter FY2025 very much on track to continue the
delivery of our strategic plan.
Barry Irvin
Peter Findlay
Executive Chairman
Chief Executive Officer
Chairman and Chief Executive Officer’s Report
16
2024 Annual Report
Return to Table of Contents
Case study
We launched Farmers Union Kids yoghurt pouches
in Coles in August 2023 with the goal of providing
more nourishment to growing kids. These products
now have a 7.4% share of the Coles kids yoghurt
segment in under 12 months.1
Driving sales growth in attractive categories such as
yoghurt is vital to our growth ambitions. The Kids pouch
format meets the needs of out-of-home consumption
and healthier snacking within a compelling segment
of the overall yoghurt category. Our knowledge of
consumer needs and investment in new-format
production lines at Morwell have enabled us to
deliver innovation that supports business growth
while meeting evolving consumer preferences.
The new Kids Farmers Union yoghurt pouches have
been embraced by parents and kids alike. Parents
want to give their kids nutritious food but often don’t
know what’s best or how much they need.
Our solution was a range of tasty, nutritious yoghurts
with five flavours and two straightforward claims that
resonated with parents:
‘High in calcium’, which is the #1 ingredient sought.
‘No added sugar’ which is wanted by 45% of parents
with children aged 2-12.2
Despite high competition in this segment, these
products have rapidly established strong sales, and
set the stage for further range expansion. It exemplifies
how we innovate across life stages and needs, contribute
to people’s health through nutrition, and create growth
opportunities for us and our retail partners.
1. Circana Scan data, AU Coles Group Scan, Dollars and Value share of Total Kids Yoghurt,
QTR 27/07/24.
2. Nature Research Agency. Yoghurt Usage & Attitude Study, Nov 2022.
DRIVING ORGANIC
SALES GROWTH
WITH TASTY KIDS’
NUTRITION
17
Bega Cheese Limited
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Case study
REALISING CREAM
CHEESE OPPORTUNITIES
IN GREATER ASIA AND
THE MIDDLE EAST
Bega’s foodservice cream cheese has experienced
significant growth, with exports to 25 countries
in Greater Asia and the Middle East increasing
volume by 52% over the past five years. These
regions have shown sustained demand for
premium dairy products, particularly in the bakery
and foodservice sectors.
Asia has become a hotbed for innovation in the food
industry, with Southeast and North Asian countries
leading the way in consumer adoption of new
products and trends. Cream cheese has become a
staple ingredient in many Asian bakeries, with bakers
using it to create unique and innovative products that
have gained worldwide popularity.
At Bega, we have positioned ourselves to capitalise
on this growth trend by investing in our cream cheese
business. Our staged capital investments over the
past decade have increased capacity, expanded
product formats, and developed new formulations
to meet the evolving needs of modern bakeries.
Our cream cheese products have evolved to cater
to the demands of busy bakeries, offering time-
saving formulations that work straight from the
fridge and always taste great with a variety of novel
flavours and recipe additions. Our sales revenue
has grown an average of 18% per year over the past
five years, supported by the continuous building of
our applications and market understanding through
insights from our distributors, co-development with
customers, and chef recipe development.
Our cream cheese, sold under a Bega-owned brand,
is available in sizes from 2kg to 500g. We see positive
signs of continued market growth and will capitalise
on the opportunity through branded innovation,
quality, and customer service.
2024 Annual Report
18
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Progressing sustainability
for the future
The Greater Good Strategy has been our
sustainability approach since 2019 and we
are pleased to announce its evolution.
This iteration of the strategy works
with our business of today and our
ambitions for the future. Its three
strategic pillars – circularity, community,
and collaboration – focus on our
business’s highest material sustainability
impacts and our opportunities for
business development.
Our Risk and Sustainability Committee
oversees this work - reviewing, reporting,
and, where appropriate, recommending
changes in our sustainability approach to
the Board. We will include further details
on our new strategy in our FY2024
Sustainability Report.
19
Bega Cheese Limited
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Our sustainability ambition
CIRCULARITY
COMMUNITY
COLLABORATION
To achieve our ambition, we will focus on three impact areas:
Leading in circularity through our
practices, industry partnerships
and effective use, reuse and
recycling of our resources.
Making a positive and lasting impact
by supporting our people, their
families and our communities.
Working together with our
producers, partners and customers
to enable sustainable practices,
grow domestic economies and
deliver great Australian products
that people love and trust.
GREAT
FOOD FOR
A BETTER
FUTURE
For generations, we have been
in the hearts of every Australian.
That is a heritage we are proud of,
and it is a legacy that will endure.
With abundant natural resources and
a thriving agricultural industry, we
are aiming for a future that is greater
through sustainability. So we can
keep nourishing and nurturing not
just Australians but Australia, and
the world, for generations to come.
20
2024 Annual Report
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Case study
The ‘Bega Circular Valley 2030’ program is a
transformational regional development initiative
with a vision to establish the Bega Valley as
the most circular regional economy in Australia
by 2030.
The Regional Circularity Co-operative (RCC), a not-
for-profit, independent entity, was established by
Bega Group in 2021 to drive this transition. With
collaboration at its core, the RCC has garnered
strong partnerships with the community, businesses,
corporations, academia and government, all working
together
to
demonstrate
transition
pathways
through pilots in the Bega Valley and beyond.
The range of projects and partnerships that the
RCC is working on and developing is continuously
expanding and, amongst others, includes:
• National Centre for Circularity in Bega: design is
almost complete for construction of this $20 million
joint NSW Government and Bega Group funded
education, tourist information, heritage, hospitality
and collaboration centre to showcase circular
economy initiatives locally and across the world.
• National Circularity in Fisheries and Aquaculture
program: driving circularity in Australia’s fishing
and aquaculture sectors and harnessing solution
providers in partnership with the Fisheries Research
and Development Corporation.
• Decarbonisation in grazing sectors – dairy and beef:
pilot program baselining and transition pathway
analysis of dairy and beef sectors in the Bega Valley, in
partnership with NSW Department of Primary Industry.
• Heat exchange and energy optimisation program at
factory and farm: partnership with NSW Decarbonisation
Hub to monitor and deliver energy efficiency gains
in the dairy sector.
• Baselining circularity and opportunity analysis
(in development): a one of a kind place-based
whole-of-economy program in Australia that will
include comprehensive material flow analysis and
identification of transition opportunities.
• Other projects in delivery or development include
management of plastics and organics in agriculture,
sensorisation of the landscape, natural capital and
regenerative, resilient agriculture program, net zero
energy strategy, biochar investigations, enterprise
stacking and more.
For more information on the Bega Circular Valley
program, visit begacircularvalley.com.au
Artist rendering of proposed National Circularity Centre design
BEGA CIRCULAR
VALLEY 2030
INITIATIVE
21
Bega Cheese Limited
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Case study
The $14 million investment in the Wetherill Park
blow-moulding facility has enabled us to continue
the transition to 100% recycled plastic bottles
at that site, reducing virgin plastic use by around
1,800 tonnes per annum.
In 2023, we completed our project to transition our
Wetherill Park site capability for blow-moulding
our own 100% recycled plastic bottles for Dare Iced
Coffee, Big M and Dairy Farmers Classic milk-based
beverages under one litre. This milestone is part of
an ongoing transition to PET plastics, which, unlike
HDPE plastic, can be recycled multiple times using
100% recycled content. Bega has been a leader in
the dairy industry in transitioning its single serve
iced coffee and flavoured milk bottles to recycled
polyethylene terephthalate (rPET) across all states
and territories in Australia.
The project is a win for consumers, and not only for
environmental reasons. Our rPET bottle is clear, which
is great for appetite appeal and shelf stand out, an
attribute impossible to get with HDPE.
We partnered with two key bottle suppliers and
invested $14 million to establish in-house production.
Our reduced use of virgin plastic derived from
fossil fuels is around 1,800 tonnes per annum and
contributes to Australia’s national targets to increase
recycling and incorporate more recycled materials in
packaging. The market success of the new packaging
also demonstrates to other businesses the benefits
of launching rPET and shows how we can reuse plastic
in the convenience drinks market.
INVESTING IN
100% RECYCLED
PLASTIC
2024 Annual Report
22
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Directors’ Report
Your Directors present the Annual
Financial Report of the Bega Cheese
Group for the year ended 30 June 2024.
23
Bega Cheese Limited
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Directors (from left to right)
Barry Irvin, Peter Margin, Patria Mann, Terry O’Brien,
Rick Cross, Raelene Murphy, Harper Kilpatrick
24
2024 Annual Report
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The Group generated normalised EBITDA of $164.1 million
in FY2024, up 2% on FY2023, normalised profit after tax of
$29.2 million, up 2% and normalised earnings per share of
9.6 cents, up from 9.4 cents.
The Group FY2024 result was positively impacted by:
•
strong category growth and margin expansion across the
Branded segment domestically and internationally from
volume, mix and price
•
achievement of operational cost saving and continuous
improvement programs
•
the benefit of a significant restructuring program implemented
throughout FY2024
•
a focus on working capital improvement, particularly on
inventory reduction.
The Group result for FY2024 was adversely impacted by:
•
intense competition for milk supply and the second highest
year of farm gate milk prices in the past decade
•
a reduction in global dairy commodity prices and a loss in the
Bulk segment
•
supply constraints and higher cost of oranges and peanuts.
The Group maintains a strong balance sheet, reducing net debt
to $162.4 million (FY2023: $203.6 million) and leverage ratio
down to 1.3 times (FY2023: 1.6 times), well within covenant limits,
positioning the Group well to fund investments in growth and
future commitments.
The Group received 1.33 billion litres of milk during FY2024
(excluding milk received for some tolling arrangements), almost
flat on the 1.34 billion litres received in FY2023. The Group
is pleased that the national milk pool stabilised in FY2024.
This was in response to price and favourable weather conditions.
The Group acknowledges the loyalty of its milk suppliers and
welcomes new suppliers.
Strategic priorities
In FY2024 the Group progressed strongly in the first year of its
five-year strategy, S28. During the year the Group updated and
refined its strategic priorities under the following pillars:
•
Protect and grow the core
•
Win on the street
•
International opportunity
•
Streamlined sites
•
Secure solids
•
Sustainability.
The strategic priorities are underpinned by the foundation of
‘Organisational enablement’ and will be achieved by continuing
to build the culture and capabilities of a sustainable and high
performing organisation.
Key highlights
Profitability increases in the Branded segment along with
reductions in net debt were two particular highlights in FY2024.
The Group maintained its leading share position in the yoghurt,
milk-based beverages, spreads, and water ice categories. The
restructuring announced in June 2023 aligned the organisation
to the Group’s new five-year strategic plan, delivering the final
round of synergies from the Lion Dairy & Drinks acquisition and
efficiencies in the corporate functions and the Bulk segment. The
organisational realignment focused the business on innovating in
its core categories, clarified the resources and tactics to succeed
in each sales channel, and eliminated overlap within the business.
Export dairy commodity prices hit a low point in September of
2023, following a substantial drop in the second half of FY2023.
Commodity prices were disconnected from Australian farm gate
milk prices which were at the second highest level in the past
decade. This resulted in the Group’s Bulk segment recording
a normalised EBITDA loss of $18.2 million in FY2024 against a
normalised EBITDA profit of $43.1 million in FY2023. The Group
focused on agility in its Bulk operations including efficiency
programs and, whenever it became available, securing incremental
milk to make better use of facilities. Opening milk prices for the
FY2025 season are expected to reduce the disconnect between
farm gate milk and global dairy commodity prices, and, if this
convergence continues, the Bulk segment is projected to return
to profitability in FY2025.
In FY2024, the Group acquired the businesses and a range of
assets of Betta Milk and Meander Valley Dairy from TasFoods
Limited and its subsidiary Van Diemen’s Land Dairy Pty Ltd for
$12.4 million. In February 2024, the Group ceased manufacture
of its fresh dairy products at the Burnie facility and relocated
manufacture to the Group’s Lenah Valley site. In FY2024, the
Group incurred acquisition related expenses of $6.9 million and
impaired acquired plant and equipment by $2.8 million.
The Group maintained a focus on cash, improving working capital
by $74.2 million and selling excess land in Canberra. The Group
reduced net debt by 20% to $162.4 million and lowered the
leverage ratio to 1.3 times (from 1.6 times in FY2023). The Group
maintains a strong balance sheet and is well placed to support
future growth opportunities.
Finance and operational overview
The Group generated top line statutory revenue of $3.5 billion in
FY2024, up 4% on FY2023, and statutory EBITDA of $165.1 million,
up 15%. Statutory after-tax profit was $30.5 million, up $260.4
million compared to prior year, and statutory earnings per share
(EPS) was 10.0 cents in FY2024, up from a loss of 75.6 cents in
the prior year. The prior year EPS was impacted by impairment of
primary processing bulk assets.
The Group will, as it has in previous years, report on both the
statutory result and the normalised result for FY2024 compared
to the prior year. This report focuses on the normalised result to
demonstrate the underlying financial performance of the Group.
The normalising adjustments to the statutory results are in the
table on page 30. The non-IFRS financial information contained
in this Directors’ Report has not been audited in accordance with
the Australian Auditing Standards.
Review of Financial
Performance and Operations
25
Bega Cheese Limited
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Review of Financial Performance and Operations
Protect and grow the core
During FY2024, well over 80% of the Group’s external net revenue
came from Branded sales. The Group’s new strategy focuses on
allocating resources to the most advantaged product categories.
For the Group, the categories of yoghurt, milk-based beverages,
and spreads are currently the core focus categories and as such
they benefit from the greatest level of innovation and support.
The Group leveraged its unrivalled capability in pouch yoghurt,
as well as launching yoghurts and milk-based beverages with
functional benefits such as lactose-free, no-sugar-added, and
high protein while ensuring that both financial and organisational
resources are available to make these innovations successful.
The iconic Vegemite brand recently celebrated its 100th
anniversary – a shining example of how a well-supported brand
can excel for generations.
Win on the street
The Group has a substantial opportunity to improve its trading
and share in foodservice, petrol and convenience, independent
grocery, quick service restaurants and institutional channels.
While the challenging consumer environment is impacting out-
of-home consumption in restaurants and cafes in the short term,
Australians are still amongst the largest per capita consumers
of food in restaurants and cafes. During FY2024, the Group
refreshed its entire foodservice lineup and is investing greater
financial and organisational resources in winning in this channel.
The Group also has one of the largest cold chain distribution
networks in the country, and for FY2025 and beyond, the focus will
be on leveraging this competitive advantage to succeed in these
important sales channels.
International opportunity
The markets of Asia and the Middle East represent a significant
growth opportunity and are important to the international pillar of
the Group’s strategic plan. In FY2024, the Group grew its branded
international sales and posted record-setting profitability in
international branded markets. The cheese, cream cheese and
yoghurt categories made up the most compelling growth
categories for the international business in FY2024. The Group is
building capabilities in its in-market distributor management, and
during FY2024 began to streamline its branding in overseas
markets to enable successful product extensions in the future.
Streamlined sites
Maintaining a network of high-quality and efficient manufacturing
sites which can produce the Group’s brands to serve customers
and consumers is a vital part of the strategic plan. The Group
followed its consolidation efforts in FY2023 by selling the Canberra
site in 1H FY2024, with the volume from this site now successfully
produced in Penrith, NSW. In FY2024, the Group consolidated
its Tasmanian production (including the newly acquired Betta
Milk brand) into its Lenah Valley site, resulting in greater network
efficiency. More importantly, the Supply Chain teams improved
the efficiencies and shift structures within numerous sites to
deliver the Group’s high-quality products while mitigating some
of the impact of inflation.
Secure solids
Dairy solids are the proteins, vitamins, fats, and other compounds
which form the nutritional basis of each litre of milk. The Group
secures most of its milk solids directly from farmers, and these
relationships remain the cornerstone of the Group’s dairy
business. The Group also secures additional solids from third
parties, such as cream and cheese from both domestic and
international sources. Maintaining the right balance between the
Group’s direct farm sourcing and the sourcing of dairy solids from
other domestic and international partners is a key focus of the
Group’s new five-year strategy, and ensures the right availability
and product portfolio to meet consumer needs.
Sustainability
The Group’s approach to sustainability has, to date, been
underpinned by the Greater Good Strategy, developed in 2019.
The Greater Good Strategy is structured around three key areas of
impact: products, people, and communities and planet. While the
strategy has served the business well to date, a refreshed strategy
has been developed during FY2024 and will be activated in FY2025.
This new iteration of the strategy works with the business of today
and the ambitions of the Group for the future. The focus will be on
the most material sustainability impacts structured around three
pillars: circularity, community, and collaboration. The Group will
include further details on the new strategy and commitments in
the FY2024 Sustainability Report.
Significant events
Acquisition of Betta Milk and Meander Valley Dairy
On 28 August 2023, the Group announced that it had entered
into a binding agreement to acquire the businesses and certain
assets of Betta Milk and Meander Valley Dairy from TasFoods
Limited and its subsidiary Van Diemen’s Land Dairy Pty Ltd.
The acquisition also included an exclusive royalty-free licence
to use the Pyengana Dairy brand for milk and cream products in
Australia. The total purchase price was $12.4 million.
The Group completed the acquisition on 1 December 2023.
Acquisition-related costs of $6.9 million are included in the
Consolidated Statement of Comprehensive Income for the year
ended 30 June 2024. Refer to note 26 for further details.
After the acquisition, the Group ceased manufacture of its
fresh dairy products at its Burnie and Kings Meadow facilities
in Tasmania and relocated manufacturing to the Group’s Lenah
Valley site. It made the decision to do this following a review of its
fresh milk manufacturing operations across Tasmania. Following
this decision, an impairment of plant and equipment of $2.8
million was recognised as an expense during the year.
Canberra property sale and leaseback
In FY2023, the Group ceased the manufacture of fresh milk product
at its Griffith facility in Canberra and relocated manufacturing to
the Group’s Penrith site. The Griffith site comprises five adjacent
blocks of land, operating as a combined manufacturing site and
logistics hub.
In November 2023, the Group sold all five blocks of land at the
Griffith site for $25.3 million. The Group leased back Block 5 of the
site for use as a logistics hub. The pre-tax profit recognised on
sale of the property was $15.4 million and was partially offset by
$2.2 million of related exit costs for the year ended 30 June 2024.
26
2024 Annual Report
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Review of Financial Performance and Operations
Environmental regulatory compliance
The Group’s manufacturing sites are subject to many Federal
and State Environment Protection Regulations. The Group is also
subject to various licensing requirements. These licences stipulate
performance requirements as well as the specific monitoring of
emissions such as noise, air, odour, and wastewater.
In FY2024, the Group reported compliance activities to
environmental regulators and water authorities with no financial
penalties for non-compliance reported. Most notifications
have been successfully resolved with the appropriate regulator,
with the following specifically reported:
•
An advisory letter was issued to the Penrith site regarding
odour. Actions presented to the regulator have been fully
implemented.
•
Two events of exceeding solid particle limits at the Lagoon
Street site were reported to the EPA. Corrective actions have
been implemented.
•
Eight wastewater breaches were reported against waste trade
agreements: five at the Penrith site, New South Wales, two at
the Lenah Valley site, Tasmania and one at the Morwell site,
Victoria. No fines were issued in respect of these breaches.
•
A
transitional
environmental
program
is
open,
and
actions being progressed for the Tolga site regarding dust
management and reduction.
The Group resolved all remaining informal and formal complaints
received in relation to environmental issues and no further action
was required of the Group by respective regulators.
In addition, during FY2024, the Group complied with all statutory
environmental reporting requirements and continues to monitor
and report energy consumption and greenhouse gas emissions to
the relevant authorities.
Sustainability program
Outlined below are the key deliverables in FY2024 from the
Group’s sustainability program. The 2024 Sustainability Report,
the Corporate Governance Statement, the Bega Respect
Statement and the Modern Slavery Statement will provide further
details. These documents are published on the Group’s website.
Governance
During FY2024 the newly formed Risk and Sustainability
Committee endorsed a refreshed materiality assessment. The
materiality assessment is consistent with global standards, to
determine the Group’s key risks, opportunities, impacts and
priorities in sustainability. The assessment included direct
engagement with internal and external stakeholders. The application
of the materiality principle helps focus reporting and disclosure
and also informs priorities for sustainability strategy development.
Energy management
The Group is committed to advancing projects and initiatives to
achieve its emission reduction targets. The Energy Management
Capability (EMC) program, now in its fifth year, has resulted in
significant energy mapping and the identification of opportunities
at the Group’s manufacturing sites.
Restructuring implementation
During FY2024 the Group commenced implementation of
the restructuring program, initially announced in FY2023, with
the new structure taking effect from October 2023. The aim of
the restructure was to increase organisational alignment to the
five-year strategy by creating teams with the broader focus of
delivering results for the Group as one integrated business.
The reorganisation program simplified operations and decision-
making by consolidating business unit and Group function team
structures. The Group is committed to ongoing organisational
alignment initiatives and technology-led projects to ensure
that corporate decision-making processes and structures
continue to be streamlined. Restructuring costs of $5.3 million
from the continuation of the Group’s announced restructuring
program were recognised during FY2024 and the last minor
remaining changes relating to the restructuring program will occur
during FY2025.
Effective tax rate
The Group’s effective company tax rate is calculated as income
tax expense divided by profit before tax. Income tax expense
captures taxes on profits and excludes other types of taxes for
example GST, FBT, payroll tax and PAYG tax paid on behalf of
employees. The effective company tax rate will differ from the
statutory company tax rate of 30 per cent due to non-temporary
differences. The prima facie effective tax rate of the Group is
23.4% which is largely attributable to the favourable impact of
finalising the Group’s formation of a tax consolidated group and
the permanent benefit in respect of research and development
tax incentive.
Safety
A healthy and safe workplace is of fundamental importance
and the Group recognises that its current Total Reportable
Injury Frequency Rate (TRIFR) needs to improve. The Group has
focused on hazard identification to drive improvement in its
safety performance and has continued the safety behavioural
leadership program supported by DuPont Sustainable Solutions.
A safety perception survey was completed across the Group in
November 2023, facilitated through DuPont Sustainable Solutions to
benchmark progress on the Group’s safety culture transformation.
The Group is committed to ensuring a healthy and safe work
environment for employees, contractors, and visitors to its
operations. The Group’s safety culture encompasses the
employees’ beliefs and values with respect to safety and
this helps effectively manage any safety risks present in
activities. The safety principles, launched in 2022, guide the
Group safety culture.
27
Bega Cheese Limited
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Review of Financial Performance and Operations
Packaging
The Bega Group Packaging Sustainability Policy which supports
Australia’s 2025 National Packaging Targets guides the Group’s
approach to reducing the impact of packaging. FY2024 saw a
national roll-out of recycled plastic in bottles of less than one litre
for Dare Iced Coffee, Big M and Dairy Farmers Classic milk-based
beverages. The Group worked with a range of supplier partners
and invested $14 million to establish in-house production of the
bottles, reducing transport costs.
Ethical sourcing
The Group seeks to build trust and meet customer and consumer
expectations by ethically sourcing raw materials. The Bega
Supplier Responsible Sourcing Code provides details of the
minimum standards expected of suppliers. All new vendors on-
boarded in FY2024 were risk assessed against the Code. Of these,
10% were identified as high-risk and were subsequently registered
with globally recognised human rights data exchange databases.
There were no business-critical non-conformances arising from
audits of high-risk suppliers this year.
Nutrition
The Group takes its role in promoting sustainable behaviours
and diets among consumers seriously by offering healthy food
and beverages that it produces responsibly. FY2024 saw the
launch of lactose-free options across white milk and flavoured
milk, including Pura, Dairy Farmers, Dairy Farmers Classic, Dare
and Big M. In April, the Group launched Dare Oat Milk, in mocha
and double espresso flavours, broadening the Dare range even
further. The Group’s product range continues to be recognised
by Australia’s Healthy Food Guide Awards, receiving 13 awards in
the past year in categories including plant-based, heart health,
diabetes-friendly and lunchbox awards.
Employee health and wellbeing
This year, the Group launched the Bega Respect Statement
(the Statement). The Statement provides a succinct guide, clearly
articulating expectations for behaviour. The Statement responds
to amendments to Australia’s anti-discrimination and human
rights legislation, placing a duty on employers to take reasonable
and proportionate measures to eliminate discrimination,
harassment, and victimisation. The Group developed the
Statement through a collaborative process involving team
members from across the company. The Group reports annually
to the Workplace Gender Equality Agency (WGEA) against the
standardised gender equality indicators, in accordance with
requirements under the Workplace Gender Equality Act 2012
(Cth). The Group is a signatory to the HESTA 40:40 Vision, an
investor-led initiative to achieve gender balance in executive
leadership across all ASX300 companies by 2030. The Group
has committed to reach the 40:40 Vision target of 40% women
on the Executive Leadership Team and Board: 20% by 2024,
30% by 2027, and 40% by 2030.
