Bega Cheese Ltd (ASX: BGA) is on track to not only meet, but exceed its targets for earnings growth, the company said on Monday.
The $1.64 billion dairy company's Chief Executive Officer, Pete Findlay, told the company's annual general meeting (AGM) on Monday morning that the company's strategy, anchored around six strategic pillars, was performing well.
He added that the company believed "there is significant opportunity within those pillars to not only meet but exceed our FY2028 commitments'' to grow earnings.
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Multi-pronged approach to grow earnings
One of those pillars was new product development, where Mr Findlay said, "Our … pipeline is robust and closely aligned with evolving consumer needs''.
I have long been a strong advocate for the functional benefits of dairy, benefits that resonate with both Australian consumers and those in our key international markets. Dairy continues to be a powerful vehicle for delivering daily health and wellness outcomes, and we are well-positioned to lead in that space.
The company was also strongly focused on cost management, Mr Findlay said, and was implementing artificial intelligence-driven initiatives across the business.
At the head office level, the team have made impressive strides with robotic process automation, unlocking further efficiencies and scalability.
Mr Findlay said internationally the business had invested "ahead of the curve", and its efforts in this area "will not only contribute meaningfully to our current strategy but also lay the foundation for sustained growth over the next five to ten years''.
The company had also increased its milk intake over the past two years, Mr Findlay said, which adds stability to the company's bulk business.
Bringing all of this together, we believe we are on track to exceed our EBITDA target of $250 million by FY2028. We are pleased to provide guidance for FY2026 with a normalised EBITDA range of $215 million to $220 million, further evidence of our strategic momentum and delivery capability.
If achieved, this would be an uplift from the normalised EBITDA result for FY25, which came in at $202 million, up 23.1% on the previous year.
Debt to increase
Mr Findlay said in the current year there would be an increase in milk prices, which would have a short-term impact on debt levels during the year, "but we remain confident in our ability to deleverage from that point forward''.
We closed year two of our strategic plan with gross margin and cash flow performance exceeding expectations. This positions Bega Group exceptionally well to continue creating shareholder value through both organic growth and strategic, inorganic opportunities.
Bega Cheese shares were 1.3% higher on Monday morning at $5.44.
