Synlait Special Shareholders’ Meeting 2024 Presentation

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






NZX: SML
ASX: SM1


18 September 2024

Synlait Special Shareholders’ Meeting 2024 Presentation

Please see the attached presentation, which Synlait Chair George Adams will deliver to shareholders at
the company’s Special Shareholders’ Meeting at 9:00am (NZST).

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

After the meeting, a video replay will be available at: https://www.synlait.com/investors/

For more information contact:
Media
Jo Scott
Corporate Communications Lead
P: +64 21 883 123
E: jo.scott@synlait.com

Investors
Hannah Lynch
Head of Strategy & Corporate Affairs
P: +64 21 252 8990
E: hannah.lynch@synlait.com

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WELCOME TO SYNLAIT’S
SPECIAL SHAREHOLDERS’ MEETING
Wednesday 18 September 2024

VOTING ONLINE
• Voting is now open.
• To vote, click the vote tab and
select your preferred option.
Once your vote is cast, a tick
will appear.
• There is no submit or send
button. Your selection is
automatically recorded, and you
can change it until voting closes.
PAGE 2SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

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
concise, clear, and relevant to
the meeting.
PAGE 3SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

NEED HELP?
• Use the Q&A tab to message a
Computershare representative.
• Check the virtual meeting
guide issued with the Notice of
Meeting or on Synlait’s website.
• Call the Computershare team on
+64 9 488 8777.
PAGE 4SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

CHAIR
ADDRESS
George Adams
Chair
PAGE 5SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

TODAY’S
AGENDA
• Chair Address
• Bright Dairy Appointed
Director Address
• Resolution & Voting
SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024PAGE 6PAGE 6

Underpinned by state-of-the-art facilities which have the capability to manufacture highest quality dairy,
plant-based and hybrid products for a committed pool of global customers.
CURRENT POSITION
Unsustainable
debt levels
(circa $560
million)
North Island
investment
($450 million)
$180 million
due to retail
bond holders
in December
2024
Bank facility
due for
repayment
on 1 October
2024
1,400+
employees
200+ farmer
suppliers
PAGE 7SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

REDUCING DEBT TO A SUSTAINABLE LEVEL
A TWO STEP PLAN
SHAREHOLDER LOAN
PROPOSED EQUITY RAISE
AND BANK REFINANCING
12
Timing: July 2024
Proceeds: $130 million
Use of proceeds: repayment of bank debt.
Approved by: 99.59% of shareholders
Proceeds: approximately $217.8 million
Use of proceeds: repaying a portion of the outstanding
bank debt
Bank refinancing: $450 million package ready to activate
Underpinned by a strategy to further lift performance and return to profitability.
Today
with your
support
PAGE 8SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

BUSINESS RECOVERY
PROGRESS SINCE JULY
NORTH ISLAND
STRATEGIC REVIEW
COMPLETED
SETTLEMENT WITH THE
a2 MILK COMPANY
BANKING
REFINANCING
123
Pathway to profitability now
in place.
Conditional agreement has been
reached to end all disputes that
were subject to arbitration.
$450 million package agreed with
new banking syndicate.
Ready for your support today.
PAGE 9SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

TODAY IS A CRITICAL
NEXT STEP
ORDINARY RESOLUTION 1
Bright Dairy
placement
PAGE 10SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

TODAY IS A CRITICAL
NEXT STEP
ORDINARY RESOLUTION 1 ORDINARY RESOLUTION 2
Bright Dairy
placement
The a2 Milk Company
placement and settlement
PAGE 11SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

TODAY IS A CRITICAL
NEXT STEP
+=
ORDINARY RESOLUTION 1 ORDINARY RESOLUTION 2
Bright Dairy
placement
Bank refinancing
The opportunity
to support Synlait
returning to sustainable
profitability.
The a2 Milk Company
placement and settlement
PAGE 12SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

PATHWAY TO TODAY
LED BY SYNLAIT’S INDEPENDENT DIRECTORS
George Adams
Approach underpinned by Companies Act director duties, including to:
• Act in good faith and in the best interests of the company
• Exercise a duty of care
• Trade sensibly
Paul McGilvaryPaul Washer
SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024PAGE 13PAGE 13

