Equity Raising Presentation 22 June 2020 0 Funding the next phase - PowerPoint PPT Presentation

Equity Raising Presentation 22 June 2020 0

Funding the next phase of our journey 1

Beston Global Food Company Becoming a leading supplier of dairy, meat and plant-based protein to domestic and international markets • Production of cheese (mozzarella, cheddar), lactoferrin, cream, butter and whey powder DAIRY • Dairy processing facilities at Jervois and Murray Bridge • >20% of South Australian milk pool processed • Provincial Food Group facility at Shepparton, Victoria MEAT AND PLANT-BASED MEAT • Current focus on core meat products ALTERNATIVES • Medium-term outlook for plant-based meat products • BrandLok (anti-counterfeiting technology) and OZIRIS (end-to-end traceability technology) mobile phone apps TECHNOLOGY AND INVESTMENTS • Neptune Bio-Innovations (pharmaceutical and nutraceutical products) and AquaEssence (Eigh+ alkaline water) Australia’s 3 rd largest mozzarella producer and growing 2

The journey to date Earnings platform established for continuing growth momentum FIX AND FOCUS BUILD EARNINGS PLATFORM GROW EARNINGS AND CASH FLOW 2015 - 2020 FY21 ❑ Complete sale of dairy farms  Low cost acquisition of non-operational dairy facilities (out of receivership) in 2015 ❑ Increase lactoferrin production capacity  Acquired dairy farm portfolio of five farms, 3,600 cows and 17 MLpa milk supply to 12 Tpa ❑  Built state-of-the-art mozzarella cheese production infrastructure (online March Increase milk supply to ~135 ML ❑ 2018), with installed capacity of 20,000 Tpa Reduce gearing to ~10% ❑ Achieve free cash flow  Acquired lactoferrin production facility with 3 Tpa installed capacity ❑ Continue transition to higher margin  Milk supply taken from nil to 111 MLpa; buyer of choice for independent farmers products  Restructured and expanded meat processing business Provincial Food Group FY22+  Expanded brand portfolio, market penetration and international presence ❑ Increase lactoferrin production capacity to >20 Tpa  Patented food provenance technology platforms BrandLok and OZIRIS ❑ Increase annual milk supply to 180 ML  Won over 120 Australian and international awards for product quality and innovation ❑ Sustainable free cash flow  Achieved year-on-year revenue growth of 65% since 2015 ❑ Capital management initiatives 3

Delivering against Business Plan and strategic imperatives Demonstrating a track record of growth Upcoming catalysts +107% +58% • Complete sale of dairy farms with 10-year milk supply contract Mozzarella production Dairy product revenue • Debt reduction to ~10% gearing 2 • Expansion of lactoferrin production 4,387 T 9,100 T $52 million $82 million • New milk supply contracts FY20 1 FY20 1 FY19 FY19 • Expansion of customer base Key statistics +8% +180% Shares on issue 471 million Share price (17-Jun-20) $0.105 Milk supply Export sales Market capitalisation $49.5 million Debt (31-Dec-19) $47.6 million 103 ML 111 ML $5 million $14 million Cash reserves (31-Dec-19) $1.5 million FY20 1 FY20 1 FY19 FY19 Enterprise Value 3 $98.6 million 1. Forecast FY20 (11 months actual; one month forecast) 2. Post completion of dairy farms sale 3. Based on current market price 4

Sale of dairy farms at well above book value Strategic reallocation of capital to reduce debt and deliver on strategic imperatives Reduce gearing Funds Sale of dairy FIRB approval FIRB approval to ~10% received farms FY21 contracted Lactoferrin Increase milk supply Improve free production milk supply of from higher price at cash flow ~135 ML expansion farmgate • $40.4 million to be received from sale of dairy farms • All milk produced from divested Beston dairy farms secured for ten years at arm’s length market rates • Cash proceeds to materially reduce debt and enable delivery of strategic imperatives • Further enhance higher margin product mix, to deliver sustainable free operating cash flow − Ability to pay higher prices to secure additional milk supply − Improved capacity utilisation − Further staged capital investment program (driving value per kilogram of milk solids processed) 5

