Full Year Results Investor Presentation 2023
GROSS MARGIN PERFORMANCE
Group gross profit was largely consistent with the prior year (FY 23: $144.0m, FY 22: $146.8m). Overall
performance fell short of expectations due to lower than forecast Advanced Nutrition margin and significant
cost pressures due to operational stability challenges and inflation.
Ingredients
5% decrease in gross profit performance
(FY 23: $54.6m, FY 22: $57.5m) driven by:
Reduction in sales volumes due to 38% higher
Advanced Nutrition base powder production
displacing ingredient powders production.
Gross margin on a per MT basis increased 16%
(FY 23: $501/MT, FY 22: $434/MT). This is due to
excellent alignment to the SMP/AMF lead bucket
which prevailed for most of the year.
Advanced Nutrition
Decrease in gross margin of 23% (FY 23: $57.0m,
FY 22: $73.8m) driven by:
Lower sales volumes of infant formula, the impact of
which was offset by higher production of infant base
powders driving higher recoveries of overheads.
Gross margin per MT decreased 19% (FY 23: $1,782/
MT, FY 22: $2,203/MT). This is due to:
Lag pricing mechanisms which are
unfavourable in periods of high inflation.
Higher write-downs of inventories and other
financial impacts due to operational stability
challenges which cannot be passed onto the
customers.
Consumer
Gross profit increase of $7.6m (FY 23: $29.0m,
FY 22: $21.3m) driven by:
•
Benefit from large pricing lag and
lower manufacturing overhead costs.
No further sales of high-cost cheeses
manufactured at Temuka, the closure of which
reduced operational costs. Dairyworks cool
store commissioned in FY 22 also contributed
to savings in storage and handling costs.
Foodservice
Gross profit loss of ($0.2m) as initial sales made into
China. Margin attainment is expected to improve as
volumes increase. Current year margin has been
impacted by write-offs during initial product runs.
Other margin
$3.7m difference between Group gross profit of
$144.0m and business unit gross profit of $140.4m
relates primarily to the impact of raw milk and
cream sales, Synlait farms, and other recoveries.
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Gross profit ($ millions)
Total*
Ingredients
Advanced Consumer*** Foodservice
Nutrition**
FY 21
70.0
14.5
45.0
10.5
FY 22
152.6
57.5
73.8
21.3
FY 23
140.4
54.6
57.0
29.0
(0.2)
Gross profit ($/MT)
Total*
Ingredients
FY 21
320
FY 22
676
FY 23
707
115
434
501
Advanced
Nutrition**
1,310
2,203
1,782
Consumer*** Foodservice
179
357
508
(313)
*
Excludes amounts not attributable to business units
** Restated to exclude costs relating to raw milk and cream sales
***
Dairyworks FY 23 gross profit was $26.1m (FY 22: $22.8m) and gross profit per MT was $1,053/MT
(FY 22: $818/MT)
FULL YEAR RESULTS INVESTOR PRESENTATION 2023View entire presentation