FUTURE OPTIONS ANALYSIS
RIGOROUS AND STRATEGIC ANALYSIS OF ALL OPTIONS
Asset sales Ownership
structures
Alternative
recapitalisation
Equity raise Insolvency
Receivership
and voluntary
administration
PAGE 14SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

OPTIMAL OFFER STRUCTURE DRIVEN BY
• Tight timeframe and level of certainty required
• High level of equity required (around three times market capitalisation)
• High-risk investment requiring deep understanding of the company
• Major shareholders commercially-driven to ensure Synlait’s future and subscribe at a premium
Bright Dairy: $130 million loan, largest shareholder for
14 plus years, previous control, ability and willingness to
provide long-term support.
The a2 Milk Company: key customer, 13-year

business relationship.
PAGE 15SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

THE ALTERNATIVE
• There are no other proposals on the table.
• If either of our ordinary resolutions are not passed, Synlait would likely need
to cease trading and initiate a formal insolvency process unless it were to
become clear that further support would be forthcoming from its banks.
PAGE 16SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

AN INDEPENDENT ASSESSMENT
Overall, Northington Partners concluded that:
• on balance and having regard to all relevant factors, the
merits of the Bright Dairy placement, The a2 Milk Company
placement and The a2 Milk Company settlement outweigh
the negative aspects and are in the best interests of
existing Synlait shareholders; and
• in its opinion, the terms and conditions of both the Bright
Dairy placement and The a2 Milk Company placement and
the settlement collectively are fair to Synlait shareholders
not associated with Bright Dairy or The a2 Milk Company.
































Synlait Milk Limited
Independent Adviser’s Report and Appraisal Report
Prepared in Relation to the Allotment of Shares to Bright Dairy Holding Limited and
Allotment of Shares and Disputes Settlement with The a2 Milk Company Limited

20 August 2024
Statement of Independence
Northington Partners Limited confirms that it:
§ Has no conflict of interest that could affect its ability to provide an unbiased report; and
§ Has no direct or indirect pecuniary or other interest in the proposed transaction considered in this report,
including any success or contingency fee or remuneration, other than to receive the cash fee for
providing this report.
Northington Partners Limited has satisfied the Takeovers Panel, on the basis of the material provided to the
Panel, that it is independent under the Takeovers Code for the purposes of preparing this report.
PAGE 17SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

Special Shareholders’
Meeting
Full year 2024 result
published:
• On track to meet
minimum adjusted
EBITDA for FY24
for bank covenant
purposes
• Guidance remains
withdrawn
Equity raise anticipated
to occur, concurrently
with the refinancing
of Synlait’s existing
bank facilities and the
settlement with The a2
Milk Company, subject to
all remaining conditions
to the transactions being
satisfied as set out in the
notice of meeting
Areas of focus for the
Board going forward
• Farmer retention
• Customer growth
• Retain and recruit key
talent
• Sustainable earnings
growth in FY25 and
beyond
NEXT STEPS
TODAY30 SEPTEMBER1 OCTOBEROCTOBER ONWARDS
PAGE 18SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

BRIGHT DAIRY
APPOINTED
DIRECTOR
ADDRESS
Julia Zhu
PAGE 19SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

BRIGHT FOOD GROUP OVERVIEW
Bright Food Group is a comprehensive food industrial group, integrating modern
agriculture, food processing and manufacturing, and city service.
CHINESE A-SHARED
LISTED COMPANIES
OVERSEAS
INVESTMENTS
SCALE AND RATINGS
KEY BRAND PORTFOLIO
OVERSEAS LISTED
COMPANY
5
1
Synlait Milk
Stock code: SML
Shanghai Kaichuang Marine Int’l Co.,Ltd.
Stock code: 600097
Shanghai Maling
Stock code: 600073
Bright Life
Stock code: 600708
Jinfeng Wine
Stock code: 600616
Bright Dairy & Food
Stock code: 600597
~US$19bn
Revenue
Dairy
Seafood
Meat
Spice
Snacks
Agriculture
Sugar & Wine
Service
>US$1bn

EBITDA
Investment Grade
by all ratings agencies
PAGE 20SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

