|+ 61 2 8073 3160 | CITIGROUP CENTRE, L18, SUITE C, 2 PARK ST, SYDNEY NSW 2000. | ABN 61 140 174 189 |
15 November 2022
The Manager
Companies Announcement Office
Australian Securities Exchange
20 Bridge Street
Sydney NSW 2000
Dear Sir/Madam,
United Malt Group Limited 2022 Annual Report
United Malt today announced its results for the full year ended 30 September 2022.
Attached is the Appendix 4E and 2022 Annual Report including:
•
Directors’ report
•
Remuneration report
•
FY22 Financial report
This announcement is authorised for market release by the United Malt Board of
Directors.
Yours sincerely,
United Malt Group Limited
Lisa Jones
Company Secretary
|+ 61 2 8073 3160 | CITIGROUP CENTRE, L18, SUITE C, 2 PARK ST, SYDNEY NSW 2000 |
|ABN 61 140 174 189|
APPENDIX 4E- Preliminary Final Report
Under ASX Listing Rule 4.3A
Current Reporting Period
1 October 2021 to 30 September 2022
Prior Corresponding Period
1 October 2020 to 30 September 2021
RESULTS FOR ANNOUNCEMENT TO THE MARKET
To be read in conjunction with the FY22 Financial Report.
Key information
% change
$M (AUD)
Revenue from ordinary activities
13.9%
to
1,406.7
Net profit after tax attributable to members for United Malt Group
Limited
(20.0%)
to
11.6
Net profit after tax before significant items
(66.6%)
to
11.6
Earnings before depreciation, amortisation, interest, tax, and significant
items
(26.0%)
to
91.8
Basic earnings per share (cents per share)
(18.8%)
to
3.9
Details relating to dividends
Record
Date
Payment
Date
Cents per
share
$M (AUD)
Franked %
Conduit
foreign
income
%
FY21 Final dividend per
share
2 December
2021
17 December
2021
3.5
10.5
0%
0%
FY22 Interim dividend
per share
2 June 2022
17 June 2022
1.5
4.5
0%
100%
FY22 Final dividend per
share
N/A
N/A
Nil
Nil
N/A
N/A
Total FY22 dividend
5.0
15.0
0%
Net tangible assets per share
30 September 2021
30 September 2022
Net tangible assets per share
$2.68
$2.71
Additional information
Additional Appendix 4E disclosure requirements and further information including commentary on significant features
of the operating performance, trends in performance and other factors affecting the results for the current period is
contained in the FY22 Annual Report and accompanying Investor Presentation.
This report is based on the consolidated financial statements and notes which have been audited by
PricewaterhouseCoopers.
Further information regarding the company and its business activities can be obtained by visiting the Company’s
website at www.unitedmalt.com
Annual Report
2022
22
AR
04
LETTER FROM THE CHAIRMAN
06
MANAGING DIRECTOR & CEO’S REVIEW
08
UNITED MALT OVERVIEW
10
VALUE CREATION
12
WHERE WE OPERATE
14
OUR STRATEGY
16
STRATEGIC DELIVERY
18
SUSTAINABILITY HIGHLIGHTS
20
BOARD OF DIRECTORS
22
EXECUTIVE LEADERSHIP TEAM
25
DIRECTORS’ REPORT
27
OPERATING AND FINANCIAL REVIEW
43
REMUNERATION REPORT
63
INDEPENDENT AUDITOR’S DECLARATION
65
FINANCIAL REPORT
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
100 DIRECTOR’S DECLARATION
101 INDEPENDENT AUDITOR’S REPORT
106 SHAREHOLDER INFORMATION
108 GLOSSARY
110 CORPORATE DIRECTORY
Safety
The safety of our people
is paramount. Safety is
part of our way of life and
requires the commitment
of everyone throughout the
organisation.
Safety extends to the health
and wellbeing of ourselves
and everyone around us
and to the environment
in which we operate.
It is part of everything
that we do as well as the
way that we do it. It is our
way of coming together
as a community.
Quality
We provide outstanding
ingredients and superior
service that, together,
deliver premium value
to our customers.
At every step in the process,
and in all our roles, we
come together as a team
to make sure that we strive
to provide the best.
Passion
We are deeply passionate
about making malt and
proud of our industry, our
business and our people.
We are proud to be part
of a wider community and
are positive stewards in the
way we work. We bring
a spirit of innovation and
continuous improvement
to everything that we do.
Integrity
We believe that nothing
is more important than our
reputation and, behaving
with the highest level of
integrity is fundamental
to who we are.
Our Values
Creating the
ingredients
that bring
people
together.
Our Purpose
Our company purpose is in ‘Creating the ingredients that bring
people together’ in order to create value for our stakeholders.
It provides the foundation of our business strategy.
CONTENTS
Annual Report 2022
3
Chairman’s
Letter
Graham Bradley AM
Chairman and Non-Executive Director
Fellow shareholders,
In a year which we hoped would
have been one of recovery after
the Covid-19 pandemic, United Malt
Group delivered an unsatisfactory
result for the past year.
Our financial results in FY22 were
affected by adverse volatility in market
conditions, including the impact of the
severe drought on the Canadian barley
crops, significant disruption to ocean
and rail supply chains, and increased
freight and energy costs. Faced with
these changes in external conditions,
the Company’s commercial arrangements
did not respond with the required speed
to protect our returns, especially in our
Processing Segment in Canada.
As a result, earnings declined in our
Processing Segment while earnings
in our Warehouse & Distribution
Segment remained firm.
The Board and management have acted
decisively to implement initiatives to
strengthen our management capability,
re-negotiate our contracts with larger
customers for FY23, diversify our
barley sourcing and bring increased
discipline and rigour to costs and capital
management. We also improved the
timeliness and quality of performance
reporting to top management and
to the Board.
These measures mean that the Group
can respond more effectively to changed
market conditions through more active
and informed management of risks
going forward.
As a result of these improvements, we
expect a material increase in earnings in
FY23 and a further improvement in FY24.
Overview of FY22
Performance
Group Underlying Earnings Before
Interest Tax Depreciation & Amortisation
(EBITDA) for FY22 was $105.9 million1,
down 23.2 per cent on the prior year
results of $137.9 million. Underlying
EBITDA excludes Software as a Service
(SaaS) charge of $13.3 million and one-
off impairment of $0.8 million on the sale
of our Brewers Select business in the UK.
EBITDA was $91.8 million and Net Profit
After Tax for the year was $11.6 million,
down from $14.5 million in FY21.
Group Underlying Net Profit After Tax
(NPAT) was $11.6 million compared
to $34.7 million for FY21.
FY22 Dividend
The Board declared an unfranked 1.5 cent
interim dividend in May 2022 in respect
of the Company’s first half earnings. In
light of the Company’s second-half profit
performance, the Board did not declare
a final dividend for FY22. Total dividends
for FY22 represented ~40 per cent of
Underlying NPAT.
However, the Board expects a material
recovery in earnings in FY23 and expects
to resume dividend payments in line with
our policy to distribute approximately
60 per cent of Underlying NPAT
as dividends to shareholders.
Capital and Debt
The increased value of both our barley
and malt inventories as a result of high
barley prices, coupled with the additional
intake of barley in the UK in preparation
for the commissioning of our expanded
Inverness facility, caused the Company’s
Net Debt/EBITDA ratio to temporarily
exceed our target range of 2.0 - 2.5
times as at 30 September 2022.
We maintain strong relationships
with our major banks, all of whom
provided covenant amendments in
respect of 30 September 2022 and
31 March 2023 together with additional
inventory funding to accommodate
higher inventory values and our
increased requirements for the Inverness
expansion. We also have entered in
to a factoring arrangement under which
we anticipate factoring up to ~ $90
million2 to provide further short term
financing flexibility.
We expect to work with our banks
during FY23 to restructure our debt
facilities to better accommodate volatile
inventory values.
Our expected improvement in earnings in
FY23, together with significantly reduced
capital expenditure in FY23, mean we
have a clear pathway to our target Net
Debt/EBITDA range of 2.0 – 2.5 times
by 30 September 2023.
Sustainability
United Malt is committed to safe,
efficient and sustainable operations
and to managing our business
consistent with our values and the
expectations of our stakeholders and
the communities in which we operate.
We are committed to managing our
environmental impact responsibly. We
also recognise commitments made by
governments in each of our geographies
to achieve net zero emissions. With the
support of external advisors, we are
working on a roadmap to help develop
our plans and timeframes to make
tangible and sustainable reductions
in our use of energy and water and
associated emissions.
Details of progress towards our
sustainability targets are contained in our
Sustainability Report which is available
on the United Malt website.
CEO succession
In October, Mark Palmquist informed
the Board of his intention to retire from
his role as Managing Director and Chief
Executive Officer during FY23.
The Board has a global CEO search
process underway. Mark will remain
in his role until his successor is appointed
to assist with an orderly transition.
I want to acknowledge and thank Mark
for his service to the Company and
the pivotal role he played in establishing
United Malt as a listed Company.
Governance
Your Board continues to focus on
having the requisite diversity of skills
and experience to assist management
to deliver the Company’s strategy and
to oversee the Company’s governance
and risk management.
We strengthened our Board in
September 2022 with the appointment
of Pat Bowe as an Independent
Non-Executive Director. Pat has 40
years’ experience in agribusiness directly
relevant to our malting and distribution
businesses, including grain trading,
agriculture processing and supply
chain management. He is currently
President and Chief Executive Officer
of The Andersons, Inc., an Ohio-based
Fortune 500 listed agricultural supply
chain company.
We are currently well advanced towards
appointing a further North American
director with experience in the beverage
and food ingredient production and
distribution sectors.
Conclusion
The Board shares Shareholders’
disappointment with the Company’s
financial performance in FY22. We
acknowledge the need for the Company
to do better, to execute the actions
needed to make our business more
resilient to future shocks and to do
so effectively and quickly.
While high energy prices and supply
chain disruptions may remain challenges
in FY23, the volume and quality of
the North American barley crop has
improved significantly on the prior year
and we are reducing the risk inherent
in our commercial arrangements against
future volatility of barley prices and
inflation in input costs.
Our Inverness expansion is expected to
be producing commercial quality malt
in the first quarter of calendar 2023.
This new capacity is now approximately
95 per cent sold and our Arbroath
expansion is already producing above
target rate of 22,000 tonnes per annum.
The completion of our two expansion
projects in Scotland is expected to deliver
incremental EBITDA of approximately
$18.03 million on a full year run rate basis.
Assuming no material deterioration
in market conditions, we are targeting
a significant improvement in the
Company’s financial performance in
FY23. We expect Underlying EBITDA
to be in the range of $140-160 million
driven by improved crop conditions,
improved pricing and commercial
discipline, completion of the Scottish
expansion and efficiencies underpinned
by completion of our new technology
platform. Our second half EBITDA is
expected to be substantially higher than
the first half as the new calendar year
contracts come into force from January.
We are targeting a further step up in
EBITDA in FY24 as more legacy contracts
are re-negotiated, as the full benefit
of the Inverness expansion is achieved,
and further planned cost-efficiencies
are realised.
In the meantime, I want to thank
shareholders for your ongoing support
and thank my Board and management
colleagues for their efforts over the
past difficult year.
Graham Bradley AM
Chairman and Non-Executive Director
1. Underlying EBITDA for FY22 excludes
SaaS costs of ($13.3m) and the impairment
of the Brewers Select assets ($0.8m).
For FY21 underlying EBITDA excludes SaaS
costs ($6.5m), Grantham site closure costs
($3.1m) and transformation costs ($4.3m).
2. US$60 million receivables
factoring arrangement.
3. Subject to FX.
United Malt is committed to safe, efficient and sustainable operations
and to managing our business consistent with our values and the expectations
of our stakeholders and the communities in which we operate.
Annual Report 2022
5
4
UNITED MALT
CHAIRMAN’S LETTER
FY22 presented an extraordinarily
challenging year to the malting
industry in North America generally
and to United Malt’s business.
Our Processing Segment in North
America was adversely impacted by a
number of external events, including the
significant deterioration of the Canadian
barley crop, supply chain disruptions,
increased costs of imported barley which
could not be fully passed on to customers
and accelerating input cost inflation.
This resulted in the Company delivering a
disappointing financial result for the year
with Group Underlying EBITDA (before
SaaS costs and one-off items) of $105.9
million, a decline of 23.2 per cent on the
prior year.
As the Chairman indicated in his report,
this was a year which we had hoped
would have been one of recovery after
the Covid-19 pandemic.
We are implementing measures to
ensure the Company is better equipped
to mitigate external risks to our business
in the future, including a more pro-
active approach to managing risk, with
improved pricing and commercial terms
to better capture the true cost-to-serve
our customers.
With a significant improvement in the
volume and quality of the North American
barley crop this year we expect a material
increase in earnings in FY23.
Safety
Our safety performance during FY22 did
not meet our expectations and does not
represent the progress we set ourselves
on our Safe for Life journey.
While we have been able to improve the
Lost Time Injury Frequency Rate from
4.04 to 3.48, we have seen an increase
in the Recordable Injury Frequency
Rate from 1.42 to 1.89, with the total
number of recordable injuries increasing
by 5, which was mostly driven by poor
performance in our Canadian plants.
We continue to focus on proactive
leadership engagements, with over 7,000
engagements completed during the year.
We continued with our Global ISO
Certification work and we have now
successfully transitioned two regions;
Australia and the United Kingdom to
our global framework. Further work
is underway to prepare our North
American sites for certification.
FY22 Financial Results
Group Results
Sales volumes in FY22 were in line with
FY21, while Group revenue increased
by 13.9 per cent to $1,406.7 million
compared to the prior year, primarily
reflecting the pass through of increased
barley prices. On a constant currency
basis revenue increased by 10.5 per cent.
Underlying EBITDA (before SaaS costs
and one-off items) was $105.9 million,
down 23.2 per cent on the prior year,
reflecting the significant decline in
earnings in the Processing Segment.
Net Profit After Tax was $11.6 million
down 20 per cent on the prior year,
and earnings per share were 3.9 cents
compared to 4.8 cents for the prior year.
Segment Results
The Processing Segment was impacted by
the drought in Canada which produced
poor quality barley resulting in increased
production costs. The reduced barley crop
also resulted in the Company incurring
additional logistics costs to import barley
into Canadian processing plants from
Australia and Denmark to ensure we
continued to supply customers.
The Segment was also impacted by
disruption to supply chains including
sea, rail and road freight which caused
continued delays in customer shipments
and higher than expected energy costs
which were not able to be fully passed
through to customers.
Segment Underlying EBITDA (before
SaaS costs) declined by 30.8 per cent
to $70.1 million.
The Warehouse & Distribution Segment
performed solidly in FY22.
Revenue increased by 8.0 per cent to
$356.6 million as a result of ongoing
benefits of the optimisation initiatives
delivered over the past two years.
Underlying EBITDA (before SaaS costs
and one-off items) increased by 2.5
per cent to $44.6 million. The Segment
operates on a relatively short cycle and
is better able to manage margins in an
inflationary environment, as experienced
during the year.
Subsequent to the year end, in
October 2022 we divested our UK craft
distribution business, Brewers Select.
We will continue to supply our malts
to the UK craft market via a third-party
distribution partner, which will provide us
with the most effective access to smaller
craft customers. This decision was part
of our continual review of our portfolio
of assets to ensure we positioning our
business and resources to best serve the
growing distilling market in the UK.
An impairment on sale of $0.8 million
was recorded as a one-off item in the
FY22 results.
Including one-off costs and SaaS costs,
Segment EBITDA was $40.3 million and
was 1.2 per cent down on the prior year.
Balance sheet
Net debt at 30 September 2022 was
$453.4 million which resulted in the
Company’s Net Debt/ EBITDA ratio
of 5.0 times at 30 September 2022
temporarily exceeding the target range
of 2.0-2.5 times.
The Company received covenant
amendments in respect of 30 September
2022 and 31 March 2023 and additional
inventory funding capacity with our banks
to accommodate expanded short term
requirements.
An expected improvement in earnings and
significantly reduced capital expenditure
commitments in FY23 mean we maintain
a clear pathway to our target Net debt/
EBITDA range by 30 September 2023.
Capital Expenditure
Capital expenditure for FY22 was
$91.2 million which represents the
peak in our growth capital expenditure.
Major growth initiatives included the
expansion of the Scottish distilling project.
In total this project will add 79,000
tonnes to our capacity at both Arbroath
and Inverness and is expected to generate
incremental EBITDA of approximately
$18 million on full year run rate basis.
Other growth projects included
sustainability and efficiency programs
including the new speciality ingredient
processing plant in Calgary and our
Optisteep water reduction technology
installation at our Pocatello plant.
For the next few years, the Company
expects base capital expenditure to
be in the range of ~$55 to $60 million
including stay-in-business and safety-
related investment in the range of
~$30 to $35 million.
Update on Strategy
During the year United Malt held an
investor day to outline our strategy
and how we expect to deliver earnings
growth to create shareholder value over
the medium term.
Notwithstanding the significant
challenges of FY22, the fundamentals of
our industry remain positive.
Beer remains a significant beverage
category. Beer consumption has not
typically been significantly impacted in
periods of recession. While demand for
craft beer and ancillary products continues
to grow. Malt whisky production is also
expected to continue its upward trend and
demand for distilling continues to grow
with United Malt’s customers laying down
spirits for 10+ years for aged whisky.
Our strategic focus is to build a more
resilient global malting business to
strengthen our ability to fully capture
value for shareholders from this expected
malt demand and tighter capacity
utilisation in the industry.
In the short term we are taking a more
pro-active approach to managing risk,
with improved pricing and commercial
terms to better capture the true cost-to-
serve our customers. This includes pricing
malt to customers more frequently,
when we have more certainty on crop
quality and price, and a more disciplined
approach to managing customers’
volume commitments. Our contracts will
also include more frequent freight price
re-sets and inflation cost escalation.
Over the medium term our focus will
be on ensuring a more rigorous approach
to capital, cost and cash discipline across
all elements of our business.
This will be supported by our
transformation programme which is
focused on renewing our organisation
and technology platforms to create a
simplified, more efficient and effective
organisation. We expect to complete the
implementation of the new technology
platform in 2023. The new Enterprise
Resource Planning (ERP) platform and
Transport Management System (TMS) are
well advanced and are being progressively
deployed across the business. We remain
confident and committed to achieving
~$30 million of net transformation
benefits in EBITDA by FY24.
Sustainability
Sustainability is a key strategic priority
for United Malt. We continue to focus
on embedding sustainability within our
day-to-day operations, emphasising
safe, efficient and sustainable operations
while ensuring the management of our
business is consistent with our values and
the expectations of our stakeholders and
the communities in which we operate.
In 2022 we continued to progress our
commitment to gender equality and have
increased the level of female participation
at the Leadership level to 28 per cent
compared to 26 per cent for the prior year.
As a malting business, we have a direct
relationship with nature, land and the
farming community and water is central to
our success. Malting is a water intensive
process and therefore we focus on
managing our consumption, reducing our
usage, responsibly treating effluent and
looking for new technologies to reduce
consumption to ensure the sustainability
of our business into the future.
During the year we successfully
implemented a new Optisteep technology
at our Pocatello plant, which reduces
water consumption by up to 30 per cent
during the steeping phase.
Looking ahead
United Malt anticipates a material
increase in earnings in FY23 with the
expected drivers of earnings improvement
including improved North American
barley crop conditions, improved pricing
and commercial terms with customers,
completion of the Scottish expansion
project and the progressive delivery of the
transformation project.
Our confidence in the improved outlook
for FY23 is founded on the improved
quantity and quality of barley we have
purchased in North America and the UK
for conversion into malt during calendar
2023 and the prices at which we have
agreed with our customers to supply.
Our focus is on disciplined execution and
risk management and the delivery of our
strategy for shareholder value creation.
Conclusion
On a personal note, in October 2022,
I advised the Board of my intention
to retire as Managing Director and
CEO during FY23.
It has been a privilege to serve United
Malt as CEO during its first three
years as a standalone company and
I believe the time is right for a new
Chief Executive to lead United Malt
for the next period of its development.
I remain committed to the role while the
Board undertakes a search for a successor
to ensure both an orderly transition to a
new CEO and that we retain focus and
momentum on our priorities as outlined.
In conclusion, I want to thank all our
employees at United Malt for their
efforts in what has been a difficult and
ultimately disappointing year.
I also want to acknowledge and thank
our shareholders for your continued
support of the Company.
Mark Palmquist
Managing Director and CEO
Managing Director
and CEO’s Review
Mark Palmquist
Managing Director and CEO
Annual Report 2022
7
6
UNITED MALT
MANAGING DIRECTOR AND CEO’S REVIEW
34%
22%
7%
12%
24%
16%
4%
60%
21%
United Malt primarily serves the
brewing, distilling and food markets
through our family brands, anchored
in the world’s finest barley growing
regions, as well as our Warehouse
& Distribution arm, which champions
local malts and other products of
outstanding character.
We maintain a presence in Canada, the
US, Australia, the UK and New Zealand
and products sold in these markets as
well as export markets across Asia, Latin
and South America, Europe and Africa.
We’re proud to be one of the leading
malt suppliers to the craft brewing sector,
supported by a distribution network
of 21 warehouses (both Company-
operated and through third party
logistics providers) and international craft
distribution partnerships throughout
North America, South America, Europe,
Asia and Australia.
Our customer-centric strategy puts
customers at the centre of everything we
do, whilst targeting high value markets
where the long-term outlook for growth
remains supportive. Our customer base
is diversified by product, end-market and
geography, and comprises a range of
high-quality customers including global
brewers, craft brewers, distillers and food
companies. We sell into domestic and
export markets. We serve over 7,000
customers around the globe.
We have a long history of established
brands in each of our markets and
operate United Malt with a shared
purpose and values.
United Malt Overview
United Malt’s operational headquarters
are in Vancouver, Washington, US and
the Company is listed on the Australian
Securities Exchange (ASX: UMG).
North America
Europe
Australasia
Asia
Revenue by customer geography
Micro brewers
Major domestic brewers
Major export brewers
Distillers
Other
Revenue by customer group
Our long history of established brands
1823
1902
1912
1934
1995
Annual Report 2022
9
8
UNITED MALT
UNITED MALT OVERVIEW
Value Creation
Customers
The centuries of experience of our
international maltsters in creating the
finest malts, combined with strong
end to end supply chain capabilities
in each of our operating geographies,
supports our customers by delivering the
ingredients they need to create world-
class food and beverage products.
Shareholders
We’re focused on delivering long term
sustainable growth and returns and to
generate cash flows to support dividends
and investment in responsible growth
for the future.
Employees
We provide a safe work environment.
We seek to foster an inclusive and
development focused employee
experience. Our employees make up an
inclusive, diverse and exceptional team
full of passionate people with teams who
are always collaborating and supporting
each other while upholding a culture
of continuous improvement and passion
for our ingredients.
United Malt’s business model, strategic
positioning and expertise in leveraging
key inputs into our business creates value
for our customers, shareholders, employees,
supply chain and community.
We’re proud partners in craft to the world’s best distillers and brewers
and their most discerning customers and strive to be our customers’
preferred partner in quality, service experience and innovation.
Community
We act as a responsible neighbour
in all our interactions with the intent
of positive long-term impact.
Supply Chain
We act to deliver better outcomes
for all stakeholders, including reducing
the environmental impact of business
activities, managing risks within
supply chains, including human rights,
providing visibility and confidence
for quality relationships.
Selection of the
Highest Quality Barley
We maintain long term relationships with
a variety of growers, across many growing
regions. We contract directly with growers
for production acres and planting of
specific varieties to meet the needs of our
customers. Many of our malting facilities
are strategically located in key barley
growing areas.
Quality & Provenance
Preservation
We have capabilities to store our barley
in the right conditions to maintain quality
prior to processing. We segregate our
barley to preserve its unique identity
and key quality attributes to meet our
customers’ requirements.
Processing – Conversion to Malt
Our 12 processing plants convert barley
into malt via a process of steeping,
germination and kilning. Through these
processes we create our range of base
and speciality malts for applications in the
brewing, distilling and food markets.
Distribution
Distribution is a further step in our value
creation, allowing us to connect our
customers to our malts in the format that
meets their requirements. Our Processing
division distributes our malt products in a
bulk format via rail car, road and containers
to major food and beverage producers.
Our Warehouse & Distribution division
provides our malts in a smaller format to
meet the needs of craft producers. We
complement our malt ingredient offering
with the provision of the full range of
other brewing and distilling ingredients.
We provide our customers with products
including hops, yeast, adjuncts, flavours
and packaging materials – providing the
one stop shop for craft producers.
Annual Report 2022
11
10
UNITED MALT
About United Malt
VALUE CREATION
Processing
United Malt has approximately 1.25Mtpa of capacity
across 12 processing plants in Canada, United States
of America (US), Australia and the United Kingdom (UK).
Our malting assets are strategically located across major barley
growing regions providing access to high quality barley and
in close proximity to critical transport infrastructure proving
better access to customers. The Processing Segment services
over 600 customers including major brewers, national craft
brewers, distillers and food companies.
Where We
Operate
North America
Canada Malting Company
Great Western Malting
~750kt of production capacity
Australia
Barrett Burston
~250kt of production capacity
UK
Bairds
~250kt of production capacity
Warehouse & Distribution
Our Warehouse & Distribution Segment generates
revenue from the sale and distribution of bagged
malt, hops, yeast, adjunctions and related products.
The Company’s distribution network is supported by international
craft distribution partners focused on regions exhibiting growth
in craft. United Malt’s competitive advantage is its ability
to deliver all ingredients to the brewer on a just-in-time basis.
Key
Key barley growing regions
Processing facility
Storage facility
Warehouse & Distribution facility
BeerMex – partner Warehouse
& Distribution facility
North America
Country Malt Group
13 Facilities
Australia
Cryer Malt
5 Facilities
Mexico
BeerMex
3 facilities
Annual Report 2022 13
12
UNITED MALT
WHERE WE OPERATE
Our Strategy
Maximise value
and returns
Drive penetration in
the distilling market
Expand craft
distribution business
into new geographies
Renew our
organisational and
technological platforms
to create a simplified,
more efficient and
effective organisation
Integrate sustainable
actions into everyday
operations, embracing
our commitment
to Zero Harm.
Proactively assess
acquisitive growth
opportunities
Invest in our assets
to create best in class
operation and grow
malting capacity
Develop innovative
products and solutions
for customers
Op
ti
mi
se
t
he
C
or
e
Tr
an
sf
or
m
fo
r t
o
mo
rr
ow
1
Optimise the core
Drive penetration in
the distilling market
• Capture growth from increasing demand for whisky in emerging
markets and higher value, single malt whiskies.
Expand craft distribution
business into new
geographies
• Expand into the growing craft beer markets in Latin America
and Asia by leveraging extensive craft distribution experience.
• Supported by bolt-on acquisitions, start-up opportunities
and new distribution partnerships.
Maximise value and returns
• Optimise our business to target ROCE in excess 10%, with a focus
on North American operations.
2
Transform for tomorrow
Renew our organisational
and technological
platforms to create
a simplified, more efficient
and effective organisation
• Redesign our organisation to simplify our operations to create
an organisational design reflecting a standalone malting Company.
• Embrace process changes to improve capabilities by implementing
simplified and standard processes, skills and systems.
• Strengthen operational management by harnessing our network of production
facilities and warehouse and distribution centres as one global network
to deliver better outcomes for customers.
Integrate sustainable actions
into everyday operations,
embracing our commitment
to Zero Harm
• Develop priorities and actions to address climate change and resource scarcity.
3
Create new value
Proactively assess acquisitive
growth opportunities
• Take a disciplined approach to evaluating acquisitive growth opportunities
to extend our geographic reach, product offering and/or customer base.
Invest in our assets to create
best in class operation
and grow malting capacity
• Continue to optimise our asset footprint including upgrading capacity
to create best in class operation, enhancing customer experience.
Develop innovative products
and solutions for customers
• Leverage our rich pedigree and expertise in the brewing, distilling and food
ingredients markets to create new and innovative product solutions for our customers.
Cr
ea
te
n
e
w
va
lu
e
Annual Report 2022 15
14
UNITED MALT
OUR STRATEGY
Arbroath
Inverness
SCOTLAND
Pencaitland
Scottish expansion – Expanding our capacity
to serve the growing distilling market
United Malt continues to progress the delivery of its 79,000 tonnes
expansion of malt capacity in Scotland.
The first stage of the project was completed in March 2021, with 22,000 tonnes
of additional capacity commissioned in Arbroath. The next stage is the 57,000 tonnes
capacity expansion at the Inverness facility which is nearing completion and expected
to be producing commercial quality malt in the first quarter of calendar year 2023.
The expansion will support the long-term customer demand from Scottish distillers
for malt, underpinned by global demand for aged whisky. Our malting facilities are
strategically positioned in close proximity to key customers and high quality barley.
Our new capacity is predominantly sold with agreements in place with key
distilling customers.
Strategic Delivery
New technology solution
United Malt continues the implementation of its new technology solution.
During 2022 the roll out was successfully completed in the Warehouse &
Distribution segment, with the Processing segment to be completed during 2023.
The new technology solution will support United Malt to improve operating
performance and grow the business, creating value for customers and shareholders.
Innovation – Responding to market
conditions by creating a North American
produced European style pilsner malt
In 2022 in North America we launched a domestically malted European style pilsner
to meet the needs of our customers. This was in response to the continued disruption
on ocean freight meaning our customers could not easily access a European style malt.
