BGA - Bega Cheese

[dyna]

Dick Smith's autobiography was an interesting read for me, over Xmas. You might recall his OzEmite brand.
Re BGA : Vegemite was only bought back to OZ by Bega Cheese five years ago. American food conglomerate Kraft had owned it for well over half a century , since just before Elvis was born, in fact. And they had changed the taste of it many times over the years , without telling anyone !
Dick's no fan of ALDI ,paying only half the wages turnover with 50 % less workers than its Woolies and Coles rivals. Nobody knows what the Germans pay their Argentine growers and factory hands making cheap Aldi own-brand peanut butter , either.

 

[frugal.rock]

Nobody knows what the Germans pay their Argentine growers and factory hands making cheap Aldi own-brand peanut butter , either.

Are you nuts?
Everyone knows what... peanut's ?

 

[JohnKelly]

Dick Smith's autobiography was an interesting read for me, over Xmas. You might recall his OzEmite brand.
Re BGA : Vegemite was only bought back to OZ by Bega Cheese five years ago. American food conglomerate Kraft had owned it for well over half a century , since just before Elvis was born, in fact. And they had changed the taste of it many times over the years , without telling anyone !
Dick's no fan of ALDI ,paying only half the wages turnover with 50 % less workers than its Woolies and Coles rivals. Nobody knows what the Germans pay their Argentine growers and factory hands making cheap Aldi own-brand peanut butter , either.

Leave the Vegemite brand alone, this is silly and is causing confusion,

View attachment Vegemite.png

 

[dyna]

Yeah. I got caught with some of that black muck over Xmas.
More than a little inebriated , I'll admit , but I became aware that I was spreading a very liquid Vegemite over my nicely toasted English muffins.
Lo! It's effin beef stock !
( Truth be told , it's not bad , either but I won't do it again. )

 

[rcw1]

Good morning

What's impressing analysts?​

Bega Cheese cut to sell, price target at $3.60: CLSA

Kind regards
rcw1

 

[mullokintyre]

According to Australian Business Review , Bega may be about to unload some if its "non Core" brands.

With a new chief executive at the helm of Bega Cheese and a strategic review under way, there are rumblings in the market that some of the company’s non-core brands could be on the block.
Bega became Australia’s second-largest juice manufacturer in 2020 behind Asahi when it purchased the Lion Dairy & Drinks portfolio for $534m, and some believe the juice division is the obvious candidate for a sale.

At the time the business was purchased, a number of experts around the market thought a sale would be inevitable because juice would be non-core to its portfolio and can be hard to make profitable.
Bega executive chairman Barry Irvin was known to have ruled out a sale at the time, although some questioned whether this decision was more of a case where there was no buyer for the juice business at the right price.

Bega reports its half-year results on February 23, the first result for new boss Pete Findlay, who took over at the start of February.
Other major players are Coca-Cola, which is not expected to be a buyer, and Kraft Heinz, which is selling its Australian arm.

There are also producers such as Grove juice in Queensland, Nudie and Tasmania’s Juicy Isle.

Bega’s Lion assets have held the number one position in the Australian chilled juice market, with well-known brands such as Daily Juice, Berri, Mildura and The Juice Brothers, and processing plants in NSW.

Some suspect Daily Juice will be placed up for sale.

Bega is under pressure from rising milk costs to manufacture its dairy products, which comprise the company’s core business.

I would be more comfortable if Bega stuck to milk production.
This is where its long term expertise lies, not so sure about juices spreads etc.
Mick

 

[mullokintyre]

Was listening to the Head of dairy corp speak on Country hour today.
Australia has gone from its record of 11 billion litres of milk production in 2003 to about 8 billion litres today.
Victoria and Tasmania now supply about 65% of the OZ milk market, with the other states falling further behind.
The competition for fresh milk is getting hotter every day.
The local ABC interviewd a number of Dairy farmers who have left the industry in the past 12 months.
They all said basically the same thig.
They could not make a decent living despite working 7 days a week months at a time.
If it was poor management, then corporates would be jumping in to put a paid manager in these dairy farms , but virtually all of them have been lost to the industry.
No one else wants to take it on.
Decided to get out of Bega while i still can.
And its ex dividend.
Mick

 

[Value Collector]

If it was poor management, then corporates would be jumping in to put a paid manager in these dairy farms ,
Mick

That is happening though, and has been happening for years, its been a trend for decades, dairy businesses are getting larger and larger, while smaller higher cost ones fail and shut down or change industry. 60% of Victorias dairy cows are fully fed in feed lots for most of the year, not even grazing an, this puts a lot of pressure on the higher cost family farms with a couple of hundred cows.