Supporting farmer suppliers
To June 2024, the Group has invested $3.3 million in grant support
across all milk supply regions, including funding of projects in
best practice adoption for animal welfare, effluent management,
and irrigation and water management improvement. This year,
114 on-farm capital works projects were completed. Most of the
projects this year were linked to best practice in animal welfare,
effluent management and work health and safety. Emissions
reduction is one of the priority areas the Group is focusing on to
support suppliers to transition to a circular economy. The Group
has made a specific commitment in the updated Sustainability
Strategy to support and collaborate with suppliers to measure
and mitigate scope 3 emissions. The Group implemented an on-
farm data collection trial late in the year with a number of suppliers
from each region. This data provides the Group with emission
intensity and total emission information, along with key data to
help suppliers reduce emissions and improve broader circularity.
Modern slavery prevention
The Group issues its Modern Slavery Statement annually in
December, in compliance with section 13 of the Modern Slavery Act
2018 (Cth) and section 24 of the Modern Slavery Act 2018 (NSW).
During FY2024 the Modern Slavery Working Group, consisting of a
cross-functional group of executives, met monthly to oversee the
delivery of the Group’s Modern Slavery Action Plan and to assess
current and emerging risks within the Group’s supply chain.
This year the working group has focused on the development of
the Group’s Modern Slavery Remediation Process.
Climate-related financial disclosures
The Group is preparing for climate-related reporting which is
likely to be mandatory in Australia in coming years. Based on
global standards, IFRS S1 General Requirements for Disclosure
of Sustainability-related Financial Information and IFRS S2
Climate-related Disclosures, the developing Australian standards
may apply to the Group’s reporting from FY2026. The Australian
Sustainability Reporting Standards (ASRS) are expected to adopt
the same structure as the global standards, which are based on
four pillars: governance, strategy, risk management and metrics
and targets.
This year, the Group finalised a gap assessment against the
requirements and obligations of the draft Australian standards:
ASRS 1 General Requirements for Disclosure of Climate-related
Financial Information, ASRS 2 Climate-related Financial Disclosures
and ASRS 101 References in Australian Sustainability Reporting
Standards. As a result, it has developed a roadmap, building on
the work to date, and closing gaps to enable compliance and
continuous improvement in climate-related financial disclosure.
The Group has been publicly reporting on scope 1 and 2
greenhouse gas emissions since FY2015 and set targets for
reduction of scope 1 and 2 emissions in FY2021. Scope 3
emissions were first estimated and reported in FY2022, and work
has continued to improve the accuracy and integrity of this data
and how emissions may be reduced. The Group reviewed its
approach to managing the effects of climate change and its
impact through the existing risk framework introduced in FY2022
and included climate change as a key strategic risk in the
Review of Financial Performance and Operations in the FY2023
Annual Report.
28
2024 Annual Report
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Review of Financial Performance and Operations
Reconciliation of statutory and
normalised performance
As in previous years, the Group reports on both the statutory
result and the normalised result for FY2024 compared to the prior
year. Commentary in this report focuses on the normalised result.
Group statutory result FY2024
On a statutory reporting basis, the Group generated:
$ million
FY2024
FY2023
EBITDA
165.1
144.1
EBIT
74.3
(233.7)
PBT
39.8
(256.8)
PAT
30.5
(229.9)
EPS
10.0 cents
(75.6) cents
Group normalised result FY2024
The statutory result for the Group in each of FY2024 and FY2023
included several one-off items. While these items all had a
financial impact on the statutory performance, they did not affect
the underlying financial performance of the Group.
To provide a more meaningful understanding of the underlying
financial performance, normalising adjustments to the statutory
financial statements for each of these items were made.
These are set out in more detail in the table on page 30. On a
normalised basis the Group generated:
$ million
FY2024
FY2023
EBITDA
164.1
160.2
EBIT
76.1
58.3
PBT
41.6
35.2
PAT
29.2
28.5
EPS
9.6 cents
9.4 cents
Normalising adjustments in FY2024 consist of the following:
•
Profit before tax of $13.2 million generated from the sale of
property in Canberra partially offset by exit costs.
•
Betta Milk and Meander Valley Dairy acquisition and integration
costs of $6.9 million and impairment of plant and equipment
of $2.8 million following closure of the Burnie processing site.
•
Restructuring costs of $5.3 million from the continuation of
the Group’s restructuring program announced in FY2023.
•
One-time income tax costs of $3.3 million which primarily
relate to Bega Group finalising the formation of a tax
consolidated group, which required resetting the tax cost
bases of revenue and capital assets. The effective income tax
rate is 29.8% on a normalised basis.
Dividends paid in FY2024
On 24 August 2023 the Group declared a final FY2023 fully
franked dividend of 3.0 cents per share, representing a
distribution of $9.1 million. The Directors activated the Group’s
Dividend Reinvestment Plan (DRP) for this dividend. The DRP
offers ordinary shareholders in Australia and New Zealand
the opportunity to acquire fully paid ordinary shares without
transaction costs. Shares purchased under the DRP were
allotted on 21 September 2023 and raised $0.8 million in new
share capital.
On 22 February 2024 the Group declared an interim fully franked
dividend of 4.0 cents per share, representing a distribution
of $12.2 million. The Directors activated the Group’s DRP for this
dividend. Shares purchased under the DRP were allotted on
4 April 2024 and raised $1.1 million in new share capital.
On 29 August 2024 the Group declared a final fully franked
dividend of 4.0 cents per share representing a distribution of
$12.2 million, an increase of $3.1 million compared to the 2023
final dividend. The DRP will also be available for this dividend.
Dividends paid to shareholders in relation to the FY2024 year
will total $24.4 million which represents a $1.6 million increase
from the dividends paid in respect of FY2023 which totalled
$22.8 million.
29
Bega Cheese Limited
Return to Table of Contents
Review of Financial Performance and Operations
The table below demonstrates the movement between the financial performance for statutory reporting purposes and the normalised
financial performance for the Group. These adjustments have not been subject to specific audit procedures.
Consolidated
Per Financial
statements
$m
Canberra
sale
$m
Restructuring
$m
Betta Milk
acquisition
$m
Tax
adjustments
$m
Normalised
outcome
$m
Period ended 30 June 2024
Revenue
3,521.6
-
-
-
-
3,521.6
Cost of sales
(2,823.1)
-
-
-
-
(2,823.1)
Gross profit
698.5
-
-
-
-
698.5
EBITDA
165.1
(13.2)
5.3
6.9
-
164.1
Depreciation, amortisation
and impairment
(90.8)
-
-
2.8
-
(88.0)
EBIT
74.3
(13.2)
5.3
9.7
-
76.1
Net finance costs
(34.5)
-
-
-
-
(34.5)
Profit/(loss) before income tax
39.8
(13.2)
5.3
9.7
-
41.6
Income tax (expense)/benefit
(9.3)
3.9
(1.6)
(2.1)
(3.3)
(12.4)
Profit/(loss) for the year
30.5
(9.3)
3.7
7.6
(3.3)
29.2
Gross margin - percentage
19.8%
19.8%
Basic earnings per share - cents
10.0
9.6
Consolidated
Per Financial
statements
$m
Vegemite
Way
$m
Impairment
$m
Restructuring
$m
Other
costs
$m
Tax
consolidation
$m
Normalised
outcome
$m
Period ended 30 June 2023
Revenue
3,376.0
-
-
-
-
-
3,376.0
Cost of sales
(2,719.6)
-
-
-
-
-
(2,719.6)
Gross profit
656.4
-
-
-
-
-
656.4
EBITDA
144.1
(16.2)
-
26.3
4.8
1.2
160.2
Depreciation, amortisation
and impairment
(377.8)
-
275.9
-
-
-
(101.9)
EBIT
(233.7)
(16.2)
275.9
26.3
4.8
1.2
58.3
Net finance costs
(23.1)
-
-
-
-
-
(23.1)
Profit/(loss) before income tax
(256.8)
(16.2)
275.9
26.3
4.8
1.2
35.2
Income tax (expense)/benefit
26.9
2.0
(45.9)
(7.9)
(1.4)
19.6
(6.7)
Profit/(loss) for the year
(229.9)
(14.2)
230.0
18.4
3.4
20.8
28.5
Gross margin - percentage
19.4%
19.4%
Basic earnings per share - cents
(75.6)
9.4
30
2024 Annual Report
Return to Table of Contents
Review of Financial Performance and Operations
Cash flow, net debt and
Group capital management
Cash flows
The Group generated the following cash flows in FY2024:
$ million
FY2024
FY2023
Operating activities
134.3
8.2
Investing activities
(52.3)
99.9
Financing activities
(82.8)
(86.6)
Key operating activities generating cash flow in FY2024 were:
•
net profit after tax of $99.0 million after adjusting back
non-cash items of impairment, depreciation, amortisation,
profit on sale of non-current assets
•
lower working capital of $74.2 million, mostly from a lower
quantity of Bulk inventory on hand. Both payables and
receivables increased in FY2024 mainly due to timing of
activity and price and cost increases
•
additional taxation payments of $16.5 million including the
formation of the tax consolidation of the Group and payments
of $16.2 million against provisions.
Key investing activities generating cash flow in FY2024 were:
•
receipt of $27.9 million largely from the sale of property in
Canberra
•
payments totalling $74.6 million for capital investment
including software
•
payments of $12.4 million for the Betta Milk and Meander
Valley Dairy asset acquisition.
Key financing activities generating cash flow in FY2024 were:
•
decrease in net borrowings of $42.0 million
•
principal elements of lease payments of $21.4 million
•
dividend payments of $19.4 million.
Net debt at year end
The Group had consolidated net debt of $162.4 million as at
30 June 2024, compared to $203.6 million as at 30 June 2023,
a reduction of $41.2 million. The reduction in net debt arose
from the cash inflow of $74.2 million from improvements in
working capital. This was partially offset by dividend payments
of $19.4 million, and principal lease payments of $21.4 million.
Balance sheet capital management
The Group’s Syndicated Debt Facility was transitioned to
Common Terms Deed Debt Facilities in June. The Common
Terms Deed Debt Facilities established two aggregate facilities:
Facility 1 which has an aggregate limit of $270 million maturing
in July 2027 and Facility 2 which has an aggregate limit of
$180 million maturing in February 2027. In June, the Group
extended and expanded its Rabobank Trade Receivables Facility,
which now expires on 31 August 2025.
The Group continues to receive strong support from its bankers
and has the following facilities:
•
the Common Terms Deed Debt Facilities funded by six banks
with Westpac acting as the agent
•
an Inventory Facility and Trade Receivables Facilities provided
by Rabobank, and
•
other guarantee facilities provided by Westpac.
The Group reduced its normalised EBITDA to net debt
leverage ratio to 1.3 times in FY2024 (1.6 times in FY2023) and
is well within the year end bank covenant limit of 3.5 times.
The Group expects its leverage ratio to continue within
covenant requirements throughout FY2025 and is well placed
to meet future covenant obligations.
Capital investment
The Group invested capital of $74.6 million during FY2024
(FY2023: $68.1 million). The Group’s FY2024 capital works program
centred on:
•
implementing a new digital ordering platform to enhance
customer experience and improve the efficiency of processing
customers payments and claims
•
establishing a single order to cash process across the Group,
leveraging the cold chain network optimising the cost to serve
•
automation of warehouse capability at the Laverton national
distribution centre
•
improving safety and infrastructure across multiple sites.
Risk management
The Group’s senior management team is responsible for an
effective and integrated risk management framework to ensure
both strategic and operational risks are continuously identified,
assessed, and treated in a timely and appropriate manner.
In FY2024, the Group established the Risk and Sustainability
Committee (RSC), a new Board-level committee tasked
with oversight of the governance of both corporate risk and
sustainability. The role of the RSC is to work in conjunction with
the Board on assessing and setting the Group’s risk appetite and
provide senior management with decision-making guidelines to
support the agreed profile. The RSC is responsible for overseeing
and assessing the efficacy of the Group’s risk management policy,
processes and procedures, and regularly reviews and updates the
risk appetite statement for approval by the Board.
The changing nature of the risk environment is reflected in
the Group’s risk appetite statement which the Board reviews
and updates regularly. During FY2024, the Board adjusted
the appetite ratings of two risks in response to internal or
external factors. Additionally, in FY2024 the RSC and Board
have requested additional industry-relevant risks be elevated,
requiring quarterly management reporting. In FY2024, the
Group also implemented additional risk management initiatives
including additional detailed reports and increased frequency of
risk management reporting.
The internal audit function provides independent and objective
assurance on the adequacy and effectiveness of the Group’s
systems for risk management, internal control and governance,
along with recommendations to improve the effectiveness and
efficiency of these systems and processes.
31
Bega Cheese Limited
Return to Table of Contents
Review of Financial Performance and Operations
Key strategic risks include:
Source of risk
Risk overview
Mitigation strategies
Geopolitical tensions
Significant country and regional
upheavals impacting normal
lines of business
•
Continue to focus on building diversified revenue streams
•
International supply chain resilience including multi-supplier
arrangements for key raw materials
•
Supply chain reviews for capital item purchasing
Product and
consumer trends
Unable to forecast significant
shifts away from profitable
product categories that
materially impact returns to
the business
•
Further investment in consumer insights teams, research
and trend analysis
•
Active product innovation team
•
Align capital investment plan to support attractive categories
Competitors
New domestic market
entrants change the
competitive landscape
•
Investment in key brands, brand growth, and brand
extension plans
•
Maintain strong customer and supplier relationships
Milk pool and milk
returns
Milk volumes continue to
decline in Australia increasing
the relative price of milk
and reducing ability to
grow profitably
•
Emphasis on maintaining strong farmer relationships and
delivering a competitive farm gate milk price
•
More geographically diverse spread of site assets
•
Focus on higher returning dairy categories, solids returns
and portfolio mix
Climate change
Failure to understand,
prepare for, or respond to,
climate-related financial
impacts including
climate-related financial
disclosures
•
Strong relationships with industry bodies, regulators
and suppliers
•
Understand long-term scenario impacts of global warming
on key assets and address long-term capital and
investment plans
Biosecurity
Biosecurity hazards have a
material and immediate impact
on the Group’s access to key
international markets and may
limit the supply of agricultural
inputs and long-term viability
of producers and processors
•
Relationships with federal and state government and trade
industry bodies
•
Review in-market supply, production and distribution options
to maintain continuity of supply and sales globally
Technology and
cyber security
Technology becomes aged
and is not maintained and
upgraded on a regular basis and
is no longer able to support the
business adequately
Security of technology platforms
across the business is breached
•
Maintain conformance to the ISO 27001 Information Security
Management System (ISMS) standard
•
Maintain alignment to NIST CSF (Cyber Security Framework)
•
Continue regular organisation-wide awareness and
training programs
•
Enterprise-wide backup and system recovery solution
People retention
Failure to attract and retain top
talent that gives the Group a
competitive advantage
•
Development plans in place for top talent across the Group
•
Remuneration reviews, benchmarking and
performance recognition
•
Regular reviews and recommendations for improvement
for regretful exits and unsuccessful contract offers
32
2024 Annual Report
Return to Table of Contents
Review of Financial Performance and Operations
Key operational risks include:
Source of risk
Risk overview
Mitigation strategies
Business continuity
Robust business continuity
plans for all sites and essential
centralised services are not
in place and the business is
unable to respond to an event
•
Identify ‘high risk sites’ and implement upgraded business
continuity plans referencing production and supply chain
alternatives in the event of a disruption
•
Regular testing of response plans, product recall processes
and production diversion processes
Safety
Operations fail to protect
employees from physical and
or psychosocial harm
•
Executive level performance measures include safety performance
•
Comprehensive safety management systems inclusive of
incident management
•
Capital approval process that prioritises safety investment
Food safety
Unsafe products are produced
and leave Bega facilities
causing harm to the public and
significant reputational damage
•
Mature quality management system that is compliant to
international standards
•
Frequent external reviews of premises by external parties across
a number of accreditations
•
Continue to integrate quality reviews, approvals and testing
protocols into the product release process
Environmental
compliance
Operations fail to
meet environmental
compliance obligations
•
Energy Management Capability Program
•
Continuous site reviews and audit schedule
Sustainability
Failure to deliver on
commitments made and
communicate effectively
with internal and external
stakeholders on sustainability
•
Undertake comprehensive materiality assessments and
review target areas
•
Develop, launch and activate the Bega Sustainability Strategy
•
Engage and communicate with stakeholders on sustainability
commitments
Wage
underpayment
Underpaying staff in
relation to legal obligations
incurring significant fines
and reputational damage
•
Continue to assess areas of high risk
•
Implement rolling EBA compliance reviews covering the
waged workforce
33
Bega Cheese Limited
Return to Table of Contents
Review of Financial Performance and Operations
Outlook
The increase in profitability of the Branded segment has been important to the Group in FY2024. The Group’s market-leading brands
participated in growth categories with the Branded segment having recovered its EBITDA margins in FY2024 with factors such as
favourable category mix, value creation programs and pricing to offset cost inflation all playing a role.
The relocation of manufacturing from Burnie to Lenah Valley and continuation of the restructuring program announced in FY2023
will improve the efficiency and effectiveness of the Branded segment and corporate functions, and mitigate overhead cost inflation.
Continuation of Branded innovation and investment behind market-leading brands in key growth categories, coupled with International
expansion is expected to deliver solid growth in FY2025 and across the strategic horizon.
The Group experienced a significant challenge in the Bulk segment in FY2024 as the disconnect between farm gate milk prices and a
rapid and sustained fall in dairy commodity prices in late FY2023 continued and led to a loss in the Bulk segment. Looking forward, the
disconnect between farm gate milk prices and global dairy commodity prices has eased, and returns in the Bulk segment are expected
to significantly improve in FY2025.
The Group remains focused on cash generation and maintaining balance sheet strength to enable it to unlock the growth expected
across the strategic horizon. The Group has considered these matters leading into FY2025 and factored them into the Group’s outlook
and guidance.
34
2024 Annual Report
Return to Table of Contents
Barry Irvin is recognised globally for his extensive
experience in the dairy industry and has been
Chairman of Bega Cheese Limited since 2000.
Barry’s leadership has seen Bega grow from a small
regionally based dairy company to now one of
the largest dairy and food companies in Australia,
supplying a large range of dairy and grocery
products in Australia and around the world.
Barry’s depth of knowledge of the industry includes
a significant understanding of the issues affecting
Australian dairy farmers, the key investments
required to meet changing consumer needs and the
management of long-term customer relationships.
Barry is very aware of the importance of social
responsibility, he has been Chairman of Giant Steps,
an organisation providing services to children and
young adults with autism since 2002.
Peter has many years of leadership experience in
major Australian and International food companies,
including Executive Chairman of Asahi Holdings
(Australia) Pty Ltd, Chief Executive of Goodman
Fielder Ltd and before that Chief Executive and
Chief Operating Officer of National Foods Ltd.
Raelene Murphy has over 35 years’ experience in
strategic, financial and operational leadership in both
industry and professional advisory. In her professional
advisory career, she specialised in operational
and financial restructuring including merger and
acquisition integration. She was formerly a Managing
Director at KordaMentha and a Partner in a national
accounting firm where she led the corporate
turnaround practice. Her industry experience
includes as CEO of the Delta Group and senior
executive roles in the Mars Group.
Raelene is a Fellow of Chartered Accountants
Australia and New Zealand and a Member of
Chief Executive Women.
Other BGA Committees:
• Nil
Other Directorships:
• Chairman of Giant Steps Australia Limited
• Chairman of the Regional Circularity
Co-operative Limited
Former ASX listed Directorships in the last 3 years:
• Nil
Other BGA Committees:
• Chair of the Risk and Sustainability Committee
Other Directorships:
• Non-executive Director of Endeavour Group
• Chairman at Golf Australia
Former ASX listed Directorships in the last 3 years:
• Non-executive Director of Costa Group Holdings
(ASX:CGC)
• Non-executive Director of Nufarm Ltd (ASX:NUF)
Other BGA Committees:
• Chair of the Audit Committee
• Member of the Nomination, Remuneration,
People & Capability Committee
• Member of the Risk & Sustainability Committee
Other Directorships:
• Non-executive Director of Elders Limited (ASX:ELD)
• Non-executive Director of Integral Diagnostics
Limited (ASX:IDX)
• Non-executive Director of Tabcorp Holdings
Limited (ASX:TAH)
Former ASX listed Directorships in the last 3 years:
• Non-executive Director of Altium Limited (ASX:ALU)
Barry Irvin – AM
Executive
Chairman Bega
Cheese Limited
Peter Margin
BSc(Hons), MBA
Independent
Director since
September 2020
and Deputy
Chairman
Raelene Murphy
BBus, FCA, GAICD
Independent
Director since
June 2015
Directors Report
35
Bega Cheese Limited
Return to Table of Contents
Terry brings to the Board a wealth of experience
in the food industry, including a period of the
Chairmanship of the Australian Food and Grocery
Council and has been responsible for leading
growth and acquisition strategies over many
years in the industry.
Terry was, from 2001 until 2017, the Managing Director
of Simplot Australia Pty Limited, the US owned, but
Australian-centric, food processor and marketer
managing leading Australian brands including Birds
Eye, Edgell and John West. After his retirement in early
2017, Terry took up a number of Australian Company
Board positions, recently reducing these to two.
Rick was appointed to the Board following the
merger of Bega Cheese Limited and Tatura Milk
Industries Pty Ltd.
Rick joined the Tatura Milk Industries’ Board in
2003 and was heavily involved in negotiating the
initial subscription by Bega of 70% shareholding in
Tatura Milk Industries. Rick also took a lead role in
negotiating the scheme of arrangement for Bega to
acquire the remaining 30% of Tatura Milk Industries
in December 2011.
Rick has represented dairy farmers in many various
industry roles, and was formerly the Chair of
Murray Dairy.
Appointed in September 2019, Patria is an
experienced Independent Director with over
20 years Board experience across various sectors
and geographies. She has significant insight and
understanding of market development, business
transformation, including digital and technological
change and M&A and financial transactions.
She also brings strong ASX, audit, risk management
and governance experience.
Patria qualified as a Chartered Accountant and
was a Partner at KPMG. She is a Fellow of the
Australian Institute of Company Directors.
Originally from Northern Ireland, Harper and his wife
own and actively manage a dairy farm near Koroit
in Western Victoria. Harper’s career has centred
around agriculture and agribusiness. His career in
agribusiness included several senior executive roles
with Glenfarm Holdings rendering business in the UK,
and Deputy CFO / Head of Finance with Almarai Co.,
the market leading GCC food and beverage company
based in Riyadh, Kingdom of Saudi Arabia. Harper
has held several Australian dairy industry positions
including three years as a non-executive director of
West Vic Dairy Inc., 18 months as a non-executive
director of Murray Goulburn Co-operative Limited
and seven years as a non-executive Finance Director
of the Australian Dairy Conference Pty. Ltd.
An accountant by training, Terry has been active in
finance and management roles in the textile industry
for ten years and in the food industry for over 30 years.
Other BGA Committees:
• Chair of the Nomination, Remuneration,
People & Capability Committee
• Member of the Audit Committee
Other Directorships:
• Chairman of Bundaberg Brewed Drinks Pty Limited
Former ASX listed Directorships in the last 3 years:
• Chairman of Clean Seas Seafood Limited (ASX:CSS)
Rick has been a Supplier Director of the Group since
December 2011. He ceased being a supplier of milk to
the Group on 23 December 2023 and therefore has
become an Independent Director of the Group from
this date.
Other BGA Committees:
• Chair of the Milk Services Committee
• Member of the Nomination, Remuneration,
People & Capability Committee
Other Directorships:
• Nil
Former ASX listed Directorships in the last 3 years:
• Nil
Other BGA Committees:
• Member of the Audit Committee
• Member of the Risk and Sustainability Committee
Other Directorships:
• Non-executive Director of GWA Limited (ASX:GWA)
• Non-executive director of GDI Property Group
Limited (ASX:GDI)
Former ASX listed Directorships in the last 3 years:
• Non-executive Director of EVT Limited (ASX:EVT)
• Non-executive Director of Ridley Corporation
Limited (ASX:RIC)
Other BGA Committees:
• Member of the Audit Committee
• Member of the Risk and Sustainability Committee
• Member of the Milk Services Committee
Other Directorships:
• Nil
Former ASX listed Directorships in the last 3 years:
• Nil
Terry O’Brien
FCPA, FAICD
Independent
Director since
September 2017
Rick Cross
BAgrSc (Hons),
GAICD
Independent
Director since
December 2023
Patria Mann
BEc, FAICD
Independent
Director since
September 2019
Harper Kilpatrick
BSc(Agri), MBA,
FCA, GAICD
Director since
April 2021
36
2024 Annual Report
Return to Table of Contents
Directors’ Report
Indemnification and insurance
premiums for officers
During the financial year, the Group paid a premium in respect of
a contract insuring the Directors and all executive officers of the
Group and of any related body corporate against a liability incurred
as such a Director or executive officer, not exceeding the extent
permitted by law. The contracts of insurance prohibit disclosure
of the nature of the liabilities and the amount of the premiums.
The Group has not otherwise, during or since the financial year,
except to the extent permitted by law, indemnified or agreed to
indemnify an officer of the Group or any related body corporate
against a liability incurred as such an officer. This does not include
remuneration or employment-related benefits, any sum payable
pursuant to a financial support direction or contribution notice
issued in respect of any pension scheme, fines and pecuniary
penalties for a deliberate or intentional act, nor amounts which
are prohibited to be paid by law.