Our team spent the time in the lab, to create this product and the very clean, crisp
biscuity notes and increased head retention the brewers look for in a European style
pilsner malt. The product was successfully released to the market on July 5.
Key
Processing facility
Storage facility
Distillery
Annual Report 2022 17
16
UNITED MALT
STRATEGIC DELIVERY
Sustainability
Highlights
Sustainability is a key strategic priority for
United Malt. We continue to focus on embedding
sustainability within our day to day operations,
emphasising safe, efficient and sustainable
operations while ensuring the management
of our business is consistent with our values
and the expectations of our stakeholders
and the communities in which we operate.
Our 2022 Sustainability Report provides our stakeholders greater visibility
into how we are working to fulfill our Company-wide commitment to operate
as a sustainable company and integrate sustainable actions in everyday
operations, as we embrace our commitment to Zero Harm.
CARBON IMPACT OF IMPORTATION
OF BARLEY INTO CANADA
In 2022, the drought in Canada adversely impacted barley supply in Canada,
and as a result United Malt imported 120,000 metric tonnes (MT) of barley
from Denmark and Australia to augment our Canadian supply and ensure
customers were not impacted. This barley was shipped to Canada in one
bulk cargo ship from Denmark and three bulk cargo ships from Australia.
The carbon impact of the alternative transport modes required for the
120,000MT of imported barley was 18% greater than the same amount
of barley sourced and transported internally in Canada, despite the distance
travelled being over 10 times greater. This was due to the fact that a bulk
cargo ship has a lower carbon impact than the alternative of road and rail
transport modes.
CASE STUDY:
FIRST NATIONS PEOPLE
During FY22 United Malt
commenced a review of our
accountability regarding First
Nations people. As we determine
and develop our approach to First
Nations people, as an Australian
Company operating across
geographies including Canada,
the US and New Zealand, we
intend to develop approaches
suitable to our geographic reach
and connect our commitments
to First Nations people with our
Diversity, Equity and Inclusion
commitment and broader
Human Rights commitment. It is
intended that our activities will
form part of a business plan and
become embedded in our culture.
Activities will be overseen by
United Malt’s ELT.
CASE STUDY: INDSPIRE
Indspire recognises that First
Nations, Inuit and Métis students
encounter additional barriers
to completing and funding their
education. Indspire has established
the Building Brighter Futures
programme which provides
scholarships, bursaries and
awards to Indigenous students
every year. United Malt via its
Canadian operation, Canada
Malting, is continuing to support
Indspire’s scholarship programme
for students from Indigenous
communities by sponsoring the
‘Canada Malting Indigenous
Student Award’. In 2022 this award
helped support two students from
within the Ontario regions who are
studying academic programmes
in Sciences and Business. Canada
Malting has been a proud supporter
of this programme since 2018.
Approximately
90%
of award recipients
graduate from
post-secondary institutions
58% of graduates
go on to achieve an
undergraduate
degree
About 60%
of employed awards
recipients work in
fields that impact
Indigenous people
Building on our
commitment
to workplace diversity
FY22
Female participation at
the combined Executive
Leader, Senior Leader
and Senior Manager
level was 28%
compared to 26%
for the prior year
In 2022 United Malt
became a signatory
to the
HESTA
40:40
Vision
OPTISTEEP
What is it? The malting process requires the use of
water with the highest consumption occurring during the
steeping phase. Approximately 15% to 20% of the water
used is absorbed during the steeping phase to hydrate and
initiate germination. Through the steeping process water-
borne effluents are produced; requiring treatment before
returning the processing water safely to the water table.
Optisteep technology enables the use of significantly less
water in the steeping phase of the malting process. The
barley only requires one water immersion as the Optisteep
technology continuously conditions and circulates the
water during the steeping process. In March 2022,
Optisteep was successfully commissioned at United Malt’s
Pocatello processing facility.
What are the benefits? There are several key
benefits realised with the use of Optisteep technology
including reductions in water consumption of up to 30%,
and a decrease in natural gas and electrical consumption
by around 8-10% due to germination at lower
moisture levels.
A roll-out programme has been developed to install
Optisteep in targeted facilities across the United
Malt network.
What did it cost? What are the returns?
Project costs US$2.6 million and is expected to deliver
an IRR of >12% (post tax basis).
Sustainability at the forefront
of our new malting facility
in Scotland
SUSTAINABILITY AT INVERNESS
Our new malting facility at Inverness which will
commence production in 2023 has been designed
to utilise the best available technology which will reduce
our impact on the environment and our local community.
The kilning equipment uses technology to limit gas and
electricity consumption whilst the Plant Control System
has energy monitoring technology and process control
that allow both consistent production quality and data-
led analysis of energy consumptions.
To ensure that our water consumption is as sustainable
as possible, we have installed Advanced Membrane
Bioreactor and Reverse Osmosis Plant (AMBR RO).
This AMBR RO technology is capable of digesting
maltings effluent, creating clean water for processing with
no germination inhibitors.
AMBR RO Plant has the capacity to generate sufficient
additional water for our 57,000 tonne expansion without
generating any additional effluent volumes from the
site. Therefore, our expansion at Inverness will have
no additional water or effluent impact to the local
Inverness environment.
Annual Report 2022 19
18
UNITED MALT
SUSTAINABILITY HIGHLIGHTS
MS JANE MCALOON
Independent
on-Executive Director
BEc (Hons), LLB, GDip CorpGov,
FAICD
Appointed to the Board
on 13 January 2020.
Skills and experience:
Ms McAloon has over 30 years of
business, government and regulatory
experience at senior executive and
board levels across the natural
resources, energy and infrastructure
sectors. In particular, she has
experience in navigating complex ESG
issues across multiple jurisdictions.
Ms McAloon was an executive at
BHP Billiton and AGL. Prior to this,
she held positions in government in
energy, rail and natural resources.
Ms McAloon is currently Chair of
EnergyAustralia (since April 2022)
and Non-Executive-Director (since
December 2021), Home Consortium
(since October 2019), Allianz
Australia (since July 2020), Newcrest
Mining (since July 2021) and
BlueScope Steel (since 30 September
2022). Jane is also a board member
of the Allens Advisory Board (since
September 2019).
She is a former director of Viva
Energy (June 2018 to August 2021),
Healthscope Limited (February 2016
to June 2019), Cogstate Limited
(January 2017 to November 2019),
Civil Aviation Safety Authority
(December 2017 to December 2019),
Port of Melbourne (February 2018
to February 2020) and GrainCorp
(December 2019 to March 2020). Ms
McAloon was also previously Chair
of Defence Reserves Support Council
and a Member of the Referendum
Council on Constitutional
Recognition for Aboriginal and Torres
Strait Islander Peoples.
Board Committee memberships:
Chair of the Nomination
and Remuneration Committee.
Member of the Audit and
Risk Committee.
MR GARY W. MIZE
Independent
Non-Executive Director
BA (Marketing and Finance)
Michigan State University and
Advance Executive Program,
Northwestern University
Appointed to the Board
on 23 October 2020.
Skills and experience:
Mr Mize has over 36 years
of experience managing
commodity-based trading
and processing businesses
at the senior executive and
board levels.
He was previously the Global
Chief Operating Officer of
Noble Group Hong Kong,
President of Conagra Foods
Grain Processing Group, CEO
Conagra Malt and President
Cargill Worldwide Juice Group.
Mr Mize has lived in Hong
Kong, Sao Paulo and Geneva.
Mr Mize is currently Lead
Independent Director of
Darling Ingredients (a company
listed on NYSE) (Since February
2021) and Independent
Director since May 2016),
an Independent Director of
Gevo Inc (a company listed
on NASDQ) (since September
2011). He is a former director
of Ceres Global (a company
listed on TSX) (from September
2013 to December 2021).
Board Committee
memberships:
Chair of the Environment,
Health and Safety Committee
(since 1 September 2022).
Member of the Nomination
and Remuneration Committee.
MR PATRICK BOWE
Independent
Non-Executive Director
BArtsSc (Political)
Stanford University,
MA Economics Stanford
Food Research Institute
Appointed to the Board
on 1 September 2022.
Skills and experience:
Mr Bowe has over
40 years Agribusiness
experience in executive
leadership roles across food
ingredients, corn milling,
and commodity trading.
Mr Bowe is currently the
President and Chief Executive
Officer of The Andersons, Inc.
(a company listed on NASDAQ)
(since November 2015).
He was previously the
Corporate Vice President
at Cargill Inc. (January 2007
to September 2015). Prior
to this role, Mr Bowe was
President of Cargill’s corn
wet milling in North America.
Mr Bowe is a current Director
of Primient (since August
2022), a global food and
industrial ingredients, a
privately held company. He
is a former Chairman (June
2020-June 2022) of the Toledo
Alliance for the Performing
Arts Board of Trustees and
continues to hold a seat on
the Board. In addition, he is the
current Treasurer and Director
of the Toledo Museum of Art
(since July 2020).
Board Committee
memberships:
Member of the Audit
and Risk Committee.
Member of the Environment,
Health and Safety Committee.
Board of Directors
MR GRAHAM BRADLEY AM
Independent Chairman
and Non-Executive Director
BA, LLB (Hons. Sydney University),
LLM (Harvard)
Appointed to the Board on
13 January 2020.
Skills and experience:
Mr Bradley has over 30 years of
business, executive leadership and
governance experience at senior
executive and board levels across
banking and financial services,
manufacturing, infrastructure,
resources, agribusiness and
corporate strategy consulting.
Mr Bradley has previously held
the position of Managing Director
of Perpetual and senior roles
at Blake Dawson and McKinsey
& Company.
Mr Bradley is currently Chairman
of Virgin Australia International
Holdings (since March 2012)
and Shine Justice Limited
(since May 2020).
Mr Bradley is also the Chairman
of Infrastructure NSW (since July
2013), a member of the Advisory
Council of the Australian School
of Business at UNSW and was
made a member of The Order
of Australia in 2009.
He is a former Chairman of
EnergyAustralia Holdings (June
2012 to April 2022), GrainCorp
(March 2017 to March 2020
and HSBC Bank Australia
(March 2004 to October 2020).
He is also a former Director of
Hongkong and Shanghai Banking
Corporation (November 2012 to
June 2022). Mr Bradley was the
President of the Business Council
of Australia and the Deputy
President of the Takeovers Panel,
among other notable roles.
Board Committee
memberships:
Member of the Nomination
and Remuneration Committee.
MR MARK PALMQUIST
Managing Director
and Chief Executive Officer
Bec, GAICD
Appointed to the Board
on 13 January 2020.
Skills and experience:
Mr Palmquist has over
40 years experience in food
processing and agricultural
sectors and has held
a number of senior leadership
roles prior to commencing
his role at United Malt.
Mr Palmquist is focused
on building a sustainable
business aligned to meeting
the needs of our customers
in each of our markets,
whilst ensuring strong
governance, risk management
and continued innovation.
Prior to his role at United
Malt, Mr Palmquist was the
Managing Director and CEO
of GrainCorp Limited from
2014 until 2020, which
demerged its malt business
that is now United Malt. Prior
to this, he was Executive Vice
President and Chief Operating
Officer, Ag Business, for
CHS Inc., a leading global
agribusiness, diversified in
energy, grains, and food.
He has held a variety of global
leadership roles for a broad
range of CHS agricultural
inputs and marketing
areas, retail businesses, and
grain based food and food
ingredients operations.
Mr Palmquist is a former
director of Telesense, Inc
(from September 2020 until
August 2022) and is a former
director of GrainCorp Limited
(from October 2014 until
March 2020).
MS BARBARA GIBSON
Independent
Non-Executive Director
B.Sc MAACB FTSE MAICD
Appointed to the Board
on 13 January 2020.
Skills and experience:
Ms Gibson has over 30 years
of business experience at
senior executive and board
levels across the chemicals,
health care, agriculture and
manufacturing sectors.
Ms Gibson is an experienced
executive having spent
20 years with Orica Limited.
Prior to this, she held positions
in medical diagnostics,
pharmaceuticals and fine
chemicals.
Ms Gibson is currently
a fellow of the Australian
Academy of Technology
and Engineering. In 2003,
Ms Gibson was awarded
a Centenary of Federation
Medal for services to
Australian society in medical
technology. She is a Member
of the Australian Institute
of Company Directors.
She is a former director of
GrainCorp Limited (March
2011 until March 2020),
and Chair of Warakirri Asset
Management Pty Ltd (July
2006 until December 2018).
Board Committee
memberships:
Member of the Environment,
Health and Safety Committee.
Member of the Audit and
Risk Committee.
MR TERRY WILLIAMSON
Independent
Non-Executive Director
MBA, BEc, FCANZ, FGIA, FAICD
Appointed to the Board
on 23 March 2020.
Skills and experience:
Mr Williamson has an extensive
background in financial reporting
and risk management with prior
roles as senior audit partner of
Price Waterhouse, Chief Financial
Officer Bankers Trust Australia,
Member of the Global Controls
Group Bankers Trust New York
Group, Chair of Audit and Risk
Committee Stockland Property
Group, Avant Insurance and
Member of the Audit Committee
of the Reserve Bank Australia
and financial advisor to a number
of not-for-profit organisations.
Mr Williamson is a Fellow of The
Australian Institute of Company
Directors, Fellow Chartered
Accountants in Australia and
New Zealand, Fellow CPA
Australia, Fellow Governance
Institute of Australia and Member
Australian Computer Society.
Mr Williamson is currently
a Director of Apollo Care
Operations Pty Ltd and Apollo
Care Pty Ltd (since August 2020),
Member of the Building Estates
Committee of the University of
Sydney, and Finance Advisor to
the Society of the Divine Word.
Mr Williamson was previously
a Director of Stockland Capital
Partners and Stockland Direct
Retail Trust No. 1 (April 2018
to September 2021).
Mr Williamson has had no other
public company directorships in
the last three years.
Board Committee
memberships:
Chair of the Audit and
Risk Committee.
Member of the Environment,
Health and Safety Committee.
Annual Report 2022 21
20
UNITED MALT
BOARD OF DIRECTORS
Executive Leadership Team
MR TIAGO DAROCHA
Chief Operating Officer
Qualifications: B.S. Mechanical
Engineering (University of
Missouri), M.S. Industrial and
Organizational Psychology
(Kansas State University), Masters
in Business Administration
Monmouth University (MBA)
Appointed: July 2021
Priorities: Tiago has
comprehensive management
responsibility for all elements
of the United Malt Group
production activities including
all malt production, barley
procurement, engineering,
logistics, continuous
improvement, innovation and
environment, health & safety.
His focus is centred on delivering
operational excellence to ensure
customer satisfaction with the
highest quality products and
service and the development
of the company’s long-term
strategy that will drive continued
performance and growth.
Experience: Tiago spent 21
years at Anheuser-Busch InBev,
where he started as an intern
and held positions of increasing
responsibilities including Sr.
Brewmaster, Sr. General Manager,
Sr. Operations Director and Vice-
President of Operations. Tiago’s
last role prior to transitioning
to United Malt was Global Vice-
President of Brewing & Quality,
with worldwide responsibility for
brewing operations and end-to-
end quality. Tiago is native of
Brazil and has lived in São Paulo
and Mexico City.
MS NINA PALLUDAN
Chief Information Officer
Qualifications: Bachelor
of Science, Information Systems
from the California State
University, Long Beach
Appointed: March 2020
Priorities: Nina is responsible
for the Group’s Information
Technology and Project
Management functions. Her
priorities are driving agility
through technology, data and
process optimisation.
Experience: Prior to the
demerger of United Malt,
Nina held the position of CIO
of GrainCorp Malt since October
2019. Previously, Nina was
the CIO at Hanna Andersson.
Nina has over 30 years’
experience as a technology
and operational leader. Using
technology as the catalyst
for change, Nina has been
responsible for leading global
transformations across the
manufacturing, logistics, retail
and hospitality industries.
MR RYAN DUTCHER
Interim Chief Financial
Officer
Qualifications: Master of
Business Administration from
Cornell University. Bachelor
of Arts from University of
Colorado.
Appointed: July 2022
Priorities: Ryan is responsible
for the Group’s finance,
treasury, tax, investor relations
and risk functions. His priorities
are ensuring his team provides
accurate, independent and
objective analysis to drive
decision making, performance
and value creation for all
stakeholders.
Experience: Ryan has
more than 25 years finance
experience in both public
and private companies in the
manufacturing, technology,
healthcare, education,
construction, and service
industries.
MR BRYAN BECHARD
President, Warehouse
& Distribution
Qualifications: Bachelor
of Applied Science from
the Madden School of Business
at LeMoyne College.
Appointed: March 2020
Priorities: Bryan is responsible
for the Warehouse &
Distribution operations of
United Malt serving the needs
of its craft brewing, distilling
and food customers. Providing
market leading services, and
outcomes for the Group’s
customers in the craft segment
is a primary focus.
His priorities are to ensure
the Group’s warehouse and
distribution business continually
provides the one-stop-shop
of ingredient solutions of
branded and innovative
products through its network
of distribution facilities and a
portfolio of services geared to
the needs of its customers.
Experience: Bryan joined
GrainCorp in 2009 and was
appointed President of the
Global Craft business in
February 2019.
As one of the co-founders of
the North Country Malt Supply
business in 1995, which formed
the basis of today’s North
American Country Malt Group,
Bryan has been involved in
ingredient distribution to the
craft brewing industry for over
25 years. He previously held
the role of President, Country
Malt Group beginning in
October 2014.
MS ERIKA MORGAN
Chief People Officer
Qualifications: B.A Bachelor
of Arts in International Business
& Marketing, (University
of Washington)
SHRM – Senior Certified
HR Professional
Appointed: July 2021
Priorities: Erika is responsible
for the Group’s Human
Resource strategy and
operations globally. Her
priorities are to ensure her
teams lead and develop
programs that engage, equip
and empower the highest
levels of team performance
and business success. Erika’s
priorities include building and
developing a workforce with
the capability and capacity
to help create value and
operate as a more integrated
organisation.
Experience: Prior to United
Malt, Erika has held various
leadership positions within HR
for global and multi-national
companies in the consumer
goods, services and food &
beverage industries. She has
extensive experience in the
assessment and implementation
of Global HR Service Delivery
Models to support scale and
growth. Erika started her career
with Nike Inc. where she led
HR teams and implemented
enterprise wide transformation
initiatives across North and
Latin America, Europe and Asia
Pacific.
MR MARK PALMQUIST
Managing Director
and Chief Executive Officer
Bec, GAICD
Skills and experience:
Mr Palmquist has over 40 years
experience in food processing
and agricultural sectors and
has held a number of senior
leadership roles prior to
commencing his role at United
Malt. Mr Palmquist is focused
on building a sustainable
business aligned to meeting
the needs of our customers
in each of our markets, whilst
ensuring strong governance,
risk management and continued
innovation.
Prior to his role at United
Malt, Mr Palmquist was the
Managing Director and CEO of
GrainCorp Limited from 2014
until 2020, which demerged
its malt business that is now
United Malt. Prior to this, he
was Executive Vice President
and Chief Operating Officer, Ag
Business, for CHS Inc., a leading
global agribusiness, diversified
in energy, grains, and food.
He has held a variety of global
leadership roles for a broad
range of CHS agricultural inputs
and marketing areas, retail
businesses, and grain based food
and food ingredients operations.
Mr Palmquist is a former
director of Telesense, Inc
(from September 2020 until
August 2022) and is a former
director of GrainCorp Limited
(from October 2014 until March
2020).
Annual Report 2022 23
22
UNITED MALT
EXECUTIVE LEADERSHIP TEAM
Directors’ Report
Directors
The Directors in office at the date of this report are:
Name
Position held
Period as Director during FY22
Graham Bradley AM
Chairman and Independent Non-Executive Director
1 October 2021 – 30 September 2022
Mark Palmquist
Managing Director and Chief Executive Officer
1 October 2021 – 30 September 2022
Jane McAloon
Independent Non-Executive Director
1 October 2021 – 30 September 2022
Patrick E. Bowe1
Independent Non-Executive Director
1 September 2022 – 30 September 2022
Barbara Gibson
Independent Non-Executive Director
1 October 2021 – 30 September 2022
Gary W. Mize
Independent Non-Executive Director
1 October 2021 – 30 September 2022
Terry Williamson
Independent Non-Executive Director
1 October 2021 – 30 September 2022
Notes:
1 Mr Patrick E. Bowe was appointed as a Non-Executive Director on 1 September 2022.
Details of current Directors, including their experience, qualifications, special responsibilities and term of office, are included on
pages 20 to 21 of the Annual Report.
Company Secretary
Ms Lisa Jones
Qualifications: LLB, University of Sydney
Lisa was appointed Company Secretary of United Malt at the time of its listing on ASX in March 2020 and is based in Sydney.
Lisa is an experienced corporate lawyer and corporate governance professional with more than 20 years’ experience in commercial
law and corporate affairs, working with both public and private companies in Australia and in Europe.
She has held executive positions with private and public listed companies in Australia and in Italy and prior to that was a senior
associate in the corporate and commercial practice in Allens.
Annual Report 2022 25
24
UNITED MALT
Board and Board Committee Meetings
The number of United Malt Board meetings (including meetings of Committees of Directors) and the number of meetings attended
by each of the Directors of the Company to 30 September 2022 are set out below:
Name
Board
Environment,
Health and Safety
Committee
Audit
and
Risk Committee
Nominations
and Remuneration
Committee
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Graham Bradley AM
13
13
5
5
Mark Palmquist
13
13
Barbara Gibson
13
13
4
4
4
4
Gary W. Mize
13
13
4
4
5
5
Jane McAloon
13
13
4
4
5
5
Patrick E. Bowe1
1
1
1
1
1
1
Terry Williamson
13
13
4
4
4
4
Note 1: Patrick E. Bowe was appointed to the Board on 1 September 2022.
All Directors are sent Board Committee agendas and papers and may attend any meeting. The Chairman of the Board and the CEO
attend Board Committee meetings by invitation as a matter of course. The above table excludes the attendance of Directors at Board
Committee meetings of which they are not a member.
From time to time, additional Board sub-committees are established, for example to consider material transactions or material
issues which may arise, and meetings of those sub-committees are held throughout the year. Those sub-committee meetings are not
included in the above table.
Operating and Financial Review
About United Malt
Overview
United Malt is the fourth largest commercial maltster globally, producing ingredients for the brewing, distilling and food markets.
United Malt has approximately 1.25Mtpa of capacity across 12 processing plants in Canada, the US, Australia and the UK. United Malt
also operates an international warehouse and distribution business, providing a full service offering for craft brewers and distillers,
including malt, hops, yeast, adjuncts and related products.
We are one of the leading malt suppliers to the craft brewing sector, supported by a distribution network comprising 21 warehouses
(both Company-operated and through third party logistics providers) and international craft distribution partnerships throughout
North America, South America, Europe, Asia and Australia.
United Malt generates earnings along the malt supply chain, from barley procurement and handling, malt processing, and sale and
distribution of value-added malt and related products. United Malt benefits from having high quality, low operating cost processing
assets that are strategically located in premium barley growing regions, allowing it to source high quality barley and access a diverse
range of customers.
Our customer base is diversified by product, end-market and geography, and comprises a range of high quality customers including
global brewers, craft brewers, distillers and food companies. We sell into both domestic and export markets. Export markets
(particularly Asia) are an important source of demand for malt produced in Australia.
United Malt has two operating segments: Processing and Warehouse & Distribution.
Our Business Model
United Malt’s business model, strategic positioning and expertise in leveraging key inputs into our business create value for our
customers, shareholders and employees.
Our Processing assets are strategically located in premium quality barley growing regions and in close proximity to a diverse range
of customers, including global brewers, craft brewers, distillers, and food companies. We benefit from having high quality and low
operating cost processing assets.
Our Warehouse & Distribution Segment is one of the leading malt and ingredient suppliers to the craft brewing sector and has a
strong market position in our key markets.
United Malt has a highly capable team of ~900 employees across our operating geographies; this, combined with the long and rich
history of our operating brands, delivers a business model to capitalise on growth trends to deliver shareholder returns over the
medium to longer term.
Our Strategy
Our strategy is focused on keeping our customers at the centre of everything we do, whilst targeting those high value markets where
the long-term outlook for growth remains supportive.
Our strategic priorities are centred on three areas, whilst remaining agile in times of uncertainty:
•
Optimise the core
•
Transform for tomorrow
•
Create new value
Annual Report 2022 27
26
UNITED MALT
DIRECTOR’S REPORT
Focus Area
Strategic Priorities
Strategic Actions
Optimise the core
Drive penetration in the
distilling market
Capture growth from increasing demand for whisky in emerging
markets and higher value single malt whiskies
Expand craft distribution
business into new
geographies
Expand into the growing craft beer market in South America and Asia by
leveraging extensive craft distribution experience.
Supported by bolt-on acquisitions, start-up opportunities and new
distribution partnerships.
Maximise value and returns
Optimise our business to target ROCE in excess 10%, with a focus on
North American operations.
Transform for
tomorrow
Renew our organisational
and technological platforms
to create a simplified, more
efficient and effective
organisation
Redesign our organisation to simplify our operations to create an
organisational design reflecting a standalone malting Company.
Embrace process changes to improve capabilities by implementing
simplified and standard processes, skills and systems.
Strengthen operational management by harnessing our network of
production facilities and warehouse & distribution centres as one global
network to deliver better outcomes for customers.
Integrate sustainable actions
into everyday operations,
embracing our commitment
to Zero Harm
Develop priorities and actions to address climate change and resource
scarcity.
Create new value
Proactively assess acquisitive
growth opportunities
Take a disciplined approach to evaluating acquisitive growth
opportunities to extend our geographic reach, product offering and /or
customer base.
Invest in our assets to create
best in class operation and
grow malting capacity
Continue to optimise our asset footprint including upgrading capacity to
create best in class operation, enhancing customer experience.
Develop innovative products
and solutions for customers
Leverage our rich pedigree and expertise in the brewing, distilling and
food ingredients markets to create new and innovative product
solutions for our customers.
Group Financial Summary
Key Results
2022
$ M
(restated)
2021
$ M
Change %
Revenue
1,406.7
1,235.0
13.9%
EBITDA
91.8
124.0
(26.0)%
EBIT
29.8
63.4
(53.0)%
Net Finance Costs
(11.7)
(9.8)
19.4%
Significant Items
-
(21.1)
NM
Tax Expense
(6.5)
(18.0)
(63.9)%
Net Profit After Tax
11.6
14.5
(20.0)%
Add back Significant Items
-
21.1
NM
Tax recovery on Significant Items
-
(0.9)
NM
Underlying Net Profit After Tax
11.6
34.7
(66.6)%
Shareholder Returns
Basic earnings per ordinary share
cents
3.9
4.8
(18.8)%
Return on equity
%
1.1%
1.4%
(0.3)pts
Return on capital Employed (ROCE)
%
2.1%
4.9%
(2.8)pts
Dividend per ordinary share
cents
1.5
5.5
(72.7)%
Segment Results
Key Results
($M)
2022 Revenue
2022
EBITDA
2021
Revenue
(restated)
2021 EBITDA
% Change
Revenue
EBITDA
Processing
1,084.7
60.3
938.1
90.2
15.6%
(33.1)%
Warehouse & Distribution
356.6
40.3
330.1
40.8
8.0%
(1.2)%
Corporate and Eliminations
(34.6)
(8.8)
(33.2)
(7.0)
4.2%
25.7%
Total
1,406.7
91.8
1,235.0
124.0
13.9%
(26.0)%
Reconciliation of EBITDA to Statutory NPAT and Underlying NPAT
Reconciliation
($M)
2022
$ M
(restated)
2021
$ M
Change %
Underlying EBITDA1
105.9
137.9
(23.2)%
EBITDA
91.8
124.0
(26.0)%
Net Interest
(11.7)
(9.8)
19.4%
Depreciation and Amortisation
(62.0)
(60.6)
2.3%
Significant Items
-
(21.1)
NM
Profit Before Tax
18.1
32.5
(44.3)%
Income Tax Expense
(6.5)
(18.0)
(63.9)%
Net Profit After Tax
11.6
14.5
(20.0)%
Add back Significant Items
-
21.1
NM
Tax recovery on Significant Items
-
(0.9)
NM
Underlying Net Profit After Tax
11.6
34.7
(66.6)%
1 Underlying EBITDA for FY22 excludes SaaS costs of ($13.3m) and the impairment of the Brewers Select assets on sale ($0.8m). For FY21 underlying
EBITDA excludes SaaS costs ($6.5m), Grantham site closure costs ($3.1m) and transformation costs ($4.3m).
Annual Report 2022 29
28
UNITED MALT
OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW
Financial Analysis and Commentary
United Malt’s operating environment experienced significant challenges during the year ending 30 September 2022. The Group’s
financial results were adversely affected by a number of external events, including the material deterioration of the Canadian barley
crop, supply chain disruptions, increased costs of imported barley which could not be fully passed on to customers and general cost
inflation.
The severe drought in Canada caused a 35% reduction in the total barley crop from the prior year and significantly reduced the
availability of malting quality barley. This reduction in the barley crop resulted in the Company incurring additional logistics costs to
import barley into our processing plants in Canada from Denmark and Australia and managing the reduced yields and higher
production costs as we continued to provide an uninterrupted supply to our customers.
