Full Year Results Investor Presentation 2023
SG&A & MANUFACTURING COSTS
Increase driven by higher people costs, ERP and other costs, and general cost pressures due to high
inflation. In summary, SG&A and manufacturing costs have increased $37.0m and $34.7m, respectively
compared to FY 22.
SG&A and ERP costs
Increases compared to FY 22 include:
Employee costs up $9.8m due to inflationary wage
increases, additional FTEs to support anticipated
demand increases and ERP implementation, ELT
renewal, less capitalised labour, and higher rates
of illness (COVID-19) covered by overtime and
temporary staff.
Consultancy and legal up $4.2m due to a significant
contract dispute, capital structure review and bank
refinancing, and divestment of Dairyworks.
Distribution costs up $1.9m, driven by high
demurrage costs due to ERP disruption in H1 23.
Travel up $1.6m as our sales teams returned to key
and developing markets after COVID-19 and as we
commissioned our Pokeno site in preparation for
the launch of new Advanced Nutrition products.
Depreciation up $1.4m due to new Auckland
warehouse and equipment leases.
Increase in other of $2.3m is due to impact of
inflation and immaterial line-item reclassifications.
Recurring ERP costs of $10.6m include depreciation
($6.1m) and ongoing service/support costs ($4.5m).
Additional ERP cost ($3.5m) incurred during
stabilisation phases.
Dairyworks up $1.7m due to across-the-board
impact of inflation on wages and operational costs.
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Manufacturing costs
Increases compared to FY 22 include:
.
•
Employee costs (including independent contractors)
up $15.9m, driven by:
Significant increase in staff in anticipation of
higher Advanced Nutrition demand and to mitigate
impacts of ERP challenges.
Establishment of contingent workforce to mitigate
risk of downtime due to staff shortages.
Impacts of higher-than-normal wage increases due
to inflation, higher overtime due to a tight labour
market, and less capitalised labour as major capital
projects wound up.
Freight up $4.5m due to higher fuel costs and
shipping rates.
Milk supply costs up $3.8m due to higher milk
transport costs and incentives.
Energy costs up $3.6m due to higher energy prices.
Repairs and maintenance up $3.5m due to plant
outages, higher preventative maintenance and inflation.
Consumables up $1.9m due to increased testing
requirements and inflation.
Farms up $1.3m due to first full year of operations.
Dairyworks savings of $1.5m reflect idling of Temuka
cheese plant and first full year of cool store operations.
FY 22
contractors
Employees &
Freight
Milk supply
FULL YEAR RESULTS INVESTOR PRESENTATION 2023
Energy
Repairs &
maintenance
FY 22
contractors
Employees &
Consultancy &
legal
Distribution
Travel
Depreciation
Manufacturing cost movement ($ millions)
Other/inflation
15.9 4.5
3.8 3.6
3.5
1.9
1.7
1.3
304.5
269.8
(1.5)
$34.7m total increase in manufacturing overhead costs
Consumables
Other/inflation
Farms
Dairyworks
FY 23
SG&A and ERP cost movement ($ millions)
10.6
3.5
1.7
129.3
9.8
4.2
1.9
1.6
1.4 2.3
92.3
$37.0m total increase in SG&A and ERP costs
Recurring
ERP costs
ERP
stabilisation
Dairyworks
FY 23View entire presentation