Each Director has entered into a deed of access and indemnity
with the Group, which indemnifies them for losses incurred as a
Director or officer of the Group and places an obligation on the
Group to maintain a current Directors’ and Officers’ policy with
a reputable insurer for the period of the Director’s tenure and
for a seven year tail period (or longer if there is an unresolved
outstanding claim against the Director) and a contractual right
of the Director to access Group records for the period of the
Director’s tenure and for a seven year tail period (or longer if there
is an unresolved outstanding claim against the Director).
The Group has also agreed to indemnify the Company Secretary
and certain senior executives for all liabilities to another person
(other than the Group or a related body corporate) that may
arise from their position, except where the liability arises out of
conduct involving a lack of good faith. The agreement stipulates
that the Group will meet the full amount of any such liabilities,
including costs and expenses.
Company Secretary
The Company Secretary registered with the ASX is Brett Kelly FCA,
GAICD. Brett was appointed to the position of Company Secretary
in 2002. Brett holds a Bachelor of Commerce in Accounting and
is a Chartered Accountant with 39 years’ experience. He has
also been a graduate member of the Australian Institute of
Company Directors since 2006. Brett completed the Certificate in
Governance and Risk Management with the Governance Institute
of Australia in December 2011.
Principal activities
The principal activity of the Group in the course of the financial
year was receiving, processing, manufacturing and distributing
dairy and other food-related products. A number of key events
in relation to the activities of the Group during the year ended 30
June 2024 are set out in the Chairman and Chief Executive Officer’s
Report and the Review of Financial Performance and Operations
which are to be read in conjunction with this Directors’ Report.
Dividends
2024
$m
2023
$m
Interim ordinary dividend for the year
ended 30 June 2024 of 4.0 cents
12.2
-
Final ordinary dividend for the year
ended 30 June 2023 of 3.0 cents
9.1
-
Interim ordinary dividend for the year
ended 30 June 2023 of 4.5 cents
-
13.7
Final ordinary dividend for the year
ended 30 June 2022 of 5.5 cents
-
16.7
In addition to the above dividends, since the end of the financial
year the directors of the Group (Directors) have recommended
payment of a final ordinary dividend of $12.2 million (4.0 cents per
fully paid share) to be paid on 3 October 2024.
Review of operations
A comprehensive review of operations is set out in the Review of
Financial Performance and Operations.
Significant changes in the state of affairs
Other than those disclosed in the Chairman and Chief Executive
Officer’s Report and the Review of Financial Performance and
Operations there have been no significant changes in the state of
affairs of the Group since the last annual report.
37
Bega Cheese Limited
Return to Table of Contents
Directors’ Report
Meetings of Directors and
Board Committees
Meetings of the Audit Committee
Held and eligible
Attended
Raelene Murphy
5
5
Patria Mann
5
5
Terry O’Brien
5
5
Harper Kilpatrick
5
5
Meetings of the Nomination, Remuneration,
People & Capability Committee
Held and eligible
Attended
Terry O’Brien
4
4
Rick Cross
4
4
Raelene Murphy
4
4
Meetings of the Milk Services Committee
Held and eligible
Attended
Rick Cross
4
4
Harper Kilpatrick(1)
3
3
Meetings of the Risk and Sustainability Committee
Held and eligible
Attended
Peter Margin
4
4
Raelene Murphy
4
4
Harper Kilpatrick
4
4
Patria Mann(2)
3
3
Meetings of the Board of Directors
Held and eligible
Attended
Barry Irvin
11
11
Rick Cross
11
11
Patria Mann
11
11
Raelene Murphy
11
11
Terry O’Brien
11
11
Peter Margin
11
11
Harper Kilpatrick
11
11
(1) The Board resolved to appoint Harper Kilpatrick as a member of the
Milk Services Committee, effective 1 December 2023.
(2) The Board resolved to appoint Patria Mann as a member of the Risk and
Sustainability Committee, effective 1 December 2023.
38
2024 Annual Report
Return to Table of Contents
Directors’ Report
Remuneration report (audited)
Letter from the Nomination, Remuneration, People & Capability Committee (NRPCC) Chair
Dear Shareholders,
On behalf of the Board of Bega Cheese Limited (or the Group), I am pleased to present you with our FY2024 Remuneration Report.
At Bega Group, we remain committed to ensuring that we have remuneration structures in place which supports our vision and purpose
(“Great Food, Great People, Great Aspirations and Greater Good”) and that our reward outcomes align with sustainable long-term value
creation in the interests of our shareholders and other stakeholders.
FY2024 Performance & strategy highlights
FY2024 delivered growth in the Branded segment, with continued leading share position in key categories driven by innovation and
focused investment. Price increases were taken in our Branded business to reflect the inflationary environment and offset some of the
challenges faced by the Group in FY2024. The strategic decisions of recent years, to transform into a predominantly branded business,
played a pivotal role in FY2024 allowing the Group to meet the Short Term Incentive (STI) payment gateway threshold. A portfolio of
market-leading brands and a strong balance sheet, positions the business well for future growth.
FY2024 Remuneration and People & Capability highlights
We were proud to have become a signatory in FY2023 to HESTA’s 40:40 Vision to achieve gender balance in executive leadership by
2030, and have this year made the same commitment to membership of the Board. This is an initiative led by members of Australia’s
investor and business community across all ASX300 companies. Signing up to this initiative demonstrates our long-term commitment
to workplace gender equality and demonstrates our values of Support Each Other and Grow Our People.
Linking remuneration outcomes with Group performance
Having regard to the Group performance:
•
The FY2024 STI Plan opened for payment for the Executive Chairman, the Chief Executive Officer and the Chief Financial Officer.
These outcomes are as a result of the Group EBITDA metrics meeting the payment gateway threshold, free cash flow metrics
being achieved, safety metrics not being achieved, together with the individually assessed partial achievement of personal
objectives under the FY2024 STI Plan. Refer Section “FY2024 STI outcomes” for further details.
•
Performance rights granted under the FY2022-2024 Long-Term Incentive Plan (LTI), tested on 30 June 2024, lapsed, reflecting
that the performance hurdles of Earnings Per Share (EPS) and Return on Funds Employed (ROFE) were not achieved.
•
Performance rights granted under the FY2024-2026 LTI plan, tested on 30 June 2024, will vest at the end of the three-year
period of the plan reflecting that the FY2024 performance hurdle of ROFE was achieved. Refer section “LTI awards vesting in
FY2024” for further details.
•
To increase alignment between Key Management Personnel (KMP) incentives and shareholder interests, a relative Total Shareholder
Return measure was introduced in the FY2024-2026 LTI which will be assessed over the three-year period of the plan.
Overall remuneration outcomes for our Executive KMP reflect the business performance in FY2024.
Terry O’Brien
Chair of the Nomination, Remuneration,
People & Capability Committee
39
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Directors’ Report
Remuneration at Bega Group in FY2024
40:40 Vision of gender composition of reports to the Chief Executive Officer and the Board
We were proud to become a signatory in FY2023 to HESTA’s 40:40 Vision to achieve gender balance
in executive leadership by 2030. In FY2024 we extended this vision to also include membership of
the Board. This initiative is led by members of Australia’s investor and business community across
all ASX300 companies.
40:40 stands for 40% women, 40% men and 20% any gender, and 40:40 Vision seeks to achieve
this goal by encouraging companies to set and publicly report on progress against targets for the
composition of their executive leadership teams.
Signing up to 40:40 Vision demonstrates our long-term commitment to workplace gender equality,
demonstrating our values of Support Each Other and Grow Our People. 40:40 Vision is a way we
can further align to the United Nations Sustainable Development Goal, to achieve gender equity and
empower all women.
We have set our goals to reach the 40:40 Vision target of 40% women on our Executive Leadership Team and the Board in the
following way, and we recognise we must continue to do more work to reach 40:40 in all leadership teams across the Group.
•
2024 – 20%
•
2027 – 30%
•
2030 – 40%
As at the end of FY2024 22% (2) of our Executive team, and 29% (2) of our Board are women.
40
2024 Annual Report
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Directors’ Report
Key Management Personnel Remuneration
This report sets out the remuneration of the Executive Chairman, Chief Executive Officer (CEO), Chief Financial Officer (CFO) and
Non-executive Directors. These individuals represent the Key Management Personnel (KMP) of the Group, being those accountable for
planning, directing and controlling the affairs of the Group during the financial year to 30 June 2024.
The executive positions comprising KMP are determined by the Nomination, Remuneration, People & Capability Committee (NRPCC)
in consultation with the Executive Chairman and the CEO. There was no change to the composition of executive KMP or any changes to
the composition of the Board in FY2024.
Name
Position held
Term
Executive KMP
Barry Irvin
Executive Chairman
Full year
Peter Findlay
Chief Executive Officer
Full year
Gunther Burghardt
Chief Financial Officer
Full year
Non-executive Directors
Rick Cross
Non-Executive Director
Full year
Harper Kilpatrick
Non-Executive Director
Full year
Patria Mann
Non-Executive Director
Full year
Peter Margin
Deputy Chairman
Full year
Raelene Murphy
Non-Executive Director
Full year
Terry O’Brien
Non-Executive Director
Full year
Overview of FY2024 executive remuneration framework
At Bega Group, our executive remuneration framework is designed to attract, motivate and retain highly qualified and experienced
executives, who align with our vision and purpose of “Great Food, Great People, Great Aspirations and Greater Good.”
Our remuneration structures ensure a linkage between pay outcomes and business performance. Our remuneration structures ensure
that we:
•
appropriately remunerate executives for their role
•
motivate executives to perform in the best interests of the company
•
make remuneration decisions in a way that provides equity and consistency in and between roles
•
have remuneration outcomes that are aligned with our short-term and long-term objectives
•
support effective governance
•
attract and retain the talent we need to underpin the Group’s strategic plan.
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Bega Cheese Limited
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Directors’ Report
An overview of our Executive KMP remuneration framework is set out below:
Remuneration Element
Description
Fixed remuneration
50% of total target
opportunity
Total fixed remuneration (TFR) comprises cash salary and superannuation contributions.
TFR is not subject to specific performance or deliverables criteria and is generally considered fixed for
the duration of the relevant annual review period.
TFR is reviewed annually by the NRPCC regarding individual and Group performance, the skills and
experience of the individual, the size and complexity of the individual’s role and the KMP’s total
remuneration package.
Further information can be found under FY2024 Fixed Remuneration outcomes.
Short-Term Incentive
25% of total target
opportunity
The objective of the Short-Term Incentive (STI) Plan is to reward participants for achieving annual goals
linked with the Group’s strategy.
Payments under the STI Plan are subject to agreed performance outcomes as approved by the Executive
Chairman and the NRPCC for the CEO and CFO. The performance outcomes for the Executive Chairman
are approved by the Board.
Further information can be found under FY2024 STI outcomes.
Long-Term Incentive
25% of total target
opportunity
The objective of the Long-Term Incentive (LTI) Plan is to reward participants for long-term performance
and long-term value creation for shareholders.
The LTI Plan is subject to the achievement of performance hurdles as determined by the NRPCC.
Further information can be found under LTI awards granted in FY2024.
Linking remuneration outcomes with Group performance
The key indicators of Group performance and shareholder wealth relevant to the remuneration of KMP that have been extracted from
the FY2024 financial statements are as follows:
Key
performance
indicator
FY2024
Actual
FY2024
Normalised
FY2023
Actual
FY2023
Normalised
FY2022
Actual
FY2022
Normalised
FY2021
Actual
FY2021
Normalised
FY2020
Actual
FY2020
Normalised
FY2024
vs FY2023
Normalised
Amount
%
Enterprise value
$m
1,456
1,456
1,070
1,070
1,422
1,422
2,087
2,087
1,190
1,190
386
36
Profit before tax
$m
39.8
41.6
(256.8)
35.2
33.8
64.0
99.2
60.1
31.0
46.2
6.4
18
Profit after tax
$m
30.5
29.2
(229.9)
28.5
24.2
46.3
78.0
39.6
21.3
31.9
0.7
2
Dividends
per share
Cents
8.00
8.00
7.50
7.50
11.00
11.00
10.00
10.00
10.00
10.00
0.5
7
Earnings
per share
Cents
10.0
9.6
(75.6)
9.4
8.0
15.2
29.5
15.0
9.9
14.9
0.2
2
Share price
at 30 June
$
4.25
4.25
2.85
2.85
3.82
3.82
5.89
5.89
4.38
4.38
1.40
49
Total shareholder
return
%
51.9
51.9
(23.4)
(23.4)
(33.3)
(33.3)
34.6
34.6
(4.8)
(4.8)
75.3
n/a
KMP total
remuneration
$’000
4,540
4,540
3,507
3,507
3,852
3,852
4,446
4,446
2,940
2,940
1,033
29
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Directors’ Report
FY2024 Fixed Remuneration outcomes
(a) Overview
As noted above, the Total Fixed Remuneration (TFR) for KMP is reviewed annually by the NRPCC having regard to individual and Group
performance, the skills and experience of the individual, the size and complexity of the individual’s role and the KMP’s total remuneration
package. In setting TFR, to remain market competitive, the NRPCC will refer to appropriate external market benchmarks.
(b) Review of TFR in 2024
The following changes were made to the TFR of Executive KMP in FY2024:
•
Executive Chairman: consistent with previous years, the Board agreed that the TFR of the Executive Chairman be split as to his
responsibilities as Chairman of the Board and as the most senior executive of the Group.
In FY2024, the Executive Chairman’s remuneration was adjusted as follows:
o
The Executive Chairman’s TFR was increased by 3.9% (inclusive of the legislated superannuation guarantee increase effective
1 July 2023), in line with the Group’s annual salary review budget, to $526,543 per annum effective 1 September 2023, as approved
by the Board.
o
The Executive Chairman’s fee for his role as the Chairman of the Board was increased by 3.5% to $226,000 in line with the
Group’s annual salary review budget, effective 1 December 2023, as approved by the Board.
The Executive Chairman’s annual fixed remuneration is $752,543 comprising a TFR of $526,543 relating to his executive duties and
$226,000 relating his role as Chairman of the Group.
•
CEO: The CEO’s TFR was increased by 3.7% (inclusive of the legislated superannuation guarantee increase effective 1 July 2023),
in line with the Group’s annual salary review budget to $995,780 per annum effective 1 September 2023 as approved by the Board.
•
CFO: The CFO’s TFR was increased by 3.8% (inclusive of the legislated superannuation guarantee increase effective 1 July 2023),
in line with the Group’s annual salary review budget to $664,580 per annum effective 1 September 2023 as approved by the Board.
The target pay mix of the Executive Chairman (excluding Chairman Board Fees), the CEO and CFO is set out below:
Executive Chairman
50%
25%
25%
CEO
50%
25%
25%
CFO
50%
25%
25%
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
Fixed remuneration
Target STI opportunity
Target LTI opportunity
43
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Directors’ Report
FY2024 STI outcomes
(a) Overview
Executive KMP have the potential for part of their total remuneration to be delivered under the Group’s STI Plan, which is designed to reward
the achievement of performance hurdles that are linked to the annual objectives which are tied to the Group’s overarching strategy.
The payment of any STI is subject to the personal performance of the individual and the Group against determined financial and
non-financial criteria and is also subject to the achievement of Group and individual gateways i.e., if these gateways are not met there
will be no payment under the STI unless discretion is exercised by the Board. The maximum STI payable is 110% of target opportunity with
10% aligned to a stretch EBITDA target.
The Group performance and individual gateway for the STI Plan to open in FY2024 were met.
The target STI awards that Executive KMP were eligible to receive in respect of FY2024 are set out in the table below. These outcomes reflect
both individual and Group performance against key metrics.
Executive KMP
Target STI
opportunity ($)
Target STI (% of
fixed remuneration)
% of target FY2024
STI awarded
% of target FY2024
STI forfeited
Barry Irvin
$263,271(1)
50%
74%
26%
Peter Findlay
$497,890
50%
75%
25%
Gunther Burghardt
$332,290
50%
75%
25%
(1) Mr Irvin’s target STI opportunity is based on his executive remuneration, not on the fees he receives as Chairman of the Board.
(b) Performance against FY2024 STI measures
The target STI award that the Executive Chairman was eligible to receive in respect of FY2024 is set out in the table below.
The NRPCC reviewed the performance of the Executive Chairman and recommended the following outcomes for Board approval.
STI component
Target %
Barry Irvin, Executive Chairman
Achieved %
EBITDA
50%
42%
EBITDA stretch
10%
0%
Personal objectives
50%
32%
The target STI award that the CEO and CFO were eligible to receive in respect of FY2024 is set out in the table below. The NRPCC
reviewed the performance of the CEO and CFO and recommended the following outcomes for Board approval.
STI component
Target %
Peter Findlay, CEO
Achieved %
Gunther Burghardt, CFO
Achieved %
EBITDA
50%
42%
42%
EBITDA stretch
10%
0%
0%
OH&S
10%
0%
0%
Free cash flow
15%
15%
15%
Personal objectives
25%
18%
18%
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Directors’ Report
FY2024 STI terms – further detail
The STI for the Executive Chairman, CEO and CFO are determined in accordance with the STI Plan as approved annually by the Board.
The table below outlines the key terms and conditions applying to the STI Plans for the Executive KMP during FY2024.
Component
Detail
Target opportunity
50% of total fixed remuneration for the Executive Chairman, CEO and CFO.
Performance period
STI awards are assessed over the 12-month financial year. Any STI award payments are made after
performance is tested at the end of the performance period.
Vehicle
All STI awards are delivered in cash.
Gateway
The Executive Chairman, CEO and CFO are only entitled to a payment under the STI Plan if specific Group
performance and individual gateways are achieved. These gateways ensure that STI payments are aligned
to the Group’s key strategic and business objectives.
The Group gateways are as follows:
•
no STI payments are made unless the Group achieves or exceeds targeted EBITDA (having accrued
for the payout of the program in that year)
•
no STI payments are made if during the year there is a major safety, quality or environmental event
that was within the reasonable control of the Group.
Individual gateways apply to the Chairman, CEO and CFO meaning that no STI payment is made unless
the individual KMP executed their duties in a proper and effective manner by:
•
leading by example and being a role model for safety, quality, and the environment
•
demonstrating collegiate behaviour and active participation in workgroup meetings
•
upholding and promoting the Group’s values and behaviours.
The CEO and CFO need to meet additional individual performance gateways relating to participation in
safety, quality and environmental programs as well as achieving a satisfactory annual performance review.
Personal objectives
Each KMP has individual performance objectives. These personal objectives are clearly linked to key
strategic areas set for the business. Performance objectives include improvement in Group safety
performance, cost reduction, productivity improvements, and business growth.
Financial objectives
The financial metrics to be applied are reviewed by the Board on an annual basis to ensure that they
closely align with the specific corporate, leadership and financial objectives of the Group.
The strategic plan, business and operating plans and annual budgets are the key reference points used
in determining the financial metrics.
Each year the NRPCC makes a recommendation to the Board for approval in respect of the determined
financial metrics for all KMP.
Performance
assessment
Each KMP’s performance was assessed at the end of the financial year against their agreed objectives.
Overall performance was assessed considering what was achieved in total across all objectives, how
this was achieved and by an assessment of personal adherence to the Group’s values.
Governance
Executive Chairman performance
At the end of the financial year the NRPCC reviews the performance of the Executive Chairman relating
to his executive duties against determined criteria.
CEO performance
At the end of the financial year the Executive Chairman assesses the actual performance of the CEO
against determined criteria.
CFO performance
At the end of the financial year, the CEO assesses the actual performance of the CFO against the
determined criteria.
STI outcome recommendations are submitted to the NRPCC prior to being submitted to the Board for
final review and approval. Board approval is required before any STI plan is paid.
Board discretion
The Board has absolute discretion to amend any component of the STI for KMP.
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Directors’ Report
LTI awards granted in FY2024
(a) Overview
The group operates an LTI Plan for the Executive Chairman, CEO and CFO. The purpose of the LTI is to:
•
assist in the retention, motivation and reward of the Executive Chairman, CEO and CFO
•
link the reward of the Executive Chairman, CEO and CFO to shareholder value creation
•
align the economic interests of CEO and CFO with shareholders by providing an opportunity to be rewarded via an equity interest
in the Group based on creating shareholder value.
The Executive Chairman, CEO and CFO have identical LTI performance targets.
The FY2024 LTI grant will be assessed against Earnings Per Share (EPS), Return on Funds Employed (ROFE) and Total Shareholder
Return (TSR).
(b) FY2024 LTI awards
The table below outlines the face value of LTI awards granted to KMP during FY2024.
Executive KMP
Target LTI
opportunity ($)
Target LTI opportunity
(% of Fixed Remuneration)
Number of performance
rights allocated
Barry Irvin
$263,271
50% of fixed remuneration
86,318
Peter Findlay
$497,890
50% of fixed remuneration
163,242
Gunther Burghardt
$332,290
50% of fixed remuneration
108,947
The table below sets out the key terms attached to the LTI awards granted to the KMP during the year.
Component
Detail
Overview
The FY2024 LTI Plan is designed to reward the Executive Chairman, CEO and CFO for long-term
performance and long-term value creation for shareholders.
Instrument
•
Executive Chairman (cash-settled performance rights): The Executive Chairman is a substantial
shareholder of the Group and as a result his personal financial interests are already aligned with
other shareholders. The opportunity to receive further shares in the Group under a share-based long-
term incentive plan may be seen to provide the Executive Chairman with an opportunity to increase
his shareholding in a manner not available to other substantial shareholders. As such, the Executive
Chairman’s LTI is to be paid in cash if the performance hurdles are met.
•
CEO and CFO (equity-settled performance rights): Given that the CEO and CFO are not
substantial shareholders of the Group, the Board has agreed that the best way to align the
performance of the CEO and CFO with the interests of shareholders is for the outcome available
under their long-term incentive to be based on performance rights over ordinary shares in the Group.
The number of performance rights for the LTI Plan is calculated using the ‘fair value’ method
(see below). Subject to the satisfaction of the performance hurdles and the vesting conditions
as set out below, each performance right issued under the plan is converted into one fully paid
ordinary share in the Group.
Exercise price
Nil.
Allocation methodology
The fair value of the performance rights for allocation purposes is calculated by taking the closing price
of Bega Cheese Limited shares at the November NRPCC meeting which was held on 20 November 2023
and deducting the present value of expected dividends forgone over the duration of the FY2024 Plan
(i.e. the dividends not received until the performance rights vest).
The fair value as per AASB 2 Share-based payments for the FY2024 LTI grant is $3.24 and the grant date
is 20 December 2023.
Performance period
The FY2024 LTI grant is subject to a performance period from 1 July 2023 to 30 June 2026.
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2024 Annual Report
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Directors’ Report
Component
Detail
Performance measures
Performance measures
The table below outlines the performance measures and vesting schedules applying to the FY2024 LTI
Plan as it applies to the Executive Chairman, CEO and CFO.
Apportionment of performance rights
•
33% of the performance rights granted under the FY2024 LTI Plan are subject to a performance
hurdle based on the achievement of an Earnings Per Share (EPS) growth target. The EPS growth
target is outlined below and applies over the entire performance period.
•
33% of the performance rights granted under the FY2024 LTI Plan are subject to a Return On Funds
Employed (ROFE) performance hurdle, apportioned into three equal tranches of 11% that are tested
each year of the plan where each annual target is met. The ROFE targets are set out in the below
table for each year of the performance period.
•
34% of the performance rights granted under the FY2024 LTI Plan are subject to a relative
Total Shareholder Return (TSR) target. The TSR target applies over the entire performance period.
The apportionment of performance rights is outlined in the table below:
Performance hurdle
Apportionment of performance rights
EPS FY2024-FY2026
33%
ROFE FY2024
11%
ROFE FY2025
11%
ROFE FY2026
11%
Relative TSR FY2024-FY2026
34%
Total
100%
Performance measures and targets
Earnings Per Share
Vesting percentage
EPS Compound Annual Growth Rate (CAGR)
target FY2024-FY2026
Nil vesting
Below 16% over the performance period
Pro-rated vesting between
0% and 50%
Between 16% and 18% compound annual EPS
growth over the performance period
50% vesting
At 18% over the performance period
Pro-rated vesting between
50% and 100%
Between 18% and 20% over the performance period
100% vesting
At 20% or above over the performance period
The Board retains the discretion to adapt the calculation of the LTI Plan measure of the Earnings Per
Share performance hurdle to reflect the impact of significant events, such as capital raising or corporate
activity, that may occur during the performance periods.