BRIGHT DAIRY OVERVIEW
Bright Dairy & Food Co., Ltd. (Bright Dairy) is a leading high-end dairy product company in China,
ensuring consistent high-quality products and services with its complete industrial chain that
begins from the farms to the sales terminals.
MISSIONTo become “China’s best dairy products enterprise” and allow more people to enjoy delicious and healthy dairy products.
Full category, high quality and perfect supply chain.
FACTORIES & 65 COLD CHAIN LOGISTICS
WAREHOUSES ACROSS CHINA
FARMS ACROSS CHINA
2027
60
years experience
in cattle raising
3.27 million tonnes
total capacity
121,600
dairy cattles
110+ cities
delivery services coverage
11.5 tons
average annual
yield per dairy cattle
50,000
terminals, 1,000 refrigerated
logistical vehicles
PAGE 21SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

TODAY’S VOTE & OUTLOOK
A BRIGHT DAIRY PERSPECTIVE
SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024PAGE 22

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
concise, clear, and relevant to
the meeting.
PAGE 23SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

RESOLUTION
& VOTING
SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024PAGE 24

Voting online
To vote, click the vote tab and select your preferred option. Once your vote is 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 voting closes.
Need help?
Call Computershare on +64 9 488 8777.
ORDINARY
RESOLUTION 1
“That, subject to Ordinary Resolution 2 being passed, the issuance of
308,333,333 shares to Bright Dairy Holding Limited at an issue price of 60
cents per share, contemporaneously (or substantially contemporaneously)
with the occurrence of the matters contemplated in Ordinary Resolution 2
and the Bank Refinancing, as described in the Notice of Meeting dated 20
August 2024, be approved for all purposes, including under NZX Listing Rules
4.2.1 and 5.2.1 and Rule 7(d) of the Takeovers Code.”
SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024PAGE 25PAGE 25

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
concise, clear, and relevant to
the meeting.
PAGE 26SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

Voting online
To vote, click the vote tab and select your preferred option. Once your vote is 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 voting closes.
Need help?
Call Computershare on +64 9 488 8777.
ORDINARY
RESOLUTION 2
“That, subject to Ordinary Resolution 1 being passed: (i) the issuance of
76,283,104 shares to The a2 Milk Company Limited (or, at its direction, a
whollyowned subsidiary of The a2 Milk Company Limited) at an issue price of
43 cents per share; and (ii) the settlement deed dated 16 August 2024 between
Synlait, Synlait Milk Finance Limited, A2 Infant Nutrition Limited and The a2
Milk Company Limited becoming effective, in each case contemporaneously
(or substantially contemporaneously) with the occurrence of the matters
contemplated in Ordinary Resolution 1 and the Bank Refinancing and as
described in the Notice of Meeting dated 20 August 2024, be approved for all
purposes, including under NZX Listing Rules 4.2.1 and 5.2.1”
PAGE 27SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024PAGE 27PAGE 27

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
concise, clear, and relevant to
the meeting.
PAGE 28SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

Voting online
To vote, click the vote tab and select your preferred option. Once your vote is 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 voting closes.
Need help?
Call Computershare on +64 9 488 8777.
SPECIAL
RESOLUTION 1
“That, subject to Ordinary Resolution 1 being passed, Synlait Milk Limited’s
constitution be amended, with effect from the issuance of 308,333,333 shares
to Bright Dairy Holding Limited contemplated by Ordinary Resolution 1, as
described in the Notice of Meeting dated 20 August 2024.”
SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024PAGE 29PAGE 29

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
concise, clear, and relevant to
the meeting.
PAGE 30SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

PROXY VOTES CAST
AHEAD OF THE MEETING
ForOpenAgainstTotalAbstain
Ordinary Resolution 183,377,042 (91.40%)2,650,412 (2.91%)5,195,662 (5.70%)91,223,11685,299,714
Ordinary Resolution 2125,131,210 (94.00%)2,657,812 (2.00%)5,334,683 (4.01%)133,123,70543,399,125
Special Resolution 1168,387,453 (95.45%)2,706,696 (1.53%)5,319,138 (3.02%)176,413,287109,543
PAGE 31SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

THIS CONCLUDES SYNLAIT’S
SPECIAL SHAREHOLDERS’ MEETING
PAGE 32SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024

DISCLAIMER
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.
SPECIAL SHAREHOLDERS’ MEETING PRESENTATION 2024PAGE 33PAGE 33