Synlait Annual Meeting 2020

WELCOME TO SYNLAIT’S ANNUAL MEETING
Wednesday 25 November 2020

ASKING A QUESTION ONLINE
• Click on the Q&A icon at the top of your screen.
• Click on the box, type your question, and press
the send arrow.
• 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 2

VOTING ONLINE
• When the poll is open, select the voting icon
at the top of your screen.
• To vote, click on your preferred option.
The selected option will change colour.
• There is no submit or send button, your selection
is automatically recorded, although it can be
changed up until the time voting closes.
PAGE 3

NEED
ASSISTANCE?
• Check the online voting guide.
This is available on Synlait’s
website.
• Call the Computershare team
on +64 9 488 8777.
PAGE 4

CHAIR ADDRESS
Graeme Milne ONZM
PAGE 5SYNLAIT MILK ANNUAL MEETING 2020

Milk tanker and the pink pathway at
Synlait Dunsandel
AGENDA
• Chair’s address
• CEO’s address
• Resolutions and voting
• Other business
PAGE 6SYNLAIT MILK ANNUAL MEETING 2020 PAGE 6

A STRONG RESULT IN AN
EXTRAORDINARY YEAR
27%
REVENUE
$
1.3B
13%
EBITDA
$
171.4M
9%
GROSS PROFIT
$
203.7M
9%
N PAT
$
75.2M
15%
CONSUMER-PACKAGED INFANT

FORMULA SALES
49,180MT
46%
LACTOFERRIN SALES
30MT
PAGE 7SYNLAIT MILK ANNUAL MEETING 2020

IMPLEMENTING
OUR STRATEGY
Synlait Pokeno Commissioned;
New Customer Announced
• Second integrated processing facility established in
North Island creates further supply chain efficiencies and
site diversification.
• Strategy pivoted from infant nutrition to nutritional powders:
• New multinational customer diversifies Synlait’s
customer, category and geographic reach.
• Synlait to manufacture, blend, and package nutrition
products, which include plant-based products.
• Commercial production currently projected to
start mid-2022.
• Pokeno land covenant legal dispute settled.
PAGE 8SYNLAIT MILK ANNUAL MEETING 2020

IMPLEMENTING
OUR STRATEGY
Expanding The Synlait Network Via
Category Diversification
Dairyworks and Talbot Forest Cheese
• Synlait is now closer to the consumer and owns a fully
vertically integrated value chain.
• Focus is now to generate:
• Business and supply chain synergies
• Market and category expansion
• Sustainable earnings stream
PAGE 9SYNLAIT MILK ANNUAL MEETING 2020 PAGE 9

IMPLEMENTING
OUR STRATEGY
Expanding The Synlait Network Via
Category Diversification
Fresh milk and cream line
• First full financial year of sales.
• Operational performance exceeded expectations.
• Increased demand during COVID-19 met with almost
100% accuracy.
UHT line
• Foodservice category is being established, focus on
functional UHT whipping creams.
• Progress delayed due to COVID-19.
• Remain confident in opportunity and strategy.
A Synlait Dunsandel warehouse operator loads an
order of fresh milk and cream from the coolstore
for delivery to Foodstuffs South Island stores
PAGE 10SYNLAIT MILK ANNUAL MEETING 2020 PAGE 10

BALANCE SHEET:
$200 MILLION EQUITY RAISE
Offer rationale
Synlait is raising equity to:
1. Complete the investment phase of its strategy including
the customisation of Synlait Pokeno and Auckland for
processing and packaging equipment to service its new
multinational customer.
2. Strengthen its balance sheet to:
• Provide more financial headroom as it navigates
COVID-19, which is having an unpredictable impact on
the stability of its current and future earnings.
• Create capacity to deliver on its purpose: Doing Milk
Differently For A Healthier World.
Offer summary
• NZ$180 million Placement fully subscribed, with
NZ$167.2 million already settled.
• Allocations under the placement were only to existing
shareholders.
• All shareholders (above 44,800 shares) received an
allocation of at least pro-rata of the full $200 million
offer to the extent they bid.
• NZ$20 million share purchase plan closes tonight.
PAGE 11SYNLAIT MILK ANNUAL MEETING 2020

THE BOARD’S FY21
AREAS OF FOCUS
• FY21 is a year to consolidate and set ourselves
up for success. We are focused on:
• Delivery of strategy.
• Ensuring good, efficient use of capital spend.
• FY21 NPAT expected to be at or slightly below the
FY20 NPAT result for FY21 as Synlait continues
to focus on optimising its assets and manufacturing
efficiencies.
• Synlait’s share price has experienced pressure as
we work to achieve our growth ambitions. The Board
remains confident that these investments will drive an
improved return over the long-term.
PAGE 12SYNLAIT MILK ANNUAL MEETING 2020