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Directors’ Report
Return on Funds Employed (ROFE)
Vesting percentage
ROFE CAGR target FY2024-FY2026
Nil vesting
At less than 4% for FY2024, at less than 5% for FY2025 and less
than 5% for FY2026 annual ROFE growth over the respective
performance period
50% vesting
At 4% FY2024, 5% FY2025 and 5% in FY2026 annual ROFE growth
over the respective performance period
Pro-rated vesting between
50% and 75%
75% vesting
At 4.5% FY2024, 5.5% FY2025 and 6% FY2026 annual ROFE growth
over the respective performance period
Pro-rated vesting between
75% and 100%
100% vesting
At 5% or above in FY2024, 6% or above in FY2025 and 7% or above
in FY2026 or above annual ROFE growth over the respective
performance period
Total Shareholder Return (TSR)
The Board has determined that the TSR hurdle will be based on the Company’s TSR relative to the TSR
performance of a group of companies (Peer Group) over the performance period. The Peer Group for
the TSR hurdle will be the ASX 101-300, and vesting will occur in accordance with the below schedule.
Vesting percentage
TSR Compound Annual Growth Rate (CAGR)
target FY2024-FY2026
Below the median of the
Peer Group nil vesting
Vesting will occur on a straight-line basis between 50% and 100%
of the metric
At the median of the Peer
Group 50% vesting
At or above the 75th
percentile of the Peer Group
100% vesting
TSR is calculated as a percentage growth in shareholder value over the performance period based on
share price growth and dividends, assuming they are reinvested into shares.
Component
Detail
Dividend and
voting rights
There are no voting or dividend rights until the performance rights vest and are exercised and converted
into ordinary shares in the Company. Additional performance rights are not granted as a result of holding
performance rights when dividends are declared by the Group.
Restrictions on transfer
The CEO and CFO may not transfer or encumber the performance rights with a security interest without
the consent of the Board.
Malus
All performance rights will also lapse in other circumstances, including, but not limited to, where the
CEO and CFO have acted fraudulently or dishonestly as determined by the Board.
There will be no vesting of performance rights assessed under the EPS and TSR measure under the FY2024 LTI Plan unless the KMP
remains employed with the Group during the entire performance period of the plan, unless the KMP is determined to be a “good leaver”
under the rules of the plan. Performance rights are assessed under the ROFE measure at the end of each of the three years of the
FY2024 LTI Plan. There will be no vesting of performance rights assessed under the ROFE measure unless the KMP remains employed
with the Group at the end of each performance period of the plan, unless the KMP is determined to be a “good leaver” under the rules
of the plan.
Performance rights that have not vested because of performance measures not being met will automatically lapse, nor will any cash
payment be made to the Executive Chairman in these circumstances.
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Directors’ Report
LTI awards vesting in FY2024
(a) Overview
Long-Term Incentive Plan FY2022 – FY2024
The FY2022 LTI Plan was tested in FY2024 (i.e. on 30 June 2024). 55% of this award was tested against EPS growth targets, and 15%
against ROFE targets in each of the three years of the plan with vesting subject to continued employment over the performance period.
The FY2022 LTI performance hurdles tested were not met and as a result no cash payment was made to the Executive Chairman and no
performance rights vested into shares for the CEO or CFO.
Long-Term Incentive Plan FY2024 – FY2026
The first ROFE tranche of the FY2024 LTI was tested in FY2024 (i.e. on 30 June 2024). 11% of the award was tested against the FY2024 ROFE target.
The ROFE performance hurdle for the first tranche of the FY2024 LTI was met, and as a result a cash payment will be made to the
Executive Chairman and vested Performance Rights granted to the CEO or CFO at the end of the three year plan period, or earlier if they
leave the groups employment and are determined to be a “good leaver” under the rules of the plan.
Employee Share Purchase Plan
The Group provides employees the opportunity to acquire Bega Cheese Limited shares under the Bega Cheese Limited Employee Share
Plan through a pre-tax salary sacrifice arrangement. The plan enables participants to sacrifice up to $5,000 to acquire shares in the
company, subject to a holding restriction. The plan is open to all permanent employees of the company.
Executive KMP remuneration statutory table
Details of each Executive KMP’s remuneration for FY2024 (calculated in accordance with the applicable Accounting Standards) are set
out below.
Short-term benefits
Post-
employment
benefits
Long-term benefits
Share-based payment
Total
Year
Cash
salary
and fees
Short-term
incentive(1)
Superannuation
Leave(2)
Long-term
incentive(3)
Cash settled
performance
rights(4)
Equity settled
performance
rights(4)
All
amounts
$
$
$
$
$
$
$
$
Executive Chairman
Barry Irvin(5)
2024
719,010
194,821
27,399
63,446
(85,424)
144,339
- 1,063,591
2023
694,612
-
25,292
57,988
(45,287)
-
-
732,605
Executives
Peter Findlay(6) 2024
962,769
373,418
27,399
98,687
-
-
73,097 1,535,370
2023
836,687
-
25,292 104,076
-
-
(36,136)
929,919
Gunther
Burghardt(7)
2024
633,436
249,218
27,399
55,620
-
-
62,820 1,028,493
2023
456,032
-
18,969
41,415
-
-
78,061
594,477
Former executives
Paul van
Heerwaarden(8) 2024
-
-
-
-
-
-
-
-
2023
604,142
-
18,969
39,813
-
-
(248,837)
414,087
Total
Executive
remuneration
2024 2,315,215
817,457
82,197 217,753
(85,424)
144,339
135,917 3,627,454
2023 2,591,473
-
88,522 243,292
(45,287)
-
(206,912) 2,671,088
(1) No STI payments were made to KMP for FY2023.
(2) The expense relates to the combined long service and annual leave accrual movement during the year.
(3) Long-term incentive based on the achievement of specified milestones of the Executive Chairman’s LTI Plan. The amount reflects the prior period expense
reversal relating to the FY2023 to FY2025 LTI plan not vesting. Further details of the Executive Chairman’s LTI Plan are set out in the Summary of Plans above.
(4) In accordance with accounting standards, remuneration includes the amortisation of the fair value at grant date of performance rights issued under
the LTI Plans that are expected to vest, less any write-back on performance rights lapsed or expected to lapse as a result of actual or expected
performance against Plan hurdles. The value disclosed in the above table represents the portion of fair value allocated to this reporting period and
is not indicative of the benefit, if any, that may be received by the Executive should the performance conditions with respect to the relevant long-term
incentive plan be satisfied. The amount of $144,339 under the cash settled performance rights in FY2024 reflects current year expense for the FY2024
to FY2026 plan for the Executive Chairman. The amount of $135,917 under the equity settled performance rights in FY2024 reflects current year expense
for the FY2024 to FY2026 plan for the CEO and CFO; less the write-back of expense incurred in prior periods relating to unvested rights that were
forfeited in respect of the FY2023 to FY2025 plan of $216,054. Further details of the CEO’s and CFO’s LTI Plan are set out in the Summary of Plan above.
(5) Includes remuneration for Non-executive Chairman responsibilities.
(6) Mr Findlay held the roles of Chief Financial Officer, Chief Operating Officer and Chief Executive Officer throughout FY2023. Remuneration over the
period is pro-rated accordingly.
(7) Mr Burghardt commenced in his role as Chief Financial Officer and subsequently as Key Management Personnel on 3 October 2022.
(8) Mr van Heerwaarden ceased employment with the company on 3 February 2023, and subsequently ceased as Key Management Personnel on the same day.
49
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Directors’ Report
Non-Executive Directors’ remuneration
Remuneration policy and arrangements
On 1 July 2023 there was a change to Board committees with the Audit and Risk Committee responsibilities changing to Audit, with Risk
responsibilities moving to a new committee, Sustainability and Risk.
The Board sets Non-executive Director fees in line with the key objectives of the Group’s remuneration policy set out below.
•
Market competitive: In setting Directors’ fees, the Board takes into consideration the Group’s existing remuneration policies,
fees paid by comparable companies and the level of remuneration required to attract and retain Directors of the appropriate calibre.
The Board will also have regard to the size and complexity of the Group’s operations, as well as the workload and time commitments
and responsibilities of their roles.
•
Independence and impartiality: To maintain independence and impartiality, Non-executive Directors are not entitled to any form of
incentive payments and the level of their fees is not set with reference to measures of Group performance (except for the Executive
Chairman who participates in the STI and LTI plan based on his TFR which relates to his executive duties).
Aggregate fee pool
The Group pays Chair and Committee fees to the Non-executive Directors out of the maximum aggregate fee pool of $1,750,000 per
annum approved by shareholders at the 2021 Annual General Meeting.
Fees and other benefits
The following table details the previous and current level of all Directors’ fees and allowances, which are all inclusive of superannuation
obligations. Fees were increased in December 2023 by approximately 3.5% in line with the salaried staff annual salary review budget:
Rate as from 1 July 2023
$
Rate as from 1 December 2023
$
Board fees
Chairman of the Board
218,400
226,000
Deputy Chairman
51,500
53,500
Director fees
109,200
113,000
Committee fees
Chair of Audit Committee
24,800
25,500
Audit Committee member allowance
12,400
12,750
Chair of NRPCC
24,800
25,500
NRPCC member allowance
12,400
12,750
Chair of Milk Services Committee
15,500
16,000
Milk Services Committee member allowance
7,800
8,000
Chair of Risk and Sustainability Committee
24,800
25,500
Risk and Sustainability Committee member allowance
12,400
12,750
Non-executive Directors are also entitled to be reimbursed for reasonable travel, accommodation and other expenses incurred while
engaged on the business of the Group.
50
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Directors’ Report
Non-executive Directors – statutory remuneration
The fees paid or payable to the Non-executive Directors of the Group in respect of FY2024 are set out in the table below.
Year
Director fees
Superannuation
Total
$
$
$
$
Non-executive Directors
Harper Kilpatrick
2024
127,290
14,002
141,292
2023
108,890
11,434
120,324
Patria Mann
2024
118,431
13,027
131,458
2023
108,890
11,434
120,324
Peter Margin
2024
170,533
18,759
189,292
2023
154,179
16,189
170,368
Raelene Murphy
2024
145,796
16,038
161,834
2023
131,073
13,763
144,836
Rick Cross
2024
125,957
13,855
139,812
2023
122,754
12,889
135,643
Terry O’Brien
2024
134,441
14,788
149,229
2023
131,073
13,763
144,836
Total Non-executive
Director remuneration
2024
822,448
90,469
912,917
2023
756,859
79,472
836,331
Remuneration governance
Overview of remuneration governance framework
The Board, supported by the NRPCC, is responsible for the remuneration strategy, principles and procedures for employees of the Group.
The NRPCC operates under a formal charter to assist the Board in relation to its responsibilities in identifying, attracting and remunerating
Directors, the Executive Chairman, the CEO and the CFO.
The NRPCC provides guidance to the Executive Chairman and the CEO in implementing decisions of the Board in relation to remuneration
and strategic human resource planning.
An overview of the NRPCC responsibilities is set out below:
Role
Details
Recommendations to the Board
The Board takes recommendations from the NRPCC in setting the remuneration of
Executive KMP. The NRPCC assesses and makes recommendations to the Board on any
changes to the composition of the Board with a view to ensuring that it can operate
effectively and efficiently and adequately discharge its responsibilities and duties.
In formulating its recommendations, the NRPCC considers a range of factors including:
•
group financial performance
•
remuneration market data for KMP operating in similar listed organisations and
industry sectors
•
remuneration components and weightings of fixed and variable remuneration
•
the performance levels and contribution of the individual KMP.
51
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Directors’ Report
Role
Details
Advice and assistance to the Board
The NRPCC advises and assists the Board to ensure that the Group:
•
has coherent human resources policies and practices which enable the Group to
attract and retain Directors and executives who will create value for shareholders
and that support the Group’s wider objectives and strategies
•
fairly and responsibly remunerates Directors and executives, having regard to
the performance of the Group, the performance of executives and the market
remuneration environment
•
has effective human resources policies and procedures to attract, motivate and
retain appropriately skilled people to meet the Group’s current and future needs.
Further details of the role of the NRPCC is provided in the FY2024 Corporate Governance Statement published on the Bega Cheese
Limited website (www.begagroup.com.au/investors/corporate-governance/).
Executive KMP service agreements
The Executive Chairman, in relation to his executive duties, the CEO and the CFO have service agreements, the key terms of which were
unchanged as follows:
Term
Ongoing, subject to termination rights set out in the service agreement.
Termination by Group
Six months’ notice or payment in lieu of such minimum notice, or without notice where
the termination is for cause.
Termination by Executive
Six months’ notice or lesser period as agreed by the Group.
Payments on termination
Salary and statutory entitlements up to the date of termination and, if applicable,
payment in lieu of the minimum notice period as per above.
Use of remuneration consultants
In accordance with its Charter, the NRPCC can engage with remuneration consultants. Ernst & Young was engaged during FY2024,
rendering $134,875 in consulting fees for services which included a review of the LTI Plan rules, relative TSR comparator group
consideration and Board fee benchmarking and associated documents. No remuneration recommendations as defined in section 9B of
the Corporations Act 2001 were obtained in FY2024.
Other matters
Related party transactions
During the year, some KMP and their related entities entered into related party transactions with the Group relating to the supply of milk
and the sale of peanuts. These transactions were on the same normal commercial terms as other suppliers and are summarised in the
table below:
CONSOLIDATED
2024
2023
$m
$m
Payments made by the Group during the year
3,243,144
5,987,855
Sales made by the Group during the year
401,766
341,145
Rental income received by the Group during the year
-
45,378
Amounts payable at year end
236,792
191,377
Amounts receivable at year end
65,102
90,852
No executive KMP or their related parties held any loans with the Group during FY2024.
52
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Directors’ Report
Director minimum shareholding guidelines
From 1 July 2022, a minimum shareholding guideline for Directors was implemented by the Board. Under this guideline, Directors have
three years to build a minimum shareholding equal to 100% of annual base fees, inclusive of superannuation. The three-year time frame
commences from the latter of 1 July 2022, or the date of Director appointment (if a new Director). The shareholding guideline is met
once a Director meets the guideline for the first time which must be maintained but will not be retested for fluctuations in the share
price. Adherence to these guidelines will be tested by the Company’s appointed valuations partner using a 12-month Volume-Weighted
Average Price (VWAP) calculation as at 30 June of the financial year.
Shareholdings
The number of shares held by the Directors and KMP during the year including their close family members and entities related to them
are as follows:
2024 – Numbers of
ordinary shares
Balance at
start of year
Shares
purchased
STI/LTI shares
awarded
Shares
sold
Balance at the
end of the year
Executive Chairman
Barry Irvin
2,038,841
-
-
-
2,038,841
Executive KMP
Peter Findlay
23,098
-
-
-
23,098
Gunther Burghardt
22,002
1,700
-
-
23,702
Non-executive Directors
Rick Cross
202,566
-
-
(50,000)
152,566
Harper Kilpatrick
30,475
609
-
-
31,084
Patria Mann
50,000
400
-
-
50,400
Peter Margin
36,069
-
-
-
36,069
Raelene Murphy
22,065
223
-
-
22,288
Terry O’Brien
27,005
13,387
-
-
40,392
Movements in performance rights during FY2024
The below table outlines the movements in performance rights for KMP during FY2024. The lapsed awards referenced in the LTI vesting
section of this report will be reflected in the FY2025 Annual Report. The ROFE performance hurdle for the first tranche of the FY2024 LTI
was met and as a result performance rights granted to KMP will vest at the end of the three year plan period, or earlier if they leave the
Group’s employment and are determined to be a “good leaver” under the rules of the plan.
2024 - Number
of rights
Rights held at
1 July 2023
Rights granted
in FY2024
Rights exercised
in FY2024
Rights lapsed
in FY2024
Rights held at
30 June 2024
Rights
vested and
exercisable in
FY2024
Executive KMP
Barry Irvin
-
86,318
-
-
86,318
9,494
Peter Findlay
253,662
163,242
-
(75,833)
341,071
17,956
Gunther Burghardt
76,395
108,947
-
-
185,342
11,984
53
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Directors’ Report
Likely developments and expected
results of operations
Other than as disclosed in the Chairman and Chief Executive
Officer’s Report and the Review of Financial Performance and
Operations information on likely developments has not been
included because disclosure would likely result in unreasonable
prejudice to the Group.
Rounding of amounts
The Group is of a kind referred to in Instrument 2016/191, issued by
the Australian Securities and Investments Commission, relating to
the ‘rounding off’ of amounts in the Directors’ Report. Amounts in
the Directors’ Report have been rounded off in accordance with
that instrument to the nearest one hundred thousand dollars, or in
certain cases, to the nearest dollar.
Matters subsequent to the
end of the financial year
On 26 August 2024, the Group announced that it has entered
into a binding agreement to sell its Leeton juice extraction facility
and related assets to Australian Juice Processing and Bottling
Pty Ltd (Grove Juice) subject to conditions for $11.4 million. Upon
completion, which is expected to occur in the second quarter
of FY2025, Grove Juice will take ownership of the facility and
provide employment to existing staff. Grove Juice will process
fruit on behalf of the Group as part of a long-term agreement.
The Group will maintain its strong relationships with local
and regional suppliers to source its fruit. As at reporting date,
property, plant and equipment of $11.0 million related to this
site has been reclassified to assets held for sale under current
assets. No adjustment has been made to the carrying value of
these assets.
On 29 August 2024, the Directors declared a final fully franked
dividend of 4.0 cents per share, which represents a distribution
of $12.2 million.
No other matters or circumstances occurring subsequent to
the end of the financial year have significantly affected, or may
significantly affect, the operations of the consolidated entity, the
results of those operations, or the state of affairs of the Group in
future years.
Auditor
Details of the amounts paid or payable to PricewaterhouseCoopers
(PwC) Australia for audit and non-audit services provided during
the financial year are set out in note 32.
The Board of Directors have considered the position and in
accordance with advice from the Audit Committee are satisfied
that the provision of non-audit services is compatible with the
general standard of independence for auditors imposed by the
Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed by the Audit
Committee to ensure they do not impact the impartiality and
objectivity of the auditor
•
none of the services undermine the general principles relating
to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants.
A copy of the Auditor’s Independence Declaration as required
under section 307C of the Corporations Act 2001 is set out on
page 55.
This report is made in accordance with a resolution of the Directors.
Barry Irvin
Executive Chairman
Melbourne
Raelene Murphy
Independent Director
Melbourne
29 August 2024
54
2024 Annual Report
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Auditor’s Independence Declaration
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Bega Cheese Limited for the year ended 30 June 2024, I declare that
to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Bega Cheese Limited and the entities it controlled during the period.
Sam Lobley
Melbourne
Partner
PricewaterhouseCoopers
29 August 2024
55
Bega Cheese Limited
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Corporate Governance Statement
Bega Group is committed to achieving and maintaining the highest standards of
accountability and transparency in the management and conduct of its business.
The Board has adopted corporate governance policies and practices that it believes are consistent with the continued growth and
success of the Group and the ongoing enhancement of value for the Bega Group shareholders.
The Corporate Governance Statement outlines the key aspects of the Group’s corporate governance framework and is available on the
Group’s website at www.begagroup.com.au/investors/corporate-governance/.
The Board considers that the Group’s corporate governance framework and practices have complied with the ASX Recommendations
for the financial year, except as otherwise detailed in the Corporate Governance Statement.
56
2024 Annual Report
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Case study
We have enhanced our chilled distribution network
capability with a new B2B e-commerce platform.
It creates a market-leading service offer for our
customer base and implements advanced sales
technology across the network.
Advances in B2B e-commerce technology rival the
best in B2C e-commerce, and we wanted to bring
those benefits to customers in our network. Our
investment in upgrading e-commerce capability
provides a leading customer buying experience
designed for the complexities of high-velocity, short
shelf-life chilled distribution.
The new technology platform allows us to serve our
customers better, with more customer flexibility,
autonomy, freedom, and transparency. It provides sales
intelligence for increased supply chain responsiveness
and faster adaptation to market demand changes.
This exciting new portal went live shortly before the
end of the financial year, and will be rolled out to the
majority of our customers during FY2025. We expect
a significant proportion of our customers to switch
from traditional to digital ordering and estimate that
the new e-commerce platform will process more than
450,000 orders annually.
We aim to be the leading distribution network for
chilled dairy categories across Australia, and this
investment supports our growth and leadership in
categories such as milk beverages, with Dare, Big M,
Dairy Farmers, Masters and Farmers Union Ice Coffee
brands. Improving ordering efficiency will translate
to improved sales, with less order time lag and potential
out-of-stock occasions in retail. This improves sales
turnover for the retailer and ensures our beverage
brands, such as Dare, are readily available in over
20,000 outlets across Australia.
DELIVERING B2B
E-COMMERCE
EXCELLENCE
57
Bega Cheese Limited
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59
Consolidated Statement of Comprehensive Income
60
Consolidated Balance Sheet
61
Consolidated Statement of Changes in Equity
62
Consolidated Statement of Cash Flows
63
HOW NUMBERS ARE CALCULATED
63
1
Significant Events in the Accounting Period
63
1a Acquisition of Betta Milk and Meander Valley Dairy
63
1b Canberra Property Sale and Leaseback
63
1c Revised Debt Facilities
63
1d Restructuring Implementation
63
1e Effective Tax Rate
64
2
Segment Information
64
2a Description of Segments
64
2b Segment Information Provided to the CODM
65
2c Other Segment Information
66
3
Earnings Per Share
66
4
Dividends to Shareholders
67
5
Revenue and Other Income
68
6
Expenses
68
7
Income Tax
68
7a Income Tax Expense
69
7b Numerical Reconciliation of Income Tax
Expense to Prima Facie Tax Expense
69
7c Amounts Recognised Through Other
Comprehensive Income
70
7d Amounts Recognised Through Equity
70
7e Movements in Deferred Tax
71
7f Income Taxes Paid
72
8
Trade and Other Receivables
72
9
Other Assets
73
10 Inventories
73
11
Property, Plant & Equipment
74
12
Leases
75
13
Intangible Assets
77
14 Trade and Other Payables
77
15
Other Liabilities
77
16 Borrowings
78
17
Provisions
79
18 Share Capital
79
18a Share Capital
79
18b Movement in Share Capital Value
and Number of Shares
79
19 Reserves
80
20 Notes to the Consolidated Statement of Cash Flows
80
20a Reconciliation of Cash and Cash Equivalents
80
20b Reconciliation of Profit or (Loss) for the Period
to Net Cash Flows from Operating Activities
81
RISK
81
21 Critical Accounting Estimates and Judgements
81
22 Financial Risk Management
81
22a Market Risk
Market Risk - Foreign Exchange Risk
81
Market Risk - Commodity Price Risk
82
Market Risk - Group Sensitivity
83
Market Risk - Cash Flow and
Fair Value Interest Rate Risk
83
Market Risk - Interest Rate Sensitivity
83
22b Credit Risk
85
22c Liquidity Risk
85
22d Financing Arrangements
86
22e Maturities of Financial Liabilities
86
22f Fair Value Estimation
87
23 Capital Risk Management
88
GROUP STRUCTURE
88
24 Parent Entity Financial Information
88
24a Summary Financial Information
88
24b Guarantees Entered into by Parent Entity
88
24c Contingent Liabilities of the Parent Entity
88
24d Contractual Commitments for the Acquisition
of Property, Plant or Equipment
89
25 Subsidiaries, Joint Arrangements and Associates
89
26 Business Combinations
90
27 Closed Group Disclosure
92
UNRECOGNISED ITEMS
92
28 Contingent Liabilities
92
29 Commitments
92
30 Subsequent Events
92
30a Dividend
92
30b Sale of Leeton Juice Extraction facility
92
FURTHER DETAILS
92
31 Related Party Transactions
92
31a Terms and Conditions of Related
Party Transactions
92
31b Key Management Personnel
Remuneration (KMP) and Transactions
93
32 Remuneration of Auditors
94
33 Share-based Payments
95
34 Summary of Material Accounting Policies
104
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
104
Consolidated Entity Disclosure Statement
Index to Financial Statements
58
2024 Annual Report
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Financial Statements
Consolidated Statement of Comprehensive Income
CONSOLIDATED
2024
2023
Notes
$m
$m
Revenue
5
3,521.6
3,376.0
Cost of sales
(2,823.1)
(2,719.6)
Gross profit
698.5
656.4
Other revenue
5
11.7
11.6
Other income
5
26.6
24.4
Distribution expense
(314.5)
(311.7)
Marketing expense
(108.0)
(106.2)
Occupancy expense
(45.9)
(45.5)
Administration expense
(189.8)
(185.0)
Impairment of assets
6
(2.7)
(275.9)
Finance costs
6
(36.1)
(24.1)
Share of net loss of equity accounted investments
-
(0.8)
Profit/(loss) before income tax
39.8
(256.8)
Income tax (expense)/benefit
7a
(9.3)
26.9
Profit/(loss) for the period attributable to owners of Bega Cheese Limited
30.5
(229.9)
Other comprehensive income:
Items that may be reclassified to profit or loss
Cash flow hedges, net of tax
0.4
(0.7)
Exchange differences on translating foreign operations
-
(0.1)
Total other comprehensive income
0.4
(0.8)
Total comprehensive income for the period attributable to owners of Bega Cheese Limited
30.9
(230.7)
2024
2023
Cents
Cents
Earnings per share for profit attributable to ordinary equity holders of the parent:
Basic earnings per share
10.0
(75.6)
Diluted earnings per share
9.9
(75.3)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
59
Bega Cheese Limited
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Financial Statements
Consolidated Balance Sheet
CONSOLIDATED
2024
2023
Notes
$m
$m
ASSETS
Current assets
Cash and cash equivalents
20
65.6
66.4
Trade and other receivables
8
350.9
306.1
Derivative financial instruments
1.2
0.2
Inventories
10
358.1
428.7
Assets held for sale
11
17.3
1.4
Other current assets
9
28.6
29.4
Total current assets
821.7
832.2
Non-current assets
Property, plant and equipment
11
673.4
687.2
Right-of-use assets
12
150.8
161.4
Deferred tax assets
7e
16.3
7.8
Intangible assets
13
476.6
464.5
Total non-current assets
1,317.1
1,320.9
Total assets
2,138.8
2,153.1
LIABILITIES
Current liabilities
Trade and other payables
14
558.4
510.0
Other liabilities
15
16.2
17.3
Derivative financial instruments
0.3
0.8
Lease liabilities
12
23.9
17.2
Current tax liabilities
4.9
13.0
Provisions
17
103.8
120.3
Total current liabilities
707.5
678.6
Non-current liabilities
Borrowings
16
226.7
269.0
Lease liabilities
12
168.3
180.9
Other liabilities
15
4.7
4.4
Provisions
17
16.8
16.5
Total non-current liabilities
416.5
470.8
Total liabilities
1,124.0
1,149.4
Net assets
1,014.8
1,003.7
EQUITY
Share capital
18a
882.2
881.0
Reserves
19
26.4
25.7
Retained earnings
106.2
97.0
Capital and reserves attributable to owners of Bega Cheese Limited
1,014.8
1,003.7
Total equity
1,014.8
1,003.7
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
60
2024 Annual Report
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Financial Statements
Consolidated Statement of Changes in Equity
Consolidated
Notes
Share
capital
$m
Reserves
$m
Retained
earnings
$m
Total
$m
Balance as at 1 July 2022
878.2
26.9
357.3
1,262.4
Loss for the period
-
-
(229.9)
(229.9)
Other comprehensive income for the period
-
(0.8)
-
(0.8)
Transactions with owners in their capacity as owners:
- Issue of shares
18b
3.6
-
-
3.6
- Share-based payments relating to incentives
33
-
(0.4)
-
(0.4)
- Dividends provided for or paid
4
-
-
(30.4)
(30.4)
- Tax effect of prior period share issue transaction costs
7d
(0.8)
-
-
(0.8)
Balance as at 30 June 2023
881.0
25.7
97.0
1,003.7
Balance as at 1 July 2023
881.0
25.7
97.0
1,003.7
Profit for the period
-
-
30.5
30.5
Other comprehensive income for the period
-
0.4
-
0.4
Transactions with owners in their capacity as owners:
- Issue of shares
18b
1.9
-
-
1.9
- Share-based payments relating to incentives
33
-
0.3
-
0.3
- Dividends provided for or paid
4
-
-
(21.3)
(21.3)
- Tax effect of prior period share issue transaction costs
7d
(0.7)
-
-
(0.7)
Balance as at 30 June 2024
882.2
26.4
106.2
1,014.8
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
61
Bega Cheese Limited
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Financial Statements
Consolidated Statement of Cash Flows
CONSOLIDATED
2024
2023
Notes
$m
$m
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers inclusive of goods and services tax
3,725.2
3,611.1
Payments to suppliers and employees inclusive of goods and services tax
(3,537.8)
(3,607.8)
Net proceeds from Trade Receivables Facility
7.2
36.6
Interest and other costs of financing paid
(36.1)
(24.1)
Interest received
1.6
1.0
Income taxes paid
7f
(25.8)
(8.6)
Net inflow from operating activities
20
134.3
8.2
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of Vitasoy Australia shares
-
51.0
Proceeds from sale of land and buildings at Port Melbourne
-
114.6
Payments for property, plant and equipment
(63.0)
(61.0)
Net proceeds from sale of property, plant and equipment
27.9
1.5
Net proceeds from sale of intangible assets
6.8
-
Payments for intangible assets
(11.6)
(7.1)
Payments for business combinations
26
(12.4)
-
Joint venture distributions received
-
0.9
Net (outflow)/inflow from investing activities
(52.3)
99.9
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
228.0
-
Repayment of borrowings
(270.0)
(40.0)
Principal elements of lease payments
(21.4)
(19.8)
Dividends paid to Bega Cheese Limited's shareholders
4
(19.4)
(26.8)
Net outflow from financing activities
(82.8)
(86.6)
Net (decrease)/increase in cash and cash equivalents
(0.8)
21.5
Cash and cash equivalents at the beginning of the year
66.4
44.9
Cash and cash equivalents at the end of the year
20
65.6
66.4
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
62
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
How numbers are calculated
1.