In addition to the challenges relating to the Canadian barley crop, the business continued to manage ongoing supply chain
disruptions, higher freight costs and cost inflation.
The Company’s commercial arrangements and forecasting systems did not respond adequately to these previously unforeseen
external challenges to protect margins in the Processing business. In response, the Company has implemented a more proactive
approach to risk allocation, with improved pricing and commercial terms to better capture the true cost-to-serve our customers.
This includes pricing barley with customers only when we have more certainty on crop quality and price and a more disciplined
approach to managing customers’ volume commitments. Our contracts now also include more frequent freight price re-sets and
inflation cost escalation.
These initiatives are designed to ensure a more resilient business which is better equipped to manage external volatility.
Group Financial Results
Revenue increased by 13.9 per cent to $1,406.7 million compared to the prior year (on a constant currency basis, revenue was up
10.5 per cent), primarily reflecting higher barley prices.
Underlying EBITDA was $105.9 million (before SaaS costs and one-off items); down 23.2 per cent on the prior year. Underlying
EBITDA excludes $13.3 million related to SaaS costs and $0.8m impairment on the Company’s sale of Brewers Select business that
has been recorded as a one-off item.
The Company delivered an Underlying Net Profit After Tax of $11.6 million compared to $34.7 million for FY21.
Statutory Net Profit After Tax for the period was $11.6 million compared with $14.5 million for FY21. Earnings per share were 3.9
cents compared to 4.8 cents in the prior year.
Segment Financial Results
In the Processing Segment, revenue increased by 15.6 per cent to $1,084.7 million reflecting the higher barley prices compared to
the prior year (on a constant currency basis, revenue was up 12.9 per cent). Sales volume was in line with FY21 volume.
Underlying segment EBITDA (before SaaS costs) declined by 30.8 per cent to $70.1 million as a result of adverse external events,
including the significant deterioration of the Canadian barley crop which resulted in increased production costs and reduced yields.
The reduced Canadian crop also resulted in the Company incurring additional logistics costs to import barley into processing plants
in Canada from Denmark and Australia to ensure uninterrupted supply to customers.
The combined impact of additional barley required to address reduced quality and yield and additional logistics costs for importing
barley was $51.7 million for the year.
The Processing segment was also impacted by industry-wide disruption to supply chains including sea, rail and road freight which
caused continued delays in customer shipments and higher than anticipated energy costs which were not able to be fully passed
through to customers. The impact of these additional costs was $7.3 million for the year.
Including SaaS costs, segment EBITDA was $60.3 million down 33.1 per cent on the prior year.
Revenue in the Warehouse & Distribution Segment increased by 8.0 per cent to $356.6 million, benefiting from the business
optimisation initiatives implemented over the past two years. On a constant currency basis, revenue increased by 3.4 per cent.
Underlying EBITDA (before one-off items and SaaS costs) increased by 2.5 per cent to $44.6 million. The segment operates on a
relatively short cycle and is better able to maintain margins in an inflationary environment, as experienced during the year.
In October 2022 the Brewers Select business in the UK was sold to Loughran Brewing Stores in line with our strategy to streamline
our UK operations. An impairment on sale of $0.8 million was recorded as a one-off item. We will continue to supply our malts to the
UK craft market via a third-party distribution partner, which will provide us with the most effective access to these craft customers.
This decision was part of our continual review of our portfolio of assets and positioning our business and resources to best serve the
growing distilling market in the UK.
Including one-off costs and SaaS costs, segment EBITDA was $40.3 million and was 1.2 per cent down on the prior year.
Capital Expenditure
Capital expenditure for the year was $91.2 million compared to $103.3 million for FY21 and represents the peak in the Group’s
growth capital expenditure. Growth capital expenditure represented 71 per cent of the total capital spend for the year or $64.7
million.
The expansion of capacity in the Company’s operations in Scotland is focused on the distilling market and represented the majority
of the growth capital spend in the year, at $50.2 million. This project is in its final stages of completion with dry commissioning
underway at Inverness. In total this project will add 79,000 tonnes to capacity across two sites; (Arbroath and Inverness) and is
expected to generate incremental EBITDA of approximately $182 million on a full year run rate basis.
Other growth capital projects included sustainability and efficiency programs such as the new specialty ingredient processing plant
in Calgary and the Optisteep water reduction technology installed at the Pocatello plant.
FY22 represented the peak in capital expenditure for the business, with a significant step down in capital spending commitments
expected for FY23 and subsequent years. For the next few years, the Company expects base capital expenditure to be in the range of
~$55 to $60 million including stay-in-business and safety-related investment in the range of ~$30 to $35 million, with all capital
projects being subject to rigorous approval criteria.
Financial Position and Balance Sheet
Net debt at 30 September 2022 was $453.4 million compared to $427.3 million at 31 March 2022.
This increase is as a result of the short-term impact of the higher barley inventory costs and the additional volume of barley required
for the start-up of the Inverness facility in Scotland. The Company’s gearing ratio (net debt/EBITDA) at 30 September 2022 was 5.03
times and exceeded the Group’s target range of 2.0 - 2.5 times.
As announced on 7 September 2022, United Malt received covenant amendments from its banks in respect of 30 September 2022
and 31 March 2023 and increased its inventory funding capacity with its banks to accommodate expanded short-term requirements.
The agreement with our banks reflects the strong relationship United Malt maintains with our lenders and their understanding of
the short-term impact on our business of higher barley inventory costs and volumes required for the start-up of the Inverness facility
in Scotland. At the 30 September 2022 the Company maintained headroom on its amended covenants.
Additionally, in November 2022 the Group entered into a factoring arrangement under which we anticipate factoring up to
approximately $904 million to provide further short-term financing flexibility.
The expected improvement in earnings, the significantly reduced capital expenditure commitments, availability of a factoring facility
and cost and cash conservation disciplines means the Company maintains a clear pathway to its target net debt/EBITDA range of 2.0
– 2.5 times by 30 September 2023.
If required, the Group expects to be able to successfully implement the required actions and meet its covenant obligations.
The Company has no significant near-term refinancing requirements in relation to its long term debt facilities which mature in
November 2024 and has completed its customary annual refinancing of inventory and working capital facilities in November 2022.
Dividend
The Board declared a 1.5 cent per share (unfranked) interim dividend in May 2022 in respect of the Company’s first half earnings. In
light of the Company’s second-half profit performance, the Board did not declare a final dividend for FY22. Dividends for FY22
totalled ~40% of Underlying NPAT.
United Malt’s dividend policy in future years is to distribute approximately 60 per cent of Underlying Net Profit after tax as dividends
to shareholders.
2 Subject to FX
3 Based on a 12 month rolling EBITDA excluding the impact of AASB16, significant Items and net debt excluding finance lease commitment. The
impact of AASB16 on the 12 month rolling EBITDA is $18.7 million
4 US$60 million receivables factoring arrangement
Annual Report 2022 31
30
UNITED MALT
OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW
Operating Cash Flow
Operating cash flow remained positive during FY22. Additional working capital was required due to the impact of the higher price
barley.
Cash conversion was reduced, reflecting the higher short-term working capital draw and interest and tax paid was consistent with
the prior year.
Future Business Prospects
United Malt continues to implement its strategy and is stepping up the pace of change to ensure the Company delivers performance
and value in 2023 and over the medium term. United Malt has a strong underlying business underpinned by consistent and growing
demand for malt products.
United Malt expects to deliver a significant earnings uplift in 2023 driven by improved North American crop conditions, pricing and
commercial discipline, completion of the Scottish expansion project and efficiencies gained from the transformation programme and
the implementation of a new technology platform.
In addition, new commercial terms and management processes have been put in place to allow the business to respond more quickly
and effectively to changing external circumstances and market dynamics through more active management of risk.
The Canadian crop outlook is positive with barley production estimated to increase by 35.5% to 9.4 million5 tonnes in 2022 from 6.9
million1 tonnes last year, based on Statistics Canada August field crop estimate. At the time of writing this report, the barley harvest
has completed in North America and United Malt is confident in the quality, supply and price secure for its barley requirements in
North America for 2023.
In addition, 2023 is expected to benefit from the more disciplined approach to customer pricing and terms, including dynamic barley
pricing with customers as we price with more certainty on crop quality and take a more disciplined approach to managing
customers’ volume commitments. In 2023 we have also incorporated more frequent freight price re-sets and inflation cost escalation
in our customer terms to more appropriately reflect our malt processing costs.
These initiatives are designed to ensure a more resilient business which is better equipped to manage external volatility.
In the UK, we remain well positioned to service the Scottish whisky market which requires malt to meet the long-term requirements
of distillers to produce aged whisky. We are expanding capacity by 79,000 tonnes across two facilities in Scotland; Arbroath facility
which is producing at 22,000 tonnes per annum and the new facility at Inverness which is currently being commissioned will add
57,000 tonnes of capacity per annum. This strategic addition of capacity has been underpinned by expanded contracts with customers
with the new capacity already largely contracted. The facility at Inverness is expected to producing commercial quality malt in the first
quarter of calendar 20236. We continue to expect incremental EBITDA of approximately $187 million on a full year run rate basis from
our Scottish expansion project.
Meanwhile, we are in the final stages of completing our new specialty ingredient processing plant in Calgary which is supporting
growing demand for new products in craft beer and food applications.
We continue to progress the business transformation programme which is focused on creating a simplified, more efficient and effective
organisation. A key pillar of this transformation is the implementation of the new technology platform which is expected to be
completed in 2023. The Warehouse & Distribution Segment has been successfully transitioned to the new technology platform. We
remain confident and committed to achieving ~$30 million of net transformation benefits in EBITDA by FY24.
We remain well positioned to continue navigating and adapting to the short-term challenges facing our business. The steps we have
implemented to better equip the business to manage external volatility including the strategic reset of commercial terms and the
improvement in the quality, supply and price of barley in North America in 2023, give us confidence in the material uplift in earning
expected in 2023.
Rounding of amounts
The Directors’ Report is presented in Australian dollars, with all amounts rounded to the nearest one hundred thousand dollars
(unless specifically stated otherwise) under the option available to the Company under ASIC Corporations (Rounding in
Financial/Director’s Report) instrument 206/191. The is an entity to which this legislative instrument applies.
5 Statistics Canada, Model-based principal field crop estimates, August 2022
6 Timing of completion remains subject to final construction and commissioning timing
7 Subject to FX
Risks
There are various risks associated with owning shares in United Malt. Some of these risks are specific to United Malt and its
business, while others are risks of a more general nature that apply to any investment in publicly traded shares. The list of risks set
out below is not exhaustive and does not consider the personal circumstances of shareholders. The list of risks set out below is also
not arranged in any hierarchical manner. Shareholders should seek professional advice if they are in any doubt about the risks
associated with holding shares in United Malt.
The Board and the Audit and Risk Committee are ultimately responsible for Risk Management. The Board approved Risk Appetite
Statement and Risk Management Framework are used by the Executive Leadership Team (ELT) and managers to identify and
manage risks to the business. The business maintains Operational and Strategic Risk Registers that are reviewed and approved by
the Audit and Risk Committee.
Risks affecting United Malt’s business
Risks affecting United Malt’s business
Risk
Risk overview
Risk management actions
Geopolitical Risks
Geopolitical conflict, including war, could
disrupt United Malt’s normal business
operations, impair its logistics or supply chain,
further exacerbate energy cost increases, and
could also alter the demand for our products –
either in the geographies that United Malt is
present in, or those that its customers exist in.
The Board and management continually monitor the events in Eastern Europe as
well as other areas of geopolitical tension and evaluate the potential impacts to the
business that they pose. The processes and behaviours that United Malt
established during the COVID-19 pandemic, along with lessons learned from the
event, have been repurposed to respond to the changes in economic, business or
political environments.
A critical input in Malting is natural gas for the kilning process. United Malt
maintains long-term contracts with gas suppliers to reduce the financial impact
that the geopolitical risks would have on United Malt’s input costs.
Inflation Risks
Inflationary trends in the global market could
drive up the costs to procure raw materials,
process them, and transport them to
customers and these trends could adversely
affect the achievement of financial
performance.
Wherever possible United Malt is entering into long-term contracts with suppliers
that provide us with greater certainty on cost inputs over a longer time horizon.
United Malt is working with its customers to manage the risks that early pricing
contracting can have on United Malt where input costs are ill defined. United Malt
has internal processes to ensure that we have back-to-back arrangements in place
for barley that provide cost and price certainty; and as long-term contracts with
customers renew, we are implementing more robust and clear pass-through
mechanisms in contracts.
Customers seeking price certainty early in a malting year may be asked to re-price
contracts and/or be restricted from pricing during the year, due to cost inflation.
Utility Pricing and Availability Risks
Some of our largest expenditures are power
and natural gas utilities costs. These costs
could increase due to factors outside of United
Malt’s control – namely the Ukrainian Conflict
as well as governmental policy changes,
including the impact of energy transition, in
the jurisdictions in which we operate.
Insufficient supply of natural gas could lead to
production shortages.
United Malt reviews utilities pricing in each geography. We have local expert
energy brokers work with us to manage the volatility of these costs. At times,
United Malt may hedge these costs to further mitigate this risk.
Our CFO and COO work together to understand the consumption needs and costs
in each geography and where possible work to lock in long-term supply
agreements. Relatedly, consumption reducing technologies are evaluated for each
site that provide the opportunity to reduce overall utility need and therefore
pricing.
As noted in the inflationary risks section, work is also being undertaken with
customer contracting language to share the impact of this risk with customers and
where it makes sense, re-evaluate our contract pricing. United Malt is reviewing
long-term contracts with customers as they renew, and we are implementing more
robust and clear pass-through mechanisms in contracts for energy price increases.
Climate
and
Environme
We are intrinsically linked to the barley crops
grown around the globe. Climate Change can
imperil the global barley supply which we
depend on for our core functions of
Our reporting is guided by the Task Force on Climate-related Financial Disclosures
(TCFD) recommendations and climate risk is emerging as a consideration in our
customer and supplier contracts as well as in our future capital expenditure
projects. We are also tracking proposed policy, legal and technological changes that
Annual Report 2022 33
32
UNITED MALT
OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW
Risks affecting United Malt’s business
Risk
Risk overview
Risk management actions
processing and distributing malted products.
Climate Change could lead to higher costs,
lower margins and potentially increased
costs associated with our business functions.
It could also lead our farming partners to
plant other crops that are more resilient to a
changing climate.
Relatedly, transition risks such as legislative
changes that target emissions reduction or
cross border carbon adjustment schemes
may impact United Malt’s costs.
are on the horizon during the transitional phase of a coordinated global response to
Climate Change. Our Corporate Risk Register and Risk Appetite Statement have
been updated to include the results of our Climate Risk Assessment and now include
transition and physical risks and opportunities.
We are evaluating our exposure to yield shortages, particularly in jurisdictions that
do not irrigate barley crops; and whether financial instruments to hedge that risk
are appropriate.
We continue to review and, where possible, reduce our consumption of water and
fossil fuels. This includes finding alternative sources to heat our plants or power our
kilns, including cogeneration capabilities or investigating geothermal heating
opportunities. Future capital expenditures managed by the Project Management
Office (PMO) actively review opportunities for reduced consumption.
We continue to monitor and understand emerging trends, policy developments, and
our emissions profile.
Water Access Risks
Water is an essential component of the
malting process. Access to high quality water
may be impacted by Climate Change, long-
term drought or widespread contamination
of local aquifers.
This could lead to adverse financial
impacts in the form of higher costs or
reduction in product quality.
We understand the critical importance of water. United Malt is focused on
consumption reduction strategies, recycling, reclamation and effluent management
regimes; all to reduce our consumption of water and creation of wastewater. Each of
our processing facilities closely monitors and reports their consumption of water.
We are committed to evaluating and rating the impact of our future capital
expenditure projects’ changes to water consumption and effluent treatment.
Furthermore, all capital expenditure projects are evaluated for their access to water
supplies.
Transportation and Supply
Chain Risks
We rely on our supply chain to store and
transport barley to our production sites and
finished products to our customers. There is a
risk that disruption to the supply of raw
materials to our processing plants,
particularly delays via rail, and/or finished
goods through our network, could adversely
impact our financial results or increase the
costs associated with running the business.
The transportation and logistics function has been streamlined in North America
and has been brought into the remit of the COO which has allowed for greater
collaboration between Sales, Production and Transportation.
The Transportation Management System (TMS) has been rolled out for our
Warehouse and Distribution segment regarding timely and safe delivery tracking of
our products to our customers.
Capital Requirement Risk
We require significant capital to operate and
fund the business. If United Malt is unable to
generate sufficient cash flows or raise sufficient
external financing, then we may be forced to
limit our operations and growth plans and this
could adversely affect the achievement of the
Company’s financial performance.
United Malt strives to ensure strict cash management and maintain cash reserves;
and, when appropriate, will continue to build up those reserves. We look to pay
down debt when doing so is prudent. Our Risk and Finance team actively seeks to
optimise capital management. We select capital projects based on an assessment of
business needs and financial benefits.
United Malt has rigorous Treasury, Capital Management and Credit controls
including strong bank relationships and appropriate, working capital optimisation,
inventory management processes, debtor controls and a comprehensive global
credit insurance program.
Commodity Pricing and Agricultural Risks
Barley growing and procurement are
subject to a variety of agricultural factors
beyond our control, such as disease, pests,
rainfall and extreme weather conditions. To
the extent that any of these factors impact
the quality, price and quantity of barley
available to United Malt for malting, its
operations and financial performance could
be adversely affected.
Relatedly, there is the risk that farmers will
substitute their crops away from barley to
other crops, reducing the overall supply of
malting barley available.
United Malt seeks to mitigate this risk by maintaining a diversified network of
growers, leveraging its strong supplier relationships, importing barley in each
jurisdiction in which it operates if necessary, all in an effort to respond to local
variations of agricultural yields.
We enter forward contracts with multiple growers, co-operatives and grain
companies in all geographies where we currently source barley, and we seek to
renew these well in advance of expiry. We continually review options to diversify
our procurement footprint. We also malt other cereal grains, which further mitigates
this risk.
As previously noted, we work with customers to help them understand our input
costs and during years of shortfall in production share those increased costs with
customers.
We are very cognisant of crop substitution risks and rely on the strength of long-
term supplier relationships and long-term barley production contracting as
mitigants.
Risks affecting United Malt’s business
Risk
Risk overview
Risk management actions
Project Management
Risks
There is a risk that a lack of proper
oversight or controls, delays to or increased
costs of construction projects, or changes to
government or regulatory approval regimes
could result in future projects failing to
achieve their intended benefits.
We created a Project Management Office (PMO) that is tasked with oversight of all
critical projects. This office works with stakeholders, senior management and
project owners to oversee and report on delivery and budget targets. The PMO has
been re-aligned to report to the CIO and has been strengthened with data analysis
and reporting software. Moreover, the PMO has developed a multi-tier ranking and
risk management process to allow for greater oversight over project management
throughout the business.
Cyber Security Risks
United Malt is exposed to Cyber Security risks
posed to it by malicious third parties, and by
unintended outcomes from actions taken by
employees or delivered by existing
programmes.
Each of these risks has the potential to
disrupt our systems, production or
distribution capabilities which would damage
United Malt’s reputation, and impact
customers, suppliers and financial
performance.
These risks could also lead to the accidental
release or unauthorised access of privileged
or confidential information.
United Malt has a defined cyber security strategy as well as a defined risk appetite
against cyber security risks. United Malt is committed to address cyber-risk by
employing industry cyber security best practices and in seeking ISO 27001:2013
certification for its Information Security programmes.
United Malt deploys many methods to protect its systems, including but not limited
to security infrastructures and procedures including multi-factor authentication
(MFA), zero-trust access, deployed managed security services provider (MSSP), and
has significantly hardened its infrastructure through further deployment of firewalls,
virus scanning, data back-up systems, network performance monitoring, improved
and geographically dispersed redundancies, an Information Security Management
System, Access Control Standards, Global Disaster Recovery and Business Continuity
Plans, and a Cyber Incident and Response plan that is actively challenged and
practiced.
The information technology infrastructure team, along with the operational
technology and engineering teams, have been aligned under one information security
team, providing reduced risk of misalignment or gaps in cyber security.
United Malt maintains strong partnerships with private and governmental vendors
for support in this space. Some of those partnership include penetration, resilience
and response plan testing. United Malt also provides training to employees and Board
members on internet and email best practices to reduce the risk to United Malt of
email-based threats.
We rely upon Data Classification, Management, Privacy, Security and Governance
processes and procedures to identify and protect data across the business. This
includes assigned owners of different data types and silos.
Strategy
Implementation Risks
Failure to successfully understand,
disseminate to the employees and execute
the business strategy that United Malt has set
out could adversely impact our ability to
satisfy customers, suppliers and shareholders
and could damage the financial performance
of the business.
Members of the Executive Leadership Team and Board are dedicated to enable and
drive strategic implementation and a detailed scorecard to measure outcomes of both
financial and non-financial metrics. The Project Management Office (PMO) has been
strengthened to help drive strategic implementation and the Internal
Communications function has been enhanced to bring regular cadence of updates to
all employees to understand United Malt’s strategy, trajectory and goals.
Market and Substitution Risks
United Malt faces the risk that integration of
customers, suppliers or competitors could
disadvantage the competitiveness of United
Malt relative to its peers. Moreover,
innovations in beverage production
technologies could lead to substitution of
malted products for other carbohydrates in
beverages.
Each of these risks could result in an adverse
impact on our business and financial
performance.
United Malt invests in market intelligence to better understand its customers,
suppliers and competitors and leverages its international scale to help our customers
meet end consumer demands. United Malt’s Warehouse and Distribution business
provides the unique ability to observe end-consumer preferences and substitutions
actions by small innovative craft brands as well as the very large global brands its
production facilities service.
United Malt operates an innovation lab, the Malt Innovation Centre, which allows for
real-time experimentation and analysis of market trends and consumer preferences
through small batch brewing.
Annual Report 2022 35
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UNITED MALT
OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW
Risks affecting United Malt’s business
Risk
Risk overview
Risk management actions
Product and Food Safety Risks
United Malt operates an international
network of malting and warehouse
facilities and is subject to food and stock
handling risks.
These include spoilage, contamination,
misappropriation, damage to food and stock
through insurable and non-insurable risks,
incorrect grading, product tampering, product
recall, changes to government, industry or
destination standards regarding product
specification, product liability claims or
perceived obsolescence of stock.
Any of these occurrences could result in an
adverse impact on our business and
financial performance.
United Malt utilises product quality policies, procedures and controls that are
managed at the Group, and not subsidiary, level. All portions of the business are
subject to audit procedures relating to Food Safety and Quality Management (FSQM)
standards. Food safety risks have been identified and are covered by Statements of
Procedure (SOP) or contract. United Malt continues to move towards using Company
managed facilities, instead of 3PLs, to give us greater control of this risk.
Third-party audits are performed, focusing on Hazard Analysis and Critical Control
Points (HACCP). These audits are shared with the Executive Leadership Team and
where appropriate the Audit and Risk Committee.
Inventory and stock controls that United Malt has in place include procedures such
as inventory reconciliation against third-party logistics, stocktakes/cycle counts,
site visits, due diligence conducted for new facilities and audit procedures. When
United Malt purchases stock that is held at a third-party location, we secure
certificate of ownership or title of the goods. We also purchase appropriate
insurances against physical damage to our stock in transit, stored at our sites or
stored at third-party sites.
United Malt is protected by a global Products Recall Insurance policy and is also
moving from subsidiary level Food Safety and Quality Management (FSQM)
standards to a global harmonised standard that is managed by the COO.
Position and Credit Risk
We take large holding positions of
commodities at various times of the year. In
addition to these, United Malt also hedges
interest rates and foreign exchange rates.
There is a risk that our hedging management
strategies might not successfully minimise
exposure to these risks.
Moreover, there is the risk that an inadequate
segregation of duties or inadequate oversight
of these positions could lead to an adverse
impact on United Malt’s business and
financial performance.
United Malt has a robust Position and Trading Risk Management Policy (PTRMP)
that is overseen by the Company CFO and the Audit and Risk Committee. We
continually monitor the positions and associated risks of each geography through
daily tracking and weekly meetings of senior leadership.
United Malt utilises a Credit Policy to manage exposure from customers in each
jurisdiction it operates in. This policy is also overseen by the Company CFO and the
Audit and Risk Committee. We have also obtained global trade credit insurance for
key customers in both our bulk business and warehouse and distribution business.
We also utilise enterprise risk management software programmes to track and
hedge these risks. In addition, we have implemented a clear Segregation of Duties
protocol between the front, middle and back offices that clearly delineates the
authority levels of all decision makers as sanctioned by the Audit and Risk
Committee.
Systems, Reporting and Controls Risks
There is a risk that a major system outage to
one of the business’ core software or system
platforms could increase United Malt’s costs
and could lead to regulatory or government
intervention in the form of costs,
investigations, penalties or liabilities.
We rely on IT systems that, if they fail, could
lead to a loss of confidential data,
deterioration in reputation and impacts on
suppliers or customers.
All of these outcomes would have an
adverse impact on our business and
financial performance.
United Malt deploys many methods to maintain the functionality of its systems,
including but not limited to data back-up systems, network performance
monitoring, improved and geographically dispersed redundancies, an Information
Security Management System, Access Control Standards and Global Disaster
Recovery. United Malt catalogues and manages physical and software end-of-life
systems and has a plan to phase them out.
Risks affecting United Malt’s business
Risk
Risk overview
Risk management actions
Taxation and Regulatory Change
Risks
Changes in taxation laws (or their
interpretation) where we have operations
could materially affect our financial
performance.
In addition, governments may review and
impose additional or higher excise or other
taxes on beer or whisky, which may have an
adverse effect on consumer buying patterns
and may adversely impact United Malt’s
financial results.
United Malt works closely with our advisors in all geographies to thoughtfully
consider and confirm that we adhere to tax regulations and potential liabilities
associated with doing business in each of the countries in which we operate.
Our legal counsel provides guidance on compliance and governance matters and
consults with us on ramifications of any potential changes in the jurisdictions
where we operate.
Where appropriate, our obligations and consent registers are maintained and
reviewed. Moreover, clearly defined compliance oversight responsibilities are
assigned to specific job roles. Lastly, our internal audit programme reviews
compliance matters as required.
Consumer Preference Risks
United Malt supplies food and beverage
companies, specialising in the production of
malted products for brewing and distilling
customers. There is a risk that we may not
optimally align with consumers, or that beer
consumption could fall or that our products
could be used less often in customers’ end
products.
These risks could lead to a reduction in
market demand which could have an adverse
impact on United Malt’s business and
financial performance.
United Malt is actively involved in industry forums and trade groups that shape and
influence consumer trends. In addition, market research and competitor intelligence
are incorporated into the Strategic Planning Process.
The use of the Net Promotor Score (NPS) tracking methodology gives us early
warning systems to see where we could better align with market or consumer
trends. Our employees gather and act on customer feedback at all times. This
includes formal research (utilising NPS and other research methods), as well as
providing training to members of staff in managing customer relationships.
Skills and Capabilities Risks
People capability or capacity could impact the
effective execution of United Malt’s strategic
plans and future operation of the business.
Moreover, inflationary pressures, changes in
employee working environment expectations,
benefits and compensation bring employee
retention challenges – these challenges do
have an impact on United Malt’s costs.
United Malt has enhanced how employees set and achieve their annual goals and is
aligning those goals to overall Group level targets, furthering integration in the
business. United Malt continues to investigate systems and processes that improve
data gathering and reporting on employee productivity, satisfaction and growth.
United Malt utilises global benchmarking to make sure it is competitive in attracting
and maintaining talent and has implemented a detailed talent management and
succession planning process to identify high potential employees and prepare
successors for senior executive positions. United Malt is committed to developing
leadership and management skills at all levels of the Company and has introduced
skills training and development. United Malt has also deployed a hybrid working
model.
Employee Safety
Risks
United Malt is an international maltster and
employs ~900 people globally. There is a risk
that insufficient safety protocols or lack of
focus could lead to serious injury to
employees, contractors, or visitors to our sites.
United Malt’s Executive Leadership Team and Board have oversight of employee
health and safety and part of their annual performance review is tied to safety
metrics. It is a requirement to notify the Board of any significant events that cause
injuries or potential injuries (near misses). United Malt’s capital expenditure
process is designed to prioritise safety-related expenditures.
Foreign Exchange Risks
United Malt and its related entities enter into
foreign currency transactions, typically in the
purchase of raw materials or in the sale of
malt.
Additionally, a significant proportion of United
Malt’s income is denominated in foreign
currencies. Therefore, our reported net
income in Australian dollars will fluctuate
inversely to the Australian dollar’s
relationship with the other foreign currencies
in which we do business.
United Malt leverages a multi-desk foreign exchange processing platform to
facilitate entering and sourcing of foreign exchange trades to improve operating
efficiency and reduced foreign exchange exposure in purchases or sales.
These actions and procedures are reviewed by the Audit and Risk Committee and
monitored by internal audit for efficacy and compliance. Translation risk of the
earnings of the overseas subsidiaries is mitigated by the fact that the assets and
liabilities of those businesses, including external debt, are held in local currencies.
Any change in exchange rates will not impact a business unit’s ability to repay its
debts or suppliers in its local currency.
