Synlait Annual Meeting 2023 Presentation

Synlait Milk Limited · 1028 Heslerton Road, RD13 Rakaia, Canterbury, New Zealand · +643 373 3000 · www.synlait.com






NZX: SML
ASX: SM1


1 December 2023

Synlait Annual Meeting 2023 - Presentation

Please see the attached presentation, which will be delivered to shareholders by Synlait Acting Chair
Paul McGilvary and CEO Grant Watson at the company’s Annual Meeting commencing at 1.30pm today.

To access the meeting virtually, please go to: www.meetnow.global/nz

More details about joining the meeting can be found in the Notice of Meeting.

A replay of the Annual Meeting will be available at the link below following the meeting:

https://www.synlait.com/investors/

For more information contact:
Allan Swann
Corporate Communications Manager
P: +64 27 211 4874
E: allan.swann@synlait.com

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WELCOME TO
SYNLAIT’S 2023
ANNUAL MEETING
Friday 1 December 2023
Synlait Dunsandel,
Canterbury, New Zealand

VOTING ONLINE
• Voting is now open.
• To vote, click on the vote tab, and select
your preferred option. Once your vote has
been cast a tick will appear.
• You can vote for all resolutions at once or
by each resolution.
• There is no submit or send button. Your
selection is automatically recorded. It can
be changed up until the time voting closes.
PAGE 2SYNLAIT’S ANNUAL MEETING 2023

ASKING A
QUESTION ONLINE
• To ask a question click on the Q&A icon.
• Click on the box, type your question, and
press submit.
• Your question will be asked at the
appropriate part of the meeting.
• Please ensure questions are succinct,
clear and relevant to the meeting.
• Questions submitted ahead of the meeting
will be answered during general business.
PAGE 3SYNLAIT’S ANNUAL MEETING 2023

NEED HELP?
• Check the virtual meeting guide on Synlait’s
website.
• Call the Computershare team on +64 9 488 8777
• Use the Q&A tab to message a Computershare
representative.
PAGE 4SYNLAIT’S ANNUAL MEETING 2023

CHAIR ADDRESS
Paul McGilvary
Acting Chair
Independent Director

• Chair Address
• Bright Dairy Appointed Director Address
• CEO Address
• Resolutions and Voting
• Other Business
TODAY’S AGENDA

ACTING CHAIR AREAS OF FOCUS
FOUR KEY THEMES
STRENGTHEN
BALANCE SHEET
Reduce debt profile.
STRENGTHEN
FOUNDATIONS
Position Synlait
for growth.
RETAIN
MANAGEMENT
Ensure key talent
is retained and
motivated.
STRENGTHEN
RELATIONSHIPS
Improve key customer
and farmer supplier
relationships.
PAGE 7SYNLAIT’S ANNUAL MEETING 2023

SYNLAIT’S PERFORMANCE
FY23 HAD ITS CHALLENGES, BUT BUILDING BLOCKS IN PLACE
STRATEGY REFRESH COMPLETED
Creation of a more focused Synlait.
Joyhana (UHT cream) launched,
commercial sales underway.
State Administration for Market Regulation
(SAMR) re-registration achieved.
ELT renewal.
*TRIFR reduced >30% since Synlait
Safe launch in November 2022.
* TRIFR is Total Recordable Injury Frequency Rate, reduced to 10.6 at the end of FY 23.
KEY PERFORMANCE HIGHLIGHTSKEY FINANCIAL METRICS
21%
NET DEBT
$
413.5M
83%
OPERATING CASHFLOW
$
39.0M
$40.9M
11%
TOTAL GROUP EBITDA
TOTAL AVERAGE MILK PRICE
$
90.7M
$
8.49kgMS
PAGE 8SYNLAIT’S ANNUAL MEETING 2023

SUSTAINABILITY AS ENABLER OF OUR FUTURE STRATEGY
B CORP™ RECERTIFICATION’S IMPORTANCE
DOING MILK
DIFFERENTLY FOR A
HEALTHIER WORLD
PAGE 9SYNLAIT’S ANNUAL MEETING 2023

