Bega Cheese (ASX: BGA) – 2026 Annual General Meeting Presentation

Bega Cheese has delivered a strong FY2026 result that moves the company closer to its medium-term targets ahead of schedule. The company achieved a return on funds employed (ROFE) of 10.0%, hitting its stated target two years earlier than planned and marking a 1.6 percentage point improvement on the prior year. This metric matters because ROFE captures the efficiency with which management deploys capital, and hitting it early signals disciplined execution across the group’s transformation initiatives. Earnings per share jumped 36% to 22.6 cents on a normalised basis, driven by a 12% lift in EBITDA to $225.6 million despite a modest 0.3 percentage point margin compression to 6.0%. Net revenue grew 6.7% to $3.8 billion, supporting the upbeat earnings trajectory.

The company attributes much of this performance to its ongoing transformation and efficiency programs. The consolidation of cheese production from Strathmerton into the Bega Valley facility completed in June, while the earlier-than-expected exit from peanut processing operations at Kingaroy and Tolga sites delivered cost savings ahead of original timelines. The Branded segment benefited from a $9 million increase in marketing spend behind five power brands, with particular momentum in higher-margin categories such as protein yoghurt and nutritional products. The Bulk business contributed through increased milk intake driving lower unit conversion costs and higher sales of nutritional and bionutrient products. These twin drivers suggest management is successfully executing the dual strategy of growing branded revenue while optimising the manufacturing footprint.

The balance sheet remains prudent with net debt of $151.6 million and a leverage ratio of 0.8x, unchanged from the prior year despite $37.1 million in cash restructuring costs. Management returned capital to shareholders through a total dividend of 14.5 cents per share, fully franked, representing a 21% increase on the prior year. The company funded this through operating cash flow of $129.3 million, which was lower than prior year due to the redundancy payments but still covered the dividend with room to spare. Capital expenditure of $109.8 million supported the manufacturing automation and consolidation programs, positioning the business for efficiency gains in FY2027.

Management has guided FY2027 normalised EBITDA in the range of $240 million to $245 million, implying a mid-point growth rate of approximately 6.5%. The company also reiterated its long-term target of $310 million-plus normalised EBITDA by FY2031, which would represent a 37% increase on FY2026. This guidance assumes normal trading conditions and is predicated on the continued rollout of innovation in the Branded portfolio, the delivery of benefits from the Laverton warehouse automation now operational, and further cost management in supply chain and procurement.

Investors should monitor whether the company achieves the full benefits from its recent capacity investments in yoghurt and protein products, particularly the uptake of new launches such as Dare Protein and Farmers Union Protein ranges. The international expansion, particularly in Southeast Asia and the Middle East, warrants attention given the company’s stated focus on accelerating this segment. The ASX has flagged this announcement as price sensitive and material.

View the full ASX announcement (PDF)

About Bega Cheese Ltd (ASX: BGA)

Bega Cheese Ltd is an Australia-based dairy processor and food manufacturer of well-known brands including Bega Cheese and Vegemite. The company operates two business segments: a branded segment producing consumer packaged goods sold through supermarket and foodservice channels, and a bulk segment producing commodity dairy ingredients for business-to-business customers. The company is headquartered in Bega, New South Wales, Australia.

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