Annual Report 2022 37
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UNITED MALT
OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW
Risks affecting United Malt’s business
Risk
Risk overview
Risk management actions
Customer and Supplier Relationship
Risks
There is a risk to United Malt that a loss of key
customers or suppliers could result in an
adverse impact on our financial performance
through either a reduction in revenue or an
increase in costs associated with running the
business.
We enjoy strong partnerships with key customers and suppliers in our production
and distribution businesses. Many of these relationships are codified in the form of
long-term agreements. They provide us with the stability in the form of forward
orders that allows us to control costs and deliver savings to our customers, while
also providing our suppliers with certainty.
Our senior leaders regularly engage with their counterparts to find innovative ways
to improve our commercial relationships.
Our Malt Innovation Centre (MIC) is driving product development, improving
processes and quality; all with the goal of maintaining key customers.
COVID Impact Risks
The COVID-19 pandemic continues to
adversely impact the global economy and our
customers, suppliers and employees although
its overall effects have reduced over the past
year.
The impact on global and regional economic
conditions could disrupt the supply chain,
operations, industries or production
capabilities of our customers.
We have taken consistent and measurable steps to keep our employees safe to keep
our production facilities open. This includes pre-shift screening, contract tracing,
cohort working, partnerships with expert vendors and pre-negotiated testing
agreements. We continue to monitor site access to third parties to reduce risks to
employees.
A standing committee of the ELT who meet regularly to monitor the pandemic and
calibrate our response remains in place and we continue to closely monitor
customer offtake of products and conditions in their markets to identify potential
changes in demand for our goods.
General Risks
In addition to the risks specific to United Malt noted above, we also monitor the below risks which are generally associated with any
investment in publicly traded shares. These risks are reviewed by the Audit and Risk Committee, as well as the CEO and the
Executive Leadership Team. The Director, Group Risk and Insurance also provides guidance on the below matters as part of the
annual reporting regime.
Economic Risks
General economic conditions, fluctuations in interest and inflation rates, commodity prices, currency exchange rates, energy costs,
changes in government, changes in fiscal, monetary and regulatory policies, the development of new technologies and other
changes to the general market conditions may have an adverse effect on United Malt, its future business activities and the value of
United Malt shares.
Market Conditions Risks
Share market conditions may affect the value of shares regardless of United Malt’s financial or operating performance. Share market
conditions can be unpredictable and are affected by many factors including changes in investor sentiment towards market sectors
(in particular food and beverage supply) and the domestic and international outlooks.
Significant Events Risks
Significant events may occur in Australia or internationally that could impact the market for United Malt’s products and its
operations, the share price and the overall economy generally. These events include war, terrorism, civil disturbance, political
actions and natural events such as earthquakes, floods and pandemic risks.
Global, Regional and Country Specific Sovereign Risks
As an international maltster, United Malt is vulnerable to geopolitical tensions that may impact global trading patterns and flows.
There is a risk that United Malt’s financial performance may be impacted when those tensions affect markets or commodities that
United Malt purchases.
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UNITED MALT
OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW
Subsequent Events
Other than the sale of Brewers Select assets in October for $2.4m and the executed uncommitted factoring arrangement in November
2022, as described in the financial report note 4.6, no matters or circumstances have arisen since 30 September 2022 which have
significantly affected or may significantly affect: a) The Group's operations in future financial years; b) The results of those
operations in future financial years; or c) The Group’s state of affairs in future financial years.
Additional Disclosures
Indemnification and Insurance of officers
Under the Company’s constitution, the Company may indemnify, to the extent permitted by law, each director and company
secretary of United Malt or its related bodies corporate as the directors determine, for all losses and liabilities incurred by the person
as an officer to the extent that such losses and liabilities are not covered by insurance.
The Company has entered Deeds of Access, Indemnity and Insurance with its directors, company secretary and certain executives.
The Company has paid a premium in respect of a contract insuring current and former directors, company secretaries and executives
of the Company and its subsidiaries against liability that they may incur as an officer of the Company, including liability for costs and
expenses incurred by them in defending civil or criminal proceedings involving them as such officers, with certain exceptions. It is a
condition of the insurance contract that no details of the premiums payable or the nature of the liabilities insured are disclosed.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to reimburse its auditor, PricewaterhouseCoopers (PwC) for any liability
(including reasonable legal costs) PwC incurs in connection with any claim by a third party arising from the Company’s breach of its
audit agreement. No payment has been made to reimburse PwC during, or since, the end of the financial year.
No proceedings
No application has been made under section 237 of the Corporations Act 2001 (Cth) in respect of United Malt, and there are no
proceedings that a person has brought or intervened in on behalf of United Malt under that section.
Audit services
Audit services during the year have been provided by PricewaterhouseCoopers (PwC), led by partner Scott Walsh. Details of the
amounts paid to PwC for audit services are set out in note 4.5 of the financial report.
Non-audit services
The Company may decide to engage the external auditor on assignments additional to its statutory audit duties where the auditor’s
expertise and experience with the Company are important. Details of the amounts paid to the external auditor PwC for non-audit
services provided during the year are set out in note 4.5 to the financial report.
In accordance with advice received from the Audit & Risk Committee (ARC), the Board is satisfied that the provision of non-audit
services by PwC during the year is compatible with the auditor independence requirements of the Corporations Act 2001 (Cth) The
Board is satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements
of the Corporations Act 2001 (Cth) for the following reasons:
•
All non-audit services have been reviewed by the ARC to ensure that they do not impact the integrity and objectivity of the
auditor;
•
None of the services undermine the general principles relating to auditor independence as set out in the APES 110 Code of
Ethics for Professional Accountants.
A copy of the external auditor’s independence declaration as required by s307C of the Corporations Act 2001 (Cth) is set out on page
101 and forms part of this report.
Corporate Governance Statement
During the year ended 30 September 2022, the Company’s corporate governance framework was consistent with the 4th edition of
the ASX Corporate Governance Council. United Malt’s corporate governance statement can be viewed at
www.unitedmalt.com//corporate-governance.
Annual Report 2022 41
40 UNITED MALT
OPERATING AND FINANCIAL REVIEW
OPERATING AND FINANCIAL REVIEW
Remuneration Report
Introduction
This Report covers the remuneration of Non-Executive Directors, the Managing Director and Chief Executive Officer (MD & CEO) and
senior executives who are considered Key Management Personnel (KMP), who have authority for and are accountable for planning,
directing and controlling the activities of United Malt consistent with the Australian Accounting Standards Board 124 (Related Party
Disclosures (‘AASB 124’) definition).
This report outlines the remuneration outcomes and structures in place for the financial year ended 30 September 2022 and a high-
level overview of proposed changes planned for FY23.
FY22 Overview
a) FY22 Year in Review
As outlined in this Annual Report, the Company’s financial performance was extremely disappointing. Our results were adversely
affected by a range of external market conditions in particular a severe drought that reduced the Canadian barley crop, supply chain
disruptions to ocean freight and rail transportation and rapidly escalating energy costs. Margins were significantly eroded by extra
costs including procuring alternative barley supply to meet customer contracts in North America in particular. Our commercial
arrangements did not allow for full pass through of costs to our customers. Faced with these challenges our people across the globe
made extraordinary efforts to continue to supply quality products to customers.
With this backdrop, the Board and management have been focused on making the organisation more resilient, better manage risk
and implement the optimisation measures which will allow United Malt to take advantage of expected better crop conditions and
increased production capacity in future years. This includes, for example, ensuring as contracts are due for renewal updated
commercial arrangements are put in place. This has been a high priority for the company.
As well as focusing on improving our facilities and processes in a sustainable and efficient manner, the last 12-18 months has also
seen new capability added to both management and the Board to address these evolving challenges. Despite the progress that has
been made, and the tremendous amount of work and effort put in to look after our customers and employees, the Board is conscious
that the executive remuneration outcomes in FY22 must reflect that the Company’s financial performance fell well below
expectations. Accordingly there have been hard decisions taken which demonstrate the Board’s commitment to financial
responsibility and ensuring executives are accountable for the challenging FY22 earnings and profit results.
b) Financial Performance
The Company’s Underlying Earnings Before Interest Tax Depreciation Amortisation (EBITDA) was $105.9 million for the year, down
23% from $137.9 million in FY21. The Company’s Processing Division was most adversely affected by the external factors and was
$60.3 million, down 33% from $90.2 million in FY21. By contrast our Warehouse and Distribution’s EBITDA was $40.3 million
broadly consistent with FY21.
Reported Statutory Net Profit After Tax (NPAT) was $11.6 million, compared to $14.5 million for FY21. Dividends for FY22 totalled
1.5 cents per share, down from 5.5 cents in FY21.
c) FY22 Remuneration Outcomes
The Board is committed to ensuring a strong alignment between the Company’s performance and executive remuneration. The
disappointing financial results have been reflected in remuneration outcomes for Executive KMP (and across all senior
management).
Key points are:
•
No FY22 short-term incentive (STI) payments were made, reflecting the unsatisfactory financial performance.
•
There were no salary increases to any Executive KMP in FY22, other than for the President, Warehouse and Distribution
following a benchmarking review undertaken in FY21.
Annual Report 2022 43
42
UNITED MALT
•
The MD & CEO’s FY20 long-term incentive (LTI) award lapsed with no vesting because United Malt’s return on capital
employed (ROCE) and absolute total shareholder return (ATSR) performance did not reach the required thresholds for vesting.
d)
Remuneration in FY23
Our remuneration structure will not change significantly in FY23. The key changes are set out below (with further detail in Section 8
of this Report).
•
The only Executive KMP who will receive a base salary increase in FY23 is the Interim CFO, who will receive a 6 percent
increase due to a contract extension from 2 January 2023 to 30 September 2023 to ensure continuity in this role until after a
new CEO is appointed (see Section 8).
•
There will be no changes to Non-Executive Director base fees or committee fees in FY23.
•
The FY23 STI Plan will remain similar to the FY22 Plan, although the number of measures on the Corporate Scorecard will
reduce and the weighting for achieving financial targets will increase from 60 percent to 70 percent to underscore the
importance of achieving profit improvement objectives in FY23. Also, the Corporate Scorecard will represent 70 percent of
KMPs’ STI opportunity, to further reinforce this priority.
•
The FY23 LTI Plan will remain broadly consistent with the awards made in FY22, but will be measured against two hurdles
only, with equal 50 percent weighting, namely ROCE and ATSR. The specific targets for the ROCE and ATSR hurdles have been
significantly increased from those set in FY22.
1. Key Management Personnel (KMP)
KMP are listed in the table below. The Managing Director and Chief Executive Officer (MD & CEO) and other Executives considered
KMP are collectively referred to as ‘Executive KMP’ in this report.
Non-Executive Directors
Role
Graham Bradley AM
Chairman and Non-Executive Director
Patrick E. Bowe
Non-Executive Director (appointed 1 September 2022)
Barbara Gibson
Non-Executive Director
Jane McAloon
Non-Executive Director
Gary W. Mize
Non-Executive Director
Terry Williamson
Non-Executive Director
Executive KMP
Role
Mark Palmquist
Managing Director and Chief Executive Officer
Ryan Dutcher
Chief Financial Officer (appointed as Interim Chief Financial Officer on 6 July 2022)
Bryan Bechard
President, Warehouse and Distribution
Tiago Darocha
Chief Operating Officer
Former Executive KMP
Amy Spanik
Chief Financial Officer (ceased as KMP on 6 July 2022 and ceased employment on 4 October 2022)
2. FY22 Executive Remuneration Outcomes
FY22 Base Salary
Remuneration for the Executive KMP was set prior to demerger of United Malt from GrainCorp Limited in FY20 after a
comprehensive review of relevant benchmarks, both in Australia and in the United States where all the Executive KMP are based.
This review looked at both Australian companies of a similar market capitalisation, but also similarly sized roles and companies in
the United States. While Australian market practice is a key consideration in assessing base salaries, the Nominations and
Remuneration Committee must also ensure that Executive KMP salaries are competitive in the markets in which they operate.
There were no increases to any Executive KMP salaries since demerger other than an increase in base salary for the President,
Warehouse and Distribution in FY22. Following a review, his salary increased by approximately 15% to align the remuneration with
market benchmarks for this role and his STI opportunity was increased at target from 50 percent to 60 of base salary to align with
peer KMP roles.
FY22 Short-term Incentive
The Board reviewed the structure of the STI Plan in FY22 to ensure an appropriate balance between corporate and individual
outcomes. This has resulted in changes to better align the STI programme with executive accountabilities. The Corporate Scorecard
approach was maintained, with EBIT remaining the largest measure along with safety, environment, and other non-financial
measures. The increased emphasis on Environmental, Social and Governance objectives in the Corporate Scorecard includes a new
Waste Management and Landfill reduction objective and also revised safety objectives.
In FY22, the Corporate Scorecard was used to assess 60% of the STIP opportunity for those Executive KMP with specific Group-wide
responsibilities such as the MD & CEO and CFO. The Chief Operating Officer and President, Warehouse and Distribution have more
specific responsibilities for managing specific business units, so the Corporate Scorecard applied to 50 percent of their opportunity,
allowing more room for assessment against metrics aligned to their specific business unit. The metrics for the FY22 Corporate
Scorecard and an overview of how they were assessed is set out below.
FY22 Executive KMP Short-term Incentive Performance
Corporate Scorecard (60%/50%)
Individual Scorecard
(40%/50%)
Executive KMP*
Financial measures
weighting (%) and
performance
Process weighting
(%) and
performance
Customer
weighting (%)
and performance
People and Safety
weighting (%)
and performance
Individual
Scorecard (%)
and performance
Name
Position Title
EBIT
Upgrading product
non-conformance
tracking and root
cause analysis,
Transformation
process and systems
delivery,
Waste management
and landfill
reduction
NPS and
DIFOT-Q
RIFR, EH&S
Leadership,
Employee
Engagement and
Action Plans
Agreed objectives
tailored to the
Executive KMP’s Team
and role.
Mark Palmquist
MD & CEO
(60%)
(10%)
(10%)
(20%)
Amy Spanik
Chief Financial Officer
(60%)
(10%)
(10%)
(20%)
N/A
Bryan Bechard
President, Warehouse
and Distribution
(60%)
(10%)
(10%)
(20%)
Tiago Darocha
Chief Operating
Officer
(60%)
(10%)
(10%)
(20%)
Minimum performance
threshold not achieved
Threshold performance
achieved
Target performance
achieved
Stretch performance
achieved
Each Executive KMP has their own individual metrics approved by the Board in an Individual Scorecard which aligns to their
respective areas of responsibility. For the MD & CEO, key individual objectives include the metrics aligned to customer retention,
growth and profitability, the successful execution of the capital project plan, pursuit of key growth opportunities and the effective
leadership of the United Malt executive group. Other Executive KMP have a variety of metrics aligned to their business unit. These
include driving the transformation process to support project goals, establishing ESG Goals, improving customer advocacy across key
areas of the Group, process and freight optimisation goals, and the achievement of specific financial savings in landed costs via
optimisation of planning and processes.
Due to the disappointing financial results during the year, the Board determined that it was not appropriate to award any STI
payments to either the MD & CEO or any Executive KMP for FY22, despite several Corporate Scorecard and individual goals being
partially achieved and despite the hard work done by our leadership team to meet the challenging market conditions that occurred
Annual Report 2022 45
44 UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
during the year. This reflects the strong commitment by the Board to ensure that Executive remuneration reflects management’s
collective accountability for the financial results.
There are a number of reasons for this outcome:
•
Environment, Health and Safety performance during FY22 was mixed. In FY22 we committed to reducing waste to landfill by
setting goals for recycling of materials in our manufacturing and distribution activities. Our target for fiscal year 2022 was 10
percent and we achieved a reduction of 15 percent. However, our safety performance was not where we wanted to be in FY22.
•
Despite challenging market conditions and barley crop shortages, we continued to supply our customers throughout the year,
but key measures of our customer satisfaction (Net Promoter Score) and on-time delivery performance fell short of the
challenging targets we had set.
•
Our two major capital projects during FY22 – the Inverness Expansion project and our new Enterprise Resource Planning
(ERP) System project – both ran late and over budget.
•
We undertook our first employee engagement survey during FY22 and our employees’ ratings did not meet our expectations.
FY22 Executive KMP Short-term Incentive outcomes
The table below sets out the actual STI outcome for each Executive KMP as a percentage of both their target and maximum STI
percentage.
Executive KMP1
2022
Target/maximum
2021
Target/maximum
Current Executive KMP
Mark Palmquist
0% / 0%
33% / 22%
Bryan Bechard
0% / 0%
37% / 24%
Tiago Darocha2
0% / 0%
37% / 24%
Former Executive KMP
Amy Spanik
0% / 0%
33% / 22%
1 Mr Dutcher was not eligible for a FY22 STI.
2 Mr Darocha’s FY21 STI award was pro-rated based on his start date in July 2021.
FY20 One-off Award Outcome
At the time of the Demerger in March 2020 there were no LTI awards due to vest until post FY22. To encourage retention of
Executive KMP and to support alignment with United Malt shareholders during the period following the demerger, a One-off Award
was granted to the MD & CEO in September 2020. The Chief Financial Officer and the President, Warehouse and Distribution had not
been eligible for LTI prior to the offering of the United Malt FY20 LTI, and as such they were not offered participation in the One-off
Award.
The performance period for this award commenced on the date United Malt shares commenced trading on the ASX (24 March 2020)
and ended on 30 September 2021.
There were two performance hurdles, ROCE and ATSR, each applying to 50 percent of the One-off Award.
ROCE
United Malt’s ROCE performance over the period of 24 March 2020 to 30 September 2021 was 5.8% versus a threshold of 8.6% and
so no portion of this award vested.
Absolute TSR
United Malt’s Absolute TSR performance over the period of 24 March 2020 to 30 September 2021 was 0.77% versus a threshold of
6% and so no portion of this award vested.
3. Executive KMP actual and statutory remuneration outcomes for FY22
The tables below set out both actual remuneration outcomes for Executive KMP in FY22 and also the total remuneration in FY22 and
FY21, calculated in accordance with statutory accounting requirements.
FY22 actual remuneration outcomes for Executive KMP
This table outlines the cash remuneration that was received by Executive KMP in FY22 which includes their fixed remuneration and
the cash, non-deferred portion of any FY22 STI payments (which are typically payable in November 2022). The table also includes
the value of deferred STI rights, the value received for any LTI awards which vested during the year and any termination payments
made in respect of service during FY22.
This actual remuneration outcomes table differs from the statutory remuneration table as the latter table was calculated in
accordance with statutory rules and the applicable accounting standards.
Financial
Year
Fixed
remunerationi
Cash STIii
Vested prior
year DSTI
Rightsiii
Vested prior
year LTI
Rights
awardsiv
Termination
Benefits
Full Year
Total
Current Executive KMP
Mark Palmquist
2022
$1,271,609
–
$233,588
–
–
$1,505,197
Bryan Bechard
2022
$456,701
–
$30,105
–
–
$486,806
Tiago Darocha
2022
$735,428
–
–
–
–
$735,428
Ryan Dutcherv
2022
$151,134
–
–
–
–
$151,134
Former Executive KMP
Amy Spanikvi
2022
$372,295
–
$56,339
–
$249,940
$678,573
Explanatory notes to the Actual Remuneration outcomes table. All Executive KMP reside and work in the United States. Amounts have been converted
using the average exchange rate for the period the remuneration is reported. In FY22 the exchange rate used was USD1: AUD1.4034.
i.
Fixed remuneration includes any 401K contributions by United Malt and the value of any non-monetary benefits such as health insurance
premiums, and Life and Disability insurance. For Mr Darocha, it also includes relocation assistance paid in FY22.
ii.
Cash STI is the cash portion of the FY22 STIP payable in November 2022.
iii.
Deferred STI Rights values are the value of any Deferred STI Rights which vested in FY22, valued on the date vested in November 2021 (at
$4.19).
iv.
This is the value of any prior year LTI awards which vested in FY22. The only awards which could have vested in FY22 were the One-off awards
to the MD & CEO of which no portion vested as the performance hurdles were not met.
v.
Mr Dutcher was appointed Interim CFO on 6 July 2022. His fixed remuneration is shown from that date and includes a sum payable as
relocation assistance. As he is on a fixed term contract, he was not entitled to any additional benefits in FY22.
vi.
Ms Spanik was an Executive KMP until 6 July 2022. Her fixed remuneration is pro-rated to this date. Ms Spanik received a severance benefit
and payment in lieu of six months’ medical and dental benefits payable on cessation of her employment on 4 October 2022 and this value is
show under Termination Benefits.
Annual Report 2022 47
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UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
FY22 and FY21 statutory remuneration outcomes for Executive KMP
Amount A$
Short-Term Benefits
Post-Employment
Benefits
Share-based
Payments
Financial Year
Base Salary
Cash STI
Non-Monetary
benefitsi
401K
Termination
Benefits
Rights – STI
deferralii
Rights – LTI
awardsii,iii
Full Year Total
Current Executive KMP
Mark
Palmquistiv
2022
$1,242,696
$0
$21,698
$7,215
–
$193,904
–$20,994
$1,444,519
2021
$1,178,674
$191,535
$16,779
$9,114
–
$292,567
$538,853
$2,227,523
Bryan
Bechard
2022
$420,354
$0
$27,180
$9,167
–
$28,070
–$628
$484,143
2021
$393,628
$31,641
$24,752
$7,602
–
$40,408
$56,999
$555,030
Tiago
Darochav
2022
$699,313
$0
$26,748
$9,368
–
$26,206
$35,279
$796,914
2021
$185,116
$14,394
$3,919
$2,050
–
$2,015
–
$207,494
Ryan
Dutchervi
2022
$151,134
–
–
–
–
–
–
$151,134
Former Executive KMP
Amy Spanikvii
2022
$343,489
$0
$20,693
$8,114
$249,940
$59,072
$8,452
$689,759
2021
$432,602
$42,179
$24,273
$11,221
–
$69,003
$71,113
$650,391
Explanatory notes to the Statutory Remuneration outcomes table. All Executive KMP reside and work in the United States. In the above table amounts
have been converted into AUD using the average exchange rate for the period the remuneration is reported. In FY22 and FY21 the exchange rates
used were USD1: AUD1.4034 and USD1: AUD1.3943 respectively.
i.
Non-monetary benefits include the gross value of health insurance, basis life and disability benefits and vehicles (if applicable). All Executive
KMP are based in the United States and have no superannuation or long service leave entitlements.
ii.
The value of the STI deferral and the LTI awards represents the accounting value rather than the cash value to participants. In 2021, all
Executive KMP STI awards were paid 50% in cash and 50% in STI deferral awards. No STI or STI Deferral awards were made in FY22. For Mr
Darocha the FY22 STI deferral amount includes the FY22 portion of the amortised value of the Retention award he received in the year.
iii.
Where allowed under the applicable accounting standards, LTI award values have been updated to reflect the probability of vesting.
iv.
Mr Palmquist’s annual base salary remained unchanged at US$885,500.
v.
Mr Darocha commenced employment on 12 July 2021 and his FY21 remuneration is shown from that date. The base salary amounts shown
include assistance paid to Mr Darocha for his relocation, both in FY21 and FY22. Mr Darocha’s FY21 STI payment is also pro-rated based on the
portion of the year he was employed.
vi.
Mr Dutcher commenced as the Interim CFO from 6 July 2022 and his FY22 remuneration is shown from that date. The amount shown includes
assistance paid to Mr Dutcher for his relocation.
vii.
Ms Spanik ceased to be an Executive KMP on 6 July 2022 and her base salary, non-monetary benefits and 401K are shown up to this date. Ms
Spanik received a severance benefit and payment in lieu of six months’ medical and dental benefits payable on cessation of her employment on
4 October 2022 and this value is shown under Termination Benefits. Any remaining value associated with STI deferral and the LTI awards has
been accelerated into FY22.
Executive KMP mix of fixed and variable remuneration
The proportion of each Executive KMP’s remuneration for FY22 that was fixed, and the portion that was subject to a performance
measure, is set out below. The percentages are based on the FY22 statutory remuneration disclosures above (including the STI
deferral and LTI awards values which are determined in accordance with accounting standards) and do not correspond to the target
remuneration percentages set out below.
Executive KMPi
Fixed
Variable (including short-term and
long-term incentive payments)ii
Executive KMP
Mark Palmquist
88%
12%
Bryan Bechard
94%
6%
Tiago Darocha
92%
8%
Former Executive KMP
Amy Spanik
90%
10%
i In FY22 Mr Dutcher received no STI payment or LTI award as he is engaged on a fixed term contract.
ii The lower variable remuneration percentages reflect no STI awards being made in FY22 and reductions in the valuation of outstanding LTI awards
to reflect the possibility of vesting (where required by accounting standards).
4. Executive Remuneration Policy
Our Remuneration Policy aims to engage and retain executive talent, while motivating them to deliver business strategy and key
performance targets that create value for shareholders. It seeks to provide remuneration that is structured in a manner that also
encourages behaviours consistent with United Malt’s corporate values.
The Board affirmed its commitment to the following principles underlying the Company’s Remuneration Policy:
•
Fixed remuneration is determined at a level to attract and retain top talent with a market competitive offering. It is determined
regarding the complexity, responsibility, competence, and levels that are competitive with remuneration levels for employees
in comparable roles in the relevant market.
•
Variable remuneration plans link outcomes to achievement of business and individual goals, as well as to behaviours which are
consistent with United Malt’s values.
•
United Malt aims to position Executive KMP at the median of the relevant market for fixed remuneration with a range up to the
75th percentile of total remuneration for outstanding performance.
Annual Report 2022 49
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UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
Remuneration framework
Remuneration for Executive KMP comprises fixed and variable (‘at risk’) elements. A significant proportion of the total remuneration
for Executive KMP is ‘at risk’ to create alignment with United Malt’s strategic objectives and Shareholder interests.
The executive remuneration framework elements and their links to performance are outlined below.
Base Salary
Variable Remuneration (At Risk)
Elements
Salary (and benefits as relevant
to local conditions).
Short-Term Incentive (STI)
Long-Term Incentive (LTI)
Delivery Method
Cash
Cash and Equity
(Deferred Rights)
Equity
(Performance Rights)
Intent
Attract and retain talent by providing
competitive package, recognising job size,
complexity, and capability.
Reward for short-term business
and personal goals with equity
deferral, alignment with
sustainable shareholder return
performance.
Alignment with long-term
business goals and shareholder
value creation.
Link to
Performance
Suitable and appropriate reward
commensurate with the role.
A balanced Corporate Scorecard of
key business measures and an
Individual Scorecard with
measures aligned to core team
and individual accountabilities.
Key measures set with three-
year targets to focus on cost
efficiency and sustainable
improvement.
Performance
Measures
Position requirements and
accountabilities that align to achieving
business strategy.
Financial (EBIT), Process –
including Waste Reduction, Health
and Safety, Customer, People and
Individual measures.
• ROCE
• ATSR
• Strategic measures
How it works
• Set in relation to relevant external
market considering experience and
performance.
• Target median of the market for base
salary with range up to 75th percentile
of base plus variable for outstanding
performance.
• 50% paid in cash.
• 50% deferred over 12 and 24
months into equity.
• Measured against Scorecards
(financial, process, customer,
safety, people, team and
individual measures).
• Delivered as Rights.
• Vest after three years subject
to performance conditions of
50% ROCE, 25% ATSR and
25% strategic measures.
Remuneration mix
The tables show the breakdown of total remuneration at target achievement by our three remuneration elements in accordance with
our policy. The split of cash and equity is considered important for building alignment with shareholder value creation. The balance
of the pay mix, and the cash and equity mix, will continue to be reviewed over time.
Executive KMP remuneration mix at target
5. Variable Remuneration – Short-term Incentive
The United Malt STI Plan rewards achievement against annual business goals. It forms a part of our attraction strategy and provides
for both recognition and retention. The terms of the STI plan are outlined below.
Term
Details
Eligibility
All permanent Executive KMP are eligible to participate in the STI. The United Malt Board determines the employees
who are eligible to participate in the STI from time to time.
Opportunity
The opportunity is set as a percentage of base salary. Maximum opportunity is 1.5 times target (150%).
The CEO has a target opportunity of 100% and a maximum opportunity of 150%.
The target opportunity for the remaining Executive KMP is 60%, with a maximum opportunity of 90%.
Form of award
The proportion of the STI award that vests is delivered:
•
50% as cash; and
•
50% deferred into rights to acquire United Malt shares.
Deferred rights do not carry any voting or dividend rights, but dividend equivalent payments (which may be delivered
in cash or additional shares) may be made on vesting of the rights.
Deferred STI
award and
deferral period
The deferred rights will vest in two tranches – 50% of the deferred awards vest after 12 months and 50% after 24
months.
Performance
period
Performance was tested over one financial year, 1 October 2021 to 30 September 2022.
Performance
measures
The United Malt STI Corporate Scorecard measures four key financial and non-financial segments and each segment
within the Corporate Scorecard is weighted the same for the MD & CEO and the other KMP. The Corporate Scorecard
is either 60% (MD & CEO, CFO) or 50% (COO, President Warehouse and Distribution) of the Executive KMP’s total
target opportunity. The remaining 40% or 50% of target opportunity is assessed by team or individual metrics within
an Executive KMP’s Individual Scorecard.