CEO ADDRESS
Leon Clement
PAGE 13SYNLAIT MILK ANNUAL MEETING 2020

SYNLAIT STARTED ITS
JOURNEY AS A SUCCESSFUL,
HIGH GROWTH, HIGH VALUE
BUSINESS, BUT IT HAD A LOT
OF STRATEGIC RISK.
PAGE 14SYNLAIT MILK ANNUAL MEETING 2020

HEART
OUR PURPOSE
HEAD
OUR AMBITION
HANDS

OUR STRATEGY
WE CONTINUE TO BE GUIDED BY OUR
PURPOSE, AMBITION AND STRATEGY
PAGE 15SYNLAIT MILK ANNUAL MEETING 2020

CHINA
WHERE WE WERE
SITECUSTOMERMARKET
DUNSANDEL
CATEGORY
INFANT NUTRITION
AUSTRALIA
PAGE 16SYNLAIT MILK ANNUAL MEETING 2020

CHINA
WHERE WE ARE TODAY
SITECUSTOMERMARKET
DUNSANDEL
POKENO
PALMERSTON NORTH
TEMUKA
HORNBY
AUCKLAND
CHINA
South Island Limited
MULTINATIONAL LACTOFERRIN
CUSTOMER
NEW MULTINATIONAL
CUSTOMER
NEW ZEALAND
ASIA PACIFIC
CATEGORY
INFANT NUTRITION
LACTOFERRIN
FRESH MILK AND CREAM
CHEESE
UHT BOTTLE
BUTTER
PLANT-BASED PRODUCT
AUSTRALIA
PAGE 17SYNLAIT MILK ANNUAL MEETING 2020

COVID-19 CONFIRMED THAT OUR
STRATEGY TO CREATE A STRONG,
DIVERSE AND SUSTAINABLE SYNLAIT,
IS MORE RELEVANT GIVEN THE
UNCERTAIN WORLD AHEAD.
PAGE 18SYNLAIT MILK ANNUAL MEETING 2020

OUR JOURNEY
PHASE 1PHASE 2PHASE 3
Build
Create opportunities
and reduce risk
Extract and generate
new value
Build growth
momentum
Fill and develop
capability
Expand in response
to demand
PAGE 19SYNLAIT MILK ANNUAL MEETING 2020

WE WILL EXTRACT VALUE BY WORKING THE MIX
ACROSS THE NEW OPPORTUNITIES WE HAVE CREATED
CHINA
SITECUSTOMERMARKET
DUNSANDEL
POKENO
PALMERSTON NORTH
TEMUKA
HORNBY
AUCKLAND
CHINA
South Island Limited
MULTINATIONAL LACTOFERRIN
CUSTOMER
NEW MULTINATIONAL
CUSTOMER
NEW ZEALAND
ASIA PACIFIC
CATEGORY
INFANT NUTRITION
LACTOFERRIN
FRESH MILK AND CREAM
CHEESE
UHT BOTTLE
BUTTER
PLANT-BASED PRODUCT
AUSTRALIA
PAGE 20SYNLAIT MILK ANNUAL MEETING 2020

Having invested in creating
opportunities we must now focus
on converting these into value.
We have built the capacity and
capability to deliver, now we need
to focus on creating value that
builds a more sustainable business,
which is making a genuine
contribution to our industry,
New Zealand and the planet.
PAGE 21SYNLAIT MILK ANNUAL MEETING 2020 PAGE 21

RESOLUTIONS AND
VOTING
PAGE 22SYNLAIT MILK ANNUAL MEETING 2020

RESOLUTION 1: AUDITORS’ REMUNERATION
That the board be authorised to determine the auditors’ fees and expenses for the 2021 financial year.
Voting online
• Select the voting icon at the top of the screen.
• To vote, click on your preferred option. The selected option will change colour.
• 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 23SYNLAIT MILK ANNUAL MEETING 2020

RESOLUTION 2: DIRECTOR ELECTION
Election of Simon Robertson as a Director.
Voting online
• Select the voting icon at the top of the screen.
• To vote, click on your preferred option. The selected option will change colour.
• 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 24SYNLAIT MILK ANNUAL MEETING 2020

OTHER BUSINESS
Synlait Dunsandel
PAGE 25
SYNLAIT MILK ANNUAL MEETING 2020

ASKING A QUESTION ONLINE
• Click on the Q&A icon at the top of your screen.
• Click on ‘Ask a question’ box, type your question,
and press the send arrow.
• Please ensure questions are succinct, clear and
relevant to the meeting.
PAGE 26

THIS CONCLUDES SYNLAIT’S
ANNUAL MEETING.
Thank you for attending.
PAGE 27SYNLAIT MILK ANNUAL MEETING 2020