Established milk supply and cheese distribution channels Supply and distribution channels built on strong relationships with independent farmers and high-quality customers Milk Supply Production Customers JERVOIS Mozzarella facility (90%) FY21 contracted milk supply of ~135 ML MURRAY BRIDGE Cheddar facility (10%) Mozzarella market 1 Expanding customer base South Australian milk market • • • High quality existing customers US$22 billion global market (2019) ~500 ML total milk supply (2019) • • • Growing both domestic and Global CAGR of 4.4% to 2025 Majority of milk supplied by international customer base independent farmers • Asia Pacific CAGR of 6.8% to 2025 • • Asia Pacific a key focus for export Stable outlook for milk supply • Favourable pricing dynamics market • All milk secured at arm’s length • Pizza consumption driving demand market rates 1. Source: Adroit Market Research, 19 July 2019 6

Attractive lactoferrin market fundamentals Growing demand and prices, with limited producers of scale globally CURRENT DEMAND (2019) 1 FORECAST DEMAND (2023) 1 GLOBAL PRODUCERS TO SERVICE DEMAND 1 352 Tpa +500 Tpa <10 STRONG PRICING GROWTH 1 LIMITED AUSTRALIAN PRODUCERS 2015 $500 – 600 /kg 4 ~5% Targeted Beston Current Australian global market Current producers $1,500 – 3,000 /kg share (FY22+) FAVOURABLE GLOBAL MARKET DYNAMICS ✓ Increasing awareness of health ✓ China regulation requiring ✓ Significant anti-viral, anti- ✓ Increasing pharmaceutical benefits in functional foods, lactoferrin to be added to bacteriological and anti-fungal product use, including immune cosmetics products and oral infant formula properties system stimulation hygiene 1. Source: Strategic Insights into the Global Lactoferrin and Lactoferoxidase Market, UBIC Consulting 2020 7

Equity raising 8

Equity raising to fund expansion of lactoferrin production Lactoferrin production from skim milk to materially increase Beston’s gross margin Equity raising rationale “The raising of approximately $12 million through an Institutional Placement and Share Purchase Plan will ✓ Fast growing global demand for lactoferrin allow Beston to immediately commence the expansion of our highly profitable lactoferrin ✓ Construction of skim milk lactoferrin facility to production capacity from 3 to 12 tonnes per annum. deliver three-fold increase in lactoferrin yield In combination with the sale of our farms, this ✓ capital raising provides the Balance Sheet strength to Lactoferrin production capacity to increase from 3 Tpa to 12 Tpa take advantage of opportunities as and when they arise in the future by ensuring cash reserves as the economy recovers from the current COVID-19 ✓ Maintain Balance Sheet strength; preserve cash environment. reserves in current COVID-19 environment This is all in line with our strategic imperatives that ✓ Drive strategy of higher margin product mix are focused on sustainable and profitable growth.” Dr Roger Sexton, Chairman of Beston ✓ Deliver earnings growth and shareholder value 9

Investment highlights Becoming a leading supplier of dairy, meat and plant-based protein to domestic and international markets Current 1 Target 2 Focus on increasing milk supply 111 ML 180 ML Improving utilisation of mozzarella facilities 55% 90% 9,100 T 18,800 T Doubling higher margin mozzarella production 3 T >20 T Lactoferrin plant expansion to meet growing demand Near-term line of site to free operating cash flow From FY21 High quality, experienced management team 1. Forecast FY20 (11 months actual; one month forecast) 2. FY23 aspirational targets, post equity raising and sale of dairy farms 10

Equity raising overview Approximately $12 million equity raise, with $10 million institutional placement and ~$2 million Share Purchase Plan FINANCIAL IMPACT PRO FORMA BALANCE SHEET Pre-equity Post-equity Post-farms Post-equity raise pro forma ($ million) raise sale 4 raise 77% Pre-raise ordinary shares 471m 47.6 2 36.2 3 Drawn debt 8.3 Pre-raise market capitalisation 1 $49.5m Cash 2 1.5 1.5 1.5 Approx. new shares issued (placement + SPP) 141m 23% 6.8 Net Debt 46.1 34.7 Approx. shares post-equity raise 611m 100% 52.7 34.9 Debt facility 52.7 Issue price $.085 Available liquidity 6.6 18.0 28.1 Implied market capitalisation (at issue price) $51.9m Gearing 57.6% 37.9% 7.2% Cash 2 $1.5m Financial strength to fund growth agenda 4 Drawn debt 3 $36.2m Implied enterprise value $86.6m ~$28m Gearing ~$7m available ~7% net debt 1. As at last close of $0.105 per share on 17 June 2020 liquidity 2. As at 31 December 2019 3. Debt as at 31 December 2019 plus assumed $11.4m equity raise net of fees (excluding legal costs) 4. Reflects proceeds from farms sale of $40.4m less $12.5m allocation to Stage 1 lactoferrin plant upgrade 11