Corporate Scorecard
1. Financials/Growth: (EBIT) 60% weighting
2. Process: (Product Non-conformance and tracking, Process and Systems implementation,
and Waste Management and Landfill Reduction. 10% weighting
3. Customers (NPS and DIFOT Q) 10% weighting
4. People and Safety: RIFR, EH&S Leadership Engagement, Employee Engagement
and successful establishment of OCI action plans 20% weighting
Malus
The United Malt Board in its discretion may determine that some, or all, of an employee’s deferred STI should be
forfeited for gross misconduct, material misstatement or fraud.
Cessation of
employment
Unless the United Malt Board determines otherwise, STI awards will:
a. remain on foot to be paid, or be awarded in full, at their normal payment or grant date for cessation of
employment due to any other reason (including redundancy, disability, death or retirement); or
b. lapse where the participant ceases employment due to resignation or termination for cause.
Change of
Control
All deferred STI awards will vest upon a change of control unless the United Malt Board determines otherwise.
Annual Report 2022 51
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UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
6. Variable Remuneration – Long-term Incentive
The LTI Plan awards are granted under the United Malt Employee Incentive Plan Rules and are intended to reward superior long-
term performance and encourage retention and alignment with United Malt shareholders.
The terms of the Long-term Incentive Plan are outlined below.
Term
Details
Eligibility
The United Malt Board determines the employees who are eligible to participate. Currently, the LTI is open only to
Executive KMP.
Instrument
Performance rights, each being a right to acquire a United Malt share for nil consideration, upon specified
performance measures being satisfied over the relevant performance period. Performance rights will not carry
voting or dividend rights.
The Board retains discretion to settle Vested Rights in cash by making a cash payment equal to the Cash Equivalent
Value in lieu of an allocation of Shares.
Opportunity
The number of Performance Rights granted to each participant is determined by dividing the dollar value of a
participant’s LTI opportunity by the Volume Weighted Average Price (VWAP) of shares over a defined period. For
the FY22 LTI the VWAP was the 20 trading days immediately following the date on which the Company’s full-year
results were released for the financial year ended 30 September 2021.
For FY22 the LTI opportunity was as follows:
•
CEO – 100% of base salary.
•
All other Executive KMP – 40% of base salary.
Performance
period
The FY22 LTI performance period commenced on 1 October 2021 and ends on 30 September 2024.
Performance
conditions
Vesting of Performance Rights under the FY22 LTI plan will be subject to the participant’s continued employment
with United Malt and satisfaction of specified performance conditions.
The performance conditions applicable to the FY22 award under the LTI plan are as follows:
a.
Return on Capital Employed (ROCE) – 50% of the FY22 LTI grant
Defined as EBIT divided by capital employed. Earnings before interest and taxes (EBIT) divided by capital
employed (being the sum of United Malt’s total borrowings net of cash assets and average shareholders’ equity).
An average of the three financial year ROCE outcomes will be calculated to determine the ROCE over the three-
year vesting period and then measured against the applicable ROCE targets.
b.
Absolute total shareholder return (ATSR) – 25% of the FY22 LTI grant
Defined as the compound annual growth rate (CAGR) of United Malt’s TSR over the performance period
measured against the applicable ATSR targets
c.
Strategic measures – 25% of the FY22 LTI grant
In assessing performance against pre-set Strategic measures, the Board will evaluate how well management has
delivered against key projects and goals over the three-year performance period from 1 October 2021 to 30
September 2024. A major focus will be Transformation strategy and the drive to create a more streamlined and
efficient organisation and improve capabilities by implementing simplified and standardised processes, skills
and systems.
In addition, Executive KMP will also be assessed regarding the on-time and on-budget delivery of major capital
projects and management’s success in identifying and executing growth opportunities, including greenfield
business developments in new geographies.
The key criteria to be used by the Board are as follows:
• Achieving annualised EBITDA benefits (savings or revenues).
• Achieving the agreed benefits within the timeframes and financial goals.
• Demonstrating teamwork to achieve good customer and stakeholder management.
• Adapting to any material changes in circumstances impacting the timeframes and estimated benefits.
Performance against these measures including detail regarding the annualised benefits achieved, the status of the
capital projects delivered and the progress on the identification and execution of organic growth opportunities will
be disclosed in the FY24 Remuneration Report.
Term
Details
FY22 Vesting
schedules
a.
The proportion of rights that may vest based on ROCE performance is determined by the Board, based on the
following vesting schedule.
ROCE
Percentage of ROCE rights to vest
Below threshold ROCE target – 6%
Nil
Equals threshold ROCE target – 6%
25%
Between threshold and maximum ROCE target
Straight-line between 25% and
100%
At or above maximum ROCE target – 10%
100%
b.
The proportion of rights that may vest based on ATSR performance is determined by the Board based on the
following vesting schedule.
Absolute TSR
Percentage of TSR rights to vest
Below threshold ATSR CAGR target – 6%
Nil
Equals threshold ATSR CAGR target – 6%
25%
Within target range of 6% to 10% TSR CAGR
Straight-line between 25% and 100%
At or above maximum ATSR CAGR target – 10%
100%
c.
The proportion of rights that may vest based on the execution of Strategic measures is determined by the Board
based on the following vesting schedule.
Strategic measures
Percentage of Strategic rights to vest
Majority of strategic measures not achieved
Nil
Majority of strategic measures partially
achieved
25% to 100%
Majority of strategic measures fully achieved
100%
In determining whether the strategic measures are achieved the Board will primarily examine the performance
against the defined financial targets associated with the applicable measures, but also take into consideration
qualitative factors such as execution against agreed timeframes.
Vesting
Based on performance relative to the performance conditions, the relevant number of performance rights will vest,
and each participant will receive a United Malt share in respect of each vested performance right (unless the United
Malt Board, in its sole discretion, determines to settle vested performance rights by making a cash equivalent
payment in lieu of the allocation of United Malt shares).
Disposal
restrictions
In accordance with the Minimum Shareholding Policy (MSP), a participant must seek approval to sell or transfer any
Shares allocated on Vesting of the Rights. Approval will be granted if the participant meets or exceeds the minimum
holding level set under the MSP (and would continue to satisfy the holding requirements immediately after the
disposal).
However, a participant may seek approval to dispose of Shares at any time if compliance with the MSR will cause
severe financial hardship (including meeting a tax obligation in connection with participation in the Plan) or could
prevent a participant from complying with an order from a court of law.
Malus
The United Malt Board in its discretion may vary downwards the number of an employee’s shares due to vest, if the
Board determines that the performance of the Group, any member of the Group, any business, area or team, and the
conduct, capability, or performance of the Participant, justifies the variation.
Cessation of
employment
Unless the United Malt Board determines a different treatment, where a participant ceases employment with United
Malt:
a.
as a result of resignation or termination for cause, all unvested performance rights will lapse; or
b.
for any other reason (including redundancy, disability, death or retirement), a pro-rata number of the
participant’s unvested performance rights (based on the proportion of the performance period that has
elapsed at the time of cessation) will remain on foot and will be eligible to vest on the original vesting date. To
the extent the relevant performance hurdles are satisfied the shares will then vest.
Change of
Control
In the event of a change of control all unvested performance rights will vest unless the United Malt Board determines
otherwise.
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UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
Retention award
In FY22, a two-year retention incentive was made to the Chief Operating Officer in consideration of his key role and his recent
tenure. This award, worth approximately 60% of base salary, has a value tied to the United Malt share price, and will vest in July
2024, subject to a service condition and the achievement of performance hurdles aligned to the optimisation of United Malt’s
operations integrated network.
7. Legacy Long-term Incentive awards
As a stand-alone Company from 24 March 2020, there are no United Malt prior year LTI awards able to vest in FY22. The One-off
Award to the MD & CEO has a performance period ending on 30 September 2021 and was assessed by the Board in FY22 (although
no portion vested). Details regarding this award are set out in Section 2 of this Report.
FY20 Long-term Incentive
The first United Malt LTI (the FY20 LTI) was offered to Executive KMP in September 2020. Due to the timing of the grant and
demerger, it has a slightly shortened performance period (2.5 years) commencing on the date United Malt shares commenced
trading on the ASX (24 March 2020) and ending on 30 September 2022.
There were two performance hurdles, ROCE and ATSR, each applying to 50% of the FY20 LTI award.
The proportion of rights that may vest based on ROCE performance was determined by the Board based on the following vesting
schedule:
ROCE
Percentage of ROCE rights to vest
Below threshold ROCE target – 8.6%
Nil
Equals threshold ROCE target – 8.6%
25%
Between threshold and maximum ROCE target
Straight-line between 25% and 100%
At or above maximum ROCE target – 11.4%
100%
The proportion of rights that may vest based on ATSR performance was determined by the Board based on the following vesting
schedule:
Absolute TSR
Percentage of ATSR rights to vest
Below threshold ATSR CAGR target – 6.0%
Nil
Equals threshold ATSR CAGR target – 6.0%
25%
Within target range of 6% to 10% TSR CAGR
Straight-line between 25% and 100%
At or above maximum ATSR CAGR target – 9.0%
100%
All other significant terms and conditions, including the definition of the ROCE and ATSR performance conditions, are as per the
FY22 LTI award terms noted above.
FY20 LTI vesting outcomes
ROCE
United Malt’s ROCE performance over the period of 24 March 2020 to 30 September 2022 was 4.8% versus a threshold of 8.6%, so
no portion of this award will vest.
Absolute TSR
United Malt’s ATSR performance over the period of 24 March 2020 to 30 September 2022 was –8.8% versus a threshold of 6%, so no
portion of this award will vest.
FY21 Long-Term Incentive
The FY21 LTI was offered to Executive KMP in March 2021, with a performance period commenced on 1 October 2021 and ending
on 30 September 2023. Due to the timing of the grant and demerger, it has a slightly shortened performance period (2.5 years)
commencing on the date United Malt shares commenced trading on the ASX (24 March 2020) and ending on 30 September 2022.
There were two performance hurdles, ROCE and absolute TSR, each applying to 50 percent of the FY20 LTI award.
The performance conditions applicable to the FY21 award under the LTI plan are as follows:
a.
Return on Capital Employed (ROCE) – 50% of the FY21 LTI grant
The ROCE performance hurdle and vesting schedule is the same as outlined in the FY22 LTI awards above.
b.
Absolute total shareholder return (ATSR) – 25% of the FY21 LTI grant
The ATSR performance hurdle and vesting schedule is the same as outlined in the FY22 LTI awards above.
c.
Strategic execution – 25% of the FY21 LTI grant
Realisation of the pre-determined agreed metrics that will demonstrate the achievement of United Malt’s Strategic Plan. There are a
variety of quantified metrics predominately designed to increase revenue or manage costs in the following key areas:
•
Profitability and customer performance – realign and enhance our marketing and decision-making capabilities with a focus on
customer efficiencies and increased profitability.
•
Operating Model – reposition our operating model to reflect the needs of United Malt as a stand-alone, listed Company involved
in Malt and beverage ingredient products.
•
Growth – establishing and executing strategic growth opportunities.
The other terms and conditions are substantially the same as outlined for the FY22 LTI awards above.
Annual Report 2022 55
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UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
8. Remuneration in FY23
Base salary
There will be no changes to the base salary for the MD & CEO. The only Executive KMP to receive a salary increase is the Interim CFO,
who receives a 6.25 percent increase due to a contract extension from 2 January 2023 to 30 September 2023 to ensure continuity in
this role until after a new CEO is appointed.
Short-term incentive
There will be no change to STI quantum for any Executive KMP in FY23. The FY23 STI structure will remain similar to the FY22 Plan,
although the weighting on the primary financial measure, EBIT, increases to 70 percent to emphasise the importance of improving
the financial performance in FY23. The weighting of the Corporate Scorecard also increases to 70 percent of the Executive KMP total
STI opportunity to reinforce the importance of achieving the financial targets, with the remaining STI opportunity (30 percent) in
Individual Scorecards tied to objectives aligned with the Executive’s direct responsibilities.
Long-term incentive
ROCE is a measure of profitability and the efficient use of capital efficiency. Both are critical to our business. ATSR is a measure of
shareholder value. These are considered key drivers for the long-term performance of the Company and its shareholders over the
three-year FY23 LTI performance period which commenced on 1 October 2022 and ends 30 September 2025.
An overview of the weightings and definitions for our FY23 LTI measures is set out below.
Measure
Weighting
Definition
ROCE
50%
Earnings before interest and taxes (EBIT) divided by capital employed (being the sum of United
Malt’s total borrowings net of cash assets and average shareholders’ equity). An average of the
three financial year ROCE outcomes will be calculated to determine the ROCE over the three-
year vesting period.
The FY23 LTI ROCE threshold, target and stretch metrics have been increased relative to the
FY22 awards and will be 8%, 10% and 12% respectively. This is significantly above the
Company’s recent ROCE (which have been 7.5%, 4.8% and 2.1% in FY20, FY21 and FY22
respectively) to reflect the improved returns sought by the Board and management due to
capital invested and increased efficiencies made in enhanced processes and systems in FY22 and
beyond.
One-third (33.3%) of the award vests on achieving threshold; two-thirds (66.6%) vests on
achieving target; and at stretch performance, 100% of the award vests (with straight-line
vesting in between these metrics).
ATSR
50%
The compound annual growth rate of United Malt’s TSR over the performance period.
The FY23 LTI ATSR threshold, target and stretch metrics have been significantly increased from
those used in the FY22 awards to 12%, 16% and 20% CAGR TSR respectively. This will be
calculated off a starting price of $3.05 (one-month VWAP of United Malt’s share price from the
beginning of performance period) and reflects the Board and management’s priority to
significantly increase United Malt’s share price to deliver value to our shareholders.
One-third (33.3%) of the award vests on achieving threshold; two-thirds (66.6%) vests on
achieving target; and at stretch performance, 100% of the award vests (with straight-line
vesting in between these metrics).
As the MD & CEO will retire during FY23 he will not receive a FY23 LTI award.
Non-Executive Director fees
No changes are proposed to any Non-Executive Director fees in FY23.
9. Non-Executive Director fees
Full-year Non-Executive Director fees are set out below. They reflect the approach agreed as a result of the review undertaken in
preparation for the demerger. The fees were positioned at market median for base fees, committee chair and membership fees, and
aligned with positioning against companies of a similar size.
Fees are paid from the $1,500,000 aggregate annual fee pool. This pool value was set to allow for growth and changes within the
structure of the United Malt Board over time. This fee pool was approved as part of the Scheme approved by shareholders in
November 2019 and remained unchanged at the 2020 AGM. Total Director fees paid during FY22 was $952,505. These fees
represented 64 percent of the fee pool.
No changes to Board fees will be made for FY23, notwithstanding the increase in superannuation contributions.
FY22 Non-Executive Director fees
Function
Role
Fees A$ (including superannuation)
Board
Chairman
$340,000
Non-Executive Director
$120,000
Board Committees:
•
Audit and Risk
•
Nominations and Remuneration
•
Environment, Health and Safety
Chair
$22,000
Committee Member
$11,500
Superannuation contributions are made in accordance with Australian superannuation legislation at a rate of 10%, and 10.5% from
1 July 2022. Superannuation is included in the fees presented above.
Committee fees are not paid to the Chairman of the Board.
FY22 and FY21 Non-Executive Director fees (statutory remuneration outcomes)
The following table sets out the audited Non-Executive Director fees in FY22 and FY21 calculated in accordance with statutory
accounting requirements, and which reflect the remuneration received during the year. Non-Executive Directors are not eligible to
receive any cash-based or equity-based incentives.
Financial
Year
Board and
Committee Fees
Superannuation
Other Benefits i
Total Fees
Non-Executive Directors
Graham Bradley AM
2022
$308,741
$31,260
$12,000
$352,001
2021
$310,149
$29,851
–
$340,000
Patrick E. Boweii
2022
$10,866
–
–
$10,866
Barbara Gibson
2022
$138,596
$14,031
–
$152,627
2021
$140,023
$13,477
–
$153,500
Jane McAloon
2022
$149,663
$3,837
–
$153,500
2021
$153,500
–
–
$153,500
Gary W. Mizeiii
2022
$142,008
–
–
$142,008
2021
$133,508
–
–
$133,508
Terry Williamson
2022
$139,387
$14,115
–
$153,502
2021
$140,023
$13,477
–
$153,500
i.
Other benefits include travel allowances paid for international travel for overseas Board meetings.
ii.
Mr Bowe was appointed 1 September 2022. His fees are paid in USD. The USD:AUD exchange rate used for the FY22 fees is 1:1.4034.
iii.
Mr Mize was appointed 23 October 2020. His fees are paid in USD. The USD:AUD exchange rate used for the FY22 fees is 1:1.4034.
Annual Report 2022 57
56
UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
10. Remuneration Governance
The Board has ultimate responsibility for the Company’s remuneration policies and takes that responsibility very seriously. Strong
governance and oversight processes have been established for remuneration, assisted by the Nominations and Remuneration
Committee which comprises three Non-Executive Directors. The Committee assists the Board to satisfy itself that the Company:
•
has coherent remuneration and people management policies and practices which are aligned with the Company’s purpose,
values, strategic objectives and risk appetite and which enable the Company to attract, motivate and retain capable and talented
Directors, Executives and employees;
•
fairly and responsibly remunerates Directors, Executives and employees having regard to the performance of the Company and
best market practices; and
•
delivers on its overall people strategy, with regard to the Company’s succession planning, talent management, diversity,
performance management and employee relations policies.
The Nominations and Remuneration Committee operates under a Charter which was established at the commencement of the
Company and will be reviewed every two years. The Charter is available on the Company’s website.
Minimum Shareholding Policy
A Minimum Shareholding Policy was approved in July 2020 in recognition of the importance of aligning the interests of United Malt’s
Non-Executive Directors and Executives with the long-term interests of the Company’s shareholders. Non-Executive Directors must
have a minimum shareholding equal to one times base fees within five years, Executive KMP must hold one times base salary, and
the CEO must hold two times base salary also within five years from commencement of the policy or appointment. Compliance is
reviewed by the Nominations and Remuneration Committee following the end of each financial year. Executives are required to
retain all shares acquired from participation in the United Malt employee incentive plan (other than shares sold to cover tax
obligations) until such time as they meet the minimum shareholding. They are not expected to buy shares on-market to reach the
minimum shareholding. A full copy of the Policy is available on the Company website.
Remuneration Advisers
The Board and the Nominations and Remuneration Committee may seek advice from external advisers as required.
In FY22 no remuneration recommendations relating to KMP remuneration were obtained.
Employment Terms
The Executive KMP are employed under employment contracts which are open-ended, aside from Mr Dutcher who is currently
engaged on a fixed term contract.
The Non-Executive Directors have a letter of appointment which outlines their duties and their remuneration. Non-Executive
Directors are not eligible to receive variable pay, bonuses, or termination payments.
Executive KMP key employment terms
A summary of the key employment terms for the Executive KMP is shown in the table below.
Executive KMP
Notice period
Company
Notice period
KMP
Termination entitlements
MD & CEO
6 months
6 months
Redundancy – 6 months
Other Executive KMP*
3 months
6 months
Redundancy – 6 months
* This does not include Mr Dutcher who is currently engaged via an interim fixed term contract, which can be terminated by ei ther party by
30 days’ written notice.
Amy Spanik – Chief Financial Officer
Ms Spanik resigned from United Malt on 6 July 2022 and ceased to be an Executive KMP from this date. A three-month notice period
was agreed to assist the transition of an Interim Chief Financial Officer and her last date of employment was 4 October 2022. The
Board agreed a six-month severance payment and a gross payment designed to cover the cost of six months’ medical and dental
benefit. Ms Spanik’s LTI awards will be pro-rated based on the portion of the vesting period remaining for each respective award.
Existing Deferred STI awards will be retained and vest on their normal vesting dates. Ms Spanik is not eligible for a FY23 STI or LTI
award.
Ryan Dutcher – Interim Chief Financial Officer
Mr Dutcher was appointed as interim Chief Executive Officer on 6 July 2022 on an initial six-month contract which has been
extended to 30 September 2023 to ensure continuity in this role until after a new CEO is appointed. Mr Dutcher received relocation
assistance and is eligible for a performance bonus if the agreed criteria are met at the end of the initial six-month contracted term.
11. Shareholdings and other mandatory disclosures
Movement of Rights held during the FY22 reporting period
Details of the issue of Performance Rights and Deferred STI Rights in the Company are shown in the table below.
Role
Balance as at
1 October 2021
Granted during
the year
Exercised
during the year
Forfeited or
lapsed during
the year
Balance as at
30 September
2022
Vested and
exercisable as
at 30
September
2022
Current KMP
Mark Palmquist
956,325
342,289
(55,749)
(280,543)
962,322
–
Ryan Dutcher
–
–
–
–
–
–
Bryan Bechard
82,289
47,785
(7,185)
–
122,889
–
Tiago Darocha
–
62,882
–
–
62,882
–
Former Executive KMP
Amy Spaniki
111,628
53,708
(13,446)
–
151,890
–
I Ms Spanik’s unvested LTI awards are shown as at the cessation of her time as KMP as at 6 July 2022. On cessation of her employment on 4 October
2022 her various LTI awards were pro-rated based on the period of the respective vesting periods she was employed and 50,633 Performance Rights
lapsed.
Annual Report 2022 59
58
UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
Number of rights granted, vested and forfeited under the deferred STI and LTI
awards
Details of the number of rights granted to Executive KMP, as well as the number of rights that vested or were forfeited during the
year are provided below.
Equity granted
Vested in FY22
Plan
Number
of rights
Grant date
Fair value
at grant
Date on which
rights may be
exercised i
Maximum
value of
future years’
awards
Vested or
(forfeited)
in the
year
Number
of
ordinary
shares
Executive KMP
Mark
Palmquist
FY22 LTI
295,208
21 Feb 2022
$1,032,490
Dec 1, 2024
$374,262
FY21 Deferred STI
47,081
2 Dec 2021
$ 192,561
16 Nov 2022,
Nov 2023
$48,048
FY21 LTI
268,218
11 Mar 2021
$ 869,697
Nov 2023
$50,728
–
–
FY20 Deferred STI
111,497
22 Dec 2020
$ 451,563
16 Nov 2022
$14,529
50%
55,749
FY20 LTI
296,067
1 Sept 2020
$ 789,019
16 Nov 2022
$15,914
–
–
One-off Awardii
280,543
1 Sept 2020
$ 758,869
Not applicable
–
(100%)
–
Bryan
Bechard
FY22 LTI
40,008
24 Dec 2021
$ 142,428
Dec 1, 2024
$51,532
–
–
FY21 Deferred STI
7,777
2 Dec 2021
$ 31,808
16 Nov 2022,
Nov 2023
$7,937
FY21 LTI
31,562
11 Mar 2021
$ 102,340
Nov 2023
$5,969
FY20 Deferred STI
14,369
22 Dec 2020
$ 58,194
16 Nov 2022
$1,872
50%
7,185
FY20 LTI
36,358
1 Sept 2020
$ 96,894
16 Nov 2022
$1,954
–
–
Tiago
Darocha
FY22 LTI
59,344
24 Dec 2021
$ 211,265
Dec 1, 2024
$76,438
–
–
FY21 Deferred STI
3,538
2 Dec 2021
$ 14,470
16 Nov 2022,
Nov 2023
$3,611
–
–
Former Executive KMP
Amy
Spanikiii
FY22 LTI
43,340
24 Dec 2021
$ 154,290
Dec 1, 2024
–
–
–
FY21 Deferred STI
10,368
2 Dec 2021
$ 42,405
16 Nov 2022,
Nov 2023
–
FY21 LTI
39,377
11 Mar 2021
$ 127,680
Nov 2023
–
FY20 Deferred STI
26,891
22 Dec 2020
$ 108,909
16 Nov 2022
–
50%
13,446
FY20 LTI
45,360
1 Sept 2020
$ 120,884
16 Nov 2022
–
–
–
i.
This column reflects the financial year in which the award will vest, rather than the final year of the vesting period.
ii.
All awards of the FY20 LTI will lapse in November 2022, as the performance hurdles for the Award have not been met.
iii.
None of Ms Spanik’s LTI awards lapsed in FY22. A pro-rated portion (50,633 Performance Rights) will lapse in FY23 on her cessation
of employment based on the portion of the respective vesting periods she was employed.
Shares held by KMP
The table below details the number of Company shares, in which KMP have a relevant interest, as at the date of this report.
FY22
Role
Balance
as at
30 September 2021
Vested
Purchased
Sold
Balance
as at
30 September 2022
Executive KMP
Mark Palmquist
437,473
55,749
50,000
–
543,222
Bryan Bechard
2,898
7,185
–
(2,703)
7,380
Tiago Darocha
–
–
–
–
–
Ryan Dutcheri
–
–
–
–
–
Former Executive KMP
Amy Spanikii
10,347
13,446
–
(3,228)
20,565
Non-Executive Directors
Graham Bradley AM
101,395
–
110,000
–
211,395
Patrick E. Boweiii
–
–
–
–
–
Barbara Gibson
34,895
–
–
–
34,895
Jane McAloon
22,810
–
–
–
22,810
Gary W. Mize
17,696
–
30,503
–
48,199
Terry Williamson
49,586
–
7,000
–
56,586
FY21
Role
Balance
as at
1 October 2020
Vested
Purchased
Sold
Balance
as at
30 September 2021
Executive KMP
Mark Palmquist
427,473
–
10,000
–
437,473
Bryan Bechard
2,898
–
–
–
2,898
Tiago Darocha
–
–
–
–
–
Former Executive KMP
Amy Spanik
8,183
2,861
–
697
10,347
Non-Executive Directors
Graham Bradley AM
81,395
–
20,000
–
101,395
Barbara Gibson
29,895
–
5,000
–
34,895
Jane McAloon
12,076
–
10,734
–
22,810
Gary W. Mizeiv
–
–
17,696
–
17,696
Terry Williamson
34,586
–
15,000
–
49,586
i.
Mr Dutcher was appointed Interim CFO on 6 July 2022 and any shareholdings are shown from this date.
ii.
Ms Spanik ceased to be an Executive KMP as at 6 July 2022 and her FY22 shareholdings balance is shown as at this date.
iii.
Mr Bowe was appointed to the Board effective 1 September 2022 and any commencing balance shareholdings are shown from this date.
iv.
Mr Mize was appointed to the Board effective 23 October 2020 and any applicable commencing balance shareholdings are shown from this
date.
Annual Report 2022 61
60 UNITED MALT
REMUNERATION REPORT
REMUNERATION REPORT
Link between United Malt financial performance and executive remuneration
Summary of performance over 2022 - 2020 and link to remuneration
2022
2021
2020
EBIT
$29.8M
$62.7M
$92.0M
EBITDA
$91.8M
$123.3M
$156.1M
Dividends (cents per share)
1.5 cents
5.5 cents
3.9 cents
Share pricei
$3.13
$4.10
$4.12
Share price (three-month average)ii
$3.40
$4.38
$4.08
EPS
3.9 cents
4.6 cents
16.8 cents
Average Executive KMP STI payout (relative to target)
0%
35%
45%
LTI vesting outcomes
0%
0%
n/a
I. The share price quoted is the closing price on the last day of trading in the financial year.
II. This is the three-month average closing price to and including the last day of trading in the financial year.
Transactions and Loans to KMP
No transactions or loans involving Directors or Executive KMP, or their related parties, were made.
Signed on behalf of the Board in accordance with a resolution of Directors.
Graham Bradley AM
Chairman
15 November 2022
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, 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 United Malt Group Limited for the year ended 30 September 2022, 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 United Malt Group Limited and the entities it controlled during the
period.
