DGL Group Limited (DGL) investor relations material

Executive summary

• FY 2026 was challenging, with revenue declining 4.8% to $457.9 million due to ERP rollout disruptions, Middle East conflict, volatile external conditions, and heavy investments for future growth.

• Integration of over 30 acquired companies and relocation to larger, more efficient facilities continued, with productivity initiatives and cost reductions implemented.

• Underlying EBITDA fell 20.7% to $41.3 million, and the group reported a statutory loss after tax of $40.2 million, down 44.1% from the prior year.

• DGL operates across chemical manufacturing, logistics, and environmental services, with a network spanning Australia and New Zealand.

• Significant progress made in health and safety systems and compliance.

Financial highlights

• Manufacturing and logistics divisions saw higher revenues, but environmental services revenue dropped sharply due to the closure and sale of a loss-making battery recycling facility.

• Margins were pressured by higher input costs, low-cost import competition, underutilized expanded capacity, and higher fuel and shipping costs.

• Productivity initiatives reduced operating costs by AUD 11 million and operating expenses by 7% to $142.6 million, mainly through lower headcount.

• Statutory NPAT was a loss of $40.2 million, driven by nearly AUD 30 million in non-cash write-downs on goodwill and plant/equipment.

• Operating cash flow dropped to $15.8 million from $44.7 million, with cash conversion at 100%.

• Investing cash flows included AUD 30 million from sale of non-core assets and AUD 18 million invested in new plant/equipment.

• Net debt slightly reduced to $93.9 million; net tangible assets per share decreased 16% to $0.69.

Outlook and guidance

• Early FY 2027 shows significant improvement in profitability due to FY 2026 restructuring, cost-saving measures, and productivity initiatives.

• Management targets annual revenue above AUD 500 million and EBITDA margins of 8–9%.

• Focus remains on margin improvement, cost management, organic growth, integration, and better utilisation of expanded facilities.

• Ongoing challenges expected from Middle East conflict, global volatility, and elevated fuel prices.