BRIGHT DAIRY APPOINTED
DIRECTOR ADDRESS
Julia Zhu

CEO ADDRESS
Grant Watson

Enterprise Resource
Planning system was
stabilised.
HOW DID WE END FY23?
* TRIFR is Total Recordable Injury Frequency Rate, reduced to 10.6 at the end of FY23. TRIFR reduced 30% since Synlait Safe launch in November 2022.
** September 2022 to September 2023.
State Administration
for Market
Regulation (SAMR)
achieved with The
a2 Milk Company –
and two more brand
slots available.
Utilisation of Synlait
Pokeno (Advanced
Nutrition growth)
and Synlait’s Liquids
facility (Joyhana
growth) ramping up.
Continued
commitment to a
competitive milk
price for our farmers.
People performance
heading in the right
direction:
• TRIFR reduced
30%*
• Employee
engagement
improving
• Staff turnover
down 7.1%**
• ELT renewal
completed
PAGE 12SYNLAIT’S ANNUAL MEETING 2023

OUR CONTINUED FY24 PRIORITIES
Grow our Advanced Nutrition
and Foodservice businesses
Strengthen our
balance sheet
Manage our
cost base
PAGE 13SYNLAIT’S ANNUAL MEETING 2023

New Zealand
Infant: $0.1 B (5%)
Australia
Infant: $0.7 B (4%)
Indonesia
Infant: $2 B (2%)
Malaysia
Infant: $0.6 B (3%)
Vietnam
Infant: $2 B (5%)
Thailand
Infant: $0.9 B (3%)
China
Infant: $23 B (0.5%)
South Korea
Infant: $0.2 B (1%)
Japan
Infant: $0.5 B (-2%)
Philippines
Infant: $0.9 B (2%)
APAC total market value: US $31 B (CAGR 1.3%)
EARLY LIFE NUTRITION LANDSCAPE IS CHANGING
China remains the largest market with a 49% global share.
Source: Euromonitor, Statista, Chemlinked 2023, Macquarie 2022
Notes: CAGR is estimated from 2023-2028, ELN includes Stages 1-4
Domestic vs imported
12
8
4
16
0
20
0
2
4
6
8
10
12
14
201420172021201520182022201620202019e-2023
Domestic
57%
International
43%
2023
Domestic
40%
International
60%
2014
Birth rate
Marriage rate
Birth rate
(millions)
Marriage rate
(millions)
China’s marriage and birth rates
Source: Euromonitor, Allied Market Research. Market Value is for tracked markets only.
Notes: CAGR is estimated from 2020-2026, ELN includes Stages 1-4
PAGE 14SYNLAIT’S ANNUAL MEETING 2023

ADVANCED NUTRITION FOR ALL LIFE STAGES
Leveraging our infant and plant-based capability to grow into Adult Nutrition.
EARLY LIFE NUTRITIONADVANCED INGREDIENTSADULT NUTRITION
Lactoferrin and
specialty ingredients
Maternal
nutrition
Sports
nutrition
Infant
nutrition
Clinical
nutrition
Child
nutrition
Active
nutrition
Healthy
ageing
Adult Nutrition is a $13 billion market in APAC, growing at 8%.
Source: Euromonitor.
30% of China’s population will be over 60 years old in 2035.
Source: Mintel Trends in Health and Wellness, China 2023.
PAGE 15SYNLAIT’S ANNUAL MEETING 2023

BALANCE SHEET AND COST BASE MANAGEMENT
WHAT ARE WE DOING?
STRENGTHENING OUR BALANCE SHEET
• Good progress made converting inventory to cash.
• CAPEX spend reducing (FY22: $96.3m,
FY23: $65.1m, FY24 target: $30m).
• Options to strengthen the balance sheet progressing.
• Dairyworks divestment update – actively engaging
with several parties. Proceeds will be used to pay
down debt.
MANAGING OUR COST BASE
• Significant internal programme across Synlait
to reduce OPEX (excluding growth areas).
• Zero based labour programme progressing.
• Leadership team focused on lifting internal people
capability to improve productivity.
PAGE 16SYNLAIT’S ANNUAL MEETING 2023