Scott Walsh
Sydney
Partner
PricewaterhouseCoopers
15 November 2022
Annual Report 2022 63
62
UNITED MALT
REMUNERATION REPORT
INDEPENDENT AUDITOR’S DECLARATION
Financial Report
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 September 2022
Note
2022
$ M
2021
(restated)
$ M
Revenue
1.2
1,406.7
1,235.0
Other income / (loss)
1.3
11.9
6.0
Raw materials and consumables used
(1,113.9)
(924.4)
Employee benefits expense
1.3
(118.3)
(116.4)
Finance costs
(14.2)
(10.5)
Depreciation and amortisation
3.2,3.3,3.4
(62.0)
(60.6)
Occupancy costs
(3.9)
(3.0)
Repairs and maintenance
(19.3)
(18.0)
Other expenses
1.3
(68.9)
(75.6)
Profit before income tax
18.1
32.5
Income tax expense
1.4
(6.5)
(18.0)
Profit for the year attributable to equity holders of parent entity
11.6
14.5
Other comprehensive income
Items that will not be reclassified to profit and loss:
Remeasurement of retirement benefit obligations
3.6
(0.2)
18.4
Income tax relating to these items
1.4
(1.4)
(5.1)
Items that may be reclassified to profit and loss:
Changes in fair value of cash flow hedges
(5.5)
7.6
Income tax relating to these items
1.4
4.4
(2.1)
Exchange differences on translation of foreign operations
36.8
19.7
Other comprehensive income for the year, net of tax
34.1
38.5
Total comprehensive income for the year attributable
to the equity holders of the parent entity
45.7
53.0
Note
2022
2021
(restated)
Earnings per share
Basic earnings per share (cents)
1.5
3.9
4.8
Diluted earnings per share (cents)
1.5
3.9
4.8
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Annual Report 2022 65
64
UNITED MALT
Consolidated Statement of Financial Position
As at 30 September 2022
Note
2022
$ M
2021
(restated)
$ M
Current assets
Cash and cash equivalents
2.1
222.9
286.8
Trade and other receivables
3.1
249.7
206.0
Inventories
3.1
475.7
339.9
Derivative financial instruments
2.5
17.0
8.7
Current tax assets
11.5
4.3
Assets held for sale
3.2
4.4
2.5
Total current assets
981.2
848.2
Non-current assets
Trade and other receivables
1.7
1.4
Derivative financial instruments
2.5
10.4
2.4
Deferred tax assets
1.4
29.8
24.7
Property, plant and equipment
3.2
754.7
679.6
Intangible assets
3.3
356.3
337.9
Right of use assets
3.4
85.2
77.4
Retirement benefit asset
3.6
16.8
16.8
Total non-current assets
1,254.9
1,140.2
Total assets
2,236.1
1,988.4
Current liabilities
Trade and other payables
3.1
298.6
179.4
Borrowings
2.1
220.2
168.2
Lease liabilities
3.4
13.3
12.2
Derivative financial instruments
2.5
23.3
4.5
Current tax liabilities
0.2
0.2
Provisions
3.5
9.6
12.1
Total current liabilities
565.2
376.6
Non-current liabilities
Income received in advance
17.7
18.5
Borrowings
2.1
367.1
349.5
Lease liabilities
3.4
75.7
69.3
Derivative financial instruments
2.5
7.4
3.2
Deferred tax liabilities
1.4
104.5
103.0
Provisions
3.5
5.9
3.0
Retirement benefit obligations
3.6
0.2
3.6
Total non-current liabilities
578.5
550.1
Total liabilities
1,143.7
926.7
Net assets
1,092.4
1,061.7
Equity
Contributed equity
2.2
166.9
166.9
Reserves
526.1
492.0
Retained earnings
399.4
402.8
Total equity
1,092.4
1,061.7
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the year ended 30 September 2022
Hedging
reserve
$ M
Pension
reserve
$ M
Share
option
reserve
$ M
Common
Control
reserve
$ M
Trans-
lation
reserve
$ M
Total
reserves
$ M
Cont-
ributed
equity
$ M
Retained
earnings
$ M
Total
equity
$ M
At 30 September 2020
(3.3)
(26.1)
0.8
441.5
39.7
452.6
166.9
410.8
1,030.3
Opening retained earnings
adjustment 1
-
-
-
-
-
-
-
(4.8)
(4.8)
Profit for the year
-
-
-
-
-
-
-
14.5
14.5
Other comprehensive income:
Exchange differences on translation
of foreign operations
0.1
(0.6)
-
0.5
19.7
19.7
-
-
19.7
Changes in fair value of cash flow
hedges
7.6
-
-
-
-
7.6
-
-
7.6
Remeasurements of retirement
benefit obligations (note 3.6)
-
18.4
-
-
-
18.4
-
-
18.4
Tax effect of above items
(2.1)
(5.1)
-
-
-
(7.2)
-
-
(7.2)
Total other comprehensive
income
5.6
12.7
-
0.5
19.7
38.5
-
-
38.5
Total comprehensive income for the
year
5.6
12.7
-
0.5
19.7
38.5
-
14.5
53.0
Transactions with owners:
Share-based payments (note 1.3)
-
-
1.0
-
-
1.0
-
-
1.0
Employee shares purchased
-
-
(0.1)
-
-
(0.1)
-
-
(0.1)
Dividends paid (note 2.3)
-
-
-
-
-
-
-
(17.7)
(17.7)
At 30 September 2021
2.3
(13.4)
1.7
442.0
59.4
492.0
166.9
402.8
1,061.7
Profit for the year
-
-
-
-
-
-
-
11.6
11.6
Other comprehensive income:
-
Exchange differences on translation
of foreign operations
-
0.2
-
(1.2)
37.8
36.8
-
-
36.8
Changes in fair value of cash flow
hedges
(5.5)
-
-
-
-
(5.5)
-
-
(5.5)
Remeasurements of retirement
benefit obligations (note 3.6)
-
(0.2)
-
-
-
(0.2)
-
-
(0.2)
Tax effect of above items
4.4
(1.4)
-
-
-
3.0
-
-
3.0
Total other comprehensive
income
(1.1)
(1.4)
-
(1.2)
37.8
34.1
-
-
34.1
Total comprehensive income for the
year
(1.1)
(1.4)
-
(1.2)
37.8
34.1
-
11.6
45.7
Transactions with owners:
Share-based payments (note 1.3)
-
-
0.4
-
-
0.4
-
-
0.4
Employee shares purchased
-
-
(0.4)
-
-
(0.4)
-
-
(0.4)
Dividends paid (note 2.3)
-
-
-
-
-
-
-
(15.0)
(15.0)
At 30 September 2022
1.2
(14.8)
1.7
440.8
97.2
526.1
166.9
399.4
1,092.4
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
1 The opening retained earnings adjustment relates to a correction of prior period inventory valuation. Refer to the Overview section b) in the notes to the
financial statements for further details.
Annual Report 2022 67
66
UNITED MALT
FINANCIAL REPORT
FINANCIAL REPORT
Consolidated Statement of Cash Flows
For the year ended 30 September 2022
Note
2022
$ M
2021
$ M
Cash flows from operating activities
Receipts from customers
1,426.0
1,326.9
Payments to suppliers and employees
(1,410.2)
(1,202.6)
15.8
124.3
Net proceeds of inventory funding loans
61.5
58.9
Interest received
1.3
0.6
Interest paid
(10.9)
(8.8)
Lease payments (interest component)
(3.0)
(2.7)
Income taxes paid
(18.1)
(18.5)
Net inflow from operating activities
2.1
46.6
153.8
Cash flows from investing activities
Payments for property, plant and equipment
(90.9)
(102.1)
Payments for computer software
(0.3)
(1.2)
Net outflow from investing activities
(91.2)
(103.3)
Cash flows from financing activities
Proceeds from borrowings
88.3
-
Repayment of borrowings
(88.2)
-
Lease payments (principal component)
(11.4)
(11.3)
Dividends paid
2.3
(15.0)
(17.7)
Shares purchased for employee share plan
(0.4)
(0.1)
Net outflow from financing activities
(26.7)
(29.1)
Net (decrease) / increase in cash and cash equivalents
(71.3)
21.4
Cash and cash equivalents at the beginning of the year
286.8
262.1
Effects of exchange rate changes on cash and cash equivalents
7.4
3.3
Cash and cash equivalents at the end of the year
2.1
222.9
286.8
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Notes to the Consolidated
Financial Statements
For the year ended 30 September 2022
Overview
The financial report includes consolidated financial statements for United Malt Group Limited (‘United Malt’ or the ‘Company’) and
its controlled entities (collectively the ‘Group’). United Malt Group Limited is a for-profit company incorporated and domiciled in
Australia, limited by shares which are publicly traded on the Australian Securities Exchange. The financial report of United Malt
Limited for the period ended 30 September 2022 was authorised for issue in accordance with a resolution of the Directors on 15
November 2022.
a)
Basis of preparation
This general purpose financial report has been prepared in accordance with Australia Accounting Standards issued by the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001. The report also complies with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
United Malt successfully demerged from GrainCorp Limited on 23 March 2020 to form a stand-alone entity listed on the Australian
Securities Exchange.
The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instruments
measured at fair value and the defined benefit plan assets and liabilities, which are recognised as the net total of the plan assets, plus
unrecognised past service costs less the present value of the defined benefit obligation.
The report is presented in Australian dollars, with all amounts rounded to the nearest one hundred thousand dollars (unless
specifically stated otherwise) under the option available to the Company under ASIC Corporations (Rounding in Financial/Director’s
Report) Instrument 2016/191. The Company is an entity to which this legislative instrument applies. Comparative information has
been reclassified where necessary to conform to changes in the current year.
The financial statements are prepared on a going concern basis. 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
At 30 September 2022, the Group had a net current asset position of $416.0 million (2021: $471.6 million), and the Group had
$222.9 million (2021: $286.8 million) available cash and cash equivalents (refer to note 2.1). The Group’s profit after tax for the year
ended 30 September 2022 was $11.6 million (2021: $14.5 million).
In August 2022 the Group received covenant amendments from its banks in respect of 30 September 2022 and 31 March 2023
calculation dates, and additional inventory funding capacity to accommodate expanded short-term requirements. This was necessary
due to the anticipated negative impact on FY22 profitability from external factors such as the significant deterioration in the North
American barley crop, supply chain disruptions, increased costs of imported barley and general cost inflation which could not be
fully passed on to customers.
The Group has implemented substantial changes to pricing and commercial terms for its customers. As these renegotiated terms
come into effect progressively into calendar 2023 the Group will better capture the true cost to serve customers which takes into
account crop quality, barley price and cost inflation and will also be in a position to manage margin risk better.
Since amendments to the covenants were made, the Group’s updated budgets and forecasts indicate that additional actions are
needed to mitigate any risk of not meeting Net Debt / EBITDA covenant requirements.
Annual Report 2022 69
68
UNITED MALT
FINANCIAL REPORT
a)
Basis of preparation (continued)
In preparing these financial statements, therefore, the Directors have considered earnings forecasts reflecting the anticipated trading
conditions and funding requirements for a period of at least 12 months from the date of the Directors Report in order to meet
covenant compliance obligations.
The Group has a range of available strategies which include:
•
implementing cost and cash conservation disciplines
•
deferring non-essential operating and capital expenditure
•
factoring selected accounts receivable balances under the Group’s recent agreement;
•
pursuing other debt-reduction strategies
The Directors firmly believe that the Group will be successful in implementing the actions necessary to meet its covenant obligations
and have therefore prepared these financial statements on a going concern basis.
However, there is always a degree of execution risk with the strategies outlined and therefore there is a material uncertainty related
to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, that it
may be unable to realise its assets and discharge its liabilities in the normal course of business.
b)
Restatement of comparative information
As disclosed in the half year results, comparative information has been adjusted to restate a historic overstatement of inventory on
costs. Adjustments have been reflected in retained earnings, inventory, raw materials and consumables used (P&L) and Statement of
Changes in Equity as below:
$m
1 October 2020
6 months ended
31 March 2021
6 months ended
30 September 2021
Cumulative impact
30 September 2021
Retained earnings
4.8
-
-
4.8
Inventory
(4.8)
0.4
0.3
(4.1)
Raw materials and consumables
used (P&L)
-
(0.4)
(0.3)
(0.7)
c)
New and amended standards adopted
The Group has adopted all mandatory amended Accounting Standards issued that are relevant and effective for the current reporting
period but does not early adopt any Australian Accounting Standards and Interpretations that have been issued or amended but are
not yet effective.
d)
Key judgements and estimates
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 applying the Group’s accounting policies, management has made a number of judgements and applied estimates of future events.
Judgements and estimations which are material to the financial report relate to the following areas:
Note
Taxation
Financial instruments and risk management
Intangible assets
Right of use assets and lease liabilities
Provisions
Retirement benefit obligations
1.4
2.5
3.3
3.4
3.5
3.6
d)
Key judgements and estimates (continued)
CLIMATE CHANGE
The Group makes estimates and assumptions concerning the future, including climate-related matters. There is considerable
uncertainty over assumptions under various climate change scenarios and how they may impact the Group’s business operations,
and the subsequent impact on cash flow projections. The Group regularly assesses its assumptions to reflect the market it operates
within, the sustainability targets it sets, and the commitments made to investors and other stakeholders. The estimates and
assumptions have been based on the available information and regulations in place as at 30 September 2022, and are aligned with
UMG’s published 2022 sustainability targets detailed in the 2022 Sustainability Report.
e)
Foreign currency
These consolidated financial statements are presented in Australian dollars, which is the functional currency of the United Malt
Group Limited and its Australian subsidiaries. Each entity in the Group determines its own functional currency, reflecting the
currency of the primary economic environment in which it operates.
Foreign currency transactions are translated into the functional currency using the exchange rates at the transaction date. Foreign
exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and
liabilities denominated in foreign currencies at reporting date exchange rates, are recognised in profit or loss.
Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of
the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate when
the fair value was determined.
The assets and liabilities of foreign subsidiaries are translated into Australian dollars by applying the rate ruling at balance sheet
date and revenue and expense items are translated at the average rate calculated for the period. Transactions in equity are
translated by applying the rate on the date of the transaction with no subsequent revaluation. Foreign exchange differences
resulting from translation are initially recognised in the foreign currency translation reserve and subsequently transferred to profit
or loss on disposal of the foreign operation.
Annual Report 2022 71
70
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Group Performance
This section provides information on the performance of the Group, including segment results, line items in the consolidated income
statement, earnings per share, and income tax.
1.1 Operating segments
a)
Description of segments
The Group is organised into two segments based on operational activity. These segments are consistent with internal reports that
are reviewed and used by the Group’s chief operating decision maker, the Managing Director & CEO, in assessing performance and
determining the allocation of resources.
The operating segments are as follows:
Processing: generates earnings from the production and sale of bulk malt to major brewers, craft brewers, distillers and food
companies.
Warehouse & Distribution: generates revenue for the distribution and sale of bagged malt, hops, yeast, adjuncts, and related
products to craft brewers, distillers and food companies.
Corporate includes costs associated with the corporate office function for the group. Segment performance is based on a measure of
EBITDA.
b)
Performance of segments
2022
Processing
$ M
Warehouse &
Distribution
$ M
Reportable
segments
$ M
Corporate &
Eliminations
$ M
Total
$ M
Reportable segment revenue
External revenue
1,050.1
356.6
1,406.7
-
1,406.7
Intersegment revenue
34.6
-
34.6
(34.6)
-
Total reportable segment revenue
1,084.7
356.6
1,441.3
(34.6)
1,406.7
EBITDA
60.3
40.3
100.6
(8.8)
91.8
Net interest
(0.9)
(2.2)
(3.1)
(8.6)
(11.7)
Depreciation and amortisation
(50.0)
(11.9)
(61.9)
(0.1)
(62.0)
Profit / (loss) before income tax
9.4
26.2
35.6
(17.5)
18.1
Other segment information
Capital expenditure
89.7
1.5
91.2
-
91.2
Reportable segment assets
1,726.4
305.5
2,031.9
204.2
2,236.1
Reportable segment liabilities
(811.6)
(102.0)
(913.6)
(230.1)
(1,143.7)
1.1 Operating segments (continued)
c)
Geographical information
Revenue by customer location
Non-current assets2
2022
$ M
2021
$ M
2022
$ M
2021
$ M
North America
842.4
755.5
794.5
718.2
Europe
291.2
234.9
217.8
192.7
Australasia
100.3
94.4
185.5
185.4
Asia
166.3
141.7
-
-
Other
6.5
8.5
-
-
1,406.7
1,235.0
1,197.9
1,096.3
1.2 Revenue
2022
2021
Total revenue from external customers
Total
$M
Total
$M
Revenue from sale of finished goods
1,384.2
1,217.0
Service and other revenue
22.5
18.0
Revenue from contracts with customers
1,406.7
1,235.0
Revenue recognised at point in time
1,384.2
1,217.0
Revenue recognised over time
22.5
18.0
Total revenue from external customers
1,406.7
1,235.0
Revenue from the sale of goods and services is recognised when the control of the goods has transferred to the customer. Sales in the
Processing segment consist of bulk malt, and control is transferred to the customer in line with shipping terms. Sales in the
Warehouse & Distribution segment consist of bagged malt, hops, yeast, and other brewing-related products, and control is
transferred to the customer at point of sale. Service revenue relates to tolling contracts in which the customer provides the barley
and UMG process the raw material and is recorded at the time the service is performed. Revenue is recorded at the value of
consideration receivable net of discounts and goods and services tax (GST).
1 The Group defines significant items as those items not in the ordinary course of business, non-recurring and material in nature and amount. The amounts are
included in other expense in the consolidated income statement and in 2021 relate to costs incurred to the provision for bad debt of one customer ($16.4m)
and the provision related to the inventory held at a grain contactor in administration in the UK ($4.7m).
2 Excludes derivative financial instruments, retirement benefit assets and deferred tax assets.
2021 (restated)
Processing
$ M
Warehouse &
Distribution
$ M
Reportable
segments
$ M
Corporate &
Eliminations
$ M
Total
$ M
Reportable segment revenue
External revenue
904.9
330.1
1,235.0
-
1,235.0
Intersegment revenue
33.2
-
33.2
(33.2)
-
Total reportable segment revenue
938.1
330.1
1,268.2
(33.2)
1,235.0
EBITDA
90.2
40.8
131.0
(7.0)
124.0
Net interest
(0.5)
(1.9)
(2.4)
(7.4)
(9.8)
Depreciation and amortisation
(50.0)
(10.5)
(60.5)
(0.1)
(60.6)
Significant items1
(21.1)
-
(21.1)
-
(21.1)
Profit / (loss) before income tax
18.6
28.4
47.0
(14.5)
32.5
Other segment information
Capital expenditure
99.7
3.6
103.3
-
103.3
Reportable segment assets
1,408.0
279.7
1,687.7
300.7
1,988.4
Reportable segment liabilities
(309.8)
(87.9)
(397.7)
(529.0)
(926.7)
Annual Report 2022 73
72
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.3 Other income and expenses
a)
Other income
2022
$ M
2021
$ M
Interest income
2.5
0.7
Net gain on foreign currency derivatives
6.4
2.2
Sundry income
3.0
3.1
Total other income
11.9
6.0
Interest income is recognised as it accrues using the effective interest method. Gain/loss on foreign currency derivatives are
recognised through the P&L as the derivatives are revalued to fair value. The derivatives are mainly purchased to hedge future sales
and purchases in foreign currency. Sundry income is comprised of items not in the course of normal operations, such as proceeds
from asset sales, government grants, and sublease income.
b)
Other expenses
2022
$ M
2021
$ M
Employee benefits expense
Defined contribution superannuation and defined benefit superannuation expenses
5.5
7.4
Share-based payment expense
0.4
1.0
Other employee benefits
112.4
108.0
Total employee benefits expense
118.3
116.4
Other expenses
Bad debt expense 3
-
16.8
Consulting
14.1
12.5
Insurance
12.6
11.9
Software implementation costs
13.3
6.5
Communication
6.3
5.7
Grain supplier provision3
-
4.7
Legal expenses
2.8
2.3
Impairment4
1.1
2.0
Marketing costs
2.0
1.0
Travel
3.0
0.8
Other
13.7
11.4
Total other expenses
68.9
75.6
3 Some expense items in these categories in 2021 are included in note 1.1 as Significant Items.
4 Impairment in 2021 is largely related to the impairment of fixed assets at the Grantham site as a result of the closure of the operations, as announced to the
ASX on 8 February 2021. Impairment in 2022 relates to Brewers Select assets write-down ($0.8m) and inventory impairment relating to onerous contracts
($0.3m).
1.3 Other income and expenses (continued)
Employee benefits expense includes salaries and wages, superannuation contributions, share-based payments and other
entitlements. The Group’s accounting policy for retirement benefit obligation plans is set out in note 3.6.
Share-based payment expense is determined by the grant date. The fair value of equity-settled share-based payments is
recognised as an expense proportionally over the vesting period, with a corresponding increase in equity. The fair value of
instruments with market-based performance conditions (aTSR) is calculated at the date of grant using the Monte Carlo simulation
model, which is a commonly used valuation technique. The probability of achieving market-based performance conditions is
incorporated into the determination of the fair value per instrument. The fair value of instruments with non-market-based
performance conditions (ROCE and Strategic) and service conditions is calculated using the Black-Scholes option pricing model. The
amount recognised as an expense over the vesting period is adjusted to reflect the actual number of instruments that vest. The
expense associated with the instruments with market-based performance conditions is recognised in full if the awards do not vest
due to market condition not being met.
Share based payment expense has two components, the long-term incentive plan (LTIP) and the deferred equity plan (DEP).
LONG TERM INCENTIVE PLAN
Under the Group’s LTIP, senior executives have the opportunity to be rewarded with fully paid ordinary shares, provided the LTIP
minimum pre-determined hurdles for aTSR and ROCE covering a three-year period, as set by the Board of Directors, are met. In
2021, a Strategic hurdle was also introduced. These shares are generally purchased on market once the LTIP vests.
The fair value of performance rights is determined as described above using the following inputs:
Grant date
1 Sep 2020
One-off
award
1 Sep 2020
LTIP
11 Mar 2021
LTIP
24 Dec 2021
LTIP
21 Feb 2022
LTIP
Fair value at grant date (aTSR)
$1.66
$1.72
$1.72
$1.82
$1.81
Fair value at grant date (ROCE)
$3.75
$3.61
$3.75
$4.14
$4.06
Fair value at grant date (Strategic)
N/A
N/A
$3.75
$4.14
$4.06
Estimated vesting date
Nov 2021
Nov 2022
Nov 2023
Dec 2024
Dec 2024
Share price at grant date
$3.85
$3.85
$4.00
$4.43
$4.33
Volatility
42%
42%
36%
31%
30%
Risk free interest rate
0.23%
0.25%
0.08%
0.88%
1.46%
Dividend yield
2.23%
2.96%
2.39%
2.33%
2.34%
Set out in the table below is a summary of the number of rights granted under the LTIP. The exercise price on outstanding options is
zero.
Grant date
Expiry date
Balance at
start of
year
Granted
during year
Exercised
during the year
Forfeited
during year
Balance at
end of year
Exercisable at
end of year
1 Sep 2020
Nov 2021
280,543
-
-
(280,543)
-
-
1 Sep 2020
Nov 2022
377,785
-
-
-
377,785
-
11 Mar 2021
Nov 2023
339,157
-
-
-
339,157
-
24 Dec 2021
Dec 2024
-
244,044
-
(40,008)
204,036
-
21 Feb 2022
Mar 2025
-
295,208
-
-
295,208
-
997,485
539,252
-
(320,551)
1,216,186
-
DEFERRED EQUITY PLAN
All senior executives are required to have a portion of their short-term incentives deferred and awarded in the form of rights, subject
to service conditions. The deferred component is awarded over two years as rights i.e. 50% deferred component vesting at the end
of year one and 50% of deferred component vesting at the end of year 2.
For the short-term incentive earned in FY20 by senior executives, 204,003 rights were granted on 22 December 2020. The first
tranche (50%) of these rights was exercisable in November 2021. The remaining tranche will be exercisable in November 2022. The
fair value used for determining the share-based payment expense is $4.05. 39,579 of the rights lapsed in 2021, 2,964 of the rights
lapsed in 2022.
For the short-term incentive earned in FY21 by senior executives, 83,482 were granted on 2 December 2021. The first tranche (50%)
of these rights is exercisable in November 2022. The remaining tranche will be exercisable in November 2023. The fair value used
for determining the share-based payment expense is $4.09. 7,558 of the rights lapsed in 2022. No short-term incentives are to be
granted for FY22.
Annual Report 2022 75
74
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.4
Taxation
a)
Income tax expense
2022
$ M
2021
(restated)
$ M
Income tax expense recognised in the consolidated income statement
Current tax
11.6
17.1
Deferred tax
(5.0)
(1.1)
Under / (over) provision in prior years
(0.1)
2.0
6.5
18.0
Reconciliation to effective tax rate
Profit subject to tax
18.1
32.5
Income tax expense calculated at 30% (2021: 30%)
5.5
9.8
Tax effect of amounts which are not deductible / (taxable) in calculating taxable income
Non-deductible / non-assessable items
(1.9)
1.4
Tax losses for which no deferred tax asset has been recognised
3.8
5.5
Change in substantially enacted tax rates
-
4.2
Under provision in prior years
(0.1)
1.7
Difference in overseas tax rates
(0.8)
(4.6)
Income tax expense
6.5
18.0
Effective tax rate 5
35.9%
55.4%
Tax (credit) / expense relating to items of other comprehensive income
Change in fair value of cash flow hedges
(4.4)
2.1
Remeasurement of retirement benefit obligations
1.4
5.1
Total tax (credit)/expense relating to items of other comprehensive income
(3.0)
7.2
Unused tax losses for which no deferred tax asset has been recognised (not tax effected)
35.7
18.2
b)
Deferred tax assets and liabilities
Deferred tax assets
2022
$ M
2021
$ M
The balance comprises temporary differences attributable to:
Tax losses
4.0
6.4
Provisions and accruals
4.0
3.5
Inventories
1.3
0.8
Lease liabilities
22.2
15.7
Other
8.3
10.1
Set-off deferred tax liabilities pursuant to set-off provision
(10.0)
(11.8)
Net deferred tax assets
29.8
24.7
Movements:
Opening balance at 1 October
24.7
21.7
Recognised in the income statement
5.2
3.3
Recognised in other comprehensive income
(0.1)
(0.3)
Closing balance at 30 September
29.8
24.7
5 Effective tax rate is calculated as the income tax expense divided by profit subject to tax. The effective tax rate is impacted in the prior period by the unused
tax losses for which no deferred tax asset has been recognised and the change in substantially enacted corporate tax rate in the UK from 19% to 25% effective
April 2023 (it is noted that this decision has been reversed in 2022).
1.4 Taxation (continued)
Deferred tax liabilities
2022
$ M
2021
$ M
The balance comprises temporary differences attributable to:
Property, plant and equipment
88.9
98.4
Right of use assets
20.2
14.5
Intangible assets
1.6
1.3
Retirement benefit obligation
3.8
0.6
Set-off deferred tax liabilities pursuant to set-off provision
(10.0)
(11.8)
Net deferred tax liabilities
104.5
103.0
Movements:
Opening balance 1 October
103.0
93.3
Recognised in the income statement
0.2
2.2
Recognised in other comprehensive income
(3.1)
6.9
Exchange differences
4.4
0.6
Closing balance at 30 September
104.5
103.0
c)
Accounting policy
Income tax expense is calculated at the applicable income tax rate for each jurisdiction and recognised in profit for the year, unless
it relates to other comprehensive income or transactions recognised directly in equity.
The tax expense comprises both current and deferred tax. Current tax represents the tax expense paid or payable for the current
year, using tax rates which are enacted or substantially enacted at the reporting date. Deferred tax is recognised using the balance
sheet liability method, providing for temporary differences between the carrying amount of the assets and liabilities for financial
reporting purposes and the amounts for taxation purposes. Temporary differences generally occur when there is a timing difference
in recognition between income and expenses as recognised by tax authorities and accounted for in different periods. The amount of
deferred tax provided is based on the expected manner of realisation of the carrying amount of the assets and liabilities, using tax
rates enacted or substantially enacted at the reporting date.
Deferred tax assets, including those arising from tax losses, are recognised to the extent it is probable that sufficient taxable profits
will be available to utilise the related tax assets in the foreseeable future. Deferred tax assets are reduced to the extent that it is no
longer probable that the related tax benefit will be utilised.
As the Group is subject to income taxes in Australia and jurisdictions where it has foreign operations, management consider the
estimation of the worldwide tax provision and recognition of deferred tax balances in the consolidated statement of financial
position to be an area of judgement. Changes in circumstances will alter expectations, which may impact the amount of provision for
income taxes and deferred tax balances recognised.
Tax consolidation
The Company has an income tax group for its 100% Australian resident subsidiaries, with United Malt Group Limited being the head
entity. The tax consolidated group uses the group allocation approach whereby the current and deferred tax assets for the group are
allocated among each entity within the group.
1.5 Earnings per share
2022
2021
Basic earnings per share (cents)
3.9
4.8
Diluted earnings per share (cents)
3.9
4.8
Weighted average number of ordinary shares – basic
299,179,135
299,179,135
Add: adjustment for calculation of diluted earnings per share (performance rights)
1,277,479
1,052,111
Weighted average number of ordinary shares – diluted
300,456,614
300,231,246
Basic earnings per share (EPS) is calculated by dividing profit for the year attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the financial year.
Diluted EPS is calculated on the same basis except that it includes the impact of any potential commitments the Group has to issue
shares in the future. For the year ended 30 September 2022, these relate to the performance rights granted.
Annual Report 2022 77
76
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. Capital and Financial Risk Management
The Group maintains an optimal capital structure so that it can continue to provide returns for shareholders and benefits for other
stakeholders. The Group’s capital consists of net debt and equity. Net debt is calculated as total borrowings and lease liabilities, net
of cash assets.
The capital structure of the Group is continuously monitored and can be changed by adjusting the amount of dividends paid to
shareholders, returning capital to shareholders or issuing new shares.
2.1 Net debt
2022
$ M
2021
$ M
Total borrowings (note 2.1(b))
587.3
517.7
Cash and cash equivalents (note 2.1(c))
(222.9)
(286.8)
Net debt
364.4
230.9
Lease liabilities (note 3.4)
89.0
81.5
Net debt including lease liabilities
453.4
312.4
a)
Net debt reconciliation
Cash and cash
equivalents
$M
Inventory
funding
facilities
$M
Borrowing
facilities
$ M
Lease
liabilities
$ M
Total
$M
Net debt as at 30 September 2020
(262.1)
107.3
348.1
68.4
261.7
Cash flows
(21.4)
58.9
-
(11.3)
26.2
Net lease additions
-
-
-
24.7
24.7
Foreign exchange movements
(3.3)
2.0
1.4
(0.3)
(0.2)
Net debt as at 30 September 2021
(286.8)
168.2
349.5
81.5
312.4
Cash flows
71.3
61.5
-
(11.4)
121.4
Net lease additions
-
-
13.5
13.5
Foreign exchange movements
(7.4)
(9.5)
17.6
5.4
6.1
Net debt as at 30 September 2022
(222.9)
220.2
367.1
89.0
453.4
b)
Borrowings
Facility limits
Drawn amounts
2022
$M
2021
$M
2022
$ M
2021
$ M
Current
Working capital facilities
160.0
160.0
-
-
Commodity inventory funding facilities
293.4
227.6
220.2
168.2
Total current borrowings
453.4
387.6
220.2
168.2
Non-current
Term debt facilities
367.1
349.5
367.1
349.5
Total non-current borrowings
367.1
349.5
367.1
349.5
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost using the effective interest method.