Significant events in the accounting period
A. Acquisition of Betta Milk and Meander Valley Dairy
On 28 August 2023, the Group announced that it had entered into a binding agreement to acquire the businesses and certain assets
of Betta Milk and Meander Valley Dairy from TasFoods Limited and its subsidiary Van Diemen’s Land Dairy Pty Ltd. The acquisition also
included a perpetual, royalty-free licence to use the Pyengana Dairy brand for milk and cream products in Australia. The total purchase
price was $12.4 million.
The acquisition was successfully completed on 1 December 2023. Acquisition related costs of $6.9 million are included in the Consolidated
Statement of Comprehensive Income for the year ended 30 June 2024. Refer to note 26 for further details.
Subsequent to the acquisition, the Group ceased manufacture of its fresh dairy products at its Burnie and Kings Meadow facilities in Tasmania
and relocated manufacturing to the Group’s Lenah Valley site. This decision was made following a review of its fresh milk manufacturing
operations across Tasmania. Following this decision, an impairment of plant and equipment of $2.8 million has been recognised as an
expense during the year.
B. Canberra property sale and leaseback
In FY2023, the Group ceased the manufacture of fresh milk product at its Griffith facility in Canberra and relocated manufacturing to the
Group’s Penrith site. The site was comprised of five adjacent blocks of land, operating as a combined manufacturing site and logistics hub.
In November 2023, the Group sold all five blocks of land at the Griffith site for $25.3 million. The Group leased back Block 5 of the site for use
as a logistics hub. The pre-tax profit recognised on sale of the property was $15.4 million and was partially offset by $2.2 million of related
exit costs for the year ended 30 June 2024.
C. Revised debt facilities
The Group’s Syndicated Debt Facility was transitioned to Common Terms Deed Debt Facilities in June 2024 (refer to note 22d for further details).
D. Restructuring implementation
During FY2024 the restructuring program, which was initially announced in FY2023, commenced implementation with the new structure
taking effect from October 2023. The aim of the restructure was to increase organisational alignment to the five-year strategy, by creating
teams with the broader focus of delivering results for the Group as one integrated business. The reorganisation program simplified
operations and decision-making by consolidating business unit and Group function team structures. The Group is committed to ongoing
organisational alignment initiatives and technology-led projects to ensure that corporate decision-making processes and structures
continue to be streamlined. Restructuring costs of $5.3 million from the continuation of the Group’s announced restructuring program
were recognised during FY2024 and the last minor remaining changes relating to the restructuring program will occur during FY2025.
E. Effective tax rate
The Group’s effective company tax rate is calculated as income tax expense divided by profit before tax. Income tax expense captures
taxes on profits and excludes other types of taxes for example GST, FBT, payroll tax and PAYG tax paid on behalf of employees. The effective
company tax rate will differ from the statutory company tax rate of 30% due to non-temporary differences. The prima facie effective tax
rate of the Group is 23.4% which is largely attributable to the impact of finalising the Group’s formation of a tax consolidated group and the
permanent benefit in respect of research and development tax incentive.
63
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
2. Segment information
A. Description of segments
The Group determines the reporting segments based on financial and other management reports reviewed by the Executive Chairman,
Chief Executive Officer and Chief Financial Officer, in their capacity as the Chief Operating Decision Makers (CODM).
The Group has two reporting segments:
i.
Branded – the manufacture of value-added consumer products for owned and externally owned brands.
ii.
Bulk – the manufacture of bulk dairy ingredients, nutritional and bio nutrient products.
The CODM assesses the performance of the reporting segments based on a measure of EBITDA. In addition, the CODM takes into
account significant current year events by segment so that normalised business performance is assessed.
Unallocated overheads relate to corporate and legal costs that cannot be reasonably classified into a segment.
Inter-segment eliminations represent elimination of sales and profit in stock arising from inter-segment sales at an arm’s length
transfer price.
B. Segment information provided to the CODM
The segment information provided to the CODM for the reportable segments for the year ended 30 June 2024 is as follows:
Branded
$m
Bulk
$m
Unallocated
overheads
$m
Inter-segment
eliminations
$m
Group
total
$m
Year ended 30 June 2024
Revenue
3,039.3
876.8
-
(394.5)
3,521.6
EBITDA
206.2
(18.2)
(25.4)
2.5
165.1
Depreciation, amortisation and impairment
(90.8)
EBIT
74.3
Interest income
1.6
Interest expense
(36.1)
Profit before income tax
39.8
Income tax expense
(9.3)
Profit for the year
30.5
Impact of current year events on profit before tax
Canberra sale
13.2
Restructuring
(5.3)
Betta Milk acquisition
(9.7)
64
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
2. Segment information (cont.)
Prior period comparative segment information as follows:
Branded
$m
Bulk
$m
Unallocated
overheads
$m
Inter-segment
eliminations
$m
Group
total
$m
Year ended 30 June 2023
Revenue
2,880.7
797.4
-
(302.1)
3,376.0
EBITDA
139.4
38.3
(32.3)
(1.3)
144.1
Depreciation, amortisation and impairment
(377.8)
EBIT
(233.7)
Interest income
1.0
Interest expense
(24.1)
Loss before income tax
(256.8)
Income tax benefit
26.9
Loss for the year
(229.9)
Impact of prior year events on loss before tax
Vegemite Way
16.2
Impairment
(275.9)
Restructuring
(26.3)
Other costs
(4.8)
Tax consolidation
(1.2)
C. Other segment information
Segment revenue
Sales between segments are carried out at arm’s length and eliminated on consolidation. The revenue from external parties reported to
the CODM is measured in a manner consistent with that in the Consolidated Statement of Comprehensive Income.
Total sales by segment are as follows:
CONSOLIDATED
2024
2023
$m
$m
Sales to external customers by segment
Branded
3,039.3
2,880.7
Bulk
482.3
495.3
Total sales to external customers
3,521.6
3,376.0
Segment sales by destination are as follows:
CONSOLIDATED
2024
2023
$m
$m
Sales to external customers in Australia
Branded
2,782.0
2,649.8
Bulk
190.3
212.5
Total sales to external customers in Australia
2,972.3
2,862.3
Sales to external customers in other countries
Branded
257.3
230.9
Bulk
292.0
282.8
Total sales to external customers in other countries
549.3
513.7
Total sales to external customers
3,521.6
3,376.0
65
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
3. Earnings per share
CONSOLIDATED
2024
2023
Cents
Cents
Earnings per share for profit/(loss) from continuing operations
attributable to ordinary equity holders of the parent:
Basic earnings per share
10.0
(75.6)
Diluted earnings per share
9.9
(75.3)
2024
2023
Number
Number
Weighted average number of shares used as the denominator
in calculating basic earnings per share
304,518,598
303,851,779
Adjustments for calculation of diluted earnings per share:
Contingent employee incentives
1,730,448
1,390,248
Shares used as the denominator in calculating diluted earnings per share
306,249,046
305,242,027
2024
2023
$m
$m
Profit/(loss) attributable to the ordinary equity holders of the Group
used in calculating earnings per share
30.5
(229.9)
4. Dividends to shareholders
CONSOLIDATED
Full year
2024
Full year
2023
$m
$m
Recognised amounts:
2024 Interim dividend of 4.00 cents
12.2
-
2023 Final dividend of 3.00 cents
9.1
-
2023 Interim dividend of 4.50 cents
-
13.7
2022 Final dividend of 5.50 cents
-
16.7
Total dividend
21.3
30.4
Issue of shares under the DRP
(1.9)
(3.6)
Net cash outflow
19.4
26.8
Unrecognised amounts:
2024 Final dividend of 4.00 cents
12.2
-
2023 Final dividend of 3.00 cents
-
9.1
The dividends paid in 2024 and 2023 were fully franked. The 2024 final dividend will be fully franked.
66
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
4. Dividends to shareholders (cont.)
CONSOLIDATED
2024
2023
$m
$m
Value of the dividend franking account
113.5
96.0
The value of the dividend franking account represents the balance of the franking account as at the end of the year, adjusted for franking
credits and debits that will arise from the settlement of liabilities or receivables for income tax.
5. Revenue and other income
CONSOLIDATED
2024
2023
$m
$m
Sale of goods
3,468.7
3,316.0
Services
52.9
60.0
Total revenue
3,521.6
3,376.0
Other revenue
Royalties
11.6
11.2
Other
0.1
0.4
Total other revenue
11.7
11.6
Other income
Gain on sale and leaseback
15.4
16.2
Gain from early lease termination
-
1.3
Interest income
1.6
1.0
Rental income
0.2
0.5
Gain on sale of property, plant and equipment
1.3
0.4
Insurance proceeds
3.6
-
Other
4.5
5.0
Total other income
26.6
24.4
The Group recognises the majority of its revenue from contracts with customers for the transfer of goods at a point in time. Refer to note
34e for further explanation of the Group’s revenue recognition policy.
Revenues of approximately $1.2 billion (2023: $1.3 billion) are concentrated in a small number of external customers. These revenues are
attributed to the Branded and Bulk segments.
67
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
6. Expenses
Profit before income tax includes the following specific expenses:
CONSOLIDATED
2024
2023
Notes
$m
$m
(Decrease)/increase in inventory provisions
(13.6)
9.4
Decrease in bad and doubtful debts provision
(0.2)
(0.8)
Trade Receivables Facility costs
7.0
6.3
Depreciation and amortisation:
- Depreciation of property, plant and equipment
11
49.7
62.5
- Depreciation of right-of-use assets
12
24.4
23.9
- Amortisation of intangible assets
13
14.0
15.5
Total depreciation and amortisation
88.1
101.9
Impairment:
- Impairment of property, plant and equipment
11
2.7
151.5
- Impairment of intangible assets
13
-
117.9
- Impairment of right-of-use assets
12
-
1.5
- Impairment of inventory maintenance spares
-
5.0
Total asset impairment
2.7
275.9
Employee benefit expense:
- Restructuring expense
6.7
19.5
- Defined contribution superannuation expense
42.4
40.0
- Other employee benefits expense
474.5
458.8
Total employee benefit expense
523.6
518.3
Finance costs:
- Interest on bank loans
20.5
15.6
- Lease liability interest
12
12.2
5.2
- Other finance costs
3.4
3.3
Total finance costs
36.1
24.1
7.
Income tax
The major components of income tax expense in the Consolidated Statement of Comprehensive Income are set out below:
CONSOLIDATED
2024
2023
$m
$m
A. INCOME TAX EXPENSE
Current tax expense
(14.4)
(16.6)
Deferred tax benefit from the origination and reversal of temporary differences
8.7
41.0
Adjustments recognised in the current year in relation to tax of prior years
(3.6)
2.5
Total income tax (expense)/benefit
(9.3)
26.9
Judgement is required in determining the provision for income taxes. There are certain transactions and calculations undertaken during
the ordinary course of business for which the ultimate tax determination is uncertain as at the end of the financial year. The Group
estimates its tax liabilities based on its understanding of the tax law. Where the final tax outcome of these matters is different from the
amounts recorded, such differences will impact the amount of current or deferred income tax liabilities in the period such determination
is made.
68
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
7.
Income tax (cont.)
CONSOLIDATED
2024
2023
$m
$m
B. NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO
PRIMA FACIE TAX EXPENSE
Profit/(loss) from continuing operations before income tax
39.8
(256.8)
Tax (expense)/benefit at the Australian tax rate of 30% (2023 - 30%)
(11.9)
77.0
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Non-assessable income
1.0
0.1
Non-deductible expenses
(1.7)
(36.7)
Other assessable income
(0.7)
(1.3)
(1.4)
(37.9)
Tax incentives
0.7
1.0
Adjustments in respect of prior year
(3.6)
2.5
Tax consolidation adjustments (1)
5.1
(19.6)
Previously unrecognised capital losses used / deferred tax movements now recognised
1.8
1.8
Previously unrecognised tax losses used to reduce deferred tax expense
-
2.1
Total income tax (expense)/benefit
(9.3)
26.9
(1)Reflects the reset of the tax cost base of revenue assets and capital assets associated with the formation of the income tax
consolidated group.
Tax consolidation
Bega Cheese Limited is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing and funding
agreement which operates to manage joint and several liability for group tax liabilities amongst group members, as well as enabling group
members to leave the group clear of future group tax liabilities. The agreement also provides that each member of the tax consolidated
group pay a tax equivalent amount to or from the parent in accordance with their notional current tax liability or current tax asset. Such
amounts are reflected in amounts receivable from or payable to Bega Cheese Limited in the financial statements of subsidiaries and are
settled as soon as practicable after lodgement of the consolidated tax return and payment of the tax liability.
Key estimate: Tax cost base of revenue and capital assets
Upon formation of the income tax consolidated group, the tax cost base of revenue and capital assets were required to be reset under
Australian taxation legislation which is calculated in part by reference to independent market valuations. In performing these valuations,
certain judgements and assumptions are made such as future earnings and discount rates.
The tax cost base of revenue and capital assets was reset on 1 July 2022 giving rise to a $19.6 million net debit to income tax expense with
corresponding changes to current and deferred tax balances as reflected in FY2023. Following finalisation of independent valuations,
the tax resetting process was finalised in FY2024 resulting in a $5.1 million net credit to income tax expense. The judgements and
assumptions adopted in the independent market valuations are subject to review by tax authorities, and any change could impact
income tax expense and deferred tax balances recognised in the year ended 30 June 2024.
CONSOLIDATED
2024
2023
$m
$m
C. AMOUNTS RECOGNISED THROUGH OTHER COMPREHENSIVE INCOME
Aggregate current and deferred tax arising in the reporting period and not recognised
in net profit or loss but through other comprehensive income in respect of:
Movement in hedging reserve
(0.3)
0.4
Total amount recognised through other comprehensive income
(0.3)
0.4
69
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
7.
Income tax (cont.)
CONSOLIDATED
2024
2023
$m
$m
D. AMOUNTS RECOGNISED THROUGH EQUITY
Aggregate current and deferred tax arising in the reporting period and not recognised
in net profit or loss or other comprehensive income but through equity in respect of:
Share issue costs - net of adjustment in respect of prior year
(0.7)
(0.8)
Total amount recognised through equity
(0.7)
(0.8)
E. MOVEMENTS IN DEFERRED TAX
Movements in deferred tax in the year are detailed below:
Consolidated
Opening
balance
$m
Acquisition
$m
Charged
to income
$m
Charged
to equity
$m
Closing
balance
$m
Year ended 30 June 2024
Deferred tax assets
Doubtful debts
1.2
-
0.3
-
1.5
Sundry accrued expenses
2.6
-
2.5
-
5.1
Black hole expenditure
0.8
-
(0.2)
-
0.6
Employee provisions
33.2
0.1
1.1
-
34.4
Other provisions
11.8
0.6
(6.1)
-
6.3
Leased assets
11.2
0.1
2.7
-
14.0
Property, plant and equipment
2.9
-
15.0
-
17.9
Share issue costs
1.4
-
-
(0.7)
0.7
Other
0.3
-
(0.2)
-
0.1
Total deferred tax assets
65.4
0.8
15.1
(0.7)
80.6
Deferred tax (liabilities)
Brand names
(53.9)
-
0.4
-
(53.5)
Software
(7.0)
-
0.3
-
(6.7)
Inventories
5.6
-
(6.5)
-
(0.9)
Fair value of derivatives
0.1
-
-
(0.3)
(0.2)
Other
(2.4)
-
(0.6)
-
(3.0)
Total deferred tax (liabilities)
(57.6)
-
(6.4)
(0.3)
(64.3)
Total deferred tax
7.8
0.8
8.7
(1.0)
16.3
70
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
7.
Income tax (cont.)
E. MOVEMENTS IN DEFERRED TAX (cont.)
Consolidated
Opening
balance
$m
Charged
to income
$m
Charged
to equity
$m
Closing
balance
$m
Year ended 30 June 2023
Deferred tax assets
Doubtful debts
0.2
1.0
-
1.2
Inventories
0.4
5.2
-
5.6
Sundry accrued expenses
3.9
(1.3)
-
2.6
Black hole expenditure
1.7
(0.9)
-
0.8
Employee provisions
29.8
3.4
-
33.2
Other provisions
4.1
7.7
-
11.8
Leased assets
1.0
10.2
-
11.2
Property, plant and equipment
(13.3)
16.2
-
2.9
Share issue costs
2.2
-
(0.8)
1.4
Fair value of derivatives
(0.3)
-
0.4
0.1
Tax losses
8.4
(8.4)
-
-
Other
0.5
(0.2)
-
0.3
Total deferred tax assets
38.6
32.9
(0.4)
71.1
Deferred tax (liabilities)
Investments
(4.8)
4.8
-
-
Brand names
(56.1)
2.2
-
(53.9)
Software
(9.1)
2.1
-
(7.0)
Other
(1.4)
(1.0)
-
(2.4)
Total deferred tax (liabilities)
(71.4)
8.1
-
(63.3)
Total deferred tax
(32.8)
41.0
(0.4)
7.8
CONSOLIDATED
2024
2023
$m
$m
Deferred tax assets
16.3
7.8
Net deferred tax assets
16.3
7.8
Unused tax losses for which no deferred tax asset has been recognised as at 30 June 2024 are $30.1 million (2023: $30.4 million),
the potential tax benefit of this at 30% is $9.0 million (2023: $9.1 million). Unused capital losses for which no deferred tax asset has
been recognised as at 30 June 2024 are $6.2 million (2023: $6.4 million), the potential tax benefit of this at 30% is $1.9 million (2023:
$1.9 million).
CONSOLIDATED
2024
2023
$m
$m
F. INCOME TAXES PAID
Income taxes paid is included in the Consolidated Statement of Cash Flows as follows:
Income taxes paid included in operating activities
(25.8)
(8.6)
Total income taxes paid
(25.8)
(8.6)
71
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
8. Trade and other receivables
CONSOLIDATED
2024
2023
$m
$m
Current assets
Trade receivables
320.0
276.1
Allowance for impairment of receivables
(5.5)
(5.7)
Net trade receivables
314.5
270.4
Goods and services tax (GST) receivable
18.5
23.3
Accrued revenue
1.1
1.8
Amounts receivable under Trade Receivables Facility
13.2
6.7
Other debtors
3.6
3.9
Total trade and other receivables
350.9
306.1
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are
generally due for settlement within 30 to 60 days and are therefore all classified as current. Trade receivables are recognised initially at
the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair
value. The Group holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest method. Details about the Group’s impairment policies and the calculation
of the loss allowance are provided in note 34.
Accrued revenue primarily relates to receivables from customers under product supply contracts whereby the revenue has yet to be
invoiced.
The Group utilises a Trade Finance Facility (‘Trade Receivables Facility’) with the Coöperatieve Rabobank U.A. (Australia Branch)
(Rabobank) whereby it may purchase receivables from the Group at a discount. This facility is utilised by the Group as a primary
source of working capital. Most eligible receivables sold to Rabobank are insured by the Group with the Group retaining a continuing
involvement asset of up to 10%, representing its maximum exposure under the facility. Up to 90% of the value of receivables sold by
the Group into this facility are derecognised as an asset as the contractual rights to cashflows from these receivables have expired on
acceptance of the sale to Rabobank. The Trade Receivables Facility is a $250.0 million facility with $100.0 million on a fully committed
basis and a maturity date of 31 August 2025. The funded value of the Group’s Trade Receivables Facility was $200.8 million as at 30 June
2024 (2023: $193.5 million).
9. Other assets
CONSOLIDATED
2024
2023
$m
$m
Current assets
Prepayments
11.6
11.7
Trade Receivables Facility continuing involvement asset
14.8
15.1
Other assets
2.2
2.6
Total current other assets
28.6
29.4
72
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
10. Inventories
CONSOLIDATED
2024
2023
$m
$m
Raw materials and work in progress
150.7
211.4
Finished goods
186.2
213.9
Maintenance spares
52.8
48.6
Provisions
(31.6)
(45.2)
Carrying amount of inventories at the lower of cost or net realisable value
358.1
428.7
The write-down of inventories to net realisable value (NRV) requires judgement in assessing future commodity prices, other market
conditions, product shelf life and provisions for quality. From time to time certain inventories are sold below cost, for example, when
global commodity prices are lower than the cost of production in the Bulk segment. In these situations, the NRV expense incurred from
writing down the value of inventories is recognised in cost of sales in the Consolidated Statement of Comprehensive Income.
