Comvita (CVT) investor relations material

Executive summary

• FY25 performance was impacted by sector pressures, weakening demand, oversupply, and internal challenges, with significant capital constraints and execution issues from prior years.

• Revenue declined 4% year-over-year, with a net profit before tax loss of $21.9 million and a net profit after tax loss of $104.8 million due to impairments and provisioning.

• Tangible progress includes positive free cash flow, reduced net debt, disciplined inventory and cost management, and a signed Scheme Implementation Agreement with Florenz at $0.80 per share, offering shareholders certainty amid ongoing sector and financial challenges.

• Leadership changes include a new CEO and ongoing CFO recruitment, with a focus on operational reset and improved performance.

Financial highlights

• Revenue for FY25 was $192.4 million, down 4.1% year-over-year, returning to FY21 levels.

• Gross profit margin was $82.7 million (43%), or $97.8 million pre-inventory provisions; adjusted margin would be about 50% (down from 54% last year).

• Operating expenses decreased by 9% year-over-year, with $11.4 million in reductions and further cost savings expected as restructuring costs will not recur.

• Operating cash flow was $34.1 million, up 539.9% year-over-year; free cash flow $25.3 million, up 273.2%, achieved through significant inventory reduction.

• Net debt reduced to $62.4 million (down $17.4 million), with ongoing focus on further reduction.

Outlook and guidance

• No formal forward guidance provided; an independent appraiser's report will be available in October.

• FY26 forecast anticipates sufficient cash to meet obligations and a return to profitability, contingent on execution and bank support.

• Board signals need for long-term recapitalisation if the Scheme with Florenz does not proceed.

• Management's near-term priorities include lifting direct margin, growing share in lower UMF grades, ongoing OpEx savings, and returning to profitability.