The maturity date of the term debt facilities expires in November 2024. The term facility is an evergreen facility which provides an
option to extend maturity dates on the anniversary of the facility. The terms of the debt remain materially unchanged from the
previous terms, except for the change in reference rate for the UK based debt from LIBOR to SONIA.
2.1 Net debt (continued)
b)
Borrowings (continued)
The commodity inventory funding facilities are secured by the related inventory. The carrying amounts of inventory pledged as
security at the reporting date is $220.2 million (2021: $168.2 million).
Loans under term and working capital funding facilities are secured by a negative pledge, and these facilities provide the related
entities in the Group, that are party to the pledge, the flexibility in funding their respective liquidity requirements as needed. The
facilities impose certain financial covenants on the Group. All covenant ratios have been complied with during the financial year.
As announced on 7 September 2022, the Group received covenant amendments from its banks in respect of 30 September 2022 and
31 March 2023 and additional inventory funding capacity with its banks to accommodate expanded short-term requirements. Please
refer to the basis of preparation for further emphasis on forecasts and estimates.
c)
Cash and cash equivalents
Cash and cash equivalents on hand at 30 September 2022 was $222.9 million (2021: $286.8 million). Cash and cash equivalents
include cash on hand, deposits held at call with banks, and short-term investments with maturities three months or less.
RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH FLOW FROM OPERATING ACTIVITIES
Note
2022
$ M
2021
(restated)
$ M
Profit for the year
11.6
14.5
Non-cash employee benefits expense – share-based payments
0.4
1.0
Depreciation and amortisation
62.0
60.6
Impairment
1.1
2.0
Derivative mark-to-market
(1.4)
0.1
73.7
78.2
Changes in operating assets and liabilities:
(Increase) / decrease in inventories
(73.3)
38.4
(Increase) / decrease in deferred tax
(2.9)
7.1
Decrease / (increase) in derivatives
6.6
(0.9)
(Increase) / decrease in receivables
(35.1)
40.6
Increase / (decrease) in trade payables
114.0
(0.1)
(Decrease) / increase in other liabilities
(17.5)
12.8
(Decrease) / increase in provision for income tax
(6.6)
0.4
(Decrease) in defined benefit pension plan liability
(5.5)
(24.2)
(Decrease) / increase in provisions
(6.8)
1.5
Net cash inflow from operating activities
46.6
153.8
2.2 Contributed equity
Consolidated and Company
Ordinary shares
Number
$ M
Balance at 30 September 2020
299,179,135
166.9
Balance at 30 September 2021
299,179,135
166.9
Balance at 30 September 2022
299,179,135
166.9
ORDINARY SHARES
Ordinary shares issued are classified as equity and are fully paid, have no par value, carry one vote per share and the right to
dividends.
Annual Report 2022 79
78
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.3 Dividends
The Company considers current earnings and future cash flow requirements in determining the amount of dividends to be paid.
Dividends are recognised in the Statement of Financial Position in the period in which they are declared by the Board.
Dividends paid and declared
2022
$ M
2021
$ M
Dividends paid
Prior year final dividend paid at 3.5 cents, 0% franked (2021: 3.9 cents, 0% franked)
10.5
11.7
Current year interim dividend paid at 1.5 cents, 0% franked (2021: 2.0 cents, 0% franked)
4.5
6.0
Total dividends paid
15.0
17.7
Dividends declared
Current year final dividend declared is nil (2021: 3.5 cents, 0% franked)
-
10.5
There is no liability recorded at 30 September 2022.
FRANKING CREDITS AVAILABLE
Immediately after the Demerger from GrainCorp, the Group’s franking account balance was nil. There have been no additions to the
franking account balance during the period, therefore the dividend declared above is unfranked.
The Group intends to frank future dividends to the extent practicable, although it is anticipated that there will be limited capacity for
franking credits with a substantial proportion of the Group’s earnings being derived outside Australia and which therefore may not
be subject to Australian income tax.
2.4 Commitments and guarantees
FINANCIAL COMMITMENTS
2022
$ M
2021
$ M
Capital expenditure commitments
Total capital expenditure contracted for at the reporting date but not provided for in payables:
- Not later than one year
20.7
44.6
Total capital expenditure commitments
20.7
44.6
The capital expenditure commitments are associated with both stay-in-business and growth projects related to the Company’s malt
processing and distribution facilities.
FINANCIAL GUARANTEES
Financial guarantees are provided by Group entities as follows:
The Group enters into guarantees as part of the normal course of business. At 30 September 2022, these guarantees amounted to
$6.0 million (2021: $7.3 million). The Directors do not believe any claims will arise in respect of these guarantees.
United Malt Limited and the wholly owned Australian entities listed in note 4.1 are parties to a deed of cross guarantee as described
in note 4.2. The nature of the deed of cross guarantee is such that each company which is party to the deed guarantees, to each
creditor, payment in full of any debt in accordance with the deed of cross guarantee. No deficiency of net assets existed for the Group
as at 30 September 2022.
No liability was recognised by the Group in relation to these guarantees as the fair value of the guarantees is immaterial.
2.5 Financial instruments and risk management
The Group’s Treasury function is responsible for managing the liquidity requirements of the Group and mitigating any financial risks
relating to the Group’s operations through continuous monitoring and evaluation. The Treasury function is governed by the Board
approved Treasury Policy. The Policy requires periodic reporting of financial risks to the Board, and its application is subject to
oversight from the Chief Financial Officer and the Chair of the Audit and Risk Committee. Financial risks include:
Market risk (refer to note 2.5(b))
Liquidity risk (refer to note 2.5(c))
Credit risk (refer to note 2.5(d))
a)
Classification of financial instruments
United Malt classifies its financial instruments into categories in accordance with AASB 9 Financial instruments depending on the
purpose for which the financial instruments were acquired, which is determined at initial recognition based on the business model.
The following table presents the Group’s financial assets and liabilities measured and recognised at fair value.
$M
30 September 2022
30 September 2021
Current
Non-current
Current
Non-current
Derivative assets
Derivative financial instruments – fair value through profit and loss
Commodity futures and options
1.9
-
0.5
-
Foreign currency derivatives
10.8
3.1
3.6
0.9
Derivative financial instruments – cash flow hedge
Foreign currency derivatives
2.5
0.4
4.6
1.5
Interest rate swap contracts
1.8
6.9
-
-
Total derivative assets
17.0
10.4
8.7
2.4
Derivative liabilities
Derivative financial instruments – fair value through profit and loss
Commodity futures and options
1.2
-
-
-
Foreign currency derivatives
9.1
2.6
3.6
1.1
Derivative financial instruments – cash flow hedge
Foreign currency derivatives
13.0
4.8
0.9
1.1
Interest rate swap contracts
-
-
-
1.0
Total derivative liabilities
23.3
7.4
4.5
3.2
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered. Subsequently, at
each reporting date, the gain or loss on remeasurement to fair value is recognised immediately in the consolidated income
statement, unless they qualify for hedge accounting as outlined in AASB 9 Financial Instruments.
The Group enters into certain cash flow hedges to hedge exposure to variability in cash flows that are attributable to the risk
associated with the cashflows of recognised assets or liabilities and highly probably forecast transactions caused by interest rate and
foreign currency movements. The Group’s cash flow hedges include:
Interest rate swap contracts
Forward foreign exchange contracts
When a derivative financial instrument is designated as a cash flow hedge, the effective part of any gain or loss on the derivative
financial instrument is recognised in other comprehensive income and accumulated in the cashflow hedge reserve within equity. The
gain or loss relating to the ineffective portion is recognised immediately in consolidated income statement, within other income/loss.
Amounts accumulated in equity are reclassified to the consolidated income statement in the periods when the hedged item affects
profit or loss.
The Group’s derivative instruments are measured at fair value at the end of each reporting period. Derivative instruments are
grouped into Levels 1 to 3 based on the degree to which fair value measurement inputs are observable. The fair value of derivative
instruments has been determined as follows:
Level 1 financial instruments held by the Group are instruments which are traded on an active market. The fair value of these
financial instruments is the quoted market settlement price on the reporting date.
Annual Report 2022 81
80
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.5 Financial instruments and risk management (continued)
a)
Classification of financial instruments (continued)
Level 2 financial instruments held by the Group are financial instruments that are not traded on an active market. The fair value is
determined using valuation techniques which maximise observable market data and rely as little as possible on entity-specific
estimates.
Level 3 financial instruments do not have quoted market prices available. If one or more of the significant inputs is not based on
observable market data, the instrument is level 3. The fair value of financial assets and liabilities that are not traded in an active
market is determined using valuation techniques. Management considers the valuation of these financial instruments to be an
area of judgement.
All derivative financial instruments are considered Level 2 financial instruments.
b)
Market risk
The Group’s activities expose it to the financial risks of changes in (i) commodity prices, (ii) foreign currency and (iii) interest rates.
COMMODITY PRICE RISK
The Group enters into forward physical purchase and sales contracts, along with commodity derivative contracts, to manage the
underlying price risks in the purchase of barley for malt production and the subsequent sale of malt. These contracts are entered
into, and continue to be held, for the purpose of delivery of raw materials and subsequent sale of processed malt and are therefore
classified as non-derivative and not fair valued.
FOREIGN CURRENCY RISK
The Group has exposure to movement in exchange rates through:
•
Purchase of barley and other goods from suppliers in foreign currency;
•
Sale of malt in foreign currency; and
•
Translation of net investments in foreign subsidiaries denominated in foreign currencies.
To manage exposure to this risk, the Group enters into forward exchange contracts, foreign currency options and swap contracts,
with the contracted time to mature when the relevant underlying contracts expire.
Expressed in Australian Dollars, the following table indicates exposure and sensitivity to movements in exchange rates on the profit
or loss and equity of the Group, based on the foreign currency exposure of each entity against its functional currency at 30
September. The tables are based upon the Group’s financial asset and liability profile at 30 September, which fluctuates over the
course of normal operations.
2022
Exposure at
reporting date
$M
Impact on profit / (loss) after tax
$ M
Impacts on other
components of equity
$ M
Movement in exchange rate
+10%
-10%
+10%
-10%
US Dollar
Canadian Dollar
UK Pound Sterling
New Zealand Dollar
Euro
Yen
42.7
207.6
65.2
1.2
19.2
(43.5)
(11.8)
11.4
0.7
0.1
1.3
(3.0)
11.8
(11.4)
(0.7)
(0.1)
(1.3)
3.0
14.8
3.2
3.9
-
-
-
(14.8)
(3.2)
(3.9)
-
-
-
Total
292.4
(1.3)
1.3
21.9
(21.9)
2021
Exposure at
reporting date
$M
Impact on profit / (loss) after tax
$ M
Impacts on other
components of equity
$ M
Movement in exchange rate
+10%
-10%
+10%
-10%
US Dollar
Canadian Dollar
UK Pound Sterling
New Zealand Dollar
Euro
Yen
65.1
221.3
72.3
2.8
13.1
(34.9)
(8.8)
12.4
0.8
0.2
0.9
(2.4)
8.8
(12.4)
(0.8)
(0.2)
(0.9)
2.4
13.3
3.1
4.2
-
-
-
(13.3)
(3.1)
(4.2)
-
-
-
Total
339.7
3.1
(3.1)
20.6
(20.6)
2.5 Financial instruments and risk management (continued)
INTEREST RATE RISK
The Group has exposure to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk is managed by
maintaining between 40% and 75% of long-term borrowings at fixed rates through the use of interest rate swap contracts.
Under interest rate swap contracts, the Group is entitled to receive interest at variable rates and is obliged to pay interest at fixed
rates. The contracts require settlement of net interest receivable or payable at each reset period. The settlement dates coincide with
the dates on which interest is payable on the underlying debt.
At 30 September 2022, after taking into account the effect of interest rate swap contracts, approximately 74% ($271.1 million) of the
Group's long-term borrowings are at a fixed rate of interest (2021: 74%, $258.2million).
The Group continuously monitors its interest rate exposure with consideration given to cash flows impacting on rollovers and
repayments of debt, alternative hedging instruments and the mix of fixed and variable interest rates.
At balance date, the Group had the following mix of financial liabilities with interest at variable rates:
2022
2021
Weighted
average
interest rate %
Balance
$ M
Weighted
average
interest rate %
Balance
$ M
Current instruments
Commodity inventory facilities
3.38%
(220.2)
0.95%
(168.2)
Interest rate swaps (notional principal amount)
0.67%
38.9
-
-
Non-current instruments
Term debt facilities
3.95%
(367.1)
1.53%
(349.5)
Interest rate swaps (notional principal amount)
2.96%
232.2
0.15%
258.2
Net exposure to cash flow interest rate risk
4.69%
(316.2)
1.16%
(259.5)
INTEREST RATE SENSITIVITY ANALYSIS
At balance date, if interest rates had moved as illustrated in the table below, with all other variables held constant, profit and equity
would have been affected as follows:
2022
2021
Profit / (loss)
Increase /
(decrease) in
equity
Profit / (loss)
Increase /
(decrease) in
equity
$ M
$ M
$ M
$ M
+ 100 basis points
(3.2)
2.7
(2.6)
2.6
– 100 basis points
3.2
(2.7)
2.6
(2.6)
Annual Report 2022 83
82
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.5 Financial instruments and risk management (continued)
c)
Liquidity risk
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank
loans, finance leases and committed available credit facilities. The Group manages liquidity risk by regularly monitoring actual and
forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Group Treasury aims at maintaining flexibility in funding by keeping committed credit lines available with a variety of
counterparties. At balance date, the Group had approximately $233.2 million of unused credit facilities available for immediate use.
The tables below show the contractual maturities of financial liabilities, including estimated interest payments. The amounts
disclosed in the table are the contractual undiscounted cash flows.
30 September 2022
Carrying
Value
$M
Total
$M
Less than 1
year
$ M
Between
1 and 2 years
$ M
Between 2
and 5 years
$ M
Over 5
years
$ M
Non-derivatives:
Borrowings 6
(587.3)
(601.8)
(220.2)
-
(381.6)
-
Trade and other payables
(298.6)
(298.6)
(298.5)
(0.1)
-
-
Lease liabilities 7
(89.0)
(111.6)
(13.9)
(13.1)
(39.3)
(45.3)
Derivatives:
Interest rate swap contracts
-
-
-
-
-
-
Foreign currency derivatives
(Outflow)
(29.5)
(470.5)
(328.2)
(137.2)
(5.1)
-
Inflow
-
441.0
306.1
130.2
4.7
-
Commodity futures and options
(Outflow)
(1.2)
(52.7)
(52.7)
-
-
-
Inflow
-
51.5
51.5
-
-
-
30 September 2021
Carrying
Value
$M
Total
$M
Less than 1
year
$ M
Between
1 and 2 years
$ M
Between 2
and 5 years
$ M
Over 5
years
$ M
Non-derivatives:
Borrowings6
(517.7)
(521.7)
(168.2)
(353.5)
-
Trade and other payables
(177.5)
(177.5)
(177.2)
(0.3)
-
Lease liabilities7
(81.5)
(98.8)
(11.7)
(9.0)
(26.9)
(51.2)
Derivatives:
Interest rate swap contracts
(1.0)
(1.0)
-
(1.0)
-
-
Foreign currency derivatives
(Outflow)
(6.7)
(270.4)
(199.7)
(56.0)
(14.7)
-
Inflow
-
263.7
195.2
54.7
13.8
-
6 The Group’s bank borrowings facilities are set out in note 2.1b. Cash outflows associated with bank borrowings are inclusive of principal and interest.
7 Cash outflows associated with leases are inclusive of principal and interest.
2.5 Financial instruments and risk management (continued)
d)
Credit risk
Credit risk is the risk of loss that would be recognised if a counterparty were to default on its contractual obligations. The Group has
a Board approved Credit Policy which provides guidelines for the management and diversification of the credit risk to the Group.
The Group is exposed to credit risk from its operating activities and financing activities. The Group’s maximum exposure for credit
risk is the carrying amount of all trade and other receivables, derivative asset balances, and cash assets as set out in the consolidated
statement of financial position.
TRADE RECEIVABLES
The credit risk on trade and other receivables which has been recognised on the consolidated statement of financial position is the
carrying amount of trade debtors, net of allowances for impairment and further disclosed in note 3.1. The Group minimises credit
risk associated with trade and other receivables by performing a credit assessment for all customers who wish to trade on credit
terms. Credit limits are determined for each individual customer based on their credit assessment and as per the Credit Policy. The
Group does not have any significant credit risk exposure to a single customer or group of customers.
The Group applies the simplified approach to provision for expected credit losses prescribed by AASB 9, which permits the use of the
lifetime expected loss provision for all trade receivables. Under this method, determination of the loss allowance provision and
expected loss rate incorporates past experience, forward-looking information, and market data. In FY22 the Group considered the
impact of the COVID pandemic on the forward-looking information and market data when applying these rates.
The aging of the trade receivables at the reporting date was:
2022
2021
Gross
$ M
Loss
allowance
$M
Gross
$ M
Loss
allowance
$M
Current
209.9
(0.1)
180.2
-
More than 30 days past due
11.0
-
2.4
-
More than 60 days past due
2.6
-
1.3
(0.3)
More than 90 days past due
25.0
(18.7)
21.8
(17.5)
Total
248.5
(18.8)
205.7
(17.8)
The movement in the allowance for doubtful debts was:
2022
$M
2021
$M
Balance at 1 October
(17.8)
(1.4)
Provisions made during the year
(0.9)
(17.1)
Loss recognised during the year
0.4
0.4
Provisions reversed during the year
0.1
0.4
Exchange differences
(0.6)
(0.1)
Balance at 30 September
(18.8)
(17.8)
FINANCIAL INSTRUMENTS AND CASH DEPOSITS
To minimise the credit exposure to financial institutions that are counterparties to derivative contracts and cash, the Group has a
panel of authorised counterparties who are principally large banks and recognised financial intermediaries with acceptable credit
ratings determined by a ratings agency. The Group’s net exposure and credit assessment of its counterparties are continuously
monitored to ensure any risk is minimised.
The Group may also be subject to credit risk for transactions that are not included in the consolidated statement of financial position,
such as when a guarantee is provided for another party.
Annual Report 2022 85
84
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3. Operating Assets and Liabilities
This section shows the assets used to generate the Group’s operating performance and liabilities incurred as a result. Liabilities
relating to the Group’s financing activities are addressed in Section 2 Capital and Financial Risk Management.
3.1 Working capital
2022
$ M
2021
(restated)
$ M
Trade receivables
249.7
206.0
Inventories
475.7
339.9
Trade and other payables
(298.6)
(179.4)
426.8
366.5
a)
Trade and other receivables
2022
$ M
2021
$ M
Trade receivables
248.5
205.7
Allowance for doubtful receivables
(18.8)
(17.8)
229.7
187.9
Prepayments
18.3
16.9
Other receivables
1.7
1.2
Total current trade and other receivables
249.7
206.0
Trade and other receivables are recognised at the face value of amounts due less an allowance for doubtful receivables. Doubtful
receivables are determined using an expected credit loss model whereby trade and other receivables that share the same or similar
credit risk characteristics and debt ageing are grouped and then assessed for collectability as a whole. Refer to note 2.5 for details of
the Group’s credit exposures.
b)
Inventories
2022
$ M
2021
(restated)
$ M
Raw materials
287.6
196.8
Work in progress
14.8
11.1
Finished goods
173.3
132.0
Total inventories
475.7
339.9
Inventories are valued at lower of cost and net realisable value, unless stated otherwise. Cost includes direct labour, other direct
costs, and production overheads, where applicable. Net realisable value is the estimated selling price less cost of completion and
variable selling expenses. Write-downs of inventories to net realisable value recognised as an expense during the year ended 30
September 2022 amounted to $4.0 million (2021: $3.6 million), which is included in raw materials and consumables used in the
consolidated income statement.
c)
Trade and other payables
Current
2022
$ M
2021
$ M
Trade payables
195.7
109.4
Accrued expenses
99.4
67.8
Income received in advance
3.5
2.2
Total current trade and other payables
298.6
179.4
Trade and other payables are carried at the amount payable. Accrued expenses are amounts payable in relation to goods received
or services rendered which have not been billed at the reporting date.
3.2 Property, plant and equipment
Land
$ M
Buildings and
structures
$ M
Leasehold
improvements
$ M
Plant and
equipment
$ M
Capital works in
progress
$ M
Total
$ M
At 30 September 2020
Cost
45.3
206.2
23.2
622.1
61.6
958.4
Accumulated depreciation
-
(46.3)
(8.0)
(283.3)
-
(337.6)
Net book value
45.3
159.9
15.2
338.8
61.6
620.8
Movement
Transfer between asset categories
-
3.6
0.5
22.2
(26.3)
-
Assets transferred to held for sale
(2.5)
(2.5)
Additions
-
-
-
0.1
102.3
102.4
Disposals
-
(0.2)
-
(0.1)
-
(0.3)
Depreciation
-
(7.4)
(1.0)
(35.9)
-
(44.3)
Impairment
-
-
-
(1.9)
-
(1.9)
Exchange differences
1.1
0.2
-
2.2
1.9
5.4
Net book value
43.9
156.1
14.7
325.4
139.5
679.6
At 30 September 2021
Cost
43.9
210.5
23.7
648.3
139.5
1,065.9
Accumulated depreciation
-
(54.4)
(9.0)
(322.9)
-
(386.3)
Net book value
43.9
156.1
14.7
325.4
139.5
679.6
Movement
Transfer between asset categories
0.1
2.2
3.9
27.6
(33.0)
0.8
Assets transferred to held for sale
-
(0.6)
-
-
-
(0.6)
Additions
-
-
0.1
5.5
93.7
99.3
Disposals
-
-
-
(0.4)
-
(0.4)
Depreciation
-
(7.8)
(1.5)
(38.8)
-
(48.1)
Exchange differences
(0.7)
10.4
0.9
13.0
0.5
24.1
Net book value
43.3
160.3
18.1
332.3
200.7
754.7
At 30 September 2022
Cost
43.3
225.1
29.2
697.8
200.7
1,196.1
Accumulated depreciation
-
(64.8)
(11.1)
(365.5)
-
(441.4)
Net book value
43.3
160.3
18.1
332.3
200.7
754.7
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Subsequent costs are
capitalised when it is probable that future economic benefits associated with the expenditure will flow to the Group.
Property, plant and equipment assets, other than land, are depreciated on a straight-line basis over the useful lives of the assets.
Useful lives are reviewed on an annual basis and have been assessed as follows:
Buildings and structures:
30-50 years
Leasehold improvements: 5-40 years
Plant and equipment:
5-15 years
Tests for impairment on items of property, plant and equipment are conducted in accordance with the policy for impairment of
non-financial assets. Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows.
In 2021, the Group announced the closure of its Grantham site in the UK. This site is classified as an asset held for sale on the
statement of financial position. The asset is valued at the lower of cost or fair value less cost to sell at $2.3 million (2021: $2.5
million).
In October 2022, post year end, the assets of Brewers Select were sold. These assets are classified as held for sale on the statement
of financial position. The asset is valued at the lower of cost or fair value less cost to sell at $2.1 million (2021: nil).
Annual Report 2022 87
86
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.3 Intangible assets
Computer
software
$ M
Trade name
$ M
Customer
relationship
$ M
Goodwill
$ M
Capital works
in progress
$M
Total
$ M
At 30 September 2020
Cost
26.6
1.5
118.7
324.3
7.1
478.2
Accumulated amortisation
(21.2)
(0.7)
(118.7)
-
-
(140.6)
Net book value
5.4
0.8
-
324.3
7.1
337.6
Movement
Transfer between asset categories
7.4
-
-
-
(7.4)
-
Additions
-
-
-
-
1.4
1.4
Amortisation charge
(4.0)
(0.1)
-
-
-
(4.1)
SaaS adjustment 8
(0.1)
(0.9)
(1.0)
Exchange differences
0.1
-
-
4.1
(0.2)
4.0
Net book value
8.8
0.7
-
328.4
-
337.9
At 30 September 2021
Cost
34.5
1.5
120.2
328.4
-
484.6
Accumulated amortisation
(25.7)
(0.8)
(120.2)
-
-
(146.7)
Net book value
8.8
0.7
-
328.4
-
337.9
Movement
Transfer between asset categories
-
-
-
-
-
-
Additions
-
-
-
-
0.4
0.4
Amortisation charge
(2.9)
(0.1)
-
-
-
(3.0)
Exchange differences
0.3
-
-
20.7
21.0
Net book value
6.2
0.6
-
349.1
0.4
356.3
At 30 September 2022
Cost
35.2
1.5
122.7
349.1
0.4
508.9
Accumulated amortisation
(29.0)
(0.9)
(122.7)
-
-
(152.6)
Net book value
6.2
0.6
-
349.1
0.4
356.3
Intangible assets include definite life and indefinite life intangibles. The accounting treatment for each of the asset categories is:
•
Computer software is costs capitalised in developing products or systems and costs incurred in acquiring software and
licenses that will contribute to future period financial benefits. Amortisation is calculated on a straight-line basis over an
estimated useful life of 3 to 7 years. Capitalised costs exclude software as a service (SaaS) arrangements, where the fee for use of
the application software is expensed over the life of the service contract. Customisation costs related to SaaS are expensed as
incurred, unless they are paid to the supplier of the cloud-based software to significant customise the product for the Group, in
which case they are recorded as a prepayment for services and amortised over the expected term of the service contract.
•
Trade names are acquired as part of a business combination and recognised separately from goodwill. Trade names are
carried at fair value at the date of acquisition less accumulated amortisation, which is calculated on a straight-line basis over an
estimated useful life of 3 to 9 years.
•
Customer relationships are acquired as part of a business combination and recognised separately from goodwill. They are
carried at the fair value at the acquisition date less accumulated amortisation. Amortisation is calculated on a straight-line basis
over an estimated useful life of 5 to ten years.
•
Goodwill is measured on acquisition as part of a business combination as the difference between the consideration paid and the
fair value of the net assets acquired. Goodwill is tested for impairment as described in note 3.3 a).
8 SaaS adjustment relates to software as a service costs that were previously capitalised that would have been expensed in the prior period under the IFRIC
pronouncement.
3.3 Intangible assets (continued)
a)
Impairment test for goodwill
For purposes of impairment testing, goodwill acquired through business combination is allocated to cash-generating units (CGUs):
2022
$ M
2021
$ M
Processing
239.4
228.3
Warehousing & Distribution
109.7
100.1
Total goodwill
349.1
328.4
Goodwill and intangible assets with indefinite lives are tested for impairment annually or more frequently if circumstances indicate
that an asset may be impaired. In assessing impairment, the recoverable amount of assets is estimated to determine the extent of the
impairment loss. The recoverable amount for goodwill is assessed at each of the CGU levels and is based on value in use (VIU)
calculations. Management uses judgement in determining the recoverable amount of assets including expected future cash flows,
long term growth rates and discount rates.
In assessing VIU, estimated future cash flows are based on the Group’s most recent estimates covering a period of five years.
Projected cash flows are based on past performance and management’s future expectations, taking into account the Group’s
production capacity, long-term customer agreements, and market information in key geographies. Cash flows beyond the five-year
period are extrapolated using an estimated growth rate. The growth rate does not exceed the long-term average growth rate for the
business in which the CGUs operate.
Assumptions made within the Company’s modelling, which are not considered certain, include:
•
The gross margin of each CGU is sensitive to future assumptions in Barley commodity prices and quality of crop. The
forecast assumes a trend towards more historical, pre-Covid averages for margins from FY24 and a good quality crop.
•
The Group has applied pre-tax discount rates to the forecasted future cashflows; 10.98% (2021: 8.96%) for the Processing
CGU and 11.45% (2021: 9.10%) for the Warehousing & Distribution CGU. These discount rates reflect the current market
assessment of the time value of money and risks specific to the relative segment, as well as an additional Asset Risk
Premium to reflect risks in the cashflows such as uncertainty over potential increases in the cost of inputs and the Group’s
ability to pass them on to customers.
•
A long-term nominal growth rate of 1.97% (2021: 2.01%) for the Processing CGU and 2.03% (2021: 2.04%) for the
Warehousing & Distribution CGU.
Based on the impairment testing performed at 30 September 2022, the recoverable amount of the respective CGU exceeds its
carrying amount by $43m in the Processing CGU, and $80m in the Warehousing & Distribution CGU. The Directors and Management
have considered and assessed reasonably possible changes in key assumptions.