11. Property, plant and equipment
CONSOLIDATED
2024
2023
$m
$m
Land and buildings
At cost
416.9
417.7
Accumulated depreciation and impairment
(90.4)
(66.7)
Total land and buildings
326.5
351.0
Plant and equipment
At cost
918.9
879.4
Accumulated depreciation and impairment
(612.5)
(589.5)
Total plant and equipment
306.4
289.9
Construction in progress
40.5
46.3
Total property, plant and equipment
673.4
687.2
The movements in property, plant and equipment are:
Consolidated
Notes
Construction
in progress
$m
Land and
buildings
$m
Plant and
equipment
$m
Total
$m
Year ended 30 June 2024
Balance at the beginning of the financial year
46.3
351.0
289.9
687.2
Acquisitions from business combinations
26
-
-
3.4
3.4
Capital expenditure
65.4
-
-
65.4
Disposals
-
(7.0)
(0.5)
(7.5)
Depreciation
6
-
(11.2)
(38.5)
(49.7)
Impairment
6
-
-
(2.7)
(2.7)
Assets classified as held for sale
-
(13.6)
(3.4)
(17.0)
Transfers
(71.2)
7.3
58.2
(5.7)
Balance at the end of the financial year
40.5
326.5
306.4
673.4
Year ended 30 June 2023
Balance at the beginning of the financial year
51.3
369.0
423.7
844.0
Capital expenditure
69.9
-
-
69.9
Disposals
-
(4.2)
(0.5)
(4.7)
Depreciation
6
-
(11.6)
(50.9)
(62.5)
Impairment
6
-
(11.0)
(140.5)
(151.5)
Assets classified as held for sale
-
(0.4)
-
(0.4)
Transfers
(74.9)
9.2
58.1
(7.6)
Balance at the end of the financial year
46.3
351.0
289.9
687.2
73
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
11. Property, plant and equipment (cont.)
Assets held for sale
CONSOLIDATED
2024
2023
$m
$m
Assets held for sale
Land and buildings
13.9
1.4
Plant and equipment
3.4
-
Total assets held for sale
17.3
1.4
As disclosed in note 30, assets held for sale include land and buildings of $7.6 million and plant and equipment of $3.4 million relating
to the Leeton juice extraction facility. After the reporting date the Group entered into a binding agreement to sell these assets and
completion is expected to occur in the second quarter of FY2025. The remaining amounts relate to various unutilised properties across
the Group’s property portfolio which are expected to be sold in the next 12 months.
12. Leases
The Consolidated Balance Sheet shows the following amounts relating to leases:
CONSOLIDATED
2024
2023
$m
$m
Right-of-use assets
Properties
133.0
143.9
Equipment
12.4
13.2
Motor vehicles
5.4
4.3
Total right-of-use assets
150.8
161.4
Additions and remeasurements to the right-of-use assets during the 2024 financial year were $14.3 million (2023: $91.6 million).
CONSOLIDATED
2024
2023
$m
$m
Lease liabilities
Current
23.9
17.2
Non-current
168.3
180.9
Total lease liabilities
192.2
198.1
The Consolidated Statement of Comprehensive Income shows the following amounts relating to leases:
CONSOLIDATED
2024
2023
Notes
$m
$m
Depreciation charge of right-of-use assets
6
24.4
23.9
Impairment of right-of-use assets
6
-
1.5
Interest expense (included in finance costs)
6
12.2
5.2
The total cash outflow for leases in 2024 was $33.6 million (2023: $25.0 million).
74
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
13. Intangible assets
CONSOLIDATED
2024
2023
$m
$m
Brands
177.6
177.6
Water rights
4.3
5.6
Software
54.3
50.9
Goodwill
239.6
229.5
Other
0.8
0.9
Total intangible assets
476.6
464.5
Consolidated
Notes
Brands
$m
Software
$m
Water
rights
$m
Goodwill
$m
Other
$m
Total
$m
Year ended 30 June 2024
Balance at the beginning of the financial year
177.6
50.9
5.6
229.5
0.9
464.5
Acquisitions through business combinations
26
-
-
-
10.1
-
10.1
Additions
-
11.6
-
-
-
11.6
Disposals
-
-
(1.3)
-
-
(1.3)
Amortisation
6
-
(13.9)
-
-
(0.1)
(14.0)
Transfers
-
5.7
-
-
-
5.7
Balance at the end of the financial year
177.6
54.3
4.3
239.6
0.8
476.6
Year ended 30 June 2023
Balance at the beginning of the financial year
177.6
56.2
5.6
347.4
1.3
588.1
Additions
-
2.2
-
-
-
2.2
Amortisation
6
-
(15.1)
-
-
(0.4)
(15.5)
Impairment
6
-
-
-
(117.9)
-
(117.9)
Transfers
-
7.6
-
-
-
7.6
Balance at the end of the financial year
177.6
50.9
5.6
229.5
0.9
464.5
Brands and other identifiable intangible assets
Brands and other identifiable intangible assets purchased by the Group are initially recognised at cost, or at their fair value if acquired
as part of a business combination.
These identifiable intangible assets are subsequently measured:
•
if they have a finite life, at cost less amortisation, and
•
if they have an indefinite life, at cost less accumulated impairment losses.
Finite life brands or other identifiable intangible assets are amortised on a straight-line basis over the shorter of their contractual or
useful economic life, being 3 to 25 years. They are also tested for impairment when an indicator of impairment may exist.
Indefinite life identifiable intangible assets are not amortised but are instead tested for impairment annually, or more frequently if there
is an indicator of impairment. Brands or other identifiable intangible assets are determined to have an indefinite life where there is an
intention to maintain and support the brand or other intangible asset for an indefinite period.
Water rights
Water rights are indefinite life identifiable intangible assets and were acquired as part of the acquisition of the Strathmerton and Peanut
Company of Australia (PCA) facilities. Water rights are attributable to the Branded segment. Impairment was tested by reference to third
party market valuations based on recent transactions and related data.
Software
Software as a service (SaaS) arrangements are service contracts providing the Group with the right to access the cloud provider’s
application over the contract period. As such the Group does not receive a software intangible asset at the contract commencement date.
For SaaS arrangements, the Group assesses if the contract will provide a resource that it can control to determine whether an intangible
asset is present. If the Group cannot determine control of the software, the arrangement is deemed a service contract and any
implementation costs including costs to configure or customise the cloud provider’s application software are recognised as operating
expenses when incurred.
75
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
13. Intangible assets (cont.)
Costs incurred to obtain access to the cloud provider’s application software are generally recognised as operating expenses when the
services are received.
Costs incurred for the development of software code that enhances, modifies or creates additional capability to existing for on-premise
are capitalised if it meets the recognition criteria for an intangible asset.
Certain internal and external costs directly incurred in acquiring and developing software are capitalised if it they meet the recognition
criteria of an intangible asset and are amortised on a straight-line basis over their estimated useful lives, being three to ten years.
Capitalised costs are tested for impairment when an indicator of impairment exists.
Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of the net identifiable assets of the acquired business at the
date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill is not amortised but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it
might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the
carrying amount of goodwill related to that entity.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating
units or groups of cash-generating units (CGU) that are expected to benefit from the business combination in which the goodwill arose.
Cash generating units
The Group’s CGUs are the Bulk CGU and the Branded CGU.
The Bulk CGU is equivalent to the Bulk operating segment. It is comprised of the assets of the Tatura, Lagoon St (Bega), and Koroit
manufacturing sites. The cash inflows of the Bulk CGU are driven by available milk volumes, which are utilised across all manufacturing
sites in the CGU and can be diverted to the site that can produce the highest return on that milk. The CGU does not hold any indefinite
life intangible assets. An impairment test of the CGU’s assets was not required to be performed as it was assessed that no indicators of
impairment were present.
During the year, management has reviewed its cash generating units and determined that the Bega Dairy and Drinks and the Bega Foods
CGUs are now combined to form a single Branded CGU. Management has deemed the Branded CGU to be the smallest identifiable
group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The
organisational restructure in October 2023, current projects within the Group’s operating systems, and the strategic direction of the
Group have all increased the interdependencies of cash inflows being generated from the collective assets in the Branded segment,
which has led to this decision. The cash inflows of the Branded CGU are driven by the sale of goods to shared customers, which are
produced at shared manufacturing facilities.
The Branded CGU is equivalent to the Branded operating segment. It is comprised of the Lion Dairy and Drinks business, acquired in
January 2021 and renamed Bega Dairy and Drinks, the Mondelēz Grocery Business, acquired in July 2017 and renamed Bega Foods, and
assets of the Group’s third party contract manufacturing sites. It includes goodwill of $239.6 million, and capitalised brands of $177.6
million. The core business of the Branded CGU is the manufacture, marketing, sale and distribution of branded white milk, milk-based
beverages, yoghurt, chilled juices, spreads and other culinary products to domestic and international customers.
The goodwill from the Betta Milk asset acquisition is tested for impairment within the Branded CGU, as the acquired business has
been fully integrated into the Branded segment and does not constitute a CGU in its own right. The Betta Milk brand of products is
manufactured and distributed across the Group’s existing network, achieving synergies by better utilising the existing assets of the
Branded segment. The cash flows generated from these products are included within existing category and channel reporting used by
the Branded segment.
Branded impairment assessment
The Branded CGU is subject to annual impairment testing as it holds indefinite life intangible assets. Impairment testing requires a
high degree of judgement in assessing whether the carrying value of assets is supported by their recoverable amount. The recoverable
amount of the Branded CGU has been determined using the ‘value in use’ approach.
In calculating the recoverable amount of the Branded CGU a discounted cash flow model was utilised forecasting cash flows for the
period FY2025 to FY2029. A number of assumptions were made in respect of matters which are not certain, including the following
key assumptions:
•
a long-term nominal growth rate of 2.0% beyond the forecast period
•
with advice from independent experts, applied a post-tax discount rate of 7.9%
•
improvements in sales mix and volume and price increases are forecast in FY2025 and are expected to largely offset the increase
in costs of production inputs and the supply chain. The cash flow model assumes an EBITDA increase by a CAGR of 3.1% between
FY2025 - FY2029, which includes the impact of assumed sales volume and price increases and the impact of Bega’s recently
announced farm gate milk prices and other key production inputs.
Based on sensitivity analysis, a reasonably possible change in any single assumption would not result in the recoverable amount of the
Branded CGU being lower than its carrying value as at 30 June 2024.
76
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
14. Trade and other payables
CONSOLIDATED
2024
2023
$m
$m
Current liabilities
Trade payables
295.1
300.7
Accrued charges and sundry creditors
158.3
139.0
Amounts payable under Trade Receivables Facility
105.0
70.3
Total trade and other payables
558.4
510.0
The average credit period on purchases is between 30 and 60 days, except for utilities and certain professional fees. No material amounts
of interest are charged on late payments and the amounts are unsecured.
Judgement is used in assessing trade payables due to suppliers under product supply contracts that require a periodic reconciliation to
specific terms of those contracts. From time to time there may be differences of opinion between the Group and the supplier as to the
amount payable under the contracts. Such differences are usually resolved amicably between the parties having regard to the relevant
contract. Where such differences are unresolved at reporting dates the Group seeks additional information and professional advice in
the context of the relevant contract in forming a view as to the amount to be accrued for at the reporting date.
15. Other liabilities
CONSOLIDATED
2024
2023
$m
$m
Current liabilities
Deferred income
0.6
1.9
Trade Receivables Facility continuing involvement liability
14.8
15.1
Other financial liabilities
0.8
0.3
Total current other liabilities
16.2
17.3
Non-current liabilities
Other financial liabilities
4.7
4.4
Total non-current other liabilities
4.7
4.4
Total other liabilities
20.9
21.7
16. Borrowings
CONSOLIDATED
2024
2023
$m
$m
Non-current - at amortised cost
Secured term loans
228.0
270.0
Borrowing costs
(1.3)
(1.0)
Total non-current borrowings
226.7
269.0
Total borrowings
226.7
269.0
For further details on borrowings and facilities, see note 22d.
77
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
17. Provisions
CONSOLIDATED
2024
2023
$m
$m
Current liabilities
Employee benefits
93.6
96.2
Restructuring provision
6.7
19.5
Restoration provision
0.6
0.5
Other provisions
2.9
4.1
Total current provisions
103.8
120.3
Non-current liabilities
Employee benefits
5.9
5.9
Restoration provision
10.9
10.6
Total non-current provisions
16.8
16.5
Total provisions
120.6
136.8
Consolidated
Notes
Restructuring
provision
$m
Restoration
provision
$m
Other
provisions
$m
Total
$m
Year ended 30 June 2024
Balance at the beginning of the financial year
19.5
11.1
4.1
34.7
Acquisitions through business combinations
26
-
0.1
2.0
2.1
Charged to profit or loss
6.7
0.3
-
7.0
Charged to balance sheet
-
0.2
-
0.2
Amounts used during the year
(19.5)
(0.2)
(3.2)
(22.9)
Balance at the end of the financial year
6.7
11.5
2.9
21.1
Year ended 30 June 2023
Balance at the beginning of the financial year
1.6
11.2
11.5
24.3
Charged to profit or loss
19.0
-
1.7
20.7
Credited to balance sheet
-
(0.1)
-
(0.1)
Amounts used during the year
(1.1)
-
(9.1)
(10.2)
Balance at the end of the financial year
19.5
11.1
4.1
34.7
The current provision for employee benefits includes accrued annual leave, vesting sick leave and long service leave. Long service leave
covers all unconditional entitlements where employees have completed the required period of service. The amount of the provision
presented as current of $93.6 million (2023: $96.2 million) is due to the Group not having an unconditional right to defer settlement
for any of these obligations. However, based on past experience, the Group does not expect all employees to take the full amount of
accrued leave or require payment within the next 12 months.
78
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
18. Share capital
A. Share capital
CONSOLIDATED
2024
2023
$m
$m
Share capital - ordinary shares fully paid
882.2
881.0
B. Movement in share capital value and number of shares
Ordinary
shares
number
‘000
Ordinary
shares
$m
Ordinary shares on issue at 1 July 2022
303,283
878.2
Shares issued under Dividend Reinvestment Plan
965
3.6
Tax effect of prior period share issue transaction costs
-
(0.8)
Ordinary shares on issue at 30 June 2023
304,248
881.0
Ordinary shares on issue at 1 July 2023
304,248
881.0
Shares issued under Dividend Reinvestment Plan
528
1.9
Tax effect of prior period share issue transaction costs
-
(0.7)
Ordinary shares on issue at 30 June 2024
304,776
882.2
Ordinary shares entitle the holder to participate in dividends and share in the proceeds of winding up the Company in proportion to the
number of shares held. On a show of hands every holder of ordinary shares present at a meeting in person, or by proxy is entitled to one
vote and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital. There are no different rights,
preferences or restrictions among the class of ordinary shares.
19. Reserves
CONSOLIDATED
2024
2023
$m
$m
Share-based payment reserve
4.8
4.5
Capital profits reserve
34.0
34.0
Hedging reserve
0.1
(0.3)
Foreign currency translation reserve
0.1
0.1
Transactions with non-controlling interests reserve
(12.6)
(12.6)
Total reserves
26.4
25.7
The share-based payment reserve is used to recognise the fair value of shares and performance rights issued to employees by the Company.
The capital profits reserve is as a result of historical capital transactions.
The hedging reserve is used to record gains or losses on hedging instruments (cash flow hedges) that are recognised directly in equity, as
described in note 34.
The foreign currency translation reserve is used to convert the results of the parent company‘s foreign subsidiaries to its reporting currency.
The transactions with non-controlling interests reserve records the difference arising as a result of the acquisition of the non-controlling
interest in Tatura Milk Industries Pty Ltd.
79
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
20. Notes to the Consolidated Statement of Cash Flows
CONSOLIDATED
2024
2023
$m
$m
A. RECONCILIATION OF CASH AND CASH EQUIVALENTS
Cash and cash equivalents
65.6
66.4
Balance per statement of cash flow
65.6
66.4
B. RECONCILIATION OF PROFIT OR (LOSS) FOR THE PERIOD
TO NET CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) after income tax
30.5
(229.9)
Adjustments for non-cash, investing and financing items:
Depreciation of non-current assets
74.1
86.4
Amortisation of intangible assets
14.0
15.5
Profit on sale of non-current assets
(22.3)
(16.6)
Gain from early lease termination
-
(1.3)
Impairment of tangible assets
2.7
151.5
Impairment of intangible assets
-
117.9
Impairment of right-of-use assets
-
1.5
Impairment of inventory spares
-
5.0
Fair value adjustment to derivatives
(0.9)
0.6
Non-cash employee benefit - share-based payments
0.3
(0.4)
Share of loss of equity accounted investments
-
0.8
Changes in operating assets and liabilities:
(Increase)/decrease in assets:
Trade and other debtors and GST recoverable
(44.1)
(33.0)
Inventories
70.6
(116.1)
Prepayments
0.1
(0.9)
Current and deferred tax assets
(8.5)
34.1
Increase/(decrease) in liabilities:
Trade and other payables
42.1
49.5
Provision for income taxes payable excluding taxation on investments
(8.1)
(69.0)
Changes in provisions
(16.2)
12.6
Net cash flow from operating activities
134.3
8.2
80
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
Risk
21. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances.
In particular, information about significant areas of estimation, uncertainty and critical judgement in applying accounting policies that
have the most significant effect on the amount recognised in the financial statements are described in note 7 - income tax, note 8 - trade
and other receivables, note 10 - inventories, and note 13 - intangible assets.
22. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risks (including currency risk, interest rate risk and commodity price
risk), credit risk and liquidity risk. The Group’s overall risk management approach focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments
such as foreign exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, not for
trading or other speculative purposes. The Group uses different methods to measure different types of risk to which it is exposed. These
methods include sensitivity analysis in case of interest rate, foreign exchange and aging analysis for credit risk.
Financial management is carried out by the treasury function within the finance department under policies approved by the Board of
Directors and overseen by the Audit Committee. Treasury identifies, evaluates and hedges financial risks in close co-operation with the
Group’s operating units, by applying principles provided by the Board that has overall responsibility for risk management. The Board also
approves policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and commodity price risk, use of
financial instruments, and investment of excess liquidity.
A. Market risk
The Group’s activities expose it primarily to market risks in relation to foreign currency interest rate movements and commodity prices.
The Group enters into a variety of derivative financial instruments to manage exposures which include forward foreign currency contracts
to hedge exchange rate risks from the sale of exported goods and purchase of imported goods.
Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is
not the entity’s functional currency. The Group exports dairy products and is exposed to foreign exchange risk, primarily movements in
exchange rates of US dollar and Japanese Yen. The Group also makes purchases including capital equipment, ingredients and packaging
that exposes it to movements in exchange rates of US dollar and Euro. The risk is measured using sensitivity analysis and cash flow
forecasting. Forward contracts and options are currently used to manage these risks.
The Group’s risk management policy is to match known and highly probable future cash flows in foreign currencies, for cash flow and fair
value hedge accounting purposes, with forward exchange contracts in the same currency and with closely corresponding settlement
dates. 30-80% of its estimated foreign currency exposures in respect of forecast sales over the subsequent 12 months are hedged. All
material foreign currency purchases are hedged on execution of contracts.
Commodity price risk
Commodity price risk in the Group primarily arises from price fluctuations and the availability of raw materials and other manufacturing
inputs (e.g. crude oil, sugar). The Group may enter into derivative transactions to limit these risks. Hedging activities are evaluated
regularly to align with Group expectations about the price changes and defined risk appetite; ensuring the most cost-effective hedging
strategies are applied.
It is the policy of the Group that it may enter into commodity forward contracts hedges to manage the commodity price risk associated
with anticipated purchase transactions out to 12 months. In the current year, the Group has designated certain commodity forward
contracts as a cash flow hedge of highly probable purchases.
81
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
22. Financial risk management (cont.)
The Group’s exposure to foreign exchange risk at the end of the reporting period is expressed as follows:
Consolidated
Contract
amount
$m
Contract
amount in
foreign
currency
m
Weighted
average
forward
rate
Market
value
assets
$m
Market
value
liabilities
$m
Year ended 30 June 2024
Cash flow hedges
US Dollar
27.3
18.0
0.6592
0.4
-
Euro
4.2
2.5
0.5979
-
(0.2)
Japanese Yen
2.9
287.7
99.8675
0.2
-
Held for trading
US Dollar
23.1
15.4
0.6662
-
(0.1)
Consolidated
Contract
amount
$m
Unit - Ltr
m
USD per Ltr
$
Market
value
assets
$m
Market
value
liabilities
$m
Commodity hedges
US Dollar
-
10.6
0.7
0.6
-
Consolidated
Contract
amount
$m
Contract
amount in
foreign
currency
m
Weighted
average
forward
rate
Market
value
assets
$m
Market
value
liabilities
$m
Year ended 30 June 2023
Cash flow hedges
US Dollar
11.3
7.5
0.6656
-
-
Euro
1.3
0.9
0.6341
0.1
-
Japanese Yen
2.0
185.6
90.7873
0.1
-
Held for trading
US Dollar
21.4
13.9
0.6508
-
(0.5)
Consolidated
Contract
amount
$m
Unit - Ltr
m
USD per Ltr
$
Market
value
assets
$m
Market
value
liabilities
$m
Commodity hedges
US Dollar
-
6.1
0.6
-
(0.3)
Group sensitivity
The Group sensitivity for cash flow exposures is based on the financial instruments held on 30 June 2024, had the Australian dollar
strengthened or weakened by 10% against the US dollar with all other variables held constant. The analysis is performed on the same
basis for 2023 and has no material impact on profit after tax due to the Group aiming to fully hedge its foreign currency exposures and
the accounting treatment of the instruments held. The sensitivity on the Group’s hedging instruments is detailed in the following table:
CONSOLIDATED
2024
2023
$m
$m
Equity
AUD$ strengthens 10% - increase
2.0
0.9
AUD$ weakens 10% - decrease
(2.0)
(0.8)
82
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
22. Financial risk management (cont.)
Cash flow and fair value interest rate risk
The Group’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash
flow interest rate risk. The Group regularly monitors and reviews the appropriateness to use interest rate swaps to manage interest
rate risk. There were no interest rate swaps in place at 30 June 2023 or 2024. All borrowings were denominated in Australian dollars
during 2023 and 2024.
As at the reporting date, the Group had the following interest bearing borrowings and assets outstanding:
CONSOLIDATED
2024
2023
$m
$m
Fixed rate instruments
Liabilities
Lease liabilities
(192.2)
(198.1)
Variable rate instruments
Assets
Cash and cash equivalents
65.6
66.4
Liabilities
Bank loans
(228.0)
(270.0)
Net exposure to interest rate risk on variable rate instruments
(162.4)
(203.6)
An analysis by maturities is provided in note 22e.
Interest rate sensitivity
At 30 June 2024, if interest rates had changed by -/+ 100 basis points from the year end rates with all other variables held constant, the
Group’s post-tax profit for the year would have been $2.7 million higher/(lower) (2023: $2.9 million higher/(lower)).
B. Credit risk
Credit risk is managed on an entity basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits
with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables
and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of “AA” are
accepted. For customers, the finance function assesses the credit quality of the customer, taking into account its financial position, past
experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board.
The compliance with credit limits by customers is regularly monitored by management.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised in note 8 and
note 22f. For some trade receivables, the Group may also obtain security in the form of guarantees, deeds of undertaking or letters of
credit that can be called upon if the counterparty is in default under the terms of the agreement. In addition, the Group obtains credit
insurance over export customers and some Australian customers.
83
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
22. Financial risk management (cont.)
The maximum exposure to credit risk is as follows:
CONSOLIDATED
2024
2023
$m
$m
Cash and cash equivalents
65.6
66.4
Trade receivables
314.5
270.4
Amounts receivable under Trade Receivables Facility
13.2
6.7
Accrued revenue
1.1
1.8
Other receivables
22.1
27.2
Fair value derivatives
1.2
0.2
Total credit risk exposure
417.7
372.7
There is considered to be limited credit risk in the balances of other receivables due to their nature as entities with which close
commercial relationships are maintained, related parties or government agencies. The Group manages amounts payable by direct milk
suppliers to the Group for supplier advances, loans or other prepayments for milk so as to mitigate any material exposure to default.
The ageing analysis of trade receivables is set out in the table below. The credit quality of financial assets that are neither past due nor
impaired is assessed based on the application of the credit risk policies described above. The expected impairment loss calculation
for trade receivables considers the impact of past events, and exercises judgment over the impact of current and future economic
conditions when considering the recoverability of outstanding trade receivable balances at the reporting date. Subsequent changes in
economic and market conditions may result in the provision for impairment losses increasing or decreasing in future periods.
Consolidated
Current
$m
More than 30
days past due
$m
More than 60
days past due
$m
More than 90
days past due
$m
Total
$m
Year ended 30 June 2024
Expected loss rate
0.1%
-
-
47.2%
Gross carrying amount - trade receivables
304.9
2.2
1.9
11.0
320.0
Loss allowance
0.3
-
-
5.2
5.5
Year ended 30 June 2023
Expected loss rate
-
1.7%
5.9%
35.0%
Gross carrying amount - trade receivables
250.2
6.3
4.4
15.2
276.1
Loss allowance
-
0.1
0.3
5.3
5.7
CONSOLIDATED
2024
2023
$m
$m
Opening loss allowance
5.7
6.5
Decrease in loss allowance recognised in profit or loss during the year
(4.3)
(0.8)
Receivables written off during the year as uncollectible
4.1
-
Closing loss allowance
5.5
5.7
84
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
22. Financial risk management (cont.)
C. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through
committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying
businesses, the Group maintains flexibility in funding by maintaining availability under committed credit lines. The Group manages
liquidity risk by continuously monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities.
