Strategic Financial Overview
Risks Summary (per Financial Statements)
INGHAM'S
Heart of the Table
Material business risks faced by the Group that may have a significant effect on the financial
prospects of the Group include:
> Import restrictions: Changes to import quarantine conditions in Australia and/or New Zealand that would allow additional forms of poultry to be imported
could result in changes to the poultry market that would adversely impact Ingham's financial performance.
> Food safety and disease outbreak: If products of Ingham's or a competitor became unsafe or were to be perceived as unsafe, reduced demand for
Ingham's products or for poultry products as an industry could follow. Food safety costs can lead to significant costs being incurred for recalls or other
operations to address such issues, in addition to compensation, penalties or liability claims which could be incurred. Outbreak of avian disease(s) occurring
in Ingham's flock or in geographic areas in which Ingham's operates could lead to restriction on the use or transportation of affected poultry. Such disruption
to supply, in addition to the other events identified here could have an adverse effect on Ingham's financial performance.
> Material increase in input costs: There have been recent actual and forecast increases in a number of input costs such as utilities and commodities, ie
grains and legumes. While Ingham's has a range of cost pass through arrangements in place with customers, especially in respect of feed prices, there may
be instances where Ingham's is not able to pass through, or is delayed from passing through, increases in these costs to customers, resulting in the potential
risk of margin erosion.
> Supply chain disruption: Failure of a parent stock supplier, poor animal husbandry practices, poor feed quality or outbreak of disease could all cause a
significant reduction in the volume or quality of Ingham's parent stock or broiler stock, limiting the Group's ability to supply sufficient volumes of product.
Disruption to the supply chain such as time critical delays, failure or dispute with key suppliers, severe weather events, fires, floods, failure in the supply of
energy, water or other significant inputs or other events of disruption could limit the Group's ability to supply sufficient volumes of product and have a
material adverse impact on the Group's financial performance.
> Regulatory factors: Ingham's requires a range of licences, permits and accreditations/certifications relating to food standards, animal welfare, workers
compensation and the environment in order to continue operating successfully. Inability to secure or retain these regulatory approvals, or amendments or
revoking of these approvals could have an adverse effect on Ingham's financial performance. Ongoing compliance with laws and regulations in the countries
in which Ingham's operates, and ability to comply with changes to these laws and regulations are material to Ingham's business. Failure to do so would have
a material adverse impact on Ingham's.
Transformation projects: Project Accelerate involves material capital investment and is expected to deliver cost savings and efficiencies to the business in
future periods. Delays in the project or cost overruns, in addition to realised results differing from estimates, may negatively impact Ingham's financial
performance compared to management's forecasts.
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