Bega Cheese (BGA) H2 2025 earnings summary

Executive summary

• Achieved strong normalised earnings growth in FY2025, driven by strategic focus on branded growth, productivity, innovation, and cost optimisation, despite a constrained consumer environment.

• Bulk segment returned to profitability as farm gate milk prices aligned with global commodity pricing.

• Major structural changes included closure/consolidation of Strathmerton and PCA sites, sale of Leeton site, and impairment of peanut processing assets, expected to deliver significant future efficiencies.

• Continued transformation from commodity-focused to branded, value-added business, with international expansion and innovation in dairy proteins and functional products.

• Maintained strong market share in key categories and expanded in foodservice and Asian markets.

Financial highlights

• Group normalised EBITDA rose 23.1% to $202.0m, with gross margin expanding to 21.5%.

• Normalised profit after tax surged 74% to $50.8m; normalised EPS up 73% to 16.6c.

• Net debt reduced by $36.3m to $126.1m, leverage ratio improved to 0.8x.

• Fully franked dividend increased 50% to 12.0c per share.

• Return on funds employed (ROFE) improved to 8.4%, with focus on asset utilisation and working capital.

Outlook and guidance

• Guidance for FY2026 normalised EBITDA of $215m–$220m, underpinned by branded segment growth, new product launches, and ongoing cost initiatives.

• On track to exceed $250m EBITDA by FY2028, supported by a strong new product pipeline and international expansion.

• Continued investment in automation, AI, and process optimisation to drive further efficiencies.

• Expects stable Bulk segment returns and improved consumer sentiment.