The recoverable amount of the Processing CGU would equal its carrying amount if the key assumptions were to change as follows:
• An increase in the pre-tax discount rate by 0.25%
• A decrease in underlying EBITDA of 2.31%
• A decrease in terminal growth rate of 0.24%
The recoverable amount of the W&D CGU would equal its carrying amount if the key assumptions were to change as follows:
• An increase in the pre-tax discount rate by 2.62%
• A decrease in underlying EBITDA of 18.18%
• A decrease in terminal growth rate of 2.64%
Annual Report 2022 89
88
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.4 Leases
a)
Right of use assets
Property
leases
$M
Equipment
leases
$M
Motor vehicle
leases
$M
Total
$M
At 30 September 2020
Cost
7.7
57.1
13.5
78.3
Accumulated depreciation
(1.0)
(6.4)
(4.5)
(11.9)
Net book value
6.7
50.7
9.0
66.4
Movement
Additions to right of use asset
7.6
18.5
-
26.1
Disposals
-
(2.4)
-
(2.4)
Depreciation expense
(0.9)
(6.8)
(4.5)
(12.2)
Exchange rate differences
0.1
(0.6)
-
(0.5)
Net book value
13.5
59.4
4.5
77.4
At 30 September 2021
Cost
15.4
71.3
13.8
100.5
Accumulated depreciation
(1.9)
(11.9)
(9.3)
(23.1)
Net book value
13.5
59.4
4.5
77.4
Movement
Additions to right of use asset
0.4
4.9
15.0
20.3
Disposals
-
(3.9)
-
(3.9)
Depreciation expense
(1.4)
(7.9)
(4.1)
(13.4)
Exchange rate differences
0.3
4.3
0.2
4.8
Net book value
12.8
56.8
15.6
85.2
At 30 September 2022
Cost
16.4
77.0
29.4
122.8
Accumulated depreciation
(3.6)
(20.2)
(13.8)
(37.6)
Net book value
12.8
56.8
15.6
85.2
b)
Lease liabilities
Total
$M
Lease liabilities at 30 September 2020
68.4
Interest expense
2.7
Additions
27.1
Repayments
(14.0)
Disposals
(2.4)
Exchange rate differences
(0.3)
Lease liabilities at 30 September 2021
81.5
Interest expense
3.0
Additions
17.1
Repayments
(15.8)
Disposals
(2.2)
Exchange rate differences
5.4
Lease liabilities at 30 September 2022
89.0
Current
13.3
Non-current
75.7
3.4 Leases (continued)
The Group enters into non-cancellable leases as a lessee on properties, motor vehicles, railcars, and other plant and equipment.
There are leases in all of the Group’s operating geographies.
For a qualifying lease, there is a right of use asset and a lease liability recorded based on the present value of the future lease
payments, excluding variable payments. Fixed lease payments are discounted using the Group’s incremental borrowing rate, which
is the rate of interest that a lessee would have to pay to borrow over a similar term, with a similar security, the funds necessary to
purchases an asset of similar value to the right of use asset in a similar economic environment. The incremental borrowing rate has
been used when the rate implicit in the lease is not readily determinable. The weighted average incremental borrowing rate applied
to the lease liabilities at 30 September 2022 is 3.8% (2021: 3.6%).
Right of use assets are depreciated over the shorter of the asset’s useful life or the lease term on a straight-line basis. Payments
associated with low value assets or short-term leases with a term of 12 months or less are recognised on a straight-line basis as an
expense.
3.5 Provisions
Employee
benefits
$ M
Onerous
$M
Other
$M
Total
$M
At 1 October 2021
11.3
1.2
2.6
15.1
Additional provisions
10.6
1.4
3.3
15.3
Amounts used
(9.8)
(0.3)
(0.7)
(10.8)
Unused amounts reversed
(3.6)
(0.8)
(0.3)
(4.7)
Exchange differences
0.3
0.1
-
0.4
At 30 September 2022
8.8
1.6
4.9
15.5
Current
6.9
1.6
0.9
9.6
Non-current
1.9
-
4.0
5.9
Provisions are:
Recognised when the Group has a legal or constructive obligation as a result of a past event, it is probable that cash will be required
to settle the obligation, and the amount can be reliably estimated.
Measured at the present value of the estimated cash outflow required to settle the obligation. For non-current provisions, the
nominal amount is discounted, and the financing impact is recognised in the Consolidated Income Statement.
An onerous provision is recognised where there is a contract in which there are unavoidable costs of meeting the obligations under
the contract which exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the
least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from
failure to fulfil it.
Annual Report 2022 91
90 UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.6 Retirement benefit obligations
The Group operates pension plans for some employees in US, Canada, UK and Australia. The plans are closed to new members. The
plan is funded through contributions to the defined benefit plan as determined by annual actuarial valuations. A defined benefit plan
is a pension plan that defines the amount of pension benefit an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service and compensation.
a)
Retirement benefit liability recognised in the consolidated statement of financial position
2022
$ M
2021
$ M
Present value of the defined benefit obligations
(121.4)
(182.6)
Fair value of defined benefit plans assets
140.0
195.8
Effect of asset ceiling/onerous liability
(2.0)
-
Net defined benefit asset
16.6
13.2
Recognised in the consolidated statement of financial position as:
Retirement benefit asset
Retirement benefit obligation
16.8
(0.2)
16.8
(3.6)
Net defined benefit asset
16.6
13.2
b)
Categories of plan assets
2022
%
2021
%
The major categories of plan assets are as follows:
Cash
1%
3%
Equity instruments
28%
28%
Debt instruments
67%
65%
Other assets
4%
4%
Total
100%
100%
c)
Reconciliations
2022
$ M
2021
$ M
Reconciliation of the present value of the defined benefit obligations:
At 1 October
182.6
201.6
Current service cost
1.0
1.3
Interest cost
3.8
4.0
Scheme participants contributions
0.1
0.1
Remeasurements
(43.7)
(14.9)
Benefits paid
(9.9)
(16.8)
Past service cost
-
0.4
Exchange differences
(12.5)
6.9
At 30 September
121.4
182.6
Reconciliation of fair value of plan assets:
At 1 October
195.8
190.5
Interest income
4.1
3.8
Remeasurements
(41.8)
3.5
Contributions by Group companies
5.1
8.3
Scheme participants contributions
0.1
0.1
Actual plan administration expense
(0.5)
(0.4)
Benefits paid
(9.9)
(16.8)
Exchange differences
(12.9)
6.8
At 30 September
140.0
195.8
3.6 Retirement benefit obligations (continued)
d)
Amounts recognised in the consolidated income statement
2022
$ M
2021
$ M
The amounts recognised in the income statement are as follows:
Current service cost
1.0
1.3
Net interest expense
(0.3)
0.2
Effect of asset ceiling/onerous liability
0.4
0.4
Total expense included in employee benefits expense
1.1
1.9
e)
Amounts recognised in other comprehensive income
2022
$ M
2021
$ M
Remeasurements of retirement benefit obligations
(0.2)
18.4
Cumulative remeasurements recognised
(13.1)
(12.9)
f)
Principal actuarial assumptions
2022
North
America
UK
Australia
Principal actuarial assumptions used (expressed as weighted averages):
Discount rate
4.8%
5.4%
4.8%
Future salary increases
3.0%
3.6%
2.5%
2021
North
America
UK
Australia
Principal actuarial assumptions used (expressed as weighted averages):
Discount rate
3.17%
2.00%
1.50%
Future salary increases
2.50%
3.30%
3.00%
g)
Sensitivity analysis
Changes in the following principal actuarial assumptions would have the following effect on the defined benefit pension obligation:
2022
$ M
Increase/(decrease)
2021
$ M
Increase/(decrease)
Discount rate:
0.25% increase
(3.1)
(6.6)
0.25% decrease
3.3
6.8
Inflation:
0.25% increase
1.1
2.3
0.25% decrease
(1.6)
(2.3)
The sensitivity information has been derived for all plans using projected cash flows valued using the relevant assumptions and
membership profiles as at 30 September 2022. Extrapolation of these results beyond the sensitivity figures shown may not be
appropriate.
Annual Report 2022 93
92
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.6 Retirement benefit obligations (continued)
h)
Employer contributions
Based on the recommendations of the plans’ actuaries, total employer contributions expected to be paid by the Group for the year
ended 30 September 2023 are $3.0 million (2022: $6.0 million).
i)
Accounting treatment
The asset or liability recognised in the consolidated statement of financial position in respect of defined plan benefits is the present
value of the defined benefit obligation at the balance sheet date minus the fair value of plan assets. The present value of the pension
liability is determined by discounting the estimated future cash flows using interest rates of high quality corporate or government
bonds that:
Are denominated in the currency in which the benefits will be paid; and
Have terms to maturity approximating the terms of the related pension liability.
The defined benefit obligation is calculated at least annually by independent actuaries using the projected unit credit method, which
in simple terms, proportions the benefit based on years of service provided. Management considers the valuation of defined benefit
plans to be an area of judgement as a number of key assumptions must be adopted to determine the fair value.
Actuarial gains and losses arise when there is a difference between previous estimates and actual experience or a change to
assumptions in relation to demographic and financial trends. Gains and losses are recognised directly in other comprehensive
income as remeasurements in the period in which they occur.
The Group determines the net interest expense (income) on the net defined benefit liability for the period by applying the discount
rate at the beginning of the period to the net defined benefit liability, considering any changes during the period because of
contributions and benefit payments. Net interest expense (income), service cost and other expenses related to defined benefit plans
are recognised in the consolidated income statement.
4. Group Structure & Other
This section provides information on how the Group structure affects the financial position and performance of the Group. The
disclosures detail the types of entities and transactions included in the consolidation and those which are excluded.
4.1 Subsidiaries
The Company, which is the ultimate parent of the Group, is incorporated in Australia. Subsidiaries are consolidated from the date of
acquisition, being the date the Company obtains control, and continue to be consolidated until the date control ceases. Control exists
where the Company has power to govern the financial and operating policies of the entity in order to obtain benefits from its
activities. Below are the subsidiaries within the Group.
Controlled entities are fully consolidated from the date control is obtained until the date that control ceases. All subsidiaries
incorporated in Australia, along with the United Malt Group Limited, form part of the Closed Group (note 4.2). All entities were
wholly owned at 30 September 2022 unless otherwise stated.
SUBSIDIARIES CONTROLLED AT 30 SEPTEMBER
Name of entity
Country of
incorporation
% controlled
2022
% controlled
2021
Australia Malt Finco Pty Limited
Australia
100
100
Australia Malt Holdco Pty Limited
Australia
100
100
Barrett Burston Malting Co. Pty. Limited
Australia
100
100
Barrett Burston Malting Company WA Pty Limited
Australia
100
100
Malt Real Property Pty Limited
Australia
100
100
Security Superannuation Fund Pty Limited
Australia
100
100
United Malt Australia Pty Limited
Australia
100
100
Canada Malting Co. Limited
Canada
100
100
Barrett Burston Malting Co (NZ) Limited
New Zealand
100
100
Bairds Malt Limited
UK
100
100
Bairds Malt (Pension Trustees) Limited
UK
99
99
Brewers Select Limited
UK
100
100
Malt UK Holdco Limited
UK
100
100
Maltco 3 Limited
UK
100
100
Mark Lawrence (Grain) Limited
UK
100
100
Moray Firth Maltings Limited
UK
100
100
Norton Organic Grain Limited
UK
100
100
Scotgrain Agriculture Limited
UK
100
100
Ulgrave Limited
UK
100
100
United Malt (Canada) Holdings UK Limited
UK
100
100
United Malt UK Limited
UK
100
100
Great Western Malting Co
USA
100
100
Malt US Holdco Inc
USA
100
100
Metropolitan Insurance Group
USA
100
100
United Malt Holdings USA
USA
100
100
United Malt USA
USA
100
100
Annual Report 2022 95
94
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.2 Deed of cross guarantee
The Company and the Australian subsidiaries, as disclosed in note 4.1, have entered a Deed of Cross Guarantee on 9 April 2020
under which each of the companies guarantees the debts of the other and are relieved from the requirement to prepare financial
statements under ASIC Class Order No. 2016/785. These are collectively known as the Closed Group.
A Statement of Comprehensive Income and Retained Earnings, and a Statement of Financial Position, comprising the Company and
controlled entities which are party to the Deed, after eliminating all transactions between the parties to the Deed, are set out below.
Statement of Comprehensive Income and Retained Earnings (Closed Group)
2022
$ M
2021 (restated)
$ M
Revenue
191.5
183.2
Other income
20.9
2.1
Raw materials and consumables used
(154.0)
(153.8)
Employee benefits expense
(16.3)
(17.1)
Depreciation and amortisation
(11.7)
(11.3)
Finance costs
(4.0)
(2.4)
Repairs and maintenance
(3.7)
(3.8)
Other expenses
(16.6)
(31.5)
Profit before income tax
6.1
(34.6)
Income tax (expense) / benefit
(0.4)
1.9
Profit/(loss) for the year
5.7
(32.7)
Other comprehensive income:
Changes in the fair value of cash flow hedges
10.2
1.8
Remeasurements of retirement benefit obligations
-
0.1
Income tax benefit / (expense) relating to components of other comprehensive income
(0.2)
(0.4)
Other comprehensive income for the year, net of tax
10.0
1.5
Total comprehensive income/(expense) for the year
15.7
(31.2)
Summary of movements in consolidated retained earnings
Retained losses at the beginning of the financial year
(75.4)
(25.7)
Income for the year
5.7
(32.0)
Dividends paid
(15.0)
(17.7)
Retained losses at the end of the financial year
(84.7)
(75.4)
4.2 Deed of cross guarantee (continued)
Set out below is the consolidated statement of financial position of the Closed Group as at 30 September.
Consolidated Statement of Financial Position (Closed Group)
2022
$ M
2021 (restated)
$ M
Current assets
Cash and cash equivalents
15.7
34.5
Trade and other receivables
44.8
37.5
Inventories
48.0
42.8
Derivative financial instruments
9.4
3.4
Current tax assets
0.1
0.1
Total current assets
118.0
118.3
Non-current assets
Trade and other receivables
44.1
338.6
Investment in subsidiaries
309.1
309.1
Property, plant and equipment
151.5
148.6
Intangible assets
23.5
23.9
Lease assets
10.4
12.9
Derivative financial instruments
7.2
0.2
Total non-current assets
545.8
833.3
Total assets
663.8
951.6
Current liabilities
Trade and other payables
30.4
23.5
Borrowings
36.4
39.2
Derivative financial instruments
0.7
1.1
Lease liabilities
5.2
1.1
Provisions
2.6
3.0
Total current liabilities
75.3
67.9
Non-current liabilities
Borrowings
55.0
349.5
Lease liabilities
10.2
11.9
Derivative financial instruments
1.3
1.4
Provisions
1.9
1.7
Deferred tax liabilities
0.3
0.2
Total non-current liabilities
68.7
364.7
Total liabilities
144.0
432.6
Net assets
519.8
519.0
Equity
Contributed equity
166.9
166.9
Reserves
437.6
427.5
Retained losses
(84.7)
(75.4)
Total equity
519.8
519.0
Annual Report 2022 97
96
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.3 Parent entity financial information
Summary financial information for the Company is set out below:
2022
$ M
2021
$ M
Non-current assets
518.0
513.0
Total assets
518.0
513.0
Non-current liabilities
-
-
Total liabilities
-
-
Shareholders’ equity
Contributed equity
166.9
166.9
Reserves
393.0
393.0
Retained earnings in 2020 and subsequent periods
115.0
110.0
Retained losses in prior periods
(156.9)
(156.9)
Total shareholders’ equity
518.0
513.0
(Loss)/Profit for the year
19.8
(16.4)
Total comprehensive (loss) / income
19.8
(16.4)
The parent entity is party to the Deed of Cross Guarantee and is subject to the terms of the deed as described in note 4.2. At 30
September 2022, the parent entity did not provide any other guarantees (2021: nil), contingent liabilities (2021: nil) or capital
commitments (2021: nil).
4.4 Related party transactions
KMP compensation
Disclosures relating to KMP are provided in the Remuneration Report. There were no other transactions with KMP during the
period.
2022
$’000
2021
$’000
Short-term employee benefits
3,855
3,471
Post-employment benefits
347
92
Share-based payments
329
1,071
Total KMP compensation
4,531
4,634
4.5 Remuneration of auditor
2022
$’000
2021
$’000
PricewaterhouseCoopers Australia
Audit and review of financial reports
426
450
Other non-audit services (specified agreed upon procedures)
11
10
Total remuneration of PricewaterhouseCoopers Australia
437
460
Overseas PricewaterhouseCoopers firms
Audit and review of financial reports
895
797
Other non-audit services (company secretarial services)
19
9
Total remuneration of overseas PricewaterhouseCoopers
914
806
Total auditors’ remuneration
1,351
1,266
4.6 Events subsequent to reporting date
In October 2022, the assets of Brewers Select were sold for $2.4m. An asset write down of $0.8m was recognised at year end and the
asset was held for sale as at 30 September 2022.
In November 2022, the Group executed agreements for an uncommitted factoring arrangement which provides for the sale of certain
accounts receivables to provide short term financing flexibility. The Group has not yet presented invoices for acceptance under the
facility.
No other significant events subsequent to the balance date have occurred.
Annual Report 2022 99
98
UNITED MALT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Directors’ Declaration
In the Directors’ opinion:
a)
The financial statements and notes set out on pages 65 to 99 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 September 2022 and of its performance for
the financial year ended on that date; and
b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable; and
c)
At the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified in note
4.2 will be able to meet any obligation or liabilities to which they are, or may become, subject to by virtue of a deed of cross
guarantee described in note 4.2.
The Basis of Preparation note as disclosed on page 69 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.
Graham Bradley AM
Chairman
Sydney
15 November 2022
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of United Malt Group Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of United Malt Group 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 September 2022 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 Group financial report comprises:
●
the consolidated statement of financial position as at 30 September 2022
●
the consolidated statement of changes in equity for the year then ended
●
the consolidated statement of cash flows for the year then ended
●
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
●
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
●
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.
Annual Report 2022 101
100 UNITED MALT
INDEPENDENT AUDITOR’S REPORT
Material uncertainty related to going concern
We draw attention to the Basis of preparation in the financial report, which indicates that the Group
must implement a number of actions to meet covenant compliance obligations across the next twelve
months. The Group's ability to continue as a going concern is dependent on the Group being
successful in undertaking these actions. These conditions indicate that a material uncertainty exists
that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
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.
Materiality
●
For the purpose of our audit we used overall Group materiality of $1.7 million, which represents
approximately 5% of the Group’s three year weighted average profit before tax from continuing operations.
●
We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
●
We chose Group profit before tax because, in our view, it is the benchmark against which the performance
of the Group is most commonly measured. Due to fluctuations in profit and loss from year to year, we used
a three year average.
●
We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
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 matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were 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 these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the Audit
and Risk Committee.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matters described below to be the key audit matters to be communicated in our
report.
Key audit matter
How our audit addressed the key audit matter
Goodwill impairment assessment
(Refer to note 3.3 in the financial report) [$349.1m]
The Group holds goodwill totalling $349.1m as at 30
September 2022, across its Processing, and
Warehousing & Distribution cash generating units
(CGUs).
Under Australian Accounting Standards, the Group is
required to assess goodwill for impairment at least
annually.
The Group performed the annual impairment
assessment on the carrying value of the Processing
and Warehousing & Distribution CGUs at 30
September 2022. This was performed by calculating
the value in use for each CGU using discounted cash
flow models (the models). The models estimated cash
flows for each CGU for 5 years, with a terminal value
applied. These cash flows were then discounted to
net present value using a CGU specific discount rate.
This was a key audit matter due to the financial size
of the goodwill balances and the significant
judgements involved with key assumptions including:
●
Estimated future gross margins
●
Discount rates
●
Long term average growth rates
We performed the following procedures, amongst
others, in respect of the Processing and Warehousing
& Distribution CGUs:
●
Assessed whether the allocation of assets
and liabilities to CGUs was consistent with
our understanding of the Group’s operations
and internal Group reporting.
●
Considered whether the methodology
applied in the models was consistent with
the basis required by Australian Accounting
Standards.
●
Tested the mathematical accuracy of the
calculations in the models used to assess
impairment.
●
Assessed whether the forecast cash flows in
the impairment assessments were
appropriate by performing the following
procedures, amongst others:
○
Compared the 2023 forecasted
cash flows used in the models with
the latest forecast approved by the
Board.
○
Evaluated the historical accuracy of
the Group’s forecasts by comparing
the forecasts used in prior year
models to the actual performance.
○
Assessed the forecast growth
assumptions used in the models by
reference to our understanding of
the key drivers for future growth,
including reference to third party
information including economic and
Annual Report 2022 103
102 UNITED MALT
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
Key audit matter
How our audit addressed the key audit matter
industry forecasts, and historical
results.
○
With the assistance of PwC
valuation experts, assessed
whether the discount rates used in
the models were appropriate with
reference to market data,
comparable companies and
industry research.
○
Evaluated the appropriateness of
the long term average growth rate
in the models by comparison to the
long term average growth rates of
the countries that the Group
operates in.
●
Evaluated the reasonableness of the
disclosures made in note 3.3, including key
assumptions, in light of the requirements of
Australian Accounting Standards.
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 September 2022, 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.
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 that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and 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.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 43 to 62 of the directors’ report for the
year ended 30 September 2022.
In our opinion, the remuneration report of United Malt Group Limited for the year ended 30 September
2022 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
Scott Walsh
Sydney
Partner
15 November 2022
Annual Report 2022 105
104 UNITED MALT
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
Shareholder Information
Listing Information
United Malt is listed, and our issued shares are quoted, on the Australian Securities Exchange (ASX) under the code: UMG.
Unless otherwise stated all information set out below is current as of 28 October 2022. The Company has on issue 299,179,135
ordinary fully paid shares and a total of 15,166 shareholders.
Substantial Shareholders
The following organisations have a substantial shareholding in United Malt Group Limited based on substantial holding notices
lodged on or before 28 October 2022.
Name
Notice date
Shares held
Issued capital %
Tanarra Capital Australia Pty Ltd
3-Aug-22
32,349,769
10.81%
GrainCorp Limited
29-Jun-20
25,428,404
8.50%
Aware Super Pty Ltd ATF Aware Super
9-Sep-22
21,954,547
7.34%
Ethical Partners Funds Management Pty Ltd
5-Oct-22
20,570,994
6.88%
Host-Plus Pty Ltd as Trustee of the HostPlus
Pooled Superannuation Trust
30-Aug-22
20,151,550
6.74%
Australian Retirement Trust Pty Ltd
2-Sep-22
18,584,922
6.21%
State Street Corporation
16-Sep-22
15,312, 187
5.12%
Twenty largest ordinary fully paid Shareholders as at 28 October 2022
Rank
Name
Shares held
Issued capital %
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
83,526,417
27.92
2
CITICORP NOMINEES PTY LIMITED
61,877,058
20.68
3
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
32,333,258
10.81
4
GRAINCORP LIMITED
25,428,404
8.50
5
NATIONAL NOMINEES LIMITED
11,976,672
4.00
6
BNP PARIBAS NOMS PTY LTD
7,631,373
2.55
7
CITICORP NOMINEES PTY LIMITED
4,931,766
1.65
8
FIRST SAMUEL LTD ACN 086243567
3,005,393
1.00
9
UBS NOMINEES PTY LTD
2,711,923
0.91
10
BNP PARIBAS NOMINEES PTY LTD
2,285,177
0.76
11
JARJUMS HOLDINGS PTY LIMITED
1,700,000
0.57
12
MRS INGRID KAISER
1,133,976
0.38
13
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
1,041,811
0.35
14
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
724,454
0.24
15
MR. MARK L. PALMQUIST
543,222
0.18
16
SANDHURST TRUSTEES LTD
534,158
0.18
17
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
396,563
0.13
18
BNP PARIBAS NOMINEES PTY LTD
368,437
0.12
19
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
350,698
0.12
20
AUSTRALIAN PIONEER PTY LTD
255,167
0.09
Total for top 20 shareholders
242,755,927
81.14
Holding distribution as at 28 October 2022
Range
Securities
%
No. of Holders
%
100,001 and Over
247,786,648
82.82
53
0.35
10,001 to 100,000
24,669,347
8.25
1,114
7.35
5,001 to 10,000
10,827,568
3.62
1,484
9.79
1,001 to 5,000
13,050,782
4.36
5,291
34.89
1 to 1,000
2,844,790
0.95
7,224
47.63
Total
299,179,135
100
15,166
100.00
There were 1,855 shareholders holding less than a marketable parcel of shares.
Voting rights
In accordance with Recommendation 6.4 set out in the fourth edition of the ASX Corporate Governance Principles and
Recommendations, all substantive resolutions at United Malt Shareholder meetings are decided by a poll. Upon each poll each fully
paid ordinary share carries one vote per share.
Unquoted Equity Securities
The Company has a total of 1,320,723 unquoted rights issued pursuant to the Company’s Long-Term Incentive Offers, One-off Award
offer and Deferred STI Awards as further described the Remuneration Report. There was a total of seven holders of the unquoted
rights.
Corporate Governance Statement
United Malt has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations
(4th edition) published by the ASX Corporate Governance Council.
The 2022 corporate governance statement was approved by the Board on 14 November 2022 and reflects the corporate governance
practices in place for year ending 30 September 2022. United Malt’s 2022 corporate governance statement and key governance
documents such as charters, policies and United Malt’s Appendix 4G Key to Disclosures under the Corporate Governance Principles
and Recommendations can be viewed at www.unitedmalt.com/corporate-goverance.
Annual Report 2022 107
106 UNITED MALT
SHAREHOLDER INFORMATION
Glossary
Term
Description
AASB
Australian Accounting Standards Board
ABN
Australian Business Number
ACN
Australian Company Number
AGM
Annual General Meeting
AM
Member of the Order of Australia
AMBR RO
Advanced Membrane and Reverse Osmosis
ARC
Audit and Risk Committee
ASX
Australian Securities Exchange
ASIC
Australian Securities and Investments Commission
aTSR
Absolute total shareholder return
AUD
Australian Dollar
Board
The Board of Directors of United Malt Group Limited, details of which are on pages 20 to
21.
CAGR
Compound Annual Growth Rate
Capex
Capital Expenditure
CFO
Chief Financial Officer
COO
Chief Operating Officer
Constant currency
Prior period results translated into Australian dollars at the actual monthly exchange
rates applicable in the current period, so as to show relative performance between the
two periods.
COVID-19
An acute respiratory illness in humans caused by a coronavirus, capable of producing
severe symptoms and in some cases death, especially in older people and those with
underlying health conditions. It became pandemic in 2020.
Cth
Commonwealth
DEP
Deferred equity plan
D&O
Directors and Officers
EBIT
Earnings before interest, tax, and excluding significant items.
EBITDA
A non-IFRS measure representing earnings before net interest, tax, depreciation and
amortisation, and excluding significant items.
EH&S
Environment, Health and Safety
EIP
Employee Incentive Plan
ELT
Executive Leadership Team
EPS
Earnings per share
ERP
Enterprise Resource Planning System
ESG
Environmental, Social and Governance
Executive KMP
CEO and other executives considered KMP
FSQM
Food safety quality management
FY21
2021 financial year
FY22
2022 financial year
GRI
Global Reporting Initiative
Group
United Malt Group Limited
HACCP
Hazard Analysis and Critical Control Points
HY
Half-year
IFRS
International Financial Reporting Standards
IRR
Investment Return Rate
IP
Institutional Placement
ITGC
Information Technology General Controls
KMP
Key Management Personnel
Kt
Thousand kiloton
Ltd
Limited
LTI
Long-term incentive
LTIFR
Lost Time Injury Frequency Rate
LTIP
Long-term incentive plan
Term
Description
MD & CEO
Managing Director and Chief Executive Officer
Mtpa
Million Tonnes Per Annum
MT
Metric Tonnes
Net finance costs
Interest expense net of interest income
NPAT
Net Profit After Tax
NPS
Net Promoter Score
NRC
Nominations and Remuneration Committee
Non-Executive Directors
Directors of the Board who are not Executives
PMO
Project Management Office
PTY
Proprietary
PTRMP
Position and Trading Risk Management Policy
PWC
PricewaterhouseCoopers
RIFR
Recordable Injury Frequency Rate, calculated as the number of injuries per 200,000 hours
worked.
ROCE
Return on capital employed
Significant Items
Significant items such as those items not in the ordinary course of business, non-recurring
and material in nature and amount.
SDG
United Nations Sustainable Development Goals
SPP
Share Purchase Plan
STI
Short-term incentive
TCFD
Task Force on Climate-Related Disclosures
the Company
United Malt Group Limited
TMS
Transportation Management System
TSR
Total Shareholder Return
UK
United Kingdom
UMG
United Malt Group Limited
Underlying NPAT
Net profit after tax excluding Significant Items
United Malt
United Malt Group Limited
US
United States of America
USD
United States Dollar
VP HR
Vice President, Human Resources
VWAP
Volume Weighted Average Price
2H
Second Half of financial year ending 30 September
1H
First Half of financial year ending 31 March
Annual Report 2022 109
108 UNITED MALT
GLOSSARY
Corporate Directory
Board of Directors
Graham J. Bradley AM
(Chairman)
Mark L. Palmquist
(Managing Director and CEO)
Patrick E. Bowe
(Non-Executive Director)
Barbara J. Gibson
(Non-Executive Director)
Jane McAloon
(Non-Executive Director)
Gary W. Mize
(Non-Executive Director)
Terry Williamson
(Non-Executive Director)
Lisa Jones
(Company Secretary)
Registered Office
Citigroup Centre
Level 18
Suite C, 2 Park Street
Sydney NSW 2000
Tel: + 61 2 8073 3160
Company website
www.unitedmalt.com
Share Registry
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Tel: +61 1300 554 47
110 UNITED MALT