D. Financing arrangements
The Group had access to the following borrowing facilities at the end of the reporting period:
CONSOLIDATED
2024
2023
$m
$m
Undrawn facilities expiring within one year
-
100.0
Undrawn facilities expiring beyond one year
372.0
180.0
Drawn facilities
228.0
270.0
Total facilities
600.0
550.0
Total facilities are represented by:
Common Terms Deed - Revolving Cash Advance Facility maturing 2 July 2027
270.0
-
Common Terms Deed - Revolving Cash Advance Facility maturing 17 February 2027
180.0
-
Syndicated Facility - Revolving Cash Advance Facility maturing 17 February 2025
-
270.0
Syndicated Facility - Revolving Cash Advance Facility maturing 17 February 2027
-
180.0
Inventory Facility - maturing 25 August 2025
150.0
100.0
Total facilities
600.0
550.0
The Group’s Syndicated Debt Facility was transitioned to Common Terms Deed Debt Facilities in June 2024. The Common Terms Deed
Debt Facilities established two aggregate facilities: Facility 1 which has an aggregate limit of $270 million maturing in July 2027 and
Facility 2 which has an aggregate limit of $180 million maturing in February 2027.
In addition to the Common Terms Deed Debt Facilities, the Group continues to operate a stand-alone Inventory Facility (matures on
25 August 2025) which is not subject to cross-charges or cross-guarantees, except as disclosed in note 24. The Inventory Facility has an
individual limit of $150 million and a combined aggregate limit of $350 million with the Trade Receivables Facility as disclosed in note 8.
The Common Terms Deed Debt Facilities and Inventory Facility are secured by equitable mortgages and floating charges on the assets
of Bega Cheese Limited and its subsidiaries subject to the Deed of Cross Guarantee as disclosed in note 25.
Under the Common Terms Deed Debt Facilities, the Group is required to comply with the following covenants:
i.
the leverage ratio is not greater than 3.5 times;
ii.
the interest cover ratio must be equal to or greater than 2.0 times, increasing to 2.5 times from 1 July 2025; and
iii. shareholder funds must be equal or greater than $750 million.
The Group has complied with these and previous covenants throughout the reporting period.
85
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
22. Financial risk management (cont.)
E. Maturities of financial liabilities
The following table analyses the Group’s financial liabilities. The amounts disclosed in the table are contractual undiscounted cash flows:
Consolidated
0-12
months
$m
1-2 years
$m
2-5 years
$m
>5 years
$m
Total
contractual
cash flows
$m
Carrying
amount
$m
At 30 June 2024
Non-derivatives
Lease liabilities
(33.8)
(26.2)
(63.8)
(156.6)
(280.4)
(192.2)
Secured bank loans
(11.7)
(11.2)
(231.3)
-
(254.2)
(226.7)
Trade and other payables
(558.4)
-
-
-
(558.4)
(558.4)
Derivatives
Inflows
57.3
-
-
-
57.3
1.2
Outflows
(56.9)
-
-
-
(56.9)
(0.3)
Total financial liabilities
(603.5)
(37.4)
(295.1)
(156.6)
(1,092.6)
(976.4)
At 30 June 2023
Non-derivatives
Lease liabilities
(29.5)
(29.5)
(63.5)
(175.6)
(298.1)
(198.1)
Secured bank loans
(14.6)
(284.3)
-
-
(298.9)
(269.0)
Trade and other payables
(510.0)
-
-
-
(510.0)
(510.0)
Derivatives
Inflows
35.6
-
-
-
35.6
0.2
Outflows
(35.9)
-
-
-
(35.9)
(0.8)
Total financial liabilities
(554.4)
(313.8)
(63.5)
(175.6)
(1,107.3)
(977.7)
F.
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and financial assets at
fair value securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by
the Group is the current bid price.
The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. The
fair value of forward exchange contracts is determined using forward exchange market rates at the reporting date. The carrying value
less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.
The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current
market interest rate that is available to the Group for similar financial instruments. The Directors consider that the carrying amounts of
financial assets and financial liabilities recorded at amortised cost in the financial statements approximate their fair values. All fair value
instruments are measured using quoted prices from active markets where available.
AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level under the following fair value
measurement hierarchy:
i.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
ii.
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices)
or indirectly (derived from prices);
iii. Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
86
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
22. Financial risk management (cont.)
The following table presents the Group’s assets and liabilities measured and recognised at fair value at the end of the reporting period:
Consolidated
Level 2
$m
Total
$m
At 30 June 2024
Assets
Foreign currency forwards - cash flow hedges
0.6
0.6
Commodity hedges - cash flow hedges
0.6
0.6
Total assets
1.2
1.2
Liabilities
Held for trading
(0.1)
(0.1)
Foreign currency forwards - cash flow hedges
(0.2)
(0.2)
Total liabilities
(0.3)
(0.3)
At 30 June 2023
Assets
Foreign currency forwards - cash flow hedges
0.2
0.2
Total assets
0.2
0.2
Liabilities
Held for trading
(0.5)
(0.5)
Commodity hedges - cash flow hedges
(0.3)
(0.3)
Total liabilities
(0.8)
(0.8)
23. Capital risk management
The Group’s objectives when managing capital are to safeguard the ability to continue as a going concern and generate adequate
returns to shareholders. Consistent with others in the industry, the Group monitors its capital on the basis of net debt, total equity and
gearing ratio.
CONSOLIDATED
2024
2023
$m
$m
Borrowings
226.7
269.0
Add back: borrowing costs
1.3
1.0
Cash and cash equivalents
(65.6)
(66.4)
Net debt
162.4
203.6
Total equity
1,014.8
1,003.7
Net debt to equity ratio
16%
20%
87
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
Group structure
24. Parent entity financial information
A. Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
BEGA CHEESE
2024
2023
$m
$m
Current assets
441.0
635.4
Total assets
1,780.1
1,995.4
Current liabilities
(470.7)
(688.5)
Total liabilities
(794.1)
(1,053.3)
Net assets
986.0
942.1
Shareholder’s equity
Issued capital of parent entity
885.5
884.4
Reserves
Share-based payment reserve
2.1
1.8
Capital profits reserve
32.6
32.6
Hedging reserve
0.3
(0.1)
Retained earnings
65.5
23.4
Total equity
986.0
942.1
Profit/(loss) after tax for the year
63.4
(47.3)
Total comprehensive income
63.4
(47.3)
Current assets and liabilities of Bega Cheese include intercompany loans.
B. Guarantees entered into by parent entity
The parent entity has entered into a deed of cross guarantee in relation to the debts of its subsidiaries as described in note 25.
C. Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2024 or 30 June 2023 except as disclosed in note 28.
D. Contractual commitments for the acquisition of property, plant or equipment
As at 30 June 2024, the parent entity had contractual commitments for the acquisition of property, plant or equipment totalling
$3.8 million (2023: $5.3 million). These commitments are not recognised as liabilities as the relevant assets have not yet been received.
88
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
25. Subsidiaries, joint arrangements and associates
Consolidated
Country of
incorporation
Nature of
relationship
2024 % of
ownership
interest
2023 % of
ownership
interest
180 Nutrition Pty Ltd
Australia
Subsidiary
100
100
BDD Australia Pty Ltd(1)
Australia
Subsidiary
100
100
BDD Foods Pty Ltd(1)
Australia
Subsidiary
100
100
BDD Milk Pty Ltd(1)
Australia
Subsidiary
100
100
Bega Cheese Benefit Fund Ltd
Australia
Subsidiary
100
100
Bega Cheese Investments Pty Ltd
Australia
Subsidiary
100
100
Bega Dairy and Drinks Pty Ltd(1)
Australia
Subsidiary
100
100
Bega Dairy and Drinks Finance Pty Ltd(1)
Australia
Subsidiary
100
100
Bega Dairy and Drinks Services Pty Ltd(1)
Australia
Subsidiary
100
100
Bega Insurance Pte Ltd
Singapore
Subsidiary
100
100
Berri Pty Ltd(1)
Australia
Subsidiary
100
100
Berri Asia Sdn Bhd
Malaysia
Subsidiary
100
100
Blowflex Mouldings Pty Ltd(1)
Australia
Subsidiary
100
100
Capitol Chilled Foods (Australia) Pty Ltd(1)
Australia
Subsidiary
100
100
Dairy and Drinks Singapore Pte Ltd
Singapore
Subsidiary
100
100
Dairy Farmers Pty Ltd(1)
Australia
Subsidiary
100
100
Dairy Vale Foods Pty Ltd(1)
Australia
Subsidiary
100
100
Malanda Dairyfoods Pty Ltd(1)
Australia
Subsidiary
100
100
National Foods Holdings Ltd(1)
Australia
Subsidiary
100
100
National Foods Beverage Holdings Pty Ltd(1)
Australia
Subsidiary
100
100
Peanut Company of Australia Pty Ltd(1)
Australia
Subsidiary
100
100
QUD Pty Ltd(1)
Australia
Subsidiary
100
100
Shanghai Great Lion Food & Beverages Management Co Ltd
China
Subsidiary
100
100
Tatura Milk Industries Pty Ltd(1)
Australia
Subsidiary
100
100
Tatura Cheese Industries Pty Ltd
Australia
Subsidiary
100
100
CBH Fresh Ltd
Australia
Joint venture
11.5
11.5
(1)A party to Deed of Cross Guarantee dated 21 February 2021.
26. Business combinations
On 1 December 2023, the Group completed the acquisition of the businesses and certain assets of Betta Milk and Meander Valley Dairy,
and the licence to use the Pyengana Dairy brand. The core business of Betta Milk and Meander Valley Dairy is the manufacture, marketing
and sale of white milk, milk-based beverages and culinary products. The acquisition has increased the number of branded products
manufactured and sold by the Group, complementing the existing portfolio.
The results of the Betta Milk and Meander Valley Dairy businesses are included in the Branded segment from the date of acquisition.
The total contribution to the Group’s earnings for the year ended 30 June 2024 was not material.
The fair values of the assets acquired, and total purchase consideration paid are summarised below. The goodwill recognised on
acquisition represents the synergies expected to be achieved in utilising the acquired brands and products in combination with the
existing assets of the Branded operating segment.
Fair value
$m
Inventories
0.8
Right-of-use lease assets
0.8
Property, plant and equipment
3.4
Deferred tax assets
0.8
Lease liabilities
(1.0)
Provisions
(2.5)
Fair value of identifiable net assets acquired
2.3
Total purchase consideration
12.4
Goodwill
10.1
89
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
26. Business combinations (cont.)
Identifiable net assets acquired
The fair values of the identifiable assets and liabilities have been determined as at 1 December 2023, applying the acquisition date fair
value as determined by independent expert valuations.
Purchase consideration
Total purchase consideration and net cash paid of $12.4 million does not include acquisition related expenses. Total acquisition related
costs incurred to date are $6.9 million (before tax). The total costs have been incurred in the current period. These costs are included
in the Group’s Consolidated Statement of Comprehensive Income for the year ended 30 June 2024 and are disclosed as a significant
item (see note 1).
27. Closed group disclosure
Entities that are party to a Deed of Cross Guarantee under which each company guarantees the debts of the other are included in
note 25. These companies represent a “closed group” for the purposes of Instrument 2016/785, issued by the Australian Securities and
Investments Commission. By entering into the deed these entities have been relieved from the requirement to prepare a financial report
and directors’ report under the Instrument.
The Statement of Comprehensive Income and the Balance Sheet for this closed group are shown below:
CLOSED GROUP
2024
2023
$m
$m
Profit/(loss) before income tax
39.7
(257.1)
Income tax (expense)/ benefit
(9.3)
26.9
Profit/(loss) for the year
30.4
(230.2)
CLOSED GROUP
2024
2023
$m
$m
ASSETS
Current assets
Cash and cash equivalents
64.0
62.2
Trade and other receivables
345.9
304.0
Derivative financial instruments
1.2
0.2
Inventories
358.1
428.5
Assets held for sale
17.3
1.4
Other assets
28.6
29.4
Total current assets
815.1
825.7
Non-current assets
Property, plant and equipment
673.4
687.2
Right-of-use assets
150.8
161.4
Deferred tax assets
16.3
7.8
Intangible assets
476.6
464.5
Total non-current assets
1,317.1
1,320.9
Total assets
2,132.2
2,146.6
90
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
27. Closed group disclosure (cont.)
CLOSED GROUP
2024
2023
$m
$m
LIABILITIES
Current liabilities
Trade and other payables
557.9
509.4
Other liabilities
16.2
17.3
Derivative financial instruments
0.3
0.8
Lease liabilities
23.9
17.2
Current tax liabilities
4.9
13.0
Provisions
103.8
120.3
Total current liabilities
707.0
678.0
Non-current liabilities
Borrowings
226.7
269.0
Lease liabilities
168.3
180.9
Other liabilities
4.7
4.4
Provisions
16.8
16.5
Total non-current liabilities
416.5
470.8
Total liabilities
1,123.5
1,148.8
Net assets
1,008.7
997.8
EQUITY
Share capital
874.2
872.9
Reserves
25.4
24.7
Retained earnings
109.1
100.2
Total equity
1,008.7
997.8
91
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
Unrecognised items
28. Contingent liabilities
The Group enters into product supply agreements with ongoing requirements to reconcile to specific contractual terms (see note 14).
Contingent liabilities may arise where completion of the reconciliation process subsequent to a reporting date results in a payable greater
than the amount accrued. Based on all available information and professional advice, management considers there are no significant
contingent liabilities at 30 June 2024. The Group has $13.3 million of bank guarantees as at 30 June 2024 (2023: $16.8 million).
29. Commitments
CONSOLIDATED
2024
2023
$m
$m
Capital expenditure contracted for at the reporting date
but not recognised as liabilities is as follows:
Plant and equipment - payable within one year
23.5
21.4
30. Subsequent events
The financial impact of the transactions set out below, which occurred after 30 June 2024, has not been recognised in these financial statements.
A. Dividend
On 29 August 2024, the Directors declared a final fully franked dividend of 4.0 cents per share, which represents a distribution of
$12.2 million.
The Group’s Dividend Reinvestment Plan (DRP) will be activated for the FY2024 final fully franked dividend. The DRP is optional and offers
ordinary shareholders in Australia and New Zealand the opportunity to acquire fully paid ordinary shares without transaction costs.
Shares allocated under the DRP will be derived from new issued ordinary shares. The shares issued rank pari passu with other ordinary
shares already on issue. The allocation price will be determined in accordance with the DRP rules as the arithmetic average of the daily
volume weighted average market price of all Bega Cheese Limited shares sold through a normal trade on the ASX trading system over
the five business days commencing on the day of the record date.
A shareholder can elect to participate in or terminate their involvement in the DRP at any time. Election notices for participation in the
DRP in relation to the FY2024 final fully franked dividend to be paid on 3 October 2024 must be recorded by the registry by 5:00 pm on
5 September 2024 to be effective for that dividend.
B. Sale of Leeton juice extraction facility
On 26 August 2024, the Group announced that it has entered into a binding agreement to sell its Leeton juice extraction facility and
related assets to Australian Juice Processing and Bottling Pty Ltd (Grove Juice) subject to conditions for $11.4 million. Upon completion,
which is expected to occur in the second quarter of FY2025, Grove Juice will take ownership of the facility and provide employment to
existing staff. Grove Juice will process fruit on behalf of the Group as part of a long-term agreement. The Group will maintain its strong
relationships with local and regional suppliers to source its fruit. As at reporting date, property, plant and equipment of $11.0 million
related to this site has been reclassified to assets held for sale under current assets. No adjustment has been made to the carrying
value of these assets.
Further details
31. Related party transactions
A. Terms and conditions of related party transactions
Transactions between the Group and related parties are conducted on normal commercial terms and conditions.
B. Key management personnel (KMP) remuneration and transactions
CONSOLIDATED
2024
2023
$
$
Short-term employee benefits
3,955,120
3,348,332
Post-employment benefits
172,666
167,994
Other long-term employee benefits
132,329
198,005
Share-based payments
280,256
(206,912)
Total employee benefits
4,540,371
3,507,419
92
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
31. Related party transactions (cont.)
During the year, some KMP and their related entities engaged in related party transactions with the Group relating to the supply of milk and
sale of peanuts. These transactions were on the same normal commercial terms as other suppliers and customers and are summarised
in the table below.
CONSOLIDATED
2024
2023
$
$
Payments made by the Group during the year
3,243,144
5,987,855
Sales made by the Group during the year
401,766
341,145
Rental income received by the Group during the year
-
45,378
Amounts payable at year end
236,792
191,377
Amounts receivable at year end
65,102
90,852
Further details of KMP remuneration are disclosed in the Remuneration Report.
32. Remuneration of auditors
CONSOLIDATED
2024
2023
$
$
Audit services
PwC Australia - Audit and review of financial statements
2,003,000
1,723,000
PwC Australia - Limited assurance on Sustainability Report
135,000
-
Non-audit services
PwC Australia - Assurance services
23,000
18,000
PwC Australia - Other services
392,000
512,000
From time to time the Group may engage PwC Australia on assignments additional to the statutory audit duties where their experience
with the Group is important, provided such assignments do not give rise to a potential conflict of interest. During the current year PwC
provided non-audit services relating to tax advice and tax compliance.
93
Bega Cheese Limited
Return to Index to Financial Statements
Notes to the Financial Statements
33. Share-based payments
Expenses arising from Bega Cheese Limited Long-Term Incentive and Short-Term Incentive Plans
The Long-Term Incentive Plans (LTIs) are designed to provide long-term incentives to the CEO and executive team to deliver shareholder
returns. Under the 2022-2024 LTI Plan (FY2022 Plan), 2023-2025 LTI Plan (FY2023 Plan) and the 2024-2026 LTI Plan (FY2024 Plan), each
member of the executive team is granted share rights which only vest if certain performance standards are met.
The total number of performance rights outstanding at 30 June 2024 was 1,730,448 (2023: 1,390,248).
Certain executives and staff have been awarded Short-Term Incentive (STI) payments that will be partly made in the form of Bega
Cheese Limited Shares.
Details of the movements in LTI performance rights are disclosed in the Remuneration Report.
CONSOLIDATED
2024
2023
$m
$m
Entitlements due under employee share schemes
Expense/(benefit) in relation to LTIs and STIs
0.3
(0.4)
Total employee share scheme expense/(benefit)
0.3
(0.4)
The following tables detail the total performance rights issued by the Group:
CONSOLIDATED
Valuation price
2024
2023
LTI Plan
Vesting date
No. of rights
No. of rights
FY2024 Plan
30 June 2026
$2.99
813,744
-
FY2023 Plan
30 June 2025
$3.11
672,763
693,569
FY2022 Plan
30 June 2024
$5.50
243,941
307,446
FY2021 Plan
30 June 2023
$4.17
-
389,233
Performance rights on issue at end of period
1,730,448
1,390,248
Long-term incentives
performance rights
No. of rights
$
Year ended 30 June 2024
Outstanding at the beginning of the period
1,390,248
n/a
Granted during the period
813,744
$2.99
Lapsed during the period
(473,544)
$5.07
Outstanding at end of period
1,730,448
n/a
Year ended 30 June 2023
Outstanding at the beginning of the period
1,069,744
n/a
Granted during the period
693,569
$3.11
Lapsed during the period
(373,065)
$4.76
Outstanding at end of period
1,390,248
n/a
94
2024 Annual Report
Return to Index to Financial Statements
Notes to the Financial Statements
34. Summary of material accounting policies
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated. The financial statements are for the consolidated entity
consisting of Bega Cheese Limited and the entities it controlled at year end or from time to time during the financial year (the Group).
Bega Cheese Limited is domiciled in New South Wales and is incorporated in Australia.
The financial statements were authorised for issue by the Directors on 29 August 2024. The Directors have the power to amend and
re-issue the financial statements.
A. Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (AASB), and the Corporations Act 2001. Bega Cheese Limited is a for-profit entity
for the purpose of preparing the financial statements and is a company limited by shares.
Compliance with IFRS
The consolidated financial statements of the Group also comply with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
Early adoption of standards
The Group has elected not to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2023.
Adoption of new standards
Internation tax reform - Pillar Two
The Organisation for Economic Co-operation and Development has developed a global solution to address the tax challenges arising
from a globalised economy. Pillar Two of the two-pillar solution introduces a global minimum effective tax rate where multinational
groups with consolidated revenue over €750m (during a specific period) are subject to a minimum effective tax rate of 15% on income
in each jurisdiction in which they operate. Where the effective tax rate is less than 15%, a top up tax applies.
The Group is within the scope of the Pillar Two top up tax. These rules have been enacted or substantively enacted in certain jurisdictions
in which the Group operates. Since the Pillar Two legislation was not effective at the reporting date, the Group has no related current tax
exposure. The Group has adopted the temporary mandatory exception from the requirement to recognise and disclose deferred taxes
arising from enacted or substantively enacted tax law that implements Pillar Two. The Pillar Two rules are expected to apply to the Group
from the financial year beginning 1 July 2024 at which time Pillar Two taxes will be accounted for as current taxes in FY2025.
The Group is in the process of assessing its potential exposure (if any) to Pillar Two taxes based on the most recent tax filings,
country-by-country reporting and financial statements for the constituent entities in the Pillar Two group. Based on the Group’s profile,
the Group does not expect a material exposure to Pillar Two taxes.
There are no other standards that are not yet effective and that would be expected to have a material impact on the Group in the current
or future reporting periods and on foreseeable future transactions.
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets
and liabilities (including derivative instruments).
Critical accounting estimates
The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. Areas
where assumptions and estimates are significant to the financial statements are disclosed in note 21. Certain items in the prior period
have been reclassified to be consistent with their presentation in the current period.
B. Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Bega Cheese (Company or parent
entity) as at 30 June 2024 and the results of all subsidiaries for the year then ended. Bega Cheese and the entities it controlled together
are referred to in this financial report as the ‘Group’ and the ‘consolidated entity’.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
The acquisition method of accounting is used to account for business combinations by the Group. Intercompany transactions, balances
and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
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34. Summary of material accounting policies (cont.)
Joint ventures and associates
Interests in joint ventures and associates are accounted for using the equity method, after initially being recognised at cost in the
Consolidated Balance Sheet. The interest in joint ventures and associates are accounted for using the equity method after initially being
recognised at cost in the Consolidated Balance Sheet. Under the equity method of accounting, joint ventures and associates are initially
recognised at cost and adjusted thereafter to recognise the Group’s share of post-acquisition profits or losses of the joint venture or
associate in profit or loss, and the Group’s share of movements in other comprehensive income of the joint venture or associate in other
comprehensive income. Distributions received or receivable from joint ventures and associates are recognised as a reduction in the
carrying amount of the investment.
C. Segment reporting
Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision Makers.
The Chief Operating Decision Makers, who are responsible for allocating resources and assessing performance of the reporting segments,
are the Executive Chairman, the Chief Executive Officer and the Chief Financial Officer.
D. Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is Bega Cheese Limited’s functional and
presentation currency.
Foreign operations
The assets and liabilities of the Group’s foreign operations are translated at applicable exchange rates at 30 June of the relevant
reporting period. Income and expense items are translated at the average exchange rates for the period.
Foreign exchange gains and losses arising on translation are recognised in the foreign currency translation reserve.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when they
are deferred in equity as qualifying cash flow hedges.
E. Revenue recognition
Revenue is recognised to the extent that the Group satisfies a performance obligation where control of the goods or services passes to
the customer, and the transaction price can be readily identified. Revenue is measured at the agreed price being the amount to which
the entity expects to be entitled in exchange for goods and services. Amounts disclosed as revenue are net of returns, trade allowances,
rebates and amounts collected on behalf of third parties.
Judgement is used in assessing revenue from customers under product supply contracts that require a periodic reconciliation to
specific terms of those contracts. From time to time there may be differences of opinion between the Group and the customer as to
the amount receivable under the contracts. Such differences are usually resolved amicably between the parties having regard to the
relevant contract.
The cost of advertising of Bega-owned retail brands in conjunction with certain customers where the Group has some control over the
way the money is invested, and a similar service could be provided by another party, has been recognised separately as an advertising
expense, consistent with prior periods.
The Group does not have any contracts where the period between the transfer of the promised product or services to the customer
and payment by the customer exceeds one year. Consequently, the Group does not adjust any of the transaction prices for the time
value of money.
Revenue is recognised for the major business activities as follows:
Sale of goods and disposal of assets
Revenue from the sale of goods and disposal of other assets is recognised at a point in time when the Group has passed control of
promised goods or assets to the customer. Transfer of control to the customer occurs when the product has been shipped to the
location specified by the customer and the customer accepts the product. The delivery terms include cost and freight (CFR) and cost,
insurance and freight (CIF). These terms mean the Group is responsible for providing shipping services up until the date at which control
of the goods passes to the customer. The Group assesses these sales at December and June reporting period and adjusts for those
where control has not transferred to the customer.