The biggest Dairy business in Australia operates out of Victoria, with 16,000 Hectares across 33 farms.

Aurora Dairies was established in February 2019, with the acquisition of its foundation asset, Warakirri Dairies, which consisted of 11 dairy farms which have been operated for over 15 years. Aurora has a demonstrated commitment to long-term investment in the Australian Dairy Industry and today owns and operates more than 16,000 hectares across 33 pasture based dairy farms across the southwest, northern and Gippsland regions of Victoria and southeast South Australia, with a forecast annualised milk production of over 185 million litres.

Aurora employs local expertise to operate and improve the productivity of our dairy farms by employing and developing great people, investing in technology, farm development strategies, and providing the supporting farm infrastructure.

Australians Biggest Dairy producing Corporation


The corporates focus on the best regions and the lowest cost operations, the independents in the higher cost operations in the marginal regions struggle and some fail and leave.

 

[Dona Ferentes]

At Tuesday’s AGM, Bega shareholders were told they shouldn’t expect significant earnings gains in the 2023-34 financial year, with the company anticipating a “relatively flat” result compared to the 2022-23 fiscal year when ‘normalised EBITDA’ was reported at $160 million.

In other words, shareholders shouldn’t anticipate a profit surge, especially in the December half of the year, as the meeting hinted at a slow and low six months. However, CEO Peter Findlay expressed confidence that the company’s brand-driven strategy would lead to substantial improvements in the following years.

“The bulk commodity business challenges (in milk) will persist for the remainder of the year, particularly impacting 1H FY2024 performance, and we expect our normalised FY2024 EBITDA to be relatively flat, ranging from $160 to $170 million,” said CEO Peter Findlay.

“We believe that the contribution from the branded business in FY2024, which we observed in 2H FY2023 and the first quarter of FY2024, can be maintained. It will be this contribution that counters the commodity headwinds we have already explained and propels the business forward through FY2025, FY2026, and beyond.”

Findlay assured shareholders, saying, “I am confident that within the timeframe of our current five-year strategic plan (FY2023 – FY2028), we can expect to increase our EBITDA to $250 million-plus, with a return on funds employed growing to 10%. This will primarily be driven by our branded business.”

“Our branded business will be the source of all our momentum over the next five years. We possess market-leading iconic brands that resonate with our customers. Our products are competitively priced to align with the evolving customer proposition and remain relevant in the future. We are confident in our ability to grow our branded business within its current context and explore adjacent opportunities that excite us.”

Findlay shared positive news about recent acquisitions, stating, “Both of our branded acquisitions are exceeding our expectations. The Mondelz Grocery business has been an outstanding acquisition, and the Bega Dairy and Drinks business, acquired from Kirin of Japan in 2H FY2023, continues to perform well into FY2024.”

Speaking about the company’s infrastructure, he highlighted their network of integrated manufacturing and milk processing sites, capable of managing seasonal milk and optimising milk solids value. Despite current challenges in global commodity markets, Bega Cheese sees an opportunity to reshape its commodity assets to support its brands in the long term and take advantage of any positive changes in commodity markets.

Findlay concluded, “We see numerous opportunities for further brand pricing, innovations, and efficiency programs to enhance margins. Our fresh white milk segment, a significant part of our volume, is moving in the right direction in terms of growth and profitability. Yoghurt, milk-based beverages, and spreads are still growing, and we have tangible opportunities in almost all the channels and categories we operate in. With the changes we’ll be making to our bulk commodity infrastructure over the next 12 months, we believe the business will be less exposed to farm gate milk price volume and volatility."

 

[debtfree]

6 months since the last post so time for a chart update. The trend has been and still is certainly UP.

 

[JohnDe]

Fair point "Bega executive chairman Barry Irvin says ASX-listed companies should spend less time in the board rooms of Sydney and Melbourne and more time channelling country town values to better serve workers, communities and tackle rising issues around ESG requirements."

Bega chairman Barry Irvin says Aussie country values key to navigating ESG

Bega Group executive chairman Barry Irvin says companies should spend less time in boardrooms deciding ESG policies and more time taking actual action. Picture: Supplied

Bega executive chairman Barry Irvin says ASX-listed companies should spend less time in the board rooms of Sydney and Melbourne and more time channelling country town values to better serve workers, communities and tackle rising issues around ESG requirements.

