Full Year Results Investor Presentation 2023
CASH FLOW AND NET DEBT
Net debt ended 21% ($71.6m) higher than FY 22 due to lower operating cash flows, significantly higher
interest costs, and Advanced Nutrition base powder build.
Operating cash flows
Operating cash flows decreased by $193.9m
(FY 23: $39.0m, FY 22: $232.9m) driven by:
Significant increases in employee and other
operating costs due to high inflation and significant
costs due to ERP and operational stability challenges.
$70m increase in inventory levels due to higher
Advanced Nutrition base powder manufacture and
higher raw materials balances due to higher landed
costs and change in product mix.
Less sales of carryover inventory compared to FY 22 -
a year where revenues benefited from higher-than-
normal inventory levels at the end of FY 21.
Capital expenditure
CAPEX down 32% (FY 23: $65.1m, FY 22: $96.3m)
driven by:
Substantial completion of Pokeno processing
upgrade project which has enabled
commencement of production for new portfolio of
Advanced Nutrition products.
Completion of our ERP implementation and
SAMR registration projects.
Capital spend has wound down and is expected to
comprise substantially of routine maintenance capital
expenditure moving forward, with an expectation of
less than $30m of spend in FY 24.
Financing costs
Higher interest costs adversely impacted net debt by
$44.0m. This is up by $17.9m on FY 22 due to:
Significant increases in interest rates (impact of
$12.6m). The effective interest rate in FY 23 was 5.5%
(FY 22: 3.3%).
Higher debt load during the first nine months of the
year due to ERP challenges. Total interest attributed to
this was $4.5m.
Financing cash flows and net debt
341.9
(39.0)
FY 22
net debt
Net debt movement ($ millions)
44.0
3.8
413.5
65.1
(2.3)
•
Net debt up $71.6m or 21% (FY 23: $413.5m,
Net cash from operating
activities ($ millions)
Net debt
($ millions)
FY 22: $341.9m) because of lower operating cash
flows, higher interest costs, and Advanced Nutrition
base powder build.
232.9
136.7
333.6
103.8
Synlait anticipates that net debt will reduce
significantly in FY 24 as Dairyworks is sold and
operating cash flows improve.
Balance sheet and leverage
Balance sheet metrics have deteriorated in FY 23.
The net debt to EBITDA ratio is 4.6x (normalised 4.3x).
Synlait is targeting a net debt to EBITDA ratio of below
3.5x in FY 24 through the divestment of Dairyworks and
improved profitability.
Banking facilities
See next slide for further info on banking facilities.
18.4
39.0
FY 19 FY 20 FY 21 FY 22 FY 23
527.0
479.4
413.5
341.9
FY 19 FY 20 FY 21 FY 22 FY 23
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FULL YEAR RESULTS INVESTOR PRESENTATION 2023View entire presentation