RESOLUTIONS AND VOTING

Voting online
To vote, click on the vote tab, and select your preferred option.
Once your vote has been cast a tick will appear. There is no
submit or send button, your selection is automatically recorded,
although it can be changed up until the time voting closes.
Need help?
Call Computershare on +64 9 488 8777
ORDINARY RESOLUTION
RESOLUTION 1:
AUDITOR’S REMUNERATION
“That the Board be authorised to determine
the auditor’s fees and expenses for the coming
financial year.”
PAGE 18SYNLAIT’S ANNUAL MEETING 2023

SPECIAL RESOLUTION
RESOLUTION 2:
CONSTITUTION AMENDMENT
“That Synlait Milk Limited’s Constitution be amended,
with effect from the close of the Annual Meeting, in the
form and manner described in the Explanatory Notes, to:
1) Add two new clauses, ‘2.8 Purpose Statement’
and ‘2.9 Stakeholder Consideration’ to meet the
requirements for Synlait Milk Limited to maintain its
B Corp™ certification;
2) Remove the now redundant additions to clause 8,
Schedule 1 that were adopted at the 2021 Annual
Meeting to allow the Board Appointed Director to
be the Chair of the Board until the completion of the
2022 Annual Meeting; and
3) Remove clause 2, Schedule 1 as it is now redundant
given the elapse of time since the Constitution was
first adopted.”
Voting online
To vote, click on the vote tab, and select your preferred option.
Once your vote has been cast a tick will appear. There is no
submit or send button, your selection is automatically recorded,
although it can be changed up until the time voting closes.
Need help?
Call Computershare on +64 9 488 8777
PAGE 19SYNLAIT’S ANNUAL MEETING 2023

OTHER BUSINESS

ASKING A
QUESTION ONLINE
• To ask a question click on the Q&A icon.
• Click on the box, type your question, and
press submit.
• Your question will be asked at the
appropriate part of the meeting.
• Please ensure questions are succinct,
clear and relevant to the meeting.
• Questions submitted ahead of the meeting
will be answered during general business.
PAGE 21SYNLAIT’S ANNUAL MEETING 2023

Thank you for attending.
THIS CONCLUDES
SYNLAIT’S 2023
ANNUAL MEETING

This presentation is given on behalf of Synlait
Milk Limited (Synlait). Information in this
presentation:
• comprises a statement or report made to or
for the purposes of a meeting of Synlait’s
shareholders and is provided for general
information purposes only, and is not an offer
or invitation for subscription, purchase, or
recommendation of securities in Synlait;
• should be read in conjunction with, and is
subject to, Synlait’s audited Annual Report
for the twelve months ended 31 July 2023,
prior annual and interim reports and Synlait’s
market releases on the NZX and ASX;
• includes forward-looking statements about
Synlait and the environment in which Synlait
operates which are subject to uncertainties
and contingencies outside of Synlait’s control.
Synlait’s actual results or performance may
differ materially from these statements;
• includes statements relating to past
performance, which should not be regarded
as a reliable indicator of future performance;
• may contain information from third parties
believed to be reliable; however, no
representations or warranties are made as
to the accuracy or completeness of such
information; and
• is current at the date of this presentation,
unless otherwise stated. Synlait is not under
any obligation to update this presentation
at any time after its release, whether as a
result of new information, future events or
otherwise.
All currency amounts are expressed in New
Zealand dollars unless otherwise stated and
figures, including percentage movements, are
subject to rounding. Similarly, unless otherwise
indicated, all references to a year in the
presentation are for the financial year ended
31 July 2023.
Synlait, its directors, employees and/or
shareholders shall have no liability whatsoever
to any person for any loss arising from this
presentation or any information supplied in
connection with it. Nothing in this presentation
constitutes financial, legal, tax or other advice.
Synlait has been designated as a “Non-
Standard” (NS) issuer by NZX due to the
nature of the company’s constitution. In
particular, Bright Dairy and Food Co Limited
(which holds its shares in Synlait through its
wholly-owned subsidiary, Bright Dairy Holding
Limited) has the right to appoint four directors
to the board of Synlait. Further details of these
director appointment rights are included on
pages 144 to 147 of Synlait’s Annual Report for
the financial year ended 31 July 2023.
For the purposes of this Disclaimer and
Important Notice, “presentation” means
this presentation, any presentation of this
presentation by Synlait and any question and
answer session that follows that presentation.
DISCLAIMER
PAGE 23SYNLAIT’S ANNUAL MEETING 2023