Overseeing a staple of 34 iconic Aussie food brands including Vegemite and Bega Cheese, the company is a rarity on the Australian Securities Exchange — opting to be based in Bega on NSW’s south coast, rather than in the country’s two largest cities.

It is the same location where the Bega Group transformed from a local dairy cooperative in 1899 to a ASX 300-listed business generating revenue of more than $3bn.

Mr Irvin told The Australian the company owed its success to its roots and maintaining a sense of community as the company celebrates its 125th anniversary this month.

“My mother used to always say to me, never get too big for your boots. And when you keep your values close to you and remember your origins, you have a level of humility,” he said.

Bega is celebrating its 125th anniversary this month.

“We still have that level of humility around how we go about doing business and how we work with people. I can still point to families or dairy farming families in the Bega Valley that go back to 1899 and have stayed with us on the journey.”

Almost 70 per cent of companies listed on the ASX 100 are based in Sydney and Melbourne. Mr Irvin, who was born in the Bega Valley and has overseen Bega since 2000, said not being removed from its workers and supplies has fostered a culture of responsibility among executives.

“You become close to people you’re relying on. It makes a huge difference, it creates a different culture, because you don’t get removed from the business, whether that’s walking down the street and running into a farmer or indeed a customer,” he said.

“Even though we have a factory in Port Melbourne, our executives work in the same building instead of the CBD. You go to the canteen and have lunch with staff. It creates a typically Australian culture.”

Mr Irvin said that the company has remained true to its roots throughout its history.

Ahead of speaking at The Australian’s Global Food Forum in Brisbane this month on free trade, sustainability and ESG, Mr Irvin said sustainable and ESG issues were natural for Bega, and ones many companies needed a rethink.

“It’s important that we actually take action. Sometimes there is more focus on words that are written when it would be better, less resources were spent on that and more on getting out and doing things,” he said.

“Those country town philosophies for many people that work for Bega tend to carry these issues forward. ESG is something almost in their DNA because if you think about farming, farmers do tend to think about generational succession.”

Mr Irvin, whose son is the sixth generation of the Irvin family to farm in the Bega Valley, said companies had a responsibility to do their part to preserve the environment and having executives based out of the city meant a vested interest in doing their part.

“In the era I grew up in, in a small country town, if you wanted to play football on the weekend, you went and repaired the oval to make sure it was ready, and you held a working bee,” he said.

Barry Irvin owns a farm in the Bega Valley and says working in regional Australia has heightened the importance of being sustainable. Picture: Robert Hayson

“We were always told it is the responsibility of all of us, and therefore we must make our contribution. We all have our shared responsibility. And if you take it to the next step then if you have the added capacity to help, you should.”

Bega has grown its stable in recent years to include Vegemite, Dairy Farmers and Meander Valley Dairy. Mr Irvin said the company would always look to continue to grow and expand, with Bega wanting to develop its brands in Asia and Middle East.

“It’s a very strong business with great opportunities within the business now. We see those opportunities in Australia where there is strong loyalty to our brands, but we also want to meet the future requirements of our future consumers,” he said.

Bega has seen a noticeable shift in the market with stronger demand from consumers after health and convenience requirements, as it says inflationary pressures remain across the industry but are easing.

“The strongest demand drivers at the moment are nutrition, convenience, value for money, and then sustainability,” he said. “The demand for those products has just taken off.”

“Post-Covid there were just extraordinarily inflationary impacts across our entire supply chain. We’re still seeing areas of inflation, but it is easing in terms of the total effect it was having on our business.”

 

[divs4ever]

Fair point "Bega executive chairman Barry Irvin says ASX-listed companies should spend less time in the board rooms of Sydney and Melbourne and more time channelling country town values to better serve workers, communities and tackle rising issues around ESG requirements."

cheers

you just saved me some research time

i endured a super-market trip yesterday and some of their products caught my eye and was tempting me to run the tape-measure over them again

but ESG ( under the current meaning ). makes me RUN to the sidelines and lock the wallet in the safe

 

[Dona Ferentes]

125 years old today

 

[rnr]

125 years old today

Hi @Dona Ferentes,

That event would herald a worthy achievement for an Aussie company.

Just as well they didn't age their cheeses for anywhere near that period of time, otherwise they would not have been so successful.

Cheers, Rob

 

[eskys]

Cheese and milk today's staple.....BGA up 9 cents, 5.11, A2M up 3cents on a red day, not bad.