Rebates and sales incentives to customers that have variable consideration are only included in revenue when it is highly probable that
the inclusion will not result in significant adjustments in the future.
The Group procures some ingredients from customers which are used to produce finished goods sold to those same customers.
Payments for these ingredients are offset against the revenue earned from those customers where the payments are not deemed to be
for distinct goods or services as defined in the standard. The Group has not recognised the ingredients purchased from customers as
inventory, instead recognising the items in other assets.
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34. Summary of material accounting policies (cont.)
Services
Revenue from services relating to certain production agreements with customers is recognised over time in the reporting period in
which the performance obligation is met.
Royalties and rental revenue
Revenue is recognised over time on an accruals basis in accordance with the substance of the relevant agreement. Royalties and licence fees
for use of its brand names with customers is recognised when the performance obligation is satisfied (for the use of intellectual property).
F.
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable
income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not recognised if it
arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities. Current
tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis,
or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
G. Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or
other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair
value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-
acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of the net
identifiable assets acquired is recorded as goodwill. If the fair value of the net identifiable assets acquired exceeds the consideration
transferred this amount is recognised immediately as a gain on bargain purchase in the Consolidated Statement of Comprehensive Income.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value
as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing
could be obtained from an independent financier under comparable terms and conditions.
H. Impairment of assets
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
that are largely independent of the cash flows from other assets or groups of assets or cash generating units (CGUs).
The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. Fair value measurement is covered by AASB 13 and defines fair value of an asset
as the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date.
The Group uses a discounted cash flow model to assess the value in use for impairment testing purposes of its CGUs.
The estimated future cash flows are based on reasonable underlying financial and operational assumptions at the time including having
regard to each of:
•
recent actual historical performance
•
business plans, budgets and other forecasts reflecting the short to medium-term outlook
•
strategic plans defining the longer-term outlook and strategy approved for the business and related identifiable intangible assets.
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Notes to the Financial Statements
34. Summary of material accounting policies (cont.)
The future cash flows are discounted to their present value using a discount rate reflecting the appropriate weighted average cost of
capital based on capital market conditions, risk free rates, underlying growth rates and the risks specific to the asset at the time of the
assessment. Key cash flow and discount rate assumptions are based on management judgement and also refer to external data and
input from independent experts as required.
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each
reporting period.
I.
Cash and cash equivalents
For the purpose of presentation in the Consolidated Statement of Cash Flows, cash and cash equivalents includes cash on hand and
deposits held at call with financial institutions. Bank overdrafts are shown within borrowings in current liabilities in the Balance Sheet.
J. Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method,
less provision for impairment. Trade receivables are generally due for settlement within 30 to 60 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off by reducing
the carrying amount directly.
A loss allowance provision (allowance for impairment of trade receivables) is recognised for the lifetime expected credit losses from
trade receivables. The loss allowance considers the impact of past events including historical loss rates, and exercises judgment over
the impact of current and future economic conditions when considering the recoverability of outstanding trade receivable balances
at the reporting date. Subsequent changes in economic and market conditions may result in the loss allowance provision increasing or
decreasing in future periods.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default
or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the impairment allowance
is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
The amount of the impairment loss is recognised in profit or loss within administration expense. When a trade receivable for which
an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance
account. Subsequent recoveries of amounts previously written off are credited against administration expense in profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:
•
the rights to receive cash flows from the asset have expired
•
the Group transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in
full without material delay to a third party under a “pass through” arrangement; and either (a) the Group transferred substantially all
the risk and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risk and rewards of the
asset, but has transferred control of the asset.
When the Group transfers its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if
and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset
is recognised to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognises an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
K. Inventories
Inventories are stated at the lower of cost and net realisable value. Costs are assigned to individual items of inventory on hand by the
method most appropriate to each particular class of inventory, with the majority being valued on a first in first out basis. Milk is valued
at average annual cost, including committed price increases in respect of the reporting period.
Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being
allocated on the basis of normal operating capacity or other appropriate cost allocation apportionments.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
L. Other assets
Some of the ingredients which the Group procures from customers are used to produce finished goods sold to those same customers.
Payments for these ingredients are offset against the revenue earned from those customers where the payments are not deemed to be
for distinct goods or services as defined in the standard.
The Group has not recognised the ingredients purchased from customers as inventory, instead recognising the items in other assets.
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Notes to the Financial Statements
34. Summary of material accounting policies (cont.)
M. Investments and other financial assets
The Group classifies its investments in the following categories: loans and receivables, and financial assets at fair value through other
comprehensive income (FVOCI). The classification depends on the purpose for which the investments were acquired. Management
determines the classification of its investments at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They are included in current assets, except for those with maturities greater than 12 months after the reporting date that are classified
as non-current assets. Loans and receivables are included in trade and other receivables (note 8) in the Balance Sheet.
Loans and receivables are initially recognised at fair value plus transaction costs that are directly attributable to the acquisition of the
financial asset. They are subsequently carried at amortised cost using the effective interest method. They are derecognised when the
rights to receive cash flows from them have expired or have been transferred and the Group has transferred substantially all the risks
and rewards of ownership.
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised
cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade
receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised
from initial recognition of the receivables, see note 22 for further details.
The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future
cash flows (excluding future credit losses that have not been incurred) discounted at the asset’s original effective interest rate. The
carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously
recognised impairment loss is recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Certain shares held by the Group are classified as being financial assets at fair value through other comprehensive income (FVOCI) and
are stated at fair value. Fair value is determined in the manner described in note 22. Gains and losses arising from changes in fair value
are recognised through other comprehensive income with the exception of impairment losses that are recognised directly in profit or
loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in reserves
is included in profit or loss for the period.
N. Derivatives and hedging activities
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate
risk, including forward foreign exchange contracts and options. The Group does not enter into derivative financial instruments for
speculative purposes.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to
their fair value at the end of each reporting period. The accounting for subsequent changes in fair value assumes that the derivative is
designated as a hedging instrument and depends on the nature of the item being hedged.
At the inception of the hedge relationship the Group documents the relationship between the hedging instrument and the hedged item,
along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of
the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly
effective in offsetting changes in fair values or cash flows of the hedged item.
The fair values of various derivative financial instruments used for hedging purposes are disclosed in note 22. Movements in the hedging
reserve in shareholders’ equity are shown in the Consolidated Statement of Changes in Equity. The full fair value of a hedging derivative
is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months and otherwise
as a current asset or liability.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other
comprehensive income and accumulated in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit
or loss within other income or administration expenses.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for instance,
when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of forward foreign exchange contracts
hedging export sales is recognised in profit or loss within “revenue”. However, when the forecast transaction that is hedged results in
the recognition of a non-financial asset (for example, inventory or fixed assets) the gains and losses previously deferred in equity are
transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised
in profit or loss as cost of goods sold in the case of inventory, or as depreciation in the case of fixed assets.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in
equity is immediately reclassified to profit or loss.
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Notes to the Financial Statements
34. Summary of material accounting policies (cont.)
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss, together with
any changes in the fair value of the hedged items that are attributable to the hedged risk. The gain or loss relating to the ineffective
portion is recognised in profit or loss within other income or administration expenses.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the
effective interest method is used is amortised to profit or loss over the period to maturity using a recalculated effective interest rate.
O. Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Cost may also include any gains/losses on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of any replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued
amounts, net of their residual values, over their estimated useful lives, as follows:
•
buildings, 10 to 50 years
•
plant and equipment, 2 to 30 years.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in profit or loss.
P. Leases
The Group leases various buildings (offices, warehouses, and manufacturing facilities), motor vehicles and equipment (forklifts and
other equipment). The building rental agreements are generally for fixed periods between two and twenty years with options to extend
for further one to ten years. Other lease contracts are typically made for fixed periods of between two and ten years. Leases identified
as short term (12 months or less) and low value will continue to be recognised in the profit or loss as a lease expense. Lease terms are
negotiated on an individual basis and contain a wide range of different terms and conditions.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and
non-lease components when possible, however for real estate for which the Group is lessee, it has elected not to separate and includes
all non-lease components as a single lease component.
Lease liabilities are recognised by the Group at the commencement date of the lease and are measured at the present value of lease
payments to be made over the lease term. Lease payments include fixed payments and variable lease payments that depend on an index
or rate. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The incremental borrowing rate is used unless the implicit interest rate in the lease is readily determined. The lessee’s incremental
borrowing rate is the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value
to the right-of-use asset in a similar economic environment with similar terms, security, and conditions. Determining the incremental
borrowing rate requires significant judgement. The discount rate is derived from key external market-based rates, the Group’s credit
margin, location of the asset and the length of the lease.
Right-of-use lease assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use lease assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease incentive received. Right-of-use lease
assets are depreciated on a straight-line basis in the profit or loss over the lease term.
Q. Intangible assets
Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of the Group’s share of the net identifiable assets of the
acquired subsidiary at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill is not amortised but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it
might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the
carrying amount of goodwill related to that entity.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating
units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
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34. Summary of material accounting policies (cont.)
Brands and other identifiable intangible assets
Brands and other identifiable intangible assets purchased by the Group are initially recognised at cost, or at their fair value if acquired
as part of a business combination.
These identifiable intangible assets are subsequently measured:
•
if they have a finite life, at cost less amortisation, and
•
if they have an indefinite life, at cost less accumulated impairment losses.
Finite life brands or other identifiable intangible assets are amortised on a straight-line basis over the shorter of their contractual or
useful economic life, being three to 25 years. They are also tested for impairment when an indicator of impairment may exist.
Indefinite life identifiable intangible assets are not amortised but are instead tested for impairment annually, or more frequently if there
is an indicator of impairment. Brands or other identifiable intangible assets are determined to have an indefinite life where there is an
intention to maintain and support the brand or other intangible asset for an indefinite period.
Such assets are tested for impairment in accordance with the policy stated in note 34h.
SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s application over the contract
period. As such the Group does not receive a software intangible asset at the contract commencement date. For SaaS arrangements,
the Group assesses if the contract will provide a resource that it can control to determine whether an intangible asset is present. If the
Group cannot determine control of the software, the arrangement is deemed a service contract and any implementation costs including
costs to configure or customise the cloud provider’s application software are recognised as operating expenses when incurred.
Costs incurred to obtain access to the cloud provider’s application software are generally recognised as operating expenses when the
services are received.
Costs incurred for the development of software code that enhances, modifies or creates additional capability to existing on-premise
software are capitalised if it meets the recognition criteria for an intangible asset.
Certain internal and external costs directly incurred in acquiring and developing software are capitalised if it they meet the recognition
criteria of an intangible asset and are amortised on a straight-line basis over their estimated useful lives, being three to ten years.
Capitalised costs are tested for impairment when an indicator of impairment exists.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value
at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
R. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They
are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
S. Borrowings
Establishment fees are capitalised against borrowings and amortised over the period of the facility to which it relates. Should it be
probable that the facility will not be fully utilised, the related establishment fees are written off to profit and loss as soon as the
underutilisation has been identified.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least
12 months after the reporting date.
Borrowing costs are expensed as incurred unless they relate to significant qualifying assets.
T. Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting
date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value
of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is
recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
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34. Summary of material accounting policies (cont.)
Restoration provisions
Provisions for the costs to restore (make good) leased plant assets to their original condition, as required by the terms and conditions
of the lease, are recognised when the obligation is incurred, either at the commencement date or as a consequence of having used the
underlying asset during a particular period of the lease, at the Directors’ best estimate of the expenditure that would be required to
restore the assets. Estimates are regularly reviewed and adjusted as appropriate for new circumstances.
Restructurings
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid
expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to
those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring,
which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the
entity.
U. Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and vesting sick leave that are expected to be settled within 12
months after the end of the period in which the employees render the related service are recognised in respect of employees’ services
up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability
for accumulating sick leave and annual leave is recognised in the provision for employee benefits. All other short-term employee benefit
obligations are presented as payables.
Other long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the period
in which the employees render the related service is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the end of the reporting period on high quality corporate bonds with
terms to maturity that match, as closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer
settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur.
Retirement benefit obligations
All employees of the Group are entitled to benefits from the Group’s superannuation plan on retirement, disability or death. All employees
receive fixed contributions from the Group and the Group’s legal or constructive obligation is limited to these contributions.
Share-based payments
The fair value of rights granted under the Bega Cheese Limited Long-Term Incentive Plan is recognised as an employee benefit expense
with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the rights granted
at the beginning of the scheme, which includes any market performance conditions and the impact of any non-vesting conditions.
Non-market vesting conditions are included in assumptions about the number of performance rights that are expected to vest. The total
expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.
At the end of each period, the entity revises its estimates of the number of performance rights that are expected to vest based on the
non- market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding
adjustment to equity.
Profit-sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit sharing based on a formula that takes into consideration the
profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a liability where contractually obliged
or where there is a past practice that has created a constructive obligation.
V. Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
W. Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity,
on or before the end of the reporting period but not distributed at the end of the reporting period.
102
2024 Annual Report
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Notes to the Financial Statements
34. Summary of material accounting policies (cont.)
X. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of
ordinary shares outstanding during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
•
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares
•
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
Y. Research and development costs
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally-generated
intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred.
Z. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from
the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables
and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to,
the taxation authority is included with other receivables or payables in the balance sheet. Cash flows are presented on a gross basis.
The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation
authority, are presented as operating cash flows.
AA. Rounding off amounts
The Company is of a kind referred to in Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating
to the ‘rounding off’ of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance
with that Instrument to the nearest hundred thousand dollars, or in certain cases, the nearest dollar.
AB. Parent entity financial information
The financial information for the parent entity, Bega Cheese, disclosed in note 24 has been prepared on the same basis as the
consolidated financial statements, except as set out below:
i.
Investments in subsidiaries and joint venture entities
Investments in subsidiaries and joint venture entities are accounted for at cost in the financial statements of Bega Cheese.
ii.
Dividend income
Dividends receivable from subsidiaries and joint venture entities are included in Bega Cheese’s income statement.
103
Bega Cheese Limited
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Consolidated Entity Disclosure Statement
Consolidated Entity Disclosure Statement
Entity name
Entity type
2024 %
of share
capital held
Place
formed or
incorporated
Australian
or foreign
resident
Foreign
resident
jurisdiction
Bega Cheese Limited
Body corporate
n/a
Australia
Australian
n/a
180 Nutrition Pty Ltd
Body corporate
100
Australia
Australian
n/a
BDD Australia Pty Ltd
Body corporate
100
Australia
Australian
n/a
BDD Foods Pty Ltd
Body corporate
100
Australia
Australian
n/a
BDD Milk Pty Ltd
Body corporate
100
Australia
Australian
n/a
Bega Cheese Benefit Fund Ltd
Body corporate
100
Australia
Australian
n/a
Bega Cheese Investments Pty Ltd
Body corporate
100
Australia
Australian
n/a
Bega Dairy and Drinks Pty Ltd
Body corporate
100
Australia
Australian
n/a
Bega Dairy and Drinks Finance Pty Ltd
Body corporate
100
Australia
Australian
n/a
Bega Dairy and Drinks Services Pty Ltd
Body corporate
100
Australia
Australian
n/a
Bega Insurance Pte Ltd
Body corporate
100
Singapore
Foreign
Singapore
Berri Pty Ltd
Body corporate
100
Australia
Australian
n/a
Berri Asia Sdn Bhd
Body corporate
100
Malaysia
Foreign
Malaysia
Blowflex Mouldings Pty Ltd
Body corporate
100
Australia
Australian
n/a
Capitol Chilled Foods (Australia) Pty Ltd
Body corporate
100
Australia
Australian
n/a
Dairy and Drinks Singapore Pte Ltd
Body corporate
100
Singapore
Foreign
Singapore
Dairy Farmers Pty Ltd
Body corporate
100
Australia
Australian
n/a
Dairy Vale Foods Pty Ltd
Body corporate
100
Australia
Australian
n/a
Malanda Dairyfoods Pty Ltd
Body corporate
100
Australia
Australian
n/a
National Foods Holdings Ltd
Body corporate
100
Australia
Australian
n/a
National Foods Beverage Holdings Pty Ltd
Body corporate
100
Australia
Australian
n/a
Peanut Company of Australia Pty Ltd
Body corporate
100
Australia
Australian
n/a
QUD Pty Ltd
Body corporate
100
Australia
Australian
n/a
Shanghai Great Lion Food &
Beverages Management Co Ltd
Body corporate
100
China
Foreign
China
Tatura Milk Industries Pty Ltd
Body corporate
100
Australia
Australian
n/a
Tatura Cheese Industries Pty Ltd
Body corporate
100
Australia
Australian
n/a
Basis of preparation
This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes
information for each entity that was part of the consolidated entity as at the end of the financial year in accordance with AASB 10
Consolidated Financial Statements.
Determination of tax residency
Subsection 295 (3A)(a)(vi) of the Corporations Act 2001 defines tax residency as having the meaning in the Income Tax Assessment
Act 1997. The determination of tax residency involves judgement as there are different interpretations that could be adopted, which
could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
•
Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commissioner’s
public guidance in Tax Ruling TR 2018/5
•
Foreign tax residency
Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its determination
of tax residency to ensure applicable foreign tax legislation has been complied with (see subsection 295 (3A)(a)(vii) of the
Corporations Act 2001).
104
2024 Annual Report
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Directors’ Declaration
In the Directors’ opinion
a. the financial statements and notes set out on pages 35 to 103
are in accordance with the Corporations Act 2001, including
i.
complying with Accounting Standards, the Corporations
Regulations 2001 and other mandatory professional
reporting requirements; and
ii.
giving a true and fair view of the consolidated entity’s
financial position as at 30 June 2024 and of its performance
for the financial year ended on that date; and
b. there are reasonable grounds to believe that the Group will
be able to pay its debts as and when they become due and
payable, and
c. the Consolidated Entity Disclosure Statement on page 104 is
true and correct, and
d. at the date of this declaration, there are reasonable grounds
to believe that the members of the extended closed Group
identified in note 27 will be able to meet any obligations or
liabilities to which they are, or may become, subject by virtue
of the deed of cross guarantee described in note 27.
Note 34a confirms that the financial statements also comply
with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Chief
Executive Officer and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the
Directors.
Barry Irvin
Executive Chairman
Melbourne
Raelene Murphy
Independent Director
Melbourne
29 August 2024
105
Bega Cheese Limited
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PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Bega Cheese Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Bega Cheese Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2024 and of its financial
performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
●
the Consolidated Balance Sheet as at 30 June 2024
●
the Consolidated Statement of Comprehensive Income for the year then ended
●
the Consolidated Statement of Changes in Equity for the year then ended
●
the Consolidated Statement of Cash Flows for the year then ended
●
the Notes to the Consolidated Financial Statements, including material accounting policy
information and other explanatory information
●
the Consolidated Entity Disclosure Statement as at 30 June 2024
●
the Directors’ Declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
Independent Auditor’s Report
106
2024 Annual Report
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Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Audit Scope
Our audit focused on where the Group made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
Key audit matter
A key audit matter is those matter that, in our professional judgement, was of most significance in our
audit of the financial report for the current period. The key audit matter was addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on this matter. Further, any commentary on the outcomes of a particular audit
procedure is made in that context. We communicated the key audit matter to the Audit Committee.
Key audit matter
How our audit addressed the key audit matter
The carrying value of the Branded CGU (Refer to
note 13)
The Group is required to conduct a detailed impairment
assessment relating to the Branded CGU on an annual
basis given it holds indefinite lived intangible assets.
The carrying value of the intangible assets in the
Branded CGU is a key audit matter due to both the
significance of the balance and the degree of
subjectivity in the judgements and assumptions.
Our procedures included the following, amongst others:
●
Obtaining the Group’s value in use model for
the Branded CGU and evaluating the
appropriateness of the valuation methodology
used to estimate the recoverable amount of
the CGU.
●
Evaluating the Group’s cash flow forecasts
included in the value in use model and the
process by which they were developed, with
reference to the historical performance of the
business.
●
Assessing key assumptions within the models
for reasonableness with reference to external
market data where possible.
●
Evaluating the related financial statements
disclosures for consistency with Australian
Accounting Standards requirements.
●
Professionals with specialised skill and
knowledge were used to assist in the
evaluation of the Group’s discount rate
assumption.
Independent Auditor’s Report
107
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Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2024, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial report. We
have issued a separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Independent Auditor’s Report
108
2024 Annual Report
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Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30 June
2024.
In our opinion, the remuneration report of Bega Cheese Limited for the year ended 30 June 2024
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Sam Lobley
Melbourne
Partner
29 August 2024
Independent Auditor’s Report
Independent Auditor’s Report
109
Bega Cheese Limited
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Shareholder information
The shareholder information set out below was applicable as at 30 June 2024:
Distribution of equity securities
HOLDING
NUMBER
1 – 1,000
7,775
1,001 – 5,000
6,765
5,001 – 10,000
2,258
10,001 – 100,000
1,638
100,001 and over
167
18,603
There were 560 holders of a less than marketable parcel of ordinary shares.
Equity security holders
The names of the twenty largest holders of quoted equity securities are listed below.
INVESTOR
NAME
NUMBER OF
SHARES
% OF TOTAL
SHARES ON ISSUE
1
Forrest Family
34,877,593
11.4
2
Spheria Asset Management Pty Limited
15,289,412
5.0
3
The Vanguard Group, Inc
10,726,383
3.5
4
Dimensional Fund Advisors Limited
9,878,252
3.2
5
Wilson Asset Management (International) Pty Ltd
8,504,944
2.8
6
Argo Investments Limited
8,073,793
2.6
7
State Street Global Advisors Australia Limited
7,777,507
2.6
8
BlackRock Investments, LLC
5,781,122
1.9
9
Messrs Roy A & Anthony P Medich
5,000,000
1.6
10
Investors Mutual Limited
4,836,772
1.6
11
Vanguard Investments Australia Limited
4,741,958
1.6
12
IFM Investors Pty Ltd (Sydney Fund)
4,450,743
1.5
13
RQI Investors
4,042,194
1.3
14
Tribeca Investment Partners Pty Ltd
3,865,367
1.3
15
Norges Bank Investment Management
3,089,647
1.0
16
Macquarie Asset Management Holding Pty Limited
2,727,212
0.9
17
Jerang Pty Ltd
2,670,000
0.9
18
BlackRock Investments, LLC
2,297,066
0.8
19
IFM Investors Pty Ltd (Melbourne Fund)
2,057,943
0.7
20
Aljo Pastoral Pty Ltd*
2,038,841
0.7
Total
142,726,749
46.9
*Shareholdings related to KMP including Directors are detailed in the Remuneration Report.
Voting rights
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall
have one vote.
110
2024 Annual Report
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Corporate Directory
Entity Information
Bega Cheese Limited
Trading as “Bega Cheese” ABN 81 008 358 503
The Annual Report includes the results of Bega Cheese Limited (Bega Cheese, Company or parent entity) and the results of the
subsidiaries, joint venture and associate. Bega Cheese and its subsidiaries together are referred to in this financial report as the
Bega Cheese Group (Group, Bega Group or consolidated entity).
Principal Registered Office
23 Ridge Street
Bega NSW 2550
T: 02 6491 7777
E: admin@bega.com.au
W: www.begacheese.com.au
Advisors
Auditor
PricewaterhouseCoopers
2 Riverside Quay Southbank VIC 3006
Solicitors
Addisons
Level 12, 60 Carrington Street Sydney NSW 2000
Bankers
Rabobank Australia Limited
Level 16, Darling Park Tower 3 201 Sussex Street
Sydney NSW 2000
Westpac Banking Corporation
360 Collins Street Melbourne VIC 3000
J.P. Morgan Australia
85 Castlereagh St Sydney NSW 2000
Commonwealth Bank of Australia Limited
Commonwealth Bank Place South
Level 1, 11 Harbour Street NSW 2000
Australia and New Zealand Banking Group Limited
ANZ Centre, Level 9, 833 Collins Street
Docklands VIC 3008
ING Bank (Australia) Limited
Level 28, 60 Margaret Street
Sydney NSW 2000
Directors & Company Secretaries
Directors
Barry Irvin
Executive Chairman
Rick Cross
Independent Director
Harper Kilpatrick
Director
Patria Mann
Independent Director
Peter Margin
Independent Director
Raelene Murphy
Independent Director
Terry O’Brien
Independent Director
Company Secretary
Brett Kelly
Stock Exchange Listing
Bega Cheese Limited shares are listed on the
Australian Securities Exchange (ASX) – Code BGA
Executive Team
Peter Findlay
Chief Executive Officer
Gunther Burghardt
Chief Financial Officer
David McKinnon
Executive General Manager People and Capability
Adam McNamara
Executive General Manager Growth Channels & Customer
Supply Chain
Jacqueline Scarlett
Group General Counsel
Hamish Reid
Executive General Manager Bulk Nutritionals & Ingredients
Antonietta Timms
Executive General Manager Branded Business Operations
Darryn Wallace
Executive General Manager Retail Sales, Marketing & Partnerships
Rob Grima
Executive General Manager Operational Excellence
111
Bega Cheese Limited
111
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